TRANSITION TO INTERNATIONAL ACCOUNTING STANDARDS STATUTORY FINANCIAL STATEMENTS. ENGINEERING INGEGNERIA INFORMATICA SpA

Transcription

1 TRANSITION TO INTERNATIONAL ACCOUNTING STANDARDS STATUTORY FINANCIAL STATEMENTS ENGINEERING INGEGNERIA INFORMATICA SpA Index Introduction... 2 Changes in accounting policies, errors, and changes in estimates... 3 IFRS and IFRIC interpretations not yet endorsed... 4 Reconciliations between Italian GAAP and IFRS... 4 Effects on balance sheets, income statements, and cash flow statements... 7 Opening statutory balance sheet as at January 1st FY2004 statutory income statement...10 Statutory balance sheet as at December 31st

2 Introduction In application of European regulation 1606/2002 of July 1\9th 2002 the financial statements of Engineering Ingegneria Informatica SpA (hereinafter, simply the Company ) for the year ending on December 31st 2005 will be the first statutory year-end accounts prepared in compliance with the international accounting and financial reporting standards endorsed by the European Commission (hereinafter IAS/IFRS individually or, collectively, IFRS). Until December 31st 2004 the Company prepared its accounts in compliance with Italian regulations, interpreted and supplemented by the accounting standards devised by the Italian National Council of Chartered & Registered Accountants (hereinafter generally defined as Italian GAAP ). Italian GAAP differ from IFRS in some respects. As required by Article 81 of Italian Issuer Regulation no , as amended by CONSOB resolution of April 14th 2005, the Company has therefore determined the effects of transition to IFRS and prepared the statements of reconciliation envisaged by paragraphs 39 and 40 of IFRS 1 ( First-Time Adoption of International Financial Reporting Standards ), endorsed by the European Commission, accompanied by notes explaining the approach to preparation and the criteria underlying the items shown in the statements of reconciliation. The Company s date of adoption of IFRS is January 1st 2005 whilst the transition date is January 1st The Company has therefore prepared an opening balance sheet as at the same date, adopting all of the mandatory exceptions and some of the optional exceptions allowed by IFRS 1 in retrospective application of IFRS. As required by IFRS 1, the accounting standards and policies described in the Explanatory Notes to the Midyear Interim Report as at , attached to the latter, have been applied to the opening balance sheet as at January 1st 2004 and to the balance sheet and income statement as at December 31st 2004, including the standards concerning classification and measurement of financial instruments (IAS 32 Financial instruments: disclosure and presentation and IAS 39 Financial instruments: recognition and measurement ), application of which as at transition date (January 1st 2004) as regards accounts for the year starting on January 1st 2005, although not mandatory, is allowed. In the following paragraphs we provide: A description of the optional exemptions to retrospective application allowed by IFRS 1 and adopted by the Company Reconciliations of net equity as per Italian accounting standards (Italian GAAP) with IFRS as at January 1st 2004 (transition date) and December 31st 2004 (comparative figures for year-end accounts as at December 31st 2005), highlighting the effects on individual balance sheet items Reconciliations of net profit as per Italian GAAP with IFRS for the year ending on December 31st 2004 (comparative figures for year-end accounts as at December 31st 2005), highlighting the effects on individual income statement items A description of significant effects on the financial position stemming from the aforementioned accounting policies An analysis of the potential effects on the Company s balance sheet and income statement of application of IFRS and IFRIC interpretations that have not yet been endorsed. The data included in the balance sheet and income statement as at December 31st 2004, presented in this section, restated in compliance with IFRS as endorsed as at the date of the present document will be the data that will be published for comparative purposes in the Company s statutory year-end accounts as at December 31st In some respects, the activity of adaptation and interpretation by the official bodies responsible for such matters, together with the necessary process of endorsement by the European Commission, is still underway. Consequently, today it cannot be ruled out that such data might undergo modifications during the next few months. Preparation of IFRS-compliant financial statements requires use of estimates and assumptions that affect reported assets and liabilities together with costs and revenues, and also presentation of potential assets and liabilities. These estimates have been made to the best of management s knowledge of future events and actions. 2

