Zschokke gb finanzteil 2005 e

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Financial reports 2005 Consolidated financial statements of the Zschokke Group Financial statements of Zschokke Holding SA

Unofficial translation for information purpose only.

Approved and published official versions are available in French and German.

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Contents

1

Page

Consolidated financial statements of the Zschokke Group Consolidated income statement

2

Consolidated balance sheet

3

Consolidated cash flow statement

4

Consolidated statement of changes in equity

5

Accounting principles

6

Notes and comments to the consolidated financial statements

8

Auditor’s report on the consolidated financial statements

25

Historical analysis of significant figures

26

Financial statements of Zschokke Holding SA Income statement

30

Balance sheet

31

Notes and comments to the consolidated financial statements

32

Auditors’ report

38

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Consolidated income statement (in thousand CHF) Restated figures

Notes

2005

2004

2

1 362 089

1 316 410

(855 648)

(819 674)

Personnel

3

(384 642)

(374 596)

Other operating expenses

4

(72 404)

(76 724)

(412)

(248)

Group sales Materials and sub-contractors

Income from associated companies Income from other investments

5

1 569

792

Non-operating results

6

2 656

1 139

53 208

47 099

(18 144)

(18 808)

35 064

28 291

(4 011)

(4 546)

EBITDA Depreciation

7

Earnings before interest and taxes (EBIT) Financial charges

8

Financial income

8

Result before taxes

3 282

3 311

34 335

27 056

Income taxes

9

(9 110)

(5 853)

Consolidated Group results

2

25 225

21 203

25 190

21 043

35

160

25 225

21 203

Fr. 85.50

Fr. 72.10

Breakdown of consolidated Group results Zschokke Holding SA Shareholders Minority interests Consolidated Group results Result per share

29

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Consolidated balance sheet

3

(in thousand CHF) Restated figures

ASSETS

Notes

31.12.05

31.12.04

Cash and cash equivalents

10

99 437

70 971

Securities

11

5 430

–

Trade debtors

12

177 867

168 354

Work partnerships

13

44 877

43 746

Other debtors

14

9 142

16 423

Work in progress

15

82 895

55 183

4 517

4 250

112 141

114 832

6 564

7 650

542 870

481 409

Inventories Net real estate operations

16

Prepayments and accrued income Current assets Tangible fixed assets

17

101 244

103 894

Investments in associated companies

18

6 902

3 022

Other financial investments

19

33 005

39 945

Intangible assets

20

5 529

5 376

Deferred tax assets

21

4 627

4 797

Non-current assets

151 307

157 034

TOTAL

694 177

638 443

44

38

39 210

88 621

34 312

31 693

LIABILITIES AND EQUITY Current portion of long-term borrowings, banks Trade payables Other payables

22

Work partnerships

13

8 275

16 463

Work in progress

15

325 565

247 490

4 880

2 683

23

49 156

43 027

461 442

430 015

Current tax liabilities Accruals and deferred income Current liabilities Long-term borrowings

24

1 491

3 300

Provisions for deferred tax liabilities

25

23 195

17 407

Other provisions

26

Non-current liabilities Zschokke Holding SA share capital Reserves Consolidated Group results

27

1 491

917

26 177

21 624

25 500

28 200

154 582

136 187

25 190

21 043

205 272

185 430

1 286

1 374

Equity

206 558

186 804

TOTAL

694 177

638 443

Minority interests

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Consolidated cash flow statement (in thousand CHF) Restated figures

Notes

2005

2004

34 335

27 056

Operating activities Net profit before taxes

18 144

18 808

Changes in provisions

6 361

945

Others, value adjustments

(1 194)

(1 136)

Changes in trade/other debtors

(2 228)

26 649

Changes in trade/other payables

(46 793)

(21 828)

Changes in work-in-progress/ inventories

50 097

(28 339)

(8 654)

(11 878)

2 500

24 029

(3 979)

(8 675)

( 961)

(1 804)

Depreciation

7

Changes in work partnerships Changes in real estate operations

16

Other short-term assets and liabilities Interest paid Interest received

955

975

Taxes paid

(974)

(996)

a)

47 609

23 806

17

(15 699)

(14 732)

Net cash from operating activities Investment activities Investments in tangible fixed assets Disposals of tangible fixed assets Purchase/sale of companies

28

Other investments in financial assets Other disposals of financial assets Investments in intangible assets

20

Disposals of intangible assets Net cash from investment activities

b)

625

132

–

(3 380)

(977)

(1 714)

3 119

6 360

(582)

(206)

–

–

(13 514)

(13 540)

6

(15 109)

Financing activities Increase/(Repayment) of short-term borrowings

–

(51)

(123)

(47)

Dividends paid

(6 828)

(5 893)

Movements of treasury shares

1 316

1 019

(5 629)

(20 081)

Increase/(Repayment) of long-term borrowings Minority interests

Net cash from (used for) financing activities

c)

Net increase/(decrease) in cash and cash equivalents (a+b+c)

28 466

(9 815)

Cash and cash equivalents at the beginning of the financial year 10

70 971

80 786

Cash and cash equivalents at the end of the financial year

99 437

70 971

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Consolidated statement of changes in equity

5

(in thousand CHF)

Zschokke Holding SA shareholders Share capital

Treasury shares

Retained earnings

Result

Sub-total

Minority interests

Total equity

30 000

(3 489)

137 125

18 230

181 866

1 260

183 126

(12 251)

(482)

(12 733)

30 000

(3 489)

124 874

17 748

169 133

1 260

170 393

Transfer of profit 2003

17 748

(17 748)

Dividends paid

(4 093)

(46)

(4 139)

Balance as at 1.1.2004, published Consolidation effect of SDT* as at 1.1.2004 Balance as at 1.1.2004, including SDT

Refund of nominal value

(1 800)

Changes in treasury shares1)

(12 733)

– (4 093)

–

46

(1 754)

(1 754)

973

973

973

(80)

(80)

Conversion difference

(80)

Consolidation effect of SDT* on 1.1.2004 as at 31.12.2004

208

(98)

110

21 141

21 141

160

21 301

138 657

21 043

185 430

1 374

186 804

Transfer of profit 2004

21 043

(21 043)

Dividends paid

(4 128)

(123)

(4 251)

Profit 2004, published Balance as at 31.12.2004/1.1.2005

28 200

Changes in treasury shares1) Refund of nominal value

(2 700)

(2 470)

1 269

1 269

(2 653)

(2 653)

164 (1 154)

155 736

164

Changes in Treasury Shares

Balance as at 1.1.2004 Purchases Disposals (Profit sharing plan)

25 190

35

25 225

25 190

205 272

1 286

206 558

Average unit price Number

(in CHF)

Total

9 328

374

3 489

–

–

–

(2 009)

484

(973)

6

(46)

337

2 470

Refund of nominal value Balance as at 31.12.2004/1.1.2005 Purchases Disposals (Profit sharing plan)

7 319 194

784

152

(2 403)

591

(1 421)

9

(47)

5 110

226

1 154

Refund of nominal value Balance as at 31.12.2005

164

25 190

* Société Développements Transfrontaliers SA.

1)

–

47

Profit 2005 25 500

– (4 128)

1 269

Conversion difference Balance as at 31.12.2005

110

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Notes and comments to the consolidated financial statements Accounting principles Presentation of the consolidated accounts The Zschokke Group consolidated accounts are prepared in accordance with IFRS (International Financial Reporting Standards) as issued by the International Accounting Standards Board (IASB).

Changes in accounting principles Some IFRS standards have been changed or have come into force starting from 1st January 2005. The following accounting principles have been changed accordingly.

