Financial Statements of ACEA S.p.A. Consolidated Financial ...

Financial Statements of ACEA S.p.A. Consolidated Financial Statements of the ACEA Group for the year 2011

2011 Financial Statements of ACEA S.p.A. Consolidated Financial Statements of the ACEA GROUP

Acea S.p.A. Registered office Piazzale Ostiense 2 – 00154 Rome Share capital 1,098,898,884 euros, fully paid-up Tax code, VAT number and Rome Companies’ Register no. 05394801004 Registered in Rome at REA no. 882486

Prepared by Planning and Finance Editorial coordination External Relations and Communication Graphic design, editing and copyediting Message Photographs Acea archives Fabio Anghelone Printed by LitografTodi Printed in April 2012 2

Contents Report on operations The ACEA Group Corporate bodies

8 10

Significant events in 2011

84

Significant events after the balance sheet date 93

10

Purchase of the Site

93

ACEA Ato5 Arbitration

93

Letter to shareholders

11

Orvieto - SAO Regulator Plan

93

Group operating review

15

Approval of the ACEA Group’s 2012 - 2016 Business Plan

93 94

Equity investments held by Directors and Statutory Auditors

Networks Industrial Area

15

Energy Industrial Area

36

CIP (Interdepartmental Price Commission) 6/92 incentives - ARIA

Water Industrial Area

46

Breakdown of ATI 1 and 2 tariff

94

Environment Industrial Area

55

ACEA Ato5 2012 tariff determination

94

63

Campania Region-EASV-GORI settlement agreement

95

Economic and financial review ACEA Group economic results

64

Risultati patrimoniali e finanziari

71

Risks and uncertainties

96

Regulatory risks

96

Legislative risks

98

81

Strategic risks

98

ACEA S.p.A activities

81

Photovoltaic risks

100

Performance of the international stock markets and of the ACEA share

81

Operational risks

100

Litigation risks

102

Other information

Operating (and financial) outlook

109

Resolutions on profit for the year and distribution to shareholders

111

3

Contents Financial Statements of ACEA S.p.A. Income Statement

114

Report of the Board of Statutory Auditors

199

Statement of Comprehensive Income

114

Independent auditors’ report

210

Balance Sheet - Activities

115

Balance Sheet - Liabilities

116

Certification of separate financial statements in accordance with art. 154-bis of Legislative Decree 58/98

212

Cash Flow Statement

117

Statement of Changes in Shareholders’ Equity 118 Notes Form and structure of the financial statements for the year ended 31 December 2011 120 Accounting standards and policies

120

Notes to the income statement

133

Notes to the balance sheet

143

Information on the Balance sheet

157

Related party transactions

168

Update on major disputes and litigation

171

Additional disclosures on financial instruments and risk management policies 179 Related Party Transactions

184

1. Analysis of net debt

186

2. Statement of movements in investments at 31 December 2011

187

3. Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006

189

4. Non-recurring material transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 194 5. Positions or transactions deriving from unusual and/or exceptional transactions 195 6. Segment information (IAS 14)

4

196

Contents Consolidated Financial Statements Consolidated Income Statement

216

Annexes

350

A. List of consolidated companies

352

217

B. Reconciliation of shareholders’ equity and net profit – consolidated

354

Consolidated Balance Sheet

218

C. Remuneration of Directors, Statutory Auditors and Key Managers

219

355

Consolidated Cash Flow Statement

D. Information provided pursuant to CONSOB Ruling no. 6064293

357

E. Segment information: balance sheet and income statement

362

Consolidated Statement of Comprehensive Income

Statement of Changes in Consolidated Equity 220 Notes Basis of Presentation and Consolidation

221

Accounting standards and policies

222

Accounting standards, amendments, interpretations and improvements applied from 1 January 2011

232

Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance by the Group 233 Consolidation policies and procedures

236

Financial Highlights of Companies accounted for under Proportionate Consolidation 240 Segment information

241

Notes to the Consolidated Income Statement

241

Consolidated net revenue

242

Notes to the Statement of Consolidated Balance Sheet

268

Acquisition of the Acea Energia Holding Group

302

Service Concession Arrangements

305

Related Party Transactions

321


326

F. Financial Highlights of Companies accounted for under Proportionate Consolidation 374 G. List of significant investments at 31 December 2011 - art. 120, paragraph 4, Legislative Decree no. 58/98

376

Independent auditors’ report

388

Certification of consolidated financial statements in accordance with art. 154-bis of Legislative Decree 58/98

390

Corporate governance and ownership structure report

392

Additional disclosures on financial instruments and risk management policies 336 Commitments and contingencies

348

5

Report on operations

The ACEA Group The share capital of ACEA S.p.A. at 31 December 2011 is broken down as follows:

15%

Municipality of Rome Market

12% Caltagirone

51%

GDF Suez

22% * The chart only shows equity investments of more than 2%, as confirmed by CONSOB data.

8

2011 | Report on operations

As at the same date, the Group structure comprises the following main companies:

Acea Holding

water

96%

Acea Ato 2

94%

Acea Ato 5

96%

Sarnese Vesuviano 37% Gori

Energy

Environment

100% Acea Energia

100% Acea Risorse

Holding

100% Acea Produzione 100% Acea Energia

100% Acea8cento

100% Crea Gestioni 40%

Umbra Acque

55%

Acque Blu

55%

Acea Gori Servizi

85%

Ombrone

e Impianti per l’Ambiente

84% Aquaser 50% Ecomed 50% Apice

40% Acquedotto del Fiora

69%

Acque Blu Arno Basso 45% Acque

69%

Acque Blu Fiorentine 40% Publiacqua

35%

Networks

100% Acea Reti e Servizi Energetici

Intesa Aretina

50% Acea Distribuzione

46% Nuove Acque

1%

Ingegnerie Toscane

51% Ecogena

100% Acea Illuminazione

Other services

50%

100% LaboratoRI

Pubbllica

25%

Consorcio Agua Azul

51%

Aguazul Bogotà

Acea Distribuzione

100% Acea Dominicana


9

Corporate bodies Board of Directors

1

Giancarlo Cremonesi

Chairman

Marco Staderini

Chief Executive Officer

Paolo Giorgio Bassi

Director

Francesco Caltagirone

Director

Jean Louis Chaussade

Director

Aldo Chiarini*

Director

Giovanni Giani**

Director

Paolo Di Benedetto

Director

Luigi Pelaggi

Director

Andrea Peruzy

Director

* resigned on 10 November 2011 ** appointed by the Board of Directors at the meeting on 29 November 2011

General Manager Paolo Gallo

Board of Statutory Auditors Enrico Laghi

Chairman

Corrado Gatti

Standing Auditor

Alberto Romano

Standing Auditor

Gianluca Marini

Alternate Auditor

Leonardo Quagliata

Alternate Auditor

1

Independent Auditors Reconta Ernst & Young S.p.A.

Executive Responsible for Financial Reporting Giovanni Barberis

1 (appointed by the Shareholders’ Meeting on 29 April 2010)

10


The Chairman

Letter to shareholders Within the current complex recessionary phase, the Italian economy continues to be affected by fears resulting from government debt conditions in certain Euro area countries, representing a potential factor of vulnerability for the European banking system and markets, which continue to feel the effects of these tensions, sowing the seeds of the financial crisis that has severely impacted Italy’s production system and its businesses. This economic phase has led to an extremely complex scenario, which has forced Acea to adopt prudential policies, while attempting to maintain a high capacity for producing, innovating and building the future of the company, and only thanks to more than one hundred years of experience, representation of end users’ interests, values which characterise Acea’s links with the local area, has this situation turned out to have a less significant impact for the Group than for other companies. For these reasons, Acea has managed to create value whilst retaining economicfinancial solidity, based on the efficiency of its portfolio of assets, essentially built upon the right mix of regulated businesses and on the soundness of its investment decisions, always bearing in mind the role of guaranteeing and representing the interests of the communities served. As confirmation of this, in March, Acea signed an agreement with Roma Capitale for the adjustment of the Public Lighting Service Contract. The company will invest in the public lighting network with new lighting points, in order to ensure the mobility and safety of the city’s citizens. The key points of the renegotiations are the extension of the contract to 2027, consistent with the term of the concession arrangement, and the review of quality and quantity parameters. Investments in 2011 were retained significantly high. In fact, Acea invested more than 413 million euros, in order to strategically maintain competitiveness in the market and service quality. More than 230 million euros of this investment (roughly 56% of the total and up over the previous year) will ensure the forecast tariff development. Particular attention will be focused on the distribution of electricity and Renewable Energy (31%), both photovoltaic and cogeneration, in order to guarantee an improvement in quality and in service continuity. The Group has made a significant

www.acea.it 2011 | Report on operations

11

contribution to environmental sustainability, by allocating 5% of its investments to the Environment Segment, in which the Group intends to increase and develop its waste-to-energy capability, widen its capacity in the disposal of biological sludge, in biomass and special waste treatment. Roughly 5% of investments will be made in the Energy segment, for the process of revamping of thermoelectric and hydroelectric plants, while 11 million euros (around 3%) will be pumped into the Group’s IT development and maintenance of its property portfolio. Investments will continue at the same rate over the coming years too, as set out in the 2012-2016 Business Plan approved on 20 March 2010, which shows a healthy balance between management, efficiency and development, identifying Acea as a vital company that can look to the future with a reasonable degree of optimism, with the objective of consolidating existing operations and grasping the opportunities presented by the market. The year 2011 also the completion of the dissolution of the energy partnership with GDF Suez. Following said agreement - signed on 31 March - the Acea Group acquired full control of electricity and gas sales activities, as well as ownership of all plants transferred in due course under the joint venture. Investments in trading and electricity generation companies were instead sold to GDF Suez. Furthermore, it seems appropriate to reflect on the referenda called concerning the management of water resources, to which Italians were called to voice their opinions in June. It is well-known that the referendum abrogated the legislative structure concerning assignment methods and the management of economically important local public services and the loss of the return on guaranteed invested capital, in respect of criteria for the determination of the integrated water service tariff. For said reason, the organisational structure regarding local public services then witnessed a new raft of changes. As on similar occasions in previous years, these were characterised more by an occasional nature than by the presence of a clear industrial policy theme. However, the introduction of regulation of the integrated water service at domestic level represented a glimmer of light, which allows us to believe that the trend can be reversed, through the assignment of said activity to the existing Italian Authority

12


for Electricity and Gas, whose independence means it possesses the quality lacking in the dissolved Supervisory Committee for the Use of Water Resources (Conviri). AEEG shall henceforth be responsible, which is not without its difficulties, for fulfilling the functions of regulation and control of water services and, in particular, of stabilising the industry’s new tariff method. This move should cushion the otherwise harmful impact of the outcome of the referendum on the return on invested capital. The electricity sector also suffered from the conversion to law of the decree on the “manovra correttiva bis” (corrective financial measure) which makes provision for the amendment to the IRES surcharge regulations, extending this tax to other operators in the sector and increasing the rate. In spite of this, in 2011, the company maintained high levels of profitability, thanks to the contribution of all industrial segments and excellent cash flow management, hence reaching the streamlining objectives set forth in the ambitious budget, consolidating its national leadership in the water segment and achieving growth thanks to the input from the photovoltaic and environment segments. As a result, in November, advances on 2011 dividends were distributed, equal to 0.28 euro per share.

In this regard, an overview of the 2011 income statement results may be useful. The financial statements for the year under review closed with consolidated revenues of 3,538.0 million euros and a gross margin (Ebitda) of 655.8 million euros, down slightly over the previous year due to a change in the basis of consolidation resulting from the termination of the joint venture with GdF-Suez on 31 March 2011. The Group’s operating profit (Ebit) came to 222.6 million euros. Consolidated net profit after disbursements to third parties totalled 86.0 million euros, in line with the expectations, which incorporate not only the effects of the aforementioned dissolution of the joint venture, but provisions relating to the companies Gori and Acea Ato 5, prudentially recognised to cover any regulatory risks while awaiting formalisation of the agreements between the Area Authority and the Campania Region for the determination of the new tariffs.


13

Lastly, at the start of 2012, the historic site in Piazzale Ostiense was acquired, grasping the opportunity presented by disposal, at a price of 110 million euros. The aforegoing demonstrates the profound commitment and effort Acea’s management has dedicated, and continues to devote, to developing and sustaining the growth of the Group, even at an extremely difficult time such as the current one. Your company’s business strength and the sound results achieved up until now, combined with a strong financial structure, allowed as many as three Ratings Agencies to assign Acea, at the end of this financial year, a rating that is equal to or higher than that assigned to Italy. Lastly, I would like to offer my thanks to the Board of Directors, Board of Statutory Auditors, all the management and employees for the constant support that they have, as a group, dedicated to this company, with so much commitment and skill. Giancarlo Cremonesi

14


Group operating review Networks Industrial Area Electricity demand in Italy in 2011 increased by 0.6%

Domestic production met 86.3% of Italy’s electricity re-

compared to the previous year. Peak demand on the Ital-

quirements, whilst the remaining 13.7% was covered by

ian electricity network stood at 53,668 MW, recorded on

imports. As regards the contributions to total production,

13 July 2011, at 12.00. The figure was around 2,757 MW

64.7% came from thermoelectric plants, 14.3% from hy-

lower (down 4.89%) than the peak recorded in the previ-

droelectric sources and, lastly, 7.3% from geothermal

ous year, equal to 56,425 MW, recorded on 16 July 2010,

and wind/PV sources.

at 12.00.

1.1.2011 31.12.2011

1.1.2010 31.12.2010

Change 2011-2010

GWh

GWh

%

–11.4

Net production Hydroelectric

47,672

53,795

217,369

220,984

–1.6

Geothermal

5,307

5,047

+5.2

Wind power

9,560

9,048

+5.7

Thermoelectric

Photovoltaic Total net production (of which: CIP 6 production)

9,258

1,874

+394.0

289,166

290,748

–0.5

26,639

36,939

–27.9

Import

47,349

45,987

+3.0

Export

1,723

1,827

–5.7

45,626

44,160

+3.3

2,518

4,453

–43.5

332,274

330,455

+0.6

Balance of imports Consumption for pumping systems Electricity demand


15

Electricity transmission

Peak demand on the Acea Distribuzione network in 2011

In 2011, the total electricity injected into ACEA Distribuzione’s

stood at 2,361 MW, and was recorded at 1.00 p.m. on 13

network (from the National Transmission Grid, from gener-

July 2011. This is down approximately 37 MW, or 1.53%, on

ating plants directly connected to the ACEA Distribuzione

the peak of 2,398 MW recorded in the same period in 2010,

network and from ENEL Distribuzione’s interconnected net-

at 1.00 pm on 20 July 2010. The year saw a considerable in-

work) recorded a decrease of 0.24% in 2011 compared to the

crease in the number of insignificant plants2 installed and the

amount of energy injected during the same period of the pre-

associated nominal power in relation to 2010 (up 76%).

vious year1.

200 73,83

MWp

150

119,1

100

31,58 12,60

50 3,71

0

17,05

213,0

4,41

22,5

33,75

2006

2007

potenza installata

41,94

42,78

2008

2009

199,5 98,32

55,93

2010

2011

di cui fotovoltaico

Electricity demand recorded on Acea Distribuzione’s net-

10.01%). As regards the rest of 2011, weather condi-

work in 2011 was affected in various ways by weather

tions had a significant impact in September, causing an

conditions (with particular relevance in July, September

increase in electricity demand (up 6.98%) in response to

and December), and a lower number of working days

warmer weather, and in December, in which the reduc-

(two less working days than the last calendar year).

tion in the load (down 3.37%) was due to milder tem-

Weather conditions affected demand significantly in May

peratures and one less working day.

and June, during which increases in temperature led to

The graph below shows the trend in the reference tem-

rises of 2.65% and 3.65% respectively in electricity de-

perature4 recorded in 2011 and the average monthly dif-

mand. The opposite effect was recorded in July in which

ference of said parameter calculated in the correspond-

milder weather conditions and less working days than in

ing months of 2011 and 2010.

3

2010 generated a reduction in the electricity load (down

1 Data provided at the end of 2010. 2 An insignificant plant is one with a total power of less than 10 MVA. 3 The calendar is assessed by counting the number of weekdays, holidays and pre-holidays distributed throughout the year. 4 The reference temperature (TDR) is defined as the weighted average of the daily temperature highs and lows which better reflects the effect of the weather on electricity demand. The reference temperature trend shown in this report was drawn up on the basis of updates to historical series’ carried out following the drafting at the end of the half in 2010.

16


MONTHLY PERCENTAGE VARIATIONS – “RAW SERIES, PURIFIED SERIES 2011 Vs. 2010

January

February

March

April

May

June

July

August September

October November December

Total

"RAW" SERIES

-0.96%

-0.99%

0.93%

-0.69%

2.65%

3.65%

-10.01%

2.78%

6.98%

-0.55%

-0.67%

-3.37%

-0.24%

"PURIFIED" SERIES

-0.47%

-0.70%

1.74%

1.55%

2.04%

1.43%

-2.56%

1.91%

0.33%

0.51%

0.17%

1.76%

0.61%

The following table shows the monthly sequence of electricity injected into ACEA Distribuzione’s network during 2011, together with the same series for 2010: ELECTRICITY INJECTED INTO ACEA’S NETWORK [GWh]

January

February

March

April

May

June

July

August September

October

November December

Total

2011

1,033.65

944.31 1,004.66

887.02

944.15 1,008.09

1,076.67

996.16

1,039.26

955.63

963.55

1,018.78

11,871.93

2010

1,043.70

953.76

893.22

919.74

1,196.37

969.21

971.48

960.87

970.03

1,054.31

11,900.72

995.44

972.59

These electricity amounts were intended to cover the

injections of energy between the ACEA Distribuzione’s

needs of the utilities supplied by the above-mentioned

network and ENEL Distribuzione’s networks at some LV,

network, i.e. the customers of the free and protected

MV and HV interconnection points.

markets and of the market subject to additional safe-

With regard to FY 2011 and as compared to 2010, the

guards, as well as the so-called underlying distributors,

following table illustrates the above-mentioned aspects,

which are represented by the electricity company of the

with further specification of the contribution given by Ac-

municipality of Saracinesco. There are also sales and

quirente Unico S.p.A. and by the import supply:

Market subject to additional safeguards

Free market

Underlying distributors

Total

GWh

GWh

GWh

AU Source

Other Sources

GWh

GWh

2011

3,513.95

432.38

7,922.74

2.86

11,871.93

2010

4,117.32

432.38

7,348.17

2.85

11,900.72

With regard to import supply, as from 1 January 2002

and Gas, based on the Decree issued by the Ministry for

ACEA Distribuzione signed an agreement with the Vati-

Productive Activities – now the Ministry for Economic

can City State (that was renewed on 5 August 2011) in

Development - that sets out the assignment of transmis-

force from 1 January 2012 to 31 December 2022, for the

sion capacity shares to the interconnection with foreign

optimised management of imported electricity assigned

countries for the Vatican City State and the Republic of

to it (established by Terna, in accordance with the indi-

San Marino).

cations provided by the Italian Authority for Electricity


17

Service quality

Resolution ARG/elt 168/08 for the delivery of continu-

On 24 December 2007 the Italian Authority for Electricity

ity data and the calculation of starting and trend lev-

and Gas issued Resolution no. 333/07 regarding the third

els for distribution companies, pursuant to paragraph

regulatory period from 2008 until 2011.

30.1 of the Integrated Code, which opted for three-

Resolution no. 333/07 introduces and governs four differ-

year levels of continuity indicators, instead of two-

ent types of regulation, amending the two pre-existing ones and supplementing the current legislation: 1. Regulation of prolonged or extended outages;

vided for with regard to service continuity, which are

2. Individual standards regarding the number of out-

relevant for the procedure concerning service conti-

ages for MV customers; 3. Regulation of the total duration of long outages without advance warning; 4. Regulation of the average number of long and short outages.

nuity for 2008; • exclusion of outages due to thefts from electricity distribution plants, from Title 7 of the Integrated Code. Reporting activities in 2010 were concluded within the deadlines established beforehand by the Regulator (by

On 27 April 2009, the Authority then issued consulting

31 March 2011).

document DCO 9/09 “Electricity distribution service con-

The results of the aforesaid reporting were ratified by

tinuity - Urgent review of some provisions concerning

AEEG by means of resolution ARG/elt 170/11 of 24 No-

the regulation of the number of outages without advance

vember 2011.

warning and the 2008-2011 trend levels”.

It should also be noted that, on the 12th and 13th of July

Following the end of the consultation process, the Au-

2011, an AEEG inspection office carried out an inspection

thority issued Resolution ARG/elt no. 76/09 that imple-

at ACEA Distribuzione regarding the timely recording of

ments the observations received from the entities con-

data relating to continuity of the electricity service.

cerned, by amending Annex A of Resolution no. 333/07

The inspection concluded positively (in this regard, see

of 19 December 2007, with the postponement of the

also Resolution ARG/elt 170/11 of 24 November 2011),

relevant deadlines for the termination of the procedure

with no penalties for the company.

pursuant to paragraph 22.4, Annex A for 2008 and the deadlines pursuant to point 2 of Authority Resolution no.

Regulatory Framework

ARG/elt 168/08 of 25 November 2008.

12 January 2011 – Consulting document DCO

The main changes, with respect to the previous regula-

1/11: Automatic compensation for the seller’s

tory period, can be summarised as follows:

failure to periodically issue invoices for electric-

• change in the selection rule of exceptional long out-

ity and natural gas for reasons attributable to

ages starting in “periods of perturbed conditions”,

the distributor.

with the introduction of a threshold for the number of

The Italian Authority for Electricity and Gas proposed

outages that is necessary in order to identify the “peri-

the introduction of compensation on the account of dis-

ods of perturbed conditions” (upper limit), by making a

tribution companies in case the failure to provide me-

distinction between low voltage and medium voltage;

tering data does not allow the seller to respect the bill-

• exclusion of all long outages without advance warning

ing frequency. The Italian Electricity and Gas Authority

which start in periods of perturbed conditions, with

proposes a limitation of the charges on the distributor’s

regard to the number of outages, similarly to the pro-

account only to the cases of switching, with failure to

visions in force for short and temporary outages;

provide the items below by the 20th day of the month

• extension of the above-mentioned provisions to the duration of outages, excluding all long outages starting in periods of perturbed conditions; • postponement of the deadlines set out in point 2 of

18

year levels; • postponement of the deadlines and obligations pro-


related to the switching date: • metering data defined by the regulation according to the treatment (hourly treatment, time period treatment or single time treatment);

• historical metering data referred to the period be-

tion to call auditions and make documents available for

tween the thirteenth and the second month before

consultation to acquire useful knowledge for the cre-

the switching date.

ation and adoption of the provisions.

With reference to the effectiveness of the compensation on the distributors’ account, the Italian Electricity

7 February 2011 – Imposition of a fine pursu-

and Gas Authority proposes a differentiation based on

ant to article 2, paragraph 20, letter c), of law

the billing frequency defined in contractual conditions,

no. 481 of 14 November 1995, towards A2A Reti

for the provision to be effective:

Elettriche S.p.A (Resolution VIS 15/11), Terna –

• from 1 September 2011 for final customers with a

National Electricity Grid (Resolution VIS 16/11),

billing frequency of at least twice a month; • from 1 March 2012 for final customers with monthly billing.

Enel Distribuzione S.p.A. (Resolution VIS 17/11), Acea Distribuzione S.p.A (Resolution VIS 18/11) and Gelsia Reti S.r.l. (Resolution VIS 19/11). Following the investigation started with resolution VIS

31 January 2011 - Resolution ARG/elt 6/11: Launch

171/09, the Italian Electricity and Gas Authority im-

of procedure for setting up arrangements on the

posed fines on some distribution companies, including

tariffs for the electricity transmission, distribu-

Acea Distribuzione and Terna, for breaches that pre-

tion and metering services and the economic

vented the correct provision of the dispatching service

conditions for delivery of the connection servic-

in the years 2005, 2006 and 2007.

es, for the regulatory period 2012-2015.

For the distribution companies, the breaches concern:

Aside from the application of a single national tariff,

• the management of supply points’ customer infor-

the resolution to launch the procedure of tariff regulation for the fourth regulatory period revealed the Italian Electricity and Gas Authority’s intention to reconsider

mation; • the aggregation of withdrawal measurements for the dispatching service.

a tariff regulation by company for ascertained distribu-

A fine of 571,000 thousand euros was imposed on ACEA

tion costs. To this end, the Italian Electricity and Gas

Distribuzione.

Authority included among its objectives the definition of provisions regarding:

8 February 2011 – Resolution ARG/elt 12/11: Mea-

• verification of the investment capitalisation and ef-

surement and ranking of the pilot projects re-

ficiency criteria; • the investment effectiveness and indebtedness monitoring indicators. Furthermore, the provision on the tariff will include issues relating to:

garding the active networks and smart grids, under resolution ARG/elt 39/10 by the Italian Electricity and Gas Authority of 25 March 2010. The Italian Electricity and Gas Authority identified the “pilot projects” inclusive of automation, protection and

• the technical and economic regulation of reactive

control systems for active MT networks (smart grids)

energy transports on transmission and distribution

connected with the incentive treatment, which for 12

grids;

years are guaranteed a 2% increase in the return on the

• the increase in the power that can be taken in low load hours by domestic users; • the promotion and development of the smart grids under resolution ARG/elt 39/10;

invested capital in the tariff. ACEA Distribuzione presented a pilot project that was admitted to the incentive treatment, regarding a significant portion of its secondary distribution network,

• the implementation of special provisions and the

which envisages the predisposition of an accumulation

start of the pilot projects to recharge electric vehi-

system integrated with a recharge station for electric

cles under resolution ARG/elt 242/10.

vehicles (corporate fleets) and features a solar power

The Italian Electricity and Gas Authority stated its inten-

plant; in particular the project:


19

• ranked 2nd after the Enel Distribuzione project, for the indication of the expected benefits, scoring 73 points;

tomatic reading of the customer who takes over the POD. In addition, the Italian Electricity and Gas Authority in-

• ranked 4th with reference to the priority indicator

tends to start some actions to attain and maintain the

(ratio between expected benefits and cost of the pi-

alignment of the information contained in the master

lot project), with 660 points.

data of sellers and distributors, in such a way as to al-

In detail, the Italian Electricity and Gas Authority assessed that the pilot project presented by ACEA Dis-

low the correct population of the Integrated Information System (so-called SII).

tribuzione is characterised by: • a considerable level of innovation, particularly with

21 April 2011 – Consulting document DCO 13/11:

reference to the enhancement of the automation

Tariff adjustment of power and reactive energy

and remote-control system, which will allow a sig-

withdrawals and inputs in the supply points and

nificant improvement of continuity levels and service

interconnection points between networks.

quality;

AEEG proposed measures substantially revising the

• fair feasibility times;

regulation regarding power and reactive energy ab-

• a high level of repeatability on a large scale.

sorption, aimed at making end customers responsible by having them reduce withdrawals of reactive energy

16 March 2011 – Consulting document DCO 4/11:

by installing power factor correction equipment.

Completion of the regulation concerning the ex-

To this end, it is proposed that the power factor thresh-

ecution of the electricity and natural gas sales

old value for the application of fees for reactive energy

contracts in case of supply/delivery points al-

absorption be increased.

ready active and of alignment of the data in the

Furthermore, the fee should compensate costs incurred

availability of the various operators.

by distribution companies, in order to cover:

The Italian Electricity and Gas Authority presented pro-

• the effects on network infrastructures, with reve-

posals referring to the electricity and gas sectors in

nues included within the obligation of effective rev-

order to define procedures that facilitate the subscrip-

• the effects caused by the increase in network losses,

change of the identification data on the supply point

with revenues included within the balance of loss dif-

(so-called transfer).

ferential equalisation.

In particular, it proposes the introduction of the follow-

AEEG assesses that approximately 20% of the total fee

ing provisions:

may be attributed to compensation for the increase in

• request to subscribe a sales contract certifying the

network losses, and the remaining part to the compen-

ownership of the POD through the indication to the

sation of infrastructure costs.

seller of the registration details of the lease agree-

The provisions should become effective as of 1 January

ment and/or land registry details of the property sub-

2016, in order to enable:

ject to supply;

• end customers to procure and install the power fac-

• withdrawal from a sales contract compulsorily asso-

tor correction equipment;

ciated to a POD deactivation request, except for the

• distribution companies to adapt their invoicing sys-

cases of change in supplier (to be treated as switch-

tems as well as to reprogram the meters that are

ing) or data of the end customer (to be treated as

currently installed.

activation); • collection of the metering data for invoicing purposes, carried out by the distribution company with electronic meters or by the new seller through au-

20

enues for the distribution service;

tion by an end customer of a sales contract in case of


28 April 2011 – Resolution ARG/elt 52/11: Launch

revenue equalisation amounts for the low-volt-

of the procedure to review the conventional per-

age metering service for the year 2008.

centage factors of electricity loss on the distri-

With reference to the equalisation of revenues from the

bution and transmission networks.

low-voltage metering service, AEEG noted:

AEEG intends to review the conventional loss factors

• the adjustment amount compared to the amount

based on changes made to some system parameters

determined by resolution ARG/elt 40/10 for the year

which had determined their establishment in 2004.

2008;

Specifically, AEEG deems that the percentage factor re-

• the amount set forth for the year 2009.

view must account for:

ACEA Distribuzione’s adjustment for the year 2008

• the development of distributed generation, which

was 1,304,693.04 euros and for the year 2009 was

could cause an increase in network losses; • the process of streamlining electrical networks, also

1,238,361.03 euros, for a total of 2,543,054.07 to be received.

from the operational point of view, which caused a decrease in network losses.

7 July 2011 – Consulting document DCO 25/11: Implementation of article 20 of Decree of the

26 May 2011 - Resolution VIS 60/11: Start-up of a

Ministry of Economic Development, in agree-

procedure against ACEA Distribuzione S.p.A. for

ment with the Ministry for the Protection of the

the investigation of a violation regarding record-

Environment, Land and Sea, dated 5 May 2011,

ing electricity distribution service outages.

for the purposes of incentivisation of the pro-

A penalty proceeding has been initiated against ACEA

duction of electricity from photovoltaic plants.

Distribuzione for the alleged violation of the following

AEEG formulated proposals to implement the provi-

regulations regarding recording:

sions set out in article 20 of the Interministerial Decree

• the beginning of long outages without advance warn-

dated 5 May 2011 (so-called Fourth Energy Account),

ing originating on the LV network by noting the date,

with particular reference:

hour and minute of the first report of the outage, also

• to the coverage of resources for the provision of in-

by telephone call, on the dedicated list; • all of the telephone calls received to report failures, also if an outage did not occur (requests). The AEEG investigation is taking place following a complaint referring to a failure on the LV network (which occurred between 22 and 23 August 2009). The complaint

centives and for the management of the activities defined by the decree, particularly as regards the preparation of unique master records for photovoltaic plants by GSE (National Grid Operator); • to making network operators responsible again for the metering service for energy produced;

was forwarded to ACEA Distribuzione by the Consumer

• to the remuneration of certification activities as re-

Protection Office, which had requested information

gards the completion of works performed by net-

from that company about how reports of failures from

work operators.

end customers were managed. ACEA Distribuzione replied indicating, inter alia, that requests for reports al-

13 July 2011 – Resolution ARG/elt 97/11: Adjust-

ready entered are not managed in the system.

ments to Tables 1 and 2 of AEEG resolution ARG/ elt 74/11 of 16 June 2011, relating to the recal-

16 June 2011 - Resolution ARG/elt 74/11: Deter-

culation of the balance of revenue equalisation

mination of the amount of revenue equalisation

amounts for the low-voltage metering service

for the low voltage metering service pursuant

for the year 2008.

to article 40 of Annex A of AEEG resolution no.

AEEG adjusted the balancing amounts relating to me-

348/07 of 29 December 2007 (Transport Code) for

tering equalisation for the year 2008 set out by resolu-

the year 2009. Redetermination of the balance of

tion ARG/elt 74/11.


21

With respect to the previous calculation, the amount

- enabled for the timely recording of low voltage cus-

in favour of Acea Distribuzione increased by 2,783 eu-

tomers affected by outages - on 31 October 2011, the

ros, given that in the previous resolution the penalty

deadline was set, within which distribution companies

amount was charged twice, whose 2008 equalisation

that presented applications for the incentive for reach-

amount is now 1,307,476 euros.

ing the aforementioned objective can waive the incentive, through written communication to the Authority’s

4 August 2011 – Consulting document DCO 32/11:

Consumer and Service Quality Department.

Regulations governing the functioning of the Indemnity System pursuant to Annex B of AEEG

15 September 2011 – Consulting document DCO

resolution ARG/191/09 of 11 December 2009.

35/11: Launch of the Integrated Information Sys-

AEEG formulated certain proposals for the completion

tem (IIS).

of regulations governing the indemnity system, tar-

AEEG set out the process for activation and the imple-

geted, in particular, at protecting sellers - as incoming

mentation of the IIS, with particular reference to the

sales operators - from the credit risk deriving from the

different phases of implementation of the process and

acquisition following the switching of an end customer

services offered by the IIS in the initial phase (so-called

from which the Cmor indemnity payment has not been

phase 1).

collected, which said customer would have had to pay

DCO 35/11 indicates, in particular:

in relation to the delinquency assessed relating to a

• processes that will be managed by the IIS;

previous seller (so-called outgoing seller).

• the role performed by the IIS Operator that, depend-

Specifically, provision was made for the introduction of

ing on the Processes, will be:

a return mechanism, which the incoming sales opera-

-- the official certifier of information flows between

tor can avail of for the recognition of the Cmor amount

operators (distribution companies, sellers and

in the event given conditions occur (suspension or re-

Terna);

quested suspension, deactivation or transfer). The above-mentioned mechanism envisages the in-

-- responsible for carrying out given activities, currently performed by distribution companies;

volvement of distributors in identifying and managing

-- the agent for centralised communications, in the

flows of information with the other players involved

event in which the data involved in the informa-

(sellers, Sole Buyer as indemnity system operator,

tion flows channelled through the IIS, will not be

CCSE).

the object of the RCU, but the IIS Operator will be limited to tracking and conserving the data input

15 September– Resolution ARG/elt 121/11: Deadline for waiving the incentive set out under para-

tions through the IIS.

graph 12.5 of Annex A to resolution no. 292/06

• alternative assumptions for development of the IIS,

dated 18 December 2006 for distribution compa-

outlining, in particular, the development of processes

nies that use electronic meters and remote con-

in parallel with the setting up of a database (Official

trol systems for the recording of LV customers

Central Database);

affected by electricity service outages starting

• implementation plan, for which, in particular, the

from 1 January 2011 and acceptance of renun-

completion of the preparatory phase is envisaged

ciations from distribution companies Società

(accreditation of operators, standardisation of flows

Elettrica Ponzese S.p.A. and Consorzio Elettrico

and population of the Official Central Database) and

Di Storo Soc. Coop.

launch of phase 1 within 9 months from publication

With reference to the objective of the commissioning,

of the regulations governing IIS functioning (still to be

by 31 December 2010, of 85% of electronic meters out

issued).

of the total of active withdrawal points as at same date

22

by the third parties responsible for performing ac-


15 September 2011 – Consulting document DCO

tion regarding metering data for unscheduled with-

36/11: Standardisation of flows of measure-

drawal points (table 2 of TIV - Retail Service Code),

ments of electricity withdrawals.

for the period included between 1 July 2007 and 28

AEEG presented its final guidelines regarding standard

February 2009. Specifically, AEEG verified the incom-

flows of metering data, together with the definition of

pleteness of certain data, the non-use of the elec-

amendments to the regulations governing the provision

tronic format for the transmission to all sellers and

of measurements by distribution companies.

non-compliance with the deadline for the transmis-

The amendments to the regulations outlined will determine the introduction of the following additional obliga-

sion for the data required by the regulations; • failure to apply the scheduled system to all supply

tions for distribution companies in respect of sellers:

points with available power of over 55 kW (envisaged

• monthly transmission of adjustments to metering

as of 1 April 2009). In this regard, AEEG imposed an

data relating to the calendar year in progress for un-

additional prescriptive measure, asking that applica-

scheduled withdrawal points;

tion of the scheduled system be completed within

• yearly transmission of “late” adjustments to metering data for unscheduled withdrawal points;

120 days from notification of the measure (next 8 February).

• monthly transmission of adjustments for metering

By contrast, SET Distribuzione S.p.A. incurred a fine of

data for scheduled withdrawal points, in addition to

27,000 euros (equal to 0.066% of 2008 turnover) for

half-yearly and yearly sessions of communication of

non-compliance with the deadline for the transmission

adjustments currently provided for by the regula-

to sellers of information regarding metering data for un-

tions.

scheduled withdrawal points (table 2 of TIV - Retail Ser-

As regards communication flows, AEEG proposes the

vice Code), verifying the breach for the period between

definition of standards for the transmission of “special-

1 July 2007 and 31 July 2008, and then from July 2009

ised” metering data according to the type of transmis-

to October 2009.

sion or the nature of the content. In addition, AEEG:

27 October 2011 – Resolution ARG/com 146/11:

• indicates the obligation for distribution companies

Provisions for the alignment of the master re-

with more than 100,000 withdrawal points to use the

cord data of withdrawal and redelivery points

portal as a communication tool;

in the availability of the different operators and

• clarifies that the proposed solutions are planned by

amendments to the contents of information

taking into account that the function of providing

used in the request for access to the natural

measurements of withdrawals of electricity will be

gas distribution service, in cases involving the

performed by the Integrated Information System in

replacement in the supply of a redelivery point

the future.

(switching), with additions to similar regulations in the electricity sector.

6 October 2011 – Resolutions VIS 91/11 and VIS

AEEG introduced a procedure targeted as resolving the

92/11: Imposition of fines and the adoption of

misalignments between the data in the master records

provisions pursuant to article 2, paragraph 20,

of distribution companies and the data in the master

letter c), of law no. 481 of 14 November 1995,

records of sellers (operators subject to additional safe-

against Acea Distribuzione S.p.A. and SET Dis-

guards and dispatching users) for withdrawal (for the

tribuzione S.p.A.

electricity sector) and redelivery (for the gas sector)

A fine of 243,000 thousand euros was imposed on Acea

points, which makes provision for:

Distribuzione S.p.A. (equal to 0.064% of turnover in

• an initial alignment procedure, which will consist

2009) following verification:

of correcting the content in the master records of

• of breaches in the transmission to sellers of informa-

withdrawal points held by distribution companies


23

(electronic database pursuant to art. 14 of the TIS-

In order to manage the connection process more ef-

Integrated Code) based on updating the data sent by

fectively, AEEG referred to the provision which requires

sellers;

network operators to prepare, by 31 December 2011,

• the introduction of a continuous alignment proce-

an IT portal targeted at the exchange of information

dure, by sellers in respect of distribution companies,

and/or documents between the entity requesting con-

to communicate changes in the identification data of

nection and the network operator.

the supply point. This procedure, already present in

The report on the closing of the enquiry also outlined

the gas sector, was also extended to the electricity

Enel’s observations relating to criticalities deriving from

sector.

constant adjustments to the relevant regulations. Lastly, AEEG showed that, two inspections were con-

3 November 2011 – Resolution EEN 10/11: As-

ducted alongside the enquiry: at Acea Distribuzione and

sessment of the fulfilment of specific updated

Enel Distribuzione.

energy-saving objectives for liable distributors

As regards Acea Distribuzione, the inspection conclud-

in 2010 and provisions to the Electricity Sector

ed positively, while the inspection at Enel Distribuzione

Equalisation Fund regarding the payment of the

is still in progress.

tariff contribution to those distributors that were fully or partially compliant..

17 November 2011 – Resolution VIS 104/11: Start

AEEG determined the size of the tariff contribution to

of proceedings against AGSM Verona S.p.A.,

be paid to distribution companies for fulfilment of the

AGSM Distribuzione S.p.A. and AGSM Energie

primary energy-saving objective set for 2010.

S.p.A. for the verification of breaches of the reg-

With reference to Acea Distribuzione, an amount of

ulations governing functional and accounting

9,143,521 euros was recognised, to be paid by CCSE

unbundling obligations and tariffs.

within 30 days from notification of this provision.

AEEG launched penalty proceedings against the companies AGSM Verona, AGSM Distribuzione and AGSM En-

3 November 2011 – Resolution VIS 99/11: Closing

ergie. The violations disputed concern, in particular, the

of the enquiry launched by means of AEEG reso-

application of the obligations set out in the regulations

lution VIS 42/11 of 16 March 2011 on the provi-

governing unbundling, and specifically, non-compliance

sion of the grid connection service for electric-

with the regulations:

ity production plants by the grid operators.

• governing functional unbundling, put in place to

The enquiry conducted by AEEG through the request

monitor the guarantee of independence in the man-

for information from grid operators (Terna and distri-

agement of distribution activities;

bution companies) showed a significant increase in re-

• governing accounting unbundling, targeted at pre-

cent years of requests for the connection of production

venting discrimination and cross transfers of re-

plants. Considering the volumes, AEEG judged the regu-

sources between activities and conduct within the

latory measures and work performed by network op-

Group.

erators to be, on average, efficient, although recorded:

In addition, AEEG identified additional tariff breaches,

• some anomalies, including a delay in providing con-

especially in relation to:

nection services and in compensation payment times; • the persistence, particularly in certain areas of the country, of the so-called “virtual saturation of the grid capacity” (quotes accepted that are not followed by the actual construction of production plants).

24


• the application of the regulations relating to employee discounts; • non-adjustment of the amounts due for temporary connections applied to end customers.

24 November 2011 – Resolution ARG/elt 166/11:

• for 2011, equal to the difference between the amount

Review of low-voltage metering service revenue

requested, before interest, and the respective final

equalisation mechanism pursuant to article 40

amounts defined.

of the Transport Code for the years 2010 and 2011. Amendments to the Integrated Code con-

24 November 2011 – Resolution ARG/elt 170/11:

taining the provisions of the Italian Authority for

Determination of continuity recovery amounts

Electricity and Gas for the delivery of electric-

of electricity distribution services for 2010.

ity transmission, distribution and metering ser-

AEEG calculated the amounts relating to application of

vices for the regulatory period 2008-2011 (Trans-

the incentive regulation for distribution service continu-

port Code).

ity for 2010.

AEEG defined the methods for calculating the amounts

As regards Acea Distribuzione, the incentive came to

relating to the low-voltage metering service equalisa-

5,582,905.63 euros, and will be paid by CCSE before 31

tion mechanism for the years 2010 and 2011. The provi-

December 2011.

sion was necessary to clear up the anomalies deriving

This amount is the result of the incentive delivered

from the previous calculation mechanism (as regards

(10,807,830.64 euros), which was then reduced in re-

the breakdown of revenue, distributors with the longest

spect of the application of the ceiling on incentives

delay in installing electronic meters benefitted).

(equal to 32.27%) and deduction of the penalty, (equal

Furthermore, the possibility was introduced, to ask

to 1,737,238.06 euros).

CCSE, by 15 December 2011, for an advance of the

By means of this provision, AEEG also published the re-

amounts for the years 2010 and 2011, which CCSE

sults of the inspections carried out at the distribution

will pay before 31 December 2011, in order to mitigate

companies. As regards Acea Distribuzione, the outcome

the effects of the delay regarding quantification of the

was positive, with the values of the precision, accuracy

equalisation amounts for the year 2010, for an amount

and registration system indexes approaching 100%.

no higher than the advance for the year 2010 and at a rate equal to the 1-month Euribor, 360 basis, plus 215

15 December 2011 – Resolution ARG/elt 184/11:

basis points, applied as of the date of disbursement of

Disbursement of the reduced bonus, set forth

the advance and up until 30 November 2012 (date on

in paragraph 12.5, of Annex A of resolution no.

which disbursement is expected to take place of the

292/06 of 18 December 2006 for distribution com-

amount for the year 2011 which should be communi-

panies that use electronic meters and remote

cated by CCSE by 30/09/2012).

control systems for the recording of LV custom-

Therefore, AEEG envisaged, in the form of an advance

ers affected by electricity service outages start-

and with the exception of equalisation, that distribution

ing from 1 January 2011.

companies for which a positive amount was defined for

AEEG identified the distribution companies to which to

the year 2009 (Resolution ARG/elt 74/11) may request

provide the bonus for reaching the objective of the com-

an advance (a maximum of 80% and before next 15 De-

missioning, by 31 December 2010, of 85% of electronic

cember) in respect of the final result of metering equali-

meters out of the total of active withdrawal points as at

sation for the year 2010.

same date, used for the recording of low voltage cus-

If the final amount defined is lower than expected, the

tomers affected by outages, effective as of 1 January

return must occur within 30 days from the communica-

2011. In addition, AEEG:

tion and for an amount:

• accepted the waiving of the bonus by some distribu-

• for 2010, equal to the difference between the amount

tion companies (including Acea Distribuzione);

received in the form of an advance and the amount

• identified the distribution companies that, despite

of final equalisation, plus interest and effective from

having requested the incentive, showed non-com-

the date of disbursement of the advances;

pliance with the checks performed by AEEG at the


25

relevant site.


Distribution companies that waived the incentive and

Update, for the year 2010, of the value of the

those that did not comply with the checks performed

company-specific correction factor for the rev-

were permitted, for 2011, to choose one of the alter-

enues admitted to cover distribution costs in

native methods set out in TIQE (Integrated Code to

accordance with Annex A of AEEG resolution

regulate the quality of electricity distribution, sales and

no. 348/07 of 29 December 2007, regarding ACEA

measurement service) for the recording of low voltage

Distribuzione S.p.A. and other companies, and

customer outages, valid for the 2007-2011 regulatory

the adjustment of the company-specific correc-

period. This decision must be communicated to AEEG

tion factor for the revenues admitted to cover

during the annual transmission of service continuity

distribution costs, relating to 2009, for Acea Dis-

data.

tribuzione S.p.A. The company-specific correction factor was adjusted


for the year 2009 for Acea Distribuzione S.p.A., which

Amendments and additions to Italian Author-

increased from 0.2153 to 0.2230. The change was made

ity for Energy and Gas resolution ARG/elt 99/08

following the appropriate request formulated by Acea

regarding technical and economic conditions

Distribuzione S.p.A., by means of communicated dated

for connecting to networks with the obligation

14 July 2011. By contrast, as regards Acea Distribuzi-

of third-party connection to production plants

one, the company-specific correction factor for 2010

(TICA), for the review of instruments for over-

was set at 0.2136.

coming the problem of the virtual saturation of electricity networks.


AEEG intervened again on the subject of the virtual

Review, in force from 1 January 2012, of conven-

saturation of electricity networks (quotes accepted, not

tional percentage factors of electricity losses on

followed by the construction of the connection plant,

the networks with the obligation of third-party

the subsequent occupation of network capacity: so-

connection, pursuant to table 4, of Annex A of

called critical areas), by reintroducing an amount for

AEEG resolution no. 107/09 (TIS) of 30 July 2009.

the reservation of network capacity in areas and lines

The Italian Authority for Electricity and Gas arranged for

identified as critical based on network maps published

a reduction in the standard loss factors on HV and HHV

periodically by network operators.

networks and, subsequently, of the values of standard

AEEG subsequently also regulated other aspects re-

losses on MV and LV networks.

garding active connections, establishing:

The decision was adopted following a study conducted

• the introduction of an automatic indemnity in the

by the Milan Polytechnic, which showed that the net-

event of a delay in the payment of the indemnity due,

works falling under the National Grid adhered to a con-

owing to a service provided that does not meet the

stant streamlining process which led to a reduction in

standards;

typical technical losses.

• the introduction of an automatic indemnity in the

By contrast, the review of the standard loss factors re-

event of a delay in the transmission of the operating

lating to MV and LV networks was put back to subse-

regulations;

quent provisions. In any case, for the sole purpose of

• the modification of the expiry dates and information content of annual data collections.

minimising the value of the difference between actual losses and standard losses and, subsequently, also of standard loss factors on MV and LV networks, the value of losses on the MV network (up 0.7%), was increased in this provision in an artificial manner.

26



With reference to the modifications regarding commercial

Regulation of the quality of electricity distribu-

quality, the following should be pointed out in particular:

tion and metering services during regulatory

• the introduction of the so-called rapid quote, on the

period 2012-2015 (Part I - Service continuity and

basis of which, during the first telephone call or first

voltage quality).

contact, the seller must inform the LV customer of

In general, for the 2012-2015 regulatory period, AEEG

the charges and service performance times. This

also extended the regulation governing service continu-

type (which takes effect from 1 January 2013) con-

ity and voltage quality to owners of production plants.

cerns requests up to an available power of 6.6 kW

With reference to outages on LV networks, it should be

(for single-phase supply) and 33 kW (for three-phase

noted that AEEG:

supply);

• introduced the right - for distribution companies that

• the introduction of a standard timeframe for the de-

requested and then waived the incentive relating

ferred execution of activation and deactivation ser-

to the use of electronic meters for the recording of

vices;

outages affecting LV customers (resolution ARG/elt

• the extension to temporary connections of specific

184/11) – to use, for the years 2012 and 2013 too,

promptness indicators relating to activation services,

one of the alternative methods set forth in TIQE, valid

deactivation services (according to rules set forth for

for the 2007-2011 regulatory period;

deferred execution), simple and complex works;

• modified the provisions regarding the recording of outage reports, making provision, in particular,

• the increase in the amount of automatic indemnities to be disbursed in the event of a delay;

for the recording “for each case in which the user

• the introduction of a new procedure and a new spe-

speaks with the operator”, including so-called re-

cific indicator relating to verification of the metering

minders (from 1 January 2012), the insertion of the

unit (from 1 January 2013) and definition of a spe-

code of the LV line involved in the outage (from 1

cific indicator for the replacement of the faulty meter

January 2012) and the recording of the call (from 1 January 2013);

(from 1 January 2013); • the introduction of a new procedure and a new spe-

With reference to outages on MV networks, AEEG:

cific indicator relating to verification of the voltage

• extended the individual regulation of MV customers

quality (from 1 January 2013) and definition of a spe-

also to short outages, with the subsequent redefini-

cific indicator for the restoration of the correct volt-

tion of specific levels of continuity;

age value (1 January 2013).

• introduced the interrupted power supply to the calculation of penalties, granting the right to continue to


use the average interrupted power supply for 2012;

Provisions of the Italian Authority for Electricity

• increased the ceilings within which distribution com-

and Gas for the delivery of electricity transmis-

panies are required to pay penalties for MV outages;

sion, distribution and metering services for the

• modified the calculation criteria for the specific tar-

regulatory period 2012-2015 and provisions re-

iff component applied to MV users with inadequate

garding economic conditions for the supply of the

plants;

connection service (Annex A - Transport Code).

• introduced the use of the website for the transmission of communications to MV customers.

With reference to new rules relating to distribution service tariffs for the 2012-2015 regulatory period, AEEG defined, in particular:


• the increase in the rate of annual reduction in op-

Regulation of the quality of electricity distribu-

erating costs (X-factor), from 1.9% to 2.8% for the

tion and metering services for regulatory period

distribution service, and from 5% to 7.1% for the me-

2012-2015 (Part II - Commercial quality).

tering service;


27

• for connection contributions, the inclusion of con-

will be carried out through subsequent provisions,

tributions set forth by TICA (code for active connec-

for which distribution companies are currently re-

tions) for the connection of injection points among

sponsible for carrying out the entire measurement

those deducted from the gross value of the investment and elimination of the revenue guarantee mechanism;

service; • the introduction of a tariff component to cover the residual non-depreciated value of electro-mechan-

• the increase in the return on investments for the dis-

ical meters replaced with electronic meters before

tribution service (WACC), up from 7% to 7.6%, for in-

the end of their useful life, so-called MIS (RES), to be

vestments implemented up until 31 December 2011,

billed to LV end customers.

and to 8.6% for investments that will be implemented in the 1 January 2012 - 31 December 2015 period

29 December 2011 – Resolution ARG/elt 199/11

(the increase of 1% envisaged over those taking ef-

(Annex C – Integrated Connection Code – TIC).

fect from 1 January 2012 is due to the recognition of

The provisions regarding the financial conditions for the

the regulatory lag);

supply of connection services to passive users are essen-

• updating of the rate of return on investments by 30

tially the same as those in the previous regulatory period.

November 2013, applicable to the years 2014 and

However, of note is the introduction of the obligation to

2015, to take account of any changes in the rate of

provide separate accounting evidence of contributions

return of assets with no risk (annual average of gross

for connections and payments for specific services reg-

return of 10-year Italian Government Bond);

ulated by the provision, separately per voltage level and

• the introduction of new types of investments for

service type.

which an increase is recognised in the return on investments, equal to 1.5% for 12 years for the “re-


newal and enhancement of MV networks in historic

Provisions governing switching of end custom-

centres” and “enhancement of the transformation

ers in the electricity and gas sectors, in imple-

capacities of primary stations in critical areas”;

mentation of Legislative Decree no. 93 of 1 June

• the elimination of equalisation for marketing ac-

2011.

tivities and introduction of payments for standard

AEEG acknowledges the provisions of primary legis-

national costs, differentiated on the basis of the

lation regarding the obligation to effect switching re-

provision of the sale service subject to additional

quests within three weeks. As regards this timescale, it

safeguards in “integrated” form or functionally sepa-

must be ensured that the start of supply coincides with

rate from the distribution service.

the first day of the month. However, the acknowledgement represents merely a

29 December 2011 – Resolution ARG/elt 199/11

formal obligation at present, given that the introduction

(Annex B – Integrated Metering Code – TIME).

of application methods is deferred to the transfer of op-

For the 2012-2015 regulatory period, AEEG decided to

erational management of the switching service to the

remove the section on the metering service from the

Integrated Information System.

Transport Code, outlining subsequent provisions with ever, some amendments and additions were introduced

Energy Services, Public Lighting and Digital Meters project

in 2012, including:

In the Energy services sector, the activities of the com-

• the transfer to Terna of the measurement collection,

pany Arse, which has been operational since 1 April 2005,

recording and validation service relating to intercon-

focus on four main lines of action: energy saving, photo-

nection points between the networks of distribution

voltaic power, cogeneration and, lastly, the control of air

companies and the National Grid; this amendment

quality (“Caldaia Sicura” and “Sanacaldaia” projects).

which it will rationalise the relevant regulations. How-

28


Energy savings

taken this year, but it has been deemed more appropri-

The Italian Authority for Electricity and Gas, by means

ate to focus on the monitoring of existing projects re-

of resolution no. 9/11, introduced some amendments

porting, with special attention to projects with a final

to the guidelines which should help improve the current

certification.

difficult situation faced by distribution companies in ful-

At legislative level, we are still awaiting the new decree

filling the obligations set forth by the decree on white

which extends and supplements the energy saving sys-

certificates, by increasing the availability of recognised

tem through White Certificates, Yearunced before the

and marketable bonds.

end of the year, and 15 new standardised formats pre-

Within this framework, as already outlined previously,

pared by Enea, as set forth in Legislative Decree no. 28

ACEA Distribuzione is not affected by this negative eco-

“Implementation of directive 2009/28/EC on promotion

nomic situation thanks to the availability of bonds result-

of the use of renewable energy, containing the amend-

ing from energy saving initiatives undertaken with ARSE.

ment and subsequent repeal of directives 2001/77/EC

Furthermore, ENEL DISTRIBUZIONE made a direct re-

and 2003/30/EC”, and still being examined by the Minis-

quest to Arse for additional sales of EEBs as an advance

try of Economic Development.

of the bond transfer set forth in the contract for 2012, as

The acquisitions of type I and II bonds are described in

did ASM TERNI.

Figure 1, while those regarding type III bonds are shown

Subsequently, no energy saving initiatives were under-

in Table 2.

Fig. 1 – Performance of Type I and II EEBs (Energy Efficiency Bonds), resulting from the initiatives reported 700,000

600,000

500,000

EEBs

400,000

300,000

200,000

100,000

0

EEBs produced

2005

2006

2007

2008

2009

2010

2011

2012

22,733

58,988

127,148

223,074

226,859

215,185

169,430

100,270

EEBs per Acea D. objective

3,897

7,850

15,596

49,131

73,335

99,149

143,702

163,776

EEBs exceeding cumulated totals

18,836

69,974

181,526

355,469

508,993

625,029

650,757

587,251

Table 2 – Performance of Type III EEBs (Energy Efficiency Bonds), resulting from the initiatives reported Year

2008

2009

2010

2011

2012

TOT

Type III EEBs (1)

9,293

5,695

5,695

5,117

2,674

28,474

(1) 2008 figures are cumulated with previous years’ bonds


29

The cited insufficiency of EEBs on the market is also confirmed by the market performance during the year. In fact, the exchange price of EEBs on the platform managed by the GME (Electricity Market Operator) greatly exceeded the tariff reimbursement set forth. Fig. 3a – Average price trend of EEBs - Type I 100

60,000

90 Price

50,000

80 70

Price

30,000

50 40

EEBs exchanged

40,000

60

20,000

30 20

10,000

EEBs exchanged 10

0 16.11.10

24.08.10

25.05.10

09.03.10

01.12.09

15.09.09

16.06.09

07.04.09

20.01.09

14.10.08

15.07.08

29.04.08

05.02.08

06.11.07

07.08.07

15.05.07

27.02.07

28.11.06

30.05.06

14.03.06

0

Total Type I bonds exchanged on the market

2,643,972

Weighted average price, with exchanges

85.52

Fig. 3b - Average price trend of EEBs - Type II 100

35,000

90 30,000 80 Price

Price

60

20,000

50 15,000

40 30

EEBs exchanged

25,000

70

10,000

20 EEBs exchanged

5,000

10 0

Total Type II bonds exchanged on the market Weighted average price, with exchanges

30


12.10.10

06.07.10

20.04.10

02.02.10

27.10.09

28.07.09

19.05.09

03.03.09

25.11.08

16.09.08

17.06.08

18.03.08

27.11.07

28.08.07

22.05.07

13.02.07

10.10.06

28.03.06

0

1,300,481 91.18

Fig. 3c - Average price trend of EEBs - Type III 100

7,000

90

6,000

80

Price

60

4,000

50 3,000

40 Price 30

EEBs exchanged

5,000

70

2,000

20 EEBs exchanged

1,000

10 0

16.11.10

28.09.10

20.07.10

01.06.10

13.04.10

23.02.10

15.12.09

27.10.09

01.09.09

01.07.09

05.05.09

17.03.09

27.01.09

11.11.08

23.09.08

08.07.08

28.03.06

0

Total Type III bonds exchanged on the market

352,130

Weighted average price, with exchanges

93.63

Table 4 shows the annual trend of exchanges in the stock market, which shows that the exchanges made in the year just closed greatly exceeded the levels of the two previous years. The same table also shows the average prices in the different years considered. The average market price saw a sharp increase.

