Impn gb finanzteil 2007 e

Financial Reports 2007

4

Consolidated Financial Statements of the Implenia Group

Statutory Financial Statements of Implenia Ltd

04 Consolidated Income Statement 05 Consolidated Balance Sheet 06 Consolidated Statement of Cash Flows 07 Consolidated Statement of Changes in Equity 08 Notes to the Consolidated Financial Statements 55 Report of the Group Auditors on the Consolidated Accounts

58 Income Statement 59 Balance Sheet 60 Notes to the Statutory Financial Statements 65 Report of the Statutory Auditors

1

Unofficial translation for information only.

Approved and published version is available in German.

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1

Consolidated Financial Statements of the Implenia Group

4

Consolidated Income Statement Restated figures1

(in 1000 CHF)

Group turnover Materials and sub-contractors Personnel Other operating expenses Depreciation2 Income from associated companies Income from other investments Operating result

Notes

2007

2006

2

2 380 625 (1 448 835) (711 280) (138 678) (46 010) 2 846 – 38 668

2 413 868 (1 517 735) (686 704) (158 836) (37 326) 3 294 483 17 044

3 4 17 2

1

Discounts and commissions on finance guarantees (amounting to KCHF 2 770 in 2006 in the financial result) have been reclassified in the Income Statement (materials and subcontractors: KCHF +801, Turnover: KCHF –3 571).

According to the new accounting policies, turnover from real estate transactions should correspond to the selling price. Turnover was adjusted by KCHF +79 297 and charges

by KCHF –79 297.

2

Including adjustment of goodwill. See note 20.

Financial charges Financial income Result before tax

5 5

(10 422) 3 312 31 558

(8 342) 5 337 14 039

Income tax expense Group result

6

(6 024) 25 534

(7 897) 6 142

24 819 715 25 534

5 277 865 6 142

CHF 1.37 CHF 1.37

CHF 0.31 CHF 0.31

Attributable to: Shareholders of Implenia Ltd Minority interests Group result Earnings per share (undiluted) Earnings per share (diluted)

7 7

The notes on pages 8 to 54 are an integral part of these consolidated financial statements.

Consolidated Income Statement

Consolidated Financial Statements of the Implenia Group Consolidated Income Statement l Consolidated Balance Sheet

Consolidated Balance Sheet Restated figures1

(in 1000 CHF) ASSETS Cash and cash equivalents Securities Trade debtors Work in progress Work partnerships Other debtors Inventories Real estate operations Prepayments and accrued income Current assets Tangible fixed assets Investments in associated companies Other financial investments Benefit plan surplus Intangible assets Deferred tax assets Non-current assets TOTAL EQUITY AND LIABILITIES Current portion of long-term borrowings, banks Trade payables Work in progress Work partnerships Other payables Current tax liabilities Accruals and deferred income Current portion of long-term provisions Current liabilities

Notes

31.12.2007

31.12.2006

8 9 10 11 12 13 14 15

47 153 1 343 432 633 187 013 34 886 40 857 19 005 168 049 31 659 962 598

107 346 686 374 823 172 168 11 462 29 984 18 310 165 077 22 994 902 850

16 17 18 24 19 25

231 097 31 481 22 191 8 776 83 137 2 588 379 270 1 341 868

212 812 22 354 40 823 8 258 92 599 4 953 381 799 1 284 649

23

158 645 175 772 381 276 70 517 41 728 3 059 77 336 1 999 910 332

81 096 134 254 485 341 34 972 36 885 4 883 87 638 1 766 866 835

11 12 21 22 26

Long-term borrowings Provision for deferred tax liabilities Long-term provisions Non-current liabilities

23 25 26

5 780 14 666 6 196 26 642

15 718 13 613 19 933 49 264

Share capital Reserves Retained earnings Treasury shares Result attributable to shareholders of Implenia

27

83 124 133 783 160 398 (1 961) 24 819 400 163

89 589 123 315 153 496 (7 319) 5 277 364 358

4 731 404 894 1 341 868

4 192 368 550 1 284 649

28

Minority interests Equity TOTAL The notes on pages 8 to 54 are an integral part of these consolidated financial statements.

Consolidated Balance Sheet

1 Amounts owed by work partnerships of KCHF 61 153 were reclassified from work partnerships to trade debtors.

Within liabilities, the sum of KCHF 224 was reclassified to trade payables.

Provisions for partnerships of KCHF 26 093 were reclassified from work in progress liabilities to partnerships liabilities.

Deferred taxes on pension scheme assets were recalculated on 1 January 2006 for an amount of KCHF 1 922 (Goodwill: KCHF –817 for the Batigroup share and reserves on profits: KCHF –2 739 for the Zschokke share). In 2006, the immaterial amount of KCHF 41 was not adjusted for.

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6

Consolidated Cash Flow Statement Restated figures1

(in 1000 CHF) 2007

2006

a)

31 558 46 010 (9 691) 45 (3 601) (518) 2 916 2 109 (47 105) 46 361 (119 605) 12 121 (43 198) 44 125 (23 686) (6 192) 935 (2 760) (70 176)

14 039 37 326 8 230 2 348 256 175 5 033 2 117 (123 711) 18 258 52 071 (13 364) (42 835) 76 949 9 261 (7 321) 2 186 (3 451) 37 567

16 16 36 17, 18 17, 18 19 b)

(58 235) 6 127 – (4 940) 14 144 (204) (43 108)

(28 832) 5 517 19 392 (22 968) 13 588 (444) (13 747)

23 23

323 681 (256 070) (176) – (6 284) (19 944) 11 620 52 827

306 887 (315 221) (104) (6 827) – (1 220) 729 (15 756)

(60 457) 264 (60 193) 107 346 47 153

8 064 (155) 7 909 99 437 107 346

Notes Operating activities Net profit before taxes Depreciation Changes in provisions Changes in value adjustment of real estate operations Profit on sale of fixed assets Changes in benefit plan adjustments Dividends received from associated companies Other adjustments not effecting cash and cash equivalents Changes in trade and other debtors Changes in trade and other payables Changes in work in progress/inventories Changes in work partnerships Investments in real estate operations Disposals of real estate operations Other short-term assets and liabilities Interest paid Interest received Taxes paid Net cash from operating activities Investment activities Investments in tangible fixed assets Disposals of tangible fixed assets Purchase/sale of subsidiaries Other investments in financial assets Other disposals of financial assets Investments in intangible assets Net cash from investment activities Financing activities Increase in borrowings Repayment of borrowings Minority interests (dividends paid) Dividends paid Nominal value refund Purchase of treasury shares Sale of treasury shares Net cash from financing activities

1 The 2006 cash flows have been adjusted according to changes made to the balance sheet.

26 15 24 17 10, 13 11, 14 12 15 15

c)

Net increase / (decrease) in cash and cash equivalents (a+b+c) Foreign currency translation Increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year

Significant non-cash transactions: no acquisition of leased equipment in 2007 (2006: CHF 3.8 million).

The notes on pages 8 to 54 are an integral part of these consolidated financial statements.

Consolidated Cash Flow Statement

Consolidated Financial Statements of the Implenia Group Consolidated Cash Flow Statement l Consolidated Statement of Changes in Equity

Consolidated Statement of Changes in Equity (in 1000 CHF) Implenia Ltd Shareholders ConsoliRevaForeign dated luation Currency Reserves Reserves Translation

Retained Earnings

Subtotal

Minority Interests

Total Equity

486

162 057

205 272

1 286

206 558

– – –

– 486 (126)

(2 739) 159 318 –

(2 739) 202 533 (126)

– 1 286 –

(2 739) 203 819 (126)

– – –

– – –

(126) – (126)

– 5 277 5 277

(126) 5 277 5 151

– 865 865

(126) 6 142 6 016

(4 905) –

100 390 (1 214)

– –

– –

– –

159 574 (1 214)

6 –

159 580 (1 214)

–

–

–

–

–

(765)

(765)

–

(765)

– – – – 89 589

– – (491) – (7 319)

– – 1 721 – 120 049

2 906 – – – 2 906

– – – – 360

– 1 770 – (6 827) 158 773

2 906 1 770 1 230 (6 827) 364 358

2 139 – – (104) 4 192

5 045 1 770 1 230 (6 931) 368 550

Balance as at 1.1.2007 Foreign currency translation Gain/Loss recognised directly in equity (sub-total) Profit for the period Gain/Loss recognised for the period

89 589 –

(7 319) –

120 049 –

2 906 –

360 3 341

158 773 –

364 358 3 341

4 192 –

368 550 3 341

– – –

– – –

– – –

– – –

3 341 – 3 341

– 24 819 24 819

3 341 24 819 28 160

– 715 715

3 341 25 534 28 875

Payments based on shares Change in treasury shares Fiscal impact Nominal value refund Dividends paid Balance as at 31.12.2007

– – – (6 465) – 83 124

– 5 177 – 181 – (1 961)

– 7 328 (201) – – 127 176

– – – – – 2 906

– – – – – 3 701

2 583 (958) – – – 185 217

2 583 11 547 (201) (6 284) – 400 163

– – – – (176) 4 731

2 583 11 547 (201) (6 284) (176) 404 894

Balance as at 1.1.2006 Deferred tax adjustment on pension scheme assets Position as at 1.1.2006 after adjustment Foreign currency translation Gain/Loss recognised directly in equity (sub-total) Profit for the period Gain/Loss recognised for the period Capital increase as at 6.03.06 (and share exchange) Transaction costs Reverse 2005 capital gain on Batigroup shares Value adjustment of newly consolidated companies Payments based on shares Change in treasury shares Dividends paid Balance as at 31.12.2006

Share Capital

Treasury Shares

25 500

(1 923)

19 152

–

– 25 500 –

– (1 923) –

– 19 152 –

– – –

– – –

64 089 –

Share capital: see note 27.

Treasury shares: see note 28.

Deferred taxes on pension scheme assets were recalculated on 1 January 2006 for an amount of KCHF 1 922 (Goodwill: KCHF –817 for the Batigroup share and reserves on profits: KCHF –2 739 for the Zschokke share). In 2006, the immaterial amount of KCHF 41 was not adjusted for.

Consolidated Statement of Changes in Equity

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General Presentation of the consolidated financial statements The consolidated financial statements of the Implenia Group are prepared in accordance with IFRS (International Financial Reporting Standards) as defined by the International Accounting Standard Board (IASB).

The comparative information on the income statement and associated notes for the 2006 financial year includes for the period from 1 January to 2 March 2006 only the activities of the former Zschokke Group.

The merger of Zschokke and Batigroup to form Implenia is recognized from 3 March 2006.

Changes in accounting policies The following new standards, amendments to standards and IFRS interpretations have been considered for the preparation of the 2007 Financial Report: – IFRS 7 Financial instruments: From this report onwards, the new disclosure rules require disclosure of additional information on financial instruments that could materially affect the company's financial and income position.

This information is qualitative as well as quantitative.

Accounting policies relating to risk management for financial instruments have been adjusted accordingly.

– IFRIC 7 Applying the restatement approach under IAS 29 – Financial Reporting in hyperinflationary economies.

– IFRIC 8 Scope of IFRS 2.

– IFRIC 9 Reassessment of embedded derivatives.

– IFIRC 10 Interim financial reporting and impairment losses.

– Amendment to IAS 1 – Presentation of financial statements.

The impact of these changes is not significant for the consolidated accounts and/or is limited to additional disclosure, particularly with regard to IFRS 7.

As part of the accounting policies, the breakdown into segments has been adjusted according to the reassignment of activities to the different sectors.

The new segments are described below under “Segment information”.

Accounting Policies

Turnover from real estate transactions now includes the revenue from the relevant period, rather than, as previously, just the net income from the properties sold.

The costs of the properties sold are shown on sale under expenses as a decrease in inventory; valuation adjustments on properties within the portfolio are also shown under expenses.

The content of other accounting policies has not been changed. However, the form of some policies has been adapted and, if appropriate, additional disclosure has been added to facilitate understanding.

Standards, interpretations and amendments to standards published (but not yet mandatory) The following standards, amendments and interpretations have already been adopted by IASB, although their application will become mandatory only for the years starting after 1 January 2007. (Implenia decided not to adopt those requirements early.)

– IFRS 8 Operating Segments: (for years starting from 1 January 2009).

IFRS 8 replaces IAS 14 Segment Reporting.

The definitions of operating segments and the reporting are based on the information used by the operating management. The application of IFRS 8 will influence the reporting by segments, but will have no impact on the consolidated result.

– IAS 1 Presentation of Financial Statements – revised.

The revised version of IAS 1 should make it easier for the reader to analyse and compare the information given in financial reports. The main changes are that in future companies will have to prepare a more comprehensive “Statement of financial position” (formerly “Balance sheet”) and a more comprehensive “Statement of income” (formerly “Income statement”).

The new “Statement of income” should also include the items that are currently booked directly through equity (e.g. exchange rate differences). In addition, the tax implications of each item are to be shown.

The new “Statement of financial position” can be shown as a single global statement with appropriate interim results, or as two separate statements – an income statement followed by a “Statement of financial position”.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

– IAS 23 – Borrowing Costs – Amendment – Change of treatment of borrowing costs concerning the acquisition, construction or production of a qualifying asset (that necessarily takes a substantial period of time to get ready for its intended use or sale). Borrowing costs related to qualifying assets will have to be capitalised (for financial years beginning on or after 1 January 2009).

– IFRIC 11, Group and Treasury Share Transactions according to IFRS 2 (for years starting from 1 March 2007).

– IFRIC 12, Service Concession Arrangements (for years starting from 1 January 2008).

– IFRIC 13, Customer loyalty programmes (for years starting from 1 January 2008).

– IFRIC 14, IAS 19, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (for years starting from 1 January 2008).

– IFRS 3 – Business combinations – revised standard (for financial years beginning on or after 1 July 2009).

