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17. Provisions for risks and charges
The changes in the provisions for risks and charges during 2008 are detailed below:
(in thousands of Euro) Equity Testing Litigation Tax Agents’ Restructuring Employee Total
investments and work disputes termination bonuses
performed
indemnities
As of 1 January 2008 31 602 880 22 34 2,029 353 3,951
Increases due to
business combinations 8 270 1,387 2,029 3,694
Provisions 2 332 931 21 2,420 259 3,965
Utilisations (4) (184) (50) (2,639) (306) (3,183)
Releases
Other 22 (22)
As of 31 December 2008 37 1,020 3,170 0 55 3,839 306 8,427
Short term
31 December 2008 14 120 36 3,839 306 4,315
Medium/long term
31 December 2008 23 900 3,134 55 4,112
Short term
31 December 2007 31 184 447 22 2,029 353 3,066
Medium/long term
31 December 2007 418 433 34 885
Provision for risks in relation to testing and work performed
This provision covers risks relating to possible disputes with customers about the reporting of work performed,
principally overtime, that must be approved by them before invoices are issued. During 2008, Euro 184 thousand was
utilised from this provision, while new provisions totalled Euro 332 thousand and business combinations (especially
the Altair Group) contributed a further Euro 270 thousand.
Provision for litigation in progress
The risk of having to make settlements in relation to the litigation in progress with customers, suppliers and employees
is assessed when preparing the financial statements. Certain of these disputes relate to alleged defective work
pursuant to art. 1669 of the Italian Civil Code. These risks and the related provisions were contributed to the Group
on 30 December 2003. In relation to the employees transferred on contribution of the ‘Palladio’ and ‘Fidia’ lines of
business, no provisions have been made in relation to the disputes that arose with them prior to the contribution
dates. In particular, even though the Parent Company is jointly liable together with Manutencoop Soc.Coop., current
agreements establish that the latter will make any necessary settlements. New provisions made during the year
amounted to Euro 931 thousand (MFM S.p.A.: Euro 725 thousand), business combinations (Altair Group) contributed
Euro 1,387 thousand and reclassifications (from the provision for tax disputes) totalled Euro 22 thousand. Utilisations
totalled Euro 50 thousand during the year.
Provision for benefits due on the termination of employment
This provision, established in prior years by MP Facility S.p.A., the joint venture consolidated up to 31 December 2008
using the proportional method (50%), amounted to Euro 2,029 thousand as of 1 January 2008 (Group interest in the
provision at that date). The provision then increased by the same amount (Euro 2,029 thousand) as a result of the
business combinations: specifically the purchase of the remaining 50% interest in the company on the acquisition
of the Altair Group in 2008 (see note 4), while Euro 2,639 thousand was utilised during 2008 to cover payments to
personnel whose employment was terminated. In May 2008, MP Facility reached an agreement with the unions to shed
a certain number of jobs by the end of 2009. The detail exodus plan resulted in the recognition of a further provision
of Euro 2,123 thousand (only 50% of this amount is reflected in the consolidated income statement). The provision for