3 Lastly, the information provided herein, prepared as part of the process of conversion to IFRS, does not include all the tables, comparative information and thorough explanatory notes that would be necessary to provide full IFRS-compliant representation of the Company s balance sheet, income statement and financial status as at December 31st Changes in accounting policies, errors, and changes in estimates For the purposes of preparation of reconciliation of net equity as at January 1st 2004, international accounting standards have been retrospectively applied except in the case of exemptions from retrospective application allowed by IFRS 1 and adopted by the Company as described in the following paragraph. Exemption Business combinations: acquisitions of equity interests in associate companies and in joint ventures Opening value of tangible and intangible assets Choice The Company has decided to avail itself of exemption as regards retrospective application of IFRS 3 ( Business Combinations ) for business combinations and acquisitions of equity interests in subsidiary and associate companies taking place prior to January 1st 2004 The Company has decided to apply deemed cost for some land and buildings based on specific appraisals performed by independent expert valuers. As regards intangible assets, given the absence of active markets, the Company has been unable to benefit from use of the deemed cost method. Employee benefits As regards accounting treatment of defined-benefit plans (= employee severance indemnities in Italy) the Company has decided not to avail itself of the corridor [= transitional] approach and therefore, disregarding the exemption granted under IFRS 1, the actuarial gain/loss has been fully recognised as at transition date and duly reflected in net equity Cumulative translation differences Compound financial instruments Transition of subsidiary, associated and JV companies Alignment of comparative information concerning financial assets and liabilities Designation of financial instruments already recognised Stock options The Company does not have any compound financial instruments The Company has decided to apply IAS 32 and IAS 39 as from the transition date. Exemption is therefore not applicable. The Company has decided to apply IAS 32 and IAS 39 early, as from the transition date. Exemption has therefore been applied as from that date. The Company had no stock options plans in place as at transition date Insurance contracts Changes in liabilities booked for decommissioning, restoration and similar liabilities The Company did not have any liabilities for decommissioning, restoration and similar liabilities as at transition date The effects of IFRS adoption have been recognised in initial net equity in the reserve for Retained earnings/(losses carried forward). 3

4 Following the closing date of accounts for the year ending on December 31st 2004, no subsequent modifying events have occurred such as to request adjustment of the data recorded. As required by IFRS 1, in preparing the necessary balance sheets and income statements, the estimates and assumptions underlying determination of the value of assets and liabilities recorded in year-end accounts as at December 31st 2004 in compliance with Italian GAAP have not been revised. During transition no material errors have been identified. IFRS and IFRIC interpretations not yet endorsed During the last few months the IASB (International Accounting Standard Board) and the IFRIC (International Financial Reporting Interpretations Committee) have published new standards and interpretations. Although, to date, the EU legislator has not yet endorsed such standards and interpretations, the Company s top management has in any case considered their effects, highlighting their potential impact on its balance sheet and income statement as follows: IFRS/IFRIC Interpretation Effects for the Company IAS 39 - Amendment of fair value option IFRS 6 - Exploration for and evaluation of mineral assets IFRIC 2 - Members shares in co-operative entities and similar instruments IFRIC 3 Emission rights IFRIC 4 Determining whether an arrangement contains a lease IFRIC 5 - Rights to interests arising from decommissioning, restoration and environmental rehabilitation funds None The Company does not envisage any change in the accounting treatment of existing arrangements Reconciliations between Italian GAAP and IFRS Below we provide the reconciliations between net equity and net result determined according to Italian GAAP and the corresponding figures determined according to IFRS, as endorsed by the European Commission, accompanied by explanatory notes. These reconciliations have been prepared according to the approach indicated by IFRS 1. Unless otherwise indicated, all numerical data presented in the following paragraphs are presented in euro. 4

