cfe - financial report 2010 · under construction and already launched: fall pipe vessel...

121CFE / Annual Report 2010 / 130th corporate financial year / Financial report

Financial report

Management report

Consolidated financial statements

Statutory financial statements

122 123CFE / Annual Report 2010 / 130th corporate financial year / Financial report

Table of content

MANAGEMENT REPORT OF THE BOARD OF DIRECTORS 125 A. Report on the accounts of the financial year 125 1. Consolidatedaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Generalsummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Revenue,resultsandorderbookbydivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Significanteconomicdatabydivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Notestotheconsolidatedfinancialstatements,cashflowandCAPEXtables . . . . . . . . . . . . . . . . . . . 129 2. Parentcompanyfinancialstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 3. Capitalremuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 B. Corporate governance declaration 131 1. Corporategovernance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 2. CompositionoftheBoardofDirectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 2 .1 MandatesanddutiesofBoardmembers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 2 .2 EvaluationoftheindependenceofBoarddirectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 2 .3 LegalsituationofBoarddirectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 2 .4 Conflictofinterest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 3. OperationoftheBoardofDirectorsanditscommittees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 3 .1 TheBoardofDirectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 3 .2 TheRemunerationandNominationCommittee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 3 .3 TheAuditCommittee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 4. Shareholderbase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 4 .1 Equityandshareholderbase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 4 .2 Sharesincludingspecialrightsofcontrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 4 .3 Votingrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 5. Internalcontrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A . Internalcontrolandriskmanagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .1 .1 Definition–frameofreference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .1 .2 Scopeofapplicationofinternalcontrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .2 Organisationofinternalcontrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .2 .1 Principlesofactionandbehaviour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 5A .2 .2 Internalcontrolplayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 5A .3 Identificationofriskandriskmanagementsystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 5A .4 Maininternalcontrolprocedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 5A .4 .1 Compliancewithlawsandregulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 5A .4 .2 Applicationofthegeneraldirective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 5A .4 .3 Proceduresrelatingtocommitments–riskcommittees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 5A .4 .4 Proceduresrelatingtomonitoringofoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 5A .4 .5 Proceduresrelatingtotheproductionandprocessingofaccountinginformation . . . . . . . . 148 5A .5 Actionscarriedouttostrengtheninternalcontrolandriskmanagement . . . . . . . . . . . . . . 149 5B . Riskfactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 5B .1 RiskscommontothesegmentsinwhichtheCFEgroupisactive . . . . . . . . . . . . . . . . . . . . 150 5B .1 .1 Operationalrisks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 5B .1 .1 .1 Theactofconstruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 5B .1 .1 .2 Realestate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

5B .1 .1 .3 Dredging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 5B .1 .2 Theeconomicclimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 5B .1 .3 Managementandworkforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .2 Marketrisks(interestrates,exchangerates,insolvency) . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .2 .1 Interestrates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .2 .2 Exchangerates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .2 .3 Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .2 .4 Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5B .3 Rawmaterialrisks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .4 Dependenceoncustomers/suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .5 Environmentalrisks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .6 Legalrisks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .7 RisksspecifictotheCFEgroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .7 .1 SpecialPurposeCompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 5B .7 .2 StakeinDEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 6. Remunerationreport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 6 .1 RemunerationoftheBoardandcommitteemembers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 6 .1 .1 Directors’fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6 .1 .2 RemunerationofAuditCommitteemembers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6 .1 .3 RemunerationofRemunerationandNominationCommitteemembers . . . . . . . . . . . . . . . . 155 6 .1 .4 Remunerationofthemanagingdirector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6 .2 Remunerationofseniormanagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 6 .2 .1 CFEmanagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 6 .2 .2 Remunerationpolicy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 6 .2 .3 Levelofremuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 7. EvaluationofmeasurestakenbytheCompanyinresponsetothedirective oninsidertradingandmarketmanipulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 8. TransactionsandothercontractualrelationshipsbetweentheCompany, includingrelatedcompanies,andtheBoarddirectorsandcompanydirectors . . . . . . . . . . . . . . . 157 9. Assistanceagreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 10.Corporatecontrols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 C. Insurance policy 159 D. Special reports 159 E. Takeover bid 159 F. Acquisitions 159 G. Creation of branches 159 H. Post-balance sheet events 159 I. Research and Development 159 J. Outlook 160 K. Audit Committee 160 L. Notice of the Annual General Meeting of May 5, 2011 160


Management report of the Board of DirectorsA. Report on the accounts of the financial year

1. Consolidated accounts

Generalsummary

Thegroup’sconsolidatedrevenuerose10 .7%to€1,774millionfrom€1,603millionin2009 .

Operatingprofitfromordinaryactivitieswas€99 .1million,up11 .8%from€88 .6millionin2009 .Netprofitattributabletoownersoftheparentwas€63 .3millioncomparedwith€61 .7millionin2009 .

CFE’sorderbookstoodat€1,939millionatDecember31,2010,downfrom€2,024millionatJanuary1,2010 .However,itrosesignificantlyatthebeginningof2011thankstosubstantialordersbeingbooked .

Revenue,resultsandorderbookbydivision

Constructiondivision

Constructiondivisionrevenuefell4 .7%(7%onaconstantconsolidationscopebasis)to€708million,comparedwith€742millionin2009 .Howeverthetrendisfarfromuniform .Salesfellbyalmost10%intheBeneluxcountries,withthecrisishavingaparticularlystrongimpactinLuxembourg .Conversely,revenueoutsideEuropewasup,boostedbythecontracttobuildauniversityinChad .Intermsofbusinessactivities,civilengineeringgrewslightly,boostedbymajorprojectssuchastheLiefkenshoekrailtunnel,theCoentunnelandtheDelftrailtunnel,whilebuildingsalesfell,reflectingtheimpactofthecrisisonprivateinvestors .

Operatingprofit,undertheimpactofthefallinsales,amplifiedbythefactthatthisfalloccurredprimarilyinregionswithhistoricallyhighermargins,fell11 .4%to10 .2million(€11 .5millionin2009) .MBG,CFEBrabant,Geka,BPCandAmartcontinuedtogeneratesatisfactoryresults .SubstantialdifficultieswereencounteredwithamajorprojectintheNetherlands;apreliminaryagreementwasreachedwiththeclient,extendingthedeadlineandsettlingsomecontractualproblems .

Netprofitaftertaxamountedto€8 .8million(€6 .3millionin2009) .

Theorderbook,downslightly,stoodat€826million(€845millionon1January2010) .Thefallisparticularlyevidentincivilengineering,duetotheexecutionofthemajorinfrastructureprojectsmentionedaboveandthefactthatnolargecivilengineeringcontractswerewonduringtheyear,whenpricesweresubjecttoparticularpressure .Conversely,theorderbookwasupinconstruction,and,moreparticularly,inpublic-sectorcontracts .However,theorderbookwassubstantiallystrengthenedatthebeginningof2011whenBPCwasawardedthecontractforthePremiumTowerinBrussels(CFEshare€70million) .


Realestatedevelopmentandmanagementservicesdivision

Overall,therealestatedevelopmentandmanagementservicesdivision’sbusinessremainedbrisk .

InBelgium,businessactivityremainedfocusedmainlyontheresidentialsector,wherethesaleofongoingprojectscontinuedtobesatisfactory .ThreeofficebuildingprojectsdevelopedintheframeworkofpartnershipsneartheGareduMidiwererentedandsoldtoinvestors .

NewresidentialprojectsareinthepipelineandBPIwonaPPPcallfortendertodevelop55,000squaremetresofresidentialunitsandtertiaryfacilities .

InPoland,theOcean’sFourresidentialprojectinGdanskwaslaunchedandsalesareproceedinginlinewithprojections .

InLuxembourg,activitywashithardbythecrisis .TheSerenityproject(Climmolux)wasdeliveredatthebeginningoftheyear .TheLuxembourgsubsidiaryhastakenstakesintwomajorprojects:a170-unitresidentialproject(Greenhill)launchedinthethirdquarterof2010andanofficeproject .

At€7 .2million,operatingprofitwascomparabletothe2009figure(€7 .4million),withapronouncedshiftinbreakdownfromLuxembourgtoBelgium .

Netprofitcameto€3 .5million,versus€5 .2millionin2009 .

Dredging&environmentdivision

(TheDEMEfiguresreportedbelowareat100%;CFEowns50%ofDEME’ssharecapital .)

DEME’srevenuerosesharplyto€1,801million,up28%from€1,403millionin2009 .ThesharpriseinrevenuegeneratedinEuropereflectscompletionofseveralmajorcontacts,notablyconstructionofacontainerterminalforLondonGatewayintheUKandwindfarms .

Operatingprofitwasup19%at€177millioncomparedwith€147millionin2009 .Theslightfallinoperatingmarginreflectsthefactthatsomecontractswerecarriedoutasgeneralcontractorandincludedsupplies,togetherwiththeneedtoleasevessels .Thefleetoccupancyrateremainedhigh .

Netprofit,takingintoaccountanincreaseininterestexpenselinkedtoinvestmentprogrammesunderwayandhighertax,cameto€116 .5million(€103millionin2009) .

Theorderbookremainedhigh(€1,935millionversus€2,122milliononJanuary1,2010) .Substantialorderswerebookedinthevariousbusinessactivitiesandgeographicaloperationsin2010,therebyvalidatingthediversificationstrategy .

Furthermore,DEMErecordedneworderstotallingaround€500millionatthebeginningof2011 .

Theinvestmentprogrammecontinuedaccordingtoplan .Severalvesselsareunderconstruction:suctionhopperdredgerBreughel,jack-upvesselNeptuneandsea-goingrockcutterdredgerAmbiorix .Othersareunderconstructionandalreadylaunched:fallpipevesselFlintstone,graveltrailerVictorHortaandtheNextGenerationPlusmegatrailerCongoRiver(30,000cubicmetres) .Thesevesselswillallbeoperationalin2011-2012 .

DEMEpursueditspolicyofhighupstreaminvolvementininnovativeprojectssuchastidalenergyduringtheyear .

Multitechnicsdivision

Activityremainedbriskinthemultitechnicsdivisionandrevenueroseto€149million,comparedwith€141millionin2009 .ThisgrowthcorrespondstoinclusioninthescopeofconsolidationofVanDeMaeleMulti-Techniekoverthefullyear .

Substantialvariationscanbenotedwithinthisdivision .UndertheimpetusofalargeprojectsuccessfullyconductedinHungary,VMAreportedsharpgrowthinrevenue,whilethatofNizetfell .Therailwayelectrificationandsignallingsegmentremainedbriskwithtrendscomparableto2009 .

Asignificantdevelopmentattheendoftheyearwasthecreationofbe .Maintenance,acompanysetuptodevelopthemultitechnicalmaintenanceactivity .

Operatingprofitroseslightly(€6 .3millioncomparedwith€6millionin2009) .VMA,EngemaandVanDeMaeleMulti-Techniekpostedparticularlysatisfactorylevelsofoperatingprofit,whileDruartreturnedtoprofitafteradifficultyearin2009 .

Netprofitamountedto€3 .7million,comparedwith€3 .3millionin2009 .

Theorderbookroseappreciablyto€128millionversus€109millionatJanuary1,2010 .

PPP–Concessionsdivision

ConstructionworkcontinuedontheCoentunnel(Amsterdam)andLiefkenshoekrailtunnel(Antwerp)projects,whiletheTurnhoutcarparkconcessionhasmovedintooperatingphase .Theyearwasthereforedevotedtonewstudiesandsubmissionofbids .Attheendoftheyear,inpartnershipwithaDutchinvestmentfundandSKEFacilities(aVINCIsubsidiary),CFEwonacontractforschoolsintheGerman-speakingCommunityofBelgium .Italsopre-qualifiedforthe“missinglinks”projects,alightraillineinAntwerpandbusdepots .AsconcernstheAntwerpringroad,theNoriantconsortiumofwhichCFEisamemberisstillawaitingthedecisionoftheFlemishgovernment .

Rent-A-Portconsolidateditspositionsinthreeportconcessions(Vietnam,NigeriaandOman) .InDecember2010,Rent-A-PortEnergywassetupinpartnershipwithAckermans&vanHaarenandthecompany’smanagement .Itsaimwillbetomanageandcoordinateoffshorewindenergyconcessions .

Thedivisionmadeanoperatinglossof€3 .7million,correspondingtothecostofstudiesunderwayandthewrite-downofassetsinaconcessionpreviouslyawardedtoRent-A-PortinLiberia .

Itmadeanetlossof€3 .4million(versusalossof€0 .8millionin2009) .

Holdingcompany

Theholdingcompanygeneratedaslightnetprofit .Inter-divisionresultsarisingfrompropertydevelopmentorconcessionprojectswereeliminated .

InviewofthepoliticalsituationinTunisiaandthecurrentstoppageofworks,CFEmadethedecisiontopartiallywritedownassetsinthecourseofconstructiononthemixeddevelopmentandconcessionprojectintheportofBizerte .Thiswrite-downamountsto€6 .2million .


Significanteconomicdatabydivision

Orderbook AsofJanuary1,2011AsofJanuary1,2010 %change(in€millions) Construction 826 .4 845 .0 -2 .2Realestatedevelopmentandmanagementservices 17 .0 9 .4 n .s .Subtotal 843 .4 854 .4 -1 .3Dredgingandenvironment 967 .5 1,061 .0 -9 .1Multitechnics 128 .2 108 .7 17 .9Totalconsolidated 1,939.1 2,024.2 -4.2

Revenue 2010 2009 %change(in€millions) Construction 707 .8 742 .5 -4 .7Real-estatedevelopmentandmanagementservices 19 .8 27 .1 n .s .Inventoryeffect 11 .2 1 .5 n .s .Subtotal 738 .8 771 .1 -4 .2Dredgingandenvironment 900 .3 701 .3 28 .4Multitechnics 148 .6 140 .7 5 .6PPP-Concessions 3 .4 3 .6 n .s .Holdingco .(inter-segmenteliminations) -16 .7 -14 .1 n .s .Totalconsolidated 1,774.4 1,602.6 10.7

Revenuebygeographicalarea 2010 2009 %change(in€millions) Belgium 772 .5 750 .2 3 .0Netherlands 156 .6 150 .3 4 .2Luxembourg 41 .4 93 .7 -55 .8SubtotalBenelux 970 .5 994 .2 -2 .4Europeexcl .Benelux 314 .9 185 .3 69 .9TotalEurope 1,285 .4 1,179 .5 9 .0America(Mid+South) 92 .9 71 .7 29 .6Africa 143 .9 124 .6 15 .5Asia 67 .9 78 .2 -13 .2MiddleEast 130 .0 100 .0 30 .0Oceania 54 .3 48 .8 11 .3Totalconsolidated 1,774.4 1,602.6 10.7

Contributiontooperatingprofit 2010 %revenue 2009 %revenue %change(in€thousands) Construction 10,227 1 .4 11,545 1 .6 -11 .4ImpairmentofgoodwillConstruction - - -2,733 - -Realestatedevelopmentandmanagementservices 7,205 n .s . 7,370 n .s . -2 .2Inventoryeffect -121 n .s . -242 n .s . n .s .Subtotal 17,311 2 .3 15,940 2 .1 8 .6Dredgingandenvironment 86,489 9 .6 72,820 10 .4 18 .8Multitechnics 6,255 4 .2 5,968 4 .2 4 .8Impairmentofgoodwill:multitechnics - - -1,800 - -PPP-Concessions -3,666 n .s . -1,885 n .s . -Holdingcompany -584 n .s . -1,448 n .s . -94 .5Inter-divisioneliminationsandconsolidationadjustments -521 - -1,000 - -ImpairmentonmixedoperationinTunisia -6,197 - - - -Totalconsolidated 99,087 5.6 88,595 5.5 11.8

Contributiontonetprofitattributable toownersoftheparent 2010 %revenue 2009 %revenue %change(in€thousands) Construction 8,772 1 .2 6,262 0 .8 40 .1ImpairmentgoodwillConstruction - - -2,733 - -Realestatedevelopmentandmanagementservices 3,529 n .s . 5,222 n .s . -32 .4Inventoryeffect -65 n .s . -196 n .s . n .s .Subtotal 12,236 0 .7 8,555 1 .1 43 .0Dredgingandenvironment 57,109 6 .3 53,800 7 .7 6 .1Multitechnics 3,681 2 .5 3,163 2 .2 16 .4Impairmentgoodwill:multitechnics - - -1,800 - -PPP-Concessions -3,396 n .s . -824 n .s . -Holdingcompany 385 - -167 - -Inter-divisioneliminationsandconsolidationadjustments -522 - -1,000 - -ImpairmentonmixedoperationinTunisia -6,197 n .s . - - -Totalconsolidated 63,296 3.6 61,728 3.9 2.5

Notestotheconsolidatedfinancialstatements,cashflowandCAPEXtables

Netfinancialdebt(*)atendDecemberwas€248million,against€152 .3millionatend2009 .Itismadeupoflong-termdebtof€284millionoffsetbynetshort-termcashof€36million .

Cashflowfrominvestmentactivitiesfortheyearamountedto€242 .6million,comparedwith€174 .9millionin2009 .TheseactivitieswererelatedprimarilytotheinvestmentprogrammesofDEME(€215 .1million)andCFE(€27 .5million) .InadditiontoitsCAPEXprogrammes,CFEacquiredtheresidualstakeinDruartandamajoritystakeinGroepTerrynNVandBrantegemNVduringtheyear .

Workingcapitalrequirementrose€10milliondueprimarilytotherealestateactivityandthepositionstakenintworealestateprojectsinLuxembourg .

(*)Netfinancialdebtdoesnotincludethefairvalueofderivativeinstruments,whichamountedtoanexpenseof

€20 .9million .


Equityrose€51 .8millionto€475 .5million(€423 .8millionatend2009) .

CFEhasconfirmedlong-termcreditfacilitiestotallingalmost€135million,ofwhich€85millionremainunused .DEME’sacquisitionofdredgersandothermarineworksequipmentarefinancedunderseparatearrangementsbackedbytheseassets .

(in€thousands) 2010 2009Cashflowfromoperatingactivities 169,097 172,184Cashflowfrominvestmentactivities -242,585 -174,928Cashflowfromfinancingactivities 77,976 -27,024Netincrease/(decrease)incash 4,488 -29,768Equityattributabletoownersoftheparentonopening 413,343 357,701Equityattributabletoownersoftheparentonclosing 466,061 413,343Netresultfortheyear 63,296 61,728ROE 15.3% 17.3%

2. Parent company financial statements

CFESA’srevenueincreased9 .8%to€374 .6million,drivenprimarilybycivilengineeringactivityatMBG .

TheCompanygeneratedanoperatinglossof€3 .7million,representingaslightimprovementoverthepreviousyear,duetorecognitionoffurtherprovisionsoncashinbankaccountsandreductionsinequityholdings .

Financialincomefellduetothedecreaseindividendspaidbysubsidiaries .Debt-servicingcostsremainedundercontrol .

CFESAalsobookedanexceptionalexpenseof€5millioncorrespondingtoawrite-downinthevalueoftheholdingintheBizerteCap3000projectasaresultofthesituationinTunisia .

Netprofitaftertaxrose17%to€19 .7million .

ProfitandlossaccountCFESA(Belgianaccountingstandards):

(in€thousands) 2010 2009Salesandotherincome 434,947 394,464Revenue 374,627 341,131Operatingprofit/(loss) -3,710 -12,795Financialresult 28,547 33,664Profitfromordinaryactivities 24,837 20,869Exceptionalincome - -Exceptionalexpenses -5,007 -3,969Profit/(loss)beforetax 19,830 16,900Incometax -138 -62Profit/(loss)fortheyear 19,692 16,838

3. Capital remuneration

TheBoardofDirectorsofCFESAwillproposetotheAnnualGeneralMeetingonMay5,2011thedistributionofagrossdividendof€1 .2pershare,representinganetdividendof€0 .9375andcorrespondingtoatotaldistributionof€16,365,325 .Afterdistribution,retainedearningswillamountto€29,057,821 . B. Corporate governance declaration

1. Corporate governance

TheCompanyhasadoptedtheBelgianCompanyCode(2009)asitsreferencecode .

CFE’scorporategovernancecharter,establishedonthebasisofthereferencecode,maybeconsultedontheCompany’swebsitewww .cfe .be .

Initscorporategovernancecharter,CFEappliestheprinciplesoftheBelgianCompanyCode(2009) .

Furthermore,CFEconstruescorporategovernanceasgoingbeyondcompliancewiththecodeinthebeliefthatitisessentialtobasetheconductofitsactivitiesonbehaviouralanddecision-makingethicsandastronglygroundedcultureofcorporategovernance .

2. Composition of the Board of Directors

OnDecember31,2010,CFE’sBoardofDirectorsconsistedof10members,whosetermsofofficebeganonthedateslistedbelowandwillexpireimmediatelyaftertheAnnualGeneralMeetingsoftheyearslistedbelow: Startofterm ExpiryoftermC .G .O .SA,representedbyPhilippeDelaunois** 06 .05 .2010 2014RenaudBentégeat* 18 .09 .2003 2013PhilippeDelusinne 07 .05 .2009 2013RichardFrancioli 13 .09 .2006 2013BernardHuvelin 23 .06 .2005 2014ChristianLabeyrie 06 .03 .2002 2013JeanRossi 06 .05 .2010 2014ConsucoSA,representedbyAlfredBouckaert 06 .05 .2010 2014BVBACiskaServais,representedbyCiskaServais 03 .05 .2007 2011JanSteyaert 07 .05 .2009 2013

*Managingdirectorresponsibleforday-to-dayoperation

**PhilippeDelaunoishasbeenamemberofCFE’sBoardofDirectorsinapersonalcapacitysinceMay5,1994

ThetermofofficeofBoarddirectorsisfouryearsforthoseappointedorwhosemandateswererenewedafterJanuary1,2005 .


C.G.O.SA,representedbyPhilippeDelaunois

CFEAvenueHerrmann-Debroux,40-42B-1160Brussels

ChairmanoftheBoardofDirectorsDirector

Bornin1941,PhilippeDelaunoisgraduatedasacivilengineer-steelfromtheMonsPolytechnicUniversityandasacommercialengineerfromtheMonsStateUniversity .HeisalsoagraduateofHarvardBusinessSchool .Hespentmostofhiscareerinthesteelindustry,anduntil1999,wasmanagingdirectorandgeneralmanagerofCockerill-Sambre .AnOfficeroftheOrderofLéopoldandChevalieroftheLégiond’Honneur,hewaschosenManageroftheYearin1989,waschairmanoftheUnionWallonnedesEntreprises(WalloonBusinessAssociation)from1990to1993,andhasbeenhonoraryconsulofAustriaforHainautandNamursince1990 .

Directorships:

a-listedcompanies:DirectorofMobistarSA

b-non-listedcompanies:ChairmanoftheBoardofDirectorsofVersl’AvenirDirectorofINGBelgiumSAVice-PresidentofCORELIOSADirectorofIntégraleDirectorofAhlersInternationalSA(Luxembourg)DirectorofGDFSuezEnergieServicesSA(France)

c-associations:DirectorofEuropaliaASBLDirectoroftheASBLOrdredeLéopoldDirectoroftheChapelleMusicaleReineElisabeth

2.1 Mandates and duties of Board members

Boarddirectors

Thetablebelowsummarisesthemandatesanddutiesofthe10BoardmembersasofDecember31,2010 .

RenaudBentégeat

CFEAvenueHerrmann-Debroux,40-42B-1160Brussels

Managingdirector

Bornin1953,RenaudBentégeatholdsabachelor’sdegreeinpubliclaw,amaster’s(DEA)inpubliclaw,amaster’s(DEA)inpoliticalanalysisandadiplomafromthePoliticalStudiesInstituteofBordeaux .Hebeganhiscareerin1978atCampenonBernard .Hewasthensuccessivelynamedheadoflegalservices,directorofcommunication,administrativedirectorandsecretarygeneralresponsibleforlegalservices,communication,administrationandhumanresourcesforCompagnieGénéraledeBâtimentetdeConstruction(CBC) .From1998to2000,hewasregionaldirectorofbuildingconstructionforCampenonBernardSGE’sGreaterParisregion,beforebeingpromotedtodeputygeneralmanagerofVINCIConstructioninCentralEurope,andmanagingdirectorofBuildingsetPontsConstructionandBâtipontImmobilierinBelgium .Since2003,hehasbeenthemanagingdirector

ofCFE .HeisalsoamemberofVINCI’sManagementandCoordinationCommittee .RenaudBentégeatisanOfficeroftheOrderofLéopoldandChevalieroftheOrdreNationalduMérite(France) .

Directorships:

a-listedcompanies:ManagingdirectorofCFESA

b-non-listedcompanies:DirectorofvariouscompanieswithintheCFEgroupChairmanandCEOofCompagnieGénéraledeBâtimentetdeConstruction(CBC)ChairmanandCEOofUfimmo

c-associations:PresidentoftheChambreFrançaisedeCommerceetd’IndustriedeBelgique(FrenchChamberofCommerceandIndustryofBelgium),Vice-PresidentoftheAssociationdesEntrepreneursBelgesdeGrandsTravaux(ADEB-VBA)(AssociationofBelgianConstructionContractors)andForeignTradeAdviserforFrance

PhilippeDelusinne

RTLBelgiumAvenueJacquesGeorgin,2B-1030Brussels

MemberoftheAuditCommittee

Independentdirector

PhilippeDelusinnewasbornin1957andistheholderofadiplomainmarketinganddistributionfromISECinBrusselsandaShortMBAfromtheSterlingInstituteofHarvardUniversity .HestartedhiscareeratTedBatesasanaccountexecutive .HesubsequentlyheldthepositionsofaccountmanageratPublicis,clientservicesdirectoratImpactFCB,deputygeneralmanageratMcCannEriksonandchiefexecutiveofficerofYoung&Rubicamin1993 .HehasbeenchiefexecutiveofficerofRTLBelgiumsinceMarch2002 .

Directorships:

a-listedcompanies:MemberoftheSupervisoryBoardofMétropoleTélévision(M6),Paris

b-non-listedcompanies:ManagingdirectorofRTLBelgiumSAManagingdirectorofRadioHSAManagingdirectorofCLT-UFABelgianBroadcastingChairmanofIPPlurimediaSAManagingdirectorofCobelfraSAManagingdirectorofNewContactSADirectorofINADISADirectorofCLT-UFASADirectorofBEWEBSADirectorofHomeShoppingServiceBelgiumDirectorofFRONTSA


c-associations:Vice-PresidentoftheBelgianManagement&MarketingAssociationMemberoftheHighCouncilfortheAudiovisualSectorDirectoroftheThéâtreRoyaldeLaMonnaieChairmanoftheAssociationofCommercialTelevisioninEurope(A .C .T .)DirectoroftheAssociationforSelf-RegulationofJournalisticEthics(ASBL)

RichardFrancioli

VINCIConstruction1,coursFerdinand-de-LessepsF-92851Rueil-MalmaisonCedex

MemberoftheRemunerationandNominationCommittee

Director

RichardFrancioliwasborninDole(France)in1959 .AftergraduatingfromtheEcoleSupérieuredeCommerced’Angers,hestartedhiscareerwiththeVINCIgroupin1983withatraineeshipasacorporatevolunteer(VSNE)ontheAinShamshospitalprojectinCairo .Hesubsequentlyheldthefollowingpositionswithinthegroup:regionalmanagerfortheNorthforSogeaConstruction,provincialmanagerforSogeaConstructionandchairmanofVINCIConstructionFilialesInternationales .HewasappointedchairmanofVINCIConstructioninMarch2006and,asfromJanuary1,2010,heheadsVINCI’sContractingbusiness .

Directorships:

a-listedcompanies:MemberoftheExecutiveCommitteeandExecutiveVice-PresidentofVINCIRepresentativeofVINCIConstructionParticipationsontheBoardofDirectorsofEntreposeContracting(France)

b-non-listedcompanies:ExecutiveVice-PresidentcontractingofVINCIMemberoftheSupervisoryBoardofVINCIDeutschlandGmbH(Germany)DirectorofVINCIPlc(England)RepresentativeofVINCIConstructionontheBoardofDirectorsofDorisEngineering(France)RepresentativeofVINCIConstructionontheBoardofDirectorsofCofiroute(France)DirectorofSoletancheFreyssinetSA(France)

BernardHuvelin

VINCI1,coursFerdinand-de-Lesseps,F-92851Rueil-MalmaisonCedex

Director

Bornin1937,BernardHuvelinisanHECgraduate .HejoinedSGE(whichlaterbecameVINCI)in1962 .Hebecamesecretarygeneralin1974,deputygeneralmanagerfrom1982to1988,memberoftheManagementBoardfrom1988to1990,deputygeneralmanagerfrom1991to1997,chiefexecutiveofficerfrom1997to1999,anddirectorandchiefexecutiveofficerfrom1999to2005 .BernardHuvelinisanOfficeroftheLégiond’HonneurandChevalieroftheOrdreNationalduMérite .

Directorships:

b-non-listedcompanies:DirectorofVINCIParkDirectorofVINCIConcessionsDirectorofSoficotDirectoroftheStadedeFranceconsortium

c-associations:Vice-PresidentoftheEuropeanConstructionIndustryFederationAdvisertotheEuropeanEconomicandSocialCommittee

ChristianLabeyrie

VINCI1,coursFerdinand-de-Lesseps,F-92851Rueil-MalmaisonCedex

MemberoftheAuditCommittee

Director

Bornin1956,ChristianLabeyrieisexecutivevice-presidentandchieffinancialofficeroftheVINCIgroup,andamemberofitsExecutiveCommittee .BeforejoiningVINCIin1990,heheldvariouspositionsintheRhône-PoulencandSchlumbergergroups .Hestartedhiscareerinthebankingindustry .ChristianLabeyrieisagraduateofHEC,theEscuelaSuperiordeAdministracióndeEmpresas(Barcelona)andMcGillUniversity(Canada),andholdsaDECSdiploma(advancedaccountingdegree) .HeisaChevalieroftheLégiond’HonneurandaChevalieroftheOrdreNationalduMérite .

Directorships:

a-listedcompanies:MemberoftheExecutiveCommitteeoftheVINCIgroup,ChiefFinancialOfficerofVINCIandExecutiveVice-presidentofVINCI

b-non-listedcompanies:DirectorofEuroviaDirectorofVINCIParkDirectorofVINCIDeutschlandDirectorofASFDirectorofEscotaDirectorofArcourDirectoroftheStadedeFranceconsortiumChairmananddirectorofVFIDirectorofthecompanyLCLActionsEuro,partofCréditAgricoleAssetManagementBoardMemberoftheBanquedeFrance–Hauts-de-Seinebranch

JeanRossi

VINCIConstruction5,coursFerdinand-de-LessepsF-92851Rueil-MalmaisonCedex

Director

Bornon6November,1949,JeanRossihasanengineeringdegreefromtheEcoleSpécialedesTravauxPublicsdeParis(ESTP) .HestartedhiscareerasaworksengineeratPradeauetMorin .HemovedtobecomeoperationsdirectorandthenmanagingdirectorofSNEG .Afterthat,heheldseveralpositionsatSOGEA,aVINCIgroupsubsidiary,includingdirectorofbuildingandcivilengineering,regionaldirector,directorinchargeofNorthernFrance,director


inchargeofFranceexcludingtheParisregion,andchiefoperatingofficer,beforebecomingthecompany’schairmanin2001 .JeanRossihasbeenchairmanofVINCIConstructionFrancesinceJanuary1,2007andbecameChiefOperatingOfficerofVINCIConstructioninjune2007 .In2008,hebecameamemberofVINCI’sExecutiveCommitteeandwasappointedPresidentofVINCIConstructionin2010 .

Directorships

a-listedcompanies:MemberoftheExecutiveCommitteeofVINCI

b-non-listedcompanies:PresidentofVINCIConstructionChairmanofGTMGénieCiviletServicesChairmanofSociétéGénéraledeTravauxNon-partnerManagerofADIMRepresentativeofVINCIConstructionontheBoardofDirectorsofDumezMonacoRepresentativeofVINCIConstructionontheBoardofDirectorsofSGTM

c-associations:ChairmanofEGF-BTP

SAConsuco,representedbyAlfredBouckaert

AvenuedeFoestraets,33AB-1180Brussels

MemberoftheNominationandRemunerationCommittee

Independentdirector

Bornin1946,AlfredBouckaerthasadegreeineconomicsfromKUL(theCatholicUniversityofLouvain) .Hestartedhiscareerin1968asastockbrokeratJMFinn&CoinLondon .In1972,hejoinedChaseManhattanBankwhereheheldvariouscommercialandcreditpostsbeforebecomingcommercialbankingmanagerforBelgium .HewasappointedgeneralmanagerforChaseinCopenhagen(Denmark)in1984 .Twoyearslater,bebecamegeneralmanagerandcountrymanagerforChaseinBelgium .In1989,ChaseManhattanBanksolditsBelgianbusinesstoCréditLyonnaisandAlfredBouckaertwasmaderesponsibleformergingthetwobanks’operatingactivitiesinBelgium .In1994,CréditLyonnaisaskedAlfredBouckaerttoheadthebank’sEuropeanoperations .In1999,hetookoverthemanagementofAXARoyaleBelgeandwasalsoappointedcountrymanagerfortheBeneluxcountries .HebecamegeneralmanagerforNorthernEurope(Belgium,Netherlands,Luxembourg,GermanyandSwitzerland)in2005andwasappointedtoAXA’sManagementBoardinOctober2006withresponsibilityforNorthern,CentralandEasternEuropebusiness .InApril2007,hewasappointedchairmanoftheBoardofDirectorsofAXABelgium,retainingthispositionuntil27April2010 .