– IAS 27 – consolidated financial statements and accounting for investments in subsidiaries – revised standard (for financial years beginning on or after 1 July 2009).

The management has examined these new standards and interpretations and has reached the conclusion that the effects on the consolidated accounts are not material (except IFRS 3 in the case of a new acquisition), and that they are limited to additional disclosures or disclosures in another form.

Basis of consolidation The parent company of the group (Holding) is Implenia Ltd, with registered office in Dietlikon, Switzerland. The consolidated accounts are presented in thousands of Swiss francs, unless indicated otherwise. In principle, it owns directly the main subsidiaries of the Group that come within the consolidation.

The details of the shareholdings held directly or indirectly by Implenia Ltd are given on pages 52 and 53 of the present annex.

Valuation is based on historical cost, with the exception of certain items for which the valuation methods are described below.

Subsidiaries Subsidiaries are companies in which Implenia exercises control over the financial and commercial policies.

This is generally the case if Implenia holds, directly or indirectly, more than 50% of the capital or the majority of the voting rights. To determine whether control exists, the existence and impact of potential existing or convertible voting rights is considered. The accounts of these companies are prepared using consistent accounting policies as those of the group and in conformity with IFRS. The year end of subsidiaries is the same as of the parent company.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intragroup transactions that are recognised in assets and that have not yet been realised in relation to third parties (for example: inventory movements), are eliminated in full. Intra-group transactions are done at market prices.

New subsidiaries are consolidated from the date of their acquisition, which corresponds to the date of taking control, using the Purchase Method of accounting, as defined by the standard IFRS 3.

A company is excluded from the consolidation on the date when control ceases.

Transactions with minority interest holders Transactions with minority interest holders are treated similarly to transactions with third parties. Sales of minority shares generate a profit or a loss in the consolidated accounts. Purchases of minority shares generate goodwill amounting to the difference between the purchase price and the corresponding net asset value of the affiliated company.

Associated Companies Associated companies are companies in which Implenia exercises a considerable influence, but not control. In principle, they are companies in which the Group holds between 20 and 50% of the capital.

These entities are accounted for using the Equity Method. In the balance sheet, they are separately disclosed. The reference date for the Equity Method calculation is, in principle, the same as the year end date of the parent company. However, if some of the accounts are not available at this time, the valuation is performed on the basis of the last available financial

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statements, taking into consideration any changes noted since then. Associated companies are included in the consolidation using accounting and valuation policies similar to those of the group.

The share of the Group in the result of associated companies is accounted for separately in the consolidated income statement. The share in losses is limited to the value of the shareholding, in so far as the Group is not committed to any liability beyond that value.

Work partnerships (consortia) These are activities carried on jointly by two or more partners and are performed, in general, in the legal form of a partnership. The partners share control and share the running, resources and know-how with the aim of performing a given activity in the context of one or more contracts. The partners must make available human and material resources that are invoiced directly to the work partnership. The results achieved for works executed jointly are distributed on the basis of contractual agreements and are recorded in the context of these activities.

Certain work partnerships have their own assets, acquired or contributed for the execution of the planned activity. The share of the group in these net assets is presented as credit and debit balances in relation to the work partnership. The composition of the net assets of the work partnerships is presented in the notes.

Minority holdings The minority holdings in which Implenia does not exercise predominant control, in general shareholdings not exceeding 20%, are classified as “available for sale” and are reported in the balance sheet at their fair value, in accordance with IAS 39. Changes in the fair value are recorded in equity. These unrealised profits and losses recorded in equity are transferred to the income statement on sale of the shareholdings.

The losses previously recorded in equity are also transferred to the income statement whenever a significant and lasting impairment in the value of the shareholdings is noted.

Estimates and assumptions The preparation of the Group financial statements according to IFRS standards requires that a number of assumptions be formulated concerning the future, which entails a certain number of judgements and estimates that directly impact the values disclosed in the balance sheet and the income statement.

These assumptions, judgements and estimates are based on experience and on factors considered relevant in the given conditions.

Assumptions are subject to permanent review.

Changes made in the estimates used are accounted for directly in the year when the estimate is reviewed.

The categories that are especially based on assumptions and estimates and for which such estimates may generate significant adjustments to the book values during the following year are detailed below.

Turnover of Works in progress and Work partnerships: the valuation of works in progress and work partnerships, and therefore also the determination of their turnover, which is done according to the “percentage-of-completion” (PoC) method, is based on estimates and assumptions on the income, costs and final margins of the projects in progress, as well as the income, costs and margins already realised at the balance sheet date.

Goodwill: this asset is subject to an annual impairment test. Such a test requires the estimation of future cash flows, as well as the discount rate.

Tangible fixed assets: depreciation is based on estimates of the useful life of the tangible fixed assets.

Deferred tax assets: the valuation is based on estimates of future profits.

Current taxes: current taxes for the period are calculated on the basis of declarations by Group companies. On the date the accounts were closed, a large number of these declarations had not yet been finally accepted by the different fiscal administrations.

Any corrections made by the fiscal administrations may entail adjustments to tax charges for the preceding periods.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

Judgements in the application of accounting and valuation methods Some judgements are required notably in the following cases: – Securities can be classified in various categories; – In the context of the valuation of provisions for benefit plan commitments, actuarial gains and losses can be accounted for differently; – Assets that the Group considers selling must be examined to ascertain whether realisation is possible and highly probable. If these conditions are met, these assets must be reported as “held for sale” and valued accordingly.

The decisions taken by Implenia in the cases that actually arose are disclosed in the comments on the accounting and valuation policies.

Foreign currency translation The consolidated financial statements are presented in Swiss francs, the local and operating currency of Implenia Ltd and of most of the affiliated companies.

Transactions and balances in foreign currencies Transactions in foreign currencies are converted into the operating currency at the exchange rate prevailing on the day of the transaction. Financial assets and liabilities in foreign currencies are converted at the exchange rate prevailing on the balance sheet date. The exchange rate differences resulting from the settlement of such transactions and from the translation of balance sheet items are recognised in the income statement.

Translation of the accounts of subsidiaries whose accounting records are maintained in foreign currencies The assets and liabilities of balance sheets prepared in foreign currencies are converted at the rate prevailing on the balance sheet date of the parent company.

The income statement is translated at the average exchange rate.

The resulting exchange rate differences on the balance sheet and income statement items are posted directly to equity.

The exchange rate differences related to the conversion of group loans, being in the nature of a shareholding, are also posted directly to equity. On the sale of these shareholdings, the exchange rate differences that were posted to equity are transferred to the income statement.

Segment reporting (Following new assignment of activities to the different sectors.)

The operational organisation of the Group is based on the following main segments of activities: General contracting (part of the Real Estate Division) The activities carried on by this division include general project planning, work as general contractor and total contractor in the construction sector.

Real estate (part of the Real Estate Division) The real estate segment includes real estate promotions and the realization of projects in the real estate sector.

Services (part of the Real Estate Division) Services include studies, management and running of properties, coordination, engineering, and planning of projects in the property sector, and facility management.

Tunnel and General Contracting Division The segment provides services in the areas of subterranean construction, tunnelling and general contracting for rail technology.

Infrastructure This segment's activities include road and building construction and maintenance, civil engineering infrastructure and special construction works.

Global Solutions This new segment offers engineering and management services for projects, mainly outside Switzerland.

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Head office overheads and sundry expenses This category includes the costs of the parent company that cannot be assigned to a segment and the inactive affiliated companies. At the segment reporting level, this category includes the Group’s financial commitments (consortium loan) in particular.

The list of affiliated companies on pages 52 and 53 shows how each company is assigned to the various segments.

Because the Implenia group presently operates mainly in Switzerland, geographical segmentation is limited to the following: – Services supplied in Switzerland; – Services supplied abroad.

Materials and subcontractors Materials and subcontractors include all items of cost that are directly allocated to projects and are taken into account in the calculation of the project margin.

This item also includes costs from real estate sales during the period.

Personnel Personnel costs consists of gross salaries, social security contributions charged to the employer, as well as any other employee benefits that must be accounted for in the period concerned.

Other operating expenses These are the other operating expenses that are not directly allocated to projects.

Consolidated income statement Turnover Turnover represents all the income from the different activities of the group.

Within General Contracting and Construction divisions orders are recorded according to the Percentage of Completion Method. The income and results are recognised as a proportion of the work done in relation to the total contract value. Expected losses on the order book are included in relation to the valuation of works in progress and are recognised as a reduction in turnover. Conversely, price uplifts, supplements and bonuses are included if they have already been accepted by the customer. For work partnerships only the work done for the work partnerships and the share in the results of these work partnerships are included in the turnover.

The turnover of Services is calculated on the basis of the service actually performed for the customer on the balance sheet date.

For the Real Estate segment, the turnover includes the proceeds from property sales and general contracting work, as well as from temporary leases (pending sale).

The revenues are recognised when the risk is actually transferred, which, generally speaking, is at the time when ownership is transferred, with registration in the Land Register.

Reductions of income such as losses on debtors, changes in provisions for unsecured debts, rebates or discounts directly related to the invoiced services are accounted for as a reduction of turnover.

Financial charges and income Financial expenses consist of the interest charged on financial commitments, foreign currency exchange losses, losses on financial instruments and losses on the revaluation or sale of financial investments.

Borrowing costs directly related to a real estate operation are accounted for as part of the cost of the operation.

Financial income consists of the interest income on loans granted, dividends, foreign currency exchange gains, gains on financial instruments and profits on the revaluation or sale of financial investments.

Income taxes Taxes reported in the income statement consist of current taxes on profits and deferred taxes. Taxes on amounts recognised directly in equity are also posted to equity.

Current taxes are estimated on the basis of the taxable result and are calculated at the prevailing tax rates. Any differences on the tax accounts for previous years are also included in current taxes.

Deferred taxes are determined on the basis of the timing differences arising between the tax bases of assets and liabilities and their carrying values (Balance Sheet Liability Method).

Deferred taxes are determined based on the fiscal legislation and the tax rates in force at the balance sheet date or announced and expected to apply at the time of the realisation of the asset, or when the deferred tax liability is settled.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

Deferred tax assets are recognised on the balance sheet to the extent that it is probable that future taxable profits will be available to offset the taxable losses carried forward.

Deferred tax liabilities are provided on timing differences arising on investments in subsidiaries and associated companies, except where the timing of the reversal of the timing difference is controlled by the Group and it is probable that the timing difference will not reverse in the foreseeable future.

Earnings per share Earnings per share are calculated by dividing the group result attributable to the shareholders of Implenia Ltd by the average weighted number of shares in circulation during the period concerned. To date, there are no factors that would require the calculation of a diluted result per share.

Consolidated balance sheet Cash and cash equivalents Cash and cash equivalents include cash, assets held in current accounts (with the post office and banks), and deposits with a term of not more than 90 days.

Trade debtors The carrying value represents the amounts invoiced after deducting allowance for doubtful debts.

The allowance is recognised in the income statement.

Work in progress Expenses related to orders are recorded at the time they occur. If the result of an order cannot be estimated reliably, income is recorded only up to the amount of the recoverable estimated expenses.

If the result of an order can be estimated reliably and if the final estimated result is a profit, the order is valued at the net selling price, according to the Percentage of Completion Method. When it appears probable that the total costs of an order will exceed the expected income, the total amount of expected loss is recognised immediately in the income statement.

The percentage of completion is expressed as a percentage of the costs incurred up to the balance sheet date in relation to the total expected costs to completion of the project.

Each order is valued individually, and the valuation is based on the estimated result at completion.

Work in progress consists of work not yet invoiced to customers and services and work not yet invoiced by suppliers and subcontractors, as well as provisions for losses on the order book, if any (negative margins and provision for any overheads not recoverable).

The valuation adjustments are determined separately.

The net balance, by project, of these adjustments is disclosed as an asset if it is positive, or a liability if it is negative.

Work partnerships This balance sheet item includes advances paid to and received from work partnerships, as well as undistributed shares in the result of the partnerships. A single asset or liability is reported on the balance sheet in relation to each work partnership. Work partnerships are valued in a similar way as work in progress.

Inventories Inventories are valued at the lower of cost (including the purchase costs but not taking into account selling costs) and net realisable value at the balance sheet date. Inventory costs are taken to the income statement at their weighted average cost.

Real estate operations The real estate classified under this heading consist of properties held for sale in the ordinary course of business and valued like “Inventories� according to IAS 2.

Completed operations not yet sold, may temporarily generate rental income. They continue to be classified under this heading as they are intended to be sold.

Some real estate operations are conducted jointly with one or more partners. The operations that are carried on under joint control and ownership are reported as Real estate operations in the balance sheet for the share pertaining to Implenia, but as a maximum at the value of the funds invested.

Each transaction is measured individually.

The valuation is stated at the lower of the construction cost of the property and its market value estimated by the Group’s real estate specialists. The construction cost includes the borrowing costs paid to third parties until the property is ready for use or sale.

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Impairments resulting from the above valuation policies are deducted from the carrying value as a valuation adjustment. Revenues from the sale of real estate are shown as turnover. Changes to the portfolio and changes in valuation adjustments on real estate transactions are recognized in expenses.

Tangible fixed assets Tangible fixed assets are stated at their acquisition or production cost, after deducting depreciation and any impairment. Borrowing costs are capitalized only if financing has been specifically obtained for the asset.

Improvement investments are capitalized only if they increase the value or if they replace a complete part of the asset. The replaced part is written off through the income statement.

Other expenses related to tangible fixed assets are recognised directly in the income statement.

Depreciation is charged using the estimated useful life of the fixed asset. Fixed assets that are significant in value are divided into components with different useful lives. Depreciation is recorded separately for each component according to its useful life.

The main depreciation periods are as follows: Business premises 25-50 years Investment properties 25-50 years Production facilities 15-20 years Machinery and vehicles 6-15 years Furniture 5-10 years IT equipment 3-50 years The residual value and useful lives are checked every year. If the current estimate changes from the previous assessment, the resulting value adjustments are recognised in the income statement in the period when the change occurs in accordance with IAS 8.