5 Reconciliation of Net Equity and Net Profit Note Net Equity Net Profit Net Equity Italian GAAP totals 146,896,467 7,301, ,846,664 Measurement of tangible assets (property, plant, and equipment) 1 3,697,588 (3,826) 3,693,762 Recognition of payable finance leases 2 (589,614) 459,007 (130,607) Elimination of uncapitalisable costs 3 (325,216) (221,681) (546,897) Measurement of financial assets 4 200, ,287 Measurement of financial liabilities 5 (177,814) 29,044 (148,770) Treasury shares 6 (1,271,555) (74,580) (346,968) Measurement of employee severance indemnity provision 7 420,969 16, ,998 Elimination of tax distortions 8 1,362,457 (1,362,457) 0 Recognition of employee benefits 9 (2,851,984) (2,689,983) (2,689,983) Other minor items 10 (104,920) Tax effects on adjustments made 11 (1,663,954) 500,387 (1,163,568) IFRS totals 145,497,344 4,154, ,045,998 Notes 1. For tangible assets (property, plant & equipment) the Company has opted for application of deemed cost as defined by IFRS 1. For all land and buildings held as at transition date revaluation has been performed based on appraisals performed by expert independent valuers. The higher value substantially relates to plots of land and to a building held via finance leases. Given this, the effect on the income statement has not been recognised for the higher value attributed to the plots of land and is included in the effect highlighted in the next note. 2. Finance lease contracts have been accounted for by posting, in balance-sheet assets among Tangible assets (property, plant and equipment), the residual net value of the assets covered by the contracts set against the consequent financial debt for the residual capital portion of payments that have yet to fall due. The positive effect recognised in the FY2004 income statement originates from the difference between lease payments (for the interest portion) and depreciation of assets as well as from proportional recognition of the capital gain made in 1997 following a sale & lease-back transaction. 3. Some cost categories substantially start-up and expansion costs capitalised as intangible non-current assets in compliance with Italian GAAP, have been eliminated from the opening IFRS balance sheet because they do not meet the new capitalisation requisites. 4. During FY2004 a contract was signed for step-sale of the equity interest owned by the Company in the investee company Reitek SpA. Analysis of the deal has shown substantial sale of the investment regardless of formal transfer of portions of equity interests. This conclusion permitted earlier recognition than envisaged by Italian GAAP of the capital gain made on the sale. 5. For loans in place as at transition date, we have determined the effective rate of return. The effect recognised is a consequence of the different policy of amortised cost versus nominal value. 5

6 6. Treasury shares (own shares repurchased), previously classified as financial assets, have been recognised as a deduction from share capital. In addition the profit effects of sale at values higher than cost and the effects of write-ups to market values posted in previous years have been eliminated. 7. Cumulative employee severance indemnity provision has been calculated at present value, as at transition date, of the defined benefit obligation, adjusted to allow for actuarial gains and losses. The effect posted has been calculated by an outside actuary according to the projected unit credit method. 8. In year-end financial statements as at December 31st 2004 prepared according to Italian GAAP, the effect of elimination of tax distortions from accounts (so-called tax decontamination ) had been recognised. Upon transition to IFRS this effect was brought forward to the opening balance sheet. 9. The Company remunerates its employees also via profit sharing. These benefits, in compliance with IFRS, have been recognised on an accrual accounting basis, charging them to the income statement. 10. (No note) 11. The tax effect has been determined via application to the adjustments illustrated above of the tax rates substantially enacted as at transition date. 6