Directorships:

a-listedcompanies:DirectorofMitiskaSADirectorofLeasinvestRealEstate

b-non-listedcompanies:DirectorofVandemoorteleSADirectorofAXAItalyDirectorofAXAGreece

c-associationsDirectoroftheInstitutdeDuve(ICP)

BVBACiskaServais,representedbyCiskaServais

Boerenlegerstraat204B-2650Edegem

ChairoftheNominationandRemunerationCommittee

Independentdirector

CiskaServaisisapartnerinlegalfirmAstrea .Sheisactiveinthefieldofadministrativelaw,focusinginparticularonenvironmentalandtownplanninglaw,realestatelawandconstructionlaw .Shehasextensiveexperienceasaconsultantinjudicialproceduresandnegotiations;sheteachesuniversitycoursesandisaregularspeakeratseminars .Shegraduatedwithabachelor’sdegreeinlawfromtheUniversityofAntwerp(1989),andacomplementarymaster’s(LL .M)ininternationallegalcooperationattheFreeUniversityBrussels(V .U .B .)in1990 .ShealsograduatedwithaspecialdiplomainecologyfromtheUniversityofAntwerp(1991) .Shestartedhertraineeshipin1990atthelegalfirmVanPassel&Greeve .ShebecameapartnerinVanPassel&Vennotenin1994and,subsequently,inLawfortin2004 .In2006,sheco-foundedthelegalfirmAstrea .CiskaServaispublishesmainlyonthesubjectofenvironmentallaw,includingonthewastewatertreatmentdecree,environmentalliabilityandregulationsregardingthemovementofsoil .SheisamemberoftheAntwerpBar .

Directorships:

b- non-listedcompanies:NautinvestVlaanderenNVAstreabvcvba

JanSteyaert

MobistarBoulevardReyers,70B-1030Brussels

ChairoftheAuditCommittee

Independentdirector

Bornin1945,JanSteyaerthasbeenactiveforthegreaterpartofhiscareerinthetelecomsector .Hestartedhiscareerasacompanyauditor .In1970,hejoinedTelindus(acompanylistedonthestockmarket)wherehesuccessivelyheldthepositionsofchieffinancialofficer,chiefexecutiveofficerandchairmanoftheManagementBoardoftheTelindusGroupanditsaffiliatedcompaniesuntil2006 .HehasbeenamemberoftheBoardofDirectorsofMobistarsinceitscreationin1995andhasbeenitschairmansince2003 .HeisanOfficeroftheOrderofLéopoldIIandhasbeenappointedaChevalierintheOrderoftheCrown .


Directorships:

a-listedcompanies:ChairmanofMobistarNV

b-non-listedcompanies:DirectorofCredocSADirectorofPortolaniSADirectorofAutomationSA

c-associations:DirectorofAnimaEternaVZWDirectorofVVWVZWChairmanoftheDhondt-DhaenensFoundationandMuseuminDeurle

2.2 Evaluation of the independence of Board directors

Ofthe10membersoftheBoardofDirectorsonDecember31,2010,sixmaynotbeconsideredasindependentunderthetermsofArticle526teroftheBelgianCompanyCodeandtheCorporateGovernanceCode:

. RenaudBentégeat,whoisthemanagingdirectoroftheCompany; . ChristianLabeyrie,RichardFrancioli,BernardHuvelinandJeanRossi,whorepresentthecontrolling

shareholder,VINCIConstruction; . C .G .O .SA,representedbyPhilippeDelaunois,whohasheldmorethantwoconsecutivemandates .

AccordingtorulingsmadeattheAnnualGeneralMeetingsofMay3,2007,May7,2009andMay6,2010,theindependentdirectorsarePhilippeDelusinne,BVBACiskaServais,representedbyCiskaServais,JanSteyaertandConsucoSA,representedbyAlfredBouckaert .

ItshouldbenotedthatallCFE’sindependentdirectorswereabletocarryouttheirmissionwithcompleteindependencein2010 .

2.3 Legal situation of Board directors

NoneoftheBoarddirectorsofCFE(i)hasbeenfoundguiltyoffraudoranyotherinfractionorpublicsanctionbytheregulatoryauthorities,(ii)hasbeenassociatedwithabankruptcy,receivershiporliquidationor(iii)hasbeenpreventedbyaCourtfromactingasamemberofanadministration,managementorsupervisoryboardofapubliccompanyorfromparticipatinginthemanagementorbusinessdecisionsofapubliccompany .

RenewalofthetermofofficeofthefollowingmemberoftheBoardofDirectorsisproposedtotheAnnualGeneralMeeting

ThetermofofficeasaBoarddirectorofBVBACiskaServais,representedbyCiskaServais,willexpireatthecloseoftheAnnualGeneralMeetingofMay5,2011 .AtthatAnnualGeneralMeeting,itwillbeproposedtorenewthetermofofficeasaBoarddirectorofBVBACiskaServais,representedbyCiskaServais,foraperiodoffouryears,expiringatthecloseoftheAnnualGeneralMeetingof2015 .BVBACiskaServais,representedbyCiskaServais,meetstheindependencecriteriadefinedinArticle526teroftheBelgianCompanyCodeandtheCorporateGovernanceCode .

2.4 Conflict of interest

TothebestofCFE’sknowledge,theBoarddirectorsdonothaveanyprivateinterest,includingfamilyinterests,thatcouldplacetheminaconflictofinterestwiththeCompany .

SomeBoarddirectorsareactiveinothercompanieswhoseactivitiesare,attimes,incompetitionwithCFE .FourofCFE’sBoarddirectorswerenamedattheproposaloftheVINCIgroup,whichisCFE’scontrollingshareholder .

CFEensuresthattheproceduresprovidedforinArticle523oftheCompanyCodeconcerningconflictsofinterestwithintheBoardofDirectorsandinArticle524oftheCompanyCodeconcerning«intra-group»transactionsarerespected .

3. Operation of the Board of Directors and its committees

3.1 The Board of Directors

RoleandjurisdictionoftheBoardofDirectors

RoleoftheBoardofDirectors

ThemissionoftheBoardofDirectorsiscarriedoutintheinterestoftheCompany .

TheBoardofDirectorsdeterminestheorientationsandvalues,thestrategyandthekeypoliciesoftheCompany;itexaminesandapprovesrelatedsignificantoperations;itensuresthattheyarewellexecutedanddefinesanymeasuresneededtocarryoutitspolicies .Itdecidesonthelevelofriskitagreestotake .

TheBoardofDirectorsfocusesonthelong-termsuccessoftheCompanybyprovidingentrepreneurialleadershipandbyconductingriskevaluationandmanagement .

TheBoardofDirectorsensuresthatthefinancialandhumanresourcesneededbytheCompanytoachieveitsobjectivesareavailable,anditputsinplacethestructuresandmeansrequiredtoachievetheseobjectives .TheBoardofDirectorspaysspecialattentiontosocialresponsibility,agoodgenderbalanceanddiversityingeneralwithintheCompany .TheBoardofDirectorsapprovesthebudgetandexaminesandclosestheaccounts .

TheBoardofDirectors:– verifiesthatmanagementhasputinplaceaglobalinternalcontrolandriskmanagementsystemand

thatthissystemiscorrectlyimplemented;– takesallmeasuresneededtoensuretheintegrityofthefinancialstatements;– supervisestheactivitiesoftheStatutoryAuditor;– reviewstheperformanceofthemanagingdirectorandseniormanagement;– ensuresthatthespecialisedcommitteesoftheBoardofDirectorsfunctionwellandefficiently .

JurisdictionoftheBoardofDirectors

(i) GeneralpowersoftheBoardofDirectors

WiththeexceptionofpowersexpresslyreservedfortheAnnualGeneralMeetingandwithinthelimitsoftheCompany’sobjectives,theBoardofDirectorshasthepowertocarryoutallactionsthatareneededorusefultomeettheCompany’sobjectives .

TheBoardofDirectorsreportsontheexerciseofitsresponsibilitiesandmanagementtotheAnnualGeneralMeeting .ItpreparestheproposedresolutionstobeconsideredbytheAnnualGeneralMeeting .


(ii)PowersoftheBoardofDirectorswithregardtocapitalincreases(authorisedcapital)

FollowingtheauthorisationgivenbytheAnnualGeneralMeeting,theBoardofDirectorsisauthorisedtoincreasetheCompany’scapital–inoneormoreoperations–withinamaximumamountof€2,500,000,excludingissuepremiums,bymeansofcashornon-cashcontributions,byincorporationofreservesandwithorwithouttheissueofnewshares .Intheframeworkofauthorisedcapital,theBoardofDirectorsdecidesontheissueofshares,determinesthetermsofissueofthenewsharesand,inparticular,theissueprice .

TheauthorisedcapitalofCFEallowsissueof1,531,260additionalsharesintheeventofacapitalincreasewithissueofsharesonthebasisoftheirparvalue .

ThisauthorisationexpiresonMay21,2015,butcanberenewedoneormoretimes,inaccordancewiththerelevantlegalprovisions .

(iii) PowersoftheBoardofDirectorswithregardtoacquisitionoftreasuryshares TheAnnualGeneralMeetingofMay7,2009authorisedCFE’sBoardofDirectorstoacquireamaximumof1,309,226CFEtreasuryshares .Theacquisitioncanbemadeatapriceequaltotheaverageoftheclosingpriceofthelast20daysoftradingofCFEsharesonEuronextBrusselsimmediatelyprecedingtheacquisition,plusamaximumoftenpercent(10%)orminusamaximumoffifteenpercent(15%) .

ThisauthorisationexpiresonMay25,2014,butcanberenewedoneormoretimes,inaccordancewiththerelevantlegalprovisions .

TheagreementoftheAnnualGeneralMeetingisnotrequiredfortheacquisitionoftreasurysharesbyCFEwithaviewtodistributingthemtoemployees .

Byvirtueofanexpressstatutoryprovision,treasurysharesheldbyCFEthatarequotedontheprimarymarketofastockexchangeorofficiallylistedonastockexchangelocatedinamemberstateoftheEuropeanUnionmaybetransferredwithoutthepriorauthorisationoftheAnnualGeneralMeeting .

(iv) PowersoftheBoardofDirectorswithregardtotheissueofbonds Subjecttotheapplicationoftherelevantlegalprovisions,theBoardofDirectorsmaydecideonthecreationandissueofbonds,whichmaybebondsconvertibleintoshares .

OperationoftheBoardofDirectors

TheBoardofDirectorsisorganisedsoastoensurethatdecisionsaretakenintheinterestoftheCompanyandthatitsworkisexecutedefficiently .

MeetingsoftheBoardofDirectors

TheBoardofDirectorsmeetsregularlyandwithsufficientfrequencytoperformitsobligationseffectively .ItalsomeetswheneverrequiredintheinterestoftheCompany .TheBoardhasincreasedthenumberanddurationofitsmeetings,someofwhichincludevisitstoongoingprojects .

In2010,theBoardofDirectorsruledonallmajorissuesconcerningtheCompany .Itmetsixtimes .

Inparticular,theBoardofDirectorsperformedthefollowingtasks:- approvedthefinancialstatementsfortheyear2009andtheinterimfinancialstatementsfor2010;- examinedthe2010budgetanditsupdates;- examinedthestrategyofCFEforthe2011-2013period;- examinedthefinancialpositionoftheCompanyandchangesinitsdebt;- discussedmajoracquisitionprojects;- decidedonacquisitionofastakeinthecapitalofGroepTerrynNVandBrantegemNV;- decided,onthebasisofproposalsmadebytheRemunerationandNominationCommittee,ontheterms

ofremunerationandbonusesforthemanagingdirectorandseniormanagement;- decidedonthefeestobepaidtoAuditCommitteeandRemunerationandNominationCommittee

members .

ThetablebelowindicatestheindividualattendancerateofdirectorsatBoardmeetingsin2010 . Boarddirectors Attendance/TotalnumberofmeetingsPhilippeDelaunois 1/1C .G .O .SA,representedbyPhilippeDelaunois 5/5RenaudBentégeat 6/6PhilippeDelusinne 6/6RichardFrancioli 6/6BernardHuvelin 4/6ChristianLabeyrie 6/6JeanRossi 5/5ConsucoSA,representedbyAlfredBouckaert 4/5BVBACiskaServais,representedbyCiskaServais 6/6JanSteyaert 6/6

Thedecision-makingprocesswithintheBoardofDirectors

Exceptinthecaseofforcemajeureresultingfromwars,uprisingsorotherpublicdisturbances,theBoardofDirectorscanonlyvalidlydeliberateifatleasthalfofthemembersarepresentorrepresented .BoardmemberswhoareunabletoattendameetingmayberepresentedbyanotherBoardmember .Inaccordancewithlegalandregulatoryprovisions,eachmembercanhaveonlyoneproxyvote .Letters,telegrams,telexes,faxesore-mailmessagesconveyingtheproxyvoteareattachedtotheminutesoftheBoardmeetingatwhichtheyareused .

IfsodecidedbythechairmanoftheBoard,meetingsmaybeattendedbyallorsomeofthemembersviaaudioorvideoconference .Thesemembersaredeemedtobepresentforthepurposeofcalculatingquorumandmajority .Thecompanysecretarytakesthenecessarystepstoorganiseanysuchaudioorvideoconference .

Resolutionsarepassedbymajorityvoteofthememberspresentorrepresented .Intheeventthatmembersneedtoabstainfromtakingpartindeliberationsasaresultoflegalconsiderations,thesaidresolutionswillbepassedbymajorityvoteoftheothermemberspresentorrepresented .Intheeventofatie,thechairmanoftheBoardofDirectorswillcastthedecidingvote .

Aftereachmeeting,thedeliberationsarerecordedinminutessignedbythechairmanoftheBoardofDirectorsandbyamajorityoftheBoardmemberswhotookpartinthedeliberations .

Theminutessummarisethediscussions,specifythedecisionstakenand,ifapplicable,anyreservationsraisedbytheboardmembers .TheyarerecordedinaspecialregisterkeptattheCompany’sheadoffice .

ThemaincharacteristicsoftheevaluationprocessoftheBoardofDirectorsarestipulatedintheinternalregulationspublishedintheCompany’sCorporateGovernanceCharter .


3.2 The Remuneration and Nomination Committee

AtDecember31,2010,thiscommitteecomprised:

-BVBACiskaServais,representedbyCiskaServais,chair(*)-RichardFrancioli-ConsucoSA,representedbyAlfredBouckaert(*)

(*)independentdirectors

Thecommitteemetthreetimesin2010 .

Overthecourseofthefinancialyear,thecommitteeexamined,notably:

– theremunerationandincentivespaidtothemanagingdirector;– thefixedandvariableremunerationpaidtoseniormanagement;– theproposedappointmentasBoarddirectorsofJeanRossiandConsucoSA,representedby

AlfredBouckaert;– thetermsandconditionsoftheCompany’sdifferentinsurancepolicies;– theappointmentofBernardColsasmanagingdirectorofthemultitechnicsdivision;– theappointmentofChristopheVanOphemasdirectorofCFEBrabant,effectiveFebruary1,2011 .

ThecommitteealsofamiliariseditselfwiththenewobligationsregardingremunerationasaresultoftheprovisionsoftheLawofApril21,2010oncorporategovernance .

ThetablebelowindicatestheindividualattendancerateofthemembersoftheRemunerationandNominationCommitteeatmeetingsin2010 .

Members Attendance/TotalnumberofmeetingsBVBACiskaServais,representedbyCiskaServais,chair 3/3RichardFrancioli 3/3ConsucoSA,representedbyAlfredBouckaert 1/1PhilippeDelaunois 1/1C .G .O .SA,representedbyPhilippeDelaunois 1/1

MembersoftheRemunerationandNominationCommitteearepaid€1,000persession;thechairispaid€2,000persession .

ThemaincharacteristicsoftheevaluationprocessoftheRemunerationandNominationCommitteearestipulatedintheinternalregulationspublishedintheCompany’scorporategovernancecharter .

3.3 The Audit Committee

AtDecember31,2010,thiscommitteecomprised:

– JanSteyaert,chair,– PhilippeDelusinne– ChristianLabeyrie

CFE’sBoardofDirectorspaysparticularattentiontoensuringthatAuditCommitteemembershavefinancial,accountingandriskmanagementskills .

MrJanSteyaertchairstheAuditCommittee .HemeetstheindependencecriteriadefinedinArticle526teroftheBelgianCompanyCode .

JanSteyaerthasadegreeineconomicsandfinance .Hehasheldvariousposts,includingworkingforanauditingfirmandforTelindus,alistedcompany,wherehewasinitiallyCFO,thenCEOandthenchairmanoftheBoardofDirectors .TheforegoingbearsoutMr .Steyaert’scompetenceintermsofaccountingandauditing .

TheStatutoryAuditorparticipatesintheworkoftheAuditCommitteewhenthecommitteesorequests .

Thiscommitteemetfivetimesduringthefinancialyear .

Itperformedthefollowingtasks:

– examinedthefinancialstatementsfortheyear2009andtheinterimfinancialstatementsfor2010;– examinedthedraft2011budgetbeforeitwaspresentedtotheBoard;– assessedthetasksoftheStatutoryAuditorand,togetherwithhim,redefinedthecontentofthesetasks,

takingintoaccountknownchangesarisingduringthefinancialyear;– undertookareviewoftheprincipalrisks;– readthefindingsoftheauditscarriedoutrelativetoITsecurityandcontinuityofoperationsintheevent

ofamajorincident .

TheAuditCommitteepaidparticularattentiontotheCompany’sinternalcontrolandmonitoredtheproceduresinitiatedbyCFEtoimprovethiscontrol .

Attheendof2010,CFEdecidedtomoderniseitsmanagementsystemsandchosetoputinplaceanintegratedsystemcoveringprocurement,accounting,budgetmanagementandcashmanagement .Thespecificationsweredefinedindetail .TheAuditCommitteemonitoredthisprocessthroughoutthefinancialyearandmettheproject’ssteeringcommitteeandtheteamresponsiblefortheanalysesleadingtodefinitionofthefinalspecificationsapprovedattheendof2010 .

ThetablebelowindicatestheindividualattendancerateofthemembersoftheAuditCommitteeatmeetingsin2010 .

Members Attendance/TotalnumberofmeetingsJeanSteyaert 5/5PhilippeDelusinne 5/5ChristianLabeyrie 4/5

MembersoftheAuditCommitteearepaid€1,000persession;thechairispaid€2,000persession .

ThemaincharacteristicsoftheevaluationprocessoftheAuditCommitteearestipulatedintheinternalregulationspublishedintheCompany’sCorporateGovernanceCharter .

4. Shareholder base

4.1 Equity and shareholder base

Atthecloseofthefinancialyear,CFE’ssharecapitalamountedto€21,374,971,representedby13,092,260shares,withnodeclaredparvalue .TheCompany’ssharesareregisteredordematerialisedsecurities .

Thesharesareregistereduntilfullypaidup .Oncefullypaidup,theymaybeconvertedintodematerialisedsecurities,atthechoiceandexpenseoftheshareholder .

Theregistryofregisteredsharesisheldinelectronicform .ManagementoftheregistryhasbeenentrustedtoEuroclearBelgium(CIKS .A) .


Registeredsharesmaybeconvertedintodematerialisedsharesandvice-versaonrequestbytheirholderandattheirexpense .However,conversionofsharesissuspendedfromthemomentthesharesaredepositedinadvanceofanAnnualGeneralMeetinguntiltheconclusionofthatmeeting .DematerialisedsharesareconvertedintoregisteredsharesbymakingthecorrespondingentryintheregisterofCFEshareholders .Registeredsharesareconvertedintodematerialisedsharesbyentryintoanaccountinthenameoftheirownerorholderopenedwithanapprovedaccount-holderorabodyresponsibleforcancellationandremovaloftheentryintheregisterofshareholders .

BearersharesintheCompanyalreadyregisteredinasecuritiesaccountasofJanuary1,2008automaticallyexistindematerialisedformasofthisdate .

BearersharesnotregisteredinasecuritiesaccountasofJanuary1,2008areconvertedintodematerialisedsecuritiesatthetimeoftheirregistrationinasecuritiesaccountorlater,asthecasemaybe .

BearersharesthatarenotregisteredinasecuritiesaccountasofDecember31,2013,willbeautomaticallyconvertedintodematerialisedsecuritiesonthatdate .

CFE’sshareholderbaseasofDecember31,2010isshownbelow:

Numberofshareswithoutdeclarationofparvalue 13,092,260

-registeredshares 6,185,480-dematerialisedshares 6,856,700-bearershares 50,080

Shareholdersowning3%ormoreofthevotingrightsattachedtothesharestheyhold:

VINCIConstructionSAS5,coursFerdinand-de-LesseptsF-92851Rueil-MalmaisonCedex(France) 46 .84%,or6,132,880shares

4.2 Shares including special rights of control

Atthecloseofthefinancialyear,noshareholderownedshareswithspecialrightsofcontrol .

4.3 Voting rights

OwnershipofaCFEshareentitlestheownertovoteinCFE’sAnnualGeneralMeetingandautomaticallyassumesapprovalofCFE’sArticlesofAssociationandthedecisionsofCFE’sAnnualGeneralMeeting .ShareholderscanonlybeheldliableforthecommitmentsoftheCompanyuptotheamountofthesharesheld .

TheCompanyrecognisesonlyoneownerpershareasconcernstheexerciseofrightsgrantedtoshareholders .TheCompanymaysuspendtheexerciseoftherightsattachedtosharesheldinco-ownership,usufructorunderpledge,untilasinglepersonisdesignatedasbeneficiaryoftheserightsinrespectoftheCompany .

SinceJanuary1,2008,theexerciseofanyrightsattachedtophysicalbearersharesissuspendeduntiltheyareregisteredinasecuritiesaccountorintheregisterofshareholders .

5. Internal control

5.A Internal control and risk management

5A.1 Introduction

5A.1.1Definition–frameofreference

Internalcontrolmaybedefinedasasystemdevelopedbythemanagementbodyandimplementedunderitsresponsibilitybyexecutivemanagement .Itcontributestogoodmanagementofthecompany’sactivities,theeffectivenessofitsoperationsandtheefficientuseofitsresources,asafunctionofthegoals,sizeandcomplexityofthecompany’sactivities .

Moreparticularly,theinternalcontrolsystemaimstoensure:-theapplication(executionandoptimisation)ofthepoliciesandgoalssetbythemanagementbody(e .g .performance,profitability,protectionofresources,etc .);-thereliabilityoffinancialandnon-financialinformation(e .g .preparationofthefinancialstatements,themanagementreport,etc .;-compliancewithlaws,regulationsandotherlegaltexts(e .g .theArticlesofAssociation,etc .) .

(ExcerptfromtheguidelinesintheframeworkoftheLawofApril6,2010andtheBelgianCodeofCorporateGovernance(2009)publishedbytheCorporateGovernanceCommission-version10/01/2011,page8) .

Likeanyothercontrolsystemhowever,theinternalcontrolsystem,nomatterhowwelldesignedandapplied,cannotguaranteetheabsoluteeliminationofsuchrisks .

5A.1.2Scopeofapplicationofinternalcontrol

TheinternalcontrolsystemappliestoCFEandthesubsidiariesincludedinitsscopeofconsolidation .InthespecificcaseofDEME,Rent-A-Port,GroepTerryn,VanDeMaeleMulti-TechniekandSogesmaint-CBRE,internalcontrolistheresponsibilityoftheirBoardsofDirectors .However,CFEseekstoencouragetheapplicationofitsownbestpracticesthroughitsrepresentativesontheseboards .

5A.2 Organisation of internal control

5A.2.1Principlesofactionandbehaviour

CFE’sbusinessactivitiesrequiretheteamsexercisingthemtobeclosetotheirclients .Toenableeachprofitcentremanagertorapidlytaketheappropriateoperatingdecisions,adecentralisedorganisationhasbeensetupintheconstruction,realestatedevelopmentandmanagementservices,multitechnicsandPPP–Concessionsdivisions .

CFE’sorganisationalstructurenecessitatesdelegatingauthorityandresponsibilitytooperationalandfunctionalplayersateveryleveloftheorganisation .DelegationisexercisedintheframeworkofageneraldirectiveandincompliancewithCFE’sprinciplesofactionandoperation:

– strictcompliancewiththerulescommontotheentiregroupintermsofenteringintocommitments,risktaking,acceptanceofnewbusiness,andreportingoffinancial,accountingandmanagementinformation;

– transparencyandloyaltyofmanagerstotheirlinemanagementandfunctionaldepartments;– compliancewithallthelawsandregulationsapplicableincountrieswherethegroupoperates,

regardlessoftheparticularsubject;– communicatingthegroup’srulesandguidelinestoallemployees;– safetyofpeople(employees,serviceproviders,subcontractors,etc .);– thesearchforfinancialperformance .


5A.2.2Internalcontrolplayers

TheBoardofDirectorsofCFEisacollegialbodyresponsibleforcontrollingmanagementoftheCompany,settingstrategicguidelinesforitandensuringsatisfactoryoperationoftheCompany .Itrulesonallmajorquestionspertainingtothegroup .TheBoardofDirectorshassetupspecialisedcommitteesforauditingtheaccountsandforremunerationandnominations .

TheSteeringCommittee,alsoknownasthe“Committeeof15”comprises:

– Themanagingdirectorresponsibleforday-to-daymanagementofthegroup;– ThecorporatedeputygeneralmanagerandCFOofthegroup;– ThedeputygeneralmanageroftheConstructiondivision;– ThemanagingdirectorofBPC,whoisalsoresponsibleforthesupervisionofAmart;– ThegeneralmanagerofBAGECI;– ThegeneralmanagerofCFEBrabant;– ThegeneralmanagerofCFENederland;– ThegeneralmanagerofMBG;– ThemanagingdirectorofAannemingenVanWellen,

alsogroupcommunicationandsynergiesdirector;– ThedirectorofCFEInternational;– ThemanagingdirectorofCLEandtheLuxembourgreal-estatesubsidiaries;– ThemanagingdirectorofCFEImmoandmanagingdirectorofBPI;– Thegeneralmanagerofthemultitechnicsdivision;– Thegrouphumanresourcesdirector;– Thegroupsustainabledevelopmentdirector .

TheSteeringCommitteeisresponsibleforimplementinggroupstrategy,applicationofpoliciesrelatedtomanagementofthegroupandthegeneraldirectivementionedabove .

Theholdingcompanyhasalimitedstructureappropriatetothegroup’sdecentralisedorganisation .Thefunctionaldepartmentsoftheholdingcompanyaretaskedwithestablishingandensuringcorrectapplicationofgrouprulesandproceduresanddecisionsmadebythemanagingdirector .Onthefinanciallevel,cashmanagementiscentralisedattheleveloftheholdingcompany .Asconcernsthesubsidiaries,theexpressapprovaloftheholdingcompany’sfinancedepartmentisrequiredbeforeenteringintorelationswithabankingorganisation .Theholdingcompanyalsodirectlymanagesspecificprojectfinancing .

CFEdoesnothaveanauditdepartment .

5A.3 Identification of risk and risk management system

Asof2006,CFEsetupasystemforidentifyingthemainriskstowhichitisexposed .Theidentificationofrisksisregularlyupdated .Therisksaredescribedinpoint5B .Theidentificationprocessrevealsthatthemainrisksareatoperationallevel .Thisisbecausethemaincharacteristicofthesectorliesinthecommitmentmadeonsubmissionofaproposaltobuildastructurethatisbyitsnatureunique,forapricewithpredeterminedtermsandwithinanagreedtimeschedule .

5A.4 Main internal control procedures

Theprocedurescoveredbythissectionarecommontothewholegroupinaccordancewiththeprecedingdefinitionofscope .

5A.4.1Compliancewithlawsandregulations

Theapplicablelawsandregulationssetbehaviouralstandardsandareanintegralpartofthecontrolprocess .ThelegaldepartmentoftheholdingcompanymonitorsdevelopmentsinthelegalfieldinordertoidentifythedifferentrulesapplicabletothegroupandpassesthisinformationontothemembersoftheSteeringCommitteeandemployeesconcerned . 5A.4.2Applicationofthegeneraldirective

ThegeneraldirectiveissuedbyCFE’smanagingdirectortoExecutiveCommitteemembersdefinestheoperationsrequiringpriorinformationorapprovalbyCFE’sseniormanagementorfunctionaldepartments .

Thedirectivecoversthefollowingareas:

– riskstakenincontracts;– theacquisitionorsaleofrealestateassets;– theacquisitionorsaleofothertangibleassets;– theacquisitionofcompanies;– humanresources;– administrativeandlegalmanagement;– bankingrelationsandfinancialundertakings;– financialinformation;– internalandexternalcommunication;– ethicalbehaviour;– socialandcivicengagementresponsibility .

TheseoperatingrulesmustberespectedbyallCFEseniormanagers .Thisgeneraldirectiveistransmittedbyeachseniormanagertosubsidiaryandbranchofficemanagers .AdditionaldirectivescoveringmorerestrictiverulesmaybeformulatedbyCFEseniormanagersfortheirsphereofjurisdictionandaddressedtoemployeeswiththerequisiteauthorityattheheadofaprofitcentre .However,additionaldirectivesmaynot,underanycircumstances,constituteanexceptiontoCFE’soperatingrules .

5A.4.3Proceduresrelatingtocommitments–riskcommittees

Giventhespecificnatureofthebusinessactivities,strictupstreamcontrolproceduresareapplied .

CFE’sriskcommitteereviews:

– thetermsandconditionsofsubmissionofworksproposalswhich,byvirtueoftheirsize,implementationofnewtechnology,thespecificfinancialengineeringfeatures,inclusionofspecificsocialobligationsortheirlocation,carryaspecificrisk,whethertechnical,legal,financial,socialorother .Thegeneraldirectivesetsthresholdsforautomaticexaminationpriortosubmissionofsuchproposals;

– allpublic-privatepartnershipandconcessionoperations .

Theriskcommitteecomprisesthefollowingmembers:

– themanagingdirectorofCFE;– thedirectorandmemberoftheSteeringCommitteeresponsibleforthesubsidiaryorthebranch;– theoperationalorfunctionalrepresentativesofthecompany;– and,dependingonthespecificnatureoftherisk,thefinanceandadministrationdirector,thehuman

resourcesdirector,andthedeputygeneralmanageroftheconstructiondivision,whoaremembersoftheSteeringCommittee .


Therealestatecommittee

Noacquisitionoflandoranycommitmenttoacquireordeveloprealestatecanbecarriedoutwithoutthepriorapprovaloftherealestatecommittee .

Thiscommitteecomprises:

– themanagingdirectorofCFE;– thefinanceandadministrationdirector,memberoftheSteeringCommittee;– thedirectorandmemberoftheSteeringCommitteeconcernedbytheoperation;– theoperationalrepresentativesoftheprojectconcerned;– thegeneralsecretaryoftherealestatedivision;– thefinanceandadministrationmanageroftherealestatedivision .

Furthermore,anyrealestateinvestmentforanamountexceeding€5millionmustreceivethepriorapprovalofCFE’sBoardofDirectors .

Withregardacquisitionprojects,anyacquisitionofamajorityorminoritystakefallswithintheresponsibilityofthemanagingdirectorafterauthorisationoftheBoardofDirectors .

5A.4.4Proceduresrelatingtomonitoringofoperations

Thedivisionshavetheirownoperationscontrolsystemsadaptedtothespecificfeaturesoftheiractivity .

Adashboardreportofsales,orderintake,theorderbookandnetfinancialdebtisdrawnupeverymonthbythefinancedepartmentonthebasisofinformationforwardedbythevariousoperationalentities .

Themanagersofthevariousentitiesprepareamonthlyreportonkeyfacts .

Thebudgetaryprocedureiscommontoallthegroup’sdivisionsandtheirsubsidiaries . Itincludesfourannualmeetings:

– theinitialbudgetpresentedinNovemberofyearY-1;– thefirstbudgetupdatepresentedinAprilofyearY;– thesecondbudgetupdatepresentedinJuly/AugustofyearY;– thethirdupdatepresentedinNovemberofyearY .

Thesemeetings,whichareattendedbythemanagingdirector,thefinanceandadministrationdirector, theconsolidationdirector,thedirectorofthesubsidiaryorbranchconcernedanditsfinancedirector, review:

– thevolumeofbusinessforthefinancialyearinprogress,thestatusoftheorderbook;– theforecastprofitmarginoftheprofitcentre,withdetailsofprofitmarginsperproject(orby

departmentforthemultitechnicsdivision);– analysisofcurrentrisksincluding,notably,anexhaustivepresentationoflegaldisputeswhetheras

plaintiffordefendant;– thestatusofguaranteesgiven;– investmentordisinvestmentrequirements;– cashflowandforecastover12months .

