Report 2010 - Italcementi Group

2010 Annual Report

Contents 

Presentation 

General information 

Italcementi S.p.A. Directors, Officers and Auditors 6 

Professional profiles of the members of the Board of Directors and the Board of Statutory Auditors 7 

Notice of Call 14 

Italcementi Group in the world 18 

Highlights 20 

Italcementi S.p.A. on the Stock Exchange 21 

Consolidated Annual Report 

Directors’ report 

Results and significant events for the year 29 

The international economy and industry trends 31 

Business and financial performance in 2010 32 

Performance by country and business 45 

Energy project 53 

Dealings with related parties 55 

Information systems 58 

Sustainable development 58 

Engineering, technical assistance, research and development 62 

Innovation 63 

E-business 63 

Disputes and pending proceedings 64 

Significant post balance-sheet events 65 

Outlook 66 

Consolidated financial statements 

Financial statements 68 

Notes 73 

Annexes 142 

Representation pursuant to art. 154-bis paragraph 5 TUF 150 

Report of the Independent Auditors 151 

Italcementi S.p.A. financial statements 

Financial statements 154 

Report of the Board of Statutory Auditors 159 


Summary of resolutions 164 

Corporate Governance 

Corporate Governance 168 

Annexes 218 

Representation pursuant to art. 154-bis paragraph 5 TUF 225 

This Annual Report has been prepared in English for the convenience of international readers. 

It is based on the Italcementi S.p.A. consolidated financial statements and also contains the translation of 

the set of financial statements of the Parent company Italcementi S.p.A., as well as the section 

“Corporate Governance” also part of the separate Annual Report of Italcementi S.p.A. and the “Summary 

of resolutions”. The consolidated Annual reports and the full documentation of the 2010 separate Annual 

report of Italcementi S.p.A. is published in Italian on the internet site www.italcementigroup.com. 

The original Italian documents should be considered the authoritative version.

2010 Annual Report 

Italcementi S.p.A. 

Via G. Camozzi, 124 - 24121 Bergamo - Italy 

Share Capital € 282,548,942 

Bergamo Companies Register 

Company subject to management control 

and coordination by Italmobiliare S.p.A. 

The photos illustrating this annual report refer to the Italian Pavilion at Expo 2010 Shanghai China featuring the new transparent 

cement i.light ® expressly developed by Italcementi

Letter to the stakeholders 

Industrial consolidation and financial solidity 

Financial and economic conditions remain highly volatile, 

although most international observers see a more positive 

outlook for 2011 as a whole. We may not experience a clear 

turnaround, but the growth trends on the emerging markets will 

continue (especially in Asia) and the first signs of recovery can 

be seen in the industrialized nations. 

The time has come to take stock of our progress in the past three 

years, after the shock of 2008, and the strategies put in place by 

the Group since the crisis began. The goals we set out to 

achieve were clear and simple: 

- to strengthen our industrial structure; 

- to cut costs; 

- to consolidate our financial and capital structure. 

Despite the economic crisis, since we firmly believed in the 

importance of our industrial vocation, we decided not to cancel 

Giampiero Pesenti 

Chairman 

our investments; instead, we have moved confidently ahead with 

the modernization of our production system in order to raise our economic and environmental efficiency. 

Carlo Pesenti 

Chief Executive Officer CEO 

We have taken a series of selective measures designed to modernize and rationalize the industrial network on 

the most advanced markets with the closure of obsolete plant, and, on the emerging markets, to enhance 

existing factories and construct new lines to boost production capacity and raise system competitiveness. 

Since 2008 we have completed: 

- in North America the start-up of the Martinsburg 5,000 tpd cement plant, which has doubled the capacity of 

the old lines we closed in Bessmer, Frederick and Martinsburg. 

In Italy, the revamping of the Matera cement plant; 

- in Morocco the new 5,000 tpd plant in Ait Baha, which has raised the country’s industrial potential despite the 

closure of the Agadir plant. 

In Yerraguntla, India, the start-up of a new 5,500 tpd line, which has more than doubled production capacity. 

These projects have expanded our operations in countries with higher growth rates: in fact the production 

potential of the Group in the emerging countries has been raised from 53% to 57%. 

In parallel with this scenario we have paid close attention to economic management, enabling us to strengthen 

the Italcementi system’s financial and equity position. 

At the end of 2010, our net financial position reflected debt of 2,230 million euro, a reduction of 187 million euro 

from the situation at December 31, 2007. The result was achieved through positive cash flows from operations 

(for 2,485 million euro), divestment of non-core assets for 304 million euro and the temporary deconsolidation 

of Calcestruzzi for 158 million euro. Consequently, we were able to fund investments for 2,270 million euro. 

That’s not all. The resources generated allowed us to distribute dividends for 427 million euro in three years to 

our group’s shareholders. 

4

In the past three financial years we have reported earnings totaling 685 million euro. Key positive factors 

contributing to this result are the measures taken to cut variable and fixed costs (662.9 million euro) and the 

capital gains on divestments (78 million euro) net of re-organization costs (-74 million euro) and related tax 

(-193 million euro); total tax paid during the period amounted to 307 million euro. 

From the beginning of 2008 to the end of 2010,Italcementi consolidated shareholders' equity rose by 224 million 

euro, to reach nearly 5 billion euro. 

Our strategy to strengthen the Group’s equity base continues: in early 2011 we announced the sale in Turkey of 

the majority of non-core cement operations, of the wind project and the divestment of a number of assets. This 

has generated a further improvement in the net financial position estimated at approximately 367 million euro 

and an additional increase in shareholders' equity for an estimated 137 million euro. 

We believe that the commitment of Italcementi’s management and all Group employees has enabled us to take 

a responsible approach to the severe crisis that began in 2008. The measures we have taken have given the 

Group the knowledge that it is stronger from an industrial viewpoint, more effective from an environmental 

viewpoint, and more robust from a financial and equity viewpoint. We are ready to move toward what we hope 

will be a more positive future. 


Chairman 

Carlo Pesenti 

Chief Executive Officer CEO 

www.italcementigroup.com 

5

Italcementi S.p.A. Directors, Officers and Auditors 

Board of Directors 

(Term ends on approval of financial statements at 12.31.2012) 

Giampiero Pesenti 1 Chairman 

Pierfranco Barabani 1 Executive Deputy Chairman 

Carlo Pesenti 1-2 Chief Executive Officer - CEO 

Alberto Bombassei 4-7 

Giorgio Bonomi 

Antonio Carosi 7 

Alberto Clô 3-5-6-7 

Federico Falck 1-5-6-7 

Pietro Ferrero 7 

Danilo Gambirasi 

Italo Lucchini 4 

Sebastiano Mazzoleni 

Yves René Nanot 1 

Marco Piccinini 

Ettore Rossi 7-8 

Attilio Rota 1-5-6-7 

Carlo Secchi 5-6-7 

Elena Zambon 7 

Emilio Zanetti 4-7 

Paolo Santinoli 9 Secretary to the Board 

Board of Statutory Auditors 


Acting Auditors 

Maria Martellini 

Mario Comana 

Luciana Gattinoni 

Substitute Auditors 

Fabio Bombardieri 

Carlo Luigi Rossi 

Leonardo Cossu 

Giovanni Ferrario 

Carlo Bianchini 

Reconta Ernst & Young S.p.A. 

Chairman 

Chief Operating Officer - COO 

Manager in charge of preparing 

the company’s financial reports 

Independent Auditors 

1 Member of the Executive Committee 

2 Executive Director responsible for supervising the internal control system 

3 Lead independent director 

4 Member of the Remuneration Committee 

5 Member of the Internal Control Committee 

6 Member of the Committee for Dealings with Related Parties 

7 Independent director (in accordance with the Voluntary Code of Conduct and Legislative Decree no.58 of February 24, 1998) 

8 Member of the Compliance Committee 

9 Secretary to the Executive Committee 

6


Presentation General information Italcementi S.p.A. Directors, Officers and Auditors 6 


Professional profiles of the members of the Board 

Corporate Governance of Directors and Board of Statutory Auditors 7 



Highlights 20 


Professional profiles of the members of the 

Board of Directors and the Board of Statutory Auditors 



Born in Milan, May 5, 1931 

Degree in mechanical engineering – Milan Polytechnic. 

1958, began working in the Technical Division of Italcementi S.p.A., the family firm established 

in 1864. 

1983, appointed Chief Operating Officer; 1984, Chief Executive Officer; since 2004 Chairman 

of Italcementi S.p.A.. 

1984, appointed Chairman-Chief Executive Officer of Italmobiliare S.p.A., the holding 

company that controls Italcementi S.p.A., the Sirap Gema group and other finance and 

banking companies. 

Director of Pirelli & C. S.p.A., Mittel S.p.A., RCS Quotidiani S.p.A., Allianz S.p.A., Compagnie 

Monegasque de Banque, Finter Bank Zurich and of other companies in the Italmobiliare 

Group. 

Pierfranco Barabani 

Born in Milan, September 9, 1936 

Degree in civil engineering – Milan Polytechnic. 

Worked as an independent professional until 1970, when he joined Italcementi S.p.A., holding 

a variety of posts: Assistant to the Chief Operating Officer, Property Manager, Corporate 

General Affairs Manager. 

1993, appointed Chief Operating Officer and held the post until September 1999. 

Carlo Pesenti 

Born in Milan, March 30, 1963 

Degree in mechanical engineering – Milan Polytechnic. 

Master in economics & management – Bocconi University, Milan. 

After joining the Italcementi Group, gained significant experience in a variety of Group 

production units and especially in the Corporate Finance, Administration & Control Division. 

Having held the post of Joint Chief Operating Officer, in May 2004 he was appointed 

Italcementi Chief Executive Officer. 

Chief Operating Officer of Italmobiliare. 


7

Alberto Bombassei 

Born in Vicenza, October 5, 1940 

Chairman and Chief Executive Officer of Brembo S.p.A., a worldwide market leader in 

braking systems and acknowledged innovator in disk brake technology. 

2003, awarded an honorary degree in mechanical engineering by the University of 

Bergamo 

2004, named a Cavaliere del Lavoro in Italy’s honors system. 

From June 2001 to May 2004, President of Federmeccanica. 

Since May 2004 Vice President of Confindustria for Industrial Relations and Social Affairs. 

Director of Atlantia S.p.A., Pirelli & C. S.p.A., Ciccolella S.p.A., Nuovo Trasporto 

Viaggiatori S.p.A. and Fiat Industrial S.p.A. 


Born in Bergamo, November 2, 1955 

Degree in law - Milan State University 

Practises law in Bergamo. Account auditor. 

As a specialist in distribution contracts, he has been involved in the creation of some of 

Italy’s most important purchasing consortia. Assists some of the leading Italian groups on 

advertising and mass merchandising, with a particular focus on growth and corporate 

disputes (M&A). 

Antonio Carosi 

Born in Rome, July 27, 1942 

Degree in mechanical engineering - La Sapienza University, Rome. Specialization in 

Mechanical Plant 

IBM scholarship for a blast furnace computerization project at the Italsider steel plant in 

Bagnoli. 

Master in Business Administration (MBA), Columbia University New York. 

Dean’s List. Fulbright scholarship, EXXON scholarship. Specialization in international 

finance. 

Began his career at the head office of Esso Italiana in the heating division. Transferred to 

the Milan branch, from 1967 to 1970 was supervisor of the heating products sales network 

for northern Italy. 

Subsequently worked at the head office of Banca Commerciale Italiana, in the secretariat 

of the CEO and the securities and stock exchange director. From 1972 to 1973, was 

based at the New York branch, working with some of the bank’s affiliates. 

From 1974 to 1977 worked as an independent consultant in New York for Italian and 

international companies in the field of corporate finance. 

From 1977 to 1999 worked in the international investment banking department at Lehman 

Brothers in New York. 

Since 1999 has worked as an independent consultant in New York for Italian and 

international companies in the field of corporate finance. 

From 2000 - 2005 was advisor for Italy at Smith Barney. 

8








Highlights 20 


Alberto Clô 

Born in Bologna, January 26, 1947 

Degree in political science - Bologna University 

Full professor of Industrial Economics and Public Services Economics at Bologna 

University 

Author of numerous books, essays and articles on industrial economics and energy, 

founder and since 1984 editor of the “Energia” review. 

Minister of Industry and Foreign Trade in the Dini Government (1995-96). 

Federico Falck 

Born in Milan, August 12, 1949 - Married with two children 

Degree in mechanical engineering - Milan Polytechnic. 

Began his career in 1977 at the Acciaierie e Ferriere Lombarde Falck S.p.A. (now “Falck 

S.p.A.”); after internships in a number of US steel companies, he worked mainly in 

production and procurements for steel operations; Procurements Manager and Chief 

Operating Officer for many years. 

Currently Chairman of the Board of Directors of Falck S.p.A. and Falck Renewables 

S.p.A., a Falck Group company listed on the Milan Stock Exchange (STAR segment); 

Director of Banca Popolare di Sondrio, Italcementi S.p.A.; Deputy Chairman Ucid, Director 

Milan Section Ucid, member of the management committee of Assolombarda, Director 

Fondazione Sodalitas (association for development of social enterprise), Director of 

Fondazione Centesimus Annus. 

He was Chairman of ADR, Aeroporti di Roma - Director of Camfin, Credito Italiano, Banco 

Lariano, Cassa di Risparmio di Parma e Piacenza S.p.A., Viscontea Assicurazioni, 

Emittente Titoli and Chairman of Sodalitas. 

Pietro Ferrero 

Born in Turin, September 11, 1963 

Degree in biology - Turin University 

1985, joined the Ferrero Group at the Allendorf plant and then moved to the Alba facility to 

work on technical and production questions. 

1992, appointed Operations Manager in the European Division of the Ferrero Group. 

Currently Chairman of Ferrero S.p.A., the Group’s Italian company with a sole shareholder, 

and Chief Executive Officer of Ferrero International S.A., the Group top holding in 

Luxembourg. 


Born in Bergamo, January 22, 1932 

Science high-school degree. 

Italcementi S.p.A., first as Deputy Corporate Procurements Manager, later as International 

Relations & Fuel Procurement Manager until his retirement in 1997. 


9

Italo Lucchini 

Born in Bergamo, December 28, 1943 

Degree in economics & commerce - Bocconi University, Milan 

Assistant lecturer at Bocconi University, non-tenured lecturer at Bergamo University, public 

accountant with a successful practice in Bergamo. 

Supervisory Director at Unione di Banche Italiane S.c.p.a. and Chairman of the Board of 

Statutory Auditors of BMW Italia S.p.A. and its subsidiaries. 


Born in Milan, May 11, 1968 

Degree in geology - Milan State University 

Master in Business Administration, Bocconi University, Milan 

Began his professional career in 1996 with CTG S.p.A., as a research geologist with 

responsibility for assessing raw material reserves for cement production, coordinating work 

groups in Italy, France, Spain and Thailand. 

2000, moved to the Italcementi S.p.A. as Project Manager in the Marketing Division, with 

joint responsibility for drawing up new product marketing plans and benchmark analyses 

for the development of competitive positioning models. 

2003, involved in the creation of the new Group New Product Marketing Division, where he 

was responsible for innovation management in the USA, Greece, Bulgaria, Turkey, Egypt, 

Thailand, Kazakhstan and India. He was also Group manager of the new project for 

enhancement of recoverable resources. 

Since 2010 active in non-profit and consultancy on innovation. 

Yves René Nanot 

Born in Asnières (France), March 27, 1937 

Degree in engineering – Paris 

Master and Ph.D. in Business Administration from the University of California, Los Angeles 

Held a variety of posts at Dupont de Nemours and then in the Total Group; 1993, joined 

Ciments Français where he is currently Chairman. 



Attended science high school and the faculty of architecture. Subsequently studied 

“International Negotiating Techniques” at the Institut des Hautes Etudes Internationales in 

Geneva. 

Director of a number of listed and unlisted companies active in banking, insurance, 

automobiles. 

Citizen of Monaco, advisor on finance and economy to the government of the Principality 

of Monaco. 

10








Highlights 20 


Ettore Rossi 

Born in Vicosoprano (Switzerland), August 4, 1934 

Degree in economics & commerce - Catholic University, Milan 

Worked in the Italcementi company from September 1953 to December 31, 1999, in the 

Corporate Administration Division. 

A senior administration manager from 1967, he held the posts of Secretary to the 

Corporate Administration Division (1977/1985), Joint Corporate Administration Manager 

(1985/1986), Corporate Finance Administration & Control Manager (1986/1995), Deputy 

General Administration Manager (1995/1999). 

He has sat on the boards of directors and boards of statutory auditors of a number of 

Group companies. 

Attilio Rota 

Born in Bergamo, December 5, 1935 

Degree in law - Pavia University 

Has sat on the boards of directors and boards of statutory auditors of companies in the 

publishing, cement, and agriculture sectors as well as on the boards of public and private 

bodies. 

Practicing barrister in Bergamo. 

Director-Controller of the Bergamo branch of Bank of Italy. 

Carlo Secchi 

Born in Mandello del Lario (Lecco), February 4, 1944 


Diploma in economic planning (Institute of Social Studies, The Hague, 1969-1970). 

Further studies at Netherlands Economic Institute and the Center for Development 

Planning, Erasmus University (Rotterdam, 1970-1972). 

Full professor in European Economic Policy since November 1, 1983, and director of the 

Institute for Latin American Studies and Countries in Transition (ISLA) at the Bocconi 

University, Milan. 

Conducts research work as a member of numerous scientific committees or boards of 

entities active in science and culture. 

Director of various listed and unlisted companies. 

Elena Zambon 

Born in Vicenza, October 15, 1964. 

Degree in Business Economics - Bocconi University, Milan 

From 1989 to 1994 worked at Citibank N.A. where she was in charge of international 

investors on the Italian market and, subsequently, of reports and risk assessments for 

institutional clients (especially insurance, financial and world corporation groups). 

Currently Chairman of Zambon S.p.A., a pharmaceuticals multinational established in 

Vicenza in 1906, Deputy Chairman of ZaCh System - Zambon Advanced Fine Chemicals 

S.p.A. and Director of Zambon Company S.p.A., the group holding. 

Also Chairman of Secofind SIM S.p.A., the Multi-Family Office formed in 2000 to extend to 

other entrepreneurial families the expertise accumulated in wealth management for the 

Zambon family since 1994 in selection and control of asset managers. 

11 

www.italcementigroup.com

Emilio Zanetti 

Born in Bergamo, October 26, 1931 

Honorary degree in economics & commerce 

Currently Chairman of the Management Committee of UBI BANCA - Unione di Banche 

Italiane since April 2007; Chairman of Banca Popolare di Bergamo S.p.A. (formerly Banca 

Popolare di Bergamo - Credito Varesino) since July 1985; Deputy Chairman S.A.C.B.O. 

S.p.A. 





Specialization in economics of industry, London School of Economics. 

Full professor of economics & corporate management. 

Certified accountant and account auditor. 

Director of a number of listed and unlisted companies. 

Mario Comana 

Born in Bergamo, January 22, 1957 

Degree in economics & commerce - Bergamo University 

Specialization at Harvard University, Cambridge. 

Since 2000, full professor of financial intermediary economics at LUISS Guido Carli, 

Rome. 

Certified accountant and author of numerous banking publications; works as a consultant 

to financial intermediaries and as an independent and court-appointed consultant on 

financial questions and assessments. 


Born in Bergamo, November 29, 1950 


Has worked as a certified accountant since 1976, primarily on corporate and tax questions, 

and as a consultant to the Bergamo Law Court on insolvency procedures (receiver, courtappointed 

coordinator, court-appointed liquidator). 

She is also an auditor of a number of non-profit foundations and associations in the arts, 

welfare and science. 

12








Highlights 20 



Born in Verona, May 23, 1958 

Degree in economics & commerce - University of Brescia 

Registered on the roll of certified accountants and accountants and on the register of 

account auditors. 

Specific professional expertise in the corporate field; for more than twelve years has been 

a director and independent director of a company listed on the Milan Stock Exchange, 

where he oversaw the operational aspects of the application for admission to trading and 

relations with shareholders. 

Chairman of the board of statutory auditors, acting auditor, director and chief executive 

officer of a number of companies active in finance, banking and industry. 


Born in Alzano Lombardo (Bergamo), August 14, 1959 

Registered on the roll of certified accountants and accountants and on the register of 

account auditors. 

Holds a number of positions in the area of voluntary jurisdiction and insolvency 

procedures. 

Provides professional services mainly for medium-size companies. 

Director/auditor of companies in the credit and publishing fields and of a number of 

foundations and non-commercial entities. 


Born in Alzano Lombardo (Bergamo), October 11, 1947 

Degree in economics & commerce - Catholic University of Milan 

June 1975, established the eponymous consultancy studio providing accounting, 

administrative, corporate and fiscal services. 

Holds a number of positions in the area of insolvency procedures. 

In the area of civil judicial proceedings, he works as a court-appointed technical 

consultant; for penal proceedings he works as a consultant to the state prosecutor. 

13 


Notice of Call 

The Shareholders are hereby called to attend the annual general Meeting on first call on 

April 19 th , 2011 at 10 a.m., in Bergamo, Via Madonna della Neve 8, and on second call on 

April 20 th , 2011, same time and place, to resolve upon the following 

Agenda 

Ordinary items 

1) Board of Directors and Board of Statutory Auditors Reports on 2010 fiscal year: 

examination of financial statements at December 31 st , 2010 and subsequent 

resolutions; 

2) Report on the Remuneration Policy of Italcementi S.p.A.; 

3) Authorization to purchase and dispose of treasury shares; 

4) Appointment of the Audit firm for the legal audit of the annual financial statements and 

the consolidated financial statements for the years 2011-2019 and for the limited review 

of the half year reports at June 30 th , 2011-2019; 

5) Appointment of a Director after increasing the number of members of the Board of 

Directors; 

6) Resolutions on the remuneration of the Board of Directors and the Committee for 

transactions with related parties; 

7) Cancellation of the stock option plan for directors and the stock option plan for officers. 

Extraordinary items 

1) Proposal to amend articles 6 (Shares), 7 (Characteristics of savings shares), 8 (Call), 

10 (Participation and representation), 15 (Appointment of the Board of Directors) 21 

(Powers of the Board of Directors), 26 (Appointment of the Board of Statutory auditors) 

and 32 (Profits – Advance payments on dividends) of the company bylaws; 

2) Proposal to renew the directors’ powers, under article 2443 of the Italian Civil code, to 

increase, in one or more times, free-of-charge and/or by means of payment, the share 

capital according to article 2441 of the Italian Civil Code, 8 th clause, for a maximum 

amount of nominal € 6,000,000 by means of the issue of 6,000,000 ordinary and/or 

savings shares to be reserved, under current regulations, to employees of the company 

and its subsidiaries, parent companies and other companies controlled by the latter. 

Relevant and consequent resolutions. Assignment of relevant powers. 

* * * 

14








Highlights 20 


Legitimacy to take the floor: holders of ordinary shares have a right to take the floor if, 

according to the accounting entries of the Intermediary, are entitled to the voting rights at 

the end of the seventh open market day before the Meeting date on first call (April 8 th , 

2011). 

Legitimacy to take the floor in the Meeting and to exercise voting right is proved by a 

notice to the Company, made by the Intermediary in favour of who is entitled to the voting 

right. Credit and debit entries registered in the Intermediary accounts’ after the above 

mentioned deadline do not affect the legitimacy of the voting right’s exercise at the 

Meeting. Therefore, holders of ordinary shares after such date have no legitimacy to take 

the floor or vote during the Meeting. 

Shareholders who own ordinary shares that have not been dematerialized must previously 

deliver them to an Intermediary, in time to be centralized in a dematerialization system. 

Vote by proxy: those who are legitimised to take the floor at the Meeting can be 

represented by means of written proxy under current law provisions, and can use the form 

available at our registered offices (Via G. Camozzi 124, 24121 Bergamo ) and on the 

Company website: www.italcementigroup.com. The proxy can only be notified to the 

Company by means of registered letter sent to the headquarters (Finance Department – 

Shareholders’ Office, at the above mentioned address) or by sending it to the address of 

certified electronic mail: soci.italcementi@legalmail.it. The representative can also deliver 

or send to the Company, instead of the original, a copy of the proxy, also on an IT support, 

stating, under his/her responsibility, that the proxy is a copy of the original, and the identity 

of the delegating person. 

Company appointed Representative: the proxy can be given with voting instructions, to 

Servizio Titoli S.p.A. appointed for this purpose by the Company, under article 135- 

undecies of Legislative Decree 58 dated February 24 th , 1998. To this extent, the specific 

form drafted by Servizio Titoli S.p.A in agreement with the Company and available through 

the company website www.italcementigroup.com, must be used. Proxy with voting 

instructions shall be sent to Servizio Titoli, S.p.A., in Torino 10138, C. so Ferrucci 112/A, 

within the end of the second day of open market before the Meeting date on first call (i.e. 

by April 15 th , 2011) according to the instructions on the relevant form. 

Proxy to the Company appointed Representative is effective with reference to the sole 

proposals in relation to which voting instructions have been granted; proxy and voting 

instructions are revocable within the end of the second day of open market before the 

Meeting date on first call (i.e. by April 15 th , 2011). The proxy form to the Company 

Representative is also available at the registered offices (at the above address); anyhow, 

in case of technical troubles in downloading the electronic forms, those would be sent at 

request to be made by phone to: 0039.011.0059376. 

No voting rights by correspondence or by means of electronic devices are provided for. 

* * * 

15 


Questions on the items on the agenda: shareholders can also submit questions on the 

items on the agenda before the meeting. In order to facilitate the appropriate development 

and preparation of the Meeting, such questions must be received by the end of the fourth 

open market day before the Meeting date on first call (i.e. by April 13 th , 2011) by means of 

a registered letter sent to the headquarters (Corporate Affairs Department – at the above 

mentioned address) or by sending notice to email address affari.societari@italcementi.it 

along with a notification issued by an Intermediary who can prove the entitlement of the 

voting right. Questions submitted before the meeting are answered during the Meeting at 

the latest. The Company can provide with a sole answer to questions having the same 

content. 

Supplements to the agenda: according to the applicable law and the company bylaws, 

shareholders who, even jointly, own at least one fortieth of share capital represented by 

shares with voting rights, can request in writing, within 10 days from the publication of this 

notice of call, for supplements to the Meeting agenda, stating in their application which 

further issues are being suggested. Requests must be sent by means of registered letter 

to the headquarters (Corporate Affairs Department – to the above mentioned address) or 

by sending notice to email address affari.societari@italcementi.it, along with a notification 

issued by an Intermediary who can prove the legitimacy to supplement the items on the 

agenda. A report on the items whose examination is proposed, must be delivered to the 

Board of Directors by the same deadline and following the same procedure. 

The supplement to the items on the agenda will be published, following the same 

procedure provided for the publication of this notice of call, at least 15 days before the 

Meeting date on first call; at the same time, the report drafted by shareholders who made 

the request will be publicly available, along with any remarks of the Board of Directors. 

A supplement to the agenda is not accepted for items on which the Meeting, under the 

applicable law, resolve upon proposal of the directors or based on Board’s project or 

report. 

* * * 

With reference to the fifth item on the agenda, it should be noted that, since this is a mere 

integration of the Board of Directors with the appointment of only one new member, the 

Meeting shall resolve upon the proposal according to legal majorities and therefore without 

the application of the List Vote. 

* * * 

The Meeting Documents, required by applicable laws and regulations, will be made 

publicly available, according to legal deadlines, at the registered offices, at Borsa Italiana 

S.p.A. and on the Company website www.italcementigroup.com: 

In particular: 

* 1 st item on the agenda – ordinary items: 21 free days before the meeting on first call; 

* 2 nd and 3 rd item on the agenda – ordinary items: 21 days before the meeting on first call; 

* 4 th , 5 th , 6 th and 7 th item on the agenda – ordinary items: 30 days before the meeting on 

first call; 

16








Highlights 20 


* 1 st and 2 nd item on the agenda – extraordinary items: 21 days before the meeting on first 

call. 

Shareholders have the right to review all the documents filed with the registered offices, 

and to obtain a copy of them. 

* * * 

The regularity of the Meeting and the validity of its resolutions on the items on the agenda 

are governed by law. 

The company share capital is equal to € 282,548,942, divided into 177,117,564 ordinary 

shares and 105,431,378 savings shares with a face value of € 1 each. When this notice is 

published, the number of ordinary shares representing share capital with voting rights, 

therefore net of 3,793,029 own ordinary shares held by the company, is equal to 

173,324,535. 

The Board of Directors 

(Notice published on 16 th March 2011 in “Il Sole - 24 Ore” and in the Company’s website) 

17 


Italcementi Group 

in the world 

(as of December 31 st 2010) 

NORTH AMERICA 

ESSROC 

CIMENT QUEBEC 

ESSROC SAN JUAN 

RIVERTON 

ARROW 

CAMBRIDGE 

CRIDER & SHOCKEY 

FRANCE 

CIMENTS FRANCAIS 

CIMENTS CALCIA 

GSM 

UNIBÉTON 

AXIM 

SPAIN 

FINANCIERA Y MINERA 

ITALY 

ITALCEMENTI 

CALCESTRUZZI 

CTG 

AXIM ITALIA 

ITALGEN 

BELGIUM 

CCB 

TERMINALS 

Albania 

Gambia 

Sri Lanka 

Mauritania 

(grinding center) 

18








Highlights 20 


BULGARIA 

DEVNYA CEMENT 

VULKAN CEMENT 

GREECE 

HALYPS CEMENT 

TURKEY 

SET 

CYPRUS 

VASSILIKO CEMENT 

EGYPT 

SUEZ CEMENT 

TOURAH CEMENT 

HELWAN CEMENT 

RMB 

MOROCCO 

CIMENTS DU MAROC 

SAUDI ARABIA 

INTERNATIONAL CITY FOR 

READY MIX (JV) 

KUWAIT 

HILAL CEMENT COMPANY 

KAZAKHSTAN 

SHYMKENT CEMENT 

INDIA 

ZUARI CEMENT 

THAILAND 

JALAPRATHAN CEMENT 

ASIA CEMENT 

CHINA 

SHAANXI FUPING CEMENT 

19 


Highlights 

Breakdown of consolidated revenues by line of business 

(in millions of euro) 2010 2009 %change 

Cement 3,389 3,638 (6.9) 

Ready mixed concrete/ 

Aggregates 1,092 1,111 (1.6) 

Other 310 257 20.4 

Total 4,791 5,006 (4.3) 

*changes at constant size and exchange rates -6.6% 

2010 

70.7% 

22.8% 

6.5% 

2009 

72.7% 

22.2% 

5.1% 

Recurring EBITDA 

(in millions of euro) 

Sales volumes and internal 

transfers by business 

57.8% 


3.0% 

39.2% 

836 

(2.4)% 

(2.4)%* 

(6.0)% 

36.7 

54.4 

55.7 

Cement and 

clinker (Mt) 

52.9% 

2009 

Others 

North America 

Central Western Europe 

1.3% 

45.8% 

972 

(6.4)%* 

1.4% 11.4 

11.2 

(0.2)%* 

*change at constant size 

39.1 

Aggregates (Mt) 

Ready mixed 

concrete (Mmc) 


2009 

Group business and financial highlights 

(in millions of euro) 2010 2009 2008 2007 2006 

Revenues 4,791 5,006 5,776 6,001 5,854 

Recurring EBITDA 836 972 1,113 1,404 1,447 

EBITDA 834 957 1,103 1,405 1,434 

EBIT 354 443 607 958 1,012 

Net profit for the period 197 215 277 612 651 

Group net profit 46 71 142 424 449 

Investments in fixed assets 548 742 988 999 773 

Total shareholders’ equity 4,986 4,692 4,622 4,760 4,660 

Group shareholders’ equity 3,525 3,353 3,330 3,479 3,298 

Net debt 2,231 2,420 2,679 2,418 2,210 

Number of employees at December 31 20,763 21,155 22,243 23,706 22,868 

20








Highlights 20 


Italcementi S.p.A. on the Stock Exchange 

1 Share capital and shareholders 

1.a Share capital at 12.31.2010 

1 

Savings shares 37% 

1 

At 12.31.2010, Italcementi S.p.A. share capital 

was € 282,548,942 represented by 282,548,942 

shares with a par value of € 1 each, of which 

177,117,564 ordinary shares and 105,431,378 

savings shares. 

2 

Ordinary shares 63% 

2 

1.b Ordinary shares 

Survey of shareholders with over 2% of share 

capital at 12.31.2010 (based on the 

shareholders' register, Consob 

communications and other information). 

1 Italmobiliare 60.262% 

2 Free float 34.914% 

3 Group FIRST EAGLE FUNDS (First Eagle 

Invest. Management, LLC) - USA 2.746% 

4 

Treasury shares 2.142% 

2 

3 

4 

1 

1.c Ordinary shares 

Breakdown of free float based 

on information in the 

shareholders' register for 

payment of the FY 2009 

dividend; Shareholders listed in 

the register: 23,397. 

1 Private individuals 40% 7 Italian Funds 2% 

2 Foreign Funds 23% 

8 Foreign Companies 2% 

3 Foreign Banks 10% 

9 Foreign Insurance Co. 2% 

4 Italian Banks 7% 

10 Italian Insurance Co. 1% 

5 Brokers and Omnibus accounts 8% 11 Other 2% 

6 Italian Companies 3% 

Ticker symbol Italcementi Italcementi bearer Italcementi registered 

ordinary shares savings shares savings shares 

BLOOMBERG: IT IM ITR IM - 

REUTERS: ITAI.MI ITAIn.MI - 

ISIN: IT0001465159 IT0001465167 IT0001465175 

1 

10 

11 

9 

7 6 

8 

5 

2 

4 

3 

2 Financial indicators 

Italcementi S.p.A. 2010 2009 2008 2007 2006 

(euro) 

Market prices (annual average official prices): 

- Ordinary share 7.200 8.893 11.020 20.022 19.297 

- Savings share 4.007 4.793 7.889 13.238 12.589 

Per share dividend: 

- Ordinary share 0.12 (1) 0.120 0.180 0.360 0.360 

- Savings share 0.12 (1) 0.120 0.210 0.390 0.390 

Dividend yield (on annual average official prices): 

- Ordinary share 1.67% 1.35% 1.63% 1.80% 1.87% 

- Savings share 2.99% 2.50% 2.66% 2.95% 3.10% 

(1) Proposal of Board of Directors of March 4, 2011 

21 


3 Share prices and market capitalization 

3.a Italcementi share prices, “FTSE MIB INDEX” (01.02.2006 - 02.28.2011) 

27 

25 

23 

21 

19 

17 

15 

13 

11 

9 

7 

5 

3 

1 

53,000 

51,000 

49,000 

47,000 

45,000 

43,000 

41,000 

39,000 

37,000 

35,000 

33,000 

31,000 

29,000 

27,000 

25,000 

23,000 

21,000 

19,000 

17,000 

15,000 

13,000 

11,000 

2 Jan. 06 

11 Feb. 06 

23 Mar. 06 

2 May 06 

11 June 06 

21 July 06 

30 Aug. 06 

9 Oct. 06 

18 Nov. 06 

28 Dec. 06 

6 Feb. 07 

18 Mar. 07 

27 Apr. 07 

6 June 07 

16 July 07 

25 Aug. 07 

4 Oct. 07 

13 Nov. 07 

23 Dec. 07 

1 Feb. 08 

13 Mar. 08 

22 Apr. 08 

1 June 08 

11 July 08 

20 Aug. 08 

29 Sept. 08 

8 Nov. 08 

18 Dec. 08 

27 Jan. 09 

7 Mar. 09 

16 Apr. 09 

26 May 09 

5 July 09 

14 Aug. 09 

23 Sept. 09 

2 Nov. 09 

12 Dec. 09 

21 Jan. 10 

2 Mar. 10 

11 Apr. 10 

21 May 10 

30 June 10 

FTSE MIB INDEX 

9 Aug. 10 

18 Sept. 10 

28 Oct. 10 

7 Dec. 10 

16 Jan. 11 

25 Feb. 11 

Italcementi ordinary shares 

Italcementi savings shares 

“FTSE MIB INDEX” 

3.b Italcementi shares, “FTSE MIB INDEX” performance (base 01.02.2006 = 100) 

160 

150 

140 

130 

120 

110 

100 

90 

80 

70 

60 

50 

40 

30 

20 

2 Jan. 06 

11 Feb. 06 

23 Mar. 06 

2 May 06 

11 June 06 

21 July 06 

30 Aug. 06 

9 Oct. 06 

18 Nov. 06 

28 Dec. 06 

6 Feb. 07 

18 Mar. 07 

27 Apr. 07 

6 June 07 

16 July 07 

25 Aug. 07 

4 Oct. 07 

13 Nov. 07 

23 Dec. 07 

1 Feb. 08 

13 Mar. 08 

22 Apr. 08 

1 June 08 

11 July 08 

20 Aug. 08 

29 Sept. 08 

8 Nov. 08 

18 Dec. 08 

27 Jan. 09 

7 Mar. 09 

16 Apr. 09 

26 May 09 

5 July 09 

14 Aug. 09 

23 Sept. 09 

2 Nov. 09 

12 Dec. 09 

21 Jan. 10 

2 Mar. 10 

11 Apr. 10 

21 May 10 

30 June 10 

9 Aug. 10 

18 Sept. 10 

28 Oct. 10 

7 Dec. 10 

16 Jan. 11 

25 Feb. 11 




22








Highlights 20 


3.c Italcementi share prices, “FTSE MIB INDEX” (01.04.2010 - 02.28.2011) 

11 

10 

9 

8 

7 

6 

5 

4 

3 

2 

30,000 

28,000 

26,000 

24,000 

22,000 

20,000 

18,000 

16,000 

14,000 

12,000 

FTSE MIB INDEX 

4 Jan. 10 

11 Jan. 10 

18 Jan. 10 

25 Jan. 10 

01 Feb. 10 

08 Feb. 10 

15 Feb. 10 

22 Feb. 10 

01 Mar. 10 

8 Mar. 10 

15 Mar. 10 

22 Mar. 10 

29 Mar. 10 

5 Apr. 10 

12 Apr. 10 

19 Apr. 10 

26 Apr. 10 

03 May 10 

10 May 10 

17 May 10 

24 May 10 

31 May 10 

07 June 10 

14 June 10 

21 June 10 

28 June 10 

05 July 10 

12 July 10 

19 July 10 

26 July 10 

02 Aug. 10 

09 Aug. 10 

16 Aug. 10 

23 Aug. 10 

30 Aug. 10 

06 Sept. 10 

13 Sept. 10 

20 Sept. 10 

27 Sept. 10 

04 Oct. 10 

11 Oct. 10 

18 Oct. 10 

25 Oct. 10 

01 Nov. 10 

08 Nov. 10 

15 Nov. 10 

22 Nov. 10 

29 Nov. 10 

06 Dec. 10 

13 Dec. 10 

20 Dec. 10 

27 Dec. 10 

03 Jan. 11 

10 Jan. 11 

17 Jan. 11 

24 Jan. 11 

31 Jan. 11 

07 Feb. 11 

14 Feb. 11 

21 Feb. 11 

28 Feb. 11 




3.d Italcementi share, “FTSE MIB INDEX” performance (base 01.04.2010 = 100) 

110 

105 

100 

95 

90 

85 

80 

75 

70 

65 

60 

55 

50 

4 Jan. 10 

11 Jan. 10 

18 Jan. 10 

25 Jan. 10 

01 Feb. 10 

08 Feb. 10 

15 Feb. 10 

22 Feb. 10 

01 Mar. 10 

8 Mar. 10 

15 Mar. 10 

22 Mar. 10 

29 Mar. 10 

5 Apr. 10 

12 Apr. 10 

19 Apr. 10 

26 Apr. 10 

03 May 10 

10 May 10 

17 May 10 

24 May 10 

31 May 10 

07 June 10 

14 June 10 

21 June 10 

28 June 10 

05 July 10 

12 July 10 

19 July 10 

26 July 10 

02 Aug. 10 

09 Aug. 10 

16 Aug. 10 

23 Aug. 10 

30 Aug. 10 

06 Sept. 10 

13 Sept. 10 

20 Sept. 10 

27 Sept. 10 

04 Oct. 10 

11 Oct. 10 

18 Oct. 10 

25 Oct. 10 

01 Nov. 10 

08 Nov. 10 

15 Nov. 10 

22 Nov. 10 

29 Nov. 10 

06 Dec. 10 

13 Dec. 10 

20 Dec. 10 

27 Dec. 10 

03 Jan. 11 

10 Jan. 11 

17 Jan. 11 

24 Jan. 11 

31 Jan. 11 

07 Feb. 11 

14 Feb. 11 

21 Feb. 11 

28 Feb. 11 




23 


3 Share prices and market capitalization 

3.e Share prices and market capitalization from 01.04.2010 al 02.28.2011 

Share price (euro) 

Capitalization (milioni di euro) 

01.04.10 high low 02.28.11 01.04.10 high low 02.28.11 

Ordinary shares 9.693 10.280 5.329 7.115 1,717 1,821 944 1,260 

Savings shares 5.158 5.455 3.023 3.708 544 575 319 391 

Total 2,261 2,396 1,263 1,651 

“FTSE MIB INDEX” 23,545 23,811 18,383 22,467 

3.f Average monthly capitalization (January 2010 - February 2011) 

2010 2011 



Total capitalization 

24








Highlights 20 


4 Trading volumes on the Italian Stock Exchange 

Month Ordinary shares (euro) Savings shares (euro) 

Number Average Trade Number Average Trade 

of traded monthly value of traded monthly value 

shares price shares price 

January 2010 18,283,165 9.642 176,293,312 3,442,298 5.172 17,802,074 

February 17,259,209 8.437 145,623,093 3,756,294 4.632 17,400,561 

March 16,613,479 8.623 143,265,880 4,538,153 4.824 21,891,284 

April 19,584,454 8.952 175,311,513 4,223,568 4.964 20,965,252 

May 36,610,609 7.276 266,369,652 6,051,938 4.009 24,259,966 

June 21,676,002 6.685 144,897,507 4,790,415 3.740 17,916,803 

July 21,772,155 6.190 134,760,365 2,438,342 3.510 8,559,647 

August 20,256,747 5.902 119,557,719 2,482,700 3.353 8,325,007 

September 23,067,977 6.269 144,622,090 2,294,862 3.492 8,012,676 

October 19,189,983 6.474 124,232,621 2,382,664 3.633 8,656,179 

November 21,645,430 5.880 127,281,741 2,619,784 3.295 8,633,214 

December 19,063,009 6.224 118,638,953 2,735,928 3.447 9,429,940 

January 2011 22,840,216 6.311 144,143,991 3,445,499 3.562 12,271,747 

February 22,793,639 6.672 152,077,627 4,302,879 3.571 15,364,715 

300,656,074 2,117,076,064 49,505,324 199,489,065 

4.a Turnover 




25 



27 


Directors’ report 

Following the adoption by the European Union of Regulation no. 1606 of 2002, the 

Italcementi S.p.A. consolidated financial statements for 2010, and the comparatives for 

financial year 2009, have been drawn up in compliance with the International Accounting 

and Financial Reporting Standards (IAS/IFRS). 

In accordance with the aforementioned Regulation, the principles to be adopted do not 

include the standards and interpretations published by the International Accounting 

Standards Board (IASB) and the International Financial Reporting Interpretations 

Committee (IFRIC) at December 31, 2010, but not adopted by the European Union at that 

date. Furthermore, the European Union has adopted additional standards/interpretations 

that Italcementi S.p.A. will apply at a subsequent time, having decided not to elect early 

application. 

The main changes with respect to the financial statements as at December 31, 2009, are 

set out in detail in the notes, in the section “Declaration of compliance with the IFRS”. 

As already noted in the half-year financial report and in the quarterly reports as at March 31 

and September 30, in 2010: 

- with regard to application of IAS 16 “Property, plant and equipment”, the list of the 

components and useful lives of the industrial assets in the cement sector has 

been updated to reflect technological developments and the benefits expected from 

the use of such assets. The review generated a reduction of 29.2 million euro in 

depreciation charges compared with 2009; 

- a new format was adopted for the operating segment disclosure. The main 

changes with respect to the 2009 financial statements, designed to ensure 

compliance with IFRS 8 by using a format consistent with Group operations and 

areas of business, are the classification of the BravoSolution group and other minor 

operations from Italy to the segment “Other operations”, and the grouping together 

of segments including countries with smaller-scale operations: Other Countries 

Central Western Europe (currently only Greece), Other Countries Emerging 

Europe, North Africa and Middle East (Bulgaria, Turkey, Kuwait, Saudi Arabia), 

Other Countries Asia (China and Kazakhstan). To permit comparison on a like-forlike 

basis, the 2009 data in this report have been reclassified accordingly. 

The changes in the scope of consolidation compared with 2009 were immaterial and 

are illustrated in the notes. 

Earnings indicators 

To assist comprehension of its business and financial data, the Group employs a number of 

widely used indicators, which are not contemplated by the IAS/IFRS. 

Specifically, the income statement presents the following intermediate results / indicators: 

recurring EBITDA, EBITDA, EBIT, computed as the sum of the preceding items. On the 

balance sheet, similar considerations apply to net debt, whose components are detailed in 

the specific section of the notes. 

Since the indicators employed by the Group are not envisaged by the IAS/IFRS, their 

definitions may not coincide with and therefore not be comparable to those adopted by 

28


Presentation 6 

Consolidated Annual Report Directors’ report 28 

Corporate Governance Consolidated financial statements 68 

Italcementi S.p.A. financial statements 158 

other companies/groups. 

This report contains many financial and non-financial earnings indicators, including those 

mentioned above. The financial indicators, taken from the financial statements, are used in 

the tables summarizing Group business, equity and financial performance, in relation to 

comparative values and other values from the same period (e.g., change in revenues, 

recurring EBITDA and EBIT with respect to the previous year, and change in their return on 

revenues). The use of economic values not directly apparent from the financial statements 

(e.g., the exchange-rate effect on revenues and on earnings) and the presentation of 

comments and assessments assist qualification of the trends in the values concerned. 

The directors’ report also provides a series of financial ratios (gearing, leverage, coverage) 

that are clearly of importance for a better understanding of Group performance, especially 

with respect to previous periods. The non-financial indicators refer to external and internal 

elements: the general economic situation and the situation of the industry in which the 

Group operates, trends on the various markets and lines of business, trends in sales prices 

and key cost factors, acquisitions and disposals, other significant events in the period, 

organizational developments, the introduction of laws and regulations, etc.. In the notes, 

the section on the net financial position provides information about the effects of changes in 

interest rates and the main exchange rates on the balance sheet and the income 

statement. 

Results and significant events for the year 

Results 

Inevitably, the Group’s results were affected by the continuing difficulties in the international 

economic scenario in 2010. 

Sales volumes decreased, with a sharper reduction in aggregates and cement, and a 

marginal reduction in ready mixed concrete. 

Revenues, at 4,790.9 million euro, were down 4.3% from 2009 (-6.6% at constant size and 

exchange rates). 

Recurring EBITDA, at 836.3 million euro, was down 13.9%. 

EBIT, after amortization and depreciation charges of 472.5 million euro (459.8 million euro 

in 2009) and impairment losses of 8.0 million euro (54.0 million euro in 2009), was 353.8 

million euro (-20.1%). 

Profit before tax, at 259.2 million euro (309.5 million euro in 2009), fell by 16.3%. 

The downturn in results generated a reduction in income tax expense, from 94.2 million 

euro in 2009 to 62.1 million euro in 2010. 

Net profit for the year was 197.1 million euro (215.3 million euro in 2009), while net profit 

attributable to the Group was 45.8 million euro (71.3 million euro in 2009). Net profit 

attributable to minority interests increased from 144.0 million euro to 151.3 million euro. 

Net debt at December 31, 2010, was 2,230.9 million euro, a decrease of 189.0 million euro 

from December 31, 2009 (2,419.9 million euro). 

Total shareholders' equity stood at 4,985.9 million euro, an increase of 293.8 million euro 

from December 31, 2009; Group shareholders' equity was 3,525.1 million euro, an 

increase of 172.0 million euro from the end of 2009 (3,353.1 million euro). 

29 


Significant events for the year 

Significant events in the first nine months of the year, previously illustrated in the halfyear 

financial report and the quarterly reports at the end of March and September, are 

described below. 

In March, Italcementi Finance S.A. issued debentures on the European market maturing 

on March 19, 2020, for an aggregate nominal amount of 750 million euro. The proceeds 

were used to provide financing for Italcementi S.p.A. (210 million euro) and Ciments 

Français S.A. (540 million euro). 

April saw the close of the Ciments Français offer on the “US Private Placement Notes” 

with the repurchase of all the “Notes” issued in 2006 (300 million euro) and of 183.5 million 

of the total 200 million US dollars issued in 2002. Ciments Français simultaneously agreed 

a “clarifying amendment” expressly permitting Ciments Français to borrow funds from 

Italcementi or from subsidiaries. 

On April 27, 2010, with regard to the assets that make up the Calcestruzzi business 

concern, the Caltanissetta preliminary investigating magistrate issued an “order for the 

return of the corporate assets under seizure with prescriptions”. 

Also in April, Italcementi S.p.A. joined the United Nations’ “Global Compact”, the leading 

international forum set up to discuss the most critical aspects of globalization. 

In September, at the Investor Event organized in Agadir, Morocco, the Group illustrated 

its development guidelines for the medium/long-term. 

An agreement was reached by Italcementi Finance with a pool of 16 international banks 

for a 5-year revolving line of credit for 920 million euro. 

Significant events in the fourth quarter of 2010 are described below. 

On November 4, 2010, the Board of Directors of Ciments Français S.A. approved plans 

for the merger by and into Ciments Français of Société Internationale Italcementi 

France (SIIF), as part of a program to simplify the Group shareholding structure. On 

December 23, the Ciments Français and SIIF Shareholders' Meetings approved the 

merger; Italcementi S.p.A. received the same number of shares and voting rights as those 

previously held by SIIF prior to the merger, and thus became a direct shareholder in 

Ciments Français S.A.. At December 31, 2010, the Italcementi S.p.A. shareholding in 

Ciments Français S.A. was 81.82% with 89.0% of voting rights. 

At the end of November, Moody’s Investor Services amended its rating for Italcementi 

(and for the subsidiaries Ciments Français and Italcementi Finance) from Baa2 to Baa3. 

The outlook was upgraded to stable from negative. 

At the end of the financial year, subject to approval by the Board of Directors, Italcementi 

S.p.A. sold to the parent company Italmobiliare S.p.A. 12,099,146 Mediobanca shares 

representing 1.405% of share capital and 17,084,738 RCS MediaGroup S.p.A. shares 

representing 2.332% of share capital. The transactions generated an aggregate 

consolidated capital gain of 17.1 million euro. They are intended to help Italcementi focus 

its financial resources on its core business and further strengthen its financial structure by 

freeing up resources for possible growth opportunities in the future. The transactions are 

illustrated in detail in the section on dealings with related parties. 

30






The international economy and industry trends 

After the economic collapse of 2009, the world economy saw a strong recovery in 

production and trade. The central driver of the growth process was Asia, specifically China 

and India, but generally speaking all the emerging areas reported very substantial 

progress. By contrast, in the more industrialized areas the recovery proceeded at a 

moderate overall pace, with far greater performance differences, with North America, Japan 

and Germany reporting far stronger upturns than the euro zone as a whole. A feature 

common to the advanced nations was the weak situation in employment, where the 

response to the rise in production and demand was very limited. 

While the real economy improved, the financial sector continued to display a high level of 

volatility, largely due to the emergence of potential crisis situations in the sovereign debt of 

some countries in the euro zone. In part in response to these difficulties in public finances, 

restrictive fiscal policies were introduced almost everywhere to correct the stimulus 

measures adopted previously to combat the 2008-2009 recession. Monetary policies in the 

most industrialized countries continued to take a permissive approach, with domestic price 

trends staying easily under control despite widespread increases in prices for raw 

materials, notably energy. 

The instability of the financial situation was reflected on the foreign exchange market: the 

euro lost almost 20% against the dollar in the first half of the year, recovering much of the 

lost ground in the second half; meanwhile a situation of ample international liquidity 

fostered a strong outflow of funds toward the faster growing emerging countries, exerting 

upward pressure on a number of currencies in that area. 

In the construction sector, the recessionary wave that hit the Group’s industrialized 

countries eased only slightly in 2010 after the heavy slowdowns reported in 2009. 

Specifically the business downturn continued for the fifth consecutive year in the USA, 

where the residential sector – whose decline is close to 60% of the previous peak – 

struggled to pick up in a situation of unabsorbed surplus supply on the market. 

In the Group’s main euro zone countries the contraction in the construction sector 

continued for the third consecutive year, affecting all segments. Moreover, in Spain and 

Greece, the difficulties in the real estate sector combined with the general domestic 

recessionary conditions kept performance in the construction industry at very modest 

levels. More generally, although the fiscal stimulus measures – based in part on investment 

in infrastructure – helped mitigate the severity of the recession in the construction industry 

in 2009, in 2010 the budget policies of the mature area took a restrictive stance almost 

everywhere, thus accentuating the weakness of market factors in construction demand. 

Meanwhile, the picture remained very favorable in the Group’s emerging countries. A 

strong macroeconomic trend and expansionary monetary and fiscal policy helped generate 

important growth in construction, with significant recoveries also reported in countries like 

Turkey and Thailand that had suffered a recent slowdown. 

31 


Business and financial performance in 2010 

Key consolidated figures 

2010 2009 % change 


vs. 2009 

Revenues 4,790.9 5,006.4 (4.3) 

Recurring EBITDA 836.3 971.6 (13.9) 

% of revenues 17.5 19.4 

Other non-recurring income (expense) (2.0) (14.9) (86.7) 

EBITDA 834.3 956.7 (12.8) 


Amortization and depreciation (472.5) (459.8) 2.8 

Impairment (8.0) (54.0) (85.2) 

EBIT 353.8 443.0 (20.1) 


Finance income (costs) (90.6) (106.9) (15.2) 

Impairment on financial assets (21.0) (41.1) (48.9) 

Share of results of associates 17.1 14.6 17.1 

Profit before tax 259.2 309.5 (16.3) 


Income tax expense (62.1) (94.2) (34.1) 

Net profit for the period 197.1 215.3 (8.5) 


Group net profit 45.8 71.3 (35.8) 

Minority interest 151.3 144.0 5.0 

Cash flow from operating activities 747.9 1,101.9 (32.1) 

Investments in fixed assets 547.7 742.4 (26.2) 

32






Quarterly trend 


Full year 


Q4 


Q3 


Q2 


Q1 


Revenues 4,790.9 1,125.1 1,210.8 1,382.6 1,072.5 

% change vs. 2009 (4.3) (2.9) (4.0) (0.1) (10.7) 

Recurring EBITDA 836.3 176.3 225.5 298.8 135.7 

% change vs. 2009 (13.9) (4.1) (22.3) (3.1) (28.2) 

% of revenues 17.5 15.7 18.6 21.6 12.7 

EBITDA 834.3 178.0 227.1 296.4 132.7 

% change vs. 2009 (12.8) (4.0) (19.8) (4.6) (25.2) 

% of revenues 17.4 15.8 18.8 21.4 12.4 

Amortization and depreciation (472.5) (120.2) (121.2) (122.0) (109.1) 

Impairment (8.0) (7.4) (0.4) (0.4) 0.2 

EBIT 353.8 50.4 105.5 174.0 23.9 

% change vs. 2009 (20.1) 33.5 (37.0) 0.4 (63.0) 

% of revenues 7.4 4.5 8.7 12.6 2.2 

Finance income (costs) (90.6) (3.7) (29.2) (20.5) (37.2) 

Impairment on financial assets (21.0) 9.6 (9.9) (20.7) - 

Share of results of associates 17.1 4.4 6.4 5.2 1.0 

Net profit for the period 197.1 63.6 51.7 90.4 (8.6) 

% of revenues 4.1 5.7 4.3 6.5 (0.8) 

Group net profit 45.8 27.3 18.1 37.9 (37.5) 

% of revenues 1.0 2.4 1.5 2.7 (3.5) 

Net debt (2,230.9) (2,230.9) (2,357.0) (2,458.1) 2,360.6 

(at period end) 

33 


Fourth-quarter sales volumes and internal transfers 

Cement and clinker 

(millions of metric tons) 

Q4 


% change vs. 

Q4 2009 

Constant 

Historic 

size 

Aggregates* 


Q4 


% change vs. 

Q4 2009 

Constant 

Historic 

size 

Ready mixed concrete 

Q4 


(millions of m³) 

% change vs. 

Q4 2009 

Constant 

Historic 

size 

Central Western 

Europe 4.5 (4.9) (4.9) 7.5 (12.4) (12.4) 1.4 (7.8) (7.8) 

North America 1.0 3.6 3.6 0.2 17.4 (1.2) 0.2 3.5 3.5 

Emerging Europe, 

North Africa and 

Middle East 4.8 (3.5) (3.5) 0.3 (45.7) (45.7) 1.0 6.5 6.5 

Asia 2.8 2.3 2.3 n.s. n.s. n.s. 0.2 25.7 15.2 

Cement and 

clinker trading 0.8 (20.9) (20.9) - - - n.s. n.s. n.s. 

Eliminations (0.6) n.s. n.s. - - - - - - 

Total 13.2 (2.5) (2.5) 8.1 (14.5) (14.9) 2.8 (0.2) (0.7) 

Central Western Europe: Italy, France, Belgium, Spain, Greece - North America: U.S.A., Canada - Emerging Europe, North Africa and 

Middle East: Egypt, Morocco, Bulgaria, Turkey, Kuwait, Saudi Arabia - Asia: India, Thailand, China, Kazakhstan 

Amounts refer to companies consolidated on a line-by-line basis and, pro quota, to companies consolidated on a proportionate basis 

(*) excluding outgoes on work-in-progress account 

n.s. not significant 

Fourth-quarter sales volumes were down on the year-earlier period. 

In cement and clinker, progress was reported in North America and Asia. Performance 

declined in Central Western Europe (France-Belgium, Spain and Greece), Emerging 

Europe, North Africa and Middle East (a slowdown in Egypt counterbalanced only in part by 

the improvement in Turkey and Morocco), and in Trading. 

In aggregates a widespread and significant decrease arose on the main markets, Central 

Western Europe (especially Spain and Greece) and Morocco. 

In ready mixed concrete, the slight downturn with respect to the fourth quarter of 2009 

stemmed from a decline in Central Western Europe countered almost in full by positive 

performance in the other main regions. 

Fourth-quarter results 

In the fourth quarter, revenues amounted to 1,125.1 million euro (-2.9%), with a slowdown 

in the European countries, while all the Asian markets, Turkey and North America reported 

improvements in turnover. In the absence of a net perimeter effect, the exchange-rate 

effect was positive and significant. 

Recurring EBITDA was 176.3 million euro, a reduction of 4.1% from the fourth quarter of 

2009 due mainly to the decrease in prices and sales volumes. These effects were 

counterbalanced by on-going action in the fourth quarter to contain operating expenses. 

The quarter’s results also benefited from a material positive effect from capital gains on the 

sale of CO 2 emission rights and the reduction of excise tax on raw materials in Egypt. 

34






EBIT at 50.4 million euro (+33.5%) was assisted by a small reduction in amortization and 

depreciation and significantly lower impairment losses compared with 2009. 

The fourth quarter posted a net profit of 63.6 million euro (a loss of 6.1 million euro in Q4 

2009). 

Full-year sales volumes and internal transfers 

Sales volumes by geographical area 

Cement and clinker 


% change vs. 

% change vs. 

2010 2009 2010 2009 2010 

Historic 

Constant 

size 

Aggregates* 


Historic 

Constant 

size 

Ready mixed concrete 

(millions of m³) 

% change vs. 

2009 

Constant 

Historic 

size 

Central Western 

Europe 19.2 (4.2) (4.2) 33.5 (5.4) (5.4) 5.7 (6.2) (6.9) 

North America 4.0 0.2 0.2 1.0 50.4 19.1 0.8 3.9 0.9 

Emerging Europe, 

North Africa and 

Middle East 19.3 (3.8) (3.8) 2.1 (19.5) (19.5) 4.2 9.2 7.5 

Asia 11.1 4.2 4.2 0.2 (52.1) (52.1) 0.7 27.3 16.4 

Cement and 

clinker trading 3.8 (6.9) (6.9) - - - n.s. n.s. n.s. 