7 Effects on balance sheets, income statements, and cash flow statements The reported accounts shown later on reflect the effects highlighted and discussed in the reconciliations of net equity and profit in the previous section as at relevant dates. Specifically: - All assets and liabilities recognition of which is required by IFRS, included those not envisaged in the application of Italian GAAP, have been duly recognised as per IFRS - All assets and liabilities recognition of which is required or allowed by Italian GAAP, but not by IFRS, have been derecognised - All assets and liabilities have been measured in compliance with IFRS - Some items have been reclassified in compliance with IFRS. The notes commenting on individual adjustments concerning the balance sheets and income statements presented are not repeated because they have already been described in the notes on the reconciliations of net equity and profit. The balance-sheet and income-statement formats used until December 31st 2004 have been modified in compliance with IAS 1 ( Presentation of financial statements ). The first column of the formats presented later on has thus being adapted accordingly to make it comparable with the fourth column. As regards the cash flow statement as at January 1st and December 31st 2004, we note that application of IFRS has not caused adjustments generating any significant effects on the Company s net financial position and cash flows. 7

8 Opening statutory balance sheet as at January 1st 2004 STATUTORY BALANCE SHEET - ASSETS 01/01/2004 Effects of IFRS Conversion (euro) Italian GAAP Reclassifications Adjustments IFRS A) NON-CURRENT ASSETS Property, plant, and equipment 4,493, ,764 6,148,835 11,092,938 Intangible assets 4,349,496 (450,764) (300,063) 3,598,670 Goodwill 1,615, ,615,746 Equity investments 65,045, ,045,754 Other non-current assets 1,835, ,835,265 TOTAL NON-CURRENT ASSETS 77,339, ,848,772 83,188,372 B) NON-CURRENT ASSETS HELD FOR SALE C) CURRENT ASSETS Inventories Job order work in process 12,905,904 (3,615,904) 0 9,290,000 Trade receivables 92,446, ,446,644 Other current assets 16,089,246 (1,271,555) 0 14,817,691 Cash & cash equivalents 47,406, ,406,139 TOTAL CURRENT ASSETS 168,847,933 (4,887,458) 0 163,960,475 TOTAL ASSETS ( A + B + C ) 246,187,533 (4,887,458) 5,848, ,148,847 STATUTORY BALANCE SHEET - LIABILITIES 01/01/2004 Effects of IFRS Conversion (euro) Italian GAAP Reclassifications Adjustments IFRS D) NET EQUITY Share capital 31,875,000 (1,271,555) (129,023) 30,474,422 Reserves 104,155, ,155,563 Retained earnings 10,865, ,414 10,867,359 TOTAL NET EQUITY 146,896, (1,271,554.71) (127,609.81) 145,497, E) NON-CURRENT LIABILITIES Non-current financial liabilities 9,335, ,333 9,984,964 Other non-current liabilities 2,005, ,663,996 3,669,773 Employee severance indemnity provision 13,595,999 0 (420,969) 13,175,030 TOTAL NON-CURRENT LIABILITIES 24,937, ,892,359 26,829,767 F) CURRENT LIABILITIES Current financial liabilities 1,635, ,603 2,176,100 Other current liabilities 30,825, ,543,420 34,368,666 Trade payables 41,892,916 (3,615,904) 0 38,277,013 TOTAL CURRENT LIABILITIES 74,353,659 (3,615,904) 4,084,023 74,821,778 G) TOTAL LIABILITIES ( E + F ) 99,291,067 (3,615,904) 5,976, ,651,545 TOTAL NET EQUITY AND LIABILITIES ( D + G ) 246,187,533 (4,887,458) 5,848, ,148,888 8