Tab. 4 - EEBs exchanged on the GME market

EEBs exchanged

EEB average price (Euro€)

year

I

II

III

Total

I

II

III

2006

22,664

11,564

76

34,304

67.3

90.3

33.8

2007

167,502

58,639

10

226,151

38.5

84.0

5.0

2008

377,059

114,194

29,761

521,014

68.5

71.7

34.1

2009

640,124

285,843

49,311

975,278

80.7

80.6

80.0

2010

580,688

322,970

76,077

979,735

93.1

93.1

92.8

2011

734,140

415,767

129,466

1,279,373

100.9

101.1

101.4

2,522,177

1,208,977

284,701

4,015,855

Total EEBs


31

PV POWER

Works were completed during the same period (with the

As regards the Photovoltaic sector, all currently connect-

relative connection to the electricity network) on plants

ed plants are operating normally, and performed brilliant-

constructed under the EPC contract in Calabria and in

ly this year in terms of production, thanks to favourable

Lazio, for a total power of almost 23 MWp, relating to dif-

weather conditions and efficient management.

ferent types of plant (table 7).

In fact, the final figure of power plants for 2011 showed

In general, as regards the legislation in place and, in par-

over-production of 6 GWh.

ticular, the “4th energy account”, the changes present-

The Giuliano di Roma and Villa Latina plants were added

ed include the introduction of a new procedure for the

to the plants connected during this period (for a total ca-

granting of the incentive tariff for so-called “large plants”.

pacity of around 5 MWp), to which GSE recognised the

A dedicated log managed by GSE has been established,

incentive tariff. The last plant to be connected was Parco

where the energy account requests for that type of plant

della Mistica (total power of around 5 MWp), for which

must be recorded.

the phase of activation of the procedure for the recogni-

As expected, GSE did not reopen the terms for recording

tion of the incentive tariff is currently underway.

in the log in the second part of the year, given that the

The total current installed power on behalf of Acea

cost threshold established was already reached. Thus, as

amounts to more than 46 MWp distributed throughout

regards the installation of so-called “Large Plants”, com-

the area, as illustrated in table 6.

panies must wait for the opening of next year’s log.

Tab. 6 - Summary of PV connection status (kWp) 100%

46.183

Plants connected in 2008

GENERAL TOTAL

6%

2,562


19%

8,866


29%

13,352


46%

21,403

Puglia

By geographical area

BA

4,950

Puglia

BAT

990

Puglia

FG

2,945

Puglia

FR

5,003

Puglia

LE

10,302

Lazio

LT

5,110

Campania

NA

553

Lazio

RM

14,927

Puglia

TA

888

Umbria

TR

515

By region Campania

553

Lazio

20,037

Puglia

25,078

Umbria

32


515

Table 7 - “’Turnkey” EPC/O&M plants built by Arse (kWp) 100.0%

25,655


GENERAL TOTAL

1.6%

422


0.2%

58


9.7%

2,487


88.4%

22,688

Abruzzo – AQ

By geographical area

3.0%

767

Calabria – CS

56.5%

14,486

Marche – MC

2.8%

727

Tuscany - PO

3.9%

994

Lazio - RM

32.2%

8,262

Umbria - TR

1.6%

419

As shown in the above tables, the Lazio region was the

e Servizi Energetici S.p.A. and the remaining amount,

main reference area for the works. In May, the Commer-

due to the transfer of ASTRIM’s portion, by Società En-

city plant in Rome was inaugurated (5 MWp on cantilever

ergia Alternativa, in which Astrim S.p.A., Vigest S.r.l.,

roofs), which covers the car parks of the wholesale shop-

and the Jacorossi e Parnasi Group have a holding.

ping centre of the same name, adjacent to the structures of the new Fiera di Roma. This plant allows the produc-

Company activities continued in line with those sched-

tion of around 6,000,000 kWh per year with an annual

uled.

CO2 reduction of approximately 2,766,000 Kg.

In this scenario, activities continued for the construction

The considerable growth in both Acea owned plants

of the cogeneration plan for the Europarco Complex, for

and plants constructed on behalf of third parties made

which, through an internal invitation to tender process,

it necessary to review, modify and enlarge the organ-

three leading companies were selected to supply plant

isational structure for the management of said plants.

works, which are now on a short list. The winning bid is

In fact, this management makes provision for the daily

expected to be selected by March 2012.

monitoring of the running of the plants (the status of all switches are remote controlled), testing of production

The client also started the main excavation and restruc-

meters and network exchange (250 meters currently

turing works in the areas dedicated to the construction

managed), functioning of safety systems and the asso-

of the new “Laurentino” shopping centre for which the

ciated remote control of images from sites and, lastly,

company has already obtained the building contract for

the management of ordinary (according to precise time

the trigeneration plant to the latter’s benefit.

schedules) and extraordinary maintenance works. The energy service contract was signed last July with SOGEI, while the contract with Cinecittà Parchi is ex-

COGENERATION

pected to be signed in the next few months. These

As regards the Cogeneration sector, the joint venture

plants will contribute a total of 3.6 Mwe.

between ACEA S.p.A. and ASTRIM S.p.A. was established in September 2007, aimed at the marketing and

Assessments were also carried out for further develop-

creation of energy cogeneration plants, called Ecogena.

ment with both the Auditorium della Musica di Roma

51% of the share capital of Ecogena is held by ACEA Reti

designed by Renzo Piano, and a residential-commercial


33

initiative of around 400,000 cubic metres in the munici-

PUBLIC LIGHTING

pality of Marino.

Public Lighting service management activities, without interruption and as per instructions from the Parent

In addition, the company successfully concluded the

Company, were carried out as part of the new Service

assessment by client Cinecittà Parchi for the construc-

Contract, defined with Roman Council Resolution no. 130

tion and subsequent management of a plant, powered

of 22 December 2010, then stipulated on 15 March 2011.

by renewable energy for 1.6 Mwe, to service the first phase of the amusement park on the theme of cinema

The programmes focused on a series of operating guide-

and the history of cinema. In said light, the commercial,

lines, the majority of which were realised and included in

technical and legal departments, in agreement with the

the Lighting Plan.

client, drew up the final draft of the contract, which will

The main programmes are as follows:

probably be signed at the start of next year. Financing for the initiative will be guaranteed by an operating lease provided by the company Centroleasing, part of the Intesa San Paolo Group.

• the replacement of 2.7 kV circuits was definitively completed in 2011; • network modernisation: in 2011, works were completed which involved the renovation of 1,167 lighting

Development activities also continued positively at

points, often including maintenance, also carried out

investee company Eur Power, that carried out both

on the power supply network;

planned commercial and authorisation activities, ob-

• remote control of Public Lighting Plants: in 2011, 100

taining the initial permit to perform civil works at the

remote control modules were installed in the power

first Adenauer cogeneration plant, which will serve the

supply panels of new plants, those already in opera-

INPS complex and BNL and Unicredit buildings.

tion and stock panels available in the warehouse for the next operational upgrading activities and new

The services conference will also soon be called for the

constructions;

building permit of the second cogeneration plant Eu-

• Decommissioning of the 8.4 kV network: modernisa-

ropa, to serve the new EUR Conference Centre (la Nu-

tion work carried out in 2011 made it possible to con-

vola) and adjoining hotel, together with other important

tinue with the programme that makes provision for

users in close proximity.

the activation of electrical LV supplies, with the gradual phasing out of the 8.4 kV power supply network;

The activities managed by the Air Quality sector

• Plant Repairs: involves the inspection, extraordinary

“Sanacaldaia” and “Caldaie Sicure” were exer-

maintenance and possible renovation to class II of

cised in accordance with the contractual extension

lighting points managed on behalf of Roma Capitale;

from 31 July 2007; the latest extension covered the

• plant maintenance: maintenance activities primarily

period from 30 June 2011 to 31 December 2011. The

took the form of planned, emergency and extraordi-

service was granted again under the same contractual

nary maintenance;

terms and conditions as previously and using prevailing

• artistic maintenance: in 2011, work was carried out

tariffs defined by the Managerial Directive 1425 of 2006.

on the Villa Paganini, Villa Leopardi, Parco Simone

The service ended on 1 January 2012 due to the loss of

Bolivar and Piazza del Campidoglio plants, the Castel

the tender with Roma Capitale.

S. Angelo gardens and massive works on Tiber river bridges and docks, for a total of 4,611 lighting points. Furthermore, upgrading was carried out on artistic structures, including works on the Pantheon Fountain and Vittorio Emanuele II bridge for a total of 172 lighting points using LED technology, and plants on Isola

34


Tiberina and Cavour bridge for a total of 116 lighting

Lastly, as regards the “Digital Meters” project, in 2011,

points. A total of 525 lighting points were upgraded.

roughly 100,000 meters and 101 concentrator cabinets

Extraordinary maintenance on various historically and

were installed. This made it possible to reach a total of

archaeologically important sites was also ensured;

1,550,000 meters installed, in line with the objectives set

• energy efficiency initiatives: in 2011, the plan to in-

out by the Italian Authority for Electricity and Gas in reso-

stall LED technology covers on new plants continued,

lution no. 292/06 – annex A (95% of total active PODs).

and some of the sodium covers on already operation-

In addition, system maintenance and fine-tuning was

al plants were replaced; in 2011, 1,227 LED lighting

completed to make it easier to reach and read meters.

points were installed; • new plant works: a total of 3,899 lighting points were constructed for Roma Capitale, with requests coming in mainly from Department IX and SIMU; • districts: 2 new agreements with districts were stipulated and include maintenance contracts subject to the condition precedent that the related works must be completed.


35


the introduction of new tariff support mechanisms or

Roughly 15 years from the launch of EU energy policies,

competitive procedures. The regulations intend to guar-

with the adoption of the Terzo Pacchetto Energia (Third

antee a fair return for investment and running costs for

Energy Package), the European Union provided further

a given period (average useful life of the plant), by ensur-

stimulus to the liberalisation and integration processes

ing constant incentives. The incentive will be allocated

in the electricity and gas markets.

through private law contracts between GSE and the en-

Il Terzo Pacchetto Energia (Third Energy Package),

tity responsible for the plant and will concern new plants

composed of five legislative measures (Regulation no.

(including those created following full reconstruction),

713/2009 which establishes an Agency for cooperation

redeveloped plants, limited to additional production

between Member States; Directives 2009/72/EC and

capacity and hybrid plants, restricted to the portion of

2009/73/EC governing electricity and natural gas and

energy produced from renewable sources. The Decree,

Regulations nos. 714/2009 and 715/2009 governing ac-

for plants that will commence operations from 1 January

cess to transmission/transportation infrastructures),

2013, makes provision for diversified incentive mecha-

was incorporated into Italian law by means of Legisla-

nisms (administered tariff or Dutch auction procedure)

tive Decree no. 93/2011. The most interesting aspect for

on the basis of different power thresholds.

Acea Energia is the assignment to MSE (Ministry of Eco-

Dutch auctions will be managed by GSE and broken

nomic Development) of the job of monitoring (at least

down by source and technology, on a periodic basis.

every two years) the performance and developments in

As regards energy produced by plants that come into

the retail market and existence of effective competitive

operation before 31 December 2012, the current incen-

conditions, as well as the provision of additional tools to

tive mechanism remains in force. The regulations make

protect consumers including:

provision, starting from 2013, for the mandatory amount

• the reduction of switching times (compared to the

to decrease on a linear basis in each of the subsequent

current 2 months - maximum time) to a maximum of

years, starting from an assumed value (7.5%) for 2012,

3 weeks;

until reaching 0.00% in 2015.

• the obligation, for distribution companies, to ensure

As regards rebuilding work, the incentive is granted

the full availability of customer consumption data to

through power quotas to production by plants subject

sellers, guaranteeing data quality and promptness;

to full or partial rebuilding, in compliance with certain

• complete transparency on tariffs and contractual con-

criteria, such as the conventional useful life of the plant

ditions for end customers.

in operation.

A strict measure is also in place for companies that sell

Specific provisions contained in the regulations will be

electricity on the free market and the market subject

implemented through further decrees.

to additional safeguards in order to avoid confusion between the business units over the service supplied and

Criteria and methods for the supply to end

to derive a competitive advantage. The regulation makes

customers of information on the composition of

provision for the restructuring of the communication

the energy mix used for the production of the

processes and models of said companies, in respect of

electricity supplied, and on the environmental

which an exact expiry date has not yet been set.

impact of production, Decree of 31 July 2009 of the Ministry of Economic Development - Update

Legislative Decree of 28 March 2011 on the promotion of energy from renewable sources. By means of Legislative Decree of 28 March 2011, provision was made for the replacement of the current renewable energy incentive system based on Green Certificates, applied to traditional producers, through 36


to Resolution ARG/elt 104/11. The regulations introduce a series of rules for guaranteeing that the electricity sold to individual customers, through a renewable energy sale contract, is actually produced from renewable sources and is not marketed several times. This requirement has arisen as the RECS

certification system does not appear to be suitable for

78/2010, regarding the excessive duration and the gen-

guaranteeing the tracking of green energy. It should be

eral and automatic nature of the extension of the con-

noted that the RECS project (Renewable Energy Certifi-

cessions asserting the “non-proportionality of the exten-

cate System) was created in the European domain for

sion of all concessions without a distinction being made

promoting the development, on the basis of a standard

between guarantees expired in December 2010 and

certification, of a voluntary, international market for

those expiring in subsequent years, and with no evalua-

Green Certificates that certify the production of elec-

tion being performed on the investments actually carried

tricity from renewable sources for a minimum output

out and, subsequently, on the need for an indemnity”.

of 1 MWh, and favour the production of electricity from

Subsequently, with ruling no. 205 of 4 July 2011, the Con-

renewable sources by plants that otherwise would not

stitutional Court declared the unconstitutionality of the

have the economic conditions to continue to produce

5-year extension of hydroelectric concessions for large-

“green” energy. Therefore, RECS certificates are distin-

scale abstraction (increased to 7 for companies at least

guished by the physical provision of electricity and their

30% owned, and a maximum of 40% owned by the Prov-

issuing makes it possible to market said certificates also

inces) established by 2010 Provision (Decree Law no.

separately from the electricity which certify production.

78/2010, art. 15). In fact, the 5-year extension, even if

Therefore, AEEG established that, as of 1 October 2011,

targeted at recouping the cost of investments in mod-

the only valid certification system for certifying the origin

ernisation work carried out by concessionaires, was con-

and traceability of green energy underlying a sale con-

sidered to have been aimed at ensuring the temporary

tract, is represented by guarantees of origin established

situation already achieved, by subsequent paragraph 6

by means of Directive 2009/28/EC and issued by GSE.

ter, letter e), which allows the outgoing concessionaire to

Pending the entry into force of additional regulatory pro-

continue to manage the branching-off until the replace-

visions, the “guarantee of origin” certificate envisaged by

ment of the contractor, if, on the date of expiry of the

AEEG coincides with CO-FER bonds, i.e. certificates as-

concession, the process of identifying the new operator

signed by GSE to producers of electricity generated from

has still not been completed.

renewable sources, in relation to electricity produced

The Court also notes that the “provisions challenged […]

and injected into the network each calendar year. There-

are inconsistent with the general principles established

fore, CO-FER bonds will be transferred from producers

by government legislation, the temporary nature of con-

to sellers according to transparency principles in such

cessions and opening up to competition, and are not in

a way as to ensure that each certification is owned by

keeping with the relevant EU principles”, given that, even

only one entity.

if only in the medium-term, they restrict “access by other potential economic market operators, putting up barriers

Hydroelectric

concessions

on

large-scale

abstraction Constitutional Court Ruling no. 1/08,

to entry as such to alter competition between entrepreneurs”.

published in the Official Journal on 23 January 2008. Update.

Capacity payment. Provisions governing the

In March 2011, the European Commission issued the

adequacy of the production capacity of the

Italian government a formal notice of default, with the

domestic electricity system.

launch of Infringement Proceedings 2011/2026, for an al-

By means of resolution ARG/elt 98/11, the Authority in-

leged breach of art. 49 TFUE (freedom of establishment)

tends to implement a new payment system in respect of

in implementation of the recent regulations adopted

the electricity production capacity following in the foot-

regarding hydroelectric concessions (art. 15, paragraph

steps of systems already operational in other countries,

6 ter of Decree Law no. 78/10, converted with Law no.

through which it “should” be possible to protect consum-

122/2010). In particular, the Commission disputed with

ers and improve market competition.

Italy the unlawfulness of art. 15 of Decree Law no.

In a nutshell, AEEG expects to extend to all thermo-


37

electric plants currently operating and those to be con-

Formation of provisions relating to regulation

structed, the capacity payment mechanism from 2017,

of the dispatching service - Resolution ARG/elt

requiring tenders for obtaining incentives to have been

160/11.

conducted at least 4 years earlier. The mechanism will

The Italian Authority for Electricity and Gas, with the ob-

involve an annual premium for the operator for power

jective of overcoming problems relating to heavy com-

provided and any positive differences between the price

petition in terms of production from renewable sources

of electricity sold on the markets (reference price) and

through the appropriate regulatory measures which al-

the strike price (valued at the standard variable cost of a

low network operators to effectively and safely manage

new leading-edge plant) set forth in the contract. These

the national electricity system and, at the same time, re-

amounts must be paid by operators in Terna and will be

ducing costs, launched a procedure for issuing provisions,

earmarked for reducing costs for final consumers. Ten-

with particular reference to improving the efficiency and

ders will take place through the purchase, by the grid

cost-effectiveness of the dispatching service, essential

operator, of production capacity options for quantities

for maintaining the electricity system in a constantly

equal to an objective, fixed annually, through the proper

balanced position. Intervention from the Regulator was

contracts.

borne out of the need to respond to changes in the sys-

The quantities will be determined on the basis of ex-

tem providing the driving force for the sharp increase in

pected consumption and reserve needs, also taking into

production from renewable energy sources which has

account the effects of energy efficiency measures and

led to the extremely rapid development of wind power

production from renewable sources.

plants - mainly connected to the high voltage national

The legislation is currently awaiting specifications for

grid - and photovoltaic plants, predominantly connected

functioning of the mechanism.

to the medium and low voltage distribution networks. The provisions will be issued in 2012 through specific consultations and resolutions.

Emission Trading Scheme post 2012 Regulations. The competent national Authority, by means of Resolution no. 26/2011, began to collect the necessary data

Recognition activities regarding non-requested

for determining the quantity of quotas to assign free of

contracts for the supply of electricity and/or

charge for the post 2012 period (moment in which the

natural gas: Resolution Vis 76/11.

insolvency proceedings for assignment of CO2 quotas

In 2011, AEEG started a procedure to reduce the num-

will take place).

ber of non-requested activations, i.e. all cases where

This data collection concerned all plants in possession of

consumers are fraudulently, or unwittingly, persuaded

an authorisation to emit greenhouse gas issued in accor-

to transfer from one provider to another or transfer

dance with Legislative Decree no. 216/2006 or by means

from the service subject to additional safeguards to the

of Resolution no. 25/11 issued by the National Commit-

free market. This phenomenon developed over recent

tee for the management of Directive 2003/87/EC and for

years, to the point it reached highly critical levels, and is

the support in the management of project activities of

especially widespread in all those cases where the sale

the Kyoto Protocol.

activities of given customer segments is entrusted to

The data were transmitted by using the proper form, ac-

third parties. In fact, AEEG showed how said practices,

companied by the methodological report containing the

which materialised into genuine commercial malprac-

description of the plant, the method applied for filling in

tice, make consumers wary of the free market and the

the form, indications of the various sources of data, the

companies operating in the market, damaging the en-

different steps in the calculations and any assumptions

tire system.

made in order to obtain free assignments of emissions.

To this end, by means of Resolution VIS 76/11, AEEG launched a formal enquiry in order to assess the scale

38


of the phenomenon and identify both preventive and

between market operators. Operators registered in the

restorative measures.

Indemnity System can, through the aforementioned

In October and December 2011, the main stakeholders

registration, request an indemnity to partially cover ar-

were summoned to a hearing at the Authority, for the

rears left by customers that changed supplier, through

purpose of collecting as much information as possible

the request to the system for application of the CMor

on the frequency of the cases under review, and then

component. This component will be applied by the

identifying solutions and deterrents. At the end of the

distributor to the incoming seller which, in turn, will

year, AEEG published Consultation Document 46/11, in

reverse the component to the acquired customer. In

which it presented some initial proposals with both pre-

addition, solely sellers registered in the Indemnity Sys-

ventive and restorative objectives:

tem will have access to information flows regarding re-

• Adoption of internal self-regulation codes for each

quests for the CMor component that will be applied to

company meeting the minimum requirements estab-

them, as incoming seller, by distributors and requested

lished by AEEG;

by other outgoing sellers registered in the system.

• Creation of black lists and/or white lists which report any fraudulent conduct or the absence of said conduct with reference to each company; • Stricter controls on the work performed by sales agencies;

Energy Market As regards the Italian Electricity Exchange, on one hand, 2011 saw a consolidation of growth in the sup-

• Active role of the Consumer Protection Office;

ply of electricity, and on the other, given the persistent

• Provision of specific methods to restore the status

phase of economic stagnation, registered another de-

quo ante of the customer affected by the aggressive

crease in energy requirements which also caused li-

practice.

quidity to fall to 57.9%. In fact, despite low electricity demand, the increasing costs of electricity production and, in particular, those tied to the prices of fuels on in-

Containment of credit risk for the retail electricity

ternational markets (Dated Brent over 40%), determined

market and setting up of an indemnity system:

a rise in the price of energy on the Italian electricity ex-

Resolution ARG/elt n. 219/10 - Updates.

change (PUN) which, after essentially remaining stable

The Indemnity System entered into operation in 2011.

in the previous two years, rose to 72.2 €/MWh (up 12.6%)

This involves an initial transitory phase while waiting

in 2011. Lastly, 2011 saw growth in the electricity for-

for said system to be incorporated in the Integrated

ward market, where contracts traded (more than 8,000)

Information System for the management of relations

quintupled over 2010 (up 403.8%).


39

Liquidity on the DAM 350

70.0% 69.0%

TWh

200

67.1% 133.3

120.2

68.0%

104.3 119.1

100.4

108.7

66.0%

131.1

64.0%

62.8%

62.6%

150

62.0% 196.5

100

221.3

232.6

213.0

203.0

50

199.5

180.3

59.6%

Liquidity

300 250

68.0%

60.0% 58.0%

57.9%

0

56.0% 2005

2006

power exchange

2007

2008

2009

2010

2011

off-exchange trading

liquidity dx scale

As regards the Italian electricity exchange, the average purchase price for electricity (PUN) stood at 72.23 €/MWh, an increase of 8.11 €/MWh over 2010 (up 12.6%). National Standard Price 120 108.73

114.38 104.90

100

€��/MWh

87.80

86.99 74.75

80

83.05 76.77

70.99

72.2 63.72

58.59 60

57.06

82.7

64.12

72.53

66.7

53.00

43.18

53.41

57.34

40 2005

2006

2007

2008

2009 baseload

40

2010 peak

2011 off-peak

The increases recorded in fuels only had a partial effect

over-capacity still affecting Italy. This recovery was con-

on the prices of the main European electricity exchang-

centrated in the latter part of the year, in line with the

es, which showed a mild recovery compared to the low

acceleration in prices of national gas, the reference fuel

levels registered in the previous two years. In central-

in the Italy-generated mix. Indeed, the different structure

northern Europe and in Spain, prices touched 49/56 €/

of the plants and different trend in the cost of reference

MWh (up 8/15%), showed slight increases in France (up

fuels aids the new, minor widening in the differential

2.9%), and highs were recorded on the Iberian price list

between the Italian price and Transalpine prices, which

(up 34.9%).

returned to a little over 20 €/MWh in 2011. As regards

In line with the variations prevalent in the rest of Europe,

2012, data on forward exchange prices at European level

in Italy the price rose to 72.23 €/MWh (up 12.6%), mark-

showed slight or moderate growth in prices, signalling

ing growth partially lessened by the considerable level of

a markedly winter trend in French and German profiles.


Price on the European Power Exchanges (arithmetic mean €/MWh) 90 80 70

€/MWh

60 50 40 30 20 10 2007

2008

2009

2010

2011

90 80 70

€/MWh

60 50 40 30 20 10 3.2011

6.2011

9.2011

Source: Electricity Market Operator – Monthly trading report – December 2011. IPEX: the Italian Power Exchange; EEX: European Energy Exchange, the German Power Exchange;

12.2011

3.2012

6.2012

9.2012

12.2012

PowerNext: the French Power Exchange; OMEL: Compañía Operadora del Mercado Español de Electricidad, the Spanish Power Exchange; NordPool: the Scandinavian Power Exchange (Norway, Sweden, Denmark, Finland)

As regards the gas market in Italy, 2011 closed with

both a decrease in imports and greater use of stock-

gas demand markedly down compared to the previ-

piles. The decrease in imports mainly concerned Afri-

ous year (down 6.0%) which brings total demand to

can gas pipelines, especially those coming from Libya,

2009 levels. The decrease is essentially due to weather

which were shut down due to the civil war. Domestic

factors, borne out by the fall in domestic consump-

production, which accounts for 11% of supply, remained

tion (down 8%), and strong development in renewable

essentially stable on a YoY basis (down 1%), by contrast

sources which led to a huge decrease in thermoelectric

registering significant trend-based growth in December

consumption (down 7%), especially in the last quarter.

(up 12%). Driven by a brent price which increased to

Solely consumption in the Industrial Area bucked this

79.99€/bbl (up 33.3%), despite the fall in consumption,

trend which, despite a sizeable trend-based reduction

the price recorded on the Virtual Exchange Point con-

in the last quarter (down 4%), recorded a significant in-

tinued to grow, reaching 28.27 €/MWh (up 21%), almost

crease of 2% YoY. Lower demand was tackled through

returning to 2008 levels (29.11 €/MWh). This increase is 2011 | Report on operations

41

incorporated within a context of similar rises in the main European hubs, although the Italian price is around 5 €/MWh higher than the average reference prices in continental Europe.

Italian Gas Market

Total withdrawn/injected

PSV 35

12.000 11.000

30 10.000 25 €/MWh

MCM

9.000 8.000

20

7.000 6.000

15 5.000 10

4.000 01

03

2011

42

05

07

2010

09

11

01

02

03

04

05

06

07

08

09

10

11

12

2009

As regards European energy markets, 2011 saw a net in-

to remain essentially stable in 2012, recording a slight

crease in the prices of all fuels, consolidating the trend

decrease only in the second half of 2012. International

recorded in 2010. The increases appear to be larger on

crude oil felt the effects of the differentiation between

the crude oil markets and its refinement products mar-

traditionally aligned European and US prices.

ket, where prices reached a historic high.

The changes recorded by fuels underwent only a slight

The Brent price rose to 111.3 $/bbl (up 40% compared

downward readjustment as regards the conversion of

to 2010), greatly exceeding the markedly bullish ex-

prices to euros, due to a dollar/euro exchange rate at

pectations expressed by the markets in the previous

2009 levels, equal to 1.39 $/€, reversing the two-year

year. Down the line, forward markets expect oil prices

wave of reductions following the exploits of 2008.


140

2.4

130

2.3

120

2.2

110

2.1

100

2.0

90

1.9 $/€

$/bbl

Dated Brent price trend

80

1.8

70

1.7

60

1.6

50

1.5

40

1.4

30

1.3

20

1.2 2007 Brent

2008

2009

2010

Iranian Light

2011

Jan

WTI

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$/€ exchange rate (dx scale)

As regards the electricity production market, Acea

high level of overall availability.

Produzione is responsible for carrying out electricity

By contrast, production from the S. Angelo plant (down

generation activities.

7.7%), which stood at 91.5 GWh, fell when compared to the ten-year averages.

The company’s production system is now made up of

a collection of generation plants, with a total installed

The company’s thermoelectric production stood at 13.1

power of 344.8 MW, composed of five hydroelectric

GWh as at 31 December 2011.

plants (including those located in Lazio, one in Umbria

2011 saw a continuation of the negative trend in pro-

and one in Abruzzo), two so-called “mini hydroelectric”

duction for the combined cycle of the Tor di Valle plant,

plants, Cecchina and Madonna del Rosario, two thermo-

no longer suitable for sustaining the market impact

electric plants, Montemartini and Tor di Valle (the latter

due to the efficiency gap with respect to modern latest

equipped with a combined cycle module and a turbogas

generation combined cycles which is accentuated by

module with thermal energy recovery, which provides

market prices which show a net decrease. In addition,

the district heating service in the areas of Torrino Sud

particularly low market prices also shaped production

and Mostacciano, in the Municipality of Rome).

in the cogeneration section, which recorded a further decrease in production compared to past use; due to

The hydroelectric area recorded production of 174.5

the restriction placed on the TG3 units of the cogenera-

GWh, heavily impacted by the marginal contribution

tion section on maximum NOx emissions, it was there-

from production in the period from the Salisano plant

fore necessary to use auxiliary boilers to produce heat

which underwent “complete renovation”. Production in

for district heating.

the Castel Madama, Mandela and Orte plants was es-

2011 was the fourth year of operation of the Montemar-

sentially in line with the historical ten-year average (up

tini plant as a generating unit that is essential to the

3.2%) due to an average level of water supplies to the

security of the National Electricity System, pursuant to

plants in the Tiber basin (rivers Aniene and Nera), and a

A.E.E.G. Resolution no. 111/06, as part of the National


43

Electricity System Security Plan – Emergency Plan for

328,356 withdrawal points as at 31 December 2011.

the City of Rome. The plant’s TG1, TG2 and TG3 units

The number of customers totalled 218,105, of which

were subject to dispatching orders from Terna, except

190,000 Acea Energia customers and the remaining

for short periods of maintenance and black start-up

customers part of the retail joint ventures. In 2011, the

testing. Plant production was therefore limited exclu-

number of users switching from the regulated to the

sively to dispatching orders from Terna, as well as pro-

free market amounted to 172,431, representing an an-

duction functional in the testing activities. The econom-

nual volume of 579 GWh, of which around 34% of us-

ic result was, however, guaranteed by the reintegration

ers acquired by other wholesalers, whilst the remaining

of costs recognised by the Italian Authority for Electric-

66% stayed with Acea Energia. In addition, the company

ity and Gas.

sold 96.2 million standard cubic metres of gas to final

The management strategy as regards the availability of

customers and wholesalers.

CO2 emission securities to cover the risk of volatility of the price on the Emission Trading market, implemented

Lastly, with regard to trading activities, as a result of

with the sale of total available accumulated securities

the new corporate structure following the termination

and the repurchase of items corresponding solely to

of the joint venture, Acea Energia Holding S.p.A. was

quantities of energy actually sold as part of the con-

identified as a legal entity, as part of the ACEA Group’s

tracts stipulated, represented an additional element of

Energy Area, responsible for carrying out trading activi-

growth in the total economic result due to a balance

ties, and, in more general terms “Energy Management”.

of CO2 quotas sold in 2011 of roughly 200,000 tonnes.

These are necessary for the functioning of Group operations, with particular regard to sellers (Acea Energia

As regards the sales market, in 2011 Acea Energia S.p.A.

SpA) and production companies (Acea Produzione SpA).

continued its expansion throughout Italy by means of synergies with established local players boasting a well-

In particular, Acea Energia Holding S.p.A.’s objective is

known brand, strong local roots and a well-established

the purchase and sale - in whatever form - of electricity,

customer base. These alliances enabled local partners

heat, methane gas and other fuels and energy carriers

to benefit from the size and reputation of Acea Ener-

for the national and international markets.

gia S.p.A., as well as from its sourcing capacity. In turn,

In particular, the company, provided that at least 80% of

Acea Energia S.p.A is able to leverage local expertise

its average turnover comes from supplies of the above-

and know-how. Moreover, thanks to these agreements,

mentioned goods to companies subject to a dominant

free market customers may take advantage of the ser-

influence from Acea S.p.A. on the basis of proprietary

vices of a supplier able to offer complete, tailor-made

relations, a financial holding or international regula-

and profitable solutions.

tions, may act directly as the contractor, pursuant to

art. 218 of Legislative Decree no. 163 of 12 April 2006, in

In 2011, the sale of electricity on the market sub-

respect of the relative supply contracts from the afore-

ject to additional safeguards came to 3,661 GWh, a

mentioned companies which are also the contracting

reduction of 13.1% over 2010. The number of customers

entities as defined by art. 3, paragraph 29 of the above

totalled 1,147,771 (1,350,505 as at 31 December 2010).

Legislative Decree.

The decrease is linked to the opening up of the market

To this end, the company makes provision for the direct

following completion of the liberalisation process.

or indirect stipulation of dispatching, transportation and storage contracts with operators of the national trans-

44

By contrast, the sale of electricity on the free mar-

port network and institutional market operators, all in

ket came to 10,142 GWh for Acea Energia and 2,784 GWh

the name and/or on behalf of subsidiaries and/or as-

for the retail joint ventures, for a total amount of 12,926

sociates in accordance with art. 2359 of the Italian Civil

GWh, a decrease of 16.1% over 2010, and concerned

Code and/or third parties.


Furthermore, the company operates in favour of its

In fact, according to the ACEA – GdF Suez joint venture,

subsidiaries in particular (Acea Energia SpA and Acea

in response to energy requirements of 15 TWh, roughly

Produzione SpA), by carrying out the following main ac-

12 TWh was purchased from Group companies (Ace-

tivities:

aElectrabel Produzione S.p.A. and Tirreno Power S.p.A.)

• marketing of electricity produced by the Tor di Valle

whilst, effective as of 1 April 2011 - given the compa-

and Montemartini thermoelectric plants and the S.

nies no longer possessed this availability - the total en-

Angelo hydroelectric plant

ergy required for Acea Energia S.p.A. activities (equal to

• the negotiation of contracts for the procurement of fuels for generating plants;

roughly 12 TWh) was procured entirely from the wholesale market and national and international producers.

• procurement of natural gas and electricity for companies selling to end customers; • the marketing of environmental bonds (green certificates, emission rights and certificates for production from renewable sources) Acea Energia S.p.A. and Acea Produzione S.p.A.; • optimisation of the portfolio offered as regards supplies of electricity and management of the risk profile of companies in the Energy Area. The company also performs the role of interacting with Gestore dei Mercati Energetici S.p.A. and TERNA S.p.A.; in respect of the latter institutional entity, the company is the user of the dispatch point for energy injection on behalf of Acea Produzione. In light of the corporate changes which occurred in the first few months of 2011, it should be noted that, as at 31 March 2011, the company sold electricity produced by the plants of AceaElectrabel Produzione S.p.A. and Tirreno Power S.p.A. and, following the expiry of the service contract signed between Acea Produzione S.p.A. and GDF Suez Energia Italia S.p.A., effective as of 1 October 2011, the company sold electricity produced by Acea Produzione’s plants.


45

Water Industrial Area

• On 18 January 2011, to allow works to be completed to improve the water service in the Castelli Romani

Management of water services in Lazio and Campania

area, water was cut off in the section of the new Simbrivio Castelli aqueduct that supplies the municipalities of Albano Laziale, Ariccia, Genzano di Roma, Cas-

Acea Ato 2 S.p.A.

tel Gandolfo and Lanuvio;

Since 2007 the acquisition of contracts with the mu-

• On 23/01/2011, in order to allow the completion of

nicipalities involved has slowed. This has been caused

urbanisation works included in the Laurentino Urban

by local authorities’ natural political alternation and

Recovery Plan, the pipeline on via Laurentina near via

internal difficulties within the authorities themselves.

Celine was cut off, with drops in Undici Ponti, Ferra-

Moreover, based on assessments carried out, certain

tella, Giuliano Dalmata and Colle della Strega;

municipalities still have problems relating to the state

• On 20 February 2011, due to an unexpected fault on

of treatment plants and lack of authorisation for waste

the main DN 800 course of the new Simbrivio Cas-

disposal.

telli aqueduct, drops in pressure and a water short-

No other Integrated Water Service management was

age were recorded in the municipalities served by the

acquired in 2011.

aforementioned pipeline. Normal operating conditions were restored on the morning of 21/02/2011;

Drinking water ACEA ATO 2 S.p.A. provides the full range of drinking

unexpected damage to the Peschiera aqueduct af-

water distribution services including collection and ab-

ter an accident in the section in the municipality of

straction, as well as retail and wholesale distribution.

Sant’Angelo, Acea Ato2 intervened immediately by

Water is abstracted from sources on the basis of long-

carrying out stabilising measures on the supply sys-

term concessions.

tem, restoring normal running conditions on the water

Ten water sources – including five sources (Peschiera,

network in the city of Rome on the same night, except

Capore, Acqua Marcia, Acquoria and Salone), 4 well

in the area of Santa Lucia in the municipality of Fonte

fields (Pantano Borghese, Finocchio, Torre Angela and

Nuova, for which the tanker truck system was imple-

Torre Spaccata) and the Lake Bracciano Aqueduct –

mented. Repair works on the damaged section were

supply approximately 3,000,000 people in Rome and

difficult and completed in the first few days of April.

Fiumicino, as well as more than 60 municipalities in the

Consequently, it was possible to restore normal water

Lazio region, via four aqueducts and a hierarchical system of pressurised pipes.

abstraction structures in the entire metropolitan area; • In March, major ruptures were discovered on sections

Three further sources of supply provide non-drinking

of the Simbrivio aqueduct, some of which attributable

water used in the sprinkler system of Rome.

to landslides caused by heavy rain, which affected the

In addition, ACEA ATO 2 S.p.A. manages the Simbrivio

pipes. The company intervened immediately, restoring

aqueduct, which supplies water to 54 municipalities

the water service as quickly as possible and ensuring

and 3 consortia, the Laurentino aqueduct (formerly

the emergency water tanker service during the sus-

CASMEZ Lazio Regional Authority), which supplies the

pension of the water service. As regards landslides,

municipalities of Pomezia, Ardea and the Campoleone

these concerned the institutional bodies responsible

area in the municipality of Lanuvio, the Doganella aq-

for finding a definitive solution to the problems of

ueduct, serving 8 municipalities in the Castelli Romani

stability on slopes on which the water aqueduct net-

area, and the distribution of water in 73 municipalities

works managed by this company rest;

in addition to Rome.

46

• In the night between 8 and 9 March 2011, due to

• On 26 May 2011, to order to allow the commissioning

With regard to major disruptions, the most significant

of the new Pozzo San Pietro drinking water purifica-

ones are detailed below.

tion plant and the new lifting system at the Vascucce


water plant, it was necessary to suspend the water

population, in agreement with the municipal admin-

flow in the Municipality of Velletri. Normal operating

istrations, ASL (Local Health Authorities) and STO. In

conditions were restored on the night of 26 May 2011;

addition, Acea Ato2 realised supply points distributed

• On 24 and 31 July and 7 August 2011, as part of the

throughout the areas concerned in which it is possible

construction of the new Tiburtina station and re-

to procure water resources in compliance with Legisla-

lated works, suspensions to the water service were

tive Decree no. 31/01, and to distribute bottles of min-

effected on 6 important abstraction pipelines called

eral water in schools. As regards the vanadium, Acea

Acqua Marcia siphons which supply the central area

ATO2 completed works for the restoration and, in any

and east of the city of Rome with a total capacity of

case, in December 2011, the Ministry of Health changed

around 2 m3/s. During said occasions, to overcome

the value of the vanadium parameter from 80 micro-

interference with the new Tiburtina station, a shifting

grams/litre to 140 micrograms/litre.

operation was carried out and simultaneous repairs on the pipes. This involved the design and completion

Sewerage and waste water treatment

of large infrastructural, construction and hydraulic

The sewerage service comprises a sewage network of

works consisting of flyover tunnels on the railway line

about 6,020 km (including approximately 4,050 km of

and the city’s new internal bypass. Thanks to the inter-

network serving the municipality of Rome) and more

connection of the abstraction network serving Rome,

than 300 km of collectors.

it was possible to contain the effects of the temporary

ACEA ATO 2 S.p.A. manages the waste water treatment

disruption to users;

system and pumping stations that serve the network and

• On 13 November 2011, in order to allow the comple-

sewage collectors. Some of them are quite large, with

tion of significant safety works on the new Simbrivio

a throughput of more than 10 cubic metres/sec, and in

Castelli aqueduct and to improve the water service,

some cases they also provide flood protection.

water was shut off on said aqueduct which concerned

In 2011 the main waste water treatment plants handled

33 ATO2 municipalities, in agreement with the authori-

around 599 million cubic metres, an increase of around

ties and area organisations and in coordination with

2.0% compared with the previous year.

the Prefecture of Rome.

Sludge, sand and grating production for all managed plants was equal to 150,885 tonnes, up approximately

In addition, the main works completed in 2011 included

10.3% compared to the previous year.

the commissioning of the Santa Palomba water plant

At the end of December 2011, ACEA ATO 2 S.p.A. man-

and its activation to serve the municipality of Albano La-

aged a total of 489 sewage pumping stations, including

ziale and the partial activation of the new “Colli” water

169 in the municipality of Rome, and a total of 173 waste

plant in the municipality of Albano Laziale.

water treatment plants, including 35 in the municipality of Rome.

As regards exceptions relating to water quality, these currently refer to a population of around 23,000 in-

Research and development

habitants for arsenic and roughly 27,000 inhabitants

In cooperation with LaboratoRI S.p.A., research and de-

for fluorine. The exception provisions, or the Decree

velopment activities continued, in terms of the analysis

of the President of the Lazio Region T0258 of 29 July

of distribution networks and research of leaks according

2011 for arsenic and Presidential Decree T0076 of 11

to the district metering approach set out in Ministerial

March 2011 for fluorine, make provision for the return

Decree 99/97, which was performed mainly in the mu-

within the limits set by Legislative Decree no. 31/01 by

nicipalities of Monterotondo, Grottaferrata, Riano, Fiano,

31/12/2012. In the meantime, the company is carrying

Santa Severa in the municipality of Santa Marinella, Cer-

out the work set out in the restoration plans. Simulta-

veteri, Subiaco.

neously, an information campaign was targeted at the


47

Adoption of a single tariff

ATO 2 that, as at this date, have transferred, or will

As is well known, the Technical Regulations attached

transfer, the services to ACEA Ato2 S.p.A., the single

to the Management Agreement set out (art. 12.2) that,

tariff structure (see tables: “Annex 1 to resolution

for the launch of the management of ACEA Ato 2 S.p.A.,

no. 6/10”), with the increase in the Average Tariff ap-

like the initial tariff structure, the current tariff structure

proved by the Mayors’ Conference (the single tariff

should have been adopted in each municipality. More-

adopted sets out, in particular, a basic tariff, a reduced

over, these structures would have been unified with re-

tariff and three surpluses for domestic users, as well

gard to the one in force in the municipality of Rome.

as a basic tariff and three surpluses for non-domestic

Moreover, the Mayors’ Conference with resolution no.

users. Moreover, the minimum commitment for do-

4/02 of 10 December 2002 envisaged a gradual conver-

mestic users will be cancelled, with a consequent in-

gence of pre-existing tariffs for services managed by the

crease in the fixed amount and maintenance of the

municipalities acquired in line with the Area Plan, within a maximum term of six years from 2003 (transitory period).

minimum commitment for non-domestic users); • to adopt a governing implementation of the single tariff structure;

The tariff convergence plan cited above envisaged that

• to establish a division into instalments of the bills for

the acquisition of all municipalities of the ATO would be

the households from those municipalities affected by

finished by 31 December 2005, guaranteeing the last mu-

an increase of more than 40% between the old and

nicipalities to join a tariff adjustment period of at least three years (up to 31 December 2008).

the new tariff, for specific consumption hypotheses; • to apply a 10% discount (for the first year of adoption)

Given the plan to acquire municipal management of the

on the bills of domestic users affected by an increase

services was not completed within the prescribed time

in annual expenses of more than 20%, given specific

frame, with resolution no. 02/06 of 23 February 2006 the Mayors’ Conference extended conclusion of the acquisi-

consumption hypotheses; • to apply a single tariff to those municipalities whose

tion phase to 31 December 2007.

integrated water service will be transferred (entirely

Consequently, and in line with the criteria established by

or partially) to ACEA Ato2 S.p.A., starting from 1 Janu-

resolution no. 4/02 of 2002, the last term of the period of

ary 2011, from the time of the transfer taking place.

adjustment of the average, individual municipal tariffs in line with the average area tariff was extended to 2010.

48

In addition, the conference resolved to approve the

Acea Ato 5 S.p.A.

adoption of a single tariff structure for the entire ATO 2,

The company manages the integrated water services in

without prejudice to the need to guarantee the operator

ATO 5 Southern Lazio-Frosinone, as set out in Regional

the revenues recognised in the 2009-2011 period (iso-

Law no. 6 of 22 January 1996, under an agreement en-

revenue).

tered into with the Area Authority. The company is also

Given that, afterwards, the need to cancel, by 31 De-

responsible for all other related, resulting or associated

cember 2010, the minimum commitment for domestic

activities.

users was reaffirmed, as set out in CIPE Resolution no.

The management of the integrated water service in the

117/2008 and that this commitment was also reaffirmed

territory of ATO 5 Lazio-Frosinone involves a total of 85

by Co.N.VI.RI., according to which this provision was

municipalities (management still remains to be surveyed

deemed applicable also for the Management in which

for the municipalities of Atina, Paliano and Cassino Cen-

the Ministerial Decree of approval of the Standardised

tro Urbano as regards water services only) for a total

Method of 1/8/1996 is applied, the Mayors’ Conference

population of around 480,000 inhabitants, about 450,000

of 14 December 2010 mainly resolved, by means of Res-

inhabitants supplied and a number of end users equal to

olution no. 6/10, to:

around 188,900.

• adopt, as of 1 January 2011, in the municipalities of

No new purchases were formalised in the January-De-


cember 2010 period. Following organisational restruc-

Updates were completed during the year to the techni-

turing of technical management, aimed at rationalising

cal documentation relating to the water treatment plants

resources, a new organisational structure was launched,

managed by the company.

divided into 3 operating centres called Area Nord, Area centro and Area Sud (Northern, Central and Southern Ar-

As at 31.12.2011 – pursuant to Legislative Decree no.

eas), each with an Area Manager under the control of a

31/2001 – quality controls (routine and inspection) were

single Coordinator.

performed on the drinking water sources, tanks and net-

The drinking water system comprises supply and distri-

works.

bution plants and networks that use 6 main sources from

In 2011, a total of 2,354 samples were taken from water

which 6 aqueduct systems originate (Northern supply,

destined for human consumption.

Southern supply); minor plants serve certain local systems.

As regards the search for water leaks, activities contin-

The coverage of this service amounts to about 97%.

ued to be focused on areas rendered especially critical

The sewerage-purification system comprises a network

in view of adverse weather conditions which involved a

of collectors and sewerage trunk lines connected to ter-

drop in sources.

minal treatment plants of urban waste waters.

The task-force, set up in 2010 as part of the Abstraction

Following the recognition and the associated assess-

Unit, completed activities to modernise and adapt chlo-

ment of the users connected to the sewerage system

rination systems and measuring plants to comply with

(as a result of Ruling no. 335/2008), it was noted that the

regulations throughout the area.

coverage of this service is equal to approximately 68% with respect to aqueduct users.

For more information on the tariff applied, please refer to the appropriate section “Risks and Uncertainties” in the

This year too, management of the water and sewer net-

Report to the 2011 Consolidated Financial Statements.

works was shaped by the operator’s inability, due to the persistent inactivity from the grantor, that still has not reviewed the Area Plan and subsequent financial crisis

Gori

owing to the constant ostracism of ATO 5 as regards defi-

GORI provides integrated water services in 76 municipali-

nition of the subsequent Tariff Plan, to devise and imple-

ties in the provinces of Naples and Salerno, on the basis

ment a plan of measures aimed at resolving severe plant

of a thirty-year agreement signed on 30 September 2002

criticalities in respect of aqueducts and, in terms of sew-

by the company and the Sarnese Vesuviano Area Author-

erage, considerable infrastructural gaps.

ity. In return for award of the concession GORI pays a

In light of the above, the networks continue to be in an

fee to the grantor (the Sarnese Vesuviano Area Authority)

extremely poor state of repair, forcing the operator to

based on the date the right to manage the related ser-

carry out continuous, large-scale extraordinary mainte-

vices is effectively acquired. The perimeter managed has

nance works.

remained essentially unchanged compared to the previous year, since the process of acquiring management

Water treatment plants are subject to targeted systemat-

is, by now, complete. In fact, there are 76 municipalities

ic upgrading and/or adjustment into line with applicable

managed, and that is, all of those falling within ATO no. 3

legislation. As a result of this, activities involving the rou-

of the Campania Region.

tine collection, transportation and final disposal of solid

With reference to the tariff problems, it should be not-

and/or liquid waste on the sites involved the final dispos-

ed that, on 2 August 2011, by means of resolution no.

al of waste of a total volume of roughly 11,000 tonnes,

5, the General Meeting of the Sarnese Vesuviano Area

an increase of 35% over the previous year (around 7,100

Authority (EASV) approved, with a prior amendment, the

tonnes in 2010).

proposed tariff plan of EASV’s Board of Directors, as ap-


49

proved by said Board of Directors on 30 December 2010

Owing to these reasons, and in order to avoid uncertain-

with resolution no. 34. In particular, said General Meeting

ties, it was extremely important for the Area Authority

resolved, among other things:

to quickly complete the process for the review of the

• to invite GORI to sign a streamlining plan for the man-

Plan in order to be able to definitively determine, among

agement of the integrated water service of A.T.O. 3

other things:

which involves an amount of total tariff costs relating

• total costs to be recognised in the integrated water

to 2011 (operating costs, modernisation and return on

service tariff for 2011;

already invested capital) of no more than 130 million

• total costs to be recognised in the integrated wa-

euros (Group share 48.2 million euros). The resolution

ter service tariff for 2009 and 2010 and subsequent

of the Board of Directors of December 2010 envisaged an amount of revenues equal to 136 million euros (Group share 50.4 million euros), • to approve the following tariff system, deemed suited

equalisation; • total costs to be recognised in the integrated water service tariff for the subsequent 2012-2014 regulatory period;

to cover the aforementioned total tariff costs, with the

• an adequate tariff plan which allows the recovery

exception of equalisation upon approval of the tariff

of previous equalisation accumulated throughout all

system following the review of the area plan in prog-

of 2011 and a repayment plan for the debt accrued,

ress:

above all, in respect of the Campania region for water

-- tariff basins: the breakdown of the municipalities of

supplies and waste water treatment services, so as to

A.T.O. 3 into two tariff basins was confirmed as per resolution no. 9 of the General Meeting on 10 July

standardise relations; • guaranteed revenues for 2011.

2009; with the following tariff system: -- basic basin “A” tariff: Basic tariff = €/m3 1.3210

The approval of resolution of 2 August removed the need

-- Basic basin “B” tariff: Basic tariff = €/m3 1.1719

to set aside a provision for risks for tariff equalisation per-

• Tariff structure coefficient before domestic use brack-

taining to 2011, instead included in the accounting situ-

et: 0.6 which cancels and replaces the corresponding

ation for the first half of 2011 in relation to the assumed

coefficient of 0.5 in the tariff structure approved by

non-recognition of estimated revenues, while waiting for

means of resolution no. 9 of the general meeting of 10

a review of the area plan currently being drawn up.

July 2009, • The average area value of the basic tariffs in force in

The 40 million euros bridge loan which matured on 30

“basin A” and “basin B” pursuant to resolution no. 9 of

June 2011 is related to the Area Plan review.

the general meeting of 10 July 2009 stands at 1.2795

At the current state of play, GORI is working with the

€/m3 (it was set at 1.3210 €/m3 in the resolution of the

Area Authority to transform the loan into a long-term

Board of Directors in December 2010).

mortgage.

It should be pointed out that the new revenue forecast (130 million euros) is neither in line with the value of

As part of the repeatedly mentioned extraordinary re-

costs to be recognised in the integrated water service

view, the debt situation towards the Campania Region

tariff for 2011, in compliance with the review criteria

must be definitively settled with regard to drinking water

set forth in the applicable Area Plan, whose application

supplies: for more information on said dispute, please

would, by contrast, lead to a value of around 145 million

see the appropriate section “Update on major disputes

euros, nor let alone with the value of 136 million euros,

and litigation”.

a value already approved, after all, by EASV’s Board of

50

Directors by means of the aforementioned resolution

It is evident that, as a result of the well-known and pro-

no. 34/2010, on the basis of a specific preliminary report

longed tariff circumstances, also in relation to the recov-

drafted by the Area Authority’s Planning Department.

ery of the significant amount of equalisations (147 million


euros, of which the Group’s portion is 54.5 million euros as at 31 December 2011), and the settlement of the debt

Management of water services in Tuscany and Umbria

to the Campania Region, the company’s financial position caused the Directors to carefully assess GORI’s busi-

On 28 December 2001, the subsidiary Acque S.p.A.

ness continuity: for these reasons, a total amount of 44.1

signed the twenty-year management agreement, which

million euros was set aside.

came into force on 1 January 2002. In accordance with that agreement, the Management Body took over the ex-

In relation to the problems concerning ruling no. 335 of

clusive integrated water service of ATO 2, comprising all

2008, it should be noted that, on 2 August 2011, the Gen-

the public water collection, abstraction and distribution

eral Meeting of the Area Authority, by means of resolu-

services for civil use, sewage systems and the treatment

tion no. 6, approved the lists of users not served by water

of urban waste water. The Area includes 57 municipali-

treatment plants and the associated amounts to be re-

ties. In return for award of the concession, Acque pays

imbursed, authorising GORI to carry out the relevant pub-

a fee to all the municipalities, including accumulated li-

lication and go ahead with the subsequent reimburse-

abilities incurred prior to award of the related contracts.

ment to entitled parties, with reference to the period

Based on the provisions of the concession, on 22 De-

running from 16/10/2003 to 15/10/2008, in compliance

cember 2008, the General Meeting of the Area Author-

with the provisions of the Decree of the Ministry of the

ity approved the tariff review for the years 2005-2007,

Environment dated 30 September 2009 and art. 2033 of

in which checks were performed on the actual volume

the Italian Civil Code. The resolution in question also es-

of investments carried out, operating costs, revenues

tablished that the charges deriving from the application

generated, the amounts billed and the technical and or-

of ruling no. 335/2008 must be covered, on a priority ba-

ganisational standards achieved. Based on the results of

sis, by the residual amounts allocated to the provisions

these checks, the adjustment was calculated (positive

set up in accordance with art. 14 of Law no. 36/1994 and

for the operator) for lost revenues for 2005-2007, given

subsequent amendments and additions and pertaining

more than 0.5% lower than those forecast in the Area

to the integrated water service operator (GORI); in the

Plan.

event in which said sums are insufficient to cover the

Penalties were also applied during the revision, as pro-

expenses to be reimbursed, additional extraordinary

vided for in the Agreement, for the failure to achieve cer-

tariff measures must be implemented beforehand - also

tain technical and organisational standards.

as an exception to limit “k” set out by the Standardised

During the second tariff review, the new Investment Plan

Method - which ensure the required economic-financial

was defined, later described in detail in the new three-

funding. In 2011, the charges recorded as a result of the

year operating plan for 2008-2010 approved by the Au-

aforementioned ruling concerned the write-off of receiv-

thority in March 2009.

ables relating to water treatment amounts not due, for an amount of around 3.3 million euros (Group share of

In October 2006, the Operator signed a contract with a

1.2 million euros), fully covered by using the sums as per

syndicate of banks which provides for a total loan of 255

the provisions of art. 14.

million euros to cover the financial needs of the investment plan from 2005 to 2021 of around 670 million euros. As of 31 December 2011, the operator has drawn down 187 million euros. With reference to the subsidiary Publiacqua S.p.A, on 17 December 2010, the General Meeting of the Area Authority approved the 2010-2021 tariff development. The Board of Directors was entrusted by the General Meeting


51

to draw up the new Chapter 6 of the Area Plan, contain-

ous factors such as the lack of jurisdiction (given the ob-

ing comments and details concerning the approved tariff

ject of the resolution is a matter for the General Meeting

profile, as well as the tables of the economic-financial

and not the Board of Directors), the non-adjustment of

plan set out in art. 149, paragraph 4 of Legislative Decree

the analysis of the criticalities of the service and invest-

no. 152/2006.

ment objectives, and, therefore, incompleteness of the

This document was partially approved (in fact, the ap-

document, also shown by the absence of the definition

proved document did not contain the economic-financial

of investments to be carried out. Also in the regulatory

plan) by Area Authority Board of Directors’ resolution no.

area, Conviri (Supervisory Committee for the Use of Wa-

4/2011 of 23 February 2011. The following were the main

ter Resources) also filed a second-instance appeal with

lines adopted by the Authority in defining the tariff de-

the Council of State against the Regional Administrative

velopment:

Court of Florence’s judgment which, by ruling 6863 of 23

• estimate of 86 million cubic metres billed each year,

December 2010, cancelled that Committee’s resolution

as compared to 88.6 million cubic metres as in previ-

no. 3 of 16 July 2008. The resolution challenged the le-

ous forecasts;

gitimacy of the settlement agreed by the Area Authority

• recognition in the tariff of costs already allocated and

and Publiacqua. This was designed to resolve numerous

those expected in the future for the dispute with staff

disputed items that gave rise to the payment of 6.2 mil-

regarding career advancement;

lion euros to the operator. Ruling no. 5788 of the Council

• penalties charged to the operator for 2.7 million euros

of State of 27/10/2011 overturned the judgment of the

due to the failure to reach standards for the 2005 -

Regional Administrative Court of Tuscany. By means of

2009 period, as a reduction of the revenues from the

resolution no. 1 of 16 March 2011 the Area Authority’s

tariff in the 2010-2012 three-year period;

General Meeting resolved to amend article 49 of the sup-

• tariff adjustments for the 2002 - 2009 period for 26.9 million euros;

ply regulation, decisively changing the procedures for calculating and applying the guarantee deposit, introduc-

• non-recognition of part of the new adjustments for

ing a criterion based on user payment times. The reso-

the years 2002 -2003 (1.5 million euros), in application

lution envisaged the adjustment into line with the new

of the 6 year prescription of the new agreement.

criteria during the year, which Publiacqua complied with. In July, the Board of Directors of the Area Authority ap-

The Area Authority provided for 10.2 million euros to

proved the Economic-Financial Plan, therefore only par-

be allocated in order to cover reimbursement requests

tially supplementing the revision of the Area Plan, but

of the water treatment tariff by users who are not con-

still failing to update the service criticalities and invest-

nected to the sewerage network or are connected to

ment objectives, also a preparatory analysis for the iden-

a plant that is temporarily inactive. This amount covers

tification of the level and type of investment. Given the

approximately 50% of the maximum amount estimated

Economic-Financial Plan is an agreement document, and

to be reimbursed (21.6 million euros, including 10% of

therefore must be shared by the operator, and its ap-

non-deductible VAT). If this tariff amount is lower than

proval a matter for the Area Authority, Publiacqua pre-

that actually paid by the operator to the users, the dif-

sented additional grounds for the appeal already filed

ference shall be used to reduce adjustments on past lost

against resolution no. 4/2011 of the Area Authority.

revenues. If the opposite is true (requests exceeding expectations), the operator may request an adjustment in the subse-

As regards tariffs, the Area Authority formally communi-

quent review.

cated to the operator the legitimacy of the tariffs applied,

Publiacqua filed an appeal with the Regional Administra-

also in light of the referendum vote, while awaiting the

tive Court of Tuscany against the resolution of the Area

necessary legislative amendments.