5A.4.5Proceduresrelatingtotheproductionandprocessingofaccountinginformation

Theconsolidationdepartment,whichreportstothegroup’sfinancedepartment,isresponsibleforproducingandanalysingCFE’sfinancialandaccountinginformationfordisseminationbothinsideandoutsidethegroupandforensuringitsreliability .

Inparticular,itisresponsibleforthe:

– production,validationandanalysisoftheinterimandannualconsolidatedfinancialstatementsandprovisionaldata(consolidationofbudgetsandbudgetupdates);

– definitionandmonitoringofaccountingproceduresinthegroupandapplicationofIFRSstandards .

Theconsolidationdepartmentsetstheclosingtimetableforpreparationoftheinterimandannualfinancialstatements .Theseinstructionsareforwardedtothefinancedepartmentsofthedifferententitiesconcernedandaccompaniedbyinformationortrainingsessions .

TheconsolidationdepartmentisresponsiblefortheaccountingtreatmentofcomplexoperationsandensuresthattheyarevalidatedbytheStatutoryAuditor .

Attheendofeachaccountingperiod,thefinancemanagersoftheprincipalentitiespresenttheaccountsofthesubsidiaryorthebranchtothegroup’sfinanceandadministrationdirectorandtheconsolidationdirector .

TheconsolidationdirectorisamemberoftheAuditCommitteeofDEMEandRent-A-Portandattendsthemeetingsheldonclosingofeachaccountingperiodfortheseentities .TheDEMEAuditCommitteeregularlypresentsaspecificsubject(analysisofasubsidiary)andcarriesoutanassignmentonsite .

TheStatutoryAuditorinformstheAuditCommitteeofanyremarksconcerningtheinterimandannualfinancialstatementsbeforetheyarepresentedtotheBoardofDirectors .

Beforesigningitsreports,theStatutoryAuditorrequestsrepresentationlettersfromgroupmanagementandseniormanagementofthesubsidiaries .Intheserepresentations,groupmanagementandseniormanagementofthevarioussubsidiariesconfirm,inparticular,thatalltheelementsattheirdisposalhavebeensubmittedtotheStatutoryAuditortoenablehimtocarryouthisassignmentandthattheeffectsofanyanomaliesobservedbyhimandstillunresolvedatthedateofthoserepresentationsdonothaveamaterialimpactontheconsolidatedandparentcompanyaccounts .

5A.5 Actions carried out to strengthen internal control and risk management

During2010,CFE’smanagingdirectorandthecompanydirectorswhoaremembersoftheSteeringCommitteeupdatedthegeneraldirectiveasconcernstherulesofinternaloperation .

Aworkinggroupwasformedtoidentifyparticularpointsofriskontheoperatinglevelandproposeareasforimprovement .Thegroup’sfindingswerehandedinattheendoftheyear .

Themanualofinternalcontrolprocedures,are-writingofwhichwasinitiatedin2009,waspresentedtotheSteeringCommitteeandneedstobesupplementedtotakeaccountofthecommentsandsuggestions .

Attheendof2009,CFEdecidedonaradicaloverhaulofitsmanagementtoolsandchoseanintegratedmanagementsystem(ERP) .Thissystemintegratesthemanagementofprogressreports,purchasing,accounting,managementcontrolandmanagementofeverydaycashflow .

Workcarriedoutin2010wasdevotedtodraftingspecifications .Thisworkwascarriedoutbyaprojectteamcomprisingoperationalandfunctionalmanagers(projectmanagers,buyers,managementcontrollers,accountsandfinancemanagers)fromthevariousdivisionsandcompanies .Theprojectteamwasledbythegroup’sconsolidationdirector .TestswerelaunchedinJanuary2011 .

Implementationoftheintegratedmanagementsystemwillhaveanappreciableeffectonthelevelofinternalcontrol,whichiswhytheAuditCommitteeattachedparticularimportancetoitandregularlyincludedthesubjectonitsagenda .Asaresult,theAuditCommitteeandprojectteammetseveraltimes .

In2011,thenewmanagementsystemwillbetestedinthreedivisionsandsystemauthorisationsset .Themanualofinternalcontrolprocedureswillalsobefinalisedin2011 .Thiswillstrengthenthebasisofinternalcontrol .


5.B Risk factors

5B.1 Risks common to the segments in which the CFE group is active

5B1.1Operationalrisks

5B.1.1.1Theactofconstruction

Themaincharacteristicofthesectorliesinthecommitmentmadeonsubmissionofaproposaltobuildastructure(building,infrastructure,quay,etc .)thatisbyitsnatureunique,forapricewithpredeterminedtermsandwithinanagreedtimeschedule .

Theriskfactorsthereforeconcern:

– establishmentofthepriceofthestructuretobebuiltand,intheeventofdivergencebetweentheanticipatedpriceandtheactualprice,thepossibility(ornot)ofobtainingcoverageforadditionalcostsandpriceincreases;

– design,ifthisisthecontractor’sresponsibility;– theactualconstructionand,inparticular,therisksconcerningthesubsoilandthestabilityofthe

structure;– controloftheelementsincludedinthecostprice;– projecttimescheduleanddeadlines;– performanceobligations(quality,schedule)andtherelateddirectandindirectconsequences;– warrantyobligations(10-yearguarantee,maintenance);– compliancewithsafetyandothercorporatelawobligationsthatare,moreoverextendedtoservice

providers .

Tomanagetheserisks,CFEhasqualifiedandexperiencedstaff,theservicesofaninternaldesignandengineeringdepartmentandaccesstoexternaldesignandstabilityofficesandcontrolagencies .

Pricequotesfollowstrictproceduresforproposalreviewandaresubmitted,whereappropriate,toariskcommittee .Projectsaresubjectedtobudgetarycontrolsandaquarterlyprogressreview .

5B.1.1.2Realestate

Overall,realestateactivityisdirectlyorindirectlygovernedbycertainmacroeconomicfactors(interestrates,propensitytoinvest,savings,etc .),political(developmentofsupra-nationalinstitutions,developmentplans,etc .)thatinfluencethebehaviourofplayersinthemarket,intermsofbothsupplyanddemand .

Thisactivityisalsocharacterisedbylongoperatingcycles,whichimpliestheneedtoanticipatedecisionsandmakelong-termcommitments .

Inadditiontogeneralsectorrisks,eachprojecthasitsownspecificrisks:

– choiceoflandforinvestment;– definitionoftheprojectanditsfeasibility;– obtainingthevariouspermitsandauthorisations;– controlofconstructioncosts,feesandfinancing;– marketing .

CFEanditsrealestatedevelopmentsubsidiarieshaveteamsspecialisinginrealestatemanagement .Theyworkwithwell-knownarchitectsanddesignofficesandhandleprojectmanagement,whiletheconstructiondivisionisresponsibleforprojectexecution .

CFEhassetupinvestmentcommittees,whichreviewprojectsbeforetheyaresubmittedtotheBoardofDirectors .Lastly,toreduceitsexposuretorisk,CFEisseekingtodiversifyitsprojectportfolio(housing,retirementhomes,shoppingcentres)andlimititsexposuretothedevelopmentofoffices,sincethissegmenthasbeenhitharderbytheeconomiccrisis .

CFEhassetupageneralinvestmentcommittee,whichguaranteesthataprojectfitswiththegroup’sgeneralfinancialpolicy,hasasoundfinancialbasisandthatitissatisfactorilyexecutedwithintheframeworkofcompliancewiththeundertakingsmade .Asaresult,anyprojectselectedwithavalueofover€5millionmustbesubmittedforapprovalbyCFE’sBoardofDirectors .However,inviewofexternalfactorsinparticular,itisnotpossibletoeliminatealltherisksinherentinrealestatebusinesscompletely .

5B.1.1.3Dredging

DredgingactivitiesareperformedbyDEME(inwhichtheGroupownsa50%interest)anditssubsidiaries .DEMEisoneoftheworld’sleadingplayersindredging .Itsmarketincludesbothmaintenancedredgingandcapital(infrastructure)dredging .Thelatterisparticularlyrelatedtogrowthinworldtradeanddecisionsonthepartofgovernmentstoinvestinmajorinfrastructureprojects .DEMEisalsoactiveintheenvironmentalsectorthroughits75%ownedsubsidiaryEcoterres,acompanyspecialisinginthetreatmentofsludgeandpollutedsoils .ThroughDMB(DEMEBuildingMaterials),DEMEisalsoactiveinthegravelsupplymarket .

Apartfromthefactthatdredgingisprimarilyamaritimeactivity,itisalsocharacterisedbyitscapital-intensivenatureduetohighlevelsofinvestmentinthesector .Forthisreason,DEMEisfacedwithcomplexinvestmentdecisions .Inadditiontotherisksspecifictomarineworkandtheexecutionofprojects(see1 .1),dredgingisalsoexposedtospecificrisks:

– technicaldesignoftheinvestment(typeofdredger,capacity,power,etc .)andcommandofnewtechnologies;

– timebetweentheinvestmentdecisionandcommissioningofthevessel,andanticipationofthefuturemarket;

– controloverconstructionbytheshipyardoncetheinvestmentdecisionhasbeenmade(cost,performance,conformity,etc .);

– occupancyofthefleetandschedulingofactivities;– financing .

DEMEhascreatedaninvestmentcommitteetowhichallsubstantialinvestmentsarepresentedforapprovalbyitsBoardofDirectors .

Lastly,sinceDEMEworksinexportmarketsbeyondEurope,itisexposedtopoliticalrisk .

DEMEhasqualifiedstaffwiththecapacitytodesigndredgersanddesignandexecutelarge-scaleprojects .Giventheverynatureoftheactivityandthemanyexternalfactorstobetakenintoaccount,therisksinherentinthisbusinesscannotbecompletelyeliminated .

5B.1.2Theeconomicclimate

Theconstructionsectoris,byitsverynature,perceivedasbeingsubjecttostrongcyclicalfluctuations .Nevertheless,thisobservationmustbequalifiedbysegmentorsub-segmentofactivity,asthekeyfactorscanbedifferentineach .Bywayofexample:

– Civilengineeringactivitiesarestronglylinkedtogovernmentinvestmentinlargeinfrastructureprogrammes .CFEhassharplyreduceditsexposuretothisriskbyenteringintojointventuresforseveralmajorcivilengineeringprojectsthatarespreadoverseveralyears,including:

. worksontheraillinebetweentheE19motorwayandZaventemairportstation; . expansionofthecapacityoftheCoentunnelinAmsterdamintheNetherlands; . arailtunnelaspartofthefirstphaseofredevelopmentofDelftrailwaystationandtheexisting

railwaylines(Netherlands); . thecontractfortheLiefkenshoekrailtunnelinthenorth-westofAntwerp .– Constructionactivitiesforthepublicsectorarelinkedtonationalandregionalinvestmentprogrammes .– Constructionactivitiesandrealestatedevelopmentactivitiesrelatedtotheofficepropertymarketevolve

inlinewiththetraditionaleconomiccycle,whileprivatehousing-relatedactivitiesreactmoredirectlyto


generaleconomicconditions,levelsofconfidenceandinterestrates .– Dredgingactivitiesaremoresensitivetotheinternationaleconomicclimate,trendsinworldtradeand

governmentinvestmentpolicyasconcernsmajorinfrastructureandsustainabledevelopmentworks .

5B.1.3Managementandworkforce

Theconstructionsectorisstillhamperedbyalackofsupervisorystaffandskilledworkers .Successfulcompletionofprojects,whetherintermsofstudiesandprojectpreparationphases,ormanagementandexecutionofprojects,dependsbothontheskillsofemployeesandtheiravailabilityonthejobmarket .

5B.2 Market risks (interest rates, exchange rates, insolvency)

5B.2.1Interestrates

TheCFEgroupisfacedwithmajorinvestmentsextendingoverlongperiodsoftime .Inthiscontextandintermsoftheavailabilityoflong-termcredit,projectfinanceormajorcapitalexpenditure(dredgers),CFE(directly)oritssubsidiaries(DEME)practice,wherenecessary,apolicyofinterestratehedging .Nevertheless,interestrateriskcannotbeentirelyeliminated .

TheCFEgroupwasnotdirectlyhitbythefinancialcrisis .However,thescaleandpersistenceofthefinancialcrisishashadanegativeimpactonthecostoffinancingformajorPPP-typeorrealestateprojects .

5B.2.2Exchangerates

CFEanditssubsidiariesdonothedgeexchangeratesfortheirconstruction,realestateandmultitechnicsactivities,sincetheyareprimarilylocatedintheeurozone .However,giventheinternationalnatureofitsactivitiesandthefactthatcontractsareenteredintoinforeigncurrencies,DEMEengagesinexchangeratehedgingorforwardexchangecontracts .Nevertheless,exchangerateriskcannotbeentirelyeliminated .

5B.2.3Credit

Giventhenatureofitsclients,whoareprimarilypublic-sectororequivalentoperatorsorwell-knowninvestors,theCFEgroupdoesnotusecreditinsurance .

InmarketsoutsideEurope,ifacountryiseligibleandtheriskcanbecoveredbycreditinsurance,DEMEregularlyobtainscoveragefromorganisationsspecialisinginthisarea(OfficeNationalduDucroire) .

Toreduceunderlyingsolvencyrisk,CFEchecksonthesolvencyofitsclientswhensubmittingitsproposal,regularlymonitorsaccountsreceivableandadjustsitspositionswiththemwherenecessary .Nevertheless,creditriskcannotbeentirelyeliminated .

5B.2.4Liquidity

Tighterliquidityandthedifficultyofobtainingcreditundereconomicallyacceptableconditionsremainaconcern .CFEsucceededinpreservingitspositionsduringtheyearthroughstrictcashmanagementtechniques .Thesubjectsofliquidityandcashmanagementineverydaybusinesswereaddressedinregularinformationbriefingsaimedatthegroup’stop150managers .Directorsofsubsidiariesandbranchescontributetocashflowforecastsandensuringthattargetsaremet .

CFEcoveredallitsDiabolofinancingrequirements(€40million)withaconfirmedlong-termcreditfacility .Moreover,atthebeginningof2008,CFEfinalisedalong-termclubdealfor€100millionenablingittocoveritsowninvestmentprogrammesanditsworkingcapitalrequirement .

5B.3 Raw material risks

CFEispotentiallyexposedtoincreasesinthepricesofcertainrawmaterialsusedinitsworksactivities .Nevertheless,CFEbelievesthatsuchincreasesarenotlikelytohaveasignificantlynegativeimpactonitsresults .ThisisbecauseasubstantialportionoftheCFEgroup’sworkscontractsincludepricerevisionformulaethatenablepricesforprojectsunderconstructiontovaryaccordingtotrendsinrawmaterialprices .Furthermore,CFE’sworksactivitiesarecarriedoutthroughalargenumberofcontracts,manyofthemofshortormediumdurationwhich,evenintheabsenceofapricerevisionformula,limitstheimpactofariseinrawmaterialprices .Intheframeworkoflarge-scaleprojects,CFEhasnegotiatedfirm,long-termcontracts,inparticularforsteel .Lastly,andmorespecificallyatDEME,thegrouphedgesagainstthepriceofcertainsupplies(e .g .fueloil) .

5B.4 Dependence on customers/suppliers

Giventhegroup’sactivitiesanditsorganisationalstructure,whichreflectsthelocalnatureofitscontracts,CFEconsidersthat,overall,itisnotdependentonasmallnumberofclients,suppliersorsubcontractors .Furthermore,theoperationalorganisationofthegroupischaracterisedbyahighdegreeofdecentralisation,whichgenerallytranslatesintogreaterautonomyofdecision-makingbylocalmanagerswithinthescopeofthepowersdelegatedtothem,particularlyasregardspurchasing .

5B.5 Environmental risks

Inviewofthetypeofworkitiscalledontoexecuteandnotablyrenovationwork,CFEmaybeinvolvedinhandlingunhealthyorhazardousmaterials .CFEtakesallpossiblesafetyandhealthprecautionsforitsworkersandisparticularlyattentivetothispoint,althoughthisriskcannotbeentirelyeliminated .Duetothenatureofitswork,DEC-Ecoterresisexposedtoenvironmentalrisks .Whileallprecautionsandcontrolmeasuresaretakenbythecompany,theseriskscannotbetotallyeliminated .

5B.6 Legal risks

Giventhediversityofitsactivitiesandgeographicallocations,CFEisexposedtoacomplexregulatoryenvironmentasconcernstheplaceofexecutionofservicesandthefieldsofactivityinvolved .Inparticular,itissubjecttorulesconcerningadministrativecontracts,publicandprivateworkscontractsandcivilliability,especiallybuilder’sliability,bothinBelgiumandabroad .Theconstructionsectorisalsoconfrontedbyawideinterpretationofconceptsrelatingtobuilder’sliabilityinthefieldsofthe10-yearconstructionguarantee,liabilityforminorhiddendefectsandtheemergenceoftheconceptofliabilityforindirectconsequentialdamage .TheCFEgrouphasbeeninvolvedindisputesatascalethatcanbeconsiderednormalfortheconstructionindustry .Inmostcases,CFEattemptstoreachout-of-courtsettlementswiththeopposingparty,whichsubstantiallyreducesthenumberofcourtcases .

5B.7 Risks specific to the CFE group

5B.7.1SpecialPurposeCompanies

Tocarryoutsomeofitsrealestateoperationsorinpublic-privatepartnerships,CFEparticipatesandwillcontinuetoparticipateinspecialpurposecompanieswhichproviderealguaranteesinsupportoftheircreditfacilities .Therisk,intheeventofthefailureofthistypeofcompanyandexerciseoftheguarantee,isthattheproceedsfromsuchexercisearenotsufficienttocoverinwholeorinparttheamountofshareholders’equityorequivalentusedascollateralforsettingupthecreditfacility .

AtDecember31,2010,collateralamountedto€18 .2million,thelimitbeingsetinternallyat30%ofconsolidatedshareholders’equity .Currentobligationsconcerningcollateralequity(Liefkenshoekrailtunnel,CoentunnelandtheschoolsintheGerman-speakingCommunity)amountedto€27 .1million .


5B.7.2StakeinDEME

Thecompanyowns50%inDEME,acompanycontrolledjointlywithAckermans&vanHaaren,whichalsoowns50%ofDEME’scapital .

In2007,Ackermans&vanHaarenandCFErenewedthecooperationagreementconsolidatingthecollaborationbetweenthem,theobjectivebeingtomanagetheDEMEgroupasequalpartners .

TheDEMEgroupbenefitsfromautonomousmanagementpowers .ThepartnersareequallyrepresentedonitsBoardofDirectorsandontheExecutiveandAuditCommittees .

ThegroupisautonomousfinanciallyandCFEhasnevermadeanyadvanceorfinancialcommitmentinfavourofthissubsidiary .

TheprofitabilityofCFE’sstakeinDEMEdependsinpartoncontinuedgoodrelationsbetweenitsshareholders .

Theholdingriskrelatedtothisstakeisinherentinthejointcontrolstructureunderwhichitisheld,asindicatedabove .

6. Remuneration report

6.1 Remuneration of the Board and committee members

6.1.1 Directors’ fees

TheExtraordinaryGeneralMeetingofCFESAonMay6,2010approvedremunerationoftheBoardmembersbyalumpsumfee,recognisedintheprofitandlossaccount .Theamountwassetat€325,000fortheentireBoard .

TheBoardofDirectorsdecides,accordingtorulesthatitsets,howthissumwillbeallocatedtoitsmembers .Onepart,amountingto€200,000,wassharedequallybetweentheBoardmembersproratatotheirtimeinoffice,i .e .€20,000perdirector .Theotherpart,amountingto€125,000,wasdividedaccordingtotheattendancerateatmeetingsoftheBoardofDirectors .

Boarddirectorsarealsoreimbursedforexpensesincurredduringtheexecutionoftheirduties,accordingtoconditionssetbytheBoardofDirectors .

TheamountoffeespaiddirectlyorindirectlytotheBoardmembersforcarryingouttheirdutieswithinthegroup:

(EUR) Fees Fees Other CFESA Subsidiaries expensesPhilippeDelaunois 9,177 12,814C .G .O .SA,representedbyPhilippeDelaunois 24,460 37,000RenaudBentégeat 33,636 PhilippeDelusinne 33,636 RichardFrancioli 33,636 BernardHuvelin 29,091 ChristianLabeyrie 33,636 JeanRossi 24,459 ConsucoSA,representedbyAlfredBouckaert 22,187 BVBACiskaServais,representedbyCiskaServais 33,636 JanSteyaert 33,636 Total 311,192 0 49,814

NoagreementwithanyBoarddirectorprovidingforseverancepayamountingtoover12months’remunerationcameintoforceorhasbeenextendedsinceMay3,2010(dateonwhichtheLawofApril6,2010cameintoforce) .Furthermore,noindependentdirectorbenefitsfromvariableremuneration .Consequently,noagreementwithanyBoarddirectorneedstobesubmittedforapprovalbytheAnnualGeneralMeetingonMay5,2011 .

6.1.2 Remuneration of Audit Committee members

PhilippeDelusinne 5,000ChristianLabeyrie 4,000JanSteyaert 10,000Total 19,000

6.1.3 Remuneration of Remuneration and Nomination Committee members

C .G .O .SA,representedbyPhilippeDelaunois 1,000PhilippeDelaunois 1,000RichardFrancioli 3,000ConsucoSA,representedbyAlfredBouckaert 1,000BVBACiskaServais,representedbyCiskaServais 6,000Total 12,000

6.1.4 Remuneration of the managing director

InadditiontohisfeeasaBoardmember,i .e .€33,636,themanagingdirectorreceivedgrossannualremunerationof€178,916inrespectofhisexecutivefunctionswithintheCFEgroup,togetherwithavariablecomponentamountingto€250,000inrespectof2010,payablein2011 .Themanagingdirectoralsobenefittedfromtheuseofcompanyhousingandacompanycar,representing€43,135in2010 .HedoesnotbenefitfromapensionplanwithCFE .

CFEgrantedthemanagingdirectornostockoptionsorotherrightstoacquiresharesintheCompany .

Lastly,noagreementwiththemanagingdirectorprovidingforseverancepayhasbeensignedorextendedsinceMay3,2010 .Consequently,nosuchconventionneedstobesubmittedforapprovalbytheAnnualGeneralMeetingonMay5,2011 .

6.2 Remuneration of senior management 6.2.1 CFE management

CFE’scorporatestructuresaresuited,ontheonehand,totheprerogativesmustbemetfollowingthecreationofaholdingcompany,and,ontheother,totherequirementsrelatedtoitsorganisationbydivision .

Eachdivision,representingaportfolioofactivities,consistsofseveralsubsidiariesand,insomecases,branches,thatconstituteaprofitcentreand,ingeneral,representaspecificbusinessinadefinedgeographicalarea .EachsubsidiaryismanagedbyaBoardofDirectorsandacompanydirector;eachbranchismanagedbyacompanydirector .Thisuniqueorganisationofmanagementofsubsidiariesandbranchesthereforeconsistsofaspecificdelegationofpowerstoagroupofpersons,thecompanydirectors,whichguaranteesactive,front-linemanagementandthesatisfactoryoperationalorganisationofeachdivision .

SincethesecorporatestructuresensureabalanceddistributionofpowersandthesmoothoperationofCFE,theCompanyhasdecidednottoestablishaManagementBoardwithinthemeaningofthelaw,buthasnonethelessanticipatedfutureneedsbyprovidingforthispossibilityinitsArticlesofAssociation .


Thepersonsresponsiblefortheactualmanagementofactivitiesarethusthemanagingdirectorfirstandthenthecompanydirectors .

Forthe2010financialyear,thecompanydirectorswere:

FrédéricClaesSA,representedbyFrédéricClaesArtistValleySA,representedbyJacquesLefèvreBernardCols,PatrickdeCaters,AndrédeKoning,LodeFranken,MichelGuillaume,GabrielMarijsse,YoussefMerdassi,JacquesNinanne,PatrickVanCraen,ChristianVanHamme,ParickVerswijvel,YvesWeyts .

OnFebruary1,2011,ChristopheVanOphemwasappointeddirectorofCFE .

6.2.2 Remuneration policy

ThefixedportionofremunerationisbasedonCFE’ssalarygrid .Itreflectsthelevelofresponsibilityofeachofthegroup’scompanydirectors .

Thevariableportionofremunerationforlinedirectors,i .e .profitcentre(subsidiariesandbranches)managers,isdirectlylinkedtothefinancialperformanceoftheirscopeofresponsibility(thequantitativefactor)andtotwoqualitativefactors,namely,workplaceaccidentpreventionperformanceandcompliancewiththevaluesoftheCFEgroup .

Forfunctionaldirectors,thevariablecomponentofremunerationtakesseveralfactorsintoconsideration,namelythegroup’sfinancialperformance,theperformanceoftheirdepartmentandtheachievementofspecifictargetssetforthematthebeginningoftheyear .

Eachdirector’sperformanceisassessedsolelyonthefinancialyearjustended .

Thefixedandvariablecomponentsofthemanagingdirector’sremunerationaresetbytheRemunerationandNominationCommittee .

Thefixedandvariablecomponentsofdirectors’remunerationareproposedbythemanagingdirectortotheRemunerationandNominationCommitteeatthebeginningofeachnewfinancialyear,afterclosingtheaccountsforthepreviousyear .Thecommitteedecidesonthenewfixedandvariableremunerationgranted .Noagreementestablishedwithadirectorprovidingforseverancepayamountingtoover12months’compensationcameintoforceorhasbeenextendedsinceMay3,2010(dateonwhichtheLawofApril6,2010cameintoforce) .Consequently,noagreementwithacompanydirectorneedstobesubmittedforapprovalbytheAnnualGeneralMeetingonMay5,2011 .

Therewasnomaterialchangeinthepolicyoffixedandvariableremunerationin2010 .

6.2.3 Level of remuneration

Remunerationofdirectors

Thecompanydirectorslistedinpoint6 .2 .1ofthisreportreceived:

Fixedremunerationandfees 2,289,621Variableremuneration 910,777Paymentstoinsuranceschemes(pensionplans,healthandaccidentinsurance) 576,174Companyvehicleexpenses 220,105Total 3,996,677

CFEdidnotgrantanystockoptionsorotherrightstoacquiresharesintheCompanytothesedirectors .

7. Evaluation of measures taken by the Company in response to the directive on insider trading and market manipulation

CFE’spolicyonthismatterisspecifiedinitscorporategovernancecharter .

In2006,acomplianceofficer(JacquesNinanne)wasappointedandaninformationprogrammeestablishedaimedatseniormanagementandemployeeswho,throughtheirjob,haveaccesstoprivilegedinformation .

TheCompanysystematicallyinformsthispopulationofclosedperiodsandissuesregularremindersofthegeneraldirectives .

8. Transactions and other contractual relationships between the Company, including related companies, and the Board directors and company directors

Thepolicyonthismatterisspecifiedinthecorporategovernancecharter .

ThereisnoservicecontractbindingtheBoardmemberswithCFEorwithanyofitssubsidiaries .

9. Assistance agreement

CFEenteredintoaservicecontractwithitsreferenceshareholder,VINCIConstruction,onOctober24,2001 .ThefeespayablebyCFEforfinancialyear2011amountto€1,190,000 .

ThisagreementallowsCFEtoaccessVINCI’sdatabasesandtobenefitfromitssupportinareasasvariedashumanresources,sustainabledevelopment,riskanalysisandmethods .

10. Corporate controls

TheStatutoryAuditorisDeloitteRéviseursd’Entreprises,representedbyPierre-HuguesBonnefoy .

TheAnnualGeneralMeetingofMay6,2010renewedtheappointmentoftheStatutoryAuditor,DeloitteRéviseursd’Entreprises,representedbyPierre-HuguesBonnefoy,foraperiodofthreeyears,endingatthecloseoftheAnnualGeneralMeetingofMay2013 .ThefeespaidbyCFESAin2010amountedto€138,500 .

Duringthefinancialyear,theAuditCommitteeagreedthattheStatutoryAuditorshouldwriteadetailedreportonoperationsin2010foranamountof€40,000 .


OthercostsfordifferentmissionsinvoicedbyDeloitteRéviseursd’Entreprisesamountedto€22,100 .

Inaddition,duringfinancialyear2010,thecostsinvoicedbyDeloitteConseillersFiscauxconcerningtaxadviceamountedto€17,020 .

DeloitteauditedtheaccountsofmostofthecompanieswithintheCFEgroup .TheStatutoryAuditor’scontrolscovered87%oftheconsolidatedbalancesheetand91%ofconsolidatedrevenuein2010 .

Fortheothermaingroupsandsubsidiaries,theStatutoryAuditorgenerallyobtainedthecertificationreportsofthoseentities’auditorsand/orinterviewedthem,andalsoperformedcertainadditionalchecks .

Remunerationoftheauditorsofthegroup,includingCFESA(financialyear2010)

in€thousands Deloitte Other Amount % Amount %Audit Auditingofaccounts,certification,examinationofindividualandconsolidatedaccounts 293 .31 81 .84% 155 .79 51 .80%Otherauxiliarymissionsandotherauditingmissions 33 .39 9 .32% 32 .18 10 .70%Auditsubtotal 326.70 91.16% 187.97 62.50%Otherservices Legal,tax,corporate 18 .61 5 .19% 109 .94 36 .56%Other 13 .10 3 .65% 2 .84 0 .94%Othersubtotal 31.70 8.84% 112.78 37.50%Totalauditors’fees 358.40 100% 300.75 100%

C. Insurance policy

TheCFEgroupsystematicallytakesoutacontractorallriskpolicyforallconstructionsites,thepolicygivingsufficientcoverforoperatingandpost-constructioncivilliability .Theriskofterrorismisnotincludedinthispolicy .

Giventheupsurgeinterrorism,CFEanditsrealestatesubsidiariesmayoccasionallybeobligedtoseekcoveragainstthisriskforrealestateprojectsprovidedtheinsurancemarketiswillingtooffersuchcoverateconomicallyacceptablerates .

D. Special reports

Nospecialreportwasestablishedduringthecourseofthefinancialyear .

E. Takeover bid

PursuanttoArticle34oftheBelgianLawof14 .11 .2007concerningtheobligationsofissuersoffinancialinstrumentsadmittedtotradingonaregulatedmarket,theCompagnied’EntreprisesCFESAnotesthat:I . theBoardofDirectorsisempoweredtoincreasetheauthorisedcapitalbyamaximumamountof

€2,500,000(Article4oftheArticlesofAssociation),itbeingnotedthatexerciseofthispowerislimited,intheeventofatakeoverbid,byArticle607oftheCompanyCode;

II . theBoardofDirectorsisentitledtoacquireupto10%ofCFE’sshares(Article14bisoftheArticlesofAssociation) .

F. Acquisitions

InJuly2010,CFESAacquiredtheresidualstake(37 .5%)inthecapitalofDruartSAfor€3 .07million .

InJune2010,CFESAacquired55%ofthesharecapitalofGroepTerrynNV,Belgium’smarketleaderinbondedlaminates,locatedinMoorslede,for€10 .86million .

InDecember2010,CFESAacquireda65%stakeinBrantegemNV,acompanylocatedinAlostandactiveintheair-conditioningmarket,for€146,340 .

G. Creation of branches

OnFebruary24,2010,CFE’sBoardofDirectorsdecidedtocreateabranchinTunisiaunderthename“CFETunisie”andtoappointPatrickVanCraenasitsmanagingdirector .

H. Post-balance sheet events

TherehasbeennosignificantchangeinthefinancialandcommercialsituationofthegroupsinceDecember31,2010 .

I. Research and Development

Financialyear2010wasmarkedbystudiesfortwomajorprojects,theA15motorwayintheNetherlandsandtheschoolsintheGerman-speakingCommunityofBelgium .CFEcontinueditspolicyofrecognisingR&Dcostsdirectlyinexpenses .


J. Outlook

Basedontheorderbook,thegroupexpectstogenerate2011revenuecomparabletothatof2010,withprofitatleastequivalenttothatof2010 .

K. Audit Committee

TheAuditCommitteeischairedbyJanSteyaert,whomeetstheindependencecriteriadefinedbyArticle526teroftheBelgianCompanyCode .JanSteyaerthasadegreeineconomicsandfinance .Hehasheldvariousprofessionalposts,includingworkingforanauditingfirmandforTelindus,alistedcompany,wherehewasCFObeforebecomingCEOandthenchairmanoftheBoardofDirectors .TheforegoingbearsoutMrSteyaert’scompetenceintermsofaccountingandauditing .