9 STATUTORY BALANCE SHEET - ASSETS Measurement Finance leases Reversal of Measurement Treasury Severance Deferred Employee (euro) of tangibles payable uncap.ble costs Reitek fin. liabilities shares indemnity fund taxes benefits Total A) NON-CURRENT ASSETS Property, plant, and equipment 3,697,588 1,113,944 (25,154) 1,362,457 6,148,835 Intangible assets (300,062) (300,062) Goodwill 0 Equity investments 0 Other non-current assets 0 TOTAL NON-CURRENT ASSETS 3,697,588 1,113,944 (325,216) ,362, ,848,773 B) NON-CURRENT ASSETS HELD FOR SALE C) CURRENT ASSETS 0 Inventories 0 Job order work in process 0 Trade receivables 0 Other current assets 0 Cash & cash equivalents 0 TOTAL CURRENT ASSETS TOTAL ASSETS ( A + B + C ) 3,697,588 1,113,944 (325,216) ,362, ,848,773 STATUTORY BALANCE SHEET - LIABILITIES Measurement Finance leases Reversal of Measurement Treasury Severance Deferred Employee (euro) of tangibles payable uncap.ble costs Reitek fin. liabilities shares indemnity fund taxes benefits Total D) NET EQUITY Share capital (129,023) (129,023) Reserves 0 Retained earnings 3,697,588 (589,614) (325,216) (177,814) 129, ,969 (301,538) (2,851,984) 1,414 TOTAL NET EQUITY 3,697,588 (589,614) (325,216) 0 (177,814) 0 420,969 (301,538) (2,851,984) (127,609) E) NON-CURRENT LIABILITIES 0 Non-current financial liabilities 471, , ,333 Other non-current liabilities 1,663,995 1,663,995 Employee severance indemnity provision (420,969) (420,969) TOTAL NON-CURRENT LIABILITIES 0 471, ,814 0 (420,969) 1,663, ,892,359 F) CURRENT LIABILITIES 0 Current financial liabilities 540, ,603 Other current liabilities 691,436 2,851,984 3,543,420 Trade payables 0 TOTAL CURRENT LIABILITIES 0 1,232, ,851,984 4,084,023 G) TOTAL LIABILITIES ( E + F ) 0 1,703, ,814 0 (420,969) 1,663,995 2,851,984 5,976,382 TOTAL NET EQUITY AND LIABILITIES ( D + G ) 3,697,588 1,113,944 (325,216) ,362, ,848,773 Notes For an explanation of individual adjustments, reference should be made to the notes concerning reconciliations of net equity and profit. The main reclassifications relate to: a) Invoices on account relating to job-order work in progress, classified in compliance with Italian GAAP in balance sheet liabilities among Trade payables and write-down provision for work in progress, posted as a direct reduction of job-order work in progress in compliance with IAS 11; and to improvements made to third-party assets for structural renovation, previously classified among intangible assets b) Treasury shares held by the Company, classified under Italian GAAP in balance sheet assets under Other current receivables and, in compliance with IAS 32, as a direct reduction of Share capital. 9