Authority Board of Directors. The appeal is based on vari-

52


Through a merger of equals of Acque Ingegneria and

among other things, advisors’ express wishes.

Publiacqua Ingegnerie on 27 December 2010, Ingegnerie

In terms of the financial-equity position, the operator

Toscane srl was formed, in which Publiacqua, Acque,

continues to work, with the support of the competent

Acquedotto del Fiora and ACEA are shareholders.

corporate structures of ACEA, towards defining a proj-

The company brings together the skills and expertise

ect financing transaction that will support the borrowing

developed over the years, ensuring significant syner-

requirements of the Company until the end of the con-

gies both for the development of planning and works

cession, ensuring the realisation of the entire Investment

management activities in the water services field and in

Plan.

terms of acquiring higher operating efficiency margins.

In the meantime, in the short-term, the operator has covered its investment requirements by drawing down the

As regards ATO 6 Ombrone, based on the management

remaining 15 million euros of the bridge loan of 80 mil-

agreement signed on 28 December 2001, the operator

lion euros in place with MPS, Cassa Depositi e Prestiti e

(Acquedotto del Fiora) is to supply integrated water

Centrobanca - Banca di Credito Finanziario e Mobiliare

services on an exclusive basis in ATO 6, consisting of

Spa. The bridge loan was fully utilised as at 31/12/2011.

public services covering the collection, abstraction and distribution of water for civil use, sewerage and waste

In ATO 1 Toscana Nord the ACEA Group is present

water treatment.

through its own wholly owned subsidiary CREA S.p.A.,

The concession term is twenty-five years from 1 January

which holds shares in GEAL (manager of integrated wa-

2002.

ter services for the city of Lucca alone), AZGA Nord and

In August 2004, ACEA – via the vehicle, Ombrone SpA –

Lunigiana Acque.

completed its acquisition of a stake in the company.

In June 2011, the company CREA S.p.A. was placed into

The year 2011 began with preparations for the tariff re-

liquidation in accordance with the joint provisions of art.

view of the 2008-2010 three-year period, and the subse-

2446, second paragraph and art. 2484 no. 6 of the Italian

quent review of the Area Plan in line with the principles

Civil Code.

of sustainability of the medium/long term economic-fi-

As noted, GEAL S.p.A. is not the Territorial management

nancial balance. In relation to the latter, in resolution no.

body in accordance with Law no. 36/1994 (now Legisla-

23 of 16/11/2010, the Area Authority committed to bring-

tive Decree no. 152/06), and therefore the “standardised

ing forward the normal terms set forth in the agreement

method” pursuant to Decree of the Ministry of Public

(from November 2011 to April/May 2011), as desired by

Works of 01.08.1996 (Standardised Method) for tariff re-

the advisors, in order to ensure the best possible coordi-

view does not apply to it, but the entire method applies,

nation between the Area Plan and the Banks’ Economic

based on the decisions of the Interministerial Economic

and Financial Plan.

Planning Committee (CIPE).

The already mentioned uncertainties connected to the

On 11 March 2011, following the Board of Directors

outcomes of the Referendum June did, however, deter-

resolution, an agreement was signed with the cleaning

mine a slowdown with respect to the programme, which

Consortium Auser-Bientina, in accordance with Tuscany

was completed as expected by the end of 2011, with the

Regional Law no. 38/2003 and Tuscany Regional Law no.

Area Authority General Meeting’s approval of the three-

03/2004, which regulated the payment of fees for 2009-

year 2008-2010 review of the new Area Plan, 2011-2026

2011 for waste water drainage and removal due by the

Investment plan and the definitive 2011-2013 POT (three-

integrated water service manager, which charged them

year operating plan).

to the users served in accordance with art. 16 paragraph

The new Area Plan acknowledges the desired align-

12 of Regional Law no. 34/94 as amended. The tariffs de-

ment of planning of water sale volumes with the op-

termined in this manner were published in the Official

erator’s forecasts, acknowledged in Project Financing’s

Journal of the Tuscany Region (BURT) on 23 March 2011.

FEP which is currently being structured, incorporating,


53

AZGA Nord S.p.A. was put into liquidation in December

document targeted at updating the area plan in force.

2010 and the liquidators were authorised to continue to

These resolutions identified both the proposing and

operate temporarily, also in order to ensure the conti-

transferring entities (the two competent ATIs), the Um-

nuity and correct management of integrated water ser-

bria Region as the competent party plus all other compe-

vices beyond the expiry of 31 December 2010 and until

tent environmental parties. On 13 April and 4 May 2011,

replacement by the new operator. Consultations are cur-

the advisory general meetings set forth in art. 13, para-

rently underway between the Area Authority (now the

graph 1 of Legislative Decree no. 152/2006 and subse-

Tuscan Water Authority), the municipality of Pontremoli

quent amendments and additions and art. 5 of Regional

(majority shareholder of AZGA Nord) and GAIA, for the

Law no. 12/2010 were held. With approval of the reports,

transfer to the latter of management of the integrated

filed at the office of ATI no. 2, the procedure for approval

water service which has not yet been completed.

of the preliminary document for the purposes of the Stra-

Lunigiana S.p.A. was placed into liquidation on 28 July

tegic Environmental Evaluation was concluded. There-

2011. Despite being in liquidation, management contin-

fore, as the identification phase has been completed,

ued in order to ensure continuity in the provision of an

the actual Plan documents will be drafted, according to

essential public service, while awaiting the assignment

the recommendations pursuant to CONVIRI Resolution

of the integrated water service to a new operator.

no. 27 of 24 March 2010, and the actual Environmental

This assignment was transferred to GAIA S.p.A. follow-

Report. The process for the review of the Area Plan in

ing resolution no. 17 of 6 December 2011 of the General

force is therefore taking place very slowly, preventing the

Meeting of the Area Authority and will take effect on 1

company from establishing greater equilibrium from an

April 2012. Therefore, Lunigiana Acque’s management

economic-financial point of view and a renewed invest-

will cease definitively on 31 March 2012.

ment capacity.

The grantor is obliged to reimburse the costs incurred, i.e. the net carrying amount of the works carried out,

In ATO 2 Terni, management of the company Umbriadue

plants and equipment, at its own expense.

scarl, which is a minority shareholder in the integrated

As regards the investments in the Umbria region, in

water service company SII scpa, continues through sub-

December 2007 ACEA was definitively selected by the

sidiary Crea Gestioni S.p.A. which acquired the company

Area Authority for ATO 1 Perugia as the private industrial

AceaRieti through a merger by incorporation, effective

shareholder to take a minority interest in Umbra Acque

from 1 January 2011 for accounting and tax purposes.

S.p.A. Acquisition of the stake in the share capital (with 40% of the shares) took effect on 1 January 2008. In 2011, the company exercised its activities in all 38 Municipalities constituting ATI (integrated local authorities) 1 and 2. By means of General Meeting decision dated 21/02/2011, the Area Authority approved 2011 tariffs, by establishing a 1.25% increase, plus the planned inflation rate of 1.5%. Therefore, the overall increase is 2.75%. The review of the Area Plan by the Authorities will continue. By means of resolution no. 10 of 31 March 2010, the Authority approved to launch the operational activities to draw up the Plan review. By means of resolutions no. 20 of 22 December 2010 and no. 2 of 10 February 2011, the General Meetings of Mayors of the ATI no. 2 Umbria and no. 1 respectively, approved the preliminary

54



nomic operator that was the winning bidder in the initial selection procedure. This required a re-planning of the

A.R.I.A.

supply terms of the turbine, involving a different, specific

With a view to the simplification, optimisation and ratio-

contract relationship, to be installed in the plant follow-

nalisation of the corporate structure and in compliance

ing revamping works, and the need to identify a different

with the guidelines of the 2011-2013 strategic plan,

economic operator to assign the works to. The new con-

approved by the Board of Directors of ACEA S.p.A., it

tract was signed in October 2011, which envisages the

seemed appropriate and convenient, effective from 1

completion of works in the second half of 2012, set out in

September 2011, to go ahead with the merger by incor-

the time schedule presented by the new contractor. This

poration of TERNI EN.A. S.p.A., E.A.L.L. S.r.l., ENERCOM-

meant the plant shutdown stretched throughout 2011.

BUSTIBILI S.r.l. and ERGO EN.A. S.r.l. into A.R.I.A. S.p.A..

The following activities are also underway:

Completion of this corporate restructuring and sim-

• the continuation of scheduled maintenance work per-

plification project led to significant organisational ra-

formed directly by plant personnel;

tionalisation, a reduction in company operating costs,

• the expected start of authorisation activities to obtain

simplification of the flow of human resources and ma-

a new AIA (Integrated Environmental Authorisation)

terials between the different companies, elimination of

for the extension of authorised fuels.

recharge flows, and rationalisation of property assets used by the various industrial companies.

PALIANO RDF PRODUCTION PLANT: the Paliano RDF

Activities performed by the company A.R.I.A. S.p.A. in

production plant possesses an ordinary authorisation for

2011 were characterised, until the end of August, by

the production of RDF, expiring on 30 June 2018.

the coordination and provision of services to the sub-

This authorisation certainly represents a significant as-

sidiaries.

set, especially if we consider the difficulties connected

Subsequently, due to the aforementioned merger by

with locating, realising and authorising activities in the

incorporation, A.R.I.A. S.p.A. started the direct manage-

environmental sector, and in particular, waste treatment.

ment of the assets deriving from the incorporated com-

In line with the provisions of the business plan, reduced

panies.

RDF production recommenced in the last few days of Au-

The operating activities performed by the different

gust, by working the FSC (dry waste) produced by AMA

plants are commented on below.

S.p.A. plants; this allowed the definition of RDF according to UNI 9903 regulations, which requires 5 consecutive

TERNI WASTE-TO-ENERGY PLANT: the waste-to-ener-

weeks of analysis.

gy plant operates in electricity production from renew-

The company is currently completing upgrading work

able sources, and specifically the paper mill pulp waste

linked to the safety of plant infrastructures.

to energy sector.

These activities, performed alongside works to upgrade

Due to the plant revamping works which began in 2010,

the plant’s fire safety system, required the plant to be

the waste-to-energy project is currently suspended. The

shut down, which will extend until the end of the first

photovoltaic plant installed at the site, however, is cur-

quarter of this year at the latest.

rently operational and in 2011 it generated 442,255.80

The technical details of the activities performed are

kW of electricity.

shown below:

Plant “revamping works”, already commenced on October 2010, stopped as a result of the company’s withdrawal, pursuant to Legislative Decree no. 490 of 8 August 1994 and Presidential Decree no. 252 of 3 June 1998, from the tender contract stipulated with the eco-


55

Dry waste

Year 2011

Year 2010

3,285

2,072

ton

Incoming RDF

ton

0

0

Other incoming special waste

ton

0

204

ton

3,285

2,276

TOTALS

WASTE-TO-ENERGY

by an operating period essentially combined between

PLANT: the San Vittore del Lazio waste-to-energy plant

SAN

VITTORE

DEL

LAZIO

the final management period of line 1 and the launch of

operates in electricity production from renewable sourc-

line 2 in April, and the launch of line 3 in July.

es, and specifically from RDF. 2011 saw the completion of the revamping project

The main operational data is shown below. The compari-

through the implementation of lines 2 and 3 of the plant,

son between the same period in the previous year, in

while works commenced for the complete renovation of

technical and economic terms, is purely indicative, given

line 1, whose activities ended in March.

that it relates to two different productive and managerial

This determined a complex plant situation, characterised

situations.

2011 LN 1 Directly operational hours in parallel Electricity generated

LN 2

2010 LN 3

TOT

h

1,868

5,417

3,787

11,072

8,051

MWh

16,954

77,289

55,180

149,423

80,171

MWh

14,562

66,019

47,707

128,288

70,603

tonnes

15,606

36,377

18,958

70,941

77,765

RDF delivered by OTHERS

tonnes

2,848

42,669

40,762

86,279

13,383

RDF produced by the Paliano plant

tonnes

0

1,209

1,138

2,347

2,127

Electricity sold RDF delivered by SAF

An examination of the operating figures highlights a sig-

As regards the revamping of line 1 of the existing plant, a

nificant increase in the quantity of RDF delivered by third

plant upgrading project was launched, in order to reach

parties, in addition to the quantity delivered by SAF S.p.A.,

the following objectives:

and the increase in the potential productivity (MWh sold/

• enhancement of energy performances (with equal

parallel hours) of line 2 (plus 11 MWh/h), compared to

thermal potential of the oven and equal quantity of

that obtained previously by line 1 (8 MWh/h).

fuel treated);

These figures allow the performances of the new plant to

• enhancement of environment performances;

be viewed in a positive light.

• improvement of the operating and management structure of fuels.

As outlined above, April saw the conclusion of the implementation of line 2 and start of the phase of assisted

Works started in June, with the start of demolition ac-

management which extended until the end of November.

tivities. During the last quarter, an authorisation request

Realisation of line 3, by contrast, was concluded in July,

was presented targeted at environmental upgrading for

while the associated phase of assisted management ex-

the architectural-functional redevelopment of the site as

tended until the end of December.

a whole, and the completion of civil works strictly related to the plant.

56


SAO

• application of the tariff plan provided by the agree-

The company SAO owns the waste dump located in the

ment between SAO and ATO4 on 13 August 2007, that

municipality of Orvieto and manages urban and special

regulates management of the public service of selec-

waste.

tion, treatment and disposal of solid urban waste and

The following events took place in 2011:

similar products from the ATI4 municipalities and the

• pursuant to provisions envisaged in the Integrated En-

special waste resulting from treatment of the afore-

vironmental Authorisation issued by the Umbria Re-

said urban waste.

gion with Managerial Directive no. 210 of 19 January 2010, the transfers of special non-hazardous waste

The quantities of waste input and treated at the Orvieto

continued;

plants in 2011 is reported below, as compared to 2010.

Year 2010

Year 2011

Solid Waste ATO 4

tonnes

20,500

6,638

Solid Waste extra ATO 4

tonnes

26,397

22,942

Solid Urban Waste Orvieto

tonnes

13,487

9,863

Solid Urban Waste Orvietano Area

tonnes

10,656

9,926

Solid Urban Waste Amerino Area

tonnes

6,245

5,702

Solid Urban Waste Ternano Area

tonnes

7,732

1,190

Terni org. waste from selec. plants

tonnes

21,709

23,730

Org. waste from sorted collection

tonnes

8,307

7,868

Sludge

tonnes

6,492

6,420

FSC (dry waste) from sel. plant Terni

tonnes

34,978

33,604

ASM Terni pieces

tonnes

1,968

1,842

Bulky solid urban waste TOTALS

tonnes

0

4,068

tonnes

158,471

133,793

The figures above show that quantities transferred were roughly 25 thousand tonnes less than the final value in 2010.

OTHER COMPANIES

tor of integrated water services in ATO6 Ombrone, ATO2 S.p.A., the operator of integrated water services in ATO2

AQUASER

Lazio and ATO 5 S.p.A., the operator of integrated wa-

The company was set up in order to manage ancillary

ter services in ATO5 Lazio. Moreover, starting from year

services associated with the integrated water cycle, car-

2010, the Company carries out the transportation and

rying out the recovery and disposal of sludge from bio-

recovery services of treatment sludge on behalf of the

logical treatment and waste produced from water treat-

company UMBRA ACQUE S.p.A.

ment, treating effluent and liquid waste and providing

The recovery is mainly carried out by spreading sludge

the services connected thereto.

in farming based on clearances, mostly from third par-

In particular, it currently carries out the transport and re-

ties, and the delivery to composting plants, also mainly

cycling of sludge from treatment plants for ASA S.p.A.,

owned by third parties.

the operator of integrated water services in ATO5 along

With the acquisition of control of the companies So-

the Tuscan coast, Acquedotto del Fiora S.p.A., the opera-

lemme Spa and Kyklos Srl, taking place in the previous


57

years, AQUASER started a positioning process on the

tance and closely complements the activities performed

reference market, by acquiring own plants enabling it to

by Aquaser Srl, a completion of the missing link in the

carry out a part of recovery activities itself, and to re-

production chain managed by AQUASER and the devel-

duce fluctuations in prices for waste treatment, which

opment of tools acquired through the acquisition of the

are highly volatile and subject to speculation.

ACEA RIETI business unit, which took place in previous

The location of the plants is also extremely important

years.

from a strategic viewpoint, with one in Lazio, which pro-

In February 2011, the Board of Directors approved the

cesses the sludge transferred under the contract with

company’s business plan, which identifies two paths of

ATO2 and ATO5, and one in Tuscany near Grosseto, which

development that the company intends to pursue:

processes the sludge transferred under the contracts

a) consolidation of the perimeter currently managed and

with FIORA and ASA. This has resulted in a reduction of

expansion of the service to other ACEA group compa-

transport costs. Plant ownership strengthens the role of AQUASER as a qualified operator in its own sphere of reference, with a

new initiatives in the regions of interest.

goal of ever increasing freedom from reliance on plants

As regards the first area, procedures are being defined

it does not own, with a view to increasing the level of

to transform AQUASER into a joint company of the ACEA

service already provided continuously to its own clients/

Group’s integrated water management companies, by

partners.

having them invest in the company’s share capital. As re-

Over the previous years, the company has obtained

gards the second point, initiatives to expand the KYKLOS

three authorisations for the recycling of sludge in the

and SOLEMME plants and due diligence activities to pur-

agricultural sector. Direct ownership of the authorisa-

chase plants in the Lazio and Tuscany regions are being

tions for the recycling of sludge in the agricultural sector

implemented. In particular, the due diligence activities

makes the company more independent from third-party

for SAMACE were completed in respect of the Lazio re-

suppliers. Activities are currently underway to obtain ad-

gion. The S.A.MA.CE. plant is incorporated in the regional

ditional authorisations for the recovery of sludge in the

plant system set out in the new waste management plan

agricultural sector.

of the Lazio region and dedicated to the composting of

Operations in 2011 confirms the consolidation of the

sludge from sanitation, organic waste and green waste,

company both in terms of turnover and management

with the production of compost used in the farming and

yield.

floriculture market in the Lazio region. The reference area

The market in which the Company operates was marked

basin of the S.A.MA.CE. plant supplements the basin of

by an increase in the costs of delivering sludge to the dis-

the Kyklos plant, and together they cover the entire prov-

posal sites and increased transport costs. Despite this,

ince of Latina. The S.A.MA.CE. and Kyklos plants work

however, thanks to the sales initiatives created in the

in synergy, and the acquisition of the former will allow

area of identifying and contractually signing up plants,

AQUASER to consolidate its leadership in the treatment

and to the stipulation of transport contracts, the Com-

of organic waste in the Lazio region. The acquisition of

pany has managed to limit its effect, thereby maintaining

the already existing and authorised S.A.MA.CE. plant will

its profits at similar levels.

allow AQUASER to increase its competitive advantage in

From a strictly operational point of view, the Company

the environmental sector in which local suitability and

has begun to decrease its level of reliance on the ser-

authorisation procedures constitute a huge obstacle. The

vices provided to it by the shareholders; this process

S.A.MA.CE. plant is currently authorised to treat 50,000

was completed with the acquisition of an interest in the

tonnes/year of compostable and liquid waste

company ISA S.r.l. in March 2011. This company provides

The operation is expected to be completed in the first

logistics and transportation activities and, therefore,

half of 2012.

represents a strategic element of fundamental impor-

58

nies that manage the integrated water service; b) strengthening of owned plants and development of


In March 2011, a stake of 40% was acquired in the share

On 23 June 2011, on request of the company, the prov-

capital of ISA S.r.l., with registered office in Pontecorvo

ince of Latina issued the authorisation in accordance

(FR), with a share capital of 91,800. The company per-

with art. 208 for the implementation of some substan-

forms transportation and logistics activities, and is there-

tial variations (closure of the maturation facility, cover-

fore strategic in terms of Aquaser Srl’s objectives of mar-

ing of the existing bio-filter, construction of the waste

ket consolidation and an increase in profits, particularly

treatment plant, installation of the screening plant with

with reference to the management of the transportation

deplastification) necessary for streamlining the manage-

segment, which is fully outsourced at present.

ment process. The changes are proof of the company’s focus and desire

KYKLOS

to reduce the environmental impact of its activities to

The company operates in the waste treatment sector. It

a minimum, by optimising the high quality and manage-

produces and markets moulds, soil conditioners and or-

ment standards already ensured.

ganic fertilisers and carries out its activities in the areas

The associated activities are still in progress.

of Nettuno Ferriere in Aprilia on the basis of an authorisation obtained from the Lazio Region for the recovery of 66,000 tonnes/year.

SOLEMME

The purchase by Aquaser has opened direct access for

The company operates in the waste recycling sector

the company to the market for sludge produced by in-

through the composting of organic waste, in particular

tegrated water service operators in the ACEA Group to

sludge from civil waste water treatment.

the Company; in addition it enabled the creation of posi-

The purchase by Aquaser during the course of the pre-

tive synergies related to the experience of Aquaser in the

vious year has opened direct access to the market for

Solemme subsidiary, which owns a similar plant. Special

sludge produced by integrated water service opera-

attention was and will be given to the development of

tors in the ACEA Group to the Company, with special

the synergy resulting from the professional competence

reference to the Tuscany Region. In addition it enables

and experience of the long-standing shareholders with

the creation of positive synergies related to the experi-

the potential offered by the ACEA Group.

ence built up by Aquaser in the Kyklos subsidiary, which

The year ending on 31 December 2011, represented the

owns a similar plant.

second year of operation of the plant after the increase

Out of all composting plants set forth in the Grosseto

in treatable quantities, and saw the consolidation of the

province waste plan, this is the only one constructed

company in the market and its strengthening in strate-

and operating to date.

gic terms. The company increased and consolidated the

The reference market is represented by urban sanita-

waste volumes recovered within its plant, while increas-

tion sludge produced in the Tuscany region, and in par-

ing its turnover.

ticular, in the context of ATO6 Ombrone, relating to the

In the period in question, the substantial absence of

provinces of Grosseto and Siena, and by the treatment

other similar plants in the regional territory made Kyklos

of waste from sorted collection.

the reference plant for the Provinces of Rome and Lati-

The current potential of the plant is not enough to guar-

na. Thanks to the availability of Kyklos, the two provinces

antee the recovery of the quantities currently produced

averted any organic waste emergency.

for which there is a forecast increase in accordance

In order to strengthen the leadership acquired, on 8 June

with increased urban effluent treatment activity.

2010, the clearance process was started for the adjustment of the current plant and the enlargement of its ca-

The company, also by availing itself of synergies with

pacity up to 120,000 tonnes/year through the construc-

KYKLOS, started to transfer new types of waste and, has

tion of a biogas plant with recovery of electricity and

moved to clarify the interpretation of method of fertil-

heat energy.

iser production at all institutional sites, in order to re-


59

commence full production as soon as possible.

respectively.

In any case, in October 2010 the delivery of biological

In February 2012, during the decision-making services

treatment sludge recommenced in respect of the initial

conference, the Province of Grosseto approved the con-

mix percentages with reference to the weight/weight

struction and operation of the plant with the potential

as sampled, leading, however, to a substantial decrease

for treating 70,000 tonnes per year, upon completion of

in the volumes of sludge transferable to the plant with

town planning procedures.

respect to the volume set out in the authorisation which

In fact, the positive conclusion of the services confer-

also concerned 2011.

ence for SOLEMME made it possible to carry out the

The new business plan sets forth the expansion of the

proposed essential plant upgrading, in order to ensure

current composting plant, which, when operational,

the business continuity of the company, even though

has an input capacity of 26,100 tonnes of compostable

SOLEMME is first required to actually conclude proce-

waste and whose potential is not completely exploit-

dures relating to approval of the implementation plan.

able as of today, in addition to the existing anaerobic

In this sense, however, the company already started the

treatment plant and the expansion of treatment poten-

authorisation procedure in August 2011, as part of au-

tial, guaranteeing the management of 15,000 tonnes

thorisation activities pursuant to art. 208 of Legislative

of organic waste, 25,000 tonnes of biological treat-

Decree no. 152 of 3 April 2006 - Environmental regula-

ment sludge, 15,000 tonnes of agroindustrial sludge

tions governing plant upgrading as a whole.

and 15,000 tonnes of green waste, for a total of 70,000

In addition, Municipal Administration, which had suspend-

tonnes per year. A capacity of approximately 0.5 MW of

ed the review of the implementation plan, re-commenced

electricity production is also expected.

its own procedure on request of SOLEMME, which had

An investment of approximately 12 million euros, to be

requested the immediate recommencement of the proce-

made between 2012 and 2013, is expected for the ex-

dure, highlighting the illegitimate suspension.

pansion of the current plant.

Therefore, plant upgrading activities are expected to

The procedure commenced in August 2010 for the au-

start in September 2012.

thorisation of the upgrade of the current plant, with an increase in treatment potential to 70,000 tonnes per

60

year and insertion of a biogas plant section with the pro-

ISA

duction of electricity and heat energy. On 31/12/2010,

In March, the latter acquired a stake of 40% in the share

by means of Resolution no. 4044 the Province of Gros-

capital of ISA S.r.l.

seto extended the plant operating authorisation until 7

The company operates in the services sector and, in par-

January 2012.

ticular, transportation and in devising solutions relating

On 1 June, in resolution no. 113, the Grosseto Provincial

to civil and industrial works, including through the use

Council excluded the initiative proposed by Solemme

of computerised networks and systems, in order to im-

S.p.A. from the Environmental Impact Assessment in

prove the logistics service, and in the management of

accordance with art. 49 of Tuscany Regional Law no.

complex mechanical and electrical systems.

10/2010; therefore, the procedural process for the issue

A combination of the experience built up by the com-

of the new plant’s construction and operating authori-

pany and the requirements of new shareholder Aquaser

sation was re-initiated.

S.r.l, that wanted to reinforce its structure in order to

Individual citizens, associations and the Municipality of

carry out its services more independently, not just trans-

Monterotondo Marittimo submitted an appeal to the

portation services, but those relating to other connected

Regional Administrative Court of Tuscany against the

and complementary activities such as the spreading of

provision of exclusion from the Environmental Impact

sludge in farming, maintenance of drying beds and auto-

Assessment procedure of 1 June 2011, relating to plant

discharge services, led to a significant increase in activi-

upgrading, notified to the company on 3 and 4 October

ties performed.


ECOMED

“pending procedures for the issue of the Integrated En-

The company (50:50 owned by ACEA and AMA) came out

vironmental Authorisation”.

of liquidation on 29 January 2007 in order to set up the

This Integrated Environmental Authorisation, in accor-

CO.E.MA Consortium.

dance with Legislative Decree no. 56/05 was then issued, by the Territorial Department of the Lazio Region, with ruling no. B3694 of 13 August 2009.

COEMA

In June 2009, the preliminary agreement with GSE was

The Massimetta Ecological Consortium (CO.E.MA.) was

signed for the granting of incentives CIP 6/92 for elec-

established on 30 January 2007 as a partnership be-

tricity that will be produced by the plant in Albano.

tween Ecomed S.r.l. holding 67% and Pontina Ambiente

The order, by which the environmental compatibility

S.r.l. 33%, with a duration up to 31.12.2050, which may

was approved, and the related authorisations for the

be extended if the Consortium so decides.

plant, were disputed before the Regional Administrative

The objective of the Consortium is to establish a com-

Court of Lazio by certain local committees.

mon organisation to plan, build and manage a biomass

The order to suspend the aforesaid environmental com-

and/or waste electricity production plant for the eco-

patibility order was rejected by the Regional Adminis-

logical treatment and transformation of solid urban,

trative Court of Lazio in March 2009.

industrial and special waste in general, with energy

In January (note no. 127 of 19 January 2010), upon invi-

recovery, including energy recovery plants from waste

tation of the Lazio region, CO.E.MA. was advised not to

through combustion, pyrolysis and gasification process-

start the work before the ruling of the Regional Admin-

es, and management of all related preliminary activities.

istrative Court, a letter recorded by CO.E.MA. under no.

The project for this plant with an electrical power of

9/P of 10 February 2010: that if the suspension order is

40Mw was approved by the structures of the Lazio Re-

not issued, (I) our company will have a right-liability (as

gion responsible.

it is an entity with a public majority equity investment

In particular, the Commissioner appointed for the Waste

and urgent public utility work which cannot be delayed)

Emergency in the Lazio region, firstly, by Decree no. 147

to carry out the activities commenced, insofar as they

of 28 December 2007, approved the aforesaid defini-

are expressly authorised and (II) any detrimental event

tive project; subsequently, by Decree no. 24 of 24 June

shall not be charged to the Lazio Region”. Obligations

2008, he approved the “State of implementation of the

set out by the Waste Regulatory Plan were also recalled

actions carried out to overcome the emergency stage

“and the need for completing the intervention within

declared by the Decree of the President of the Council

the terms of authorisations granted”.

of Ministers (D.P.C.M) of 19 February 1999”, that identi-

No further reply was received from the Lazio Region.

fies the plant for the production of electricity in ques-

However, solely for opportunity reasons, CO.E.MA did

tion, as the reference plant in the context of regional

not carry out the works externally and materially, while

plant availability.

it developed all the additional activities necessary to be

On 8 October 2008, the Territorial Department, Regional

able to proceed, in line with the outcomes of the on-

Division for Environment and Cooperation of the pub-

going administrative dispute, without any delay to the

lic, by record no. 177177, gave their positive opinion on

construction of the plant while recovering the time lost.

the environmental compatibility of the repeatedly men-

In this regard, the Regional Administrative Court of Lazio

tioned plant, in accordance with article 23 of Legislative

combined the administrative appeals and, after the

Decree no. 152/06.

hearing held on 27 October 2010, by means of the pro-

Subsequently, by Order no. 2003 of 22 October 2008, the

visions issued on 13 and 14 December 2010, cancelled

Chairman of the Lazio Region, ordered the Massimetta

Environmental Impact Assessment index no. 177177 of

Ecological Consortium CO.E.MA. to implement the

8 October 2010, Environmental Impact Assessment in-

project pursuant to Commission Decree no. 147/2007,

dex no. B3694 of 13 August 2009 and the Order of the


61

Chairman of the Lazio Region no. 3 of 22 October 2008.

APICE

CO.E.MA. promptly submitted an appeal to the Council

The company purpose of A.PI.C.E. S.P.A., formed on 7

of State, and is still awaiting discussion of the same.

May 2008 by ACEA S.p.A. (50%) and Pirelli & C. Ambiente

In January 2012, the Lazio Region approved the Waste

Renewable Energy S.p.A. (50%), involves activities falling

Management Plan, which also includes the Albano gas-

within the sphere of waste recycling and treatment, with

ification plant among the plants to be constructed, with

the purpose of producing electricity, and related ancillary

operations expected to start in 2014.

work such as the purchase, sale, conversion, construction and management of industrial plants in the sector. The company is currently inoperative.

62


Economic and financial review Introduction

Alternative performance indicators

The income statement and balance sheet and the asso-

In line with recommendation CESR/05-178b, the content

ciated comments contained in this section describe the

and meaning of non-GAAP measures of performance

ACEA Group’s performance in 2011, also including the

and other alternative performance indicators used in

economic data as at 31 March 2011 of companies sold as

these financial statements are described below:

part of the Framework Agreement executed by the end

1. gross operating profit is used by the ACEA Group as

of the first quarter, targeted at terminating the 2002 joint

an indicator of operating performance and is calculat-

venture agreement.

ed by adding “Amortisation, depreciation, provisions and impairment charges” to the operating result; 2. net debt indicates the state of the ACEA Group’s financial structure and is obtained by adding noncurrent borrowings and financial liabilities, less noncurrent financial assets (loans and receivables and securities other than investments), to current borrowings and other current liabilities, less current financial assets and cash and cash equivalents; 3. net invested capital is the sum of “Current assets”, “Non-current assets” and assets and liabilities held for sale, less “Current liabilities” and “Non-current liabilities”, excluding items taken into account in calculating net debt.


63

ACEA Group economic results Euro thousand

Income statement Reclassified 31/12/2011

31.12.2010

Increase/ (Decrease)

3,464.7

3,517.5

(52.7)

-1.5%

73.3

88.2

(14.9)

-16.9%

3,538.0

3,605.7

(67.7)

-1.9%

280.6

274.9

5.7

2.1%

Revenue from sales and services Other revenues and proceeds Consolidated net revenue Staff costs Costs of materials and overheads

Increase/ (Decrease) %

2,599.9

2,672.9

(73.0)

-2.7%

2,880.5

2,947.8

(67.3)

-2.3%

(1.7)

8.7

(10.3)

-119.1%

655.8

666.5

(10.7)

-1.6%

433.3

348.6

84.7

24.3%

Operating profit/(loss)

222.6

317.9

(95.4)

-30.0%

Finance (costs)/income

Consolidated operating costs Net income/(costs) from commodity risk management Gross Operating Profit Amortisation, depreciation, provisions and impairment charges

(120.6)

(98.9)

(21.7)

21.9%

Profit/(loss) on investments

57.1

2.6

54.5

2,120.5%

Profit/(loss) before tax

159.1

221.6

(62.5)

-28.2%

Taxation

65.6

85.4

(19.8)

-23.2%

Net profit/(loss)

93.5

136.2

(42.7)

-31.3%

7.6

7.9

(0.3)

-3.9%

86.0

128.3

(42.4)

-33%

0.0

(36.2)

36.2

100.0%

86.0

92.1

(6.2)

-6.7%

Profit/(loss) attributable to minority interests Net profit/(loss) attributable to the Group Fair value adjustment of discontinued operations Net profit/(loss) attributable to the Group net of fair value measurement of discontinued operations

The consolidated income statement shown above is dis-

mained unchanged,

played gross of IFRS 5 reclassifications, that is, including

• Furthermore, worth mentioning is that the Develop-

the economic data of the companies sold in the figures

ment and Special Projects Department changed its

for the period.

name to Engineering and Services Department. With a subsequent order, the coordination of the com-

The Organisational Order of 25 January 2011 changed

pany AceaGori Servizi was entrusted to the Water Indus-

the macrostructure of ACEA S.p.A..

trial Area.

The main changes referring to the Industrial Areas are as follows:

The operations and financial position by Industrial Area

• Industrial Energy Area: the company Acea8cento, pre-

of 2011 was calculated on the basis of the above order,

viously under the Personnel and Service Department,

and that of the same period in 2010 was reclassified for

was placed under the responsibility of this area,

the purposes of a homogeneous comparison.

• Water Industrial Area: the water companies operating abroad and previously under the Development and

Since the economic data are strongly influenced by the

Special Projects Department, were placed under the

change in the basis of consolidation, the tables below set

responsibility of this area,

forth the details of EBITDA changes by Area. It should be

• Environment and Energy Industrial Area: the name was changed to Environment Industrial Area; the responsibilities referring to the managed businesses re-

64


noted that the figures in question only include eliminations within the same business area.

31/12/2011

31/12/2010


655,830

666,527

(10,697)

Energy:

0

42,605

(42,605)

Production

0

34,097

(34,097) (21,429)

Consolidated gross operating profit Change in consolidation:

Trading

0

21,429

Sales

0

(12,921)

12,921

11,491

0

11,491

Lazio - Campania

(142)

0

(142)

Tuscany - Umbria

11,633

0

11,633

221

0

221

11,712

42,605

(30,893)

Pro-forma gross operating profit of changes in basis of consolidation

644,118

623,922

20,196

CHANGE IN GROSS OPERATING PROFIT ON A LIKE-FOR-LIKE BASIS

31/12/2011

31/12/2010


269,627

250,328

19,299

ENERGY

61,384

79,352

(17,968)

Production

15,563

35,743

(20,180)

6,806

6,124

682

39,015

37,485

1,529

Water:

Environment Total change in consolidation

ENERGY NETWORKS

Trading Sales ENGINEERING

7,951

6,848

1,103

WATER:

304,302

289,536

14,766

Overseas

8,697

4,423

4,275

Lazio - Campania

227,439

225,328

2,111

Tuscany - Umbria

68,166

59,785

8,381

ENVIRONMENT

31,457

23,084

8,373

ACEA (structure)

(30,602)

(25,225)

(5,377)

Total on a like-for-like basis

644,118

623,922

20,196


Vatican City, partially offset by an overall increase in en-

The EBITDA in 2011 came out at 269.6 million euros, an

ergy distribution operating costs (up 8 million euros) and

overall increase of 19.3 million euros due to the com-

lower user accessory revenues (down 5.7 million euros).

bination of macro-phenomena indicated hereafter by

Public lighting recorded a drop in the gross operating

company.

profit of 13.8 million euros deriving from the new con-

Concerning Arse, worth mentioning is an increase in the

tract with Roma Capitale.

gross operating profit of 14.6 million euros chiefly produced from the activities carried out in the PV business and (up 16.2 million euros) referring to the marketing


and supply of photovoltaic panels and the energy ac-

The comparison of the results of this Area is affected by

count gained in the period. ACEA Distribuzione recorded

the dissolution performed on 31 March 2011.

growth of 13.5 million euros, due to an increase in the

The economic data of the companies in the Area were

primary energy margin (up 24.6 million euros), attribut-

accounted for under proportionate consolidation, based

able to the recovery in equalisation revenues of previ-

on the proportion effectively held in the first quarter of

ous years (15.3 million euros), services provided to the

2011, and they have been consolidated on a line-by-line


65

basis since 1 April 2011; the economic data therefore are

views in 2011 and 2010 respectively.

not immediately comparable with the data from the pre-

The gross operating profit of this area felt the effects of

vious year.

higher expenses (up 2.6 million euros) deriving from the

The financial position and cash flow are affected by the

seizure of some of ACEA Ato2’s treatment plants.

deconsolidation of the transferred companies and the consolidation of the financial position and cash flow

Overseas

related to the additional shares acquired by GDF SUEZ

The contribution to the area’s EBITDA amounted to 4.3

Energia Italia S.p.A. (excluding the higher intercompany

million euros, generated mainly by AguaAzul Bogotà as

eliminations made necessary). These therefore take ac-

a result of the consolidation of Conazul and the stipu-

count of the proprietary structure post-closing: please

lation of the new commercial management contract in

refer to the basis of consolidation for more details. Thus

Bogotà’s zone 1.

the financial position and cash flow are not immediately comparable with those at 31 December 2010.


The Area closed 2011 with an EBITDA level of 61.4 million

EBITDA in the area as at 31 December 2011 stood at 31.5

euros. On a like-for-like basis, a decrease of 18 million

million euros, up 8.4 million euros compared to the previ-

was recorded in the operating profit, attributable mainly

ous year, mainly attributable to ARIA, which recorded a

to generation activities as a result of lower quantities

gross operating profit of 18.5 million euros, an increase

produced due to plant shutdown for the repowering of

due to higher revenues generated by the second and

hydroelectric plants. Trading and sales activities, by con-

third lines of the San Vittore del Lazio WTE plant, which

trast, were essentially in line with 2010.

mitigated the non-production of the first line of the plant and of the Terni plant, shut down due to repower-

Water Industrial Area (including therein the Engineering and Services Department)

ing. Furthermore, Aquaser registered an increase in the gross operating profit, attributable to higher quantities of sludge treated for the ATO2 contract and the acquisition of some new contracts. In respect of said increase

The Area’s EBITDA totalled 323.8 million euros, an in-

in revenues, a significant decrease was also recorded in

crease of 27.4 million euros compared to last year. The

disposal/recovery costs, generating an increase of 53.2%

increase is broken down as follows:

in the gross operating profit compared to the same pe-

• Engineering and services + 1.1 million euros

riod of the previous year.

• Management of water services in Lazio and Campania + 2 million euros • Management of water services in Tuscany and Umbria + 20 million euros • Management of overseas water services + 4.3 million euros.

Corporate ACEA closed the period in question with an EBITDA level that was negative by 30.6 million euros (including consolidation adjustments), down by 5.4 million euros compared to 31 December 2011, essentially as a result of the

Italy

increase in costs relating to personnel and to the com-

The positive impact on EBITDA is due to the change in ba-

pany Marco Polo.

sis of consolidation, with the consolidation of Acquedotto del Fiora and Acea Servizi Acqua amounting to 11.5

A brief illustration of the main changes in the consoli-

million euros, and to the increase in integrated water

dated income statement is shown below.

service revenues as a result of the natural increase in tariffs, also following the Acque and Publiacqua tariff re-

66


Consolidated Net Revenue: - 3,538.0 million euros

sale of CO2 rights and green certificates due to the

Revenue from sales and services amounted to

change in the basis of consolidation produced by the

3,464.7 million euros and relates to:

companies sold, ii) the increase of 1.9 million euros

• revenue from electricity and gas sales and ser-

from energy efficiency certificates generated by ACEA

vices totalling 2,440.5 million euros. This item record-

Distribuzione.

ed a decrease of 114.8 million euros compared to 31

• revenues from services to customers amounted

December 2010, due to the change in the basis of con-

to 185.9 million euros, marking a 22.1 million euros

solidation (down 101.9 million euros) On a like-for-like

increase mainly as a result of: i) the change in Arse’s

basis, the change is attributable mainly to lower rev-

contract work in progress which relates to works as-

enues from generation activities as a result of lower

signed to third parties for the construction of photo-

quantities produced due to plant shutdown for the re-

voltaic plants in the sites at Cassano, Villa Piana, Or-

powering of the Salisano and Orte hydroelectric plants.

somarso and Scalea, not finished as at 31 December

As regards activities regulated by distribution, an in-

2011 (up 10.6 million euros), ii)activities performed by

crease was recorded in revenues generated by the

Arse involving the marketing and installation of photo-

combined effect of a reduction in electricity inject-

voltaic panels on behalf of third parties (up 7.8 million

ed into the network and the different mix of energy

euros), and Public Lighting revenues in the municipali-

distributed between the types, and a different value

ties of Naples (up 3.7 million euros) and Rome (up 6.6

of tariff parameters. It should be pointed out that

million euros). This increase was partially offset by the

2011 benefitted from the recognition of a significant

reduction in services carried out by ACEA Ato2 on re-

amount of revenues relating to the recovery of gen-

quest of third parties (down 2.5 million euros).

eral equalisation of previous years (15.3 million euros).

• revenues from the delivery of waste and waste

This balance included higher revenues deriving from

dump management amounted to 28.9 million eu-

energy produced by plants owned by the A.R.I.A.

ros, in line with the previous period, achieved by the

Group, due to the entry into operation of two new

Aquaser Group (8.2 million euros), down 0.5 million

lines of the San Vittore plant, partially offset by lower

euros compared to the previous year, and by ARIA

revenues resulting from the shutdown of the Terni

Group companies (20.8 million euros), up 1.3 million

plant (from 6 August 2010) and of the first line of the

euros. The trend is related to the quantity/price effect.

San Vittore plant. • revenues from the management of water

• connection fees totalling 36.3 million euros, marking an increase of 4.4 million euros.

services in Italy and overseas amounted to 753.3 million euros, marking an increase of 62.4

Other revenues, standing at 73.3 million euros, regis-

million euros: i) due to the different method of con-

tered a decrease of 14.9 million euros compared to the

solidation of Acquedotto del Fiora (up 29.5 million

same period in 2010. This change reflects opposing fac-

euros), ii) the tariff review of Acque (up 3.6 mil-

tors:

lion euros) and Publiacqua (up 4.7 million euros),

• the increase in the energy account (11 million euros),

iii) the tariff increase of Ato2 (up 7.3 million euros).

mainly due to the entry into operation of some PV

Furthermore, Aguazul Bogotá also recorded growth of

plants owned by Arse,

12.3 million euros as a result of the consolidated per-

• the decrease in gains on the disposal of assets which,

formance of Conazul, established in the second half

in 2010, included the profit generated by the sale of

of 2010.

the Parent Company’s car fleet for 9.5 million euros,

• revenues from the sale of certificates and

• the reduction of 10.3 million euros in contingent as-

rights totalled 19.7 million euros, a reduction of 27.7

sets - essentially due to energy items - also deter-

million euros, whose breakdown is shown below, i)

mined by the change in the basis of consolidation.

the decrease of 29.5 million euros in income from the


67

Consolidated operating costs - 2,880.5 million euros

• the costs of materials came to 104 million euros

The costs include:

as at 31 December 2011, an increase of 24.1 million

• the cost of personnel which amounted to 280.6

euros due mainly to: movements in photovoltaic pan-

million euros, in respect of average staff numbers of

els used to produce proprietary plants or destined for

7,136 in the period. The increase of 5.7 million eu-

sale (up 16 million euros) and as a result of require-

ros compared to 31 December 2010 reflects natural

ments generated in the fourth quarter by the start of

growth (up 511 average units) due to the change in

activities set out in the “Lighting Plan” project, com-

the basis of consolidation, partially offset by the vol-

missioned by Roma Capitale as part of the public light-

untary redundancy programmes implemented by the

ing service contract (up 5.7 million euros); the follow-

larger companies in the Group, and increase in av-

ing companies contributed to the variation: Aguazul

erage per capita costs as a result of the renewal of

Bogotà (due to Conazul) for 3 million euros, Acquedot-

employment contracts and salary policies. Changes in

to del Fiora for 0.9 million euros and ASA and ISA for

the perimeter relate to: -- Acquedotto del Fiora for 5 million euros,

0.4 million euros. • costs for the provision of services amounted

-- Aguazul Bogotá for 3.5 million euros, as a result of

to 331.5 million euros at December 2011 and regis-

the expansion of the activities carried out by the

tered an increase of 8 million euros over the same

foreign subsidiary, including therein those provided

period in 2010. This was a result of the change in the

by Conazul,

basis of consolidation: (i) due to the consolidation of

-- Acea Servizi Acqua and ISA totalling 1.6 million euros and 0.4 million euros,

68

(down 30.6 million euros).

Acquedotto del Fiora with the proportionate method from 1 January 2011, for 9.4 million euros, (ii) the con-

-- companies acquired as part of the termination of

solidation of Conazul for 1.9 million euros, (iii) for the

the joint venture totalling 8.1 million euros. The

acquisition of Acea Servizi Acque for 0.4 million eu-

result produced, as at 31 December 2010, by the

ros and Innovazione Sostenibilità Ambientale for 0.4

companies sold should be deducted from this

million euros. Furthermore, the effect of the termina-

change, owing to the different period of owner-

tion of the joint venture with GDF Suez Energia also

ship in the two years being compared (7.9 mil-

had a significant impact, leading to a change in the

lion euros). A negative net change was recorded

percentage of consolidation of Acea Energia Holding

amounting to 0.2 million euros. Staff costs for the

and its subsidiaries (up 10.7 million euros in total), off-

transferred companies were 2.9 million euros at 31

set by costs incurred by the companies transferred.

December 2011.

This item benefitted, when compared to the previous

• energy, gas and fuel costs amounted to 2,034.1

year, from the reduction brought about by the rec-

million euros, a reduction of 108.5 million euros com-

ognition, in 2010, of costs related to the termination

pared to the corresponding period in the previous year.

of the joint venture, amounting to 3.5 million euros.

The change reflects the variation in basis of consolida-

The costs of contract works performed registered

tion and includes: (i) expenses relating to the supply of

an increase of 2.8 million euros, attributable to ACEA

electricity for the protected and free markets, and the

Distribuzione and the Parent Company for the activi-

market subject to additional safeguards and the as-

ties performed as part of the public lighting service,

sociated transportation costs (up 304.4 million euros),

partially offset by less maintenance works carried

(ii) the cost of the purchase of gas destined for resale

out by the water companies (down 8.6 million euros).

and production of electricity and the cost of other fu-

The costs of electricity, water and gas con-

els used by the plants during the period (down 378.3

sumption

million euros), (iii) expenses relating to the purchase

consolidation

of green certificates, CO2 rights and white certificates

In contrast, the following should be noted: i) the in-


fell,

following percentage

the of

change Acea

in

the

Energia.

crease in the costs of Facility management services

nancial contracts stipulated in 2011 by Acea Energia (up

provided by Marco Polo to the Parent Company (up

0.3 million euros) that, following the termination of the

4.4 million euros), ii) technical and administrative ser-

joint venture, assumed the role of energy management.

vices (up 5.9 million euros) attributable to ACEA Energia and Acea8cento.

Depreciation of property, plant and equipment

• concession fees, standing at 61 million euros, regis-

and amortisation of intangible assets as at 31 De-

tered an increase of 3.5 million euros compared to the

cember 2011 totalled 264.7 million euros and comprises

previous year, for Acquedotto del Fiora (up 2.1 million

amortisation/depreciation of 250.5 million euros (up 19.6

euros) and Publiacqua (up 1.6 million euros),

million euros), additional write-downs of 8.9 million eu-

• costs for the use of third party assets stood at

ros (up 5.5 million euros) recorded by ARIA in relation

33.3 million euros, down by 0.6 million euros over 31

to plant parts that will be disposed of upon repowering

December 2010 as a result of higher costs incurred for

and the impairment of the value of goodwill and other

rental expenses (up 0.8 million euros) and lower charg-

intangible assets of 5.4 million euros (up 2 million euros).

es for other hiring and leases (down 1.4 million euros);

The increase in amortisation/depreciation is a result of

• sundry operating costs amounted to 36.1 million

both the level of investments and the change in the basis

euros, essentially in line with 2010.

of consolidation.

Net income from management of commodity risk

The impairment of receivables amounted to 55.1

was a negative 1.7 million euros, and refers to fair value

million euros as at 31 December 2011, marking a de-

changes relating to the companies transferred (down 2

crease of 8.8 million euros, caused mainly by lower pro-

million euros) and to the fair value measurement of fi-

visions made by water companies (10.9 million euros).

Provisions totalled 113.5 million euros and are composed as shown in the table below. Nature of the provision

FY 2011

FY 2010


Euro millions Legal reserve

9.3

8.5

0.7

Tax reserve

0.8

0.0

0.8

51.6

0.0

51.6

8.0

2.4

5.6

27.5

7.9

19.5

Contracts and supplies

2.0

12.1

(10.1)

Insurance excesses

1.1

0.3

0.8

Other liabilities and charges

1.6

6.0

(4.3)

101.8

37.2

64.6

11.7

9.9

1.7

113.5

47.2

66.3

Regulatory water risks Contribution risks Redundancy and retirement

Total Restoration charges - IFRIC12 TOTAL PROVISIONS

With reference to GORI and ACEA Ato5, as a result of

has still not been overcome. For this reason, an alloca-

significant events which occurred in 2011 (please see

tion of 44.1 million euros was made to cover the risk of

the Consolidated Financial Statements for a description),

uncertainty in respect of GORI and 4.8 million euros on

ACEA believes that the problem of uncertainty over the

top of the provisions made by ACEA Ato5 to take account

business continuity of the aforementioned companies

of the measure issued by the Commissioner for deeds


69

(4.8 million euros augmenting the provision of 25 million

Net income from investments totalled 57.1 million

euros allocated in 2009).

euros and mainly includes gains from the termination of the joint venture with GDF Suez Energia Italia (47.8 mil-

Net financial expenses amounted to 120.6 million eu-

lion euros) and the positive result from the fair value as-

ros, marking an increase of 21.7 million euros compared

sessment of the Acea Energia shareholding already held

to 31 December 2010, due essentially to (i) charges re-

by the Group (7.5 million euros).

sulting from the discounting of receivables for 11.2 million euros (of which 9.3 million euros relating to public

Taxation in the period was estimated at 65.6 million

lighting and 1.8 million euros to the estimated timescale

euros, with an incidence on the pre-tax result of 41.2%,

for collection of the tariff adjustments of ACEA Ato5), (ii)

compared to an incidence of 38.5% as at 31 December

increase in the costs of the non-recourse factoring of re-

2010.

ceivables (13.4 million euros), (iii) increase in medium/ long-term debt charges (7.5 million euros), with particular reference to bonds placed by ACEA in the first few days of March 2010, (iv) increase in income (5.5 million euros) on trade and financial receivables and (v) the recognition in 2010 of interest expenses on tax disputes (3.8 million euros).

70


Therefore, net Group profit came to 86 million euros.

Group financial position and cash flows Acea Group

31.12.2011

31.12.2010



(a)

(b)

(a) - (b)

%

BALANCE SHEET (amounts in thousands of euros) NET WORKING CAPITAL

89.3

73.0

16.3

22.3%

Current receivables

1,510.0

1,324.5

185.5

14.0%

- due from end users/customers

1,304.7

1,170.9

133.8

11.4%

160.1

113.6

46.4

40.9%

- due to the municipality of Rome Inventories

66.1

86.0

(19.9)

-23.1%

246.6

166.2

80.4

48.4%

Current payables

(1,344.8)

(1,103.1)

(241.6)

21.9%

- due to Suppliers

Other current assets

(1,185.0)

(986.5)

(198.5)

20.1%

- due to the municipality of Rome

(132.8)

(96.2)

(36.6)

38.0%

Other current liabilities

(388.7)

(400.6)

11.9

-3.0%

NON-CURRENT ASSETS AND LIABILITIES

3,548.0

3,512.1

36.0

1.0%

Property, plant equipment and intangible assets

3,844.6

3,821.2

23.4

0.6%

19.5

35.8

(16.3)

-45.6% 39.0%

Investments

416.8

299.9

116.9

Staff termination benefits and other defined-benefit plans

Other non-current assets

(104.8)

(110.8)

6.0

-5.4%

Provisions for liabilities and charges

(250.9)

(200.8)

(50.1)

24.9% 13.2%

Other non-current liabilities INVESTED CAPITAL NET DEBT Medium/long-term loans and receivables Medium/long-term borrowings

(377.2)

(333.3)

(43.9)

3,637.3

3,585.0

52.2

1.5%

(2,325.8)

(2,203.7)

(122.1)

5.5%

19.9

15.2

4.7

31.1%

(2,298.9)

(2,490.7)

191.8

-7.7%

Short-term loans and receivables

172.8

334.2

(161.4)

-48.3%

Cash and cash equivalents

321.0

296.5

24.5

8.3%

Short-term borrowings

(540.6)

(359.0)

(181.7)

50.6%

Total shareholders’ equity

(1,311.5)

(1,381.3)

69.9

-5.1%

COVERAGE

(3,637.3)

(3,585.0)

(52.2)

1.5%

The above balance sheet has been reclassified to show

The financial position and cash flow, as mentioned above,

the components of invested capital and the correspond-

are affected by the deconsolidation of the transferred

ing funding.

companies as part of the Framework Agreement and the

In particular, the net carrying amounts of non-current

consolidation of the financial position and cash flow re-

assets and net working capital, consisting of current

lating to additional shares acquired from GDF SUEZ Ener-

receivables, other receivables, inventories, current pay-

gia Italia S.p.A. (net of the greater intercompany elimina-

ables and the short-term portion of long-term debt have

tions made necessary).

been added together.

The ACEA Group’s balance sheet reports an increase in

The figure obtained for invested capital is then compared

invested capital of 52.2 million euros compared to 31 De-

with the corresponding amounts for shareholders’ eq-

cember 2010 (up 1.5%).This is the result of the increase

uity and the net debt, thereby showing the proportions

in net working capital (16.3 million euros), and net fixed

of equity and debt used.

assets (36 million euros).


71

The balance of non-current assets and liabilities

This item is primarily influenced by the change in the

amounted to 3,548 million euros (up 36 million euros

consolidation basis of Acquedotto del Fiora (from the eq-

compared to 31 December 2010, equal to 1%).

uity method to proportionate consolidation), which led

In particular:

to an increase in fixed assets for 57.8 million euros at 1

• property, plant and equipment and intangible

January 2011.

assets amounted to 3,844.6 million euros, and in-

Investments in the period for 413 million euros, net of

creased by 23.4 million euros over the end of the pre-

depreciation and amortisation and impairment (264.7

vious year.

million euros), contributed to the change. Compared to

This item is significantly influenced by the dissolution,

the same period of the previous year, investments in the

which led to a reduction of 103.5 million euros in the

year fell by 60.2 million euros. The table below shows,

value of fixed assets and represents the net effect of the

per Industrial Area and Company, the level of invest-

deconsolidation of the transferred companies and the

ments at 31 December 2011, compared with the same

consolidation of the additional interest purchased from

period in the previous year.

GDF SUEZ Energia Italia S.p.A.

72


Industrial Area

Company

Networks

Acea Distribuzione Acea S.p.A. – Public Lighting Arse Ecogena Total Networks Area

Energy

97.6

3.7

0.0

8.8

(8.8)

26.3

53.3

(27.0)

1.5

1.4

0.0

161.1

(32.1)

19.0

(19.0)

AceaElectrabel Trading

0.0

0.0

0.0

Voghera

0.0

0.2

(0.2)

Roselectra

0.0

0.2

(0.2)

Longano

0.0

0.0

(0.0)

Tirreno Power

0.0

24.0

(24.0)

11.2

0.0

11.2

Acea Energia Holding

1.6

0.3

1.3

Acea Energia S.p.A.

9.5

5.1

4.5

0.1

0.0

0.1

Total Energy Area

22.5

48.7

(26.2)

ARIA Group

18.5

45.6

(27.1)

Aquaser

0.6

0.4

0.2

Kyklos

0.9

1.8

(0.9)

Solemme

0.3

0.6

(0.3)

I.S.A.