• Real estate operations • Property • Goodwill If necessary, the figures for comparative periods have been restated in this report.

The other changes or innovations in IFRS standards have no significant effect on the other accounting principles or on the presentation of the consolidated accounts.

Basis of consolidation In addition to the financial statements of Zschokke Holding SA, Geneva, the consolidation includes affiliated companies in which the Group holds more than 50% of the share capital or the majority of votes. The financial statements of these companies are prepared in accordance with uniform policies.

Assets and liabilities in these companies are fully consolidated into the consolidated balance sheet.

The work partnership balance sheets and income statements are consolidated using the equity method.

“Group Sales” include (pretax) sales to third parties, the net results from real estate sale transactions and the changes in provisions for: doubtful debts, guarantees, losses on orders in portfolio and real estate operations.

All transactions within the group and between the consolidated units have been eliminated. Profits on intra-group operations not involving third parties have also been eliminated.

Balance sheets of foreign subsidiaries are converted into Swiss Francs at the rates prevailing at the balance sheet date.

Income statements of foreign subsidiaries are converted at the average rate for the year.

Accounts of companies acquired during the year are included in the consolidation from their date of acquisition, and accounts of companies disposed of are excluded as of their date of disposal.

Associated companies, i.e. those in which the Group holds between 20% to 50% of the capital, are consolidated using the equity method and are disclosed in the consolidated balance sheet under “Investments in associates”.

Minority holdings, i.e. those in which the Group holds less than 20%, are valued at their fair value in accordance with IAS 39.

The change in fair value is recorded in the income statement.

Basis of valuation The accounts have been prepared using the historical cost basis of accounting, with the exception of some items described below, for which fair value has been used.

Translation of foreign currencies All assets and liabilities denominated in foreign currencies are translated into Swiss Francs at the rates prevailing at the balance sheet date. Exchange differences originating from the conversion of subsidiary accounts (balance sheet and income statement) are charged to equity. Foreign exchange transactions are converted at the current market value.

Financial instruments and hedging operations The Zschokke Group uses derivative financial instruments to manage foreign exchange and interest-rate risks only in specific cases, to the exclusion of any speculative transactions.

Cash and cash equivalents Cash and cash equivalents accounted for in the consolidated statement of cash flows include sight deposits and term deposits of less than 3 months.

Securities Marketable securities are stated at their market value.

Trade debtors Trade debtors are stated at their nominal value, after deducting the necessary provisions, determined on an individual basis.

A general provision of 1% calculated on the net residual value is booked as a deduction from this item.

Work in progress Work currently being carried out for third parties is stated at the net selling price including a prudent profit estimation, calculated on a pro rata basis of completed work. This profit figure is based on the estimated final profit. For unprofitable work in progress, the estimated final loss is provided for immediately. No profit figure on construction work for own account is given until a sale is made to a third party. According to the nature of work, the state of progress is determined either based on the estimated costs or on the schedule of contracts.

The net balance is recorded as an asset or a liability, based on an individual analysis at project level.

Work partnerships Income statements for work partnerships are stated in a manner similar to that used for work in progress.

Inventories Inventories are stated at the lower of cost and net realizable value at 31st December of the relevant year. Inventory issues are reported at their weighted average cost.

Real estate operations All transactions are valued on an individual basis. Valuation is carried out on the lower of cost – including own work – and market value as estimated by the Group’s own real estate experts. The cost calculation includes financial expenses paid to third parties until the real estate’s entry into service.

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7

Real estate operations carried out through limited partnerships or real estate companies in which the share holding is 50% or less or whose sale is expected within 12 months, are shown at the amounts invested in these companies.

If the holding is more than 50% and its sale is not expected in the next 12 months, this holding is consolidated.

Capital losses recognized according to the above basis of valuation are provided for in the accounts. Income from real estate operations and changes in the relevant provisions are shown under sales.

Property For property acquired or constructed a long time ago, it is not possible to determine separate values for each element.

For this reason, such real estate is stated in the balance sheet at acquisition or construction cost. Buildings are depreciated according to the straight-line method based on their estimated useful lives, usually 25 to 50 years depending on the type of building.

For real estate acquired or constructed since 2005, the elements with the same useful lives are determined. Depreciation is calculated separately for each group of elements.

The Group does not hold any investment building as defined under standard IAS 40.

Machinery, equipment and furniture These items are shown in the balance sheet at cost and are depreciated according to the straight-line method based on their estimated useful lives between 3 and 15 years, generally 8 years.

Financial investments The valuation of investments in associated and minority companies is described under Basis of consolidation.

Debts and long-term loans are measured at their fair value.

Intangible assets Intangible assets are capitalized and depreciated according to the straight-line method over a period not exceeding 5 to 10 years.

Changes are reported in the income statement.

Goodwill Goodwill represents the difference between the purchase price of an investment and the fair value of the net assets acquired.

For companies acquired before 31.03.2004, the goodwill is depreciated on a straight-line basis over a period of five to ten years starting from the year of acquisition until the end of 2004.

For acquisitions made since 01.04.2004, if the goodwill is negative, it is reported directly in the income statement for the period; if the goodwill is positive, the amount is included as an asset on the balance sheet.

At the end of the year an impairment test on goodwill is carried out based on cash generating units. If there is any difference, the change is recorded in the income statement.

Taxes The taxes shown in the consolidated income statement include income tax for the fiscal year and deferred income tax.

The current taxes represent the amounts paid or payable to the various tax authorities. Deferred taxes are determined according to the liability method, arising from timing differences between the tax base and the accounting base of assets and liabilities.

Deferred tax assets as a result of carrying forward tax losses are considered only to the extent that the achievement of future taxable profits is likely to absorb such losses.

Provisions Provisions are reported when: • the Group has an on-going commitment owing to a past event; • it is likely that a disbursement will be necessary to fulfil the commitment; • the total commitment can be reliably estimated.

Borrowing costs As a rule, borrowing costs are recorded in the income statement, with the exception of interest charges that are directly related to real estate operations. These are capitalized and included in the asset, as they are an integral part of the cost of the asset.

Sales and income Sales include all the revenues from the Group’s businesses (General Contracting, Works, Property Management, Real Estate).

Income is recognized at the date the services are provided or, for long-term contracts, based on the state of progress. Gains on real estate sales are recognized at the date of transfer of ownership, i.e. the date of registration in the land register.

Pension funds The employees of the Group companies are covered by an independent defined benefit retirement scheme. This is funded by employer and employee contributions.

The funds of this scheme are managed independently from the Group companies. The commitments are regularly valued by an authorized actuary.

The employers’ and equal-representation foundations of Zschokke Group are taken into account under standard IAS 19.

Actuarial gains and losses are recorded only to the extent that they “fall outside of the corridor” at the end of the previous period.

The excess amount is recognised in the income statement of the following periods, on the basis of the expected average remaining working lives of the employees participating in the scheme.

Other staff benefits The Group Management benefits from a profit-sharing scheme.

The terms are specified from year to year by the Board of Directors.

Use of estimates in the financial statements The Group financial statements require the use of estimates and assumptions concerning the future. The items for which such estimates may generate significant adjustments of the accounting values are work in progress, work partnerships and the goodwill reported in the accounts. For the latter, an impairment test is carried out. These tests require the estimation of future cash flows, as well as the discount rate used.

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Notes and comments to the consolidated financial statements (in thousand CHF)

1

Changes in the basis of consolidation Mergers Zschokke Locher AG, GU Tiefbau AG and Erval SA merged with Zschokke Construction SA on 18 May 2005 (retrospective to 1.1.2005).

Zschokke GmbH Berlin merged with Zschokke Holding Deutschland GmbH on 13 June 2005 (retrospective to 1.1.2005).