Eliminations (3.0) n.s. n.s. - - - - - - 

Total 54.4 (2.4) (2.4) 36.7 (6.0) (6.4) 11.4 1.4 (0.2) 

Amounts refer to companies consolidated on a line-by-line basis and, pro quota, to companies consolidated on a proportionate basis 

(*) excluding outgoes on the work-in-progress account 


Group sales volumes decreased in 2010. 

In cement and clinker, the fall in sales volumes arose largely in Central Western Europe, 

Egypt, Bulgaria and in Trading. Performance in North America was stable, while Asia 

reported progress, driven by higher sales volumes on all domestic markets, with important 

growth rates in China and Kazakhstan. 

The aggregates sector was affected by the sharp decline in the fourth quarter. The fullyear 

downturn arose on all markets with the exception of North America, although here 

absolute sales values were low. 

In ready mixed concrete the decrease in sales volumes was marginal, thanks to the 

healthy performance of the emerging countries (notably Turkey and Thailand), which offset 

the downturn in Central Western Europe. 

35 


Revenues and operating results 

Contribution to consolidated revenues 


% % % % (*) 

Line of business 

Cement and clinker 3,388.7 70.7 3,638.6 72.7 (6.9) (9.3) 

Ready mixed concrete and aggregates 1,092.6 22.8 1,110.6 22.2 (1.6) (3.5) 

Miscellaneous 309.7 6.5 257.2 5.1 20.4 18.7 

Total 4,790.9 100.0 5,006.4 100.0 (4.3) (6.6) 

Geographical area 

Central Western Europe 2,337.6 48.8 2,571.3 51.4 (9.1) (8.9) 

North America 414.6 8.7 400.7 8.0 3.5 (1.6) 

Emerging Europe, North Africa 

and Middle East 1,368.6 28.6 1,387.4 27.7 (1.4) (4.7) 

Asia 445.3 9.3 399.6 8.0 11.4 (0.2) 

Cement and clinker trading 136.2 2.8 154.0 3.1 (11.5) (14.1) 

Other 88.5 1.8 93.3 1.8 (5.2) (7.8) 

Total 4,790.9 100.0 5,006.4 100.0 (4.3) (6.6) 

(*) at constant size and exchange rates 

2010 2009 Change 

2010/09 

Revenues and operating results by geographical area 


2010 % change 

vs. 2009 

Recurring 

EBITDA 


vs. 2009 


vs. 2009 


vs. 2009 

Central Western Europe 2,407.3 (9.1) 328.0 (26.2) 329.0 (28.3) 110.7 (48.1) 

North America 415.3 3.5 25.4 >100 21.7 >100 (48.2) 13.3 

Emerging Europe, North 

Africa and Middle East 1,378.7 (1.1) 414.8 (0.9) 411.8 (1.4) 277.1 (3.4) 

Asia 449.0 9.1 68.2 (28.5) 67.7 (23.8) 20.0 (23.7) 

Cement and clinker trading 229.3 3.7 14.3 30.0 14.3 29.9 11.4 34.5 

Other 424.6 20.2 (14.5) n.s. (10.0) n.s. (17.0) n.s. 

Eliminations (513.2) n.s. 0.2 n.s. (0.1) n.s. (0.1) >100 

Total 4,790.9 (4.3) 836.3 (13.9) 834.3 (12.8) 353.8 (20.1) 


Revenues 

EBITDA 

EBIT 

The 4.3% reduction in revenues from 2009 arose from the business slowdown (-6.6%) 

mitigated by a positive exchange-rate effect (+2.3%), in the absence of a consolidation 

effect. 

The decrease in revenues reflected the trend in sales volumes and weak sales prices in 

some countries, notably Italy, North America and India, although a significant recovery was 

reported in the fourth quarter. At constant perimeter and exchange rates, the decline in 

revenues affected all the macro areas, especially Central Western Europe; by contrast, 

performance was positive in Turkey, China and Kazakhstan. 

36






The positive exchange-rate effect arose chiefly from the appreciation of the Egyptian 

pound, the rupee, the baht and the US dollar against the euro. 

The volume effect and the negative price dynamic described above, together with a rise in 

the cost of energy products, had a material impact on operating results. These factors 

were counterbalanced by the on-going plan to contain costs and recover efficiency, 

which generated savings estimated at more than 130 million euro in 2010. As noted in the 

comments on performance in the fourth quarter, 2010 benefited from capital gains on the 

sale of CO 2 emission rights (55.2 million euro against 19.5 million euro in 2009) and the 

reduction of excise tax on raw materials in Egypt. Recurring EBITDA, at 836.3 million 

euro, was down 13.9% from 2009. After net non-recurring expense of 2.0 million euro (14.9 

million euro in 2009), EBITDA, at 834.3 million euro, was down 12.8% from 2009. 

After amortization, depreciation and impairment totalling 480.5 million euro (513.7 million 

euro in 2009), EBIT amounted to 353.8 million euro, a decrease of 20.1% from 2009. 

Finance costs and other items 

Finance costs net of finance income decreased from 106.9 million euro to 90.6 million 

euro (-15.2%), down in relation to revenues from 2.1% to 1.9%. 

As already noted in the interim reports, 2010 finance costs were penalized by non-recurring 

costs of approximately 21.4 million euro for repayment of the Notes issued in the USA. By 

contrast, the year benefited from important net income from equity investments (29.2 

million euro compared with 4.9 million euro in 2009), relating largely to capital gains on the 

sale of equity investments, notably Mediobanca, Cementos Capa and Società del Gres. 

Net interest expense on net debt, excluding the impact of the costs for the Notes 

repayment described above, decreased from 102.3 million euro to 91.3 million euro. 

A positive trend was reported in exchange-rate differences net of hedges (a gain of 8.5 

million euro compared with a loss of 8.5 million euro in 2009), while capitalized finance 

costs decreased from 16.3 million euro to 8.4 million euro. 

The share of results of associates, at 17.1 million euro, increased from 2009 (14.6 million 

euro), largely due to the improvement in results at the Canadian companies Ciment 

Quebec and Innocon. 

Impairment losses on financial assets amounted to 21.0 million euro (41.1 million euro in 

2009) and referred chiefly to the share held in the Calcestruzzi group. 

Net profit 

Profit before tax was 259.2 million euro, a decrease of 16.3% from 2009 (309.5 million 

euro). 

Income tax expense amounted to 62.1 million euro, a decrease of 34.1% from 2009 (94.2 

million euro). 

Net profit attributable to the Group, at 45.8 million euro, was down 35.8% compared with 

2009 (71.3 million euro), while net profit attributable to minority interests rose by 5.0%, 

from 144.0 million euro to 151.3 million euro. 

37 


Total comprehensive income 

In 2010, beginning with the net result for the year, the components of other comprehensive 

income showed a positive balance of 223.9 million euro (a negative balance of 32.9 million 

euro in 2009) arising from translation gains of 201.2 million euro, fair value gains on 

available-for-sale financial assets of 12.8 million euro, fair value gains on financial 

derivatives of 11.7 million euro and related income tax expense of 1.9 million euro (for 

comparison with 2009, see the statement of comprehensive income in the “Financial 

statements” section). Considering these components and the above-mentioned net profit 

for the period of 197.1 million euro, total comprehensive income for 2010 was 420.9 million 

euro (200.9 million euro attributable to the Group and 220.0 million euro attributable to 

minorities). This compares with total comprehensive income of 182.4 million euro in 2009 

(61.2 million euro attributable to the Group and 121.2 million euro attributable to minorities). 

Investments in fixed assets 

Investments by geographical area (*) 

PP&E + 

Financial fixed 

investment 

assets 


property 

Intangible assets Total 

2010 2009 2010 2009 2010 2009 2010 2009 

Central Western Europe 4.0 26.4 207.7 184.1 16.6 12.9 228.3 223.4 

North America 0.5 1.7 42.3 216.0 0.5 0,1 43,3 217,8 

Emerging Europe, North 

Africa and Middle East 4.8 14.0 169.6 223.8 0.5 0.5 174.9 238.3 

Asia 5.3 8.1 83.6 64.0 - 0.6 88.9 72.7 

Cement and clinker trading - - 2.5 2.4 0.2 0.1 2.7 2.5 

Other 0.2 0.8 2.2 2.0 4.4 5.1 6.8 7.9 

Total 14.8 51.0 507.9 692.3 22.2 19.4 544.9 762.6 

Change in payables 

for fixed assets 9.8 (8.2) (7.0) (12.2) - - 2.8 (20.2) 

Total investments 

in fixed assets 24.6 42.8 500.9 680.1 22.2 19.4 547.7 742.3 

(*) amounts refer to the area for which the investment is intended 

2010 investments in fixed assets totaled 547.7 million euro, a decrease of 194.7 million 

euro from 2009 (742.4 million euro). 

Capital expenditure, at 500.9 million euro, was down on 2009 (680.1 million euro) due to 

the reduction in strategic investments, completed in 2009 and 2010: Martinsburg (North 

America), Ait Baha (Morocco), Yerraguntla (India) and Matera (Italy). 

Investments in intangible assets consisted mainly of software development; they amounted 

to 22.2 million euro and were up on 2009 (19.4 million euro). 

Investments in non-current financial assets amounted to 24.6 million euro (42.8 million euro 

in 2009), and referred largely to acquisitions of minority interests (China and Syria), and 

payment of investments made in 2009. 

38






Equity structure, cash flows and net debt 

Condensed balance sheet 

(in millions of euro) 2010 2009 

Property, plant and equipment and investment property 4,628.2 4,424.6 

Goodwill and intangible assets 2,150.4 2,084.0 

Equity investments and other assets 576.8 620.2 

Non-current assets 7,355.4 7,128.8 

Current assets 2,665.7 2,683.9 

Total assets 10,021.1 9,812.7 

Group shareholders' equity 3,525.1 3,353.1 

Minority interests 1,460.8 1,339.1 

Total shareholders' equity 4,985.9 4,692.2 

Non-current liabilities 3,266.2 3,358.6 

Current liabilities 1,769.0 1,761.9 

Total liabilities 5,035.2 5,120.5 

Total shareholders' equity and liabilities 10,021.1 9,812.7 

Summary of cash flows 

(in millions of euro) 2010 2009 

Net debt at beginning of period (2,419.9) (2,679.3) 

Cash flow from operating activities: 

Cash flow before change in working capital 614.3 721.8 

Change in working capital 133.6 380.1 

Total cash flow from operating activities 747.9 1,101.9 

Investments in fixed assets: 

Tangible and intangible assets (523.1) (699.5) 

Financial assets (24.6) (42.8) 

Total investments in fixed assets (547.7) (742.3) 

Divestments 143.9 53.3 

Dividends paid (130.0) (124.8) 

Net debt of acquisitions (0.7) 4.9 

Other (24.4) (33.5) 

Change in net debt 189.0 259.4 

Net debt at end of period (2,230.9) (2,419.9) 

39 


Net debt breakdown 

(in millions of euro) 12.31.2010 12.31.2009 

Cash, cash equivalents and current financial assets (835.6) (782.7) 

Short-term financing 535.4 551.0 

Medium/long-term financial assets (65.0) (34.8) 

Medium/long-term financing 2,596.1 2,686.4 

Net debt 2,230.9 2,419.9 

Financial ratios 

(absolute amounts in millions of euro) 

12.31.2010 

12.31.2009 

Net debt 2,230.9 2,419.9 

Consolidated shareholders' equity 4,985.9 4,692.2 

"Gearing"% 

44.74 

51.57 

Net debt 2,230.9 2,419.9 

Recurring EBITDA 836.3 971.6 

"Leverage" 

2.67 


2.49 

2009 

Recurring EBITDA 836.3 971.6 

Net finance costs* 115.7 109.2 

"Coverage" 7.23 

8.90 

* finance costs net of capital gains/losses on sale of equity investments 

Shareholders' equity 

Total shareholders' equity at December 31, 2010, was 4,985.9 million euro, an increase of 

293.8 million euro from December 31, 2009 (4,692.2 million euro). 

The main increases were: 

– net profit for the period of 197.1 million euro; 

– the net adjustment of 22.6 million euro in the fair value reserves for derivatives and 

available-for-sale assets; 

– the increase of 201.2 million euro in the translation reserve as a result of the 

appreciation of other currencies against the euro; 

the main decrease was: 

– dividends paid for 130.0 million euro. 

At December 31, 2010, no changes had taken place in treasury shares in portfolio with 

respect to December 31, 2009. Italcementi S.p.A. held 3,793,029 ordinary treasury shares 

(representing 2.14% of ordinary share capital) servicing stock option plans and 105,500 

savings treasury shares (0.1% of savings share capital). 

40






Reconciliation between parent company net profit and 

shareholders' equity and Group net profit and shareholders' 

equity 

(in millions of euro) 2010 

Net profit of the parent company (Italcementi S.p.A.) (34.4) 

Consolidation adjustments: 

- Net profits of consolidated companies (in accordance with Group accounting policies) 683.4 

- Elimination of intragroup dividends collected during the year (466.5) 

- Reversal of impairment variations in consolidated equity investments 8.7 

- Elimination of intercompany (gains) losses and other changes 5.8 

- Consolidated net profit 197.1 

- Minority interests 151.3 

- Group net profit 45.8 

December 31, 


Shareholders' equity of the parent company (Italcementi S.p.A.) 1,814.3 

Consolidation adjustments 

- Elimination of carrying amount of consolidated equity investments 

• Carrying amount of consolidated equity investments (8,794.2) 

• Shareholders' equity of consolidated companies (in accordance with Group accounting policies) 11,965.8 

- Consolidated shareholders' equity 4,985.9 

- Minority interests 1,460.9 

- Group shareholders' equity 3,525.1 

Risks and uncertainties 

In May 2010, Italcementi S.p.A. formed a Risk Management Department to improve its 

ability to create value for stakeholders by optimizing enterprise risk management (ERM). 

The mission of the function is to guarantee a structured approach to risk management, 

integrated with the Group growth strategy, and to support the improvement of Group 

performance by identifying, measuring, managing and controlling key risks. 

The creation of the Risk Management Department is part of the “Risk & Compliance” 

program set up in 2008, consisting of four phases: 

1. identification of the main areas of risk for Group strategic goals and development of 

methods and tools to analyze and assess the correlated risk events; 

2. assessment, at country level and at aggregate level, of identified risk events in terms of 

impact and probability, in order to acquire an overall vision of the Group risk portfolio; 

3. selection of priority risks and definition of response strategies, Group governance rules 

and actions to integrate and improve risk management systems; 

4. implementation of mitigation strategies and action and development of the Enterprise 

Risk Management process. 

The first three project phases, to map company and Group risks, were completed during 

2008 and 2009. The results of these activities were presented in the second quarter of 

41 


2010 to the Internal Control Committees and management bodies of Italcementi S.p.A. and 

Ciments Français. 

Activities in 2010, backed by special incentives programs, focused on priority risks, 

regarding which: 

- appropriate risk mitigation measures were taken to guarantee Group-wide 

consistency and coordination; 

- responsibilities for such measures were assigned and a “Primary Risk Owner” was 

identified for each area of risk; 

- Group-wide guidelines were formulated identifying the main types of intervention 

and controls for the various areas of risk. These principles were formalized in 

internal documents known as “Risks Management Guidelines”; 

- strategies were defined and measures taken to align Group risk management 

systems with the target standards, in order to contain exposure to risks within the 

defined limits. 

Sustainable development and risk management: protection of people and assets 

Sustainable development favors a corporate approach that balances economic growth, 

protection of the environment and social sustainability. By constantly pursuing an optimal 

balance of these elements and ensuring that benefits extend to everyone involved, 

companies enhance their long-term value, ability to survive and competitive advantage, 

thus helping to prevent industrial risks. 

The Group checks that its protection and prevention programs are consistently applied to 

all personnel in production sites and to all operations in its companies. 

Regulatory limits and Group sustainable development goals and initiatives are examined in 

a separate report (Sustainable Development Report) and also summarized in a specific 

section in this report. 

The Asset Protection Program continued in 2010; it qualifies the importance of risks and 

develops a suitable prevention and protection policy, thereby limiting damage to assets and 

consequent operating losses. The program is now a consolidated Group process. 

Risks relating to the general economic and industry situation 

The economic and financial situation represents an element of risk for the Group, also in 

relation to its specific area of business, which is sensitive to changes in the economic 

situation. Household and business propensity to invest in construction is affected by the 

uncertainty and rigidity of the general scenario. 

Risks associated with energy factors 

The cost of energy factors, which represents a large portion of Group variable costs of 

production, varied significantly in the past and may vary significantly in the future as a result 

of factors beyond the Group’s control. The Group has adopted measures to mitigate risks 

for certain energy factors by entering into medium-term supply contracts. Furthermore the 

centralized procurement organization enables the Group to benefit from more efficient 

relations with suppliers and to obtain competitive conditions. 

42






Risks relating to availability of raw materials 

The availability of raw materials is a strategic factor in investment decisions. The Group 

generally sources its raw materials – limestone, clay, gypsum, aggregates and other 

materials used in the production of cement, ready mixed concrete and aggregates – from 

quarries it owns (the majority) or quarries rented from third parties. For these and other 

significant materials, the Group has also reached specific agreements with suppliers to 

guarantee continuous, stable procurement. 

Risks relating to environmental policy 

The section on Sustainable Development illustrates the measures taken by the Group to 

manage environmental risks and control and reduce emissions. With regard to CO 2 

emissions, the Group’s European companies are exposed to price fluctuations on emission 

rights depending on its own rights surplus or deficit. The Group’s position is therefore 

constantly monitored to ensure correct risk management (see note 22 in the notes). 

Financial risks 

The current period of crisis puts corporate cash flows at risk, endangering companies’ selffinancing 

ability and creating growing difficulties for normal, orderly operations on the 

financial market. 

The Group procures sources of finance and manages interest rates, exchange rates and 

counterpart risk, for all the companies in the scope of consolidation. The Group uses 

derivative financial instruments to reduce the risk of fluctuations in interest rates and 

exchange rates with respect to debt and its international operations. Detailed analysis of 

this type of risk is provided in note 22 of the notes, on net debt. 

Rating risks 

The Group’s ability to compete successfully in the marketplace for funding depends on 

various factors, including its credit ratings assigned by recognized ratings agencies. Its 

credit ratings may change to reflect changes in its operating results, financial situation, 

credit structure and liquidity profile. As a result, a rating downgrade may have negative 

repercussions on the Group’s ability to raise funding. 

Legal risks 

Suitable provisions and write-downs have been applied with regard to existing risks and 

their related economic effects. Estimates and valuations are based on available information 

and are in any case regularly reviewed, with immediate recognition in the financial 

statements of any variations. 

Updates on the Calcestruzzi question and the other main disputes are provided in specific 

sections of this report (Calcestruzzi and Disputes and pending proceedings) with further 

details in the notes. 

43 


Conformity risks 

The Group is subject to specific regulations concerning the quality of the products it 

markets; special monitoring activities have been set up to ensure compliance with the 

regulations in the countries where it operates. 

At a general level, the “Risk and Compliance” program has introduced specific training and 

circulates procedures and recommendations in the Group countries, to ensure compliance 

with legislation and with tax, social and environmental regulations. The program is reviewed 

on an annual basis to take account of regulatory changes. 

Political risks 

The Group has taken out insurance covers to limit the financial consequences of possible 

political measures that might prevent normal management of some subsidiaries in 

emerging countries. 

Financial disclosure risks 

The main characteristics of the risk management system and the internal control system 

with respect to the financial disclosure process are illustrated in a specific chapter of the 

section “Corporate Governance” in the Italcementi S.p.A. annual report. 

Insurance 

In the interest of all Group subsidiaries, Italcementi has taken out policies with leading 

insurance companies to cover risks to people and assets, as well as product and general 

third-party liability covers. As part of its risk coverage policy, the Group aims to optimize 

risk management costs by assessing direct assumption and transfer to the market. All 

policies are negotiated under a frame agreement to ensure a balance between the 

probability of a risk occurring and the damage that would ensue for each subsidiary. 

44






Performance by country and business 

The Group in 2010 

Cement: 

No. 

full-cycle cement plants 57 

grinding centers 11 

trading terminals 5 

Aggregates: 

quarries 90 

Ready mixed concrete: 

plants 349 

CENTRAL WESTERN EUROPE 

Italy 

France/ 

Belgium 

Spain Others (1) Total Central 

Western Europe 

Full-cycle cement plants 17 10 3 1 31 

Grinding centers 4 1 - - 5 

Quarries - 76 7 1 84 

RMC plants - 188 20 3 211 

Revenues Recurring EBITDA EBIT Capex Employees 

EBITDA 

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 

Italy 689.5 824.8 (36.3) 47.3 (33.3) 56.9 (122.6) (53.0) 90.2 101.8 2,915 3,046 

France / 

Belgium 1,493.8 1,529.7 318.2 334.1 316.8 338.2 215.5 232.5 99.0 65.3 4,162 4,261 

Spain 176.5 226.9 31.6 42.2 31.1 43.0 7.7 16.9 11.0 12.2 634 711 

Others (1) 70.3 83.3 14.5 21.1 14.6 21.1 10.2 16.7 7.5 4.8 209 222 

Eliminations (22.8) (16.5) (0.1) - (0.1) - - - - - - - 

Total 2,407.3 2,648.2 328.0 444.7 329.0 459.2 110.7 213.1 207.7 184.1 7,920 8,240 

(1) Greece 

Italy 

According to our estimates, in 2010, for the fourth consecutive year cement consumption 

was down on the previous year, although the reduction was smaller than the sharp drop 

from 2008 to 2009. The 2010 decrease affected all areas of the construction sector, with 

the exception of maintenance, and all geographical areas. In the fourth quarter, the market 

reported a larger slowdown than in the first nine months, partly as a result of unfavorable 

meteorological conditions. 

On the trading front, cement exports grew and imports showed a significant decrease. 

In these conditions, Group cement and clinker sales volumes recorded a decrease of 

3.3% from 2009. This arose largely as a result of performance in the first nine months, 

while sales in the fourth quarter were only slightly below those of the year-earlier period 

(-0.6%). The Group reported a less negative sales dynamic than the market, despite the 

45 


constraints imposed by the stringent commercial risk assessment criteria it continues to 

apply. 

Sales prices in the fourth quarter decreased by a smaller amount than in the third quarter, 

and showed signs of stabilizing. Nevertheless the negative performance of the previous 

months generated a notable erosion in average annualized prices compared with 2009. 

The negative price dynamic and, to a lesser extent, the fall in sales volumes caused the 

significant reduction in 2010 revenues and were also the chief cause of the sharp downturn 

in recurring EBITDA. 

These effects were counterbalanced only in part by the savings in variable and fixed costs. 

The reductions in variable costs were achieved through the constant pursuit of production 

efficiencies, notably greater use of alternative fuels and reductions in energy consumption 

thanks to the revamping of the Matera cement plant, whose new line began production as 

scheduled at the end of March 2010. Variable costs also benefited from the decrease in 

production factor costs, especially energy in the first half of the year. 

Measures affecting the majority of cost items continued throughout 2010 to achieve a 

significant reduction in fixed costs. The decrease was also achieved through the on-going 

production and logistics restructuring launched in 2008. 

Under this program, non-recurring charges of 3.6 million euro were provided in 2010, for 

the closure of two cement grinding centers. 

France – Belgium 

In France the slight decrease in cement consumption continued in 2010 (estimated at 

3.1%), due not only to poor performance in the building sector (notably non-residential 

building) and public works, but also to the adverse weather conditions at the start and the 

end of the year. 

In this context, our domestic cement sales volumes fell by 4.3% (-3.0% for overall cement 

and clinker sales). 

Cement consumption in Belgium grew as from the second quarter, supported by the upturn 

in the residential sector, but with strong growth in imports, which accounted for a quarter of 

total consumption. On a highly competitive market, our sales volumes fell by 4.2% (+1.5% if 

exports are included). 

Average cement sales prices were substantially stable in both France and Belgium. 

Operating results were down on 2009; the fall in volumes and rise in energy costs were 

offset only in part by savings in fixed costs and the positive impact of sales of CO 2 emission 

rights. 

In France, the negative trend in the construction sector penalized sales volumes of ready 

mixed concrete and aggregates, which fell by approximately 2% in both businesses. In 

Belgium, the upturn that emerged as from the second quarter more than made up for the 

negative performance of the first quarter, with full-year sales volumes rising 1.8% in ready 

mixed concrete and 3.6% in aggregates. 

Ready mixed concrete prices fell, whereas aggregates prices rose in France and 

decreased in Belgium. 

Operating results were down mainly due to the reduction in ready mixed concrete sales 

margins, counterbalanced only in part by the decrease in fixed costs. 

46






Spain 

Cement consumption continued to decline in 2010, with national consumption for the full 

year declining by an estimated amount of approximately 15%, a trend exacerbated by poor 

weather conditions in the first two months of the year. The main reason for the reduction in 

cement consumption was the difficult situation in residential building and in public 

investments, which led to a downturn in investment in public works. 

In this context, Group domestic cement sales volumes were down 26.2% from 2009; 

including exports, the fall in cement and clinker sales volumes was 14.7%. 

The sales price dynamic was also negative, with a stronger decrease in southern Spain 

compared with the Basque Country. 

The crisis in the construction sector penalized sales volumes of ready mixed concrete and 

aggregates, which dropped by 30.7% and 10.7% respectively from the previous year. 

Overall, operating results were pushed down by the reduction in revenues caused by the 

volume and price effect, counterbalanced only in part by fixed cost savings, greater use of 

alternative fuels, and capital gains on the sale of CO 2 emission rights. 

In the first quarter of 2010, Cements CAPA, a company active in ready-mixed mortars, was 

sold to a third party. 

Others 

In Greece, Group operations were affected by the severe local economic crisis. Sales fell in 

all three businesses: cement and clinker (-11.2%, including imports), ready mixed concrete 

(-14.6%), aggregates (-22.7%). Operating results dropped sharply, penalized mainly by the 

negative trend in sales volumes; a positive contribution came from capital gains on the sale 

of CO 2 emission rights. 

NORTH AMERICA 

Total 

North America 

Full-cycle cement plants 6 

Grinding centers 1 

Quarries 3 

RMC plants 36 

Revenues Recurring 

EBITDA 

EBITDA EBIT 

Capex Employees 


Total 415.3 401.2 25.4 12.5 21.7 2.4 (48.2) (55.5) 42.3 216.0 1,686 1,788 

US GDP rose by 3.2% in the fourth quarter (on an annualized basis) and by 2.9% in fullyear 

2010; this compared with a reduction of 2.6% in 2009, confirming the moderate 

recovery now underway. The latest estimates indicate growth between 3% and 4% in 2011. 

Despite positive signs of a recovery, unemployment remained high, at 9.4% at the end of 

December. 

47 


The construction sector reported a further downturn in investments; the December figures 

show a 2.5% reduction from November and a fall of 10.3% from 2009, the lowest level 

since 2000. 

The latest estimates from the Portland Cement Association (PCA) reflect a marginal 

increase in cement consumption through December 2010 compared with 2009, in line with 

the performance on the Group markets, after a drop of approximately 15% in 2008 from 

2007, and 27% in 2009. 

In these conditions, our cement sales volumes gained 0.2% in line with the market. Sales 

prices were affected by fierce competition and were lower than in 2009. 

Ready mixed concrete sales volumes increased by 0.9% from 2009 at constant size, and 

the price dynamic was positive. 

Overall, action continued to contain fixed costs and reduce variable costs. 

EMERGING EUROPE, NORTH AFRICA AND MIDDLE EAST 

Egypt Morocco Others (1) Total Emerging 

Europe, North Africa 

and Middle East 

Full-cycle cement plants 5 4 6 15 

Grinding centers - 1 1 2 

Terminals 2 2 

Quarries - 3 - 3 

RMC plants 20 21 23 64 

Revenues Recurring EBITDA EBIT Capex Employees 

EBITDA 


Egypt 788.7 793.0 270.7 262.2 270.5 261.5 191.2 183.2 53.3 30.5 4,781 4,558 

Morocco 326.1 320.3 125.7 132.2 122.4 132.2 95.6 108.6 95.3 151.2 1,095 1,130 

Others (1) 264.4 281.5 18.5 24.0 18.9 23.9 (9.6) (5.1) 21.0 42.1 1,527 1,585 

Eliminations (0.5) (0.6) (0.1) - - - (0.1) (0.1) - - - - 

Total 1,378.7 1,394.2 414.8 418.4 411.8 417.6 277.1 286.7 169.6 223.8 7,403 7,273 

(1) Bulgaria, Turkey, Kuwait, Saudi Arabia 

Egypt 

On a market that grew by approximately 3% from 2009 and in a highly competitive situation 

which put pressure on prices, the Group gave priority to maintaining margins over volumes 

in the second half. This effect, associated with production discontinuities at a time of 

capacity saturation, generated a 5.4% reduction in our domestic cement sales volumes. 

A direct consequence of production levels that were insufficient to meet demand was 

recourse to clinker purchases in the first half. 

In ready mixed concrete, supported by the growth of the construction sector, sales 

volumes rose by 1.2% from 2009. Group performance in this business was penalized, 

however, by the fall in sales prices and the increase in raw material costs. 

48






Overall, 2010 operating results were up on 2009. The negative effect of lower sales 

volumes and higher operating expenses was more than offset by the partial reduction in 

variable costs arising from the decrease in excise tax on raw materials, the positive sales 

price effect, as well as the appreciation of the Egyptian currency in denomination of results 

in euro. 

Morocco 

During 2010, according to our estimates, cement consumption was slightly higher than in 

2009: demand was driven largely by private building and public investments, while 

investment in social building and investment in tourist infrastructures remained at fairly 

contained levels. 

Group domestic cement sales volumes rose by 2.9%, with a small increase in prices. Sales 

benefited from the additional production capacity of the new Ait Baha cement plant, which 

began cement production in November 2009 and clinker production in July 2010, and from 

the cement grinding line installed at the Indusaha grinding center. Overall cement and 

clinker sales volumes, including exports, rose by 3.6%. 

Sales volumes for ready mixed concrete and aggregates were down on the previous 

year, by -12.6% for ready mixed concrete and -19.5% for aggregates. 

Operating results declined, since the positive effect from sales prices in the three 

businesses and from cement sales volumes was not sufficient to set off fully the rise in 

operating expenses. 

Others 

In Bulgaria, despite some signs of recovery at the end of 2010, Group cement and clinker 

sales volumes fell by 33.4% from 2009 due to performance on the domestic market, which 

was severely hit by the crisis in the residential sector. Operating results were significantly 

lower, penalized in part by the negative trend in sales prices, although they benefited from 

containment of fixed costs and capital gains from the sale of CO 2 emission rights. 

In Turkey the strong growth of the construction sector drove a 15.7% increase in cement 

consumption compared with 2009. Group domestic cement sales rose by 8.8% (an overall 

rise of 5.6% in cement and clinker sales), with a positive trend in sales prices 

counterbalancing the negative dynamic in operating expenses (fuel, electricity, personnel). 

In ready mixed concrete, a strong improvement in sales volumes (+27.1%) was set against 

a decrease in sales prices. Overall, although operating results were negative, they were 

better than those of 2009. 

In Kuwait, although cement consumption decreased (-2.9%), Group sales volumes were 

up 5.0%. In ready mixed concrete, the decline in sales volumes (-5.3%) was offset by the 

positive trend in prices and containment of variable costs. Overall operating results were up 

on 2009. 

49 


ASIA 

Thailand India Others (1) Total Asia 

Full-cycle cement plants 1 2 2 5 

Grinding centers 2 - - 2 

Quarries - - - - 

RMC plants 35 - 1 36 

Revenues Recurring EBITDA EBIT 


EBITDA 


Thailand 180.2 160.8 15.0 22.2 14.7 15.9 (7.3) (25.6) 7.2 5.6 846 837 

India 169.8 171.8 36.0 60.6 35.9 60.5 20.2 47.0 68.9 50.8 787 777 

Others (1) 98.9 79.1 17.3 12.6 17.1 12.5 7.2 4.8 7.5 7.6 758 830 

Eliminations - - - - - - - - - - - - 

Total 449.0 411.7 68.2 95.4 67.7 88.8 20.0 26.2 83.6 64.0 2,391 2,444 

(1) China and Kazakhstan 

Thailand 

Despite continuing political uncertainty, the economy began to pick up in the first half of 

2010, thanks to the government stimulus package and to exports. The growth already 

reported in the second half of 2009 in the construction sector continued, supported by 

government investment in infrastructures and a recovery in private investments; according 

to our estimates, cement consumption rose by 7.1% from 2009. 

In these conditions, Group domestic cement sales volumes increased by 3.1%; total 

cement and clinker sales fell by 2.1% due to the decrease in clinker exports, which was 

counterbalanced only in part by cement sales to Cambodia and Myanmar. Sales prices on 

the domestic market were down on 2009, but made a recovery; nevertheless, they were 

extremely volatile due to surplus production capacity on the market. 

Sales volumes for ready mixed concrete improved by 17.9%, buoyed by the favorable 

trend on the construction market. 

Operating results progressed from 2009, when Thailand posted non-recurring expenses for 

the restructuring of the Takli and Cha-am plants, with all clinker production transferred to 

the Pukrang plant. Excluding these expenses, operating results would have been down on 

2009, mainly because of the fall in average sales prices and higher costs for electricity and 

fuel, despite the positive sales volumes effect. 

Domestic cement consumption is expected to show further growth in 2011, driven by major 

infrastructure projects, notably construction of the new transport infrastructure in the 

Bangkok area. 

India 

The growth of the Indian economy and construction sector continued in 2010 thanks to 

government initiatives in infrastructure. Nevertheless, a slowdown was reported in the 

fourth quarter on the southern Indian markets, especially in the state of Andhra Pradesh, 

due to political uncertainly and delays in some investments. 

50






At the end of March, the new 5,500 mt/day kiln line at the Yerraguntla plant began 

production; cement production began in the fourth quarter. Group domestic cement sales 

grew by 3.8%, while total cement and clinker sales were up 8.4%. Competitive pressures 

tightened considerably due to the start-up of new production capacity; after the drop that 

began in September 2009, average sales prices remained at a significantly lower average 

level than in 2009, despite the gradual rise reported in the last four months of the year. 

Operating results were sharply down on 2009 chiefly because of the fall in average sales 

prices and, in the last quarter, the rise in the cost of fuel and electricity, counterbalanced 

only in part by higher sales volumes and a favorable exchange-rate effect. 

Cement consumption is expected to continue growing in 2011 on Group markets, but 

competition will be fiercer due to new production capacity and the consequent pressure on 

average sales prices. 

Others 

In China, the economy continued to grow, although the trend slowed in the second half of 

2010. In a favorable scenario, our cement sales volumes rose by 11.2% (+9.4% for total 

cement and clinker sales), while sales prices were affected by the start-up of new 

competitor plants. Operating results decreased compared with 2009 due to the fall in prices 

and rise in fuel costs, countered only in part by the increase in sales volumes and a 

positive exchange-rate effect. In 2011 the market is expected to show further growth, 

thanks to new public investment in infrastructure, but competition will be more aggressive. 

In Kazakhstan, the rapid expansion of the construction sector in 2010 contributed to the 

strong increase in cement consumption compared with 2009 (+10.5%). Despite competition 

from imports, domestic cement sales volumes rose by 12.7% (+16.1% for overall cement 

and clinker sales) with a very positive trend in prices. Despite the unfavorable dynamic in 

operating expenses, especially for energy, a significant improvement was posted in 

operating results. 

CEMENT AND CLINKER TRADING 

Total Cement 

and Clinker Trading 

Grinding centers 1 

Trading terminals 3 

RMC plants 2 

Revenues Recurring 

EBITDA 

EBITDA EBIT 



Total 229.3 221.1 14.3 11.0 14.3 11.0 11.4 8.5 2.5 2.4 369 360 

In 2010 intragroup and third-party cement and clinker sales volumes fell by 6.9%, largely as 

a result of performance in the second half. 

51 


The reduction arose essentially as a result of lower third-party sales in a weak economic 

climate, offset in part by the rise in intragroup sales volumes. 

Despite the decline in volumes, operating results improved, in part thanks to the increase in 

sales margins. 

Calcestruzzi 

As noted in the quarterly report at March 31, 2010, and the half-year financial report at 

June 30, 2010, on April 27, 2010, the Caltanissetta preliminary investigating magistrate 

(GIP) issued an “order for the return of company assets under seizure with prescriptions”. 

In the second half of 2010, however, Calcestruzzi operations continued to be excluded 

from the Italcementi Group scope of consolidation. After examining the GIP’s order with its 

advisors and conferring with the Board of Statutory Auditors and the independent auditors, 

Italcementi S.p.A. believes that, at the present time, the motives whereby Calcestruzzi is 

excluded from the scope of consolidation persist. Its opinion is based, first, on the fact that 

the Calcestruzzi company continues to be subject to the preventive seizure order; second, 

on the fact that management is subject to serious limitations (authorization of the GIP for 

extraordinary transactions; absence of a fully approved industrial plan). 

The above-mentioned order issued by the GIP re-established the conditions for the 

resumption by Calcestruzzi S.p.A. of the power to govern its subsidiaries’ financial and 

management policies; consequently the governing bodies of Calcestruzzi appointed boards 

of directors at the subsidiaries. 

On December 23, 2010, the Calcestruzzi S.p.A. Board of Directors approved the industrial 

plan drawn up by the company’s chief executive officer, which was forwarded to the GIP 

and the external vigilance and control body for the appropriate determinations. 

During the second half of the year the Calcestruzzi company took rigorous action to fulfill all 

the prescriptions set out in the GIP’s order, and kept the GIP’s assistant constantly up to 

date on progress, acting promptly upon that officer’s comments and suggestions. On 

January 31, 2011, as planned, Calcestruzzi completed the entire schedule of prescriptions 

and drew up a report for the GIP and the external vigilance and control body detailing the 

action taken to complete the prescriptions. 

In view of the current situation with the courts, and in consideration of the resolution 

approving the industrial plan by Calcestruzzi S.p.A. and completion of all the prescriptions 

incumbent on the company, the date for the re-inclusion of Calcestruzzi operations within 

the scope of consolidation of the Italcementi Group is expected to be established shortly. 

On March 3, 2011, the Calcestruzzi S.p.A. Board of Directors approved the company’s 

financial statements as at and for the year to December 31, 2010. The statements were 

forwarded to Italcementi S.p.A. for correct evaluation of the equity investment in Italcementi 

S.p.A.’s own separate and consolidated financial statements as at and for the year to 

December 31, 2010. 

The Calcestruzzi S.p.A. balance sheet and income statement as at and for the year to 

December 31, 2010, reflect: 

– revenues of 271.2 million euro (-11.1%% from 305.1 million euro in 2009); 

52






– negative recurring EBITDA of 30.1 million euro (negative recurring EBITDA of 26.5 

million euro in 2009); 

– negative EBIT of 37.0 million euro (-36.0 million euro in 2009); 

– a net loss of 22.8 million euro (net loss of 35.0 million euro in 2009); 

– shareholders' equity of 52.0 million euro (74.7 million euro at December 31, 2009); 

– a negative net financial position of 188.4 million euro (165.5 million euro at 

December 31, 2009). 

Based on the information forwarded by the other companies in the Calcestruzzi group, 

Italcementi S.p.A. drew up a consolidated balance sheet and income statement for the 

Calcestruzzi group for full-year 2010 reflecting: 

– revenues of 335.3 million euro (-13.9% from 389.5 million euro in 2009); 

– negative recurring EBITDA of 30.8 million euro (-26.7 million euro in 2009); 

– negative EBIT of 40.1 million euro (-40.4 million euro in 2009); 

– a net loss of 23.7 million euro (a net loss of 40.4 million euro in 2009); 

– a negative net financial position of 217.7 million euro (200.0 million euro at 


Energy project 

Work continued on current initiatives during 2010 and a 49% shareholding was acquired in 

a company with two 9 MW wind farms in Bulgaria. 

Italy 

The Single Authorization decree for the revamping of the Villa di Serio power station 

issued on March 17, 2010, by the Ministry of Economic Growth authorized Italgen to build a 

190 MW combined cycle turbogas power station and a gas pipeline of approximately 40 km 

to supply energy to the station. Italgen has examined a number of options for 

implementation of the project, including the possibility of holding a partial shareholding, 

thus reducing its investment. In this connection it has signed a letter of intent valid through 

April 30, 2011, with a potential industrial partner, Compagnia Valdostana delle Acque 

(CVA). 

Morocco 

Consistently with the business model formulated in 2009, under which the Indusaha 

company, a subsidiary of Ciments du Maroc (CIMAR), will make an investment for the first 

5 MW and draw up a Service Agreement with Italgen Maroc, operations continued in 2010 

for the construction of the Laayoune wind farm, with the official opening of the construction 

site, the start-up of civil works and delivery of materials. The plant is due to begin 

operations at the end of 2011. 

53 


Turkey 

Work continued in 2010 to obtain all the necessary approvals for construction work to begin 

on the wind farm (142.5 MW) in Bares. To select a turnkey supplier, a request for tenders 

was sent out to some of the top international players and a short list of three bidders has 

been drawn up. Meanwhile, with regard to the commitment on the project, a search began 

for a partner to take control of the initiative. The feedback received indicates the interest of 

the potential purchasers to take over the entire project. Exclusive rights have been granted 

and negotiations are currently underway. 

Egypt 

With regard to the authorization process for the construction of a wind farm for 

approximately 120 MW in the Gulf El Zeit area (80 km north of Hurghada near the Red 

Sea), in June the Egyptian Environment Ministry approved the environmental impact study. 

In the fourth quarter of 2010, a study was conducted on the possible lay-outs for the first 

step, consistent with the constraints indicated in the environmental impact study and the 

wind turbines to be considered for the future installation. 

Bulgaria 

In May 2010 a 49% share in the Gardawind company was acquired from the Leitner Group; 

Gardawind owns two wind farms (Kavarna I and Kavarna II) for aggregate power of 18 MW, 

one of which was under construction at the acquisition date. Work on Kavarna II ended in 

September 2010 and commissioning began, completed in February 2011. In June 2010, 

the E-ON electric power company notified all the operators that it was not possible to 

connect any additional wind farms in the area until 2013, due to congestion on the Italian 

national grid. Gardawind drew E-ON’s attention to the existing contract obliging E-ON to 

connect the wind farm. The question is being monitored closely. 

In 2010 Italgen S.p.A. reported revenues of 46.9 million euro, an increase of 21.4% from 

2009, thanks to higher sales prices and sales volumes. Electric energy production in 2010 

was 341.3 GWh (the largest amount of the last 60 years), an increase of 11% from 2009, 

with an improvement in the plant availability index from 88% in 2009 to 92% in 2010. 

Recurring EBITDA in 2010 was 16.0 million euro, down on 2009 (16.4 million euro) when 

Italgen had net capital gains of approximately 2.0 million euro for the sale of CO 2 emission 

rights. 

No change has taken place in legislation governing the approval of concessions for largescale 

hydroelectric derivations since the end of 2009; Italgen S.p.A. has begun procedures 

to renew all concessions due to expire. In August 2010 it successfully completed the 

renewal procedure for the plants in Borgo San Dalmazzo (2.6 MW) and Roccavione (1.4 

MW). Also in August, a thirty-year concession decree was issued. 

54






Transactions with related parties 

For the purposes of the consolidated financial statements, transactions with related parties 

concerned 

- the parent company Italmobiliare S.p.A. and its subsidiary companies; 

- Italcementi S.p.A. subsidiaries not consolidated on a line-by-line basis; 

- associates; 

- other related parties. 

Key figures at December 31, 2010, for transactions with related parties are provided in the 

notes (note 34). 

Transactions with related parties reflect Italcementi S.p.A.’s interest in leveraging the 

synergies within the Group to enhance production and commercial integration, employ 

competencies efficiently and rationalize use of corporate divisions and financial resources. 

All transactions with related parties, whether financial or relating to the exchange of goods 

and services, are conducted at normal market conditions and comply with the Code of 

Conduct. No atypical or unusual transactions took place during the year. 

Transactions with the parent company Italmobiliare S.p.A. and its subsidiary 

companies 

Italcementi S.p.A. is subject to management and coordination activity of Italmobiliare 

S.p.A.. 

Italcementi S.p.A. provides Italmobiliare S.p.A. and that company’s subsidiaries with 

personnel administration services and receives and provides services. It also provides 

Italmobiliare S.p.A. with a share register management service and administration services 

for shareholders' meetings. 

In 2010 Italcementi S.p.A. and some of its Italian subsidiaries renewed the national tax 

consolidation agreement as per articles 117-129 of the Consolidated Income Tax Act 

(TUIR) for the three years 2010 – 2012, with Italmobiliare S.p.A. as the consolidating 

company. 

Italcementi S.p.A. does not hold nor held during the year, directly or indirectly, Italmobiliare 

S.p.A. shares. 

As mentioned in the section of significant events for the year, at the end of 2010 and 

subject to the approval of the Board of Directors, Italcementi S.p.A. sold to Italmobiliare 

S.p.A. 12,099,146 Mediobanca shares representing 1.405% of share capital and 

17,084,738 RCS MediaGroup S.p.A. shares representing 2.332% of share capital, for an 

aggregate consolidated capital gain of 17.1 million euro. The considerations for the sale of 

the two investments were agreed by the parties after receiving the positive opinion of their 

respective Committees for transactions with related parties and after an independent 

assessment conducted by Prof. Gualtiero Brugger for Italcementi S.p.A. and Prof. 

Francesco Momenté for Italmobiliare S.p.A. 

The sale price for the entire investment in RCS was 1.44 euro per share for a total of 

24,602,022.72 euro, paid at the time of the transfer. 

The sale price for the entire investment in Mediobanca consisted of a fixed amount and a 

55 


variable amount. The fixed amount is 7.1044 euro per share for a total of 85,957,172.84 

euro, paid at the time of the transfer. The variable amount will be paid to Italcementi after 

September 30, 2011, in the form of a possible price adjustment equivalent to 50% of any 

positive difference between the average official share price on the Italian Stock Exchange 

in the month prior to September 30, 2011 (from September 1, 2011, to September 30, 

2011) and the base price plus 10% (the lower limit), subject to the fact that the variable 

amount may not exceed 50% of the positive difference between the lower limit plus 10% of 

the base price and the lower limit. No price adjustment will be recognized in the event that 

the average official share price on the Italian Stock Exchange in the month before 

September 30, 2011 (from September 1, 2011, to September 30, 2011) is lower than or 

equal to the lower limit. The variable amount will be recognized up to a maximum 

equivalent to 5% of the fixed amount (0.3552 euro per share). 

Transactions with subsidiaries and associates 

Transactions with subsidiaries not consolidated on a line-by-line basis and with associates 

are of a trading nature (exchange of goods and/or services) and a financial nature. 

Transactions with the Calcestruzzi group 

Following deconsolidation of the Calcestruzzi group, all business and financial dealings 

with the group have been included in transactions with related parties. Full information is 

provided in the notes. 

Transactions with other related parties 

In 2010, Finsise S.p.A., whose majority shareholder is Italo Lucchini, a director of 

Italcementi S.p.A., provided administrative, financial, contractual, tax and corporate reorganization 

consultancy services for a consideration of 342,000 euro. In 2010 a new 

contract was drawn up by Italcementi S.p.A. and Finsise S.p.A., effective as from April 1, 

2010, and expiring on March 31, 2013, establishing an overall annual consideration of 

360,000 euro, including expenses determined as a lump sum of 30,000 euro. A similar 

contract for an annual consideration of 10,500 euro exists between Finsise S.p.A. and the 

subsidiary Azienda Agricola Lodoletta S.r.l.. Mr Lucchini also received a consideration of 

14,600 euro for his position as a director of Ciments Français S.A.. 

During the year Italcementi S.p.A. and subsidiaries received legal services for 513,000 euro 

from the Dewey & LeBoeuf law firm, of which Luca Minoli, a director of Italmobiliare S.p.A., 

is a partner. 

Legal services for 4,000 euro were also provided by Giorgio Bonomi, a director of 

Italcementi S.p.A.. 

Italcementi S.p.A. has a land occupation contract with River S.p.A. (a company in which the 

director Alberto Bombassei holds an investment), in connection with building works for the 

management office; the amount relating to 2010 was 64,000 euro. 

In 2009, the subsidiary Bravosolution S.p.A. signed an agreement with Ferrero 

International S.A. (of which Italcementi S.p.A. director Pietro Ferrero is chief executive 

officer) regarding professional services and technological tools for the project to raise the 

efficiency of general services. Under this contract and other minor agreements, 

Bravosolution S.p.A. provided similar services for other companies in the Ferrero group. 

The overall consideration paid for services provided in 2010 was 1,201,000 euro. 

56






In 2010 Italcementi S.p.A. disbursed an amount of 300,000 to the Italcementi Cav. Lav. 

Carlo Pesenti foundation to cover management costs. With regard to the contract for the 

supply of corporate-administrative services and provision of staff, Italcementi S.p.A. 

charged the foundation for an amount of 198,000 euro. CTG S.p.A. provided the foundation 

with services for 27,000 euro. 

Transactions with related parties and compensation paid to the Directors and Chief 

Operating Officer of Italcementi S.p.A. for positions held within the Group are illustrated in 

the notes. 

Information on transactions with related parties of the parent company Italcementi S.p.A. is 

provided in the specific sections in the Italcementi S.p.A. directors’ report and notes. 

57 


Information systems 

The three-year plan for the renewal of Group information systems introduced at the end of 

2009 produced some initial results in 2010: 

– update of the latest version of the SAP ERP system, reducing the risk of 

obsolescence and introducing new functionalities; 

– consolidation of SAP indications to simplify system architecture, reduce running 

costs and, above all, enhance integration of Group solutions; 

– definition of a single reference model in the management control area, with the 

enhancement of current analytical and planning capabilities; 

– the roll-out of an intranet platform for the entire Group. The solution is designed as 

a knowledge management and cooperation tool as well as being a powerful internal 

communication channel. 

In 2010 the roll-out continued of solutions for Cash Management and the ready mixed 

concrete sector. 

Developments also took place in Disaster Recovery solutions to enable faster recovery 

times and improve data integrity. At the end of 2010 and early 2011 a new role segregation 

procedure was finalized. 

For 2011 the three-year plan will focus on standardizing processes and rolling out the 

single control model and the new planning system to some Group countries. 

Sustainable development 

In 2010, the Group maintained and strengthened its commitment to sustainable 

development in all countries and lines of business, with initiatives coordinated by the 

Group’s “Sustainable Development Steering Committee”. Details on objectives, initiatives 

and results are provided in the 2010 Sustainable Development Report. 

A milestone in 2010 was the membership of the United Nations Global Compact, 

completing the Group’s long-standing participation in the World Business Council for 

Sustainable Development. The Global Compact brings together organizations to protect 

and promote human rights, employment, the environment and the fight against corruption. 

With regard to the WBCSD, the Group subsidiaries are entering the regional networks. 

At the end of 2010, the Group issued a complete series of new “Sustainability Policies” for 

gradual circulation during 2011. 

Italcementi was reconfirmed in “The Sustainability Yearbook 2011”, the most complete 

publication on corporate sustainability issued annually by the Sustainable Asset 

Management (SAM); the Group improved its position with a ranking in the “SAM Silver 

Class” category. 

Social initiatives 

The Group takes active steps to improve quality of life for its employees, support local 

communities and cooperate with customers and suppliers. No form of discrimination is 

applied in any area and employee health and safety are considered of fundamental 

importance. Key aspects of workers rights are managed through Group human resources 

policies, in compliance with top international standards like the International Labor 

58






Organization (ILO) and OECD Guidelines. 

With the contribution of the principles of the United Nations Global Compact, the gradual 

implementation continued of the agreement signed by Italcementi S.p.A. with Building and 

Wood Workers International in 2008 to promote and safeguard worker rights. The 

agreement is a charter of worker rights valid all round the world: the focus is on 

guaranteeing and safeguarding basic rights, without race or gender discrimination, and 

applying principles in relations with third parties like counterparts, subcontractors and 

suppliers. The Group is also completing formulation of a program to raise awareness of 

internationally recognized human rights and establish a detailed internal reporting and 

monitoring system. 

Health and safety 

Improvement of safety is a constant Group objective. Since the introduction of the “Zero 

accidents” project in 2000, the accident frequency rate has fallen significantly 

(approximately 80%). Nevertheless, the Group is fully committed to improving safety 

conditions not only for its own employees but also for its contractors’ workers, in order to 

prevent fatal accidents and foster a safety and awareness culture among its own workforce 

and other workers. 

In 2010, the Group’s continuing efforts enabled it to consolidate its results at the best 

recent levels. At the same time, to boost the level of employee safety protection, the Group 

began a full review of its approach: a new Group Policy, a new Safety Management 

Handbook, a growing number of compulsory safety standards to be adopted by all 

subsidiaries. Special attention is being given to management of subcontractor employees. 

Protection of the health and safety of employees and third-party workers is a pillar of Group 

social responsibility. The Group standard establishing minimum requirements for 

monitoring activities and limiting exposure to dust, noise and vibrations is being 

implemented. Additional monitoring operations were conducted in many countries, 

including Bulgaria and India. 

With regard to third parties, and customers in particular, the Group continues to guarantee 

high safety standards on cement used by customers, distributors and end users, providing 

basic information about the potential risks of improper use of its products. 

Environmental management systems 

In 2010, other cement plants in Italy and the USA obtained ISO14001 environment 

management certification. At the end of 2010, 52 plants on a total of 58 had this 

certification: 2 in Bulgaria, 5 in Egypt, 9 in France/Belgium, 1 in Greece, 17 in Italy, 1 in 

Kazakhstan, 3 in Morocco, 5 in North America, 3 in Spain, 2 in Thailand, 4 in Turkey. 

Although the target of 90% of ISO 14001 certified cement plants by the end of 2010 has 

been reached, other certification processes are underway. Environmental management 

systems are being gradually extended to all Group operations in cement, aggregates, 

ready mixed concrete and other areas. 

Risk management is also handled through environmental reviews conducted by the 

Sustainable Support Division as part of a long-term program. In 2010, these reviews 

covered cement plants in India, Italy and Turkey. 

59 


Raw materials and alternative fuels 

To ensure responsible use of raw materials and fuels, many Group companies are taking 

action to increase use of alternative sources and thereby minimize impact on the 

environment and on the health and safety of its employees and other parties using these 

materials. 

In 2010, the ratio of alternative fuels to total Group energy consumption was 5.1% of the 

energy requirement, a slight decrease on 2009, largely due to low availability of biomass in 

Thailand; this was counterbalanced by the significant increase in some countries, including 

Spain. In Egypt and India, a number of promising initiatives are being tested. 

Emissions control and reduction 

At the end of 2010, 52 out of 90 active kilns were equipped with complete CEMs to 

measure dust, NO x and SO 2 , in line with the requirements of the Cement Sustainability 

Initiative. Including the COMs installed in North America to monitor dust, the number rises 

to 57, while another 22 kilns are currently measuring dust, NO x or SO 2 . Therefore, 79 kilns 

are partially or fully equipped with CEMs, while the remainder are kept under constant 

control through regular spot checks. 

In addition to dust, NO x and SO 2 , spot monitoring of minor elements such as volatile 

organic pollutants, metals and dioxins is conducted in a growing number of plants. 

At European Union level, on-going reviews of the Integrated Pollution Prevention and 

Control Directive require continuous updating of industrial facilities through the introduction 

and optimization of Best Available Techniques. 

CO 2 emissions monitoring and European Union trading system 

The CO 2 emissions generated by Group operations directly (e.g., production) and indirectly 

(e.g., transport) are closely monitored. 2010 saw a significant improvement in CO 2 

emissions in countries where revamped plants resumed operation. In North America, the 

thermal consumption of the new kiln is half that of the old plant, cutting CO 2 emissions by 

more than 30%. In Italy, the revamp of the Matera kiln, with the addition of a pre-heater and 

pre-calciner, generated a reduction of 10% in specific emissions. 

European clinker production plants are subject to the European Directive on greenhouse 

gas emissions trading, now in the second period of application (2008-2012). The downturn 

in the European cement market continued in 2010, leading to a fall in clinker production 

volumes and consequently in CO 2 emissions in all Group countries. In 2010, the Group had 

a CO 2 surplus of more than 4 million metric tons, on a total allocation of approximately 18 

million metric tons. 

The Group’s position is being constantly monitored over the time frame for the entire period 

2008-20 (EU ETS application phases 2 and 3). Under these projections, in 2009 and 2010 

the Group sold a portion of its surplus emission rights; it also introduced price risk 

management operations over the period to 2012. 

Also in 2010, the Group conducted EUA-CER forward swaps (forward EUA sales and CER 

forward purchases) to diversify and optimize its CO 2 emission rights portfolio. 

The Group is actively engaged in projects to cut CO 2 emissions, especially in India, Egypt 

and Thailand, with the priority on renewable energy and alternative fuels (biomass). Under 

60






the “Clean Development Mechanism” envisaged by the Kyoto protocol, these projects 

generate emission credits (CERs). 

Human resources 

In the absence of material changes in the scope of consolidation, the Group workforce 

decreased from 21,155 heads at the end of 2009 to 20,763 at December 31, 2010 (a 

reduction of 392 heads) as a result of widespread re-organization measures in Europe, the 

USA and Kazakhstan, net of increases in Egypt to replace the presence of external 

companies. 

With regard to personnel management and development, in 2010 the Group continued to 

introduce remuneration policies more closely tied not only to employment market trends, 

but also to performance assessment. It began implementation of a uniform Group job 

grading system. 

The Group intensified definition of “succession” plans to ensure appropriate coverage of all 

key positions, extending the range of the project to all functions. 

Reprising an initiative previously effected in 2007, in 2010 the Group conducted a second 

climate survey. The survey involved 20 countries and 19,081 employees; despite the 

greater complexities of Group business compared with the situation three years earlier, the 

results were very encouraging. On the basis of the results, an action plan was developed to 

further improve workplace conditions and employee perception of the Group. The activity 

will be completed with specific initiatives during 2011. 

Consistently with the Group guidelines on risk management, in 2010 training activities 

were re-organized under a Training Management System with: 

– the definition of 4 training areas (Compliance and Risk Mitigation, Efficiency, 

Sustainable Development and Innovation, Human Capital Development); 

– drafting of a “People Development and Training Policy; 

– implementation of a half-yearly Group training report; 

– activation of a Learning Management System for online training. 

Thanks in part to funding for training provided under local laws, the Group provided a total 

of 386,902 hours of training, involving 18,095 people on at least one course, for a total of 

36,690 participants. 

Under initiatives to improve corporate governance, with regard to Italcementi the focus 

was on development and updating of an integrated governance system (organization, job 

description, corporate powers and processes) and continued integration of management 

systems (quality, environment and safety) with business processes. For the international 

subsidiaries, on the basis of the targets set for each country, development of corporate 

governance tools to meet local priorities continued. A new Web 2.0 version is being 

released of the B.E.S.T.(Business Excellence Support Tool), a specific Knowledge 

Management Database that enables active involvement of the various corporate players in 

all phases of development, control, review and approval of governance tools. 

Work continued on organizational alignment with strategic objectives and critical success 

factors in order to guarantee operating efficiency, transparency and uniformity in 

organizational models and closer conformity with international governance standards. 

61 


Engineering, technical assistance, research and 

development 

(CTG S.p.A. – Group Technical Center) 

In 2010 CTG S.p.A. carried out R&D, engineering and technical assistance activities for the 

Group subsidiaries in Italy and abroad, providing services for 61.8 million euro (67.5 million 

euro in 2009). 

Staff at December 31, 2010, numbered 404 (412 at December 31, 2009), of whom 306 at 

the headquarters in Bergamo, 94 in Guerville and 4 at Group companies. 