Gains and losses on disposal represent the difference between the book value and the sales proceeds, if any.

Tangible fixed assets are no longer recognised when they are sold or when it is determined that the asset no longer represents a future economic value.

Leasing Lease agreements that substantially transfer to Implenia all the risks and rewards incidental to ownership are classified as finance leases. All other lease agreements are classified as operating leases. The decision as to whether a lease agreement is an operating or finance lease is made on an individual basis, according to the policies of IAS 17.

Properties under finance leases are recognised on the balance sheet at the discounted value of the minimum lease payments or at market value if lower.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Fixed assets acquired through finance leases are depreciated over their estimated useful life or over the duration of the lease agreement, if it is shorter.

The charges for operating lease agreements are included in the income statement at the time of payment.

Long-term investments The valuation of minority shareholdings is presented under the heading “Basis of Consolidation; Minority shareholdings�.

Long-term loans and receivables are recorded initially at their fair value and subsequently measured at amortised cost, less any allowance for unrecoverable amounts. The allowance is recorded in the income statement.

Intangible assets a) Licenses and software Software is recorded at purchase cost after deducting the accumulated depreciation and any impairment.

Depreciation is calculated using the straight line method based on the estimated useful life, not exceeding 5 years. b) IT Projects The costs incurred for IT projects are included on the balance sheet as intangible assets only if it is considered probable that they can be exploited commercially and are technically feasible, and the costs can be determined reliably. Other development expenses that do not satisfy these conditions are recognised in the income statement as they occur.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

As a maximum, the costs are capitalised for an amount corresponding to the discounted income from their future use. The development costs recognised are depreciated on a straight line basis over an estimated useful life between 3 and 6 years.

Development expenses once recorded as expenses cannot be included as an asset in subsequent years. c) Goodwill In a business combination, goodwill represents the difference between the cost of acquisition and the fair value of the share in the net assets of the acquired company at the time of the acquisition. In the case of negative goodwill (if the value of the net assets exceeds the acquisition price), the amount is recognised directly in the income statement.

Goodwill resulting from the acquisition of an associated company is included in the book value and is disclosed under “Investment in associated companies”.

Goodwill recognised on the balance sheet is subject to impairment tests conducted annually and whenever there are indications of a potential impairment.

Goodwill is stated at the acquisition cost less accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to cash generating units or groups of units that are expected to benefit from the advantages that gave rise to the goodwill. d) Trademarks Acquired trademarks are stated at their acquisition cost less accumulated depreciation. Depreciation is calculated on a straight line basis, over the estimated useful life of 1 to 5 years. e) Customer lists and order books Acquired customer lists and order books are stated at their acquisition cost less accumulated depreciation.

Depreciation is calculated on a straight line basis, over the estimated useful life of 1 to 5 years.

Impairment of tangible and intangible fixed assets Fixed assets are reviewed annually to detect any indications of a permanent reduction of value. If such indications do exist, the recoverable amount of the fixed asset is determined on the basis of an impairment test.

Intangible assets with indefinite useful life (such as goodwill, for example) are systematically subject to annual impairment tests.

The recoverable amount is the higher of the fair value less selling costs, and the value in use.

An impairment is charged to the income statement if the carrying value of the fixed asset or the cash generating unit exceeds the recoverable amount.

With the exception of Goodwill, non monetary fixed assets whose value has been impaired previously are reviewed at each balance sheet date to determine any potential reversal of impairment.

Financial liabilities Financial liabilities are initially recognised at the actual cost less transaction costs and subsequently measured by using the effective interest rate method.

The difference between the amount borrowed and the amount to be repaid is recognised in the income statement over the period of the borrowing.

Provisions Provisions are recognised when at the date of the financial statements: – The Group has a present legal or constructive obligation resulting from a past event; – it is probable that a transfer of economic resources will be necessary to settle the obligation; – a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, the amount of the provision is appropriately discounted.

15

16

Pension plans The employees of Group companies are affiliated to autonomous and independent pension plans. These plans are financed by regulatory contributions paid by both employers and employees.

The assets of the pension plans are managed independently and are completely separate from the Group. The benefit obligations are calculated every year by an independent actuary.

In relation to the application of the international accounting standard IAS 19, the Group's pension plans are considered to be defined benefit pension plans, although, according to the interpretation given in Switzerland, they are considered as mixed plans.

The balance-sheet provision corresponds to the discounted value of any future defined benefit obligation (DBO) as at the balance-sheet date, after deducting the fair value of long-term assets, adjusted for the accumulated actuarial differences which fall outside of the corridor, to be depreciated over the remaining number of years of service. The liabilities are calculated periodically using the projected unit credit method by an independent actuary. The value of the liabilities is determined by discounting the expected future cash flows. The discount rate used is the market rate for top quality industrial debtors.

Actuarial gains and losses due to experience adjustments and changes made in the actuarial assumptions are recognised over the expected average remaining working lives of the employees to the extent that they fall outside of the corridor at the end of the previous period.

The cost of past services is recorded on a straight line basis over the average remaining working lives until the benefits corresponding to the adopted or modified scheme become due to the employees.

Other employee benefits Group executives benefit from a profit-sharing plan in shares. It may be considered as supplementary remuneration linked to the result of the year concerned and takes the form of a free distribution of shares or shares offered at a preferential purchase price.

These benefits (the difference between the stock market value of the shares distributed and the amounts received for the shares) are reported as personnel charges. The charges related to shares that are distributed only during the following year are fully provided for and recognised in the year concerned, as this remuneration is not related to the future performance of the executives. The details are defined from year to year by the Board of Directors.

All the employees of the group enjoy the benefit of a profit-sharing plan in shares managed according to the regulations of the Motivation Foundation. Under the framework of this plan, the employees can acquire, once a year, a fixed number of Implenia Ltd shares at a preferential price. The difference between the stock market value of the shares distributed and the amounts received for the shares is charged to the Group units concerned and reported in the consolidated accounts as personnel expenses in the year when the shares are allocated.

Equity The share capital consists of all issued registered shares. Dividends are recognised when the entitlement to their payment arises.

External transaction costs related directly to the issue of share capital are deducted directly from the capital reserves.

The acquisition by Implenia Ltd of treasury shares or those of the affiliated companies is recognised as a reduction of equity at the purchase cost, including transaction expenses. The income from the resale of these treasury shares is also recognised in equity.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

Financial instruments The Group divides financial instruments into the following classes: – operating receivables and liabilities; – Available-for-sale financial instruments; – Financial instruments held to maturity; – Financial instruments held at fair value adjusted through the income statement.

The “Financial instruments valued through the income statement at fair value” are initially recognised at fair value (market value); other assets are recognised at fair value plus transaction costs. Assignment to a particular class of financial instrument takes place on initial booking. All purchases and sales of financial instruments are booked on the transaction date.

Operating receivables and liabilities Operating receivables and liabilities are non-derivative financial instruments with fixed or determinable payment streams that are not traded on active markets.

After initial recognition, these financial instruments are shown at amortized cost as determined on the basis of initial recognised value less any repayments and amortization calculated using the effective interest rate method. This includes all payments that are defined as a fixed element of the agreement for these financial instruments. Gains and losses made on sales or as a result of impairment are recognised in the income statement.

The following balance sheet items are classed as operating receivables and liabilities: – Cash and cash equivalents – Customer receivables – Other receivables – Financial assets – Supplier liabilities – Finance liabilities – Other liabilities

Financial instruments held to maturity Held-to-maturity financial instruments are non-derivative financial instruments with fixed or determinable payments and fixed maturities that the Group wants to and can hold to maturity. After initial recognition, these instruments are valued at amortized cost, i.e. the value originally recognised is corrected to allow for repayments; for the (positive or negative) effect of amortization as determined by the effective interest rate method, to take account of the difference between initial and final value; and for value adjustments.

This calculation includes all additional payments that are defined as a fixed element of the agreement for these financial instruments. These corrections are recognised in the income statement.

During the year under review the group had no financial instruments held to maturity (previous year: none).

Available-for-sale financial instruments Available-for-sale financial instruments are those that are either assigned to none of the classes mentioned above or that are available for sale. After the initial recognition, these are valued at fair value, with unrealised gains and losses recognised directly through equity. When sales are recognised or impairments made, these sums are charged out through the income statement. Interest earnings or expenses are recognised in the financial result. Dividend earnings are shown as dividend income as soon as the payment is received.

The following balance sheet items are classed as available-for-sale financial instruments: – Securities.

Determining fair value The fair value of financial instruments that are traded on an active market is determined on the basis of transactions on the balance sheet date. The fair value of financial instruments that are not traded on an active market is determined through suitable valuation methods. These might mean, for example, looking at current transactions involving similar financial instruments, or the current market value of similar financial instruments, discounted cash flow calculations, and other methods.

17

18

Impairments on financial instruments Financial instruments are reviewed periodically, but at least every quarter, for impairment of value.

The process for checking impairment of receivables is set out in the explanation of Financial Risk Management. As soon as an impairment test indicates that impairment has occurred, a value adjustment is recognised in the income statement. Impairments on operating receivables are recognised as reductions in revenue, impairments on financial receivables are booked as finance expense. If there are clear indications that an impairment is no longer needed or that the current impairment level is too high (e.g. because a borrower has made payments), the impairments are reversed in full or in part through the income statement, except in the case of financial instruments where the unrealised value adjustment is recognised through shareholders' equity. In this case any reversal is also recognised through shareholders' equity.

Derecognition of financial instruments Financial assets Financial instruments held as assets are derecognised if: – the rights to payment streams expire – the group still has rights to payment streams but has committed to pass on the payment streams to another party – the group has assigned the rights to payment streams and has assigned all significant risks and revenues, or surrendered control of the financial instruments.

Financial liabilities Financial instruments held as liabilities are derecognised if the liability has been satisfied, waived or has expired. If a financial liability is replaced by a new liability with the same creditor, but with substantially different conditions, or if an existing financial liability is substantially altered, the existing financial liability is derecognised and the replacement (or altered) financial liability recognised, with any difference booked through the income statement.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

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20

1. Consolidation scope Merger Following the acquisition of the Reuss group in 2006 and with the aim of a simplification of the legal structure, the following companies were merged with retroactive effect as of 1st January 2007. The company resulting from the merger bears the new name of Reuss Engineering Ltd. Merged companies: – B+B Engineering AG – Reuss Management AG – Reuss FM AG – Robert Aerni AG – Reuss Group Holding AG – S+P Haustechnik AG This merger of 6 wholly-owned subsidiaries (100%) of the Implenia group has no impact on the presentation of the consolidated financial statements.

Name changes Implenia Real Estate Ltd has changed its name and is now called Implenia Development Ltd. Reuss Group International AG has changed its name and is now called Implenia Global Solutions Ltd. Batilabor AG has changed its name and is now called Implenia Investment Management Ltd. Tetrag AG has changed its name and is now called Tetrag Automation Ltd. Zschokke Österreich GmbH has changed its name and is now called Implenia Österreich GmbH. The subsidiary Zschokke Bratislava was liquidated and struck off in 2007. This company which had very little business even in 2006, is the only change in the companies that are consolidated using the purchase method of accounting.

The position as at 31 December 2007 of the affiliated companies is reported on page 52 and 53 of this report.

Notes to the Consolidated Financial Statements

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

2. Segment Information The new operational organisation of the Group is based on the following main sectors of activity: – general contractor (general planning, general and total contractor); – real estate (promotion, project development) ; – tunnel construction works + TC (tunnels, total contracting in railway engineering); – infra construction works (roads and buildings, civil engineering, special construction); – services (building management, engineering and facility management); – global solutions (engineering and project management abroad).

Sectors “General contracting”, “Real estate” and “Services” are gathered within the global segment “Real Estate”.

The distribution of group entities by segment can be found on page 52 and 53 of the present report.

Inter-segment transactions are carried out at market conditions.

Business segment information (in 1000 CHF) Real Estate

January to June 2007 Turnover including inter-segment sales ./. Inter-segment sales Group Turnover of which services of which sale of assets Profit from associated companies Operating profit/EBIT Financial profit Income tax Group Result Depreciation Other non monetary items Investments Segment assets Segment liabilities

Head office Tunnel Infra overheads construction construction Global and MiscelServices works + TC works Solutions laneous

General contracting

Real Estate

1 101 612 (69 760) 1 031 852

143 171 (14 947) 128 224

92 140 (5 824) 86 316

136 063 1 120 144 (14 051) (115 676) 122 012 1 004 468

1 031 852 –

66 805 61 419

86 316 –

122 012 –

– 8 482

– 14 218

– (2 450)

3 984 (5 906) 293 308 085 351 755

1 512 (1 141) 2 357 204 184 24 159

3 288 (1 805) 2 670 46 173 17 636

Group Total

6 237 (3 132) 3 105

35 159 2 634 526 (30 511) (253 901) 4 648 2 380 625

992 358 12 110

3 105 –

4 636 2 307 084 12 73 541

– 20 586

2 846 8 114

– (4 123)

1 091 – 866 46 257 63 375

32 781 (1 572) 49 945 684 120 366 526

– – – 502 1 499

– (6 159)

2 846 38 668 ( 7 110) ( 6 024) 25 534

3 354 46 010 (4 629) (15 053) 2 308 58 439 52 547 1 341 868 112 024 936 974

21

22

(in 1000 CHF) Restated figures1

2006 Turnover including inter-segment revenue ./. Inter-segment revenue Group Turnover of which services of which sale of assets

1

The operating result of the Construction segments has been restated to reflect the new organisation of the segments. The impact of the reclassifying of discounts and the result of other financial investments is attributed to the Infra Construction Works segment. (See also the comment on the Income Statement).