These mergers have no influence on the presentation of the Consolidated Financial Statements.

Companies included within the consolidation for the first time: Until 31.12.2004, real estate operations conducted through financial holdings in joint-stock companies or ordinary partnerships were reported under “Real estate operations”, even when such holdings exceeded 50%. Such companies are created for a specific property and liquidated with its sale.

Commencing from 1st January 2005, only majority interests in real estate operations lasting less than 12 months are reported in this way. For operations lasting longer than 12 months, majority interests will be reported according to the full-consolidation method, in compliance with IAS 27, as amended on 1st January 2005.

As a result of these changes, the Group's majority interest in the French Archamps real estate operation (through a 100% interest in Développements Transfrontaliers SA and its subsidiary Junior Sport Archamps SA, held by Zschokke Entreprise Générale SA) has been consolidated for the first time in compliance with this standard.

The consolidation of Développements Transfrontaliers SA and its subsidiary required a restatement of previous years, with retrospective adjustment of assets, liabilities and equity. These changes were in compliance with IAS 8, applicable in the case of changes in accounting principles. The information provided following these adjustments were made is based on paragraph 29 of this standard.

Consolidation effect of Société Développements Transfrontaliers SA Main positions in the Income Statement Group sales Personnel Materials and sub-contractors Other operating expenses Income from associated companies Financial income Consolidated Group result Main positions in the Balance Sheet Trade debtors Other debtors Net real estate operations/Reserves Prepayments and accrued income Deferred tax assets Tangible fixed assets Trade payables Accruals and deferred income Long-term borrowings Equity 1) Difference between the figures contained in the 2004 report and adjusted figures.

Impact on 2005 1 498 – (576) (3 562) – 34 (1 016)

Adjustment for 20041) 5 709 (211) (1 416) (3 140) (420) (497) (98)

4 949 1 709 21 327 511 (595) 18 1 296 3 597 – (1 016)

3 430 631 (14 385) 639 2 815 – 1 119 3 156 1 804 (12 623)

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Notes and comments to the consolidated financial statements

9

(in thousand CHF)

Main position in the Cash Flow Statement Net profit before taxes Changes in provisions Others, value adjustments Changes in trade/other payables Changes in trade/other debtors Changes in real estate operations Other short-term assets and liabilities Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year

Impact on 2005 (1 048) – – (415) (267) 1 286 (3 117) 153 60

Adjustment for 20041) (95) 420 688 (1 802) (3 548) 1 997 591 2 698 153

1) Difference between the figures contained in the 2004 report and adjusted figures.

Effect on consolidated equity As at 1.1.2004, the Group's equity has been adjusted by more than CHF 12 million. This change results from the difference between the reported value of the equity of Développements Transfrontaliers SA (SDT) and the value of the real estate investment in our subsidiary Zschokke Entreprise Générale SA, which represents an estimate of future sales value.

Value as at 31.12.04 of the SDT project in the item “Net real estate operations” ./. Value of SDT equity as at 31.12.04 ./. Recognised deferred taxes2) Adjustment of Equity

31 593 (16 155) (2 815) 12 623

2) As at 31.12.04, SDT had a loss carry forward of CHF 26.8 million. In accordance with the financial plan, estimated future profits at the applicable tax rate of 30% allow the recognition of deferred taxes amounting to 2.8 million.

2

Segment information The operational organization of the group is based on the following primary sectors of activity: – general contractor (general planning, general and group company); – real estate management (property business); – works (buildings, civil engineering, special work); – property (promotion, project development).

Engineering activities and discontinued activities in France and Germany are shown under the heading “Other”.

Services between different sectors of activity are invoiced on terms in line with market prices.

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Notes and comments to the consolidated financial statements (in thousand CHF)

2.1 Results according to operational structure General contractor Real estate management Works Property Other Miscellaneous and general holding costs Earnings before interest and taxes (EBIT)

2005 9 280 1 158 16 239 9 912 210 (1 735) 35 064

2004 9 416 2 503 10 092 8 683 764 (3 167) 28 291

Net financial charges Results before taxes

( 729) 34 335

(1 235) 27 056

Income taxes Group consolidated income (including income of minority shareholders)

(9 110) 25 225

(5 853) 21 203

(1 049) 34 (3)

519 ( 614) (3)

Consolidation effect of Société Développements Transfrontaliers SA Property Net financial charges Income tax

2.2 Sales The share of sales from work partnerships has not been recorded. Only that share of the net result from partnerships and own services provided to these partnerships are posted under sales.

The overall sales comprising the Group’s share in the work partnerships is shown for statistical purposes.

Additionally, the results from the sale of property are shown under sales.

According to operational structure

2005

2004

General contractor Sales before eliminating intra-group sales ./. Intra-group services ./. Share of sales and invoicing to partnerships Sales

831 322 (3 057) (4 485) 823 780

801 400 (3 158) (22 095) 776 147

Real estate management Sales before eliminating intra-group sales ./. Intra-group services ./. Share of sales and invoicing to partnerships Sales

66 011 (2 029) – 63 982

65 828 2 549 – 68 377

Works Sales before eliminating intra-group sales ./. Intra-group services ./. Share of sales and invoicing to partnerships Sales

811 731 (81 191) (279 919) 450 621

738 881 (73 296) (219 711) 445 874

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Notes and comments to the consolidated financial statements

11

(in thousand CHF)

Property Sales before intra-group sales ./. Intra-group services ./. Share of sales and invoicing to partnerships Sales

2005 15 381 (2 796) – 12 585

2004 23 228 (4 090) – 19 138

Other Sales before intra-group sales ./. Intra-group services ./. Share of sales and invoicing to partnerships Sales

29 447 (18 326) – 11 121

34 302 (27 428) – 6 874

1 362 089

1 316 410

1 364 210 (2 121) 1 362 089

1 316 403 7 1 316 410

1 498

5 709

63 253 15 421 227 663 243 778 26 244 117 818 694 177

94 123 23 798 210 583 226 090 28 897 54 952 638 443

250 591 8 157 177 508 7 951 10 256 33 156 487 619

231 575 10 001 145 125 35 450 5 291 24 198 451 640

645 178 48 999 694 177

585 657 52 786 638 443

Group sales According to geographical distribution Switzerland Europe

Consolidation effect of Société Développements Transfrontaliers SA Property 2.3 Balance sheet according to operational structure Assets according to operational structure General contractor Real estate management Works Property Other activities Assets not assigned

Liabilities according to operational structure General contractor Real estate management Works Property Other activities Liabilities not assigned

Assets according to geographical distribution Switzerland Europe

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Notes and comments to the consolidated financial statements (in thousand CHF)

2.4 Investments in tangible assets and intangible assets according to operational structure General contractor Real estate management Works Property Others According to geographical distribution Switzerland Europe

2.5 Depreciation of tangible and intangible assets according to operational structure General contractor Real estate management Works Property Other According to geographical distribution Switzerland Europe

2.6 Other non-monetary items according to operational structure General contractor Real estate management Works Property Other According to geographical distribution Switzerland Europe

2005 475 1 278 13 240 1 060 228 16 281

2004 442 1 770 11 673 368 663 14 916

16 281 – 16 281

14 916 – 14 916

513 3 507 11 635 2 223 266 18 144

829 4 131 10 528 2 672 648 18 808

18 137 7 18 144

18 808 – 18 808

4 870 250 1 352 (18 242) 349 (11 421)

57 316 (651) (3 441) (68) (3 787)

(12 204) 783 (11 421)

(3 744) (43) (3 787)

265 354 38 386 28 165 52 737 384 642

264 490 37 064 26 945 46 097 374 596

Mainly a change increase/(decrease) in provisions.