The year’s operations reflected the following priorities: 

– realization and start-up of the main projects already underway and implementation 

of studies and projects for approved initiatives; 

– technical assistance for plant maintenance and operations, and for improvement of 

industrial performance; 

– implementation of R&D projects relating to materials, products and technologies, 

optimization processes and productivity improvement. 

Work to complete the main projects proceeded at an intense pace. At Yerraguntla in 

India, the new clinker production lines began operations in March (5,500 mt/day) and the 

cement lines in July. In March the revamped kiln line at Matera in Italy began operations 

(2,200 mt/day). At the new plant in Ait Baha, Morocco, clinker production began in July 

(5,000 mt/day), while cement production began in December. Finishing operations 

continued on the new cement and clinker production lines in Martinsburg, North America, 

and the new cement 1 production line in Ait Baha, which began operations at the end of 

2009. 

With regard to the revamping of the Devnya cement plant in Bulgaria, a review is being 

conducted on the plant dimensions, layout and program. For the opening of the Barry 

quarry (Belgium) and the revamping of the Monselice and Rezzato plants in Italy, work 

focused on basic engineering and licensing applications. 

Assistance operations included action to improve product quality and raise technological 

and production efficiency at a number of Group cement plants. To boost efficiency, the 

STEP 2 project continued at 12 plants, with the number of plant analyses now standing at 

41. 

R&D work focused on materials and processes. During the year 9 patent applications were 

filed (5 for additives, 4 for basic cement and clinker products with specific characteristics). 

In sulfoalluminate binders, industrial tests concentrated on production of sulfoalluminate 

clinker and its chemical and mineralogical characterization. For TX Active products, new 

paint and roofing formulations were developed and successfully tested, as well as road 

paving formulations. 

In ready mixed concrete, a number of insulating formulations were developed using light 

aggregates, and industrial tests were conducted. 

Special attention was devoted to chemical transformation of CO 2 , cement formulations and 

a new clinker with lower CO 2 production. 

In additives, tests were conducted on the feasibility of a new generation of 

superplasticizers. 

62






Innovation 

In 2010, the Group actively promoted development of new products and applications. This 

included the planned re-organization of the Innovation Division with a view to improving the 

structure of innovative product and application marketing and product development. 

In 2010 relations were strengthened with the subsidiaries, with attention paid to emerging 

markets offering important opportunities, in part through support services for local 

marketing functions and Group product branding strategies. 

Looking at innovative product development and the strategies described above, a key 

success was the “i.light” transparent cement, used for the first time as a distinguishing 

element on the Italian Pavilion at Expo Shanghai 2010. Marketing of the product and 

related know-how has begun; licensing and distribution contracts are being negotiated in 

Italy and abroad. 

The success of TX Active continued, especially in Italy and France, and marketing support 

activities began in India. Development of TX Active solutions for specific applications 

continued, and the Group gradually began marketing solutions for vertical applications (wall 

coatings) and horizontal applications (a variety of road solutions). 

Sales volumes of sulfoalluminate cement-based products (ALIPRE range) rose 

significantly, thanks in part to the gradual expansion of the range. 

Despite difficult market conditions, revenues from innovative products amounted to 190 

million euro, with an Innovation Rate (IR: the ratio of revenues from innovation to operating 

revenues) of 4.0% for the Group as a whole. In the first half the IR entered the group of 

parameters subject to external certification. 

E-business 

In 2010 the revenues of the BravoSolution group made further progress, accompanied by 

an improvement in earnings, despite continuing economic difficulties that caused revenue 

and earning declines among industry operators. 

Consolidated revenues were 53.7 million euro, up by 6.1% from 2009 (50.6 million euro). 

EBITDA was 6.8 million euro (5.5 million euro in 2009), while EBIT was 2.9 million euro (2.1 

million euro). Profit before tax was 2.6 million euro (1.5 million euro) and net profit for the 

year was 1.4 million euro, as in 2009. 

In 2010 the industry shakeout on the Italian and world market continued, with the 

disappearance of less solid and “global” operations, and a series of mergers and 

acquisitions. Long regarded by analysts as the second player worldwide, the BravoSolution 

group confirmed its excellent market positioning with one of the industry’s most complete 

and successful offers, reflected in the important contracts awarded in Italy, France, USA, 

UK and Mexico through public and private tenders. At the end of 2010 the group had 

approximately 230 licenses, while the number of procurement specialists using 

BravoSolution platforms to purchase goods and services and analyze expenditure was 

approximately 35,000; approximately 450,000 suppliers were involved in trades conducted 

using BravoSolution software. The group had more than 400 customers in 35 countries. 

In 2010 BravoSolution S.p.A. posted revenues of 24.4 million euro (+4.1%) and further 

growth in earnings, confirming its undisputed leadership on the Italian market. BravoBus 

S.r.l., which operates on the e-sourcing market in the Italian local public transport area and 

63 


serves public companies and institutions in the Rome area, also improved its revenues 

(+30.9%) and earnings. 

BravoSolution France, which in 2008 merged with Mobile Workers S.A. (a spend analysis 

company acquired in 2007), reported revenues of 8.7 million euro (+6.7%) and posted a net 

profit for the seventh consecutive year. 

BravoSolution Espana S.A. is active mainly on the Spanish market but also provides 

support for the development of the South and Central American markets. Despite a decline 

in revenues (11.1%), which totaled 3.1 million euro, the company maintained its leadership 

on the Spanish market and again achieved breakeven. 

After a new tender in 2009, BravoSolution UK was confirmed for a further 3 years as the 

sole qualified supplier of e-sourcing technology to the British civil service. In 2010, the 

company reported revenues of 8.4 million euro (-3% from 2009), and posted a net profit. 

The group of companies headed by BravoSolution US (USA, Canada, UK) closed 2010 

with aggregate revenues showing a strong improvement (+32.2%) to 11.6 million euro (8.8 

million euro in 2009), positive EBITDA and a net loss, although the earnings figure 

improved compared with 2009. 

The more recently established subsidiaries in Benelux, Mexico and China reported 

important growth in 2010. 

Disputes and pending proceedings 

Belgium 

No developments took place in the proceeding begun in 2009 by the General Directorate of 

the Belgian Competition Authority against cement producers (including Compagnies des 

Ciments Belges (CCB)) and the national industry association. The companies involved 

received formal notification of the charges in April 2010 and the investigation is still 

underway. 

India 

As successor to Zuari Industries Ltd., Zuari Cement Ltd. has become a party to the 

proceedings begun in 2006 by the Indian Antitrust Authority, and has drawn up its defense. 

The investigation resumed in February 2011. 

No developments took place in the investigation begun in August 2010 by the Indian 

Antitrust Authority against cement producers, including the Zuari Cement Ltd. and Sri 

Vishnu Cement companies, for alleged unfair trading. The companies received a request 

for information and replied within the specified time. 

Turkey 

With regard to the arbitration proceedings in Turkey on the Ciments Français (CF)/Sibirskiy 

Cement (Sibcem) dispute, on December 8, 2010, the arbitration award was notified to 

Ciments Français; arbitration took place at the International Chamber of Commerce in 

compliance with the contractual clauses attributing resolution of any disputes to that body. 

64






Briefly, the award recognized: 

– the exclusive competence of the arbitration board regarding the validity and effects 

of the share purchase agreement; 

– the validity and binding nature of the contract on the parties and the correctness 

and validity of the resolution by CF; 

– the full and incontestable right of CF to retain the initial payment of 50 million euro 

made at the time the contract was signed. 

The decision on the CF application for compensation of losses and damages suffered due 

to the default of the counterpart in failing to close the contract was referred to a subsequent 

arbitration award. 

Ciments Français has begun procedures in a number of countries to obtain recognition of 

the sentence, and Sibcem is currently seeking to oppose these procedures: at the 

beginning of January 2011, Sibcem filed a petition in a Turkish court for the annulment of 

the arbitration award in Turkey. 

Regarding the proceedings in Russia on the same question, on August 13, 2010, the 

Kemerovo court in Russia declared the share purchase agreement of March 26, 2008, to 

be invalid and ordered Ciments Français to return the advance payment of 50 million euro 

collected on the non-closing of the final sale contract for Group assets in Turkey. On 

September 23, an appeal was presented and the effects of the initial ruling were 

suspended. 

Europe 

Regarding the investigation begun in November 2008 by the European Commission into 

some cement producers, including Italcementi S.p.A. and the subsidiaries Ciments 

Français SA, Ciments Calcia SA and Compagnie des Ciments Belges SA, in December 

2010 the European Commission notified the decision for the formal opening of the 

proceeding to Italmobiliare (and, indirectly through Italmobiliare, to the above-named Group 

companies and the Spanish subsidiary Financiera Y Minera). 

Significant post balance-sheet events 

At the end of January, in view of the political unrest in Egypt, the Group decided to 

suspend production operations and bring back its expatriate employees working in the 

country. 

After a closure of approximately one week, and the return to conditions of greater security, 

the five Group plants resumed operations and the expatriate employees gradually began to 

return to Egypt. 

At the end of February, through the Ciments Français sub-holding, the Group reached an 

agreement to sell Set Group Holding and its subsidiaries to Limak Holding. Limak 

Holding is a diversified Turkish group active in construction, infrastructures, energy, 

transport and tourism. 

The agreement was drawn up for a total amount of 290 million euro, on a cash- and debtfree 

basis. It is subject to the approval of the Turkish authorities. Closing is expected to 

take place by the end of the second quarter of 2011. 

65 


Set Group Holding represents a significant part of the Italcementi Group production network 

in Turkey. It operates three cement plants, in Ankara, Balikesir and Trakya (for a total 

nominal clinker capacity of 2.3 mt/year), a terminal in Ambarli (with a cement grinding 

capacity of 1.2 mt/year) and 13 ready mixed concrete plants. In 2010, Set Group Holding 

reported revenues of approximately 130 million euro, and had net debt of approximately 17 

million euro at December 31, 2010. The agreement does not involve the listed subsidiary 

Afyon Çimento, for which the Group will examine the best industrial and financial 

alternatives. 

Outlook 

Overall, the outlook for 2011 is brighter. While the growth trend in the emerging markets 

(Asia in particular) is likely to be confirmed, the industrialized markets are showing signs of 

a cyclical recovery. In Italy, a slight market upturn is expected with a favorable price 

dynamic. 

In this scenario, the Group will maintain its commitment to improving its industrial 

performance, enhanced by the entry into operation of the new production lines. 

A number of elements of uncertainty could affect the outlook for the year, such as prices for 

raw materials, which have risen in the last few months, and the time needed for the 

situation in Egypt to return to normal. 

The recently announced sale of operations in Turkey and other sales that could take place 

during the year, combined with control of non-core industrial investments, will help the 

Group strengthen an already solid financial position, with a further reduction in debt, 

thereby improving conditions for other opportunities for growth on the markets of greatest 

interest to the Group. 

Bergamo, March 4, 2011 

For the Board of Directors 

The Chairman 


66

Consolidated financial statements 

67 


Financial statements 

Balance sheet 

(in thousands of euro) Notes 12.31.2010 12.31.2009 Change 

Non-current assets 

Property, plant and equipment 5 4,595,148 4,392,993 202,155 

Investment property 5 33,098 31,621 1,477 

Goodwill 6 2,016,614 1,961,616 54,998 

Intangible assets 7 133,817 122,353 11,464 

Investments in associates 8 212,261 228,437 (16,176) 

Other equity investments 9 200,172 269,124 (68,952) 

Deferred tax assets 21 52,995 42,289 10,706 

Other non-current assets 10 111,271 80,399 30,872 

Total non-current assets 7,355,376 7,128,832 226,544 

Current assets 

Inventories 11 726,152 686,289 39,863 

Trade receivables 12 738,555 881,066 (142,511) 

Other current assets 13 323,353 270,456 52,897 

Income tax assets 52,621 70,976 (18,355) 

Equity investments and financial receivables 249,852 227,826 22,026 

Cash and cash equivalents 36 575,220 547,273 27,947 

Total current assets 2,665,753 2,683,886 (18,133) 

Total assets 10,021,129 9,812,718 208,411 


Share capital 14 282,549 282,549 - 

Reserves 15 519,756 361,362 158,394 

Treasury shares 16 (58,690) (58,690) - 

Retained earnings 17 2,781,467 2,767,874 13,593 

Equity attributable to holders of the parent 3,525,082 3,353,095 171,987 

Non-controlling interests 18 1,460,851 1,339,062 121,789 

Total shareholders' equity 4,985,933 4,692,157 293,776 

Non-current liabilities 

Interest-bearing loans and long-term borrowings 22 2,567,468 2,632,588 (65,120) 

Employee benefit liabilities 19 184,822 180,930 3,892 

Non-current provisions 20 241,240 227,820 13,420 

Deferred tax liabilities 21 239,460 261,114 (21,654) 

Other non-current liabilities 33,203 56,197 (22,994) 

Total non-current liabilities 3,266,193 3,358,649 (92,456) 

Current liabilities 

Bank overdrafts and short-term borrowings 22 222,985 392,096 (169,111) 

Interest-bearing loans and short-term borrowings 22 293,493 140,393 153,100 

Trade payables 588,572 548,358 40,214 

Current provisions 20 3,537 3,387 150 

Income tax liabilities 55,542 66,682 (11,140) 

Other current liabilities 23 604,874 610,996 (6,122) 

Total current liabilities 1,769,003 1,761,912 7,091 

Total liabilities 5,035,196 5,120,561 (85,365) 

Total shareholders' equity and liabilities 10,021,129 9,812,718 208,411 

68


Presentazione 6 


Corporate Governance Consolidated financial statements Financial statements 68 

Italcementi S.p.A. financial statements Notes 73 

Annexes 142 


Income statement 

Notes 2010 % 2009 % Change % 

(in thousands of euro) 

amount 

Revenues 4 4,790,944 100.0 5,006,379 100.0 (215,435) -4.3 

Other revenues 33,697 34,385 

Change in inventories 25,917 (91,199) 

Internal work capitalized 58,745 58,685 

Goods and utilities expenses 25 (2,019,558) (1,880,728) 

Services expenses 26 (1,075,499) (1,096,234) 

Employee expenses 27 (916,261) (914,589) 

Other operating income (expense) 28 (61,723) (145,121) 

Recurring EBITDA 4 836,262 17.5 971,578 19.4 (135,316) -13.9 

Net capital gains on sale of fixed assets 29 9,864 26,102 

Non-recurring expenses for re-organizations 29 (12,001) (33,987) 

Other non-recurring income (expense) 29 153 (7,008) 

EBITDA 4 834,278 17.4 956,685 19.1 (122,407) -12.8 

Amortization and depreciation (472,543) (459,755) 

Impairment 5-6 (7,982) (53,956) 

EBIT 4 353,753 7.4 442,974 8.8 (89,221) -20.1 

Finance income 30 66,685 33,652 

Finance costs 30 (161,844) (131,712) 

Net exchange-rate differences and derivatives 30 4,523 (8,811) 

Impairment on financial assets 9 (21,014) (41,129) 

Share of results of associates 8 17,052 14,568 

Profit before tax 259,155 5.4 309,542 6.2 (50,387) -16.3 

Income tax expense 31 (62,087) (94,225) 

Net profit for the year 197,068 4.1 215,317 4.3 (18,249) -8.5 

Attributable to: 

Equity holders of the parent 45,780 1.0 71,288 1.4 (25,508) -35.8 

Non-controlling interests 151,288 3.2 144,029 2.9 7,259 5.0 

Earnings per share (EPS) 33 

- Basic 

savings shares € 0.183 

€ 0.274 

ordinary shares € 0.153 

€ 0.244 

- Diluted 

savings shares € 0.183 

€ 0.274 

ordinary shares € 0.153 

€ 0.244 

69 


Statement of comprehensive income 

(in thousands of euro) Notes 2010 % 2009 % Change % 

Net profit for the period 197,068 4.1 215,317 4.3 (18,249) -8.5 

Fair value adjustments to: 

Available-for-sale financial assets 12,796 32,973 (20,177) 

Derivative financial instruments 11,750 (36,486) 48,236 

Translation differences 201,211 (40,448) 241,659 

Tax relating to components of other 

comprehensive income (1,901) 11,027 (12,928) 

Components of other 

comprehensive income 32 223,856 (32,934) 256,790 

Total comprehensive income 420,924 8.8 182,383 3.6 238,541 130.8 

Attributable to: 

Equity holders of the parent 200,893 61,169 139,724 

Non-controlling interests 220,031 121,214 98,817 

70






Annexes 142 


Statement of movements in consolidated total shareholders' equity 

Non- Total 

Attributable to equity holders of the parent controlling shareholders’ 

(in millions of euro) interests equity 

Riserve 

Share Share Fair value Fair value Other Translation Treasury Retained Total 

capital premium reserve for reserve for reserves reserve shares earnings capital and 

reserve available- derivative reserves 

for-sale financial 

financial instruments 

assets 

Balances at December 31, 2008 

(re-stated) 282.5 344.1 17.5 2.5 92.5 (97.6) (58.7) 2,747.6 3,330.3 1,291.3 4,621.6 

Net profit for the period 71.3 71.3 144.0 215.3 

Total components of the other 

comprehensive income 30.1 (21.4) (18.9) (10.1) (22.8) (32.9) 

Stock options 12.0 12.0 1.1 13.1 

Distribution of profits: Dividends (53.3) (53.3) (71.0) (124.3) 

% change in control and consolidation area 0.5 2.3 3.0 (3.5) (0.5) 

Balances at December 31, 2009 282.5 344.1 47.6 (18.9) 105.1 (116.5) (58.7) 2,767.9 3,353.1 1,339.1 4,692.2 

Net profit for the period 45.8 45.8 151.3 197.1 

Total components of the other 

comprehensive income 6.4 8.8 139.9 155.1 68.7 223.9 

Stock options 3.1 3.1 0.5 3.6 

Distribution of profits: Dividends (33.4) (33.4) (96.6) (130.0) 

% change in control and consolidation area 0.2 1.2 1.4 (2.2) (0.8) 

Balances at December 31, 2010 282.5 344.1 54.0 (10.1) 108.3 23.5 (58.7) 2,781.5 3,525.1 1,460.9 4,985.9 

71 


Consolidated cash flow statement 

Notes 2010 2009 


A) Cash flow from operating activities: 

Profit before tax 259,155 309,542 

Adjustments for: 

Amortization, depreciation and impairment 502,189 552,367 

Reversal undistributed results of associates 1,506 (1,656) 

Capital (gains)/losses on sale of fixed assets (31,022) (25,726) 

Change in employee benefit liabilities and other provisions 8,165 (3,316) 

Stock options 3,566 13,116 

Reversal finance costs 122,580 109,929 

Cash flow from operating activities before tax, 

finance income/costs and change in working capital: 866,139 954,256 

Change in working capital 36.4 133,627 380,101 


and finance income/costs: 999,766 1,334,357 

Net finance costs paid (122,585) (100,766) 

Dividends received 3,790 3,824 

Taxes paid (133,060) (135,502) 

Total A) 747,911 1,101,913 

B) Cash flow from investing activities: 


Intangible assets (22,167) (19,353) 

Property, plant and equipment and investment property (500,882) (680,101) 

Financial assets (equity investments) net of cash acquisitions (*) 36.2 (24,647) (34,244) 

Total investments in fixed assets (547,696) (733,698) 

Proceeds from divestments of fixed assets 36.3 143,361 53,285 

Total divestments 143,361 53,285 

Change in other long-term financial assets and liabilities (406) (9,784) 

Total B) (404,741) (690,197) 

C) Cash flow from financing activities: 

New interest-bearing loans and long-term borrowings 790,292 629,100 

Repayments of long-term financing (823,508) (758,327) 

Change in short-term financing (129,541) 54,822 

Dividends paid (129,989) (124,828) 

Change in equity interests in subsidiaries (791) - 

Other sources and applications (39,828) (26,613) 

Total C) (333,365) (225,846) 

D) Currency translation differences and other changes 18,142 (2,461) 

E) Cash flows for the period (A+B+C+D) 27,947 183,409 

F) Cash and cash equivalents at beginning of period 547,273 363,864 

Cash and cash equivalents at end of period (E+F) 36.1 575,220 547,273 

(*) cash of acquired and consolidated companies 18 8,621 

72






Annexes 142 


Contents 

Notes 

1. Accounting policies 

2. Exchange rates used to translate the financial statements of foreign entities 

3. Change in the scope of consolidation 

4. Operating segment disclosure 

5. Property, plant and equipment and Investment property 

6. Goodwill 

7. Intangible assets 

8. Investments in associates 

9. Other equity investments 

10. Other non-current assets 

11. Inventories 

12. Trade receivables 

13. Other current assets 

14. Share capital 

15. Reserves 

16. Treasury shares 

17. Retained earnings, dividends paid 

18. Non-controlling interests 

19. Employee benefit liabilities 

20. Provisions 

73 


21. Deferred tax 

22. Net debt 

23. Other current liabilities 

24. Commitments 

25. Goods and utilities expenses 

26. Services expenses 

27. Employee expenses and Stock options 

28. Other operating income (expense) 

29. Non-recurring income (expense) 

30. Finance income (costs), net exchange-rate differences and derivatives 

31. Income tax expense 

32. Components of other comprehensive income 

33. Earnings per share 

34. Dealings with related parties 

35. Joint ventures 

36. Cash flow statement 

37. Non-recurring transactions 

38. Considerations to the Independent Auditors 

39. Post balance-sheet events 

74






Annexes 142 


Notes 

The Italcementi S.p.A. consolidated financial statements as at and for the year to December 31, 2010, were 

approved by the Board of Directors on March 4, 2011. At the meeting, the Board authorized publication of a 

press release dated March 4, 2011, containing key information from the financial statements. 

Italcementi S.p.A. is a corporate entity established in accordance with the laws of the Republic of Italy. It has 

been listed on the Milan Stock Exchange since 1925, belongs to the S&P/Mib index of leading Italian 

companies and is subject to management and coordination by Italmobiliare S.p.A., whose key data from the 

most recently approved financial statements are provided in an annex to the parent company’s separate 

financial statements. 

Italcementi S.p.A. and its subsidiaries form the “Italcementi Group”, an international player whose main lines of 

business are hydraulic binders, ready mixed concrete and aggregates. The Group is also active in other areas, 

some of which are instrumental to its core businesses: materials for the construction industry, additives, 

transport, energy, engineering and e-business. 

The financial statements have been drawn up assuming business continuity. Despite the difficult economic and 

financial situation, by virtue of the measures already in place to respond to the changes in demand, and its 

industrial and financial flexibility the Group has no material uncertainties about its business continuity. 

1. Accounting policies 

1.1. Declaration of compliance with the IFRS 

These consolidated financial statements have been drawn up in compliance with the International Accounting 

and Financial Reporting Standards (IAS/IFRS) applicable at December 31, 2010, adopted by the EC 

Commission. 

In compliance with European Regulation no. 1606 of July 19, 2002, the principles adopted do not include the 

standards and interpretations published by the IASB and the IFRIC through December 31, 2010, that had not 

been approved by the European Union at that date. 

Since December 31, 2009, a number of principles and interpretations approved by the European Union have 

come into force and have been applied in the 2010 financial statements, specifically: 

Principles 

IFRS 1 revised “First-time adoption of IFRS”, approved by the European Commission in November 

2009. The new principle facilitates the future use and possible amendments to the principle itself, 

eliminates a number of obsolete transitional provisions and sets out a number of minor changes to the 

text; 

IFRS 2 revised “Share-based payment”, approved by the European Commission in March 2010. The 

amendments provide clarifications on accounting treatment of share-based payments where the 

provider of the goods or services is paid in cash and the obligation is assumed by another company of 

the Group; 

IFRS 3 revised “Business combinations”, approved by the European Commission in June 2009. This 

introduces significant changes in accounting treatment of business combinations with regard to 

measurement of minority interests, accounting treatment of costs associated with the acquisition, initial 

recognition and subsequent measurement of any contingent considerations and business combinations 

achieved in stages; 

IAS 27 revised “Consolidated and separate financial statements”, approved by the European 

Commission in June 2009. The principle requires that a change in ownership of a subsidiary (without 

loss of control) be accounted for as a transaction between owners. Consequently, these transactions 

75 


no longer generate goodwill, nor gains or losses, but have a direct impact on equity. The revised 

principle also introduces changes with regard to accounting treatment after loss of control; 

amendment to IAS 39 “Financial instruments: recognition and measurement”, approved by the 

European Commission in September 2009. The amendment, entitled “Eligible hedged items”, clarifies 

application of hedge accounting to inflation in a financial item and to options used as hedges; 

amendments to IAS 39 “Reclassification of financial assets” and IFRS 7 “Financial instruments, 

disclosures” approved by the European Commission in September 2009. The amendments specify the 

effective date and transitional provisions with respect to the changes to these principles issued by the 

IASB on October 13, 2008. 

Interpretations 

IFRIC 12 “Service concession arrangements”, approved by the European Commission in March 2009, 

clarifies application of provisions concerning service concession arrangements; 

IFRIC 15 “Agreements for the construction of real estate”, approved by the European Commission in 

July 2009, regulates recognition of revenues from construction of real estate; 

IFRIC 16 “Hedges of a net investment in a foreign operation”, approved by the European Commission 

in June 2009, clarifies application of the requirements of IAS 21 and IAS 39 in cases where an entity 

hedges the foreign-exchange risk arising on its net investments in foreign operations; 

IFRIC 17 “Distribution of non-cash assets to owners”, approved by the European Commission in 

November 2009, provides clarifications and guidance on accounting treatment of distributions of noncash 

assets to an entity’s owners; 

IFRIC 18 “Transfers of assets from customers”, approved by the European Commission in November 

2009, provides guidance on the accounting treatment of assets or cash for the purchase of assets, 

received from customers. 

As from January 1, 2010, the changes introduced in some IAS/IFRS/IFRIC as part of the improvement process 

of standards and interpretations (IFRS 2, 5, 8, IAS 1,7, 17, 36, 38, 39, IFRIC 9 and 16) have also become 

applicable. 

The application of the new principles and interpretations has not had a material impact on the Group’s annual 

accounts. 

With regard to application by the Group of IAS 16 “Property, plant and equipment”, the list of the components 

and useful lives of the industrial assets in the cement sector has been updated to reflect technological 

developments and the benefits expected from the use of such assets. 

With reference to operating segments (IFRS 8), a new model has been introduced for operating segments, 

illustrated in detail in note 4 “Operating segment disclosure”. 

Standards, amendments and interpretations approved by the European Union but not yet in force and for 

which the Group has not elected early application are: 

- IAS 24 revised “Related party disclosures”; 

- amendment to IFRS 1 “First-time adoption of IFRS” and the related amendment to IFRS 7; 

- IFRIC 19 “Extinguishing financial liabilities with equity instruments”; 

- amendment to IFRIC 14 “Advance payment of minimum funding requirements”; 

- amendment to IAS 32 “Financial instruments: presentation” regarding classification of emission 

rights. 

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Standards, amendments and interpretations published by the IASB but not yet approved by the European 

Union are: 

- IFRS 9 “Financial instruments” (phase 1: classification and measurement of financial assets); 

- amendments to IFRS 7; 

- amendments to a number of IAS/IFRS/IFRIC as part of the improvement process of standards 

and interpretations (IFRS 1, 3, 7, IAS 1, 27, 34, IFRIC 13). 

1.2. Accounting policies and basis of presentation 

The consolidated accounts adopt the cost principle, with the exception of derivative financial instruments and 

financial assets held for trading or for sale, which are stated at fair value. The carrying amounts of hedged 

assets and liabilities are adjusted to reflect changes in fair value on the basis of the hedged risks. The 

consolidated financial statements are presented in euro. All amounts in the accounting schedules and in the 

notes are rounded to thousands of euro, unless otherwise specified. 

The basis of presentation of the Group financial statements is as follows: 

current and non-current assets and current and non-current liabilities are presented as separate 

classifications on the face of the balance sheet. Current assets, which include cash and cash equivalents, 

are assets that the Group intends to realize, sell or consume during its normal business cycle; current 

liabilities are liabilities that the Group expects to settle during the normal business cycle or in the twelve 

months after the balance sheet date; 

on the income statement, costs are analyzed by the nature of the expense; 

with regard to comprehensive income, the Group presents two statements: the first statement reflects 

traditional income statement components and the net result for the period, while the second statement, 

beginning with the net result, presents other components of comprehensive income, previously reflected 

only in the statement of movements in consolidated shareholders' equity: fair value gains/losses on 

available-for-sale financial assets and financial derivatives, currency translation differences; 

on the cash flow statement, the indirect method is used. 

The preparation of the consolidated financial statements and the notes in conformity with the international 

accounting policies requires management to make discretional assessments and estimates that affect the 

values of assets, liabilities, income and expense, such as amortization, depreciation and provisions, and the 

disclosures on contingent assets and liabilities in the notes. 

Since these estimates assume business continuity and are determined using the information available at the 

time, they could diverge from the actual future results. This is particularly evident in the present financial and 

economic crisis, which could generate situations diverging from those estimated today and require currently 

unforeseeable adjustments, including adjustments of a material nature, to the carrying amounts of the items in 

question. 

Assumptions and estimates are particularly sensitive with regard to measurement of fixed assets, which 

depend on forecasts of future results and cash flows, measurement of contingent liabilities, provisions for 

disputes and restructurings and commitments in respect of pension plans and other long-term benefits. 

Management conducts regular reviews of assumptions and estimates, and immediately recognizes any 

adjustments in the financial statements. 

1.3. Principles of consolidation 

The consolidated financial statements are based on the accounts as at and for the year to December 31, 2010, 

of the parent company Italcementi S.p.A. and the consolidated companies. Where necessary, the financial 

statements are adjusted to ensure alignment with the Group’s classification criteria and accounting principles. 

77 


Subsidiaries 

Subsidiaries are companies in which the Group has the power to determine, directly or indirectly, 

administrative and management decisions and to obtain the benefits thereof. Generally speaking, control is 

assumed to exist when the Group holds, directly or indirectly, more than one half of voting rights, including 

potential voting rights deriving from convertible securities. 

Subsidiaries are consolidated on a line-by-line basis as from the date at which control is obtained and until 

control is transferred out of the Group. 

Associates 

Associates are companies in which the Group has significant influence over administrative and management 

decisions even though it does not hold control. Generally speaking, significant influence is assumed to exist 

when the Group holds, directly or indirectly, at least 20% of voting rights or, even if it holds a lower percentage 

of voting rights, when it is entitled to take part in financial and management policy decisions by virtue of a 

specific juridical status including, but not limited to, participation in voting trusts or other forms of material 

exercise of rights of governance. Equity investments in associates are valued with the equity method, whereby 

they are recognized initially at cost, and subsequently adjusted to reflect changes in the value of the Group’s 

interest in the associate’s equity. The Group’s share of an associate’s net profit or loss is recognized in a 

specific income statement line item from the date at which the Group exerts significant influence until it 

relinquishes such influence. 

Joint ventures 

Joint ventures are companies whose business operations are controlled by the Group jointly with one or more 

other parties, under contractual arrangements. Joint control presupposes that strategic, financial and 

management decisions are taken with the unanimous consent of the parties that control the venture. 

Equity investments in joint ventures are consolidated on a proportionate basis, whereby assets, liabilities, 

income and expenses are recognized line-by-line proportionately to the Group’s interest. 

The balance sheets and income statements of joint ventures are consolidated from the date on which joint 

control is assumed and until such control is relinquished. 

Transactions eliminated during consolidation 

All intragroup balances and transactions, including any unrealized gains in respect of third parties, are 

eliminated in full. Unrealized losses in respect of third parties deriving from intragroup transactions are 

eliminated, except in cases where it will not subsequently be possible to recover such losses. 

Unrealized gains in respect of third parties deriving from transactions with associates are eliminated against 

the equity investment carrying amount, while losses are eliminated proportionately to the Group’s interest, 

unless it will not subsequently be possible to recover such losses. 

Scope of consolidation 

A list of the companies consolidated on a line-by-line basis, on a proportionate basis and with the equity 

method is provided in the annex to these notes. 

1.4. Business combinations 

On first-time adoption of the IFRS, as allowed by IFRS 1, the Group elected not to apply IFRS 3 retrospectively 

to business combinations that took place before January 1, 2004. 

Until December 31, 2009, business combinations were accounted for with the purchase method in IFRS 3. 

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Since January 1, 2010, business combinations have been accounted for with the acquisition method in IFRS3 

revised. 

Cost of business combinations 

Under IFRS 3 revised, acquisition cost is the sum of the acquisition-date fair value of the contingent 

consideration and the amount of any minority interests in the acquired entity. For each business combination, 

any minority interests in the acquired entity must be measured at fair value or in proportion to their interest in 

the identifiable net assets of the acquired entity. 

IFRS 3 revised provides that costs relating to the acquisition be expensed in the periods in which they are 

incurred and the services are received. Any costs incurred in 2009 relating to business combinations in 2010 

were expensed in 2009. 

Apportionment of the cost of business combinations 

Goodwill is measured as the positive difference between: 

- the aggregate of the consideration transferred, the amount of any minority interests in the 

acquired entity, the acquisition-date fair value of the acquirer’s previously held equity interest in 

the acquired entity, with respect to 

- the net value of acquisition-date amounts of identifiable assets acquired and liabilities 

assumed. 

If the difference is negative, it is recognized in the income statement. 

If on initial recognition the acquisition cost of a business combination can only be determined provisionally, the 

apportioned amounts are adjusted within twelve months of the acquisition date (measurement period). 

Business combinations achieved in stages 

When a business combination is achieved in stages, through a series of share purchases, for each transaction 

the fair value of the previously held interest is re-determined and any gain or loss is taken to the income 

statement. 

Changes in equity interests in subsidiaries 

Acquisitions of additional shares after acquisition of control do not require re-determination of identifiable asset 

and liability values. The difference between the cost and the acquired equity interest is recognized as Group 

shareholders' equity. Transactions that reduce the percentage interest held without loss of control are treated 

as sales to minorities and the difference between the interest sold and the price paid is recognized in Group 

shareholders' equity. 

This accounting policy has been adopted by the Group since financial year 2009. 

Purchase commitments on interests held by minorities 

A put option granted to minority shareholders of a company controlled by the Group is initially recognized by 

recording the purchase value as a liability, since the value in question is the present value of the put option 

exercise price. 

The complementary purchase of interests held by minorities to whom put options have been granted is 

anticipated in the financial statements: 

the minority interests are reclassified under liabilities and the difference between the fair value of the 

purchase commitment liabilities and the net carrying amount of the minority interests is recognized under 

Group shareholders' equity; 

subsequent changes in liability values are recognized under Group shareholders' equity with the exception 

of adjustments to the present value, which are taken to the income statement. 

79 


1.5. Translation of foreign currency postings 

The reporting currency of the subsidiaries located outside the euro zone is usually the local currency. 

Transactions in currencies other than the reporting currency 

Foreign currency transactions are initially translated into the reporting currency using the exchange rate at the 

transaction date. At closure of the reporting period, foreign currency monetary assets and liabilities are 

translated into the reporting currency at the closing exchange rate. Exchange-rate gains and losses are taken 

to the income statement. 

Non-monetary foreign currency assets and liabilities valued at cost are translated at the exchange rate ruling at 

the transaction date; those valued at fair value are translated with the exchange rate at the date fair value was 

determined. 

Translation of the financial statements of foreign entities 

At closure of the reporting period, the assets, including goodwill, and liabilities of consolidated companies that 

report in currencies other than the euro are translated into the presentation currency of the Group’s 

consolidated accounts at the exchange rate ruling at close. Income statement items are translated at the 

average rate for the period. Gains and losses arising from the translation of opening shareholders’ equity at the 

closing exchange rates and those arising from the different method used to translate profit and loss for the 

period are recognized in a specific equity item. In the event of subsequent disposal of a foreign entity, the 

cumulative translation differences are taken to the income statement. 

As allowed under IFRS 1, cumulative translation differences at the date of first-time adoption of the IFRS have 

been reclassified in “Retained earnings” under shareholders’ equity and therefore will not be taken to the 

income statement in the event of subsequent disposal. 

1.6. Property, plant and equipment 

Measurement 

Property, plant and equipment is recognized at cost, less accumulated depreciation and impairment losses. 

Cost includes the purchase or production cost and the directly attributable costs of bringing the asset to the 

location and the conditions required for its operation. Production cost includes the cost of materials and direct 

labor costs. Finance costs relating to the purchase, construction and production of qualified assets are 

capitalized. 

The carrying amount of some assets existing at the IFRS first-time adoption date of January 1, 2004, reflects 

revaluations applied in prior periods in connection with specific local laws, based on the real economic value of 

the assets in question. Assets acquired through business combinations are stated at fair value, determined on 

a provisional basis at the purchase date and subsequently adjusted within the following twelve months. 

Subsequent to initial recognition, property, plant and equipment is carried at cost depreciated over the asset’s 

useful life, less any impairment losses. 

Assets under construction are recognized at cost; depreciation begins when the assets enter useful life. 

When an asset consists of components with a significant cost and different useful lives, initial recognition and 

subsequent measurement are effected separately for each component. 

Subsequent expense 

Repair and maintenance expense is normally recognized as incurred. Component replacement costs are 

treated as separate assets and the net carrying amount of the replaced component is expensed. 

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Depreciation 

Depreciation is generally calculated on a straight-line basis over the estimated useful life of each component of 

an asset. Land is not depreciated, with the exception of land used for quarrying operations. 

Asset useful life determines the depreciation rate until a subsequent review of residual useful life. The useful 

life range adopted for the various categories of assets is disclosed in the notes. 

Quarries 

Costs for the preparation and excavation of land to be quarried are amortized as the economic benefits of such 

costs are obtained. 

Quarry land is depreciated at rates reflecting the quantities extracted in the period in relation to the estimated 

total to be extracted over the period in which the quarry is to be worked. 

The Group makes specific provision for quarry environmental restoration obligations. Since the financial 

resources required to settle such obligations are directly related to degree of use, the charge cannot be defined 

at inception with a balancing entry to the asset cost, but is provided to reflect the degree of use of the quarry. 

1.7. Leases 

Finance leases, which substantially transfer to the Group all risks and rewards incident to ownership of the 

leased asset, are recognized from the lease inception date at the lower of the leased asset fair value or the 

present value of the lease payments. Lease payments are apportioned between finance costs and reductions 

against the residual liability so as to obtain a constant rate of interest on the outstanding liability. 

The policies used for depreciation and subsequent measurement of leased assets are consistent with those 

used for the Group’s own property, plant and equipment. 

Lease contracts where all risks and rewards incident to ownership are retained by the lessor are classified as 

operating leases. 

Operating lease payments are recognized as expense on a straight-line basis over the lease term. 

1.8. Investment property 

Investment property is land and/or buildings held to earn rentals and/or for capital appreciation, rather than for 

use in the production or supply of goods and services. Investment property is initially recognized at purchase 

cost, including costs directly attributable to the purchase. Subsequent to initial recognition, investment property 

is measured at amortized cost. 

1.9. Goodwill 

Goodwill recognized in accordance with IFRS 3 revised is apportioned to the cash-generating units that are 

expected to benefit from the synergies created by the acquisition. Goodwill is stated at the original value less 

any impairment losses identified as a result of tests conducted on an annual basis or more frequently if 

indications of impairment emerge. 

When goodwill is attributed to a cash-generating unit part of whose assets are disposed of, the goodwill 

associated with the sold assets is taken into account when determining the capital gain or loss arising from the 

transaction. 

81 


1.10. Intangible assets 

Intangible assets purchased separately are capitalized at cost, while those acquired through business 

combinations are recognized at provisionally estimated fair value at the purchase date and adjusted where 

necessary within the following twelve months. 

Subsequent to initial recognition, intangible assets are carried at cost amortized over asset useful life. 

Other than goodwill, the Group has not identified intangible assets with an indefinite useful life. 

1.11. Impairment of assets 

Goodwill is tested for impairment on an annual basis or more frequently if indications of impairment emerge. 

Tangible assets and amortizable intangible assets are tested for impairment if indications of impairment 

emerge. 

Impairment is the difference between the asset net carrying amount and its recoverable amount. Recoverable 

amount is the greater of fair value, less costs to sell, of an asset or cash-generating unit, and its value in use, 

determined as the present value of future cash flows. Fair value less costs to sell is determined through 

application of relevant valuation models adopting appropriate income multipliers, quoted share prices on an 

active market for similar enterprises or other available fair value indicators applicable to the assets being 

measured. 

In determining value in use, assets are measured at the level of cash-generating units on a continuing 

operations basis. Estimated future cash flows are discounted at a rate determined for each cash-generating 

unit using the weighted average cost of capital method (WACC). 

If an impairment loss on an asset other than goodwill subsequently reverses in full or in part, the asset net 

carrying amount is increased to reflect the new estimated recoverable amount, which may not exceed the 

amount that would have been reflected in the absence of the impairment loss. Impairment losses and 

impairment reversals are taken to the income statement. 

1.12. Financial assets 

All financial assets are recognized initially at cost at the purchase date. Cost corresponds to fair value plus 

additional costs attributable to the purchase. 

Subsequent to initial recognition, assets held for trading are classified as current financial assets and carried at 

fair value; any gains or losses are taken to income. 

Assets held to maturity are classified as current financial assets, if they mature within one year; otherwise they 

are classified as non-current assets and subsequently carried at amortized cost. Amortized cost is determined 

using the effective interest rate method, taking account of any acquisition discounts or premiums, which are 

apportioned over the entire period until maturity, less any impairment losses. 

Other financial assets are classified as available for sale and recognized at fair value. Any gains or losses are 

shown in a separate equity item until the assets are sold, recovered or discontinued, or until they are found to 

be impaired, in which case the cumulative gains or losses in equity are taken to the income statement. Equity 

instruments that are not listed on an active market and whose fair value cannot be measured reliably are 

carried at cost. 

1.13. Inventories 

Inventories are measured at the lower of purchase/production cost (using the weighted average cost method) 

and net realizable value. 

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Purchase cost includes costs incurred to bring assets to their present location, less allowances for obsolete 

and slow-moving items. 

Production cost of finished goods and semi-finished goods includes the cost of raw materials, direct labor and 

a portion of general production costs, determined on the basis of normal plant operations. Financial costs are 

not included. 

The net realizable value of raw and ancillary materials and consumables is their replacement cost. 

The net realizable value of finished goods and semi-finished goods is the estimated selling price in the ordinary 

course of business, less estimated cost of completion and estimated costs to sell. 

1.14. Trade receivables and other receivables 

Trade receivables and other receivables are stated at fair value plus transaction costs, less allowances for 

uncollectible amounts, which are provided as doubtful debts are identified. 

Derecognition of financial assets: 

The Group derecognizes all or a part of the carrying amount of financial assets when: 

the contractual rights on the assets in question have expired; 

it transfers the near totality of the risks and rewards incident to ownership of the asset or does not transfer 

and does not even substantially maintain all the risks and rewards but transfers control of the assets. 

1.15. Cash and cash equivalents 

Cash and cash equivalents consists of cash on hand, bank demand deposits and other treasury investments 

with original maturity of not more than three months. Current account overdrafts are treated as financing and 

not as a component of cash and cash equivalents. 

The definition of cash and cash equivalents in the cash flow statement is identical to that in the balance sheet. 

1.16. Income taxes 

Current income taxes are provided in accordance with local tax laws in the countries where the Group 

operates. Deferred tax is recognized using the balance sheet liability criterion, based on temporary differences 

between the tax base of assets and liabilities and their carrying amount in the balance sheet. 

Deferred tax liabilities are recognized on all taxable temporary differences. Deferred tax assets are recognized 

for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is 

probable that future taxable income will be available against which such differences, losses or credits may be 

reversed. 

Taxable or deductible temporary differences do not generate recognition of deferred tax liabilities or assets 

only in the following cases: 

taxable temporary differences arising from the initial recognition of goodwill, unless goodwill is taxdeductible; 

taxable or deductible temporary differences arising from initial recognition of an asset or a liability in 

transactions that are not business combinations and affect neither accounting profit nor taxable profit at the 

transaction date; 

equity investments in subsidiaries, associates and joint ventures when: 

a) the Group is able to control the timing of the reversal of the taxable temporary differences and it is 

probable that such differences will not reverse in the foreseeable future; 

b) it is not probable that the deductible temporary differences will reverse in the foreseeable future and that 

taxable income will be available against which the temporary difference can be used; 

83 


deferred tax assets are reviewed at the end of every reporting period and reduced to the extent that 

sufficient taxable income is no longer likely to be available in the future against which the assets can be 

used in full or in part. 

Deferred tax assets and liabilities are determined at tax rates expected to apply when the deferred tax asset 

(liability) is realized (settled), based on rates that have been enacted or substantially enacted at the balance 

sheet date. 

Taxes relating to items recognized directly in equity are recognized in equity, not income. 

1.17. Employee benefits 

The Group operates pension plans, post-employment medical benefit plans and leaving entitlement provisions. 

It also has other commitments, in the form of bonuses payable to employees on the basis of length of service 

in some Group companies (“Other long-term benefits”). 

Defined contribution plans 

Defined contribution plans are structured post-employment benefit programs where the Group pays fixed 

contributions to an insurance company or pension fund and will have no legal or constructive obligation to pay 

further contributions if the fund does not dispose of sufficient assets to pay all the employee benefits accruing 

in respect of services rendered during the current year and in previous years. These contributions are paid in 

exchange for the services rendered by employees and recognized as expense as incurred. 

Defined benefit plans 

Defined benefit plans are structured post-employment benefit programs that constitute a future obligation for 

the Group. In substance, the company assumes the actuarial and investment risks of the plan. In accordance 

with IAS 19, the Group uses the unitary credit projection method to determine the present value of obligations 

and the related benefit cost of current services rendered. 

These actuarial calculations require use of consistent and objective actuarial assumptions about demographic 

variables (mortality rate, personnel turnover rate) and financial variables (discount rate, future increments on 

salaries and medical benefits). 

When a defined benefit plan is funded in full or in part by contributions paid to a fund that is a separate legal 

entity or to an insurance company, the assets servicing the plan are estimated at fair value. 

Benefit obligations are therefore recognized net of the fair value of the plan assets that will be used to settle 

the obligations. 

Leaving entitlements provided by the Italian companies (TFR, trattamento di fine rapporto) are treated in the 

same way as benefit obligations arising from defined benefit plans. 

Plans for termination of employment 

Plans for termination of employment include provisions for restructuring costs recognized when the Group 

company in question has approved a detailed formal plan that has already been implemented or notified to the 

third parties concerned. 

Treatment of actuarial gains and losses 

Actuarial gains and losses on post-employment defined benefit plans may arise as a result of changes in the 

actuarial assumptions used in two consecutive periods or as a result of changes in the obligation value or in 

the fair value of any plan asset in respect of the actuarial assumptions used at the beginning of the period. 

The Group uses the corridor method whereby actuarial gains and losses are recognized as income or expense 

when their unrecognized cumulative net value, for each plan, at the end of the previous period exceeds 10% of 

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the larger of present value of the defined benefit obligation or the fair value of plan assets at that date. These 

gains or losses are taken to income over the estimated average residual working life of the employees 

participating in the plans. 

Actuarial gains and losses relating to “Other long-term benefits” (service medals, length of service benefits) 

and to early retirement benefits are recognized as income or expense immediately. 

Past service cost 

Changes in liabilities resulting from a change to an existing defined benefit plan are recognized as expense on 

a straight-line basis over an average period until the benefits have vested. Costs for benefits that vest 

immediately upon changes to a plan are recognized as expense as incurred. 

Curtailment and settlement 

Gains or losses on the curtailment or settlement of a defined benefit plan are recognized as income or expense 

when the curtailment or settlement occurs. The gain or loss includes changes in the present value of the 

obligation, changes in the fair value of plan assets, actuarial gains or losses and past service costs not 

previously accounted for. 

At the curtailment or settlement date, the obligation and the fair value of the plan assets are re-measured using 

current actuarial assumptions. 

1.18. Share-based payments 

The Group has applied IFRS 2 as from January 1, 2004. 

Options for the subscription and purchase of shares granted by Group companies to employees and directors 

give rise to recognition of a cost classified under employee expenses, with a corresponding increase in equity. 

In accordance with IFRS 2, only options granted after November 7, 2002, whose rights had not vested at 

December 31, 2003, have been measured and recognized at the transition date. Options for the subscription 

and purchase of shares are measured at fair value at the grant date and amortized over the vesting period. 

Fair value is determined using the binomial method, and taking account of dividends. Future volatility is 

determined on the basis of historic market prices, after correction for extraordinary events or factors. 

The cost of granted options is reviewed on the basis of the actual number of options that have vested at the 

beginning of the exercise period. 

1.19. Provisions for risks and charges 

The Group recognizes provisions for risks and charges when a present or constructive obligation arises as a 

result of a past event, the amount of which can be reliably estimated, and use of resources is probable to settle 

the obligation. Provisions reflect the best estimate of the amount required to settle the obligation or transfer it to 

third parties at the balance sheet date. If the present value of the financial resources that will be used is 

material, provisions are determined by discounting expected future cash flows at a rate that reflects the current 

market assessment of the time value of money and, where appropriate, the risks specific to the liability. When 

discounting is performed, movements in provisions due to the effect of time or changes in interest rates are 

recognized in financial items. 

Changes in estimates are recognized as income or expense for the period. 

The Group recognizes a separate provision for environmental restoration obligations on land used for quarry 

work, determined in relation to the use of the quarry in question. 

85 


Pending publication of a standard/interpretation on accounting treatment of greenhouse gas emission 

allowances, after the withdrawal of IFRIC 3 by the International Accounting Standards Board, the Group 

recognizes a separate provision when emissions are greater than the allowance. 

1.20. Loans and borrowings 

Loans and borrowings are initially recognized at the fair value of the consideration provided/received less 

charges directly attributable to the financial asset/liability. 

After initial recognition, loans and borrowings are measured at amortized cost using the effective interest rate 

method. 

1.21. Trade payables and other payables 

Trade payables and other payables are stated at the fair value of the original consideration received. 

1.22. Derivative financial instruments 

The Group uses derivative financial instruments such as foreign currency forward contracts and interest-rate 

swaps and options to hedge exchange-rate and interest-rate risks. Derivative financial instruments are 

measured and recognized at fair value. 

The fair value of foreign currency forward contracts is determined on the basis of the current forward exchange 

rates for contracts with similar maturity profiles. The fair value of interest-rate contracts is determined on the 

basis of discounted flows using the zero coupon curve. 

Hedging transactions 

Derivative financial instruments are designated as hedging instruments or as non-hedging instruments. 

Transactions that qualify for application of hedge accounting are classified as hedging transactions; other 

transactions are designated as trading transactions, even if they are performed for the purposes of risk 

management. 

For accounting purposes, hedging transactions are classified as “fair value hedges” if they cover the risk of 

changes in the fair value of the underlying asset or liability; or as "cash flow hedges” if they hedge cash flows 

arising from an existing asset or liability or from a future transaction, which are exposed to variability. 

With regard to fair value hedges, fair value gains and losses on the derivative instruments are taken to income 

immediately. Similarly, the underlying assets or liabilities are measured at fair value and any gain or loss 

attributable to the hedged risk is recognized as an income or expense balancing entry. 

If the movement refers to an interest-bearing financial instrument, it is amortized on the income statement until 

maturity. 

With regard to cash flow hedges (foreign currency forward contracts, fixed-rate interest swaps), movements in 

intrinsic value are reflected in a separate equity item, while time-based changes and the non-effective hedge 

component are recognized in the income statement. The effective component and non-effective component 

are calculated using the methods indicated in IAS 39. 

Gains or losses arising from changes in the fair value of derivatives designated for trading are recorded as 

income or expense. 

When the financial instrument matures, is sold, settled, exercised or no longer qualifies for hedge accounting, 

the derivative is no longer treated as a hedging contract. In this case, gains or losses on the derivative are 

retained in equity until the hedged transaction takes place. If the Group no longer expects the hedged 

transaction to take place, the net gain or loss in equity is taken to the income statement. 

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Annexes 142 


1.23. Revenues, other revenues, interest income and dividends 

Sale of goods and services 

Revenues are recognized to the extent that it is probable that the economic benefits associated with the sale of 

goods or rendering of services are collected by the Group and the amount in question can be reliably 

determined. Revenues are recognized at the fair value of the consideration received or due, taking account of 

any trade discounts given and volume discounts. 

Revenues from the sale of goods are recognized when the company transfers the material risks and rewards 

incident to ownership of the goods to the purchaser. 

Rental income 

Rental income is recognized as other revenues, as received. 

Interest income 

Interest income is classified as finance income on an accrual basis using the effective interest rate method. 

Dividends 

Dividends are recognized as finance income as shareholders’ right to receive payment arises, in accordance 

with local laws. 

1.24. Government grants 

Government grants are recognized when there is a reasonable certainty that they will be received and all the 

requirements on which receipt depends have been fulfilled. 

Grants related to the purchase or production of fixed assets (grants related to assets) are recognized as 

deferred income and taken to the income statement over the useful life of the underlying assets. 

1.25. Management of capital 

The Group monitors its capital using the gearing ratio: net financial position/equity. The net financial position 

reflects financial debt less cash and cash equivalents and other financial assets (as described in note 21). 

Equity consists of all the components of equity presented in the balance sheet. 

Group strategy aims to keep the gearing ratio at a level such as to ensure the smooth running of business 

operations, funding of investments and creation of maximum value for shareholders. 

To maintain or modify its capital structure, the Group may decide to vary the amount of dividends paid to 

shareholders, redeem capital, issue new shares, raise or reduce its shareholding in subsidiaries, purchase or 

sell interests. 

87 


2. Exchange rates used to translate the financial statements of foreign entities 

Exchange rates for 1 euro: 

Average rate 

Closing rate 

Currencies 

Full year 


Full year 

2009 

December 31, 


December 31, 

2009 

Albania lek 137.74003 132.06922 138.86000 138.03300 

Saudi Arabia riyal 4.97226 5.22798 5.01060 5.40329 

Canada dollar 1.36508 1.58530 1.33220 1.51280 

Egypt pound 7.47113 7.74032 7.75751 7.90576 

GB sterling 0.85805 0.89140 0.86075 0.88810 

India rupee 60.58486 67.34896 59.75800 67.04000 

Kazakhstan tenge 195.38110 205.96651 196.96400 213.77500 

Kuwait dinar 0.38019 0.40163 0.37594 0.41315 

Libya dinar 1.67844 1.74613 1.67606 - 

Morocco dirham 11.15625 11.25223 11.17980 11.33490 

Mauritania ouguiya 365.68685 364.95711 377.75700 377.42300 

Mexico peso 16.73637 18.78758 16.54750 18.92230 

Moldavia leu 16.38605 15.50707 16.24000 17.72180 

Qatar riyal 4.82647 5.07816 4.86375 5.24609 

People's Republic of China renminbi 8.97294 9.52237 8.82200 9.83500 

Sri Lanka rupee 149.85278 160.25073 148.24700 164.74000 

USA dollar 1.32588 1.39400 1.33620 1.44060 

Switzerland franc 1.38063 1.51013 1.25040 1.48360 

Thailand baht 42.02675 47.79504 40.17000 47.98600 

Turkey lira 1.98756 2.15138 2.04910 2.16030 

The exchange rates used to translate the financial statements of the foreign entities are those published by the 

Bank of Italy and by the Turkish central bank. 

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Annexes 142 


3. Changes in the scope of consolidation 

The main changes in 2010 were: 

- line-by-line consolidation as from January 1 of Beton Ata LLP (Kazakhstan) in the ready mixed concrete 

sector; exit from the Group of Cementos Capa S.L. (Spain) following the sale of the company in January; 

- line-by-line consolidation as from August of the Star. Co. S.r.l. company (Italy) in the ready mixed concrete 

sector; 

- valuation with the equity method of the Gardawind S.r.l. group (Italy) as from September 30. Gardawind is 

active in wind energy and is part of the Italgen group. 

The main changes in 2009 were: 

- line-by-line consolidation as from April 1 of Beton Masoni Sas (France) in the ready mixed concrete sector; 

- line-by-line consolidation as from May 1 of Gulf Ready Mix Concrete Co. (Kuwait) in the ready mixed 

concrete sector. 

The equity investments in subsidiaries, joint ventures and associates, and the respective method of 

consolidation, are listed in the annex. 

89 


4. Operating segment disclosure 

The model for the operating segment disclosure (IFRS 8) has been updated. The Group operating segments 

continue to comprise the countries in which the Group operates, but representation of the countries in question 

has been modified with respect to the 2009 financial statements. The main changes, designed to ensure a 

close correspondence between Group operations and areas of business and disclosure requirements, are the 

reclassification of the BravoSolution group and other minor operations from Italy to the segment “Other 

operations”, and the creation of three new segments comprising (current and future) countries with smallerscale 

operations: Others Central Western Europe (with Greece), Others Emerging Europe, North Africa and 

Middle East (with Bulgaria, Turkey, Kuwait and Saudi Arabia) and Others Asia (with China and Kazakhstan). 

The Group operating segments are: 

Italy 

France-Belgium 

Spain 

Others Central Western Europe (Greece) 

North America 

Egypt 

Morocco 

Others Emerging Europe, North Africa and Middle East (Bulgaria, Turkey, Kuwait, Saudi Arabia) 

Thailand 

India 

Others Asia (China and Kazakhstan) 

Cement & clinker trading 

Other operations 

Cement & clinker trading includes cement and clinker marketing activities in countries where Group terminals 

are located: Gambia, Mauritania, Sri Lanka and Albania, as well as direct exports to markets not covered by 

Group subsidiaries. 

The “Other operations” segment comprises the operations of the Ciments Français S.A. sub-holding, consisting 

essentially of provision of services to subsidiaries. It also includes liquid and solid fuel procurement operations 

for Group companies, the BravoSolution group, Italcementi Finance S.A., other international holdings and other 

minor operations in Italy. 

The Group management and organizational structure essentially reflects the operating segment structure. 

Finance income and costs, impairment on financial assets and income taxes are not allocated to the operating 

segments. 

The Group business sectors are: 

operations relating to the production and sale of cement/clinker, 

operations relating to construction materials: ready mixed concrete and aggregates, 

other operations such as: transport, additives for cement and ready mixed concrete, PVC and clay pipes, 

e-business and energy. 

The operating segments and business sectors are organized and managed by country. The operating 

segments consist of the fixed assets of the individual entities located and operating in the countries indicated 

above; sales refer mainly to the local market, exports are generally with other Group entities; exports to 

external countries are conducted through the Group companies of the international Trading segment. 

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Annexes 142 


Consequently the revenues of the entities in each operating segment, net of revenues within the Group, arise 

essentially in the areas in which the fixed assets are located. 

The cement/clinker business delivers a portion of its production to the ready mixed concrete segment. The 

transfer prices applied to trading of goods and services among the segments are regulated on the basis of 

arm’s length transactions. 

Consolidated cement/clinker revenues are present in all the operating segments with the exception of “Other 

operations”, which consists largely of fuel sales and e-business revenues. 

Consolidated ready mixed concrete and aggregates revenues are present in almost all the operating segments 

with the exception of: Italy (due to the deconsolidation of Calcestruzzi), Bulgaria, India and China. 

Revenues of other operations refer mainly to sales of additives for cement and ready mixed concrete in Italy, 

France/Belgium, Spain, North America and Morocco, e-business revenues and energy revenues in the Italy 

segment. 

With regard to dependence on the main Group customers, no single customer accounts for more than 10% of 

consolidated revenues. 

