Notes to the consolidated financial statements

Basis of presentation

The consolidated financial statements of Saipem have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission pursuant to Article 6 of EC Regulation No. 1606/2002 of the European Parliament and Council of July 19, 2002 and in accordance with Article 9 of Legislative Decree No. 38/20051-2. The consolidated financial statements have been prepared by applying the cost method, with adjustments where appropriate, except for items that under IFRS must be recognized at fair value, as described in the accounting policies section.
The consolidated financial statements include the statutory accounts of Saipem SpA and the accounts of all Italian and foreign companies in which Saipem SpA holds the right to directly or indirectly exercise control, determine financial and management decisions and obtain economic and financial benefits. The consolidated financial statements also include, on a line-by-line proportional basis, data of companies managed under joint operating agreements.
Subsidiaries performing only limited operating activities are not consolidated. Their non-consolidation is therefore not material and does not have a significant effect on total assets, liabilities, net financial position and profit for the year3. These interests are accounted for as described below under the heading ‘Financial fixed assets’.
Immaterial subsidiaries excluded from consolidation, associates and other interests are accounted for as described under the heading ‘Financial fixed assets’.
Consolidated companies, non-consolidated subsidiaries, associates and relevant shareholdings as set forth in Article 126 of Consob Resolution 11971 of May 14, 1999 and subsequent addenda, are indicated separately in the section ‘Scope of consolidation at December 31, 2011’.
After this section, there follows a list detailing the changes in the consolidation area from the previous year.
Financial statements of consolidated companies are audited by independent auditors, who also examine and certify the information required for the preparation of the consolidated financial statements. The consolidated financial statements at December 31, 2011, approved by Saipem’s Board of Directors on March 13, 2012, were audited by the independent auditor Reconta Ernst & Young SpA. As Saipem’s main auditor, Reconta Ernst & Young is fully responsible for auditing the Group’s consolidated financial statements and, to the extent allowed under Italian legislation, for the work of other independent auditors.
Amounts stated in financial statements and the notes thereto are in millions of euros (€ million).

(1) The international accounting standards used in the preparation of the consolidated financial statements are essentially the same as those issued by the IASB and in force in 2011, since the current differences between the IFRS endorsed by the European Commission and those issued by the IASB relate to situations that do not affect the Group.
(2) Disclosures regarding relations with related parties have been prepared pursuant to the provisions of IAS 24 ‘Related Party Disclosures’, which entered into force at the end of 2011 and which provide an expanded definition of related parties and amend the relevant disclosure requirements.
(3) According to the IASB conceptual framework, ‘information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements’.