3

Personnel Salaries Social security contributions Pension provisions Other expenses (incl. third party personnel)

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Notes and comments to the consolidated financial statements

13

(in thousand CHF)

4

Other operating expenses Essentially rent, maintenance and repairs, transport, insurance, consumables, office and administration costs, commissions for securities, purchasing charges, advertising and sales costs, fees, tax on capital and duties.

5

Income from other investments Income from associated companies liquidation Income from minority interests

6

Non operating results Results from sale of machinery and materials, as well as a penalty paid to DĂŠveloppements Transfrontaliers SA for a contract cancellation.

7

Depreciation Depreciation on tangible assets Depreciation on intangible assets

8

2005 – 1 569 1 569

2004 – 792 792

17 715 429 18 144

17 254 1 554 18 808

(963) (3 048) (4 011)

(1 816) (2 730) (4 546)

Interest income Other financial income

1 261 2 021 3 282

1 395 1 916 3 311

Net financial charges

(729)

(1 235)

3 152 5 958 9 110

3 173 2 680 5 853

34 335

27 056

8 584 (501) (566) 297 1 471 (175) 9 110

6 764 (1 366) (1 683) 2 029 451 (342) 5 853

Financial charges and income Interest charges1) Other financial charges

1) The average interest rate on short-term borrowings was 1.44% in 2005 (2004: 1.4%).

9

Income taxes The taxes included in the income statement include income tax for the year as well as deferred income tax.

The breakdown of this amount is as follows: Current taxes Deferred tax

Pre-tax income Tax calculated at a rate of 25% Effect of the differences in tax rates in certain Cantons Effect of using non-capitalized tax losses carried forward Effect of non taxable or non deductible items Effect of non-capitalized tax losses created during the year Other taxes Tax expense

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Notes and comments to the consolidated financial statements (in thousand CHF)

10 Cash and cash equivalents This comprises bank current accounts, Post Office current accounts and petty cash.

2005

2004

32 229 155 688 (10 050) 177 867

40 612 137 647 (9 905) 168 354

239 965 54 154 228 561 36 566 421 562 411 590

196 182 59 084 200 231 36 929 378 745 377 204

154 817

153 397

11 Securities Batigroup Holding SA shares 12 Trade debtors This relates to invoices issued to clients for work that has been completed, as well as stage-payments for on-going construction work.

Corporate clients subject to Swiss public law Private clients ./. Less doubtful debt provision

13 Work partnerships The assets and liabilities on the consolidated balance sheet include current debtor and creditor balances, financing and advance cash payments received and the share in income.

Partnerships are valued on an individual basis.

The amounts included under this section as either liabilities or assets represent all the trade debts owed to or by the partnerships.

The Group’s share in the partnerships assets, liabilities and sales includes: (statistical information only) Current assets Non-current assets Current liabilities Non-current liabilities Sales Expenses This information does not include the measurement differences calculated according to the Group's accounting principles, nor the share in the overheads of the Group companies concerned.

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

Joint liabilities toward work partners Main partnerships: TU ABL Bahntechnik Lötschberg AAT Arbeitsgemeinschaft Äschertunnel Arbeitsgemeinschaft Uetliberg Consorzio TAT Tunnel Alp Transit Ticino Arge Tunnel Flims

shareholding 50% 37% 25% 25% 18.5%

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Notes and comments to the consolidated financial statements

15

(in thousand CHF)

14 Other debtors This item includes down payments to suppliers, recoverable withholding tax, and receivables from social security institutions and employees.

2005

2004

82 895 (325 565) (242 670)

55 183 (247 490) (192 307)

838 631

1 134 403

2 582 122 41 282 9 527

3 746 165 53 361 7 187

48 596 (69 419) 18 323 (2 500) – (191) 174 721 (59 889) 112 141

17 732 (49 483) 7 722 (24 029) 548 (59) 206 012 (67 640) 114 832

129 845 17 036 6 827 153 708 (41 567) 112 141

154 188 13 306 7 227 174 721 (59 889) 114 832

44 459 57 446 10 236 112 141

50 922 39 603 24 307 114 832

15 Work in progress Work in progress includes invoicing instalments on works and expenses, accruals for finishing works, provisions for losses on order inventory, provisions for uncovered overheads, advances to suppliers, client advances and stocks of materials on construction sites.

Balance sheet presentation: Work in progress – assets Work in progress – liabilities

Information on construction contracts Proceeds recognized during the period on construction contracts Costs incurred since the start of construction work and relating to current contracts, as at 31.12 Amount of advances received on construction contracts, as at 31.12 Amount of retentions, as at 31.12 16 Real estate operations Annual investments Annual disposals (cost price) Changes in provisions Net variation Transfer to/from real estate, work in progress Conversion difference Investments, as at 1.1 Provisions, as at 1.1 As at 31.12 – of which: operations in own name operations by limited partnerships operations by real estate companies Book value as at 31.12 Provisions as at 31.12 Net book value as at 31.12 Distribution of real estate portfolio: – land reserve – Items undergoing development or construction – completed items ready for sale Net book value as at 31.12 In 2004 and 2005, no interest was capitalized in real estate transactions.

Mortgage certificates: see note 11 on page 34 of the Zschokke Holding SA report.

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Notes and comments to the consolidated financial statements (in thousand CHF)

17 Tangible assets

Acquisition value as at 1.1.04 Increase in the basis of consolidation Investments Transfers Disposals Conversion difference Acquisition value as at 31.12.04/1.1.05

Real estate1) 91 083 290 1 260 (549) – – 92 084

Machines Equipment 153 277 282 13 450 – (12 282) – 154 727

Total 244 360 572 14 710 (549) (12 282) – 246 811

Increase in the basis of consolidation Investments Transfers Disposals Conversion difference Acquisition value as at 31.12.05

– 1 060 – (133) – 93 011

– 14 639 – (1 136) – 168 230

– 15 699 – (1 269) – 261 241

Accumulated depreciation as at 1.1.04 Increase in the basis of consolidation Transfers Disposals Depreciation for the year Conversion difference Accumulated depreciation as at 31.12.04/1.1.05

45 300 22 – – 2 668 – 47 990

92 500 9 – (12 159) 14 586 – 94 936

137 800 31 – (12 159) 17 254 – 142 926

Increase in the basis of consolidation Transfers Disposals Depreciation for the year Conversion difference Accumulated depreciation as at 31.12.05

– – (52) 2 700 – 50 638

– – (592) 15 015 – 109 359

– – (644) 17 715 – 159 997

Book value as at 31.12.05

42 373

58 871

101 244

– Business property – Non business property Book value as at 31.12.04 – Business property – Non business property Fire insurance values: – as at 31.12.05 – as at 31.12.04 Surface area of land, in hectares: – as at 31.12.05 – as at 31.12.04

42 259 114 44 094 43 977 117

59 800

103 894

87 677 86 668

14 000 15 000

Global estimate of fair market value according to internal expert opinion – as at 31.12.05 – as at 31.12.04

87.7 87.7

83 078 83 263

1) Mortgage certificates: See note No. 11 on page 34 of the report of Zschokke Holding SA.

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Notes and comments to the consolidated financial statements

17

(in thousand CHF)

18 Investments in associated companies Zschokke Group has holdings, between 20% and 50%, in the following companies.

In compliance with IAS 28, these companies are reported according to the equity method basis on the financial statements available on the consolidation date.