91 


Operating segments 

The table below sets out segment revenues and results at December 31, 2010: 

(in thousands 

of euro) 

Revenues 

Intragroup 

sales 

Contributive 

revenues 

Recurring 

EBITDA 

EBITDA EBIT Finance 

income 

(costs) 

exch.rate 

differences 

and 

derivatives 

Impairment 

on financial 

assets 

Share of 

results of 

associates 

Profit 

before 

tax 

Income 

tax 

expense 

Italy 689,475 (46,528) 642,947 (36,339) (33,337) (122,626) (1,359) 

France-Belgium 1,493,788 (13,444) 1,480,344 318,229 316,756 215,547 (250) 

Spain 176,458 (24,729) 151,729 31,604 31,094 7,657 - 

Others C.W.E. 70,262 (7,687) 62,575 14,549 14,573 10,176 (1,561) 

Eliminations (22,643) 22,643 - (12) (42) (43) - 

C.W.E. 2,407,340 (69,745) 2,337,595 328,031 329,044 110,711 (3,170) 

North 

America 415,295 (670) 414,625 25,387 21,717 (48,167) 10,911 

Egypt 788,682 (5,764) 782,918 270,665 270,518 191,150 1,162 

Morocco 326,066 (1,298) 324,768 125,661 122,422 95,586 8,730 

Others 

EE.NA.ME. 264,430 (3,476) 260,954 18,486 18,879 (9,624) (476) 

Eliminations (518) 518 - (1) - - - 

EE.NA.ME. 1,378,660 (10,020) 1,368,640 414,811 411,819 277,112 9,416 

Thailand 180,236 (3,635) 176,601 14,958 14,739 (7,306) - 

India 169,806 - 169,806 36,015 35,903 20,162 - 

Others Asia 98,926 - 98,926 17,264 17,090 7,171 - 

Eliminations 1 (1) - - - (1) - 

Asia 448,969 (3,636) 445,333 68,237 67,732 20,026 - 

Cement 

& clinker 

trading 229,286 (93,056) 136,230 14,304 14,296 11,375 (105) 

Other 

operations 424,634 (336,113) 88,521 (14,489) (9,990) (16,966) - 

Unallocated 

postings - - - - - - (90,636) (21,014) - 259,155 (62,087) 

Eliminations (513,240) 513,240 - (19) (340) (338) - 

Total 4,790,944 - 4,790,944 836,262 834,278 353,753 (90,636) (21,014) 17,052 259,155 (62,087) 

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Annexes 142 


The table below sets out segment revenues and results at December 31, 2009: 

(in thousands 

of euro) 

Revenues 

Intragroup 

sales 

Contributive 

revenues 

Recurring 

EBITDA 

EBITDA EBIT Finance 

income 

(costs) 

exch.rate 

differences 

and 

derivatives 

Impairment 

on financial 

assets 

Share of 

results of 

associates 

Profit 

before 

tax 

Income 

tax 

expense 

Italy 824,800 (57,219) 767,581 47,335 56,921 (53,016) (1,717) 

France-Belgium 1,529,743 (11,631) 1,518,112 334,054 338,156 232,519 854 

Spain 226,877 (16,546) 210,331 42,159 43,001 16,940 - 

Others C.W.E. 83,286 (8,011) 75,275 21,131 21,100 16,687 305 

Eliminations (16,462) 16,462 - - - - - 

C.W.E. 2,648,244 (76,945) 2,571,299 444,679 459,178 213,130 (558) 

North 

America 401,248 (505) 400,743 12,526 2,359 (55,544) 7,478 

Egypt 792,984 (6,662) 786,322 262,226 261,470 183,183 1,086 

Morocco 320,275 (288) 319,987 132,201 132,246 108,616 9,120 

Others 

EE.NA.ME. 281,510 (405) 281,105 23,952 23,887 (5,082) (1,730) 

Eliminations (534) 534 - - - - - 

EE.NA.ME. 1,394,235 (6,821) 1,387,414 418,379 417,603 286,717 8,476 

Thailand 160,752 (12,100) 148,652 22,247 15,862 (25,644) - 

India 171,830 - 171,830 60,554 60,527 47,049 - 

Others Asia 79,119 - 79,119 12,606 12,455 4,839 (503) 

Eliminations - - - - - - - 

Asia 411,701 (12,100) 399,601 95,407 88,844 26,244 (503) 

Cement 

& clinker 

trading 221,117 (67,143) 153,974 11,003 11,007 8,458 (325) 

Other 

operations 353,265 (259,917) 93,348 (10,416) (17,055) (30,780) - 

Unallocated 

postings - - - - - - (106,871) (41,129) 309,542 (94,225) 

Eliminations (423,431) 423,431 - - (5,251) (5,251) - 

Total 5,006,379 - 5,006,379 971,578 956,685 442,974 (106,871) (41,129) 14,568 309,542 (94,225) 

93 


The table below sets out other segment data at December 31, 2010: 

December 31, 2010 

Operating 

assets 

Operating 

liabilities 

Investments in 

associates 

Depreciation PPE 

and amortization 

intangible assets 

Impairment 


Italy 1,173,675 285,394 4,498 (90,626) 1,337 

France-Belgium 1,958,148 491,672 7,876 (99,902) (1,308) 

Spain 547,913 58,570 - (20,547) (2,890) 

Others C.W.E. 101,708 20,746 61,605 (4,396) - 

Eliminations (5,822) (5,814) - - - 

C.W.E. 3,775,622 850,568 73,979 (215,471) (2,861) 

North America 1,127,477 122,122 86,331 (69,883) - 

Egypt 1,306,461 223,198 5,862 (76,338) (3,030) 

Morocco 630,146 116,810 40,706 (26,836) 

Others EE.NA.ME. 521,267 63,702 1,269 (27,201) (1,302) 

Eliminations (266) (266) - - - 

EE.NA.ME. 2,457,608 403,444 47,837 (130,375) (4,332) 

Thailand 355,035 40,250 - (22,019) (26) 

India 455,201 61,045 - (15,742) - 

Others Asia 116,772 15,782 - (9,175) (744) 

Eliminations - - - - - 

Asia 927,008 117,077 - (46,936) (770) 

Cement 

& clinker 

trading 80,720 35,658 4,114 (2,921) 

Other operations 171,446 135,001 - (6,957) (19) 

Unallocated postings - - - - - 

Eliminations (96,261) (101,644) - - - 

Total 8,443,620 1,562,226 212,261 (472,543) (7,982) 

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Annexes 142 


The table below sets out other segment data at December 31, 2009: 

December 31, 2009 

Operating 

assets 

Operating 

liabilities 

Investments in 

associates 

Depreciation PPE 

and amortization 

intangible assets 

Impairment 


Italy 1,223,294 292,314 29,380 (96,035) (13,901) 

France-Belgium 2,058,352 500,583 8,169 (104,032) (1,606) 

Spain 582,001 62,615 - (24,163) (1,898) 

Others C.W.E. 103,496 24,486 63,532 (4,413) - 

Eliminations (3,934) (3,933) - - - 

C.W.E. 3,963,209 876,065 101,081 (228,643) (17,405) 

North America 1,066,420 135,671 73,879 (47,860) (10,043) 

Egypt 1,300,142 195,881 5,110 (78,287) - 

Morocco 536,862 97,103 40,447 (23,630) - 

Others EE.NA.ME. 494,008 54,619 1,279 (28,969) - 

Eliminations (320) (319) - - - 

EE.NA.ME. 2,330,692 347,284 46,836 (130,886) - 

Thailand 305,485 31,907 - (21,710) (19,797) 

India 348,016 40,349 - (13,478) 

Others Asia 101,803 13,028 1,672 (7,616) 

Eliminations - - - - - 

Asia 755,304 85,284 1,672 (42,804) (19,797) 

Cement 

& clinker 

trading 65,127 33,790 4,969 (2,549) - 

Other operations 188,545 134,013 - (7,013) (6,711) 

Unallocated postings - - - - - 

Eliminations (99,456) (104,032) - - - 

Total 8,269,841 1,508,075 228,437 (459,755) (53,956) 

Operating assets and liabilities include all current and non-current assets and liabilities with the exception of tax 

and financial assets and liabilities. 

95 


Assets 

5 Property, plant and equipment and Investment property 

5.1 Property, plant and equipment 

Land and 

buildings 

Quarries 

Technical plant, 

materials and 

equipment 

Other PPE and 

construction in 

progress 

Total 


Net carrying amount at Dec.31, 09 899,050 372,495 2,304,317 817,131 4,392,993 

Gross amount 1,935,866 596,590 6,894,249 1,158,988 10,585,693 

Accumulated depreciation (1,036,816) (224,095) (4,589,932) (341,857) (6,192,700) 

Net carrying amount at Dec.31, 09 899,050 372,495 2,304,317 817,131 4,392,993 

Additions 58,655 12,392 226,634 210,116 507,797 

Change consolidation scope, 

Reclassifications, Other 94,729 (19,012) 357,129 (431,568) 1,278 

Disposals (3,148) (95) (3,027) (2,069) (8,339) 

Depreciation and impairment losses (54,103) (12,550) (370,858) (27,631) (465,142) 

Currency translation differences 32,962 6,660 94,319 32,620 166,561 

Net carrying amount at Dec.31, 10 1,028,145 359,890 2,608,514 598,599 4,595,148 

Gross amount 2,170,392 565,302 7,624,901 965,037 11,325,632 

Accumulated depreciation (1,142,247) (205,412) (5,016,387) (366,438) (6,730,484) 

Net carrying amount at Dec.31, 10 1,028,145 359,890 2,608,514 598,599 4,595,148 

The main additions refer to the new production lines at the Ait Baha cement plant in Morocco and the 

Yerraguntla cement plant in India. 

Construction in progress at December 31, 2010, was 511,629 thousand euro (720,271 thousand euro at 

December 31, 2009): the decrease for the year in the line “Change … other” related mainly to the 

reclassifications to the final categories of assets relating to the cement plant in Ait Baha, Morocco, and the 

Yerraguntla industrial site in India and the Martinsburg industrial site in North America. 

“Depreciation and impairment losses” include impairment of 5.2 million euro on property, plant and equipment 

(51.0 million euro at December 31, 2009) and refer mainly to industrial plants in Egypt and Saudi Arabia. The 

review of the useful lives of industrial assets in the cement sector produced a positive effect of 29.2 million euro 

in 2010. 

Fixed assets held under finance leases and rental contracts were carried at a net amount of 27.7 million euro at 

December 31, 2010 (31.8 million euro at December 31, 2009). They consist largely of “plant and machinery” 

and “automobiles and aircraft”. 

Expenses included under “Property, plant and equipment” amounted to 58.7 million euro at December 31, 2009 

(58.7 million euro at December 31, 2009). 

Fixed assets pledged as security for bank loans were carried at a net amount of 200 million euro at December 

31, 2010 (213.3 million euro at December 31, 2009). 

The useful life adopted by the Group for the main asset categories is as follows: 

Civil and industrial buildings 

10 – 33 years 

Plant and machinery 

5 – 30 years 

Other property, plant and equipment 3 – 10 years 

The range between the above minimum and maximum limits indicates the presence of components with 

separate useful lives within each asset category. 

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Annexes 142 


5.2 Investment property 


Net carrying amount at Dec.31, 09 31,621 

Gross amount 55,874 

Accumulated depreciation (24,253) 


Additions 102 

Disposals (487) 

Depreciation and impairment losses (1,550) 

Currency translation differences 1,381 

Reclassifications 2,031 


Gross amount 58,147 

Accumulated depreciation (25,049) 


Investment property is carried at amortized cost; fair value at December 31, 2010, was 134.3 million euro 

(119.2 million euro at December 31, 2009). “Depreciation and impairment losses” include a value adjustment of 

1.0 million euro on land in Spain. 

6. Goodwill 

6.1 Change in goodwill 

The change in goodwill with respect to December 31, 2009, was as follows: 


Net carrying amount at Dec.31, 09 1,961,616 

Acquisitions and changes in scope of consolidation 2,061 

Sales - 

Impairment losses (469) 

Currency translation differences 53,406 

Net carrying amount at Dec.31, 10 2,016,614 

The material change in goodwill during the year arose almost entirely from currency translation gains 

generated by the appreciation of other currencies against the euro; see the table in note 6.2 detailing goodwill 

by country. 

97 


6.2 Goodwill testing 

Goodwill acquired in business combinations is apportioned to the cash-generating units (CGUs). The Group 

tests goodwill recoverability at least once a year or more frequently if indications of impairment emerge. The 

methods used to determine the recoverable amount of CGUs are described in the notes on accounting policies 

under the section “Impairment of assets”. 

The 2010 tests took account of the structural evolution in the macro-economic scenario in all the countries 

where consumption models have altered significantly as a result of the profound changes triggered by the 

financial crisis that began in 2008; particular attention was paid to the construction industry, end consumer of 

cement, whose fluctuations have a direct impact on cement production. 

In the countries where the Group operates in the EU and North America, large and unexpected reductions 

were reported in general cement consumption, in absolute values and, above all, with respect to the growth 

rates based on the long-term demand curve trend. 

In these countries, according to the latest estimates, the economic cycle has recorded significantly lower 

growth rates in the construction sector, a phenomenon that implies a more gradual recovery in cement 

consumption; in the majority of EU countries and in North America, this recovery is therefore likely to be slower 

than that structurally expected on the basis of the customary macroeconomic indicators. 

Consequently, the long-term consumption forecasts that provide the basis for the CGU cash flow projections 

used in goodwill tests are now aligned with a timeframe adjusted to take account of the new conditions of 

general economic growth, in particular the long-term growth expectations for cement consumption indicated by 

the “structural demand curve”. 

Accordingly, for the EU countries and North America, a period of 9 years was used to estimate expected future 

cash flows; projected cement consumption is thus structurally balanced and aligned with the related long-term 

estimate implicit in the cement structural demand curve for each country. 

The emerging countries are also subject in part to a change in cyclical patterns compared with the recent past, 

but their cement consumption is more likely to be influenced by exogenous factors relating to specific macro 

economic events; as in the past, the goodwill tests were based on expected growth in demand over a four-year 

period. 

The main assumptions used for the computation are set out below: 

(in %) 

Discount factor before tax 

Growth rate 

Cash-generating units 2010 2009 2010 2009 

Italy 7.7 7.0 1.1 1.1 

France/Belgium 8.7 8.0 1.1 1.1 

Spain 8.5 7.7 1.0 1.0 

North America 7.4 7.3 1.2 1.2 

Egypt 13.4 12.7 6.0 6.0 

Morocco 9.8 9.4 2.4 2.4 

India 12.3 11.6 5.0 5.0 

Thailand 9.5 8.7 2.5 2.5 

The discount factors, determined country by country, are obtained by applying the estimated long-term inflation 

rate, adjusted in some cases with the country-risk premium, to the weighted average cost of capital (WACC) 

WACCs are computed on the basis of the market value of capital and of sector debt, to which the mean sector 

coefficient based on the debt/stock market capitalization ratio is applied. 

Goodwill testing for 2010 did not generate any goodwill impairment losses. 

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Annexes 142 


The most significant goodwill values for Group CGUs are set out below: 


Net carrying amount of goodwill 

Cash-generating units December 31, 2010 December 31, 2009 

France/Belgium 587,383 587,009 

Spain 225,564 225,849 

Egypt 594,289 583,145 

North America 140,398 129,788 

Morocco 107,679 106,205 

India 98,640 87,925 

Thailand 90,310 75,610 

Bulgaria 59,774 59,774 

Italy - cement 26,519 26,519 

Turkey 20,046 19,014 

Greece 12,100 12,100 

China 6,849 6,143 

Others 47,063 42,535 

Total 2,016,614 1,961,616 

Sensitivity analysis: 

With reference to the current and expected industry situation and to the results of the 2010 impairment tests, a 

sensitivity analysis was conducted on recoverable amount, using the discounted cash flow method. 

At December 31, 2010, a 1% increment in the WACC would determine a surplus difference in carrying amount 

with respect to recoverable amount of 9 million euro for the Turkish CGU and of 24 million euro for the Spanish 

CGU. On the basis of this analysis, the Group deems it unnecessary to reduce the goodwill of the CGUs in 

question. 

The discount factor that equates recoverable amount with net carrying amount is 11.6% for the Turkish CGU 

and 7.6% for the Spanish CGU. 

7. Intangible assets 

Patents, IT 

developments 

Concessions 

and other 


Net carrying amount at Dec.31, 09 22,816 99,537 122,353 

Gross amount 101,380 117,327 218,707 

Accumulated amortization (78,564) (17,790) (96,354) 


Additions 11,041 10,459 21,500 

Disposals (2,727) - (2,727) 

Amortziation and impairment losses (8,482) (5,200) (13,682) 

Currency translation differences 486 4,449 4,935 

Change in scope of consolidation and other 2,196 (758) 1,438 


Gross amount 115,638 126,522 242,160 

Accumulated amortization (90,308) (18,035) (108,343) 


Total 

99 


“Concessions” are amortized over the life of the conventions in question; amortization of quarrying concessions 

is determined at rates reflecting the ratio of extracted material to total to be extracted. “Concessions” includes 

the Bares licenses in Turkey for 30.2 million euro, relating to the Balikesir wind farm, on which amortization has 

not yet begun. 

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Annexes 142 


8. Investments in associates 

This caption reflects equity interests, including goodwill of 31.7 million euro at December 31, 2010 (32.1 million 

euro at December 31, 2009), in associates consolidated with the equity method. 

The main investments in associates are listed below: 

Value of investments 

Share of result 

December 31, December 31, 




2009 

Ciment Québec (Canada) 86.3 73.9 9.7 7.3 

Vassiliko Cement Works (Cyprus) 61.6 63.5 (1.6) 0.3 

Asment Cement (Morocco) 40.7 40.4 8.7 9.1 

R.C.S. Mediagroup S.p.A. (Italy) - 26.0 (1.3) (1.7) 

Tecno Gravel (Egypt) 5.9 5.1 1.2 1.1 

Acquitaine de transformation (France) 4.1 4.1 - 0.3 

Others 13.7 15.4 0.4 (1.8) 

Total 212.3 228.4 17.1 14.6 

Tests on goodwill recoverability did not generate any impairment losses. 

In December 2010 the RCS MediaGroup shares were sold to the parent company Italmobiliare S.p.A.. The sale 

price of 1.44 euro per share for an aggregate amount of 24.6 million euro was determined on the basis of 

fundamental criteria expressing the present value of expected future cash flows, given that this is an 

investment with significant influence (associate) and that, owing to low trading volumes, the market price is not 

an adequate parameter for determining a fair economic value. The consolidated capital loss after recognizing 

the share of the RCS result for the year to September 30, 2010, was 0.2 million euro. 

Values for the main associates, adjusted for compliance with Group principles, are set out below: 

Total assets Total liabilities Revenues Net profit 

(in millions of euro) 2010 2009 2010 2009 2010 2009 2010 2009 

Ciment Québec (Canada) 202.1 167.7 40.4 29.1 123.7 98.9 19.5 15.8 

Vassiliko Cement Works (Cyprus) 368.9 321.1 137.6 89.8 93.3 101.8 (6.3) 1.2 

Asment (Morocco) 115.0 114.4 29.3 29.1 93.0 94.4 23.6 24.4 

RCS MediaGroup (Italy)* 3,408.5 3,534.7 2,340.1 2,404.3 1,644.7 1,621.2 0.7 (73.3) 

* Consolidated book values at September 30 

101 


9. Other equity investments 

This non-current asset caption reflects equity investments in the “available-for-sale” category as required by 

IAS 39. 

The movements for the year are set out below: 


At December 31, 2009 269,124 

Acquisitions 14,848 

Sales (101,420) 

Changes in fair value taken to equity reserves 46,016 

Currency translation differences 292 

Other and reclassifications (7,674) 

Impairment (21,014) 

At December 31, 2010 200,172 

“Acquisitions” refers mainly to the 5.3 million euro investment for 35% of the capital of Shifeng Cement (China) 

and the increase in the equity investment in Al Badia Cement (Syria) for 4.7 million euro. 

“Sales” refers to the sale of Mediobanca S.p.A. shares, carried at 100.6 million euro, to the parent company 

Italmobiliare S.p.A.. The sale price consists of a fixed amount and a variable amount. The fixed amount is 

7.1044 euro per share for an aggregate amount of 86.0 million euro paid at the time of transfer of the shares; 

the variable amount will be paid to Italcementi after September 30, 2011, in the form of a possible price 

adjustment; the consolidated net capital gain at December 31, 2010, was 18.6 million euro, taking account of 

the transfer to income of gains of 33.2 million euro taken directly to reserves in previous years. 

“Changes in fair value taken to equity reserves” refers in the main to Goltas shares for 38.6 million euro and 

the impairment reversal of 7.5 million euro for the Calcestruzzi group with respect to the impairment loss 

posted in the 2010 half-year report. 

“Impairment” essentially reflects the impairment loss of 19.7 million euro on the investment in the Calcestruzzi 

group posted at June 30, 2010 (41.1 million euro at December 31, 2009). 

Other equity investments at December 31, 2010, were as follows: 

% share 

of total 

December 31, 


capital 


Equity investments in listed companies 

Goltas (Turkey) 35.0 85,833 

Others 2,475 

Total 88,308 

Equity investments in non-listed companies 

Calcestruzzi group 59,792 

Others 52,072 

Total 200,172 

The fair value of listed companies is determined on the basis of the official share price on the last accounting 

day. 

102






Annexes 142 


A variety of methods was used to value investments in non-listed companies, depending on their 

characteristics and available data, in compliance with IAS 39. 

Calcestruzzi group 

At December 31, 2010, the Calcestruzzi group was carried at 59.8 million euro (72.0 million euro at December 

31, 2009), reflecting fair value estimated with reference to market transactions, determined with the assistance 

of a congruity opinion issued by an independent consultant. At June 30, 2010, the impairment loss for the 

Calcestruzzi group reflected in the income statement was 19.7 million euro, which, with respect to the 

difference in the values at December 31, 2010, and December 31, 2009 (12.2 million euro) generated an 

impairment reversal of 7.5 million euro, taken to the fair value reserve for available-for-sale financial assets. 

10. Other non-current assets 

This caption reflects: 


December 31, 


December 31, 

2009 

Derivative instruments 50,864 20,345 

Concessions and licenses paid in advance 174 596 

Non-current receviables 17,414 14,565 

Guarantee deposits 32,952 35,034 

Securities and debentures 9,357 9,508 

Pension plan assets 510 352 

Total 111,271 80,399 

Derivative instruments are discussed in note 22.3 Financial instruments. 

11. Inventories 


December 31, 


December 31, 

2009 

Raw and ancillary materials and consumables 422,637 413,123 

Work in progress and semifinished goods 156,439 131,537 

Finished goods 129,510 121,484 

Payments on account 17,566 20,145 

Total 726,152 686,289 

Inventories are carried net of write-down provisions totaling 105.2 million euro (104.6 million euro at December 

31, 2009), mainly against the risk of slow-moving ancillary materials and consumables. Spares at December 

31, 2010, were carried at 189.8 million euro (202.5 million euro at December 31, 2009). 

103 


12. Trade receivables 


December 31, 


December 31, 

2009 

Gross amount 822,024 959,977 

Provision for bad debts (83,469) (78,911) 

Net amount 738,555 881,066 

In December 2006, Ciments Calcia and Unibeton stipulated five-year factoring programs. At December 31, 

2010, factored receivables totaled 118.8 million euro (133.4 million euro at December 31, 2009). 

The factoring transactions comply with IAS 39 since the associated risks are transferred with the receivables 

for approximately 90% of the factored amount. 

After this operation, the balance sheet continued to reflect: 

- subordinate additional deposits for 21.0 million euro (22.9 million euro at December 31, 2009) reflected under 

other current assets; 

- non-transferred receivables in the form of arranged guarantees for 9.9 million euro, reflected under trade 

receivables, with balancing entries of 8.2 million euro in loans and borrowings and 1.7 million euro against 

miscellaneous receivables. 

Provision for bad debts 

The provision for bad debts is determined using Group procedures, and taking account of bank guarantees and 

guarantees on company assets. At closure of the reporting period, the Group companies analyze doubtful 

overdue receivables on a customer-by-customer basis. The amount of overdue receivables at risk is adjusted 

accordingly. 

13. Other current assets 

This caption reflects: 


December 31, 


December 31, 

2009 

Amounts due from tax and social security authorities 93,997 86,435 

Amounts due on the sale of fixed assets 3,565 3,685 

Concessions and licenses paid in advance 31,046 31,005 

Derivatives 6,454 2,314 

Other 188,291 147,017 

Total 323,353 270,456 

“Other” includes amounts totaling 74.9 million euro due to Italian companies that participate in the tax 

consolidation from the parent company Italmobiliare S.p.A. (34.8 million euro at December 31, 2009). 

Derivatives are discussed in note 22.3 Financial instruments. 

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Annexes 142 


Share capital and reserves 

14. Share capital 

At December 31, 2010, parent company fully paid-up share capital amounted to 282,548,942 euro represented 

by 282,548,942 shares with a par value of 1 euro each, as follows: 

Number of shares December 31, 


December 31, 

2009 

Change 

Ordinary shares 177,117,564 177,117,564 - 

Savings shares 105,431,378 105,431,378 - 

Total 282,548,942 282,548,942 - 

15. Reserves 

Share premium reserve 

The share premium reserve stood at 344,104 thousand euro, unchanged from December 31, 2009. 

Translation reserve 

This reserve reflects exchange-rate differences on the translation of the financial statements of consolidated 

foreign entities. At December 31, 2010, it stood at 23.5 million euro, referring to the following currencies: 

December 31, December 31, 

Change 



2009 

Egypt (pound) (32.1) (39.0) 6.9 

USA and Canada (dollar) 12.3 (33.8) 46.1 

Thailand (baht) 40.4 6.6 33.8 

Morocco (dirham) (1.3) (5.8) 4.5 

India (rupee) 2.5 (22.3) 24.8 

Turkey (lira) (10.0) (20.3) 10.3 

Other countries 11.8 (1.8) 13.5 

Total 23.5 (116.5) 139.9 

16. Treasury shares 

At December 31, 2010, the value of Italcementi S.p.A. treasury shares was 58,690 thousand euro, reflected in 

the treasury share reserve. No movements took place in the reserve during the year: 

No. ordinary 

shares 

par value 1 € 

Aggregate 

carrying 

amount 

(000 euro) 

No. savings 

shares 

par value 1 € 

Aggregate 

carrying 

amount 

(000 euro) 

Total 

carrying 

amount 

(000 euro) 

December 31, 2009 3,793,029 58,342 105,500 348 58,690 

Additions - - - - - 

Disposals - - - - - 

December 31, 2010 3,793,029 58,342 105,500 348 58,690 

105 


17. Dividends paid 

Dividends declared by the parent company Italcementi S.p.A in 2010 and 2009 are detailed below: 


(euro per share) 

2009 

(euro per share) 

December 31, 2010 

(000 euro) 

December 31, 2009 

(000 euro) 

Ordinary shares 0.120 0.180 20,799 31,198 

Savings shares 0.120 0.210 12,639 22,119 

Total dividends 33,438 53,317 

Dividends paid in 2010 amounted to 33,432 thousand euro (53,308 thousand euro in 2009). 

18. Non-controlling interests 

Minority interests at December 31, 2010, stood at 1,460.9 million euro, up by 121.8 million euro from December 

31, 2009. 

Net profit for 2010 rose by 7.3 million euro, from 144.0 million euro in 2009 to 151.3 million euro in 2010; the 

change in the translation reserve had a positive impact of 61.3 million euro on minority interests, as a result of 

the performance of the euro against the currencies in countries with large minority interests, including Egypt, 

Morocco and Thailand. 

19. Employee benefit liabilities 

Employee benefit liabilities at December 31, 2010, amounted to 184,822 thousand euro (180,930 thousand 

euro at December 31, 2009). 

The Group’s main employee benefit plans are described below. 

Defined benefit plans 

The Group operates pension plans, post-employment medical benefit plans and leaving entitlement provisions. 

The most important pension plans are in the USA and France; they are financed by contributions paid by the 

company and by employees to external entities responsible for the administration and management of the 

pension funds; early retirement schemes also operate, pursuant to local laws, in France and Belgium. 

With regard to the TFR leaving entitlement provision for staff of the Group’s Italian companies, liabilities in 

respect of TFR leaving entitlements accrued and optioned by employees as from 2007 no longer qualify as 

defined benefit plans. They are treated as quotas of defined contribution plans. 

Some Group companies in the USA operate plans providing post-employment medical and life assurance 

benefits. In France and, to a lesser extent, in Belgium similar benefits are provided for certain classes of 

worker, specifically the companies pay a portion of contributions to the insurance company, which then 

reimburses workers, after retirement, for a portion of medical expenses. 

In some companies in France and Italy, the Group also recognizes liabilities in respect of future commitments, 

in the form of bonuses payable to employees on the basis of length of service; these liabilities are measured 

with actuarial assumptions. Net liabilities for pension plans, post-employment benefit plans and leaving 

entitlement provisions are determined with actuarial calculations performed by independent external actuaries. 

106






Annexes 142 


Net liabilities determined on the basis of actuarial calculations at December 31, 2010, are set out below: 

Pension plans and other 

long-term benefits 

Post-employment 

medical benefits 


Dec. 31, 10 Dec. 31, 09 Dec. 31, 10 Dec. 31, 09 Dec. 31, 10 Dec. 31, 09 

Discounted value of funded plans 129.7 118.2 - - 129.7 118.2 

Fair value of plan assets (86.1) (78.9) - - (86.1) (78.9) 

Discounted net value of funded plans 43.6 39.3 - - 43.6 39.3 

Discounted value of non-funded plans 69.7 70.7 81.7 72.1 151.4 142.8 

Net value of obligation 113.3 110.1 81.7 72.1 195.0 182.1 

Unrecognized experience adjustments (29.5) (21.2) (5.8) (1.3) (35.3) (22.5) 

Unrecognized costs on prior-period services (1.6) (1.8) (0.5) (0.3) (2.1) (2.1) 

Net liabilities 82.2 87.1 75.5 70.5 157.7 157.6 

of which: 

Liabilities 82.6 87.4 75.5 70.5 158.1 157.9 

Assets 0.4 0.3 - - 0.4 0.3 

Net (assets)/liabilities 82.2 87.1 75.5 70.5 157.7 157.6 

Total 

With reference to “post-employment medical benefits”, a change of +/- 1 percentage point in the rates relating 

to changes in medical expenditure would generate changes of +4.3 and -2.9 million euro respectively in 

balance sheet liabilities and +0.4 and -0.3 million euro respectively in the related costs. 

The movements in net liabilities during the year are analyzed below: 







Opening net liability 87.1 92.3 70.5 70.9 157.6 163.2 

Costs for the year 11.7 13.8 5.6 3.9 17.3 17.7 

Contributions or services paid (17.8) (18.9) (3.2) (3.2) (21.0) (22.1) 

Exchange-rate differences 1.3 (0.2) 2.6 (1.1) 4.0 (1.3) 

Plans acquired on changes in scope 

of consolidation (0.1) 0.1 - - (0.1) 0.1 

Closing net liability 82.2 87.1 75.5 70.5 157.7 157.6 

Total 

Costs for the year, all recognized under employee expenses, are detailed below: 






2010 2009 2010 2009 2010 2009 

Current cost of services (4.2) (4.1) (1.7) (1.4) (5.8) (5.5) 

Finance costs on obligations (10.5) (10.9) (4.0) (4.0) (14.5) (14.9) 

Revenues expected from plan assets 5.5 4.8 - - 5.5 4.8 

Net experience losses recognized in year (1.6) (1.8) (0.1) 0.1 (1.7) (1.7) 

Cost of prior-period services (1.3) (0.2) 0.2 0.8 (1.0) 0.5 

Plan settlement or curtailment (losses)/gains 0.4 (1.7) 0.6 0.4 (1.1) 

Total (11.7) (13.8) (5.6) (3.9) (17.3) (17.8) 

Real yield on assets 9.0 10.5 - - 9.0 10.5 

Total 

107 


The movements in defined benefit liabilities during the year are set out below: 





Total 



Opening present value of defined 

benefit liabilities 189.0 189.3 72.1 72.5 261.0 261.8 

Current cost of services 4.2 4.1 1.7 1.4 5.8 5.4 

Finance costs on obligations 10.5 10.9 4.0 4.0 14.5 14.9 

Employee contributions - - 0.3 0.3 0.3 0.3 

Cost of prior-period services 1.1 - - ( 0.7) 1.1 ( 0.7) 

Experience adjustments 10.7 8.4 4.7 ( 0.3) 15.4 8.2 

Amounts paid ( 19.4) ( 22.0) ( 3.6) ( 3.5) ( 22.9) ( 25.5) 

Plan curtailments 0.2 1.4 - ( 0.6) 0.2 0.7 

Plan settlements ( 4.7) - - - ( 4.7) - 

Change in scope of consolidation ( 0.1) 0.1 - - ( 0.1) 0.1 

Exchange-rate differences and other 8.0 ( 3.2) 2.5 ( 1.0) 10.5 ( 4.2) 

Closing present value of defined 

benefit liabilities 199.4 189.0 81.7 72.1 281.1 261.0 

The movements in plan asset fair values are set out below: 





Total 



Opening fair value of plan assets 78.9 73.5 - - 78.9 73.5 

Expected yield 5.5 4.8 - - 5.5 4.8 

Experience adjustments 3.4 5.7 - - 3.4 5.7 

Employer contributions 17.8 18.9 3.2 3.2 21.0 22.1 

Employee contributions - - 0.3 0.3 0.3 0.3 

Benefits paid (19.4) (22.0) (3.6) (3.5) (22.9) (25.5) 

Plan settlements (4.7) - - - (4.7) - 

Change in scope of consolidation (0.0) - - - (0.0) - 

Exchange-rate differences and other 4.6 (2.0) - - 4.6 (2.0) 

Closing fair value of plan assets 86.1 78.9 - - 86.1 78.9 

The Group’s estimated contribution to defined benefit plans in 2011 is 5.3 million euro. 

The table below sets out the main plan asset categories as percentages of total fair value: 


Equities 40.0% 34.4% 

Debentures 53.9% 58.2% 

Investment property 0.8% 1.3% 

Other 5.3% 6.1% 

108






Annexes 142 


The table below sets out key data for pension plans and other long-term benefits in the last two years: 


December 31, 


December 31, 

2009 

Discounted value of funded plans 281.1 261.0 

Fair value of plan assets (86.1) (78.9) 

Net value of funded plans 195.0 182.1 

Difference between actual asset yield and asset yield expected at beginning 

of period (experience adjustments) (3.5) -4.0% (5.7) -7.2% 

Change in value of funded plans other than experience adjustments (0.7) 0.2% (4.4) -1.7% 

Actuarial assumptions 

The actuarial assumptions used to determine liabilities arising from pension plans and other long-term benefits 

are set out below: 

(in %) 

Europe North America Other countries 

2010 2009 2010 2009 2010 2009 

Expected yield on assets 3.50 - 4.00 4.50 - 5.25 7.71 7.70 7.50 7.50 

Future wage and salary increases 2.75 - 3.50 2.75 - 5.50 n.a. n.a. 3.50 - 8.50 3.50 - 8.50 

n.a.: not applicable 

Discount factor (in %) 2010 2009 

Europe 

Long-term euro zone 5.00 5.25 

Medium-term euro zone 4.75 4.50 

Short-term euro zone 4.25 2.50 

Bulgaria 5.75 7.50 

North America 

USA 5.10 5.70 

Canada 4.75 6.25 

Other countries 

Morocco 4.50 4.50 

Turkey 10.00 11.00 

Thailand 4.00 5.00 

India 8.20 7.70 

Defined contribution plans 

The Group’s defined contribution plans are pension plans and medical plans; expense relating to these plans in 

2010 was 48.7 million euro (48.8 million euro in 2009). 

Employment termination plans 

At December 31, 2010, employment termination provisions totaled 24.5 million euro (19.8 million euro in 2009) 

and related mainly to Italcementi S.p.A. for 10.9 million euro, Ing. Sala S.p.A. for 3.5 million euro, Morocco for 

3.5 million euro and Egypt for 3.1 million euro. 

109 


20. Provisions 

Non-current and current provisions totaled 244,777 thousand euro at December 31, 2010, an increase of 

13,570 thousand euro from December 31, 2009. 

Provisions are detailed below: 


Dec. 31, 

2009 

Additions 

Decreases 

on use 

Reversed 

unused 

amounts 

Currency 

translation 

differences 

Other 

changes and 

adjustments 

Total 

changes 

Dec. 31, 


Environmental restoration 77,149 18,030 (6,462) (8,446) 977 3,648 7,747 84,896 

Disputes 91,960 14,885 (9,158) (11,993) 2,963 214 (3,089) 88,871 

Other provisions 62,098 34,153 (23,101) (3,304) 1,448 (284) 8,912 71,010 

Total 231,207 67,068 (38,721) (23,743) 5,388 3,578 13,570 244,777 

Non-current portion 227,820 66,837 (38,283) (23,743) 5,145 3,464 13,420 241,240 

Current portion 3,387 231 (438) - 243 114 150 3,537 

“Disputes” reflects provisions for fiscal risks deemed probable as a result of tax audits and adjustments to tax 

returns, provisions for disputes with employees and provisions for restoration of urban and industrial areas. 

21. Deferred tax 

Total net deferred tax liabilities are analyzed below: 

December 31, 

Result Other changes December 31, 



2009 

Benefit on tax loss carryforwards 10.0 29.9 (2.2) 37.7 

Property, plant and equipment (328.4) 6.3 (11.9) (334.0) 

Inventories (13.7) (0.2) (13.9) 

Non-current provisions and Employee benefit liabilities 87.4 0.3 3.2 90.9 

Other 25.9 4.9 2.0 32.8 

Total net deferred tax (218.8) 41.2 (8.9) (186.5) 

of which: 

Deferred tax assets 42.3 53.0 

Deferred tax liabilities (261.1) (239.5) 

At December 31, 2010, deferred tax assets reflected in equity reserves amounted to 1.7 million euro (3.6 

million euro at December 31, 2009). 

Off-balance sheet deferred tax assets relating to losses for the year and previous years amounted to 

approximately 102.4 million euro (75.7 million euro at December 31, 2009). They related to Group company 

losses, reversal of which is not considered reasonably certain at the present time. 

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Annexes 142 


22. Net debt 

An itemized correlation of net debt with the balance sheet is set out below: 


Financial asset and 

liability category 

Balance sheet line item 

December 31, 2010 December 31, 2009 

Cash, cash equivalents and 

current financial assets (835,610) (782,749) 

Cash and cash equivalents Cash and cash equivalents (575,220) (547,273) 

Current financial receivables 

Equity investments and 

financial receivables (249,561) (227,536) 

Other current financial assets Other current assets (6,122) (5,626) 

Derivative instruments Other current assets (4,707) (2,314) 

Short-term financing 535,418 551,034 

Bank overdrafts and 

short-term borrowings 

Interest-bearing loans and 

short-term borrowings 

Bank overdrafts and 

short-term borrowings 222,985 392,096 


short-term borrowings 293,493 140,393 

Derivative instruments Other current liabilities 18,940 18,545 

Medium/long-term financial assets (65,021) (34,809) 

Securities and debentures Other non-current assets (17,266) (14,464) 

Derivative instruments Other non-current assets (47,755) (20,345) 

Medium/long-term financing 2,596,108 2,686,408 


long-term borrowings 


long-term borrowings 2,567,468 2,632,588 

Derivative instruments Other non-current liabilities 28,640 53,820 

Net debt 2,230,895 2,419,884 

Consolidated net debt at December 31, 2010, continued to reflect the current account financial relationship 

between Italcementi S.p.A. and the Calcestruzzi group companies for 217.7 million euro (196.4 million euro at 


The net financial position at December 31, 2010, determined in compliance with Consob communication no. 

DEM/6064293 of July 28, 2006 (that is, excluding medium/long-term financial assets), amounted to 2,295,916 

thousand euro (2,454,693 thousand euro at December 31, 2009). 

111 


22.1 Loans and borrowings 

Loans and borrowings are shown below by category, subdivided by non-current and current liabilities: 

Effective 

interest rate 

Maturity December 31, 


December 31, 

2009 


Bank overdrafts and drawings on lines of credit 1,068,451 1,217,106 

Debentures 1,281,663 877,823 

EMTN 500 mln euro 4.75% 4.84% 2017 513,138 509,479 

For private investors EMTN 15 mln euro 4.47% 4.50% 2013 15,000 15,000 

For private investors 180 mln USD 5.63% 5.79% 2012 12,348 124,679 

For private investors 20 mln USD 5.73% 2014 - 13,704 



EMTN 750 mln euro 5.375% 5.55% 2020 741,177 - 

Convertible debentures 1.72% 2012 3,776 3,747 

Financing entities 199,731 516,594 

Billets de trésorerie 1.08% 177,000 487,000 

Other (0% - 3.67%) 22,731 29,594 

Finance lease payables 13,847 17,318 

Non-current loans and borrowings 2,567,468 2,632,588 

Fair value of hedging derivatives 28,640 53,820 

Total medium/long-term financing 2,596,108 2,686,408 

Debentures 

For private investors 50mln euro 3.50% 9 50,623 

Others 

Banks 157,984 292,094 

Bank overdrafts and drawings on lines of credit 281,600 153,971 

Financing entities 25,446 14,759 

Finance lease payables 3,705 3,791 

Accrued interest expense 47,734 17,251 

Current loans and borrowings 516,478 532,489 

Fair value of hedging derivatives 18,940 18,545 

Total short-term financing 535,418 551,034 

Total loans and borrowings 3,131,526 3,237,442 

At December 31, 2010, bank overdrafts and drawings on lines of credit secured by mortgages and liens on 

property, plant and equipment amounted to 89.0 million euro, of which 8 million euro short-term and 81 million 

euro medium/long-term. 

At December 31, 2010, short-term “Financing entities” included 8.2 million euro relating to factoring programs 

(9.2 million euro at December 31, 2009). 

“Billets de trésorerie” are linked to medium/long-term lines of credit. 

112






Annexes 142 


Non-current loans and borrowings by currency: 


December 31, 


December 31, 

2009 

Euro 2,332.8 2,096.0 

US and Canadian dollar 14.6 356.2 

Moroccan dirham 108.2 83.8 

Indian rupee 92.4 79.7 

Saudi Arabian riyal 8.0 9.3 

Egyptian pound 2.6 3.4 

Chinese renminbi - - 

Other 8.9 4.2 

Total 2,567.5 2,632.6 

Non-current loans and borrowings by maturity: 


December 31, 


December 31, 

2009 

2011 - 193.0 

2012 359.1 634.5 

2013 456.8 625.2 

2014 166.7 317.2 

2015 204.5 18.4 

2016 20.1 - 

Beyond 1,360.3 844.3 

Total 2,567.5 2,632.6 

The main medium/long-term loans and borrowings are described below. 

Italcementi Finance S.A. 

a) The Italcementi Group covers its financial requirements through recourse to diversified instruments. It 

covers its long-term financial requirements largely through debenture issues. Specifically, Italcementi S.p.A. 

has launched a Euro Medium Term Notes program (EMTN) targeting qualified investors on the European 

market, for a maximum amount of 2 billion euro. This replaces the program previously in operation at Ciments 

Français S.A.. 

The EMTN program is part of a broader project to optimize management of financial operations, under which 

Italcementi S.p.A. has been assigned a greater role as parent company responsible for the coordination and 

direct implementation of financing programs for all Group operations. 

Under this program, on March 16, 2010, Italcementi Finance S.A., a French subsidiary of Italcementi S.p.A., 

closed the placement of a ten-year debenture at a fixed rate of 5.375%, for a nominal amount of 750 million 

euro. The debenture is listed on Luxembourg Stock Exchange. The placement was managed by Banca IMI, 

BNP Paribas, Bank of America Merrill Lynch, Société Générale and Unicredit. The proceeds from the issue 

have been transferred to Italcementi S.p.A. and Ciments Français S.A. through medium/long-term 

intercompany loans for 210 million euro and 540 million euro respectively; 

113 


) in the third quarter of 2010, Italcementi Finance S.A. was granted a five-year floating-rate 920 million euro 

syndicated line of credit. The group of banks was coordinated by Bank of America, BNP Paribas, Credit 

Agricole, Intesa Sanpaolo, Natixis, Société Générale, The Royal Bank of Scotland and Unicredit. 

The arrangement of the syndicated line of credit extinguished the similar facility for 700 million euro granted to 

Ciments Français S.A. in May 2005. 

No drawings had been made on the syndicated line of credit at December 31, 2010. Simultaneously with the 

arrangement of the syndicated line of credit, Italcementi Finance S.A. granted Italcementi S.p.A. and Ciments 

Français S.A. medium/long-term intercompany lines of credit for 220 million euro and 700 million euro 

respectively; 

c) during 2010, Italcementi Finance S.A. arranged bilateral lines of credit with leading French banks for an 

aggregate amount of 350 million euro at 364 days. No drawings had been made on these lines of credit at 

December 31, 2010. 

In connection with these facilities, Italcementi Finance S.A. granted Ciments Français S.A. a short-term 

intercompany line of credit for 350 million euro at 364 days. 

Italcementi S.p.A. 

d) During 2010, Italcementi S.p.A. arranged a three-year line of credit for an original amount of 100 million 

euro, subsequently reduced to 25 million euro after the counterpart took part in the syndicated line of credit 

granted to Italcementi Finance S.A. No drawings had been made on the facility at December 31, 2010; 

e) during 2009, Italcementi S.p.A. arranged three loans: a three-year 50 million euro loan, a five-year 50 million 

euro loan and a ten-year 60 million euro loan. At the same time it arranged a six-year 150 million euro 

confirmed line of credit. The facilities replaced previous borrowings, increasing the credit granted and 

extending average maturity, and also alleviated the financial covenants. No drawings had been made on the 

line of credit at December 31, 2010; 

f) during 2009, Italcementi S.p.A. arranged a five-year 300 million euro confirmed line of credit, replacing a 

previous facility with restrictive financial covenants. The re-negotiation increased the amount of credit and 

average maturity and alleviated the financial covenants. No drawings had been made on the line of credit at 

December 31, 2010; 

g) in 2008 Italcementi S.p.A. re-negotiated and increased a confirmed line of credit from 50 to 75 million euro, 

extending maturity by two years and maintaining the absence of financial covenants. The facility was fully 

drawn at December 31, 2010; 

h) in 2008, Italcementi S.p.A. arranged a five-year 100 million euro confirmed line of credit with no financial 

covenants. The facility was fully drawn at December 31, 2010; 

i) in 2007 Italcementi S.p.A. re-negotiated a 200 million euro loan and increased a confirmed line of credit from 

180 to 200 million euro; on both facilities, maturity was extended by three years, better conditions were 

obtained and the related financial covenants were annulled. Drawings on the line of credit at December 31, 

2010, amounted to 100 million euro; 

j) in 2007, Italcementi S.p.A. arranged a six-year 50 million euro confirmed line of credit with no financial 

covenants. The facility was fully drawn at December 31, 2010; 

k) in 2007, Italcementi S.p.A. re-negotiated a 100 million euro confirmed line of credit granted in 2005, 

extending maturity to six years from re-negotiation, improving conditions and maintaining the absence of 

financial covenants. The facility was fully drawn at December 31, 2010; 

l) among medium/long-term borrowings arranged by Italcementi S.p.A. in 2006, a 75 million euro confirmed line 

of credit maturing in 2012 was still active at December 31, 2010. The facility was fully drawn at December 31, 

2010. 

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Main intercompany borrowings and lines of credit at Italcementi S.p.A. 

m) In the first half of 2010, in connection with the debenture issued by Italcementi Finance S.A., Italcementi 

S.p.A. obtained from Italcementi Finance S.A. two ten-year intercompany loans, one at a fixed rate, one at a 

floating rate, for an aggregate amount of 210 million euro; 

n) during the first half of 2010, Italcementi S.p.A. contributed funding for the Ciments Français S.A. repurchase 

offer on the US Private Placement notes, granting Ciments Français S.A. a 100 million euro 5-year 

intercompany loan at a floating rate; 

o) in the third quarter of 2010, in connection with the syndicated line of credit granted to Italcementi Finance 

S.A., Italcementi S.p.A. obtained from Italcementi Finance S.A. a 220 million euro five-year renewable line of 

credit. No drawings had been made on the facility at December 31, 2010. 

Ciments Français S.A. and its subsidiaries 

p) On November 30, 2010, Zuari Cement Ltd. renegotiated a 4.2 billion rupee amortizable syndicated line of 

credit arranged in June 2008, negotiating bilateral lines of credit with an international pool of banks for a total 

amount of 5.1 billion Indian rupees, amortizable in five years. It also arranged a bilateral line of credit 

amortizable in five years for 20 million US dollars (approximately 900 million rupees). Drawings of 4.2 billion 

Indian rupees, equivalent to 70.3 million euro, had been made on these facilities at December 31, 2010; 

q) on July 9, 2008, in connection with the Ait Baha industrial project, the subsidiary Ciment du Maroc arranged 

a 5-year 2 billion dirham amortizable syndicated line of credit. The bank pool was formed by local and 

international banks. Drawings on the facility at December 31, 2010, totaled 1,210 million dirham, equivalent to 

108.2 million euro; 

r) on December 27, 2005, a 158 million euro 6-year syndicated loan was arranged. The borrowing consists of a 

114 million euro floating-rate tranche and a 44 million euro fixed rate tranche, repayable on maturity; 

s) Ciments Français S.A. covers its long-term financial requirements largely through Italcementi Finance S.A., 

the company that coordinates and implements programs to provide funding for the entire Italcementi Group. 

Consequently, it has not renewed the EMTN program reference material since July 17, 2008. The maximum 

amount authorized under this program is 1,500 million euro. At December 31, 2010, notes issued under the 

program totaled 515.0 million euro, including 500 million euro issued on March 21, 2007, assisted by ABN 

Amro, Natixis and The Royal Bank of Scotland, at a fixed rate of 4.75% with a 10-year maturity; 

t) on February 24, 2010, Ciments Français S.A. launched an offer for holders of its 2002 and 2006 US private 

placements to repurchase any and all outstanding notes. It also reached an agreement with the note holders 

permitting it to borrow funds from the parent company Italcementi S.p.A. and from subsidiaries of the parent 

company. On April 7, 2010, the offer obtained an uptake for a nominal amount of 183.5 million US dollars out 

of a total 200 million US dollars of notes issued in 2002, and for a nominal amount of 300 million US dollars out 

of a total of 300 million US dollars of notes issued in 2006. Ciments Français S.A. repurchased all the 

securities at a price of 1,065 US dollars for each note with a nominal value of 1,000 US dollars, in addition to 

accrued interest; the repurchase generated a total net charge of 22.2 million euro. The amount was paid on 

April 14, 2010. The remaining securities for 16.5 million US dollars relate to the ten-year issue of November 15, 

2002, at a fixed rate of 5.63%. They continue to be regulated by the issue contracts and related supplementary 

agreements. 

Main intercompany borrowings and lines of credit at Ciments Français S.A. 

u) In the first half of 2010, Ciments Français S.A. financed the repurchase of the US private placements and 

reimbursement of a portion of the short-term borrowings with a five-year intercompany loan at a floating rate 

granted by Italcementi S.p.A. for an amount of 100 million euro and a ten-year intercompany loan at a floating 

rate granted by Italcementi Finance S.A. for an amount of 540 million euro; 

115 


v) in the third quarter of 2010, Ciments Français S.A. obtained from Italcementi Finance S.A. a 350 million euro 

short-term line of credit maturing on June 30, 2011, enabling it to replace the previous lines of credit at 364 

days. No drawings had been made on this line of credit at December 31, 2010; 

w) in the third quarter of 2010, Ciments Français S.A. replaced the 700 million euro five-year syndicated line of 

credit maturing in May 2012, with a 700 million euro five-year renewable line of credit granted by Italcementi 

Finance S.A. The operation extended the average life of the available lines of credit, enabling Ciments 

Français S.A. to cover borrowings maturing over the next four years. No drawings had been made on this line 

of credit at December 31, 2010. 

All loans and lines of credit arranged between Ciments Français S.A. and Italcementi S.p.A. and its 

subsidiaries are regulated at normal market conditions. 

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22.2 Value of financial assets and liabilities 

The table below sets out the carrying amount and fair value of financial assets and liabilities at December 31, 

2010: 


Fair value Carrying Fair value Carrying 


amount 

amount 

FINANCIAL ASSETS AT FAIR VALUE 

Assets originally designated at fair value 

Cash and cash equivalents without short-term deposits (note 36.1) 239.1 239.1 214.9 214.9 

Assets classified as held for trading 

Fair value of derivatives (note 22.3) 52.5 52.5 22.7 22.7 

HELD-TO-MATURITY INVESTMENTS 

LOANS AND RECEIVABLES 

Short-term deposits (note 36.1) 336.2 336.2 332.4 332.4 

Trade receivables (note 12) 738.6 738.6 881.1 881.1 

Other current assets 3.0 3.0 4.7 4.7 

Other financial assets without concessions, 

licenses paid in advance and derivatives (note 10) 63.3 63.3 59.5 59.5 

Equity investments and financial receivables 249.9 249.9 227.8 227.8 

AVAILABLE-FOR-SALE FINANCIAL ASSETS 

Other equity investments (note 9) 200.2 200.2 269.1 269.1 

FINANCIAL LIABILITIES AT FAIR VALUE 

Liabilities originally designated at fair value - - - - 

Liabilities classified as held for trading 

Fair value of derivatives (note 22.3) 47.6 47.6 72.4 72.4 

OTHER FINANCIAL LIABILITIES 

Trade payables 588.6 588.6 548.4 548.4 

Other current liabilities 113.4 113.4 101.2 101.2 

Finance lease payables 17.6 17.6 21.1 21.1 

Floating-rate loans and borrowings 1,469.3 1,469.3 1,714.7 1,714.7 

Fixed-rate loans and borrowings 1,461.9 1,422.2 1,153.1 1,122.4 

Amounts due to banks 158.0 158.0 292.1 292.1 

Other short-term financing 16.9 16.9 14.8 14.8 

Purchase commitments on minority interests 63.7 63.7 71.4 71.4 

Trade receivables and payables are current assets and liabilities and are carried at amounts that are 

reasonable approximations of their fair value. 

Derivative instruments are measured and recognized at fair value. The fair value of interest-rate contracts is 

determined on the present value of cash flows using the zero coupon curve. 

The fair value of forward currency purchase contracts is based on the current exchange rates of contracts with 

similar maturity profiles. 

The fair value of foreign currency payables and receivables is determined using year-end exchange rates. The 

fair value of fixed-rate payables and receivables is based on a fixed rate with no credit margin, net of 

transaction costs directly related to the financial asset or liability. 

117 


Fair value – hierarchy 

In determining and documenting the fair value of financial instruments, the Group uses the following hierarchy 

based on different measurement methods: 

level 1: financial instruments with prices quoted on active markets, 

level 2: prices quoted on active markets for similar financial instruments, or fair value determined with other 

measurement methods where all significant inputs are based on observable market data; 

level 3: fair value determined with measurement methods where no significant input is based on observable 

market data. 

At December 31, 2010, financial instruments stated at fair value were subdivided as follows: 

December 31, 


Level 1 Level 2 Level 3 


Mutual funds 128.2 128.2 

Derivative instruments - assets 52.5 52.5 

Equity investments and financial receivables 11.8 11.8 

Other equity investments 200.2 88.3 111.9 

Derivative instruments - liabilities 47.6 47.6 

Purchase commitments on minority interests 63.7 63.7 

Financial risk management policy 

The Group uses specific financial instruments to hedge the risk of fluctuations in interest rates and exchange 

rates in relation to the nature of the debt and international operations. 

Interest-rate risk 

The Group interest-rate risk management policy is designed to minimize the cost of net financial liabilities and 

reduce exposure to fluctuation risks. It hedges two types of risk: 

1. the risk of variations in the market value of fixed-rate borrowing and lending transactions. Group fixed-rate 

debt is exposed to an “opportunity cost” risk in the event of a fall in interest rates. A change in interest rates will 

affect the market value of fixed-rate assets and liabilities and impact the consolidated result in the event of 

liquidation or early repayment of these instruments; 

2. the risk linked to future flows arising from floating-rate borrowing and lending transactions. A change in 

interest rates will have a negligible impact on the market value of floating-rate financial assets and liabilities but 

will affect finance costs and, consequently, future profits. 

The Group manages this dual risk as part of its general policy, performance targets and risk reduction targets 

by giving priority to hedges on future flows over the short- and medium-term and to hedges against the market 

value risk over the long term, within the specified limits. 

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It hedges interest-rate risks mainly by arranging interest-rate swaps, forward-rate agreements and interest-rate 

options negotiated with top-ranking banks. Exposure in derivatives may never exceed the value of the 

underlying. 

Exchange-rate risk 

The Group companies are structurally exposed to exchange-rate risks on cash flows from business operations 

and financing operations denominated in currencies other than their respective reporting currencies. 

The Group companies operate chiefly on their respective local markets. Consequently, invoiced amounts and 

operating expenses are denominated in the same currency and exposure of operating cash flows to exchangerate 

risk is not particularly significant, with the exception of fuel, spares and investments for construction of new 

plants. 

Group policy requires borrowings or investments to be made in local currency, except in the case of hedges of 

foreign-currency cash flows. However, the Group may adapt this general policy to take account of specific 

macro-economic conditions in certain geographical areas (hyperinflation, high interest rates, liquidity, 

translations). 

With regard to financing for subsidiaries, the Group may also arrange facilities in a currency other than that of 

the loan to the subsidiary. 

Group policy is to hedge exposure whenever the market makes this possible. Net exposure of each entity is 

determined on the basis of expected net operating cash flows over one to two years and financing 

denominated in currencies other than the local currency. 

The Group hedges exposure to exchange-rate risks with forward currency purchase and sale contracts, 

currency swaps that translate loans and borrowings generally denominated in euro at inception into foreign 

currency, as well as currency put and call options. These hedges are arranged with leading banks. 

The impact of foreign currency translation on subsidiaries’ equity is recorded in a separate equity item. 

Commodity risk 

The Group’s European subsidiaries are exposed to market fluctuations on CO 2 emission rights prices, in 

connection with their surplus or deficit on the quotas allocated by their respective national governments. 

Trades on emission rights markets are transacted by the parent company, Italcementi S.p.A., which since 2010 

has also operated on behalf of the Group’s other European subsidiaries under an undisclosed agency basis. 

In 2007, on the basis of production forecasts indicating a deficit in emission rights for the period 2008-2012, the 

Group transacted a modest volume of forward purchases (delivery over the period 2008-2012) on EU CO 2 

emission rights (EUA) and certified emission reductions (CER) relating to the second period of application of 

the Emissions Trading Directive (2008-2012). 

In 2008, 2009 and 2010, the Group transacted forward EUA-CER swaps (forward EUA sales and forward CER 

purchases) for the period 2009-2013, to diversify and optimize its CO 2 emission rights portfolio. 

119 


In 2009 and 2010, in view of the surplus accumulated and the new macroeconomic and industry scenario, the 

Group sold EUAs on the spot market for approximately 73.3 million euro (17.5 million euro in 2009 and 55.8 

million euro in 2010). 

In 2010, the Group arranged price risk hedges with respect to the sales of surplus emission rights planned in 

the fourth quarter of 2010 for 2011 and 2012. 

In 2010, the Group also transacted a modest volume of price risk hedges on the tin (II) sulfate purchases made 

in 2010. These hedges expired during 2010 and so no longer existed at December 31, 2010. 

d) Equities risk 

The Group is exposed to market fluctuations on listed shares held in portfolio recognized under “Other equity 

investments”. Treasury shares held by Italcementi S.p.A are measured at cost and deducted against 

shareholders' equity under the “Treasury share” reserve (see note 16). 

Equity investments treated as available-for-sale financial assets are recognized under “Other equity 

investments” (see note 9) and refer mainly to the Goltas Cimento and Bursa listed equity investments. 

22.3 Financial instruments 

Fair value of derivative financial instruments 

The table shows the fair value of financial instruments reflected in the balance sheet, subdivided by type of 

hedge: 


(in thousands of euro) Assets Liabilities Assets Liabilities 

Derivatives - interest rates 200 5,368 533 6,846 

Future cash flow hedges - 5,017 3 6,697 

Trading 200 351 530 149 

Derivatives - exchange rates 4,507 13,572 1,781 11,699 

Future cash flow hedges 1,393 882 1,015 520 

Fair value hedges 3,079 12,359 746 11,067 

Trading 35 331 21 112 

Total current instruments 4,707 18,940 2,314 18,545 

Derivatives - interest rates 46,986 28,640 20,345 18,811 

Future cash flow hedges 105 8,716 1,081 18,811 

Fair value hedges 46,881 19,924 19,264 

Derivatives - exchange rates 769 - - 35,009 

Fair value hedges 769 - - 35,009 

Total medium/long-term instruments 47,755 28,640 20,345 53,820 

Total 52,462 47,580 22,659 72,365 

The cross currency swaps hedging the fixed-rate debenture issued in US dollars (private placement) were 

cancelled upon early repayment of the loan in April 2010. 