L. Notice of the Annual General Meeting of May 5, 2011

TheBoardofDirectorsinvitesshareholderstoattendtheAnnualGeneralMeetingthatwillbeheldattheCompany’sheadofficeat40-42avenueHerrmannDebroux,1160Brussels,onThursdayMay5,2011at3pm .Theagendaisasfollows:

1 . ReportsfromtheBoardofDirectorsandtheStatutoryAuditorsconcerningfinancialyear2010

2 . ApprovaloftheannualfinancialstatementsdatedDecember31,2010 Proposedresolution: TheAnnualGeneralMeetingapprovestheannualparentcompanyfinancialstatementsdated

December31,2010presentedbytheBoardofDirectors .

3 . ApprovaloftheconsolidatedannualfinancialstatementsdatedDecember31,2010 Proposedresolution: TheAnnualGeneralMeetingapprovestheconsolidatedannualfinancialstatementsdatedDecember31,

2010presentedbytheBoardofDirectors .

4 . Distributionofprofit Proposedresolution: TheAnnualGeneralMeetingapprovestheproposaloftheBoardofDirectorstodistributeagross

dividendof€1 .25pershare,correspondingtoanetdividendof€0 .9375pershare .Afterdistribution,thebalancecarriedforwardamountsto€29,057,821 .

5 . DischargetobegiventotheBoardDirectors Proposedresolution: TheAnnualGeneralMeetingdischargestheBoardofDirectorswithrespecttoitsobligationsfor2010 .

6 . DischargetobegiventotheStatutoryAuditor Proposedresolution: TheAnnualGeneralMeetingdischargestheStatutoryAuditorwithrespecttoitsobligationsfor2010 .

7 . Statutoryappointments ThetermofofficeasaBoarddirectorofBVBACiskaServais,representedbyCiskaServais,expireswith

today’sAnnualGeneralMeeting . Proposedresolution: TheAnnualGeneralMeetingrenewsthetermofofficeasaBoarddirectorofBVBACiskaServais,

representedbyCiskaServais,foratermoffouryears,expiringatthecloseoftheAnnualGeneralMeetingof2015 .BVBACiskaServais,representedbyCiskaServais,meetsthecriteriaofindependencedefinedbyArticle526teroftheBelgianCompanyCodeandtheBelgianCorporateGovernanceCode .

8 . BoardDirectors’fees Proposedresolution: InaccordancewithArticle17oftheArticlesofAssociation,theAnnualGeneralMeetingdeterminesthe

fixedamountoftheannualdirectors’feesat€325,000,witheffectfromJanuary1,2011 .

9 . Remunerationofthemanagingdirectorandcompanydirectors- ApplicationoftheLawofApril6,2010relatingtocorporategovernance Proposedresolution: - AsconcernsseverancepayforindependentBoarddirectors,themanagingdirectorandcompany

directorsapplicableafterMay3,2010:noagreementcameintoforceafterMay3,2010 .Thelawonemploymentcontractswillbeappliedforpeopleenjoyingthestatusofemployeeandallotherexistingagreementsremaininforce .Forpeoplewiththestatusofemployeeforwhomthereisnoexistingagreementrelatingtoseverancepay,thenextAnnualGeneralMeetingwillbeaskedtoapprovetheperiodofnoticetobegivenortheamountofseverancepaythatwillbepaidintheeventofterminationoftheemploymentcontract(forreasonsotherthanseriousmisconduct)bytheemployertosalariedmembersofseniormanagementwhohavenotenteredintoanagreementinrespectofseverancepaybeforeMay3,2010inaccordancewiththeLawofJuly3,1978onemploymentcontracts,onthebasisofthecriteriatypicallyusedbyBelgiancourtstodetermineareasonableperiodofnoticeorthereasonableamountofseverancepay,whichmaynotexceedthatdefinedbytheClaeysgrid .NoagreementexistsforindependentBoarddirectors .

- AsconcernstherulesrelatingtovariableremunerationasofthefinancialyearstartingafterDecember31,2010:

- novariableremunerationispaidtoindependentBoarddirectors; - forthemanagingdirectorandcompanydirectors,theexistingtermsandcriteriaforallocation

willbemaintainedforaperiodofthreeyears,i .e .variableremunerationbasedoneconomicperformance,theattentionpaidtoemployeesafetyandadherencetothegroup’svalues .

Ineffect,thecurrentlegislation,whichrequiresvariableremunerationtobespreadoverthreeyearsandtherelatedcriteriaarenotappropriate(andthereforecannotbeeasilyapplied)toanExecutiveCommitteeinwhichsomemembersareclosetoretirementandpensionage .

InordertotakepartintheAnnualGeneralMeetingortoberepresentedthere,shareholdersmustcomplywithArticle27ofthecompany’sArticlesofAssociation .

Ownersofdematerialisedsharesmustproducethecertificateestablishingtheunavailabilityoftheirsharesissuedbythefinancialorganisationholdingtheirsecuritiesaccount,atthelatestbyApril29,2011 .ThiscertificatemustbeproducedattheheadofficeoftheCompanyortothefollowingfinancialinstitutions:

-BanqueDegroof locatedinBrussels,44ruedel’Industrieor-BNPParibasFortis locatedinBrussels,3MontagneduParc,or-INGBelgium locatedinBrussels,24avenueMarnix .

TheownersofregisteredsharesmustberegisteredintheregisterofregisteredsharesintheCompanyatthelatestbyApril29,2011 .

TheownersofphysicalbearersharesmustfirstrequestthattheirsharesbechangedintoregisteredordematerialisedsharesandmustundertaketheformalitiesdescribedabovebyApril29atthelatest .Theownersofsuchsharesmayeithersubmitthesesharestothefinancialintermediaryoftheirchoiceinordertohavethemregisteredinasecuritiesaccount,orpresentthesharesattheCompany’sheadofficeinordertohavethemregisteredintheregisterofshareholders .

InaccordancewithArticle9oftheArticlesofAssociation,theexerciseofallrightsattachedtophysicalbearersharesshallbesuspendeduntiltheirregistrationinsecuritiesaccountsorintheregisterofshareholders .


Consolidated financial statementsTable of contents

Consolidated financial statements

Consolidated statement of comprehensive incomeConsolidated statement of financial positionConsolidated statement of cash flowConsolidated statement of changes in equityNotes to the consolidated financial statementsAuditor’s Report


Statements of financial position and comprehensive incomeAnalysis of statements of comprehensive income and financial positionAuditor’s Report

Definitions

Investments in associated companiesEntities in which the group CFE has a significant influence and that are accounted for under the Equity method of accounting

Capital employedIntangible assets + goodwill + property, plant and equipment + working capital

Working CapitalInventories + trade receivables & other operating receivables + other current assets + non current assets held for sale – other provisions for current risks - trade payables & other operating liabilities - tax payables - other current liabilities

EBITOperating result

EBITDA EBIT + depreciations and impairment + other non-cash items + share in the result of associated companies


Consolidated statement of financial position

Fortheyearended31December(inthousandEuro) Note 2010 2009 Intangibleassets 12 8,752 6,913Goodwill 13 27,893 25,791Property,plantandequipment 14 750,470 600,858Propertyinvestments 15 10,677 13,306Investmentsinassociatedcompanies 16 14,100 8,432Othernoncurrentfinancialassets 17 25,324 14,824Noncurrentderivativeinstruments 27 210 26Othernoncurrentassets 18 9,859 6,774Noncurrentdeferredtaxassets 10 7,033 3,598

Totalnoncurrentassets 854,318 680,522

Inventories 20 160,566 147,060Tradereceivablesandotheroperatingreceivables 21 661,292 674,327Othercurrentassets 21 28,978 38,148Currentderivativeinstruments 27 257 154Currentfinancialassets 55 55Cashandcashequivalents 22 175,518 170,546

Totalcurrentassets 1,026,666 1,030,290

Totalassets 1,880,984 1,710,812

Issuedcapital 21,375 21,375Sharepremium 61,463 61,463Gainonrevaluation 1,088 1,088Hedgingreserves (-2,968) (2,460)Retainedearnings 383,283 336,805Translationdifferences 1,820 (4,928)Equity–PartoftheGroupCFE 466,061 413,343Noncontrollinginterests 9 9,385 10,428

Equity 475,446 423,771

Pensionsandemployeebenefits 24 17,784 18,601Provisions 25 13,545 2,298Othernoncurrentliabilities 57,998 32,798Financialdebts 27 284,104 228,092Noncurrentderivativeinstruments 27 16,560 4,082Deferredtaxliabilities 10 7,934 2,529

Totalnoncurrentliabilities 397,925 288,400

Provisionsforterminationlosses 25 17,817 18,890Provisionsforothercurrentrisks 25 26,970 34,916Tradepayables&otheroperatingliabilities 21 543,299 548,172Taxliabilitydueforpayment 32,862 22,245Currentfinancialdebts 27 139,663 94,753Currentderivativeinstruments 27 4,787 8,594Othercurrentliabilities 21 242,215 271,072

Totalcurrentliabilities 1,007,613 998,642

Totalequityandliabilities 1,880,984 1,710,812

Consolidated statement of comprehensive income

Fortheyearended31December(inthousandEuro) Note 2010 2009 Revenue 4 1,774,401 1,602,607Revenuefromauxiliaryactivities 6 50,994 38,979Purchases (1,074,219) (942,664)Wages,salaries&socialcharges 7 (310,392) (298,774)Otheroperatingcharges 6 (243,412) (224,882)Depreciations 12-14-15 (98,285) (82,138)Impairmentofgoodwill 15 0 (4,533)

Operatingresult 99,087 88,595

Grossfinancialcost 8 (13,254) (12,894)Financialincomefromcashinvestments 8 4,418 4,000Otherfinancialcharges 8 (18,272) (15,695)Otherfinancialincomes 8 13,205 12,816

Financialresult (13,903) (11,773)

Resultbeforetaxesfortheperiod 85,184 76,822

Incometaxexpense 10 (19,747) (17,462)

Resultoftheyear 65,437 59,360

Shareintheresultofassociatedcompanies 16 (23) 2,623

Result(includingnoncontrollinginterests)fortheperiod 65,414 61,983

Noncontrollinginterests 9 (2,118) (255)

Resultofthegroup 63,296 61,728

Resultfortheperiod(includingnoncontrollinginterests) 65,414 61,983

Financialinstruments:changeinfairvalues 27 (1,009) (2,480)Currencytranslationdifferences(including46Kbynoncontrollinginterests) 6,794 105Deferredtaxes 10 501 892Changeinconsolidationmode(netofdeferredtaxes) 0 11,108Otherelementsofthecomprehensiveincome 6,286 9,625Comprehensiveincome 71,700 71,608-Attributabletothegroup 69,536 71,353-Attributabletononcontrollinginterests 2,164 255 Netresultpershare(EUR)(dilutedandbasic) 11 4 .83 4 .71Comprehensiveincomepershare(EUR)(dilutedandbasic) 5 .48 5 .47


Statement of changes in equity

FortheyearendedDecember312009

(inthousandEuro) Issued Share Retained Hedging Gainon Translation Equity Non- Total

Capital premium earnings reserves revaluation differences partof controlling

thegroup interests

AsperDecember,312008 21,375 61,463 290,788 (11,980) 1,088 (5,033) 357,701 10,516 368,217Globalresultfortheperiod 61,728 9,520 105 71,353 255 71,608Dividendspaidtoshareholders (15,711) (15,711) (15,711)Dividendsofminorities (343) (343)AsperDecember31,2009 21,375 61,463 336,805 (2,460) 1,088 (4,928) 413,343 10,428 423,771

FortheyearendedDecember312010

(inthousandEuro) Issued Share Retained Hedging Gainon Translation Equity Non- Total

Capital premium earnings reserves revaluation differences partof controlling

thegroup interests

AsperDecember,312009 21,375 61,463 336,805 (2,460) 1,088 (4,928) 413,343 10,428 423,771Globalresultfortheperiod 63,296 (508) 6,748 69,536 2,164 71,700Dividendspaidtoshareholders (15,711) (15,711) (15,711)Dividendofnoncontrollinginterests (2,344) (2,344)Businesscombinations(note5) 476 476Modificationintheinterestpercentageofcontrolledentitiesanddividendsfromnoncontrollinginterests, (1,712) (1,712) (1,339) (3,051)Modificationintheinterestpercentageforjointventures 605 605 605AsperDecember31,2010 21,375 61,463 383,283 (2,968) 1,088 1,820 466,061 9,385 475,446

Consolidated statement of cashflow

Fortheyearended31December(inthousandEuro) Note 2010 2009

Operatingactivities

Netprofit 63,296 61,728Correctionsfornonoperationalitemsornotaffectingcashflow Depreciationofintangibleassets,property,plant&equipment(PPE)andinvestmentproperty 98,285 82,138Impairmentlosses(1) 0 4,533Netincrease/decreaseofprovisions (2,045) 4,398Write-offoncurrentandnoncurrentassets 2,045 1,288Foreignexchangedifferencenotrealized(gain)/loss 2,410 (1,694)Interest&investmentincome (4,418) (4,000)Interestexpense 15,070 11,964Fair-valueadjustmentonderivatives 460 (633)Loss/(profit)onsaleofproperty,plant&equipment (2,025) (783)Incometaxexpense 19,747 17,462Noncontrollinginterests 2,118 255Shareintheresultofcompaniesconsolidatedbytheequitymethod 23 (2,623)

Cashflowfromoperatingactivitiesbeforechangesinworkingcapital 194,966 174,033

Decrease/(increase)intradereceivablesandothercurrentandnoncurrentreceivables 12,422 23,890Decrease/(increase)ininventories (4,298) (24,401)Increase/(decrease)generatedintradepayablesandothershorttermpayables (18,334) 36,809

Cashflowfromoperatingactivities 184,756 210,331

Interestpaid (14,751) (11,514)Interestreceived 4,100 4,000Incometaxpaid/received (5,008) (30,633)

Netcashflowfromoperatingactivities 169,097 172,184

Investmentactivities Proceedsfromthesaleoffixedassets 11,449 5,070Acquisitionoffixedassets (236,245) (176,342)Acquisition/Disposalofsubsidiaries,netofcashacquired(note3) 5 (6,985) (3,849)Groupingofcompanieswithjointventuresunderdeductionofacquiredtreasury (1,765)Variationofthedetainedpercentageofcontrolledcompanies 5 (3,050)Capitalincreaseincompaniesconsolidatedbytheequitymethod 16 (5,989) 193

Cashflowfrominvestingactivities (242,585) (174,928)

Financingactivities Proceedsfromborrowings 105,486 43,238Debtsreimbursements (11,799) (54,551)Dividendspaid (15,711) (15,711)

Cashflowfromfinancingactivities 77,976 (27,024)

NetIncrease/(Decrease)ofcash 4,488 (29,768)Cashandcashequivalentsatthebeginningoftheyear 22 170,546 201,164Translationdifferences 484 (850)Cashandcashequivalentsattheendoftheyear 22 175,518 170,546

(1)OngroupingofcompaniesandinvestmentsconsolidatedaccordingtotheEquityMethod


Capital and reserves

Thecapitalon31December2010iscomposedof13,092,260ordinaryshares .Thesesharesarewithoutanynominalvalue .TheshareholdersofordinaryshareshavetherighttoreceivedividendsandtherightofonevotepershareattheGeneralShareholders’Assembly .

TheincreaseofcurrencytranslationeffectismainlyduetosomeentitiesofDEMEwhichfunctionalcurrencywasgreatlyappreciatedduringtheperiod(SGD,QAR) .

On23February2011,theboardofdirectorsproposedadividendof16,365thousandEuro,correspondingto1 .25Eurogrosspershare .Thefinaldividendproposedissubmittedtotheshareholder’sapprovalattheGeneralAssemblyofShareholders,TheappropriationoftheresulthasnotbeenaccountedforinthefinancialstatementsasperDecember31,2010 .

ThefinaldividendfortheyearendedDecember31,2009was1 .2Eurogrosspershare .

Notes to the consolidated financial statements for the year ended december 31, 2010

1. Generalprinciples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 2. Significantaccountingprinciples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 3. Consolidationmethods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Consolidationscope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187Intra-groupoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188Conversionoffinancialstatementsforforeigncompaniesandestablishments . . . . . . . . . . . . . . . . . 188Foreigncurrenciestransactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

4. Segmentreporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188Operatingsegments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188Elementsoftheconsolidatedstatementofcomprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . . . 190Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Breakdownoftherevenuegeneratedbytheconstructionsegment . . . . . . . . . . . . . . . . . . . . . . . . . 191Breakdownoftherevenuegeneratedbythedredgingsegment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Orderbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191Consolidatedstatementofcomprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192Condensedconsolidatedstatementofcashflow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194Otherinformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195Geographicalsectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

5. Acquisitionsanddisposalsofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196Acquisitionsfortheexercise2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196Acquisitionsafterclosingdate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197Disposalsfortheexercise2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197Variationof%withoutchangeofcontrol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

6. Revenuefromauxiliaryactivitiesandotheroperatingcharges . . . . . . . . . . . . . . . . . . . . . . . . . . 198 7. Wages,salariesandsocialcharges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 8. Otherfinancialchargesandincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 9. Noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19910. Incometaxexpenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199

Recognizedinthestatementofcomprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Reconciliationoftheeffectivetaxrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Deferredtaxassetsandliabilitiesrecognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

11. Profitpershare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20012. Intangibleassetsotherthangoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20113. Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20214. Property,plant&equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20415. Propertyinvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20516. Investmentsinassociatedandjoinlycontroledentities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

Associatedentities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206Jointlycontrolledentities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

17. Othernoncurrentfinancialassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20718. Othernoncurrentassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20819. Constructioncontracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20820. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20921. Tradereceivablesandpayablesandotheroperatingreceivablesandpayables . . . . . . . . . . . . . 20922. Cashandcashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21023. Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21024. Employeebenefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21025. Provisionsotherthanpensionsandnoncurrentemployeebenefits . . . . . . . . . . . . . . . . . . . . . . . 21326. Possibleassetsandliabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21327. Informationrelatedtothenetfinancialdebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21428. Informationsrelativetothefinancialriskmanagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21529. Operatingleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22430. Othercommitmentsgiven . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22431. Othercommitmentsreceived . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22432. Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22433. Relatedparties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22534. Majorsubsequentevents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22535. CompaniesownedbythegroupCFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226


Preamble

ConsolidatedFinancialStatementsandNotes

TheboardofdirectorsauthorizedthepublicationoftheconsolidatedfinancialstatementsofthegroupCFEonFebruary23,2011 .

Theboardofdirector’smanagementreportshouldbereadtogetherwiththeconsolidatedfinancialstatementsofthegroupCFE .

Main transactions in 2010 and 2009 with effect on the consolidation scope of the group cfe

Transactions in 2010

1. Construction segment

OnJune3,2010,CFEtookapartof55 .04%inthegroupTerrynfor11 .9millionEuro .ThisindustrialgroupbasedinMoorsledenearRoeselareistheBelgianleaderintheproductionandconstructionofglulamstructuresfortheindustrialandtertiarysectors .Terryngeneratesrevenueof30millionEuro .ThegroupispresentinBeneluxandEuropeandhasgeneratedoverthelastthreeyearsanaverageyearlyEBITDAofmorethan3millionEuro .

2. Multitechnical segment

OnFebruary12,2010,CFEacquired37 .5%ofthecompanyEtablissementsDruartSA(«Druart»)for3,050KEuro,thepartofCFEinthiscompanynowreaches100% .ByperformingthisacquisitionCFEalsobecomesownerof100%ofthecompanyProdfroidSAofwhichDruartdetains99 .91%oftheshares .

OnDecember1,2010,CFEacquired65%ofthesharesofSABrantegem .ThiscompanybasedinAlostisspecializedinHVACandsanitation,employs25peopleandispresentintheregionofBrussels,GandandAnvers .Itgeneratesrevenueof4 .5millionsEuro .Bythisacquisition,themultitechnicalsegmentofCFEgainsaneleventhprofitcenterandnewskills .

3. Real estate development and management services segment

OnMay17,2010,thecompanyCLIsubsidiaryofthegroupCFEacquired25%ofthelimitedcompanyunderLuxembourglaw,S .A .ChâteaudeBeggen,thisinordertodevelopseveralresidentialprojects(14residencesincludingmoreorless170apartmentsand191parkinglots)onthelandthatitowns .OnMay17,2010,thecompanyCLIsubsidiaryofthegroupCFEalsoacquired50%ofthelimitedcompanyunderLuxembourglaw,Rondriesch123,inordertodevelopaprojectofofficesonthelandthatitowns .

OnJune30,2010,thegroupCFEthroughhissubsidiariesBPIandEspaceMidiyieldsSouthCityOfficeFonsnytoINTEGRALEandOGEOfund .TheshareofCFEinthisprojectisof20% .ThecomplexSOUTHCITYhasbeenanimmediatecommercialsuccess(thewholecomplexhasbeenrentedbeforedelivery) .Itrepresentsaround31 .000m²ofofficesandahostelof142rooms .ThebuildingFonsny(propertyofSouthCityOfficeFonsnySA),beingcomposedof13,200sqmofofficeand3commercesisthefirstbuildingoftheSouthCitycomplextohavebeencompleted .Thesecondbuildingofoffices,namedBroodthaers,theendoftheSouthCitycomplexhasbeencompletedinNovember2010 .

4. Dredging and environment segment

DEMEperformedin2010aregroupingofcompaniesbytakingthecontrolofISD .

Transactions in 2009

1. Construction segment

Nothing .

2. Multitechnical segment

OnFebruary6,2009,thecompaniesDruartSAandNizetSA,subsidiariesofCFEacquiredthewholecapital,either1,100shares,ofthecompanyProdfroidSA,specializedintheinstallationofairconditioning,industrialandcommercialrefrigeration .

CFESAacquiredonJuly2009forapriceof3 .7millionEuro,64 .95%ofthesharesofthecompanyElektroVanDeMaeleNV,situatedinMeulebeke .Throughthisacquisition,CFESAintendstodevelopitsactivityintertiaryelectricity .

3. Real estate development and management services segment

Attheendofthe1stsemester2009,thegroupCFEdiluteditsparticipationinthecompanyImmoangeSAof50% .Thiscompanyiscurrentlyheldat50%andaccountedforundertheproportionatemethodofconsolidation .

4. Dredging and environment segment

Nothing .

5. PPP - Concessions segment

CFESAtookaparticipationof25%forapriceof5millionEurowithinthecompanyBizerteCap3000 .Throughthisparticipation,CFEcontinuetodevelopofitsPPP-Concessionsactivity .


1. General principles IFRS as adopted by the european union Standards and interpretations applicable for the annual period beginning on 1 January 2010

– IFRS3BusinessCombinations(revisedin2008)(applicabletobusinesscombinationsforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginningonorafter1July2009) .

– ImprovementstoIFRS(2008-2009)(normallyapplicableforannualperiodsbeginningonorafter1January2010)

– AmendmenttoIFRS1FirstTimeAdoptionofInternationalFinancialReportingStandards–Additionalexemptions(applicableforannualperiodsbeginningonorafter1January2010)

– AmendmenttoIFRS2Share-basedPayment–GroupCash-settledShare-basedPaymentTransactions(applicableforannualperiodsbeginningonorafter1January2010)

– AmendmenttoIAS27ConsolidatedandSeparateFinancialStatements(revisedin2008)(applicableforannualperiodsbeginningonorafter1July2009) .

– AmendmentstoIAS39FinancialInstruments:RecognitionandMeasurement–EligibleHedgedItems(applicableforannualperiodsbeginningonorafter1July2009) .

– IFRIC12ServiceConcessionArrangements(applicableforannualperiodsbeginningonorafter1April2009)

– IFRIC15Agreementsfortheconstructionofrealestate(applicableforannualperiodsbeginningonorafter1January2010)

– IFRIC16Hedgesofanetinvestmentinaforeignoperation(applicableforaccountingyearsbeginningonorafter1July2009)

– IFRIC17DistributionsofNon-cashAssetstoOwners(applicableforannualperiodsbeginningonorafter1November2009)

– IFRIC18TransfersofAssetsfromCustomers(applicableforannualperiodsbeginningonorafter1November2009)

Theapplicationofthesestandardsandinterpretationdidnothadanysignificanteffectontheconsolidatedfinancialstatementsofthegroup .

Standards and interpretations published, but not yet applicable for the annual period beginning on 1 January 2010

– IFRS9FinancialInstruments(applicableforannualperiodsbeginningonorafter1January2013)

– ImprovementstoIFRS(2009-2010)(normallyapplicableforannualperiodsbeginningonorafter1January2011)

– AmendmenttoIFRS1FirstTimeAdoptionofInternationalFinancialReportingStandards–IFRS7exemptions(applicableforannualperiodsbeginningonorafter1January2010)

– AmendmenttoIFRS1FirstTimeAdoptionofInternationalFinancialReportingStandards–SevereHyperinflationandRemovalofFixedDatesforFirst-timeAdopters(applicableforannualperiodsbeginningonorafter1July2011)

– AmendmenttoIFRS7FinancialInstruments:Disclosures–Derecognition(applicableforannualperiodsbeginningonorafter1July2011)

– AmendmenttoIAS12IncomeTaxes–DeferredTax:RecoveryofUnderlyingAssets(applicableforannualperiodsbeginningonorafter1January2012)

– AmendmenttoIAS24RelatedPartyDisclosures(applicableforannualperiodsbeginningonorafter1January2011) .ThisStandardsupersedesIAS24RelatedPartyDisclosuresasissuedin2003 .

– AmendmentstoIAS32FinancialInstruments:Presentation–ClassificationofRightsIssues(applicableforannualperiodsbeginningonorafter1February2010)

– IFRIC19ExtinguishingFinancialLiabilitieswithEquityInstruments(applicableforannualperiodsbeginningonorafter1July2010)

– AmendmenttoIFRIC14IAS19–TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirInteraction–PrepaymentsofaMinimumFundingRequirement(applicableforannualperiodsbeginningonorafter1January2011)

Thepotentialimpactsofthesestandardsandinterpretationsontheconsolidatedaccountsofthegrouparebeingdetermined .2. Significant accounting principles

The“Compagnied’EntreprisesCFESA”(referredto“theCompany”or“CFE”)isacompanybasedinBelgium .TheconsolidatedfinancialstatementsofthecompanyfortheyearendingDecember31,2010includethecompanyanditssubsidiaries,thesharesinjointlycontrolledentities(“thegroupCFE”)andthecompany’sinterestinassociatedcompanies .

(A) Statement of compliance

TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewiththeInternationalFinancialReportingStandards(IFRS)approvedbytheEuropeanUnion .

(B) Basis of presentation

ThefinancialstatementsarestatedinthousandofEuro,roundedtothenearestthousand .Theyarepreparedonbasisofthehistoricalcostexceptforderivativefinancialinstruments,investmentsheldfortradingandinvestmentsavailable-for-salethatarestatedatfairvalue .

Instrumentsorequityderivativesarestatedatcostwhensuchequityinstrumentsdonothaveaquotedmarketpriceinanactivemarketandforwhichothermethodsofreasonablyestimatingfairvalueareclearlyinappropriateand/orinapplicable .

Recognizedassetsandliabilitiesthatarehedgedarestatedatfairvalueinrespectoftheriskthatishedged .


Accountingpolicieshavebeenappliedconsistently .

TheyarepresentedbeforetheeffectoftheprofitsappropriationoftheparentcompanyproposedtotheGeneralAssemblyofShareholders .

TheFinancialStatementspreparedinaccordancewithIFRSrequiresestimatestobeusedandassumptionstobemadeaffectingtheamountspresentedintheseFinancialStatements,inparticularasregardsthefollowingitems:

– theperiodoverwhichassetsaredepreciated;– themeasurementoftheprovisionsandpensions;– thepercentageofcompletionmethodusedinconstructioncontractstomeasuretheresult;– thevaluesusedintheimpairmenttests;– thevaluationoffinancialinstrumentsatfairvalue;– themeasurementofsharebasedpayments(expensesIFRS2);

Theseestimationsassumetheoperationsingoingconcernandaremadebasedontheinformationavailableatthetime .Theseestimationscanberevisedifthecircumstancesonwhichtheyarebasedalterorifnewinformationbecomesavailable .Theactualresultscanbedifferentfromtheseestimates .

(C) Principles of consolidation

Theglobalmethodofconsolidationisusedforsubsidiaries .Subsidiariesarethecompaniesconsolidatedbythemothercompanywhichispresumedwhenthemothercompanyholds,directlyorindirectly,morethanonehalfofthevotingrightsorotherwisehascontrol,directlyorindirectly,soastoobtainbenefitsfromthecompanies’activities .TheFinancialStatementsofsubsidiariesareincludedintheConsolidatedFinancialStatementsfromthedatethatcontrolstartsuntilthedatethatcontrolceases .

ChangesintheGroup’sinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions .ThecarryingamountsoftheGroup’sinterestsandthenoncontrollinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiary .Anydifferencebetweentheamountbywhichthenon-controllinginterestsareadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecognizeddirectlyinequity .

WhentheGroupgrantsasaleoptiontothenon-controllinginterestsofasubsidiary(“put”onthenon-controllinginterests),therelatedfinancialliabilityisdeductedinitiallyfromthenon-controllinginterestsinequity .

Jointlycontrolledentitiesareconsolidatedusingtheproportionatemethodofconsolidation .

AssociatedcompaniesareundertakinginwhichthegroupCFEhassignificantinfluenceoverthefinancialandoperatingpolicies,butwhichitdoesnotcontrol .Thisisgenerallyevidencedbyownershipofbetween20%and50%ofthevotingrights .

Theyareaccountedforbytheequitymethodofaccountingfromthedatethatsignificantinfluencestartsuntilthedatethatsignificantinfluenceceases .Whenthegroupshareoflossesexceedsthecarryingamountoftheassociatedcompanies,thecarryingamountisreducedtonilandrecognitionoffurtherlossesisdiscontinuedexcepttotheextentthathasincurredobligationsinrespectoftheassociatedcompanies .

Alltransactions,balancesandunrealisedgainsandlossesontransactionsbetweengroupcompanieshavebeeneliminated .

(D) Foreign currencies

(1)Foreigncurrencytransactions

Foreigncurrencytransactionsareaccountedforatexchangeratesprevailingatthedateofthetransactions .Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedatthebalancesheetdaterate .Gainsandlossesresultingfromthecreationofforeigncurrencytransactionsandfromthetranslationofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognizedintheincomestatement .

Non-monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattheforeignexchangerateprevailingatthedateofthetransaction .

(2)Financialstatementsofforeignoperations

Thecompany’sforeignoperationsareconsideredasforeignentities .Accordingly,assetsandliabilitiesaretranslatedtoEuroatforeignexchangeratesprevailingatthebalancesheetdate .Incomestatementsofforeignentities,excludingforeignentitiesinhyperinflationaryeconomies,aretranslatedtoEuroatanaverageexchangeratefortheyear(approximatingtheforeignexchangeratesprevailingatthedatesofthetransactions) .

Thecomponentsofshareholders’equityaretranslatedathistoricalrates .

Exchangedifferencesarisingfromthetranslationofshareholders’equitytoEuroatyear-endexchangeratesaretakeninanotherheadingnamed“Translationdifferences” .Theseexchangedifferencesarerecognizedintheincomestatementintheexerciseduringwhichtheentityisceasedorliquidated

(3)Exchangerate

Currencies Closingrate2010 Averagerate2010 Closingrate2009 Averagerate2009 PolskaZloty 3 .960 3 .993 4 .103 4 .345HungaryForint 277 .909 276 .032 270 .28 281 .406USDollar 1 .339 1 .322 1 .441 1 .432SingaporeDollar 1 .716 1 .795 2 .020 2 .024RialofQatar 4 .875 4 .810 5 .249 5 .085RomaniaLeu 4 .277 4 .219 4 .236 4 .243TunisianDinar 1 .923 1 .900 1 .900 1 .8821Euro=XCurrency

(E) Intangible assets

(1)Researchanddevelopment

Expendituresonresearchactivities,undertakenwiththeprospectofgainingnewscientificortechnicalknowledgeandunderstandingarerecognizedintheincomestatementasanexpenseasincurred .

Expendituresondevelopmentactivities,wherebyresearchfindingsareappliedtoaplanordesignfortheproductionofneworsubstantiallyimprovedproductsandprocessesarecapitalizediftheproductorprocessistechnicallyandcommerciallyfeasible,thecompanyhassufficientresourcestocompletedevelopmentandiftheexpensescanbereliablyidentified .


Theexpenditurecapitalizedincludesthecostofmaterials,directlabourandanappropriateproportionofoverheads .Otherdevelopmentexpendituresarerecognizedintheincomestatementasanexpenseasincurred .

Capitalizeddevelopmentexpendituresarestatedatcostlessaccumulatedamortization(seebelow)andimpairmentlosses .

(2)Otherintangibleassets

Otherintangibleassets,acquiredbythecompany,arestatedatcostlessaccumulatedamortization(seebelow)andimpairment .Expenditureoninternallygeneratedgoodwillandbrandsisrecognizedintheincomestatementasanexpenseasincurred .

(3)Subsequentexpenditure

Subsequentexpendituresoncapitalizedintangibleassetsarecapitalizedonlywhenitincreasesthefutureeconomicbenefitsembodiedinthespecificassettowhichitrelates,abovetheperformanceleveldefinedattheorigin .Allotherexpendituresareexpensedasincurred .