0.3

0.0

0.3

A.p.i.c.e.

0.0

0.0

0.0

Total Environment Area

20.6

48.5

(27.8) 15.6

ACEA Ato2

149.1

133.5

ACEA Ato5

5.7

4.5

1.2

GORI

5.4

6.2

(0.8)

minor entities

0.8

0.7

0.1

161.1

145.0

16.0

Acque

25.7

28.4

(2.7)

Publiacqua

26.1

20.2

5.9

Umbra Acque

4.7

4.6

0.0

Nuove Acque

2.1

2.6

(0.5)

Acquedotto del Fiora

9.2

9.2

minor entities Total water services – Tuscany/Umbria Overseas Water Services Total Water Area

ACEA GROUP TOTAL

101.2

0.0

Total water services - Lazio/Campania

Engineering and Services


129.0

Acea800

Water

31.12.2010

AceaElectrabel Produzione

Acea Produzione

Environment

31.12.2011

0.9

0.3

0.6

68.6

56.1

12.5

0.2

0.8

(0.6) 27.9

229.9

202.0

LaboratoRI

0.3

0.8

(0.5)

Total

0.4

0.9

(0.5)

Acea S.p.A. - Facility

10.5

12.1

(1.6)

Total

10.5

12.1

(1.6)

413.0

473.2

(60.2)


73

The change is determined by the decrease in the invest-

ing service contract, which represents the overall in-

ments of all Industrial Areas (88.1 million in total), with

vestments carried out until 31 December 2010 linked

the exception of the Water Area which made higher in-

to the same service, from applying IFRIC 12 with the

vestments of 27.9 million euros compared to the same

financial method, and accrued income and prepay-

period in the previous year. The increase is mainly at-

ments (7.1 million euros), mainly referring to white

tributable to companies operating in the Lazio - Campa-

The balance of the item, compared to the previous

companies operating in the Umbria - Tuscany area also

year, increased by 116.9 million euros (equal to 39.0%)

recorded an increase in investments, essentially due to

mainly due to (i) the reclassification of the rights on in-

the consolidation of Acquedotto del Fiora (9.2 million

frastructure as a consequence of the entry into effect

euros).

of the supplementary agreement signed in March (49.7

The Networks Area recorded a decrease of 32.1 million

million euros) and (ii) the reporting of greater deferred

euro, mainly relating to the start of marketing of pho-

tax assets (86.1 million euros) deriving from both the

tovoltaic panels, with a reduction of activities involving

provisions of the period and, especially, from the acqui-

the acquisition of ARSE assets (down 27 million euros);

sition of 40.59% of Acea Energia,

investments were also eliminated relating to the Public

• defined Benefit plans amounting to 104.8 million

Lighting Contract, due to the definitive adoption of the

euros recorded a decrease of 6 million euros com-

financial model in place of the mixed model (IFRIC 12).

pared to the end of the previous year, as a result of

Investments in the Energy Area fell by 26.2 million eu-

the net effect of:

ros due to the deconsolidation of the companies trans-

-- 3.4 million euros relating to staff termination ben-

ferred. The investments made in 2011 by Acea Produz-

efits,

ione total 11.2 million euros, and mainly refer to the

-- - 3.9 million euros relating to tariff subsidies,

repowering of the hydroelectric plants of Orte and Sali-

-- and, lastly, up 1.1 million relating to the medium/

sano and district heating.

long term Incentive Scheme

The Environment Area recorded a reduction in invest-

The performance of the first two items was hugely influ-

ments compared to 31 December 2010 (down 27.8 mil-

enced by both the provision for the period of 16.5 million

lion euros) due to the entry into operation of the second

euros and payments made during the period resulting

and third lines of the San Vittore del Lazio WTE plant.

from the implementation of the voluntary redundancy

Parent Company investments refer to investments in

procedures of ACEA, Ato2 and ACEA Distribuzione,

hardware needed for projects for the improvement and

• the provision for liabilities and charges con-

development of the IT network, implementation of the

tributed 250.9 million euros to net invested capital,

site video surveillance system and enhancement of

increasing by 50.1 million euros compared to the

websites and the billing system in use at some subsid-

previous year, mainly due to provisions for the period

iaries.

(113.5 million euros), net of uses (totalling 64.2 million

• investments stood at 19.5 million euros, and de-

euros) of sums set aside in previous years to cover

creased by 16.3 million euros mainly due to change

mobility, disputes and litigation and tender risks. For

in the consolidation criteria of Acquedotto del Fiora,

more details on the type of provisions made during

from the equity method to proportionate consolida-

the period, please see note no. 4 of the Consolidated

tion. The value of the investment entered at 31 De-

Income Statement.

cember 2010 amounted to 18.5 million euros,

74

certificate production activities.

nia area, particularly ACEA Ato2 (up 15.6 million euros);

As at 31 December 2011 the provision for liabilities and

• the balance of other non-current assets (equalling

charges mainly included: (i) 27.8 million euros for the

416.8 million euros) is mainly made up of deferred tax

assessment of legal and tax risks (litigation matters, dis-

assets (353.6 million euros), long-term receivables

putes, etc.), (ii) 78 million euros for the estimate of risks

of 53.4 million euros deriving from the Public Light-

related to the management of subsidiaries and/or for-


mer subsidiaries, including the risks related to the situ-

As at 31 December 2011, net working capital

ation of uncertainty and recovery of tariff adjustments

amounted to 89.3 million euros, an increase of 16.3 mil-

of ACEA Ato5 and GORI (73.9 million euros) (iii) 25.6 mil-

lion euros compared to 31 December 2010. The growth

lion euros for potential liabilities and charges related

is linked both to the 185.5 million euros increase in

to staff, including therein disputes over contributions;

current receivables (14%) and the 80.4 million euros

(iv) 8.5 million euros for risks for possible disputes with

increase in other current assets (up 48.4%) and to the

suppliers or losses on contracts; (v) 15.4 million euros

increase in current debt of 241.6 million euros (21.9%),

essentially relating to the evaluation of post-closure

the increase in other current liabilities of 11.9 million

charges connected with the management of the SAO

euros (3%) and reduction in inventories of 19.9 million

waste dump (Orvieto), (vi) 11.7 million euros for total

euros (23.1%).

borrowings that Gori is bound to pay to the municipali-

As regards the breakdown of receivables, please note

ties in accordance with the Area Plan; (vii) 12.6 million

the increase in users and customers of 133.8 million

euros deriving from charges relating to redundancy

euros, equal to 11.4%, and the increase in trade receiv-

schemes; (viii) 1.4 million euros for risks related to the

ables from the municipality of Rome of 46.4 million eu-

recovery of plant efficiency; (ix) 2.7 million euros for the

ros (40.9%).

litigation that arose between GORI and the Campania

The change of the net working capital is affected by the

Region related to water supply; (x) 4.3 million euros

dissolution.

for risks linked to projects to be carried out (suppliers); (xi) 54.5 million euros for the allocation to the provi-

• With reference to the 133.8 million euros increase in

sion for restoration charges pursuant to IFRIC 12. ACEA

receivables due from end users and custom-

maintains that the settlement of ongoing disputes and

ers, please note that:

other potential disputes should not create any addi-

-- the Networks Area companies increased their re-

tional charges for Group companies, with respect to the

ceivables by a total of 7.8 million euros, including

amounts set aside, which represent the best estimate

up 29.8 million euros due to Arse and - 23.3 mil-

possible on the basis of elements available as of today.

lion euros due to ACEA Distribuzione. Three non-

For more information, please refer to the Notes to the

recourse factoring operations were completed dur-

2011 Financial Statements, and in particular, the section

ing the year for 27.9 million euros, and receivables

entitled “Update on major disputes and litigation”,

deemed uncollectible written off amounting to 19.5

• other non-current liabilities contribute 377.2 million

million euros;

euros to the reduction in net invested capital and,

-- with reference to the Energy Area, please note that

compared to 31 December 2010, increased by 43.9

the trend of the period is substantially affected

million euros (up 13.2%). This item consists of:

by the change in the basis of consolidation. The

-- provision for deferred taxes of 98.8 million euros

amount of receivables fell by 51 million euros as

(down 6.9 million euros)

at 31 December 2010; this variation is due to (i) the

-- advances of 130 million euros (up 34 million euros):

elimination of the receivables of the transferred

this item includes the amount of guarantee depos-

companies (for a total of 179.6 million euros) and

its and consumption advance subject to adjust-

(ii) the increase in receivables of the Acea Ener-

ment by water service companies,

gia Group due to the greater consolidated share

-- grants related to assets of 66.8 million euros (up

compared to 2010 (up 317.5 million euros). ACEA

9.2 million euros due to the proportionate consoli-

Energia carried out the non-recourse factoring of

dation of Acquedotto del Fiora),

receivables for a total of 695.8 million euros, and

-- long-term deferred income of 26.7 million euros (up 3.2 million euros).

wrote off uncollectible receivables, which are fully covered by the Provision for the impairment of receivables for 16.7 million euros.


75

-- companies in the Water Area recorded an overall

by other receivables (up 109.6 million euros) and

decrease of 47.1 million euros, due essentially to

(iii) 9.5 million for accrued income and prepayments

ACEA Ato2 (down 49.7 million euros), Acea Ato2

(down 5.6 million euros) and for 0.7 million euros from

(down 12.5 million euros), partially offset by GORI

receivables deriving from the fair value measurement

(up 7.7 million euros); a rise of 3.6 million euros was

of commodities.

also recorded in the receivables of water compa-

-- Current tax assets decreased substantially due

nies in Tuscany and Umbria, of which 11.4 million

to the elimination of tax credits posted in the trans-

euros refer to Acquedotto del Fiora, 3.1 million eu-

ferred companies, which leads to a change of -28.4

ros to Acque, 1.4 million euros to Umbra Acque, par-

million euros.

tially offset by Publiacqua for - 11.2 million euros.

-- Other receivables changed substantially com-

In the January – December period, ACEA Ato2 car-

pared to the end of the previous year, and were

ried out the non-recourse factoring of receivables

affected by the change in the basis of consolidation

for a total of 284.7 million euros and wrote off re-

linked to the dissolution of the joint venture. Spe-

ceivables totalling 7.1 million euros;

cifically, the item decreased for a total of 16.4 mil-

-- the Environment Area companies contribute to the

lion euros due to the deconsolidation of the trans-

growth of receivables for 27.4 million euros; this

ferred companies and increased by 28.1 million

change is influenced mainly by the Aria Group (up

euros as a result of the line-by-line consolidation

27.9 million euros), deriving essentially from the

of the ACEA Energia Holding group companies; fur-

sale of electricity to GSE.

thermore, other receivables of Acea Ato5 recorded an increase of 58.1 million euros, in relation to the

• As regards amounts due from and to Roma Capi-

amount of tariff adjustments - classified under re-

tale (including financial items) net receivables of 144

ceivables due from customers in 2010 – quantified

million euros due to the Group from Roma Capitale

definitively by the measure of the Commissioner

were recorded, which stood at 113.7 million euros at

for deeds, which ACEA Ato5 was informed of on

the end of the previous year. For more details on the

9 March 2012. As at 31 December 2010, the post-

formation and change in the position towards Roma

netting amount of ACEA Distribuzione receivables

Capitale, please see note no. 22 of the notes to the

due from ACEA Energia, totalling 10.9 million eu-

Consolidated Balance Sheet.

ros, was also included in the balance of other receivables, and was generated by the return of the

• Inventories reached 66.1 million euros, down by 19.9

amount that was paid to the Equalisation Fund and

million euros, due to the deconsolidation of the trans-

the Electricity Operator in the name and on behalf

ferred companies, which implies an overall decrease

of ACEA Energia.

of 26 million euros, particularly for the gas stored in

Please see note 22 of the Consolidated Financial State-

the AceaElectrabel Trading warehouse (down 18.5

ments for the analysis of the other receivables item.

million euros) and Tirreno Power’s available stocks (down 8.9 million euros). The Networks Area recorded

In relation to current payables, standing at 1,344.8

an increase of 5.7 million euros, mainly due to activi-

million euros, the increase of 241.6 million euros com-

ties underway for the construction of Arse’s photovol-

pared to the previous year reflects:

taic plants (up 7.4 million euros).

• the 198.5 million euros increase in trade payables, which amounts to 1,185 million euros due both to the

76

• Other current assets, amounting to 246.6 million

deconsolidation of the transferred companies, which

euros, increased by 80.4 million euros and are com-

led to an overall decrease in payables of 219.6 million

posed as follows (i) 57.1 million euros for current tax

euros, and to the decrease in trade payables for all

assets (up 14.4 million euros) (ii) 179.3 million euros

Industrial Areas, particularly the Networks Area (down


55.9 million euros), • the increase in amounts due to Roma Capitale

Net debt was a negative 2,325.8 million euros as at 31 December 2011, marking an increase of 122.1 million

(36.6 million euros); for more information, please see

euros compared to 31 December 2010.

the comments in note no. 22 to the Consolidated Bal-

The breakdown is shown in the following table:

ance Sheet. Other current liabilities stood at 388.7 million euros at the end of the year, which is an increase of 11.9 million euros since the end of the previous year (3%).

CONSOLIDATED NET DEBT Euro millions Non-current financial assets/(liabilities) Intercompany non-current financial assets/(liabilities) Non-current borrowings and financial liabilities Medium/long-term borrowings Cash and cash equivalents and securities Short-term bank borrowing Current financial assets/(liabilities) Intercompany current financial assets/(liabilities) Net short-term debt Total net debt

31.12.2011 (a)

31.12.2010 (b)

Increase/ (Decrease) (a)-(b)

1.9

10.2

(8.3)

18.0

5.0

13.0

(2,298.9)

(2,490.7)

191.8

(2,279.0)

(2,475.5)

196.5

321.1

297.8

23.3

(448.9)

(208.8)

(240.1)

(26.8)

(87.8)

61.0

107.7

270.6

(162.9)

(46.9)

271.8

(318.7)

(2,325.8)

(2,203.7)

(122.1)

The dissolution of the JV with GDF SUEZ Energia Italia

Excluding the effect described above, growth of 330.6

significantly affected the result of the financial expo-

million euros is recorded, of which 37.5 million euros re-

sure of the ACEA Group.

fers to the change in the basis of consolidation caused

The overall impact of the operation on consolidated net

by Acquedotto del Fiora.

debt, stands at 208.5 million, including the cash-ins and

The difference of 187.2 million euros mainly derives from

cash-outs set out in the Framework Agreement: the

covering the need due to dividends distributed (126.2

amount also includes the effects of minimum tempo-

million euros), for investments in the PV area and in

rary adjustments and does not include the non-financial

waste-to-energy, the payment of 11 million euros as an

items that were equalised (other debt like).

advance on the purchase of the site and implementation

More specifically, the deconsolidation of transferred

of the redundancy scheme, which involved outgoings of

companies decreased net debt by a total of 366.5 mil-

14.5 million euros in 2011.

lion euros; conversely, the consolidation of additional shareholdings acquired led to a 151.5 million euros

The individual components break down as follows.

increase in the Group’s debt. This is in addition to the ACEA’s net outlay of 8.2 million euros and net receiv-

Medium/long-term borrowings are composed of:

ables deriving from minimum temporary adjustments of

• non-current financial assets / (liabilities) amounting to

1.7 million euros.

1.9 million euros, which fell by 8.3 million euros with


77

respect to 2010, mainly due to the deconsolidation of

As at 31 December 2010, the balance of 5 million eu-

Tirreno Power’s VAT credit,

ros included loans granted to Group companies and

• intercompany financial assets / (liabilities) of 18 million euros, and include financial receivables due from Roma Capitale relating to plant upgrades in terms of safety

the balance was reduced to zero as a result of the different basis of consolidation. • Non-current

borrowings

and

financial

liabilities

and legislation and new constructions as set out in the

amounted to 2,298.9 million euros, including the fair

addendum to the Public Lighting contract, carried out

value of hedging instruments for a positive 11.1 mil-

in 2011. This receivable relates to the long-term por-

lion euros.

tion deriving from application of the financial method

The table below shows the breakdown of the item net of

as per IFRIC 12 regarding concession arrangements.

the fair value of hedging instruments.

Euro millions Bonds Medium/long–term loans Medium/long–term loans from third parties Total

31.12.2011

31.12.2010


988.7

978.7

9.9

1,310.3

1,509.2

(198.9)

0.0

2.8

(2.8)

2,298.9

2,490.7

(191.8)

The reduction of 191.8 million euros in non-current borrowings and financial liabilities is mainly linked to the change in the basis of consolidation. The breakdown of non-current financial liabilities is shown below, including fair values per Industrial Area: Industrial Area ACEA Networks Energy Water Environment TOTAL

31.12.2010


1,784.4

1,788.3

(3.9)

363.7

378.6

(14.9)

0.0

191.2

(191.2)

144.5

124.8

19.7

6.3

7.8

(1.6)

2,298.9

2,490.7

(191.8)

Bonds

a positive 34.7 million euros, amounts to 165.3 million

Bonds equal 988.7 million euros and include the instru-

euros. As at 31 December 2011, this fair value was

ments already existing at the end of the previous ac-

allocated to a specific shareholders’ equity reserve.

counting year, in particular:

The exchange rate difference, a negative 15.5 million

• 303.2 million euros refer to the bond loan issued by

euros, of the hedged instrument calculated at 31 De-

ACEA in 2004, with interest of 6.5 million euros ac-

cember 2011 was therefore allocated to an exchange

crued in the period,

provision. The exchange rate as at 31 December 2011

• 517.3 million euros (including the accrual of accrued

stood at 100.20, whilst it stood at 108.65 as at 31 De-

interest due) due to the bond loan issued by ACEA

cember 2010; various fluctuations were recorded dur-

in March 2010 with a 10-year duration and maturity

ing the year: in March it was 117.61, 116.25 in June

term on 16 March 2020, • 200 million euros relating to the Private Placement which, net of the fair value of the hedging instrument,

78

31.12.2011


and 103.79 in September. • 2.8 million euros regarding the issue of the bond loan issued by Consorcio Agua Azul.

Medium/long-term loans and receivables The item at 31 December 2010 (1,310.3 milion euros) in-

lion euros). As a result of the proportionate consolidation

cluded medium–long term loans and the related hedges

of the Company Acquedotto del Fiora, the medium–long

stipulated with the companies being transferred, such as

term loans of the ACEA Group grew by 6.7 million euros.

Tirreno Power (for 144.1 million euros), Voghera Energia

The following table shows medium/long–term borrow-

(for 43.5 million euros) and Longano Eolica (for 2.6 mil-

ings by term to maturity and type of interest rate:

Bank Loans

TOTAL RESIDUAL DEBT

due by 31.12.2012

FROM 31.12.2012 TO 31.12.2016

DUE AFTER 31.12.2016

fixed rate

411.9

40.1

89.6

282.3

floating rate

706.2

33.2

564.7

108.3

floating rate to fixed rate

266.5

1.1

66.2

199.2

1,384.6

74.4

720.5

589.8

Total

Medium/long–term loans from third parties

to companies transferred (down 91.6 million euros),

At 31 December 2011, medium/long–term loans from

partially offset by the increase in payables deriving

third parties are completely eliminated, as a conse-

from the consolidation of greater equity investments

quence of the dissolution.

acquired for total payables of 26.8 million euros; • reduced intercompany current financial assets (162.9

As at 31 December 2011, the short-term debt was

million euros) due to the changed basis of consoli-

negative, and contributed to the increase of 46.9 million

dation connected with the termination of the joint

euros in net debt. With respect to 31 December 2010, a

venture with GDF SUEZ Energia Italia. In fact, at the

decrease of 318.6 million euros was recorded, caused

closing date, the shareholder loans granted by ACEA

by:

to Roselectra and Voghera (which amounted to 33.7

• an increase of 23.3 million euros in cash and cash

million euros at 31 December 2010) and AceaElectra-

equivalents,

bel Trading (for 1 million euros) were settled, as well

• growth in short-term bank debt of 240.1 million euros

as the inter-company current account balances with

due to the increase registered by ACEA (190.4 mil-

the Parent Company that, at the end of 2010, equalled

lion euros), which stipulated new lines of bank credit,

18.1 million euros. ACEA loans and receivables from

debt contributed by the proportionate consolidation

Roma Capitale for the management of public lighting

of Acquedotto del Fiora (34.7 million euros) and the

were recorded under said item (114.7 million euros).

growth of the Acea Energia Group (8 million euros), • the reduction of 61 million euros in the balance of current financial liabilities as a result of the change in

The performance of debt in the individual Industrial Areas is summarised in the table below:

the basis of consolidation, with particular reference


79

Industrial Area

31/12/2011

31/12/2010


ACEA

389.6

306.6

82.9

Networks

853.8

759.7

94.1

Energy

229.9

412.9

(183.0)

Water

633.8

523.7

110.2

Environment TOTAL

218.7

200.8

18.0

2,325.9

2,203.7

122.2


by 1.7 million euros compared to the end of the previous

Net debt in the period came to 853.8 million euros, an

year, mainly due to Aguazul Bogotà.

increase of 94 million euros over the end of the previous

So, overall, the area’s debt came to 633.8 million euros

year as a result of the following macro events: increase

and grew by 110.2 million euros over the end of the pre-

in receivables due from the municipality of Rome for the

vious year. The increase is broken down as follows:

public lighting service, increase in ACEA Distribuzione re-

• Management of water services in Lazio and Campania

ceivables and higher requirement in relation to the purchase of Arse’s photovoltaic panels.

+ 60.0 million euros • Management of water services in Tuscany and Umbria + 47.9 million euros

Energy Industrial Area Net debt for the period amounts to 229.9 million euros and is down by 183 million euros compared to the end of the previous year, due to the dissolution of the joint venture with GDF SUEZ Energia Italia;; the financial exposure

• Management of Overseas Water Services - 1.7 million euros • Engineering and services + 3.9 million euros.

of the companies transferred as at 31 December 2010


amounted to 313.9 million euros

Net debt for the period amounts to 218.7 million euros

The total impact of the operation on the Area’s net debt

and is up by 18 million euros compared to the end of the

at the closing date was 202 million euros, including the

previous year, mainly due to the requirement resulting

cash-in set forth in the Framework Agreement: this

from the construction of the second and third lines of the

amount partially includes the effects of the adjustments,

San Vittore plant.

currently being defined, and does not include non-finan-

Interest expense accrued during the year on the medium/

cial items subject to equalisation (other debt like).

long-term line of 9.1 million euros, including 2 million euros capitalised on the I, II and III lines of the San Vittore

Water Industrial Area (including therein the Engineering and Services Department)

plant.

The Management of Water Services in Italy closed

Net debt in the period totalled 389.6 million euros, up

the year with a level of net debt equal to 626.5 million

by 82.9 million euros due to: i) dividends of 95.8 million

euros: the 108 million euros increase over the end of the

euros distributed during the year relating to 2010 and

previous year is mainly a result of the consolidation of

30.4 million euros for the 2011 advance, ii) payment of

Acquedotto del Fiora, which contributed 37.5 million eu-

the advance for the site purchase for 11 million euros,

ros in debt. The remaining part of the increase is due to

iii) payment of the expenses relating to redundancy pro-

67.7 million euros from ACEA Ato2 (need generated by

cedures of 2.9 million euros and (iv) payment of instal-

investments and distribution of dividends in 2010) and

ments due in respect of the tax settlement for a total of

17.3 million euros in investments made by Acque.

13.4 million euros.

The net debt of overseas companies was zero, falling 80


Corporate

Other Information ACEA S.p.A activities strategic objectives at Group and subsidiary level and co-

Performance of the international stock markets and of the ACEA share

ordinates their activities.

International stock markets recorded a negative trend

ACEA S.p.A., in its role of industrial holding, defines the

in 2011, primarily as a result of the sovereign debt criWithin the Group, ACEA S.p.A acts as a centralised trea-

sis in certain countries and risk of recession. The US

surer for the largest subsidiaries.

stock market bucked the trend, where the Dow Jones

Intercompany relations are conducted on the basis of:

recorded growth of more than 5%.

• the setting up of a medium/long-term credit line for a

The year just ended was characterised by the follow-

pre-established amount to cover requirements gener-

ing main socio-political events which had a significant

ated by investments.

impact on the global economy and performance of the

• The credit line (i) has a three-year term starting on 1

stock markets: (i) political unrest in the Middle East and

January 2011, (i) generates interest at a rate which is

North Africa; (ii) the violent earthquake which struck

updated annually, equal to the 3-year IRS plus a spread

Japan and the resulting nuclear catastrophe in Fuku-

in line with that of a bond issued on the equities market

shima, which forced governments worldwide to recon-

with a BBB rating and (ii) makes provision for an annual

sider atomic energy policies; (iii) the killing of Osama Bin

credit line commission calculated on the ceiling,

Laden in May.

• the establishing of a general purpose credit facility to cover the company’s current needs.

These events determined, among other things, a rise in the price of oil, which contributed to the slowdown in

The credit line (i) has a three-year term starting on 1 Janu-

the recovery of the global economy.

ary 2011, (i) generates interest at a rate which is updated

In 2011, the sovereign debt ratings of certain countries

annually, equal to the 3-year IRS plus a spread in line with

continued to be downgraded by the three main ratings

that of a bond issued on the equities market with a BBB

agencies: Moody’s, Standard & Poor’s and Fitch. The

rating and an active rate calculated on the basis of the

revision of credit ratings, political and economic ten-

arithmetic mean of the daily 3-month EURIBOR rates in

sions in the Euro zone, the crisis in the financial sector

each calendar quarter less a spread of 5 basis points and

and fears over Greece’s potential default heightened

(ii) makes provision for an annual credit line commission

the emergency regarding European sovereign debt.

calculated on the ceiling.

This situation led, in the second half of the year, to a

It should be pointed out that ACEA SpA also acts as guar-

significant increase in “country risk” in Italy, causing a

antor for Group companies: in this regard, the contract

significant increase in the return differential between

that regulates the general purpose credit line establishes

10-year Italian government bonds and the correspond-

a ceiling for guarantees and a cost split between bank

ing German securities by more than 500 basis points.

guarantees and company guarantees.

The spread performance and political ups and downs which concerned Italy adversely impacted the Stock

ACEA SpA also provides administrative, financial, legal,

Market, which recorded an extremely high level of vola-

logistics, management and technical services to subsid-

tility and the FTSE MIB fell by more than 25%. More spe-

iaries and associated companies in order to optimise the

cifically, the Italian Stock Market underperformed the

use of the company’s existing resources and know-how

international stock market lists, recording the following

in an economically advantageous manner. These ser-

changes: FTSE Italia All Share -24.3%, FTSE MIB -25.2%

vices are regulated by the necessary service contracts:

and FTSE Italia Mid Cap -26.6%.

those in force are effective from 1 January 2011, have a term of three years with the possibility of automatic

INTERNATIONAL STOCK MARKETS

renewal and the annual payment is based on contractual

With reference to the US Stock Market, as at 31 De-

prices and the quantities actually supplied.

cember 2011 (compared to 31 December 2010), the


81

Dow Jones recorded growth of 5.5%, the Nasdaq C. a

lating the water tariff, based on the return on invested

decrease of 1.8%, while the S&P500 remained essen-

capital; 2) repeal of art. 23 bis of Legislative Decree no.

tially unchanged.

112/2008 (so-called “Ronchi” decree) which made provi-

The Asian Stock Market indexes recorded the follow-

sion for the privatisation of the water sector and which

ing performances: Nikkei 225 -17.3%, Hang Seng Hong

offered Italian local utilities opportunities for develop-

Kong -20.0%.

ment.

In Europe, the Paris Stock Exchange lost 17.0%, the

After the Referendum, the financial community ex-

London Stock Exchange 5.6% and the Frankfurt Stock

pressed worries about the reduction in visibility regard-

Exchange 14.6%.

ing regulation of the water market, highlighting the need for prompt legislative intervention by the government.

ACEA SHARE PERFORMANCE

Within said context, ACEA’s share price stood at 4.888

The extreme fragility of the Italian economic situation

euros as at 31 December 2011 (capitalisation: 1,041.0

also affected securities which belong to the utilities sec-

million euros), down 41.97% compared to 31/12/10. In

tor, that have always been considered “defensive”.

2011, a high of 8.5797 euros was recorded on 11 May,

In the second half of the year, Acea’s share performance

with a low of 4.596 euros recorded on 20 December.

was also adversely affected by the outcome of the Refer-

During the year subject to analysis, average daily traded

endum on 12/13 June, relating to the Water Area, which

volumes amounted to 251,780, a considerable decrease

involved: 1) the repeal of the current method of calcu-

compared to 2010 (515,410).

Acea shares 10.0 9.5 9.0 8.5 8.0

Acea

Euro

7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 12.2010

02.2011

(Source: Bloomberg)

82


04.2011

06.2011

08.2011

10.2011

12.2011

The normalised graph of ACEA’s share performance is shown below, compared with Stock Market indexes.

10.0 9.5 9.0 8.5 8.0

FTSE Italia Mid Cap

Euro

7.5

FTSE Italia All Share

7.0 6.5 6.0

FTSE Mib

5.5 5.0

Acea

4.5 4.0 12.2010

02.2011

04.2011

06.2011

08.2011

10.2011

12.2011

(graph normalised at Acea values – Source: Bloomberg)

% change at 31/12/2011 (compared to 31/12/10) Acea

-41,97%

FTSE Italia All Share

-24,29%

FTSE Mib

-25,20%

FTSE Italia Mid Cap

-26,56%

(Source: Bloomberg)

Around 160 reports/notes were published on ACEA’s share in 2011.


83

Significant events in 2011 Termination of the joint venture agreement between ACEA and GDF Suez Energia Italia

c. ACEA purchased from GSEI the financial receivables due to the latter from AEP against a fee, equal to the

The joint venture agreement signed between ACEA and

value of the principal and interest accrued until the

GDF Suez Energia Italia (GSEI) in 2002 was terminated on

Date of Execution, of 25.1 million euros.

31 March 2011.

As part of the dissolution of the JV, the Framework Agree-

The Framework Agreement, signed on 16 December

ment envisages a series of additional understandings. In

2010 between ACEA and GSEI, envisaged the execution

particular:

of a series of operations to be implemented in a single

1) aside from the necessary authorisations of the com-

context.

petent public entities within the limits these authori-

In particular at the Date of Execution (i) ACEA purchased

sations are necessary pursuant to applicable regula-

from GSEI an interest representing 40.59% of the share

tions, ACEA granted GSEI a right of first offer on the

capital of Acea Energia Holding S.p.A.; (ii) following the

hydroelectric plants of Castel Madama, Cecchina, M.

non-proportional demerger of GDF SUEZ Produzione

del Rosario, Mandela, Orte, Salisano, Sant’Angelo in

S.p.A. (formerly AceaElectrabel Produzione S.p.A.), the

the event of sale within 3 years from the Date of Ex-

assets and activities that are functional to manage the

ecution. On the Date of Execution GSEI paid ACEA 5.0

hydroelectric plants and thermoelectric plants of Tor di

million euros as the fee for the transfer of the above

Valle and Montermartini were allocated to the company

mentioned right of first offer,

established at the same time, Acea Produzione S.p.A.,

2) GSEI will have the right to participate in the project be-

whose share capital is entirely held by Acea Energia

ing studied only with regard to the CHP unit of the Tor

Holding S.p.A.; (iii) ACEA transferred to GSEI an interest

di Valle plant, as amended, and any other repowering

representing 30% of the share capital of GDF SUEZ Hold-

project regarding the Tor di Valle plant, with the sole

ing di Partecipazioni S.p.A. (formerly Eblacea S.p.A.), in

exception of district heating-related activities, if the

turn holder of 50% of the share capital of Tirreno Power

project is started within two years from the Date of

S.p.A.; and (iv) Acea Energia Holding S.p.A. transferred to

Execution,

GSEI an interest representing 84.17% of the share capital

3) Aside from the necessary authorisations of the com-

of GDF SUEZ Energy Management S.p.A. (formerly Ace-

petent public entities within the limits these authori-

aElectrabel Trading S.p.A.).

sations are necessary pursuant to applicable regula-

Regarding the value of the interest sold and purchased,

tions, ACEA granted GSEI a right of first offer on the

please note that:

investment owned by ACEA through Acea Energia

a. for the purchase of 40.59% of the share capital of

Holding in Acea Energia, in the event of sale within

Acea Energia Holding, ACEA paid GSEI 123.9 million

3 years from the Date of Execution. On the Date of

euros,

Execution GSEI paid ACEA 2.5 million euros as the fee

b. for the sale of 30% of the share capital of Eblacea, ACEA collected from GSEI a fee of 108.2 million euros;

for the transfer of the above mentioned right of first offer,

c. for the sale of 84.17% of the share capital of AET, Acea

4) GSEI granted ACEA an irrevocable and unconditional

Energia Holding collected from GSEI a fee of 33.7 mil-

option, to be exercised by 30 September 2011, to

lion euros.

subscribe a five-year electricity supply agreement for

Additional transactions were as follows:

5TWh per year.

a. ACEA transferred to GSEI the loans and receivables

The sale of Eblacea and Tirreno Power as well as that

due from Roselectra, Voghera and AET against a fee,

of the AceaElectrabel Produzione group, and the acquisi-

equal to the value of the principal and interest accrued

tion of 40.59% of the Acea Energia Holding Group, are

until the Date of Execution, of 49.2 million euros;

subject to adjustment in compliance with the Frame-

b. ACEA transferred to GSEI the receivables for the divi-

84

dends resolved by Eblacea for 1.8 million euros;


work Agreement.

Activities related to calculating that adjustment are still

model for the public lighting service in the municipality

ongoing, since the parties are currently analysing the

of Rome is currently being redesigned and the tender

different respective items.

contract in place with the Parent Company is being ad-

This transaction, that exceeds the thresholds of rele-

justed.

vance set out by the Company with regard to Related party transactions, was approved by the Board of Di-

Piano della Luce (Lighting Plan)

rectors during the meeting held on 25 November 2010,

In the period under observation, towards the end of last

having obtained the favourable opinion of the Commit-

year, activities were launched by the Rome Municipal Ad-

tee for related party transactions beforehand.

ministration and ACEA top management relating to the so-called Lighting Plan for Roma Capitale.

Relations with Roma Capitale: Public lighting service

On 3 August 2010, Municipal resolution no. 252 defined and officially approved the purposes and implementation timing of the Plan, which should affect streets, ar-

On 15 March 2011 ACEA and Roma Capitale agreed an

eas and locations in the municipality of Rome (previously

adjustment to the Public Lighting Service Contract.

registered) which are partially or totally lacking lighting,

The key points of the renegotiations are:

or that have lighting systems that should be improved,

• extension of the contract until 2027, making it con-

in order to guarantee mobility and safety to residents.

sistent with the concession, therefore extending the

Approximately 3,600 public lighting facilities, distrib-

remaining term from 4 years and 5 months to 17

uted along a network of over 1,400 km were identified,

years;

including roughly 52,000 lighting points according to a

• the revision of the contractual parameters, bringing

tentative estimate. In addition, in implementation of the

them into line with the CONSIP specifications of the

Directives regarding energy savings and environmen-

“Servizio Luce 2” tender;

tal pollution, the Plan makes provision, where possible,

• the certainty of the entity to be able to directly carry

for favouring the use of LED technology, given that said

out activities related to network expansion which, in

decision - please see the text of the Resolution: “owing

line with the previous version of the contract, were

to its improved lighting efficiency, its chromatic perfor-

subject to tender for Roma Capitale;

mance and the longer duration over time of LED equip-

• the recognition, on maturity of the contract, whether

ment, allows for decreasing both energy consumption

natural or not, of the non-amortised value of the in-

together with the emission of CO2 into the atmosphere,

vestments made by Acea (no provision was made for

and system management and maintenance costs”. Be-

said recognition in the previous version);

tween 23 August 2011 and 31 December 2011, the Plant

• the sterilisation of the so-called “risk-price” of elec-

Development Organisational Unit implemented systems

tricity to power the public lighting plant; in 2011,

on 133 streets pertaining to the 5th, 13th and 20th sub-

the clause allowed the recovery of around 3 million

municipalities of the municipality of Rome, carrying out

euros which, with the previous version of the con-

excavation works extending more than 61km, part of

tract, would have had a negative impact for the same

which performed using non-invasive technology known

amount on the operating result;

as “microtunneling” (which allows a smaller excavation

• the provision of an indemnity in favour of Acea in

section, reduced extension sites with discernible advan-

the event of the early termination of the contract

tages in terms of the road network and reduction in dis-

by Roma Capitale, calculated on the basis of mar-

ruption caused to citizens).

gins discounted for the years until maturity (or 31

The total number of lamps installed came to 3,137, 876

December 2027).

of which with LED technology, the remainder with SAP

In light of the new contractual structure and organ-

(high pressure sodium) technology, with power of be-

isational changes made in the Group, the operating

tween 100 and 250 W.


85

With the exception of a section of Via Ara delle Rose

type of resources used). Said provision also introduced

(which envisaged the completion of a pre-existing sec-

a 4% increase in the surcharge rate for the three-year

tion with steel posts), fibreglass supports were used, a

2011-2013 period (from 6.5% to 10.5%).

material which ensures better resistance to corrosion

In the event the parameters set forth by said law are

than traditional steel posts.

exceeded, the surcharge in question will therefore apply

During the execution of the works, audits were conduct-

to ACEA Distribuzione and ARSE plus Acea Produzione,

ed to verify the level of site safety. Only slight non-con-

Acea Energia and ARIA.

formities were recorded, which were quickly resolved.

Said amendment, calculated on the potential perimeter,

As at December 2011, no “near misses” were recorded

involves a higher annual expense for the ACEA Group,

at any of the sites managed.

estimated in current tax terms at around 13 million euros

Aside from the works realised, a further 360 lighting

for the three-year 2011-2013 period.

points were planned, which cannot be completed at present due to technical reasons unrelated to the structure, such as, for example, authorisations not granted

Medium/long–term incentive plans

by third party entities (Arsial) or works that, as a result

By means of a resolution adopted on 16 September

of the geological surveys, can only be performed after

2010, the Remuneration Committee approved the sec-

obtaining express authorisation from Roma Capitale as

ond cycle (2010–2012) of the Long-Term Incentive Plan

regards coverage of the necessary higher expenses.

set up in 2007. The structure of the plan and premium calculation methods remains unchanged, while the perimeter of benefi-

Advance on 2011 dividend

ciaries of the plan was redefined following the organisa-

As at 29 November 2011, ACEA SpA’s Board of Directors

tional changes which occurred at the start of the first

resolved the distribution of an advance on the ordinary

cycle.

2011 dividend of 0.28 per share.

This long-term incentive plan is aimed at the ACEA

This decision regarding the advance on the 2011 dividend

Group’s top management and executives; the Plan’s

was taken on the basis of the accounting situation of the

goals are as follows:

Acea Group as at 30 September 2011 in light of the busi-

a. providing incentives for management to achieve eco-

ness outlook for the year in progress.

nomic and financial targets at the Group level for the

On 29 November 2011, Independent Auditors Reconta

benefit of shareholders, thereby bringing manage-

Ernst & Young issued a judgment as set forth by article

ment’s objectives into line with those of the Group’s

2433 of the Italian Civil Code.

shareholders; and b. boosting management loyalty. The Plan envisages a cash payment to be calculated as

86

Robin Hood Tax

a percentage of the Gross Annual Remuneration (GAR) of

On 14 September 2011, Decree Law no. 138 of 13 August

beneficiaries (the CEO and ACEA S.p.A.’s senior execu-

2011, the so-called “manovra correttiva bis” (corrective

tives) and based on the achievement of pre-established

financial measure) was converted to law, which makes

economic and financial targets. The amount of benefits

provision, inter alia, for the amendment to the regulation

will be (i) based on the GAR at 31 December of each year

of the IRES surcharge (so-called “Robin Hood Tax”).

of the relevant cycle; (ii) cumulative over the three years

The law extended the IRES surcharge of 6.5%, in addition

of each cycle; and (iii) eventually paid only at the end of

to the sectors already hit by the tax, to other operators in

the third year of each cycle.

the electricity transmission, dispatching and transporta-

Receipt of the benefits is dependent on the achievement

tion sectors and to entities operating in the production

of performance targets to be established each year by

of electricity from renewable sources (regardless of the

the Remuneration Committee, and is subject to benefi-


ciaries meeting certain conditions.

stating that the analysis of the documents collected

In particular, the first cycle envisages payment of a bonus

showed the essentially correct application of the provi-

for each indicator based on achievement of the perfor-

sions subject to inspection.

mance target set.

In VIS 99/11, on closing of the enquiry launched by

The indicators are:

means of AEEG resolution VIS 42/11 of 16 March 2011 on

• Gross Operating Profit,

the provision of the grid connection service for electric-

• ROIC,

ity production plants by the grid operators, AEEG com-

• the creation of shareholder value, evaluated via a

municated, with Vis 44/11, that “the inspection at Acea

comparison of Acea’s performance with a basket of

concluded successfully, with no significant anomalies

utilities stocks.

identified”.

With reference to the first cycle, in 2010 the Remuneration Committee established that the objectives were not met.

VIS 60/11 With resolution VIS 60/11 of 26 May 2011, submitted to

Authority’s supervisory and control department controls

ACEA Distribuzione on 22 June 2011, AEEG launched a proceeding against the company for the investigation of violations related to recording electricity distribution ser-

VIS 44/11

vice outages.

On 17 and 18 May 2011, AEEG’s Markets Department and

This proceeding was generated by reports made by

Supervisory and Control Department, with the support of

some customers to AEEG and to the Consumer Protec-

the Special Market Protection Unit of the Italian Financial

tion Office related to outages without advance warning

Police, conducted the inspection preannounced by reso-

in the supply of electricity for condominium use, which

lution VIS 44/11 “Approval of the inspection programme

occurred on 22 August 2009. As a result of the requests

towards two grid operators concerning the provision of

for information submitted by the Consumer Protection

the electricity grid connection service for production

Office, ACEA Distribuzione submitted documentation

plants” and the special notice of 10 May 2011, delivered

many times regarding the recording of outages relative

to ACEA Distribuzione.

to the users in question, as well as detailed news on the

In the case in question, the various ACEA Distribuzione

status of the plants involved and the technical reasons

offices involved in the active connection application

for the outage.

management process cooperated to reply to requests

The Consumer Protection Office transmitted this infor-

for information and data contained in the checklist pre-

mation to the applicable AEEG offices, which recognised

pared by AEEG and, therefore, to collect and organise

sufficient grounds for the opening of the case being

documentation regarding:

discussed. The company intends to prepare a defence

• 5 cases regarding punctual claims;

document on the occurrence, to be provided to the same

• 52 cases sampled by the inspection office (out of a

AEEG Offices. The proceeding is still in progress.

total of approximately 4,000); • 5 cases sampled by the inspection office (out of a total of 275) amongst those compensated or not compen-

VIS 24/10

sated, even if requested by the applicant.

VIS 24/10 of 19 April 2010 replaced VIS 72/09 of 17 July

A copy of the aforementioned documentation was pro-

2009 as regards the disputes over the completeness and

vided to the inspection office, which obtained it for its

promptness of transmissions of metering data to suppli-

subsequent analyses.

ers, and on the adequacy of the IT media used for said

By means of letter dated 2 August 2011, AEEG informed

purpose, representing an additional cause for non-com-

Acea Distribuzione of the outcomes of the inspection,

pliance owing to the alleged delay in the time treatment


87

of users with potential available power of higher than

nuity of the electricity service. The inspections were per-

55 kW.

formed in accordance with the aforementioned resolu-

On 21 June 2010, a defensive brief was sent to the Au-

tion AEEG VIS 59/11 and after AEEG’s formal notification

thority’s Legal Department, which originated from the ar-

to ACEA Distribuzione by registered letter no. 0018066 of

gument already presented in previous briefs as regards

5 July 2011. The inspection concluded positively (in this

the points of overlapping with VIS 72/09 and, as regards

regard, see also Resolution ARG/elt 170/11 of 24 Novem-

the additional exception, justified the delay in the time

ber 2011, which shows the definitive results approved by

treatment of users with potential available power of

AEEG), with no penalties for the company, and confirmed

higher than 55 kW with the irrepressibility of the techni-

the correctness and accuracy of the processes for the

cal times required for manufacturing of the appropriate

treatment and recording of continuity data currently in

meter.

place.

By means of resolution VIS 91/11 of 6 October 2011, the Authority’s Legal Department essentially rejected, all defensive arguments expressed in the brief and imposed

Ohsas Certification 18001:2007

a financial penalty on the company of 243,000 euros

The process of certification of Acea Distribuzione S.p.A.

(two hundred and forty-three thousand), and set forth

in line with Ohsas 18001:2007 standards (Safety Man-

the provision to comply with the time treatment for all

agement System), commenced in August 2009, was

users with potential available power of higher than 55

completed on 14/05/2010.

kW, within 120 days from the date of notification of said

In fact, following several on-site documentary and sys-

resolution.

tem application inspections, certification body Lloyd’s

The company paid the fine and, on the prescribed expiry

Register issued the Certificate of Approval which certi-

of 8 February 2012, provided evidence to the Authority’s

fies that Acea Distribuzione S.p.A. is compliant with the

Legal Department of compliance, within the required

Ohsas 18001:2007 standard.

terms, of the actual application of the time treatment

This certificate was delivered to the Chairman of Acea

of entitled users, notwithstanding some residual cases,

Distribuzione S.p.A. by the CEO of Lloyd’s Register on 9

with objective difficulties of access, for which additional

July 2010.

attempts have been planned, whose positive outcome

As part of the process of retaining the Safety Manage-

will be subject to the proper communication to the

ment System Certification, implemented according

aforementioned Department.

to the Ohsas 18001:2007 standard, certification body Lloyd’s Register Quality Assurance carried out 3 days of inspections (1st supervisory inspection) in December

VIS 59/11

2010, in order to verify the SMS implementation, execu-

On 23 June 2011, the AEEG Supervisory and Control De-

tion and improvement status. The final outcome of these

partment served ACEA Distribuzione resolution VIS 59/11

inspections was positive.

of 19 May 2011 “Approval of the inspection programme

As part of the process of retaining the Safety Manage-

regarding electricity distribution companies in relation

ment System Certification, implemented according

to service continuity data submitted to the AEEG (Italian

to the Ohsas 18001:2007 standard, certification body

Authority for Electricity and Gas) in 2011”. The summons

Lloyd’s Register Quality Assurance carried out 3 days of

establishes the company’s de facto involvement in the

inspections (2nd supervisory inspection) in December

inspection referred to.

2011, in order to verify the SMS implementation, execu-

On the 12th and 13th of July 2011, an AEEG inspection of-

tion and improvement status.

fice, supported by the Italian Financial Police, carried out

The final outcome of these inspections was positive. The

the aforementioned inspection at ACEA Distribuzione

next supervisory inspection (third) is set for May 2012.

regarding the timely recording of data relating to conti-

88


New excavation and COSAP (occupation of public space) regulation

in-depth meeting was then held with the scientific com-

Roman Administration, after declaring order 266/2010

the innovative nature of the initiative and to acknowl-

on road works to have been cancelled, issued a new

edge certain guidelines suggested by said Ministry.

mission of the Ministry, after which Acea Distribuzione presented a report to better highlight the content and

order identical to the previous one: no. 374/2011 (it is expected to remain in force until 31/12/2012, since DPCM - Decree of the President of the Council of Minis-

Smart Grid pilot project

ters - 04/12/2011 extended the emergency traffic plan

On 9 November 2010, Acea Distribuzione S.p.A. sent

to Rome until said date). It should be noted that the

the Italian Authority for Electricity and Gas an applica-

Roman Administration updated, by means of resolution

tion for incentive treatment relative to resolution ARG/elt

30/07/2010, COSAP (increase of 35%) tariffs, effective

no. 39/10, with reference to the Smart Grid pilot project,

retroactively from 1 January 2010.

which will be developed in 2011 and 2012. The aforementioned project, for a total of roughly 4.9 million euros, is divided into various sub-projects aimed at

Technological innovation projects

developing innovative solutions as regards the manage-

Smart Network Management System

ment of improvements to service continuity and, at the

In June of 2010, Acea Distribuzione S.p.A. sent the Min-

same time, development of new criteria for the manage-

istry of Economic Development the application for ac-

ment of the distribution network, overseeing changes to

cess to financial subsidies involving the technological

said network and in line with the guidelines and general

innovation fund, according to the procedures set out by

provisions established by the Authority.

law, with reference to a project entitled “Smart Network

By means of resolution ARG/elt 12/11, published on 8

Management System: technological development in the

February 2011, the Authority admitted the project pre-

management of the electricity distribution network”.

sented by Acea Distribuzione to incentive treatment. The

The preliminary and setup phases were launched in July

development of the project is proceeding as set forth in

2010. The aforementioned project, for a total of roughly

the timetable.

12.7 million euros (around 11.0 million of which subsidisable), with a duration of three years, is divided into various sub-projects aimed at enhancing and further

New tariff cycle 2012 / 2015

developing the initiatives already implemented by Acea

By means of Resolution ARG/elt 6/11 of 31 January 2011,

Distribuzione S.p.A. to improve the continuity of the elec-

the Italian Authority for Electricity and Gas started up the

tricity service and to increase the operating efficiency in

procedure for creating measures related to the tariffs for

line with the general and special provisions established

the provision of electricity transmission, distribution and

by the sector Authority.

metering services and the economic conditions for deliv-

In December of 2010, the Ministry of Economic Devel-

ery of the connection services, for the regulatory period

opment formalised its authorisation for going ahead

2012 -2015. As part of this proceeding, it published con-

with the procedure set forth by Ministerial Decree of 14

sulting documents:

December 2009. In the first half of 2011, the operating

DCO 5/11: Final guidelines in relation to the hypothesis of

activities of the various sub-projects and the systematic

increasing the power that can be taken for the domestic

monitoring thereof were launched.

electricity users;

In May 2011, the Ministry requested that ACEA Dis-

DCO 13/11: Tariff adjustment of power and reactive en-

tribuzione communicate the technical and banking ref-

ergy withdrawals and inputs in the supply points and in-

erences for the imminent initiation of the negotiation

terconnection points between networks;

phase, which occurred in the last quarter of the year. An

DCO 29/11: Criteria for the definition of tariffs for the pro-


89

vision of electricity transmission, distribution and meter-

-- confirmation of the rules of updating operating

ing services for the 2012-2015 period - general frame-

costs through efficiency recovery mechanisms (x-

work of the proceeding and criteria for calculating the

factor) fixed at 2.8% for distribution activities and

costs recognised; DCO 34/11: Criteria for the definition of tariffs for the provision of electricity transmission, distribution and metering services for the 2012-2015 period - criteria and

7.1% for metering activities; -- confirmation and extension of higher return investment categories (incentivised investments); -- identification of a metering component to cover

mechanisms for incentivising structural investments;

the residual non-amortised amount of electrome-

DCO 42/11: Criteria for the definition of tariffs for the

chanical meters replaced with electronic meters

provision of electricity transmission, distribution and

pursuant to resolution no. 292/06, and possibility to

metering services for the 2012-2015 period - criteria for

request an advance of said revenues for the entire

the allocation of costs, tariffs, revenue restrictions and

regulatory period.

equalisation; DCO 45/11: Criteria for the definition of tariffs for the pro-

The reference tariffs per company will be published by

vision of electricity transmission, distribution and meter-

31 March of each year of the regulatory period and be-

ing services for the 2012-2015 period - final guidelines.

fore 30 April for 2012.

The main changes in the final document are: • Replacement of the current mechanism, which makes provision for an average national tariff supplemented

Relations with AATO 5

by general and company-specific equalisation, with a

On 1 June 2011, by means of note no. AT/1461, AATO

tariff per company, established to take account of spe-

notified the company of the request for enforcement of

cific company characteristics, in the following ways:

the bank surety of 2,843 thousand euros through which

-- recognition of invested capital of the company with

the Area Authority (represented by the Chairman and the

a parametric criterion for medium and low voltage

Director of STO - Technical Secretariat) sent Unicredit a

capital in 2007 and recognition of effective capital

request for enforcement of the bank surety - equal to

for high voltage and, starting from 2008, the accu-

2,843 thousand euros - given by the company, pursuant

rate recognition of increases in company capital;

to art. 31 of the Management Agreement, to guarantee

-- recognition of company operating costs on the ba-

90

the proper fulfilment of its obligations.

sis of an adjustment coefficient of the average na-

In particular, the request for enforcement of the surety

tional costs established using AEEG parameters, in

sent by the Area Authority would be justified by the com-

relation to 2010 variables of scale of the company;

pany’s failure to pay the concession fee.

-- maintenance of the metering equalisation and re-

In this regard, it is believed that the provision adopted by

peal of equalisation of business costs, envisaging

the Area Authority is definitely unjust and illegitimate -

the coverage of average national costs differentiat-

in consideration of the fact that the non-payment of the

ed between companies that set up a separate sell-

concession fee, far from being attributable to liability on

ing company with respect to those still integrated;

the part of the company, is, instead, a direct result of the

-- confirmation of the rules up updating of invested

Area Authority’s inactivity and non-fulfilment of obliga-

capital, envisaging an increase in the WACC of the

tions regarding the determination of tariffs.

3rd regulatory period from 7% to 7.6% for capital

In response to the aforementioned request, the company

invested as at 31 December 2011 and to 8.6% for

submitted an appeal to the Court of Rome in accordance

subsequent capital increases. The increase of 1% is

with art. 700 of the c.p.c (Code of Criminal Procedure), so

fixed to take into consideration the 2-year delay in

that it ascertained the non-existence of the right of the

the tariff recognition of capital increases (so-called

Area Authority to enforce the surety policy. The afore-

regulatory lag);

mentioned appeal was rejected by the honourable court,


therefore, on 8 September 2011 Acea Ato5 S.p.A filed a

Water Service Operator and that for said specific case

complaint against the rejection order.

of non-fulfilment, the contractual tools in place between

At the same time, by means of note no. 30762 of 16 Sep-

the parties did not make provision for any penalty; nor

tember 2011, the company notified AATO5 of the pay-

was said circumstance included in the causes of the ex-

ment of 10,700 thousand euros as per the legal settle-

press termination of the Management Agreement.

ment deed of 27 February 2007.

With reference to the criminal proceedings opened

The aforementioned complaint was rejected by the

against some ACEA executives, it should be noted that,

Court of Rome by means of order no. 18950 of 21 No-

on 11 May 2011, the judge for preliminary investigations

vember 2011. At the same time as the appeal, pursu-

at the Court of Frosinone, announced and published the

ant to art. 700 c.p.c. the company also filed an additional

operative part of the judgment, with which it declared

appeal to the Regional Administrative Court of Lazio for

that “there is no need to give a decision” against ACEA

the cancellation of the provision for enforcement of the

senior management with the ruling “because the act did

surety policy.

not take place”

The Administrative Court Judge, by means of order no.

The reasons for the ruling were made known on 8 Sep-

6352/2011, arranged for transmission of the trial bundle

tember.

to the President of the Regional Administrative Court of

In recognising the non-existence of the offence relating

Lazio, so that he identified the competent section of the

to the three accused managers, important aspects were

Regional Administrative Court of Lazio, and did not rec-

highlighted which shed light on the propriety of the com-

ognise the existence of the conditions for the adoption of

pany’s operations.

precautionary measures.

1. Abuse of office

On 1 December 2011, a hearing was held, set following the transfer of the case to the Regional Administrative Court of Lazio - Latina Section. Following the aforementioned hearing, the Administrative Court Judge, with order no. 497/2011, rejected the request for precautionary protection, ruling the appeal to be inadmissible due to a lack of jurisdiction. As a result, by means of note dated 14/12/2011, Unicredit issued a communication to the effect it had paid AATO the enforced sum of 2,843 thousand euros, also requesting that the amounts pledged in favour of said surety be returned.

-- Right to recognition of higher costs not adequately included in the Area Plan confirmed -- Proper accounting and amount of costs confirmed as ascertained by the Judicial Police -- Inappropriateness of the definition of the retroactivity of the tariff highlighted 2. Fraud -- Non-attributability of operating inefficiencies to the Operator ascertained -- Incorrect drafting of the original Area Plan confirmed 3. Fraud in public supplies

Given the illegitimate grounds, shown in the court acts,

-- Contradictoriness of the disputes against the com-

for enforcement of the surety set out by the President

pany which undermines the grounds for the ac-

of AATO and the risk of future repeated, groundless and

cusation ascertained: on one hand, the offence

arbitrary enforcements, the company decided not to pro-

of fraud is contested as a result of having earned

ceed, while awaiting the definitive decisions of the Com-

an unlawful profit from the investments made; on

missioner for deeds, with re-establishing the underlying

the other, the offence of fraud is contested as the

guarantee.

Operator would have failed to carry out the invest-

This should also be viewed in light of in-depth judicial-

ments which he was obliged to make and indicated

legal evaluations which showed that the failure and/or

in the Area Plan.

delay in respect of reconstitution of the aforementioned guarantee is the equivalent of the mere non-fulfilment of a contractual obligation on the part of the Integrated


91

Revamping of Waste Treatment Plant

The public tenders process is in progress, conducted

In June 2010, SAO S.p.A. presented an Environmental

targeted at assigning the works relating to the revamp-

Impact Assessment request to the Umbria Region, co-

ing of the waste treatment plant.

ordinated with the Integrated Environmental Authorisa-

In September 2011, the company challenged, by means

tion, for the project of revamping of the waste treatment

of hierarchical appeal, before the Ministero per i Beni e le

plant and expansion of the non-hazardous waste dump

Attività Culturali (Ministry of Cultural Heritage and Activi-

located in the district of Pian del Vantaggio 35/a, Orvieto.

ties), the binding provision, and with an appeal before the

During the authorisation procedure, the Direzione Regio-

Regional Administrative Court, the ruling of environmen-

nale per i Beni Architettonici e Paesaggistici dell’Umbria

tal compatibility (Environmental Impact Assessment), as

(Umbria Superintendency for Environmental and Archi-

regards the part in which said ruling was limited to the

tectural Assets) launched proceedings for the direct pro-

revamping of the plant and raising of the waste dump,

tection of the areas affected by expansion of the waste

excluding the so-called third ravine.

dump, pursuant to Legislative Decree no. 42/2004.