Medium/long-term derivatives on interest rates reflected under assets for 47.0 million euro mainly refer to fixedrate 

to Euribor-indexed floating-rate interest-rate swaps hedging part of the 500 million euro debenture issued 

by Ciments Français S.A. and part of the 750 million euro debenture issued by Italcementi Finance S.A.; both 

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debentures were fixed-rate issues under the respective EMTN programs; at December 31, 2009, the Ciments 

Français S.A. derivative was carried under assets at 11.9 million euro. 

The Group does not set up hedges on sales and purchases of equities. 

Derivatives on trading interest rates and exchange rates refer to assets that do not qualify for recognition with 

hedge accounting criteria. 

The fair value of derivative instruments relating to EUA and CER transactions was 1.5 million euro at 

December 31, 2010, of which -0.9 million euro reflected under “Other current liabilities”, 1.7 million euro under 

“Other current assets”, -2.4 million euro under “Other non-current liabilities” and 3.1 million euro under “Other 

non-current assets”. 

2010 derivative transactions on emission rights had a positive impact of 0.6 million euro on the income 

statement and an impact of 0.3 million euro on equity (OCI reserve). 

121 


22.4 Interest-rate risk 

Notional value of derivative instruments by maturity 

The notional value of interest rate derivatives by maturity is illustrated below: 

Maturity Maturity Maturity Maturity Total 

less than 1 to 2 2 to 5 more than 


1 year years years 5 years 

Fair value hedges 

SWAPs receive Fixed / pay Floating 

165 M€ 4.75% Euribor 3M+ 0.626% - - - 165.0 165.0 

650 MUSD 5.375% Euribor 3M+2.284% - - - 650.0 650.0 

Total - - - 815.0 815.0 

Cash flow hedges 

SWAPs receive Floating / pay Fixed 

210 M€ Euribor 3M 3.035% 110.0 100.0 - - 210.0 

114 M€ Euribor 3M + 0.325% 3.536% 114.0 - - - 114.0 

100.9 M€ Euribor 6M 2.697% 0.2 25.5 75.2 - 100.9 

0.4 M€ Euribor 6M+0.50% 3.275% 0.4 - - - 0.4 

75 MUSD Libor 3M 2.06% 37.4 18.7 - - 56.1 

133.5 MUSD Libor 3M 1.25% - 100.7 - - 100.7 

Cash flow hedges OPTIONS - 

Cap/Floor Euribor 3M 50.0 195.0 245.0 

Cap/Floor Libor 3M 56.1 56.1 

Total 368.1 439.9 75.2 - 883.2 

Trading 

SWAPs receive Floating / pay Floating 

114 M€ Euribor 3M + 0.50% - Euribor 3M+ 0.325% 114.0 - - - 114.0 

SWAPs receive Floating / pay Fixed - 

2 M€ Euribor 3M 1.95% 0.4 0.4 1.2 - 2.0 

75 M€ Euribor 3M 3.44% 75.0 75.0 

Trading Options - 

Total 189.4 0.4 1.2 - 191.0 

Total 557.5 440.3 76.4 815.0 1,889.2 

Exposure to interest-rate risk 

At December 31, 2010, 71% of Group net financial liabilities (not including the fair value of derivatives) was at 

a fixed rate or hedged against the risk of rate increases. 52% of fixed-rate commitments arose from swapped 

contracts initially arranged at floating rates. 

Hedges are stated at nominal value for the period in question (consistently with instrument maturity) and do not 

include fixed-rate to fixed-rate contracts. 

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22.5 Net debt at inception and after interest-rate hedging 

The evolution of net debt at December 31, 2010, is illustrated in the table below: 

Maturity 

(in millions of euro) Dec.31, 2010 < 1 year 1 - 2 years 2 - 5 years Beyond 

Fixed-rate financial liabilities 1,431.6 57.6 5.5 98.2 1,270.3 

Fixed-rate financial assets - - - - - 

Fixed-rate net debt at inception 1,431.6 57.6 5.5 98.2 1,270.3 

Fixed-to-floating rate hedges (815.0) - - - (815.0) 

Floating-to-fixed rate hedges 659.1 337.4 245.3 76.4 - 

Fixed-rate ND after hedging 1,275.7 395.0 250.8 174.6 455.3 

Floating-rate financial liabilities 1,652.4 459.0 354.2 727.3 111.9 

Floating-rate financial assets (848.3) (830.9) - (4.4) (13.0) 

Floating-rate ND at inception 804.1 (371.9) 354.2 722.9 98.9 

Fixed-to-floating rate hedges 815.0 - - - 815.0 

Floating-to-fixed rate hedges (659.1) (337.4) (245.3) (76.4) - 

Optional hedges (301.1) (106.1) (195.0) - - 

Floating-rate ND after hedging 658.9 (815.4) (86.1) 646.5 913.9 

Optional hedges 301.1 106.1 195.0 - - 

Fair value of derivatives, net (4.9) 14.1 3.2 8.4 (30.6) 

Net debt 2,230.9 (300.2) 362.9 829.5 1,338.7 

At December 31, 2010, a +0.5% change in the interest-rate curve would have an impact of -0.9 million euro, 

that is, 0.6% of 2010 net finance costs. The impact on interest-rate derivatives in portfolio would be +11.4 

million euro on shareholders' equity and -4.8 million euro on profit before tax; the latter effect would be 

countered by an effect of +4.9 million euro on fixed-rate liabilities with fair value hedges. 

At December 31, 2010, a -0.5% change in the interest-rate curve would have an impact of +0.9 million euro, 

that is, 0.6% of 2010 net finance costs. The impact on interest-rate derivatives in portfolio would be -11.8 

million euro on shareholders' equity and +4.9 million euro on profit before tax; the latter effect would be 

countered by an effect of -5.0 million euro on fixed-rate liabilities with fair value hedges. 

123 


22.6 Exposure to exchange-rate risk 

Consolidated net exposure by currency of financial assets and liabilities denominated in currencies other than 

the local currency is illustrated below: 

(in millions of euro) Euro (*) USD (*) Other (*) 

Financial assets (°) 10.1 547.3 13.3 

Financial liabilities (°) (21.7) (48.1) (38.0) 

Derivatives - (502.0) 29.2 

Net exposure (11.6) (2.7) 4.5 

(*) assets and liabilities are expressed at nominal value in euro when the local currency is not euro 

(°) excluding trade payables and receivables 

Foreign currency exposure refers mainly to the US dollar, the Thai baht, the Morocco dirham, the Egyptian 

pound and the Indian rupee. No hedging is set up on net investments in these subsidiaries. 

At December 31, 2010, a 10% change in the exchange rate with the euro, in cases where the local currency is 

not euro, would have had an impact of 4.3 million euro on shareholders' equity, of which 0.8 million euro on 

minority interests. 

At December 31, 2010, a 10% rise in the US dollar would have an impact on exchange-rate derivatives in 

portfolio of +5.7 million euro on shareholders' equity and -39.4 million euro on profit before tax. A 10% 

decrease in the US dollar would have an impact on exchange-rate derivatives in portfolio of -6.2. million euro 

on shareholders' equity and +38.9 million euro on profit before tax. 

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22.7 Exchange-risk hedges 

Exchange-risk hedges stated at the closing exchange rates are illustrated below: 


Forward purcahses 

Cash flow hedging 

December 31, 


December 31, 

2009 

US dollars 35.1 23.5 

Fair value hedging 


Others 40.1 33.5 

Trading 

US dollars - - 

Others - - 

Total 117.0 80.1 

Forward sales 


US dollars 500.2 436.3 

Others 10.9 5.1 

Trading 


Total 512.4 442.4 

Options 

Cash flow hedging 



US dollars - - 

Trading 


Total 39.8 29.0 

Cross currency swaps 


US dollars 100.7 278.0 

Total 100.7 278.0 

TOTAL 769.9 829.5 

Exchange-risk hedges expire within 12 months, with the sole exception of cross-currency swaps, which expire 

within the next 2 years for 100.7 million euro. 

125 


22.8 Hedge Accounting 

The effects arising from application of hedge accounting rules are summarized below. 

The specific equity reserve reflects fair value gains and losses on the effective component of cash flow hedges 

only. 

New derivative instruments recognized in equity totaled +2.2 million euro at December 31, 2010 (-2.7 million 

euro at December 31, 2009). The eliminated portion of the reserve relating to instruments that expired in 2010 

amounted to +21.4 million euro at December 31, 2010, compared with +11.5 million euro at December 31, 

2009. The changes in equity relating to derivatives contracted in 2009 and still in portfolio at December 31, 

2010, amounted to -12.0 million euro (-45.7 million euro at December 31, 2009). 

The non-effective component of cash flow hedges in portfolio at December 31, 2010, recognized in profit and 

loss was immaterial in 2010 (+0.4 million euro in 2009). 

With reference to fair value hedges in portfolio at December 31, 2010, the amount taken to profit and loss 

totaled +6.5 million euro for 2010 (-26.1 million euro for 2009). Recognized amounts attributable to underlying 

risk hedged during the year totaled -6.7 million euro at December 31, 2010 (+26.1 million euro at December 

31, 2009). These amounts are taken to profit and loss as gains and losses on interest- and exchange-rate 

derivatives (note 30). 

Liquidity risk 

Credit risk 

In compliance with Group procedures, customers electing extended terms of payment are vetted for credit 

worthiness before and during the life of the contract. Credit checks take the form of customer-balance 

monitoring by the administrative department, whose procedures also regulate provisions for overdue 

receivables at regular intervals. 

The concentration of trade credit risks is limited by virtue of the Group’s broadly based and uncorrelated 

customer portfolio. For this reason, management believes that no further provisions for credit risks will be 

necessary beyond the amounts normally provided for uncollectible and doubtful receivables. 

Counterpart risk 

Exchange- and interest-rate instruments are transacted only with counterparts with high ratings, selected on 

the basis of a number of criteria: ratings attributed by specialist agencies, assets and equity as well as the 

nature and maturity of transactions. The majority of counterparts are leading international banks. 

No financial instruments are negotiated with counterparts in geographical regions exposed to political or 

financial risks (all counterparts are in Western Europe or in the USA). 

At December 31, 2010, the amount of 217.7 million euro due to Italcementi S.p.A. from the Calcestruzzi group 

(on intercompany current accounts) presented no risks other than that already contemplated when the 

Italcementi interest in the Calcestruzzi group was tested for impairment. 

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Annexes 142 


Liquidity risk 

Cash and cash equivalents consist largely of short-term assets with a negligible risk of changes in value (shortterm 

deposits, certificates of deposit, mutual funds). At December 31, 2010, the maximum exposure to a single 

counterpart was 22%. 

Due to currency regulations in force in some countries where the Group operates, the cash and cash 

equivalents may not be immediately available to the Ciments Français holding, see note 36.1. 

Group centralized financial policy is designed to ensure that at any time debt at less than two years is less than 

or equal to undrawn confirmed lines of credit. 

The Group aims to keep indebtedness at a level that ensures a balance between the average maturity, 

flexibility and diversification of its sources of funds. Consequently, the Group arranges confirmed lines of credit 

and diversifies sources of finance (bank credit lines, borrowings, debentures, drawings on lines of credit, 

commercial papers, finance leases and factoring). Borrowing maturities are evenly distributed, without 

particular concentrations in specific periods, to enable the Group to refinance transactions due to mature in a 

satisfactory manner, notwithstanding the difficult economic scenario. 

The tables below compare net debt (excluding the fair value of derivatives and current financial receivables) by 

maturity with available lines of credit at the end of each period 

At December 31, 2010 * 





Interest-bearing loans and long-term borrowings (**) 359.1 828.0 1,380.4 2,567.5 

Interest-bearing loans and short-term borrowings 358.5 358.5 

Amounts due to banks 158.0 158.0 

Cash and cash equivalents (575.2) (575.2) 

Total (58.7) 359.1 828.0 1,380.4 2,508.8 

end 2011 end 2012 end 2015 

Confirmed lines of credit, available at end of each period 1,670.0 1,670.0 0.0 (***) 

(*) excluding fair value of derivative financial instruments 

(**) of which "billets de trésorerie" linked to medium/long-term confirmed lines of credit 

(***) confirmed lines of credit available at the end of 2014 amount to 973 million euro 

127 50 177.0 

At December 31, 2009 * 





Interest-bearing loans and long-term borrowings (**) - 193.0 1,576.9 862.7 2,632.6 

Interest-bearing loans and short-term borrowings 240.4 240.4 

Amounts due to banks 292.1 292.1 

Cash and cash equivalents (547.3) (547.3) 

Total (14.8) 193.0 1,576.9 862.7 2,617.8 

end 2010 end 2011 end 2014 

Confirmed lines of credit, available at end of each period 1,462.7 1,380.6 150.0 (***) 

(*) excluding fair value of derivative financial instruments 

(**) of which "billets de trésorerie" linked to medium/long-term confirmed lines of credi 

(***) confirmed lines of credit available at the end of 2013 amount to 525 million euro 

437 50 487.0 

127 


At December 31, 2010, the average maturity of Group gross debt was 5 years and 4 months (4 years and 6 

months at December 31, 2009). 

Long-term liabilities included short-term borrowings (billets de trésorerie) linked to medium/long-term confirmed 

lines of credit for 177 million euro (487 million euro at December 31, 2009). 

At December 31, 2010, the Group had 2,061 million euro of immediately available undrawn confirmed lines of 

credit (1,916 million euro at December 31, 2009). 

At December 31, 2010, Italcementi had public credit ratings from the Moody’s and Standards & Poor’s 

agencies. The ratings were, respectively: Baa3 outlook stable and BBB- outlook stable. 

22.9 Covenants 

In addition to the customary clauses, some of the Group’s financing contracts include covenants requiring 

compliance with financial ratios, fixed for the most part at the year-end date. For bilateral or syndicated lines of 

credit and borrowings, failure to comply with covenants leads to termination and consequent early repayment. 

Lines of credit and financing contracts do not contain rating triggers that would require early repayment. Some 

financing contracts involve assumption of negative pledges to the counterpart, although these are limited to 

specific instances that do not substantially compromise the Group’s ability to finance or refinance its 

operations. 

At December 31, 2010, lines of credit and loans subject to covenants accounted for 11% of total drawings 

represented by gross debt (3,084 million euro at December 31, 2010, excluding the fair value effects of 

derivatives). 

At December 31, 2009, the Group complied with all contractual commitments; covenant-related financial ratios 

were well within the contractual limits stipulated by the loans in question. The Group expects to comply with its 

covenants for the next 12 months and will provide information as appropriate should its financial situation 

deteriorate. 

128






Annexes 142 


23. Other current liabilities 


December 31, 


December 31, 

2009 

Due to employees 108,268 112,364 

Due to social security authorities 55,291 56,536 

Due to tax authorities 75,627 67,583 

Derivative instruments 19,838 18,545 

Purchase commitments on minority interests 63,749 71,402 

Advances from customers 61,283 76,070 

Other amounts due 220,818 208,496 

Total 604,874 610,996 

Derivatives are discussed in note 22.3 Financial instruments. 

“Other amounts due” comprise amounts due to suppliers for fixed assets. 

24. Commitments 


December 31, 


December 31, 

2009 

Guarantees on company assets for loans and borrowings 

- Pledges 10.0 13.3 

- Liens and mortgages 89.0 88.0 

Total guarantees on company assets for loans and borrowings 99.0 101.3 

Deposits, guarantees, other 118.3 109.6 

Total 217.3 210.9 

Guarantees on company assets at December 31, 2010, consisted mainly of mortgages and liens securing 

loans and borrowings at the Indian subsidiaries. 

In 2005 as a result of acquisition of control of Suez Cement Company, the Group undertook to make 

investments for not less than 1 billion Egyptian pounds (approximately 130 million euro) over the following ten 

years, for modernization work, extensions and environmental protection measures at the Suez and Tourah 

facilities. At December 31, 2010, 100% of the commitment had been fulfilled. 

Contracts and orders issued for investments amounted to 110.4 million euro at December 31, 2010. They 

referred mainly to property, plant and equipment, as follows: 


December 31, 


less than 1 year 1 to 5 years more than 

5 years 

Commitments for property, plant 

and equipment purchases 110.4 91.8 18.6 - 

129 


25. Goods and utilities expenses 

Goods and utilities expenses amounted to 2,019,558 thousand euro, as follows: 

(in thousands of euro) 2010 2009 Change % change 

Raw materials and semifinished goods 496,630 434,192 62,438 14.4 

Fuel 557,818 378,796 179,022 47.3 

Packaging, materials and machinery 277,069 281,075 (4,006) -1.4 

Finished goods 170,957 185,871 (14,914) -8.0 

Electricity, water, gas 491,938 431,985 59,953 13.9 

Change in inventories of raw materials, 

consumables, other 25,146 168,809 (143,663) -85.1 

Total 2,019,558 1,880,728 138,830 7.4 

n.s.=not significant 

26. Services expenses 

Services expenses amounted to 1,075,499 thousand euro, as follows: 

(in thousands of euro) 2010 2009 Change % change 

External services and maintenance 355,093 362,855 (7,762) -2.1 

Transport 441,892 440,788 1,104 0.3 

Legal fees and consultancy 54,584 66,971 (12,387) -18.5 

Rents 75,953 71,415 4,538 6.4 

Insurance 39,545 40,589 (1,044) -2.6 

Other 108,432 113,616 (5,184) -4.6 

Total 1,075,499 1,096,234 (20,735) -1.9 

"Other" consisted mainly of postal and telephone expenses, cleaning and surveillance expenses, and 

communication/marketing expenses. 

27. Employee expenses 

Employee expenses totaled 916,261 thousand euro, as follows: 

(in thousands of euro) 2010 2009 Change 

Wages and salaries 619,090 606,557 12,533 

Social security contributions and 

pension fund provisions 197,299 197,425 (126) 

Cost of stock option plans 3,566 13,055 (9,489) 

Other costs 96,306 97,552 (1,246) 

Total 916,261 914,589 1,672 

“Other costs” related mainly to costs of temporary personnel, canteen costs, employee insurance costs and 

personnel training and recruitment. 

The number of employees is shown below: 

(heads) 2010 2009 

Number of employees at year-end 20,763 21,155 

Average number of employees 21,057 21,714 

130






Annexes 142 


27.1. Stock options 

The terms and conditions of Italcementi S.p.A. stock option plans for directors and managers at December 31, 

2010, are set out below: 

No. options 

granted 

Exercise period 

Exercised 

options 

Cancelled 

options 

Unexercised 

options 

Unit 

subscription 

Grant date 

price 

March 7, 2003 965,945 1.1.2006 - 12.31.2012 924,820 - 41,125 € 8.627 

March 17, 2005 1,053,600 3.17.2008 - 3.16.2015 6,475 28,900 1,018,225 € 13.387 

March 7, 2006 631,403 3.7.2009 - 3.6.2016 4,187 50,325 576,891 € 16.890 

March 7, 2007 1,020,200 3.7.2010 - 3.6.2017 - 49,525 970,675 € 23.049 

June 20, 2007 701,250 6.20.2010 - 6.19.2015 - 701,250 - € 23.706 

March 26, 2008 623,300 3.26.2011 - 3.25.2018 - - 623,300 € 12.804 

June 4, 2008 2,000,000 6.4.2011 - 6.3.2018 - - 2,000,000 € 13.355 

Total 6,995,698 935,482 830,000 5,230,216 

With reference to the options granted on June 20, 2007, to the Italcementi S.p.A. chairman and chief executive 

officer, achievement of the performance targets assigned at inception, for a maximum grant of 1,050,000 

options, was assessed at the Board of Directors meeting on March 5, 2010, and a total of 701,250 options was 

granted, waived by the beneficiaries; the change with respect to the maximum possible grant (1,050,000 

options) generated a reduction of 1,407 thousand euro in the plan value. 

The grant date is the date of the Board of Directors meeting that approved the stock option plan. 

The average residual life of unexercised options is approximately 3 years and 3 months. 

The number and average exercise price of Italcementi S.p.A. options in the periods in question are set out 

below: 

number of 

options 


average 

subscription price 

number of 

options 

average 

subscription price 

Unexercised options at beginning of year 6,280,216 € 16.828 6,280,216 € 16.828 

Granted during year 

Cancelled during year * (1,050,000) 

Exercised during year 

Expired during year 

Unexercised options at end of year 5,230,216 € 15.447 6,280,216 € 16.828 

Vested options at end of year 2,606,916 1,636,241 

* grant waived 

The average ordinary share price in financial year 2010 was 7.2 euro (8.893 euro in 2009). 

The option exercise price at December 31, 2010, was between 8.627 euro and 23.049 euro. 

Only options granted after November 7, 2002, that had not vested at December 31, 2003, were measured and 

recognized at the date of transition to the IFRS. 

131 


The following table sets out the details of all Group stock option plans and their cost, carried under “employee 

expenses”: 


Grant date 

Company 

No. Options 

granted 

Vesting 

period 

Employee expenses 


March 7, 2006 Italcementi S.p.A. 631,403 3 years - 142 

March 23, 2006 Ciments Français S.A. 155,000 3 years - 570 

March 7, 2007 Italcementi S.p.A. 1,020,200 3 years 350 1,967 

March 23, 2007 Ciments Français S.A. 166,400 3 years 477 2,530 

June 20, 2007 Italcementi S.p.A. 701,250 3 years (1,407) 2,449 

March 26, 2008 Italcementi S.p.A. 623,300 3 years 555 555 

April 14, 2008 Ciments Français S.A. 152,900 3 years 1,080 2,222 

June 4, 2008 Italcementi S.p.A. 2,000,000 3 years 2,620 2,620 

Total 5,450,453 3,675 13,055 

Stock option plan fair value at the grant date is estimated using a binomial model that takes dividends into 

account. The total option term is ten years. Volatility projections assume that past volatility, determined as the 

annual average for the past period net of extraordinary events, is indicative of future trends. 

No other stock option plan feature is taken into consideration when measuring fair value. 

28. Other operating income (expense) 

Other operating expense net of other operating income amounted to 61,723 thousand euro, as follows: 


Other taxes 76,898 112,209 (35,311) 

Provision for bad debts 13,942 25,359 (11,417) 

Provision for environmental restoration, quarries, other 71,765 71,580 185 

Miscellaneous income (100,882) (64,027) (36,855) 

Total 61,723 145,121 (83,398) 

“Miscellaneous income” in 2010 included net capital gains of 55.2 million euro on CO 2 emission rights trading 

(19.5 million euro in 2009). 

29. Non-recurring income (expense) 

Non-recurring expense net of non-recurring income amounted to 1,984 thousand euro and referred chiefly to 

capital gains on the sale of fixed assets, employee expenses for re-organizations and industrial restructurings, 

fines and penalties. 

(in thousands of euro) 2010 2009 

Net capital gains on sale of fixed assets 9,864 26,102 

Non-recurring expenses for re-organizations (12,001) (33,987) 

Other non-recurring income/(expense) 153 (7,008) 

Total non-recurring income (expense) (1,984) (14,893) 

In 2010 expenses for re-organizations of Group industrial sites referred to Italy for 4.6 million euro, North 

America for 3.7 million euro and Morocco for 3.6 million euro. 

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Annexes 142 


30. Finance income (costs), net exchange-rate differences and derivatives 

Finance costs net of finance income, net exchange-rate differences and net derivatives were as follows: 


(in thousands of euro) Income Costs Income Costs 

Interest income 27,984 22,391 

Interest expense (135,260) (124,732) 

Sub total 27,984 (135,260) 22,391 (124,732) 

Net interest in respect of net financial position (107,276) (102,341) 

Dividends and other income 

from equity investments, net 30,082 4,931 

Other finance income 8,619 6,330 

Other finance costs (26,584) (6,980) 

Total finance income (costs) 66,685 (161,844) 33,652 (131,712) 

Gains/(losses) on interest-rate derivative contracts (3,945) (307) 

Gains/(losses) on exchange-rate derivative contracts 1,141 (19,593) 

Net exchange-rate differences 7,327 11,089 

Net exchange-rate differences and derivatives 4,523 - - (8,811) 

Total finance income (costs), net exchange-rate 

differences and derivatives (90,636) (106,871) 

Net finance costs, not considering net exchange-rate differences and derivatives, amounted to 95.2 million euro 

(98.1 million euro in 2009); the amount includes net costs of 21.4 million euro relating to the buyback of the US 

Private Placement notes, of which 15.9 million euro in respect of the net financial position. Net of this nonrecurring 

item, net finance costs in respect of net debt amounted to 91.3 million euro; the decrease compared 

with 2009 arose as a result of the reduction in interest rates and lower average debt in 2010. 

In 2010 “Dividends and other income from equity investments, net” included the capital gain of 18.6 million euro 

on the sale of Mediobanca. 

Capitalized finance costs amounted to 8.4 million euro in 2010 (16.3 million euro in 2009). 

31. Income tax expense 

Income tax expense for the year was 62,087 thousand euro, as follows: 


Current tax (110,518) (122,220) 11,702 

Deferred tax 44,242 17,561 26,681 

Prior-year tax and net non-recurring tax items 3,973 10,084 (6,111) 

Tax from change in tax rate 216 350 (134) 

Total (62,087) (94,225) 32,138 

In Italy, the IRES income tax rate applied by the parent company on estimated taxable income for the year was 

27.5%, as in 2009. Taxes for Group companies in other countries are calculated using local tax rates. 

The reconciliation between the tax charge reflected in the income statement and the theoretical tax charge 

does not consider IRAP, since IRAP uses a taxable base other than profit before tax. 

133 


The reconciliation between the theoretical tax charge, determined using theoretical tax rates applicable in Italy, 

and the tax charge reflected in the consolidated income statement is set out below: 

(in thousands of euro) 2010 

Consolidated profit before tax 259,155 

Applicable IRES tax rate % 27.5% 

Theoretical tax charge 71,268 

Effect of difference between parent company tax rate and tax rate for the other companies (1) (11,020) 

Effect of tax rate reduction for tax relief/allowances (3,092) 

Tax effect on permanent differences 1,438 

Net effect for the year of unrecognized deferred tax on temporary differences (2) 3,821 

Effect of change in tax rates (216) 

Withholding tax on foreign dividends 2,594 

Effects of change in estimate on previously recognized/unrecognized deferred tax (1,268) 

Other tax 70 

Tax on profit for the year reflected in income statement, excluding IRAP (a) 63,595 

Actual tax rate, excluding IRAP and other tax items not related to the year's income 24.5% 

Other tax items not related to the year's income (b) (3,973) 

IRAP © 2,465 

Tax on profit for the year reflected in income statement (a+b+c) 62,087 

Actual tax rate 24.0% 

(1) The difference between the Italian tax rate for the parent company and the rates in the foreign countries 

where the Group operates refers principally to France, the USA and Egypt. 

(2) Refers mainly to unrecognized deferred tax assets on losses for the year in Turkey for 3.6 million euro. 

32. Components of other comprehensive income 

(in thousands of euro) Gross amount Tax Net amount 

Components of other comprehensive income 

at December 31, 2009 (155,906) 3,589 (152,317) 

Fair value adjustments on: 

Available-for-sale financial assets 12,796 455 13,251 

Derivative financial instruments 11,750 (2,356) 9,394 

Currency translation differences 201,211 201,211 

Components of other comprehensive income 225,757 (1,901) 223,856 

Components of other comprehensive income 

at December 31, 2010 69,851 1,688 71,539 

33. Earnings per share 

Earnings per share is determined on the net profit for the period attributable to equity holders of the parent 

company, and is stated separately for ordinary shares and savings shares. 

Basic earnings per share 

Basic earnings per share is computed by dividing net profit for the year attributable to ordinary and savings 

shareholders by the weighted average number of outstanding ordinary and savings shares for the year. 

134






Annexes 142 


Earnings per savings share is increased with respect to earnings per ordinary share by an amount equivalent to 

3% of share nominal value. 

The weighted average number of shares and attributable net profit are shown below: 


(no. shares in thousands) 

ordinary 

shares 

savings 

shares 

ordinary 

shares 

savings 

shares 

Shares at beginning of year 177,118 105,431 177,118 105,431 

Treasury shares at beginning of year (3,793) (106) (3,793) (106) 

Weighted average number of treasury shares purchased in year 

Weighted average number of treasury shares sold in year 

Weighted average number of shares at end of year 173,325 105,326 173,325 105,326 


Attributable net profit 26,510 19,270 42,377 28,911 

(euro) 

Basic earnings per share 0.153 0.183 0.244 0.274 

Diluted earnings per share 

Diluted earnings per share is computed in the same way as basic earnings per share, taking account of the 

dilution effect of stock options; in 2010 this effect was zero. 

The weighted average number of shares and attributable net profit are set out below: 


(no. shares in thousands) 

ordinary 

shares 

savings 

shares 

ordinary 

shares 

savings 

shares 


Dilution effect of stock options 1 - 



Attributable net profit for diluted earnings per share 26,510 19,270 42,377 28,911 

(euro) 

Diluted earnings per share 0.153 0.183 0.244 0.274 

135 


34. Transactions with related parties 

transactions with related parties in 2010 and 2009 are illustrated in the tables below: 


Revenues 

(purchases) 

goods and 

Other 

income 

(expense) 

Interest 

income 

(expense) 

Trade and other 

receivables 

payables 

Finance 

receivables 

(payables) 


services 

Parent company 349 25 18,557 75,036 4 

(5,052) - (180) (3,016) (602) 

Parent company 7,852 6 - 2,114 - 

subsidiaries (*) (13) - - (13) - 

Subsidiaries 41,709 1,091 241 2,603 24,275 

and associates (17,803) (1,092) (5) (1,817) (461) 

Calcestruzzi group companies 93,417 2,239 2,176 28,538 223,996 

(19) (1) (64) (58) (6,321) 

Other related parties 1,831 49 - 403 - 

(1,215) - - (171) - 

Total 145,158 3,410 20,974 108,694 248,275 

(24,102) (1,093) (249) (5,075) (7,384) 

% impact on book items 3.0% 7.8% 31.5% 10.2% 30.1% 

0.6% 1.8% 0.2% 0.4% 0.2% 

2009 

Revenues 

(purchases) 

goods and 

Other 

income 

(expense) 

Interest 

income 

(expense) 

Trade and other 

receivables 

payables 

Finance 

receivables 

(payables) 


services 

Parent company 398 939 - 34,938 - 

(3,838) - (22) (3,380) (624) 

Parent company 6,900 9 - 1,706 - 

subsidiaries (*) (20) (34) - (20) - 

Subsidiaries 30,741 669 291 4,874 13,689 

and associates (26,226) (1,564) (9) (2,017) (568) 

Calcestruzzi group companies 129,415 237 2,768 39,443 201,724 

(76) (17) (65) (45) (5,369) 

Other related parties 863 63 - 401 - 

(502) (531) - (136) - 

Total 168,317 1,917 3,059 81,362 215,413 

(30,662) (2,146) (96) (5,598) (6,561) 

% impact on book items 3.4% 3.2% 9.1% 7.1% 27.8% 

0.8% 1.5% 0.1% 0.5% 0.2% 

(*) subsidiaries of Italmobiliare S.p.A. 

Economic and financial transactions with Calcestruzzi group companies are treated as transactions with related 

parties. 

Receivables and payables in respect of the parent company Italmobiliare S.p.A. mainly refer to the effects of 

the tax consolidation and to the convertible debenture issued by BravoSolution S.p.A., underwritten for a 

nominal value of 611,554 thousand euro. In 2010 finance income and costs with respect to the parent company 

included the capital gain and the capital loss on the sale of the equity investments in Mediobanca for 18.6 

million euro and in RCS Mediagroup for -0.2 million euro. 

136






Annexes 142 


Revenues and purchases of goods and services with respect to subsidiaries and associates mainly concern 

transactions with companies consolidated on a proportionate basis, notably Société des Carrières du 

Tournaisis, Les Calcaires Girondins S.a.s., Medcem Srl and Atlantica de Graneles, and with companies valued 

at equity, including the Ciments Quebec Inc. group, Vassiliko Cement Ltd. and Cementi della Lucania S.p.A.. 

Details of other transactions with other related parties are provided in the section “Dealings with other related 

parties” in the Directors’ report. 

Dividends paid to the parent company Italmobiliare S.p.A. in 2010 amounted to 13,169 thousand euro (19,845 

thousand euro in 2009). 

34.1 Compensation paid to directors and the chief operating officer 

The table below sets out compensation paid during the year to the directors and the chief operating officer of 

Italcementi S.p.A. for positions held in the Group: 

(in thousands of euro) 2010 2009 

Short-term benefits: compensation and remuneration 9,558 9,847 

Post-employment benefits: provision for leaving and end-of-term entitlements 1,257 828 

Other long-term benefits: length-of-service bonuses and incentives 2,409 18 

Share-based payments (stock options) 809 4,126 

Total 14,033 14,819 

35. Joint ventures 

The Group’s most significant joint ventures in 2010 were the French construction materials companies, the 

Medcem S.r.l. shipping company and the Saudi Arabian company International City for Ready Mix, active in 

ready mixed concrete. 

The following table sets out the portion of assets and liabilities and revenues and expenses reflected in the 

Group consolidated financial statements: 


December 31, 


December 31, 

2009 

Current assets 30.9 31.7 

Non-current assets 89.7 83.0 

Total assets 120.6 114.7 

Current liabilities 25.9 24.4 

Non-current liabilities 21.5 24.7 

Total liabilities 47.4 49.1 


Revenues 41.9 41.4 

Expenses (43.3) (38.7) 

Profit before tax (1.4) 2.7 

137 


36. Cash flow statement 

36.1. Cash and cash equivalents 

Cash and cash equivalents include: 


December 31, 


December 31, 

2009 

Bank/postal demand accounts and cash on hand 111,005 92,808 

Mutual funds 128,048 103,190 

Short-term deposits 336,167 351,275 

Total 575,220 547,273 

Short-term deposits have varying maturities within three months, in relation to the Group’s cash requirements; 

interest matures at the respective short-term rates. 

As a result of laws in force in Egypt, Morocco, Thailand and India, the cash and cash equivalents of the Group 

companies in those countries are not immediately available to the holding Ciments Français S.A.. At December 

31, 2010, they amounted to 377.7 million euro (367.3 million euro at December 31, 2009). 

36.2. Equity investments net of cash acquisitions 

The table below itemizes the main equity investments included in the corresponding item on the cash flow 

statement: 


Company 2010 2009 

Masoni - France 9.1 3.3 

Sable Wilson - Canada 0.2 1.6 

Ciments Français S.A. (*) - France - 6.4 

Gulf Ready Mix - Kuwait - 7.0 

Yuzhno Kyrgyzskij Cement - Kyrgzstan - 5.0 

Beton Ata - Kazakhstan - 2.0 

Sacbo - Italy - 1.7 

Gardawind - Italy 1.2 - 

Star. Co. - Italy 2.8 

Shifeng - China 5.3 - 

Al Badia - Syria 4.7 4.3 

Others 1.3 2.9 

Total 24.6 34.2 

(*) treasury shares 

Equity investments are shown net of acquired cash and of the change in payables for equity investment 

purchases. 

36.3. Divestments realized on sale of net fixed assets 

The amount of 143.4 million euro (53.3 million euro in 2009) includes income on the sales of Mediobanca for 

86.0 million euro and RCS Mediagroup for 24.6 million euro. 

138






Annexes 142 


36.4. Change in working capital 

The changes in working capital are illustrated in the table below: 



Change in inventories (22,894) 254,069 

Change in trade receivables 151,440 216,037 

Change in trade payables 38,979 (136,833) 

Change in other assets/liabilities (33,898) 46,828 

Total 133,627 380,101 

37. Non-recurring transactions 

The following tables itemize the most significant non-recurring transactions and their impact on Group 

shareholders' equity, financial position and net profit: 


Shareholders' 

Net profit 

Net debt 


equity 

for the year 

amount % amount % amount % 

Book values 4,985,933 197,068 2,230,895 

Net capital gains on sale of fixed assets 9,864 0.2% 9,864 5.0% 23,385 1.0% 

Non-recurring expenses for re-organizations (12,001) 0.2% (12,001) 6.1% - 0.0% 

Other non-recurring income/(expense) 153 0.0% 153 0.1% - 0.0% 

Tax on non-recurring transactions 582 0.0% 582 0.3% - 0.0% 

Non-recurring taxes 2,763 0.1% 2,763 1.4% - 0.0% 

Total 1,361 0.0% 1,361 0.7% 23,385 1.0% 

Figurative value without non-recurring transactions 4,984,572 195,707 2,254,280 

2009 

Shareholders' 

Net profit 

Net debt 


equity 

for the year 

amount % amount % amount % 

Book values 4,692,157 215,317 2,419,884 

Net capital gains on sale of fixed assets 26,102 0.6% 26,102 12.1% 43,390 1.8% 

Non-recurring expenses for re-organizations (33,987) 0.7% (33,987) 15.8% - 0.0% 

Other non-recurring income/(expense) (7,008) 0.1% (7,008) 3.3% - 0.0% 

Tax on non-recurring transactions 2,159 0.0% 2,159 1.0% - 0.0% 

Non-recurring taxes - 0.0% - 0.0% - 0.0% 

Total (12,734) 0.27% (12,734) 5.9% 43,390 1.8% 

Figurative value without non-recurring transactions 4,704,891 228,051 2,463,274 

139 


38. Considerations to the Independent Auditors 

(as per CONSOB Resolution no.11971, May 14, 1999, art. 149-duodecies, par 1): 

Details of the considerations paid by the Italcementi Group in financial year 2010 to the Independent Auditors 

Reconta Ernst & Young S.p.A. and to the foreign companies of the Ernst & Young group are set out below: 

Services provided to the Group 


Reconta Ernst 

& Young 

Other companies 

in the Ernst & 

Young group 

Auditing services 858 1,901 

Other services with issue of attestation - 23 

Other juridical, fiscal, social services 180 84 

Total 1,038 2,008 

39. Post balance-sheet events 

No significant events have taken place since closure of the financial year that require amendments to or 

additional comments on the Group’s business, financial and equity situation at December 31, 2010. 

In 2011 

At the end of January, in view of the political unrest in Egypt, the Group decided to suspend local production 

operations and bring back its ex-pat employees working in the country. 

After a closure of approximately one week, and the return to conditions of greater security, the five Group 

plants resumed operations and the ex-pat employees gradually began to return to Egypt. 

At the end of February, through the Ciments Français sub-holding, the Group reached an agreement to sell Set 

Group Holding and its subsidiaries to Limak Holding. Limak Holding is a diversified Turkish group active in 

construction, infrastructures, energy, transport and tourism. 

The agreement was drawn up for a total amount of 290 million euro, on a cash- and debt-free basis. It is 

subject to the approval of the Turkish authorities. Closing is expected to take place by the end of the second 

quarter in 2011. 

Set Group Holding represents a significant part of the Italcementi Group production network in Turkey. It 

operates three cement plants, in Ankara, Balikesir and Trakya (for a total nominal clinker capacity of 2.3 

mt/year), a terminal in Ambarli (with a cement grinding capacity of 1.2 mt/year) and 13 ready mixed concrete 

plants. In 2010, Set Group Holding reported revenues of approximately 130 million euro, and had net debt of 

approximately 17 million euro at December 31, 2010. The agreement does not involve the listed subsidiary 

Afyon Çimento, for which the Group will examine the best industrial and financial alternatives. 

Bergamo, March 4, 2011 

For the Board of Directors 

The Chairman 


140

Annexes 

141

Annex 1 

The following table has been prepared in accordance with CONSOB Resolution no. 11971, art. 126, of May 

14, 1999, which requires listed companies to disclose their investments in unlisted companies when such 

investments exceed 10% of the companies' voting capital. 

The table also indicates the consolidation method and shows investments valued with the equity method. 

Interest held by Group companies 

Company 

Registered office 

Share capital 

Method 

Direct Indirect % 

Parent company 

Italcementi S.p.A. Bergamo I € 282,548,942.00 Line-by-line 

Aliserio S.r.l. Bergamo I € 2,270,000.00 90.00 - 90.00 Italcementi S.p.A. Line-by-line 

Axim Italia S.r.l. Sorisole (BG) I € 2,000,000.00 99.90 0.10 99.90 Italcementi S.p.A. Line-by-line 

0.10 SICIL.FIN. S.r.l. 

Azienda Agricola Lodoletta S.r.l. Bergamo I € 10,400.00 75.00 - 75.00 Italcementi S.p.A. 

B2e Markets B.V. Eindhoven NL € 20,000.00 - 100.00 100.00 Verticalnet, Inc. d.b.a. BravoSolution US Line-by-line 

B2e Markets France S.A.R.L. Paris F € 20,000.00 - 100.00 100.00 Verticalnet, Inc. d.b.a. BravoSolution US Line-by-line 

Bares Elektrik Uretimi A.S. Istanbul TR YTL 33,000,000.00 - 99.99 99.99 Italgen Elektrik Uretim Anonim Sirketi Line-by-line 

BetonGenoa S.r.l. - winding up Genoa I € 10,400.00 - 36.12 22.68 Calcestruzzi S.p.A. 

13.44 Cemencal S.p.A. 

BravoBus S.r.l. Bergamo I € 600,000.00 - 51.00 51.00 BravoSolution S.p.A. Line-by-line 

BravoSolution Benelux B.V. Almere NL € 250,000.00 - 100.00 100.00 BravoSolution S.p.A. Line-by-line 

BravoSolution China Co. Ltd. Shanghai PRC CNY 80,000.00 - 100.00 100.00 BravoSolution S.p.A. Line-by-line 

BravoSolution Espana S.A. Madrid E € 120,400.00 - 99.99 99.99 BravoSolution S.p.A. Line-by-line 

BravoSolution France S.a.s. Boulogne F € 3,254,150.00 - 100.00 100.00 BravoSolution S.p.A. Line-by-line 

Billancourt 

BravoSolution Mexico S.r.l. de C.V. Mexico City MEX MXN 3,200,000.00 - 100.00 99.99 BravoSolution S.p.A. Line-by-line 

0.01 BravoSolution Espana S.A. 

BravoSolution S.p.A. Bergamo I € 29,302,379.00 83.01 - 83.01 Italcementi S.p.A. Line-by-line 

BravoSolution UK Ltd. London GB GBP 50,000.00 - 100.00 100.00 BravoSolution S.p.A. Line-by-line 

Bravosolution Technologies Ltd. Guildford GB GBP 50,000.00 - 100.00 100.00 Verticalnet, Inc. d.b.a. BravoSolution US Line-by-line 

C.T.G. S.p.A. Bergamo I € 500,000.00 50.00 50.00 50.00 Italcementi S.p.A. Line-by-line 

50.00 Ciments Français S.A. 

C.T.G. Devnya EAD Devnya BG BGN 200,000.00 - 100.00 100.00 C.T.G. S.p.A. 

CTG USA LLC Nazareth USA - - - 100.00 90.00 C.T.G. S.p.A. Line-by-line 

10.00 Essroc Cement Corp. 

Calcementi Jonici S.r.l. Siderno (RC) I € 9,000,000.00 99.90 0.10 99.90 Italcementi S.p.A. Line-by-line 


Calcestruzzi S.p.A. Bergamo I € 59,162,206.00 99.90 0.10 99.90 Italcementi S.p.A. 


Cava delle Capannelle S.r.l. Bergamo I € 31,200.00 - 49.00 49.00 Calcestruzzi S.p.A. 

Cemencal S.p.A. Bergamo I € 12,660,000.00 - 100.00 100.00 Calcestruzzi S.p.A. 

Cementi della Lucania S.p.A. Potenza I € 619,746.00 30.00 - 30.00 Italcementi S.p.A. Equity 

Cementi e Calci di S. Marinella S.r.l. Bergamo I € 10,000.00 66.67 - 66.67 Italcementi S.p.A. Line-by-line 

Cementificio di Montalto S.p.A. Bergamo I € 10,000,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

E.I.C.A. S.r.l. Norcia (PG) I € 31,392.00 - 100.00 100.00 Calcestruzzi S.p.A. 

E.S.A. Monviso S.p.A. Bergamo I € 1,340,000.00 - 100.00 59.00 Calcestruzzi S.p.A. 

41.00 Cemencal S.p.A. 

Ecoinerti S.r.l. Recanati (MC) I € 91,800.00 - 50.00 50.00 Calcestruzzi S.p.A. 

Gardawind S.r.l. Vipiteno (BZ) I I 100,000.00 - 49.00 49.00 Italgen S.p.A. Equity 

Generalcave S.r.l. Fiumicino (RM) I € 31,200.00 - 50.00 50.00 Speedybeton S.p.A. 

Gruppo Italsfusi S.r.l. Savignano s/P. (MO) I € 156,000.00 99.50 0.50 99.50 Italcementi S.p.A. Line-by-line 


I.GE.PO. - Impresa Gestione Vibo Valentia I € 25,500.00 18.00 - 18.00 Italcementi S.p.A. 

Porti S.r.l. - winding up 

142






Annexes 142 


Company 


Share capital 


Method 


IMES S.r.l. S. Cipriano Pic. (SA) I € 206,000.00 99.00 1.00 99.00 Italcementi S.p.A. Equity 

1.00 SICIL.FIN S.r.l. 

Immobiliare Salesiane S.r.l. Bergamo I € 350,000.00 99.00 1.00 99.00 Italcementi S.p.A. 


Ing. Sala S.p.A. Sorisole (BG) I € 5,858,722.00 - 100.00 99.90 Nuova Sacelit S.r.l. Line-by-line 


International City for Ready Mix Jeddah SA SAR 100,000,000.00 50.00 - 50.00 Italcementi S.p.A. Proportionate 

Intertrading S.r.l. Bergamo I € 4,160,000.00 99.50 0.50 99.50 Italcementi S.p.A. Line-by-line 


Italcementi Finance Puteaux F € 20,000,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

Italcementi Ingegneria S.r.l. Bergamo I € 266,220.00 100.00 - 100.00 Italcementi S.p.A. 

Italgen Elektrik Uretim Anonim Sirketi Istanbul TR YTL 78,271,500.00 - 99.99 99.99 Italgen S.p.A. Line-by-line 

Italgen Maroc S.A. Casablanca MAR MAD 300,000.00 - 99.87 99.87 Italgen S.p.A. Line-by-line 

Italgen Misr for Energy SAE Cairo EGY LE 35,000,000.00 - 100.00 98.00 Italgen S.p.A. Line-by-line 

1.00 Helwan Cement Co. 

1.00 Suez Cement Company 

Italgen S.p.A. Bergamo I € 20,000,000.00 99.90 0.10 99.90 Italcementi S.p.A. Line-by-line 


Italsigma S.r.l. Bergamo I € 1,500,000.00 - 50.00 50.00 Axim Italia S.r.l. Proportionate 

Italterminali S.r.l. Bergamo I € 10,000.00 - 100.00 99.50 Cementificio di Montalto S.p.A. Line-by-line 


ITC-Factor S.p.A. - winding up Bergamo I € 1,500,000.00 99.50 0.50 99.50 Italcementi S.p.A. Line-by-line 


Les Ciments de Zouarine S.A. - winding up Tunis TN TND 80,000.00 49.93 - 49.93 Italcementi S.p.A. 

Mantovana Inerti S.r.l. Castiglione delle I € 702,000.00 - 50.00 50.00 Calcestruzzi S.p.A. 

Stiviere (MN) 

Nuova Sacelit S.r.l. Sorisole (BG) I € 7,500,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

Procalmi S.r.l. winding up Milan I € 51,000.00 - 11.52 11.52 Cemencal S.p.A. 

S.A.F.R.A. S.r.l. Bologna I € 51,480.00 - 33.33 33.33 Calcestruzzi S.p.A. 

SAMA S.r.l. Bergamo I € 1,000,000.00 99.00 1.00 99.00 Italcementi S.p.A. Line-by-line 


San Francesco S.c.a r.l. Foligno (PG) I € 5,000,000.00 - 40.00 40.00 Calcestruzzi S.p.A. 

Shqiperia Cement Company Shpk Tirana ALB LEK 74,250,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

SICIL.FIN. S.r.l. Bergamo I € 650,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

Silicalcite S.r.l. Bergamo I € 4,000,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

Silos Granari della Sicilia S.r.l. Bergamo I € 7,980,000.00 99.90 0.10 99.90 Italcementi S.p.A. Line-by-line 


Société Internationale Italcementi Luxembourg L € 1,771,500.00 99.87 0.13 99.87 Italcementi S.p.A. Line-by-line 

(Luxembourg) S.A. 0.13 SICIL.FIN S.r.l. 

SO.RI.TE. S.r.l. Turin I € 100,000.00 - 25.00 25.00 Calcestruzzi S.p.A. 

Speedybeton S.p.A. Pomezia (RM) I € 300,000.00 - 100.00 100.00 Calcestruzzi S.p.A. 

Star.co S.r.l. Naples I I 118,000.00 100.00 - 100.00 Italcementi S.p.A. Line-by-line 

Vert Tech LLC Wilmington USA - - - 100.00 100.00 Verticalnet, Inc. d.b.a. BravoSolution US Line-by-line 

Verticalnet, Inc. d.b.a. BravoSolution US Harrisburg USA USD 1.00 - 100.00 100.00 BravoSolution S.p.A. Line-by-line 

Verticalnet Software, Inc. Wilmington USA - - - 100.00 100.00 Verticalnet, Inc. d.b.a. BravoSolution US Line-by-line 

Ciments Français S.A. Puteaux F € 145,527,488.00 81,82 0.38 81.82 Italcementi S.p.A. Line-by-line 


(voting rights: 

90.00 Italcementi S.p.A.) 

3092-0631 Quebec Inc. St. Basile CAN CAD 6,250.00 - 100.00 100.00 Ciment Quebec Inc. Equity 

Afyon Cimento Sanayi Tas Istanbul TR YTL 3,000,000.00 - 76.51 76.51 Ciments Français S.A. Line-by-line 

Al Badia Cement JSC Damascus SY SYP 12,200,000,000.00 - 12.00 12.00 Menaf 

Al Mahaliya Ready Mix Concrete WLL Safat KWT KWD 500,000.00 - 51.00 51.00 Hilal Cement Company Line-by-line 

Al Manar Cement Holding S.a.s. Puteaux F € 1,800,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

143 


Company 


Share capital 


Method 


Altas Ambarlj Liman Tesisleri Tas Istanbul TR YTL 500,000.00 - 12.25 12.25 Set Cimento Sanayi Ve Ticaret A.S. 

Ammos Development Quarries Ltd. Mandra GR € 18,000.00 - 100.00 100.00 Halyps Building Materials S.A. Line-by-line 

Arrowhead Investment Company Carson City USA USD 1,000.00 - 100.00 100.00 Essroc Corporation Line-by-line 

Asia Cement Energy Conservation Ltd. Bangkok TH BT 1,000,000.00 - 39.50 39.50 Asia Cement Public Co., Ltd. (*) Line-by-line 

Asia Cement Products Co., Ltd. Bangkok TH BT 10,000,000.00 - 39.52 39.52 Asia Cement Public Co., Ltd. (*) Line-by-line 

Asia Cement Public Co., Ltd. Bangkok TH BT 4,670,523,072.00 - 39.53 25.43 Ciments Français S.A. Line-by-line 

14.10 Vaniyuth Co. Ltd. (*) 

Asment Temara S.A. Temara MAR MAD 412,500,000.00 - 37.01 19.99 Ciments Français S.A. Equity 

17.02 Procimar S.A. 

Atlantica de Graneles y Moliendas S.A. Vizcaya E € 5,000,000.00 - 50.00 50.00 Sociedad Financiera y Minera S.A. Proportionate 

Axim Building Technologies S.A. Malaga E € 60,500.00 - 100.00 99.00 Sociedad Financiera y Minera S.A. Line-by-line 

1.00 Compania General de Canteras S.A. 

Axim Concrete Technologies (Canada) Inc. Cambridge CAN CAD 1,275,600.00 - 100.00 100.00 Axim Concrete Technologies Inc. Line-by-line 

Axim Concrete Technologies Inc. Middlebranch USA USD 1,000.00 - 100.00 100.00 Essroc Corporation Line-by-line 

Axim for Industrials SAE Cairo EGY LE 15,000,000.00 - 100.00 90.00 Suez Cement Company Line-by-line 


5.00 Tourah Portland Cement Company 

Axim Maroc Casablanca MAR MAD 1,000,000.00 - 99.96 99.96 Ciments du Maroc Line-by-line 

Axim S.a.s. Guerville F € 495,625.00 - 99.99 99.99 Ciments Calcia S.a.s. Line-by-line 

Betomar S.A. Casablanca MAR MAD 84,397,800.00 - 99.99 99.99 Ciments du Maroc S.A. Line-by-line 

Beton 51 SAS La Chapelle Saint Luc F € 400,000.00 - 100.00 100.00 Unibéton S.a.s. 

Beton.Ata LLP Almaty KAZ TEN 416,966,426.00 - 75.50 75.50 Shymkent Cement Line-by-line 

Béton Contrôle de Gascogne S.A. Soorts Hossegor F € 40,000.00 - 37.00 37.00 Béton Contrôle du Pays Basque S.a.s. 

Béton Contrôle de l'Adour S.a.s. Bayonne F € 150,000.00 - 59.96 59.96 Béton Contrôle du Pays Basque S.a.s. Line-by-line 

Béton Contrôle des Abers S.a.s. Lannilis F € 104,000.00 - 34.00 34.00 Unibéton S.a.s. Equity 

Béton Contrôle du Pays Basque S.a.s. Bayonne F € 120,000.00 - 59.98 59.98 Unibéton S.a.s. Line-by-line 

Béton Masoni S.a.s. La Chapelle Saint Luc F € 425,755.00 - 100.00 100.00 Unibéton S.a.s. Line-by-line 

Bonafini S.a.s. Argences F € 45,392.00 - 100.00 96.79 Tratel S.a.s. Line-by-line 

3.21 Larricq S.a.s. 

Cambridge Aggregates Inc. Cambridge CAN CAD 10.00 - 60.00 60.00 Essroc Canada Inc. Line-by-line 

Canteras Aldoyar S.L. Olazagutia E € 1,508,510.00 - 20.00 20.00 Hormigones y Minas S.A. 

Capitol Cement Corporation Winchester USA USD 1,000,000.00 - 100.00 100.00 Riverton Investment Corporation Line-by-line 

Carrières Bresse Bourgogne Epervans F € 387,189.00 - 66.48 66.48 Dragages et Carrières S.A. Proportionate 

Centro Administrativo y de 

Servicios de Malaga S.A. Malaga E € 60,200.00 - 99.99 99.99 Sociedad Financiera y Minera S.A. Line-by-line 

Chatelet S.a.s. Cayeux s/M. F € 118,680.00 - 99.98 99.98 GSM S.a.s. Line-by-line 

Cie pour l’Investissement 

Financier en Inde Puteaux F € 7,350,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Cifrinter Luxembourg L € 8,928,500.00 - 99.99 50.99 Ciments Français S.A. Line-by-line 

49.00 Ciments Français Europe N.V. 

Ciment Quebec Inc. St. Basile CAN CAD 19,461,161.70 - 100.00 100.00 Groupe Ciment Quebec Inc. Equity 

Cimento de Bissau Limitada Guinea Bissau GNB XOF 2,000,000.00 - 99.00 99.00 Tercim S.A. 

Ciment du Littoral S.A. Bassens F € 37,000.00 - 99.99 99.99 Ciments Calcia S.a.s. Line-by-line 

Ciments Calcia S.a.s. Guerville F € 593,836,525.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Ciments du Maroc S.A. Casablanca MAR MAD 1,443,600,400.00 - 62.31 58.79 Cocimar Line-by-line 

3.52 Procimar S.A. 

Ciments du Nord Nouadhibou MAU OUG 1,340,000,000.00 - 15.00 15.00 Ciments du Maroc 

Ciments Français Europe N.V. Amsterdam NL € 392,596,275.00 - 100.00 67.99 Sodecim S.a.s. Line-by-line 


CIMFRA (China) Limited Puteaux F € 62,116,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Cocimar Puteaux F € 72,957,690.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Codesib S.a.s. Puteaux F € 5,037,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

144






Annexes 142 


Company 


Share capital 


Method 


Compagnie des Ciments Belges S.A. Tournai B € 295,031,085.00 - 100.00 39.74 Ciments Français S.A. Line-by-line 


21.40 Ciments Calcia S.a.s. 

0.08 Compagnie Financière et de Participations S.A. 

Compagnie Financière et de Participations S.a.s. Puteaux F € 18,000,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Compania General de Canteras S.A. Malaga E € 479,283.69 - 99.41 96.12 Sociedad Financiera y Minera S.A. Line-by-line 

3.29 Sax S.a.s. 

Conglomerantes Hidraulicos Especiales S.A. Madrid E € 2,361,960.00 - 85.00 85.00 Sociedad Financiera y Minera S.A. Line-by-line 

De Paepe Béton N.V. Ghent B € 500,000.00 - 99.99 99.99 Compagnie des Ciments Belges S.A. Line-by-line 

DECOM Egyptian Co for Development 

of Building Materials SAE Cairo EGY LE 63,526,401.28 - 99.99 99.99 Ready Mix Production Universal Company Line-by-line 

Decoux S.a.s. Beaucaire F € 120,000.00 - 100.00 100.00 Tratel S.a.s. Line-by-line 

Development for Industries Co. SAE Cairo EGY LE 15,000,000.00 - 100.00 90.00 Suez Cement Company Line-by-line 



Devnya Bulk Services EAD Devnya BUL LEV 50,000.00 - 100.00 100.00 Devnya Cement AD 

Devnya Cement AD Devnya BUL LEV 1,028,557.00 - 99.97 99.97 Marvex Line-by-line 

Devnya Finance A.D. Devnya BUL LEV 5,000,000.00 - 50.00 50.00 Devnya Cement AD Equity 

Divas Beheer B.V. Amstelveeu NL € 18,768.92 - 100.00 100.00 Ciments Français Europe N.V. Line-by-line 

Dobrotitsa BSK A.D. Dobrich BUL LEV 88,954.00 - 26.40 26.40 Devnya Cement AD 

Dragages et Carrières S.A. Epervans F € 1,000,000.00 - 49.99 49.99 GSM S.a.s. Proportionate 

Dragages Transports & Travaux La Rochelle F € 3,947,894.00 - 50.00 33.33 GSM S.a.s. Proportionate 

Maritimes S.A. 16.67 Granulats Ouest - GO 

Dunkerque Ajouts Snc Paris F € 6,000.00 - 34.00 34.00 Ciments Calcia S.a.s. 

Ecocem Valorizacion de Residuos S.A. Barcelona E € 109,290.00 - 16.33 16.33 Sociedad Financiera y Minera S.A. 

Entreprise Lorraine d’Agriculture 

ELDA S.A.R.L. Heillecourt F € 10,000.00 - 100.00 100.00 GSM S.a.s. 

Essroc Canada Inc. Mississauga CAN CAD 258,135,174.00 - 100.00 100.00 Essroc Corporation Line-by-line 

Essroc Cement Corp. Nazareth USA USD 8,330,000.00 - 100.00 100.00 Essroc Corporation Line-by-line 

Essroc Corporation Nazareth USA USD 1,000.00 - 100.00 100.00 Essroc International Line-by-line 

Essroc International Puteaux F € 244,398,096.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Essroc Ready Mix Corp Nazareth USA USD 1.00 - 100.00 100.00 Essroc Cement Corp. Line-by-line 

Essroc San Juan Inc. Espinosa P.RICO USD 10,000.00 - 100.00 100.00 Essroc Cement Corp. Line-by-line 

ET Béton S.A. Aspropyrgos GR € 5,616,474.70 - 99.99 99.99 Halyps Building Materials S.A. Line-by-line 

Eurarco France S.A. Le Crotoy F € 1,520,000.00 - 64.99 64.99 GSM S.a.s. Line-by-line 

Eurocalizas S.L. Cantabria E € 723,030.00 - 33.33 33.33 Hormigones y Minas S.A. 