Profit from associated companies Operating result/EBIT Net financial costs Income tax Group Profit Depreciation Other non monetary items Investments Segment assets Segment liabilities

Real Estate

Head office Tunnel Infra overheads construction construction Global and MiscelServices works + TC works Solutions laneous

General contracting

Real Estate

Group Total

1 112 158 (65 240) 1 046 918

167 862 (12 551) 155 311

106 620 (13 692) 92 928

128 573 (9 075) 119 498

1 075 438 (75 911) 999 527

– – –

34 032 2 624 683 (34 346) (210 815) (314) 2 413 868

1 046 918 –

60 740 94 571

92 928 –

119 498 –

982 155 17 372

– –

(414) 2 301 825 100 112 043

– 3 709

– 1 637

– (2 873)

– 14 632

3 294 7 896

– –

– (7 957)

760 (324) 272 236 458 382 815

2 712 845 359 255 111 65 541

1 652 207 1 334 36 907 16 714

2 603 – 1 104 47 861 46 273

26 745 2 295 29 245 613 201 315 632

– – – – –

2 854 37 326 (1 287) 1 736 740 33 054 95 111 1 284 649 89 124 916 099

3 294 17 044 (3 005) (7 897) 6 142

Geographical segment information (in 1000 CHF) 2007 Group Turnover Investments Segment liabilities

In Switzerland 2 301 647 54 079 1 223 480

Outside Switzerland 78 978 4 360 118 388

Group Total 2 380 625 58 439 1 341 868

2006 Group Turnover Investments Segment liabilities

2 367 185 32 686 1 150 838

46 683 368 133 811

2 413 868 33 054 1 284 649

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

3. Personnel (in 1000 CHF) Salaries and fees Social security contributions Benefit plan expenses FAR Foundation expenses Temporary personnel Other personnel expenses Total

2007 509 423 71 301 37 754 11 052 53 704 28 046 711 280

2006 473 154 66 270 33 900 11 222 57 034 45 124 686 704

2007 50 578 25 939 5 813 12 315 44 033 138 678

2006 42 037 30 268 9 410 25 016 52 105 158 836

4. Other operating expenses (in 1000 CHF) Rent Maintenance and repairs Insurance Office and administration costs and consultants Other operating costs Total

The large variations observed between the 2006 and 2007 financial years are due in particular to costs related to the merger with Batigroup and to the creation of Implenia. These merger costs amounted in 2006 to around 39.9 million and around 16.1 million in 2007.

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24

5. Financial charges and income (in 1000 CHF)

1

Discounts and commissions on finance guarantees (amounting to KCHF 2 770 in 2006 in the financial result) have been reclassified in the Income Statement (materials and subcontractors: KCHF +801, Turnover: KCHF –3 571).

2007

20061

Financial charges Interest Other financial charges2 Foreign exchange losses Total

6 557 3 026 839 10 422

4 921 2 620 801 8 342

Financial income Interest Income from securities Other financial income Foreign exchange gains Total

1 181 606 188 1 337 3 312

2 186 1 195 – 1 956 5 337

1 595 – 1 431 3 026

930 93 1 597 2 620

2

Other financial charges comprise: Bank charges Commissions on finance guarantees Other financial expenses

The Group does not hold any financial derivatives and hence there is no impact on the financial statements.

6. Income taxes (in 1000 CHF) 2007 2 730 3 294 6 024

2006 3 961 3 936 7 897

31 558 7 640

14 039 3 614

( 90) (6 744) 3 415 1 595 208 6 024

(1 738) (77) 1 692 4 225 181 7 897

Current taxes Deferred taxes Income taxes Breakdown of tax charges: Pre-tax income Tax calculated at a rate of 24.21% (2006: 25.74%) Effect of tax rate differences in certain cantons due to taxation of real estate gains Effect of non-capitalised tax losses carried forward Effect of non taxable or non deductible items Effect of non-capitalised tax losses created during the year Other taxes Income taxes

The average tax rate is based on the weighted average of tax rates in effect for the Group companies.

The positive fiscal impact from the use of non-capitalised tax losses carried forward is largely due to carried forward losses acquired during the takeover of the Batigroup group. At the time of this acquisition, these losses had not been utilised.

These carried forward losses, which fell due this year, have been able to be partly used. According to IFRS standards, the positive effect of the use of these carried forward losses on the result is offset by a write-down of goodwill corresponding to the amount that ought to have been utilised at the time of the valuation of Batigroup (Purchase Price Allocation) in the Group accounts.

The purpose of this offsetting is to recognise the value of goodwill.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

7. Earnings per share (in 1000 CHF) Net earnings Weighted average number of shares in circulation Earnings per share (undiluted) Earnings per share (diluted) Number of shares in circulation as at 31.12

2007 24 819 18 164 296 CHF 1.37 CHF 1.37 18 419 437

2006 5 277 17 010 510 CHF 0.31 CHF 0.31 18 006 926

2007 342 37 026 9 785 47 153

2006 355 92 156 14 835 107 346

8. Cash and cash equivalents (in 1000 CHF) Cash Bank and Post Office accounts Other cash equivalents Total

The bank current account figures include an amount of 9,2 million (2006: 14,7 million), representing assets held on a fiduciary basis for general contractor projects. The credits of these accounts are restricted for payments to subcontractors for projects where the customer’s bank financing the construction loan has accepted it.

9. Securities (in 1000 CHF) Listed Shares Bills receivable Total The bills receivable relate essentially to our subsidiary SISAG in the Ivory Coast.

2007 903 440 1 343

2006 – 686 686

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26

10. Trade debtors (in 1000 CHF) Customers Work partnerships Associated companies Related parties Amount of retentions Valuation adjustments Total

2007 363 358 53 286 508 1 092 25 882 (11 493) 432 633

2006 311 094 61 153 1 600 – 14 506 (13 530) 374 823

These figures refer to invoices issued to customers for works completed and to interim statements for work in progress.

Changes in valuation adjustment: see note 29.

Ageing structure of debtors: see note 30.

11. Work in progress Work in progress includes invoicing instalments for works and expenses, provisions for works completion, provisions for losses on the order book, provisions for unrecoverable overheads, advances to suppliers, customer advances and stocks of materials on construction sites. (in 1000 CHF) Margins, costs incurred and future losses from the start of projects and related to contracts in progress ./. Invoiced to customers since the start of the project Net amounts due from customers (net amounts due to customers) Presentation in balance sheet (split by project): Work in progress - Assets (amount due from customers) Work in progress - Liabilities (amount due to customers)

Information on construction contracts: Contract revenue recognised in the period Advances received on construction contracts, as at 31.12 Amount of retentions, as at 31.12

31.12.2007

31.12.2006

6 012 684 (6 206 947) (194 263)

4 198 818 (4 511 991) (313 173)

187 013 (381 276) (194 263)

172 168 (485 341) (313 173)

2007 2 252 114 70 042 25 882

2006 1 883 588 94 331 14 506

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

12. Work partnerships The assets and liabilities on the consolidated balance sheet include advances made and received and the share in income not yet distributed. (in 1000 CHF) Partnerships assets heading Partnerships liabilities heading Services invoiced to partnerships, not received Services invoiced by partnerships, not paid Net amount of all debts (commitments) to partnerships

2007 34 886 (70 517) 53 707 (2 007) 16 069

2006 11 462 (34 972) 61 153 (3 274) 34 369

246 672 169 503 275 137 27 195 621 873 613 653

416 406 185 136 357 130 26 401 597 530 583 865

179 400

228 564

The Group’s share in the partnership assets, liabilities and sales includes: Statistical information Current assets Fixed assets Short-term liabilities Long-term liabilities Turnover Expenses This information does not include the value adjustments calculated according to the Group’s accounting policies, nor the proportion of the Group’s overheads.

Work partnerships are jointly liable for any debts of the partnership, unless otherwise agreed.

Joint liabilities toward joint partnerships’ partners Main partnerships: Consorzio TAT Tunnel Alp Transit Ticino TRANSCO-Sedrun ATW ARGE Tunnel Weinberg ARGE 2.1 Bahnhof Löwenstrasse

Shareholding 25% 40% 45% 31%

13. Other debtors (in 1000 CHF) Receivable withholding tax Other taxes and duties receivables Other receivables Total

2007 1 599 3 684 35 574 40 857

2006 891 9 897 19 196 29 984

27

28

14. Inventories (in 1000 CHF) Raw materials and ancillary products Total

2007 19 005 19 005

2006 18 310 18 310

There are no pledged inventories.

Stock is divided virtually equally between raw materials and ancillary products.

15. Investments in real estate operations (in 1000 CHF) 2007

2006

Acquisition value As at 1.1 Investments Disposals Transfers/Reclassifications Transfers from office buildings Change in consolidation scope Currency translation differences As at 31.12

208 992 43 198 (44 125) ( 6 965) 2 836 – 1 108 205 044

153 708 42 835 (76 949) 6 102 – 83 296 – 208 992

Valuation adjustment As at 1.1 Transfers/ Reclassifications Increase As at 31.12

(43 915) 6 965 (45) (36 995)

(41 567) – (2 348) (43 915)

Net book value

168 049

165 077

of which pledged

20 315

19 036

The real estate result of assets sold during the period is as follows: Selling price (included in turnover) Book value (included in charges) Real estate result No interest was capitalised in 2007 and 2006.

61 419 ( 44 125) 17 294

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

16. Tangible fixed assets (in 1000 CHF)

Acquisition value as at 1.1.2006 Change in consolidation scope Investments Transfers Disposals Currency translation differences Acquisition value as at 31.12.2006/1.1.2007

Office buildings 93 011 49 474 1 132 (18 008) (535) 45 125 119

Production units 14 287 8 814 177 – (541) – 22 737

Machines, Equipment, Furniture 153 943 63 772 31 301 – (20 342) (10) 228 664

Total 261 241 122 060 32 610 (18 008) (21 418) 35 376 520

Change in consolidation scope Investments Transfers to office buildings Transfers Disposals Currency translation differences As at 31.12.2007

– 13 283 (2 836) 3 536 (662) 83 138 523

– 6 715 – 15 723 (3 481) 144 41 838

– 38 237 – (2 084) (18 718) 344 246 443

– 58 235 (2 836) 17 175 (22 861) 571 426 804

Accumulated depreciation as at 1.1.2006 Transfers Disposal Depreciation for the year Accumulated depreciation as at 31.12.2006/1.1.2007

50 638 (11 906) – 3 763 42 495

8 583 – (22) 1 339 9 900

100 776 – (15 623) 26 160 111 313

159 997 (11 906) (15 645) 31 262 163 708

Transfers Disposal Depreciation for the year Accumulated depreciation as at 31.12.2007

(675) (320) 4 116 45 616

15 620 (3 201) 2 642 24 961

1 045 (16 814) 29 586 125 130

15 990 (20 335) 36 344 195 707

Net Book value as at 31.12.2007 Net Book value as at 31.12.2006

92 907 82 624

16 877 12 837

121 313 117 351

231 097 212 812

– –

– –

14 694 22 380

14 694 22 380

of which finance leases at 31.12.2007 of which finance leases at 31.12.2006 Other notes (in 1000 CHF) of which pledged Buildings in construction Current contractual liabilities Valuation adjustments Capitalised interest

2007 35 273 3 273 1 500 – –

2006 39 027 – – – –

29

30

17. Investments in associated companies (in 1000 CHF) 2007 22 354 31 – 6 363 3 361 (558) 2 846 (2 916) 31 481

2006 6 902 2 21 854 (1 743) 708 (3 630) 3 294 (5 033) 22 354

–

–

Balance sheets of associated companies Assets Liabilities Net assets

194 999 (138 048) 56 951

137 177 (90 258) 46 919

Income Charges

184 844 (172 223)

106 371 (95 642)

As at 1.1 Foreign currency translation difference Change in consolidation scope Transfers Acquisitions Disposals Share in earnings of associated companies Dividends received As at 31.12 of which the following are pledged

The 5 main associated companies are: – Reproad AG – Catram AG – MOAG Baustoffe Holding AG – Asfatop AG – BRZ The cumulative 100% turnover of these 5 companies is CHF 91.4 million, representing 49.5% of the cumulative turnover from associated companies.

The cumulative 100% assets of these 5 companies is CHF 63.5 million, representing 32.6% of the cumulative assets of associated companies.

To date, there are no restrictions on the transfer of profits of the associated companies.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

18. Other financial investments (in 1000 CHF) As at 1.1 Conversion difference Change in consolidation scope Transfers Acquisitions Disposals Valuation adjustments As at 31.12 Distribution: Shareholdings in unlisted companies Loans* Other financial investments As at 31.12

2007 40 823 2 – (6 519) 1 578 (13 586) (107) 22 191

2006 21 305 22 6 689 712 22 260 (9 291) (874) 40 823

3 361 16 937 1 893 22 191

8 075 31 469 1 279 40 823

255

of which pledged

–

19. Intangible assets (in 1000 CHF)

2007 Acquisition value as at 1.1 Accumulated depreciation as at 1.1 Change in consolidation scope Investments Transfers - acquisition value Transfers - accumulated depreciation Depreciation/Adjustment As at 31.12, after depreciation of which pledged 2006 Restated figures Acquisition value as at 1.1 Accumulated depreciation as at 1.1 Change in consolidation scope Investments Depreciation As at 31.12, after depreciation of which pledged Goodwill: see note nr 20.

Trademarks 2 884 (1 883) – – – – (203) 798

Customer List and Order Book 13 230 (2 329) – – 83 – (2 501) 8 483

Goodwill 76 740 – – – – – (4 792) 71 948

Group Total 100 055 (7 456) – 204 38 (38) (9 666) 83 137

–

–

–

–

–

– – 3 812 150 (1 059) 2 903

2 088 (1 393) 857 294 (792) 1 054

– – 2 884 – (1 883) 1 001

– – 13 230 – (2 329) 10 901

4 834 – 71 906 – – 76 740

6 922 (1 393) 92 689 444 (6 063) 92 599

–

–

–

–

–

–

IT Project 3 962 (1 059) – – 38 (38) (1 420) 1 483

Licences and Software 3 239 (2 185) – 204 (83) – (750) 425

–

* The carrying value approximates to the fair value.