In August 2011, ATI 4 asked SAO and ASM Terni to re-

In June 2011, the company obtained the environmental

view the Economic-Financial Plan of the respective proj-

compatibility order for the project from the Environmen-

ects on the basis of different waste flows and a different

tal Impact Assessment service, with the exclusion of

plant setup. The company prepared the review of the

phase 2 of the waste dump expansion (in the area of

Economic-Financial Plan and of the project requested by

the so-called third ravine). Due to the decisions of the

ATI 4 with the support of the competent Parent Compa-

Environmental Impact Assessment service, the Province

ny structures and re-issued said documentation to ATI 4.

of Terni asked the company to re-adjust the Economic-

Checks and in-depth examination of said documentation

Financial Plan for the project, with the removal of the

by ATI 4 are still in progress.

phase 2 expansion of the waste dump.

In 2011, the company successfully passed an audit re-

On 4 August 2011, the Direzione Regionale per i Beni Ar-

garding confirmation of environmental certification

chitettonici e Paesaggistici dell’Umbria notified the com-

UNI EN ISO 14001:2004 and safety certification OHSAS

pany of the Binding Decree, issued in accordance with

18001:2007. In addition, in September 2011, the compa-

art. 13 of Legislative Decree no. 42/2004, under which

ny obtained the registration of EMAS certification for all

the area allocated for the phase 2 expansion of the

activities from the Ecolabel – Ecoaudit Committee, EMAS

waste dump (so-called third ravine) was subject to direct

Italia section.

protection, as it is “of special historical, monumental and

On 20 December 2011, the Ministero per i Beni e le At-

ethnoantropological importance”.

tività Culturali upheld the above-mentioned hierarchical

On 11 August 2011, the Province of Terni issued the com-

appeal filed by SAO, cancelling the protection provision

pany with the Integrated Environmental Authorisation for

relating to the third ravine.

the project for the REVAMPING OF THE WASTE TREATMENT PLANT AND EXPANSION OF THE NON-HAZARDOUS WASTE DUMP, presented by the company, with the exclusion of the phase 2 expansion of the waste dump (commonly known as the third ravine). Waste dump expansion works, contracted following a public tenders process conducted via the functions of Parent Company ACEA S.p.A., are expected to be completed by April 2012, except in the case of unforeseen events or adverse weather conditions.

92


through the functions of Parent Company ACEA S.p.A.,

Significant events after the balance sheet date Purchase of the Site

modification of some town planning zones, including a

On 23 January 2012, the purchase of the Piazzale Os-

part of the area owned by the company which will ac-

tiense site was completed, taking advantage of the op-

commodate the additional phase (phase 2), in respect of

portunity presented by the disposal carried out by Beni

the phase currently in progress, of the project to expand

Stabili, by exercising the right of first offer set out in the

the waste dump located in Orvieto, Loc. Pian del Van-

lease. The purchase price amounted to 110 million euros.

taggio 35/A. Said area is reclassified from an F2A Town Planning Zone (general services and territorial techno-

ACEA Ato5 Arbitration

logical plants) to an E category Town Planning Zone (ag-

On 24 January 2012, ACEA Ato5 notified AATO 5 of the

ricultural).

request for arbitration pursuant to art. 36, paragraph 2

The relevant regional legislation envisages that the pro-

of the Management Agreement. With said request, ACEA

cedure regarding town planning variations, once adopt-

Ato5 asked the Board to “assess and declare that AATO

ed by the municipality, and once the inspection phase

owes the company the sum of 10,700,000.00, as set out

has been completed by the Province, concludes with the

in art. 4 of the legal settlement dated 27.02.2007 and to

definitive approval by the municipality.

that effect, to hold AATO 5 liable, in the person of the above amount or a larger or smaller sum considered to

Approval of the ACEA Group’s 2012 2016 Business Plan

be equitable in accordance with art. 1226 of the Italian

On 22 February 2012, ACEA S.p.A.’s Board of Directors

Civil Code”. Conversely, AATO 5, formulated a motion to

approved the Group’s Business Plan for the 2012-2016

contest the arbitration request, disputing and challeng-

period.

ing all opposing pleas, arguments and claims given un-

The 2012-2016 Strategic-Business Plan realised through

founded in fact and in law.

the definition of solid and realistic objectives which gen-

The company recently presented a petition for injunction

erate an increase in value for shareholders. The business

to the Court of Frosinone to obtain the amount due, and

plan describes the strategic guidelines and pre-estab-

the Judge ordered A.ATO 5 to pay ACEA Ato5 immedi-

lished objectives for the next five-year period: natural

ately and without delay the sum of 10,700,000.00 euros,

growth in all business segments, with particular focus

plus legal interest, from the request until fulfilment, as

on regulated activities which currently generate around

well as appeal proceedings costs which it settles at a

80% of consolidated EBITDA; strong commitment to op-

total of 14,898.00 euros, of which 1,449.00 euros in the

erational and organisational efficiency, and improvement

form of charges, 11,135.00 euros for fees, 1,557.00 euros

in the quality of services; consolidation of the Group as

for 12.5% of general office expenses, 714.00 euros for

an efficient area operator, with a sharp focus on sustain-

advances and all possible future expenses, plus VAT and

ability and development of opportunities for expansion.

C.P.A. (Lawyers’ National Insurance Fund) as per law.

ACEA’s corporate strategy, through adequate strategic

The Court also authorised the temporary execution of

planning focused on optimising resources and forecast-

the decree, notifying the debtor of the possibility of lodg-

ing and managing future industry changes, has chan-

ing an objection within the term of forty days from noti-

nelled the Group’s development through the following

fication of the decree.

main strategic guidelines:

temporary legal representative, to pay Acea Ato 5 the

• implementation of projects already started in the En-

Orvieto - SAO Regulator Plan

vironment Area and development of new initiatives

In January 2012, SAO S.p.A. challenged, with an appeal

with particular focus on the Lazio Region, also in order

submitted to the Regional Administrative Court, the reso-

to overcome the imminent waste emergency;

lution of the Orvieto Municipal Council of 7 November

• focus on energy efficiency aimed at reducing energy

2011, regarding a partial variation of the General Regu-

consumption and the development of new technolo-

lator Plan, part structural and part operational, for the

gies (smart grids, accumulator batteries,...);


93

• potential partnership with the winner of the tender for

ACEA Ato5 2012 tariff determination

the gas distribution management service in the city

On 8 March 2012, following an affirmative response con-

of Rome;

tained in corporate order dated 13 February 2012, the

• strengthening of the “customer relationship”, with

Commissioner for deeds signed a decree on the “Deter-

“customer satisfaction & loyalty” tools to improve the

mination of the integrated water service tariff applicable

service offered, also by evaluating partnerships with

for 2012 in ATO 5 Southern Lazio – Frosinone” which the

specialised operators with a view to selective out-

company was informed of on 9 March 2012.

sourcing;

The determination of the real average tariff for 2012 -

• development of the position of leadership in the water

equal to 1.359 m3 - was carried out to quickly deal with a

sector in Italy and enhancement of operational excel-

service economic-financial imbalance, caused by the fail-

lence in electricity distribution activities;

ure to update the tariff based on the trend in inflation and

• “coverage” of retail sales through agreements and/

forecasts in the area plan and management agreement.

or evaluations of the opportunities the Italian market

Therefore, determination of the 2012 real average tariff

may offer in the upstream energy sector.

is limited to restabilising normal contractual conditions of continuity of management and does not take into account

CIP (Interdepartmental Price Commission) 6/92 incentives - ARIA

the difference between the area plan forecasts and the actual trend in the management of previous years given these activities are to be carried out as part of the ordi-

By means of note dated 24 February 2012, on conclusion

nary and extraordinary review.

of the preliminary phase, GSE sent ARIA the draft of the

At present, the review of other important matters has

definitive agreement to be signed for CIP 6/92 incentives.

been postponed, such as (i) the outcomes of the abrogative referendum of article 154 of Legislative Decree no.

Breakdown of ATI 1 and 2 tariff

152/2006, (ii) the exceeding of the minimum amount guaranteed and (iii) the obtainment of the financial resources

As regards UMBRA ACQUE S.p.A., the start of 2012 saw

needed to cover expenses deriving from the obligation to

the approval of the tariff breakdown for 2012 resolved

return the undue portion of the tariff to users relating to

by the Single General Meeting of the competent Inte-

the water treatment service.

grated Area Authorities (ATI) no. 1 and no. 2 which, in

The decree also identifies the structure of the 2012 tariff

recognising the applicability, as regards tariffs, of the

and the real average tariff of each year from 2003 to 2011,

provisions still in force, particularly art. 154 of the Envi-

therefore including therein the years concerned by the

ronmental Code, art. 117 del T.U.E.L. (Consolidation Act

cancellation of the 2007 tariff review.

of Local Government) and Ministerial Decree of 1 August

Therefore, this document is valuable in definitively quan-

1996, maintained all tariff components of the Integrated

tifying the amount of receivables for tariff equalisation re-

Water Service which must ensure certain management

lating to the variation between real revenues from billing

economic-financial equilibrium, with particular reference

and those “guaranteed” with respect to the “Original area

to the recovery of all costs and, therefore, of those nec-

plan”, currently defined as the “sole contractual reference

essary for the realisation of investments, to protect the

in force between the parties”. Whilst additional receiv-

same public interest related to implementation of the

ables, deriving from the differences between plan fore-

Area Plan and the necessary economic-financial cover-

casts and the actual performance of management in the

age to be guaranteed for the operator.

previous years, will be subject to an evaluation as part of the area plan ordinary and extraordinary review activities. Operator equalisation will be calculated and any payment methods will also be defined during said phase.

94


Campania Region-EASV-GORI settlement agreement

The agreement scheme makes provision for a significant

It should be noted that, on 9 March 2012, GORI, the Area

natural consequence is an almost equal reduction in the

Authority and the Campania Region signed a report, un-

tariff adjustments accrued (as at 31 December 2011, a to-

der which the parties, having positively evaluated the

tal of 147 million euros - Group share 54.5 million euros);

agreement scheme, which is attached to said report, (i)

the agreement scheme also makes provision for the divi-

undertake to present to the respective bodies for ap-

sion into instalments of the amount of debt recognised

proval before March 2012 (GORI Board of Directors, Area

in line with the recovery of residual tariff adjustments in

Authority’s Board of Directors and Regional Council)

the Area Plan subject to review by the Area Authority.

writing off of GORI’s debt to the Campania Region, whose

and (ii) mutually acknowledge that the provisions of the agreement scheme, not strictly reserved to the jurisdiction of the Area Authority’s General Meeting, are understood to be immediately effective and binding.


95

Risks and Uncertainties Information on the main risks and uncertainties to which

the sector and their application within the Group, on

the Group is exposed, including the disclosures required

the basis of the guidelines laid down by top company

by Legislative Decree no. 195/2007, which has amended

management and based on the requirements set out

paragraph 5 of Article 154 bis (Executive Responsible for

by the top management of each company, availing

Financial Reporting) of Legislative Decree no. 58 of 24

themselves of the support of the competent Depart-

February 1998, taking account of the CONSOB consulta-

ments and Functions within the interested compa-

tion document of 7 July 2008, is provided in this docu-

nies;

ment and in the Management Reports as at 31 December 2010 of the individual ACEA Group companies.

• Management of relations with Trade Associations and companies in the sector;

Moreover, further information on foreign exchange risk,

• Single representation of the positions of the Group

market risk, liquidity risk and interest rate risk is provided

in the management of relations with the Regulatory

in the section “Additional disclosures on financial instru-

Authorities, relating to technical-economic regulation

ments and risk management policies” in the notes to the

and industry legislation;

consolidated financial statements for the year ended 31

• Acquisition of the evaluation and judgment of the

December 2011, to which reference should be made for

companies concerned by technical-economic implica-

more information.

tions, as well as the strategic, economic-financial and legal effects of the application of regulatory measures

At the date of preparation of this management report,

in the sector.

we do not expect the Acea Group to be exposed to fur-

Technical-legislative support is targeted at ensuring the

ther risks and uncertainties that may have a significant

monitoring of the following processes:

impact on its results of operations or financial position,

• Monitoring and control of the technical-regulatory

other than those mentioned in this document.

activities of the Regulatory Authorities and simultaneous technical analysis of the documents issued by

Regulatory risks ACEA S.p.A., through the Regulatory Department, moni-

responses or proposed amendments in support of the decisions agreed with the companies;

tors regulatory developments. This involves providing

• Review and planning of initiatives in relation to legis-

support both with regard to the preparation of com-

lative resolutions and provisions with an operational

ments and observations on Consultation Documents,

impact on electricity and gas;

in line with the interests of Group companies, and the

• Participation in work groups set up at the Regulator

consistent application of regulations in corporate pro-

or Trade Associations, in order to formulate and dis-

cedures and within the electricity and gas businesses.

close positions agreed regarding individual provisions

Management of regulatory risk takes the following form:

or technical-legal actions with a direct impact on the

• The management of relations of a technical and institutional nature; • Technical and regulatory support in respect of activities subject to regulation and control; • Reporting on and monitoring regulatory compliance.

Group’s areas of interest; • Coordination of the positions represented by the companies regarding each provision with an operational impact, in order to coordinate the single position taken with respect to outside the Group.

Technical-institutional relations are targeted at ensuring

Monitoring and reporting activities are structured into

the completeness, clarity and consistency of information

a process of constant internal updating on legislative

within the Group. In particular, these are broken down

changes, through the preparation of specific reports to

into:

be directed to the parties involved and updating of the

• Management of relations with the Regulatory Authori-

agenda of legislative expiries.

ties regarding issued connected with the regulation of

96

these parties, also through the drafting of judgments,


During the third regulatory period for the energy Net-

cial costs for 2008 and set out the criteria to be adopted

works market, the Italian Authority for Electricity and

for the determination of the aforementioned equalisa-

Gas introduced various new regulations governing tariffs,

tion. In fact, since the Italian Authority for Electricity and

which continue to give rise to a number of uncertainties.

Gas has still not recognised the 2009 value and collected

This may represent a risk for the Company’s econom-

the data for the years 2010 and 2011, a risk still exists

ic result, and requires further specific analyses that, in

over equalisation amounts deriving from the possibility

most cases, have already been launched together with

that commercial costs are not fully recognised by the

the Authority’s technical departments.

Italian Authority for Electricity and Gas in accordance

As regards Company Specific Equalisation, the 2008,

with evaluations that are currently not foreseeable.

2009 and 2010 company-specific correction factor

The determination of the new tariff per company is cur-

makes it possible to greatly reduce the risk of forecast

rently underway at AEEG and the formulation process

amounts of company specific equalisation for 2011.

must be completed by 30 April 2012, with publication of

With regard to 2011, the company-specific correction

the new amounts. Although uncertainty will remain until

factor was updated by applying the rules set out in the

publication of the new tariffs, the new tariff cycle must

Integrated Code containing the provisions of the Ital-

guarantee the full recognition of invested capital and op-

ian Authority for Electricity and Gas for the delivery of

erating costs.

electricity transmission, distribution and metering ser-

Resolution no. 196/11 of 29 December 2011 makes pro-

vices for the regulatory period 2008-2011 (resolution no.

vision for the review, starting in 2012, of conventional

348/07 and subsequent updates), Annex A, Article 42.5.

percentage factors of electricity losses on the networks

Any deviations with respect to the estimates could de-

with the obligation of third-party connection. The provi-

rive from the application interpretations of Art. 42.5 by

sion envisages a lowering of standard losses on high volt-

AEEG, which are currently not identifiable.

age, assessed by AEEG on the basis of a technical study

There is also a degree of uncertainty regarding the gen-

drafted by the Polytechnic of Milan. In 2012, through con-

eral equalisation mechanisms, introduced during the cur-

sultation documents, AEEG will pursue the objective of

rent regulatory period, particularly for the costs incurred

redetermining standard losses on the medium and high

in the development of electronic metering systems and

voltage chain and defining new methods for calculating

the marketing of transport services.

the equalisation of surplus losses which take account of

With regard to the equalisation of the costs incurred

the territorial diversification of operators. This collection

for electronic metering systems (equalisation of meter-

of provisions could generate economic and technical

ing), the limited reliability of projections of the economic

risks for the current structure of equalisation of surplus

impact are linked to the weight assigned, in the related

losses.

analytical formulation, to the creation of specific system parameters, exclusively developed by the Authority and,

Constitutional Court sentence 335/2008

therefore, not retroactively available to individual opera-

Details are provided in the section “Service concession

tors. The information gap was not filled with the review

arrangements” of the Consolidated Financial Statements.

of the mechanism for the determination of metering equalisation for the years 2010 and 2011 contained in

Decree Law “Stabilisation”

resolution no. 166/11, given that AEEG did not set out the


national variables and parameters which are fundamen-


tal for economic forecasts. The uncertainty over the equalisation amount of the transport marketing costs persists, despite being mitigated by the publication of resolution ARG/elt/227/10 which determined the equalisation amount of commer-


97

ACEA Ato5 - Tariff

The impact of said risk factor on the economic, equity

Details are provided in the sections “Service concession

and financial position will be high, also in relation to

arrangements” and “Update on major disputes and litiga-

the forecast scale of the problem relating to sludge dis-

tion” of the Consolidated Financial Statements.

posal over the next few years.

Provisions relating to the landfill waste eligibility criteria (sewage sludge)

Legislative risks

The Interministerial Decree “Definition of landfill waste 36/2003, published in Official Journal no. 201 of 30 Au-

Abrogative referendums of 12 and 13 June 2011

gust 2005, not only reiterates the provisions of the pre-


vious Ministerial Decree of 13 March 2003 in relation to


eligibility criteria”, implementing Legislative Decree no.

the concentration of dry waste (which must be no lower

organic carbon).

Elimination of the national agency for water regulation and monitoring and of Co.N.Vi.Ri (National Commission for Monitoring Water Resources)

Based on said Decree, effective from 1 January 2009,


it is no longer possible to transfer solid matrixes pro-


than 25%), but requires that the landfill eligibility criteria established for non-hazardous waste are complied with (with particular reference to levels of T.O.C. (total

duced by treatment plants to the landfills, if the extraordinary conditions envisaged are not met.

Elimination of the Area Authorities

Along with the entry into force of the aforementioned


Ministerial Decree, we need to take into account that


the volumes of landfills used for the disposal of sludge are almost saturated, with a subsequent 15-20% increase, on average, in disposal costs.

Strategic risks

In addition, the saturation of plant availability in the

thorisations in the Tuscany region, have made it neces-

Incompleteness of the acquisition process of the municipalities included in ATO 2

sary to use distance disposal solutions, more than 500

The 2002 Concession Agreement set out the award of

km from the point of production of the sludge. This has

the Integrated Water services for 111 municipalities

resulted in a greater incidence of transport costs, also

(which later became 112) to Acea Ato 2 Spa, with the

in relation to significant growth in fuel prices.

aim of completing the acquisition process in the three

In order to contain the effects of said risk factor, Acea

years following the signing of the Agreement. However,

ATO2 S.p.A. has undertaken a series of initiatives aimed,

the problems that emerged during the years led to a

on one hand, at reducing the production of sludge and

partial acquisition of the municipalities. Today, Acea

cut volumes through the installation of drying systems

Ato2 delivers services to 76 municipalities.

at Roma Nord and Roma Est (Rome North and Rome

In particular, since 2007 the acquisition of contracts

East) purification plants; on the other, it has adopted

with the municipalities involved has slowed. This has

initiatives targeted at monitoring the entire integrated

been mainly caused by local authorities, natural political

production/transportation/final disposal cycle (com-

alternation and internal difficulties within the authori-

posting plant recovery, spreading for farm-related pur-

ties themselves. Moreover, based on the assessments

poses and/or landfill disposal).

carried out, certain municipalities still have problems

Lazio Region and neighbouring regions – Umbria and Tuscany – and the difficulty in obtaining agricultural au-

98


relating to the state of treatment plants and lack of au-

that are subsequently classified as non-compliant, he

thorisation for waste disposal.

has to make them compliant with technical, manage-

This led to the need for subordinating the assignment

ment and regulatory provisions for their intended oper-

of municipalities to the actual compliance of plants with

ation. As a matter of fact, the operator has dealt several

the existing environmental regulations.

times with this problem, with operating (shutdowns,

In this way, on the one hand the impact of other litiga-

malfunctions) and economic consequences (increase in

tion risks for Acea Ato 2 is limited, on the other, there

management and maintenance costs). Moreover, dur-

could be an increased incompleteness risk concerning

ing the summer of 2008, the District Attorney’s Office

the acquisition process, with a significant impact on the

launched a series of investigations on the Gari and Mel-

corporate strategic requirements.

fa basins to assess non-conformities reported following complaints; the investigation concerned around 12 Gari

Incompleteness of the acquisition process of the municipalities included in ATO 5

plants and roughly 19 Melfa plants and are still ongo-

The 2003 Concession Agreement set out the award of

mapping of non-compliant plants, in order to plan any

the Integrated Water services for 85 municipalities (in

restoration work, as well as studies for network con-

addition to two other municipalities located outside the

trolling and monitoring of parameters at the plant input.

Area) to Acea Ato5 S.p.A., by immediately completing

2009 saw the normalisation of activities related to the

the acquisition process and establishing a safeguard-

transportation and disposal of waste produced at the

ing period for some of them. To date, three municipali-

water treatment plants through a contract signed with

ties are awaiting completion of the said process: Atina,

AQUASER srl. In the first half of this year, as detailed

Cassino centro and Paliano, as a result of problems that

previously, activities were implemented relating to the

have occurred over the years.

obtainment of usage authorisations. In any case, based

More specifically, failure to acquire the plants of Atina

on the weight that should be given to this issue and the

and Cassino centro was due to the policies adopted by

costly operational hitches in the case of shutdowns, the

Municipal Authorities, in clear contrast to the original

impact of this risk factor is considered high.

ing. However, in order to limit the consequences of such risk factor, controls have been adopted concerning the

forecasts of the area plans submitted in the tender and,

extensions of safeguarding periods – the activities re-

Economic consequences of non-compliant landfills: shutdowns, efficiency, management costs, maintenance costs

lated to the transfer of the Integrated Water Services

The Galli Law aims at constantly improving Integrated

were commenced upon conclusion of the assessments

Water Services, through both a quality service for users

of the locations and works to be transferred (Novem-

and compliance with current legislation. For this reason,

ber 2009). The activities connected with the commer-

if, during acquisition, the operator acquires plants that

cial, administrative, logistics and HR sector are still to

are subsequently classified as non-compliant, said op-

be completed.

erator has to make them compliant with technical, man-

Economic consequences of non-compliant landfills:

agement and regulatory pro

shutdowns, efficiency, management costs, mainte-

visions for their intended operation. However, the op-

nance costs

erator has dealt several times with this problem, with

The Galli Law aims at constantly improving Integrated

operating (shutdowns, malfunctions) and economic con-

Water Services, through both a quality service for users

sequences (increase in management and maintenance

and compliance with current legislation. For this reason,

costs), as in the case of the seizure of the treatment

if – during acquisition – the operator acquires plants

plants in Castelnuovo di Porto. In order to limit the con-

more generally, the provisions of the reference legislative framework. With regard to the Paliano plants – for which the failed acquisition was initially due to alleged


99

sequences of said risk factor, controls have been adopt-

a. risks relating to the effectiveness of the investments

ed concerning the mapping of non-compliant plants, in

in replacement/renewal of grids, as regards expected

order to plan any restoration work, as well as studies for

effects on the improvement of service continuity indi-

network controlling and monitoring of parameters at the plant entry point. In any case, based on the weight that should be given to this issue and the costly operational hitches in the case of shutdowns, the impact of this risk factor is considered high.

cators; b. risks relating to quality, reliability and duration of the works carried out; c. risks relating to the ability to meet the terms in order to obtain the prescribed authorisations, regarding both the realisation and commissioning of plants (pur-

Photovoltaic risks

suant to Regional Law no. 42/90 and related regulations) and the carrying out of works (authorisations

Photovoltaic activities highlight two types of risk:

of municipalities and other similar authorisations),

• uncertainty over the actual acquisition of incentive

according to the need to develop and enhance the

tariffs and their value, for plants subject to the proce-

plants in light of growing demand.

dure of insertion in the log (“large plants”). • vagueness of authorisation times, especially regarding

The risk listed under letter a) above arises basically

connection to the electricity network of constructed

from the increasingly stringent regulation of service

plants, which adds an additional element of uncer-

continuity of the Italian Authority for Electricity and

tainty to economic evaluations, also for plants that do

Gas outlined in the previous sections (the new regula-

not fall within the scope of the log, particularly in con-

tions published recently by the Authority, following a

sideration of the strong downward monthly trend in

consultation process, confirm said Authority’s intention

the value of grants, envisaged over the coming years.

to continue with the process of improvement already started in previous cycles). To tackle this risk, Acea Dis-

Operational risks

tribuzione has strengthened the tools for analysing the functioning of the networks in order to make increas-

With regard to the Energy Area, the main operational

ingly better use of investments (e.g. ORBT project) and

risks linked to the activities of the Group subsidiaries

applied new technologies (automation of medium volt-

(Acea Energia SpA and Acea Produzione SpA) may re-

age network, smart grid, etc.).

gard material damage (damage to assets, the short-

As far as the risk linked to work quality (letter b) is con-

comings of suppliers, negligence), damage due to lost

cerned, Acea Distribuzione implemented operational,

output, human resources and damage deriving from

technical and quality control systems, including the cre-

external systems and events.

ation of the Works Inspection Unit, which forms part of

To mitigate these operational risks, the companies

the Quality and Safety department. The results of the

have, since they began operating, took out a series of

inspections, which are processed electronically and

insurance policies with leading insurance companies

analysed statistically, give rise to rankings (reputational

covering Property Damage, Business Interruption and

indicators) with a vendor rating system, developed in

Third Party Liability. Particular attention has been de-

collaboration with the University of Tor Vergata (Rome).

voted by the companies to the training of their employ-

This system ranks contractors according to their repu-

ees, as well as the definition of internal organisational

tations, scored on the basis of their ability to meet the

procedures and the drafting of specific job descriptions.

quality and safety standards for contract work. Furthermore, this system makes it possible to recognise

The main risks falling under the Networks Area can

and apply penalties which could, in the case of serious

be classified as follows:

non-compliance, even cause the contractor’s activities to be suspended. In 2011, as a result of 962 inspections

100


made in said period, 16 companies, covering 33 sites,

Said risk has been mitigated by the implementation

had their activities suspended due to non-compliance

of the proper organisation of works management and

with safety measures.

monitoring aimed at controlling the times and quality of

During the year, additional general improvement was

the work carried out.

recorded in the reputational indicator of companies op-

By contrast, as regards the operational phase, any inter-

erating on behalf of Acea Distribuzione, up from 90% to

ruption to the waste-to-energy activities carried out at

91.5% recorded in December 2011.

the Terni and San Vittore plants or to the waste treat-

A similar project was launched in relation to the ser-

ment activities of SAO, based on the fact that they are

vices assigned to the external professionals involved in

linked to the production of electricity under the CIP

works planning and execution activities.

6/92 regime and to the provision of public services,

The risk listed under letter c) above arises from the

could have negative repercussions.

number of entities which have to be addressed in the

Any impact would be reflected in both the companies’

authorisation procedures and from the enormous un-

economic results and in terms of their commitments

certainties linked to the response times by these enti-

to public and private waste management customers. In

ties; the risk lies in the possibility of denials and/or in

this context, an unscheduled plant shutdown puts the

the technical conditions set by the above entities (such

companies’ ability to achieve their business objectives

as the realisation of underground instead of “above-

at real risk.

ground” plants, with a subsequent increase in plant and

The waste-to-energy plants, but also, though to a lesser

operating costs). It should also be noted that lengthy

extent, the waste treatment plants, are highly complex

proceedings result in higher operating costs, are diffi-

from a technical point of view, requiring the compa-

cult to deal with for operating structures (drafting and

nies to employ qualified personnel and organisational

presentation of in-depth project examinations, environ-

structures with a high level of know-how. The need to

mental assessments, etc.) and require participation in

maintain the plants’ technical performance levels and

service conferences and technical meetings at the com-

to prevent personnel with specific expertise (who are

petent offices. However, the risk is essentially linked to

difficult to recruit) leaving the companies represent real

the non-obtainment of authorisations, with the result

risks.

being the inability to upgrade plants and subsequent

The companies in this area have mitigated these risks

greater risk linked to the technical performances of the

by implementing specific maintenance and manage-

service (the procedure for the construction of the new

ment programmes and protocols, drawn up partly on

Parco dei Medici primary station, for the upgrading of

the basis of their experience in managing the plants

the high voltage network in the Litorale area and for re-

involved.

development of the high voltage network in the North-

Moreover, the plants and the related activities are de-

ern area are currently experiencing difficulties). Lengthy

signed to handle certain types of waste. The failure of

response times from certain administrative bodies con-

incoming material to meet the necessary specifications

sulted represents a particularly critical element.

could lead to tangible operational problems, such as to compromise the operational continuity of the plants

As regards Environment Area companies, the Terni

and give rise to risks of a legal nature.

and San Vittore del Lazio plants are involved in opti-

For this reason, specific procedures have been adopted

misation and revamping projects which present the

for monitoring and controlling incoming materials via

risks typical of the realisation of complex industrial in-

spot checks and the analysis of samples pursuant to

frastructures. Said risks present the real possibility of

the legislation in force.

delays in construction or imperfections in the execution of works commissioned, as regards the revamping activities underway.


101

Litigation risks Antitrust Authority investigation of the acquisition of Publiacqua

Acea Luce

On 28 November 2007, ACEA was notified of the Anti-

panies Manutencoop Facility Management (“MFM”) and

trust Authority’s ruling, in which, following an enquiry

SMAIL (formerly ACEA Luce) submitted an request for

which lasted around eighteen months on potential vio-

arbitration against ACEA and ARSE, pro-quota sellers of

lations on the part of ACEA, Suez Environnement and

100% of the share capital of ACEA LUCE: the applicants

Publiacqua regarding competition regulations (art. 101

are requesting a ruling against ACEA and ARSE due to

EU Treaty, formerly art. 81 of Treaty of Rome - anti-com-

the (alleged) non-fulfilment or negligence as regards

petitive agreements) in relation to the joint acquisition

contractual obligations and, therefore, the termination of

of a 40% stake with SUEZ, in Publiacqua, ATO operator in

the purchase contract and subsequent return of the sum

Florence, it essentially:

paid (3 million euros), plus additional costs, and compen-

• deemed that a horizontal agreement existed between

sation for damages of roughly 7 million euros.

ACEA and SUEZ in the integrated water services sec-

In support of the requests, MFM essentially believes that

tor, which is managed by a public-private partnership

the elevated number of claims raised by said party after

in which the private partner is selected via a tender

the transfer, due to an alleged breach of the contractual

process;

guarantees, would demonstrate actual divergence be-

• ruled that the parties should take actions to avoid rep-

102

By means of deed notified on 7 February 2011, the com-

tween the facts in the summary obtained and the con-

etition of the sanctioned behaviour, with the Authority

tents of first the due diligence and later the contract.

to be notified of the nature of such actions within 90

It can only be pointed out that ACEA and ARSE, in check-

days, and also amend the rules governing the partner-

ing the claim notices presented by the acquiring party

ship regarding the part deemed to be in violation of

from the acquisition until the present day have, in some

competition regulations;

cases, accepted responsibility for the facts revealed

• ordered ACEA and SUEZ to pay fines of 8.3 million eu-

therein, by paying, or undertaking to pay at the time the

ros and 3 million euros, (the difference in the amounts

associated obligation assumes a definitive nature, some

derives from their respective turnovers in the relevant

amounts, although modest in said context.

sector in Italy).

Otherwise, the purchase contract for the equity interest

ACEA submitted an appeal to the Regional Administra-

envisages, on one hand, that the financial compensa-

tive Court of Lazio against said ruling: on 7 May 2008

tion constitutes the only solution actionable by the ac-

the court announced the related sentence, finding in

quiring parties in the event of an incomplete or incor-

ACEA’s favour and cancelling all the rulings and the fine

rect declaration and, on the other, that the associated

imposed. Details of the sentence, upholding all of the ap-

liability of the grantors is restricted to a maximum limit

pellant’s arguments, were published at the end of June.

of 1,250,000 euros, to be enforced in accordance with

In the corresponding enforcement, on 11 June 2009, the

the methods and timeframes better detailed in said act.

Ministry of Economy and Finance ordered the return of

However, ACEA actioned, by way of a counterclaim, its

the penalty of 8.3 million euros paid by ACEA in February

receivables due from SMAIL for around 6.5 million eu-

2008.

ros, deriving from electricity provided and still not paid.

The Antitrust Authority submitted an appeal against

In the first few weeks of 2012, therefore after the close

the decision of the Lazio Regional Administrative Court,

of the year, the parties commenced amicable negotia-

against whom ACEA opposed the cross-appeal (due to

tions to settle the dispute, negotiations currently being

the failure to consider, in the first instance ruling, some

formalised, which essentially make provision for the fi-

of its grounds for appeal) and the hearing for the associ-

nal settlement of claims by MFM/SMAIL against the pay-

ated discussions was set for May 2012.

ment of an amount contained in the forecasts drawn up


by ACEA, payment by SMAIL of the amount due for the

biofiltration plant, carried out entirely with public funds,

above-mentioned supply, waiving of any additional claim

to request that ACEA and ACEA Ato2 be ordered to pay

and withdrawal from the dispute.

over 8 million euros for reservations. The request is in and of itself indefensible due to the inadmissibility and ungrounded nature of the reservations,

E.ON. Produzione S.p.A. proceedings launched against ACEA, ACEA Ato2 and AceaElectrabel Produzione

since the counterclaim of ACEA - that filed a formal ap-

These proceedings were launched by E.ON. Produzione

of the plant, which decreased its functionality.

S.p.A., as successor to ENEL regarding a number of con-

The arbitration is currently underway, and the CTU has

cessions for the abstraction of public water from the

just started.

pearance before the court - will blame the temporary consortium for the significant deficiencies in the building

Peschiera water sources for electricity production, to obtain an order against the jointly and severally liable defendants (ACEA, ACEA Ato2 and AceaElectrabel Pro-

ACEA/SASI Proceedings

duzione) for payment of the subtension indemnity (or

In ruling 6/10, TRAP (Regional Court of Public Waters) ac-

compensation for damages incurred due to illegitimate

cepted the request submitted by ACEA against the Soci-

subtension), which remained frozen in respect of that

età Abruzzese per il Servizio Integrato S.p.A. (SASI) for the

defendant in the 1980s, amounting to 48.8 million euros

compensation for damages from the illegitimate with-

(plus the sums due for 2008 and later) or alternatively

drawal of water from the Verde river. ACEA was awarded

payment of the sum of 36.2 million euros.

9 million euros, plus interest accrued from 14 June 2001

The question of the amount and the assumptions ap-

until 30 July 2013 as compensation for damages.

pears to be based on dubious grounds and, in any case,

The sentence, which is not temporarily executive, was

the early stage of the proceedings does not allow for

appealed by SASI before the TSAP and ACEA filed a

forecasts.

cross-appeal. The proceedings are ongoing.

The only significant development of note is the decision of the TRAP (Regional Court of Public Waters), before which a ruling is pending regarding the matter in

A.S.A. – Acea Servizi Acqua

question, to arrange for CTU (court-appointed expert)

By means of summons notified in autumn 2011, ACEA

as regards the values of subtension for branching off,

was summoned to court to respond to the presumed

and subsequent reduction in hydroelectric production,

damages that its even more strongly alleged non-compli-

and indemnities due. The expert’s report shows a cal-

ance with unproven and inexistent obligations which are

culation according to which the claims actioned in the

assumed to have been adopted under the shareholders’

proceedings, even when unfounded - which is dubious,

agreement relating to subsidiary A.S.A. – Acea Servizi Ac-

because the documents containing the metering pa-

qua – would have produced for minority shareholders of

rameters of the compensation are still deemed to be

the latter, and their respective shareholders. The claim

applicable and effective - would be greatly altered, sub-

appears to be manifestly devoid of merit, and inadmis-

stantially reducing the amount of equalisation already

sible in practice. In fact, firstly, the plaintiffs are lacking

estimated by the company.

legal standing, given bearers of only indirect and mediated interests; in this regard, full reading of the text of the contract invoked rules out burdening the companies

Vianini Lavori Arbitration

in the ACEA Group with the obligation of assigning con-

Vianini Lavori S.p.A. (in a temporary consortium with the

tracts and works to its subsidiary, an assignment which

French STEREAU) proposed a formal request for arbitra-

is, by contrast, indicated as an “objective” of the compa-

tion with reference to works to build the South Rome

ny and not the shareholders. Therefore, it is not believed


103

that too large a claim of more than 10 million euros mer-

upholding the objection raised, asked the Constitutional

its consideration.

Court to rule on the issue of legitimacy regarding the legislation which generated the costs, non-deductible for tax purposes, incurred in the years 2003 and 2004

Tax moratorium

(article 14, paragraph 4 bis, Law no. 537/93).

The appeals presented by ACEA against the payment de-

The hearing at the Constitutional Court was held on 8

mands of 2007 and the 2009 tax assessments were re-

February 2011 and the issue of legitimacy submitted for

jected by the Provincial Tax Commission.

its judgement was declared inadmissible under the as-

The Regional Tax Commission also rejected the appeal

sumption that “...the remitting tax commission, in raising

against the first instance ruling against the 2007 demands.

these questions, would have had to preliminarily confirm – also by solely providing a brief justification on the matter – the lack of grounds for the aforementioned appeal,

SAO tax inspection

because, if upheld, they would have led to the cancel-

In October 2008 the tax authorities issued two notices

lation of the tax assessment notices contested and the

of assessment to the company, amounting to 5.8 million

subsequent irrelevance of said matters....

euros in taxes and 5.7 million euros in penalties.

At the hearing on 4 October 2011, the Judge put the case

These notices of assessment regard the 2003 and 2004

back to January 2012, in order to find out the outcomes

tax years and derive from criminal proceedings launched

of the criminal proceedings at the Court of Perugia re-

by the Orvieto District Attorney’s Office. This action,

garding the delivery of waste by the Campania Region.

which is still pending before the Court of Perugia, regards transfers of waste from the Campania region in

It should be noted that, with reference to the cited

the aforementioned 2003–2004 period, based on a plan-

proceedings, S.A.O. submitted a request for cancel-

ning agreement executed at that time by the presidents

lation, by own determination, of assessment notices

of the Campania and Umbria regional authorities and the

872030100244, 872030100245 and 872080100477 l,

subsequent management of the Orvieto landfill.

following the ruling of the Court of Perugia on 29 No-

Although one of the years involved in the tax inspection

vember 2011, which established that it did not need to

notices (2004) was already subject to a tax inspection,

continue, with regard to all offences and all defendants,

the Tax Authorities deemed that it was possible to re-

with the proceedings relating to the delivery of waste

open the inspection, following the ruling under which the

from the Campania Region in 2003 and 2004 (forming the

Court of Orvieto, in criminal proceedings, declared the

basis of the relevant assessment notice) due to expiry

Court of Perugia to instead hold competence.

of the limitation period. As regards the claim, adequate

The notices of assessment regard taxation of the costs

grounds were given regarding the fact that the acquittal

incurred during the two years in relation to the above

pronounced in the criminal proceedings eliminates the

transfers of waste, based on the fact that such transfers

conditions for applicability of the prohibition of deduct-

are now considered illegal on the basis of the mere ex-

ibility of costs arising from the offence, on which the rel-

istence of criminal proceedings and despite the absence

evant assessment notice was based, as interpreted by

of provisions from the Judge regarding the verification of

the Direzione Centrale Normativa e Contenzioso (Central

the existence of the offences for which to proceed.

Legislative and Disputes Department) of the Tax Authori-

On 12 December 2008 the company submitted separate

ties in Circular no. 42/E of 2005.

appeals against the notices of assessment.

104

In May 2009, the tax commission upheld the requests

It has been deemed that the acts of the Tax Authorities

for the suspension of the notices of assessment submit-

are illegitimate and that there is a remote risk of pay-

ted by the company and, in November 2009, at the first

ment of the entire sum for which the previous share-

hearing on the matter, combined the two appeals and, in

holder is liable (Enertad now Erg Renew) on the basis


Board of Arbitrators set up, upon request of ACEA S.p.A.,

GdF Suez Energy Management (formerly AceaElectrabel Trading) tax inspection

in accordance with said contract.

On 15 September 2010 the Guardia di Finanza – Nu-

of the guarantees issued in the purchase/sale contract and the provisions in the arbitration award issued by the

cleo Polizia Tributaria di Roma (Italian Financial Police It should also be noted, for the purposes of complete-

– Rome Tax Squad) opened a tax inspection relating to

ness, that SAO challenged measure no. 2008/27753 of 27

direct taxes for 2008, subsequently extended to the

November 2008 by which the competent Tax Authorities

years 2005, 2006, 2007 and 2009 with reference to the

suspended the disbursement of a VAT rebate claimed by

so-called off-balance sheet transactions (article 112 of

the Company for the 2003 tax period. Said rebate, to-

Income Tax Consolidation Act).

talling 1,256,000.00 euros, was recognised by the Inland

In November 2010, tax inspections were concluded for

Revenue, even though for precautionary reasons due to

the 2005 tax year and the Guardia di Finanza notified

the above assessments its disbursement was suspend-

GdF Suez Energy Management and ACEA, as the con-

ed. The Tax Commission, with Ruling issued following the

solidating entity, of a Report on Findings, ascertaining a

hearing held in March 2010, upheld the appeal lodged by

higher taxable base, (Ires and Irap – corporate income

our Company, thus cancelling the cited measure against

tax and regional business tax) of 14.2 million euros, re-

the aforementioned ruling. The Tax Authorities submit-

lating to the fair value of solely hedging instruments

ted an appeal in September 2010. The proceedings are in

with a positive fair value as at 31 December 2005, pro-

progress. It should be noted that the receivable involved

ducing effects over subsequent years. In substance, the

in the cited VAT reimbursement was settled via payment

tax inspector confirmed that the disclosures made by

in July 2010. The assignee presented an appeal with a

no IAS adopters - GdF Suez Energy Management is one

simultaneous request for discussion at a public hearing,

– in their financial statements in compliance with OIC

for the cancellation of measure 73747/2011 with which

3 assume tax relevance pursuant to and in accordance

the Terni Provincial Department of the Tax Authorities

with article 112 of the Income Tax Consolidation Act.

declared the transfer of said VAT credit from SAO to said

On 5 July 2011, ACEA, as the consolidating entity, re-

assignee to be unacceptable.

ceived a report on findings, ascertaining a higher taxable base for the tax years 2006, 2007, 2008 and 2009

Tax inspection on Marco Polo

of 128.9 million euros relative to the positive fair value of hedging instruments existing at the end of the years

On 23 June 2010, the Tax Authorities notified the associ-

being audited.

ated company Marco Polo of a Report of Findings relat-

On the basis of the Framework Agreement signed in

ing to the general tax inspection started in March 2010.

December by ACEA and GDF Suez Energia Italia, ACEA

The irregularities found by the Tax Authorities totalled

is indemnified and held harmless in relation to any

6.4 million euros, (plus interest and fines) and essentially

amount it is required to pay, also temporarily, as con-

concern objections to the equalisation calculation meth-

solidating entity.

od of fees due to Shareholders of ACEA and AMA, based on the service contracts stipulated. The proper defence briefs and preliminary documen-

ARSE tax inspection

tation were presented to the Tax Authorities aimed at

On 19 July 2011, the Italian Financial Police began an in-

eliminating the most significant irregularities.

spection to check the correct use of the VAT tax warehouse system pursuant to article 50 bis of Decree Law no. 331 of 30 August 1993 (“VAT warehouses”), relating to certain goods imported by the company. The inspection, suspended on 27 July 2011, re-commenced on 9 February


105

and 2011.

Tax inspection of other Group companies

The system under review makes it possible to suspend

On 15 November 2011, ACEA Ato2 was notified of a re-

the payment of VAT at the time of import, by entering the

port on findings, drafted by the Italian Financial Police

goods in so-called VAT warehouses, i.e. facilities managed

as a result of an inspection opened in July, concerning

by third parties and subject to specific forms of control

IRES and IRAP for 2008. The company complied with the

and monitoring. The tax, where due, is paid when the good

report on findings pursuant to article 5 bis, of Legislative

is extracted through a reverse charge mechanism, with

Decree no. 218/1997 through the presentation of the ap-

the offsetting of VAT credits/debits recorded.

propriate request in December 2011, and paid 329,532

Control activities are targeted at ascertaining cases of

euros.

2012, with the extension of the controls to the years 2010

abuse of the mechanism, i.e. cases in which legal nonexistence or warehouse simulation are found, in line with

It should also be noted that, on 9 February 2012, a gen-

the instructions already recommended in turn by the Cus-

eral inspection (IRES, IRAP and VAT) was opened by the

toms Agency (see Resolution no. 23321/2009).

Tax Authorities for the year 2009 against Sarnese Vesuviano and, on 17 February 2012, the Italian Financial Police

The subject is especially well-known and debated given

opened a general inspection (IRES, IRAP and VAT) against

that several parties have recorded an extremely restric-

EALL for the years 2010/2011 until the date of incorpora-

tive attitude on the part of inspectors who tend, contrary

tion in ARIA.

to what has been repeatedly affirmed by said Customs Agency, to recognise the aforementioned non-existence/ simulation in all cases where the good delivered to the

Aria Group

warehouse has not remained in the storage area for a

The disputes involving companies in the Environment

minimum period.

Area can be divided into three types: • normal commercial (customers and suppliers), labour

As at today’s date, the company received no report on

and tax disputes that any business might encounter;

findings and deems that all conditions in fact and in law

• disputes over authorisations, deriving from actions

set forth by the legislation for the use of VAT warehouses,

brought, normally before administrative courts, by

as interpreted by said Customs Agency, have been fully

persons or entities affected by the activities of the

satisfied.

Companies in this area; • administrative disputes deriving from the application

GORI tax inspection

of environmental regulations and the related fines.

During the year, the Tax Authorities carried out an inspec-

In October 2005, A.R.I.A. launched arbitration proceed-

tion for the year 2008. At the end of the inspection, in-

ings for the recovery 2,400,000 euros due to them from

spectors contested the payment of roughly an additional

a company on the basis of a contract signed in July 2003.

1 million euros in taxes with the company (plus inter-

The counterparty did not attend the legal proceedings.

est and fines). In respect of the irregularities identified,

The arbitrator, by means of arbitration award issued on

the company is evaluating whether to lodge an appeal

30 November 2005, ordered the defendant to pay the

against the assessment notice, which has not yet been

sum demanded by A.R.I.A.. S.p.A., plus interest, legal and

notified as yet, or, alternatively, to formulate a tax settle-

other costs. A.R.I.A. S.p.A. launched subsequent legal

ment proposal in accordance with art. 6, paragraph 1, of

action to recover the amount owed, still in progress, by

Legislative Decree no. 218/97.

obtaining a temporary injunction from the Court of Milan, opposed by the counterparty, and proceeded with the subsequent enforcement procedure, and in particular,

106


with the seizure of some property assets of the defen-

ber of administrative actions brought by third parties

dant. The enforcement actions, still in progress, have not

in 2002 are pending before the Regional Administrative

produced substantial results. It should be noted that the

Court of Lazio. The plaintiffs have contested the Mas-

receivable involved in the case was settled via payment

ter Plan for waste management, insofar as it applies to

in July 2010.

waste-to-energy plants with energy recovery, approved by the Lazio Region in January 2002 and by the Mana-

An appeal brought by incorporated company Terni En.A.

gerial Directive issued by the Province of Frosinone in

S.p.A. before the Umbria Regional Administrative Court

April 2002, which authorised construction and operation

in March 2004, against the resolution passed by the Terni

of the said plant. The requests for preliminary injunctions

Provincial Council in December 2003, is still pending. The

filed by the plaintiffs have been rejected by the Regional

resolution approved, pursuant to Article 20 of Legislative

Administrative Court of Lazio, and, where appeals were

Decree no. 22/97, the identification of areas not suitable

filed, by the Council of State. Starting from 2007 the Com-

for the location of a waste treatment and recycling plant,

missioner assigned responsibility for the environmental

introducing a complex procedure that should also be ap-

emergency in the Lazio region issued a specific Integrat-

plied to plants, such as the WTE plant located in Terni, al-

ed Environmental Authorisation, pursuant to Legislative

ready approved and located. Umbria Regional Authority,

Decree no. 59/2005, covering the activities carried out by

with Managerial Directive 11879 of 19 December 2008,

the waste-to-energy plant, and its upgrade and repower-

issued the related Integrated Environmental Authorisa-

ing. The Authorisation was subsequently extended in the

tion, pursuant to Legislative Decree no. 59/2005. This is

first half of 2008.

valid for 8 years and covers the activities of the above waste-to-energy plant in Terni.

It should be recalled that during 2003, a company, acting on behalf of a consortium of municipalities, brought

The action brought by a company against incorporated

an action against incorporated company E.A.L.L. aiming

company Terni En.A. S.p.A. in April 2006, regarding al-

at obtaining the payment of damages (9,916,800.00 eu-

leged breach of a contract governing the transfer of fuel

ros) for an alleged breach of contract by incorporated

to the Terni waste-to-energy plant, is still pending. The

company EALL. During 2005, the Consortium, which had

plaintiff has filed a claim for damages of approximately

in the meantime been converted into a joint-stock com-

800,000 euros. Our company contests the arguments put

pany, brought an action supporting the claims put for-

forward by the plaintiff. The case is currently at the pre-

ward by the original plaintiff. With Ruling no. 300/2010

liminary stage.

of 27/04/2010, the Court rejected the appeal filed in by the plaintiff and the Consortium, and forced the coun-

In March 2011, the company that won the integrated

terparty to pay legal costs borne by our company. The

tender for the executive planning and revamping works

aforementioned Consortium, now a joint-stock company,

for the company’s existing energy recovery plant, First

challenged the aforementioned ruling. The company ap-

Lot, submitted an appeal to the Regional Administrative

peared before the court. The hearing for the presentation

Court of Umbria against the withdrawal measure as-

of closing statements at the Rome Court of Appeal has

sumed by Terni En.A. pursuant to Legislative Decree no.

been set for June 2016.

490 of 8 August 1994 and Presidential Decree no. 252 of 3 June 1998. No suspension provision was issued against

In April 2011, the contractor of the works relating to the

the aforementioned measure by the competent judicial

contract for the execution of civil works on the first line

body. The hearing on the matter has not been set.

of the San Vittore del Lazio plant, signed in December 1997, submitted a request for arbitration for the recogni-

With regard to the San Vittore del Lazio waste-to-energy

tion of the amounts relating to the reservations append-

plant owned by incorporated company EALL S.r.l., a num-

ed to the 9th SAL (progress report) of June 2002. The sum


107

requested in relation to the aforementioned reservations

As regards the RDF production plant in Paliano, a number

is equal to around 1,200,000.00 euros. The Board of Arbi-

of administrative appeals brought by third parties in 2003

tration has been appointed. The Board of Arbitration has

against incorporated company Enercombustibili S.r.l. are

been installed and has started its activities.

still pending, regarding the appeal against the resolution

The company, through its appointed legal representative,

of the implementing party of the Extraordinary Commis-

is preparing all necessary defence action.

sioner for Waste Emergency in Lazio no. 66 of 30 July 2003 and related acts, involving the authorisation of said

In March 2011, GSE S.p.A. requested a total of

plant, and the agreement stipulated by the company with

1,128,570.52 euros plus VAT from incorporated company

the Municipal Administration of Paliano. Applications for

EALL Srl, deeming the final quantification of the num-

the suspension of the provisions submitted by the ap-

ber of green certificates issued to said company for the

plicants were all rejected by means of first and second

years 2006, 2007, 2008 and 2009 to be incorrect. In May

instance rulings. The proceedings are still pending before

2011, the company submitted an appeal to the compe-

the competent Judicial Authorities.

tent Regional Administrative Court, requesting cancellation of the GSE S.p.A. provision.

108


Operating (and financial) outlook 2011 was a very important year for the Group, during

During the year, the tariff development set out in the

which, all personnel were especially focused on reach-

different Regulatory Plans relating to the Integrated Wa-

ing the efficiency objectives set out in the ambitious

ter Service was regularly maintained. The Energy Area

budget. The new 2012-2016 Business Plan approved in

recorded better profits thanks to the good performance

2011 also appears to strike a good balance between

by sellers. The Environment Area likewise recorded a

management, efficiency and development. In 2011 too,

better result than forecasted, thanks to the entry into

objectives were reached in full, where at consolidated

operation of the two new production lines of the San

EBITDA level, the budget targets were exceeded by

Vittore plant and greater quantities treated.

more than 40 million euros, which is mainly a result of (i) the recovery of metering equalisation of previous

ACEA will continue to commit to doing all in its power to

years by the Networks Area (8 million euros) not set out

achieve the goals set in the new Business Plan through-

in the budget, (ii) higher revenues generated by the En-

out 2011. The substantial Investment Plan is confirmed

ergy Area and (iii) savings obtained on purchases, ser-

in particular, which, over its term, envisages almost 2.3

vices and consultancy.

billion euros in investments, dedicating (i) about 46% of the Investment Plan to the Water Area, which will

The consolidated financial statements as at 31 Decem-

guarantee the expected tariff development, (ii) 32% to

ber 2011 present a gross profit of 655.8 million euros,

electricity distribution and the Renewable Energy Area,

a slight decrease compared to 666.5 million euros

both PV power and cogeneration, confirming the com-

achieved in the same period of 2010, due to the differ-

mitment to constantly improving service quality and

ent basis of consolidation resulting from the dissolution

continuity, (iii) 12% to the Environment Area, where the

of the joint venture with GdF-Suez in the Energy Area

Group is particularly committed by increasing and de-

on 31 March 2011. By contrast, on a like-for-like basis,

veloping its waste-to-energy capacity and widening its

2011 recorded growth of 20.2 million euros compared

capacity in the disposal of biological sludge, in biomass

to the previous year.

and special waste treatment, (iv) 7% to the Energy Area, particularly for the process of revamping its thermal

Consolidated net profit was essentially in line with

and hydroelectric plants and (v) 3% to the Group’s IT

the expectations, at 93.5 million euros before minori-

development and maintenance of its property portfolio.

ties, compared to 100 million euros in December 2010, marking a decrease of 6.5 million euros. This result in-

Net working capital of 89 million euros recorded as at

corporates not only the effects of the above-mentioned

31 December 2011 takes into account the new basis

termination of the joint venture with GDF – Suez, but

of consolidation, including the 100% acquisition of the

the provisions relating to companies GORI and ACEA

electricity sale company and the proportionate consoli-

Ato5 amounting to 48.9 million euros, prudentially re-

dation of the company Acquedotto del Fiora. Net debt

corded to cover any regulatory risks, as amply detailed

was also in line with the budget, standing at 2.3 billion

in the Report on Operations, pending formalisation of

euros at the end of 2011, which includes 60 million eu-

the agreements between ATO and the Campania Region

ros in the form of the advance on dividends distributed

in order to determine new tariffs which will make it pos-

at the end of 2011.

sible to maintain the company’s economic and financial equilibrium, as set forth by the Galli Law.

As is well-known, the financial restructuring project was completed in March 2010 with the issue of a new

On an economic level, net of the effects of the cited JV,

bond for 500 million euros at a 4.50% fixed rate, which

the new public lighting contract and the entry of the

represented the completion of the project to convert

company Acquedotto del Fiora, all of the business areas

all debts to long-term. This project protected the Group

are in line with or exceed the budget.

from an extremely strict credit situation, and from the


109

real explosion in spreads.

The solidity of our business, 80% of which is regulated,

The first expiry will fall in 2013, solely involving the

the results achieved so far, combined with the strong

amount of 200 million euros, but given that the Group

financial structure referred to above, have allowed the

fixed rates and loans two years ago, it did suffer at a

Ratings agencies to grant Acea the following long-term

financial level from the crisis in progress. Consequently,

ratings as at the balance sheet date:

the average global cost of borrowing stands at 3.71%.

• Standard & Poor’s: “BBB+”;

40% of total debt is floating rate: of this 80% with spread

• Fitch “A-”

fixed in previous years. In 2012, the Group will refinance

• Moody’s “Baa1”

committed three-year back-up credit lines of 500 mil-

Only a few companies in Europe chose to receive a

lion euros in advance, which helped reduce the cost of

judgment from all three main Ratings Agencies, espe-

borrowing in 2011.

cially in light of the critical and persistent international financial crisis. The current rating, recently reviewed by

The financial structure of the ACEA Group is therefore

the Agencies, is the highest in the sector and equal to

very solid for the upcoming years, as the entire debt

or better than the rating assigned to Italy.

is positioned on the long term, with an average life of about 10 years, covering 100% of the activities until at least 2013. 60% of the debt is at a fixed rate in order to guarantee protection against the mentioned increase in interest rates and any financial or loan fluctuations.

110


Resolutions on profit for the year and distribution to shareholders Dear Shareholders, in inviting you to approve the financial statements, we propose that the profit of 108,636,434.80 euros for the year ended as at 31 December 2011 be allocated as follows: • 5,431,821.74 euros to the legal reserve, equal to 5%, • 59,513,413.96 euros to shareholders, to cover the advance on the dividend paid on 22 December 2011, with prior detachment date on 19 December 2011, coupon no. 11, • 43,691,199.10 euros as retained earnings. At the date of approval of the financial statements, treasury shares total 416,993.

Acea S.p.A. The Board of Directors


111

Financial Statements of ACEA S.p.A. for the year ended 31 December 2011

Income Statement of ACEA S.p.A. for the year ended 31 December 2011 Notes Ref.