10 FY2004 statutory income statement STATUTORY INCOME STATEMENT 31/12/2004 Effects of IFRS Conversion (euro) Italian GAAP Reclassifications Adjustments IFRS A) REVENUES Revenues 152,411, ,411,557 Other revenues 13,346,586 0 (1,251,482) 12,095,104 TOTAL REVENUES 165,758,143 0 (1,251,482) 164,506,661 B) OPERATING COSTS Raw materials and expendables 3,848, ,848,577 Services 73,426,886 0 (609,316) 72,817,570 Payroll 68,940, ,673,954 71,614,481 Depreciation & amortisation 5,842,236 (1,932,885) 292,370 4,201,720 Provisions and write-downs Other costs 4,177,612 1,932,885 (355,768) 5,754,729 TOTAL OPERATING COSTS 156,235, ,001, ,237,077 C) EBIT 9,522,306 0 (3,252,722) 6,269,585 D) NET FINANCIAL INCOME/(EXPENSES) 310,376 0 (39,670) 270,706 E) SHARE OF PROFIT/(LOSS) OF EQUITY INVESTMENTS 3,044, ,044,208 F) PRE-TAX PROFIT ( C + D + E ) 12,876,890 0 (3,292,391) 9,584,499 G) INCOME TAX 5,574,978 0 (144,619) 5,430,360 NET PROFIT/(LOSS) FOR YEAR ( F - G ) 7,301,912 0 (3,147,773) 4,154, STATUTORY INCOME STATEMENT Measurement Finance leases Reversal of Measurement Treasury Severance Deferred Employee Engineering Ingegneria Informatica SpA (euro) of tangibles payable uncap.ble costs Reitek fin. liabilities shares indemnity fund taxes benefits Total A) REVENUES Revenues 0 Other revenues 377,147 (391,879) 200,287 (74,580) (1,362,457) (1,251,482) TOTAL REVENUES 0 377,147 (391,879) 200,287 0 (74,580) 0 (1,362,457) 0 (1,251,482) B) OPERATING COSTS 0 Raw materials and expendables 0 Services (609,316) (609,316) Payroll (16,029) 2,689,983 2,673,954 Depreciation & amortisation 3, ,742 (170,199) 292,369 Provisions and write-downs 0 Other costs (355,768) (355,768) TOTAL OPERATING COSTS 3,826 (150,574) (170,199) (16,029) (355,768) 2,689,983 2,001,239 C) EBIT (3,826) 527,721 (221,680) 200,287 0 (74,580) 16,029 (1,006,689) (2,689,983) (3,252,721) D) NET FINANCIAL INCOME/(EXPENSES) (68,713) 29,043 (39,670) E) SHARE OF PROFIT/(LOSS) OF EQUITY INVESTMENTS 0 F) PRE-TAX PROFIT ( C + D + E ) (3,826) 459,008 (221,680) 200,287 29,043 (74,580) 16,029 (1,006,689) (2,689,983) (3,292,391) G) INCOME TAX (144,619) (144,619) NET PROFIT/(LOSS) FOR YEAR ( F - G ) (3,826) 459,008 (221,680) 200,287 29,043 (74,580) 16,029 (862,070) (2,689,983) (3,147,772) Notes For an explanation of individual adjustments, reference should be made to the notes concerning reconciliations of net equity and profit. 10

11 Statutory balance sheet as at December 31st 2004 STATUTORY BALANCE SHEET - ASSETS 31/12/2004 Effects of IFRS Conversion (euro) Italian GAAP Reclassifications Adjustments IFRS A) NON-CURRENT ASSETS Property, plant, and equipment 5,560, ,118 4,270,025 10,364,755 Intangible assets 2,339,071 (534,118) (521,743) 1,283,210 Goodwill Equity investments 87,509,799 (459,347) 0 87,050,452 Other non-current assets 868, , ,287 1,528,067 TOTAL NON-CURRENT ASSETS 96,277, ,948, ,226,484 B) NON-CURRENT ASSETS HELD FOR SALE C) CURRENT ASSETS Inventories Job order work in process 11,152,003 (5,404,153) 0 5,747,851 Trade receivables 105,452, ,452,444 Other current assets 15,880,203 (1,228,136) 0 14,652,067 Cash & cash equivalents 35,552, ,552,382 TOTAL CURRENT ASSETS 168,037,033 (6,632,289) 0 161,404,744 TOTAL ASSETS ( A + B + C ) 264,314,948 (6,632,289) 3,948, ,631,228 STATUTORY BALANCE SHEET - LIABILITIES 31/12/2004 Effects of IFRS Conversion (euro) Italian GAAP Reclassifications Adjustments IFRS D) NET EQUITY Share capital 31,875,000 (322,182) (79,229) 31,473,589 Reserves 104,155, ,155,563 Retained earnings 3,514, ,748,518 6,262,707 Net profit/(loss) for year 7,301,912 0 (3,147,773) 4,154,139 TOTAL NET EQUITY 146,846, (322,182.24) (478,483.90) 146,045, E) NON-CURRENT LIABILITIES Non-current financial liabilities 8,028, ,770 8,177,504 Other non-current liabilities 4,179,166 (905,954) 1,239,490 4,512,702 Employee severance indemnity provision 14,977,989 0 (436,998) 14,540,991 TOTAL NON-CURRENT LIABILITIES 27,185,889 (905,954) 951,262 27,231,197 F) CURRENT LIABILITIES Current financial liabilities 1,817, ,519 2,289,054 Other current liabilities 30,191, ,004,272 33,195,423 Trade payables 58,273,709 (5,404,153) 0 52,869,556 TOTAL CURRENT LIABILITIES 90,282,395 (5,404,153) 3,475,791 88,354,033 G) TOTAL LIABILITIES ( E + F ) 117,468,284 (6,310,107) 4,427, ,585,230 TOTAL NET EQUITY AND LIABILITIES ( D + G ) 264,314,948 (6,632,289) 3,948, ,631,228 11