Eurotech Cement S.h.p.k. Durres ALB LEK 273,214,000.00 - 84.00 84.00 Halyps Building Materials S.A. Line-by-line 

Fraimbois Granulats S.A.R.L. Moncel les Luneville F € 75,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Gacem Company Limited Serrekunda GAM GMD 4,500,000.00 - 80.00 80.00 Tercim S.A. Line-by-line 

Goltas Goller Bolgesi Cimento 

Sanayi ve Ticaret Isparta TR YTL 20,000,000.00 - 35.02 35.02 Ciments Français S.A. 

Granulats de la Drôme S.a.s. Saint Jean de Vedas F € 1,011,600.00 - 51.01 51.01 GSM S.a.s. Line-by-line 

Granulats Ouest - GO Saint Herblain F € 784,657.44 - 100.00 100.00 GSM S.a.s. Line-by-line 

Graves de l’Estuaire de la Gironde L.G.E.G. St. Jean de Blaignac F - - - 50.00 50.00 GSM S.a.s. Proportionate 

Greyrock Inc. Nazareth USA USD 1,000.00 - 100.00 100.00 Essroc Cement Corp. Line-by-line 

Groupe Ciment Quebec Inc. St. Basile CAN CAD 57,000,000.00 - 50.00 50.00 Essroc Canada Inc. Equity 

GSM S.a.s. Guerville F € 18,675,840.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Gulf Ready Mix Concrete Company WLL Kuwait KWT KWD 100,000.00 - 100.00 99.90 Al Mahaliya Ready Mix Concrete WLL Line-by-line 

0.10 Hilal Cement Company 

Halyps Building Materials S.A. Aspropyrgos GR € 42,718,428.06 - 99.90 59.88 Ciments Français S.A. Line-by-line 

40.02 Sociedad Financiera y Minera S.A. 



39.99 Sociedad Financiera y Minera S.A.) 

145 


Company 


Share capital 


Method 


Helwan Cement Co. Cairo EGY LE 583,875,425.00 - 99.47 99.47 Suez Cement Company Line-by-line 

Helwan Bags Company Helwan EGY LE 6,000,000.00 - 71.00 70.00 Helwan Cement Co. Line-by-line 

1.00 Development for Industries Co. SAE 

Hilal Cement Company Safat KWT KWD 6,987,750.00 - 51.00 51.00 Suez Cement Company Line-by-line 

Hormigones Olatzi S.A. Olazagutia E € 283,804.22 - 25.00 25.00 Hormigones y Minas S.A. 

Hormigones Txingudi S.A. San Sebastian E € 240,560.22 - 33.33 33.33 Hormigones y Minas S.A. 

Hormigones y Minas S.A. Malaga E € 8,689,378.20 - 99.99 99.99 Sociedad Financiera y Minera S.A. Line-by-line 

ICS Danube Cement S.r.l. Chisinau MD MDL 556,000.00 - 100.00 100.00 Devnya Cement AD Line-by-line 

Immobilière des Technodes S.a.s. Guerville F € 8,024,400.00 - 100.00 59.97 Ciments Français S.A. Line-by-line 


Industrie Sakia el Hamra “Indusaha” S.A. Laayoune MAR MAD 81,680,000.00 - 91.00 91.00 Ciments du Maroc Line-by-line 

Innocon Inc. Richmond Hill CAN CAD 18,300,000.20 - 50.00 50.00 Essroc Canada Inc. Equity 

Innocon Partnership Agreement Inc. Richmond Hill CAN CAD 2,003.00 - 51.50 48.50 Essroc Canada Inc Equity 

3.00 Innocon Inc. 

Interbulk Egypt for Export SAE Cairo EGY LE 250,000.00 - 100.00 98.00 Interbulk Trading S.A. 

1.00 Menaf 

1.00 Tercim S.A. Line-by-line 

Interbulk Trading S.A. Lugano CH CHF 7,470,600.00 - 99.99 66.75 Cifrinter S.A. Line-by-line 

15.00 Intertrading S.r.l. 


Intercom S.r.l. Bergamo I € 2,750,000.00 - 100.00 99.50 Interbulk Trading S.A. Line-by-line 


Inversiones e Iniciativas en Aridos S.L. Madrid E € 3,010.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Investcim S.A. Puteaux F € 110,405,840.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Italcementi for Cement Manufacturing Libyian Tripoli LAR LYD 20,000,000.00 - 50.00 50.00 Al Manar Cement Holding Proportionate 

Italmed Cement Company Ltd. Limassol CYP € 21,063,780.00 - 100.00 100.00 Halyps Building Materials S.A. Line-by-line 

Jalaprathan Cement Public Co, Ltd. Bangkok TH BT 1,200,000,000.00 - 58.96 12.42 Asia Cement Public Co., Ltd. (*) Line-by-line 


9.54 Vesprapat Holding Co, Ltd. (*) 

Jalaprathan Concrete Products Co, Ltd. Bangkok TH BT 280,000,000.00 - 58.95 58.95 Jalaprathan Cement Public Co, Ltd. (*) Line-by-line 

Johar S.a.s. Luxemont et Villotte F € 1,221,632.00 - 100.00 100.00 Tratel S.a.s. Line-by-line 

JTC Bangkok TH BT 10,400,000.00 - 58.95 58.95 Jalaprathan Concrete Products Co Ltd. (*) 

Kuwait German Company for Ready Kuwait KWT KWD 824,000.00 - 100.00 99.00 Al Mahaliya Ready Mix Concrete WLL Line-by-line 

Mix Concrete WLL 1.00 Hilal Cement Company 

Larricq S.a.s. Airvault F € 508,000.00 - 100.00 100.00 Tratel S.a.s. Line-by-line 

Les Calcaires Girondins S.a.s. Cenon F € 100,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Les Calcaires Sud Charentes Cherves Richemont F € 1,524.50 - 34.00 34.00 GSM S.a.s. 

Les Graves de l’Estuaire S.a.s. Le Havre F € 297,600.00 - 33.33 33.33 GSM S.a.s. Proportionate 

Les Quatre Termes Salon de Provence F € 40,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Les Sables de Mezieres S.a.s St Pierre des Corps F € 40,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Les Sabliers de l’Odet Quimper F € 134,400.00 - 96.93 94.92 Dragages Transports & Travaux Maritimes S.A. Proportionate 

2.01 GSM S.a.s. 

Lyulyaka E.A.D. Devnya BUL LEV 759,372.00 - 100.00 100.00 Devnya Cement AD Line-by-line 

Marvex Bulgaria EOOD Devnya BUL LEV 89,424,100.00 - 100.00 100.00 Sociedad Financiera y Minera S.A. Line-by-line 

Mauritanienne des Batiments et Routes S.A. Nouakchott MAU OUG 690,000,000.00 - 99.42 99.42 Mauritano-Française des Ciments Line-by-line 

Mauritano-Française des Ciments Nouakchott MAU OUG 1,111,310,000.00 - 51.11 51.11 Ciments Français S.A. Line-by-line 

Medcem S.r.l. Naples I € 5,500,000.00 - 50.00 50.00 Intercom S.r.l. Proportionate 

Menaf S.a.s. Puteaux F € 352,500,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Met Teknik Servis ve Maden 

Sanayi Ticaret A.S. Istanbul TR YTL 50,000.00 - 99.99 99.99 Set Group Holding Line-by-line 

MTB - Maritime Trading & Brokerage Srl Genoa I € 70,000.00 - 33.33 33.33 Interbulk Trading S.A. Equity 

Naga Property Co Bangkok TH BT 100,000,000.00 - 58.95 58.95 Jalaprathan Cement Public Co. Ltd. (*) Line-by-line 

Neuciclaje S.A. Bilbao E € 396,669.00 - 30.00 30.00 Sociedad Financiera y Minera S.A. 

Novhorvi S.A. Vitoria E € 180,300.00 - 25.00 25.00 Hormigones y Minas S.A. 

146






Annexes 142 


Company 


Share capital 


Method 


Parcib s.a.s. Puteaux F € 40,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Procimar S.A. Casablanca MAR MAD 27,000,000.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Raingeard Carrières Saint Herblain F € 705,000.00 - 100.00 99.98 GSM S.a.s. Line-by-line 

Bétons et Compagnie S.n.c. 0.02 Granulats Ouest - GO 

Ready Mix Production Company Cairo EGY LE 5,000,000.00 - 52.00 52.00 Suez Cement Company Line-by-line 

Ready Mix Production Universal Company Cairo EGY LE 15,000,000.00 - 52.00 52.00 Suez Cement Company Line-by-line 

Riverton Corporation Winchester USA USD 859,310.00 - 100.00 100.00 Riverton Investment Corporation Line-by-line 

Riverton Investment Corporation Winchester USA USD 8,340.00 - 100.00 100.00 Essroc Cement Corp. Line-by-line 

S.A. Dijon Béton Dijon F € 184,000.00 - 15.00 15.00 GSM S.a.s. Equity 

Saarlandische Zementgesellschaft MBH Saarbrucken D € 52,000.00 - 80.00 80.00 Cifrinter Line-by-line 

Sablimaris Lanester F € 4,094,776.00 - 100.00 66.28 Dragages Transports & Travaux Maritimes S.A. Proportionate 

Sable Classifie et Equipement de Wilson 

Ltèe 

33.72 Les Sabliers de l’Odet 

Alcove CAN CAD 12,100.00 - 100.00 100.00 Essroc Canada Inc. Line-by-line 

Sas des Gresillons Paris F € 60,000.00 - 35.00 35.00 GSM S.a.s. Proportionate 

Sax S.a.s. Guerville F € 482,800.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

SCI de Balloy Avon F € 20,310.00 - 100.00 100.00 GSM S.a.s. Line-by-line 

SCI de Barbeau Bray sur Seine F € 8,000.00 - 49.00 49.00 GSM S.a.s. 

SCI des Granets Cayeux sur M. F € 4,575.00 - 33.33 33.33 GSM S.a.s. 

SCI du Colombier Rungis F € 2,000.00 - 63.00 63.00 GSM S.a.s. 

SCI Lepeltier S. Doulchard F € 6,150.00 - 100.00 100.00 GSM S.a.s. Line-by-line 

SCI Taponnat Cherves Richemont F € 1,500.00 - 50.00 50.00 GSM S.a.s. 

Scori S.A. Plaisir F € 1,092,800.00 - 13.95 13.95 Ciments Calcia S.a.s. 

Set Cimento Sanayi Ve Ticaret A.S. Istanbul TR TRY 28,206,537.00 - 99.81 99.81 Set Group Holding Line-by-line 

Set Group Holding S.A. Sahrayicedid-Kadikoy TR YTL 18,508,410.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Shaanxi Fuping Cement Co. Ltd. Shaanxi Province PRC CNY 597,000,000.00 - 100.00 100.00 CIMFRA (China) Limited Line-by-line 

Shaanxi Shifeng Cement Co. Ltd. Shaanxi Province PRC CNY 100,000,000.00 - 35.00 35.00 Shaanxi Fuping Cement Co. Ltd. 

Shymkent Cement Shymkent KAZ TEN 380,660,000.00 - 92.88 92.88 Ciments Français S.A. Line-by-line 

Sider Navi S.p.A. Naples I € 22,000,000.00 - 20.00 20.00 Medcem S.r.l. Equity 

Singha Cement (Private) Limited Colombo SRI L. LKR 397,395,770.00 - 80.16 80.16 Ciments Français S.A. Line-by-line 

Sitapuram Power Limited Hyderabad IN INR 480,000,000.00 - 50.99 50.99 Zuari Cement Ltd. Line-by-line 

Sociedad Financiera y Minera S.A. Madrid E € 39,160,000.00 - 99.91 56.58 Sodecim S.a.s. Line-by-line 


3.02 Hormigones y Minas S.A. 

0.44 Sociedad Financiera y Minera S.A. 


58.61 Sodecim S.a.s. 

41.30 Ciments Français Europe N.V.) 

Société Calcaires Lorrains Heillecourt F € 40,000.00 - 49.92 49.92 GSM S.a.s. Proportionate 

Société Civile Bachant le Grand Bonval Guerville F € 1,500.00 - 80.00 80.00 GSM S.a.s. 

Société Civile d'Exploitation Rheims F € 3,000.00 - 90.00 50.00 Société Civile Bachant le Grand Bonval 

Agricôle de l'Avesnois 40.00 GSM S.a.s. 

Société de la Grange d'Etaule Gray F € 3,750.00 - 99.60 99.60 Ciments Calcia S.a.s. Line-by-line 

Société des Calcaires de Souppes 

sur Loing S.C.S.L. 

Souppes sur Loing F € 2,145,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Société des Carrières Tournai B € 12,297,053.42 - 65.00 23.90 Ciments Français Europe N.V. Proportionate 

du Tournaisis S.C.T. S.A. 18.79 Ciments Français S.A. 


6.00 Compagnie des Ciments Belges S.A. 

Société Foncière de la Petite Seine S.a.s. Saint Sauveur les Bray F € 50,000.00 - 40.00 40.00 GSM S.a.s. 

Société Immobilière Marguerite VIII S.r.l. Casablanca MAR MAD 100,000.00 - 98.00 98.00 Ciments du Maroc Line-by-line 

Société Immobilière Marguerite X S.r.l. Casablanca MAR MAD 100,000.00 - 98.00 98.00 Ciments du Maroc Line-by-line 

Société Parisienne des Sablières S.A. Pont de L’Arche F € 320,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

Socli S.a.s. Izaourt F € 144,960.00 - 99.99 99.99 Ciments Calcia S.a.s. Line-by-line 

Sodecim S.a.s. Puteaux F € 458,219,678.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Sodramaris La Rochelle F € 1,000.00 - 50.00 50.00 GSM S.a.s. Proportionate 

147 


Company 


Share capital 


Method 


Soficem S.n.c. Puteaux F € 1,000.00 - 100.00 99.00 Ciments Français S.A. Line-by-line 

1.00 Compagnie Financière et de Partecipations S.A. 

Srt Rouennaise de Transformation Grand Couronne F € 7,500.00 - 60.00 60.00 Ciments Calcia S.a.s. Line-by-line 

Ste Aquitaine de Transformation S.a.s. Saint Cloud F € 10,000,000.00 - 40.00 40.00 Ciments Calcia S.a.s. Equity 

Ste Extraction & Amenagement 

de la Plaine de Marolles Avon F € 40,000.00 - 56.40 56.40 GSM S.a.s. Proportionate 

Stinkal S.a.s. Ferques F € 1,540,000.00 - 35.00 35.00 GSM S.a.s. Equity 

St. Basile Transport Inc. St. Basile CAN CAD 9,910.00 - 100.00 100.00 Ciment Quebec Inc. Equity 

Suez Bag Company Cairo EGY LE 20,250,000.00 - 57.84 53.32 Suez Cement Company Line-by-line 


Suez Bosphorus Cimento Sanayi Ticaret Istanbul TR YTL 50,000.00 - 99.99 99.99 Suez Cement Company Line-by-line 

Suez Cement Company SAE Cairo EGY LE 909,282,535.00 - 55.07 25.65 Menaf Line-by-line 


11.66 Ciments du Maroc 

5.00 Tercim S.A. 

0.40 Divas Beheer B.V. 

Suez for Import & Export Company SAE Cairo EGY EGP 3,750,000.00 - 100.00 40.00 Axim for Industrials SAE Line-by-line 

40.00 Development for Industries Co. SAE 

20.00 Suez for Transportation & Trade SAE 

Suez for Transportation & Trade SAE Cairo EGY LE 10,000,000.00 - 100.00 55.00 Helwan Cement Co. Line-by-line 

35.00 Suez Cement Company 


Suez Lime SAE Cairo EGY LE 7,390,000.00 - 50.00 49.00 Suez Cement Company Proportionate 


Tameer Betoon for Trading 

Equity 

and Contracting LLC Doha Q QAR 200,000.00 - 49.00 49.00 Hilal Cement Company 

Technodes S.a.s. Guerville F € 3,200,000.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Tecno Gravel Egypt SAE Cairo EGY LE 15,000,000.00 - 45.00 45.00 Suez Cement Company Equity 

Tercim S.A. Puteaux F € 55,539,000.00 - 100.00 99.99 Ciments Français S.A. Line-by-line 

0.01 Sax S.a.s. 

Tomahawk Inc. Wilmington USA USD 100.00 - 100.00 100.00 Essroc Cement Corp. Line-by-line 

Tourah Portland Cement Company SAE Cairo EGY LE 357,621,000.00 - 71.93 66.12 Suez Cement Company Line-by-line 

5.81 Divas Beheer B.V. 

Trabel Affretement Gaurain Ramecroix B € 61,500.00 - 100.00 99.84 Tratel S.a.s. Line-by-line 


Trabel Transports S.A. Gaurain-Ramecroix B € 750,000.00 - 100.00 89.97 Tratel S.a.s. Line-by-line 

10.03 Compagnie des Ciments Belges S.A. 

Tragor S.a.s. Pessac F € 892,048.00 - 100.00 100.00 Tratel S.a.s. Line-by-line 

Tratel S.a.s. Guerville F € 6,025,580.00 - 100.00 100.00 Ciments Calcia S.a.s. Line-by-line 

Unibéton Luxembourg S.A. Luxembourg L € 35,000.00 - 100.00 100.00 Unibéton S.a.s. 

Unibéton S.a.s. Guerville F € 27,159,732.00 - 99.99 99.99 Ciments Français S.A. Line-by-line 

Unibéton Var S.a.s. Lambesc F € 40,000.00 - 100.00 100.00 Unibéton S.a.s. Line-by-line 

Uniwerbéton S.a.s. Heillecourt F € 160,000.00 - 70.00 70.00 Unibéton S.a.s. Line-by-line 

Valoise S.a.s. Pierrelaye F € 37,570.00 - 60.00 60.00 GSM S.a.s. Proportionate 

Vaniyuth Co. Ltd. Bangkok TH BT 100,000.00 - 48.80 48.80 Investcim S.A. Line-by-line 

Vassiliko Cement Works Ltd. Nicosia CYP € 30,932,457.21 - 24.65 14.94 Italmed Cement Company Ltd. Equity 

9.71 Compagnie Financière et de Participations S.A. 

Ventore S.L. Malaga E € 14,400.00 - 100.00 99.56 Sociedad Financiera y Minera S.A. Line-by-line 

0.44 Hormigones y Minas S.A. 

Vesprapat Holding Co, Ltd. Bangkok TH BT 20,000,000.00 - 49.00 49.00 Sax S.a.s. Line-by-line 

148






Annexes 142 


Company 


Share capital 


Method 


Vulkan Cement Dimitrovgrad BUL LEV 452,967.00 - 98.35 70.00 Ciments Français S.A. Line-by-line 

28.35 Devnya Cement A.D. 

Xinpro Limited Puteaux F € 37,000.00 - 100.00 100.00 Ciments Français S.A. Line-by-line 

Yuzhno-Kyrgyzsky Cement Batken Oblast KG KGS 528,317,200.00 - 11.00 11.00 Codesib 

Zuari Cement Ltd. Andra Pradesh IN INR 4,279,614,000.00 - 99.99 80.14 Ciments Français S.A. Line-by-line 

19.85 Cie pour l’Investissement Financier en Inde 


99.99 Ciments Français S.A.) 

(*) Percentage interest held by the Ciments Français group 

149 


Representation form pursuant to art. 154-bis, par. 5 TUF in relation to the 

consolidated financial statement (pursuant to art. 81-ter of Consob Regulation n° 

11971/99, and subsequent modifications and integrations) 

1. The undersigned Carlo Pesenti, Chief Executive Officer and Carlo Bianchini, the Manager in 

charge of preparing the company’s financial reports, of Italcementi S.p.A., having also taken into 

account the provisions of Article 154-bis, paragraphs 3 and 4, of the Italian Legislative Decree 

February no. 58 of 24 February 1998, hereby certify: 

the adequacy in relation to the legal entity features and 

the effective implementation 

of the administrative and accounting procedures for the preparation of the consolidated financial 

statement over the course of the period from January 1 st , 2010 and December 31 st , 2010. 

2. The representation of the adequacy of the administrative and accounting procedures adopted 

in the preparation of consolidated financial statements as at December 31 st , 2010 is based on a 

form identified by Italcementi according to the CoSO framework (illustrated in the CoSO Report) 

and also takes into account the document “Internal Control over Financial Reporting – Guidance 

for Smaller Public Companies”, both issued by the Committee of Sponsoring Organizations of 

the Treadway Commission, representing a generally accepted international framework. 

3. It is also certified that: 

3.1 the consolidated financial statement: 

a) has been drawn up in accordance with the international accounting standards recognised 

in the European Union under the EC regulation 1606/2002 of the European Parliament 

and of the Council of 19 July 2002; 

b) is consistent with the entries in the accounting books and records; 

c) is capable of providing a true and fair representation of the assets and liabilities, profits 

and losses and financial position of the issuer and the group of companies included in 

the consolidation. 

3.2 The directors’ report includes a reliable analysis of the performance and the results of 

operations, and the overall situation of the issuer and the group of companies included in 

the consolidation, together with a description of the main risks and uncertainties they are 

exposed to. 

Signed by: Carlo Pesenti, Chief Executive Officer 

Signed by: Carlo Bianchini, Manager in Charge 

March 4 th , 2011 

This report has been translated into the English version solely for the convenience of international readers

Italcementi S.p.A. financial statements 

153 


Financial statements 

Balance sheet 

(euro) Notes 12.31.2010 12.31.2009 Change 

Non-current assets 

Property, plant and equipment 2 595,500,863 591,644,621 3,856,242 

Investment property 2 13,679,317 14,641,998 (962,681) 

Intangible assets 3 19,948,359 9,541,513 10,406,846 

Investments in subsidiaries and associates 4 1,740,651,185 1,754,720,153 (14,068,968) 

Other equity investments 4 5,802,455 107,591,072 (101,788,617) 

Deferred tax assets 18 12,079,357 3,971,502 8,107,855 

Other non-current assets 5 111,298,476 6,966,695 104,331,781 

Total non-current assets 2,498,960,012 2,489,077,554 9,882,458 

Current assets 

Inventories 6 109,876,613 116,014,785 (6,138,172) 

Trade receivables 7 220,693,223 274,218,670 (53,525,447) 

Other current assets 8 81,655,444 46,078,739 35,576,705 

Income tax assets 9 18,196,761 266,249 17,930,512 

Equity investments and financial receivables 10 419,738,235 398,156,534 21,581,701 

Cash and cash equivalents 11 946,229 1,710,658 (764,429) 

Total current assets 851,106,505 836,445,635 14,660,870 

Total assets 3,350,066,517 3,325,523,189 24,543,328 


Share capital 12 282,548,942 282,548,942 - 

Reserves 13 365,334,456 386,784,174 (21,449,718) 

Treasury shares 14 (58,689,585) (58,689,585) - 

Retained earnings 15 1,225,122,196 1,292,920,765 (67,798,569) 

Total shareholders' equity 1,814,316,009 1,903,564,296 (89,248,287) 

Non-current liabilities 

Interest-bearing loans and long-term borrowings 19 1,076,223,836 891,957,173 184,266,663 

Employee benefit liabilities 16 39,622,175 39,906,865 (284,690) 

Non-current provisions 17 30,620,306 28,506,556 2,113,750 

Deferred tax liabilities 18 - - - 

Other non-current liabilities 9 11,370,466 10,992,657 377,809 

Total non-current liabilities 1,157,836,783 971,363,251 186,473,532 

Current liabilities 

Bank overdrafts and short-term borrowings 19 135,545,990 216,814,780 (81,268,790) 

Interest-bearing loans and short-term borrowings 19 54,028,086 38,760,500 15,267,586 

Trade payables 20 132,472,181 130,439,735 2,032,446 

Income tax liabilities 9 - 2,659,390 (2,659,390) 

Other current liabilities 21 55,867,468 61,921,237 (6,053,769) 

Total current liabilities 377,913,725 450,595,642 (72,681,917) 

Total liabilities 1,535,750,508 1,421,958,893 113,791,615 

Total shareholders' equity and liabilities 3,350,066,517 3,325,523,189 24,543,328 

154





Italcementi S.p.A. financial statements Financial statements 154 




Income statement 

(euro) Notes 2010 % 2009 % Change % 

Revenues 23 614,085,918 100.0 769,342,962 100.0 (155,257,044) -20.2 

Other revenues 24 27,459,272 21,231,360 

Change in inventories (1,539,539) (37,368,445) 

Internal work capitalized 1,230,582 274,524 

Goods and utilities expenses 25 (355,509,943) (362,495,691) 

Services expenses 26 (176,492,334) (189,877,561) 

Employee expenses 27 (176,611,584) (185,294,201) 

Other operating income (expense) 28 12,915,032 10,553,972 

Recurring EBITDA (54,462,596) -8.9 26,366,920 3.4 (80,829,516) n.s. 

Net capital gains on sale of fixed assets 29 8,888,035 19,933,505 

Other non-recurring income (expense) 29 (5,786,903) (16,076,922) 

EBITDA (51,361,464) -8.4 30,223,503 3.9 (81,584,967) n.s. 

Amortization and depreciation 2-3 (80,679,610) (83,889,517) 

Impairment 1,746,395 (12,906,251) 

EBIT (130,294,679) -21.2 (66,572,265) -8.7 (63,722,414) n.s. 

Finance income 30 135,166,546 111,441,257 

Finance costs 30 (57,111,510) (40,094,748) 

Net exchange-rate differences and derivatives 30 725,377 (603,255) 

Impairment on financial assets 4 (38,225,234) (41,089,932) 

Profit before tax (89,739,500) -14.6 (36,918,943) -4.8 (52,820,557) n.s. 

Income tax income 31 55,378,980 20,633,370 

Net profit for the period (34,360,520) -5.6 (16,285,573) -2.1 (18,074,947) n.s. 

n.s. = not significant 

155 


Statement of comprehensive income 

(euro) Notes 2010 % 2009 % Change % 

Net profit for the period (34,360,520) -5.6 (16,285,573) -2.1 (18,074,947) n.s. 

Fair value adjustments to: 

Available-for-sale financial assets (25,580,600) 18,160,474 (43,741,074) 

Derivative financial instruments 2,962,356 (3,706,972) 6,669,328 

Tax relating to components of 

other comprehensive income 455,188 (249,706) 704,894 

Components of other 

comprehensive income 32 (22,163,056) 14,203,796 (36,366,852) 

Total comprehensive income (56,523,576) -9.2 (2,081,777) -0.3 (54,441,799) n.s. 

n.s. = not significant 

156









Statement of movements in shareholders’ equity 

(euro) 

Reserves 

Share Share Fair value Fair value Other Treasury Retained Total 

capital premium reserve for reserve for reserves shares earnings shareholders’ 

available- derivative equity 

for-sale financial 

financial instruments 

assets 

Balances at December 31, 2008 

(re-stated) 282,548,942 344,103,798 14,738,644 (9,062,458) 15,991,726 (58,689,585) 1,362,523,189 1,952,154,256 

Net profit for the period (16,285,573) (16,285,573) 

Total components of other 

comprehensive income 17,910,768 (3,706,972) 14,203,796 

Stock options 6,808,668 6,808,668 

Distribution of profits: 

Dividends (53,316,851) (53,316,851) 

Balances at December 31, 2009 282,548,942 344,103,798 32,649,412 (12,769,430) 22,800,394 (58,689,585) 1,292,920,765 1,903,564,296 

Net profit for the period (34,360,520) (34,360,520) 

Total components of other 

comprehensive income (25,125,412) 2,962,356 (22,163,056) 

Stock options 713,338 713,338 

Distribution of profits: 

Dividends (33,438,049) (33,438,049) 

Balances at December 31, 2010 282,548,942 344,103,798 7,524,000 (9,807,074) 23,513,732 (58,689,585) 1,225,122,196 1,814,316,009 

157 


Cash flow statement 


(euro) 

A) Cash flow from operating activities: 

Profit before tax (89,739,500) (36,918,943) 

Amortization, depreciation and impairment 79,112,627 97,115,703 

Impairment on financial assets 38,225,234 41,089,932 

Capital (gains)/losses on sale of fixed assets (24,368,172) (19,933,505) 

Change in employee benefit liabilities and other provisions 1,829,060 12,935,570 

Stock options 713,338 6,808,668 

Reversal net finance costs (income) (62,827,191) (72,018,972) 


finance costs/income and change in working capital: (57,054,604) 29,078,453 

Operating working capital 64,330,884 108,432,119 

Other assets/liabilities (7,899,009) 6,937,069 

Total change in working capital 56,431,875 115,369,188 

Net finance costs paid (41,521,046) (29,884,905) 

Dividends received 104,327,894 101,616,061 

Taxes (paid) or surpluses recovered (7,421,641) (1,337,357) 

Total A) 54,762,478 214,841,440 

B) Cash flow from investing activities: 


Intangible assets (15,027,602) (4,983,019) 

Property, plant and equipment and investment property (83,695,715) (94,441,070) 

Financial (equity investments) (43,677,307) (4,860,223) 

Other assets (39,386) (1,578,362) 

Totale investments (142,440,010) (105,862,674) 

Proceeds from divestments of fixed assets 123,786,260 26,275,139 

Total divestments 123,786,260 26,275,139 

Change in other long-term financial assets/liabilities - 535,747 

Total B) (18,653,750) (79,051,788) 

C) Cash flow from financing activities: 

New interest-bearing loans and long-term borrowings 209,482,286 278,975,780 

Repayment long-term financing (15,215,916) (418,575,566) 

Change in short-term financing (75,763,516) 50,356,682 

Change in other financial assets (121,943,624) 8,156,261 

Dividends paid (33,432,387) (53,308,146) 

Total C) (36,873,157) (134,394,989) 

D) Change in cash and cash equivalents (A+B+C) (764,429) 1,394,663 

E) Cash and cash equivalents at beginning of period 1,710,658 315,995 

Cash and cash equivalents at end of period (D+E) 946,229 1,710,658 

158









Report of the Board of Statutory Auditors under art. 153 of the Consolidated 

Law on Finance 

Dear Shareholders, 

During the fiscal year ended as at December 31 st 2010, we carried out the supervisory activity, according to 

current laws and to the new provisions of art. 19 of Legislative Decree 39/2010 which granted to the Board of 

Statutory auditors the functions of the Audit committee (as defined by the EU directive 2006/43 on statutory 

audits of annual and consolidated accounts). 

With reference to the undertaken activities, according to the prescriptions of CONSOB, we report the following: 

- We monitored the compliance with the law and bylaws, obtaining information by the Directors on the activity 

carried out and on transactions having a significant impact on the financial statements undertaken by the 

Company and its subsidiaries. 

In this regard, we can reasonably state that the mentioned transactions have been performed in compliance 

with the applicable laws and company bylaws and did not appear clearly careless, risky, in potential conflict 

of interest or not consistent with shareholders meeting resolutions’ or such as to compromise the corporate 

assets’ integrity. 

- As far as our supervisory activity is concerned, we supervised the adequacy of the organizational structure 

of the company, compliance with principles of correct management as well as adequacy of the instructions 

given to subsidiaries under art. 114, par 2 of the Consolidated Law on Finance, obtaining, to this extent, 

information from the executives in charge of the relevant functions. We do not have any remarks in this 

regard. 

- We liaised with supervisory bodies of the main subsidiaries which did not provide us with any data or 

information that we deem appropriate to highlight in this report. 

- We also met the members of the Board of statutory auditors of the parent company Italmobiliare S.p.A. in 

order to have a proficient exchange of information. 

- We supervised the adequacy of the internal control system and accounting-administrative system as well as 

its reliability in fairly representing management operations. To this extent, we periodically met, among 

others, the Chief Executive Officer, who is also executive director responsible for overseeing the internal 

control system, the officer in charge of the newly established Risk Management department, the Manager in 

charge of preparing the company’s financial reports, the Internal Audit Officer and, of course, the external 

auditors. 

We also took part to the meetings of the Internal control Committee; we met the members of the 

Compliance committee, so that we could acknowledge the updating process of the “Organizational, 

Management and Control Model”, adopted by the company according to Legislative decree 231/2001. 

- We did not notice unusual or atypical transactions, undertaken with company’s subsidiaries or related 

parties or with third parties. 

- With reference to infra-group transactions or ordinary transactions with related parties executed during 2010 

fiscal year, we noted that directors properly highlighted and illustrated in the Directors’ Report, which we 

refer to, the relevant features and the financial impact, acknowledging that these transactions have been 

executed in the interest of the Company and in compliance with the provided procedures. 

- Furthermore, an extraordinary transaction with a related party, consisting in the sale of Mediobanca S.p.A. 

and RCS MediaGroup S.p.A. shares’ from Italcementi to its parent company Italmobiliare S.p.A. was 

undertaken in December 2010. In this regard, we note that the Board of Directors adopted the procedure for 

159 


Transactions with related parties on November 5 th , 2010, in compliance with Consob Regulation no. 17221 

of March 12 th , 2010, upon favorable opinion of the Committee for Transactions with related parties, dated 

October 28 th , 2010, and acknowledging the assessment provided by the Board of Statutory auditors 

concerning the compliance of such procedure with the principles set out in the aforementioned Consob 

Regulation. 

With reference to this transaction and within the limits of the scope of our assignment, we point out that: 

o The Board of Directors, in order to assure the greatest transparency of the envisaged transaction, 

deemed appropriate to undertake it in compliance with the newly adopted procedure for Transactions 

with related parties, as referred above, although its application was required by operation of law as of 

January 1 st , 2011; 

o Given the transaction’s aggregate consideration that qualified it as “significant transaction” according to 

Consob criteria, the Company promptly published an Information memorandum containing a 

comprehensive and exhaustive description of the transaction highlighting, among others, financial 

impacts on the consolidated financial report. 

The Board of Statutory auditors hereby confirms its positive evaluation on the compliance of the 

aforementioned transaction with the applicable laws, regulations and company procedures’ as well as its 

accordance to the Company’s interests. 

- We report that no criticalities emerged during meetings with external auditors; this is confirmed, on one 

hand, in the external auditors’ Report to the Board of Statutory auditors under art. 19, 3 rd par. of Legislative 

Decree 39/2010, dated March 24 th , 2011, which states that, in the execution of the audit activities, neither 

material issues, nor significant lacks in the Internal control system with reference to the financial disclosure 

process emerged. 

On the other hand, the absence of any criticalities is confirmed in the external auditors’ Reports on the 

separate and consolidated financial statements, dated March 24 th , 2011, which do not raise any remarks 

nor disclosure recalls. In these reports, external auditors also confirmed consistency of directors’ reports 

with the financial statements, so assessing compliance, in the financial statements, with the provisions of 

art. 123-bis of the Consolidated Law on finance and of the Consob/Isvap/Banca d’Italia joint Regulation no. 

4, dated March 3 rd 2010. 

- Based on the carried out supervisory activity, we evaluate the internal control system, which is subject to a 

constant development and under an ongoing update process in order to systematically pursue the current 

procedures effectiveness, as adequate. The Board of Statutory Auditors, in its capacity as Audit Committee 

under art. 19 of Legislative Decree 39/2010, hereby acknowledges that no remarks to be reported to the 

Shareholders’ general meeting emerged. 

- The Directors drafted the separate and consolidated financial statements in accordance, as provided for, 

with IAS/IFRS Accounting Principles, as implemented by the EU, highlighting the occurred updates, and 

they provided the information requested by the aforementioned Regulation no. 4 of March 3 rd 2010 in the 

Directors’ report. 

- The Company’s compliance with the Corporate Governance Code, drafted by the Corporate Governance 

Committee of listed companies, is illustrated in the appropriate section of the Directors’ report and we deem 

such illustration to be adequate and exhaustive. As far as our intervention is concerned, we assessed the 

existence of professional and independence criteria for the members of this Board and we also monitored 

the application of the self-examination procedure followed by the Board of Directors, with specific regard to 

the requisites set out for the independent directors. 

- With reference to independence criteria, and with specific regard to representatives of the Audit Firm, we 

hereby inform that on March 24 th 2011 we received their written statement, pursuant to art. 17, par. 9, let a), 

of Legislative Decree 39/2010. 

160









- Moreover, the Audit Firm informed us about its remuneration for activities other than those related to its 

audit activity and received by itself or by domestic and foreign entities belonging to its network. With 

reference to the “Principles on the external auditor independence” released by the National Board of 

Accountants as referred to in Consob resolution no. 15185, we note that such remuneration, reported 

hereunder (figures Euro/000), does not appear to represent any criticality impacting on the external auditors’ 

independence. 

Activities 

Italcementi 

Ciment Français 

and its subsidiaries 

Total 

Attestation 10 23 33 

Other services 180 84 264 

Total 190 107 297 

- The Board of Statutory Auditors and the Audit Firm in charge of the accounting audit did not issue any 

opinions provided by law. 

- No complaints under art. 2408 of the Italian Civil Code nor claims of any other nature reached this Board 

during the fiscal year. 

- During our supervisory activity and based on the obtained information, we find no omissions, exceptionable 

actions, irregularities or any other material facts worth to be reported to the Supervisory Authorities or to be 

mentioned in this Report. 

- The activity of this Board was conducted in no. 16 meetings, and by attending no. 9 Board of Directors’ 

meetings, no. 3 Executive Committee meetings, no. 7 Internal Control Committee meetings and no. 3 

Remuneration Committee meetings. 

- The Board of Statutory Auditors prepared the proposal concerning the appointment of the Audit firm for the 

2011-2019 fiscal years, to be submitted to the Shareholders’ annual meeting and which will be separately 

illustrated. The Board of Statutory Auditors agrees with the Board of Directors’ proposal concerning the 

dividend distribution. 

With reference to the Board of Directors’ proposals concerning the amendments to be made to the by-laws 

which will be submitted to the extraordinary session of the Shareholders’ meeting, we specify that the Board of 

Directors already made the mandatory amendments to the by-laws on October 12 th , 2010, pursuant to 

Legislative Decree 27/2010, which implemented in Italy the “Shareholders’ Rights” Directive. 

The Board of Statutory Auditors 

(Prof. Maria Martellini) - Chairman 

(Prof. Mario Comana) – Standing Auditor 

(Dott.ssa Luciana Gattinoni) - Standing Auditor 

Bergamo, March 25 th 2011 

161 


Summary of resolutions 

The Annual General Shareholders’ meeting, held on April 19, 2011 in Bergamo, via Madonna della Neve no. 8, 

chaired by Mr. Giampiero Pesenti, having attended, in their own and by proxy no. 194 shareholders, holders of 

no. 118.912.640 ordinary shares over no. 177.117.564 ordinary outstanding shares, 

resolved 

Ordinary session: 

1) to approve the financial statements as at December 31, 2010, along with the relevant Directors’ Report; 

2) - to fully cover the loss of Euro 34,360,520.00 by withdrawing the same amount from the provision “Carried 

forward profits”, which decreases to Euro 3,635,176.77; 

- to withdraw Euro 33,438,049.56 from the Extraordinary Provision which therefore decreases from Euro 

511,464,705.28 to Euro 478,026,655.72, distributing: 

* Euro 0.12 to no. 173,324,535 ordinary shares (net of no. 3,793,029 ordinary treasury shares held as at 

March 4, 2011); 

* Euro 0.12 to no. 105,325,878 savings shares (net of no. 105,500 savings treasury shares held as at 

March 4, 2011); 

which will be paid as of May 26, 2011 and coupon thereof will be drawn on May 23, 2011; 

3) to agree with the Director’ Report on the Remuneration Policy; 

4) having revoked the resolution authorizing the acquisition and disposal of treasury shares adopted by the 

ordinary Shareholders' Meeting of April 16th, 2010: 

- to authorize, pursuant to art. 2357 of the Italian Civil Code, the purchase of ordinary and/or savings 

treasury shares, within 18 months as of the resolution date in order to: 

• dispose of treasury shares: 

* to be transferred to employees and/or directors in connection with stock option plans reserved to 

employees and/or directors; 

* for medium/long-term investment purposes; 

• operate, in compliance with current regulations, directly or through intermediaries, in order to limit 

anomalous trends in share prices and to regularize stock exchange prices to face temporary distortions 

caused by excessive volatility or low trading liquidity; 

• create a treasury stock portfolio to serve extraordinary financial transactions or for other purposes 

deemed to be in the financial, business and /or strategic interests of the company; 

• offer shareholders an additional tool to monetize their investments. The purchase price of each share 

shall not exceed 15% of the average reference share price occurred on the same regulated market in 

the three sessions preceding each transaction; the overall consideration to be paid by the company for 

the purchase shall in no case exceed the amount of 100 million euro; the maximum number of ordinary 

and/or savings shares acquired shall not have an overall nominal value, including treasury shares 

already held as of the date hereof by the company and by the subsidiaries, in excess of one tenth of the 

share capital. 

164









Furthermore: 

• the purchasing shall normally be conducted so that equitable treatment of shareholders is ensured and 

offers to purchase directly matched with pre-determined offers to sell are not allowed, or, taking into 

account the various possible purposes, in any other manner allowed under current laws and regulations 

governing the stock market on which the transactions are performed; 

• the shares shall be disposed of in any manner deemed appropriate to achieve the objectives pursued, 

directly or through intermediaries, in compliance with current applicable national and European laws 

and regulations; 

• treasury shares purchases and sales shall be performed in compliance with applicable laws and, 

specifically, with laws and regulations governing the stock market on which the transactions are 

performed; 

- to severally grant to the Chairman, Executive Deputy Chairman and Chief Executive Officer in office from 

time to time any power to proceed with the purchases and sales and in any case to execute the above 

resolutions, also through attorneys-in-fact, complying with any requirements presented by the competent 

authorities; 

5) to appoint KPMG S.p.A. as independent audit firm for the legal audit of the yearly financial statements and 

consolidated financial statements for the 2011-2019 fiscal years and the limited review of the half year 

reports as at June 30th, 2011-2019 and to establish an aggregate annual remuneration equal to Euro 

610,000 euro, divided as follows: 

Legal audit of the yearly financial statements and audit on the appropriate bookkeeping and correct 

representation of management facts in the accounts of Italcementi S.p.A. 

Hours 

Remuneration 

a. Audit of the yearly financial statements and audit on the appropriate bookkeeping and correct representation 

of management facts in the accounts of Italcementi S.p.A., except for the activities described under point b 

below. 3,280 366,000 

b. Audit of the yearly financial statements of the following subsidiaries: 

Axim Italia S.r.l., Ing. Sala S.p.A., Silos Granari della Sicilia S.r.l., Gruppo Italsfusi S.r.l., C.T.G. S.p.A., 

Nuova Sacelit S.r.l., 120 14,000 

3,400 380,000 

Legal audit of the Group consolidated financial statements 700 79,000 

Limited review of the consolidated half year report of Italcementi S.p.A. 1,200 151,000 

Total 5,300 610,000 

6) to fix in 20 (twenty) the number of the Board of Directors’ members and to appoint Mr. Lorenzo Renato 

Guerini director of the Company, who will remain in office until term of the office of the current Board, i.e. 

until the approval of the financial statements as at December 31, 2012; 

7) - to grant, as of January 1, 2011 and until a subsequent resolution will dispose otherwise: 

* a gross annual remuneration of Euro 45,000 for each member of the Board of Directors of Italcementi 

S.p.A., to be increased to a gross annual remuneration of Euro 90,000 for those directors who are 

members of the Executive Committee; 

* gross annual remuneration of Euro 100,000 for the entire Committee for Transactions with Related 

Parties; 

- to grant to the entire Committee for Transactions with Related Parties an additional gross annual 

remuneration of Euro 40,000 for the activities carried out in 2010. 

8) to approve the cancellation of the «Stock option plan for directors - 2007» and the «Stock option plan for 

senior managers - 2008»; 

165 


Extraordinary session: 

1) to amend articles 6 (Shares), 7 (Characteristics of savings shares), 8 (Call), 10 (Participation and 

representation), 15 (Appointment of the Board of Directors), 21 (Powers of the Board of Directors), 26 

(Appointment of the Board of Statutory Auditors) and 32 (Profits – Advances on dividends) of the Company 

By-Laws; 

2) to re-grant to the Board of Directors the delegation of the power, pursuant to art. 2443 Italian Civil Code, to 

increase the share capital in one or more times, for a maximum nominal amount of Euro 6,000,000 through 

the issue, on a free-of-charge basis and/or against consideration, of up to 6,000,000 ordinary and/or 

savings shares, to be reserved, pursuant to art. 2441 par 8, Italian Civil Code, to employees of Italcementi 

S.p.A. and its subsidiaries, parent companies and companies controlled by the latter. 

166

Corporate Governance 

167 


Report on Corporate Governance and ownership structure 

The Corporate Governance system adopted by Italcementi S.p.A. is based not only on the company by-laws, 

but also on the following codes and/or polices: 

1) Code of Conduct, 

2) Code of Ethics, 

3) Treatment of Confidential Information, 

4) Internal Dealing Code of Conduct, 

5) Procedure for Transactions with Related Parties, 

6) «Insider register» Procedure, 

6) Regulation for the manager in charge of preparing the company’s financial reports; 

7) Organizational, Management and Control Model. 

The texts of the above documents are all available on the corporate website www.italcementigroup.com, 

except for the Regulation for the manager in charge of preparing the company’s financial reports, available to 

all the Group companies on the company intranet. 

Over the years the company has been actively committed in modernizing its business culture in order to 

respond to the challenges arising from developments in corporate governance rules. This process fostered 

and enhanced the dissemination of values shared by all the subsidiaries and is based on recognition that the 

adoption of good rules of governance goes hand in hand with the spread of a business culture built on 

transparency, adequate management and effective controls. 

As part of the broader process of integrating and agreeing common principles and rules amoung the Group, 

the company’s Board of Directors, at its meeting of December 22 nd , 2010, resolved to adopt a common 

Framework of corporate governance representing the minimum corporate governance principles applicable to 

Group companies. 

These principles, which are based on national and international best practices as well as on the different local 

laws of the countries where the Group is present, will be gradually applied by all the companies of the 

Italcementi Group, in compliance with local regulations. 

The project will be applied initially to 22 companies operating in 14 countries, which are considered a 

sufficiently representative sample on the basis of pre-set relevance indicators (revenues, assets, EBIT and 

employees). 

In order for the project to be effective and for its principles and criteria to be properly implemented in both the 

parent company and in its subsidiaries, the related policies and guidelines will be developed and subsidiaries 

will gradually apply them. 

A review of the corporate governance structure as set up in the binding articles of the company by-laws and in 

the provisions of the above mentioned codes and policies confirms and bears witness to Italcementi S.p.A.’s 

commitment to comply with generally agreed best practice, whose application is reflected in Board resolutions 

and organization notices. 

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Consolidated Annual Report 28 

Corporate Governance Report on Corporate Governance and ownership structure 168 

Annexes 218 

Share capital structure and ownership 

This section includes the information required by art. 123-bis of Leg. Decree no. 58 of February 24, 1998. 

a) Share capital structure, indicating the various share categories, related rights and obligations, as well as the 

percentage of share capital represented 

Italcementi S.p.A.’s share capital is equal to 282,548,942 euro, divided into 282,548,942 shares with a 

nominal value of 1 euro each, of which 177,117,564 are ordinary shares, or 62.69% of the entire share 

capital, and 105,431,378 are savings shares, or 37.31% of the entire share capital. 

Ordinary shares have voting rights at the company’s ordinary and extraordinary Shareholders’ Meetings. 

Shareholders who, even jointly, own at least one fortieth of the share capital represented by shares with 

voting rights, may ask, within the deadlines envisaged by the law in force, for the items on the agenda of the 

Shareholders’ Meeting to be supplemented, stating in their request which further issues are being 

suggested. In addition, shareholders who, individually or with other shareholders, can prove that they hold 

an overall stake in the share capital with voting rights that is no lower than that established by the law in 

force, have the right to present lists for the appointment of the Board of Directors and the Board of Statutory 

Auditors in accordance with the provisions of the law and the by-laws. 

Savings shares do not carry voting rights. 

In the event of an increase in share capital against consideration for which option rights have not been 

excluded or limited, the holders of savings shares have option rights on the newly issued savings shares or, 

in their absence or to cover the difference, on other categories of shares. Resolutions to issue new savings 

shares with the same characteristics as those already outstanding, either through a share capital increase 

or through the conversion of other categories of shares, do not require approval by the meetings of the 

holders of the different share categories. Should ordinary and/or savings shares be excluded from trading, 

savings shares maintain the rights granted to them by law and by the by-laws, unless otherwise provided for 

by the Shareholders’ Meeting. 

During the allocation of net profit for the year, savings shares are entitled to a dividend up to 5% of the 

nominal share value, increased with respect to that of ordinary shares, by an amount equivalent to 3% of 

the share nominal value. When in a financial year a lower dividend than that indicated in article 32 of the Bylaws 

is allocated to savings shares, the difference is calculated as increase to the savings dividend paid in 

the following two years. 

In the event of distribution of reserves, savings shares have the same rights as other shares. A reduction in 

share capital owing to losses does not cause a reduction in the nominal value of the savings shares, except 

for that part of the loss in excess of the overall nominal value of the other shares. In the case of dissolution 

of the company, savings shares have priority in the repayment of the share capital for the full nominal value. 

The company has two outstanding stock option plans for directors and two for managers (for two of which, 

one from each category, no more options can be allocated), which are described in detail in the section 

«Incentive plans for directors and managers». 

b) Restrictions on the transfer of shares 

There are no restrictions on the transfer of shares or acceptance clauses. 

169 


c) Significant shareholders as disclosed pursuant to article 120 of Leg. Dec. no. 58 of February 24, 1998 

Shareholder 

No. Shares 

total 

% of capital 

ordinary 

EFIPARIND B.V. (indirectly trough Italmobiliare S.p.A.) 

This figure does not take into account the 3,793,029 treasury shares 

with voting rights held by the company 

FIRST EAGLE INVESTMENT MANAGEMENT LLC 

(as manager, among other things, of the «First Eagle Global Fund» 

which holds 2.188% of the voting share capital) 

106,734,000 37.78 60.26 

4,863,758 1.72 2.75 

ITALCEMENTI S.p.A. (treasury shares) 3,793,029 1.34 2.14 

d) Shares that confer special control rights 

No shares have been issued that confer special control rights. 

e) Shareholding of employees: mechanism for exercise of voting rights 

There is no specific system for employees to have shareholdings. 

f) Restrictions on voting rights 

The by-laws does not provide restrictions on the exercise of voting rights. 

g) Agreements among shareholders, pursuant to article 122 of Leg. Decree 58/98, of which the company is 

aware 

As far as the company is aware, there are no agreements of any kind regarding the exercise of voting rights 

and the transfer of such shares or any of the situations envisaged by art. 122 of Leg. Decree 58/98. 

h) Significant agreements to which the company or its subsidiaries are parties, that become effective, are 

modified or expire should there be a change in control of the company, and their effects 

As part of its policy to support its business and development, Italcementi S.p.A. has signed several loan 

contracts, some of which give to the lender the right, if there should be a of the 

company, to terminate the loan in advance or to withdraw from it and have the consequent right to demand 

principal and the accrued interest or, finally, in the case of derivative-based contracts, the right to terminate 

the outstanding derivative contracts. 

i) Agreements between the company and the directors that envisage compensation in the case of resignation 

or unfair dismissal or if the office ends following a takeover bid 

No agreements have been signed between the company and the directors providing for compensation in 

case of resignation, unfair dismissal or if the office should terminate following a takeover bid. 

In addition, as required by CONSOB in its communication of February 24 th , 2011, should be noted that, in 

the case of early termination of the office, there are no agreements to assign nor maintain non-monetary 

benefits, or envisaging consultancy contracts for a period following the termination of the office; in addition, 

non-competition agreements have been signed. 

l) Laws applicable to the appointment and replacement of directors and to amendments to the by-laws 

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Annexes 218 

Appointment of directors 

The company by-laws, in compliance with the law currently in force, provide for the appointment of the 

Board of Directors to occur on the basis of lists that ensure for minority shareholders the minimum number 

of directors envisaged by the law. 

In addition, the Code of Conduct recommends that this must occur in accordance with a transparent 

procedure to ensure, among other things, timely and adequate information on the personal and professional 

skills of candidates. 

The lists must be filed at the company head offices at least 25 days before the date set for the 

Shareholders’ Meeting on first call; this, together with the conditions and minimum stake required to file the 

lists, must be mentioned in the notice of call. 

Lists may be presented only by shareholders who, alone or together with other shareholders, can prove 

they hold a percentage of the share capital with voting rights no lower than that determined by CONSOB 

pursuant to the regulations in force. For 2011, the threshold established for the presentation of candidate 

lists for the election of the Board of Directors of Italcementi S.p.A. is 2% of the ordinary share capital. 

No shareholder may present or participate in the presentation of more than one list, directly or through third 

parties or trust company, or vote for different lists. 

Shareholders belonging to the same group and shareholders who join a shareholders’ agreement on the 

company shares may not present or vote for more than one list, neither through third party or trust 

companies. 

Lists presented in violation of these restrictions will not be accepted. 

Each candidate may be presented on one list only under penality of ineligibility. 

The lists presented must include: 

a) statements by which individual candidates: 

* accept their candidature 

* under his/her own responsibility state: 

- the non-existence of causes for inelegibility 

- entitlement of the good reputation requirements established by the law 

- entitlement of the independence qualification required by the law and by the Code of Conduct; 

b) a short curriculum on the personal and professional skills of each candidate with indication of their 

position as director and statutory auditor in other companies; 

c) information on the identity of shareholders who have presented lists. The intermediary certification or 

statement proving ownership of the shareholding prescribed by the law in force when the list is 

presented may also be produced after the filing of the list provided that it reaches the company within the 

term envisaged by the regulation in force for the publication of lists by the company; 

d) a statement of the shareholders who do not hold, even jointly, a controlling or majority stake, bearing 

witness to the absence of any connection with the majority shareholder, as defined by the law in force. 

A list presented not in compliance with the above provisions will be considered as not presented. 

At least 21 days before the Shareholders’ Meeting date, the company shall make available at the company 

offices, at the stock market and on its website, the lists of candidates which have been filed by shareholders 

along with supporting documentation. 

171 


In the event of presentation of more than one list: 

- all the directors are elected from the list that obtains the highest number of votes at the Shareholders’ 

Meeting, in the order in which they are listed, except for the minimum number reserved by law for the 

minority shareholders’ list; 

- the minimum number of directors reserved by law to minority shareholders are elected from the minority 

shareholders’ list that obtains the highest number of votes and is not connected in any way, directly or 

indirectly, with the majority shareholders; 

- should more than one list obtain the same number of votes, a runoff is held on these lists among all the 

shareholders present at the Shareholders’ Meeting, and the candidates are elected from the list that 

obtains the majority of the share capital represented at the Shareholders’ Meeting. 

For the purposes of the apportioning of the directors to be elected, the lists that have not achieved a 

percentage of votes at least equal to half of the percentage required for the presentation of lists will not be 

considered. 

Should a party connected to a majority shareholder vote for a list of the minority shareholders, the 

connection is significant for the purposes of excluding the minority shareholders’ elected director, only if this 

vote was crucial for the election of the said director. 

Should a single list be presented, all the candidates included in that list are elected with a simple majority 

vote of the share capital represented at the Shareholders’ Meeting. 

In the absence of lists, and whenever by means of the voting list mechanism, the number of candidates 

elected is lower than the minimum number envisaged by the by-laws, the Board of Directors is respectively 

appointed or supplemented by the Shareholders’ Meeting with the legal majority, provided that at least the 

minimum number of directors holding the independence qualification required by the law is guaranteed. 

Any director elected who during their office lose the good reputation requirements requested by the law or 

the by-laws ceases to serve. 

If during the year, owing to resignation or other reasons, one or more directors cease to serve, the others, 

provided that the majority is still represented by directors appointed by the Shareholders’ Meeting, shall 

arrange to replace them by means of a resolution approved by the Board of Statutory Auditors. 

Directors are replaced, in compliance with the above requirements of good reputation and independence, 

with the appointment of unelected candidates belonging to the same list as the directors who no longer 

serve, following the original order of presentation. Should this not be possible, the Board of Directors shall 

act pursuant to the law. 

Directors appointed in this manner hold office until the following Shareholders’ Meeting. 

The Shareholders’ Meeting resolve upon the replacement of directors, in compliance with the above 

principles, with a simple majority of the share capital represented at the Shareholders’ Meeting. 

The term of directors appointed in this way ends at the same time as that of the directors serving at the time 

of their appointment. 

No limits to re-eligibility of directors are envisaged, although directors holding the same position for more 

than nine years in the last twelve years could be considered– on voluntary basis - no longer to meet the 

independence qualification pursuant to the Code of Conduct. 

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Annexes 218 

Changes to the by-laws 

Besides the powers vested with the Board of Directors by law and by the company by-laws regarding the 

issue of shares and bonds, in compliance with art. 2436 of the Italian Civil Code, resolutions on the matters 

listed below are assigned not only to the extraordinary Shareholders’ Meeting, but also to the Board of 

Directors: 

- incorporation of wholly owned or at least ninety percent owned companies; 

- transfer of the registered office, provided that it remains within Italy; 

- establishment or removal of secondary offices, in Italy and abroad; 

- reduction of the share capital in the case of withdrawal by a shareholder; 

- amendment of the company by-laws to comply with legal requirements. 

m) delegated powers for share capital increases pursuant to article 2443 of the Italian Civil Code or power held 

by directors to issue active financial instruments 

Delegated powers for share capital increases 

The Board of Directors has the right, on one or more times within five years from the resolution of the 

extraordinary Shareholders’ Meeting of April 28 th , 2008: 

a) pursuant to art. 2443 of the Italian Civil Code, to increase the share capital by a maximum nominal 

amount of 500,000,000 euro, free of charge and/or by means of payment, through the issue of ordinary 

and/or savings shares and/or warrants for their later subscription; 

b) pursuant to art. 2420-ter of the Italian Civil Code, to issue bonds convertible into ordinary and/or savings 

shares or with purchase or subscription rights, up to a maximum amount of 500,000,000 euro, within the 

limits allowed by law from time to time, 

all with full powers in this regard, including the powers to offer shares and convertible bonds or convertible 

bonds in the form as set out in the penultimate paragraph of art. 2441 of the Italian Civil Code; to reserve up 

to a quarter of such shares and bonds pursuant to art. 2441 of the Italian Civil Code, last paragraph; to 

identify the funds and reserves to be allocated to capital in the case of a free of charge increase; to 

establish the issue price, conversion ratios, terms and method of execution of transactions. 

By resolution of April 13 th , 2006, the extraordinary Shareholders’ Meeting granted to the Board of Directors: 

- the power, pursuant to art. 2443 of the Italian Civil Code, to increase the share capital, on one or more 

times within five years from the aforementioned resolution, for a maximum amount of 6,000,000 euro 

through the issue of a maximum of 6,000,000 ordinary and/or savings shares, to be reserved, pursuant to 

art. 2441 of the Italian Civil Code, paragraph 8: 

* for employees of Italcementi S.p.A. and its subsidiaries, in the case of a free allocation, 

* for employees of Italcementi S.p.A. and its subsidiaries, as well as for employees of its parent 

companies and other subsidiaries of the latter, in the case of a rights offer, 

both in Italy and abroad and in compliance with the regulations in force in the countries of the beneficiaries; 

- the power, consequently, to establish the entitlement rights to the shares, to establish the timeframes, 

method, characteristics and conditions of the offer to employees and to set the issue price of the shares, 

including the related share premium. 

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By resolution of June 20 th , 2007, the extraordinary Shareholders’ Meeting granted to the Board of Directors: 

- the power, pursuant to art. 2443 of the Italian Civil Code, to increase the share capital against 

consideration, on one or more times during the five years from the above resolution date, for a maximum 

amount of 3,000,000 euro through the issue of a maximum of 3,000,000 ordinary and/or savings shares, 

with a nominal value of 1 euro each, excluding option rights pursuant to art. 2441 of the Italian Civil Code, 

paragraph 5, to service the incentives plan reserved for directors of the company and of subsidiaries 

vested with special powers in compliance with the articles of association or who have specific operational 

duties; 

- the power, consequently, to establish the entitlement rights to the shares, to establish the timeframes, 

method, characteristics and conditions of the offer and to set the issue price of the shares, including the 

related share premium. 