(4)Amortization

Intangibleassetsareamortizedusingthestraight-linemethodovertheirestimatedusefullivesatthefollowingrates:

Minimum 5% Operatingconcessions 33 .33% Software’slicenses

(F) Company’s combination

Acquisitionsofsubsidiariesandcompany’sareaccountedforusingthemethodoffairvalue .Theconsiderationtransferredinthecourseofcompany’scombinationismeasuredatfairvalue;expensesrelatedtotheacquisitionaregenerallyrecognizedinincomewhenincurred .WhenconsiderationtransferredbytheGroupaspartofabusinesscombinationagreementincludescontingentconsideration,thiscontingentconsiderationisvaluedatitsfairvalueattheacquisitiondate .Changesinfairvalueofcontingentconsiderationthatareadjustmentsoftheevaluationperiod(seebelow)areaccountedforretrospectively;theothervariationsofthefairvalueofthecounterpartypossibleareaccountedintheincomestatement .Incompany’scombinationrealizedbystages,theGroupmustrevaluatetheparticipationthatheheldpreviouslyinthecompanyacquiredinthefairvalueatthedateofacquisition(I-e-d .thedateonwhichtheGrouphasobtainedthecontrol)andrecognizetheeventualbenefitorlossintheincomestatement .

Tothedateofacquisition,theidentifiableassetsacquiredandtheliabilitiesresumedareaccountedatfairvalueatthedateofacquisitionwiththeexception:– theassetsordeferredtaxliabilitiesandliabilitiesorassetsrelatedtotheprovisionsaimedbenefitsof

themembersofstaff,whicharerecognizedandvaluedinaccordancewithIAS12,Theincometaxes,andtoIAS19,employeebenefits,respectively

– liabilitiesorinstrumentsofequityrelatedtopaymentagreementsbasedoncompanysharesacquiredoragreementsofpaymentbasedgroupshareconcludedtoreplacepaymentagreementsbasedontheacquiredsharesundertaking,whicharevaluedinaccordancewithIFRS2,paymentbasedonshares,tothedateofacquisition;

– theassets(orgroupstobesold)classifiedasheldforthesaleaccordingtoIFRS5,Non-currentassetsheldwithaviewtothesaleanddiscontinuedoperations,whichareassessedinaccordancewiththisstandard .

Iftheinitialrecognitionofabusinesscombinationisunfinishedattheendoftheperiodofpresentationofthefinancialinformationduringwhichthebusinesscombinationoccurs-thegroupmustpresenttheprovisionalamountsrelatingtotheelementsforwhichtheaccountingisunfinishedTheseprovisionalamountsareadjustedduringtheevaluationperiod(seebelow)-ortheadditionalassetsorliabilitiesarerecognizedtotakeintoaccountofnewinformationobtainedaboutthefactsandcircumstancesprevailingattheacquisitiondateandwhich,iftheyhadbeenknown,wouldhavehadanimpactontheamountsrecordedatthatdate .Theadjustmentsoftheevaluationperiodareaconsequenceofadditionalinformationaboutthefactsandcircumstancesprevailingatthedateofacquisitionobtainedduringthe“evaluationperiod”(Maximumofoneyearfromtheacquisitiondate) .

(1)Positivegoodwill

Thegoodwillarisingoutofabusinesscombinationisrecognizedasanassettothedateofobtainingthecontrol(theacquisitiondate) .Thegoodwillisevaluatedastheexcessofthesumofthecounterpartytransferred,theamountofshareholdingsnotprovidingcontrolintheenterprisegainedandthefairvalueoftheparticipationpreviouslyownedbythegroupinthecompanyacquired(ifnecessary)onthenetbalanceofamounts,attheacquisitiondate,identifiableassetsacquiredandliabilitiesresumed .

Theholdingsnotgivingthecontrolareevaluatedinitiallyatthefairvalue,ortotheshareoftheparticipationnotgivingthecontrolinthenetidentifiableassetsaccountedforthecompanyacquired .Thechoiceofthebasisofevaluationisaffectedtransactionbytransaction

Thegoodwillisnotdepreciatedbutwillbesubjecttoanimpairmenttestonanannualbasisormorefrequentlyifthereisanindicationthatthecash-generatingunitwhichitisallocated(generally,asubsidiary)couldhavesufferedalossofvalue .Goodwillisexpressedinthecurrencyofthesubsidiarytowhichitrelates .Iftherecoverableamountofthecash-generatingunitislessthanitscarryingvalue,thelossinvalueisfirstallocatedinreductionofanygoodwillallocatedtothisunitandissubsequentlyattributedtoanyotherassetsoftheunitinproportiontothecarryingvalueofeachoftheassetsincludedintheunit .Goodwillisstatedatcostlessaccumulatedamortizationandimpairmentlosses .Alossofvaluerecognizedforgoodwillisnotincludedinfutureperiods .Whenasubsidiarygoesout,thesubsequentgoodwillistakenintoaccountindeterminingthenetresultoftheexit .Inrespectofassociates,thecarryingamountofgoodwillisincludedinthecarryingamountoftheinvestmentintheassociate .

(2)Negativegoodwill

Ifthenetbalanceofamounts,attheacquisitiondate,identifiableassetsacquiredandliabilitiesresumedishigherthanthesumoftheconsiderationtransferred,theamountofshareholdingsnotgivingthecontrolinthecompanyacquiredandthefairvalueoftheparticipationpreviouslyownedbythegroupintheacquired,thesurplusisrecognizedimmediatelyintheincomestatementintitleaacquisitiononadvantageousterms .


(G) Property, plant and equipment

(1)Measurement&recognition

Allproperty,plantandequipmentarerecordedinassetsonlywhenitisprobablethatfutureeconomicbenefitwillimpacttheentityandifthecostcanbeevaluatedinareliableway .Thesecriteriaareapplicableatthetimeofinitialaccountingandforlaterexpenditure .

Allproperty,plantandequipmentarerecordedathistoricalcostlessaccumulateddepreciationandimpairmentlosses .

Historicalcostincludestheoriginalpurchaseprice,borrowingcostsincurredduringtheconstructionperiod,andotherdirectacquisitioncosts(e .g .nonrefundabletax,transport) .Thecostofself-constructedassetsincludesthecostofmaterials,directlabourandanappropriateproportionofproductionoverheads .

(2)Subsequentexpenditures

Subsequentexpendituresarecapitalizedonlywhenitincreasesthefutureeconomicbenefitsembodiedintheitemofproperty,plantandequipment .Repairsandmaintenance,whichdonotincreasethefutureeconomicbenefitsoftheassettowhichtheyrelate,areexpensedasincurred .

(3)Depreciations

Depreciationsarecalculatedfromthedatetheassetisavailableforuse,usingthestraight-linemethodovertheestimatedusefullivesoftheassets .

Trucks: 3yearsVehicles: 3to5yearsOthermaterial: 5yearsComputerinstallation: 3yearsOfficemachines: 5yearsOfficeequipment: 10yearsConstructions: 25-33years

Dredgeswithdisintegrator&suctiondredges: 18yearswithresidualvalueof5%Floatingdredges&navigatorboats: 25yearswithresidualvalueof5%Landingstages,boats,ferries&boosters: 18yearswithoutresidualvalueCranes: 12yearswithresidualvalueof5%Mechanicaldiggers: 7yearswithoutresidualvaluePipes: 3yearswithoutresidualvalueChainetsiteinstallations: 5yearsDiversesitematerials: 5years

Landisnotdepreciatedasitisdeemedtohaveaninfinitelife .

Theloancostsdirectlylinkedtotheacquisition,theconstructionortheproductionofanassetthatneedsalongtimeofpreparationisnotincludedinthecostoftheasset .

(4)Accountingmethodofthefleet

Theacquisitionvalueisdividedintwoparts:acomponentvessel(92%oftheacquisitionvalue)amortizedaccordingtothestraight-linemethodandwithadepreciationratedefinedbykindofboatandacomponentmaintenance(8%oftheacquisitionvalue)amortizedin4yearsusingthestraight-linemethod .

Attheacquisitionofaboat,sparepartsarecapitalizedinproportionofthepurchaseswithamaximumof8%onthetotalpurchasepriceoftheboat(100%)andareamortizedaccordingtothestraight-linemethodontheremainingusefullifeasfromthedatetheassetisavailableforuse .

Somerepairsarecapitalizedandamortizedusingthestraight-linemethodon4yearsasfromthestartingupagainoftheboat .

(H) Property investments

Apropertyinvestmentisanassetheldinordertogetrentalsortovalorisetheinvestedcapitalorboth .

Apropertyinvestmentisdifferentfromapropertyoccupiedbyitsownerorbuyersinceitgeneratescashrevenueindependentlyoftheotherassetsheldbythecompany .

Propertyinvestmentsareevaluatedatthebalancesheetattheiracquisitioncost,includingborrowingcostsincurredduringtheconstructionperiod,lessamortizationsanddepreciations .

Depreciationsarecalculatedasfromthedatetheassetisavailableforuse,accordingtothestraight-linemethodandaccordingtoaratecorrespondingtotheestimatedeconomicusefullifeoftheseassets .

Landisnotdepreciatedasitisdeemedtohaveaninfinitelife .

(I) Leasing

Leasescontractswherethecompanyassumessubstantiallyalltherisksandrewardsofownershipareclassifiedasfinanceleases .

Financeleasesarecapitalizedatthelowerofthefairvalueandtheestimatedpresentvalueoftheminimumleasepaymentsatinceptionofthelease,oratthemarketvalueifitislower,lessaccumulateddepreciationandimpairmentlosses .

Eachleasepaymentisallocatedbetweentheliabilityandfinancechargessoastoachieveaconstantperiodicrateofinterestonthefinancebalanceoutstanding .Thecorrespondingrentalobligations,netoffinancecharges,areincludedinfinancialdebts .Theinterestelementischargedtotheincomestatementasafinancechargeovertheleaseperiod .

Property,plantandequipmentacquiredunderfinanceleasingcontractsaredepreciatedovertheusefullifeoftheasset .

Leasesofassetsunderwhichthelessersubstantiallyretainsalltherisksandrewardsofownershipareclassifiedasoperatingleases .Paymentsmadeunderoperatingleasesarechargedtotheincomestatementonastraight-linebasisoverthetermofthelease .

Whenanoperatingleaseisterminatedbeforetheleaseperiodhasexpired,anypaymenttobedonetothelesserbywayofpenaltyisrecognizedasanexpenseintheperiodinwhichterminationtakesplace .


(J) Investments

Eachcategoryofinvestmentisaccountedforitsacquisitionvalue .

(1)Investmentsinequitysecurities

Investmentsinequitysecurities(availableforsale)areundertakingsinwhichthegroupCFEdoesnothavesignificantinfluenceorcontrol .Thisisgenerallyevidencedbyownershipoflessthan20%ofthevotingrights .Suchinvestmentsaredesignatedasavailableforsalefinancialassetsandarerecognizedattheirfairvalueunlessthefairvaluecannotbereliablydeterminedinwhichcasetheyarecarriedatcostlessimpairmentlosses .

Impairmentchargesarerecognizedintheincomestatement .Changesinfairvaluearerecognizedthroughequity .Ondisposalofaninvestment,thedifferencebetweenthenetdisposalproceedsandthecarryingamountischargedorcreditedtoincome .

(2)Investmentsindebtsecurities

Investmentsindebtsecuritiesareclassifiedasbeingheldtomaturityfinancialassetsandarestatedattheiramortizedcost,determinedonbasisofthe“effectiveinterestratemethod” .Gainorlossisrecognizedintheincomestatement .Impairmentchargesarerecognizedintheincomestatement .

(3)Otherinvestments

Otherinvestmentsheldbythecompanyareclassifiedasbeingavailable-for-saleandarestatedatfairvalue,withanyresultinggainorlossrecognizedthroughequity .Impairmentchargesarerecognizedintheincomestatement .

(K) Inventories

Inventoriesarevaluedatthelowerofcostandnetrealizablevalue .Costisdeterminedbytheweightedaveragemethod .Thecostoffinishedproductsandworkinprogresscomprisesrawmaterials,otherproductionmaterials,directlabour,otherdirectcosts,borrowingcostsincurredwhenthegoodrequiresalongperiodofconstruction,andanallocationoffixedandvariableoverheadsbasedonnormaloperatingcapacity .

Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lesstheestimatedcostsofcompletionandsellingcosts .

(L) Trade receivables

Tradereceivablesarecarriedatcostlessimpairmentlosses .Anestimateismadefordoubtfulreceivablesbasedonareviewofalloutstandingamountsatyear-end .Baddebtsarewrittenoffduringtheyearinwhichtheyareidentified .

(M) Construction contracts

Whentheoutcomeofaconstructioncontractcanbereliablyestimated,revenueandcostofthecontract,includingborrowingcostsincurredwhenthecontractexceedtheaccountingperiod,arerecognizedrespectivelyinrevenueandchargesdependingofthelevelofcompletionoftheactivityofthecontractatyear-end(%ofcompletionmethod) .Anexpectedlossontheconstructioncontractisimmediatelyrecognizedincharges .

Accordingtothepercentageofcompletionmethod,revenueofthecontractsisrecognizedintheincomestatementoftheperiodsoftheworksdone .Costsofthecontractarerecognizedinchargesunderthe

incomestatementoftheperiodsduringwhichworkrelatedisachieved .

Costsincurredrelatedtofutureactivitiesonthecontractarecapitalizedifitisprobablethatitwillberecovered .ThegroupCFEhastakentheoptiontonotpresentseparatelytheinformationrelatedtoconstructioncontractsinthebalancesheetbutonlyinthenotes .

(N) Cash and cash equivalents

Cashandcashequivalentscomprisecashbalancesandcalldepositshavingaduedateoflessthan3months .

(O) Impairment

Thecarryingamountsofthecompany’snoncurrentassets,otherthanfinancialassetsinaccordancewithIAS39,deferredtaxassetsandnoncurrentassetsheldforsale,arereviewedateachbalancesheetdatetodeterminewhetherthereisanyindicationofimpairment .Ifanysuchindicationexists,theasset’srecoverableamountisestimated .Forintangibleassetsthatarenotyetavailableforuse,andforgoodwillamortizedoveraperiodexceedingtwentyyearsfrominitialrecognition,therecoverableamountisestimatedateachbalancesheetdate .Animpairmentlossisrecognizedwheneverthecarryingamountofanassetoritscash-generatingunitexceedsitsrecoverableamount .Impairmentlossesarerecognizedintheincomestatement .

(1)Calculationofrecoverableamount

Therecoverableamountofthecompany’sinvestmentsindebtsecuritiesandreceivablesoriginatedbythecompanyiscalculatedasthepresentvalueofexpectedfuturecashflows,discountedattheoriginaleffectiveinterestrateinherentintheasset .Therecoverableamountofotherassetsisthegreatestoftheirnetsellingpriceandvalueinuse .Thevalueinuseisthediscountedvalueofestimatedfuturecashflows .

Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset .

Foranassetthatdoesnotgeneratelargelyindependentcashinflows,therecoverableamountisdeterminedforthecash-generatingunittowhichtheassetbelongs .

(2)Reversalofimpairment

Animpairmentlossinrespectofinvestmentsorreceivablesoriginatedbythecompanyisreversedifthesubsequentincreaseinrecoverableamountcanberelatedobjectivelytoaneventoccurringaftertheimpairmentlosswasrecognized .

Animpairmentlossinrespectofgoodwillisnotreversedunlessthelosswascausedbyaspecificexternaleventofanexceptionalnature,whichisnotexpectedtorecur,andtheincreaseinrecoverableamountrelatesclearlytothereversaloftheeffectofthatspecificevent .

Inrespectofotherassets,animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamount .

Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortization,ifnoimpairmentlosshadbeenrecognized .


(P) Share capital

Ownsharespurchase

Whensharescapital(recognizedasequity)isrepurchased,theamountoftheconsiderationpaid,includingdirectlyattributablecosts,isrecognizedasachangeinequity .Repurchasedsharesaredirectlyincludedinequity,withoutanyimpactontheincomestatement .

(Q) Provisions

Provisionsarerecognizedwhenthecompanyhasapresentlegalorconstructiveobligationasaresultofpastevents,whenitisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountoftheobligationcanbemade .

Theamountrecognizedasprovisioncorrespondstothebestestimateofthenecessaryexpendituretostopthecurrentobligationatthebalancesheetdate .Thisestimationisobtainedbyusingapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyand,whereappropriate,therisksspecifictotheliability .

Provisionsforrestructuringarerecognizedwhenthecompanyhasapprovedadetailedandformalrestructuringplan,andtherestructuringhaseithercommencedorhasbeenannouncedpublicly .Costsrelatingtotheongoingactivitiesofthecompanyarenotprovidedfor .

Thecurrentprovisionscorrespondtotheprovisionsdirectlyrelatedtotheoperatingactivitiesofeachsite,whatevertheirestimatedduedate .

Theprovisionsforafter-salesservicescovertheobligationsoftheentitiesofthegroupCFEwithintheframeworkofthelegalguaranteesconcerningthedeliveredbuildingsites .Thereareestimatedinastatisticalwayaccordingtotheexpenditurenotedduringthepreviousyearsorinanindividualwayonthebasisofthespecificallyidentifiedissues .Theprovisionsforafter-saleservicesarerecognizedasfromthebeginningofworks .

Aprovisionforonerouscontractsisrecognizedwhentheexpectedbenefitstobederivedbythecompanyfromacontractarelowerthantheunavoidablecostofmeetingitsobligationsunderthecontract .

Theprovisionsforclaimsrelatedtotheactivityconcernmainlyclientclaims,sub-contractors,co-contractorsandsuppliersclaims .Theotherprovisionsforcurrentrisksaremainlycomposedofprovisionsforpenaltiesandotherrisksattachedtotheoperatingcycles .

Thenon-currentprovisionscorrespondtotheprovisionsnotdirectlylinkedtotheoperatingcycleandforwhichtheduedateisgenerallygreaterthanoneyear .Itincludesinparticularprovisionsforrestructuring,whenthesehavebeenannouncedbeforetheclosingdateoftheexercise .

(R) Employee benefits

(1)Postemploymentbenefits

Postemploymentbenefitsincludepensionplansandlifeinsurances .

Thecompanyoperatesanumberofdefinedbenefitsanddefinedcontributionplansthroughouttheworld .Theassetsofwhicharegenerallyheldinseparatetrustee-administeredfundsandfinancedthroughcontributionsfromsubsidiariesandfromemployees .Thesecontributionsaredeterminedonbasisofindependentactuarialrecommendations .

ThepensionbenefitsobligationsatthegroupCFEareeithercoveredornon-coveredbyfunds .

a)Definedcontributionplans

Contributionstodefinedcontributionplansarerecognizedasanexpenseintheincomestatementwhenincurred .

b)Definedbenefitplans

Fordefinedbenefitplans,thepensionaccountingcostsareassessedseparatelyforeachplanusingtheprojectedunitcreditmethod .Theprojectedunitcreditmethodconsiderseachperiodofserviceasgivingrisetoanadditionalunitofbenefitentitlementandmeasureseachunitseparately .

Underthismethod,thecostofprovidingpensionsischargedtotheincomestatementsoastospreadtheregularcostovertheservicelivesofemployeesinaccordancewiththeadviceofqualifiedactuarieswhocarryoutafullvaluationoftheplansatleasteverythreeyears .Theamountschargedtotheincomestatementconsistofcurrentservicecost,interestcost,theexpectedreturnonanyplanassets,actuarialgainsorlossesandpastservicecosts .

Thepensionobligationsrecognizedinthebalancesheetaremeasuredasthepresentvalueoftheestimatedfuturecashoutflowsusinginterestratesofhighqualitycorporatebonds,whichhavetermstomaturityapproximatingthetermsoftherelatedliability,adjustedfortheunrecognizedactuarialgainsandlossesandlessanypastservicecostsnotyetrecognizedandthefairvalueofanyplanassets .

Therecognitionofactuarialgainsandlossesisdeterminedseparatelyforeachdefinedbenefitplan .Actuarialgainsandlossescomprisetheeffectsofdifferencesbetweenthepreviousactuarialassumptionsandwhathasactuallyoccurredandtheeffectsofchangesinactuarialassumptions .

Allactuarialgainsandlossesexceedingacorridorof10%ofthehigherofthefairvalueofplanassetsandthepresentvalueofthedefinedbenefitobligationsarerecognizedintheincomestatementovertheaverageremainingservicelivesofemployeesparticipatingintheplan .Otherwise,theactuarialgainorlossisnotrecognized .

Pastservicecostsarerecognizedasanexpenseovertheaverageperioduntilthebenefitsbecomevested,unlesstheyarealreadyvestedfollowingtheintroductionoforchangestoadefinedbenefitplan,inwhichcasethepastservicecostsarerecognizedasanexpenseimmediately .

Wherethecalculationresultsinabenefittothecompany,therecognizedassetislimitedtothenettotalofanyunrecognizedactuariallossesandpastservicecostsandthepresentvalueofanyfuturerefundsfromtheplanorreductionsinfuturecontributionstotheplan .

Theexpectedchargesofthesebenefitsarewritten-offduringtheactivecareeroftheemployeebyapplyingsimilaraccountingmethodsastheone’susedfordefinedbenefitsplan .Independentsqualifiedactuariesrealizethecalculationoftheseobligations .

(2)Bonus

Bonusesreceivedbycompanyemployeesandmanagementarebasedonfinancialkeyindicators .Theestimatedamountofthebonusisrecognizedasanexpenseintheyear .

(S) Interest-bearing borrowings

Interest-bearingborrowingsarerecognizedinitiallyatcost,lessattributabletransactioncosts .Anydifferencebetweenthisnetvalueandtheredemptionvalueisrecognizedintheincomestatementovertheperiodofborrowingsonaneffectiveinterestratebasis .


(T) Trade and other payables

Tradeandotherpayablesarestatedatcost .

(U) Income tax

Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax .Incometaxisrecognizedintheincomestatementexcepttotheextentthatitrelatestoitemsrecognizeddirectlyinequity,inwhichcaseitisrecognizedinequity .

Currenttaxistheexpectedtaxpayableonthetaxableincomefortheyearandanyadjustmenttotaxpayableinrespectofpreviousyears .Itiscalculatedusingtaxratesenactedatthebalancesheetdate .

Deferredtaxisprovided,usingtheliabilitymethod,foralltemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingvalues .Currentlyorsubstantiallyenactedtaxratesareusedtodeterminedeferredassetsandliabilities .

Underthismethodthecompanyisrequiredtomakeaprovisionfordeferredincometaxonthedifferencebetweenthefairvaluesofthenetassetsacquiredandtheirtaxbaseasaresultofabusinesscombination .

Thefollowingtemporarydifferencesarenotprovidedfor:goodwillnotdeductiblefortaxpurposes,theinitialrecognitionofassetsorliabilitiesthataffectbothaccountingnortaxableprofit,anddifferencesrelatingtoinvestmentsinsubsidiariestotheextentthattheywillprobablynotreverseintheforeseeablefuture .

Adeferredtaxassetisrecognizedonlytotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichtheassetcanbeutilized .Adeferredtaxassetisreducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealized .

(V) Revenue

(1)Revenuefromconstructioncontracts

Revenueofthecontractshouldincludetheinitialamountofrevenuedefinedinthecontractandthemodificationsintheworkspecifiedbythecontract,claims&performancebonuseswhenitisprobablethatthesewillgenerateproductsandwhenitcanbereliablymeasured .

Revenueofthecontractiscalculatedatthefairvalueofthecounterpartreceivedortobereceived .

Amodificationcanleadtoanincreaseoradecreaseofcontractrevenue .Amodificationisaninstructiongivenbytheclientinordertochangethescopeoftheworktoberealizedaccordingtothecontract .Amodificationisincludedinthecontractrevenuewhenitisprobablethattheclientwillapprovethemodificationaswellastheamountofrevenueresultingfromthismodificationandthattheamountcanbereliablymeasured .

Performancebonusesformpartofthecontractrevenuewhenthecompletionofcontractissothatitisprobablethatthespecifiedperformancewillbereachedorovertakenandthattheamountoftheperformancebonuscanbereliablymeasured .

Contractrevenueisrecognizedaccordingtothelevelofcompletionoftheactivityofthecontractattheclosingdate(accordingtothepercentageofcompletion,calculatedasthenoticeofcontractcostsatdateandestimatedtotalcontractcosts) .

Anexpectedlossontheconstructioncontractisimmediatelyrecognizedinprofitandloss .

(2)Goodssoldandservicesrendered

Inrelationtothesaleofgoodsandpropertyitems,revenueisrecognizedwhenthesignificantrisksandrewardsofownershiphavebeentransferredtothebuyer,andnosignificantuncertaintiesremainregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnofgoods .

(3)Rentalincome&fees

Rentalincomeisrecognizedonastraight-linebasisoverthetermofthelease .

(4)Financialincome

Financialincomecomprisesinterestreceivableonfundsinvested,dividendincome,royaltyincome,foreignexchangegainsandgainsonhedginginstrumentsthatarerecognizedintheincomestatement .

Interest,royaltiesanddividendsarisingfromtheusebyothersofthecompany’sresourcesarerecognizedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtothecompanyandtherevenuecanbemeasuredreliably .

Interestincomeisrecognizedasitaccrues(takingintoaccounttheeffectiveyieldontheasset)unlesscollectabilityisindoubt .Royaltyincomeisrecognizedonanaccrualbasisinaccordancewiththesubstanceoftherelevantagreement .Dividendincomeisrecognizedintheincomestatementonthedatethatthedividendisdeclared .

(5)Governmentgrants

Agovernmentgrantisrecognizedinthebalancesheetinitiallyasdeferredincomewhenthereisreasonableassurancethatitwillbereceivedandthatthecompanywillcomplywiththeconditionsattachedtoit .Grantsthatcompensatethecompanyforexpensesincurredarerecognizedasrevenueintheincomestatementonasystematicbasisinthesameperiodsinwhichtheexpensesareincurred .

Grantsthatcompensatethecompanyforthecostofanassetarerecognizedintheincomestatementasrevenueonasystematicbasisovertheusefullifeoftheasset .Thesegrantsaredeductedfromtherelatedassetvalue .

(W) Expenses

(1)Financialexpenses

Financialexpensescompriseinterestpayableonborrowings,foreignexchangelosses,andlossesonhedginginstrumentsthatarerecognizedintheincomestatement .

Allinterestandothercostsincurredinconnectionwithborrowings,exceptthosewhichwereeligibletobeactivated,areexpensedasincurredaspartoffinancialexpenses .Theinterestexpensecomponentoffinanceleasepaymentsisrecognizedintheincomestatementusingtheeffectiveinterestratemethod .

(2)Researchanddevelopment,advertisingandpromotionalcostsandsystemsdevelopmentcosts

Research,advertisingandpromotionalcostsareexpensedintheyearinwhichthesecostsareincurred .Developmentcostsandsystemsdevelopmentcostsareexpensedintheyearinwhichthesecostsareincurrediftheydonotmeetthecriteriaforcapitalization .


(X) Dervative financial instruments

Thecompanyusesderivativefinancialinstrumentsprimarilytoreducetheexposuretoadversefluctuationsininterestrates,foreignexchangerates,commoditypricesandothermarketrisks .Thecompany’spolicyprohibitstheuseofderivativesforspeculation .

Thecompanydoesnotholdorissuederivativefinancialinstrumentsfortradingpurposes .However,derivativeswhicharenotqualifiedashedginginstrumentsarepresentedasinstrumentsheldforthetradingpurposes .

Derivativefinancialinstrumentsarerecognizedinitiallyathistoricalcost .Subsequenttoinitialrecognition,derivativefinancialinstrumentsarestatedatfairvalue .Recognitionofanyresultingunrealizedgainorlossdependsonthenatureoftheitembeinghedged .Thefairvalueofswapsinterestratesistheestimatedamountthatthecompanywillreceiveorpaidwhenexercisingtheswapsattheclosingdate,takingintoaccountthecurrentinterestratesandthesolvabilityofthecounterpartoftheswap .

Thefairvalueofa“forwardexchangecontract”isthequotedvalueattheclosingdate,andthenthecurrentvalueofthe“forward”pricequoted .

(1)Cashflowhedges

Whereaderivativefinancialinstrumenthedgesthevariabilityincashflowsofarecognizedliability,afirmcommitmentoraforecastedtransaction,theeffectivepartofanyresultinggainorlossonthederivativefinancialinstrumentisrecognizeddirectlyinequity .Whenthefirmcommitmentortheforecastedtransactionresultsintherecognitionofanassetorliability,thecumulativegainorlossisremovedfromequityandincludedintheinitialmeasurementoftheassetorliability .Otherwisethecumulativegainorlossisremovedfromequityandrecognizedintheincomestatementatthesametimeasthehedgedtransaction .Theineffectivepartofanygainorlossisrecognizedintheincomestatement .Gainsorlossesfromthetemporaryvalueofthefinancialderivativeinstrumentsarerecognizedintheincomestatement .

Whenahedginginstrumentorhedgerelationshipisterminatedbutthehedgedtransactionstillisexpectedtooccur,thecumulativeunrealizedgainorloss(atthatpoint)remainsinequityandisrecognizedinaccordancewiththeabovepolicywhenthetransactionoccurs .Ifthehedgedtransactionisnolongerprobable,thecumulativeunrealizedgainorlossrecognizedinequityisrecognizedintheincomestatementimmediately .

(2)Fairvaluehedges

Whereaderivativefinancialinstrumenthedgesthevariabilityinfairvalueofarecognizedreceivableorpayable,anyresultinggainorlossonthehedginginstrumentisrecognizedintheincomestatement .Thehedgeditemisalsostatedatfairvalueinrespectoftheriskbeinghedged,withanygainorlossbeingrecognizedintheincomestatement .Thefairvaluesofcovereditems,relatedtotheriskcovered,arethecarryingamountsattheclosingdateconvertedinEuroattheapplicableexchangerateoftheclosingperiod .

(3)Hedgingofnetinvestmentwithinaforeigncountry.

Whereaforeigncurrencyliabilityhedgesanetinvestmentwithinaforeignentity,foreignexchangedifferencesarisingontranslationoftheliabilitytoEuroarerecognizeddirectlyin“Translationreserves”inshareholders’equity .

Whereaderivativefinancialinstrumenthedgesanetinvestmentinaforeignoperation,theportionofthegainorthelossonthehedginginstrumentthatisdeterminedtobeaneffectivehedgeisrecognizeddirectlyin“Translationreserves”inshareholders’equity,andtheineffectiveportionisreportedintheincomestatement .

(Y) Segment reporting

Asegmentisadistinguishablecomponentofthecompany,whichgeneratesrevenuesandcostsandofwhichtheoperatingresultsareregularlyreviewedbythemanagementinordertotakedecisionsordeterminetheperformanceofasegment .Thecompanyiscomposedof5segments:construction,realestatedevelopmentandmanagementservices,multitechnics,dredging&environmentandPPP-Concessions .

(Z) Shares options

Sharesoptionsarevaluedattheirfairvalueatthedateofgranting .Thisfairvalueissupportedinlinearfashionontheperiodofacquisitionoftheserights,takingintoaccountofanestimatethenumberofoptionsfinallyacquired .

3. Consolidation methods

Consolidation scope

CompaniesinwhichthegroupCFEholdsdirectlyorindirectlymorethanonehalfofthevotingrightsallowingthecontrolareconsolidatedaccordingtotheglobalmethodofconsolidation .CompaniesonwhichthegroupCFEexertsajointlycontrolwithothershareholdersareconsolidatedaccordingtotheproportionatemethodofconsolidation .ThisrelatesinparticulartoDEME,RentaPortandsomeentitiesoftheRealEstateandAssociatedServicessegment .CompaniesonwhichthegroupCFEexertsasignificantinfluenceareconsolidatedaccordingtotheequitymethod .ThisrelatesinparticulartoLocorail,CoentunnelCompanyandPPPSchulenEupen .

Evolutionoftheconsolidationscope

2010 2009

Globalmethodofconsolidation 57 50Proportionatemethodofconsolidation 138 124Equitymethod 14 10Total 209 184


Intra-group operations

Reciprocaltransactionsandoperationsofassets,liabilities,profitandlossbetweenintegratedcompaniesareeliminatedintheconsolidatedaccounts .Thisoperationisrealized:

– Totallyiftheoperationisrealizedbetweentwosubsidiaries;– Inproportionoftheproportionateconsolidatedcompany’sintegrationrateiftheoperationisrealized

betweenagloballyintegratedcompanyandaproportionateintegratedcompany;– Inproportionoftheassociate’sintegrationrateinthecaseofaninternalresultrealizedbetweenaglobal integratedcompanyandacompanyconsolidatedaccordingtotheequitymethod .

Conversion of financial statements for foreign companies and establishments

Inmostofthecases,thefunctionalcurrencyofcompaniesandestablishmentscorrespondtothecurrencyoftherelatedcountry .