Implenia AG (since 2005) Betondrance SA Gravière de la Claie-aux-Moines SA GU Kies AG Rocmouve SA Sisag SA Sema SA Parking de la Navigation SA (since 2005) Argobit AG Remora SA

2005

% 50% 46% 33% 33% 33% 33% 30% 22% 20% 20%

2004

Held by: Zschokke Holding SA Zschokke Construction SA Zschokke Holding SA Zschokke Construction SA Zschokke Holding SA Zschokke Holding SA Développements Transfrontaliers SA Zschokke Entreprise Générale SA Zschokke Construction SA Zschokke Construction SA

Share in balance sheet of associated companies Assets Liabilities Net assets

15 605 (11 837) 3 768

7 290 (4 082) 3 208

Share in results of associated companies Sales Results

14 286 (433)

12 060 (164)

3 701 – 3 240 (39) 6 902

3 020 – 270 (268) 3 022

10 711 81 849 7 983 1 681 11 700 33 005

10 951 391 1 198 13 581 1 624 12 200 39 945

Book values of investments Increase in the basis of consolidation Loans Advances Book value of investments in associated companies 19 Other financial investments Minority holdings Long-term clients and debtors WIR (net) cheques Unsecured debts, mortgage loans, miscellaneous Debt to the Motivation Foundation of the Zschokke Group, net of provisions Excess of retirement insurance scheme assets *

* See note No. 31.

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Notes and comments to the consolidated financial statements (in thousand CHF)

20 Intangible assets Acquisition value as at 1.1 Investments Offset of accumulated depreciation against Goodwill Acquisition value as at 31.12

2005 18 183 582 (12 238) 6 527

2004 17 977 206 – 18 183

Accumulated depreciation as at 1.1 Offset of accumulated depreciation against Goodwill Depreciation for the year Accumulated depreciation as at 31.12

12 807 (12 238) 429 998

11 253 – 1 554 12 807

Book value as at 31.12

5 529

5 376

Goodwill on Göhner Merkur acquisition 1) Others

4 834 695 5 529

4 834 542 5 376

The Göhner Merkur goodwill was shared out between two sectors, general contracting (2 079) and real estate management (2 755). An impairment test by sector was conducted on the basis of the future cash flows validated by the Management. These cash flows (which are constant starting from the 5th year) determined within the framework of the Group's financial plan were discounted back at a rate of 8.93% before taxes. The utility value calculated for both sectors is higher than the current net assets. Therefore, the goodwill was not depreciated.

21 Deferred tax assets In 2005, the Group recorded deferred tax assets of CHF 4.6 (2004: 4.8) million, calculated from a total tax loss of CHF 21.4 (2004: 21.0) million. The amount of fiscal losses taken into account is based on the profit projections drawn up by the management.

Unrecognized fiscal losses to be carried forward

Expiry 4 years 5 years 6 years 7 years without expiry

112 – 64 148 69 206 69 530

880 12 730 – 1 017 45 784 60 411

11 078 5 761 12 662 1 828 2 983 34 312

9 747 3 055 9 377 1 357 8 157 31 693

19 776 29 380 49 156

17 718 25 309 43 027

This amount for unrecognized fiscal losses concerns chiefly our foreign companies which no longer have any operational activities.

See also notes No. 9 and 25.

22 Other payables Tax authorities (tax at source, VAT, withholding tax) Social security funds, insurers Advances to personnel Retirement benefit schemes Others

23 Accruals and deferred income Accrued employee vacations Other payables

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Page 19

Notes and comments to the consolidated financial statements

19

(in thousand CHF)

24 Long-term borrowings Consortium credit Fixed term secured debts Non-consortium credits Mortgage debts on buildings Unsecured debts

Of which due within 12 months Total long-term debts 25 Provisions for deferred tax As at 1.1 Variation Increase/(decrease) in the basis of consolidation As at 31.12 Deferred tax is recognized on all deductible temporary differences according to the liability method.

The main components of the deferred tax liability are : Difference between the tax value and book value of provisions Difference between the tax value and book value of tangible assets Difference between the tax value and book value of work in progress receivable and payable and debtors/creditors of associations Other net differences

26 Other provisions for long-term liabilities As at 1.1 Additions Reductions Increase in the basis of consolidation Conversion difference As at 31.12

2005

2004

–

–

– 1 491 1 491

– 3 338 3 338

– 1 491

(38) 3 300

17 407 5 788 – 23 195

15 183 2 080 144 17 407

5 815 5 958

6 440 6 070

8 314 3 108 23 195

4 004 893 17 407

917 1 010 (436) – – 1 491

1 958 – (1 135) 100 (6) 917

16.3% 5.2%

15.8% 7.5%

300 000 CHF 30 000 085 CHF 25 500 000

300 000 CHF 30 000 094 CHF 28 200 000

Mainly provisions for overhauls and repairs.

27 Share capital Known shareholders holding more than 5% of shares as at 31st December: Rössler Group, Hergiswil Sarasin Investment Funds AG Number of registered shares Nominal value per share Total nominal value, as at 31.12

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Notes and comments to the consolidated financial statements (in thousand CHF)

28 Acquisition/(disposal) of companies Current assets Working capital Non-current assets Current liabilities Non-current liabilities Negative goodwill Acquisition/(disposal) costs of net assets ./. Liquid assets (taken over)/disposed of (Surplus)/Reduction in liquid assets on purchase/sale of companies Result of GU Tiefbau AG including negative goodwill reported at 100% Influence on result

2005 – – – – – – – – –

2004 (2 880) 4 298 1 121 (1 111) (534) (394) 500 2 880 3 380

– –

(405) (405)

25 190 294 456 CHF 85.50 294 890

21 043 291 980 CHF 72.10 292 681

173 871

165 983

GU Tiefbau AG was merged on 1.1.2005; the influence on the 2005 result is not measurable.

29 Result per share Net result Weighted average of the number of ordinary shares in circulation Basic result per share* Number of shares outstanding as at 31.12 * There is no diluting effect.

30 Contingent liabilities Third party guarantees These contingent liabilities are mainly linked to our activities in work partnerships (see note No. 13).

They represent the shares of our work partners in joint guarantees given to clients.

31 Retirement benefit commitments a) Zschokke Provident Fund In addition to the national retirement benefit system governed by law, the Group has its own independent retirement insurance scheme.

Financing this scheme is essentially by way of employer and employee contributions. Considering its nature, the Group’s retirement benefit scheme can be qualified as a mixed scheme as defined by Forum IAS Switzerland. Therefore, by virtue of standard IAS 19, this scheme is treated as a defined benefit plan.

The assets of the retirement benefit scheme are assessed at their market value.

The commitments are assessed by an independent actuary according to the requirements of IAS 19.

The actual net return on assets of the scheme in 2005 was 12.8% (2004: 3.3%).

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Page 21

Notes and comments to the consolidated financial statements

21

(in thousand CHF)

The following table shows the financing situation in accordance with standard IAS 19: 31.12.2005 522,2 33,5 (563,1) (7,4) 19,1 11,7

31.12.2004 502,1 33,5 (553,1) (17,5) 29,7 12,2

Cost of service acquired Cost of interest assigned Financing insured parties Expected return on plan assets Surplus not recorded in the balance sheet Retirement policy charges as per the income statement

42,0 21,2 (17,1) (23,4) – 22,7

45,7 9,6 (16,1) (19,9) 1,5 20,8

Surplus recorded at the beginning of the period Retirement policy charges as per the income statement Charges paid by the employer Surplus recorded at the end of the period

(12,2) 22,7 (22,2) (11,7)

(12,2) 20,8 (20,8) (12,2)

2005 4.0% 2.0% 4.2%

2004 4.0% 2.0% 4.0%

(in million CHF)

Net assets of the retirement insurance scheme Net assets of company foundations Current value of deferred and current services Overall excess (loss) Unrecognized actuarial difference Surplus recorded in the balance sheet The net retirement benefit scheme costs for 2005 are determined as follows: (in million CHF)

The retirement insurance commitments were calculated based on the following assumptions: Actuarial rate Rate of salary increase Yield rate of non current assets

b) Early Retirement Foundation (FAR) The Group's operating personnel has benefited, since June 2003, from early retirement through the FAR Foundation (Foundation for early retirement in the main construction sector). Employees can benefit from this early retirement as of age 62.