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32

20. Goodwill valuation and distribution The net book value of Goodwill represents the excess of the cost of acquisition over the fair value of the acquired identifiable assets, liabilities and contingent liabilities, after deduction of accumulated impairment losses.

Goodwill is allocated to the respective cash generating units (CGU). The goodwill resulting from the acquisition of Batigroup is allocated over the new entities resulting from the internal reorganisation.

The net residual value of a CGU is determined based on a value in use calculation of discounted cash flows, taking into account the business plan 2008 to 2010 adopted by the management. Subsequent years cash flows are estimated based on growth rates as disclosed below.

The Goodwill is distributed between the CGUs as follows: (in 1000 CHF) Restated figures1

1 The adjustment of deferred taxes on the pension scheme of Batigroup not taken into account at the time of the acquisition has a total impact of KCHF –817 on goodwill which is split by segment as follows: General Contracting: KCHF –238; Infra: KCHF –212 and Tunnels KCHF –367.

2

Including goodwill Göhner Merkur (CHF 2 079 million).

Cash Generating Units: Implenia Construction Ltd - Infra Implenia Construction Ltd - Tunnels and TC Implenia General Contractor Ltd2 Reuss Engineering AG Privera AG AG für manuelle Dienstleistungen

Assumptions for the calculation of the recoverable amount:

Gross margin Pre-tax discount rate – Post-business plan growth rate

Implenia Construction Ltd Infra 8.40% 7.40% 1.00%

31.12.2007

Adjustment

31.12.2006

12 835 15 596 30 467 10 295 2 690 65 71 948

(1 337) – (3 455) – – – (4 792)

14 172 15 596 33 922 10 295 2 690 65 76 740

Implenia Construction Ltd Tunnels and TC 8.90% 10.50% 1.00%

Implenia General Contractor Ltd 4.70% 10.50% 1.00%

Reuss Engineering AG 29.50% 9.90% 0.50%

Management defines the budgeted gross margin based on historical trends and expectations of future market development.

The average growth rate are in line with construction industry in Switzerland.

Discount rates are pre-tax and reflect the specific risks related to the corresponding segments.

Based on current calculations, no impairment was identified.

Goodwill adjustments recognised on the Infra, Tunnels and General Contracting segments are compensation from the use of a part of Batigroup's carried forward losses which, in the light of information at the time of the acquisition, had not been utilised.

According to IFRS standards, the positive fiscal impact of the use of non utilised carried forward losses obtained during an acquisition must be compensated by an adjustment of goodwill, the purpose being to adjust goodwill to the value it ought to have been had these carried forward losses been used at the time of the acquisition.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

21. Other creditors (in 1000 CHF) Tax authorities (withholding tax, VAT, taxes paid in advance) Social security institutions, insurance providers Payables to employees Benefit plan institutions Others Total

2007 22 156 3 993 4 033 483 11 063 41 728

2006 29 338 1 320 926 3 621 1 680 36 885

2007 51 094 26 242 77 336

2006 46 338 41 300 87 638

22. Accrued liabilities and deferred income (in 1000 CHF) Vacation and overtime entitlement of employees Other payables Total

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23. Borrowings (in 1000 CHF) 2007 96 814 – 323 681 (256 070) 164 425

2006 1 535 99 836 310 664 (315 221) 96 814

Due dates: Within 12 months Between 1 and 5 years As at 31.12

158 645 5 780 164 425

81 096 15 718 96 814

of which finance leases

7 351

13 289

As at 1.1 Change in consolidation scope Increase in borrowings Repayments As at 31.12

The main source of financing is the consortium credit that the Group obtained from a consortium of banks on 16 August 2006.

On 20 July 2007, Implenia Ltd signed a rider to its credit agreement with a consortium of banks increasing the cash credit limit from CHF 50 million to CHF 250 million and reducing the guarantee limit from CHF 50 million to CHF 250 million. The total cash and guarantee limit remains unchanged at CHF 500 million. The other terms of the initial contract also remain in effect.

To secure the consortium credit, the Implenia Group issued the following securities in favour of the bank consortium: – Pledging of mortgage certificates on the Group real estate for an amount of CHF 44 million.

– Guarantees given by the most important companies of the Group to cover the obligations of Implenia Ltd towards – the bank consortium.

The continuance of the credit relationships is dependant on various conditions (Covenants), which had been fully complied with

by Implenia Ltd at 31 December 2007.

Liabilities arising from finance leases (in 1000 CHF) As at 31.12

Within 12 months Between 1 and 5 years Total Leasing concerns mainly site equipment.

Total of minimum leasing payments 2007 2006 4 322 8 035 3 477 5 829 7 799 13 864

Total interest 2007 2006 66 294 382 281 448 575

Present value of minimum leasing 2007 2006 4 256 7 741 3 095 5 548 7 351 13 289

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

24. Employee benefit plans Implenia benefit plans essencially comprise the former plans of Zschokke and Batigroup. They consist of plans governed by Swiss pensions law and are regarded as defined benefit plans for the purpose of IAS19. The defined benefit obligation of active staff is determined using the projected unit credit actuarial valuation method, taking into account future salary and benefits increase and staff turnover expectations. The defined benefit obligation of pensioners corresponds to the fair value of present benefits taking into account future increases. Actuarial reports are prepared at the balance sheet date. (in million CHF) 2007

2006

(1 271.1) 1 235.8 (35.3)

(1 221.9) 1 193.9 (28.0)

44.0 8.8

36.3 8.3

Reconciliation of the amount recognized in the balance sheet Asset recognized as per 1.1 Effects from business combinations Expense recognized in profit or loss Contributions by the employer Asset recongnized as per 31.12

8.3 0.0 (37.0) 37.5 8.8

11.7 (3.3) (33.9) 33.8 8.3

Pension expenses recognized in profit or loss Current service cost Interest cost Expected return on plan assets Expense recognized in profit (+) / loss (–)

(40.6) (38.1) 41.7 (37.0)

(36.2) (40.7) 43.0 (33.9)

30.4

65.4

3.2% 3.5% 1.0% 0.0% 10.0 21.2

3.2% 3.5% 1.0% 0.0% 10.0 21.2

Amount recognised in the balance sheet as per year-end Present value of funded defined benefit obligation Fair value of plan assets Overfunding (+) / underfunding (–) Unrecognized actuarial gains (–) / losses (+) Asset (+) / Liability (–) recognized in balance sheet

The expected employer’s contributions for 2008 amounts approximately to CHF 37.7 million.

Actual return on plan assets Principal actuarial assumptions at 31.12 Discount rate Expected rate of return on plan assets Future salary increases Future pension increases Expected average remaining working lives in years Life expectancy at retirement age (male/femelle) in years

The expected rate of return on plan assets is based on expected performance of each investment category as per present investment policy. The long term returns by category is 7.0% on Swiss Shares, 8.0% on foreign shares, 2.5% on Swiss bonds, 3.5% on foreign bonds, 4.5% on real estate investments and 1% on cash deposits.

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36

(in million CHF) Reconcilation of defined benefit obligation Defined benefit obligation at 1.1 Effects from business combinations Interest cost Current service cost (employer) Contributions by plan participants Past service cost Actuarial gain (+) / loss (–) on defined benefit obligation Defined benefit obligation at 31.12 Reconcilation of the fair value of plan assets Fair value of plan assets at 1.1 Effects from business combinations Expected return on plan assets Contributions by the employer Contributions by plan participants Benefits paid/deposited Actuarial gain (+) / loss (–) on plan assets Fair value of plan assets at 31.12 Major categories of plan assets Properties Equity instruments Switzerland Equity instruments foreign countries Debt instruments Switzerland Debt instruments foreign countries Cash

2007

2006

(1 221.9) 0.0 (38.1) (40.6) (32.1) 61.6 0.0 (1 271.1)

(563.1) (707.3) (40.7) (36.2) (30.2) 195.0 (39.5) (1 221.9)

1 193.9 0.0 41.7 37.5 32.1 (61.6) (7.8) 1 235.8

555.7 704.0 43.0 33.8 30.2 (195.0) 22.4 1 193.9

15.6% 14.7% 15.7% 26.5% 21.6% 5.9%

14.9% 15.7% 15.9% 27.5% 19.5% 6.5%

Plan assets include shares of Implenia Ltd for a total fair value of CHF 1.9 million (2006: shares for a value of CHF 1.6 million) and properties occupied by Implenia for a value of CHF 27.2 million (2006: 30.9 million).

Information over several years Present value of funded defined benefit obligation Fair value of plan assets Underfunding Experience adjustments on defined benefit obligation Experience adjustments on plan assets

2007 (1 271.1) 1 235.8 (35.3) 0.0 (8.0)

2006 (1 221.9) 1 193.9 (28.0) 42.2 22.4

2005 (563.1) 555.7 (7.4) 6.0 4.7

Foundation for flexible retirement (FAR) Industrial personnel subject to the collective agreement benefit from the possibility of taking optional early retirement from the age of 60. Transitory benefits granted up to normal retirement age are paid by the Foundation for flexible retirement in the construction industry (FAR), established specially for this purpose. Financing of the FAR, which was created by the SIB (Industry and Construction) and SYNA trades unions and also the Société Suisse des Entrepreneurs, is assured by contributions from employers and employees. Insofar as the benefits of the FAR are financed under the margin capital distribution system, the conditions necessary to consider the FAR as a benefit system according to standard IAS 19 are not fulfilled. Consequently, the FAR is considered as a multi-employer system with defined contributions.

The FAR prepares its accounts in accordance with Swiss benefit fund legislation. On this basis, at the end of 2006 the FAR had a reserve ratio of 94.9%, i.e. a deficit of CHF 27.8 million. In view of measures decided during the 2007 financial year (mainly reductions in benefits and increased contributions by employees), the Group does not anticipate any payment obligations beyond contributions initially planned. In 2007, the Group paid the FAR contributions totalling CHF 11.1 million (2006: CHF 11.2 million).

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

25. Deferred taxes (in 1000 CHF) Deferred tax liabilities As at 1.1 Adjustment of deferred taxes on benefit fund assets (see note on balance sheet) Changes Change in consolidation scope As at 31.12 The main deferred tax liabilities refer to the following items: Difference between taxable base and carrying value of provisions Difference between taxable base and carrying value of tangible fixed assets Difference between taxable base and carrying value of work in progress (assets/liabilities) and work partnerships (debtors/creditors) Difference between taxable base and carrying value of inventories Deferred tax liabilities of benefit plan surplus Other net differences

Deferred tax assets As at 1.1 Changes Change in consolidation scope As at 31.12

2007

2006

13 613 – 1 053 – 14 666

23 195 1 922 (11 151) (353) 13 613

619 6 657

2 348 6 403

472 1 083 1 922 3 913 14 666

435 689 1 922 1 816 13 613

4 953 (2 365) – 2 588

4 627 (15 087) 15 413 4 953

Recognised deferred taxes are calculated on the basis of a loss carry forward of 12.1 million (2006: 27.8 million).

The amount of tax losses taken into account is based on profit projections prepared by the management.

Unrecognised tax losses to be carried forward Expiry date 1 year from 2 to 5 years After 5 years No expiry

– 2 12 914 123 439 136 355

31 518 8 338 17 913 98 766 156 535

The amount of unrecognised fiscal losses in 2007 mainly concerns the foreign companies, which no longer have any operational activities.

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26. Provisions (in 1000 CHF) 2007 As at 1.1 Change in consolidation scope Transfer Allocation Utilised Released As at 31.12 of which current portion 2006 As at 1.1 Change in consolidation scope Allocation Utilised Released As at 31.12 of which current portion

Warranty provisions 4 319 – 424 539 (4 252) (35) 995

Onerous contracts 3 962 – (300) – (2 262) (1 400) –

Integration costs 1 766 – 454 1 319 (1 500) (40) 1 999

Disputes 5 771 – (2 488) – (400) – 2 883

Repairs and claims 3 427 – (988) 9 (245) (910) 1 293

Others 2 454 – (914) 256 (770) – 1 026

Group Total 21 699 – (3 813) 2 123 (9 429) (2 385) 8 195

–

–

1 999

–

–

–

1 999

– 4 696 – – (377) 4 319

– 2 692 1 270 – – 3 962

– – 7 766 (6 000) – 1 766

– 2 644 3 127 – – 5 771

218 1 946 1 273 (10) – 3 427

1 273 – 1 181 – – 2 454

1 491 11 978 14 617 (6 010) (377) 21 699

–

–

1 766

–

–

–

1 766

Warranty provisions concern risks related to completed projects which, by virtue of contractual agreements, are payable normally within 2 to 3 years, or 5 years at most. Some provisions previously classified under onerous contracts were reclassified under warranty provisions. The increase in the provision is related to a new project carried out in France by Implenia.

Onerous contracts concern rental guarantees. They generally fall due within 2 to 3 years. As the result of a new rental contract signed in 2007 with the pension fund, it was possible to release a provision for the sum of 1.4 million.

The increase in integration costs is due essentially to provisions for the cost of regrouping certain subsidiaries.

A provision for redundancy costs linked to Implenia's activities abroad, previously classified under disputes, was reclassified under integration costs.

During an analysis of provisions for disputes, it transpired that some valuation differences, resulting from the merger with Batigroup and classified under provisions for disputes, should be considered as provisions for losses on debtors and provisions for site repairs respectively.

The provision for claims payable was reclassified under transitory liabilities due to the certain character of the amounts due.

An amount of CHF 910 000 was able to be released following the purchase by Implenia of a rented plot of land which as a result no longer requires reinstatement. The balance of the provision consists of future costs for the reinstatement of sites at the end of their use. This mainly concerns gravel pits.