Financialstatementsofforeigncompanieswhereasthefunctionalcurrencyisdifferentfromtheconsolidatedaccountsreportingcurrencyofthegrouparetranslatedattheclosingrateforthebalancesheetelements,andattheaveragerateoftheperiodfortheresultselements .Exchangedifferencesarerecordedin“translationdifferences”intheconsolidatedreserves .Goodwillrelatedtoforeigncompaniesisconsideredtobeincludedintheacquiredassetsandliabilitiesandarethereforetranslatedattheclosingrate .

Foreign currencies transactions

ForeigncurrenciestransactionsareconvertedintoEurousingtheconversionrateatthedateoftheoperation .Atclosingperiod,thefinancialassetsandmonetaryliabilitiesdenominatedinforeigncurrenciesareconvertedintoEuroattheexchangeclosingrateoftheperiod .Theexchangelossesandprofitscomingfromtheseoperationsarerecognizedintheheading“exchangeresult”andarepresentedinotherfinancialproductsandotherfinancialexpensesintheincomestatement .

Theexchangegainsandlossesonloansdenominatedinforeigncurrenciesoronexchangederivativesproductsusedatendsofparticipationsintheforeignsubsidiarycompaniescoveringarerecognisedintheheading“translationdifferences”intheequity .

4. Segment reporting

Operating segments

Thesegmentreportingispresentedinrespectoftheoperationalsegments .Theresultsandassetandliabilityitemsofthesegmentincludeitemsthatcanbeattributedtoasector,eitherdirectly,orallocatedonareasonablebasis .ThegroupCFEiscomposedoffiveoperatingsegments:construction,realestatedevelopmentandmanagementservices,multitechnics,dredging&environmentandPPP-concessions:

– ConstructionWithintheconstructionsector,theconstructionsegmentisactiveincivilengineering(executionofinfrastructureworks:tunnels,bridges,walls,gasterminals…)andbuilding(offices,industrialbuildings,residences,renovationandpropertiesrehabilitation) .

– RealestatedevelopmentandmanagementservicesTherealestatedevelopmentandmanagementservicessegmentdevelopsrealestateprojectswitha“promoter-constructor”approach,inassociationwiththeconstructionsegment .Inaddition,throughspecificsubsidiaries,thesegmentoffersservicesassociatedtoitsbasisskills:the“projectmanagement”andthebuildingmanagementandmaintenance .

– MultitechnicsThemultitechnicssegment,throughspecificsubsidiaries,isspecializedintertiaryelectricity(offices,hospitals,parking…),electrificationandrailsignalizationaswellasassemblyoflowandhigh-voltagelines .In2007,thissegmentalsobecameactiveinair-conditioningfollowingtheacquisitionofa25%stakeinDruartSA(upto100%in2010),andtotheautomationofindustrialprocessesbytheacquisitionofVMANV .In2009,thissegmentgeographicallydiversifiedbytheacquisitionof64 .95%ofElektroVanDeMaeleNVandin2010bytheacquisitionof65 .04%ofBrantegemNV .

– DredgingandenvironmentThedredging&environmentsegmentthroughitssubsidiaryDEMEheldby50%isactiveindredging(capitaldredgingandmaintenancedredging),inthetreatmentofpollutedgroundsandsludgeandmarineengineering .

– PPP-ConcessionsThePPP-concessionssegmentwassetupfollowingtheemergenceofanincreasingnumberofoperationsconductedunderpublic/privatepartnerships(PPP) .

TheaccountingprinciplesusedinthepresentationofthesegmentreportingarethesameastheseusedinthepreparationoftheConsolidatedFinancialStatements(refertonote2) .


Turnover

(inthousandEuro) 2010 2009Belgium 772,464 750,167OthersEurope 512,916 429,340MiddleEast 130,009 99,977OtherAsia 67,862 78,159Oceania 54,336 48,808Africa 143,869 124,592TheAmericas 92,945 71,564Totalconsolidated 1,774,401 1,602,607

Thesalesrepartitionbycountrydependsonthecountrywheretheactivityisexecuted .

During2010,thegrouphasn’tgeneratedanyrevenuewithasignificantclientthatexceedsmorethan10%ofthetotalsales .

Theturnovergeneratedbythesaleofgoodsfor2010amountsto10,882thousandEuro(2009:7,375thousandEuro)ItconsistsofsalesfromthesubsidiaryVoltisandTerrynHout .

Breakdownoftherevenuegeneratedbytheconstructionsegment

(inthousandEuro) 2010 2009Building 400,373 471,794Civilengineering 243,914 209,960Roads 45,621 44,352Other 17,903 16,431Total 707,811 742,537

ThegroupCFErecognizesintheconstructionactivitytheconstructionrevenuerealizedintherealestatedevelopmentandmanagementservicessegment .Atthelevelofrealestatedevelopmentandmanagementservices,thegroupCFErecognizestherevenuelesstheportionoftheconstructionactivity .Duetoabsenceofsimultaneitybetweentheconstructionandthesalebytherealestatedevelopmentandmanagementservicessegment,theinternalsalesarestockedunderworkinprogressandtakenoutfromthestockatthemomentofthesale .Thedifferencebetweentheinventoryincreaseanddecreaseconstitutesthemainpartofthisentry .

Breakdownoftherevenuegeneratedbythedredgingsegment

(inthousandEuro) 2010 2009Dredging 612,244 503,000Oil&Gas 87,995 48,500Environmental 119,493 92,500Civil 53,324 30,000Others 27,249 27,285Total 900,305 701,285

Orderbook

(InmillionEuro) 2010 2009 %variationConstruction 826 .4 845 .0 (2 .2)Realestatedevelopmentandmanagementservices 17 .0 9 .4 n .s .Sub-total 843 .4 854 .4 (1 .2)Dredgingandenvironment 967 .5 1 .061 .0 (9 .1)Multitechnics 128 .2 108 .7 17 .9Total 1,939.1 2,024.2 (4.2)

Elements of the consolidated statement of comprehensive income

Sales EBIT Financial Taxes result 2010 2009 2010 %Sales 2009 %Sales 2010 2009 2010 Rate 2009 Rate

Construction 707,811 742,537 10,227 1 .4% 11,545 1 .6% (500) (1,231) (1,187) 11 .9% (4,058) 39 .3%Construction-nonrecurrent - - - - (2,733) - - - - - - -Realestatedevelopmentand

managementservices 19,829 27,057 7,205 36 .3% 7,370 27 .2% (2,980) (2,800) (826) 18 .9% (136) 2 .5%Eliminations:construction-realestate 11,231 1,539 (121) - (242) - - - 56 46 .5% 46 19 .0%Multitechnics 148,604 140,744 6,255 4 .2% 5,968 4 .2% (432) (178) (1,625) 30 .6% (2,506) 44 .2%Multitechnics-nonrecurrent - - - - (1,800) - - - - - - -PPP-concessions 3,353 3,554 (3,666) - (1,885) - 121 279 (224) (6 .6%) (382) (86 .4%)Eliminations:Construction-other (15,947) (11,480) (406) - (1,000) - - - - - (36) -Dredgingandenvironment 900,305 701,285 87,604 9 .7% 73,392 10 .5% (11,242) (9,179) (15,745) 21 .2% (10,336) 16 .0%Eliminationsbetweendredgingandothersegments (785) (2,629) (116) - - - - - - - - -CorrectionDEME - - (1,115) - (572) - - - (36) - - -Holding - - (583) - (1,448) - 1,130 1,334 (160) 29 .4% (54) (4 .9%)Othernonrecurrentelements - (6,197) - - - - - - - -Totalconsolidated 1,774,401 1,602,60799,087 5.6% 88,595 5.5% (13,903) (11,773) (19,747) 23.8% (17,462) 22.1%

Shareintheresults ofassociated Resultofthegroup Noncash EBITDA companies elements 2010 2009 2010 %Sales 2009 %Sales 2010 2009 2010 %Sales 2009 %Sales

Construction - - 8,772 1 .2% 6,262 0 .8% 9,151 14,503 19,377 2 .7% 26,048 3 .5%Constructionnonrecurrent - - - - (2,733) - - 2,733 - - - -Realestatedevelopmentandmamagementservices (5) 696 3,529 17 .8% 5,222 19 .3% 1,943 (724) 9,142 46 .1% 7,342 27 .1%Eliminations:construction-realestate - - (65) - (196) - - - (121) - (242) -Multitechnics - - 3,681 2 .5% 3,163 2 .2% 3,008 1,720 9,263 6 .2% 7,688 5 .5%Multitechnics-nonrecurrent - - - - (1,800) - - 1,800 - - - -PPP-concessions 219 878 (3,396) (824) - 1 .301 494 (2,146) - (513) -EliminationsConstruction-other - (406) 2 .5% (1 .000) - - - (406) - (1,000) -Dredgingandenvironment (237) 1,049 58,260 6 .5% 54,409 7 .8% 76,358 72,344 163,726 18 .2% 146,786 20 .9%Eliminationsbetweendredgingandothersegments - - (116) - - - - - (115) - - -CorrectionDEME - - (1,151) - (608) - - - (1,114) - (573) -Holding - - 385 - (167) - 286 110 (298) - (1,338) -Othernonrecurrentelements - (6,197) - - - 6,197 - - -Totalconsolidated (23) 2,623 63,296 3.4% 61,727 3.9% 98,244 92,980 197,308 11.1% 184,198 11.5%



AtDecember31st,2010 Construction RealEstate Dredging Multi- PPP- Holding Inter Total

(inthousandEuro) &associated and technical Concessions and activities consolidated

services environment eliminations eliminations

Assets Goodwill 911 77 9,941 16,964 0 0 0 27,893Property,plantandequipment 47,024 1,890 682,968 11,387 6,978 223 0 750,470Longtermloanstoconsolidatedcompaniesofthegroup 16,795 0 0 0 0 49,981 (66,776) 0Otherheadingofnoncurrentassets 968 7,404 8,857 50 4,420 3,625 0 25,324OthernoncurrentassetsInventories 3,787 3,365 20,303 3,858 11,013 171,747 (163,442) 50,631Inventories 13,730 137,148 4,173 4,868 0 647 0 160,566Cashandcashequivalent 49,308 10,537 94,480 3,239 1,932 16,022 0 175,518Internalcashposition–cashpooling–assets 89,048 661 0 8,901 0 134,299 (232,909) 0Othercurrentfinancialassets–companiesofthegroup Otherheadingofcurrentassets 331,988 46,699 253,966 64,683 2,822 27,251 (36,827) 690,582

Totalassets 553,559 207,781 1,074,688 113,950 27,165 403,795 (499,954) 1,880,984

Liabilities

Equity 46,032 33,367 326,029 52,180 (3,123) 181,024 (160,063) 475,446Noncurrentfinancialdebt 47,482 1,528 0 0 1,084 16,682 (66,776) 0Noncurrentborrowingtoconsolidatedcompaniesofthegroup 4,852 5,083 215,459 4,061 664 53,985 0 284,104Otherheadingofnoncurrentliabilities 44,682 16,068 47,543 771 0 8,137 (3,380) 113,821Currentfinancialdebts 1,887 13,322 119,589 1,515 2,261 1,089 0 139,663Internalcashposition–cashpooling-liabilities 17,248 95,186 0 5,978 15,885 98,612 (232,909) 0Otherheadingofcurrentliabilities 391,376 43,227 366,068 49,445 10,394 44,266 (36,826) 867,950

Totalequityandliabilities 553,559 207,781 1,074,688 113,950 27,165 403,795 (499,954) 1,880,984


AtDecember31st,2009 Construction RealEstate Dredging Multi- PPP- Holding Inter Total

(inthousandEuro) &associated and technicalConcessions and activities consolidated

services environment eliminations eliminations

Activa

Goodwill 911 77 7,838 16,965 0 0 0 25,791Property,plantandequipment 26,800 1,662 553,586 11,666 6,490 654 600,858Longtermloanstoconsolidatedcompaniesofthegroup 31,729 0 0 0 0 50,694 (82,423) 0Otherheadingofnoncurrentassets 676 6,995 3,285 47 1,446 3,415 (1,040) 14,824OthernoncurrentassetsInventories 2,541 5,876 8,439 3,412 12,107 155,428 (148,754) 39,049Inventories 20,648 117,090 5,032 3,643 0 647 0 147,060Cashandcashequivalent 68,333 6,882 67,312 2,025 1,668 24,326 0 170,546Internalcashposition–cashpooling–assets 74,089 669 0 14,625 0 116,482 (205,865) 0Othercurrentfinancialassets–companiesofthegroup 0 0 0 0 0 0 0 0Otherheadingofcurrentassets 361,847 40,382 257,675 63,250 3,273 28,026 (41,769) 712,684

Totalassets 587,574 179,633 903,167 115,633 24,984 379,672 (479,851) 1,710,812

Liabilities

Equity 33,228 27,449 278,523 51,711 3,832 172,642 (143,614) 423,771Noncurrentfinancialdebt 1,851 11,443 172,104 3,684 1,050 39,000 (1,040) 228,092Noncurrentborrowingtoconsolidatedcompaniesofthegroup 50,680 76 0 0 0 31,667 (82,423) 0Otherheadingofnoncurrentliabilities 30,141 11,500 20,524 830 1,959 493 (5,140) 60,307Currentfinancialdebts 5,656 11,671 74,382 1,832 911 86 0 94,538Internalcashposition–cashpooling-liabilities 21,895 75,957 8,368 10,262 89,383 (205,865) 0Otherheadingofcurrentliabilities 444,123 41,537 357,634 49,208 6,970 46,401 (41,769) 904,104

Totalequityandliabilities 587,574 179,633 903,167 115,633 24,984 379,672 (479,851) 1,710,812


Condensed consolidated statement of cash flow

AtDecember31st,2010 Construction RealEstate Multi- Dredging PPP- Holding Total

(inthousandEuro) &associated technics and Concessions and consolidated

services environment eliminations

Cashflowfromoperatingactivitiesbeforechangesinworkingcapital 17,793 7,399 9,319 158,778 (1,065) 2,742 194,966Cashflowfromoperatingactivities (672) 3,714 2,920 170,821 (507) (7,179) 169,097Cashflowfrominvestingactivities (9,637) (3,124) (5,100) (215,142) (6,948) (2,634) (242,585)Cashflowfromfinancingactivities 4,305 (3,682) (5,484) 66,482 4,322 12,033 77,976Netincrease/(Decrease)ofcash (6,004) (3,092) (7,664) 22,161 (3,133) 2,220 4,488


(inthousandEuro) &associated technics and Concessions and consolidated


Cashflowfrom(usedin)operatingactivitiesbeforechangesinworkingcapital 24,258 5,218 7,812 139,371 (1,347) (1,279) 174,033Cashflowfrom(usedin)operatingactivities 10,415 (6,332) 9,331 173,386 9,239 (23,855) 172,184Cashflowfrom(usedin)investingactivities (12,224) (428) (6,296) (146,439) (9,187) (354) (174,928)Cashflowfrom(usedin)financingactivities (7,951) 5 .355 (4,631) (31,868) 0 12,071 (27,024)Netincrease/(Decrease)ofcash (9,761) (1,403) (1,596) (4,921) 51 (12,138) (29,768)

Cashflowsfromfinancingactivitiesincludecashpoolingloansandborrowingwithothersegments .Apositiveamountmeansauseofliquiditiesinthecashpooling .ThisheadingisalsoinfluencedbyexternalfinancingsinparticularintheRealEstateandotherservices,Holding,anddredgingsegments .Thedredgingsegmentisnotconcernedbythecashpooling .

Other information


(InthousandEuro) &associated technics and Concessions and consolidated


Amortizations (10,682) (255) (3,315) (76,660) (6,145) (1,168) (98,225)Investments (10,204) (8,765) (2,162) (204,386) (6,680) (2,634) (234,831)Impairmentlosses (60) (60)


(InthousandEuro) &associated technics and Concessions and consolidated


Amortizations (7,159) (60) (2,960) (71,059) (283) (617) (82,138)Investments (13,384) (980) (2,483) (163,623) (9,187) (425) (190,082)Impairmentlosses (2,733) (1,800) (4,533)

Geographical sectors

TheoperationsofthegroupCFE(excludingDEME)aremainlybasedintheBeneluxandincentralEurope .

Theproperty,plant&equipmentofthegroupCFEexcludingDEMEaremainlybasedinBelgiumandLuxembourg .However,themainactivityofDEMEisperformedbythefleetwhichisrecognizedindifferentcompanies,andthelegallocalizationdoesnotreflecttheeconomicrealityoftheactivityexecutedbythisfleetforthesamecompanies .Asaconsequence,adetailofproperty,plant&equipmentbycompanyisnotpresented;itwasnotpracticaltogiveapresentationreflectingthegeographicalsectorswheretheactivityisperformed .


5. Acquisitions and disposals of subsidiaries

Acquisitions for the exercise 2010

Fairvalueofassetsandliabilitiesofsubsidiariesacquiredwithintheyear

(inthousandEuro) FairValue Accountingvalue Intangibleassets 67 67Property,plantandequipment 21,350 6,273Othernoncurrentassets 312 169Othernoncurrentfinancialassets 16 15Inventories 5,296 5,296Tradereceivablesandotheroperatingreceivables 9,908 5,014Othercurrentassets 187 175Noncurrentprovisions (18) (18)Noncurrentfinancialdebts (3,108) (2,840)Othernoncurrentliabilities (124) (71)Noncurrentdeferredtaxliabilities (6,067) (128)Currentprovisions (4) (4)Tradepayableandotheroperatingdebts (4,080) (2,448)Currentfinancialdebts (1,159) (1,159)Incometaxpayable (952) (621)Othercurrentliabilities (4,380) (4,358)Cashandcashequivalents 4,267 4,267 Fairvalueofassetsandliabilities 21,511 9,631

Counterpartpaidduringtheacquisition 11,252Eventualcounterpart 1,014Acquisitionprice 12,266Noncontrollinginterests (9,245)NonallocatedGoodwill 0

Purchasepricepaid (11,252)Acquiredcash 4,267CashFlow (6,985)

NoncontrollingInterests (9,245)Selloptiongrantedbythegroup 8,769NoncontrollingInterests-Total 476

OnJune32010,CFEhasacquireda55 .04%shareholdinginTerryn,Belgianmarketleaderintheproductionandconstructionofbondedlaminatestructurefortheindustrialandtertiarysectors .Theacquisitionofthisshareholding,atthecostof11,876thousandeuro,ofwhich10,862thousandEurowerepaidthe30thJune2010,aimstostrengthenCFE’scapacitytorespondtothegrowingtrendforsustainabledevelopmentinthemarketandenableittocombineTerryn’sexpertiseasBelgianmarketleaderinbondedlaminateswithitsownexpertiseinrealestatedevelopmentandinpublic-privatepartnerships .

CFEdetainsandcontrols,fromthisdate,55 .04%ofthecapitalofthiscompany .Thiscompanyisconsolidatedintheglobalmethod .

Theacquisitionpricewasestimatedonthebasisofthecontractandalsothepricecomplementthatmaybeduein2013basedontheresultoftheacquiredcompanies,whichwasestimatedat1,014thousandEuroandaccountedinthedebts .Astheminorityshareholdershaveanoptiontoselltheirsharesexercisableinthreeinstallmentsin2016,2017and2018,thedebtrelatedtothisoptionasbeenaccountedonthebaseoftheestimatedresultsoftheacquiredcompanies,for8,769thousandEuroascounterpartof“noncontrollinginterests” .ThetotaldebttowardstheminorityshareholdersofthegroupTerrynwasaccountedfor9,783thousandEuroundernon-currentderivativeinstrumentsincounterpartofnoncontrollinginterestintheequity .

OnDecember1,2010,CFEacquired65%ofthesharesofSABrantegem .ThiscompanybasedinAlostisspecializedinHVACandsanitation,employs25peopleandispresentintheregionofBrussels,GandandAnvers .Thisacquisitionwasdoneforanamountof146thousandEuro .Bythisacquisition,themultitechnicalsegmentofCFEgainsaneleventhprofitcenterandnewskills .

TheinitialaccountingoftheperiodhasbeendeterminedprovisionallyforBrantegem .Therefore,thefairvaluesassignedtoassetsandliabilitiesacquired,maystillbechangedwithin12monthsfromthedateofacquisition .

IfthosegroupingswouldhavetakenplacethefirstofJanuary2010,theimpactonrevenuewouldhavebeenof33 .845thousandEuroandof-1,302thousandEuroonthenetincome .Thosegroupingscontributedto-640thousandEuroonresultofthegroup .

Theotheracquisitionsofsubsidiaries(ChâteauBeggenandRonndriesch123)arenotgroupingsofcompaniessoallthepricepaidisallocatedtothefieldsbuildingsdetaininstocks .

DEMErealizedagroupingofcompanybyacquiringISD .

Acquisitions after closing dateNothing .

Disposals for the exercise 2010Nothing .

Variation of % without change of controlThegroupuseditsoptiononthe37 .5%ofDruart(anditssubsidiaryProdfroid)notyetdetained,for3,050thousandEuro,accountedascounterpartofthesharesnogivingcontrol(1,338)andbalanceofretainedearnings(1,712),withoutimpactonthegoodwillaccountedatthetimeoftheacquisition .TheothervariationsofpercentagedetainedinthecontrolledcompaniesareduetoDEME,itselfajointventure .


Comprehensive Income

6. Revenue from auxiliary activities and other operating charges

Revenuefromauxiliaryactivitiesamountsto50,993thousandEuro(2009:38,979thousandEuro) .Thisincludesgainsonfixedassetsfor2,349thousandEuro(2009:908thousandEuro) .Italsoincludesrevenuefromhiring,reinvoicingofexpensesandothermiscellaneousreimbursementsfor48,644thousandEuro(2009:38,071thousandEuro) .Revenuefromauxiliaryactivitiesincreasedbymorethan30%comparedwithpreviousyear .

Otheroperatingchargesaredetailedasfollow:

(inthousandEuro) 2010 2009Servicesandothergoods (241,288) (217,768)Depreciationofassets -Inventories (857) 665-Tradereceivables&otheroperatingreceivables (1,188) (2,291)Netallocationtotheprovision 1,234 (4,398)Otheroperatingcharges (1,313) (1,090)Totalconsolidated (243,412) (224,882)

7. Wages, salaries and social charges

(inthousandEuro) 2010 2009Wagesandsalaries (228,653) (222,884)Mandatorycontributionstothesocialsecurity (64,441) (60,943)Othersalarycosts (15,138) (11,603)Contributiontodefinedcontributionsplans (39) (30)Costofservicesrenderedrelatedtodefinedbenefitsplans (2,121) (3,314)Totalconsolidated (310,392) (298,774)

Thenumberoffulltimeequivalents(average)in2010amountsto5,120(5,184in2009) .Itamountedto5,273onthefirstofJanuary2010andamountsto5,224onthe31stofDecember2010 .

8. Other financial charges and income

(inthousandEuro) 2010 2009Fairvalueadjustment (679) (831)Exchangegain(loss)realized/notrealized (3,553) 86Dividendsfromnon-consolidatedcompanies 0 40Other (835) (2,174)Totalconsolidated (5,067) (2,879)

TheevolutionoftheexchangegainsandlossesandincomeismainlyexplainedbythefloatingoftheEurocomparedtothefunctionalcurrenciesofDEMEsubsidiaries .

9. Noncontrolling interests

Asper31December2010,thepartofnoncontrollinginterestsintheresultamountsto2,118thousandEuro(2009:-255thousandEuro)andismainlyrelatedtothegroupDEME(2,122thousandEuro) .

10. Income tax expenses

Recognizedinthestatementofcomprehensiveincome

(inthousandEuro) 2010 2009Currenttaxes Taxexpenseoftheyear 17,942 19,530Under/(over)providedinprioryears 0 179Totalcurrenttaxexpense 17,942 19,709Deferredtaxes Originationandreversaloftemporarydifferences (2,101) (134)Useoflossesfrompreviousexercises 296 406Deferredtaxescalculatedonthelossesoftheexercise 0 395Deferredtaxescalculatedonthedefinitivelytaxedincomes 0 (2,914)Totaldeferredtax(expense)/income (1,805) (2,247)Totaloftaxexpensesrecognizedinthestatementofcomprehensiveincome 19,747 17,462

Reconciliationoftheeffectivetaxrate

(inthousandEuro) 2010 2009Profitbeforetaxesandshareinprofitfromassociatedcompanies 85,161 76,822Taxesontheprofitcalculatedattherateof33.99% 28,954 26,112Taximpactofnondeductibleexpenses 2,110 1,679Taximpactofnontaxablerevenues (507) (3,405)Taxcreditandimpactonnotionalinterests (12,013) (8,711)Othertaxablerevenues 1,129 1,614Effectofdifferenttaxrateofsubsidiariesactinginotherlegalenvironments (1,894) (2,429)Taximpactoftheuseoflossesnotrecognizedpreviously (3,999) (1,107)Taximpactofcurrentanddeferredtaxadjustmentsrelatedtoprioryears (1,112) 400Taximpactofdeferredtaxassetsonlossesoftheyearnotrecognized 7,086 6,223Deferredtaxescalculatedonthedefinitivelytaxedincomes 0 (2,914) Taxchargeandeffectivetaxrateoftheexercise 19,754 17,462 23.2% 22.7%

Thetaxchargesamountto19,754thousandEuroat31December2010(December2009:17,462) .Theeffectivetaxrateis23 .2%(December2009:22 .7%) .

Thistaxrateislowerthanthetheoreticaltaxrate(33 .99%)whichismainlyduetothefactoflowertaxrateforforeignsubsidiariesandtotheuseofpreviouslynonrecognizedlosses .


Deferredtaxassetsandliabilitiesrecognized Assets Liabilities(inthousandEuro) 2010 2009 2010 2009(In)tangibleassets 333 0 (30,747) (27,838)Employeebenefits 4,417 4,848 (38) (41)Provisions 232 246 (6,874) (6,597)Fairvalueadjustmentsonderivatives 500 1,785 0 0Otheritems 38,913 35,266 (30,615) (28,759)Taxlosses/credits 59,700 65,861 0 (274)Grossdeferredtaxesassets/(liabilities) 104,095 108,006 (68,274) (63,509)Write-offondeferredtaxesassets (36,722) (43,427) 0 0Taxcompensation (60,340) (60,980) 60,340 60,980Netdeferredtaxesassets/(liabilities) 7,033 3,598 (7,934) (2,529)

Thereportedfiscallossesforwhichnodeferredtaxesassetshavebeenrecognizedamountsto36,722thousandEuro .

Temporary differences or tax losses for which no deferred tax assets is recognized

Deferredtaxesassetshavenotbeenrecognizedinthecasesofitisnotcertainthatafuturetaxableprofitwouldbesufficienttoallowthesubsidiariestorecovertheirtaxlosses .

Defferd tax income (charge) directly recognised in equity

(inthousandEuro) 2010 2009Deferredtaxonrevaluationsurplusontheeffectivepartoffairvaluechangesincashflowhedge 501 892Total 501 892

11. Profit per share

Thebasicresultpershareisthesameasthedilutedresultpershareduetotheabsenceofpotentialdilutiveordinarysharesincirculation .Itiscalculatedasfollow:

(inthousandEuro) 2010 2009Netprofitattributabletoshareholders 63,296 61,728Numberofordinarysharesattheendoftheperiod 13,092,260 13,092,260Weightedaverageofthenumberofordinaryshares 13,092,260 13,092,260Basic(diluted)profitbyshareinEuro 4.83 4.71

Statement of financial position

12. Intangible assets other than goodwill

Exercise2010(inthousandEuro) Concessions,patents Development Total andlicenses costsAcquisitioncosts Balanceattheendofthepreviousperiod 9,833 1,192 11,025Effectofforeigncurrencyfluctuations 169 61 230Acquisitionsthroughbusinesscombinations 191 0 191Acquisitions 3,891 276 4,167Disposals (1,822) (141) (1,963)Transfersfromoneheadingtoanother 2 0 2Changeinconsolidationscope (1) 0 (1)Attheendoftheperiod 12,263 1,388 13,651

Depreciationsandimpairment Balanceattheendofthepreviousperiod (3,711) (401) (4,112)Effectofforeigncurrencyfluctuations (18) 0 (18)Acquisitionsthroughbusinesscombinations (933) (10) (943)Acquisitionsthroughbusinesscombinations (124) 0 (124)Depreciationsoftheperiod 0Disposals 180 119 299Transfersfromoneheadingtoanother (2) 0 (2)Changeinconsolidationscope 1 0 1Attheendoftheperiod (4,607) (292) (4,899) Netcarryingamount AtJanuary,1st2010 6,122 790 6,913AtDecember,312010 7,656 1.096 8,752


Exercise2009(inthousandEuro) Concessions,patents Development Total andlicenses costsAcquisitioncosts Balanceattheendofthepreviousperiod (81) (24) (105)Effectofforeigncurrencyfluctuations 302 - 302Acquisitions 1,071 502 1,573Disposals (19) (76) (95)TransfersfromoneheadingtoanotherChangeinconsolidationscopeAttheendoftheperiod 9,833 1,192 11,025Depreciationsandimpairment Balanceattheendofthepreviousperiod (2,958) (464) (3,422)Effectofforeigncurrencyfluctuations 12 12Depreciationsoftheperiod (738) (9) (747)Amortizations (46) (46)Disposals 20 71 91TransfersfromoneheadingtoanotherChangeinconsolidationscopeAttheendoftheperiod (3,710) (402) (4,112) Netcarryingamount AtJanuary,1st2009 5,603 327 5,929AtDecember,312009 6,122 790 6,913

Thetotalofintangibleassetsacquiredamountsto4,167thousandEuroandismainlyrelatedtolicensesandsoftwareexpenses .Amortizationsonintangibleassetsarerecognizedunderheading“depreciations”inthestatementofcomprehensiveincome .

Amortizationsonintangibleassetsamountto943thousandEuro .

AlltheintangibleassetsrespondingtotheIAS38definitions–Intangibleassetsarerecognizedifandonlyiffutureeconomicbenefitsareprobable .

13. Goodwill

(inthousandEuro) 2010 2009Acquisitioncosts Balanceattheendofthepreviousperiod 31,483 29,076Acquisitionsthroughbusinesscombinations - 2,407Othervariations 2,102 -Balanceattheendoftheperiod 33,585 31,483Depreciationsandimpairment Balanceattheendofthepreviousperiod (5,692) (1,159)Impairmentoftheperiod - (4,533)Balanceattheendoftheperiod (5,692) (5,692)Netcarryingamount AtDecember,31 27,893 25,791

Thenon-allocatedgoodwillof2,102thousandeurorelatestotheacquisitionsthroughbusinesscombinationsatDEME,herselfajointventureofCFE .

Thefollowingassumptionshavebeenconsideredforthetestofimpairment:

Activity Goodwillnetvalue Parametersofthemodelapplied Impairment

totheprojectionsofcashflows losses

accounted

duringthe

exercise

2010 2009 Growthrate Growthrate Discount Sensitivity

(terminalvalue) rate rate

Druart 1,292 1,292 0% 0% 8 .63% 5%Stevens 2,682 2,682 0% 0% 8 .63% 5%VMA 11,115 11,115 0% 0% 8 .63% 5%EVDM 1,660 1,660 0% 0% 8 .63% 5%Amart 911 911 0% 0% 8 .63% 5%Others 292 292 0% 0% 8 .63% 5%Sub-consolidationDEME 9,941 7,839 0% 0% 8 .63% 5%

Thetreasuryflowsusedforthetestofimpairmentcomefromthethreeyearplanspresentedtotheexecutivecommittee;nogrowthratehasbeenappliedforthepreviousyears,orindeterminingtheterminalvalue .

AnanalysisonthesensitivityhasbeenperformedbychangingthetreasuryflowsandtheWACCby5% .Thevalueoftheentitiesbeingalwayshigherthantheaccountedvalueevenwithgoodwilltakingintoaccount,nodepreciationhadbeendetected .

TheDEMEgroup,ajointventuredetainedat50%byCFE,isconsideredasacashgeneratingunit .Noimpairmentlosshasbeenidentifiedinit .TheDEMEgroupalsoperformsimpairmenttestsatitslevelandnoimpairmentlosseswererevealed .