The Foundation was set up by the trade unions SIB and SYNA and the “Société Suisse des Entrepreneurs” (Swiss contractors’ society).

Funding of the retirement plan is provided by the payment of contributions by employees and employers.

There is no commitment by Zschokke Group apart from the obligation to pay the agreed contributions.

The amount of contributions payable by the Group for 2005 is CHF 5 330 592.– (2004: 5 888 477.–). c) Employers’ Foundation of Zschokke Group The Employers’ Foundation of Zschokke Group owns, as at 31.12.2005, 3 830 (2004: 5830) Zschokke Holding SA shares bought at the market price, for a total value of 3 134 155.– (2004: 3 317 270.–).

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Notes and comments to the consolidated financial statements (in thousand CHF)

32 Leasing contracts Existing leases for premises intended for use as our own office space and other operating premises.

Amount of leasing liabilities for 2005 Amount of leasing liabilities for 2006 (2005) Amount of leasing liabilities for 2007 to 2010 (2006-2009) Amount of leasing liabilities from 2011 (2010) 33 Profit sharing plan a) Scheme available to all employees The profit sharing scheme for the benefit of employees is determined by the Motivation Foundation of Zschokke Group.

Under this scheme, employees can subscribe to shares of Zschokke Holding SA at a preferential price.

Share subscription number Amount expensed for the fiscal year thousand CHF The shares are blocked and cannot be traded for a period of 5 years. Employees are entitled to dividends and may exercise their voting rights. Upon expiry of the blocking period, the shares may be disposed of freely by the employees.

Shares held by the Foundation as at 31.12 number Market value of the shares as at 31.12 thousand CHF Blocked shares of employees number (in custody with the Foundation) b) Executive scheme The Group’s executives benefit from a profit sharing scheme based on shares of Zschokke Holding SA. Depending on goal achievement, the Board of Directors may decide to grant shares free of charge or on a preferential basis.

Subject to a written agreement, the grant is considered a supplementary annual remuneration that is not tied to the future performance of the executives.

The amount is therefore expensed entirely to the current fiscal year.

Share grant number Amount expensed for the fiscal year thousand CHF

2005

2004

13 583 13 562 46 295 21 321

12 491 13 067 44 314 19 402

1 409 379

1 294 290

1 954 1 599 5 028

3 007 1 711 4 529

1 925 1 965

1 710 1 004

34 Financial instruments The financial assets and liabilities posted on the closing date of the balance sheet include cash at bank and in hand, clients, work partnerships, other debtors, investments, short and long-term debts, trade and other payables.

Credit risk The credit risk represents the loss to be recorded if the co-contractor of a financial instrument fails to meet any of its obligations. Liquid assets are deposited with reputable bank institutions. In order to limit the credit risk associated with debtors and partnerships, the Zschokke Group undertakes regular assessments of its relationships.

All risks identified on the date of the balance sheet resulted in a provision for doubtful debts.

Fair value The fair value of cash at bank and in hand, clients, work partnerships, other debtors, investments, short and long-term debts, suppliers and other creditors does not differ significantly from the value stated in the balance sheet.

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Page 23

Notes and comments to the consolidated financial statements

23

(in thousand CHF)

35 Related party information Associated companies The consolidated financial statements include the financial statements of Zschokke Holding SA and the companies listed on pages 36 and 37.

Related party transactions Sales to related parties: – associated companies – companies influenced particularly by a director – work partnerships – others Purchases from related parties: – associated companies – companies influenced particularly by a director – work partnerships – others Credit claims on related parties (as at 31.12): – associated companies – companies influenced particularly by a director – work partnerships – others Debts to related parties (as at 31.12): – associated companies – companies influenced particularly by a director – work partnerships – others

2005

2004

147 35 135 608 11 168

126 30 133 207 –

1 302 2 426 – –

2 065 2 184 – –

23 22 21 873 –

13 – 32 420 –

128 22 – –

350 76 – –

4 195 316 – – 798 5 309

3 503 281 – – 444 4 228

200

–

Terms and conditions for related parties: Related party transactions are settled at market prices.

Outstanding (credit and debit) balances are unsecured.

Settlements are made in cash. No provisions for doubtful debts on these balances were created in the periods presented.

This is based on an annual review of the financial situation and, in particular, the payment record of each related party.

Other related parties: executives The term ”executives” includes the members of the Board of Directors and the members of the Group Management.

Short-term advantages Other advantages after cessation of employment Long-term advantages End of employment contract benefits Stock payments Total remuneration of executive personnel Balance in favour of executives as at 31.12

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Page 24

Notes and comments to the consolidated financial statements (in thousand CHF)

36 Post-Balance Sheet events On 1st January 2006, Zschokke Holding SA purchased 100% of the capital of Reuss Group Holding SA and its six subsidiaries.

This acquisition is part of the Zschokke Group's development strategy in the Facility Management area.

The purchase price was CHF 20 million, of which CHF 17.8 was paid in January 2006; the balance of 2.2 million is subject to conditions.

These new companies will be consolidated starting from 1st January 2006. As the financial statements of the Reuss Group were not available on the date when this report was drawn up, the information required by the IFRS standards cannot be provided here.

At the general meeting of 2nd March 2006, it will be proposed to the shareholders to merge Zschokke Holding SA with Implenia AG and to accept the merger contract with Batigroup Holding AG and Implenia AG. All details concerning this operation are given in the information booklet published specifically for this purpose.

37 Equity distributed and proposal for distribution Distributions decided and paid during the year on outstanding shares of Zschokke Holding SA: a) dividend, paid on 6 May 2005 (17 May 2004) For 2005: 294 8691) shares at CHF 14.– (2004: 292 382)

2005

2004

4 128

4 093

b) partial refund of the nominal value of the share, paid on 9 August 2005 (17 August 2004) For 2005: 294 8241) shares at CHF 9.– (2004: 292 382 at CHF 6.–)

2 653

1 754

Distribution proposals made to the ordinary general meeting (amounts still included in equity as at 31.12) a) dividend 300 0001) shares at CHF 23.– (2004: CHF 14.–)

6 900

4 200

–

2 700

b) partial refund of the nominal value of the share 2004: 300 0001) shares at CHF 9.– 1) Only outstanding shares give entitlement to the refund.

38 Approval of the consolidated accounts The board of directors of Zschokke Holding SA approved the consolidated accounts for the year 2005, at its meeting held on 16th January 2006, for presentation to the ordinary general meeting on 2nd March 2006.

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Page 25

Auditor’s report on the consolidated accounts

Report of the group auditors to the general meeting of Zschokke Holding S.A. Geneva As auditors of the group, we have audited the consolidated financial statements (including the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the notes and comments to the consolidated financial statements disclosed on the pages 2 to 24) of Zschokke Holding SA for the year ended 31 December 2005.

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 auditing standards promulgated by the Swiss profession and with International Standards on Auditing (ISA), 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

25

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 and the results 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.