At the end of 2007, other provisions consist of provisions for risks in connection with activities abroad.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

27. Share capital 2007

2006

34.1% 11.2% 6.5% 3.3% –

– 10.9% – – 5.2%

Number of registered shares: Nominal value per share in CHF Total nominal value in CHF, as at 31.12

18 472 000 4.50 83 124 000

18 472 000 4.85 89 589 200

Number of shares in circulation, as at 31.12

18 419 437

18 006 926

Known shareholders holding more than 3% (2006:5%) of share capital as at 31 December: Laxey Group Parmino Holding AG Port Noirt Investment Sàrl Ammann Group 3V Asset Management AG

ISIN Code

CH002 386 8554 (IMPN)

The Annual General Meeting of Shareholders held on 24 April 2007 decided to repay CHF 0.35 of the face value of each Implenia Ltd share. As the legal requirements for repayment were met, the repayment was made as planned on 10 July 2007.

From that date, the share capital of Implenia Ltd amounts to CHF 83 124 000.

The annual general meeting on 2 March 2006 decided on a conditional capital increase of up to a total of CHF 41.562.600 (9.236.000 shares with a nominal value of CHF 4.50 each) for the purpose of covering the potential conversion of future convertible bonds or similar financial instruments. As of 31 December 2007, no such financial instruments were issued.

The Board of Directors proposes a partial reimbursement of CHF 0.50 of the nominal value. The share capital will be reduced

by KCHF 9 236 to KCHF 73 888. The Articles of Association will be adjusted accordingly. The partial reimbursement will take place on 3 July 2008 in favour of shareholders inscribed on the register on 27 June 2008. This reimbursement is not subject to deduction of withholding tax or income tax for natural persons liable for tax in Switzerland.

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40

28. Treasury Shares (in 1000 CHF)

1 Implenia/Zschokke exchange ratio = 40:1.

2 Implenia/Batigroup exchange ratio = 1:1.

Balance as at 1.1.2006 Disposals (profit-sharing plan) Balance as at 2.03.2006

Number 5 110 (1 937) 3 173

Average Unit Price (in CHF) 376 376 376

Exchanged for Implenia shares

126 920

9

1 194

Implenia shares held by Zschokke Holding SA1 Implenia Ltd shares Implenia shares held by Batigroup Holding SA2 Purchases Balance as at 31.12.2006

259 681 20 700 6 573 51 200 465 074

18 5 21 24 16

4 665 100 140 1 220 7 319

465 074 472 017 (800 043) (84 485)

16 42 30 16 – 37

7 319 19 944 (23 791) (1 330) (181) 1 961

Balance as at 1.1.2007 Purchases Disposals Transfers (Board members and managers) Nominal value refund Balance as at 31.12.2007

52 563

Total 1 923 (729) 1 194

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

29. Financial instruments (in 1000 CHF) Classified as per IAS39* Financial assets Cash and cash equivalents Securities Short-term receivables Trade debtors Other debtors Financial investments (without securities) Total Financial liabilities Short-term financial liabilities Trade payables Other payables Long-term financial liabilities Total

Book value

Fair value

2007

2006

2007

2006

rec./liab. av.sale rec./liab. rec./liab. rec./liab. rec./liab.

47 153 1 342 148 432 633 40 708 53 673 575 657

107 346 686 1 289 374 823 29 984 63 177 577 305

47 153 1 342 148 432 633 40 708 53 673 575 657

107 346 686 1 289 374 823 29 984 63 177 577 305

other liab. other liab. other liab. other liab.

158 645 175 772 41 728 5 780 381 925

81 096 134 254 36 885 15 718 267 953

158 645 175 772 41 728 5 780 381 925

81 096 134 254 36 885 15 718 267 953

* Classifications as per IAS 39: – rec./liab.: receivables and liabilities – av.sale: available for sale – other liab.: other liabilities Amount of financial instruments held to maturity: during the financial year, the Group held none of this type of financial instrument (2006: none).

Pledging of financial assets No financial assets were pledged at the balance sheet date (2006: none).

Valuation adjustments for default changed as follows: 2007

2006

Customers: Position of value correction as at 1 January Use of value corrections Constitution of value corrections Value corrections now worthless carried forward Inputs/outputs resulting from variation of the consolidation scope Position of the value correction as at 31 December

13 530 – – (2 037) – 11 493

10 050 – – (290) 3 770 13 530

Profit and loss in income statement a) result of receivables and liabilities b) result of financial instruments available for sale c) result of financial instruments held until maturity

(6 830) 379 –

(3 906) 921 –

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30. Management of financial risks The Group's main financial instruments concern the cash and cash equivalents, customers, financial liabilities and other liabilities, long-term financial liabilities and suppliers. Customers and suppliers are generated in the course of normal activity.

Financial liabilities are intended exclusively to finance operational activity (current assets and fixed assets). Long-term investments serve mainly to finance associated companies (loans).

The Group authorises the use of derivative financial instruments only for hedging purposes. Due to the weakness of exchange rate risks and the seasonal nature of financing requirements, derivative financial instruments are rarely used. During the financial year, the Group held no derivative financial instruments (2006: none).

The main risks for the Group resulting from financial instruments are the credit risk, the interest rate risk, the liquidity risk and the market risk. Nearly 99% of sales and purchases by Group companies are made in the same currency, even 100% as regards financing. The risk run by the Group with regard to operational activity is therefore not significant. To a small extent, there is an exchange rate risk on net investments labelled in foreign currency made in foreign subsidiaries.

Credit risk The credit risk concerns losses on customer debts and on financial debts.

Customers Agreements with customers generally stipulate payment terms of from 30 to 90 days. Customer solvency is verified prior to any contract being signed. Turnover is realised mainly with the public sector and with high quality debtors (banks, insurance companies, pension funds, etc). On principle, no guarantee is requested. However, in the case of services concerning real estate, it is generally possible to have a legal mortgage registered (mortgage right of artisans and entrepreneurs). Notice of payments outstanding is given as part of a standardised procedure. Regular reports are made on the progress of debts, particularly those that are overdue.

With respect to Group turnover, irrecoverable debts are negligible.

Financial debts and other debts The credit risk concerning financial claims and other receivables resides in loss of income due to debtor insolvency.

Debtors are regularly subject to solvency checks by means of a verification of their financial situation.

The maximum credit risk corresponds to losses under the different receivables. For accounts receivables, the three largest sums amount to CHF 34.0 million (2006: CHF 15.1 million), or 7.2% of all accounts receivables (2006: 3.8%).

For financial claims and cash and cash equivalents, the three largest sums amount to CHF 21.4 million (2006: CHF 82.4 million), corresponding to 31.0% of all financial claims and liquidities (2006: 58.8%).

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

The ageing structure of customer receivables is as follows: (in million CHF) Not due and not provided Due 0-30 days Due 30-60 days Due 60-90 days Overdue (more than 90 days) Overdue and provided Total

31.12.2007 281.5 51.5 27.6 11.2 55.5 5.3 432.6

31.12.2006 214.9 60.5 29.2 11.7 53.3 5.2 374.8

Receivables subject to individual valuation adjustments amount to CHF 8.0 million net (2006: CHF 8.0 million) at the balance sheet date, valuation adjustments amount to CHF 2.7 million (2006: CHF 2.5 million). The historic rate of loss is less than 0.4% of turnover.

The table below shows receivables from the most important counterparts at closure of the balance sheet: Situation as at 31.12.2007 Counterpart1 Customer receivables: 1. Other 2. Other 3. Other Financial claims and liquidities: 1. Other 2. Financial institute 3. Financial institute Situation as at 31.12.2006 Counterpart1 Customer receivables: Public entity Other Other Financial claims and liquidities: Financial institute Financial institute Other

Rating2

Saldo

n.a. n.a. n.a.

19 500 8 016 6 456

Rating2 n.a.

Aaa Aa2

Saldo 9 011 6 376 6 022

Rating2

Saldo

n.a. n.a. n.a.

5 900 5 380 3 874

Rating2 Aaa Aa2 n.a.

Saldo 31 565 32 844 18 100

Liquidity risk The liquidity risk resides mainly in the eventuality that liabilities cannot be honoured on the due date. Future development of liquidity is forecast based on a variety of rolling planning horizons. The Group endeavours at all times to have sufficient lines of credit to cover planned funding requirements. As at 31 December 2007, the Group had cash and cash equivalents of CHF 47.2 million (2006: CHF 107.3 million) and unused credit limits of CHF 178.6 million (2006: 167.6 million). The Group seeks minimal liquidity (including cash and cash equivalents and unused credit limits) of CHF 50 million (2006: CHF 50 million).

1 Counterparts are distributed according to the following classifications: – Financial institutes (banks, – insurance companies, – pension funds); – Public entities; – Other.

2 Moody’s long-term debt rating.

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44

2007 Suppliers and other liabilities Short-term financial liabilities Long-term financial liabilities

0-3 months 215 488 158 644 –

3-6 months 44 – –

7-12 months more than12 months 1 968 – – – – 5 780

2006 Suppliers and other liabilities Short-term financial liabilities Long-term financial liabilities

0-3 months 163 108 81 096 –

3-6 months 8 – –

7-12 months more than12 months 1 102 3 957 – – – 15 718

Interest rate risk The Group has very few assets that generate interest. Consequently, the Group’s interest rate risk results from the structure and volume of its financing. Insofar as the Group’s debts are coupled exclusively with variable interest rates, the risk resides in the effect of interest rate variations on the Group’s cash flow. Indebtedness always occurs in the national currency of the financed entity and is therefore almost entirely in Swiss francs.

The structure of due dates of interest-bearing financial instruments is as follows: less than 1 year Variable rate: 47 153 Liquidities 148 Financial claims 158 645 Financial liabilities Fixed rate: Financial claims Financial liabilities

– –

2-5 years

more than 5 years

– 8 286 5 780

– – –

13 370 –

– –

The table below shows the effect of interest rate variations on the Group’s pre-tax profit (EBT). It is assumed that the interest rate variation affected the entire financial year. Only the effect of interest rate variations in Swiss francs is presented, since the Group acquires debt virtually exclusively in that currency.

Interest rate variations have no effect on shareholders’ equity.

Variation in rate Variation in EBT +/– 0.5% 1 097 Sensitivity 2007 +/– 0.5% 783 Sensitivity 2006 Exchange rate risk and market risk (cash flow risk) Risk related to exchange rate fluctuations is not significant and concerns mainly net investments held in foreign currency made in foreign subsidiaries.

Since the Group holds few securities, market risk is not significant either.

Losses on financial liabilities and contractual infringements There were no losses on financial liabilities during the financial year (2006: none). Clauses (financial convenants) stipulated in financing agreements were fulfilled.

Policy regarding structure of capital and indebtedness The Group targets a rate of self-financing around of 30%. On the year end date, the rate of self-financing was 30.2% (2006: 28.7%).

Net current assets must be financed by short-term bank finance, while the financing of assets must be assured by current cash flow.

The value of economic shareholders’ capital corresponds to that shown in the balance sheet.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

31. Leasing contracts (in 1000 CHF) Rents expense in the financial year Amount of leasing liabilities for 2008 / (2007) Amount of leasing liabilities for 2009 to 2012 / (2008-2011) Amount of leasing liabilities from 2013 / (from 2012)

2007 50 578 16 927 47 478 28 561

2006 42 037 21 704 56 496 11 331

2007

2006

Rental contracts are distributed as follows: real estate rental (80%) and vehicle rental (20%).

There are no existing leases or sub-leasing agreements that are not rescindable.

32. Profit-sharing scheme (in 1000 CHF) a) Scheme available to all employees The profit-sharing scheme for the benefit of employees is determined by the Motivation Foundation of Implenia Group.

Under this scheme, employees can subscribe to shares of Implenia Ltd (2006: Zschokke Holding SA) at a preferential price.

The difference between the average market price of CHF 32.15 per share (2006: CHF 562.99 per share) and the preferential price of CHF 19.30 per share (2006: CHF 400 per share) is recorded as an expense of the period.

52 866 679

Number of shares subscribed (converted into shares Implenia) Amount expensed in the financial year

73 120 765

The shares are blocked and cannot be traded for a period of 3 (2006: 5) years. The employees are entitled to dividends and may exercise their voting rights. Upon expiry of the blocking period, the shares may be freely traded by the employees. b) Executive scheme Group managers benefit from a profit-sharing scheme in Implenia Ltd shares. Depending on the achievement of targets, the Board of Directors may decide to allocate shares free of charge or on a preferential basis. Under a written agreement, this allocation constitutes additional annual remuneration that is not related to the future performance of managers. The amount is therefore expensed entirley in the current financial year. The amount charged to the Group is calculated on the basis of the share’s stock market value at the time of grant, which is done at the beginning of the next financial year. The Group may either buy shares on the market or draw from its own stock of shares.

In 2007, shares reserved for managers were estimated at a price of CHF 34.60 per share (2006: CHF 25.45 per share).

Allocation of shares for the previous year

Number

77 480

64 140

Allocation of shares for the previous year Estimate of cost for the previous year Estimate of cost for the current year Amount charged to the financial year

KCHF KCHF KCHF KCHF

1 972 (1 600) 2 456 2 828

1 852 (1 820) 1 600 1 632

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46

2007

2006

c) Shares to board members Some Board members receive part of their remuneration in shares. The cost is calculated in the same way as for shares allocated to managers. For the 2005 financial year, shares had already been allocated at the end of the year, which explains why there was no distribution in 2006.