Active financial instruments 

To date the company has not issued active financial instruments of any kind, nor do the by-laws grant any 

power for their issue to directors. 

Authorizations for the purchase of treasury shares 

The ordinary Shareholders’ Meeting of April 16, 2010 renewed the company’s authorization to buy and 

dispose of treasury shares for a period of 18 months from the date of the resolution. 

Under the above authorization approved by the Shareholders’ Meeting, since that date the company has 

not purchased any ordinary or saving treasury shares, nor shares held in its portfolio have been used to 

grant them to beneficiaries of stock options, since no vested rights have been exercised by directors or 

managers. 

Therefore, on December 31, 2010, the company held: 

- 3,793,029 ordinary treasury shares, equal to 2.14% of the share capital represented by ordinary shares, to 

be used to service the “Stock option plan for directors” and the “Stock option plan for senior managers”; 

- 105,500 savings treasury shares, equal to 0.1% of the share capital represented by savings shares. 

Management and coordination activity 

As noted at point «C» above, at the time of writing, Italcementi S.p.A.’s majority shareholder, with a holding, 

net of the treasury shares held by the company, of 60.26% of ordinary shares, is Italmobiliare S.p.A., whose 

own majority shareholder is Efiparind B.V. 

Italmobiliare S.p.A. is also the company which exercises management and coordination activity over 

Italcementi S.p.A. pursuant to art. 2497 ff. of the Italian Civil Code. 

Features of the risk management and internal control system regarding the financial disclosure 

process 

1. Foreword 

As already noted in the section on “Risks and uncertainties”, in 2010 Italcementi S.p.A. set up the Risk 

Management Department with the aim of improving the creation of value for stakeholders, also by optimizing 

enterprise risk management. This initiative is part of the Group’s “Risk & compliance” program launched in 

2008, which classified risks related to the financial disclosure process as one of the key risks. For this type of 

risks, in 2010 the following were realized: appropriate mitigation measures, the assignment of responsibility to 

a main reference point (“Primary Risk Owner”), the definition of common guidelines, actions and controls for 

the various risk areas (“Risk Management Guidelines”), the definition of strategies and the realization of 

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measures to align risk management systems to the standards sought. 

The risk management and internal control system relating to the financial disclosure process also benefited 

from: 

- the continuous development of an integrated organizational governance system (organization notices, job 

descriptions, corporate powers and processes) whose tools are available in a Knowledge Management 

Database, B.E.S.T. (Business Excellence Support Tool), which allows easy access to information and 

encourages cross-circulation within the Group; 

- a more timely organization and planning relating to the provisions of Law no. 262 of December 28, 2005, 

stating “Provisions for the protection of savings and the regulation of the financial markets” and the following 

corrective decrees (hereinafter the “Law on Savings”) issued by lawmakers with the aim of increasing the 

transparency of corporate disclosure and enhancing the internal control system of listed companies. 

In regard to this law, far-back Italcementi S.p.A. launched a series of activities, described in section 2 below, 

which are included in an action plan integrated into the company’s processes. The existing control procedures 

guarantee the effectiveness of the current system and the data reliability. The company therefore believes to 

comply with legal requirements, and guarantees the completeness and reliability of its financial disclosures. 

2. Description of the main features of the system 

2.1 Stages in the risk management and internal control system 

Italcementi has established its own model for the assessment of the internal control system relating to 

disclosure about financial position (hereinafter the “Operating model”) and has established the operational 

approach for undertaking these activities. This model is based on the CoSO framework, issued by the 

Committee of Sponsoring Organizations of the Tradeway Commission (CoSO), and also takes into account the 

document “Internal Control over Financial Reporting - Guidance for Smaller Public Companies”, which was 

also drafted by the CoSO. 

The operating model defined by Italcementi is based on the following main elements: 

a) Preliminary analysis. This is undertaken annually or whenever considered necessary and aims to identify 

and assess risks relating to the internal control system with regard to income, equity and financial 

disclosure, so as to establish the priorities for documenting, assessing and testing the administrative and 

accounting procedures and the related controls. Identification of the relevant entities and processes is 

based on quantitative elements (weight of revenues and assets of a single entity on consolidated amounts, 

amount of the consolidated financial statement items related to a particular process) and on qualitative 

elements (country where an entity operates, specific risks, risk levels attributed to the various items); 

b) Operational planning. Every year the activities are planned on the basis of the priorities identified through 

the preliminary analysis and any other assumptions; 

c) Analysis of company controls. The individual entities in the area for action identified in the preliminary 

analysis are responsible for assessing the effectiveness of the internal control system in relation to the 

governance principles used at entity level (Entity Level Controls), as well as for the overall management of 

the information systems used in the main financial reporting processes and the related IT structure 

(Information Technology General Controls). This must be carried out in accordance with the deadlines 

established during operational planning and on the basis of the guidelines, instructions and templates 

provided; 

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d) Analysis of controls at process level. The individual entities in the area for action identified in the 

preliminary analysis are responsible for: a) documenting, with varying levels of detail depending on the level 

of risk allocated, the administrative and accounting processes which have been identified, b) performing 

tests to check the effective operation of the key controls, in accordance with the deadlines established 

during operational planning and on the basis of the guidelines, instructions and templates provided by the 

manager in charge; 

e) Assessment of the adequacy and effective operation of the administrative and accounting 

procedures and the related controls: in order to guarantee compliance with the key requirements for 

financial reporting (“financial statement assertions”), the manager in charge, on the basis of the results of 

the work carried out and the documentation obtained, assesses the overall adequacy and effective 

operation of the system of administrative and accounting procedures and the related controls, and more 

generally, the internal control system for these areas. 

2.2. Roles and Functions involved 

The financial disclosure related to the risk management system is supervised by various company 

bodies/functions, each with specific roles and responsibilities. In particular, as already noted in other parts of 

this corporate governance report: 

1) The Board of Directors, to which the Code of Conduct assignes, among other things, the task of: 

a) checking and approving the strategic, business and financial plans of the company; 

b) assessing the forecasts on operations and the adequacy of the organizational, administrative and 

general accounting system of the company and subsidiaries; 

c) evaluating and approving the periodic accounting reports; assessing the company’s operational 

structure; 

d) establishing the guidelines for the internal control system so that the main risks for the company and the 

subsidiaries are correctly identified, as well as adequately measured, managed and monitored, and, 

also, determining criteria for the suitability of these risks with safe and appropriate management of the 

company; 

e) assessing, at least on an annual basis, the adequacy, effectiveness and effective functioning of the 

internal control system with respect to the characteristics of the company. 

2) The Chief Executive Officer, who, as executive director responsible for overseeing the functioning of the 

internal control system, has the task of: 

a) identifying the main company risks, taking into account the characteristics of the activities carried out by 

the company and by the subsidiaries, and periodically submitting them for examination to the Board of 

Directors; 

b) implementing the guidelines defined by the Board of Directors, taking care of the planning, achievement 

and management of the internal control system, constantly checking its overall adequacy, effectiveness 

and efficiency; also, adapting this system to changes in operating conditions and the legal and regulatory 

framework; 

c) issuing, with the manager in charge, certificates on the adequacy and effective application of the 

administrative and accounting procedures, the compliance of documents with applicable IFRS, the 

correspondence of documents to entries in the accounting books and records, the suitability of 

documents in providing a true and fair representation of financial position and results of operations of the 

company and Group, etc. 

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3) The Internal Control Committee, to which the Code of Conduct assignes, among other things, the task of: 

a) assessing, together with the manager in charge of preparing the company’s financial documents and the 

external auditors, the correct application of accounting and their uniformity for the purposes of preparing 

the consolidated financial statements; 

b) examining the audit plan and periodic reports prepared by the controller; 

c) reporting to the Board of Directors, at least every six months, called to approve the financial statements 

and the half-year report, on the activities undertaken and on the adequacy of the internal control system; 

4) The Chief Operating Officer, who is responsible, among other things, for overseeing Italcementi S.p.A.’s 

activities and the activities of the industrial companies directly or indirectly controlled by Italcementi S.p.A. 

and of the companies in which the latter has, directly or indirectly, an equity interest which enables the 

exercise of significant influence. Moreover, the Chief Operating Officer and the Deputy Chief Operating 

Officer, together with the heads of functions who report directly to them and who are involved in the process 

of drafting financial disclosures have to issue specific certifications on the data and information provided, 

both in relation to their correct representation and in relation to the effective and efficient application of the 

administrative and accounting procedures in their areas of assignement; 

5) The Manager in charge of preparing the company’s financial reports, who, as envisaged in the 

regulation approved by the Board of Directors, is responsible, among other things, for: 

a) planning adequate administrative and accounting procedures for the drafting of the financial statements, 

the limited half-year financial statements and the consolidated financial statements, as well as any other 

financial communication, by updating such procedures and ensuring dissemination and compliance, as 

well as verifying their effective application; 

b) assessing, together with the Internal Control Committee and the external auditors, the correct application 

of accounting principles and their uniformity for the purposes of the consolidated financial statements; 

c) handling the periodic reporting to senior management and the Board of Directors on the activities 

undertaken; 

d) managing the periodic review of the assessment activities and update the risk map relating to financial 

disclosure; 

e) taking part in the development of information systems that have an impact on the company’s financial 

positions and results of operations. 

6) The Controller, who has the task of verifying that the internal control system is always adequate, fully 

operational and functional. The controller has direct access to all the information required to perform this 

task, is not responsible for any operational area and does not report to any manager in the operational 

areas, including administration and finance. The controller reports on the way risk management is handled, 

in compliance with the plans established to contain such risks and, in compliance with the legally prescribed 

terms and procedures, to the Internal Control Committee, the executive director in charge of overseeing the 

functioning of the internal control system, and the Board of Statutory Auditors and states his opinion on the 

suitability of the internal control system to achieve an acceptable overall risk profile. 

7) Compliance committee, who is responsible for continuously overseeing the effective functioning and 

enforcement of the organization, management and control model ex Leg. Dec. 231/01, liaising with, among 

others, the manager in charge of preparing the financial reports with reference to relevant issues in terms of 

financial disclosure; 

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8) the various company functions, which, as already specified in regard to the Chief Operating Officer, must 

guarantee the correct representation of the information provided, as well as the effective and efficient 

application of the administrative and accounting procedures in the areas they are responsible for. 

Finally, against this background and in connection with the duties assigned by law, the Board of Statutory 

Auditors oversees the adequacy of the company’s organizational structure for the areas it covers, the internal 

control system, the administrative and accounting system, and the reliability of the latter to correctly represent 

company operations. 

The circulation and integration of the information produced in the various areas is ensured by a structured 

information flow. In this sense, an important role is played, for example, by the quarterly report of the manager 

in charge, setting out, among other things, the results of the activities undertaken, problems that came out, the 

action plans established and their progress. 

The Code of Conduct and corporate governance rules 

The Code of Conduct (the «Code»), last updated by the company Board of Directors in February 2007, is a 

self-regulation system including legal and regulatory framework provisions, to which Italcementi S.p.A. and its 

corporate bodies voluntarily comply with. Its aim is to highlight the corporate governance model of the 

company established to achieve its primary goal of maximizing value for shareholders. 

The «Code» is based on the Code of Conduct for listed companies lastly approved in March 2006 by the 

Corporate Governance Committee of the Italian Stock exchange (Borsa Italiana S.p.A). 

The «Code» envisages the establishment of corporate bodies and offices as well as the adoption of specific 

procedures and conduct, with the sole exceptions described below and with the amendements required by the 

specific features of Italcementi S.p.A. 

The Board of Directors, moreover, is always willing to assess further trends introduced in the « Code of 

Conduct» and their possible implementation in the company’s Corporate Governance system, provided that, in 

respect with the current company situation, the recommendations allow the company’s standing with investors 

to be further enhanced. 

A) ORGANIZATIONAL STRUCTURE 


The company by-laws provide for the company to be managed by a Board of Directors consisting of 11 up to 

21 directors who serve for the period established on their appointment, and in any case no more than three 

financial years, and who terminate their office on the date of the Shareholders’ Meeting called to approve the 

financial statements for the final year of their appointment, they may be re-elected. 

The appointment takes place following the aforementioned Vote list procedure. 

Pursuant to the current regulations, at least one of the members of the Board of Directors, or two if the Board 

of Directors consists of more than seven members, must be vested with the independence qualification 

established by the law for the members of the Board of Statutory Auditors, while the law requires all directors 

to meet the good reputation requirements established by the Minister of Justice for statutory auditors’ 

regulation. 

The «Code», as stated by the Corporate Governance Committee, requires an adequate number of nonexecutive 

directors to be independent in the sense that they do not have, nor have recently had, directly or 

indirectly, relationships with the company or with parties linked to it, such as to influence their independence of 

judgment. 

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Should an elected director during their term of office no longer satisfy the good reputation requirements 

established by the law or the by-laws, their office shall terminate. 

Should the independence criteria prescribed by the law no longer bemet, the director concerned must 

immediately inform the Board of Directors. In the event, the office of the director shall terminate, except in 

cases where such criteria are still held by at least the minimum number of directors envisaged by the current 

regulation. 

No exception to the ban on competition envisaged by art. 2390 of the Italian Civil Code has been authorized by 

the Shareholders’ Meeting or is envisaged by the company by-laws. Moreover, no director is a shareholder 

with unlimited responsibility in competitors or runs a competing business on their own on behalf or for third 

parties, or is a director or chief operating officer in competitors. 

Pursuant to the company by-laws, the Board of Directors is vested with full powers of ordinary and 

extraordinary company management. It may, therefore, perform all acts which it deems necessary to achieve 

the corporate purpose with the sole exclusion of those expressly reserved by law to the Shareholders’ Meeting. 

The Board of Directors, in compliance with the by-laws, meets at least once every quarter. At these meetings, 

the executive directors report to the Board and Board of Statutory Auditors on significant transactions 

undertaken in the exercise of their powers. 

The «Code» underlines the key role played by the Board of Directors and sets out and supplements its specific 

duties which include, among other things: the assignment and termination of delegated powers to senior 

managers; the evaluation and approval of strategic, business and financial plans as well as the assessment of 

business forecasts and the adequacy of the organizational, administrative and general accounting 

arrangements of the company and subsidiaries; the examination and approval of the accounting entries for the 

period; the prior evaluation and approval of strategic transactions; the assessment of the company operational 

structure; the determination of the compensation of directors vested with special powers and the manager in 

charge of preparing the company’s financial reports; reports presented at Shareholders’ Meetings; the 

examination and approval of the Corporate Governance system. 

In addition, the Board of Directors is required to evaluate and approve in advance: 

- the transactions with related parties undertaken by the company itself and by its subsidiaries when such 

transactions are of strategic or financial importance for Italcementi S.p.A.; 

- other transactions with related parties when expressly required by the specific company procedure and in 

compliance with the methods therein. 

Finally, the Board of Directors must review, at least once a year, the size, composition and functioning of the 

Board itself and of its Committees. 

The Board of Directors mainly consists of non-executive members and among these a sufficient number are 

independent. Should the Chairman of the Board of Directors be the primary officer responsible for company 

management, as also whenever the position of Chairman is held by the person who controls the company, the 

«Code» envisages that the Board appoints an independent director as the “lead independent director”, to be a 

reference for and to coordinate the requests and contributions of non-executive directors and, in particular, 

independent directors. 

The Chairman coordinates the activities and chairs meetings of the Board of Directors and ensures that its 

members are provided in due time with information on the related important issues in order to assure a useful 

attendance, subject to any needs of urgency or confidentiality. In addition, the Chairman, through the 

competent company departments, acts to ensure that the directors take part in initiatives aimed at increasing 

their 

179 


knowledge of the company and its dynamics and are informed about the main legislative and regulatory 

framework amendements concerning the company and its corporate bodies. 

The directors act and pass informed resolutions independently, in the pursuit of the primary goal of creating 

value for shareholders. They accept their offices aknowledging that they can devote the due time to diligent 

performance of their duties. Pursuant to the «Code», effective performance of the duties of director is deemed 

consistent with no more than: 

- 5 offices as executive director, 

- 10 offices as non-executive director or independent director or statutory auditor 

in companies listed on regulated markets in Italy and abroad, in financial, banking, insurance or major 

companies, excluding subsidiaries of Italcementi S.p.A., parents and companies subject to joint control. 

A list of the positions as director, statutory auditor, and chief operating officer held by each director in other 

companies listed on regulated markets in Italy or abroad, in financial, banking, insurance or major companies 

is set out below: 

Giampiero Pesenti * Italmobiliare S.p.A. - Chairman and Chief Executive Officer 

* Ciments Français S.A. - Director 

(representing Italcementi S.p.A.) 

* Fincomind AG - Deputy Chairman 

* Allianz S.p.A. - Director 

* Compagnie Monegasque de Banque - Director 

* Credit Mobilier de Monaco - Director 

* Finter Bank Zürich - Director 

* Mittel S.p.A. - Director 

* Pirelli S.p.A. - Director 

* Rcs Quotidiani S.p.A. - Director 

Pierfranco Barabani * Ciments Français S.A. - Director 

(representing Société Internationale 

Italcementi (Luxembourg) S.A.) 

Carlo Pesenti * Italmobiliare S.p.A. - Director - Chief Operating Officer 

* Ciments Français S.A. - Deputy Chairman 

* Mediobanca S.p.A. - Director 

* RCS MediaGroup S.p.A. - Director 

* Unicredit S.p.A. - Director 

* Ambienta SGR - Director 

Alberto Bombassei * Brembo S.p.A. - Chairman – Chief Executive Officer 

* Atlantia S.p.A. - Director 

* Ciccolella S.p.A. - Director 

* Nuovo Trasporto Viaggiatori S.p.A. - Director 

* Pirelli S.p.A. - Director 

Giorgio Bonomi * Italmobiliare S.p.A. - Director 

* IGP - Decaux S.p.A. - Director 

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Alberto Clô * Atlantia S.p.A. - Director 

* ENI S.p.A. - Director 

* De Longhi S.p.A. - Director 

* Iren S.p.A. - Director 

Federico Falck * Falck S.p.A. - Chairman 

* Falck Renewables S.p.A. - Chairman 

* Riesfactoring S.p.A. - Chairman 

* Banca Popolare di Sondrio S.c.r.l. - Director 

Pietro Ferrero * Ferrero S.p.A. - Chairman 

* Ferrero International S.A. - Chief Executive Officer 

Italo Lucchini * Italmobiliare S.p.A. - Deputy Chairman 

* Unione di Banche Italiane S.c.p.a. - Supervisory Director 

* Ciments Français S.A. - Director 

* BMW Italia S.p.A. - Chairman Board of Statutory Auditors 

* BMW Financial Services Italia S.p.A. - Chairman Board of Statutory Auditors 

Sebastiano Mazzoleni * Ciments Français S.A. - Director 

(representing Sicil.Fin. S.r.l.) 

Yves René Nanot * Ciments Français S.A. - Chairman 

* Rhodia S.A. - Director 

* Asia Cement Public Co. Ltd - Director 

* Ciments du Maroc - Director 

* Essroc Corporation - Director 

* Set Group Holding - Director 

* Suez Cement Company - Director 

* Zuari Cement Ltd - Director 

Marco Piccinini * Ferrari S.p.A. - Director 

* Finter Bank Zürich - Director 

* Montezemolo & Partners S.p.A. - Director 

Attilio Rota * Banca d’Italia – Bergamo branch - Director - Examiner 

Carlo Secchi * Allianz S.p.A. - Director 

* Expo 2015 S.p.A. - Director 

* Mediaset S.p.A. - Director 

* Parmalat S.p.A. - Director 

* Pirelli & C. S.p.A. - Director 

Elena Zambon * Secofind S.I.M. S.p.A. - Chairman 

* Zambon S.p.A. - Chairman 

* Zambon Company S.p.A. - Director 

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Emilio Zanetti * Unione di Banche Italiane S.c.p.a. - Chairman of the Operating Board 

* Banca Popolare di Bergamo S.p.A. - Chairman 

* SACBO S.p.A. - Deputy Chairman 

The financial statements report of the Board of Statutory Auditors provides for a list of the positions held by 

each of its members at the date of the report’s publication, in joint stock companies, limited liabilities 

companies and in partnerships. 

Legal representation – Executives 

Under the by-laws, legal representation of the company on behalf of third parties and in lawsuits lied with the 

Chairman and, if appointed, the Deputy Chairman (or Deputy Chairmen) and the Chief Executive Officer (or 

Chief Executive Officers). 

The Board of Directors has granted to an Executive Committee all its powers, except those that the Italian Civil 

Code and the by-laws do not allow to be delegated. 

The resolutions of the Executive Committee are reported to the Board of Directors at the first following 

meeting. 

The Board of Directors has appointed an Executive Deputy Chairman, a Chief Executive Officer and a Chief 

Operating Officer. 

In accordance with the «Code», the Board of Directors, at its first possible meeting and, in any case, at least 

on a quarterly basis, is informed on the activities of the Chief Executive Officer and the other executive 

directors, and in particular on the most important transactions with an impact on the financial statements 

undertaken by the company or by the subsidiaries, on the main transactions with related parties and those with 

a potential conflict of interest which have not been submitted for its prior approval. 

Upon proposal of the Remuneration Committee, the Board of Directors, in the absence of those directly 

concerned, establishes the remuneration, any stock option grants or other monetary benefits for directors 

vested with special powers in compliance with the articles of association, based on the opinion of the Board of 

Statutory Auditors and and, when required, upon further evaluation of the Committee for Transactions with 

Related Parties. A significant part of the compensation of the Chairman, Executive Deputy Chairman and Chief 

Executive Officer is tied to business results and to achievement of specific targets. 

A consistent approach and coordination of activities are ensured by the presence of the Chairman, Executive 

Deputy Chairman, Chief Executive Officer and Chief Operating Officer, directors or officers of Italcementi 

S.p.A. on the Boards of Directors of the main subsidiaries. 

Transactions with related parties 

Without prejudice to the provisions of the Procedure for Transactions with Related Parties recently approved 

by the Board of Directors in its session of November 2010, transactions with related parties must be carried 

transparently and in compliance with the criteria of formal and substantial accuracy. Therefore, directors who 

have an interest, even if only potential or indirect, in a transaction are required to: 

a) provide timely and exhaustive information to the Board on the existence of the interest and on its 

circumstances; 

b) to leave the Board meeting at the time the resolution is taken. 

In specific circumstances, however, the Board of Directors may allow the participation of the director 

concerned in the discussion and/or to the vote. 

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Appointment of committees 

Italcementi S.p.A., in its own «Code», provides for the Board of Directors to appoint a Remuneration 

Committee and an Internal Control Committee from among its members. Their resolutions are of advisory or 

propositive role and do not bind the following Board resolutions. 

The Committees shall be composed of no fewer than three members and, in carrying out their duties, may 

access the supporting corporate information and functions, and also request the assistance of external 

advisors. 

Each Committee elects its own Chairman and a secretary (who is not required to be a member of the 

Committee) and meets at request of its Chairman or his/her delegated. The meeting may be called informally 

(including by unwritten means). 

The meetings of each Committee are validly set with the participation of the majority of its members, in person 

or via an audio or video-conference link. Each Committee carries resolutions by an absolute majority vote of 

the members participating at the meeting. 

The Remuneration Committee, consisting of non-executive directors, the majority of whom are independent, 

has the task of proposing to the Board, in the absence of those directly involved, the remuneration of directors 

vested with special powers, as well as of the Chief Operating Officer and managers with strategic 

responsibilities. It also enforces their application on the basis of the information supplied by the Chief Executive 

Officer. The Remuneration Committee also performs additional advisory functions on remuneration and related 

matters which the Board of Directors may request from time to time. 

The Internal Control Committee, consisting of independent directors, has the task, in addition to the above, of 

verifying, together with the manager in charge of preparing the company’s financial reports and the external 

auditors, the correct application of accounting policies and their consistency for the purposes of preparing the 

consolidated financial statements; of expressing, at request of the Chief Executive Officer, opinions on specific 

aspects regarding identification of the main company risks as well as the planning, realization and 

management of the internal control system; of examining the activities’ program and periodic reports prepared 

by the Controller. In addition, the Internal Control Committee performs further duties assigned by the Board of 

Directors and reports, at least on a half-yearly basis, during approval of the yearly and half-yearly reports, on 

the activities undertaken and on the adequacy of the internal control system. 

The Internal Control Committee also supports the Board of Directors with the activities related to the 

functioning of the internal control system. 

The «Code» provides that the Internal Control Committee to be composed not only of independent directors, 

but also to include at least one director with appropriate accounting and finance experience, to be assessed by 

the Board of Directors at the time of the appointment. 

The meetings of the Committee are attended by the Chairman of the Board of Statutory Auditors or other 

auditor appointed by him/her; the Chairman and the Chief Executive Officer may also take part, as well as, if 

invited, the Chief Operating Officer, the internal control staff and the heads of other company functions. 

Among the committees recommended by the Corporate Governance Committee, the Italcementi S.p.A. 

«Code» does not provide for an «Appointments Committee», given that the shareholding structure of the 

company has a permanent majority shareholder holding the absolute majority of voting rights. Moreover, the 

appointment of the Board of Directors is now governed by the company by-laws which envisage, among other 

things, that on presentation of the list a short curriculum vitae is attached for each candidate with their personal 

and professional skills. These curricula, pursuant to the law and the «Code», must be duly published on the 

company website; in addition, it is now current practice that during the Shareholders’ Meeting the Chairman or, 

183 


at their request, the Chief Executive Officer provide data and professional details on candidates and their 

eligibility as independent directors. 

Actually, in inviting issuers to evaluate the setting-up of an Appointments Committee within the Board of 

Directors, the Corporate Governance Committee stated that “... this solution has its origin in systems with a 

widespreaded shareholdings, to ensure an adequate level of independence of the directors in relation to 

management ...”. 

Finally, the Board of Directors, in compliance with the regulation envisaged for transactions with related 

parties, set up from among its own members, during the adoption of the related procedure, a Committee for 

Transactions with Related Parties, which consists of only independent directors and the composition of which 

coincides with that of the Internal Control Committee. 

The Committee for Transactions with Related Parties has the task of assessing the formal and substantial 

accuracy of the transactions undertaken directly by the company, or through its subsidiaries, with other related 

parties. 

The members of the Committee were asked to express their approval on the procedure prior to its adoption. 

The Committee elects its own Chairman and, at the latter’s request, a secretary who is not necessarily a 

member of the Committee and who has the task of preparing the minutes of meetings. The members of the 

Committee for Transactions with Related Parties are required to promptly declare the existence of any dealings 

in relation to the specific transaction with related parties, in order to permit application of the equivalent 

controls. In order for the meetings of the Committee to be valid, it is necessary for the majority of the serving 

members to be present. The meetings of the Committee can also be held using telecommunication technology. 

The Committee passes resolutions with the majority of those with voting rights. 

Lead independent director 

The «Code» envisages, in relation to independent directors, that should the Chairman of the Board of Directors 

be the primary officer responsible for company management, and also when the position of Chairman is held 

by the person who controls the company, the Board appoint an independent director as «Lead independent 

director», to provide a reference for and coordinate requests and contributions of non-executive directors and, 

in particular, independent directors. 

At the meeting of April 16 th , 2010, the Board of Directors appointed Mr. Alberto Clô, an independent director, 

as «Lead independent director». 

Controls’ system 

The Board of Directors appoints an executive director (normally the Chief Executive Officer) to oversee the 

activities of the internal control system, whose duties, as already noted in the section «Features of the risk 

management and internal control system regarding the financial disclosure process» include, inter alia: 

a) identifying the main corporate risks, taking into account the characteristics of the activities carried out by the 

company and subsidiaries, and periodically submitting them for examination to the Board of Directors; 

b) executing the guidelines established by the Board of Directors, taking care of the planning, achievement 

and management of the internal control system, constantly checking its overall adequacy, effectiveness and 

efficiency; in addition, to keep the system aligned with developments in business scenarios, legal and 

regulatory framework. 

The Board of Directors, upon proposal of the executive director charged with overseeing the actvities of the 

internal control system and based on the Internal Control Committee’s opinion, appoints and revokes the 

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Controller, establishes the Controller’s remuneration in line with company policy and provides the Controller 

with adequate resources and organizational structures. 

The Controller is responsible for verifying that the internal control system is always adequate, fully operational 

and effective. The Controller is not responsible for any operational area and hierarchically does not report to 

any head of operational areas, including administration and finance. 

The Controller reports on risk management, on compliance with the plans drawn up to limit risks and presents 

an assessment of the internal control system’s ability to achieve an acceptable overall risk profile, to the 

Internal Control Committee, the executive director responsible for overseeing the internal control system and 

the Board of Statutory Auditors, as required by law. 

Executive director responsible for overseeing the internal control system 

In reference to the controls’ system, during the meeting of April 16 th , 2010, pursuant to the «Code» and with 

the assistance of the Internal Control Committee, the Board of Directors appointed the Chief Executive Officer 

as the executive director responsible for overseeing the internal control system. 

Manager in charge of preparing the company’s financial reports 

The Consolidated Law on Finance (TUF) provides that, within the corporate organization of companies listed 

on regulated markets which have Italy as their homemember state, should be appointed a manager in charge 

of preparing the company’s financial reports who is assigned with specific responsibilities, in particular for 

corporate disclosure. 

On April 16 th , 2010, the Board of Directors confirmed Carlo Giuseppe Bianchini, the head of Central Group 

Administration & Control, as manager in charge of preparing the company’s financial reports, pursuant to art. 

154-bis of the Consolidated Law on Finance and art. 30 of the company by-laws. 

The appointment of Mr Bianchini will end with the term of the current Board of Directors, i.e., with the approval 

of the financial statements for 2012. 

Pursuant to the company by-laws, the manager in charge of preparing the company’s financial reports must: 

1) be a manager and meets the good reputation requirements established by law for the members of the 

Board of Directors; 

2) have at least three consecutive years’ experience in the exercise of administrative/accounting and/or 

financial and/or control activities at the company and/or its subsidiaries and/or at other joint stock 

companies. 

At the time of the appointment, the Board of Directors provides the manager in charge of preparing the 

company’s financial reports with adequate powers and resources to exercise the duties envisaged by law and 

establishes his/her compensation. 


The «Code» takes up and supplements the laws and by-laws with reference to the appointment of the Board of 

Statutory Auditors which shall occur in accordance with a transparent procedure guaranteeing, among other 

things, timely and adequate information on the personal and professional skills of the candidates. 

The Board of Statutory Auditors is appointed on the basis of lists aimed at ensuring for minority shareholders 

the appointment of one acting auditor and one substitute auditor. 

185 


The lists must be presented at the company head offices at least 25 days before the date set for the 

Shareholders’ Meeting in first call; this, together with the means and minimum stake required to file the lists, 

must be mentioned in the call notice. 

Lists may be presented only by shareholders who, alone or together with other shareholders, can prove they 

hold a percentage of the voting capital no lower than that determined by CONSOB pursuant to the regulations 

in force for the appointment of the Board of Directors. For 2011, the established threshold is 2% of the ordinary 

share capital. 

No shareholder may present or participate in the presentation of more than one list, directly or through a third 

party or trust company, or vote for different lists. 

Shareholders belonging to the same group and shareholders who join a shareholders’ agreement regarding 

the company shares may not present or vote for more than one list, directly or through a third party or through 

trust companies. 

Lists presented in violation of these restrictions will not be accepted. 

Each candidate may be presented on one list only under penalty of ineligibility. 

The lists presented must include: 

a) statements by which individual candidates: 

* accept their candidature 

* under his/her own responsibilty state: 

- entitlement of the professional requirements envisaged by the by-laws, 

- the non-existence of causes for inelegibility or incompatibility, 

- entitlement of the good reputation requirements established by the law, 

- entitlement of the independence criteria required by the law and by the Code of Conduct; 

b) a short curriculum on the personal and professional skills of each candidate with an indication of their 

position as director and statutory auditor in other companies; 

c) information on the identity of the shareholders who have presented lists. The certification or statement 

proving ownership of the shareholding prescribed by the law in force when the list is presented may also be 

produced further to the file of the list provided that it reaches the company within the term envisaged by the 

regulation in force for the publication of lists by the company; 

d) a statement by the shareholders who do not hold, even jointly, a controlling or majority stake, bearing 

witness to the absence of any connection, as defined by the law in force. 

A presented list that does not comply with the above provisions will be considered as not presented. 

In the event that, within the limit of 25 days preceding the date of the Shareholders’ Meeting, a single list has 

been filed, or only lists presented by shareholders who are inter-connected pursuant to current laws, within the 

terms indicated in the law additional lists may be presented and the participation threshold indicated in the 

notice of call will be halved. 

At least 21 days before the date envisaged for the Shareholders’ Meeting which is called to appoint the Board 

of Directors and the Board of Statutory Auditors, the company shall make available at the company offices, at 

the Italian stock exchange and on its website, the lists of candidates which have been submitted by 

shareholders and the belonging documentation. 

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Annexes 218 

In the event of presentation of more than one list: 

- the list that obtains the highest number of votes at the Shareholders' Meeting elects two acting auditors and 

two substitute auditors, in the order in which they are listed in the sections of the list; 

- the minority shareholders’ list that obtains the highest number of votes among the lists presented and voted 

by shareholders who are not connected in any way, directly or indirectly, with the majority shareholders, 

elects the third acting auditor and the third substitute auditor, in the order in which they are listed in the 

sections of the list; 

- should more than one list obtain the same number of votes, a runoff is held on these lists among all the 

shareholders present at the Shareholders’ Meeting, and the candidates are elected from the list that obtains 

the majority of the share capital represented at the Shareholders’ Meeting. 

Should a party connected to a majority shareholder vote for a list of the minority shareholders, the connection 

is relevant for the purposes of excluding the minority shareholders’ elected auditor only if this vote was crucial 

for the election of the said auditor. 

Should a single list be presented, all the candidates included in that list are elected with a majority vote of the 

share capital represented at the Shareholders’ Meeting. 

Should no lists be presented, the Shareholders’ Meeting appoints the Board of Statutory Auditors with a 

majority vote of the share capital represented at the Shareholders’ Meeting. 

The chairmanship of the Board of Statutory Auditors lied with the person indicated in first place on the list 

presented and voted by the minority shareholders, or to the first name in the single list presented or to the 

person appointed as such by the Shareholders’ Meeting should no lists be presented. 

Pursuant to the by-laws of Italcementi S.p.A., people in situations of incompatibily as envisaged by the law or 

people who have exceeded the limit of engagements established by the regulations in force cannot be elected 

as auditors, and if elected cease to serve. 

Should an elected auditor during his/her term of office no longer satisfy the requirements envisaged by the law 

or the by-laws, his/her office shall terminate. 

When it is necessary to replace an acting auditor, the substitute auditor belonging to the same list as the 

removed auditor takes over. 

In their absence, in accordance with the original order of presentation, the candidate from the same list as the 

ceased auditor takes over, without taking the initial section into account. 

Should the replacement concern the Chairman of the Board of Statutory Auditors, the position will be taken 

over by the auditor of the minority shareholders. 

Auditors appointed in this manner hold office until the following Shareholders’ Meeting. 

Should it be necessary to supplement the Board of Statutory Auditors: 

- to replace an auditor elected from the majority shareholders list, the appointment takes place with a simple 

majority vote of the share capital represented at the Shareholders’ Meeting, choosing among the candidates 

indicated in the original majority list; 

- to replace an auditor elected from the minority shareholders list, the appointment takes place with a simple 

majority vote of the share capital represented at the Shareholders’ Meeting, choosing among the candidates 

indicated in the original minority shareholders’ list; 

187 


- for the simultaneous replacement of auditors elected in the majority and the minority shareholders’ lists, the 

appointment occurs with a simple majority vote of the share capital represented at the Shareholders’ 

Meeting, choosing among the candidates indicated in the list belonging to which each auditor was part of, 

with a number of auditors equal to the number of ceased auditors belonging to the same list. 

Whenever would not be possible to proceed as above, the Shareholders’ Meeting called to supplement the 

Board of Statutory Auditors passes a resolution with a simple majority of the share capital represented at the 

Shareholders’ Meeting, without prejudice to the principle by which one acting auditor and one substitute auditor 

must be appointed by minority shareholders . In any case, the Chairmanship of the Board of Statutory Auditors 

must be assigned tothe auditor representing the minority shareholders. 

Auditors shall accept their appointment when they believe they can devote the appropriate time to the diligent 

performance of their duties. 

The «Code» recommends the statutory auditors to be chosen among those who qualify as independent on the 

basis of the criteria provided for directors and, as mentioned above, upon filing of the list they submit a 

statement to confirm that they meet the independence criteria. The Board of Statutory Auditors shall verify the 

proper application of and compliance with these criteria upon appointment and then annually; the outcome of 

this assessment and of that performed by the Board of Directors to assess the independence criteria of 

directors so definied will be disclosed in the corporate governance report or in the auditors’ report to the 

Shareholders’ Meeting. 

The «Code» states that auditors, too, are bound by an obligation of confidentiality and are prohibited by law 

from using, directly or indirectly, confidential information for immediate or future personal or financial gain. 

Besides the duties envisaged by the law and the by-laws, the «Code» requires the Board of Statutory Auditors 

to: 

a) oversee the independence of the external auditors by verifying both compliance with relevant laws and the 

nature and extent of services other than account auditing provided to the company and its subsidiaries by 

the external auditors and companies belonging to its group; 

b) evaluate the proposals made by external auditors for their appointment to this position, as well as the audit 

plan and the results set out in their report and any letter of recommendations; 

c) oversee the effectiveness of the audit process. 

Under the Code of Conduct approved by the Corporate Governance Committee, these last two duties could 

have been entrusted to the Internal Control Committee rather than to the Board of Statutory Auditors. The 

company believed to be more consistent with the actual functions of the cortporate bodiesthe assignement of 

these duties to the Board of Statutory Auditors, which already reviews the proposals of the external auditors 

and their activity program and, pursuant to the current regulations, proposes the engagement and termination 

of the external auditors at the Shareholders' Meeting. 

Shareholders’ Meetings 

The «Code» envisages that all the Directors regularly attend Shareholders’ Meetings and encourage and 

facilitate the broadest possible participation by shareholders smoothing the process of exercising voting rights. 

To this extent, the Board of Directors reports to the Shareholders’ Meeting on the fulfillment of their duties as 

performed and planned and ensures shareholders to have adequate information in order to them to wellinformed 

resolve upon the matters whithin their prerogatives. 

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Annexes 218 

Shareholders who hold voting rights as certified by the communication envisaged by law and received by the 

company no later than the end of the third trading day prior to the date set for the Shareholders’ Meeting on 

first call, , are entitled to vote and attend to Shareholders' Meetings. The legitimacy to vote and attend to 

Shareholders’ Meetings is in any case etrusted with when the company has received the communication after 

the terms indicated in this paragraph, provided that this is before the begin of the proceedings for each 

individual meeting. 

No regulations have been envisaged for the proceedings of Shareholders’ Meeting since the broad powers 

assigned to the Chairman by law and current practices, as well as the by-law (art. 13) that expressly grants to 

the Chairman the power to lead the discussions, keep order and establish the voting’s method, as long as 

pursuant to disclosed proceeds, are considered adequate tools for the orderly running of Shareholders’ 

Meetings. 

Relationships with institutional investors and shareholders 

The company seeks continuous dialogue with shareholders, based on a mutual understanding of their 

respective roles. To this end, the Chairman and the Chief Executive Officer, within their respective corporate 

dutiesand assignements, provide for the general guidelines to be adopted by company departements in 

dealings with institutional investors and other shareholders. 

In addition to that andin order to provide timely and easy access to company information and thus allow 

shareholders to exercise their rights well-informed, a specific website section has been created , in wich 

corporate information and documentations are available, in particular the procedures to participate and 

exercise voting rights at Shareholders’ Meetings, documentation relating to the items on the agenda, including 

lists of candidates to director and statutory auditor positions, with their curricula, financial reports, press 

releases issued by the company pursuant to the Consolidated Law on Finance, the corporate calendar, etc. 

B) IMPLEMENTATION OF CORPORATE GOVERNANCE RULES 

The company by-laws provide for the company to be governed by a Board of Directors consisting of a 

minimum of 11 up to a maximum of 21 directors who shall serve for the period established at the time of their 

appointment, and in any case no more than three financial years, and may be re-elected. 

The Shareholders’ Meeting of April 16 th , 2010, appointed the Board of Directors for 2010 - 2012, setting the 

number of members at 19. 

On that occasion, in compliance with the procedure set out in the company by-laws, two lists of candidates 

were presented, one by the majority shareholder, the other by the minority shareholder First Eagle Investment 

Management LLC. Therefore, among the currently serving directors, 18 represent the majority and one 

represents the minority shareholders. 

Assignment of duties and granting of powers 

The company by-laws envisage the aforementioned central role of the Board of Directors. 

Pursuant to the «Code», the granting of powers, i.e., the assignement of operational powers to one or more 

directors and/or to the Executive Committee, if appointed, does not exclude the prerogative of the Board of 

Directors, which in any case holds a higher power of guidance and control over the general business of the 

company in its various aspects. 

Legal representation of the Company is granted by the by-laws, severally, to the Chairman, Deputy Chairman 

(or Deputy Chairmen) and to the Chief Executive Officer (or Chief Executive Officers) if appointed. 

189 


Within the Board of Directors, the allocation of powers is as follows: 

• to the Executive Committee, consisting of six members, all the powers of the Board of Directors, except for 

those which the Italian Civil Code and the by-laws do not allow to be delegated. As specified at the time of its 

appointment, the resolutions of the Executive Committee must be reported to the next Board of Directors; 

• to the Chairman, Mr. Giampiero Pesenti, among other duties and in addition to the powers envisaged by the 

company by-laws and by the other Corporate Governance Codes, the duties to oversee application of the 

Corporate Governance principles approved by the Board of Directors and to propose any amendement to 

them; indicate general strategic guidelines for Group business which must be followed in operational 

management; specify the general policies for annual and interim financial statements as well as the general 

financial policies of the Group; approve the most important organizational changes (regarding both 

Italcementi S.p.A. and the main directly or indirectly subsidiaries) upon proposals of the Chief Executive 

Officer or of the Chief Operating Officer; approve the significant changes to the Group’s corporate structure, 

approve, for further submission to the Board of Directors or the Executive Committee, the most important 

transactions regarding acquisitions, disposals, capital expenditure, development in new initiatives and, 

generally, extraordinary transactions; indicate general policies for recruiting, training and managing staff and 

determine, also upon proposals of the Chief Executive Officer, the recruitment, compensation (after 

consulting the Remuneration Committee and receiving the approval of the Board of Directors where 

envisaged), promotions, transfers, suspensions, severance or contract review for senior managers of the 

Group in Italy and in the other countries where the Group operates; treat external communication. 

In addition, besides the powers needed to carry out the assigned duties, the Chairman has been granted 

powers to undertake securities and real estate transactions, with a limit of 50 million euro for each individual 

transaction with single signature and 75 million euro with joint signature with the Chief Executive Officer or 

the Chief Operating Officer; 

• to the Executive Deputy Chairman, Mr. Pierfranco Barabani, the powers to undertake property transactions 

up to the limit of 15 million euro for each individual transaction; 

• to the Chief Executive Officer, Mr. Carlo Pesenti, among other duties, responsibility for supervising 

management policies, business development strategies and coordination of transactions of the company and 

of the main directly or indirectly subsidiaries, issuing the appropriateinstructions to the Chief Operating 

Officer and the other corporate bodies; proposing organizational and corporate structure changes; drafting 

the separate and consolidated financial statements, including the half-year and quarterly reports as 

envisaged by the law; preparing, with the assistance of the Chief Operating Officer, the annual budgets for 

Italcementi S.p.A. and the Group and long-term strategic plans; overseeing the financial management of the 

parent company and the Group; signing technical/administrative contracts with subsidiaries and associates; 

under the general policies indicated by the Chairman, defining policies relating to the choice of senior 

managers and staff management of Italcementi S.p.A. and of the main directly or indirectly subsidiaries; 

recruiting staff at all levels; appointing consultants generally. 

In addition, the Chief Executive Officer has been granted powers to undertake acts regarding: 

• industrial transactions (technical, manufacturing, commercial, administrative) up to a limit of 50 million euro 

for each individual transaction with single signature and 75 million euro with joint signature with the 

Executive Deputy Chairman or the Chief Operating Officer; 

• securities and real estate transactions up to a limit of 50 million euro for each individual transaction with 

single signature and 75 million euro with joint signature with the Chairman or the Chief Operating Officer; 

• at its meeting on April 16 th , 2010, the Board of Directors assigned to the Chief Operating Officer, Mr. 

Giovanni Ferrario, the duties mainly of overseeing and directing the technical, manufacturing, and 

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Annexes 218 

commercial activities of Italcementi S.p.A.; directing, coordinating and controlling the activities of the 

industrial subsidiaries; proposing to the Chief Executive Officerthe functional arrangements of the corporate 

organization; maximizing the efficiency of the corporate production units of the Italian subsidiaries and their 

compliance with the regulations and laws in force; determining and cooperating with the Chief Executive 

Officer in establishing staff management guidelines. 

In addition, the Chief Operating Officer has been granted powers to undertake industrial transactions 

(technical, manufacturing, commercial, administrative and some financial) up to a limit of 20 million euro for 

each individual transaction and real estate transactions up to a limit of 15 million euro for each individual 

transaction. 

The limits set for the powers granted respectively to the Executive Deputy Chairman and the Chief Operating 

Officer are doubled should their signature be combined with that of the other. In addition, and solely for 

industrial activities, the limits set for the powers granted to the Chief Operating Officer are doubled should their 

signature be combined with that of one of the Deputy Chief Operating Officers, if appointed. 

The Chief Executive Officer and the Chief Operating Officer have assigned specific and more limited powers to 

managers of the company within their area of activities. 

The Chief Executive Officer and the other executive directors have periodically informed the Board of Directors 

and the Board of Statutory Auditors, as envisaged by the «Code» and by the company by-laws, about activities 

undertaken within their assignements and powers. In addition, the most important transactions with an impact 

on the financial statements undertaken by the company, the main transactions with related parties as well as 

transanctions leading to potential conflicts of interests, have been submitted to the Board of Directors, even 

when within the limits of their powers. 

Composition of the Board of Directors and its meetings 

The Italcementi S.p.A. Board of Directors has 16 non-executive directors out of a total of 19. Among the nonexecutive 

directors, 10 are independent. 

The Chairman and the Executive Deputy Chairman are deemed as executive directors in consideration of the 

powers granted to them. 

The Chief Executive Officer belongs to the executive directors . The Board of Directors, upon his/her 

appointment, determines duties and powers and sets any quantitative limits on the exercise of such powers. 

The granting of powers (including those of the Chief Operating Officer) is based on the principle of segregation 

of competences. 

Three of the 6 members of the Executive Committee, are executive directors; the others, two of whom 

independent, are, in any case, deemed non-executive directors. That because the company’s Executive 

Committee does not meet on a regular basis and in fact only meets when it is necessary to promptly adopt 

specific resolutions. The Code of Conduct promoted by Borsa Italiana S.p.A., also, agrees with this 

interpretation provided that, as in this case, the director is not granted individual executive powers. 

During examination of the draft financial statements for the year and taking into account the information 

supplied by each director, the Board of Directors assessed the good reputation and independence of its 

members: the results of this assessment are shown on the first page of this Annual Report, as well as in the 

table attached to this Corporate Governance report. 

As envisaged by the «Code», on March 4 th , 2011, the Board of Directors assessed the size, composition and 

functioning of the Board and its Committees. 

To this extent, the Company circulated among the directors a questionnaire made up of statements, for which 

191 


their level of agreement has been marked. 

The outcome of this assessment and the comments made showed a clearly positive judgment on the 

functioning of the Board of Directors and its Committees. 

In particular, note was made of (i) the Board of Directors effectively exercising its management powers over 

the organization of the company and the Group, ii) the possibility for directors to act and vote independently, 

and iii) the adequate composition of the Board of Directors to guarantee the competence and quality of the 

Board’s discussions and activities. 

During 2010 the Board of Directors met 9 times in all, taking into account the changed composition of the 

Board of Directors as from April 2010; 11 directors, of whom 4 were independent, took part in all the meetings, 

4 directors, of whom 3 were independent, took part in 8 meetings, 1 independent director took part in 7 

meetings, 1 director took part in 5 meetings, 2 directors, both of whom were independent, took part in 4 

meetings, 2 directors, both of whom were independent, and whose mandate expired with last year’s 

Shareholders’ Meeting, never attended a meeting. 

The average length of meetings of the Board of Directors held during the year was approximately 3 hours and 

5 minutes. 

The entire Board of Statutory Auditors attended 6 of the meetings; just one statutory auditor was present at 

one meeting and two auditors were present for the other 2 meetings. 

Upon invitation, the Chief Operating Officer of the company attended all the meetings of the Board of Directors, 

as did the manager in charge of preparing the company’s financial reports. 

During 2010 the Executive Meeting met 3 times with all its members present. 

During 2011 the Board of Directors has so far met twice, the first time to examine revenues for 2010 and the 

outlook for 2011, the second to approve – among other things – the draft financial statements for 2010. During 

the year no fewer than a further three meetings are currently planned to approve the interim accounts. 

During 2010, the «Lead independent director» met once with the other independent directors. 

Group interdepartmental bodies 

To implement the policies of the Board of Directors, a number of bodies not provided for by the by-laws have 

been established with duties of coordination and operational integration which do not, however, modify the 

responsibilities and powers of the functions represented in that bodies. 

In addition, a Committee of Managers operates at Group level, chaired by the Chief Operating Officer of 

Italcementi S.p.A., who also holds the post of Chief Operating Officer of Ciments Français S.A., under the 

supervision of the Chief Executive Officer. This Committee involves managers of some of the executive 

departments of both companies. 

The Committee of Managers meets periodically to ensure operational consistency with the strategy and 

objectives set by the Boards of Directors of the various Group companies. 

Finally, the Conference of Managers works to raise awareness of strategic and organizational guidelines and 

the main group projects. Besides the members of the Committee of Managers, a small number of other senior 

Group managers take part in the Conference of Managers. 

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Annexes 218 

Remuneration for Directors, the Chief Operating Officer and Managers with strategic 

responsibilities 

The amount allocated, pursuant to the company by-laws, to the Board of Directors during the distribution of the 

net profit for the year, is apportioned among all the directors, granting double portions to directors who are also 

members of the Executive Committee and a single quota to the others. 

The Board of Directors, upon proposal of the Remuneration Committee and based on a positive opinion of the 

Board of Statutory Auditors, has also established the amounts, both fixed and variable, to be allocated to the 

Chairman, Executive Deputy Chairman, Chief Executive Officer, Chief Operating Officer and the Manager in 

charge of preparing the company’s financial reports in relation to the targets asssigned to each of them. 

In addition, for the same positions, the Board of Directors has approved a Long-term incentive which will be 

awarded upon achievement of three-year goals. 

In addition, at the beginning of his office, to the Chairman was assigned a “Severance pay” which will vest at 

the end of the office. 

Composition and activities of the Committees 

The Remuneration Committee is made of three non-executive members,the majority of whom independent. 

During 2010 it met 3 times to resolve upon the proposals on directors’ remuneration. 

The Internal Control Committee consists of four members, all non-executive and independent. 

During 2010 the Internal Control Committee met 7 times, 5 times with all its members present and twice with 

one member absent; in particular, the Committee was updated on developments in the legal proceedings 

concerning the subsidiary Calcestruzzi S.p.A.; it examined the reports prepared by the Controller and by the 

external auditors to verify the adequacy of the internal control system, and reported to the Board of Directors, 

during approval of the annual report and the half-year financial report, on the activities undertaken and on the 

adequacy of the internal control system. In addition, given the overlap between the composition of the Internal 

Control Committee and that of the Committee for Transactions with Related Parties, a meeting was organized, 

which was also open to the Board of Statutory Auditors, to look more closely at some aspects of the new 

procedure introduced following the CONSOB regulation of March 12 th , 2010. 

The Committee for Transactions with Related Parties consists of four members, all of whom are non-executive 

and independent. During 2010 the Committee met 3 times, with all members present. 

The meetings of the Remuneration Committee, the Internal Control Committee and the Committee for 

Transactions with Related Parties were duly minuted. 

Internal control system 

The internal control system is defined as the set of rules, procedures and organizational structures designed to 

ensure, through adequate identification, measurement, management and monitoring of key risks, healthy and 

proper management of the company in line with objectives, thus guaranteeing the safekeeping of the company 

assets, the efficiency and effectiveness of company transactions, the reliability of financial information, and 

compliance with laws and regulations. 

The Board of Directors exercises its functions in relation to the internal control system based on national and 

international reference models and best practice and pays particular attention to the organizational, 

management and control model adopted pursuant to Legislative Decree no. 231 of June 8, 2001. 

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The Board of Directors, with the assistance of the Internal Control Committee, sets the guidelines for the 

internal control system so that the main risks regarding the company and the subsidiaries are correctly 

identified and adequately measured, managed and monitored. It also sets the criteria to ensure the 

compatibility of these risks with correct and proper management of the company and assesses, at least on an 

annual basis, the adequacy, effectiveness and functioning of the internal control system with respect to the 

characteristics of the company. 

As envisaged by the «Code», the executive director charged with overseeing the functioning of the internal 

control system put into action, also in reference to the Risk & Compliance project described in the section 

«Risks and uncertainties» of this Report, to identify the main corporate risks and to verify the overall adequacy, 

effectiveness and efficiency of the internal control system, by asking in particular the Controller to undertake 

specific controls of the procedures regarding both Italcementi S.p.A. and its subsidiaries. 

Some time ago, the company set up an internal audit department. The Controller is the head of this 

department. 

During 2010 the Controller implemented the audit plan, as presented to the Internal Control Committee, and 

undertook the appropriate measures within his duties, as assigned from time to time by the Chief Executive 

Officer in his capacity as the executive director responsible for overseeing the internal control system. 

During 2010 the executive director responsible for overseeing the internal control system attended – together 

with the Controller – the meetings of the Internal Control Committee of the company. 

The Board of Directors, to which the Internal Control Committee reports to on a half-yearly basis, deems the 

internal control system adequate for the structure and kind of company and Group’s business. 


During the renewal of the Board of Statutory Auditors at the Shareholders’ Meeting of April 17 th , 2009, the 

majority shareholder presented its own list of candidates. The minority shareholders did not present a list. 

Therefore, none of the auditors currently in office represents the minority shareholders. 

As envisaged by the «Code», in 2010 the Board of Statutory Auditors, among other things, oversaw the 

independence of the external auditors, by verifying both compliance with the relevant regulatory provisions and 

the nature and extent of the non-audit services provided to the company and its subsidiaries by the external 

auditors and bodies belonging to their group. 

During the year, the internal audit manager took part in several meetings of the Board of Statutory Auditors, as 

the Board of Statutory Auditors attended all the meetings of the Internal Control Committee and of the 

Remuneration Committee. This enabled a continuous flow of information among the various bodies involved in 

monitoring the whole control system. 

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TABLE 1 

STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES 

Board of directors 

Executive 

Committee 

Internal 

Control 

Committee 

Remuneration 

Committee 

Committee 

for Related 

Parties 

Position Member Executive 

Non 

executive 

Indipendent 

No. other 

posts 

Member 

Member 

Position Member Member 

Attendance 

Attendance 

Attendance 

Attendance 

Chairman Giampiero Pesenti • 9/9 10 • 3/3 

Executive 

Deputy Pierfranco Barabani • 9/9 1 • 3/3 

Chairman 

Chief 

Executive Carlo Pesenti • 9/9 6 • 3/3 

Officer 

Director Alberto Bombassei • 9/9 5 • 1/1 

Director Giorgio Bonomi • 7/7 2 

Director Antonio Carosi • 7/7 - 

Director Alberto Clô • 8/9 4 • 6/7 • 3/3 

Director Federico Falck • 7/9 4 • 1/1 • 6/7 • 3/3 

Director Pietro Ferrero • 4/9 2 

Director Danilo Gambirasi • 9/9 - 

Director Karl Janjöri • 0/2 - • 0/2 

Director Italo Lucchini • 9/9 5 • 3/3 

Director Emma Marcegaglia • 0/2 - 

Director Sebastiano Mazzoleni • 9/9 1 

Director Yves René Nanot • 8/9 8 • 3/3 

Director Marco Piccinini • 5/9 3 

Director Ettore Rossi • 9/9 - 

Director Attilio Rota • 9/9 1 • 3/3 • 7/7 • 2/2 • 3/3 

Director Carlo Secchi • 8/9 5 • 7/7 • 3/3 

Director Elena Zambon • 4/7 3 

Director Emilio Zanetti • 8/9 3 • 3/3 

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TABLE 2 

BOARD OF STATUTORY AUDITORS 

Position Member Attendance at meetings 

Chairman Maria Martellini 15/16 

Acting auditor Mario Comana 14/16 

Acting auditor Luciana Gattinoni 15/16 

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Annexes 218 

TABLE 3 

OTHER PROVISIONS OF THE CODE OF CONDUCT 

The table below illustrates the extent to which the «Code» complies with other provisions of the Code of 

Conduct contained in the text approved by the Corporate Governance Committee. 

System of delegated powers and dealings with related parties 

Has the Board of Directors attributed the delegated 

powers establishing their: 

a) limits 

b) manner of exercise 

c) and frequency of reporting? 

Has the Board of Directors reserved the right to review and approve 

transactions with a significant impact on the financial statement (including 

transactions with related parties?) 

Has the Board of Directors established guidelines and 

criteria to identity "significant" transactions? 

Are these guidelines and criteria described in the report? 

Has the Board of Directors defined specific procedures for the 

examination and approval of transactions with related parties? 

Are the procedures for the approval of transactions with related 

parties described in the report? 

Procedures for the most recent appointment of directors and auditors 

Were candidatures for the position of director filed within the deadlines 

envisaged by the law in force at the time? 

YES 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

NO 

Summary of reasons for any divergence 

from the recommendations of the "Code" 

Were candidatures for the position of director supported by adequate 

information? 

• 

Were candidatures for the position of director supported by an indication of 

suitability to be considered as independent? 

• 

Were candidatures for the position of statutory auditor filed within the deadlines 

envisaged by the law in force at the time? 

• 

Were candidatures for the position of statutory auditor suported by adequate 

information? 

• 

Shareholders' meetings 

Has the company approved a Procedure for Shareholders' meetings? 

• 

The broad powers granted to the Chairman by law and current 

practices, as well as the provision of the by-laws that expressly 

empowers the Chairman to lead the discussion, keep order and 

establish the voting's method (on disclosed proceeds), are considered 

adequate tools for the orderly running of the Shareholders' meetings 

Is the Procedure attached to the report (or is there an indication of where it can 

be obtained/downloaded)? 

- 

Internal control 

Has the company appointed controllers? 

Are these managers hierarchically not subordinate to the managers of the 

operating areas? 

• 

• 

Unit responsible for internal control 

(pursuant to art. 9.3 of the «Code») 

Internal Control Division 

Investor relations 

Has the company appointed an investor relations manager? 

Organizational unit and references for the investor relations manager 

• 

ITALCEMENTI S.p.A. 

Group Finance Division 

Investor Relations Department 

Via G. Camozzi no.124, 24124 Bergamo 

Tel. 035 396.750 - Fax 035 396.619 

investor.relations@italcementi.it 

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Code of ethics 

The Code, approved for the first time in 1993 and further modified, envisages that all employees and those 

who deal with the Group or act to achieve its objectives shall base their dealings and conduct on principles of 

honesty, fairness, integrity, transparency, confidentiality and mutual respect. 

To this end, at its meeting of February 2 nd , 2001, the Italcementi Board of Directors approved the current 

version of the Code of Ethics which defines the rules for loyalty and fidelity, impartiality, protection of privacy 

and confidentiality of information, protection of people, the environment and company assets. The Code 

establishes the provisions which are the basis of the control processes and the accounting/operational 

information, and introduces rules to govern dealings with customers, suppliers, public institutions, political 

organizations and unions, and the media. 