Ernst & Young AG

Thomas Huwyler

Fabrice Bernhard

Swiss Certified Accountant (in charge of the audit)

Swiss Certified Accountant

Geneva, 16th January 2006

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Page 26

Historical analysis of significant figures (figures in thousand CHF unless otherwise indicated)

2005

2004

2003

1 753 892

1 663 639

1 617 940

Sales, including partnerships1)

1 646 493

1 558 215

1 534 293

– in Switzerland

1 638 295

1 558 208

1 534 293

8 198

7

–

25 225

21 203

18 447

12%

11%

11%

34 095

10 266

(48 014)

206 558

186 804

183 126

– real estate transactions

(20 823)

(31 751)

14 004

– machines, equipment, furniture

14 095

13 340

24 367

104 867

70 971

78 088

1 491

3 338

16 694

384 642

374 596

371 383

118

116

112

3 064

3 050

3 147

Sales, including partnerships, before consolidation According to IFRS

– abroad Group results as a % of equity as at 1st January Cash flow Equity 2) Net annual investments (disposals)

Liquid assets and securities Repayable debts Staff costs 3) Staff costs per employee 4) Average workforce

number

1) 2000/1996 modifications following changes in the incorporation of partnerships and the results of real estate transactions.

2) Since 1999, the company’s equity was modified as a result of the introduction of IAS 19.

3) Including outside and temporary staff.

4) Excluding outside and temporary staff.

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Page 27

27

2002

2001

2000

1999

1998

1997

1996

1 739 474

1 576 438

1 248 337

1 096 458

1 051 644

932 924

915 277

1 637 496

1 464 746

1 141 153

962 075

947 760

831 696

763 044

1 637 496

1 464 746

1 141 153

961 049

933 954

751 262

664 668

–

–

–

1 026

13 806

80 434

98 376

11 763

14 894

15 206

8 076

2 860

(14 139)

(120 176)

7%

10%

10%

6%

2%

–10%

–45%

62 432

111 106

64 555

(7 438)

20 761

5 915

6 029

167 696

163 381

151 470

151 599

132 302

131 131

145 390

9 662

443

(36 521)

(22 479)

(47 052)

(20 958)

7 986

15 347

20 975

19 901

10 587

8 051

(567)

8 200

138 355

93 020

36 080

34 816

79 757

92 353

71 960

25 750

36 489

87 878

135 268

169 858

191 938

174 998

377 181

358 680

308 777

284 977

273 670

260 391

300 630

112

114

107

101

99

99

98

3 223

3 017

2 735

2 645

2 622

2 520

2 965

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Page 28

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Page 29

29

Financial statements of Zschokke Holding SA

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Page 30

Income statement (in CHF)

INCOME

Notes

Investment income Financial income

1

Income from business premises Income from residential property Real estate gain

2

Changes in provisions TOTAL

2005

2004

17 003 066

30 253 833

1 803 751

1 747 275

318 512

341 690

15 000

15 660

–

1 318 686

–

95 000

19 140 329

33 772 144

2 053 308

2 643 561

EXPENSES Financial charges

3

Depreciation on: – property – investments – amortization of intangible assets Business property charges Residential property charges Administration costs

196 000

85 000

3 210 200

4 127 749

–

418 361

19 264

46 783

3 000

2 152

3 116 585

2 246 397

Capital tax and stamp duty

92 641

89 697

Income tax

41 119

209 957

Changes in provisions

4 900 000

318 001

Profit for the year

5 508 212

23 584 486

19 140 329

33 772 144

TOTAL

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Page 31

Balance sheet

31

(in CHF)

ASSETS

Notes

Cash

31.12.04 27 429 412

6 574 721

2 686 025

Debtors

4 468 409

4 421 737

Group companies

5 254 749

25 603 859

935 000

292 000

92 912 155

60 433 033

Securities

4

31.12.05 75 679 276

Prepayments and accrued income Current assets Buildings

5

5 464 955

4 600 955

Investments

6

169 314 884

172 193 770

15 871 801

16 450 547

2 296 904

2 539 187

Group companies Long-term debtors

7

Fixed assets

192 948 544

195 784 459

TOTAL

285 860 699

256 217 492

LIABILITIES AND SHAREHOLDERS’ EQUITY Bank debts Payables Group companies Accruals and deferred income Short-term liabilities

–

3 270

1 192 532

302 008

198 826 524

168 334 269

742 100

1 131 400

200 761 156

169 770 947

Uncalled capital on holdings

50 000

77 048

Long-term liabilities

50 000

77 048

Share capital 25 500 000

28 200 000

General reserve

6 000 000

6 000 000

Reserve for treasury shares

1 922 567

2 704 668

Voluntary reserve

2 305 143

1 523 042

43 813 621

24 357 301

– 300 000 registered shares of CHF 85.–/CHF 94.–

8

Income statement: – profit carried forward – profit for the year Shareholders’ equity TOTAL

5 508 212

23 584 486

85 049 543

86 369 497

285 860 699

256 217 492

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Notes and comments to the financial statements (in CHF)

1

Financial income Bank interest and miscellaneous Interest from Group companies Foreign exchange gains Capital gains on shares sold

2

Real estate gain 2004: Earnings on the partial sale of land situated at Rue Emma-Kammacher, Meyrin (Geneva)

3

Financial charges Interest, commissions, bank charges and miscellaneous Interest to Group companies Foreign exchange losses

4

Securities Zschokke Holding SA shares As at 1.1 Purchases Sales Partial refund of the nominal value As at 31.12 Batigroup Holding AG shares As at 1.1 Purchases Sales As at 31.12 TOTAL

5

Buildings Purchase and construction value Investments Sales Accumulated depreciation Net value Guarantee certificates with respect to consortium credits Surface area of land in m2 – of which for business use m2 – of which for non business use in m2 Fire insurance value of the buildings – of which for business use – of which for non business use

Number 7 319 194 (2 403) – 5 110

– 259 681 – 259 681

2005 134 500 788 458 212 866 667 927 1 803 751

2004 288 286 1 079 107 379 882 – 1 747 275

750 819 1 236 544 65 945 2 053 308

1 364 890 728 556 550 115 2 643 561

2 686 025 152 489 (881 885) (46 584) 1 910 045

3 481 562 – (749 835) (45 702) 2 686 025

– 4 664 676 – 4 664 676 6 574 721

– – – – 2 686 025

7 485 610 1 060 000 – (3 080 655) 5 464 955

7 220 610 405 000 (140 000) (2 884 655) 4 600 955

6 100 000

6 100 000

399 391 398 147 1 244

399 391 398 147 1 244

6 061 000 5 368 000 693 000

6 061 000 5 368 000 693 000

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Notes and comments to the financial statements

33

(in CHF)

6

Investments Group companies (associated companies, pages 36 and 37) Associated companies Minority interests Interests pledged on behalf of the consortium of banks participating in the consortium credit

2005 166 670 388 1 180 395 1 464 101 169 314 884

2004 169 700 588 1 310 000 1 183 182 172 193 770

126 468 156

126 468 156

16.3% 5.2%

15.8% 7.5%

–

–

61 051 000 10 021 965

56 545 000 9 044 717

Main changes during 2005: Zschokke Locher AG, GU Tiefbau AG and Erval SA merged with Zschokke Construction SA on 18 May 2005 (retroactive to 1.1.2005).

Zschokke GmbH Berlin merged with Zschokke Holding Deutschland GmbH on 13 June 2005 (retroactive to 1.1.2005).

7

Long-term debtors Loans to minoritary interests, to the Motivation Foundation of the Zschokke Group and other long-term secured loans.

8

Share capital The ordinary general meeting of 3 May 2005 decided to refund CHF 9.– on the nominal value of the Zschokke Holding SA share.

As the legal conditions have been fulfilled, the payment was made as planned on 9 August 2005. Since that date, the share capital amounts to CHF 25 500 000.– and the nominal value of the share is CHF 85.–.