12 STATUTORY BALANCE SHEET - ASSETS Measurement Finance leases Reversal of Measurement Treasury Severance Deferred Employee Other (euro) of tangibles payable uncap.ble costs Reitek fin. liabilities shares indemnity fund taxes benefits minor items Total A) NON-CURRENT ASSETS Property, plant, and equipment 3,639, ,201 (25,154) 4,270,025 Intangible assets (521,743) (521,743) Goodwill 0 Equity investments 0 Other non-current assets 200, ,287 TOTAL NON-CURRENT ASSETS 3,639, ,201 (546,897) 200, ,948,569 B) NON-CURRENT ASSETS HELD FOR SALE C) CURRENT ASSETS Inventories 0 Job order work in process 0 Trade receivables 0 Other current assets 0 Cash & cash equivalents 0 TOTAL CURRENT ASSETS TOTAL ASSETS ( A + B + C ) 3,639, ,201 (546,897) 200, ,948,569 STATUTORY BALANCE SHEET - LIABILITIES Measurement Finance leases Reversal of Measurement Treasury Severance Deferred Employee Other (euro) of tangibles payable uncap.ble costs Reitek fin. liabilities shares indemnity fund taxes benefits minor items Total D) NET EQUITY Share capital (79,229) (79,229) Reserves 0 Retained earnings 3,697,588 (589,615) (325,217) (177,813) 129, ,969 (301,497) (104,921) 2,748,517 Net profit/(loss) for year (3,826) 459,008 (221,680) 200,287 29,043 (74,580) 16,029 (862,070) (2,689,983) (3,147,772) TOTAL NET EQUITY 3,693, (130,607.00) (546,897.00) 200, (148,770.00) (24,786.00) 436, (1,163,567.00) (2,689,983.00) (104,921.00) (478,484.00) E) NON-CURRENT LIABILITIES Non-current financial liabilities 148, ,770 Other non-current liabilities 1,239,490 1,239,490 Employee severance indemnity provision (436,998) (436,998) TOTAL NON-CURRENT LIABILITIES ,770 0 (436,998) 1,239, ,262 F) CURRENT LIABILITIES Current financial liabilities 471, ,519 Other current liabilities 314,289 2,689,983 3,004,272 Trade payables 0 TOTAL CURRENT LIABILITIES 0 785, ,689, ,475,791 G) TOTAL LIABILITIES ( E + F ) 0 785, ,770 0 (436,998) 1,239,490 2,689, ,427,053 TOTAL NET EQUITY AND LIABILITIES ( D + G ) 3,693, ,201 (546,897) 200,287 0 (24,786) 0 75,923 0 (104,921) 3,948,569 Notes For an explanation of individual adjustments, reference should be made to the notes concerning reconciliations of net equity and profit. The main reclassifications relate to: a) Invoices on account relating to job-order work in progress, classified in compliance with Italian GAAP in balance sheet liabilities among Trade payables and write-down provision for work in progress, posted as a direct reduction of job-order work in progress in compliance with IAS 11 b) Treasury shares held by the Company, classified under Italian GAAP in balance sheet assets under Other current receivables and, in compliance with IAS 32, as a direct reduction of Share capital ; and to the equity investment in Reitek reclassified from Equity investments to Other current receivables. 12