Confidential information 

In terms of managing confidential information, the «Code», after recalling the obligation of confidentiality and 

the prohibition on using such information for personal gain, envisages the adoption of procedures for the 

disclosure of documents and information, with particular reference to price-sensitive information which may be 

disclosed only by people who are generally or specifically authorized to do so. 

At its meeting of February 2 nd , 2001, the company Board of Directors approved a specific procedure requiring 

strict compliance with the disclosure procedures and terms envisaged by the provisions in force, in full 

alignment with the principle of fairness and contextuality. 

Regarding relationships with institutional investors and other shareholders, based, as envisaged by the 

«Code», on continuous attention, the organization notices issued by the Chief Executive Officer have 

established general guidelines and identified the company structures dedicated to this activity. 

Internal Dealing Code of Conduct 

The company updated its own ‘Internal Dealing Code of Conduct’, originally adopted in application of the 

provisions issued by Borsa Italiana S.p.A., to take account of the new regulatory provisions adopted by 

CONSOB in execution of the new regulation (so-called Market abuse) introduced by the Law on Savings of 

2005. The ‘Internal Dealing Code of Conduct’ governs the information to be disclosed to the company, and by 

the company to the market, on any transactions involving Italcementi shares and other financial instruments 

connected to them undertaken by ‘Relevant persons’ on their own behalf. 

Pursuant to the ‘Internal Dealing Code of Conduct’, ‘Relevant persons’ are the members of the Board of 

Directors, the Board of Statutory Auditors and the Chief Operating Officer of Italcementi S.p.A. and any subject 

holding an equity investment of at least 10% in the voting share capital of Italcementi S.p.A., as well as any 

other subject who controls Italcementi S.p.A. 

In particular, ‘Relevant persons’ must inform Italcementi S.p.A., which in turn informs the market, about 

completed transactions for an aggregate amount of 5,000 euro by the end of the year. 

Given the particular structure of the Group, the ‘Internal Dealing Code of Conduct’ is associated with the Code 

adopted by Italmobiliare S.p.A., in the sense that market disclosures made by Italcementi S.p.A. regarding 

transactions on Italcementi shares by parties who are ‘Relevant persons’ for both companies, are considered 

as made also pursuant to the provisions contained in the Code of Conduct adopted by the parent company 

Italmobiliare S.p.A. 

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Annexes 218 

In addition, the ‘Internal Dealing Code of Conduct’ envisages that ‘Relevant persons’ must abstain from 

transactions that are subject to disclosure to the company: 

* during the 30 calendar days preceding the meeting of the Board of Directors of Italcementi S.p.A. called to 

approve the full-year and half-year financial statements, including the day on which the meeting is held; 

* during the 15 calendar days preceding the meeting of the Board of Directors of Italcementi S.p.A. called to 

approve the quarterly reports, including the day on which the meeting is held. 

Procedure for Transactions with Related Parties 

On November 5 th , 2010, based on the positive opinion of the specifically appointed Committee for 

Transactions with Related Parties, the company’s Board of Directors adopted the Procedure for Transactions 

with Related Parties envisaged by the CONSOB Regulation of March 12 th , 2010. 

The Procedure, in compliance also with art. 2391-bis of the Italian Civil Code, sets out the measures adopted 

by the company to ensure that transactions undertaken with related parties, whether directly or through 

subsidiaries, are carried out transparently and in compliance with the criteria of substantial and procedural 

correctness. 

In particular, with the exception of some situations which are described below, the Procedure provides for the 

authorization process and the disclosure requirements for transactions to be completed between i) a party 

related to Italcementi, on the one hand, and ii) Italcementi, on the other, or one of its subsidiaries when, prior to 

completing the transaction, the prior examination or authorization by a corporate body of Italcementi or by an 

officer of Italcementi with relevant delegated powers is requested. The Procedure is also applied to 

transactions undertaken by Italcementi with a subsidiary or associate, as well as among its subsidiaries, when 

the transaction involves significant interests of a party related to Italcementi. 

The Proceduredistinguishes «significant» transactions from «minor» transactions on the basis of specific 

quantitative criteria predetermined by CONSOB. This distinction is also relevant for the different kind of rules 

applicable on transparency transactions, which are simplified for minor transactions and more stringent for 

significant transactions, although both envisage prior opinion of the Committee for Transactions with Related 

Parties. 

The Committee has: 

- the duty to give and explain its opinion on both minor (non-binding opinion) and significant (binding opinion) 

transactions; 

- the right, for significant transactions, to take part in the negotiations and in the preliminary investigation stage 

through a complete and prompt flow of information, and the right to ask for information and to submit its 

remarks to the delegated boards and to those in charge of the negotiations or the preliminary investigation; 

- the right to seek the assistance, at the company’s expense, of independent experts of its choosing. 

In the case of minor transactions, the Procedure envisages the right, in any case, to execute the transaction 

even if the Committee for Transactions with Related Parties expresses a negative opinion, provided that this is 

disclosed to the market through a specific document setting out the reasons for this divergence. 

For significant transactions, on the other hand, should the Committee express a negative opinion, the Board of 

Directors may approve the transaction only with the prior authorization of the Shareholders’ Meeting. In this 

case, the Shareholders’ Meeting will give its approval on the basis of an enhanced quorum (the majority of 

shareholders who are not related parties must not vote against the transaction) and a vote against will be valid 

199 


only if the unrelated shareholders present at the meeting represent at least 10% of the share capital, with 

voting rights (the so-called “whitewash”). 

Finally, in application of the determination powers provided by the CONSOB Regulation, the company has 

identified the following main exemptions: 

- transactions of a negligible amount (transactions that do not exceed € 500,000); 

- ordinary transactions (which fall within the sphere of ordinary business and the related financial transactions 

of the company and of the Group generally) provided that they are completed on arms-lenght terms and 

equivalent to market standards; 

- transactions with or between subsidiaries or with associates, unless in the counterpart subsidiaries or 

associates there are significant interests of other related parties of the company; 

- urgent transactions. 

The Procedure is available on the company website at www.italcementigroup.com. 

Regulation of the Manager in charge of preparing the company’s financial reports 

As mentioned in another part of the report, the company, in connection with Law no. 262/05, the so-called 

«Law on Savings», appointed a «Manager in charge of preparing the company’s financial reports» and 

adopted a specific «Regulation» which, in compliance with legal provisions, the by-laws and following current 

best practices, as well as taking into consideration the arrangements for similar activities at the parent 

company Italmobiliare S.p.A., among other things: 

* defines the responsibilities of the «Manager in charge» of Italcementi and specifies his/her related powers; 

* identifies the responsibilities and method for the appointment, removal and termination of office of the 

«Manager in charge», the length of service and the requirements in terms of professional skills and good 

reputation: 

* reports the principles of conduct which the company «Manager in charge» must comply with in the event of 

conflicts of interest as well as the confidentiality obligations to be observed in carrying out his/her activities; 

* indicates the responsibilities, powers, and resources granted to the «Manager in charge» for the exercise of 

his/her duties, identifying the financial and human resources needed to carry out the mandate; 

* defines dealings with other company bodies/functions, with the corporate bodies, the internal and external 

control bodies and with subsidiaries, as well as, in compliance with the mutual areas for independent action, 

the procedures for interrelating with the parent company Italmobiliare, regulating information flows; 

* recalls the general principles of the Operating model used by the Italcementi Group, which has been 

established in order to fulfill the regulatory provisions on preparing the financial reports; 

* illustrates the internal and external certification process in reference to: a) the statements of the «Manager in 

charge» regarding the correspondence of the disclosed acts and communications of the company to the 

documents and the accounting books and entries; b) the certifications of the «Manager in charge» and of the 

executives, relating to the financial statements, the limited half-year financial statements and the 

consolidated financial statements. 

The «Regulation» has been approved by the Board of Directors and refers to all the entities, functions, 

corporate bodies of Italcementi S.p.A., as well as all the companies that it directly or indirectly controls. The 

Regulation has been circulated to the staff of the company, the subsidiaries, as well as to all those considered 

affected by its contents. 

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Annexes 218 

Organizational, management and control model 

In order to make the control system and corporate governance more effective, and prevent corporate offenses 

and offenses against the public administration, during 2004, in application of Legislative Decree no. 231/01, the 

company Board of Directors adopted an «Organizational, management and control model» (the «Model»). This 

was subsequently updated in 2006 in line with the law on market abuse and failure to disclose a conflict of 

interest by directors. 

By adopting the «Model», the company intends to disseminate and establish a corporate culture based on 

legality, with the express censure of all conduct contrary to the law and the regulations of the «Model». 

In 2008 the «Model» was also extended to crimes connected to violation of the laws on workplace health and 

safety, transnational crimes, conspiracy to handle stolen goods and money-laundering. At its meeting on 

February 3 rd , 2010, the Board of Directors updated the special section of the «Model» on safety. 

The duty of continuously overseeing the effective functioning and enforcement of the «Model», as well as 

proposing amendments, is entrusted to a Compliance Committee, which operates on an autonomous, 

professional and independent basis. 

In accordance with the provisions of the «Model», the Compliance Committee is currently composed of an 

independent director (subsequently appointed Chairman), an external qualified advisor and the company’s 

Internal Auditing manager. 

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EQUITY INVESTMENTS OF DIRECTORS, STATUTORY AUDITORS AND CHIEF OPERATING OFFICERS 

Full name Investee company 

Number of shares 

held at end 

of previous year 

Number of 

shares bought 

Number of 

shares sold 

Number of shares 

held at the end 

of current year 

Giampiero Pesenti Italcementi S.p.A. ordinary: 10,972 1 ordinary: - ordinary: - ordinary: 10,972 1 

savings: 22,698 1 savings: - savings: - savings: 22,698 1 

Pierfranco Barabani Italcementi S.p.A. ordinary: 78,780 2 ordinary: - ordinary: - ordinary: 78,780 2 

savings: 884 savings: - savings: - savings: 884 

Carlo Pesenti Italcementi S.p.A. ordinary: 1,500 1 ordinary: - ordinary: - ordinary: 1,500 1 

savings: 3,000 1 savings: - savings: - savings: 3,000 1 

Ciments Français S.A. ordinary: 50 ordinary: - ordinary: - ordinary: 50 

Giorgio Bonomi Italcementi S.p.A. ordinary: 2,500 ordinary: - ordinary: - ordinary: 2,500 

savings: - savings: - savings: - savings: - 

Federico Falck Italcementi S.p.A. ordinary: 41,600 ordinary: - ordinary: - ordinary: 41,600 

savings: 6,760 savings: - savings: - savings: 6,760 

Danilo Gambirasi Italcementi S.p.A. ordinary: 1,248 ordinary: - ordinary: - ordinary: 1,248 

Italo Lucchini Ciments Français S.A. ordinary: - ordinary: 50 ordinary: - ordinary: 50 

Sebastiano Mazzoleni Italcementi S.p.A. ordinary: 7,352 ordinary: - ordinary: - ordinary: 7,352 


Yves René Nanot Ciments Français S.A. ordinary: 89,550 ordinary: - ordinary: - ordinary: 89,550 

Attilio Rota Italcementi S.p.A. ordinary: 108,186 3 ordinary: - ordinary: - ordinary: 108,186 3 

Emilio Zanetti Italcementi S.p.A. ordinary: 30,602 4 ordinary: - ordinary: - ordinary: 30,602 4 

Carlo Bianchini Italcementi S.p.A. ordinary: 4,500 ordinary: - ordinary: - ordinary: 4,500 

Mario Comana Italcementi S.p.A. ordinary: 2,500 ordinary: - ordinary: - ordinary: 2,500 

1 shares held by spouse 

2 shares held in part directly and in part by spouse 

3 shares held in part directly (in part with only usufruct and voting rights) and in part by spouse 

4 of which 26,442 ordinary shares with only usufruct and voting rights 


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Compliance with the CONSOB Regulation on Markets 

The CONSOB Regulation on Markets provides for specific provisions governing listed companies: 

A) that control companies whose registered office is in a non-European Union state (art. 36) 

B) that are subject to management and coordination activity by another company (art. 37). 

In particular, the companies as set out in lett. A) are required to: 

1) disclose the accounts of non-EU subsidiaries drawn up for the purposes of the consolidated financial 

statements, including at least the balance sheet and the income statement; 

2) gathernon-EU subsidiaries by-laws, composition and powers of the corporate bodies; 

3) check that the non-EU subsidiaries: 

* provide the parent company external auditor with the information needed to audit the annual and interim 

accounts of the parent company, 

* have an administrative-accounting system consistent to provide the management and external auditor of 

the parent company, on a regular basis, with the business, financial and equity information needed to 

draft the consolidated financial statements. 

The companies set out at lett. B), on the other hand, may be admitted for trading on a regulated Italian market 

(or maintain their listing) where they: 

a) have fulfilled the disclosure obligations envisaged by article 2497-bis of the Italian Civil Code; 

b) are free to negotiate in dealings with customers and suppliers; 

c) do not have, with the company that exercises administration and control activity or with other companies of 

the group, a centralized treasury management agreement, which is not in their corporate interest. The 

correspondence with the corporate interest is certified by the Board of Directors with a detailed declaration 

verified by the Board of Statutory Auditors; 

d) have a Board of Directors composed mainly of independent directors (pursuant to the Code of Conduct) and 

an Internal Control Committee consisting solely of independent directors. Where appointed, also the other 

committees, as recommended by corporate governance codes promoted by regulated market managers or 

by category associations, shall consist solely of independent directors. 

In reference to the provisionsset out at art. 36, at Italcementi S.p.A., the scope of application involves 37 

subsidiaries, located in 13 countries that are not part of the European Union. 

A suitable procedure has, therefore, been established to guarantee: 

* the transmission of the accounts of the subsidiaries drawn up for the purposes of the consolidated financial 

statements, to enable such accounts to be disclosed; 

* the centralized gathering of the by-laws, the composition and powers of the corporate bodies of the 

mentioned subsidiaries. 

The procedure also provides for the documentation in question to be regularly updated. 

All the by-laws of subsidiaries located in countries that do not belong to the European Union, which are 

relevant for the purposes of the regulation in question, as well as the composition and powers of the corporate 

bodies have been acquired and are held in the company records. 

Additionally, it has been verified that the subsidiaries based in countries that are not part of the European 

Union: 

* provide the company’s external auditor with the information needed to verify the annual and interim accounts 

of Italcementi S.p.A., 

* have an administrative-accounting system suitable to provide the management and external auditor of the 

203 


parent company, on a regular basis, with the business, financial and equity information needed to draft the 

consolidated financial statements. 

In addition, pursuant to art. 37 of the Market Regulation, Italcementi S.p.A., a subsidiary subject to 

management and coordination activity by Italmobiliare S.p.A.: 

- has fulfilled the disclosure obligations envisaged by art. 2497-bis of the Italian Civil Code; 

- is free to negotiate in dealings with customers and suppliers; 

- does not have a centralized treasury management agreement with Italmobiliare S.p.A.; 

- has a Board of Directors which consists mainly of independent directors and, with the exception of the 

Remuneration Committee, all the Committees set up among the Board of Directors consist solely of 

independent directors. However, this last provision, introduced with CONSOB resolution no. 17389 of June 

23 rd ,2010, provides that companies comply with the new formulation within thirty days of the first 

shareholders’ meeting called after October 1 st , 2010, to renew the Board of Directors. 

Incentive plans for directors and managers 

Below is a description of the stock option plans for directors and managers and the long-term monetary 

incentives plan linked to the appreciation of the Italcementi share price for current managers at Italcementi 

S.p.A. 

During 2010 none of the company directors or managers who are beneficiaries of the stock option plans 

arranged to exercise rights that had already vested. 

Stock option plan for directors - 2001 

In execution of the Shareholders’ resolution of April 24 th , 2001, the Board of Directors, at its meeting of May 9 th , 

2001, approved a stock option plan for directors vested with special powers in compliance with the articles of 

association or who have specific operational functions. With the Shareholders’ resolution of June 20 th , 2007, 

this Plan was replaced, for the part that had not been implemented, by the «Stock option plan for directors - 

2007». 

No options were exercised during the year. 

In execution of this stock option plan for directors, a total amount of 1,339,825 options have been granted or 

0.47% of the share capital; the options granted at December 31 st , 2008, and not yet exercised numbered 

960,900. 

The main features of the plan are indicated below. 

a) Reasons for introduction of the plan 

The plan reflects the desire to tie the overall remuneration of plan recipients to the medium/long-term 

performance of the company and the creation of shareholder value, and also to reward achievement, by 

creating the conditions to maximize the involvement of all the company management in reaching the 

company’s goals. 

b) Plan recipients 

Plan recipients are some members of the Board of Directors of Italcementi S.p.A. and its subsidiaries who 

hold specific positions in compliance with the articles of association or who have specific operating 

functions. 

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Annexes 218 

c) Quantity of options to be granted 

The quantity of options to be granted to each recipient will be defined by the Board of Directors of 

Italcementi S.p.A. upon proposal of the Remuneration Committee and is subject to the regulations on 

conflicts of interest. 

The options, if exercised, give the right to subscribe or buy shares at a rate of 1:1. 

d) Term and objectives 

The plan envisages annual granting cycles; the options may be exercised in a period between the fourth 

and tenth year following assignment. 

Nonetheless, in the case of a director whose office expires and is not subsequently renewed, the options 

may be exercised immediately, provided that it is within the maximum term of 10 years from the grant. 

The granting of options depends on the results achieved in relation to the objectives set by the Board of 

Directors. These objectives will be notified to the recipients. 

e) Procedures and conditions of the plan 

The exercise of option rights is subordinate to the condition that the benefiting director has duly completed 

their office during which the options were granted and has not resigned early and his/her position has not 

been revoked by the Shareholders’ Meeting. 

The options are nominative, personal and non-transferable, except as provided in the case of death. 

The total number of Italcementi shares reserved to cover the plan has been set at 3,000,000 shares. 

f) Share capital increase; disposal of shares 

In the case of options for subscription of shares, the Board of Directors, by virtue of the powers entrusted 

with by the Shareholders’ Meeting, will resolve upon the increase of share capital against consideration by 

issuing shares to be reserved, pursuant to art. 2441, paragraph 5, of the Italian Civil Code, for members of 

the Board of Directors of Italcementi S.p.A. and/or its subsidiaries and to be issued at a price equal to the 

mean market share price in the period between the date of the rights offered and the same day in the 

preceding month. To this end, the external auditors have issued a positive judgment on the suitability of the 

issue price for the new shares, as required by art. 158 of Consolidated Law on Finance. 

Similarly, in the case of share purchase options, the Board of Directors, by virtue of the authorization to 

acquire and dispose of treasury shares approved by the Shareholders’ Meeting, will sell Italcementi shares 

at a price equivalent to the mean market share price in the period between the date of the rights offered and 

the same day in the previous month. 

g) Features of the shares 

The shares held by plan participants following exercise of options will have regular entitlement rights and 

will be sellable as from the start of the fifth year after assignment of the options. 

Italcementi S.p.A. will have a pre-emption right on shares put up for sale. 

In the case of a merger/demerger, assigned options will give the holder the right to subscribe or buy 

Italcementi shares proportionately to the swap rate; in the case of cancellation of Italcementi S.p.A. from the 

stock market list, the term for the exercise of options will be duly brought forward and the shares will be 

immediately sellable. 

h) Other powers granted to the Board of Directors 

The Board of Directors may temporarily suspend the exercise of option rights in specific cases envisaged by 

the Regulation and in the event of specific requirements; it may also modify some conditions of the plan to 

ensure that treatment of recipients is equivalent to that offered initially. 

205 


Stock option plan for directors - 2007 

The Shareholders’ Meeting of June 20 th , 2007, approved a second stock option plan for directors vested with 

special powers in compliance with the articles of association or who have specific operatinal duties. The 

second plan replaces the stock option plan for directors described above, to the extent that the latter has not 

been implemented. 

In relation to this stock option plan, in 2007, the Board of Directors of the company assigned targets to the 

Chairman and the Chief Executive Officer on the basis of which, such targets having been achieved, a variable 

number of options may be exercised after three years, ranging from a minimum of 555,000 to a maximum of 

1,050,000. Should the minimum targets defined by the Board of Directors not be achieved, the recipients lose 

the right to exercise all the options granted. 

At its meeting on March 5 th , 2010, the Board of Directors, upon proposal of the Remuneration Committee, 

having assessed the extent to which the goals originally assigned had been achieved, granted: 

* 401,250 options to the Chairman; 

* 300,000 options to the Chief Executive Officer. 

Both the Chairman and the Chief Executive Officer waived the allocation of stock options in their favor. No new 

option grant has been approved by the Board of Directors. Following the resolution of the Board of Directors 

and the subsequent waiver of the grant by the Chairman and the Chief Executive Officer, there are no 

outstanding options relating to the «Stock option plan for directors - 2007». 

On March 5 th , 2010, the Board of Directors, upon proposal of the Remuneration Committee, decided to grant 

no further stock options under the plan, in light of the plan’s subsequent replacement with a new cash-based 

plan. The Shareholders’ Meeting is asked to resolve upon the formal extinction of the plan. 

Long-term monetary incentive plan for Italcementi S.p.A. directors and managers with strategic 

responsibilities 

With its resolution of February 3 rd , 2011, the Board of Directors, upon proposal of the Remuneration 

Committee and with the agreement of the Committee for Transactions with Related Parties, adopted a «Longterm 

monetary incentive plan for Italcementi S.p.A. directors and managers with strategic responsibilities», the 

main features of which are set out below. 

In execution of this plan, at the meeting on February 3 rd , 2011, the Board of Directors assigned targets to the 

Chairman and Chief Executive Officer for the entire term of their office. In addition, at the meeting of March 4 th , 

2011, targets for 2011-2013 were assigned to the Chief Operating Officer and to the Manager in charge of 

preparing the company’s financial reports. 

In any case, no incentive will be provided unless an acceptable level of results is achieved. Should the results 

far exceed forecasts, the total incentive provided will be higher than that envisaged when assigning targets. 

The main features of the plan are indicated below. 


These can be summarized as follows: 

• to tie overall remuneration of plan recipients to the medium/long-term performance of the company, thus 

rewarding achievement of specific strategic targets, and the consequent creation of value for 

shareholders; 

• ensure complete transparency and compliance with the best practices for the overall remuneration of plan 

recipients. 

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Annexes 218 

b) Management of the plan 

The body responsible for decisions related to the plan is the Board, which passes resolutions upon proposal 

of the Remuneration Committee (hereinafter the Committee), with the technical support of the Manager for 

Human Resources and Organizational Development and, when applicable, subject to the opinion of the 

Committee for Transactions with Related Parties. The functioning mechanism of the plan will be aligned, 

with the necessary adjustments suggested by the Committee, with the mechanism adopted for the annual 

incentive plan (points system, a minimum entry threshold, a target objective and a maximum target). 

In particular, the Board will be responsible for: 

i) identifying the individual participants for each cycle; 

ii) establishing the amount of the long-term monetary incentive for each participant; 

iii) approving for each participant the individual targets for each cycle, failure to achieve which automatically 

terminates assignment of the incentive; 

iv) confirming the level of achievement of the targets by each participant; 

v) approving, where necessary, the changes proposed to the plan’s operating mechanism. 

The assessment as to whether review the plan is left to the Board’s common sense. 

c) Plan recipients 

Plan recipients are some Italcementi S.p.A. directors and managers with strategic responsibilities. 

The plan is offered to participants in consideration of the particular importance of the functions they have 

been assigned in terms of achieving the company’s strategic objectives. 

The eligibility condition, which is required on being admitted to the monetary incentive, is that of being a 

member of the company’s Board or of holding a position as manager with strategic responsibilities. 

d) Term and restrictions on the plan 

The plan has a term of 3 (three) three-year cycles from 2010 to 2019. The term of the first cycle is set: i) for 

directors 2010-2012; ii) for managers with strategic responsibilities who have been identified by the 

company Board of Directors (hereafter the Board) 2011-2013. 

The Board will establish for each participant, upon proposal of the Committee and, when applicable, subject 

to the judgment of the Committee for Transactions with Related Parties, the amounts of the monetary 

incentive tied to the achievement of the predetermined objectives. These amounts will be established in 

compliance with, among other things, the following criteria: 

i) remuneration practice for senior management in comparable corporations; 

ii) consistency with the principles on which the current “Remuneration Policy” in force at the company is 

based; 

iii) certainty regarding the maximum possible cost for the company, which corresponds to a sub-multiple 

that is significantly lower than the value generated for the company from achievement of the objectives 

connected to the provision of the incentive. 

The entitlement right to receive the premium connected with the Long-term monetary incentive plan, is 

subject to the achievement of the targets, linked to financial, economic and managerial results of the 

Company ant to the other targets specifically assigned to each participant, as defined by the Board at the 

beginning of the single cycle. 

207 


Based on the opinion of the Committee, the Manager for Human Resources and Organizational 

Development, and, when applicable, of the Committee for Transactions with Related Parties, it will be the 

Board’s responsibility to verify and assess the level of achievement of the objectives – which will not be 

linked in any way to the trend/performance of Italcementi’s share price – during the three-year period of 

each cycle, and consequently determine the total incentive effectively accrued by each participant. 

e) Plan implementation procedures and clauses 

The plan envisages the assignment of a monetary incentive to participants, at the end of each three-year 

cycle, once the performance expected and established at the start of the cycle has been verified. The size 

of the incentive will be directly proportional to the level of achievement of the objectives assigned. 

Without prejudice to the Board’s right to decide otherwise, participation in the long-term monetary incentive 

plan pursuant to this regulation is intrinsically and functionally subject to each participant staying in his/her 

role held at the time of the assignment for the whole duration of the cycle. 

Without prejudice to any exceptions for specific cases established by the Board after consulting the 

Committee and, when applicable, subject to the judgment of the Committee for Transactions with Related 

Parties, the following rules will be applied to the situations set out below: 

a) in the case of termination of or change in the office held during the cycle, the Board can, at its discretion, 

based on the opinion of the Committee, and considered the reasons for the termination or change, 

assess the case for the provision of a lump-sum bonus proportional to the period served and the partial 

level of achievement of the assigned objectives; 

b) in the case of the death of the participant during the cycle, the above provision will apply; should death 

occur once the assigned objectives have been achieved, the right to the provision of any incentive 

accrued will be recognized to the participant’s heirs. 

f) Other powers granted to the Board of Directors 

Based on the opinion of the Committee, the Board may temporarily suspend the long-term monetary 

incentive plan in the case of specific and particular needs. 

The suspension of the effects arising from accrual of the right to the bonus connected to the long-term 

monetary incentive plan will also occur whenever arise circumstances such as to influence the conditions 

regulating the application of the plan, and which may alter its economic and financial bases and prejudice its 

objectives as set out above at lett. a). 

The Board may, in all the aforementioned cases and upon opinion of the Committee, effect all the changes 

and additions to be made to the plan, the cycle and this regulation, or order the prescription of the plan itself 

should it no longer be consistent with the company’s situation, without prejudice to any rights that have 

been acquired in the meantime as a consequence of the completion of the whole three-year cycle and at 

the occurrence of the other prerequisites and conditions envisaged by this regulation. 

g) Support for the plan from the special fund to foster employee participation, as per art. 4, 

paragraph 112, of Law no. 350 of December 24, 2003 

Not envisaged. 

208





Annexes 218 

Stock option plan for managers - 2000 

With the resolution of the Board of Directors of March 20 th , 2000, the company approved a stock option plan for 

managers which, with the Shareholders’ resolution of April 28 th , 2008, was replaced, for the part that had not 

been implemented, by the «Stock option plan for senior managers» and by the «Long-term monetary 

incentives plan linked to the appreciation of the Italcementi share price, for managers», the main features of 

which are set out later in this report. 

In execution of this plan, a total amount of 3,483,223 options have been granted to Group managers. 

The above figures do not take account of the options granted to the previous Chief Operating Officer and to the 

Chief Executive Officer when he was a company employee. Including these, the total number of options 

granted is of 4,196,823, or 1.496% of the share capital. 

No options were exercised during the year. 

The options assigned in execution of this plan and not yet exercised are 2,269,316. 

The main characteristics of the plan are indicated below. 


The plan reflects the desire to tie overall remuneration of plan recipients to the medium/long-term 

performance of the company and the creation of shareholder value, and also to enhance managers’ sense 

of belonging, by providing incentives to remain with the company. 

b) Plan recipients 

Plan recipients are some members of the executive staff of Italcementi S.p.A. and of some of its 

subsidiaries, on the payroll at the dates envisaged for the assignment of options, who are designated by the 

Chief Executive Officer of Italcementi S.p.A., in accordance with the criteria defined by the «Remuneration 

Committee» regarding the essential nature of their positions and their organizational level. 

c) Quantity of options to be assigned 

The quantity of options to be granted to each recipient will be established by virtue of the organizational 

level of the individual and the performance of the company and the individual. 

The options, if exercised, give the right to subscribe or purchase shares at a rate of 1:1. 

As a general rule, unexercised option rights will not be recognized – except in the case of retirement – 

should the employment relationship with the Group be terminated. 

In the event of death of the option holder, the options may be exercised by entitled parties within six months 

of the death, provided that the term falls within the period in which the options may be exercised. 

d) Term and objectives 

The plan envisages annual assignment cycles; the options may be exercised in a period between the fourth 

and tenth year following assignment. 

The assignment of options will depend on the results achieved in relation to the objectives set individually. 


The options are nominative, personal and non-transferable, except as provided in the case of death. 

The total number of Italcementi shares reserved to cover the plan has been set at 6,000,000 shares. 

f) Loans or contributions for subscription or purchase of shares 

The management company may notify the names of lending institutes that may be willing to provide loans 

against the shares, to facilitate their subscription or purchase. 

209 


g) Share capital increase; disposal of shares 

In the case of options for the subscription of shares, the Board of Directors, by virtue of the powers granted 

by the Shareholders’ Meeting, will resolve upon the increase of the share capital against consideration for 

an amount equal to the options to be assigned, by issuing shares to be reserved, pursuant to art. 2441, 

paragraph 8 of the Italian Civil Code, for members of the executive staff of Italcementi S.p.A. and its 

subsidiaries, and to be issued at a price equivalent to the mean market share price in the period between 

the date of the rights offered and the same day in the previous month. 

In the case of share purchase options, the company, by virtue of the authorization to acquire and dispose of 

treasury shares approved by the Shareholders’ Meeting, will sell Italcementi shares at a price established 

by the Board of Directors, at the time of the offer, upon proposal of the Chief Executive Officer and 

acknowledged the opinion of the Remuneration Committee. 

h) Features of the shares 

The shares held by plan participants following exercise of options will have regular entitlement rights and 

will be sellable on the market as from the start of the fifth year after assignment of the options. 

Italcementi will have a pre-emption right on shares put up for sale. 

In the case of a merger/demerger, assigned options will give the holder the right to subscribe or buy 

Italcementi shares proportionately to the swap rate; in the case of cancellation of Italcementi S.p.A. from the 

stock market list, the term for exercise of options will be duly brought forward and the shares will be 

immediately tradable. 

i) Other powers granted to the Board of Directors 

The Board of Directors may temporarily suspend the exercise of option rights in specific cases envisaged by 

the Regulation and in the event of specific requirements; it may also modify some conditions of the plan to 

ensure that treatment of recipients is equivalent to that offered initially. 

Stock option plan for senior managers - 2008 

The Shareholders’ Meeting of April 28 th , 2008 approved a second stock option plan for manager which 

replaces, for the part that had not been implemented, the stock option plan for managers described above. 

In connection with this stock option plan, at a meeting on June 4 th , 2008, the company Board of Directors, for 

the period 2008-2010, assigned to the Chief Operating Officer and 10 managers a total number of options 

between a minimum of 1,180,000 and a maximum of 2,000,000. If the minimum objectives set by the Board of 

Directors are not achieved, the beneficiary loses the right to exercise the options assigned. 

At its meeting of March 4 th , 2011, upon proposal of the Remuneration Committee, the Board of Directors, 

assessed the extent to which the performance targets originally assigned had been achieved, granted 375,000 

options to the Chief Executive Officer and 80,000 options to the Manager in charge of preparing the company’s 

financial reports. 



These may be summarized as follows: 

• to tie the overall treatment of participants to the Group’s medium/long-term performance and the creation 

of value for shareholders; 

• to reward the results achieved by each participant, by creating the conditions to maximize the involvement 

of all the company management in the Group’s future and enhancing their sense of belonging by 

providing incentives to remain with the company. 

210





Annexes 218 


The body responsible for decisions relating to the plan (without prejudice to the prerogatives of the 

Shareholders’ Meeting) is the Board of Directors, which delegates the operational management of the plan 

to the Chief Executive Officer, with the technical support of the Manager for Human Resources and 

Organizational Development. 

In particular, the Chief Executive Officer is responsible for: 

i) defining the maximum number of options that may be granted during the cycle; 

ii) identifying the individual participants and setting the number of options to be granted to each 

participant during the cycle; 

iii) setting the exercise price of the option. 

Administration of the plan is entrusted to Compagnia Fiduciaria Nazionale S.p.A., Galleria De Cristoforis 3, 

20122, Milan, which will operate in compliance with the Regulation. 


Plan recipients are senior managers of the company, of its Italian and foreign subsidiaries or of its parent 

company, identified by the Chief Executive Officer. 

d) Term and restrictions on availability on shares and granted option rights 

The plan has a duration of three three-year cycles from 2008 to 2016. 

The end of the plan is set at the end of the tenth year following the allocation of the options of the last threeyear 

cycle (2014-2016) 

For the 3 years of the cycle, starting from the initial grant date, the options themselves are subject to a 

vesting period, i.e., they cannot be exercised. 

The Chief Executive Officer will establish the maximum number of options to be assigned to each of the 

participants on the basis of an overall assessment which, after taking into account the general performance 

of the company as an essential plan prerequisite and the strategic and organizational position of each 

participant’s role for the purposes of achieving the Group’s strategic objectives, will consider: 

i) consistency with the total rewarding principles on which the Group’s remuneration policy is based, 

ii) the company performance in the period, 

iii) the share price trend and related fair value. 

The vesting of the options granted to each beneficiary is subordinate to the achievement of objectives tied 

to the financial and operational results and to other individual objectives aassigned specifically to the 

beneficiary. 

The options granted to the beneficiaries, once exercised in accordance with the terms, procedures and 

conditions envisaged by the Regulations, give the right to subscribe or purchase shares at a rate of 1:1. 

The options, unless otherwise envisaged by the Regulations, may be exercised for a period of time between 

the start of the fourth year and the end of the tenth year following the grant. 

After subscription or purchase following the exercise of the options, the shares: 

• if subscribed or purchased in the 4 th year following the offer of the options will be tradable as from the 

start of the 5th year, but will be eligible for dividends and voting rights at the company Shareholders’ 

Meeting as from the year of subscription or purchase; 

• if subscribed or purchased from the 5 th year following the offer of the options, may be traded immediately 

by the beneficiaries on the market through the certifier. 

Options may be exercised separately. 

Options that have not been exercised at the end of the tenth year following the grant will automatically 

expire. 

211 


Italcementi S.p.A. will have a pre-emption right on the shares put up for sale. 


The plan envisages the offer of i) purchase options – which will be transferred by the company, in 

accordance with the authorization granted by the ordinary Shareholders’ Meeting for the purchase and 

disposal of treasury shares under art. 2357 and 2357-ter of the Italian Civil Code - and ii) subscription 

options – to be issued by the Board of Directors, in accordance with the delegated power granted under art. 

2443 of the Italian Civil Code by the extraordinary Shareholders' Meeting to increase share capital 

excluding option rights, under art. 2441, paragraph 5, Italian Civil Code. 

The vesting of the options granted to each plan beneficiary and which form part of the plan is subordinate to 

the achievement of objectives tied to the financial and operational results and to other individual objectives 

attributed specifically to the beneficiary. 

The options are nominative and non-transferable. 

In the event of: 

a) termination of the employment relationship due to dismissal or resignation once the vesting period is over 

but before exercise of the options, the general principle will be applied and therefore the beneficiary will 

definitively and automatically lose the right to subscribe or purchase the shares underlying the options; 

b) consensual termination of the employment relationship, resignation upon retirement, or due to invalidity 

once the vesting period is over but before exercise of the options or regarding a beneficiary who in the 

period achieved the objectives assigned, the beneficiary will retain the right to exercise the unexercised 

options in compliance with the terms and procedures envisaged in the Regulations; 

c) the death of the beneficiary once the vesting period is over but before exercise of the options, or 

regarding a beneficiary who in the period achieved the objectives assigned, the options may be exercised 

by the beneficiary’s heirs subject to presentation of documentation certifying their status. 

During the vesting period, should the assignee be transferred from the company to its Italian and foreign 

subsidiaries or the parent company or between the subsidiaries and the parent company, regardless of the 

manner in which the transfer takes place, or should the assignee’s organizational position be changed with 

a subsequent change in their responsibilities, the performance objectives will be updated in line with the 

new responsibilities. 

f) Procedure for determination of the share subscription or purchase price 

The exercise price for the options is the full market price and is determined on the basis of the arithmetic 

mean of the prices recorded on the regulated market managed by Borsa Italiana in the period between the 

day of the offer and the same day of the previous month, divided by the number of days the share price was 

in fact listed. 

g) Features of the shares 

In the case of a merger/demerger of the company with other companies, the options already granted and 

vested will have the right to subscribe or purchase shares of the company ensuing from the 

merger/demerger in proportion to the swap rate adopted. 

In the case of cancellation of the company from the stock market list, beneficiaries will be guaranteed the 

opportunity to exercise the options in advance of the date envisaged for the end of trading of the underlying 

shares on the regulated market. Should the beneficiary make use of this opportunity, shares subscribed or 

purchased by the beneficiaries and shares already subscribed or purchased but subject to restrictions on 

their availability as per the Regulations, will be immediately tradable. 

In the case of a change in the ownership of the company or a public tender offer or a swap involving the 

shares, the options that have already vested remain unaltered as envisaged by the Regulations. 

212





Annexes 218 

h) Other powers granted to the Board of Directors 

The Chief Executive Officer may temporarily suspend the exercise of options in the case of specific 

requirements, for example but not limited to, amendments to the laws and regulations, excluding fiscal laws 

and regulations, applicable to the legal connection arising from the plan. 

The exercise of options will also be suspended whenever particular circumstances arise, for example but 

not limited to, mergers/demergers affecting the company’s share capital, increases/decreases in the 

company’s share capital, changes to the by-laws affecting shares such as to influence the conditions 

governing application of the plan, which may alter its economic and financial pre-requisites and prejudice its 

aims. 

In any case the beneficiaries will receive advance notice of the suspension. 

i) Support for the plan from the special fund to foster employee participation, as per art. 4, 



Long-term monetary incentives plan linked to the appreciation of the Italcementi share price, for 

managers 

This plan was approved by the Shareholders’ Meeting of April 28 th , 2008. 

At a meeting on June 4 th , 2008, the company Board of Directors, for the three-year period 2008-2010, granted 

to 20 managers a total number of rights between a minimum of 180,000 and a maximum of 300,000. If the 

minimum targets set by the Board of Directors are not achieved, the beneficiary loses the right to obtain 

payment of the entire cash bonus. 



These may be summarized as follows: 

• to tie the overall treatment of assignees to the Group’s medium/long-term performance and the creation of 

value for shareholders; 

• to reward the results achieved by each assignee, by creating the conditions to maximize the involvement 

of all the company management in the Group’s future and enhancing their sense of belonging by 

providing incentives to remain with the company. 


The body responsible for decisions relating to the plan is the Board of Directors which delegates the 

operational management of the plan to the Chief Executive Officer, with the technical support of the 

Manager for Human Resources and Organizational Development. 

In particular the Chief Executive Officer is responsible for: 

i) defining the maximum number of rights to participate in the long-term monetary incentives plan linked 

to the appreciation of the share price that may be assigned in total during the cycle; 

ii) identifying the individual assignees for each cycle and establishing the number of rights to participate in 

the long-term monetary incentives plan linked to the appreciation of the share price, granted to each 

assignee; 

213 


iii) approving for each assignee the individual targets for each cycle, failure to realize which will cause 

termination of rights to participate in the long-term monetary incentives plan linked to the appreciation of 

the share price granted to the assignee as part of the cycle, with consequent loss of the right to receive 

the cash bonus connected to the rights; 

iv) confirming the level of achievement of targets by each assignee; 

v) determining the start date of the period of availability. 

The plan is administered by the company’s Human Resources and Organizational Development Division. in 

compliance with the Regulation. 


Plan recipients are managers of the company identified by the Chief Executive Officer, to whom rights are 

granted to participate in the long-term monetary incentives plan linked to the appreciation of the share price. 

d) Term and restrictions on availability of shares and granted rights 

The plan has a term of three three-year cycles from 2008 to 2016. 

The end of the plan is set at the end of 2017 (the first year following the end of the last three-year cycle). 

The Chief Executive Officer will set, under the plan, the number of rights to be granted to each of the 

assignees on the basis of an overall assessment which, after taking into account the general performance 

of the company as an essential prerequisite and the strategic and organizational position of each assignee’s 

role for the purposes of achieving the company’s strategic objectives, will consider: 

i) the company performance in the period, 

ii) the position of the assignee within the organizational structure 

iii) consistency with the total rewarding principles on which the Group’s remuneration policy is based. 

The vesting of the rights assigned to each beneficiary is subordinate to the achievement of objectives tied to 

the financial and operational results and to other individual objectives attributed specifically to the 

beneficiary. 

The Chief Executive Officer, with the support of the Human Resources and Organizational Development 

Division, will be responsible for checking and assessing, during the cycle, the level of achievement of the 

objectives, and consequently for determining the total rights to participate in the plan as previously assigned 

to each beneficiary. 

e) Procedures for determining the value of rights and plan conditions 

The plan envisages the offer to assignees, free of charge, of rights to participate in the plan which, once 

vested in line with the requirements and conditions of the Regulation, will allow assignees to receive 

payment of a cash bonus equal to the value of the shares, determined on the basis of the mean official 

share price on the market managed by Borsa Italiana in the thirty calendar days preceding the payment 

date. 

The participation rights are nominative and non-transferable. 

In the event of: 

a) termination of the employment relationship due to dismissal or resignation once the performance 

monitoring period is over but before the start of the period of availability, the general principle will be 

applied and therefore the assignee will definitively and automatically lose the right to receive the cash 

bonus connected to the participation rights in the long-term monetary incentives plan linked to the 

appreciation of the share price assigned but not yet vested; 

b) consensual termination of the employment relationship, resignation upon retirement, or due to invalidity, 

after completion of the performance monitoring period, or when the assignee has achieved the 

214





Annexes 218 

objectives assigned, the assignee will maintain the right to receive the cash bonus connected to the 

participation rights in the long-term monetary incentives plan linked to the appreciation of the share price 

assigned but not yet vested, should the rights in question vest after termination of the employment 

relationship; 

c) the death of the beneficiary after the end of the performance monitoring period or after the assigned 

objectives have been achieved, the rights to participate in the long-term monetary incentives plan linked 

to the appreciation of the share price granted to the assignee under the plan that may have vested will 

be assigned to the assignee’s heirs subject to presentation of documentation certifying their status. 

During the assignment cycle, should the assignee be transferred between the company to its Italian and 

foreign subsidiaries or the parent company or between the subsidiaries and the parent company, regardless 

of the manner in which the transfer takes place, or should the assignee’s organizational position be 

changed with a subsequent change in their responsibilities, the performance objectives will be updated in 

line with the new responsibilities. 

The Chief Executive Officer shall in any case have the right to determine an equitable amount to be paid to 

the assignee in relation to the work carried out. 

For each three year cycle a maximum of 223,000 plan participation rights may be assigned. 

f) Other powers granted to the Board of Directors 

The Chief Executive Officer may temporarily suspend the effects arising from vesting of the plan 

participation rights in the case of specific requirements, for example but not limited to, amendments to the 

laws and regulations, excluding fiscal laws and regulations, applicable to the legal connection arising from 

the plan 

The effects arising from the vesting of the plan participation rights will also be suspended whenever 

particular circumstances arise, for example but not limited to, mergers/demergers affecting the company’s 

share capital, increases/decreases in the company’s share capital, changes to the by-laws affecting shares 

such as to influence the conditions governing the application of the plan, which may alter its economic and 

financial pre-requisites and prejudice its aims. 

In any case the assignees will receive advance notice of the suspension. 

g) Support for the plan from the special fund to foster employee participation, as per art. 4, 



215 


216

Annexes 

217 


Annex 1 

Highlights from the most recent financial statements of Italmobiliare S.p.A. 

(the company that exercises management control and coordination) 

(euro) 

Balance sheet 12/31/2009 12/31/2008 

Total non-current assets 1,438,571,112 1,422,652,654 

Total current assets 165,699,467 171,058,177 

Total Assets 1,604,270,579 1,593,710,831 

Shareholders' equity: 

Share capital 100,166,937 100,166,937 

Reserves 361,023,358 233,939,267 

Treasury shares, at cost (21,226,190) (21,226,190) 

Retained earnings 843,441,182 790,798,990 

Total shareholders' equity 1,283,405,287 1,103,679,004 

Total non-current liabilities 268,481,204 281,398,216 

Total current liabilities 52,384,088 208,633,611 

Total Liabilities 320,865,292 490,031,827 

Total Shareholders' equity and Liabilities 1,604,270,579 1,593,710,831 

Income statement 12/31/2009 12/31/2008 

Revenues 92,179,600 116,658,696 

Operating expenses, other operating income (expense) (27,479,219) (58,273,136) 

Recurring EBITDA 64,700,381 58,385,560 

Other non-recurring income (expense) 3,034,058 98,026 

EBITDA 67,734,439 58,483,586 

Amortization and depreciation (64,170) (56,639) 

EBIT 67,670,269 58,426,947 

Finance income (costs) (22,146) (83,078) 

Impairment variation on financial assets (19,727,777) (84,624,065) 

Profit before tax 47,920,346 (26,280,196) 

Income tax 4,721,851 2,890,484 

Net profit for the period 52,642,197 (23,389,712) 

218





Annexes 218 

Annex 2 

Compensation paid to Directors, Statutory Auditors, the Chief Operating Officer and the 

Manager in charge of preparing the financial reports, for 2010 

The compensation shown in the table is recognized on an accruals basis. 

Therefore, in compliance with the CONSOB Regulation for Issuers and Communication no. 11012984 of 

February 24, 2011, the column shows: 

* Remuneration for post is shown for individual items and, specifically (i) for directors including any unpaid 

amounts; (ii) for the statutory auditors their fee for the year; 

* Non-monetary benefits include fringe benefits (based on a taxable income criterion) including insurance 

policies; 

* Bonuses and other incentives include remuneration amounts accruing on a non-recurring basis; 

* Other compensation includes for individual items (i) remuneration for posts held in listed and non-listed 

subsidiaries; (ii) any consideration for professional services in favor of the company and/or its subsidiaries; 

(iii) remuneration for work as an employee (gross of social security and tax charges paid by the employee. 

excluding compulsory social security charges paid by the company and leaving entitlements) and (iv) end-ofterm 

payments. 

It should also be noted that: 

- a portion of the compensation attributed to the Chairman, the Executive Deputy Chairman, the Chief 

Executive Officer, the Chief Operating Officer and the Manager in charge or preparing the financial reports is 

variable and depends on the company’s business results or attainment of specific targets; 

- the entire remuneration for the Chief Executive Officer Carlo Pesenti (who is also Chief Operating Officer of 

the parent company Italmobiliare S.p.A., where he is also employed as a senior manager) and the share of 

the profits and other fees to which Mr Pesenti is entitled, are paid over to the company by which he is 

employed and absorbed in the remuneration paid to him by that company. 

219 



Full name Post held Period 

for which 

post held 

Expiry 

of term 

Remuneration 

for 

post 

Non-monetary 

benefits 

Bonuses 

and other 

incentives 

Other 

compensation 

Giampiero Pesenti Chairman 1.1 - 12.31 2012 1,640.0 57.0 - 2.069,0 Contract 

bonus 

38.5 Other 

positions 

162.5 Annuity 

Member of Exec. Cttee 1.1 - 12.31 0.0 

Pierfranco Barabani Exec. Dep. Chairman 1.1 - 12.31 2012 216.9 2.4 - 50.0 Other positions 


Carlo Pesenti Chief Executive Officer 1.1 - 12.31 2012 2,133.0 - - 32.0 Other positions 


Alberto Bombassei Director 1.1 - 12.31 2012 0.0 - - - 

Membro of 

Remuneration Cttee 4.16 - 12.31 2012 9.7 

Giorgio Bonomi Director 4.16 - 12.31 2012 0.0 - - - 

Antonio Carosi Director 4.16 - 12.31 2012 0.1 - - - 

Alberto Clô Director 1.1 - 12.31 2012 0.5 - - - 

Member of Internal 

Control Cttee 1.1 - 12.31 2012 35.0 

Member of Cttee 

Dealings w/Rel. Parties 9.17 - 12.31 2012 - 

Federico Falck Director 1.1 - 12.31 2012 0.3 - - - 

Member of Exec. Cttee 4.16 - 12.31 2012 0.0 


Control Cttee 1.1 - 12.31 2012 35.0 



Pietro Ferrero Director 1.1 - 12.31 2012 0.2 - - - 

Danilo Gambirasi Director 1.1 - 12.31 2012 0.0 - - 90.0 Other positions 

1.3 Bonuses 

guaranteed by 

subsidiaries 

Karl Janjöri Director 1.1 - 4.16 2009 0.0 - - - 

Member of 


Italo Lucchini Director 1.1 - 12.31 2012 0.0 - - 38.2 Other positions 

Member of 


Emma Marcegaglia Director 1.1 - 4.16 2009 0.0 - - - 

Sebastiano Mazzoleni Director 1.1 - 12.31 2012 0.0 - - 32.0 Other positions 

Yves René Nanot Director 1.1 - 12.31 2012 0.0 3.8 - 285.0 Other positions 


Marco Piccinini Director 1.1 - 12.31 2012 0.2 - - - 

Ettore Rossi Director 1.1 - 12.31 2012 0.0 - - 40.1 Other positions 

1.4 Bonuses 

guaranteed by 

subsidiaries 

Member of 

Compliance Cttee 1.1 - 12.31 2012 40.0 

220





Annexes 218 


Full name Post held Period 

for which 

post held 

Expiry 

of term 

Remuneration 

for 

post 

Non-monetary 

benefits 

Bonuses 

and other 

incentives 

Other 

compensation 

Attilio Rota Director 1.1 - 12.31 2012 0.2 - - - 



Control Cttee 1.1 - 12.31 2012 35.0 

Member of 




Carlo Secchi Director 1.1 - 12.31 2012 0.4 - - - 


Control Cttee 1.1 - 12.31 2012 35.0 



Elena Zambon Director 4.16 - 12.31 2012 0.2 - - - 

Emilio Zanetti Director 1.1 - 12.31 2012 0.0 - - - 

Member of 





Chief Operating 

Officer 

Mgr in charge 

of preparing 

financial reports 

Chairman Board of 

Statutory Auditors 

1.1 - 12.31 - 673.0 24.7 3.2 1,268.0 Salary 

18.0 Other positions 

1.1 - 12.31 - - 2.7 0.9 489.0 Salary 

1.1 - 12.31 2011 71.4 - - - 

Mario Comana Acting auditor 1.1 - 12.31 2011 47.1 - - - 

Luciana Gattinoni Acting auditor 1.1 - 12.31 2011 47.2 - - - 

221 


STOCK OPTIONS GRANTED TO DIRECTORS 

AND CHIEF OPERATING OFFICERS 

ITALCEMENTI S.p.A. 

Plan for directors – 2001 

Options held 

at start of year 

Options granted 

during year 

Options exercised 

during year 

Options 

expired 

in year 

Options held 

at end of year 

A B 1 2 3 4 5 6 7 8 9 10 

Full name Post held Number 

of 

options 

Giampiero 

Pesenti 

Carlo 

Pesenti 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

market 

price on 

exercise 

Number 

of 

options 

11= 

1+4 

-7-10 

Number 

of 

options 

12 13 

Average 

exercise 

price 

Chairman 450,000 17.775 2013 - - - - - - - 450,000 17.775 2013 

Chief Executive 

Officer 

420,000 18.697 2013 - - - - - - - 420,000 18.697 2013 

Average 

expiry 

Plan for directors - 2007 (*) 

Options held 



during year 


during year 

Options 

expired 

in year 

Options held 


A B 1 2 3 4 5 6 7 8 9 10 


of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

market 

price on 

exercise 

Number 

of 

options 

11= 

1+4 

-7-10 

Number 

of 

options 

12 13 

Average 

exercise 

price 

Average 

expiry 

Giampiero 

Pesenti 

Chairman 

from 

255,000 

to 450,000 

23.706 2012 401,250 23.706 2012 - - - - - - - 

Carlo 

Pesenti 

Chief Executive 

Officer 

from 

300,000 

to 600,000 

23.706 2012 300,000 23.706 2012 - - - - - - - 

(*) 

pursuant to the regulation approved by the Shareholders’ Meeting of June 20, 2007, the exercise of options is subordinate to 

the attainment of the targets set by the Board of Directors over a three-year cycle. 

The company’s Board of Directors, at its meeting of March 5, 2010, at the proposal of the Remuneration Committee, assessed 

the level of attainment of the performance targets originally allocated at the start of the three-year cycle and granted: 

* 401,250 options to the Chairman; 

* 300,000 options to the Chief Executive Officer. 

Both the Chairman and the Chief Executive Officer waived the option grant in their favor. 

No new option grants have been approved by the Board of Directors. 

Following the decision of the Board of Directors and the subsequent waiving of the grant by the Chairman and the Chief 

Executive Officer, there is no outstanding option relating to the «Stock option plan for directors - 2007». 

222





Annexes 218 

Plan for managers – 2001 

Options held 



during year 


during year 

Options 

expired 

in year 

Options held 


A B 1 2 3 4 5 6 7 8 9 10 


of 

options 

Carlo 

Bianchini 

Manager in charge 

of preparing the 


Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

market 

price on 

exercise 

Number 

of 

options 

11= 

1+4 

-7-10 

Number 

of 

options 

12 13 

Average 

exercise 

price 

48,490 16.586 2013 - - - - - - - 48,490 16.586 2013 

Average 

expiry 

Plan for managers – 2008 

Options held 



during year 


during year 

Options 

expired 

in year 

Options held 


A B 1 2 3 4 5 6 7 8 9 10 


of 

options 

Giovanni 

Ferrario 

Carlo 

Bianchini 

Chief Operating 

Officer 

Manager in charge 

of preparing the 


from 

300,000 

to 500,000 

from 

60,000 

to 100,000 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

market 

price on 

exercise 

Number 

of 

options 

11= 

1+4 

-7-10 

Number 

of 

options 

12 13 

Average 

exercise 

price 

Average 

expiry 

13.355 2014 375,000 13.355 2014 - - - - 375,000 13.355 2014 

13.355 2014 80,000 13.355 2014 - - - - 80,000 13.355 2014 

Notes on the principles and purpose of stock option plans 

See the sections in the Corporate Governance Report on “Stock option plan for directors - 2001”, “Stock option 

plan for directors - 2007”, “Stock option plan for managers - 2000” and “Stock option plan for managers - 

2008”. 

223 


CIMENTS FRANÇAIS S.A. 

Options held 



during year 


during year 

Options 

expired 

in year 

Options held 


A B 1 2 3 4 5 6 7 8 9 10 


of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

expiry 

Number 

of 

options 

Average 

exercise 

price 

Average 

market 

price on 

exercise 

Number 

of 

options 

11= 

1+4 

-7-10 

Number 

of 

options 

12 13 

Average 

exercise 

price 

Average 

expiry 

Yves Renè 

Nanot 

Director 175,000 110.35 2016 - - - - - - - 175,000 110.35 2016 

Notes on the principles and purpose of stock option plans 

The stock option plan serves the dual purpose of correlating senior management incentives with company 

performance and of strengthening senior management’s loyalty to and interest in the company. It envisages 

subscription by senior managers of a specified number of Ciments Français shares, at special conditions. 

Under the regulation: 

- granted options may not be exercised earlier than 3 years after the date of the Board of Directors’ resolution 

that approved the benefit; 

- shares issued on exercise of options are unavailable for one year; 

- the subscription price is set at 95% of the average price in the twenty trading sessions preceding the Board 

of Directors’ resolution that approved the benefit; 

- options that are not exercised within 10 years of the Board of Directors’ resolution lapse.

Representation form pursuant to art. 154-bis, par. 5 TUF in relation to the separate 

financial statement (pursuant to art. 81-ter of Consob Regulation n° 11971/99, and 

subsequent modifications and integrations) 

1. The undersigned Carlo Pesenti, Chief Executive Officer and Carlo Bianchini, the Manager in 

charge of preparing the company’s financial reports, of Italcementi S.p.A., having also taken into 

account the provisions of Article 154-bis, paragraphs 3 and 4, of the Italian Legislative Decree 

February no. 58 of 24 February 1998, hereby certify: 

the adequacy in relation to the legal entity features and 

the effective implementation 

of the administrative and accounting procedures for the preparation of the separate financial 

statement over the course of the period from January 1 st , 2010 and December 31 st , 2010. 

2. The representation of the adequacy of the administrative and accounting procedures adopted 

in the preparation of separate financial statements as at December 31 st , 2010 is based on a form 

identified by Italcementi according to the CoSO framework (illustrated in the CoSO Report) and 

also takes into account the document “Internal Control over Financial Reporting – Guidance for 

Smaller Public Companies”, both issued by the Committee of Sponsoring Organizations of the 

Treadway Commission, representing a generally accepted international framework. 

3. It is also certified that: 

3.1 the separate financial statement: 

a) has been drawn up in accordance with the international accounting standards recognised 

in the European Union under the EC regulation 1606/2002 of the European Parliament 

and of the Council of 19 July 2002; 

b) is consistent with the entries in the accounting books and records; 

c) is capable of providing a true and fair representation of the assets and liabilities, profits 

and losses and financial position of the issuer and the group of companies included in 

the consolidation. 

3.2 The directors’ report includes a reliable analysis of the performance and the results of 

operations, and the overall situation of the issuer and the group of companies included in 

the consolidation, together with a description of the main risks and uncertainties they are 

exposed to. 

Signed by: Carlo Pesenti, Chief Executive Officer 

Signed by: Carlo Bianchini, Manager in Charge 

March 4 th , 2011 

This report has been translated into the English version solely for the convenience of international readers 

225 


Corporate bodies resulting from the appointments of April 19, 2011 



Giampiero Pesenti 1 Chairman 

Pierfranco Barabani 1 Executive Deputy Chairman 

Carlo Pesenti 1-2 Chief Executive Officer - CEO 

Alberto Bombassei 4-7 


Antonio Carosi 7 

Alberto Clô 3-5-6-7 

Federico Falck 1-5-6-7 


Lorenzo Renato Guerini 7 

Italo Lucchini 4 


Yves René Nanot 1 


Ettore Rossi 7-8 

Attilio Rota 1-5-6-7 

Carlo Secchi 5-6-7 

Elena Zambon 7 

Emilio Zanetti 4-7 

Paolo Santinoli 9 Secretary to the Board 



Acting Auditors 


Mario Comana 


Substitute Auditors 






KPMG S.p.A. 

Chairman 

Chief Operating Officer - COO 

Manager in charge of preparing 

the company’s financial reports 

Independent Auditors 

1 Member of the Executive Committee 

2 Executive Director responsible for supervising the internal control system 

3 Lead independent director 

4 Member of the Remuneration Committee 

5 Member of the Internal Control Committee 

6 Member of the Committee for Dealings with Related Parties 

7 Independent director (in accordance with the Voluntary Code of Conduct and Legislative Decree no.58 of February 24, 1998) 

8 Member of the Compliance Committee 

9 Secretary to the Executive Committee

April 2011 

Project of LSVmultimedia 

Olginate - Lecco

italcementi S.p.A. 

Via G. Camozzi, 124 

24121 Bergamo - Italy 

Tel: +39 035 396111 

Fax: +39 035 244905

Report 2010 - Italcementi Group

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