Known shareholders holding more than 5 % of shares as at 31st December: Rössler Group, Hergiswil Sarasin Investment Fonds AG, Basel

9

Hidden reserves Net dissolution as per art. 663b CO (without affecting the consolidated IFRS result)

10 Contingent liabilities Guarantees granted and used Security for joint liability regarding the levying of VAT for the Group

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Notes and comments to the financial statements (in CHF)

11 Consortium credit The consortium credit contracted at the end of December 2004 has a duration of 3 years until 31 December 2007.

This contract signed between Zschokke Holding SA and a bank consortium has two limits: – a cash credit limit (for a maximum of CHF 60 million), which was determined in relation to the value of the property portfolio of the Zschokke Group; – a limit for the issue of guarantees, amounting to CHF 200 million, for the entire duration of the contract.

To secure the consortium credit, the Zschokke Group issued the following securities in favour of the bank consortium: – pledge of the shares of Zschokke Entreprise Générale SA and Zschokke Construction SA; – assignment of mortgage certificates for CHF 75 million; – limited subsidiary guarantees for CHF 107 million.

Situation as at 31.12.2005 (in francs)

Authorized limits Limits used

Loan covered 60 000 000 –

Issue of guarantees 200 000 000 156 986 000

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Page 35

General meeting

35

Resolutions put to the General Meeting held on 2nd March 2006 The board of directors recommends: 1. approval of the annual report, the annual accounts and the consolidated accounts for the year 2005; 2. appropriation of available earnings as proposed below; 3. giving discharge to the Board members;

4. winding up of the company by merger with Implenia SA, Zurich, and approval of the merger contract between Zschokke Holding SA, Batigroup Holding SA and Implenia SA; 5. re-election of Ernst & Young SA as statutory auditors and as auditors of the consolidated accounts for fiscal year 2006 until the merger comes into effect.

Proposed appropriation of available earnings (in CHF) Balance carried forward Profit for the year Balance

2005

2004

43 813 621

24 357 301

5 508 212

23 584 486

49 321 833

47 941 787

Distribution of a dividend of CHF 14.– per share on 6 May 2005 to the holders of the 294 869 shares in circulation

4 128 166

Proposal of the Board: Distribution of a dividend of CHF 23.– per share

6 900 000

Carried forward

42 421 833

43 813 621

Following approval of the proposal made by the Board, the dividend per share amounts to: gross dividend

Fr.

23.00

35% withholding tax

Fr.

08.05

net amount

Fr.

14.95

The net dividend will be payable on 3rd March 2006.

Evolution of share price (in CHF) (as quoted on the Swiss stock exchange)

2005

2004

2003

2002

2001

864/560

584/469

480/310

575/319

600/375

818.50

569

470

362.50

480

14.00

14.00

12.00

12.00

Share high/low: – registered shares Rate as at 31st December: – registered shares Dividend distribution (in CHF) – gross amount distributed for the financial year: 1) Subject to acceptance.

23.00

1)

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Notes and comments to the financial statements

Associated companies Company name

Registered office

Capital

Share-

Held

and branch offices

(in CHF)

holding (%)

by

ROBERT AERNI INGENIEUR AG

Dietlikon, Geneva

500 000

100

Zschokke Holding SA

AG FÜR MANUELLE DIENSTLEISTUNGEN

Neuenhof

150 000

53.3

Zschokke Holding SA

GÖHNER MERKUR SA

Geneva

100 000

100

Zschokke Holding SA

PRIVERA SERVICES AG

Bern

1 000 000

100

Zschokke Holding SA

PRIVERA AG

Bern, Aarau, Baden, Basel, Lausanne,

4 000 000

100

Zschokke Holding SA

500 000

75

Zschokke Holding SA

Switzerland

Lugano, Luzern, Meyrin, St.Gallen, Sion, Wallisellen

SAPA, SOCIÉTÉ ANONYME DE PRODUITS ASPHALTIQUES

Satigny

SWISS OVERSEAS ENGINEERING COMPANY

Geneva

ZSCHOKKE CONSTRUCTION SA

Aarau, Baden, Brig-Glis, Chur,

200 000

100

Zschokke Holding SA

28 400 000

100

Zschokke Holding SA

100 000

100

Zschokke Entreprise Générale SA

44 269 300

100

Zschokke Holding SA

Davos, Delémont, Ebnat-Kappel, Echandens, Fribourg, Kradolf-Schönenberg, Kreuzlingen, Martigny, Monthey, Neuchâtel, Neuhausen am Rheinfall, Oberuzwil, Schaffhausen, St. Gallen, St. Margrethen, St. Moritz, Schwende, Sierre, Sion, Teufen, Vernier, Wallisellen, Zürich

ZSCHOKKE DÉVELOPPEMENT SA

Geneva

ZSCHOKKE ENTREPRISE GÉNÉRALE SA

Geneva, Aarau, Basel, Bern, Chur, Dietlikon, Fribourg, Lugano, Luzern, Neuchâtel, Neuhausen am Rheinfall, Renens, St. Gallen, Sion

ZSCHOKKE MANAGEMENT AG

Dietlikon

100 000

100

Zschokke Entreprise Générale SA

ZSCHOKKE SERVICES SA

Geneva

500 000

100

Zschokke Holding SA

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Notes and comments to the financial statements

37

Affiliated companies Company name

Registered office and branch offices

Capital

Share-

Held

(in CHF)

holding (%)

by

Germany ZSCHOKKE HOLDING DEUTSCHLAND GmbH

Berlin

EUR 3 067 751.29

100

Zschokke Holding SA

ZSCHOKKE GmbH LEIPZIG

Leipzig

EUR 1 022 583.76

100

Zschokke Holding Deutschland

Wien

EUR

35 000.00

100

Zschokke Holding SA

ZSCHOKKE FRANCE SA

Lyon

EUR

914 694.10

100

Zschokke Holding SA

ZSCHOKKE CONSTRUCTION Sàrl

Lyon

EUR

76 224.51

100

Zschokke France

ZSCHOKKE DÉVELOPPEMENT SA

Lyon

EUR

457 347.05

100

Zschokke France

ZSCHOKKE PROCÉDÉS SPÉCIAUX Sàrl

Lyon

EUR

457 347.05

100

Zschokke France

DÉVELOPPEMENTS TRANSFRONTALIERS SA

Archamps

EUR 14 663 800.00

100

Zschokke Entreprise Générale SA

JUNIOR SPORTS ARCHAMPS SA

Archamps

EUR

37 000.00

100

Développements Transfrontaliers SA

Bratislava

SKK

2 225 000.00

100

Zschokke Holding SA

Austria ZSCHOKKE ÖSTERREICH GmbH France

Slovakia ZSCHOKKE BRATISLAVA s.r.o.

ZSCH Rap Ang 2005_ARP

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Auditors’ report

Report of the statutory auditors to the general meeting of Zschokke Holding SA Geneva As statutory auditors, we have audited the accounting records and the financial statements (balance sheet, income statement, notes and comments to the financial statements) of Zschokke Holding SA for the year ended 31 December 2005.

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 auditing standards promulgated by the Swiss profession, 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.

Ernst & Young AG

Thomas Huwyler

Fabrice Bernhard

Swiss Certified Accountant (in charge of the audit)

Swiss Certified Accountant

Geneva, 16th January 2006

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Registered Office Zschokke Holding SA Rue du 31-Décembre 42 1211 Geneva 6 Tel. 022 787 02 00 Fax 022 787 02 21 Group Management Industriestrasse 24 8305 Dietlikon Tel. 01 805 45 55 Fax 01 805 45 56 Rue du 31-Décembre 42 1211 Geneva 6 Tel. 022 787 02 00 Fax 022 787 02 21 www.zschokke.ch