INCOME STATEMENT

1

Revenue from sales and services

2

Other revenues and proceeds

Net revenue

3

Staff costs

4

Costs of materials and overheads

31.12.2011

31.12.2010


163,764

140,545

23,219

8,868

24,840

(15,973)

172,632

165,385

7,247

47,648

39,525

8,122

159,140

139,916

19,224

Operating costs

206,788

179,442

27,346

Gross Operating Profit

(34,156)

(14,056)

(20,100)

5

Amortisation, depreciation, provisions and impairment charges

76,512

28,561

47,952


(110,669)

(42,617)

(68,051)

6


5,580

(34,970)

40,550

5,580

(34,970)

40,550

Ordinary finance (costs)/income

0

0

(0)

7


Exceptional finance (costs)/income

200,175

85,832

114,343


95,086

8,245

86,841

8

Taxation

Net profit/(loss) from continuing operations

Net profit/(loss) from discontinued operation Net profit/(loss) for the period

(13,550)

(25,571)

12,021

108,636

33,816

74,820

0

0

0

108,636

33,816

74,820

amounts in thousands of euros

Statement of Comprehensive Income of ACEA S.p.A. for the year ended 31 December 2011

STATEMENT OF COMPREHENSIVE INCOME

Net profit/(loss) for the period

Profit/(Loss) From the Redetermination of Financial Assets Available for Salea

Profit/loss from the effective portion of hedging instruments

Actuarial Profit/(Loss) on Defined Benefit Pension Plans

Taxation

Total Consolidated Operating Profits Net of Tax


114

2011 | Financial statements of Acea S.p.A.

31.12.2011

31.12.2010


108,636

33,816

74,820

0

0

0

(12,048)

5,837

(17,884)

0

0

0

(956)

(1,605)

649

95,633

38,048

57,585

Balance Sheet of ACEA S.p.A. for the year ended 31 December 2011 31.12.2011

31.12.2010


52,434

52,577

(144)

2,993

3,148

(154)

0

0

0

0

49,707

(49,707)

10,399

11,652

(1,254)

1,726,110

1,609,090

117,020

4,673

4,635

38

36,283

22,683

13,600

1,380,229

193,550

1,186,679

724

725

(1)

0

35,034

(35,034)

3,213,844

1,982,802

1,231,042

(0)

0

(0)

37,672

25,880

11,792

102,756

92,395

10,360

28,005

19,840

8,164

27,289

14,647

12,642

248,529

1,178,424

(929,896)

35,407

63,443

(28,035)

0

0

0

284,227

251,407

32,820

Notes Ref.

ASSETS

9

Property, plant and equipment

10

Investment property

Goodwill

11

Concessions

Other intangible assets

12

nvestments in subsidiaries and associates

13

Other investments

14

Deferred tax assets

15

Financial assets

16

Other non-current assets

Non-current assets held for sale

NON-CURRENT ASSETS

17.a

Inventories

17.b

Trade receivables

17.c

Intercompany trade receivables

17.d


17.e

Current financial assets

17.f

Intercompany current financial assets

17.g

Current tax assets

Deferred tax assets

17.h


Current assets held for sale

0

0

0

17

CURRENT ASSETS

763,884

1,646,037

(882,153)

TOTAL ASSETS

3,977,728

3,628,838

348,890



115

Balance Sheet of ACEA S.p.A. for the year ended 31 December 2011 Notes Ref.

LIABILITIES

Shareholders’ equity

31.12.2010


share capital

1,098,899

1,098,899

0

legal reserve

68,919

67,228

1,691

reserve for treasury shares

other reserves

profit (loss) pertaining to previous years

profit (loss) for the period

18


19 20 21

Borrowings and financial liabilities

22

Other liabilities

23

Provisions for deferred tax liabilities

Non-current liabilities held for sale

0

0

0

89,427

160,963

(71,536)

63

782

(720)

49,123

33,816

15,307

1,306,430

1,361,688

(55,258)

Staff termination benefits and other defined benefit plans

23,551

23,634

(83)

Provision for liabilities and charges

70,680

25,430

45,250

1,784,429

1,788,288

(3,859)

5,269

6,888

(1,619)

12,873

8,997

3,876

0

0

0

NON-CURRENT LIABILITIES

1,896,803

1,853,237

43,565

24.a

Borrowings

491,959

138,607

353,352

24.b

Trade payables

199,416

164,355

35,061

24.c

Tax payables

55,925

90,012

(34,086)

24.d


27,195

20,939

6,256

Current liabilities held for sale

24

CURRENT LIABILITIES

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY


116

31.12.2011


0

0

0

774,496

413,913

360,583

3,977,728

3,628,838

348,890

Cash Flow Statement of Acea S.p.A. for the year ended 31 December 2011

Cash and cash equivalents at beginning of period

31.12.2011

31.12.2010


251,407

43,818

207,589

86,841

Cash flow from operating activities Profit before taxes

95,086

8,245

Amortisation/depreciation

11,921

12,986

(1,065)

(78,602)

12,229

(90,831)

Movement in provisions for liabilities

45,250

(34,644)

79,894

Net movement in staff termination benefits

(1,185)

(2,583)

1,398

0

9,471

(9,471)

Revaluations/impairment charges

Realised gains Net financial interest expense

(5,580)

(52,978)

47,398

Income taxes paid

(53,190)

(7,402)

(45,788)

Cash generated by operations before movements in working capital

13,700

(54,676)

68,376

Increase in current receivables

(26,381)

(22,638)

(3,743)

35,061

15,723

19,338

0

0

0

Increase/decrease in current liabilities Increase/(decrease) in inventories

8,680

(6,915)

15,595

Changes in other assets/liabilities during the period

Movement in working capital

40,324

76,139

(35,815)

TOTAL CASH FLOW FROM OPERATING ACTIVITIES

62,704

14,548

48,156

(10,370)

(25,431)

15,061

811

8,164

(7,353)

(216,729)

(61,909)

(154,820)

Dividends received

112,976

87,948

25,028

Interest income received

(22,813)

28,263

(51,076)

(136,125)

37,034

(173,159)

(31,169)

(22,605)

(8,565)

0

651,422

(651,422)

Decrease/increase in other short-term borrowings

353,352

(483,302)

836,654

Interest expenses paid

(60,782)

(43,131)

(17,651)

Dividends paid

(155,160)

0

(155,160)

TOTAL CASH FLOW

106,241

102,385

3,856

0

53,622

(53,622)

32,820

153,967

(121,147)

Cash flow from investing activities Purchase/sale of property, plant and equipment and intangible assets Investments Proceeds/payments deriving from other investments

TOTAL Cash flow from financing activities Repayment of mortgages and long-term borrowings Provision of mortgages/other medium/long-term borrowings

Changes in shareholders’ equity after net profit Cash flows for the period Cash and cash equivalents at beginning of period

251,407

43,818

207,589

Cash and cash equivalents at end of period

284,227

251,407

32,820



117

Statement of changes in shareholders’ equity of ACEA S.p.A. for the year ended 31 December 2011 Share capital

Legal reserve

Demerger reserve

1,098,899

67,228

220,025

Appropriation of result for 2009:

Distribution of dividends

Legal reserve

Retaining earnings/Loss coverage

(53,622)

Other movements

Total profit (loss) recorded in the period:

Profit and losses booked directly to Shareholders’ equity

Profit for the year

1,098,899

67,228

166,403

Share capital

Legal reserve

Demerger reserve

1,098,899

67,228

166,403

Restated balances at 1 January 2010

Total as at 31 December 2010 amounts in thousands of euros

Balances as at 1 January 2011 Appropriation of result for 2010: Distribution of dividends

(63,764)

Legal reserve

1,691

Retaining earnings/Loss coverage

(71)

Other movements Total profit (loss) recorded in the period: Profit and losses booked directly to Shareholders’ equity Distribution of advance on 2011 dividends Profit for the year Total as at 31 December 2011 amounts in thousands of euros

118


1,098,899

68,919

102,567

Reserve for exchange differences

Reserve from valuation of financial instruments

Other reserves

Accumulated profit/ (loss)

Profit/(loss) for the period


0

(5,645)

(4,027)

533

(53,372)

1,323,641

0

0

53,622

0

250

(250)

0

(13,720)

17,952

4,232

33,816

33,816

(13,720)

12,307

(4,027)

782

33,816

1,361,688


Reserve from valuation of financial instruments

Other reserves

Accumulated profit/(loss)

Profit/(loss) for the period


(13,720)

12,307

(4,027)

782

33,816

1,361,688

(188)

(31,882)

(95,834)

1,034

(532)

(1,691)

0

(243)

188 0

(11,255)

2,520

(8,735) (59,513)

(24,975)

14,827

(2,993)

63

(59,513)

108,636

108,636

49,123

1,306,430


119

Notes Form and structure of the financial statements for the year ended 31 December 2011

Use of estimates In application of IFRS, preparation of the financial statements for the year ended 31 December 2011 required management to make estimates and assumptions that

General information

affect the reported amounts of assets and liabilities

ACEA S.p.A’s financial statements for the year ended 31

and the disclosure of contingent assets and liabilities

December 2011 were approved by the Board of Direc-

at the balance sheet date. The actual amounts may dif-

tors’ resolution on 21 March 2012. ACEA SpA, is an Ital-

fer from such estimates. Estimates are used in order to

ian company whose shares are traded on the Milan stock

make provisions for credit risk, obsolescent inventories,

exchange.

asset write-downs, employee benefits, taxes and other provisions. The original estimates and assumptions are

Compliance with IAS/IFRS

periodically reviewed and the impact of any change is

The financial statements have been prepared under

recognised in the income statement.

the IFRS effective at the balance sheet date, approved by the International Accounting Standards Board (IASB) and adopted by the European Union, consisting of the International Financial Reporting Standards (IFRS), Inter-


national Accounting Standards (IAS) and interpretations of the International Financial Reporting Interpretations

The most significant accounting standards and policies

Committee (IFRIC) and Standing Interpretations Commit-

are described below.

tee (SIC), collectively referred to as “IFRS”. Acea SpA has adopted International Financial Reporting


Standards (IFRS) as of 2006, with the date of transition

Non-current assets (and assets included in disposal

to IFRS established as 1 January 2005. The last financial

groups) classified as held for sale are accounted for at

statements prepared under Italian accounting standards

the lower of their previous carrying amount and their

relate to 31 December 2005.

market value less sale costs. Non-current assets (and assets included in disposal

Basis of presentation

groups) are classified as held for sale when their carry-

The financial statements for the year ended 31 Decem-

ing amount is expected to be recovered through a sale

ber 2011 consist of the balance sheet, income state-

transaction rather than through their continued use. This

ment, statement of comprehensive income, cash flow

condition is only met when the sale is highly probable,

statement and statement of changes in shareholders’

the asset (or asset included in a disposal group) is availa-

equity, all of which have been prepared under IAS 1. They

ble for immediate sale in its present condition and man-

also include notes prepared under the IAS/IFRS currently

agement is committed to the sale, which is expected to

in effect.

take place within twelve months of the classification of

The income statement is classified on the basis of the

this item.

nature of expenses, whilst the cash flow statement is The financial statements for the year ended 31 Decem-

Conversion of foreign financial statement items

ber 2011 have been prepared in euros and all amounts

Acea SpA and its European subsidiaries have adopted

have been rounded off to the nearest thousand euros,

the euro (€) as their functional and presentation currency.

unless otherwise indicated.

Foreign currency transactions are initially recognised at

presented using the indirect method.

the spot rate on the date of the transaction. Foreign currency monetary assets and liabilities are translated into

120


the functional currency at the exchange rate at the end

Rendering of services

of the reporting period. Exchange differences are recog-

Revenue is recognised with reference to the stage of

nised in the income statement, with the exception of dif-

completion of the transaction based on the same crite-

ferences deriving from foreign currency loans taken out

ria used for contract work in progress. When the amount

in order to hedge a net investment in a foreign entity.

of the revenue cannot be reliably determined, revenue

Such exchange differences are taken directly to share-

is recognised only to the extent of the expenses recog-

holders’ equity until disposal of the net investment, at

nised that are recoverable.

which time any differences are recognised as income or expenses in the income statement. The tax effect and

Finance income

tax credits attributable to exchange differences deriving

Interest income is recognised on a time proportion basis

from this type of loan are also taken directly to share-

that takes account of the effective yield on the asset

holders’ equity. Foreign currency non-monetary items

(the rate of interest required to discount the stream of

accounted for at historical cost are translated at the ex-

future cash receipts expected over the life of the asset

change rate on the date the transaction was initially re-

to equate to the initial carrying amount of the asset).

corded. Non-monetary items accounted for at fair value

Interest is accounted for as an increase in the value of

are translated at the exchange rate at the date the value

the financial assets recorded in the accounts.

was determined. The functional currency used by the Group’s Latin Amer-

Dividend income

ican companies is the US dollar. At the balance sheet

Dividend income is recognised when the shareholder’s

date the assets and liabilities of these companies are

right to receive payment is established.

translated into ACEA SpA’s presentation currency at

Dividend income is classified as a component of finance

closing rates, whilst income and expenses are translat-

income in the income statement.

ed at average rates for the period or at the rates ruling at the date of the related transactions. Exchange differenc-

Grants

es, resulting from the use of different rates to translate

Grants related to plant investments received from both

income and expenses as opposed to assets and liabili-

public and private entities are accounted for at fair value

ties, are taken directly to shareholders’ equity and rec-

when there is reasonable assurance that they will be

ognised as a separate component of equity. On disposal

received and that the conditions attaching to them will

of a foreign economic activity, the cumulative exchange

be complied with.

differences deferred in a separate component of share-

Grants related to specific plants whose value is record-

holders’ equity are recognised in the income statement.

ed under plant, property and equipment are recognised as non-current liabilities and progressively recognised in

Revenue recognition

the income statement on a straight-line basis over the

Revenue is recognised when the amount of revenue can

useful life of the asset to which they refer.

be reliably measured and it is probable that the eco-

Grants related to income (disbursed in order to provide

nomic benefits associated with the transaction will flow

an enterprise with immediate financial aid or as com-

to Acea SpA. Depending on the type of transaction, rev-

pensation for expenses and losses incurred in a previ-

enue is recognised on the basis of the following specific

ous period) are recognised in the income statement in

criteria:

full once the conditions for recognition have been complied with.

Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer.


121

Construction contracts

the present value of the defined benefit obligation or

Construction contracts are accounted for on the basis

10% of the fair value of any plan assets at that date

of the contractual payments accrued with reasonable

(the so-called corridor method). Such gains and losses

certainty, according to the percentage of completion

are recognised on the basis of the expected average

method (cost to cost), attributing revenue and profits

remaining working lives of the employees participating

on the contract to the individual reporting periods in

in the plan.

proportion to the stage of contract completion. Any enue and any prepayments received is recognised in

Share-based payment transactions (stock options)

assets or liabilities.

The Group is required to recognise the goods or ser-

In addition to contract fees, contract revenue includes

vices received in a share-based payment transaction

variations, price changes and the payment of incen-

at the date the goods or services are consumed. The

tives to the extent that it is probable that they will form

Group is required to recognise a corresponding in-

part of actual revenue and that they can be reliably de-

crease in shareholders’ equity if the goods or services

termined. Expected losses are recognised regardless

are received on the basis of a share-based payment

of the stage of contract completion.

transaction settled by the issuance of equity, or as a

positive or negative difference between contract rev-

liability if the goods or services are acquired on the

Borrowing costs

basis of a share-based payment transaction settled by

Borrowing costs that are directly attributable to the

the issuance of cash.

acquisition, construction or production of a qualifying

ACEA SpA has opted to apply IFRS 2 on a prospective

asset (an asset that necessarily takes a substantial pe-

basis from 1 January 2005.

riod of time to get ready for its intended use or sale)

With effect from 2000, Acea SpA introduced annual

are capitalised as part of the cost of the asset until it is

stock option plans, with the aim of equipping the Com-

ready for use or sale. Income on the temporary invest-

pany with a means of boosting management incentives

ment of the borrowings is deducted from the capital-

and loyalty.

ised borrowing costs. All other borrowing costs are recognised as an expense

Leases

in the period in which they are incurred.

Leases are classified as finance leases when the terms of the contract substantially transfer all the risks and

Employee benefits

benefits of ownership of an asset to the lessee. All oth-

Post-employment employee benefits in the form of de-

er leases are operating leases.

fined benefit plans (such as staff termination benefits,

122

bonuses, tariff subsidies) or other long-term benefits

The Company as lessor

are recognised in the period the related right accrues:

Assets held under a finance lease are presented as re-

Such funds and benefits are not financed.

ceivables at an amount equal to ACEA SpA’s net invest-

The cost of the benefits involved in the various plans

ment in the leased asset. Finance income is recognised

is determined separately for each plan based on the

on the basis of a pattern reflecting a constant periodic

actuarial valuation method, using the projected unit

rate of return on ACEA SpA’s residual net investment.

credit method to carry out actuarial valuations at the

Lease income from operating leases is recognised on

end of the reporting period.

a straight-line basis over the lease term. Initial direct

Actuarial gains and losses are recognised as income or

costs incurred in respect of negotiating and securing

expense if the net cumulative unrecognised actuarial

the operating lease are added to the carrying amount

gains and losses for each plan at the end of the previ-

of the leased assets and recognised on a straight-line

ous reporting period exceeded the greater of 10% of

basis over the lease term.


The Company as lessee

is probable that future taxable profit will be available

Assets held under a finance lease are recognised as

against which the temporary difference can be utilised.

assets belonging to ACEA SpA and accounted for at

The carrying amount of deferred tax assets is reviewed

amounts equal to fair value at the inception of the lease

at each balance sheet date and reduced to the extent

or, if lower, at the present value of the minimum lease

that, based on the plans approved by the Board of Direc-

payments. The underlying liability to the lessor is includ-

tors, it is no longer probable that sufficient future taxable

ed in the balance sheet as an obligation to pay future

profit will be available against which all or part of the

lease payments. Lease payments are apportioned be-

assets can be recovered.

tween the capital element and the interest element, in

Deferred taxes are determined using tax rates that are

such a way as to produce a constant periodic rate of

expected to apply to the period in which the asset is re-

interest on the remaining balance of the liability.

alised or the liability settled. Deferred taxes are taken

Finance costs, whether certain or estimated, are recog-

directly to the income statement, with the exception of

nised on an accruals basis unless they are directly at-

those relating to items taken directly to shareholders’

tributable to the acquisition, construction or production

equity, in which case the related deferred taxes are also

of an asset, which justifies their capitalisation.

taken to equity.

Lease payments under operating leases are recognised as an expense in the income statement on a straight-


line basis over the lease term. The benefits received or

Property, plant and equipment is stated at cost, including

to be received as an incentive for entering into operat-

any directly attributable costs of making the asset ready

ing leases are also recognised on a straight-line basis

for its intended use, less accumulated depreciation and

over the lease term.

any accumulated impairment charges. The cost includes the costs of dismantling and removing

Taxation

the asset and cleaning up the site at which the asset

Income taxes for the period represent the aggregate

was located, if covered by the provisions of IAS 37. Each

amount of current (under the tax consolidation arrange-

component of an asset with a cost that is significant in

ment) and deferred taxes.

relation to the total cost of the item, and having a differ-

Current taxes are based on the taxable profit (tax loss)

ent useful life, is depreciated separately.

for the period. Taxable profit (tax loss) differs from the

Land, whether free of constructions or annexed to civil

accounting profit or loss as it excludes positive and

and industrial buildings, is not depreciated as it has an

negative components that will be taxable or deductible

unlimited useful life.

in other periods and also excludes items that will nev-

Depreciation is calculated on a straight-line basis over

er be taxable or deductible. Current tax liabilities are

the expected useful life of the asset, applying the follow-

calculated using the tax rates enacted or substantively

ing rates:

enacted at the end of the reporting period, and taking account of tax instruments permitted by tax legislation (the domestic tax consolidation regime, tax transparency). Deferred taxes are the taxes expected to be paid or recovered on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases, accounted for using the liability method. Deferred tax liabilities are generally recognised on all taxable temporary differences, whilst deferred tax assets are recognised to the extent that it


123

DESCRIPTION

ECONOMIC/TECHNICAL RATE

Plant and machinery used in operations

Min

Max

1.25%

6.67%

4%

Other plant and machinery Industrial and commercial equipment used in operations

2.5%

6.67%

Other industrial and commercial equipment

6.67%

Other assets used in operations

12.50%

Other assets

6.67%

19%

Motor vehicles used in operations

8.33%

Other motor vehicles

16.67%

Plant and machinery in the course of construction for

Investment property is eliminated from the accounts

use in operations, or for purposes yet to be determined,

when sold or when the property is unusable over the

is stated at cost, less any impairment charges. The cost

long-term and its sale is not expected to provide future

includes any professional fees and, in the case of cer-

economic benefits.

tain assets, interest expense capitalised in accordance

Sale and lease-back transactions are accounted for based

with the Company’s accounting policies. Depreciation

on the substance of the transaction. Reference should

of such assets, in line with all the other assets, begins

therefore be made to the policy adopted for leases.

when they are ready for use. In the case of certain com-

Any gain or loss deriving from the elimination of an in-

plex assets subject to performance tests, which may be

vestment property is recognised as income or expense

of a prolonged nature, readiness for use is recognised

in the income statement in the period in which the

on completion of the related tests.

elimination takes place.

An asset held under a finance lease is depreciated over its expected useful life, in line with assets that are

Intangible assets

owned, or, if lower, over the lease term. Gains and losses deriving from the disposal or retire-

Intangible assets acquired separately

ment of an asset are determined as the difference be-

or deriving from a business combination

tween the estimated net disposal proceeds and the

Intangible assets acquired separately are capitalised at

carrying amount of the asset and are recognised as in-

cost, whilst those deriving from a business combination

come or expense in the income statement.

are capitalised at fair value at the date of acquisition. After initial recognition, an intangible asset is carried

124

Investment property

at cost. The useful life of an intangible asset may be

Investment property, represented by property held to

defined as finite or indefinite.

earn rentals or for capital appreciation or both, is stated

Intangible assets are tested for impairment annually:

at cost, including any negotiating costs less accumu-

the tests are conducted in respect of each intangible

lated depreciation and any impairment charges.

asset or, if necessary, in respect of each cash-generat-


ing unit.

the expected useful life of the asset. The rates applied

The useful life of an asset is reviewed annually and,

range from a minimum of 1.67% to a maximum of

where applicable, any adjustments are made on a pro-

11.11%.

spective basis.


Gains and losses deriving from the disposal of an intan-

Impairment of assets

gible asset are determined as the difference between

At each balance sheet date, ACEA S.p.A. reviews the

the estimated net disposal proceeds and the carrying

value of its tangible and intangible assets to assess

amount of the asset and are recognised as income or

whether there is any indication that an asset may be

expense in the income statement.

impaired. If any indication exists, the Group estimates the recoverable amount of the asset in order to deter-

Research and development costs

mine the impairment charge.

Research and development costs are recognised as an

When it is not possible to estimate the recoverable

expense during the period in which they are incurred.

amount of the individual asset, ACEA SpA estimates

Development costs incurred in relation to a specific

the recoverable amount of the cash-generating unit to

project are capitalised when there is reasonable assur-

which the asset belongs.

ance that they will be recovered in future periods. After

Intangible assets with indefinite useful lives, including

initial recognition, such costs are carried at cost, which

goodwill, are tested for impairment annually and each

may be reduced by any accumulated amortisation or

time there is any indication that an asset may be im-

accumulated impairment charges.

paired, in order to determine the impairment charge.

Each capitalised development cost is amortised

The recoverable amount is the higher of an asset’s fair

throughout the period in which the related project is

value less costs to sell and value in use. In calculating

expected to generate future economic benefits.

value in use, future cash flow estimates are discounted

The carrying amount of development costs is subject to

using a pre-tax rate that reflects current market assess-

an annual impairment review when the asset is not yet

ments of the time value of money and the risks specific

in use, or more frequently when an indicator during the

to the business.

period raises doubts about whether or not the carrying

If the recoverable amount of an asset (or cash-gen-

amount is recoverable.

erating unit) is estimated to be less than its carrying amount, the carrying amount is reduced to its recov-

Brands and patents

erable amount. An impairment charge is immediately

These assets are initially recognised at cost and amor-

recognised as an expense in the income statement, un-

tised on a straight-line basis over the useful life of the

less the asset is represented by land or buildings, other

asset.

than investment property, carried at a revalued amount,

With regard to the rates of depreciation, the following

in which case the impairment charge is treated as a

is noted:

revaluation decrease.

- development costs are amortised on a straight-

When an impairment no longer exists, the carrying

line basis over a period of five years based on the

amount of the asset (or cash-generating unit), with the

expected residual useful life of the asset,

exception of goodwill, is increased to its new estimat-

- intellectual property is amortised over an estimated useful life of three years.

ed recoverable amount. The reversal must not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment charge been recognised for the asset in prior periods. The reversal of an impairment charge is recognised immediately as income in the income statement, unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. Where an impairment charge is recognised in the income statement, it is included among amortisation, depreciation and impairment charges.


125

Investments

Treasury shares

Investments in subsidiaries and associates are recog-

The cost of purchasing treasury shares is accounted for

nised in the balance sheet at cost, after taking account

as a reduction of shareholders’ equity. The effects of any

of any impairment of the value of individual investments.

subsequent transactions involving the shares are also

The purchase or subscription cost, in the case of invest-

recognised directly in shareholders’ equity.

ments transferred, corresponds to the value estimated by independent experts in accordance with art. 2343 of

Inventories

the Italian Civil Code.

Inventories are valued at the lower of cost and net realis-

Any excess of the cost of the acquisition over the Com-

able value. The cost comprises all materials and, where

pany’s interest in the fair value of the investee compa-

applicable, direct labour, production overheads and all

ny’s shareholders’ equity at the date of the acquisition is

other costs incurred in bringing the inventories to their

recognised as goodwill. Goodwill is included in the car-

present location and condition. The cost is calculated us-

rying amount of the investment and subject to impair-

ing the weighted average cost formula. The net realisable

ment reviews. Any resulting impairment charges are not

value is the estimated selling price less the estimated

reversed if the circumstances that led to the impairment

costs of completion and the estimated costs necessary

no longer exist.

in order to make the sale.

The portion of an impairment that exceeds the value of

Impairment charges incurred on inventories, given their

shareholders’ equity is posted to provisions for liabili-

nature, are either recognised in the form of specific pro-

ties and charges, despite the existence of receivables

visions, consisting of a reduction in assets, or, on an item

due and until the claim on such receivables is formally

by item basis, as an expense in the income statement in

waived. The cost of liquidating investments is taken into

the period the impairment charge occurs.

account in the measurement of the investments themselves, regardless of any provisions posted in the finan-

Financial instruments

cial statements of the related companies.

Financial assets and liabilities are recognised at the time

Investments in other companies, held as non-current fi-

ACEA SpA becomes party to the contract terms applica-

nancial assets and not for trading, are accounted for at

ble to the instrument.

fair value if determinable: in this case, fair value gains and losses are recognised directly in shareholders’ equi-

Trade receivables and other assets

ty until the investment is sold, when all the accumulated

Trade receivables, which have normal commercial terms,

gains and losses are recognised in the income statement

are recognised at face value less estimated provisions

for the period.

for the impairment of receivables.

Investments in other companies for which the fair val-

The estimate of uncollectible amounts is made when col-

ue is not known are accounted for at cost and written

lection of the full amount is no longer probable.

down in the event of anything other than a temporary

Trade receivables refer to the invoiced amount which,

impairment. Dividend income is recognised in the in-

at the date of these financial statements, is still to be

come statement when the right to receive payment is

collected, as well as the receivables for revenues for the

established and when deriving from distributions of

period relating to invoices that will be issued later.

profits subsequent to acquisition of the investment. Should dividend income derive from the distribution of reserves formed prior to acquisition of the investment, the amount received is accounted for as a reduction of the cost of the investment.

126


Financial assets

cost of a financial asset means the amount recognised

Financial assets are recognised and derecognised at the

initially, less principal repayments and plus or minus

trade date and initially recognised at cost, including any

accumulated amortisation using the effective interest

directly attributable acquisition costs.

method of the difference between the initial amount and

At each future balance sheet date, the financial assets

the maturity amount, after any reductions. The effective

ACEA SpA has a positive intention and ability to hold to

interest method is a method of calculating the amor-

maturity (held-to-maturity financial assets) are rec-

tised cost of a financial asset (or group of financial as-

ognised at amortised cost using the effective interest

sets) and allocating the interest income or expense over

method, less any impairment charges applied to reflect

the relevant period. The effective interest rate is the rate

impairments.

that exactly discounts estimated future cash payments

Financial assets other than those held to maturity are

or receipts over the expected life, or contractual term

classified as held for trading or as available for sale, and

if shorter, of the financial instrument to the net carrying

are stated at fair value at the end of each period.

amount of the financial asset.

When financial assets are held for trading, gains and

In the case of financial assets stated at amortised cost,

losses deriving from changes in fair value are recognised

the income statement and balance sheet are adjusted to

in the income statement for the period. In the case of

take account of the difference between the payment or

financial assets that are available for sale, gains and

receipt calculated on the basis of the effective interest

losses deriving from changes in fair value are recognised

rate and the coupon interest to be collected/paid, recog-

directly in a separate item of shareholders’ equity until

nised on the basis of the nominal rate of the instrument.

they are sold or impaired. At this time, the total gains and losses previously recognised in equity are recycled


through the income statement for the period. The total

Cash and cash equivalents include cash at bank and in

loss must equal the difference between the acquisition

hand, demand deposits and highly liquid short-term in-

cost and current fair value.

vestments, which are readily convertible into cash and

The fair value of financial instruments traded in active

are subject to an insignificant risk of changes in value.

markets is based on quoted market prices (bid prices) at the end of the reporting period. The fair value of invest-

Financial liabilities

ments that are not traded in an active market is deter-

They are stated at amortised cost. Borrowing costs

mined on the basis of quoted market prices for substan-

(transaction costs) and any issue premiums or discounts

tially similar instruments, or calculated on the basis of

are recognised as direct adjustments to the nominal val-

estimated future cash flows generated by the net assets

ue of the borrowing. Net finance costs are consequently

underlying the investment.

re-determined using the effective rate method.

Purchases and sales of financial assets, which imply delivery within a timescale generally defined by the regulations and practice of the market in which the exchange takes place, are recognised at the trade date, which is the date ACEA SpA commits to either purchase or sell the asset. Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are initially stated at fair value. After initial recognition, they are carried at amortised cost using the effective interest method. The amortised


127

Derivative financial instruments

when the instrument no longer meets hedge account-

Derivative financial instruments are initially recognised

on the hedging instrument recognised directly in share-

at cost and then re-measured to fair value at subse-

holders’ equity are retained in equity until the forecast

quent end of the reporting periods. They are designated

transaction effectively occurs. If the forecast transac-

as hedging instruments when the hedging relationship

tion is no longer expected to occur, the accumulated

is formally documented at its inception and the periodi-

gains and losses recognised directly in shareholders’

cally verified effectiveness of the hedge is expected to

equity are immediately taken to the income statement

be high.

for the period.

Fair value hedges are recognised at fair value and any gains or losses recognised in the income statement.

Trade payables

Any gains or losses resulting from the fair value meas-

Trade payables, which have normal commercial terms,

urement of the hedged asset or liability are similarly

are stated at face value.

recognised in the income statement. value gains or losses on the hedging instrument that

Derecognition of financial instruments

is determined to be an effective hedge is recognised

Financial assets are derecognised when ACEA SpA has

in shareholders’ equity, whilst the ineffective portion is

transferred all the related risks and the right to receive

recognised directly in the income statement.

cash flows from the investments.

If the hedged contract commitment or forecast trans-

A financial liability (or portion of a financial liability) is

action results in recognition of an asset or a liability,

derecognised when, and only when, it is extinguished,

the gains and losses on the instrument previously rec-

i.e. when the obligation specified in the contract is either

ognised directly in shareholders’ equity are transferred

fulfilled, cancelled or expires.

from equity and included in the initial measurement of

If a previously issued debt instrument is repurchased,

the cost or carrying amount of the asset or liability.

the debt is extinguished, even if the Group intends to

In the case of cash flow hedges that do not result in

resell it in the near future. The difference between the

recognition of an asset or a liability, the amounts rec-

carrying amount and the amount paid is recognised in

ognised directly in shareholders’ equity are included in

the income statement.

In the case of cash flow hedges, the portion of any fair

the income statement in the same period in which the ultimately recognised in the income statement.


In the case of fair value hedges, the hedged item is

Provisions for liabilities and charges are made when

adjusted for changes in fair value attributable to the

ACEA SpA has a present (legal or implicit) obligation to

hedged risk and the resulting gain or loss recognised in

meet as a result of a past event, should it be probable

the income statement. Gains and losses deriving from

that an outflow of resources be required to settle the

measurement of the derivative instrument are also rec-

obligation and the related amount have been reliably es-

ognised in the income statement.

timated.

Changes in the fair value of derivative instruments that

Provisions are measured on the basis of management’s

do not qualify for hedge accounting are recognised in

best estimate of the expenditure required to settle the

the income statement for the period in which they oc-

present obligation at the balance sheet date, and are dis-

cur, with the exception of derivative instruments whose

counted when the effect is significant.

hedged contract commitment or forecast transaction is

fair value is not reasonably determinable. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or

128

ing criteria. At this time, accumulated gains and losses



liability extinguished. Any profit or loss is immediately recognised in the income statement.

the IASB and approved by the European Union, came into

Amendments to IFRS 1 and IFRS 7 – Limited exemption from comparative IFRS 7 Disclosure for first-time adopters

force on 1 January 2011, and contain amendments to the

This document was issued in January 2010 and approved

international accounting standards:

on 19 July 2010. It came into force on 1 January 2011.

Change to IAS 32 – Classification of rights issued

IAS 24 (Revised in 2009) – Related party disclosures

The document was issued in October 2009 and approved

The document, that was issued in November 2009 and

on 23 December 2009. It came into force on 1 February

approved on 19 July 2010, came into force on 1 Janu-

2010. This standard includes an amendment to the defi-

ary 2011. This standard includes an amendment to the

nition of financial liability for the classification of rights

definition of related party in order to simplify it and, in

issues in foreign currency (and of some options and war-

particular, to ensure symmetry in the identification of re-

rants) as equity instruments when those instruments are

lated parties.

The following documents, already previously issued by

issued pro rata to all shareholders in the same class of a (non-derivative) equity instrument of an entity, or for the

Improvements to IFRS (May 2010)

purchase of a fixed amount of the entity’s equity instru-

In May 2010, IASB issued improvements to IFRS, with a

ments for a fixed amount of currency.

set of amendments to the standards. The following are the most important for ACEA

Changes to IFRIC 14 – Prepayments of a minimum funding requirement

• IFRS 3 Business Combinations,


• IAS 1 Presentation of Financial Statements,

approved on 19 July 2010, came into force on 1 January

• IAS 27 Consolidated and Separate Financial State-

2011. This amendment provides guidelines in order to define the recoverable value of the net assets of a pen-

• IFRS 7 Financial Instruments; additional disclosures,

ments, • IFRIC 13 Customer Loyalty Programmes.

sion fund. This amendment allows an entity to recognise

It should be noted that ACEA has applied the amend-

prepayments for a minimum funding contribution as an

ments introduced to the international accounting stand-

asset.

ards shown above as well as the additional improvements to these Financial Statements.

IFRIC 19 – Extinguishing financial liabilities with equity instruments

The adoption did not have a significant impact on the company’s financial position and operating result.

This document was issued in November 2009 and approved on 23 July 2010, and became effective for financial years that begin on or after 1 July 2010. The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as a fee paid. The equity instruments issued are measured at the fair value. If the fair value is not reliably determinable, the instruments are measured at the fair value of the


129

Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance

IFRS 10 – Consolidated Financial Statements IFRS 12 – Disclosure of interests in Other Entities The documents were issued on 12 May 2011 as part of

Only amendments to IFRS 7 regarding disclosures to be

the IASB project aimed at incorporating two consolida-

made in the event of the full or partial transfer of finan-

tion criteria present in IAS 27 (more focused on control)

cial assets were approved during the year (see below).

and SIC 12 (more focused on risks and benefits) into a

Numerous standards and amendments are still pending

single standard, and therefore providing the most com-

the completion of the approval process; the most signifi-

plete guidelines for establishing under what conditions

cant are described hereafter.

an SPE or an entity whose majority of voting rights (also potential) is not held should be consolidated or not.

Change to IFRS 7 – Disclosures – Transfer of financial assets

In summary, a situation of control occurs when it can be

The amendments made to IFRS 7 intend to provide great-

decisions about the business of the company in which

er transparency in relation to risks connected with trans-

he has invested and when the investor is exposed to

actions in which, in respect of the transfers of financial

the variability of that company’s returns, and therefore

assets, the transferor retains some level of exposure to

is able to use his power to influence its returns.

demonstrated that the investor has the power to make

the risks associated with the financial assets transferred ment, translated with the term “coinvolgimento residuo”

IFRS 11 – Joint Arrangements

in the Italian version of the regulations for the approval of

The document was issued on 12 May 2011, and is in-

international accounting standards). Additional informa-

tended to replace the current IAS 31. IFRS 11 is based

tion is also required in the event of transfers of financial

on the following core principles:

(a situation generally defined as “continuing involve-

assets at particular times (e.g. near the end of the year).

• Classification of arrangements in only two man-

The amendments to IFRS 7 specify that the disclosure re-

ners (joint operation and joint venture) instead of

quirements apply to total or partial transfers of financial assets in cases in which the entity: • transfers all contractual rights to receive cash flows from a financial assets, • retains all contractual rights to receive cash flows from a financial assets, but assumes a contractual obligation to pay said cash flows to another beneficiary.

the three set forth in IAS 31 • Distinction between the two types of arrangement based on their content Reporting of contractual rights and obligations resulting from the arrangement on the basis of its content • Assessment of the investment in a joint venture based on the shareholders’ equity method in-

The amendments to the standard were approved and

stead of the proportionate method, which is no

must be applied from 1 January 2012.

longer permitted The new standard sets forth that: 1. if the assets and liabilities are not contained in a special vehicle, the joint arrangement is a joint operation 2. if the arrangement’s assets and liabilities are contained in any vehicle (partnership, joint stock company, consortium, etc.) the joint arrangement may be either a joint operation or a joint venture.

130


In a nutshell, a joint arrangement is a joint ven-

review the standard relating to financial instruments,

ture if:

hence allowing entities to apply the new IFRS 9 in its

• the arrangement’s assets and liabilities are con-

entirety.

tained in a vehicle whose legal form does not grant

An additional amendment made to IFRS 9 makes it pos-

the parties rights to the assets and obligations for

sible not to make a retrospective adjustment to applica-

the liabilities contained in the vehicle;

tion of the standard in the comparative period at the

• contractual agreements do not change the vehicle’s legal form and • the vehicle is able to operate independently from the parties.

date of first adoption of IFRS 9, however, requiring the following additional information in the year of first application of IFRS 9 (Amendment to IFRS 7): • information on the change of classification of fi-

The IASB requires IFRS 10, 11 and 12 (and subsequently

nancial assets and liabilities, showing the changes

the amendments to IAS 27 and 28) to be adopted from

in the net carrying out amount separately, using

1 January 2013.

both IAS 39 and IFRS 9 measurement criteria,

As of today, the approval process is still underway and

• for financial assets and liabilities that are reclas-

EFRAG has published a first draft of the endorsement

sified and value at amortised cost: the fair value

advice, in respect of which it requires any comments by

of said assets/liabilities at the end of the year, the

next 11 March.

profit/loss that would have been booked to the income statement in the event the instruments had

IFRS 13 – Fair Value Measurement The document was issued on 12 May 2011 and aims to:

not been reclassified, • the effective interest rate determined at the date

- clarify the definition of fair value;

of reclassification and the amount of interest re-

- establish a single benchmark framework to meas-

corded in the income statement.

ure the fair value applicable to all IAS/IFRS which indicate fair value as the applicable measurement criteria; - provide clarifications and operating guidelines to

Amendments to IAS 32 and IFRS 7: “Offsetting Financial Assets and Financial Liabilities”

determine fair value (also in illiquid or inactive

On 16 December 2011, IASB published an amendment to

market situations).

IAS 32 Financial Instruments: Presentation and to IFRS

Mandatory adoption is required by 1 January 2013: as of

7 Financial Instruments: Disclosures with reference to

today, the approval process is still underway.

rules for the offsetting of financial assets and liabilities. The joint IASB-FASB project on the offsetting of financial

Amendments to IFRS 9 and IFRS 7: “Mandatory Effective Date and Transition Disclosures”

assets and liabilities intends to eliminate current differ-

On 16 December 2011, IASB published the document

The FASB decided to maintain its current position, pre-

“Mandatory Effective Date and Transition Disclosures

sent in US GAAPs, eliminating the possibility of conver-

(Amendments to IFRS 9 and IFRS 7)”, changing the date

gence; therefore, the Boards elected to jointly focus on

of mandatory application of IFRS 9 to years starting on

the request for information in order to allow users of

or after 1 January 2015 (the date of mandatory applica-

financial statements to more easily compare the pres-

tion was previously for years on or after 1 January 2013),

entation of financial instruments according to IFRS and

leaving the possibility of early adoption unaltered.

US GAAPs.

The Board deferred the mandatory application of IFRS

Mandatory adoption is required by 1 January 2013 for

9 following the recent amendment to the timescale for

IFRS 7 and 1 January 2014 for IAS 32: as of today the ap-

completion of the remaining phase of the project to

proval process is still underway.

ences between the respective accounting standards, with regard to the offsetting of financial instruments.


131

Amendments to IAS 19: “Employee Benefits”

Thirdly, the new standard requires additional disclosures,

On 16 June 2011, the IASB issued an amended version of

The amendments must be applied to financial state-

IAS 19 “Employee Benefits”.

ments for years starting on or after 1 January 2013; early

Said document modifies the accounting of defined benefit

adoption is permitted. Retrospective application is re-

plans and termination benefits.

quired with certain exceptions and comparative sensitiv-

In the first place, it eliminated the possibility of using

ity analysis for financial years starting before 1 January

the “corridor method” for recording actuarial profits and

2014. As of today, the approval process is still underway.

losses. In particular, all actuarial profits and losses must

to show the complete net balance of the plan surplus/

Amendments to IAS 1: Presentations of Items of Other Comprehensive Income

deficit in the balance sheet. During the transition in line

On 16 June 2011, the IASB issued the document “Pres-

with the requirements of the amended standard, an en-

entations of Items of Other Comprehensive Income

tity that currently uses the “corridor method” may have to

(amendments to IAS 1)”, the result of joint work carried

record a higher liability/lower asset in the balance sheet

out with the FASB, which provides a guide on the presen-

(with a matching entry in the Statement of Other Compre-

tation and classification of items contained in the State-

hensive Income and, therefore, Equity). When fully applied,

ment of Other Comprehensive Income (“OCI”).

said amendment will generate higher volatility in the bal-

The standard does not modify the possibility of present-

ance sheet and in the Statement of Other Comprehensive

ing all revenue and cost items recorded in one financial

Income, but the income statement will no longer be af-

year in a single statement of comprehensive income, or

fected by the amortisation of actuarial profits/losses.

in two statements: one statement which shows profit

Secondly, provision is made for a new approach to the

(loss) components for the year (separate income state-

presentation and accounting of changes in the following

ment) and a second statement which starts with profits

components of defined benefit obligations and plan as-

(losses) for the year and shows the items of the State-

sets in the income statement and the Statement of Other

ment of Other Comprehensive Income.

Comprehensive Income:

The standard requires the grouping together of items of

be recorded in the Statement of Other Comprehensive Income (“OCI”), with no other option available, in order

• Service costs are charged to the income statement:

the Statement of Other Comprehensive Income into two

they include costs for services provided in the year,

categories, depending on whether they can be reclassi-

effects generated by past service costs and curtail-

fied or not, in the income statement in a future period.

ments (both now recorded immediately in the year


they occur) and profits/losses generated by settle-

ments for years starting on or after 1 July 2012, with ret-

ment of the plan (in particular, generated by pay-

rospective application. As of today, the approval process

ments not in keeping with the terms of the plan, for

is still underway.

example, early termination of the plan), • Net interests which are recorded in the income statement, • Remeasurements which are booked to the Statement of Other Comprehensive Income: these include, among other things, actuarial profits/losses on plan liabilities. Remeasurements are never reclassified to the income statement, but can be transferred to shareholders’ equity (e.g. among profit reserves).

132

to be provided in the notes.


Exposure Draft 2011/6 relating to the new version of the Exposure Draft 2010/6 “Revenue from Contracts with Customers”

Notes to the Income Statement Net revenues down 172,632 thousand euros

On 14 November 2011 the IASB published a new version of the Exposure Draft 2010/6 “Revenue from Contracts

1. Revenue from sales and services amounted to

with Customers”. A similar document was published by

163,764 thousand euros and relates to:

the FASB.

• revenues from the provision of services to sub-

The core principle of the Exposure Draft 2011/6 coin-

sidiaries and associates totalling 85,473 thousand

cides with the one set out in the Exposure Draft 2010/6:

euros, an increase of 13,492 thousand euros com-

the entity must record revenues at the time the assets or

pared to 31 December 2010: this change is attribut-

services are transferred to the customer (the concept of

able to the review of amounts due for services that

“control” is used to determine when the transfer occurs);

the Parent Company provides to Group companies,

the amount of revenues to be recorded corresponds to

with particular attention to administrative, finan-

the consideration promised by the customer in exchange

cial, legal and technical services,

for the goods or services. However, in order to take ac-

• revenues from services and work carried out for

count of numerous letters of comment received by the

third parties totalled 78,292 thousand euros: this

IASB on the Exposure Draft 2010/6, and the results of

type of revenue includes income from the manage-

the extended “outreach activity”, the Boards decided to

ment and construction of public lighting systems

improve the original proposals.

for the Municipalities of Rome and Naples. The

Comments on the Exposure Draft may be submitted until

increase of 9,727 thousand euros reflects the fol-

13 March 2012; the final accounting standard is expect-

lowing: (i) the increase of 2,443 thousand euros in

ed by the end of 2012 and will be applicable for financial

revenues from the signing of the new tender con-

statements for years starting on or after 1 January 2015.

tract for the management of the public lighting ser-

Early application will be permitted.

vice in the Municipality of Naples and (ii) increase of 5,609 thousand euros deriving from the public

At present, Acea SpA is analysing the standards and in-

lighting service in the Municipality of Rome. As re-

terpretations given, as well as assessing whether their

gards the latter service, the change reflects the fol-

adoption will have a significant effect on the financial

lowing contrasting phenomena: on one hand, the

statements.

decrease in the lump-sum payment as a result of the supplementary agreement signed in March and effective from the start of 2011 (down 11,900 thousand euros), offset by growth in revenues resulting from the design and construction of new plants, energy upgrading works, and the technological and legislative adjustments to plants (up 17,466 thousand euros). 2. Other revenue and proceeds amounted to 8,868 thousand euros, representing a reduction of 15,973 thousand euros compared with 31 December 2010 (24,840 thousand euros). A breakdown of said item is shown in the table below:


133

31.12.2011

31.12.2010


1,723

1,735

(12)

0

0

0

Property income Income from end users Gains on asset disposals

0

9,471

(9,471)

2,237

9,016

(6,779)

68

272

(204)

Recharged cost of governance bodies

2,502

2,341

161

Seconded staff

2,337

2,005

332

8,868

24,840

(15,973)

Contingent assets and other revenues Reimbursement for damages, penalties, compensation

TOTAL

• The recharged cost of governance bodies amounts

rent paid by the contractor who has taken over the

to 2,502 thousand euros and regards fees payable

Group’s stock management on the storage space

to managers of ACEA as members of subsidiaries’

used. This item also includes the rent paid by Laboratori for use of the Grottarossa laboratory.

boards of directors. amounts to 2,337

• As at 31 December 2010, gains on asset dispos-

thousand euros (compared with 2,005 thousand

als included the profit generated by the sale of the

euros at 31 December 2010) and relates to recov-

company’s car fleet, amounting to 9,471 thousand

ery of the costs of ACEA personnel seconded to

euros.

• Income from seconded staff

other Group companies. • Contingent assets and other revenues include (i) contractual servicing fees set out in the contract

Operating costs – 206,788 thousand euros

for the securitisation of Acea Energia and Acea Ato2 receivables (for 1,254 thousand euros); (ii)

3. IStaff costs amount to 47,648 thousand euros at the

contingent assets from the recognition of higher

end of 2011, marking an increase of 8,122 thousand eu-

costs set aside in previous financial years (599

ros compared to 31 December 2010 (the total was 39,525

thousand euros). At the end of the previous year,

thousand euros). In 2010, the cost of wages and salaries

the balance included the recognition of contingent

felt the effects of adjustments recorded against the non-

assets deriving from the write-off of prescribed li-

recognition of estimates due to incentive policies and

abilities for 5,633 thousand euros.

performance bonuses assessed in previous years.

• The item property income, which is substantially in line with 31 December 2010, primarily relates to

The table below shows the breakdown of staff costs, and indicates the effect of changes in the year:

Staff costs - including estimated differences due to incentive policies and performance bonuses - including the release of liabilities - Medium/long–term incentive plan (2007-2009) Net wages and salaries Capitalised costs

31.12.2010

Increase (Decrease)

47,648

39,525

8,122

(445)

(3,003)

2,558

0

(3,004)

3,004

33,960

31,341

2,619

(61)

(142)

82

Total

33,899

31,199

2,700

Social security contributions

10,850

10,149

701

Staff termination benefits

2,243

2,203

40

Other expenses

1,100

1,981

(881)

1,159

1,122

37

48,093

45,532

2,561

- including the medium/long–term incentive plan (2010-2012) TOTAL

134

31.12.2011


The net change of 2,561 thousand euros compared to

of the period, to be calculated as a percentage of the

the previous year is the joint result of:

Gross Annual Remuneration of beneficiaries, based on

• the increase in average per capita costs as a result

the achievement of pre-established operating and finan-

of the renewal of employment contracts and salary

cial targets. In 2010, costs felt the effects of the reversal

policies,

of liabilities allocated in 2009, following the negative out-

• the trend in the average size (554 average units as at 31 December 2011 compared to 537 in 2010),

come of the check performed on whether the objectives underlying the first cycle (2007-2009) were reached.

Staff costs include the amount of 1,159 thousand euros

The following table shows the average number of staff

corresponding to the assessment of the second cycle of

by category, compared with the corresponding period in

the three-year medium/long-term incentive plan (2010-

the previous year. The final amount as at 31 December

2012). This Plan envisages a cash payment at the end

2011 is also shown.

Average number of employees

Classification

31.12.2011

Employees

31.12.2010


31.12.2011

Senior managers

70

71

(1)

64

Middle managers

108

101

7

116

White-collar staff

364

356

8

370

Blue-collar staff TOTAL

10

10

0

10

552

537

15

560

4. Costs of materials and overheads amounts to a

• The costs of materials came to 7,127 thousand

total of 159,140 thousand euros, an increase of 19,224

euros, a significant increase as a result of the re-

compared to 31 December 2010. This item consists of:

quirements generated in the fourth quarter by the start of activities set out in the “Lighting Plan” project, commissioned by Roma Capitale as part of the

Materials

31.12.2011

31.12.2010


public lighting service contract. • costs for services and contract works amount

to

7,127

599

6,528

132,245

115,065

17,180

Contract work

1,574

1,792

(218)

Lease expense

13,237

15,438

(2,201)

Taxes and duties

1,082

989

93

General expenses

3,875

6,033

(2,158)

crease in services in relation to (i) public lighting

159,140

139,916

19,224

activities in Rome and Naples (up 7,984 thousand

Services

TOTAL

133,819 thousand euros, marking an increase of 16,962 thousand euros compared with 116,857 thousand euros in the previous year. The most significant changes were due to the in-

euros), (ii) higher costs for the service to associated company Marco Polo (up 4,200 thousand euros), (iii) electricity consumption linked predominantly to the public lighting service in the Rome area (up € 4,199 thousand euros), (iv) compensation by subsidiaries of costs of personnel seconded at the Parent Company (up 2,246 thousand euros), (v) costs for surveillance services, earlier included in the payment


135

made to Marco Polo, (up 1,855 thousand euros), (vi)

tions (down 3,039 thousand euros) which in 2010

rent costs paid to third parties for the maintenance

included the tax and administrative judgments re-

of hardware and software that entered operation

quired linked to the dissolution of the joint venture

at the end of the previous year (up 1,569 thousand

with GdF-Suez (3,615 thousand euros), (ii) reduc-

euros) and (vii) higher costs incurred by administra-

tion in costs incurred in relation to sponsorships

tive services performed by Group companies for

(down 2,032 thousand euros) and (iii) decrease in

the Parent Company (up 921 thousand euros).

postal and bank expenses (down 390 thousand eu-

In contrast, the reductions in the following should be noted, (i) cost of freelance and professional work of coordinated and continuous collabora-

Intercompany services - of which Public Lighting services - municipality of Rome - of which Public Lighting services - municipality of Naples - of which service contract with Marco Polo Electricity and water consumption - of which electricity consumption of Public Lighting service Professional freelance work

channelling of collections. The breakdown of service costs is as follows:

31.12.2011

31.12.2010


67,108

54,109

12,999

46,486

42,304

4,183

6,283

2,482

3,801

13,200

9,000

4,200

24,159

19,802

4,357

21,664

17,465

4,199

16,156

19,195

(3,039)

Advertising and sponsorship costs

4,804

6,835

(2,032)

Maintenance fees

3,374

1,805

1,569

Seconded staff

3,295

1,049

2,246

Services to personnel

2,889

3,394

(506)

Corporate bodies

1,873

1,689

184

Bank fees

1,858

1,831

27

Surveillance services

1,855

0

1,855

Postal expenses

1,434

1,852

(417)

Telephone costs

1,154

1,244

(90)

Coordinated and continuous collaborations

805

978

(173)

Other expenses

559

274

284

Travel and transfer expenses

383

392

(9)

Insurance expenses

293

309

(16)

Printing costs

129

169

(39)

90

112

(22)

Technical and administrative services Cleaning, transport and porterage expenses Total costs for services

136

ros) due to the benefits of the project for the bank


27

24

2

132,245

115,065

17,180

The following table shows a breakdown of the type of services provided by Group companies:

Description

31.12.2011

31.12.2010


Acea Distribuzione

Cost of the public lighting contract in the municipality of Rome

46,490

42,316

4,174

Acea Energia S.p.A.

Electricity consumption

23,364

19,281

4,083

Marco Polo

Service contract

13,200

9,000

4,200

Citelum Napoli Pubblica Illuminazione Scarl

Cost of public lighting service in the municipality of Naples

4,968

1,357

3,611

Alfano e Graded

Cost of managing public lighting service in the municipality of Naples

1,270

929

341

ACEA Ato2

Water consumption

728

480

248

Acea Energia Holding S.p.A.

Service contract

762

0

762

Acea8cento

Sundry services

269

270

(1)

ARIA

Sundry services

62

13

49

Luce Napoli

Cost of managing public lighting service in the municipality of Naples

45

196

(151)

GORI

Sundry services

39

18

21

Crea Gestioni

Sundry services

TOTAL

0

8

(8)

91,198

73,868

17,330

In addition, pursuant to article 149-duodecies of the

The contract for the sale of the property com-

CONSOB Issuers’ Regulations, the fees accruing to the

plex, completed on 22 December 2010, made

Independent Auditors, Ernest & Young, totalled 218 thou-

provision for the maintenance of use of the

sand euros, of which 133 thousand euros for the audit-

property by ACEA up until full payment of the

ing of ACEA’s accounts and 85 thousand euros for other

price due for the sale;

audit-related services, • Lease expense amounted to 13,237 thousand euros (15,438 thousand euros at 31 December 2010)

- for 856 thousand euros for the costs of hiring cars for company use; - for 425 thousand euros for the fee due to Mar-

and refer to the following:

co Polo for the occupation of spaces in the so-

- 4,876 thousand euros for rental expenses for

called Sedina which ACEA uses for some of its

ACEA’ s registered office with adjoining car park for use by senior managers; - 3,234 thousand euros to lease expenses for the Valleranello complexes; - 1,371 thousand euros for rental of the building that houses the CEDET (Data Processing and Remote Control Centre);

company functions; - for 208 thousand euros for costs of renting accommodation to house employees seconded at Group companies outside the Lazio area; - for 93 thousand euros for software application licence use. By means of notary deed of 23 January 2012, ACEA pur-

- for 1,050 thousand euros to rent for use of public

chased the company’s historic headquarters in Piazzale

land for production plants which is reversed to

Ostiense, Rome, for a price of 110,000 thousand euros,

the company Acea Ato2; in this regard, it should

strengthening the 100-year old links with the local area

be noted that this value fell by 1,434 thousand

and the citizens of the city of Rome. The company took

euros compared to 31 December 2010 due to

advantage of the opportunity presented by the disposal

the effect of the different method of recharging

carried out by the Beni Stabili Gestioni SpA SGR real es-

Group companies;

tate fund, by exercising the right of first offer set out in

- for 1,008 thousand euros for the cost of leasing the area that houses the company’s car fleet.

the lease. On 19 December 2011, the company paid Beni Stabili


137

Gestioni S.p.A. SGR an amount of 11,000 thousand euros

5. Amortisation/depreciation

as an advance for the purchase of the building with ad-

charges

joining garage.

an increase of 47,952 thousand euros compared to 2010

• Sundry operating expenses, amounting to 4,957

and

impairment

amount to 76,512 thousand euros, marking

(28,561 thousand euros). The breakdown is as follows:

thousand euros (7,022 thousand euros as at 31 December 2010), include taxes and duties of 1,082 31.12.2011

31.12.2010


Amortisation and depreciation of intangible and tangible assets

11,921

12,986

(1,065)

lection tax and other taxes (892 thousand euros);

Provisions for impairment of receivables

4,232

10,113

(5,881)

(ii) contributions paid to industry organisations

Provisions for liabilities

60,359

5,462

54,897

(666 thousand euros), (iii) CONSOB (187 thousand

TOTAL

76,512

28,561

47,952

thousand euros (989 thousand euros as at 31 December 2010) and general expenses of 3,875 thousand euros (6,033 thousand euros). Sundry operating expenses include (i) refuse col-

euros), (iv) payments to charity (478 thousand euros), (v) purchase of periodicals and publications

Amortisation and depreciation to 11,921 thousand eu-

(408 thousand euros), (vi) release of costs incurred

ros: 6,232 thousand euros of intangible assets and 5,689

in 2009 for the project to construct and manage a

thousand euros of tangible assets. The reduction in am-

cogeneration plant powered by biomass in Massa

ortisation is a result of the completion of the process of

Martana (PG), for which the feasibility of the same

amortisation of certain intangible assets, with particular

did not materialise (375 thousand euros), (vii) other

reference to software developed internally.

insurance amounts (268 thousand euros), (viii) costs incurred for dividends distributed (256 thousand

Provisions for liabilities amounted to 4,232 thousand eu-

euros) which, in 2011 related to the distribution of

ros in the year, and relates to the risks connected with

2010 profits and payment of the advance on 2011

the recoverability of the amounts due from some Group

dividends resolved by the Board of Directors at the

companies and public counterparties, including therein

meeting on 29 November 2011, (ix) municipal prop-

Roma Capitale. In the period under comparison, write-

erty tax and charges for the occupation of public

downs relate to the risks of non-collectability of receiva-

space (160 thousand euros).

bles due from customers that are not users which ACEA

The reduction in general expenses of 2,158 thou-

took on following the exit of Acea Luce from the Group.

sand euros, due (i) to the end of activities linked to the redevelopment of areas adjacent to the

Provisions for liabilities amounted to 60,359 thousand

headquarters (Headquarters Project), totalling 158

euros (5,462 thousand euros at 31 December 2010) and

thousand euros at the end of the year, compared

refer to the following:

to 1,130 thousand euros as at 31 December 2010,

• for 44,100 thousand euros for allocations to cover

and (ii) losses on receivables in the 2010 balance

GORI’s risk of the non-recognition of tariff adjust-

recorded following the transactions concluded for

ments and financial risk, pending approval and

1,225 thousand euros.

signing of the agreement to settle the dispute with the Campania Region and the Area Authority, • for 9,826 thousand euros to ACEA Ato5, as the best estimate of the risks of future losses relating to the application of the updated tariff, redetermined by the Commissioner for deeds, and the financial risk connected with the situation of uncertainty the subsidiary finds itself in,

138


• for 3,874 thousand euros to the expenses needed to cover the voluntary redundancy programme

Net finance income/(costs) and from investments – 205,755 thousand euros

started in the year, effective June 2011 - December 2012, • 1,752 thousand euros for legal liabilities and potential disputes with suppliers, • 807 thousand euros relating to staff, above all li-

6. Net finance income/(costs) amount to 5,580 thousand euros, marking an increase of 40,550 thousand euros on the previous year, when the figure was 34,970 thousand euros.

abilities regarding contributions. The breakdown is as follows:

OPERATING FINANCIAL MANAGEMENT Finance costs

31/12/2011

31/12/2010


81,920

64,189

17,731

Interest on bond loans

42,181

36,771

5,411

Interest on short-term borrowings

15,460

11,628

3,832 9,346

Costs from discounting Public Lighting service receivables

9,346

0

Expenses/(Income) on interest rate swaps

6,406

6,550

(144)

Interest on short-term borrowings

5,570

4,169

1,402

Other

1,248

4,039

(2,792)

Interest costs less actuarial gains

976

729

247

Interest on intercompany running accounts

616

186

429

Factoring fees

117

117

0

87,040

30,596

56,444

Interest on intercompany running accounts

66,962

15,445

51,517

Fees on intercompany investment line ceilings

10,024

0

10,024

Default interest towards the municipality of Rome

3,484

3,185

299

Fees on intercompany sureties

3,149

1,238

1,910

Interest on loans to subsidiaries and associates

1,236

7,049

(5,813)

Income deriving from Public Lighting contract

823

502

321

Bank interest income

433

893

(460)

Income on deposits

414

1,989

(1,575)

Interest on mortgages

313

274

39

Interest on other receivables

202

20

182

0

0

0

Finance income

Other income Foreign exchange profit/(loss) Total finance (costs)/income

460

(1,377)

1,837

5,580

(34,970)

40,550


139

As regards income, amounting to 87,040 thousand euros

Finance costs also recorded an increase over 31 De-

(30,597 thousand euros as at 31 December 2010), the

cember 2010, amounting to 81,920 thousand euros at

considerable growth over the previous year is a result of

the end of 2011, compared to 64,189 thousand euros

the review, effective as of 1 January 2011, of the econom-

in the previous year, and their breakdown is as follows:

ic conditions of treasury contracts.