14. Property, plant & equipment

Exercise2010(inthousandEuro) Land& Installations Furniture Other Under Total

buildings & &fittings tangible construction

equipments assets

Acquisitioncost Balanceattheendofthepreviousperiod 37,326 992,169 44,988 0 121,247 1,195,730Effectofforeigncurrencyfluctuations 266 5,433 249 0 4 5,952Acquisitionsthroughbusinesscombinations 10,855 10,802 212 0 0 21,869Acquisitions 4,520 77,714 4,147 0 132,717 219,098Transfersfromoneassettoanother 6,900 42,848 (2,509) 0 (43,457) 3,782Disposals (4,064) (57,373) (6,481) 0 (1,283) (69,201)Changeintheconsolidationscope 0 17,511 180 0 23 17,714Balanceattheendoftheyear 55,803 1,089,104 40,786 0 209,251 1,394,944 Depreciations&impairment Balanceattheendoftheperiod (20.489) (539.063) (35.320) 0 0 (594.872)Balanceattheendoftheperiod (20,489) (539,063) (35,320) 0 0 (594,872)Effectofforeigncurrencyfluctuations (74) (2,654) (166) 0 16 (2,878)Acquisitionsthroughbusinesscombinations (205) (128) (187) 0 0 (520)Depreciations (1,530) (85,434) (3,897) 0 (90,862)Impairments (1,751) (1,751)Transfersfromoneassettoanother 46 (1,612) 1,266 0 0 (300)Disposals 1,002 55,686 6,063 0 0 62,751Changeintheconsolidationscope 0 (15,889) (154) 0 0 (16,043)Balanceattheendoftheperiod (21,250) (589,094) (32,395) 0 (1,735) (644,474) Netcarryingamount AtJanuary,12010 16,837 453,106 9,668 121,247 600,858AtDecember,312010 34,553 500,010 8,391 0 207,516 750,470

AtDecember31,2010,theacquisitionsoftangibleassetsamountto219,098thousandEuro,andaremainlyrelatedtoDEME(203,988thousandEuro,93%oftotalinvestments)resultingfromtheexecutionofthemulti-annualinvestmentstrategywhereastheamountsoftheinvolvedinvestmentsamountsto378millionsEuro .Paymentsrelatedtothesefixedassetsamountsto220,511thousandEurofortheyear2010 .Theinvestmentsfortheyear2010increasedby30,581thousandEurocomparedto2009 .ThisismainlyrelatedtoDEME .TheCAPEXoftangibleassetsinbuildingamountsfor2 .5millionsEuroandarerelatedtointerestonloansspecificstothebuildingofboatsforDEME .

Thedepreciationoftangiblefixedassetsamountedto92,613thousandEuro(2009:81,388thousandEuro)

Theamountofproperties,plants,andequipmentsconstitutingaguaranteeforsomeborrowingcomesto302,713thousandEuro(2009:146,447thousandEuro) .

CFEtookthedecision,duetothepoliticalsituationinTunisiaandthestopofthework,todepreciatetheassetsunderconstructionofthejointprojectofpromotionandconcessionoftheportofBizerte .Thisdepreciationamountsto5,802thousandEuroandispresentedundertheheading«depreciation”oftheconsolidatedstatementofcomprehensiveincome .

Thisdepreciationisaccountedinthefollowingwayintheassets:-Tangibleassets :-1,751thousandsofEuros-Buildings :-4,051thousandsofEuros

Exercise2009(inthousandEuro) Land& Installations Furniture Other Under Total

buildings & &fittings tangible construction

equipments assets

Acquisitioncost Balanceattheendofthepreviousperiod 36,072 876,584 43,162 - 74,108 1,029,926Effectofforeigncurrencyfluctuations (149) (982) (91) 353 (869)Acquisitionsthroughbusinesscombinations 81 352 750 1,183Acquisitions 1,514 74,566 3,993 108,443 188,516Transfersfromoneassettoanother (25) 61,091 (181) (61,028) (143)Disposals (167) (19,442) (2,645) (629) (22,883)ChangeintheconsolidationscopeBalanceattheendoftheyear 37,326 992,169 44,988 - 121,247 1,195,730 Depreciations&impairment Balanceattheendoftheperiod (18,986) (477,252) (32,844) (529,082)Effectofforeigncurrencyfluctuations (71) 388 101 418Acquisitionsthroughbusinesscombinations (15) (258) (473) (746)Depreciations (1,442) (75,486) (4,460) (81,388)Transfersfromoneassettoanother 25 (27) 145 143Disposals 13,572 2,211 15,783ChangeintheconsolidationscopeBalanceattheendoftheperiod (20,489) (539,063) (35,320) - - (594,872) Netcarryingamount AtJanuary,12009 17,086 399,332 10,318 - 74,108 500,844AtDecember,312009 16,837 453,106 9,668 121,247 600,858

15. Property investments

(inthousandEuro) GrossValue Depreciations NetValueNetcarryingamountatJanuary1,2010 20,026 (6,720) 13,306Effectofforeigncurrencyfluctuations (123) 3 (120)Depreciations/reversal (617) (617)Impairment/reversal (4,051) (4,051)Acquisitions 11,567 11,567Disposals (1,355) 47 (1,308)Transfersbetweenpropertyinvestment,buildingsininventoryandusedbytheowner (8,117) 17 (8,100)NetcarryingamountatDecember31,2010 21,998 (11,321) 10,677

AsatDecember31,2010,thepropertyinvestmentspresentedonthestatementoffinancialpositionfor10,677thousandEuro(2009:13,306thousandEuro)andhaveanestimatedfairvalueof10 .677thousandEuro(2009:13,223thousandEuro) .

ThedecreaseofthenetbookvaluecomparedtoDecember31,2009(2,629thousandEuro)isduetotheimpairmentoninvestmentforthedevelopmentofcomplexrealestateBizerteCap3000andbysettingstocksbuildingsbuiltinaprocessofproduction(-8,100thousandEuro) .


Investmentpropertiesareamortizedbyapplyingthesamerulesasfortangibleassets .

(inthousandEuro) GrossValue Depreciations NetValueNetcarryingamountatJanuary1,2009 12,368 (6,713) 5,655Effectofforeigncurrencyfluctuations (76) (4) (80)Depreciationsandimpairment/reversal (3) (3)Acquisitions 8,261 - 8,261Disposals (527) (527)Transfersbetweenpropertyinvestment,buildingsininventoryandusedbytheowner - - -NetcarryingamountatDecember31,2009 20,026 (6,720) 13,306

16. Investments in associated and joinly controled entities

Associatedentities

Interestsinassociatedentitiesaredetailedasfollow:

(inthousandEuro) 2010 2009Balanceattheendofthepreviousperiod 8,432 5,831Changeoftheaccountingpolicies 0 15Balanceattheendofthepreviousperiodrestated 8,432 5,846Acquisitionsandtransfers 6,729 1,088Shareofthegroupintheresultaftertaxesandminorities (23) 2,623Reductionincapital (977) (91)Dividends 0 (1,034)Depreciation (61)Balanceattheendoftheperiod 14,100 8,432Goodwillincludedinassociatedcompanies 65 126

AlltheentitiesinwhichthegroupCFEhasasignificantinfluenceareconsolidatedbytheequitymethodofaccounting .ThegroupCFEdoesnotheldassociatedcompaniesquotedonapublicstockexchange .

ThemostsignificantentitiesareLocorailNVandCoentunnelCompanyBV .Thelistofcompaniesispresentedinthenote35 .Therewasnoacquisitionorcessionofassociatedcompanies .TheamountspresentedintheacquisitionsresultfromthecapitalincreaseofC-Power,anassociatedcompanybelongingtothegroupDEME .ThecapitaldecreasehasbeendonebythecompanyInvestissementsLéopoldbyrefundofshareholders .

Thecondensatefinancialstatementsoftheseentitiesaredetailedasfollow:

(inthousandEuro) 2010 2009

Totalassets 964,589 433,761Totalliabilities 918,787 446,733Netassets 45,802 (12,972)ShareinthenetassetofthegroupCFE 4,206 (5,319)Incomes 347,739 225,356Netresultoftheyear (1,529) 3,128Shareinthenetresultoftheyear (23) 2,623

JointlycontrolledentitiesThegroupCFEreportsitsinterestsinjointlycontrolledentities(includingtemporarycompanies)byusingareportingformatlinebylinefortheproportionatemethodofconsolidation .

ThetotalamountsoftheinterestsofthegroupCFEintheconsolidatedfinancialstatementsaredetailedasfollow:

(inthousandEuro) 2010 2009Totalnoncurrentassets 657,743 515,636Totalcurrentassets 488,561 524,390Totalnoncurrentliabilities 606,602 470,959Totalcurrentliabilities 539,702 569,067Operatingincomes 1,222,614 950,592Operatingcharges (1,078,342) (866,423)

Themostsignificantjointlycontrolledentitiesaredetailedinthenote35 .Theequityoftheseentitiesisincludedintheheading“totalnoncurrentliabilities”andamountsto265,740thousandEuro .Inaddition,thegroupCFEsetsuptemporarycompaniesfortheexecutionofsomemarketswithassociatedcompanies .ThemostsignificantareJVDialink,JVLocobouw,CoentunnelConstructionVOFandCombinatieCrommelijnVOF .

17. Other non current financial assets

Theothernoncurrentfinancialassetsamountto25,324thousandEuroasperDecember31,2010(2009:14,824thousandEuro) .Othernoncurrentfinancialassetsincludeprimarilythenon-eliminatedpartofsubordinatedloaninprojects24,819thousandEuroandinvestmentsavailableforsale(505thousandEuro) .

(inthousandEuro) 2010 2009Balanceattheendofthepreviousperiod 14,824 14,881Changeinconsolidationmethod 0 (4,510)Acquisitions 12,436 10,488Disposalsandtransfers (1,951) (6,409)Write-off 5 369Changeintheconsolidationscope 15 7Effectofforeigncurrencyfluctuations (5) (2)Balanceattheendoftheperiod 25,324 14,824

ThenoncurrentfinancialassetshaveincreasecomparedtoDecember2009(+10,500thousandEuro) .ThisreflectsdevelopmentprojectofwindturbinesintheNorthSea,theprojectBizerteandanetincreaseofnoncurrentfinancialassetsintherealestatesandHoldingsegments .

ThegroupCFEdoesnotheldinvestmentsavailableforsalequotedonapublicstockexchange .Fornotquotedinvestments,fairvalueisconsideredequaltothecost .


18. Other non current assets

AsperDecember31,2010theothernoncurrentassetsamountto9,859thousandEuroandincludenoncurrentreceivablesdetailedasfollow:

(inthousandEuro) 2010 2009NoncurrentreceivablesForem 1,890 2,323Noncurrentreceivables–CurrentaccountsDEME 2,745 0Othernoncurrentreceivables(includingguaranteesbankdeposits) 5,224 4,451Totalconsolidated 9,859 6,774

19. Construction contracts

Theamountofincurredcostsincreasedbyprofitsanddecreasedbyrecognizedlossesaswellasbyprogressbillingisdeterminedbycontract .

(inthousandEuro) 2010 2009 2008Cumulatedcostsenteredincontracts 1,953,224 1,355,717 1,877,660Profitsandlosses 56,454 26,988 60,807Totalattheendoftheperiod 2,009,678 1,382,705 1,938,467Progressbillings 1,995,035 1,358,454 1,913,856Netamountduebytheclients 14,643 24,251 24,611Which: Excessofcostsincurredandprofitsandlossesonprogressbillings 44,939 50,222 70,547Excessofprogressbillingovercostsincurredandprofitsandlosses (30,296) (25,971) (45,936)Advancesreceived-constructioncontracts (89,229) (65,826) (43,114)

20. Inventories

AsperDecember31,2010thestocksamountto160,566thousandEuro(2009:147,060thousandEuro)andaredetailedasfollow:

(inthousandEuro) 2010 2009Rawmaterialsandconsumables 15,204 13,319Depreciationsonrawmaterialsandconsumables (725) (725)Finishedproductsandpropertiesheldforsale 149,254 136,758Depreciationsonfinishedproducts (3,167) (2,292)Stocksrecognizedatnetrealizablevalue 160,566 147,060

Theevolutionoftheheading“rawmaterialsandconsumables”isexplainedbytheentryintheconsolidationscopeofcompaniesofgroupTerryn .

AsperDecember31,2010,nodepreciationon“rawmaterialsandconsumables”hasbeenrecognized .

Theincreaseintheheadingfinishedproductsisparticularlyexplainedbythecontinuityofexecutionofsomerealestateprojects .

OnDecember31,2010,857thousandEuroofdecreaseofvalueonrealestateheldforsalewererecordedintheincomestatement(seenote6)tobringthembacktotheirrealizablevalue

21. Trade receivables and payables and other operating receivables and payables

(inthousandEuro) 2010 2009Tradereceivables 499,486 543,585Minus:provisiondoubtfuldebtors (10,711) (9,621)Nettradereceivables 488,775 533,964Othercurrenttradereceivables 172,517 140,363Totalconsolidated 661,292 674,327Othercurrentassets 28,978 38,148Tradepayablesandotheroperatingdebts 43,299 548,172Othercurrentliabilities 242,215 271,073Consolidatedtotaloftradepayablesandotheroperatingdebts 785,514 819,245Netsituationoftradereceivablesandpayables (95,244) (106,770)Werefertothenote27forthecreditriskanalyze .

The“Grossamountduebytheclients”andthe“Grossamountsduetotheclients”includethe“stilltobeinvoiced”partoftheheadings:“tradesreceivablesandotheroperatingreceivables”and“tradespayablesandotheroperatingpayables”fromthefinancialstatements .Furthermore,theseheadingsinclude“othercurrentassets”and“othercurrentliabilities”relatedtotheworksitesinprogress .

Theexcessofprogressbillingoverincurredlossesandprofitsincludeontheonehand,theportionofunbilledcontractcostsunder«Tradepayablesandotherliabilities»ofthefinancialsituation,andthissecondhand,thesurplusonconstructionsitesincludedin«othercurrentliabilities»

Theadvancesreceivedonconstructioncontractsarenotincludedintheamountofprogressbillingsusedtodeterminethegrossamountduefromcustomersortocustomers .Theseadvancesareincludedunder“othercurrentliabilities” .Theincreaseismainlyexplainedbyadvancereceivedondredgingandenvironmentalcontracts .

Theamountofretentionpaymentsmadebycustomersisof7,037thousandEuroincludedin«receivablesTradeandotherreceivables»(seenote28 .6)

Currently,thegroupCFEisinnegotiationwithitssubcontractorstosolveinafriendlyandsimultaneouswaytheclaimsrelatingtotheovercostsandthepossibleapplicationofpenaltiesonanimportantworkingsiteinLuxemburg .Takingintoaccounttheuncertaintyofthisnegotiationandconsequentlytheuncertaintyofanyadditionalprofitandlossesthatcouldresultfromthis,noprovisionoradditionalrevenuehasbeenrecognizedonthissite .ThegroupCFEestimates,onthebasisofcurrentinformation,thattheriskofanadditionaloutflowisverylow .


22. Cash and cash equivalents

(inthousandEuro) 2010 2009Shorttermbankdeposits 78,140 91,853Cashatbankandinhand 97,378 78,693Cashandcashequivalent 175,518 170,546

Theshort-termbankdepositsconcernplacementsinfinancialinstitutionswithdurationofmaximum3months .Theseinvestmentsaresubjecttoavariableremuneration,whichismainlyrelatedtoEuribororEonia .

23. Grants

In2010,thegroupCFEreceivednogrants .

24. Employee benefits

ThegroupCFEparticipatestobenefitplansandpre-pensionplansinmanycountrieswherethegroupoperatesitsactivities .ThesebenefitsarerecognizedincompliancewithIAS19andconsideredas“post-employment”and“long-termbenefitplans” .AtDecember31,2010thenetdebtoftheobligationsofthegroupCFEfor“postemploymentbenefits”andforpensionandpre-pensionplansamountedto14,100thousandEuro(2009:14,201thousandEuro) .

Theseamountsaredisclosedintheheading“Pensionsandnon-currentemployeebenefits” .Thisheadingincludesalsoaprovisionfor3,684thousandEuro(2009:3,553thousandEuro)atthelevelofthegroupDEMEforshare-basedpayments .Theseplansareconsideredascashbased .

Debtrelatedtotheobligationsofdefinedbenefitplansandpre-pensions

(inthousandEuro) Defined Pre-pensions Defined Pre-pensions plans 2010 plans 2009 2010 2010 ContantePresentvalueoffundedbenefitplans (59,695) (63,078)Fairvalueofplanassets 49,052 52,017Presentvalueofnetobligationsfunded (10,643) (11,061)Presentvalueofnotfundedbenefitplans (1,569) (805) (2,365) (847)Presentvalueofnetobligations (12,212) (13,426)Unrecognizedactuarialgain/losses (1,082) (93)Netassets/(liabilities)recognizedatstatementoffinancialposition (13,294) (806) (13,519) (847)Liabilityamountrecognizedatthestatementoffinancialposition (13,294) (806) (13,519) (847)

Movementinthenetliabilityrecognizedinthestatementoffinancialpositionfordefinedbenefitplansandpre-pensions

(inthousandEuro) 2010 2010 2009 2009Netassets/(liabilities)atJanuary,1st (13,519) (847) (13,266) (1,191)Fusion/acquisitionofplans (270) (5)Changeintheconsolidationscope 0Contributionspaid 4,862 5,003Expenserecognizedinthestatementofcomprehensiveincome (3,285) 41 (5,251) 344Notrecognizedactuarialgains/(losses) (1,082)Netassets/(liabilities)atDecember,31 (13,294) (806) (13,519) (847)

Expenserecognizedinthestatementofcomprehensiveincomerelatedtodefinedbenefitplans

(inthousandEuro) 2010 2009Currentservicecost 2,149 3,314Interestchargeonobligations 2,916 3,247Expectedreturnonplanassets (1,864) (1,867)Actuarialgain/(losses) 73 537Other 11 (171)Total 3,285 5,060

Costsofpensionplansfortheperiodareincludedintothefollowingheadingofthestatementofcomprehensiveincome:“Wages,salaries&socialcharges” .

PlanassetsneitherincludefinancialinstrumentsofthegroupCFEnoranyrealestateusedbythefundorusedbythegroupCFE .

Movementinthenetpresentvalueoftheobligationsrelatedtothedefinedbenefitplans

(inthousandEuro) 2010 2009PresentvalueoftheobligationsatJanuary1st 63,077 58,155Currentservicecost 2,149 3,314Interestonobligations 2,916 3,247Amountspaid (4,862) (2,948)Actuarialgains/(losses) (2,438) 93Contributionofemployees 422 693Transfersin/out 0 524PresentvalueoftheobligationsatDecember31 61,264 63,078


Movementinthefairvalueoftheassetsplan

(inthousandEuro) 2010 2009FairvalueoftheassetsplanatJanuary1st 52,018 47,555Expectedreturnoftheassetsplan 2,194 1,407Contributionoftheemployer 3,986 5,003Contributionoftheemployee 613 693Amountspaid (4,862) (2,640)Transfersin/out 0Actuarialgains/(losses) (4,897) 0FairvalueoftheplanassetsatDecember31 49,052 52,018

Mainactuarialassumptionsattheendoftheperiod(expressedinweightedaverages)

2010 2009Discountingrateat31December 4 .35% 5 .10%Expectedrateofreturnofassetsplanat31December 4 .00% 3 .95%Forecastedrateofsalaryincrease 3 .40%<60years 3 .90%<60years and1 .90%>60years and1 .90%>60yearsInflationrate 1 .90% 1 .90%

Thediscountedrateattheendof2010islowerthantheoneappliedin2009 .Thisisexplainedbytheevolutionofcreditratesonthefinancialmarkets .

Thesensitivityanalyzeindicatesthatanincreaseinthediscountrateby25basispointswouldreducethepresentvalueoftheobligationsby2 .3%andthecurrentservicecostby1 .7% .

Thissensitivityanalyzealsoindicatesthatanincreaseintheinflationrateby25basispointswouldincreasethepresentvalueoftheobligationsby0 .7%andthecurrentservicecostby5 .5% .

25. Provisions other than pensions and non current employee benefits

AsperDecember31,2010theseprovisionsamountto58,332thousandEuro,whichrepresentsanincreaseof2,228thousandEurocomparedtoend2009(56,104thousandEuro) .

(inthousandEuro) Termination After-sale Other Othernon Total losses service current current risks risksBalanceattheendofthepreviousperiodrestated 18,890 8,526 26,390 2,298 56,104Effectofforeigncurrencyfluctuations (6) (4) 57 47Actualisationeffect 4 10 14Transferfromoneheadingtoanother (5,366) 8,767 3,401Provisionsrecognized 8,785 1,872 4,150 4,884 19,691Provisionsused (9,046) (861) (7,722) (2,415) (20,044)Provisionsreversed (806) (75) (881)Closingbalance 17,817 9,458 17,512 13,545 58,332

of whichcurrent: 44,787 noncurrent: 13,545

Theprovisionforterminationlossesdecreasedby1,073thousandEuroandamountsto17,817thousandEuroattheendof2010 .Provisionsforterminationlossesareaccountedforwhentheexpectedfinancialbenefitsofsomecontractsarelessthantheinevitablecostsattendantoncompliancewiththeirobligations .Theuseofterminationlossesisrelatedtotheperformanceoftherelevantcontracts .

Theprovisionforafter-salesserviceincreasedby932thousandEuroandamountsto9,458thousandEuroattheendof2010 .Thechangeattheendof2010isexplainedbytherecognitionor/andthereversalofprovisionsfordecennialguarantee .

Provisionsforothercurrentliabilitiesdecreasedby8,878thousandeurosandamountedto17,512thousandEuroatend2010 .Theseincludethecurrentlitigationreserves(5,701thousandEuro),includingaprovisionforrisksonamajorprojectinLuxembourg,theprovisionforremainingwork(1,621thousandEuro),provisionsforsocialrisks(5thousandEuro)andprovisionsforothercurrentliabilities(10,184thousandEuro) .Forthelatter,sincenegotiationswithcustomersareunderway,wecannotgivemoreinformationontheassumptions,northeprobabletimeofdisbursement .

Theothernon-currentrisksincludetheprovisionsforrestructuringandforotherrisksnotdirectlyrelatedtotheoperatingcycleofthebuildingsitesinprogress .

26. Possible assets and liabilities

Accordingtoavailableinformation,wedonothaveassetsorliabilitiesbetweentheclosingdateandthedatethefinancialstatementswereapprovedbytheBoard,withtheexceptionofassetsorliabilitiesrelatedtocontractsConstruction(forexample,thegroupclaimstocustomersortheclaimsofsubcontractors),whatcanbedescribedasnormalintheconstructionsector .


27. Information related to the net financial debt

27.1. Thenetfinancialdebt,asdefinedbydegroup,isanalyzedasfollow:

31/12/2010 31/12/2009(inthousandEuro) Non- Current Total Non- Current Total current current Bankloansandotherfinancialdebt (216,283) (70,611) (286,894) (170,814) (51,302) (222,116)Creditlinesused (49,851) - (49,851) (38,851) (38,851)Loansrelatedtofinancelease (17,969) (4,506) (22,475) (18,417) (4,995) (23,412)Totallongtermfinancialdebts (284,103) (75,117) (359,220) (228,082) (56,297) (284,379)Shorttermfinancialdebts - (64,547) (64,547) - (38,455) (38,455)Shorttermbankdeposits - 78,140 78,140 - 91,853 91,853Cashatbankandinhand - 97,378 97,378 - 78,693 78,693Totalshorttermnetfinancialdebt(oravailabilities) - 110,971 110,971 - 132,091 132,091Totalnetfinancialdebt (284,103) 35,854 (248,249) (228,082) 75,794 (152,288)Derivatives-interestratehedge (6,420) (1,711) (8,131) (3,909) (2,652) (6,651)

Ofthetotallongtermfinancialdebt,55millionwerenotsubjecttoapledgeoramortgage .

27.2. Financialdebtmaturity

(inthousandEuro) Duewithin Between1 Between2 Between3 Between5 Morethan Total

theyear and2years and3years and5years and10years 10years

Bankloansandotherfinancialdebt (70,611) (64,378) (46,132) (71,373) (34,371) (29) (286,894)Creditlinesused - (35,000) (14,841) - - - (49,851)Loansrelatedtofinancelease (4,506) (4,130) (3,122) (3,474) (7,163) (80) (22,475)Totallongtermfinancialdebt (75,117) (103,508) (64,105) (74,847) (41,534) (109) (359,220)Shorttermfinancialdebts (64,547) - - - - - (64,547)Shorttermbankdeposits 78,140 - - - - - 78,140Cashatbankandinhand 97,378 - - - - - 97,378Totalshorttermfinancialdebt 110,971 - - - - - 110,971Totalnetfinancialdebt 35,854 (103,508) (64,105) (74,847) (41,534) (109) (248,249)

Thepresentvalueofthefinanceleaseobligationsamountsto4,506thousandsEuro(2009:4,995thousandEuro) .ThesefinanceleasecontractsmainlyrelatetoDEME,thepremisesofthesubsidiaryLouisStevens&CoNVandthebuildingsandmachinesGroupTerrynanditsaffiliates .

27.3. Creditlinesandlongtermsbankloans.

ThegroupCFE(excludingDEME)disposesatDecember31,2010of100millionEurocreditfacility(“ClubDeal”signedinApril2008)ofwhich€15millionusedatendofDecember2010,dueinApril2013 .

Moreover,thegroupCFEdisposesatDecember31,2010ofconfirmedbankcreditlinesfor8 .7millionEuroofwhich5millionEurousedatendofDecember2010 .

AsfarasthefinancingoftheconstructionoftherailwayaxisbetweenZaventemandAntwerpisconcerned,thegroupCFEobtainedarevolvingcreditlineof40millionEuroofwhich33millionEuroutilisedattheendof2010 .

ThebankloansandotherfinancialdebtsmainlyrelatetoDEMEorrealestateprojectscreditfacilitiesandarewithoutrecourseagainstCFE

27.4. Financialcovenants

ThesyndicatedloanattheInternationalFinanceCenterCFEissubjecttospecificcovenantswhicharetakingintoaccountthefinancialindebtsanditsrelationwiththeequityorthefixedassetsaswellasthegeneratedcash-flow .Thesecovenantsarefullyrespected .

28. Informations relative to the financial risk management

28.1. Interestraterisk

Theinterestrateriskmanagementisinsuredwithinthegroupbymakingadistinctionbetweenconcessions,propertymanagement,holding,constructionactivities,multitechnicalactivitiesanddredging(DEME) .

Asfarastheconcessionsandtherealestateandmanagementservicesareconcerned,theinterestrateriskmanagementisperformedconsideringtwohorizons:Ontheonehand,along-termhorizontosecureandoptimizetheeconomicbalanceoftheconcession,andontheotherhand,ashorttermhorizontooptimizetheaveragecostofdebt .Derivativeproductsareusedsuchasinterestrateswapsinordertohedgetheinterestraterisk .Thesehedginginstrumentsequalatmaximumthesamenotionalamountsandthesameduedatesasthehedgeddebts .Fromanaccountingpointofview,theseproductsarequalifiedashedgingoperations .

Asfarasdredgingisconcerned,thegroupCFE,throughitssubsidiaryDEME,hastofaceimportantfinancingsinthecontextofthedredgesinvestments .Theobjectiveistoreachanoptimalbalancebetweenthefinancingcostandthevolatilityofthefinancialresults .DEMEusesderivativeinstrumentsasinterestrateswapsinordertohedgetheinterestraterisk .Thesehedginginstrumentsequalgenerallythesamenotionalamountsandgenerallyhavethesameduedatesasthehedgeddebts .Fromanaccountingpointofview,theseproductswillnotalwaysbequalifiedashedgingoperations .

Theconstruction,multitechnicalandholdingactivitiesarecharacterizedbyanexcessofcashwhichpartiallycompensatethepropertycommitments .Themanagementismainlycentralizedthroughthecashpooling .


Effectiveaverageinterestratebeforeconsideringderivativeproducts

Fixedrate Floatingrate Total

Typeofdebts Amounts Quota Rate Amounts Quota Rate Amounts Qouta Rate

Bankloansandother

financialdebts 16,021 41 .62% 4 .715% 270,873 84 .46% 2 .032% 286,894 79 .87% 2 .180%

Creditlineused - 0 .00% 0 .00% 49,851 15 .54% 1 .933% 49,851 13 .88% 1 .933%

Loansrelated

tofinancelease 22,475 58,38% 4 .374% - 0 .00% 0 .00% 22,475 6 .26% 5 .31%

Total 38,496 100.00% 5.064% 32,724 100.00% 2.017% 359,220 100.00% 2.341%

28.2. Sensibilitytotheinterestraterisk

ThegroupCFEissubjecttotheriskofinterestratesfluctuationonitsresultconsidering:

- cashflowsrelativetofinancialinstrumentsatfloatingrateafterhedging;- financialinstrumentsatfixedrate,recognizedatfairvalueinthestatementoffinancialpositionthrough theresult;- derivativeinstrumentsnonqualifiedashedge .

Nevertheless,thevariationinthevalueofderivativesqualifiedascashflowhedgesdoesnotimpactdirectlytheprofit&lossaccountsandisaccountedforinequity .

ThefollowinganalysisisperformedbysupposingthattheamountoffinancialdebtsandderivativesasperDecember31,2010isconstantovertheyear .

Avariationof50basispointsininterestrateattheclosingdatewouldhavehadasconsequenceanincreaseoradecreaseoftheequityandresultfortheamountsindicatedherebelow .Fortheneedsoftheanalysis,theotherparametershavebeensupposedconstant .

Effectiveaverageinterestrateafterconsideringfloatingderivativeproducts

Fixedrate Floatingrate Floatingratecapped Total

+inflation

Typeofdebts Amounts Quota Rate Amounts Quota Rate Amounts Quota Rate Amounts Quota Rate

Bankloansandother

financialdebts 234,020 80 .32% 3 .538% 52,874 100 .00% 1 .421% 0 0 .00% 0 .00% 286,894 79 .86% 3 .148%

Creditlineused 34,851 11 .96% 5 .345% 0 0 .00% 0 .00% 15,000 100 .00% 2 .001% 49,851 13 .88% 4 .339%

Loansrelated

tofinancelease 22,475 7 .72% 5 .308% 0 0 .00% 0 .00% 0 0 .00% 0 .00% 22,475 6 .26% 5 .308%

Total 291,346 100.00% 3.891% 52,874 100.00% 1.421% 15,000 100.00% 2.001% 359,220 100.00% 3451%

31/12/2010 Result Equity Impactof Impactof Impactof Impactof the the the the sensitivity sensitivity sensitivity sensitivity calculation calculation calculation calculation(thousandEuro) +50bp -50bp +50bp -50bpNoncurrentdebts(+portionduewithintheyear)withvariablerateafteraccountinghedge (261) 261 - -NetshorttermFinancialdebt(*) 323 (323) - -Derivativesnotqualifiedashedge 191 (197) - -Derivativesqualifiedashighlypotentialorcertaincashflow 1,786 (1,113)(*)outofcashatbankandinhand

28.3.DescriptionofcashflowhedgeoperationsInstrumentsqualifiedascashflowhedgesattheclosingdatehavethefollowingcharacteristics:Forconstruction,multitechnical,propertyandholdingactivities:

31/12/2010 <1year Between1 Between3 >5years Notional Fair Fair

and2years and5years value value

(thousandEuro) asset liability

Swapofinterestratereceivefloatingrateandpayfixedrate 26,000 - - - 26,000 74Interestrateoptions(cap,collar)Interestratederivativeshedgeofhighlyprobable:estimatedcashflow 26,000 - - - 26,000 74Swapofinterestratereceivefloatingrateandpayfixedrate59,000 2,000 3,000 - 64,000 7 (1,149)Interestrateoptions(cap,collar)Interestratederivatives:hedgeofcertaincashflow 59,000 2,000 3,000 - 64,000 7 (1,149)31/12/2009 <1year Between1 Between3 >5years Notional Fair Fair



Swapofinterestratereceivefloatingrateandpayfixedrate 26,000 - - - 26,000 - (1,979)Interestrateoptions(cap,collar)Interestratederivativeshedgeofhighlyprobable:estimatedcashflow 26,000 - - - 26,000 - (1,979)Swapofinterestratereceivefloatingrateandpayfixedrate26,000 - 39,000 - 39,000 - (156)Interestrateoptions(cap,collar)Interestratederivatives:hedgeofcertaincashflow 26,000 - 39,000 - 65,000 - (156)


(thousandEuro) Notional Fairvalue

USD Other GBP Other Total USD Other GBP Other Total

USDollar related Pound USDollar related Pound

toUSD toUSD

Forwardpurchase 87,536 (17,532) 9,594 244,514 324,112 632 636 (237) (2,394) (1,363)

Forwardsale - - - - - - - - - -

Thefairvaluevariationofexchangerateinstrumentsisconsideredasaconstructioncostsandisrecognizedatthepercentageofcompletionoftheprojecttowhichtheinstrumentsarerelatedto .Thisvariationispresentedasanoperationalresult .

ThegroupCFE,inparticularthroughitssubsidiaryDEME,isexposedtoexchangeratefluctuationriskonitsresult .

Thefollowinganalysisisperformedsupposingthattheamountoffinancialassets/liabilitiesandderivativesasperDecember,312010isconstantovertheyear .

Avariationof5%ofexchangerate(appreciationoftheEUR)atclosingdatewouldhaveasaconsequenceanincreaseoradecreaseoftheequityandtheresultfortheamountsdisclosedherebelow .Fortheneedsoftheanalysis,theotherparametershavebeensupposedconstant .