Allocation of shares for the previous year

Number

7 005

–

Allocation of shares for the previous year Estimate of cost for the previous year Estimate of cost for the current year Amount charged to the financial year

KCHF KCHF KCHF KCHF

170 (170) 126 126

– – 170 170

33. Related party disclosures (in 1000 CHF) 2007

2006

Information on related party transactions Sales to related parties: – associated companies – companies related to a key management executive – work partnerships – others

4 688 11 569 230 887 455

1 758 – 262 168 191

Purchases from related parties: – associated companies – companies related to a key management executive – work partnerships

19 964 6 736 4 647

23 141 544 2 078

Credit claims on related parties (as at 31.12): – associated companies – companies related to a key management executive – work partnerships – others

558 999 53 707 1 207

1 599 – 61 153 903

Debts to related parties (as at 31.12) – associated companies – companies related to a key management executive – work partnerships – others

3 851 130 1 007 704

926 – 3 274 –

Transactions with related parties are dealt with at arm’s length.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

34. Indemnities to key management executives (in 1000 CHF) 2007

2006

The term “key management executives” includes the members of the Board of Directors and the members of the Group Management.

Short-term employee benefits Other post-employment benefits Long-term benefits Termination benefits Share-based payments Total remuneration of key management executives

6 409 – 500 – 2 501 9 410

4 910 182 410 – 1 774 7 276

Balance in favour of key management executives as at 31.12

4 529

1 632

Details of remuneration in accordance with the Swiss Code of Obligations, art. 663 and following, can be found in the annual report of Implenia Ltd under note nr 8.

35. Contingent liabilities (in million CHF) Third party guarantees

2007 179.4

2006 228.6

The balance of outstanding guarantees relates essentially to ongoing projects carried out for own account (submission, warranty and issued guarantees) as well as for projects in work partnerships.

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36. Acquisition / disposal of subsidiaries - Cash flow impact (in 1000 CHF) Reuss Group Acquisition price of Reuss Group Balance payable on purchase of Reuss Group Cash and cash equivalents taken over from Reuss Group Batigroup Acquisition of Batigroup (purchase cost paid in 2006) Cash and cash equivalents taken over from Batigroup. (including newly consolidated entities) Stamm Bau Disposal price of Stamm Bau Loan to purchasers Cash and cash equivalents transferred from Stamm Bau

2007

2006

– – –

(20 143) 800 131

– –

(3 299) 40 214

– – – –

9 110 (4 000) (3 421) 19 392

There has been no change in the consolidation scope (purchase or sale of subsidiaries) during the year 2007.

The acquirers of Stamm Bau AG have repaid the first tranche of the loan as it fell due (CHF 1 million) (transfer to “Other financial investments”). The next repayments are expected as follow: CHF 1 million as of 30.06.08 and CHF 2 million as of 30.06.09.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

37. Adjustment of previous year’s reported figures The following data was modified with respect to last year’s reported figures. a) Turnover from real estate operations Turnover from real estate operations corresponds to the sales of these operations and is included in Group turnover. Until last year, only the result of the sale was recognised as turnover. The adjustment leads to an increase in turnover and subcontractors of KCHF 79 297 for 2006. There is no impact on operating profit as a result. This adjustment was necessary so that Implenia complied with the accounting requirements of IFRS standards. b) Processing of discounts and guarantee commission Previously discounts and guarantee commission were recognised under financial costs. A change of accounting principles was necessary to meet IFRS standards and these items are now included either in turnover or in charges. The previous year’s figures have been adjusted, leading to a reduction in Group turnover of KCHF 3 571 and a reduction in materials and subcontractors of KCHF 801.

The effect of points a) and b) on the profit and loss account are as follows: (in 1000 CHF) Group turnover Materials and subcontractors Operating profit Financial costs Pre-tax profit

Reprocessed figures 2006 2 413 868 (1 517 735) 17 044 (8 342) 14 039

Published last year 2006 2 338 142 (1 439 239) 19 814 (11 112) 14 039

Difference 75 726 (78 496) (2 770) 2 770 –

c) Receivables and debts in respect of Partnerships To improve the transparency of the accounts, receivables and debts with regard to services to/from partnerships have been reclassified to the “Customers” and “Suppliers” accounts respectively. Provisions for work partnerships of KCHF 26 093 were reclassified from work in progress liabilities to partnerships liabilities. Compared to last year, the accounts have been adjusted as follows: Published (in 1000 CHF) Reprocessed figures last year Difference 2006 2006 Assets Customers 374 823 313 670 61 153 Partnerships 11 462 72 615 (61 153) Liabilities Suppliers Partnerships Work in progress

134 254 34 972 485 341

134 030 9 103 511 434

224 25 869 (26 093)

49

50

d) Corrections to cash flow 2006 The adjustments in the following table were made to the 2006 cash flow: (in 1000 CHF) Other short-term assets and liabilities Interest paid Interest received Operating cash flow

Reprocessed figures 2006 9 261 (7 321) 2 186 37 567

Published last year 2006 14 294 220 – 37 567

Difference (5 033) (7 541) 2 186 –

e) Calculation of deferred tax on pension scheme assets Deferred tax on pension scheme assets was calculated for the first time this year and required an adjustment to the previous year.

The adjustment gave rise to a change in shareholders’ equity on 1st January 2006 of KCHF –2 739. For the acquisition of Batigroup, the impact on goodwill of deferred tax on pension scheme assets is KCHF 817. This gives a total adjustment of KCHF –1 922 as at 31 December 2006. The impact of KCHF 41 for the 2006 financial year was considered immaterial and was not recognised. f) Correction of the allocation of share remuneration Remuneration in shares was charged directly to shareholders’ equity. The adjustment resulted in a reclassification from accruals and deferred income to shareholders’ equity with respect to the positions as at 31 December 2006. The adjustment had no impact on the profit and loss account.

The effect of points e) and f) may be summarized as follows: (in 1000 CHF) Shareholders’ equity, 1.1 Goodwill, 31.12 Deferred taxes, liabilities, 31.12 Accruals and deferred income 31.12 Shareholders’ equity, 31.12

Reprocessed figures 2006 203 819 76 740 13 613 87 638 368 550

Published last year 2006 206 558 77 557 11 691 89 408 369 519

Difference (2 739) (817) 1 922 (1 770) (969)

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

38. Post-balance sheet events The Board of Directors of Implenia Ltd, in its meeting held on 4 March 2008 approved the consolidated accounts for the year 2007 for presentation to the ordinary General Meeting of shareholders on 8 April 2008.

The General Meeting decides on the final approval of the financial statements.

Up to the time of the approval of this report, there were no known events that might require an adjustment to the accounting values of the Groups assets and liabilities.

The takeover bid by the Laxey group lapses on 14 March 2008.

On 30 November 2007 decision for a Joint Venture contract with Russian Land and for the formation of the company have been published. Official formation of the company is in progress (and will be completed within the next months).

51

52

39. Subsidiaries

Name Share holding AG für manuelle Dienstleistungen 53.33% Balduin Weisser AG 100% Bâtiments industriels du Haut-Rhin Sàrl (Bâtirhin) 100% Développements transfrontaliers SA 100% Gebr. Ulmer GmbH 100% Gravière de La Claie-aux-Moines S.A. 66.66% Gust. Stumpf GmbH 100% Gust. Stumpf Verwaltungs GmbH & Co KG 100% Implenia (Ticino) SA 100% Implenia Construction SA 100% Implenia Bau GmbH Implenia Generalunternehmung AG Implenia Development AG Implenia Global Solutions Ltd. Implenia Holding GmbH Implenia Immobilien AG Implenia Investment Management AG Implenia Management AG Implenia Österreich GmbH M.F. Wachter Bauunternehmung GmbH Privera AG Privera Services AG

100% 100% 100% 100% 100% 100%

Registered office Neuenhof Basel

Currency CHF CHF

Mulhouse (F) Lyon (F) Bruchsal (D)

EUR EUR EUR

195 000 Overheads Holding and Miscellaneous Inactive Implenia AG 14 663 800 Real Estate Active Implenia Development AG 25 565 Overheads Holding and Miscellaneous Inactive Implenia AG

Savigny Bruchsal (D)

CHF EUR

1 500 000 Infra Construction Works Active Implenia AG 1 533 876 Overheads Holding and Miscellaneous Inactive Implenia Holding GmbH

Bruchsal (D) Lugano Genève

EUR CHF CHF

Rümmingen (D) Basel Dietlikon Dietlikon Rümmingen (D) Dietlikon

EUR CHF CHF CHF EUR CHF

100% Dietlikon 100% Genève 100% Wien (O)

CHF CHF EUR

100% Stuttgart (D) 100% Bern 100% Bern

EUR CHF CHF

Share capital Segment 150 000 Services 1 750 000 Overheads Holding and Miscellaneous

511 292 Overheads Holding and Miscellaneous 150 000 Infra Construction Works 40 000 000 Infra + Tunnel, TC Construction Works + Global 2 556 459 Infra Construction Works 20 000 000 General Contractor 30 000 000 Real Estate 100 000 Global Solutions 3 067 751 Infra Construction Works 30 600 000 Real Estate

Active/ Inactive Held by Active Implenia AG Inactive Implenia Immobilien AG

Inactive Implenia AG Active Implenia AG Active Active Active Active Active Active Active

100 000 Real Estate Active 500 000 Overheads Holding and Miscellaneous Active 35 000 Infra Construction Works Active

Implenia AG Implenia Holding GmbH Implenia AG Implenia AG Implenia AG Implenia Immobilien AG Implenia AG Implenia AG Implenia AG Implenia AG

1 000 000 Overheads Holding and Miscellaneous Inactive Implenia Holding GmbH 4 000 000 Services Active Implenia AG 1 000 000 Services Active Implenia AG

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements

Registered Name Share holding office Reprojet AG 100% Zürich Reuss Engineering AG 100% Dietlikon Rocmouve SA 66.66% Echallens SAPA, Société Anonyme de Produits Asphaltiques 75% Satigny Sisag SA 100% Abidjan (CI) Socarco Mali Sàrl 100% Bamako (Mali) Sonnrain Wohnbau GmbH 100% Rümmingen (D) Strassen und Tiefbau AG 100% Vaduz (FL) Stuag Bauunternehmung GmbH 100% Rümmingen (D) Swiss Overseas Engineering Company100%Genève Tetrag Automation AG 100% Dietlikon Trachsel AG 100% Heimberg Zschokke Construction Sàrl 100% Lyon (F) Zschokke Développement SA 100% Lyon (F) Zschokke France SA 100% Lyon (F) Zschokke GmbH Leipzig 100% Leipzig (D)

CHF XOF XOF EUR CHF EUR CHF CHF CHF EUR EUR EUR EUR

Zschokke Holding Deutschland GmbH Zschokke Procédés Spéciaux Sàrl

EUR EUR

100% Berlin (D) 100% Lyon (F)

Zschokke Bratislava was liquidated in 2007.

All subsidiaries of the Group are fully consolidated.

Currency CHF CHF CHF

Share capital 100 000 100 000 120 000 500 000 492 000 000 100 000 000 255 646 50 000 306 775 200 000 100 000 100 000 76 225 457 347 914 694 1 022 584

Segment Infra Construction Works Services Infra Construction Works

Active/ Inactive Active Active Active

Infra Construction Works Infra Construction Works Infra Construction Works Overheads Holding and Miscellaneous Overheads Holding and Miscellaneous Overheads Holding and Miscellaneous Overheads Holding and Miscellaneous Services Infra Construction Works Infra Construction Works Overheads Holding and Miscellaneous Overheads Holding and Miscellaneous Overheads Holding and Miscellaneous

Active Active Active Inactive Inactive Inactive Inactive Active Active Active Inactive Inactive Inactive

Held by Implenia AG Implenia AG Implenia AG Implenia AG Implenia AG SISAG Implenia Holding GmbH Implenia Immobilien AG Implenia Holding GmbH Implenia AG Implenia AG Implenia AG Zschokke France SA Zschokke France SA Implenia AG Zschokke Holding Deutschland GmbH

3 067 751 Overheads Holding and Miscellaneous Inactive Implenia AG 457 347 Overheads Holding and Miscellaneous Inactive Zschokke France SA

53

54

40. Associated companies Name Argo Mineral AG Argobit AG ASFATOP AG Associés Poste Enrobage en Commun (APEC) SA Bawag, Belagsaufbereitungsanlage Wimmis AG Belagswerk Rinau AG Bépo-Bétonpompé S.A. Betonwerk Vispe (EG) Bewo Belagswerk Oberwallis (EG) Bioasfa SA Bipp Asphalt AG BRZ Belags- und Recycling-Zentrum (EG) Catram AG Deponie Eglisau (EG) Garage-Parc Montreux Gare SA GU Kies AG HOLCIM BETONDRANCE S.A. Imbess, Impianto miscela bituminosa E.S.S (EG) Kieswerk Oldis AG Léchire S.A. Microlog SPA MIFAG Mischgutwerk Frauenfeld AG MOAG Baustoffe Holding AG Mobival (EG) Parking de la Place de la Navigation S.A. Prébit, Centre d'enrobage (EG) Pro Quarta (EG) Real Partners AG Remora AG Reproad AG SEBAL Belagswerk Biel-Büttenberg (EG) SEBAL Lyss AG Seval - Société d'Enrobage du Valais central (EG) SFR société Fribourgeoise de Recyclage SA Socarco Bénin Sàrl Socarco Burkina Sàrl Société Coopérative Les Terrasses Société d'exploitation du Mégastore d'Archamps - SEMA Société de recyclage de matériaux pierreux - SRMP Tapidrance (EG) Urner Belagszentrum (UBZ), Flüelen/UR (EG) URPHALT Gemeinschaftsunternehmung (EG) Valbéton (EG) Valver (EG) Wohnpark an der Kander GmbH

Share holding 50.0% 40.0% 50.0% 20.0% 24.0% 25.0% 39.0% 20.0% 25.0% 50.0% 27.5% 33.3% 24.0% 37.0% 26.0% 33.3% 46.0% 33.3% 21.4% 33.3% 24.0% 10.0% 13.3% 26.0% 24.0% 25.0% 42.0% 45.0% 18.3% 33.3% 48.0% 48.0% 83.0% 20.8% 40.0% 40.0% 42.3% 30.0% 40.0% 52.0% 50.0% 25.0% 50.6% 27.9% 40.0%

Registered office Aarau Schafisheim Unterengstringen Hauterive Wimmis Kaiseraugst Lausanne Stalden Niedergesteln Bioggio Niederbipp Horw Chur Eglisau Montreux Schaffhausen Martigny Chiggiogna Haldenstein Fribourg San Giorgio (IT) Frauenfeld Mörschwil Massongex Lausanne Marin-Epagnier Alvaneu Zug St. Gallen Dietlikon Biel-Büttenberg Lyss Vétroz Hauterive Cotonou Burkina Versoix Archamps Savigny Martigny Flüelen Altdorf Sion Martigny Rümmingen-D

Currency CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF EUR CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF CHF XOF XOF CHF EUR CHF CHF CHF CHF CHF CHF EUR

Share capital 300 000 1 200 000 1 000 000 300 000 100 000 1 000 000 120 000 673 772 1 500 000 900 000 1 000 000 1 500 000 1 000 000 – 2 050 000 450 000 300 000 – 1 200 000 100 000 120 000 600 000 300 000 – 6 986 000 500 000 500 000 300 000 300 000 1 500 000 – 500 000 – 1 200 000 1 000 000 10 000 000 815 000 37 000 250 000 1 000 000 1 000 000 – 100 000 – 204 517

Associated companies are consolidated using the equity method.