• interest on bonds in issue, totalling 42,181 thousand euros (36,771 thousand euros as at 31 De-

In particular, the changes concerned:

cember 2010), with particular reference to bonds

• the origination of the financial requirements need-

issued in March 2010;

ed for fulfilment of Group company activities. In this regard, two credit lines were taken out, a medium/

• interest accrued on medium/long-term borrow-

long-term line (investment line) aimed to cover

ings of 15,460 thousand euros, marking an in-

financial needs generated by investments and a

crease over the previous year due to higher rates

short-term line (general purpose) to cover ordinary

applied by banks starting in the second half of

liquidity requirements;

2011;

• the economic conditions applied. In particular,

• discounting expenses - even though figurative -

ACEA applies a 3-year IRS rate plus a spread of

amounting to 9,346 thousand euros, due to the

3.08% to credit positions, and a rate equal to the

impact of application of IFRIC 12 on public light-

average of three-month Euribor rates less a spread

ing service receivables, classified as “financial”

of 0.05% on debt positions. In 2010, the remunera-

after the supplemental contract between ACEA

tion of cash pooling with Group companies ACEA

and Roma Capitale was signed, which aligned the

occurred on the basis of the arithmetic mean of

expiry of the service agreement with the expiry of

the daily 3-month Euribor rates plus (or minus) a

the concession agreement (2027);

spread ranging between +0.8% and +1.50% on as-

• net charges on interest swaps of 6,406 thousand euros relating to swaps on the AFLAC Bond (3,641

sets and -0.05% and -0.20% on liabilities.

thousand euros) and on the loan with Cassa Depositi e Prestiti (2,765 thousand euros);

The breakdown of finance income is shown below: • interest from cash pooling transactions with some

• 5,570 thousand euros relating to interest on short-

subsidiaries, calculated according to new param-

term borrowings reflecting the increase in interest

eters (66,962 thousand euros);

rates applied by credit institutions, due to the period of financial instability the company finds itself

• credit facility fees due from Group companies on

in.

the ceilings of investment lines, set forth in the centralised treasury contract, calculated on the

140

basis of requirements correlated to investments

The average rate of interest paid by ACEA on its total

envisaged in the Business Plans (10,024 thousand

medium/long-term borrowings as at 31 December 2011

euros);

is 3.40%, compared with 3.175% as at 31 December

• default interest towards the municipality of Rome

2010. This indicator was calculated on the basis of the

(3,484 thousand euros) resulting from delays in

contractual conditions obtained during negotiation of

the payment of invoices issued;

each loan in the overall portfolio, taking account of all

• income envisaged in the treasury contract and

cash flows generated by the various instruments in the

deriving from the recharging of costs incurred by

portfolio, and the overall outstanding debt (in nominal

ACEA for sureties requested and given to subsidi-

terms) and the interest rate payable at the valuation

aries (3,149 thousand euros);

date.

• interest on loans granted to subsidiaries not man-

The weighted average rate of interest payable on the

aged by cash pooling relations (1,236 thousand

Parent Company’s short-term borrowings is 3.518%,

euros);

compared with 1.055% of the previous year.


7. Profit/(loss) on investments amounted to 200,175

87,662 thousand euros, partially offset by impairment

thousand euros (85,832 thousand euros as at 31 Decem-

charges or investment losses amounting to 6,419 thou-

ber 2010) and include dividends distributed by subsidiar-

sand euros. The impairment of investments came to

ies, associates and other companies for 117,340 thou-

3,175 thousand euros for ACEA Ato5, 2,000 thousand

sand euros and gains from the dissolution of the joint

euros for Crea Gestioni, 520 thousand euros for Acea-

venture between GDF Suez Energia Italia and ACEA for

8cento and 482 thousand euros for Acque Blu. 31.12.2011

31.12.2010


Losses on investments

6,419

3,707

2,712

Impairments of investments

6,419

3,707

2,712

Profits on investments

206,594

89,539

117,055

117,340

87,948

29,393

ACEA Ato2

56,875

38,150

18,725

A.R.S.E.

28,211

20,408

7,803

ACEA Distribuzione

22,546

18,285

4,261

LABORATORI

3,577

3,737

(160)

Acque Blu Fiorentine

2,426

1,892

533

Acque Blu Arno Basso

1,225

1,236

(10)

Umbra Acque

622

0

622

Consorcio Agua Azul

504

1,064

(560)

Sarnese Vesuviano

447

0

447

Agua Azul Bogotà

412

0

412

Acea Dominicana

398

382

16

Dividend income

Intesa Aretina

97

0

97


0

600

(600)

Crea Gestioni

0

763

(763)

Acea Gori Servizi

0

281

(281)

A.R.I.A.

0

1,134

(1,134)

Umbria Distribuzione Gas

0

16

(16)

87,662

0

87,662

1,591

1,591

(0)

200,175

85,832

114,343

Gain on the sale of investments Gain on the transfer of the public lighting business TOTAL


141

8. Income taxes equalled 13,550 thousand euros at

(1,026 thousand euros) relating to the taxable portion

the end of 2011, compared to 25,571 thousand euros

of the dividends collected and provisions for the period

in 2010.

(1,016 thousand euros).

Total tax is the algebraic sum of the following components.

Tax expense and income These amounted to 61,297 thousand euros and repre-

Current taxes

sent the balance of tax expense due from the Parent

As at 31 December 2011, current taxes amounted to

Company to companies included in the tax consolida-

56,461 thousand euros (56,555 thousand euros as at

tion in return for the transfer of tax losses (5,387 thou-

31 December 2010) for consolidated IRES (corporate in-

sand euros) and tax income represented by taxable

come tax) expense, representing the sum of the taxable

income transferred to the tax consolidation (66,684

income and tax losses reported by companies included

thousand euros).

in the tax consolidation arrangement.

In accordance with the Group’s general tax consolidation rules, the value of the loss is determined by ap-

Deferred taxes

plying the current IRES rate at the time to the total tax

Deferred tax assets of 8,704 thousand euros represent

losses transferred.

the algebraic sum of provisions (10,965 thousand eu-

Moreover, it is noted that, as of FY 2010, the items con-

ros) made primarily with regard to provisions for liabili-

solidated expense and income include remuneration of

ties and provisions for impairment of receivables and

interest expense and/or exceeding EBITDA transferred

provisions for defined-benefit plans, and uses (2,262

to tax consolidation and offset as part of this procedure.

thousand euros). Deferred tax liabilities totalling 10

The following table provides a reconciliation of the the-

thousand euros represent the algebraic sum of uses

oretical and effective tax charges.

Profit before tax from continuing operations IRES (corporate income tax) for the year including deferred taxation Permanent differences Art. 24 of Law Decree no. 185/2008 (2008 and 2009) IRES (corporate income tax) for the year including deferred taxation Other taxes IRAP (regional income tax) Tax on continuing operations

142


%

95,086

%

8,245

26,149

0

2,267

0

(39,303)

(0)

(27,505)

(0)

0

0

17

0

(13,154)

(0)

(25,221)

(0)

0

0

0

0

(396)

(0)

(350)

(0)

(13,551)

(0)

(25,571)

(0)

Earnings per share Earnings per share, determined in accordance with IAS 33, are shown below: 31.12.2011

31.12.2010


Net profit attributable to ACEA SpA (€/000)

108,636

33,816

74,820

Net profit attributable to ordinary equity holders of ACEA SpA (€000) (A)

108,636

33,816

74,820

- basic (B)

212,965

212,965

0

- diluted (C)

212,965

212,965

0

Weighted average number of ordinary shares in issue for the purposes of determining earnings per share

Earnings/(loss) (€) - basic (A/B)

0.5101

0.1588

0.3513

- diluted (A/C)

0.5101

0.1588

0.3513

Notes to the balance sheet Assets 9. As at 31 December 2011, iproperty, plant and equipment came to 52,434 thousand euros, compared with 52,577 thousand euros at the end of the previous year. The breakdown is as follows: 31.12.2011

31.12.2010

Land and buildings

18,961

19,364

(403)

Plant and machinery

14,935

15,938

(1,003)

2,046

2,393

(348)

13,375

13,425

(51)

Industrial and commercial equipment Other assets Fixed assets in progress and prepayments TOTAL PROPERTY, PLANT AND EQUIPMENT


3,117

1,458

1,660

52,434

52,577

(144)

The change compared to 31 December 2010 relates

Plant and machinery

to the net effect between investments in the period,

These amount to 14,935 thousand euros and mainly refer

amounting to 5,485 thousand euros and amounts of de-

to extraordinary maintenance costs for leased proper-

preciation in the period amounting to 5,629 thousand

ties, such as the registered office and the Data Process-

euros.

ing and Remote Control Centre. This item also includes

The most significant movements compared with the pre-

the carrying amount of the Grottarossa laboratory use by

vious year are described below

Group company Laboratori S.p.A.. The decrease of 1,003 thousand euros compared with

Land and buildings

the previous year is mainly due to:

At 31 December 2011, the item stood at 18,961 thousand

• extraordinary maintenance on buildings leased by

euros, the decrease of 403 thousand euros compared to

Acea, such as its headquarters and the Data Process-

the previous year (19,364 thousand euros), due mainly to depreciation during the year (405 thousand euros).

ing and Remote Control Centre (746 thousand euros); • depreciation for the period (1,748 thousand euros).


143

Industrial and commercial equipment

Fixed assets in progress

This item, totalling 2,046 thousand euros, decreased by

This item totals 3,117 thousand euros (1,458 thousand

a net 348 thousand euros due to depreciation for the

euros at 31 December 2010), marking a net increase of

period.

1,660 thousand euros compared with the previous year. This deviation is a result of the entry into operation of

Other assets

assets (down 1,125 thousand euros) and increases in the

This item, totalling 13,375 thousand euros (13,425 thou-

period amounting to 2,785 thousand euros and relate to

sand euros at 31 December 2010) is essentially in line

hardware investments needed for IT network improve-

with the previous year due to the combined effect of

ment and development projects

investments in the year (1,953 thousand euros) in new furniture and electronic office equipment and reclassifi-

Accumulated depreciation amounts to 55,949 thou-

cations from assets in the course of construction (1,125

sand euros at the end of the year and covers 51.62%

thousand euros), less depreciation for the period (3,128

of the value of properties in operation at 31 December

thousand euros).

2011. An analysis of movements during the year is provided in the following table. 31.12.2010


Historical cost

Accumul. deprec

Net carrying amount

Land and buildings

24,149

(4,786)

19,364

2

Plant and machinery

24,975

(9,037)

15,938

746


15,018

(12,625)

2,393

0

Other assets

37,297

(23,872)

13,425

1,953

Fixed assets in progress and prepayments Total property, plant and equipment

144


Increases

1,458

0

1,458

2,785

102,897

(50,320)

52,577

5,485

MOVEMENTS DURING THE PERIOD Reclassifications

Revaluations/ Impairments

0

0

0

0

0

0

1,125

0

Disposals

31.12.2011 Depreciation

Cost

Accumul. deprec.

Net carrying amount

(405)

0

(1,748)

24,151

(5,190)

18,961

25,720

(10,785)

14,935

(348)

15,018

(12,973)

0

2,046

(3,128)

40,375

(27,000)

13,375

(1,125)

0

0

0

3,117

0

3,117

0

0

0

(5,629)

108,382

(55,949)

52,434

10. Investment property amounts to 2,993 thousand

Industrial patents

euros (3,148 thousand euros at 31 December 2010) and

These amounted to 5,434 thousand euros (9,714 thou-

primarily includes land and buildings not used in opera-

sand euros at 31 December 2010), and are amortised

tions and held for rental.

over three years. With regard to the investments for

The decrease compared with the previous year was the

the period and at the end of the projects that have

result of the sale of a property for a total amount of 94

been started in previous financial years, it is noted that

thousand euros and depreciation for the period of 61

increases mainly refer to: project involving the imple-

thousand euros.

mentation and improvement of websites, implementation and upgrading of the current billing system of some

11. Concessions and other intangible assets

subsidiaries and upgrading projects involving general IT

amounted to 10,399 thousand euros, after amortisation

services and software developed internally and the ac-

for the period totalling 6,232 thousand euros, compared

quisition of software to support planning, control and

to 61,360 thousand euros as at 31 December 2010.

administration activities.

Industrial patents and intellectual property rights Concessions, licences, trademarks and similar rights Fixed assets in progress and prepayments Other TOTAL INTANGIBLE ASSETS

31.12.2011

31.12.2010


5,434

9,714

(4,280)

0

49,707

(49,707)

4,528

1,914

2,614

436

24

412

10,399

61,360

(50,961)


145

Concession right


The item showed a zero balance, and amounted to

The amount booked to the financial statements at 31 De-

49,707 thousand euros as at 31 December 2010. The

cember 2011 stood at 436 thousand euros (24 thousand

change with respect to the previous year is due to the

euros at 31 December 2010) and it mainly refers to the

reclassification of that amount in the item “Non-current

NSIU system that has been developed internally.

receivables” due to the definitive adoption of the financial model to represent the public lighting contract as

Intangible assets in progress

set forth in the supplemental agreement signed between

This item amounted to 4,528 thousand euros at 31 De-

ACEA and Roma Capitale on 15 March 2011 and in force

cember 2011, compared with 1,914 thousand euros at

from the beginning of this year.

31 December 2010, and regards new information technology projects to be completed. In particular, ACEA invested in the project to develop and implement the site video surveillance system. An analysis of movements during the year is provided in the following table:

31.12.2010


MOVEMENTS DURING THE PERIOD

31.12.2011

Net carrying amount

Increases

Reclassifications


Disposals

Amortis

Net carrying amount

9,714

1,284

661

0

0

(6,224)

5,434

49,707

0

(49,707)

0

0

24

420

0

0

(8)

436

Industrial patents and intellectual property rights Concessions Other fixed assets Fixed assets in progress Total other intangible assets

1,914

3,275

(661)

0

0

0

4,528

61,360

4,978

(49,707)

0

0

(6,232)

10,399

12. Investments in subsidiaries and associates

Investments in subsidiaries

amounts to a total of 1,726,110 thousand euros (1,609,090

These amounted to 1,711,271 thousand euros compared

thousand euros as at 31 December 2010).

with 1,594,305 thousand euros at the close of the previous year, marking an increase of 116,965 thousand eu-

Investments in subsidiaries Investments in associates Total investments

146

31.12.2011

31.12.2010


1,711,271

1,594,306

116,965

14,838

14,784

54

1,726,110

1,609,090

117,020


ros. The most important transactions during the year are described in the table below:

Investments in subsidiaries

Historical cost

Reclassifications


Disposals

Net carrying amount

Values at 31 December 2010 Movements in 2011:

0

- movements in share capital

116,262

116,262

- acquisitions/incorporations

9,969

9,969

- disposals/distributions

- reclassifications

0

- impairments

(9,266)

(9,266)

Total movements in 2011 Values at 31 December 2011

0

126,231

0

(9,266)

0

116,965

2,717,495

893

(57,024)

(950,094)

1,711,270

The most significant increases in the year concerned:

as of 1 January 2011, the carrying amount in the

• Acea Energia Holding: completion of the dis-

financial statements amounts to 8,029 thousand

solution of the joint venture between ACEA e

euros, net of the impairment of 2,000 thousand

GDF Suez Energia Italia involved the purchase of

euros resulting from impairment testing conducted

40.59% of the company’s share capital for a price

by the company,

of 116,262 thousand euros including the temporary

• Acea8cento: the value of the investment was as-

minimum adjustment of around 7,640 thousand

sessed, adjusting it into line with the shareholders’

euros; the sale price established by the Framework

equity value as at 31 December 2011, writing said

Agreement signed in December 2010 and paid to

investment down by 521 thousand euros. On 28

the transferor came to 123,901 thousand euros;

July 2011, the extraordinary shareholders’ meeting

• ACEA Ato5: resolutions adopted by the extraor-

resolved to cover losses generated as at 30 June

dinary shareholders’ meetings determined the re-

(324 thousand euros) by eliminating share capital

cording of the commitment to pay the company the

and using the hedge reserve paid by ACEA in pre-

amount of 8,675 thousand euros, in respect of the

vious years, and reconstituting share capital (120

provision to cover future losses,

thousand euros) and establishing a non-distributa-

• Aquaser: in October, an additional 10% stake in the company was purchased for 950 thousand euros,

ble extraordinary reserve to cover future losses, • Acque Blu: during the phase of approval of the financial statements for the year ended 31 Decem-

• Acea Servizi Acqua: in March 2011, ACEA pur-

ber 2010, the Board of Directors noted the essen-

chased 70% of the company’s share capital for 203

tial inactivity of the company, which reports losses

thousand euros. Acea Servizi Acqua’s company

and requests for financing in the future share capi-

objective is the performance, execution, manage-

tal increase account owing to the company’s mod-

ment and maintenance of works and network-

est capitalisation from shareholders. Therefore, the

related services, with particular reference to the

decision was taken to fully write down the value

integrated water service,

of the investment held by ACEA, equal to 55% of share capital (482 thousand euros),

Impairments/revaluations concerned:

• Acea Servizi Acque: as a result of sizeable losses

• ACcea Ato5: the investment was written down in

of the company acquired at the start of the year,

consideration of the loss achieved by the company

the extraordinary shareholders’ meeting resolved

in 2011 (ACEA share of 6,157 thousand euros);

the winding up of the same, which involved the

• Crea Gestioni: following the merger by incorporation of Crea Partecipazioni and Acea Rieti, effective

impairment of the value recorded (203 thousand euros),


147

• Overseas companies: investments held in over-

ment as at 31 December 2010 was classified under the

seas companies were written back, by adjusting

item “Non-current assets held for sale”, in compli-

the values into line with the current exchange rate

ance with IFRS 5.

(up 401 thousand euros). The agreement to dissolve the joint venture between

Investments in associates

ACEA and GDF Suez Energia Italia involved the sale of

At 31 December 2011 this amounted to 14,838 thousand

the investment held in Eblacea, amounting to 35,034

euros, almost unchanged with respect to the previous

thousand euros, at a price of 108,158 thousand euros,

year. The change of 54 thousand euros reflects the valua-

generating a gain of 73,124 thousand euros. The invest-

tion of overseas companies at the current exchange rate.

Investments in associates

Historical cost

Reclassifications


Disposals

Net carrying amount

Values at 31 December 2010 Movements in 2011:

- movements in share capital

0

- acquisitions/incorporations

0

- disposals

0

- reclassifications

0

- Impairment/revaluations

54

54

Total movements in 2011 Values at 31 December 2011

0

0

54

0

54

92,558

2,957

(79,565)

(1,112)

14,838

13. Other investments amounted to 4,673 thousand

taxation on exchange risks; 6,946 thousand euros for

euros and are almost unchanged compared with to 31

defined benefit/contribution plans and 17,008 thousand

December 2010. The item “Other investments” refers to

euros for other provisions. Following the fair value meas-

equity interests that do not qualify as subsidiaries, asso-

urement of the hedging derivative instrument deferred

ciates or joint ventures. These investments are account-

tax assets of 4,896 thousand euros have been recog-

ed for at fair value.

nised with a matching entry in shareholders’ equity. With regard to the recoverability of prepaid taxes, it is

148

14. At 31 December 2011, deferred tax assets

noted that deferred tax assets are reviewed on the basis

amounted to 36,283 thousand euros (22,683 thousand

of ACEA SpA’s business plans and a reasonable estimate

euros at 31 December 2010).

of the period in which the related difference is expected

The item is composed as follows; 8,203 thousand euros

to reverse.

for taxed provisions for liabilities (2,884 thousand euros

The following table shows movements in both non-cur-

at 31 December 2010); 3,940 thousand euros for impair-

rent and current deferred tax assets.

ment of receivables (3,303 thousand euros at 31 Decem-

The following table shows movements in deferred tax

ber 2010) and the item includes provisions of deferred

assets:


Movements during the period

31.12.2010

Uses IRES / IRAP

Movements recognised in equity

IRES/IRAP provisions

31.12.2011

Prepaid taxes

Tax losses

0

0

0

0

45

(45)

13

13

2,884

(1,753)

7,071

8,203

0

0

0

0

3,003

0

937

3,940

131

0

41

173

Directors’ fees Provisions for liabilities and charges Impairment of investments Provisions for impairment of receivables Amortisation and depreciation of intangible and tangible assets Amortisation of goodwill Defined benefit and defined-contribution plans

0

0

0

0

7,012

(399)

333

6,946

Other

9,607

(65)

4,896

2,570

17,008

Total

22,683

(2,262)

4,896

10,965

36,283

Deferred taxes Deferred tax on dividends

141

(43)

58

155

Amortisation and depreciation of intangible and tangible assets

493

(972)

2,302

0

1,823

Defined benefit and defined-contribution plans

413

(11)

0

402

Other

7,952

1,583

958

10,493

Total

8,997

(1,026)

3,886

1,016

12,873

13,685

(1,236)

1,011

9,950

23,410

Net total

15. Non-current financial assets amounted to

Receivables due from Roma Capitale (18,019 thou-

1,380,229 thousand euros (193,550 thousand euros at

sand euros) relate to investments in the Public Lighting

31 December 2010) and break down as follows:

service, such as plant upgrading, energy savings, legis-

Amounts due from Roma Capitale Receivables due from subsidiaries Amounts due from others NON-CURRENT FINANCIAL ASSETS

lative adjustments and technological innovation, which

31.12.2011

31.12.2010


18,019

0

18,019

1,308,486

175,369

1,133,117

53,723

18,181

35,543

The item receivables due from subsidiaries, , stand-

1,380,229

193,550

1,186,679

ing at 1,308,486 thousand euros, is broken down as fol-

will be paid to ACEA, for an amount equal to tax amortisation, after 2012, in compliance with the terms of the Supplementary Agreement to the service contract signed on 15 March 2011.

lows:


149

31.12.2011

31.12.2010


ACEA Ato 2

2,092

3,486

(1,394)

ACEA Distribuzione

4,997

8,328

(3,331)

Acea Produzione

2,312

3,621

(1,309)

9,400

15,435

(6,035)

Receivables for mortgages taken out

Total Loan receivables ACEA Ato 5

52,719

52,719

0

0

107,215

(107,215)

52,719

159,934

(107,215)

1,443

0

1,443

A.R.I.A. (former EALL "Linea Costruzione” - construction line ) Total Intercompany running account - Investments Line Ecoenergie SAO

2,649

0

2,649

A.R.I.A. (Includes former EALL "Linea Costruzione” - construction line )

196,301

0

196,301

ARSE

119,981

0

119,981

Acea8cento

1,131

0

1,131

ACEA Ato 2

423,120

0

423,120

ACEA Distribuzione

365,794

0

365,794

Acea Produzione Total non-current financial receivables due from subsidiaries

135,948

0

135,948

1,308,486

175,369

1,133,117

The change of 1,133,117 thousand euros with respect to

Allocated infrastructure rights in 2010 under intangible

the previous year results from:

fixed assets totalling 49,707 thousand euros.

• the reclassification in “Current financial assets” of

This item also includes amounts due from Frama (125

amounts falling due within the next 12 months of

thousand euros) for the payment of the relevant portion

6,035 thousand euros,

made to ACEA Ato5. Repayment of this receivable will

• the setting up of new Investment Credit Lines for intercompany running accounts, as established by

take place via ACEA’s collection from future distribution of dividends.

the stipulation of new treasury contracts. The total value of 1,299,086 thousand euros (159,934 thou-

16. Non-current assets amounted to 724 thousand

sand euros) includes not only interest accrued as

euros at the end of the year, with no significant changes

at 31 December 2011, but the non-interest bearing

recorded with respect to the previous year. These refer

and irrevocable 30-year loan disbursed to subsidi-

to amounts owed for long-term deposits paid.

ary ACEA Ato5 of 52,719 thousand euros. 17. Current assets The item other receivables, amounting to 53,723 thou-

These amount to 763,884 thousand euros as at 31 De-

sand euros (18,181 thousand euros as at 31 December

cember 2011, marking a decrease of 882,153 thousand

2010), relates mainly to the receivable recorded in compli-

euros compared with the previous year, amounting to

ance with the financial assets model envisaged by IFRIC

1,646,037 thousand euros in 2010.

12 with regard to service concession arrangements. This

The breakdown is as follows.

receivable, amounting to 53,443 thousand euros (17,925

150

thousand euros at 31 December 2010) represents total in-

17.a - Inventories

vestments made up to 31 December 2010 connected to

The company held no warehouse inventories as at 31

said service and includes the reclassification of the item

December 2011.


17.b - Trade receivables

• Private customers: 10,599 thousand euros (4,387

Trade receivables amounted to 37,672 thousand euros (25,880 thousand euros at 31 December 2010) and are

thousand euros), • the State: 4,550 thousand euros (4,337 thousand euros),

broken down as follows.

• Municipalities: 13,636 thousand euros (9,581 thou31.12.2011

31.12.2010


sand euros at 31 December 2010). These relate to

Receivables from other customers

17,100

5,325

11,775

thousand euros) and amounts due from municipali-

Disputed receivables

20,573

20,555

17

37,672

25,880

11,792

Total trade receivables

amounts owed to the Municipality of Naples (3,715 ties inherited from Acea Luce (5,866 thousand euros). Disputed receivables Disputed receivables amounted to 27,013 thousand euros at 31 December 2011, before the provision for the

It should be noted that in the third quarter of 2011, the

impairment of receivables and did not undergo signifi-

receivables of the largest companies in the ACEA Group,

cant changes compared with the previous year.

whose prospects of recovery and essentially nil, were

Said receivables included 20,555 thousand euros due

subject to a cancellation procedure in order to obtain a

from the Vatican City which, being a sovereign state,

simpler and more immediate picture of the general cred-

deems the fees charged for fresh and waste water ser-

it situation, and more rational planning of recovery ac-

vices to be inapplicable. Following publication of the im-

tivities. On 22 February 2012, ACEA’s Board of Directors

plementation decree provided for by article 3, paragraph

resolved the cancellation of gross receivables totalling

13 of the Finance Act for 2004, the receivables posted in

17,363 thousand euros, fully covered by the Provision for

the accounts relate to the period prior to 1998 and are

the Impairment of Receivables.

matched by a corresponding debt payable to the munici-

The breakdown of trade receivables due from customers

pality of Rome as the provider of waste water and sewer-

as at 31 December 2011 is shown below.

age services through to 31 December 1997. It should be noted that ACEA is not obliged to settle the debt payable

Receivables from other customers

to the Municipality of Rome before collection of the re-

At 31 December 2011, this item amounted to 17,100

ceivables due from the Vatican City.

thousand euros (5,325 thousand euros at 31 December

Other disputed receivables of 6,458 thousand euros in-

2010) net of the provision for the impairment of receiva-

clude amounts due for which legal recovery actions have

bles of 16,913 thousand euros. This item includes receiv-

been launched and from consortia set up by government

ables relating to accrued amounts due from private and

bodies and municipalities and municipalities in financial

public parties for services, with particular reference to

difficulty. These receivables have been almost fully writ-

public lighting.

ten down.

This item includes bills to be issued amounting to 3,725 thousand euros.

Provisions for the impairment of receivables

The change compared to the previous year derives, for

No further write-downs of trade receivables were ef-

6,078 thousand euros, from the non-recourse acquisition,

fected and the value of the provision at 31 December

by Acea Energia, of receivables accrued from Manuten-

2011 was unchanged with respect to the previous year,

zione Illuminazione S.p.A. as at 31 March 2011. (SMAIL

amounting to 23,354 thousand euros.

S.p.A.), completed on 6 April 2011 and for the remaining

Provisions for the impairment of receivables are based

5,697 thousand euros, to normal operations in the period.

on analytical assessments, supplemented by assess-

The balance essentially consists of the following catego-

ments based on historical analyses of amounts due from

ries of customer:

end users and customers broken down according to the


151

default period, the type of action undertaken to recover

Amounts due from Roma Capitale

the amount due and the status of the receivable con-

Trade receivables due from Roma Capitale totalled

cerned (ordinary, disputed, etc.).

46,260 thousand euros at 31 December 2011 (38,320 thousand euros at 31 December 2010).

17.c - Intercompany trade receivables Intercompany trade receivables amounted to 102,756

The following table presents an analysis of the ACEA


Group’s relations with the municipality of Rome regard-

2010) and are broken down as follows:

ing both receivables and payables, including those of a

31.12.2011

31.12.2010



46,260

38,320

7,939

Receivables due from subsidiaries

50,555

49,155

1,400

Receivables due from associates

5,940

4,919

1,021

Total intercompany receivables

102,756

92,395

10,360

financial nature described in the specific section of this document (Note 24).

RECEIVABLES PAYABLES BALANCE

31.12.2011

31.12.2010


178,938

136,832

42,106

47,384

33,607

13,777

131,554

103,225

28,329

The following table provides a breakdown of amounts due from the Municipality of Rome by type of service with details of amounts billed and those to be billed. Amounts due from Roma Capitale Utility receivables Contract work Receivables for services

31.12.2010

Increase/ (Decrease

3,289

3,289

0

24,514

18,082

6,432 0

907

907

1,224

1,222

2

Total invoices issued

29,934

23,500

6,434

Receivables for invoices to be issued

14,843

13,338

1,505

1,482

1,482

0

46,260

38,320

7,939

Other receivables

Other Total trade receivables Financial receivables for the public lighting service

114,659

98,512

16,147

160,919

136,832

24,087

31.12.2011

31.12.2010

Increase/ (Decrease

Sewerage and water treatment payables

8,409

8,409

0

Sundry payables

1,455

1,455

0

Other

1,015

1,015

0

10,879

10,879

0

15,989

2,213

13,777

Total receivables due within one year (A) Amounts due to Roma Capitale

Total trade payables Borrowings (including dividends) Total borrowings

15,989

2,213

13,777

Total payables due within one year (B)

26,868

13,091

13,777

134,051

123,741

10,310

18,019

0

18,019

(20,516)

(20,516)

0

131,554

103,225

28,329

Total (A) - (B) Medium/long-term loans and receivables for Public Lighting Vatican City disputed amounts Net balance

152

31.12.2011


Trade receivables increased by 7,939 thousand euros

31.12.2011

31.12.2010


compared with 31 December 2010 due to invoices is-

Acea Distribuzione

23,582

24,647

(1,066)

sued for works requested by the municipality during the

Acea ATO5

9,316

5,501

3,815

year.

Crea Gestioni

4,411

3,056

1,355

These receivables include items relating to the public

Acea Energia

3,459

7,617

(4,158)

Acea Ato2

1,760

1,040

721

Gesesa

1,345

1,038

307

Umbra Acque

820

243

577

Sarnese Vesuviano

770

777

(7)

(98,512 thousand euros at the end of the previous year).

Agua Azul Bogotà

567

790

(223)

Residual amounts from the advance on 2011 dividends

Publiacqua

472

0

472

were recorded under payables.

LaboratoRI

449

136

314

During the period, administrative offsets were effected

A.R.I.A.

412

576

(164)

Acque

407

175

232

Gori

403

320

83

lighting contract that were posted under trade receivables, in compliance with the financial model set out in IFRIC 12. These amounted to 114,659 thousand euros

with regard to amounts due from Roma Capitale, totalling 48,175 thousand euros and payables totalling 65,513


306

975

(669)

thousand euros relating to dividends on 2010 profit and

Ingegnerie Toscane

258

0

258

the advance on 2011 dividends.

Aquaser

186

63

123

It should be noted that balances as at 31 December 2011

Kyklos

176

79

97

(and those in the previous year) also include the net ex-

Acea Gori Servizi

166

9

157

Solemme

162

64

98

Ecomed

124

89

35

Crea

139

10

130

posure in relation to Administration established by the Central Government, totalling 44,488 thousand euros.

Ecogena

125

52

73

Further information on relationships with Roma Capitale,

Luce Napoli

112

340

(227)

including those with the Companies of the Gruppo Co-

Ameatad

86

31

55

mune di Roma (municipality of Rome Group), is provided

Acea Servizi Acque (ASA)

75

0

75

Ombrone

69

63

7

Acque Blu Fiorentine

68

111

(43)

Tirreno Power

60

71

(11)

Acque Industriali

50

13

37

47

0

47

a decrease of 1,400 thousand euros compared to 31 De-

Consorzio Acea Ricerca Perdite (ACEA Leak Identification Consortium)

cember 2010. They relate mainly to services provided

Acea Produzione

40

0

40

under service contracts.

Consorcio Agua Azul

37

34

2

The breakdown is as follows:

APICE

37

0

37

Coema

23

2

22

Sao

12

131

(119)

ARSE

9

9

0

Acea8cento

8

4

3

Sorepla

5

5

0

Nuove Acque

1

1

0

Acea Illuminazione Pubblica

0

0

0

Abab

0

62

(62)


0

980

(980)

Acque servizi

0

(3)

3

Ecoenergie

0

(5)

5

Voghera Energia

0

51

(51)

50,555

49,155

1,400

in the section “Related party transactions”. Receivables due from subsidiaries This item amounts to a total of 50,555 thousand euros,

TOTAL


153


tember 1973. These collections have been used to pay

This item amounts to a total of 5,940 thousand euros, an

a tax payment notice concerning lower alleged VAT pay-

increase of 1,021 thousand euros compared to 31 De-

ments charged to ACEA’s VAT consolidation; an appeal

cember 2010. The breakdown is shown below.

was filed against said payment notice before the Provincial Tax Commission of Rome, resulting in a suspension

31.12.2011

31.12.2010


Marco Polo

2,785

2,055

730

Agua de San Pedro

1,252

1,591

(339)

Sogea

604

220

383

Amounts due from assignee Autoparco were re-

Sienergia

583

379

204

corded at the end of 2010 as a result of the sale of the


525

345

180

Tirana Acque

155

255

(100)

property. The collection of the consideration was expect-

30

60

(30)

Jonica

3

3

(0)

Geal

4

11

(7)

5,940

4,919

1,021

Umbriadue

TOTAL

of the notice. ACEA believes there is a good chance of obtaining the reimbursement of the assets seized.

ed by 22 December 2011. ACEA began the normal procedures to recover the remaining amounts due. Accrued income and prepayments prepayments relate essentially to rent paid for the long-term use of public land, the lease of the Company’s headquarters, the

17.d – Other current assets

Data Processing and Remote Control Centre, the prop-

These amount to 28,005 thousand euros (19,840 thou-

erty complex in Valleranello and maintenance fees.

sand euros at 31 December 2010), representing an in17.e – Current financial assets

crease of 8,164 thousand euros. They consist of:

Current financial assets amounted to 27,289 thousand euros 31.12.2011 31.12.2010 Advances from suppliers and deposits at third parties


11,141

141

11,000

Receivables due from social security institutions

523

552

(29)

Receivables due from Equalisation Fund

127

127

0

1,087

814

273

46

46

0

2,717

3,940

(1,224)

10,250

10,250

0

2,113

3,970

(1,857)

28,005

19,840

8,164

Other receivables Receivables due from Tesima SpA Equitalia Receivables due from Autoparco (car park) assignee Accrued income and prepayments TOTAL

The change is attributable to the increase in the item Advances to Suppliers, as a result of the payment to Beni Stabili SGR, as an advance, for the purchase of ACEA’s headquarters. Amounts due from Equitalia relate to collections deriving from the seizure of the assets of public bodies pursuant to art. 48 bis of Presidential Decree 602 of 29 Sep154


(14,647 thousand euros at 31 December 2010) and include: 31.12.2011

31.12.2010


14,678

0

14,678

Receivables due from Laurentina Area assignee

6,000

6,000

0

Receivables for managing the public lighting service

5,598

5,544

55

Receivables due from ISPA and SEIN from liquidation of Acea ATO5 Servizi

837

0

837

Receivables due from Acqua Italia

96

96

0

Financial receivables due from Agag De Centroamerica

72

72

0

Receivables from dissolution of Joint Venture

Other

7

3

4

Term Deposit - Cash Collateral IPSE 2000

0

1,761

(1,761)

Accrued income on fixed term deposits

0

1,171

(1,171)

27,289

14,647

12,642

TOTAL

This is attributable mainly to:

Receivables due from parent companies

• 14,678 thousand euros generated by the temporary

The item includes amounts due from Roma Capitale, for

minimum equalisation of the transaction terminat-

invoices issued (112,999 thousand euros) and invoices to

ing the joint venture with GDF-Suez Energia Italia,

be issued (1,660 thousand euros), relating to the Public

• collection of the remaining credit on 12 July 2011,

Lighting Service Contract and plant maintenance, as set

relating to the term deposit paid in since December

out in the Intercompany Trade Receivables section in this

2002, in compliance with the cash collateral issued

document.

to cover the commitments of Atlanet and its minority shareholders in respect of IPSE 2000.

Receivables due from subsidiaries At 31 December 2011 these receivables amounted to

17.f - Intercompany current financial assets

131,043 thousand euros (1,077,013 thousand euros at 31

The item totals 248,529 thousand euros (1,178,424 thou-

December 2010) and are broken down as follows:

sand euros at 31 December 2010) and is broken down as follows. 31.12.2011

31.12.2010


81,935

791,960

(710,024)

Loans to subsidiaries

16,308

249,267

(232,959)

Current accrued finance income on loans and cash pooling

14,769

21,374

(6,606)

Other loans to subsidiaries

9,033

8,404

628

Short-term EIB loans to subsidiaries

6,023

6,008

15

Receivables for cash pooling transactions - General Purpose Line

Receivables for commission on guarantees given TOTAL

2,976

0

2,976

131,043

1,077,013

(945,970)

The financial exposure registered a decrease as regards

transactions fell by 710,024 thousand euros, also

all inherent items, with the exception of the recognition

due to the reclassification of a portion of receiva-

in 2011 of considerations for commission on guarantees

bles into the Investments Line (for 802,868 thou-

given, a condition required by the new centralised treas-

sand euros),

ury contract. The remaining change of 948,946 thousand euros is a result of the following:

• current accrued finance income corresponds to the portion of interest accrued but still not paid on the

• Receivables for loans granted to subsidiaries fell by

General Purpose line and on loans granted to sub-

232,959 thousand euros due, on one hand, to the

sidiaries, The reduction of 6,606 thousand euros is

effect of the settlement, at the date of closing of

a direct consequence of the different classification

the dissolution, of loans granted to Roselectra and

of the receivables recorded, long and short term,

Voghera which amounted to 47,991 thousand at

and lower ordinary requirements of service compa-

31 December 2010, and to AceaElectrabel Trading

nies. On cash pooling transactions (so-called Gen-

(for 2,000 thousand euros) and, on the other, the

eral Purpose Lines) ACEA applies a creditor interest

reclassification of receivables due from companies

rate equal to the 3-year IRS plus a spread in line

included in the scope of the centralised treasury

with that of a bond issued on the equities market

service under non-current intercompany financial

(3.08%) and a debtor rate calculated on the basis of

assets for Investment Lines (181,272 thousand eu-

the arithmetic mean of the daily 3-month EURIBOR

ros).

rates in each calendar quarter less a spread of 5

• Receivables for centralised treasury management

basis points.


155

Receivables due from subsidiaries include (i) dividends

17.g – Current tax assets

to be collected, specifically from Abab (1,225 thousand

“Tax receivables” amounted to 35,407 thousand euros

euros), Acque Blu Fiorentine (2,411 thousand euros) and

are relate mainly to: (i) receivables for IRES under the

to Sarnese Vesuviano (447 thousand euros), (ii) other fi-

tax consolidation arrangement (13,264 thousand euros),

nancial receivables due from Acea Ato2 (780 thousand

(ii) and receivables relating to Group VAT (5,944 thou-

euros) and from Acea Energy (2,231 thousand euros)

sand euros), (iii) amounts due to ACEA SpA from its sub-

concerning servicing fees due with regard to the se-

sidiaries who take part in the tax consolidation. These

curitisation contract, and to (iii) receivables for finance

amounts regard IRES and VAT transferred from the indi-

advances, linked to the liquidation procedure, due from

vidual companies (12,779 thousand euros), (iv) IRES re-

Luce Napoli (1,300 thousand euros).

ceivables for which a refund has been requested (1,968 thousand euros).

Receivables due from associates At 31 December 2011 this amounted to 2,826 thousand

17.h - Cash and cash equivalents

euros and, at the end of 2010 totalled 2,900 thousand

At the end of the year, cash and cash equivalents amount-

euros and relate to:

ed to 284,227 thousand euros (251,407 thousand euros

• the loan to Sienergia for 2,500 thousand euros,

at 31 December 2010). This item represents the balance

granted in 2010 in order to cover liquidity needs

of bank and post office current accounts held with vari-

linked to some investment projects, including the

ous institutions, including the Italian Postal Service.

construction of PV plants. This loan accrues inter-

It should be noted that the balance includes the amount

est equal to the 3-month Euribor plus a spread of

of 79,200 thousand euros relating to cash deposits which

1.5% p.a.;

amounted to 164,500 thousand euros as at 31 December

• 322 thousand euros due from Consorzio Citelum Napoli Illuminazione Pubblica which handles the operational management of the contract of the same name.

156


2010.

Information on the Balance sheet Liabilities 18. Shareholders’ equity At 31 December 2011, shareholders’ equity amounted to 1,306,430 thousand euros (1,361,688 thousand euros at 31 December 2010). Changes in shareholders’ equity are shown in the following table: 31.12.2011

31.12.2010


Share capital

1,098,899

1,098,899

0

Legal reserve

68,919

67,228

1,691

0

0

0

89,427

160,963

(71,536)

Reserve for treasury shares in portfolio Other reserves Other reserves Profit/(loss) for the period TOTAL

Profit for the period, amounting to 108,636 thousand euros, is shown net of the distribution of the advance on the dividend resolved by the shareholders’ meeting on 29 November 2011 (59,513 thousand euros).

63

782

(720)

49,123

33,816

15,307

1,306,430

1,361,688

(55,258)

• Municipality of Rome: 108,611,150 shares for a total par value of 560,433 thousand euros; • Free float: 103,936,757 shares for a total par value of 536,314 thousand euros; • Treasury shares: 416,993 ordinary shares for a total

During the phase of approval of the financial statements

par value of 2,152 thousand euros.

for the year ended 31 December 2010, on 11 May 2011, shareholders resolved the distribution of the profit

Legal reserve

achieved of 33,816 thousand euros, the coverage of the

This reserve reflects the allocation of 5% of net profit for

reserve generated as at 1 January 2009 by the retrospec-

previous years, in accordance with article 2430 of the

tive application of IFRIC 12, amounting to 1,016 thousand

Italian civil code.

euros and, lastly, the withdrawal and distribution from

At 31 December 2011, this amounted to 68,919 thousand

the demerger reserve of dividends of 63,889 thousand

euros, an increase of 1,691 thousand euros compared to

euros (corresponding to a unit dividend of 0.30 euros).

31 December 2010, due to the allocation of 2010 profit.

This reserve was formed by the gain generated in 1999 by transfers performed from ACEA Distribuzione and

Reserve for treasury shares in portfolio

ACEA Ato 2.

The reserve for treasury shares in portfolio amounted to 3,853 thousand euros.

The breakdown per item and relevant movements are

Pursuant to art. 2428 of the Italian Civil Code, the treas-

shown below:

ury shares in portfolio, as at 31 December 2011, consist of 416,993 shares with a par value of 5.16 euros each,

Share capital

representing 0.196% of share capital.

This amounted to 1,098,899 thousand euros, represent-

The balance of the reserve offsets the value of the treas-

ed by 212,964,900 ordinary shares with a value of 5.16

ury shares accounted for as a reduction of shareholders’

each, as per the Shareholders’ Register and is currently

equity in compliance with IAS 32.

subscribed and paid in as follows:


157

Other reserves 89,427 thousand euros

sidiaries on the above gain, or in correspondence with

Extraordinary reserve


The amount of 180 thousand euros was recorded in the

At the end of the year, the reserve for exchange differ-

financial statements, and corresponds to the portion of

ences has a negative balance of 24,975 thousand euros,

profit allocated therein during the distribution of profit

net of deferred taxation of 9,473 thousand euros. This

at 31 December 2010. A total of 162 thousand euros

was established due to the effect of the evaluation at the

recorded at 31 December 2010 was used to cover the

exchange rate at the end of the observation period of the

negative reserve established during the restatement of

private placement in YEN stipulated with AFLAC in 2010.

any proceeds from sales to third parties.

IFRIC 12 on 1 January 2009. Cash flow hedge reserve Demerger reserve

This reserve recorded a positive balance of 20,451 thou-

This reserve is fully available to cover losses, for the

sand euros as at 31 December 2011, 14,827 thousand

share capital increase and for distribution to sharehold-

euros net of deferred taxes of 5,624 thousand euros. At

ers, as established at the General Shareholders’ Meet-

the end of the previous year, the balance was a positive

ing on 29 April 2010, which approved the 2009 Financial

16,975 thousand euros (12,307 thousand euros net of

Statements and overcome the restriction on the distrib-

the related deferred tax).

utability of dividends established by the General Share-

This reserve is composed as follows:

holders’ Meeting on 29 April 2000.

• 34,672 thousand euros from the positive fair value

At 31 December 2011 this amounted to 102,567 thou-

of the cross currency on the bond loan in yen, and

sand euros, down by 63,835 thousand euros compared

• 10,887 thousand euros from the negative fair val-

to the previous year, corresponding to the amount with-

ue of the IRS on the 100 million euros from Cassa

drawn and distributed in compliance with the resolution

Depositi e Prestiti.

of the General Shareholders’ Meeting on 11 May 2011.

The amount accounted for in the financial statements

This reserve consists of (i) the gain recognised in the in-

derives from application of IAS 39 and assessment of the

come statement for 1999 deriving from the transfers of

effectiveness of the hedging instrument in accordance

assets carried out by ACEA SpA to ACEA Distribuzione

with Hedge Accounting. Under this method, the effective

and ACEA Ato2, (ii) the after-tax gain on the transfer of

portion of the cash flow hedge is recognised in share-

the “customer services” division to VoiNoi (in liquidation),

holders’ equity, whilst the ineffective portion is recog-

totalling 14,216 thousand euros. This latter component

nised in the income statement.

was used in full to cover losses deriving from the Com-

The tests carried out during the year revealed that the

pany’s first-time adoption of IAS.

cross currency is 100% effective and the interest rate

The first gain, which contributed in its entirety to the op-

swap is 99.86% effective, resulting in an impact on share-

erating result for 1999, was entirely covered by the same

holders’ equity only.

tax exemption applicable to other revenue components recorded in the financial statements for the year ended

The following table shows distributable and undistribut-

31 December 1999. The General Shareholders’ Meet-

able reserves:

ing of 29 April 2000, which approved the 1999 financial statements, also resolved the allocation of said part of the profit for the year to a specific shareholders’ equity reserve. This was done on the understanding that the reserve would be distributable in future years in correspondence with annual amortisation charged by the sub-

158


Nature/description

Amount

Capital reserves:

Potential use

Available portion

Summary of uses during previous three years To cover losses

Other purposes

53,622

119,260

0

Revenue reserves from income statement: Legal reserve

68,919

Purchased goodwill attributable to Umbra Acque

(3,173)

Available reserve for treasury shares Reserve for treasury shares in portfolio Extraordinary reserve Demerger reserve Reserve for IFRIC 12 FTA Retained earnings

B

68,919 (3,173)

0

A, B, C

0

3,853

To guarantee treasury shares

3,853

180

A, B, C

180

102,567

A, B, C

102,567

0

0

63

A, B, C

63

Cash flow hedge reserve

14,827

B


(24,975)

(24,975)

162,262

162,262

Revenue reserves from O.C.I.:

TOTAL

14,827

Undistributable portion Remaining distributable portion

59,452 102,810

19. Staff termination benefits and other defined

were calculated in accordance with actuarial criteria; the

benefit plans

second type instead includes tariff subsidies for pension-

At 31 December 2011 said items totalled 23,551 thou-

ers. This method is based on the projected unit credit

sand euros (23,634 thousand euros at 31 December

method, which measures the company’s liability at the

2010) and represent termination and other benefits pay-

end of the reporting period on the basis of the average

able to employees on retirement or termination of em-

present value of future services reproportioned on the

ployment.

basis of the service performed by the worker at the time

These obligations include defined benefit and defined

of calculation, with respect to that at the time of pay-

contribution plans. The first obligations relate to staff ter-

ment for the service.

mination benefits and employee tariff subsidies which

The following table shows the breakdown of the item.

31.12.2011

Termination benefits - Staff termination benefits - Monthly bonuses - Long-term incentive plans (LTIPs) Total Post-employment benefits - Tariff subsidies TOTAL

31.12.2010


7,620

7,511

109

778

738

40

2,346

1,136

1,210

10,744

9,384

1,360

12,807

14,250

(1,442)

23,551

23,634

(83)


159

The two comparative periods are essentially in line and

the securities of major companies listed on the same fi-

the change of 83 thousand euros reflects, on one hand,

nancial market as ACEA, and on the return on govern-

the net effect of staff leaving the Company, the transfer of

ment bonds in circulation at the same date that have

staff to a number of subsidiaries, the effect of tariff subsi-

terms to maturity approximating to the residual term

dies for staff and release of provisions for tariff subsidies

of the related liability. In order to ensure consistency of

for pensioners and, on the other, from the provision set

valuation and comply with the provisions of IAS 19, the

aside of 1,210 thousand euros for the Long-Term Incen-

same basis has been used for the various types of plan.

tive Plan for the 2010-2012 period which makes provision for the disbursement to Acea Top Management of a cash

20. Provision for liabilities and charges

payment made at the end of the reference period, to be

At 31 December 2011 this item amounted to 70,680

calculated as a percentage of gross annual remuneration,


based on the achievement of pre-established economic

2010). The movement in the provision represents the al-

and financial targets. In this regard, it should be noted

gebraic sum of uses and allocations in the period.

that, as at 31 December 2010, the item was affected by

In calculating the entity of the provisions, account is

the release, due to non-payment, of the provision set

taken both of the estimated costs that may derive from

aside in previous years for the Long-Term Incentive Plan

litigation or other disputes arising during the year and

for the 2007-2009 period (3,003 thousand euros) against

an update of estimates of the potential liabilities deriv-

a provision in 2010 of 1,122 thousand euros.

ing from the litigation involving the Company in previous

As required by paragraph 78 of IAS 19, the interest rate

years.

used to calculate the present value of the obligation is

The following table shows a breakdown of provisions

based on returns, at the end of the reporting period, on

and movements during 2011:

31.12.2010


Uses

Provisions

Alloc. on investments

31.12.2011

13,674

(6,694)

0

2,527

0

9,507

Redundancy and resignation/ retirement provision

2,264

(2,922)

0

3,874

0

3,216

Sundry provisions

9,491

(2,509)

(2,982)

31

53,926

57,956

25,430

(12,126)

(2,982)

6,433

53,926

70,680

Total provisions

At the end of the year, the provision for liabilities and charges included: (i) 53,926 million euros for the cover-

160

Reclassifications

The principal movements in the year are as follows: • uses, amounting to 12,126 thousand euros, pri-

age of risks related to the uncertainty ACEA Ato5 (9,826

marily include:

thousand euro) and GORI (44,100 thousand euro) find

- 3,631 thousand euros for the closure of legal

themselves in, (ii) 5,177 thousand euros for potential li-

disputes that arose relating to previous em-

abilities and charges relating to staff including disputes

ployment contracts and with contracting com-

over contributions, (iii) 4,663 thousand euros for the eval-

panies,

uation of legal risks (disputes, litigation, etc..), (iv) 3,216

- 3,063 thousand euros to cover risks of ex-

thousand euros relating to the provision set aside for

penses relating to contributions. As a result

redundancy and resignation/retirement plans, (v) 2,222

of enforcement actions implemented by INPS

thousand euros for potential risks resulting from liabili-

through Equitalia for the sole purpose of avoid-

ties inherited from former subsidiaries, (vi) 1,464 thou-

ing the effects of the seizures performed pur-

sand euros for the estimate of risks connected to invest-

suant to art. 48 bis of Presidential Decree no.

ment management.

602/1973, ACEA broke the payment requests


issued by INPS relating to unpaid contributions

Bonds

down into instalments. The total amount split

These amounted to 985,821 thousand euros and include:

into instalments came to 3,063 thousand euros,

• 305,854 thousand euros to the bond loan issued

- 2,922 thousand euros to cover the require-

by ACEA in 2004 and placed on the international

ments generated by the voluntary redundancy

Eurobond market. Interest accrued during the pe-

and retirement procedure, started in the previ-

riod amounts to 14,625 thousand euros. The bond

ous year,

has a term to maturity of ten years and yields a

- 1,302 thousand euros for the use for coverage

nominal fixed rate of 4.875%. Redemption will take the form of a lump-sum payment at par value, un-

of the losses of Acea ATO5, - 1,208 thousand euros for the use for coverage

less the bonds are called prior to maturity. It should be noted that the terms and conditions include

of the losses of other subsidiaries,

standard international Eurobond market conditions • provisions, amounting to 60,359 thousand eu-

regarding Negative Pledge and Events of Default,

ros, primarily include:

including a Cross Default clause should the other

- 44,100 thousand euros to GORI, as a result of

financial debt of the Company or its principal sub-

the evaluation of risks related to the non-rec-

sidiaries, totalling more than 15 million euros, be-

ognition of tariff adjustments and financial risk,

come immediately repayable,

pending approval and signing of the agreement

• 514,634 thousand euros due to the bond loan is-

to settle the dispute with the Campania Region

sued by ACEA of 500 million euros in March 2010

and the Area Authority,

with a 10-year duration and maturity term on 16

- for 9,826 thousand euros to ACEA Ato5, relat-

March 2020. Interest accrued during the period

ing to the risks of future losses connected with

amounts to 22,451 thousand euros. The bonds

recovery of tariff adjustments, and the financial

have a minimum denomination of 50 thousand

risk connected with the situation of uncertain-

euros, and pay one gross coupon annually of 4.5%

ty the subsidiary finds itself in,

and were placed at an issue price of 99.779. The

- for 3,874 thousand euros to the expenses

actual gross rate of return upon expiry is therefore

needed to cover the voluntary redundancy and

equal to 4.528% corresponding to a return of 120

retirement programme started in the year,

base points on top of the reference rate (mid-swap

- 1,751 thousand euros for legal liabilities and

at 10 years). The bonds are subject to British law. The settlement date is 16 March 2010. The bond

potential disputes with suppliers, - 807 thousand euros relating to staff, above all

loan was given a rating by Standard & Poor’s and Fitch of A- and A+, respectively.

liabilities regarding contributions.