Result31/12/2010 Impactofsensitivity Impactofsensitivity calculationdepreciation calculationappreciation(thousandofEuro) of5%oftheEUR of5%oftheEURNoncurrentdebts(+portionduewithintheyear)withvariablerateafteraccountinghedge 85 (82)NetshorttermFinancialdebt (52) 50WorkingCapital (1,130) 1,076

28.5. Riskrelatedtorawmaterials

Rawmaterialsandfurnitureincorporatedintotheworksconstituteanessentialelementofthecostprice .

AlthoughsomemarketsincludepricerevisionsclausesorrevisionformulasandthatthegroupCFEsetsup,insomecases,hedgesoffurnitureprices(gas-oil),theriskofpricefluctuationofrawmaterialscannotbecompletelyexcluded .

DEMEishedgedagainstgas-oilfluctuationsthroughthepurchaseoffueloptions .Thefairvaluevariationoftheseinstrumentsisconsideredasconstructioncostsandisrecognizedatthepercentageofcompletionoftheprojecttowhichtheseinstrumentsarerelatedto .Thisvariationispresentedasanoperatingresult .

Thefairvalueoftheseinstrumentsamountsto-1,713thousandEuroattheendof2010 .

28.6. Creditandcounterpartyrisk

ThegroupCFEisexposedtocreditriskincaseofinsolvencyofitsclients .Itisexposedtothecounterpartyriskinthecontextofcashdeposits,subscriptionofnegotiablesharereceivables,financialreceivablesandderivativeproducts .

Inaddition,thegroupCFEsetupproceduresinordertoavoidandlimittheconcentrationofcreditrisk .

Forlarge-scaleexport,ifthecountryiseligibleandtheriskcoveredbycreditinsurance,DEMEcoversitselfregularlythroughcompetentbodiesinthismatter(OfficeNationalduDucroire) .

Fordredgingactivities

31/12/2010 <1year Between1 Between3 >5years Notional Fair Fair



Swapofinterestratereceivefloatingrateandpayfixedrate 250 23,739 23,989 (430)Interestrateoptions(cap,collar)Interestratederivativeshedgeofhighlyprobable:estimatedcashflow 25 23,739 23,989 (430)Swapofinterestratereceivefloatingrateandpayfixedrate54,535 97,343 69,527 33,655 255,060 210 (6,878)Interestrateoptions(cap,collar)Interestratederivatives:hedgeofcertaincashflow 54,535 97,343 69,527 33,655 255,060 210 (6,878)31/12/2009 <1year Between1 Between3 >5years Notional Fair Fair



Swapofinterestratereceivefloatingrateandpayfixedrate 1,574 12,416 64,323 173,710 252,023 26 (4,402)Interestrateoptions(cap,collar)Interestratederivatives:hedgeofcertaincashflow 1,574 12,416 64,653 173,710 252,023 26 (4,402)

28.4. Exchangeraterisks

Natureoftherisksatwhichthegroupisexposed

ThegroupCFEanditssubsidiariesdoesnotpracticeahedgeonforeignexchangeratesforitsconstruction,propertyandmultitechnicalactivitiesastheirmarketsaremainlysituatedwithintheeurozone .DEMEpracticesexchangeratehedgestakingintoaccounttheinternationalcharacteroftheactivityandtheexecutionofmarketsinforeigncurrency .Currenciessubjectedtoexchangeriskarelistedinnote2 .Whenexchangerateriskrelatedtoariskexposureatoperationallevelwouldoccur,thegrouppolicyconsistsinlimitingtheexposuretothefluctuationofforeigncurrencies .

Thefollowingtabledisclosesthefairvalueandthenotionalamountofexchangerateinstrumentissued:

Repartitionofthelongtermfinancialdebtsbycurrency

Theoutstandingdebts(withoutconsideringfinanceleasedebtswhicharemainlyinEuro)bycurrencyare:

(thousandofEuro) 2010 2009Euro 350,426 276,938USDollar 1,713 1,989Othercurrencies 7,081 5,453Totallongtermdebts 359,220 284,380


Financialinstruments

Thegrouphasdefinedasystemofinvestmentlimitsinordertomonitorthecounterpartyrisk .ThissystemdeterminesmaximumamountseligibleforinvestmentbycounterpartydefinedaccordingtotheircreditnotationspublishedbyStandard&Poor’sandMoody’s .Theselimitsareregularlymonitoredandupdated .

Customers

Regardingtheriskontradereceivables,thegroupdefinedproceduresinordertolimittherisk .Itshouldbenotedthatalargepartoftheconsolidatedsalesisrealizedwithpublicorpara-publicclients .Inaddition,CFEconsidersthattheconcentrationofthecounterpartyriskforclientsislimitedduetothelargenumberofclients .

Inordertoreducethecurrentrisk,thegroupCFEmonitorsregularlyitsoutstandingclientsandadaptsitspositiontowardsthem .Thecreditriskishowevernottotallyeliminated,butislimited .

Theanalysisofthedelayofpaymentattheendof2010and2009arisesasfollows:

AsperDecember,312010 Closing Ofwhich <3 >3& >6& >1year late months <6 <12(thousandofEuro) payment months monthsCustomers–Invoicedincomes 492,449 182,559 70,310 26,941 24,557 60,751Customers–Deductionofguarantee 7,037 3,772 694 1,325 27 1,726Grosstotal 499,486 165,826 71,004 28,266 4,079 62,477Prov .–Customers–Invoicedincomes (10,436) (10,436) (2,253) (8,183)Prov .–Customers–Deductionofguarantee (275) (275) (275)Totalprovisions (10,711) (10,711) (2,253) (8,458)Totalnetamounts 488,775 175,620 71,004 28,266 22,331 54,019

AsperDecember,312009 Closing Ofwhich <3 >3& >6& >1year late months <6 <12(thousandofEuro) payment months monthsCustomers–Invoicedincomes 535,398 178,345 49,475 36,953 48,175 43,742Customers–Deductionofguarantee 8,187 562 364 198Grosstotal 543,585 178,907 49,475 36,953 48,539 43,940Prov .–Customers–Invoicedincomes (9,338) (3,806) (13) (379) (3,414)Prov .–Customers–Deductionofguarantee (283) (283) (283)Totalprovisions (9,621) (4,089) (13) (379) (3,697)Totalnetamounts 533,964 174,818 49,462 36,953 48,160 40,243Theoverdueamountsmainlyrelatetoadditionalworksandsubsequentcontractsmodificationsacceptedbythecustomers,butthatarestillsubjecttobudgetaryinscriptionsorthatarepartofabroadernegotiationsprocess .

28.7. Liquidityrisk

Theliquiditycrunchandthedifficultiestoobtaincreditatacceptableeconomicalconditionsarestillactualconcerns .CFEcouldkeepitspositionsduringtheexercisebymanagingitstreasuryinanintransigentway .Informationsessionsdesignatedforthe150leadingexecutiveshavebeenorganisedwiththetopicsoftheliquidityandthedailymanagementofthetreasury .Proceduresforthetreasurymanagementhavebeenupdatedandthemanagersofsubsidiariesorbranchesareimplicatedinthetreasuryforecastsplanandinitsgoodachievement .

28.8. Costofnetfinancialdebt

(thousandofEuro) 2010 2009Incomefromavailabilities 4,418 4,000Derivativeinstruments (1,816) (930)Interestcharges (15,070) (11,964)Totalconsolidated (12,468) (8,894)Theevolutionofinterestchargesreflecttheevolutionoftheshorttermratesin2010comparedto2009 .

28.9. Carryingamountsandfairvaluebyaccountingcategory

ThefollowingtableindicatesthecarryingamountsandthefairvalueinthebalancesheetforassetsandliabilitiesbyaccountingcategoriesdefinedfollowingIAS39:


31/12/2010 Financialinstrumentsat

fairvaluethroughthe

profitandlossaccount

(thousandofEuro) Financial Financial Derivatives Financial Loansand Assets Fair

instruments instruments designated instruments trade and delaclasse valueof

heldto designated ashedging available receivables liabilities theclass

maturity asbeingat instruments forsales at

fairvalue amortized

throughthe cost

profitand

losses

account

Noncurrentfinancialassets 210 505 34,678 34,678 35,393Investments(1) 505 505Financialloansandtradereceivables(1) 34,678 34,678 34,678Interestratederivatives–cashflowhedges 210 210Currentfinancialassets 312 836,810 836,810 837,122Interestratederivatives–nonhedge 257 257Tradeandotherreceivables 661,292 661,292 661,292Cashmanagementfinancialassets 55 55Cashequivalents(2) 78,140 78,140 78,140Cashatbankandinhand(2) 97,378 97,378 97,378Totalassets 312 210 505 871,488 871,488 872,515Noncurrentfinancialdebts 9,783 6,777 284,104 284,104 300,664Financialdebts 284,104 284,104 284,104Interestratederivatives–cashflowhedges 6,777 6,777Otherderivativesinstruments 9,783 9,783Currentfinancialliabilities 4,787 682,962 682,962 687,749Interestratederivatives–highlyprobableprojectedcashflowhedges 430 430Interestratederivatives–cashflowhedges 1,281 1,281Exchangeratederivatives–cashflowhedges 1,363 1,363Otherderivativesinstruments–nonhedge 1,713 1,713Tradepayablesandotheroperatingdebts 543,299 543,299 543,299Financialdebts 139,663 139,663 139,663Totalliabilities 14,570 6,777 967,066 967,066 988,413(1) Includeintheheadings“othernoncurrentfinancialassets”and“othernoncurrentassets”

(2)Includeintheheading“cashandcashequivalents”

Thecarryingamountsarenotsignificantlydifferentfromthefairvalue .

Thefairvalueofderivativesisdeterminedbasedonvaluationmodelsandinterestratefuturesorforwardpurchaseprice .(“level3”)

Thefairvalueofderivativeswasasfollows:

28.10.Fairvaluemeasurementsoffinancialassetsbylevel

31december2010(thousandofEuro) Level1 Level2 Level3 TotalFinancialassetsatFVTPLDerivativefinancialassets 467 467Non-derivativefinancialassetsheldfortrading 55 55Available-for–salefinancialassetsRedeemablenotesUnlistedshares 505 505Total 1,027 1,027FinancialliabilitiesatFVTPLContingentconsiderationinabusinesscombination (9,783) (9,783)Otherderivativefinancialliabilities (11,564) (11,564)FinancialliabilitiesdesignatedatfairvaluethroughP&LTotal (21,347) (21,347)Therewasnotransferbetweenlevelsintheperiod28.11.ReconciliationofLevel3fairvaluemeasurementsoffinancialassets

31december2010(thousandofEuro) Fairvalue Available Total through forsale profitor loss31december2010 235 550 785Totalgainsorlosses:-inprofitorloss 287-inothercomprehensiveincomeReclassification/transfers (35) (35)Purchases 85 85IssuesDisposals/settlements (95) (95)31December2010 522 505 1,027


29. Operating leases

Thenon-cancellableoperatingleasesofthegroupCFEarethefollowings:

(inthousandEuro) 2010 2009Duewithintheyear 4,239 6,931Morethan1yearbutnothigherthan5years 7,846 10,499Morethan5years 10,972 2,664Total 23,057 20,094

30. Other commitments given

ThetotalamountofcommitmentsgivenotherthanguaranteesfortheperiodendingDecember31,2010is576,005thousandEuro(2009:446,500thousandEuro)andisdetailedbynatureasfollows:

- goodexecution(includingperformancebonds)foranamountof328,550thousandEuro(2009:308,700 thousandEuro)includestheguaranteesaccordedaspartofworkmarkets .Intheeventofconstructor default,thebank(ortheinsurancecompany)willpaycompensationtotheclientforanamountequalto theguarantee .- submissionsfor4,399thousandEuro(2009:20,800thousandEuro)ofguaranteesgiveninthecontext ofadjudicationsrelatedtotheworkmarkets;- advancereimbursementsfor23,383thousandEuro(2009:46,700thousandEuro)regardingguarantees deliveredbythebanktoaclientwhoguaranteestherestitutionofadvancesoncontracts,mainlyatDEME;- deductionsofaguaranteefor49,169thousandEuro(2009:19,600thousandEuro)includesthe guaranteesdeliveredbythebanktoaclientwhotakestheplaceoftheguaranteededuction;- commitmentsgiventoasupplierfor49,175thousandEuro(2009:7,800thousandEuro)asawarranty forthedebtpayment;- othercommitmentsgivenforanamountof121,329thousandEuro(2009:42,900thousandEuro)

31. Other commitments received

CommitmentsreceivedbythegroupCFEotherthanvaluablesecuritiesamountto106,208thousandEuroattheendof2010(2009:84,100thousandEuro) .Thesearecommitmentsreceivedinthecontextofthegoodexecutionofthecontract .

32. Claims

ThegroupCFEisexposedtoanumberofclaimsthatwequalifyasnormalfortheconstructionsegment .Inmostofthecase,thegroupCFEexpectstoconcludeatransactionalconventionwiththeadversepart,whichsubstantiallyreducedthenumberofproceduresin2010 .

ThegroupCFEalsotriestorecoveramountsfromitsclients .Itisneverthelessnotpossibletoestimatethecontingentasset .

33. Related parties

- VINCIConstruction,simplifiedlimitedcompanyunderFrenchlaw,isthereferenceshareholderandholds 6,132,880sharesbeing46 .84%ofthecapitalofthegroupCFE .

- Theamountaccountedforasachargeforfixed-contributionpensionplansorotherbenefitsforkey personnelamountsto3,396 .7thousandEurofor2010(2009:4,099thousandEuro) .Theseamounts include:fixedwages(2,289 .6thousandEuro;2009:2,318thousandEuro),variablewages(910 .8 thousandEuro;2009:990thousandEuro)andothers(796 .3thousandEuro;2009:791,2thousand Euro)ofwhichnon-statepensions,contingencies,workplaceaccidents,accidentsoutsidework,health insurance,CroixJauneandBlanche .

- CFEconcludedaservicecontractwithitsmainshareholderVINCIConstructiononOctober24,2001 . TheremunerationduebyCFEforthiscontractamountsto1,190thousandEuroandareentirelypaid for2010 .

- TherearenotransactionswiththeCEOwithoutprejudicetoitsremuneration .Inthesameway,there arenotransactionswiththecompaniesFrédéricClaesSA,ArtistValleyLtdandI .DealSPRLwithout prejudiceoftheremunerationofthedirectorsrepresentedbythesecompanies .

- Fortheexecutionofsomemarkets,thegroupCFEsetsuptemporarycommercialcompanieswith partners .ThegroupCFEputsalsopeopleandmaterialatdisposaloftheseentitiesorre-invoices expenses .Theamountofotherincomeinvoicedtotheseentitiesamountsto18,903thousandEuroand isdisclosedundertheheading“Revenuefromauxiliaryactivities” .

- Asat31December2010,theCFEgroupexercisedjointcontroloverthefollowingentities:DEMENV, Rent-A-PortNVandtheirsubsidiaries .Theseentities,listedinappendix35,areconsolidatedby applyingtheproportionalintegrationmethod .

34. Major subsequent events

Nothing .


Listofthemostimportantjointlycontrolledentitiesconsolidatedwiththeproportionalmethodofaccounting

Names Headoffice Group’sinterest (in%ofeconomic interest)Belgium AMCALTD Antwerp 28 .33%BARBARAHOFLTD Leuven 40%BRUSSILIABUILDINGLTD Brussels 50%DREDGING,ENVIRONMENTALANDMARINEENGINEERINGLTDanditssubsidiaries Zwijndrecht 50%ESPACEMIDILTD Brussels 20%ESPACEROLINLTD Brussels 33 .33%IMMOANGELTD Brussels 50%IMMOBILIEREDUBERREVELDLTD Brussels 50%LARESERVEPROMOTIONLTD Kapellen 33%PROJECTRKBRUGMANNLTD Antwerp 50%REGENTTWOLTD Brussels 50%RENT-A-PORTNVanditssubsidiaries Antwerp 45%SOUTHCITYHOTELLTD Brussels 20%Luxemburg ELINVESTLTD Strassen 50%PARCRESIDENTIELNEIESCHLTD Strassen 50%Hungary BETONPLATFORMKFT Budapest 50%Qatar CFEMIDDLEEASTCO .WLL Doha 49%Tunisia BIZERTECAP3000SAanditssubsidiary Tunis 25%

Listofentitiesassociatedjointlythemostimportantconsolidatedaccordingtothemethodbytheequitymethod

Names Headoffice Group’sinterest (in%ofeconomic interest)Belgium INVESTISSEMENTLEOPOLD Brussels 24 .14%LOCORAILNV Wilrijk 25 .00%PPPBETRIEBSCHULENEUPEN Eupen 25 .00%PPPSCHULENEUPENSA Eupen 19 .00%TZZ Brugge 38 .90%Netherland COENTUNNELCOMPANYBV Amsterdam 20 .50%

35. Companies owned by the group CFE

Listofthemostimportantconsolidatedsubsidiariesconsolidatedwiththeglobalconsolidationmethodofaccounting

Names Headoffice Group’sinterest (in%ofeconomic interest)Belgium AANNEMINGENVANWELLENNV Kapellen 100%ABEBNV Antwerp 100%ABECONV Brussels 100%AMARTNV Brussels 100%BATIMENTSETPONTSCONSTRUCTIONNV Brussels 100%BATIPONTIMMOBILIERNV Brussels 100%BE .MAINTENANCENV Brussels 100%BENELMATSA Limelette 100%BRANTEGEMNV Aalst 65 .04%CONSTRUCTIONMANAGEMENTNV Brussels 100%EGIDEVANOPHEMNV Brussels 100%ENGEMANV Brussels 100%ETABLISSEMENTSDRUARTSA Péronnes-lez-Binche 100%GROEPTERRYNNV Moorslede 55 .04%INTERNATIONAALFINANCECENTERCFENV Brussels 100%LOUISSTEVENSNV Halen 100%NIZETENTREPRISESSA Louvain-la-Neuve 100%PREDELAPERCHENV Brussels 100%SOGESMAINT–CBRENV Brussels 66 .01%VANDEMAELEMULTI-TECHNIEKNV Meulebeke 64 .95%VANMAERLANTNV Brussels 100%VANDERHOYDONCKSNV Alken 100%VMANV Sint-Martens-Latem 100%VOLTISSA Louvain-la-Neuve 100%ChadCFETCHAD N’Djamena 100%France SOCIETEFRANCAISED’INGÉNIERIEETD’ENTREPRISESFIESA Paris 100%Luxemburg COMPAGNIELUXEMBOURGEOISED’ENTREPRISESCLESA Strassen 100%COMPAGNIELUXEMBOURGEOISEIMMOBILIERECLiSA Strassen 100%COMPAGNIEIMMOBILIEREDEWEIMERSKIRCHSA Strassen 100%SOCIETEFINANCIERED’ENTREPRISESSFESA Strassen 100%SOGESMAINTLUXEMBOURGSA Strassen 66 .01%Hungary CFEHUNGARYCONSTRUCTIONLLC Budapest 100%Netherlands CFENEDERLANDBV Dordrecht 100%GEKABV Dordrecht 100%Poland CFEPOLSKAS .P .ZOO Warsaw 100%BPIOBOZOWA Warsaw 98%Romania CFECONTRACTINGANDENGINEERINGSRL Bucarest 100%Slovakia CFESLOVAKIASTAVEBNAFIRMA Bratislava 100%Tunisia CONSTRUCTIONMANAGEMENTTUNISIASA Tunis 99 .96%ExceptforAannemingenVanWellenNV .whichclosesatNovember30 .allsubsidiarieshaveDecember31asclosingdateofaccounts .


Declaration given on the faithful image given by the annual financial statements and the accompanying management report

(Article12,by2,3°oftheroyalDecreeof14,11,2007relatingtotheobligationsofthetransmittersofallowedfinancialinstrumentstothenegotiationonaregulatedmarket)

Weattest,inthenameandonbehalfoftheCompagnied’EntreprisesCFELTDandundertheresponsibilityforthisone,that,toourknowledge,

1 . thefinancialstatements,benchesinaccordancewiththeapplicableaccountingstandards,giveafaithfulimageoftheinheritance,financialstandingandresultsoftheCompagnied’EntreprisesCFELTDandcompaniesincluded/understoodintheconsolidation;

2 .theannualreportcontainsafaithfultalkontheevolutionofthebusinesses,theresultsandthesituationoftheCompagnied’EntreprisesCFELTDandthecompaniesincluded/understoodintheconsolidation,aswellasadescriptionoftheprincipalrisksanduncertaintieswithwhichtheyareconfronted .

Name: JacquesNinanne RenaudBentégeatFunction: ExecutiveCorportateVicePresident Managingdirector Administrativeandfinancialdirector

February,23th2011

Totheshareholders

Asrequiredbylawandthecompany’sarticlesofassociation,wearepleasedtoreporttoyouontheauditassignmentwhichyouhaveentrustedtous .Thisreportincludesouropinionontheconsolidatedfinancialstatementstogetherwiththerequiredadditionalcomment .

Unqualifiedauditopinionontheconsolidatedfinancialstatements

WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofCompagnied’EntreprisesCFESA(“thecompany”)anditssubsidiaries(jointly“thegroup”),preparedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnionandwiththelegalandregulatoryrequirementsapplicableinBelgium .Thoseconsolidatedfinancialstatementscomprisetheconsolidatedstatementoffinancialpositionasat31December2010,theconsolidatedstatementofcomprehensiveincome,theconsolidatedcashflowstatementandtheconsolidatedstatementofchangesinequityfortheyearthenended,aswellasthesummaryofsignificantaccountingpoliciesandotherexplanatorynotes .Theconsolidatedstatementoffinancialpositionshowstotalassetsof1,880,984(000)EURandtheconsolidatedstatementofcomprehensiveincomeshowsaconsolidatedprofit(groupshare)fortheyearthenendedof63,296(000)EUR .

Thefinancialstatementsofseveralsignificantentitiesincludedinthescopeofconsolidationhavebeenauditedbyotherauditors .Ouropinionontheaccompanyingconsolidatedfinancialstatements,insofarasitrelatestotheamountscontributedbythoseentities,isbaseduponthereportsofthoseotherauditors .

Theboardofdirectorsofthecompanyisresponsibleforthepreparationoftheconsolidatedfinancialstatements .Thisresponsibilityincludesamongotherthings:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror,selectingandapplyingappropriateaccountingpolicies,andmakingaccountingestimatesthatarereasonableinthecircumstances .

Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit .WeconductedourauditinaccordancewithlegalrequirementsandauditingstandardsapplicableinBelgium,asissuedbythe“InstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren” .Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassurancewhethertheconsolidatedfinancialstatementsarefreefrommaterialmisstatement .

Inaccordancewiththesestandards,wehaveperformedprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedfinancialstatements .Theproceduresselecteddependonourjudgment,includingthe

Auditor’s report to the shareholders’ meeting on the consolidated financial statements for the year ended 31 December 2010

assessmentoftherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetofraudorerror .Inmakingthoseriskassessments,wehaveconsideredinternalcontrolrelevanttothegroup’spreparationandfairpresentationoftheconsolidatedfinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstancesbutnotforthepurposeofexpressinganopinionontheeffectivenessofthegroup’sinternalcontrol .Wehaveassessedthebasisoftheaccountingpoliciesused,thereasonablenessofaccountingestimatesmadebythecompanyandthepresentationoftheconsolidatedfinancialstatements,takenasawhole .Finally,theboardofdirectorsandresponsibleofficersofthecompanyhaverepliedtoallourrequestsforexplanationsandinformation .Webelievethattheauditevidencewehaveobtained,togetherwiththereportsofotherauditorsonwhichwehaverelied,providesareasonablebasisforouropinion .

Inouropinion,andbaseduponthereportsofotherauditors,theconsolidatedfinancialstatementsgiveatrueandfairviewofthegroup’sfinancialpositionasof31December2010,andofitsresultsanditscashflowsfortheyearthenended,inaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEUandwiththelegalandregulatoryrequirementsapplicableinBelgium .

Additionalcomment

Thepreparationandtheassessmentoftheinformationthatshouldbeincludedinthedirectors’reportontheconsolidatedfinancialstatementsaretheresponsibilityoftheboardofdirectors .Ourresponsibilityistoincludeinourreportthefollowingadditionalcommentwhichdoesnotchangethescopeofourauditopinionontheconsolidatedfinancialstatements:

–Thedirectors’reportontheconsolidatedfinancialstatementsincludestheinformationrequiredbylawandisinagreementwiththeconsolidatedfinancialstatements .However,weareunabletoexpressanopiniononthedescriptionoftheprincipalrisksanduncertaintiesconfrontingthegroup,oronthestatus,futureevolution,orsignificantinfluenceofcertainfactorsonitsfuturedevelopment .Wecan,nevertheless,confirmthattheinformationgivenisnotinobviouscontradictionwithanyinformationobtainedinthecontextofourappointment .

Diegem,24February2011

Thestatutoryauditor

DELOITTEBedrijfsrevisoren/Reviseursd’EntreprisesBVo .v .v .e .CVBA/SCs .f .d .SCRLRepresentedbyPierre-HuguesBonnefoy

General information on the company and its capital

Identityofthecompany:Compagnied’EntreprisesCFEHeadquarter:Herrmann–DebrouxAvenue40-42,1160BrusselsPhone:+3226611211Legalform:LimitedCompanyConstitution:June,21st1880Duration:undefinedSocialexercise:fromJanuary1sttoDecember31stofeachyearRegisteroftrade:RPMBrussels0400464795–TVA400464795Placewherelegaldocumentationisavailable:atheadquarter

Socialobject(article2ofthestatus)“Thepurposeofthecompanyistostudyandexecuteanyworkorconstructionundertakingwithineachandeveryofitsspecialistareas,inparticularelectricityandtheenvironment,inBelgiumorabroad,singlyorjointlywithothernaturalorlegalpersons,foritsownaccountorforaccountofthirdpartiesbelongingtothepublicorprivatesector .

Itmayalsoperformservicesrelatedtotheseactivities,directlyorindirectlyoperatethemorlicensethemoutorcarryoutanypurchase,sale,rentorleaseoperationwhatsoeverinrespectofsuchundertakings .

Itmaydirectlyorindirectlytakeup,holdorgiveupparticipationsinanycompanyorundertakingexistingnoworinthefuturebywayofacquisition,merger,divisionoranyothermeans .

Itmaycarryoutanycommercial,industrial,administrativeorfinancialoperationsoroperationsinvolvingmovableorimmovablepropertythataredirectlyorindirectlyrelatedtoitspurpose,evenpartially,orthatcouldfacilitateordeveloptheimplementation,eitherforitorforitssubsidiaries .

Theshareholders’meetingmaychangethepurposeofthecompanysubjecttotheconditionsspecifiedinArticlefivehundredandfifty-nineoftheCompaniesCode .”



Statutory balance and statement of comprehensive income

Fortheyearended31December(inthousandEuro) 2010 2009FixedAssets 299,121 279,920Formationexpenses 176 261Intangibleassets 2,050 153Tangibleassets 14,189 13,847Financialfixedassets 282,706 265,659A .Associatedcompanies 280,737 262,794B .Other 1,969 2,855CurrentAssets 296,119 278,281Receivablesaftermorethanoneyear 130 1,288Inventories&contractsinprogress 60,556 55,902Receivableswithintheyear 214,381 196,480-Tradereceivables 163,533 157,417-Otherreceivables 50,848 39,063Short-terminvestments 3,648 4,312Cashandcashequivalent 15,730 14,544Overdueaccounts 1,674 5,754TotalAssets 595,240 558,199Equity 146,911 143,584Capital 21,375 21,375Sharepremiums 62,606 62,606Revaluationsurplus 12,395 12,395Reserves 21,477 21,477Transferredprofit(+)orloss(-) 29,058 25,731Provisionsanddeferredtaxes 64,128 50,919Debts 384,201 363,696Debtsaftermorethanoneyear 58,073 60,584Debtsduewithintheyear 323,884 299,234-Financialdebts 1,000 0-Tradepayables 125,864 124,360-Taxesandadvancepayments 68,074 66,079-Otherdebts 128,946 108,795Overdueaccounts 2,244 3,878Totalliabilitiesandequity 595,240 558,199


Statutory balance and statement of comprehensive income

Fortheyearended31December(inthousandEuro) 2010 2009Operatingincome 434,947 394,464Operatingcharges (438,657) (407,259)-Purchases (303,398) (278,212)-Servicesandothergoods (44,240) (48,437)-Payroll,socialsecuritycostsandpensions (70,977) (72,260)-Depreciations,write-offandprovisions (18,782) (6,117)-Depreciations,write-offandprovisions (1,260) (2,233)Operatingprofit (3,710) (12,795)Financialincome 33,352 38,460Financialcharges (4,805) (4,796)Currentprofitbeforetaxesfortheperiod 24,837 20,869Extraordinaryrevenues 0 0Extraordinarycharges (5,007) (3,969)Profitbeforetaxesfortheperiod 19,830 16,900Taxes(adjustmentsanddeductions) (138) (62)Profitfortheperiod 19,692 16,838

Profitdistribution Profitfortheperiod 19,692 16,838Retainedearnings 25,731 24,604Dividends (16,365) (15,711)Legalreserve 0 0Profittobecarriedforward 29,058 25,731

Analysis of the statement of comprehensive income and the balans

Fixedassetsincreasedwith19,201thousandEurocomparedwiththeendof2009 .Thisvariationisexplainedbytheinvestmentsoftheyear .

Saleshaveincreasedcomparedwiththepreviousyeardrivenbythegrowthofcivilengineeringactivity .Nevertheless,operatingprofitremainsinloss .

Totheshareholders

Asrequiredbylawandthecompany’sarticlesofassociation,wearepleasedtoreporttoyouontheauditassignmentwhichyouhaveentrustedtous .Thisreportincludesouropiniononthefinancialstatementstogetherwiththerequiredadditionalcomments .

Unqualifiedauditopiniononthefinancialstatements

WehaveauditedthefinancialstatementsofCompagnied’EntreprisesCFESAfortheyearended31December2010,preparedinaccordancewiththeaccountingprinciplesapplicableinBelgium,whichshowtotalassetsof595 .240(000)EURandaprofitfortheyearof19 .692(000)EUR .

Theboardofdirectorsofthecompanyisresponsibleforthepreparationofthefinancialstatements .Thisresponsibilityincludesamongotherthings:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror,selectingandapplyingappropriateaccountingpolicies,andmakingaccountingestimatesthatarereasonableinthecircumstances .

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit .WeconductedourauditinaccordancewithlegalrequirementsandauditingstandardsapplicableinBelgium,asissuedbythe“InstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren” .Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement .

Inaccordancewiththesestandards,wehaveperformedprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements .Theproceduresselecteddependonourjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror .Inmakingthoseriskassessments,wehaveconsideredinternalcontrolrelevanttothecompany’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstancesbutnotforthepurposeofexpressinganopinionontheeffectivenessofthecompany’sinternalcontrol .Wehaveassessedthebasisoftheaccountingpoliciesused,thereasonablenessofaccountingestimatesmadebythecompanyandthepresentationofthefinancialstatements,takenasawhole .Finally,theboardofdirectorsandresponsibleofficersofthecompanyhaverepliedtoallourrequestsforexplanationsandinformation .Webelievethattheauditevidencethatwehaveobtainedprovidesareasonablebasisforouropinion .

Auditor’s report to the shareholders’ meeting on the statutory financial statements for the year ended 31 december 2010

Inouropinion,thefinancialstatementsasof31December2010giveatrueandfairviewofthecompany’sassets,liabilities,financialpositionandresultsinaccordancewiththeaccountingprinciplesapplicableinBelgium .

AdditionalcommentsThepreparationandtheassessmentoftheinformationthatshouldbeincludedinthedirectors’reportandthecompany’scompliancewiththerequirementsoftheCompaniesCodeanditsarticlesofassociationaretheresponsibilityoftheboardofdirectors .

Ourresponsibilityistoincludeinourreportthefollowingadditionalcommentswhichdonotchangethescopeofourauditopiniononthefinancialstatements:

–Thedirectors’reportincludestheinformationrequiredbylawandisinagreementwiththefinancialstatements .However,weareunabletoexpressanopiniononthedescriptionoftheprincipalrisksanduncertaintiesconfrontingthecompany,oronthestatus,futureevolution,orsignificantinfluenceofcertainfactorsonitsfuturedevelopment .Wecan,nevertheless,confirmthattheinformationgivenisnotinobviouscontradictionwithanyinformationobtainedinthecontextofourappointment .

–Withoutprejudicetocertainformalaspectsofminorimportance,theaccountingrecordsaremaintainedinaccordancewiththelegalandregulatoryrequirementsapplicableinBelgium .

–Notransactionshavebeenundertakenordecisionstakeninviolationofthecompany’sarticlesofassociationortheCompaniesCodesuchaswewouldbeobligedtoreporttoyou .Theappropriationoftheresultsproposedtothegeneralmeetingisinaccordancewiththerequirementsofthelawandthecompany’sarticlesofassociation .

Diegem,24February2011

Thestatutoryauditor

DELOITTEBedrijfsrevisoren/Reviseursd’EntreprisesBVo .v .v .e .CVBA/SCs .f .d .SCRLRepresentedbyPierre-HuguesBonnefoy


Notes Notes

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Notes

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