Despite a holding in excess of 50%, Seval, Tapidrance and Valbéton are considered to be associated companies consolidated using the equity method. These are companies over which Implenia does not have sufficient control to justify full consolidation.

In addition, other companies in which Implenia has a holding of less than 20% are considered to be associate companies due to the fact that Implenia has significant influence over them.

Consolidated Financial Statements of the Implenia Group Notes to the Consolidated Financial Statements l Report of the Group Auditors on the Consolidated Accounts

Report of the Group Auditors to the General Meeting of Implenia AG, Dietlikon

As auditors of the group, we have audited the consolidated financial statements (balance sheet, income statement, statement of cash flows, statement of changes in equity and notes – pages 4 to 54) of Implenia AG for the year ended December 31, 2007.

These consolidated financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with Swiss Auditing Standards and with the International Standards on Auditing, which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements.

We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows in accordance with the International Financial Reporting Standards (IFRS) and comply with Swiss law.

We recommend that the consolidated financial statements submitted to you be approved.

PricewaterhouseCoopers SA

Willy Wenger Auditor in charge

Gerhard Siegrist

ZĂźrich, March 7, 2008

Report of the Group Auditors on the Consolidated Accounts

55

2

Statutory Financial Statements of Implenia Ltd

58

Income Statement (in CHF)) 2007

2006

REVENUE Revenue from investments Finance revenue TOTAL

17 426 915 20 134 952 37 561 868

12 944 461 6 453 943 19 398 404

EXPENSES Finance costs Amortisation on investments Administration costs Capital tax and stamp duty Income tax Changes in provisions Profit/(loss) for the year TOTAL

12 789 109 2 156 200 2 566 514 144 003 173 875 10 831 575 8 900 593 37 561 868

5 691 958 3 006 200 8 252 800 56 023 (88 136) 5 958 2 473 603 19 398 404

Income Statement

Statutory Financial Statements of Implenia Ltd Income Statement l Balance Sheet

Balance Sheet (in CHF) Notes ASSETS Cash and cash equivalents Securities Receivables - Group companies Receivables - third parties Prepayments and accrued income Current assets Subsidiaries Minority shareholdings Other financial investments Non-current assets TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY Bank borrowings Liabilities – Group companies Liabilities – third parties Other payables Accruals and deferred income Current liabilities

31.12.2007

31.12.2006

8 836 987 1 960 633 224 423 048 24 532 773 1 529 534 261 282 975

31 814 821 7 319 308 340 657 392 4 695 489 1 498 197 385 985 207

3 3

270 252 149 1 599 101 249 092 272 100 342 533 383 318

273 058 349 1 456 334 1 721 659 276 236 342 662 221 549

7

123 018 862 188 681 963 102 088 1 716 871 1 150 728 314 670 512

70 000 000 374 464 006 90 370 44 336 1 345 423 445 944 136

800 000 800 000

800 000 800 000

83 124 000

89 589 200

1 960 633 54 558 715 24 131 272

7 319 308 54 558 715 18 772 597

45 237 593 8 900 593 217 912 806 533 383 318

42 763 990 2 473 603 215 477 413 662 221 549

2

Other long-term liabilities Non-current liabilities Share capital: – 18 472 000 registered shares of CHF 4.50 (2006: 4.85) Reserve for treasury shares General reserve Voluntary reserve Profit and loss account: – profit carried forward – profit for the year Shareholders’ equity TOTAL

Balance Sheet

4

59

60

1. Change in presentation Since the presentation of the accounts has been slightly modified, the following 2006 figures have been restated to be comparable: receivables, long-term investments, debts on purchases and services.

2. Securities (in CHF) Implenia Ltd shares Balance as at 1.1 Buyback after merger with Zschokke and Batigroup Purchases Sales Reduction of nominal value Balance as at 31.12

Number 465 074 – 472 017 (884 528) – 52 563

2007

2006

7 319 308 – 19 944 496 (25 122 393) (180 777) 1 960 633

– 6 099 014 1 220 294 – – 7 319 308

2007 270 252 149 1 599 101

2006 273 058 349 1 456 334

3. Investments (in CHF) Subsidiaries (affiliated companies, pages 52 and 53) Minority shareholdings

4. Share capital The general meeting of shareholders held on 2 March 2006 decided to authorise a conditional share capital amounting to a maximum of CHF 41 562 000 represented by 9 236 000 fully paid-up shares. To date, this conditional capital has not been used by the Board of Directors.

The General Meeting of 24 April 2007 approved of a partial refund of CHF 0.35 of the nominal value.

The share capital was reduced by CHF 6 465 000 to CHF 83 124 000.

Known shareholders holding more than 3% of shares as at 31 December 2007 (2006: 5%): Laxey Group Parmino Holding Ltd Port Noir Investment Sàrl Ammann Group 3V Asset Management Ltd

Notes to the Statutory Financial Statements

34.1% 11.2% 6.5% 3.3% –

– 10.9% – – 5.2%

Statutory Financial Statements of Implenia Ltd Notes to the Statutory Financial Statements

5. Hidden reserves (in CHF) Net release by virtue of Art. 663b CO

2007 –

2006 –

2007 18 134 17 885

2006 61 808 18 700

6. Contingent liabilities (in 1000 CHF) Guarantees granted Security for joint liability regarding the levying of VAT for the Group

7. Consortium credit A new consortium credit was signed on 16 August 2006 with a consortium of banks. The total credit limit amounts to CHF 500 million and will be valid until the end of 2009.

The limit is split between a cash limit of CHF 250 million and a limit for the issue of guarantees of CHF 250 million.

To secure the consortium credit, the Implenia Group issued the following securities in favour of the bank consortium: – Pledging of mortgage certificates on the Group real estate for a market value of CHF 44 million.

– Guarantees given by the most important companies of the group to cover the obligations of Implenia Ltd towards – the bank consortium.

The continuance of the credit relationships is dependant on various conditions («Covenants»), which had been complied with by Implenia Ltd at 31.12.2007. (in 1000 CHF) Situation as at 31.12.2007

Authorised limits Limits used

Loan covered 250 000 122 400

Guarantee issued 250 000 153 234

61

62

8. Compensation Directors of the Board and members of the Group Management 8.1. Remuneration paid to the members in office of the governing bodies The total of all remuneration paid to the members of the Board of Directors and the Group General Management amounts to KCHF 9 410.60 (including shares assigned, leaving benefits, social security contributions and additional fees).

The total of all remuneration paid to the members in office of the Group General Management only, as Implenia Ltd has no executive member on its Board of Directors, is as follows:

(in 1000 CHF) CEO Other members in office of the Group General Management Members of the Group General Management who left in 2007 Related persons Total

Shares assigned1 Number Value 33 296 1 152.1

Fixed salaries 501.4

Variable Social security salaries contributions 488.5 257.5

1 951.0

1 539.9

1 035.1

35 335

– – 2 452.4

– – 2 028.4

– – 1 292.6

– – 68 631

Leaving benefit –

Total 2 399.5

1 222.6

–

5 748.6

– – 2 374.7

– – –

– – 8 148.1

Additional 157.3 – – – – – – – – 157.3

Total 415.4 163.6 95.5 126.4 81.3 133.4 128.0 118.9 – 1 262.5

The variable part of the remuneration in cash and in shares is paid in 2008.

The total of all remuneration paid to the non executive members of the Board of Directors is as follows:

1 Implenia Ltd shares, security No 00238 6855, nominal value CHF 4.50

(in 1000 CHF) Anton Affentranger, Chairman Markus Dennler, Deputy James Lionel Cohen, Member Claudio Generali, Member Ian Andrew Goldin, Member Patrick Hünerwadel, Member Toni Wicki, Member Philippe Zoelly, Member Related persons Total

Fees 184.6 122.7 84.0 95.3 71.5 117.3 96.7 88.7 – 860.8

Social security contribitions 25.4 16.9 11.5 13.1 9.8 16.1 13.3 12.2 – 118.3

Shares Number Value 1 388 48.1 694 24.0 – – 521 18.0 – – – – 521 18.0 521 18.0 – – 3 645 126.1

No severance payments were made during 2007.

8.2. Remuneration paid to former members of the governing bodies Implenia Ltd closed its second accounting period on 31 December 2007. No remuneration was paid to former members of the governing bodies whose term of office came to an end during the previous accounting period or before.

8.3. Assignment of shares during the year The number of shares assigned in 2007 to the members of the Group General Management only, as Implenia Ltd has no executive member on its Board of Directors, as well as to related persons, is 68 631.

The number of shares assigned in 2007 to the non executive members of the Board of Directors, as well as to related persons, is 3 645.

Statutory Financial Statements of Implenia Ltd Notes to the Statutory Financial Statements

8.4. Share holding As at 31 December 2007, the number of shares held by the members of the Group General Management only, as Implenia Ltd has no executive member on its Board of Directors, as well as by related persons, is 172 430, which represents 0.93% of the share capital. This figure includes any shares acquired in a private capacity.

As at 31.12.2007 Members of the General Management 46 080 Christian Bubb, CEO 27 988 Hans-Peter Domanig, Head of division Real Estate 27 558 Arturo Henniger, Head of division Construction Infra 3 000 Luzi Reto Gruber, Head of division Construction tunnels and total contracting 13 508 Peter Bodmer, Head of division Global Solutions 25 828 Roger Merlo, CFO 28 468 Jean-Pierre Vogt, Head of Human Resources 172 430 Total As at 31 December 2007, the number of share held by the non executive members of the Board of Directors, as well as by related persons, is 51 647, which represents 0.28% of the share capital. This figure includes any shares acquired in a private capacity.

As at 31.12.2007 Members of the Board of Directors Anton Affentranger, Chairman Markus Dennler, Deputy James Lionel Cohen, Member Claudio Generali, Member Ian Andrew Goldin, Member Patrick H端nerwadel, Member Toni Wicki, Member Philippe Zoelly, Member Total

39 310 1 724 1 2 167 1 1 340 5 497 1 607 51 647

8.5. Options Implenia Ltd has no stock-option remuneration scheme.

8.6. Fees and additional remuneration The amount of fees and additional remuneration invoiced since January 2007 by each member of the Board of Directors or the Group General Management or by a related person amounts to CHF 157 336, being consulting services provided by Mr. Anton Affentranger in relation to a special mandate.

8.7. Loans to officers and governing bodies No loans have been granted to any members of the Board of Directors, the CEO or any members of the Group General Management, or to related persons.

8.8. Highest total remuneration For the member of the Board of Directors who has the highest overall remuneration, please refer to the first table presented.

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64

Proposal of the Board of Directors regarding the appropriation of available earnings (in CHF) Balance carried forward Balance carried forward contributed by Zschokke Holding and Batigroup Holding Profit for the year Profit and loss account:

2007 45 237 593 – 8 900 593 54 138 186

2006 (10 745) 42 774 735 2 473 603 45 237 593

To be carried forward

54 138 186

45 237 593

The Board of Directors proposes a partial refund of CHF 0.50 of the nominal value. The share capital will be reduced

by KCHF 9 236 to KCHF 73 888. The company’s Articles of Association will be changed accordingly. The partial refund will be made on 3 July 2008 to shareholders entered in the register on 27 June 2008. This refund is subject neither to the deduction of withholding tax nor to income tax for natural persons liable for tax in Switzerland.

(in CHF) Variation of the share price (in CHF) (as quoted on the Swiss stock exchange) Share high/low: Price as at 31st December:

Proposal of the Board of Directors

2007 44.90/25.60 34.60

2006 30.50/20.63 25.45

Statutory Financial Statements of Implenia Ltd Proposal of the Boards of Directors l Report of the Statutory Auditors

Report of the Statutory Auditors to the General Meeting of Implenia AG, Dietlikon As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement and notes – pages 58 to 64) of Implenia AG for the year ended December 31, 2007.

These financial statements are the responsibility of the board of directors. Our responsibility is to express an opinion on these financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with Swiss Auditing Standards, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the accounting principles used, significant estimates made and the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accounting records and financial statements and the proposed appropriation of available earnings comply with Swiss law and the company's articles of incorporation.

We recommend that the financial statements submitted to you be approved.

PricewaterhouseCoopers AG

Willy Wenger Auditor in charge

ZĂźrich, March 7, 2008

Report of the Statutory Auditors

JĂźrg Hofer

65

Implenia Ltd. Industriestrasse 24 CH-8305 Dietlikon Phone +41 44 805 45 55 Fax +41 44 805 45 56 www.implenia.com