• 165,333 thousand euros refer to the Private Place21. Non-current borrowings and financial

ment and related hedge. At the end of the year, the

liabilities

fair value of the hedging instrument is a positive

They total 1,784,429 thousand euros (1,788,288 thou-

by 34,672 thousand euros and was recognised in

sand euros at 31 December 2010) and are broken down

a special reserve of shareholders’ equity, together

as follows:

with the negative differential of 3.3 million euros resulting from the delta of conversion rates be31.12.2011

31.12.2010


Bonds

985,821

975,647

10,175

Medium/long–term loans

798,608

812,642

(14,033)

1,784,429

1,788,288

(3,859)

TOTAL

tween the rate provided for in the hedging contract and the rate recorded at the payment date of the bond. The exchange rate difference, a negative 34,448 thousand euros, of the hedged instrument calculated at 31 December 2011 was therefore al-


161

located to an exchange provision. This relates to a

comes 17.5 basis points), with interest due every

private bond loan (Private Placement) for 20 billion

six months and bullet repayment of the principal

Japanese Yen and 15-year maturity term (2025).

on maturity (4 August 2013). The spread may vary

The Private Placement was entirely subscribed by

based on any changes to the rating assigned to

a single investor (AFLAC). The coupons are paid on

ACEA. The loan is not subject to covenants and

a deferred half-yearly basis every 3 March and 3

the agreement contains standard Negative Pledge

September applying a fixed rate in Yen of 2.5%. At

and Acceleration Events clauses.

the same time, a cross currency transaction was

• an unsecured loan of an original amount of 77,469

carried out to transform from yens to euros and

thousand euros and a residual value of 16,139

the yen rate applied to a fixed euro rate. The cross

thousand euros; the interest rate is equal to the

currency transaction provides that the bank pays

3-month Euribor less 15 basis points and the term

ACEA, on a deferred half-yearly basis, 2.5% on 20

to maturity is 15 years (a grace period of 3 years)

billion Japanese Yen, while ACEA has to pay the

expiring on 3 June 2014;

bank the coupons on a deferred quarterly basis,

• an unsecured loan of an original amount of 51,646

at a fixed rate of 5.025%. The loan agreement and

thousand euros and a residual value of 3,495

the hedge contract contain an option, in favour of

thousand euros; the loan is subject to a fixed rate

the investor and the agent bank respectively, con-

of interest of 4.45% and has a term to maturity of

nected to the trigger rating: the payable and its de-

15 years (a grace period of 3 years);

rivative instrument can be fully recalled if ACEA’s

• an unsecured loan for a residual amount of 1,407

rating falls below the investment grade level or if

thousand euros; the original amount stood at

the debt instrument loses its rating. At the end of

25,143 thousand euros and is handled by the Ban-

the year, no conditions occurred for the exercise of

ca di Roma. The loan is subject to a fixed rate of

the option.

interest of 5.48% and has a term to maturity of 15 years;

Medium/long–term loans These totalled 798,608 thousand euros (812,642 thou-

thousand euros for the water services segment

sand euros at 31 December 2010) and represent princi-

investment plan (Acea Ato2) with a term of 15

pal outstanding at the balance sheet date and falling due

years. The first tranche of 150,000 thousand euros

after 12 months. The reduction of 14,033 thousand eu-

was disbursed in August 2008; the interest rate is

ros in amounts due is attributable to the reclassification

equal to the 6-month Euribor plus a spread of 7.8

of amounts to be paid within 12 months (down 16,396

basis points. In 2009, a second tranche was dis-

thousand euros), net of the deterioration of the valuation

bursed for 50,000 thousand euros with an interest

of the fair value of the hedging instrument on the loan

rate equal to the 6-month Euribor plus a spread of

granted by Cassa Depositi e Prestiti of 100,000 thousand euros (up 2,281 thousand euros).

0.646%, maturing on 15 June 2019; • a loan of 200,000 thousand euros drawn down on

The main mortgages, whose values at 31 December

10 October 2008 and maturing in March 2016. The

were stated inclusive of short-term portions, and are de-

interest rate applied by the bank is equal to the

scribed below:

162

• loan stipulated on 25 August 2008 for 200,000

3-month Euribor plus a spread of 50 basis points;

• an unsecured loan of 200,000 thousand euros.

• a loan for an initial amount of 100,000 thousand

Disbursement of 159,763 thousand euros took

euros drawn down on 31 March 2008 and ma-

place on 11/09/06. The remaining portion was dis-

turing on 21 December 2021. The bank applies a

bursed on 27/06/07. The loan is subject to interest

floating rate of interest, with repayments to be

equal to the 6-month Euribor plus a spread of 15

made every six months from 30 June 2010. The

basis points (from the sixth year the spread be-

residual loan value at 31 December 2011 amounts


to 83,333 thousand euros. Interest rate risk asso-

In relation to said loan, on 23 January 2012, the

ciated with the loan has been hedged via an Inter-

disbursement of an additional 100,000 thousand

est Rate Swap, with the aim of converting the un-

euros was completed, needed to cover the re-

derlying loan from floating to fixed rate. The swap

quirements of the four-year investment plan for

matches the underlying loan repayment schedule.

the strengthening and expansion of the electric-

Based on IAS 19, the Company has tested the ef-

ity distribution network in Rome, subject to the

fectiveness of the hedge using Hedge Accounting

issuing of a guarantee. The repayment plan will

under the Cash Flow Hedge model. The test re-

involve six-monthly principal repayments on a

vealed that the hedge is 99.86% effective, mean-

straight-line basis starting on 15 December 2015

ing that there was no ineffective portion to take

up until 15 December 2026. The terms provide for

to the income statement. The negative fair value

a floating interest rate equal to the 6-month Eu-

of the hedging instrument (10,887 thousand eu-

ribor plus a spread of 130.1 basis points per an-

ros) was recognised in a separate component of

num, the guarantee will accrue commission of 145

shareholders’ equity;

basis points per annum, to be calculated on the

• a loan stipulated in 2009 for 100,000 thousand euros aimed at supporting the four-year electricity

amount of the remaining debt according to the repayment plan.

network investment plan (2008-2011) in the mu-

The following table shows a breakdown of borrowings by

nicipality of Rome. The interest rate is the 6-month

type of interest rate and term to maturity. The table also

Euribor plus a spread of 0.665% maturing in June

includes short-term portions falling due within 31 De-

2018.

cember 2012 and classified under item 24 of these notes.

Bank Loans:

fixed rate floating rate Total

TOTAL RESIDUAL DEBT

DUE BY 31.12.2011

FALLING DUE BETWEEN 31.12.2011 and 31.12.2016


4,903

1,606

3,296

0

799,901

15,477

595,244

189,180

804,804

17,083

598,541

189,180

Information on financial instruments is provided in the section “Additional disclosures on financial instruments and risk management policies”.


163

22. Other non-current liabilities

Short-term bank lines of credit

These totalled 5,269 thousand euros (6,888 thousand

These amounted to 280,115 thousand euros (89,716

euros at 31 December 2010) and refer to deferment of

thousand euros at 31 December 2010), marking an in-

the gain generated in 2005 by the transfer of the pub-

crease of 190,400 thousand euros due to the compa-

lic lighting business to ACEA Distribuzione. The amount

ny’s higher financial over the short term.

accounted for in the year booked to the financial state-

Interest expense accrued over the entire year amount-

ments came to 1,591 thousand euros and is calculated

ed to 5,570 thousand euros.

on the basis of the term of the old service contract with

These lines of credit are not committed and are unse-

the municipality of Rome (ten years).

cured.

23. Provisions for deferred tax

Bank borrowings - mortgages

At 31 December 2011 the provision totalled 12,873 thou-

Bank borrowings totalled 17,083 thousand euros and

sand euros (8,997 thousand euros at 31 December 2010).

regard the short-term portion of bank borrowings fall-

This provision above all regards deferred tax liabilities

ing due within twelve months. Further details are pro-

linked with the measurement at fair value of Sharehold-

vided in note 21 of this report.

ers’ equity hedging financial instruments (9,535 thousand euros), taxation on the payment in instalments of

Due to the parent company Roma Capitale

the gain on the sale of properties (1,727 thousand euros),

As at 31 December 2011, these amounted to 15,989

and provisions for deferred tax liabilities on dividends yet

thousand, marking an increase over the previous year

to be collected (155 thousand euros).

due to ACEA’s remaining debt regarding the distribution of the advance on 2011 dividends, resolved by the

24. Current liabilities

Board of Directors on 29 November 2011. For further

They total 774,496 thousand euros at 31 December 2011

information on the composition and movements of the

(413,913 thousand euros at 31 December 2010) and are

item, reference should be made to the corresponding

broken down as follows:

item in assets.

31.12.2011

31.12.2010


Borrowings

491,959

138,607

353,352

Debt to suppliers

199,416

164,355

35,061

Tax payables

55,925

90,012

(34,086)


27,195

20,939

6,256

774,496

413,913

360,583

TOTAL

24.a - Borrowings These amounted to 491,959 thousand euros, representing an increase of 353,352 thousand euros, essentially due to the higher financial exposure to banks and service companies (up 339,311 thousand euros). This item includes: 31.12.2011

31.12.2010


280,115

89,716

190,400


17,083

16,767

316

Amounts due to Roma Capitale

15,989

2,213

13,777

178,767

29,856

148,911

5

56

(50)

491,959

138,607

353,352


Amounts due to subsidiaries and associates Due to others TOTAL

164


Due to subsidiaries and associates The financial exposure to subsidiaries and associates increased over the previous year by 148,911 thousand euros, amounting to 178,767 thousand euros at the balance sheet date (29,856 thousand euros at 31 December 2010) and is composed as follows: 31.12.2011

31.12.2010


165,877

27,355

138,523

9,920

0

9,920

Payables for cash pooling transactions Amounts due to ACEA Ato 5 to cover losses Other borrowings TOTAL

2,969

2,502

468

178,767

29,856

148,911

The balances of the intercompany current account held

24.b - Trade payables

by ACEA and a number of subsidiaries is used to settle

These amounted to 199,416 thousand euros, marking an

financial transactions regarding ordinary activities on

increase of 35,061 thousand euros, and are composed as

behalf of or authorised by the subsidiaries; the biggest

follows.

changes concerned ACEA Ato2 (up 81,221 thousand euros), ACEA Distribuzione (up 43,416 thousand euros), Acea Energia (up 30,538 thousand euros) and Acea Produzione (up 2,472 thousand euros), which reported a credit balance in 2010. Borrowings, standing at 9,920 thousand euros, recorded in the summer of 2011, owed to ACEA Ato5, is the result of the commitment undertaken by the Extraordinary Share-

31.12.2011

31.12.2010


Amounts due to thirdparty suppliers

68,412

55,641

12,771


31,395

31,395

0

Due to subsidiaries and associates

99,609

77,319

22,290

199,416

164,355

35,061

TOTAL

holders’ Meeting to make payments to the provision to cover future losses. Other borrowings include interest accrued as at 31 December 2011, and amounts due to companies not includ-

Amounts due to third-party suppliers amounted to

ed in the perimeter of service of the centralised treasury;

68,412 thousand euros (up 12,771 thousand euros com-

these include the amount due, unchanged with respect

pared with 31 December 2010) and are broken down as

to 2010, to Crea Gestioni, deriving from the split of Crea

follows:

S.p.A., which occurred in 2008, amounting to 1,854 thousand euros.

31.12.2011

31.12.2010

Bills received

22,953

20,918

2,034

Bills to be received

45,459

34,723

10,736

68,412

55,641

12,771

TOTAL


This item includes payables calculated to adjust the IAS fee of the company headquarters, recalculated by taking into consideration the expiry of the lease coinciding with the date of acquisition of the property on 23 January 2012 (75 thousand euros, compared to 1,405 thousand euros at 31 December 2010).


165

Amounts due to Roma Capitale did not register any

Amounts due to subsidiaries and associates amounts to

change with respect to the previous year, with notes pro-

a total of 99,609 thousand euros, an increase of 22,290

vided on these and trade receivables in section 17.c of

thousand euros compared to 31 December 2010 (77,319

these notes.

thousand euros). The breakdown is shown below: 31.12.2011

31.12.2010


Amounts due to Acea Distribuzione

74,856

62,087

12,769

Amounts due to Marco Polo

10,467

6,029

4,438

Amounts due to Acea Energia

6,475

6,886

(411)

Amounts due to Citelum Acea Napoli

2,929

1,357

1,573

Amounts due to Acea Produzione

2,616

2,616

0

Amounts due to Acea Energia Holding

934

0

934

Amounts due to ATO2

364

78

286

Amounts due to ATO5

334

226

108

Amounts due to CREA GESTIONI

195

173

22

Amounts due to ARIA

92

68

24

Amounts due to Acea 8cento

83

129

(46)

Amounts due to GORI

79

18

61

Amounts due to Laboratori

72

34

38

Amounts due to LUCE NAPOLI

45

196

(151)

Amounts due to Acea Illuminazione Pubblica

25

0

25

Amounts due to Acque

16

20

(5)

Amounts due to Ecomed srl

15

15

0

Amounts due to Arse

6

0

6

Amounts due to GEAL

5

0

5

Amounts due to CREA

0

1

(1)

99,609

77,319

22,290

TOTAL

The change compared with the previous financial year has been influenced: • by the increase in amounts due to ACEA Distribu-

from subsidiary Acea Produzione (2,616 thousand euros) for district heating activities;

zione (up 12,769 thousand euros), which amounted

• higher payables due to associate Citelum Napoli

to 74,856 thousand euros, due to higher allocations

Pubblica Illuminazione of 1,573 thousand euros

linked to new constructions and the upgrading of

linked to the service contract for management of

Public Lighting plants in the municipality of Rome;

public lighting in the municipality of Rome.

• the increase in amounts owed to Marco Polo for services and works performed and still not paid (up 4,438 thousand euros),

166

• the recognition of payables for bills to be received


24.c – Tax payables These amounted to 55,925 thousand euros (90,012 thousand euros in the financial statements at 31 December 2010). The breakdown of this item is shown in the following table.

Deferred VAT Withholding taxes Ires/Irap for the year

31.12.2011

31.12.2010


19,970

12,844

7,126

1,745

1,629

116 (36,198)

0

36,198

Group Ires and VAT payables

17,116

6,156

10,960

Other tax payables

17,094

33,185

(16,090)

55,925

90,012

(34,086)

31.12.2011

31.12.2010


2,591

2,144

447

TOTAL

The difference compared to the exposure in the previous year reflects the absence of the tax payable due to the tax authorities, advances paid in 2011 that were sufficient, and the reduction in the amount due relating to the tax assessment, recorded under the provision for liabilities in 2009. 24.d – Other current liabilities These totalled 27,195 thousand euros (20,939 thousand euros at 31 December 2010) and are broken down as follows:

Social security contributions Other current liabilities due to subsidiaries and associates Other current liabilities TOTAL

1,698

1,698

0

22,907

17,097

5,810

27,195

20,939

6,256

The item “other current liabilities” (22,907 thousand

Liabilities due to subsidiaries and associates, unchanged

euros) includes amounts due to employees of 9,390

with respect to last year, relate to amounts due recorded

thousand euros, to be paid for holidays accrued and not

in respect of personnel transferred.

taken, bonuses, additional monthly pay, etc. and collec-

For greater clarity, the financial statements do not report

tions from end users totalling 13,516 thousand euros for

payables falling due after five years, other than those al-

which the normal allocation/reimbursement checks are

ready mentioned in the item Borrowings.

being carried out.


167

Related party transactions

Moreover, it has been established that qualitative/quantitative parameters shall be renegotiated in 2018.

Parent Company: ROMA CAPITALE

Upon natural or anticipated expiry, ACEA will be award-

The parent holds a controlling interest via its 51% hold-

ed an allowance corresponding to the residual carry-

ing in ACEA SpA.

ing amount, that will be paid by the Municipality or the

Trading relations between ACEA SpA and ROMA CAPI-

incoming operator if this obligation is expressly set out

TALE include the provision of maintenance and upgrad-

in the call for tenders for the selection of the new op-

ing of public lighting by the Parent Company to the

erator.

municipality. Further details are provided in the section

Lastly, the Supplementary Agreement sets out a list of

“Service concession arrangements”.

events that constitute cause for the early revocation of

With regard to public lighting, the Group provides public

the concession and/or resolution of the contract by the

lighting services on an exclusive basis within the Rome

will of the parties. Among these events, importance is

area. As part of the thirty-year free concession granted

attached to newly arising needs linked with public inter-

by the municipality of Rome in 1998, the economic terms

ests, expressly including the one set out in Article 23 bis

of the concession services were renegotiated with the

of Law Decree 112/2008, according to which ACEA has

Supplementary Agreement signed in March 2011. The

the right to receive an allowance according to the dis-

renegotiations centred on the following elements:

counted product of the percentage of the annual con-

• alignment of the term of the service contract with the expiry of the concession (2027), given that the

the concession.

contract is merely additional to the agreement;

Based on the fact that the supplementary agreement

• annual update of the compensation concerning

exceeds the reference thresholds set out by the Com-

consumption of electricity and maintenance; • annual increase in the lump-sum payment with regard to the new lighting points installed.

pany with regard to Related party transactions, it was approved by the Board of Directors and authorised during the meeting held on 1 February 2011, having ob-

The lump-sum payment was redetermined on the basis

tained the favourable opinion of the Committee for re-

of the quantities of public lighting plants at 31 Decem-

lated party transactions.

ber 2009 and pays compensation for electricity supply,

As a local authority, Roma Capitale has the power to

management, running and maintenance.

regulate municipal taxes and duties that the Group

The ordinary fee is updated quarterly, in the assump-

companies are required to pay and which fall under its

tion that the unit price covers the purchase of the en-

territorial jurisdiction. However, in no case ACEA is the

ergy quota (50%) and maintenance costs (the remaining

sole payer of any of these taxes and duties within the

50%).

Municipality of Rome. The reciprocal receivables and

As regards investments regarding the service, they may

payables – with regard to payment terms and condi-

be (i) requested and financed by the municipality or (ii)

tions – are governed by each single contract:

financed by ACEA: in the first case, these measures will

a) for the public lighting service contract, payment

be recognised in respect of ACEA, corresponding to an

shall take place within sixty days of receipt of the

annual sum to cover the investment and/or annual ac-

invoice and, in case of delayed payment, the le-

crual of the investment calculated in accordance with

gal interest rate will be applied for the first sixty

the tax amortisation mechanism and repaid on the

days, after which the default interest rate will be

basis of a floating rate on the IRS base; in the second

applied, as set out from year to year by a Decree

case, the municipality is not bound to pay any extra fee;

of the Ministry of Public Works and the Ministry of

however, ACEA will be awarded all, or part of the saving expected in both energy and economic terms, according to pre-established methods.

168

tractual amount and the number of years until expiry of


Economy and Finance; b) with reference to all other service contracts, the payment term for Roma Capitale as regards ser-

vice contracts is sixty days of receipt of an invoice, and in case of late payment the parties have agreed to apply the current bank rate at the time. The following table shows details of revenues and costs deriving from the most significant financial relations between ACEA SpA and Roma Capitale in 2011. REVENUES

COSTS

31.12.2011

31.12.2010

31.12.2011

31.12.2010

44,002

55,859

0

0

Public lighting service contract

ACEA and Roma Capitale intend to set up a work group to reconcile mutual credit and debit items and identify the methods for re-establishing a net credit position for the ACEA Group.

Gruppo Comune di Roma (Municipality of Rome Group) ACEA has trading relations with Companies, Special companies or bodies owned by Roma Capitale. The table below shows details of items linked to relations with entities owned by the Roma Capitale Group.

Revenues

Cotral Group

Costs

Payables

2011

2010

2010

2011

2010

2011

0

0

0

0

0

0

0

0

0

0

0

0

Trambus

2011

Receivables

2010

Ama

0

0

787

705

2

2

1,158

354

Atac

0

0

0

0

0

0

0

0

Palaexpò

0

0

0

0

0

0

0

Musica per Roma

0

0

0

0

0

0

0

0

Risorse per Roma

0

0

0

0

623

623

585

585

Total

0

0

787

705

625

625

1,743

939


169

Relations with the subsidiaries

antor for Group companies: in this regard, the contract that regulates the general purpose credit line establishes

Financial relations

a ceiling for guarantees and a cost split between bank

Within the Group, ACEA S.p.A acts as a centralised treas-

guarantees and company guarantees.

urer for the largest subsidiaries. New “Centralised Treas-

Further information is provided in “Commitments and

ury” agreements were formalised with Group companies

contingencies”.

on 1 January 2011.

The above relations also include the dividends paid by

Intercompany relations are conducted on the basis of:

subsidiaries, and receivables and payables deriving from tax consolidation.

• the setting up of a medium/long-term credit line for a pre-established amount to cover requirements

Trading relations

generated by investments. The credit line (i) has a three-year term starting

ACEA SpA provides administrative, financial, legal, logis-

on 1 January 2011, (i) generates interest at a rate

tical, management and technical services to subsidiaries

which is updated annually, equal to the 3-year IRS

and associated companies in order to optimise the use

plus a spread in line with that of a bond issued on

of existing resources and know-how in an economically

the equities market with a BBB rating and (ii) makes

advantageous manner. These services are governed by

provision for an annual credit line commission cal-

the appropriate annual service contracts.

culated on the ceiling,

Relations with the principal associates

• the establishing of a general purpose credit facility

Up until 31 December 2011, i.e. the natural expiry date of

to cover the company’s current needs.

the business unit lease, Marco Polo carried out facility

The credit line (i) has a three-year term starting on 1 January 2011, (ii) generates interest at a rate

management services.

which is updated annually, equal to the 3-year IRS

The supply of services to ACEA is conducted on an arm’s

plus a spread in line with that of a bond issued on

length basis.

the equities market with a BBB rating and an active

Similarly, Marco Polo is provided with administrative ser-

rate calculated on the basis of the arithmetic mean

vices from ACEA under an annual service contract. This

of the daily 3-month EURIBOR rates in each calen-

supply of services is conducted on an arm’s length basis.

dar quarter less a spread of 5 basis points and (iii)

The following table shows amounts (thousand of euros)

makes provision for an annual credit line commis-

for revenues, costs, receivables and payables deriving

sion calculated on the ceiling.

from relations between ACEA and the company Marco Polo.

It should be pointed out that ACEA SpA also acts as guarRevenues

Marco Polo

170

Costs

Receivables

Payables

2011

2010

2011

2010

2011

2010

2011

2010

1,961

1,965

13,947

9,648

2,386

2,061

12,162

7,725


Relations between ACEA and GdF SUEZ Following the dissolution of the joint venture between ACEA and GDF Suez Energia Italia, (for changes please see the section in these notes entitled “Subsequent events in the year”), relations in place with GDF Suez Energia Italia are shown below: REVENUES

COSTS

RECEIVABLES

PAYABLES

ELECTRABEL S.A.

0

0

0

0

GDF SUEZ Energia Ita

0

0

0

270

ELECTRABEL INVEST

0

0

0

0

ROSEN

0

0

0

0

LABORELEC

0

0

0

0

386

0

36

0

GDF SUEZ PRODUZIONE Tirreno Power

204

0

60

0

TOTAL

590

0

95

270


was to be considered provisional. In terms of legal action, CEA, ACEA Distribuzione, ACEA Ato2, Laboratori and ACEA Luce, after appealing through

Social security issues

the administrative courts, started legal action. The judgements handed down at first instance during the second

INPDAP (National Social Insurance

half of 2006 found in favour of Laboratori and ACEA Luce

Institute for Civil Servants) contributions

(the latter being an ACEA Group company at the time),

The Group employs staff registered with both Inpdap and

whilst the appeals submitted by ACEA, ACEA Distribuzi-

Inps pension funds. Certain contribution rates applied by

one and ACEA Ato2 were turned down.

the two entities differ greatly; these include those for

The second instance proceedings, launched by the com-

family allowance payments, for which Inpdap applies a

panies or INPS in cases where the latter objected to the

rate that is 3.72% higher than that applied by Inps.

first instance rulings, met with the same unfavourable

In response to the failure to pass legislation bringing the

ruling for ACEA Group companies.

pension and social security contributions into line, the

Appeals were submitted to the Supreme Court for Labo-

Group companies decided that from November 2002 it

ratori, Acea Energia (formerly AceaElectrabel Elettricità

would pay such contributions at the lower rate. On the

spa) and Acea Produzione (through succession of rela-

other hand, the underlying legal basis is rather unclear:

tions established by transferred company AceaElectra-

Inps circular no. 103 of 16 June 2002 reiterated that,

bel Produzione).

whilst awaiting clarification from the Ministry of Econ-

A similar problem regards contributions for maternity

omy and Finance and the Ministry of Labour, the rate of

benefits, where the difference in the cost to companies,

6.20% applied to staff registered with the Inpdap pen-

based on taxable pay, is 0.57 percentage points higher

sion fund, reduced by 4.15% for 2011 (although the dif-

for staff covered by Inpdap compared with those cov-

ferential remained unchanged, with respect to the rate

ered by Inps. The ACEA Group applied a reduced rate as

of 3.72% for staff registered with the INPS pension fund)

of October 2003 for said contribution too. It should be


171

noted that as regards said contribution legislation was

where the payment of this benefit is assured by law or by

introduced with Law Decree no. 112 of 25/6/2008 con-

collective labour agreements by the employer or other

verted with amendments into law no. 133 of 6/8/2008,

bodies, to an extent either equal to or greater than what

where paragraph 2 of article 20 regulates, effective from

is established by collective labour agreements.

1 January 2009, uniformity of contributions for private

However, Inps started to request payment of the con-

employers across the board.

tribution from the entry into force of Law no. 41 of 28

ACEA, ACEA Ato2, ACEA Ato5 S.p.A., ACEA Distribuzione,

February 1986 (1986 Finance Act), which reformed the

Arse, Acea Energia and Acea Produzione filed appeals

health and social welfare contribution system, reduc-

which, although turned down, gave rise to the presenta-

ing the rate for the sickness benefit, abolishing the ad-

tion of an appeal request which also ended unfavour-

ditional rate of the old sickness contribution, establishing

ably for said parties. Appeals lodged by Laboratori and

the contribution for the National Health Service and the

ACEA Luce met with favourable outcomes, while under

welfare contribution.

appeal these companies also met with an unfavourable

This initiative led to a great deal of legal activity involv-

outcome.

ing the companies which considered the contribution

Following a series of unfavourable outcomes for Group

undue, with favourable and unfavourable outcomes to

companies, a Court of First Instance (in Brescia) has up-

said proceedings.

held the position taken by a former municipalised utility,

By means of Supreme Court (joint session) ruling no.

recognising the company’s right to pay the above con-

10232 of 27 June 2003, promoted by INPS, the principle

tributions at the reduced rate and declaring the tax de-

diametrically opposed to the one provided for by law

mands issued by Inps to have no basis in law. The court’s

was sanctioned, making the contribution due from com-

opinion appears to be substantially in line with the argu-

panies of a solidaristic rather than welfare nature.

ments adopted in the appeals submitted by Group com-

However, companies are still awaiting legislation which

panies.

would fully regulate the previous one, realised with the

The Group made the necessary allocations to cover the

issue of law no. 133 of 6 August 2008, converting Law

risk related to these problems.

Decree 112/2008.

As a result of enforcement actions implemented by INPS

The law definitively provided an authentic interpretation

through Equitalia for the sole purpose of avoiding the ef-

of the second paragraph of article 6 of law no. 138 dated

fects of the seizures performed pursuant to art. 48 bis

11 January 1943, establishing that employers are not

of Presidential Decree 602/1973, in November 2011,

obliged to pay health insurance contributions in cases

ACEA, ACEA Ato2, ACEA Distribuzione, Acea Energia and

where they have, by law or under the provisions of a col-

Laboratori broke the payment requests issued by INPS

lective labour agreement, paid sick pay, thus amending

relating to unpaid contributions down into instalments.

previous periods and providing for the payment obliga-

The total amount split into instalments for ACEA came to

tion to take effect from 1 January 2009.


Therefore, ACEA Group companies started to pay health insurance contributions from January 2009; the provision

172

Health insurance contributions

set aside relates to the period running from the date of

Si tratta di una questione riguardante il contributo del

the change to collective agreement regulations to the

The case concerns certain health insurance contribu-

date law no. 133 of 2008 was issued.

tions levied at a rate of 2.22% on the salaries of blue

In fact, the new contracts for electricity sector personnel

collar workers. Acea argues that the obligation of Inps to

of August 2006 and for gas-water personnel of April 2007

pay certain sickness benefits, which is the reason under-

regulated the sickness benefit paid by companies as a

lying the employer’s obligation to pay the contribution

supplement to indemnities paid by the insurers (INPS) to

involved in this dispute, is expressly excluded by art. 6,

the provider and paid, by said companies, at the normal

paragraph 2 of Law no. 138 of 11 January 1943 in cases

salary payment dates.


Unemployment and mobility contributions

Tax issues

This is the contribution companies have to pay due to INPS, to finance the income support fund for workers

Tax moratorium

that have become unemployed; it is decidedly insur-

The appeals presented by ACEA against the payment

ance-related in nature, for which only the previously in-

demands of 2007 and the 2009 tax assessments were

sured provider has the right to performance.

rejected by the Provincial Tax Commission.

The obligation exists toward all employees in general,


with some exceptions, e.g. for those who benefit from

against the first instance ruling against the 2007 de-

the guarantee of job security (art. 40 of Royal Decree

mands.

no. 1827/35) given they are employees of public administrations, public companies or exercise public services

Other problems

where the element of stability is based on norms regulating the legal status and remuneration of personnel or

ACEA Ato5 - Tariff

ensured, upon request, by a provision from the Ministry

Concerning the well known issue of the tariff for the

of Labour.

integrated water services of ATO 5 (southern Lazio

Despite altering the legal and economic nature of the

– Frosinone) and the related results of operations of

company since 1999, the requirement of job stability

ACEA Ato5, please note the indications below.

was however met by the collective labour agreement

With resolution no. 7/2008, Co.N.Vi.R.I. (Supervisory

applied to personnel, which for companies operating in

Committee for the Use of Water Resources) carried out

both the electricity and water services segments con-

some surveys concerning the legitimacy of the revised

sisted of the national collective labour agreement of

tariffs arranged by the Area Authority with resolution

9/7/1996 for employees working in local electricity com-

no. 4/2007. In the company’s opinion, Co.N.Vi.R.I.’s Res-

panies.

olution no. 7/2008 appears to be entirely illegitimate, so

Stipulation of the sole agreement of the electricity sec-

much so that the company filed an appeal against the

tor in July 2001, and the subsequent succession and in-

ruling before the Lazio Regional Administrative Court

terpretation agreement of April 2002 and the agreement

(TAR), which is still pending.

of contractual migration from electricity to water, in July

In short, Co.N.Vi.R.I.’s opinion as regards the above

2001 too, led to periods without job stability before the

mentioned measure appears to be entirely illegitimate

companies adopted regulations aimed at restoring the

as it is evidently in contrast with art. 154 of Legislative

requirement of employment stability.

Decree 152/2006, in accordance with which the tariff

Favourable first and second instance rulings were ap-

“constitutes the price for integrated water services and

pealed by INPS; the hearing set for 7 February 2011 was

is fixed taking account of the quality of water resources

put back to 9 January 2012.

and of the service provided, the necessary infrastructure and upgrading work, the cost of operating the infrastructure, an adequate return on invested capital and the operating costs for protected areas, in addition to a portion of the operating costs incurred by the Area Authority, in such a way as to guarantee full coverage of investment and operating costs according to the cost recovery principle…”; AATO 5 subsequently decided to implement the above mentioned resolution. However, the latest measures have also been disputed by the company that filed the appeal (with additional


173

174

reasons) before the Lazio Regional Administrative

tion could be completed, with that Administration bear-

Court, Latina section, which recently issued sentence

ing the relative expenses.

no. 357/2011, thus rejecting the appeal filed by the

With reference to that deadline set to the Area Author-

company and confirming the full legitimacy of the res-

ity, ACEA decided to settle ACEA Ato5’s losses by recon-

olutions of AATO 5 concerning the cancellation of the

stituting the share capital and establishing a provision

previous tariff review resolutions.

to cover losses that are expected to arise until determi-

The above mentioned sentence – for which the Com-

nation of the tariffs.

pany is considering a possible appeal with the Council

Considering that the Area Authority did not conclude

of State – defined the issue on a mainly legal basis, fac-

the proceedings within the deadline prescribed by the

ing it only incidentally.

Administrative Court, the Commissioner for deeds ac-

The indications above on the one hand would suggest

cepted the task until the end of October 2011.

the possible filing of an appeal with the Council of State

In December 2011, as a result of a specific request

to obtain the ruling to be amended; on the other hand,

made by ACEA Ato5, the Commissioner for deeds asked

it does not prevent the possibility for the company to

the Regional Administrative Court of Lazio “whether the

bring civil proceedings to assert the contractual and/

determination of the tariff in the area plan for the years

or non-contractual obligations of the Area Authority to

2006-2012 was an activity that conformed to the man-

ACEA Ato5 and obtain compensation for all damages

date received under ruling no. 529/2011”; and in the

incurred by the operator.

assumption that the review of the area plan and sub-

Finally, worth mentioning is that, following the cancel-

sequent determination of the real average tariff for the

lation of the 2006-2009 tariffs as ruled by the Area Au-

remaining assignment period, according to the indica-

thority, the tariffs have not yet been re-determined, nor

tions of the aforementioned ruling, constitutes a com-

have the definitive tariffs for 2010 and 2011.

plex activity given that it essentially presumes the accu-

Against this persisting inertia, the Company filed an in-

rate recognition of the previous service management.

dependent appeal before the Lazio Regional Adminis-

Following an affirmative response contained in corpo-

trative Court, Latina section, against the non fulfilment

rate order dated 13 February 2012, the Commissioner

by the Authority of its obligations (namely: the determi-

for deeds signed on 8 March 2012 a decree on the “De-

nation of the tariff for the years 2006-2009, determina-

termination of the integrated water service tariff ap-

tion of the definitive tariff for 2010, review of the 2011-

plicable for 2012 in ATO 5 Southern Lazio – Frosinone”

2013 Area Plan and 2011 tariff determination).

which the company was informed of on 9 March 2012.

The hearing was held in May and, on 20 June of this


year, the judgement was published whereby the Lazio

equal to 1.359 m3 - was carried out to quickly deal with

Regional Administrative Court, Latina section, upheld

a service economic-financial imbalance, caused by the

the appeal filed by the company and “... by effect, or-

failure to update the tariff based on the trend in infla-

dered Area Authority 5, as per art. 117 of Italian Legisla-

tion and forecasts in the area plan and management

tive Decree no. 104 of 2 July 2010, to conclude the pro-

agreement. Therefore, determination of the 2012 real

ceeding for determining the integrated water service

average tariff is limited to restabilising normal contrac-

tariff by the deadline of 120 days from the notification

tual conditions of continuity of management and does

or communication by administrative procedure of the

not take into account the difference between the area

aforementioned decision”.

plan forecasts and the actual trend in the management

Furthermore, in upholding the specific request put forth

of previous years given these activities are to be carried

by the Company, the Regional Administrative Court also

out as part of the ordinary and extraordinary review.

appointed a Commissioner for deeds - if the awarding


Authority continued not to act - represented by the

been postponed, such as (i) the outcomes of the ab-

Chairman of Co.N.Vi.Ri., so that the procedure in ques-

rogative referendum of article 154 of Legislative Decree


no. 152/2006, (ii) the exceeding of the minimum amount


guaranteed and (iii) the obtainment of the financial re-


sources needed to cover expenses deriving from the


obligation to return the undue portion of the tariff to

therefore, on 8 September 2011 Acea Ato5 filed a com-

users relating to the water treatment service.

plaint against the rejection order.

The decree also identifies the structure of the 2012 tar-


iff and the real average tariff of each year from 2003 to


2011, therefore including therein the years concerned


by the cancellation of the 2007 tariff review.

ant to art. 700 c.p.c. the company also filed an additional

Therefore, this document is valuable in definitively

appeal to the Regional Administrative Court of Lazio for

quantifying the amount of receivables for tariff equali-


sation relating to the variation between real revenues

surety policy.

from billing and those “guaranteed” with respect to the


“Original area plan”, currently defined as the “sole con-


tractual reference in force between the parties”. Whilst


additional receivables, deriving from the differences


between plan forecasts and the actual performance of


management in the previous years, will be subject to


an evaluation as part of the area plan ordinary and ex-


traordinary review activities. Operator equalisation will

On 01/12/2011, a hearing was held, set following the

be calculated and any payment methods will also be

transfer of the case to the Regional Administrative Court

defined during said phase.

of Lazio - Latina Section. Following the aforementioned

Pending the outcomes of the tariff review that the Com-

hearing, the Administrative Court Judge, with order no.

missioner must fulfil pursuant to ruling no. 529/2011 of

497/2011, rejected the request for precautionary protec-

the Regional Administrative Court of Lazio, ACEA deems

tion, ruling the appeal to be inadmissible due to a lack of

it necessary to allocate a provision of 10 million euros,

jurisdiction.

which represents the best estimate of additional risk

As a result, by means of note dated 14/12/2011, Unicred-

related to the situation of uncertainty.

it issued a communication to the effect it had paid the Area Authority the enforced sum of 2,843,622.02 euros,

ACEA Ato5 – Enforcement of guarantee

also requesting that the amounts pledged in favour of

On 1 June 2011, on the basis of the assumption that the

said surety be returned.

Operator committed breach with respect to the pay-


ment of concession fees, the Area Authority requested


that UniCredit Corporate & Investment Banking enforce


the cautionary deposit provided by ACEA Ato5 through


the “immediate payment of 2,843,622.02 euros, which


equals the amount of the guarantee provided, to par-


tially recover concession fees that, as of today, have

guarantee.

not been paid” and also requested the automatic and


immediate recovery of said cautionary deposit.

legal evaluations which showed that the failure and/or delay in respect of reconstitution of the aforementioned


guarantee is the equivalent of the mere non-fulfilment


of a contractual obligation on the part of the Integrated


Water Service Operator and that for said specific case of


175

non-fulfilment, the contractual tools in place between

undertake to present to the respective bodies for ap-




Authority’s Board of Directors and Regional Council)


and (ii) mutually acknowledge that the provisions of the agreement scheme, not strictly reserved to the jurisdic-

Gori – Contenzioso per forniture idriche

tion of the Area Authority’s General Meeting, are under-

In relation to the dispute with ARIN S.p.A., ion 11

stood to be immediately effective and binding.

April 2011, as a result of ruling no. 806/2011 of the

The agreement scheme makes provision for a signifi-

Court of Naples, GORI had already paid ARIN the sum of

cant writing off of GORI’s debt to the Campania Region,

3,133,159.63, with all the broadest privileges, whereas

whose natural consequence is an almost equal reduc-

it has already contested said ruling under appeal. In

tion in the tariff adjustments accrued (as at 31 Decem-

this regard, it should be noted that the outcomes of

ber 2011, a total of 147 million euros - Group share 54.5

the preliminary enquiry performed as part of the spe-

million euros); the agreement scheme also makes pro-

cific Services Conference called by the Area Authority to

vision for the division into instalments of the amount

regulate interdisciplinary interference in relation to the

of debt recognised in line with the recovery of residual

transfer of water resources, confirmed the arguments

tariff adjustments in the Area Plan subject to review by

proposed by the companies against ARIN’s claims, also

the Area Authority.

in legal proceedings.

Signing of the aforementioned agreement allows GORI

In relation to the dispute with the Campania Region,

to guarantee the business continuity and possibility of

negotiations are underway to normalise relations,

planning its own financial requirements on the basis of

through the definition of a plan to resolve the debt po-

the area plan forecast, once reviewed.

sition, the definition of ordinary supply conditions and

Therefore, although the situation developed positively,

the subsequent resolution of the ongoing dispute. In

ACEA deemed it appropriate to allocate a provision of

particular, in confirmation of the negotiations underway,

44.1 million euros.

provision has been made for an initial specific agree-

Lastly, the Regional Administrative Court of Campania

ment between the Region and the Area Authority, which

- Naples, by means of ruling no. 6003/2011 issued fol-

will see the sum of 5,257,459.27 (equivalent of capital

lowing the appeal against the injunction of the Commis-

= 4,612,496.26 plus legal interest accrued) split into in-

sioner appointed for the Sarno River drainage basin so-

stalments, in the form of an advance and while awaiting

cial-economic-environmental emergency, ordered GORI

completion of the aforementioned repayment plan to be

to pay the sum of 5,514,749.87. However, an appeal is

devised as part of the Area Plan review.

being prepared against said ruling before the Council of

Moreover, for the above purposes (normalisation of re-

State.

lations, definition of repayment plan, dispute resolution

176

and determination of the criteria underlying the proce-

Antitrust Authority investigation

dures for the transfer of regional works regarding the

of the acquisition of Publiacqua

Integrated Water Service and falling with the scope of


A.T.O. n. 3), GORI - also on the basis of the decisions


reached by the technical work group established by the


Region and the Area Authority and still in existence - for-


malised the proposal for a general agreement scheme.








agreement scheme, which is attached to said report, (i)

Florence, it essentially.


• deemed that a horizontal agreement existed be-


tween ACEA and SUEZ in the integrated water ser-


vices sector, which is managed by a public-private


partnership in which the private partner is selected


via a tender process;


• ruled that the parties should take actions to avoid


repetition of the sanctioned behaviour, with the Au-


thority to be notified of the nature of such actions


within 90 days, and also amend the rules governing


the partnership regarding the part deemed to be in


violation of competition regulations;


• ordered ACEA and SUEZ to pay fines of 8.3 million


euros and 3 million euros, (the difference in the


amounts derives from their respective turnovers in


the relevant sector in Italy).




















2008.












ated discussions was set for May 2012..

by ACEA, payment by SMAIL of the amount due for the above-mentioned supply, waiving of any additional claim

ACEA Luce


By means of deed notified on 7 February 2011, the companies Manutencoop Facility Management (“MFM”) and

E.ON. Produzione S.p.A. proceedings


launched against ACEA, ACEA Ato2


and AceaElectrabel Produzione




S.p.A., as successor to ENEL regarding a number of con-


cessions for the abstraction of public water from the


Peschiera water sources for electricity production, to


obtain an order against the jointly and severally liable


defendants (ACEA, ACEA Ato2 and AceaElectrabel Pro-




177




In ruling 6/10, TRAP (Regional Court of Public Waters) ac-


cepted the request submitted by ACEA against the Soci-


età Abruzzese per il Servizio Integrato S.p.A. (SASI) for the


compensation for damages from the illegitimate with-



pears to be based on dubious grounds and, in any case,


the early stage of the proceedings does not allow for


forecasts.


The only significant development of note is the deci-


sion of the TRAP (Regional Court of Public Waters), be-


fore which a ruling is pending regarding the matter in question, to arrange for CTU (court-appointed expert) as


regards the values of subtension for branching off, and


subsequent reduction in hydroelectric production, and


indemnities due. The expert’s report shows a calculation


according to which the claims actioned in the proceed-


ings, even when unfounded - which is dubious, because


the documents containing the metering parameters of


the compensation are still deemed to be applicable and


effective - would be greatly altered, substantially reduc-


ing the amount of equalisation already estimated by the


company.

sible in practice. In fact, firstly, the plaintiffs are lacking legal standing, given bearers of only indirect and medi-


ated interests; in this regard, full reading of the text of


the contract invoked rules out burdening the companies


in the ACEA Group with the obligation of assigning con-


tracts and works to its subsidiary, an assignment which





over 8 million euros for reservations.


The request is in and of itself indefensible due to the in-

its consideration.

admissibility and ungrounded nature of the reservations, since the counterclaim of ACEA - that filed a formal appearance before the court - will blame the temporary consortium for the significant deficiencies in the building of the plant, which decreased its functionality. The arbitration is currently underway, and the CTU has just started.

178


Additional disclosures on financial instruments and risk management policies Classes of financial instrument The following table shows the breakdown of financial assets and liabilities required by IFRS 7 based on the categories defined by IAS 39. €

Non-current assets

Financial instruments held for trading at fair value

Loans and receivables

Available-forsale financial instruments

Carrying amount

0

1,308,767

4,673

1,313,441

4,673

4,673

13

1,308,486

15

281

15

Other investments Financial assets due from the Parent Company, subsidiaries and associates

1,308,486

Financial assets due from third parties Current assets

281 0

685,794

Trade receivables due from customers

0

Notes

685,794

37,672

37,672

17

Trade receivables due from related parties

102,756

102,756

17

Financial assets due from the Parent Company, subsidiaries and associates

248,529

248,529

17

12,610

12,610

17

284,227

284,227

17

Financial assets due from third parties Cash and cash equivalents TOTAL FINANCIAL ASSETS

0

1,994,561

4,673

1,999,234


€

Non-current liabilities

Financial instruments held for trading

Liabilities at amortised cost

Carrying amount

0

1,784,429

1,784,429

Notes

Bonds

985,821

985,821

21

Bank borrowings (non-current portion)

798,608

798,608

21

0

0

21

674,292

674,292

Financial liabilities due to related parties Current liabilities

0

Bank borrowings

280,115

280,115

24

Financial liabilities due to the Parent Company, subsidiaries and associates

194,756

194,756

24

Financial liabilities due to factoring companies

5

5

24

Financial liabilities due to third parties

1

1

24

68,412

68,412

24

131,004

131,004

24

2,458,722

2,458,722

Trade payables due to suppliers Trade payables due to the Parent Company, subsidiaries and associates TOTAL FINANCIAL LIABILITIES

0



179

Fair value of financial assets and liabilities

ber 2012 and (ii) the remainder is available until the first

The fair value of financial instruments that are not traded

the payment of a fee for non-use (minimum of 0.28% -

in an active market is determined using valuation mod-

maximum of 0.35% per annum) plus an upfront fee paid

els and techniques that make maximum use of market

at the time the credit lines are opened.

inputs or using the price supplied by a range of independ-

On the amounts drawn down, ACEA pays an interest

ent counterparties.

rate equal to the one, two, three or six month Euribor

The fair value of medium/long-term financial assets and

(depending on the period of use chosen beforehand),

liabilities is calculated on the basis of the risk-free and the

plus a spread which, in some cases, may vary in line

adjusted risk-free interest rate curves.

with the rating assigned to the Parent Company.

The fair value of trade receivables and payables falling due

Furthermore, as at 31.12.2011, it should be noted that

within twelve months is not calculated as their carrying

ACEA has a medium/long-term committed credit line

amount approximates to fair value.

of 100 million euros in place, stipulated in September

In addition, fair value is not calculated when the fair value

2009, which has not been used as at the close of the

of financial assets and liabilities cannot be objectively de-

financial year. At the time of drafting this document,

termined.

the aforementioned line was entirely used (i.e. 100

quarter of 2013; the contracts entered into provide for

million euros) in order to optimise the management of

Type of financial risks and related hedging policies

short-term lines at the start of 2012, given the date for requested disbursement was also set for September 2012; the company chose to apply a floating rate with

Foreign exchange risk

repayments made in six-monthly instalments, the first

ACEA is not particularly exposed to this type of risk,

of which must be paid no later than the fourth year and

which is concentrated in the translation of the financial

the last no later than the fifteenth year from the dis-

statements of its overseas subsidiaries.

bursement date. The abundance of lines (committed and revocable)

Rischio di liquidità

allowed the parent company to handle temporary in-

ACEA SpA’s liquidity risk management policy is based

creases in short-term requirements with no impact on

on ensuring the availability of significant bank lines

operations.

of credit. Such facilities exceed the average require-

At the end of the year, ACEA had loans - term deposits

ment necessary to fund planned expenditure and en-

and similar transactions - totalling 79.2 million euros in

able the Group to minimise the risk of extraordinary

place.

outflows. In order to minimise liquidity risk, ACEA has

180

adopted a centralised treasury management system,

Interest rate risk

which includes the most important Group companies,

ACEA’s approach to managing interest rate risk, which

and provides financial assistance to the companies

takes account of the structure of assets and the sta-

(subsidiaries and associates) not covered by a treasury

bility of the Group’s cash flows, has essentially been

management contract.

targeted, up to now, at hedging borrowing costs and

As at 31 December 2011, the Parent Company held

stabilising cash flows, in such a way as to safeguard

committed and uncommitted lines of credit totalling

margins and ensure the certainty of cash flows deriving

1,061 million euros and 400 million euros respectively.

from ordinary activities.

No guarantees were issued to obtain said credit lines.

The Group’s approach to managing interest rate risk is,

The committed lines of credit are revolving with a

therefore, prudent and the methods used tend to be

three-year term from subscription. A total of (i) 100 mil-

static in nature.

lion euros of said credit lines is available until Decem-

A static (as opposed to a dynamic) approach means


adopting a type of interest rate risk management that does not require daily activity in the markets, but pe-

by governance bodies and in accordance with the specific nature of the business,

riodic analysis and control of positions based on spe-

• manage derivatives transactions solely for hedg-

cific needs. This type of management therefore involves

ing purposes, should the Group decide to use

daily activity in the markets, not for trading purposes

them, in respect of the decisions of the Board of

but in order to hedge the identified exposure over the

Directors and, therefore, the approved strategies

medium/long term.

and taking into account (in advance) the impact

ACEA has, up to now, opted to minimise interest rate

on the income statement and balance sheet of

risk by choosing a mix of fixed and floating rate debt

said transactions, giving preference to instru-

instruments.

ments that qualify for hedge accounting (typically

As previously noted, fixed rate debt protects a bor-

cash flow hedges and, under given conditions, fair

rower from cash flow risk in that it stabilises financial outflows, whilst heightening exposure to fair value risk in terms of changes in the market value of the debt.

value hedges). It should be noted that ACEA: • swappato swapped the 100 million euros loan

In fact, an analysis of the consolidated debt position

obtained on 27 December 2007 for a fixed rate.

shows that the risk ACEA is exposed to is mainly in the

The swap, a plain vanilla IRS, was stipulated on 24

form of fair value risk, composed as at 31 December

April 2008, effective as of 31 March 2008 (date of

2011 of fixed rate borrowings (64.7%). With reference

drawdown of the underlying loan) and expires on

to the current portfolio make-up, the Group is partly

21 December 2021,

exposed to the risk of fluctuation in future cash flows

• completed a cross currency transaction to trans-

and, by contrast, to a greater extent than changes in

form to euro – through a plain vanilla DCS swap

fair value.

– the currency of the private placement (yen) and

Given the current mix of fixed and floating rate debt

the yen rate applied to a fixed euro rate through a

and also taking account of the trend in market interest

plain vanilla IRS swap,

rates in a predominantly recessionary macroeconomic

All the derivative instruments taken out by Acea are

phase, essentially not due to sudden rises, an increase

non-speculative and the total fair value of these is 10.9,

in the percentage of medium-term floating rate debt

up 34.7 million euros.

is not ruled out, which would make it possible to take advantage of lower short-term rates, thus partially con-

The fair value of medium/long-term debt is calculated

taining the sharp rise in spreads as a result of notable

on the basis of the risk-free and the risk-adjusted inter-

events linked to the worsening in guaranteed returns

est rate curves.

on the debt of certain sovereign European states, in-

The table does not contain the liabilities relating to

cluding Italy.

companies held for sale.

ACEA is bringing consistency to its decisions regarding interest rate risk management that essentially aims to both control and manage this risk and optimise borrowing costs, taking account of stakeholder interests and the nature of the Group’s activities, and based on the prudence principle and best market practices. The objectives of these guidelines are as follows: • identify, from time to time, the optimum mix of fixed and floating rate debt, • pursue a potential optimisation of the Group’s borrowing costs within the risk limits established


181

Amortised cost

Risk-free FV


Risk-adjusted FV


(A)

(B)

(A) - (B)

(C)

(A) – (C)

985,821

1,023,636

(37,814)

1,024,684

(38,863)

Bonds Fixed rate Floating rate Total

4,903

6,900

(1,997)

4,566

336

799,901

838,314

(38,413)

815,383

(15,482)

1,790,625

1,868,850

(78,225)

1,844,633

(54,008)

Sensitivity analysis has been carried out on medium/ long-term financial liabilities using stress testing, thus

Commitments and contingencies

applying a constant spread over the term structure of the risk-free interest rate curve (for the Euro area at

These totalled 880,845 thousand euros at 31 December

31 December 2010). The following table shows overall

2011 (993,677 thousand euros at 31 December 2010).

movements in terms of the fair value of liabilities based

A description of the items that underwent significant

on parallel shifts (positive and negative) between –1.5%

movements is given below.

and +1.5%. Liens and sureties issued and received

Constant spread applied

Movements in Present Value (€m)

-1.50%

(145.7)

ported between liens and sureties issued (119,765 thou-

-1.00%

(94.9)

sand euros) and those received (50,969 thousand euros).

-0.50%

(46.4)

-0.25%

(22.9)8

These are guarantees granted by ACEA SpA to third par-

0.00%

0.0

0.25%

22.5

0.50%

44.5

1.00%

87.1

1.50%

127.9

amounts in millions of euros

A net positive balance of 68,796 thousand euros was re-

ties and mainly regard sureties provided in order to bid for contracts in Italy and overseas. For example, Acea SpA has issued bank sureties for water contracts bids, totalling 3,425 thousand euros, including a surety of 683 thousand euros in relation to the selection process for a partner for Publiacqua in the municipality of Florence and 5,165 thousand euros regarding a tender in the Campania region. The latter was

As regards the type of hedges for which the fair value is

issued to the Agency for ATO Sarnese Vesuviano in order

calculated and with reference to the hierarchies required

to take part in the tender process to select a partner in

by the IASB, given they are composite instruments, they

G.O.R.I S.p.A..

are categorised as level 2 in the fair value hierarchy.

Sureties issued to the following are included in said item: - 46,185 thousand euros to the inland revenue, to guarantee the splitting into instalments of the sums due as a result of tax settlements of Acea Energia (9,158 thousand euros) and ACEA S.p.A. (37,027 thousand euros), - 36,090 thousand euros to Terna on behalf of Acea Energia thousand euros, relative to the electricity dispatch service contract, and - 6,830 thousand euros issued to Sidra SpA, in relation to a contract to carry out a “Project to repair water leaks in the Catania distribution network”.

182


Liens and sureties received from third parties regard

ity the enforced sum, also requesting that the amounts

guarantees received from third parties in relation to con-

pledged in favour of said surety be returned. Given the

tract work and/or supplies provided, or for bids called.

illegitimate grounds, shown in the court acts, for enforcement of the surety set out by the President of AATO and

Letters of patronage issued and received

the risk of future repeated, groundless and arbitrary en-

A net positive balance of 563,550 thousand euros is the

forcements, the company decided not to proceed, while

result of letters of patronage issued, totalling 563,753

awaiting the definitive decisions of the Commissioner for

thousand euros, and letters of patronage received,

deeds, with re-establishing the underlying guarantee.

amounting to 203 thousand euros. Those issued include:

Third-party assets held under concession

- 424,206 thousand euros in favour of ACEA Dis-

Such assets amount to 86,077 thousand euros at 31 De-

tribuzione SpA and in the interests of Cassa

cember 2011 and did not undergo significant changes

Depositi e Prestiti as a back-to-back guarantee for

with respect to the end of the previous year. They refer

the new loan granted,

to public lighting assets. Such assets amount to 86,077

- 50,278 thousand euros in favour of Acea Energia

thousand euros at 31 December 2011 and did not un-

and in the interests of Enel Distribuzione S.p.A. as

dergo significant changes with respect to the end of the

a back-to-back guarantee for the transport of elec-

previous year. They refer to public lighting assets.

tricity, - 1,470 thousand euros in favour of Aquaser to guarantee the credit line granted by MPS to Solemme,

Property leases By means of notarial deed of 23 January 2012, ACEA took

- 68,277 thousand euros to Acquirente Unico (Sole

advantage of the opportunity presented by the disposal

Buyer) and in the interest of Acea Energia S.p.A. as

carried out by the Beni Stabili Gestioni SpA SGR real es-

a back-to-back guarantee relating to the electricity

tate fund, by exercising the right of first offer set out in

sale contract signed by the parties.

the lease.

It should be noted that the guarantee of 2,675 thousand

On 19 December 2011, the company paid Beni Stabili

euros issued to Banca di Roma in the interest of Acea

Gestioni S.p.A. SGR an amount of 11,000 thousand euros

Ato5 as a back-to-back guarantee for the definitive de-

as an advance for the purchase of the building with ad-

posit of 2,844 thousand euros issued by the aforemen-

joining garage.

tioned bank in favour of the Agency for Ato5 (southern

The commitments recorded in the financial statements,

Lazio) was eliminated. On 1 June 2011, on the basis of

which ended on the date of formalisation of the pur-

the assumption that the Operator committed breach

chase, amounted to 898 thousand euros.

with respect to the payment of concession fees, the Area Authority requested that UniCredit Corporate & Investment Banking enforce the cautionary deposit provided by ACEA Ato5 through the “immediate payment of 2,843,622.02 euros, which equals the amount of the guarantee provided, to partially recover concession fees that, as of today, have not been paid” and also requested the automatic and immediate recovery of said cautionary deposit. As a result of the rejection of the appeal submitted by the company to the Regional Administrative Court of Lazio for cancellation of the provision of enforcement of the surety policy, Unicredit issued a communication on 14/12/2011 to the effect it had paid the Area Author-


183

Annexes to the Notes Annex 1: Analysis of net debt Annex 2: Statement of movements in investments at 31 December 2011 Annex 3: Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 Annex 4: Non-recurring material transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 Annex 5: Positions or transactions deriving from unusual and/or exceptional transactions Annex 6: Segment information (IAS 14)

Financial Statements of ACEA S.p.A. for the year ended 31 December 2011

Annex 1: Analysis of net debt at 31.12.2011 Non-current financial assets Intercompany non-current financial assets Non-current borrowings and financial liabilities Financial assets/(liabilities) deriving from measurement of derivative instruments Net medium/long-term debt Cash and cash equivalents and securities Short-term bank borrowing

31.12.2010


281

256

25

1,326,506

175,369

1,151,136

(1,808,214)

(1,779,682)

(28,532)

23,784

(8,606)

32,391

(457,643)

(1,612,663)

1,155,020

284,227

251,407

32,820

(297,198)

(106,483)

(190,715)

Current financial assets/(liabilities)

27,283

14,591

12,692

Intercompany current financial assets/(liabilities)

53,772

1,146,355

(1,092,583)

68,085

1,305,871

(1,237,786)

(389,558)

(306,792)

(82,766)

Net short-term debt Total net debt

186

31.12.2011


Annex 2 – Statement of movements in investments at 31 December 2011 MOVEMENTS IN 2011 31.12.2010

Purchases

Disposals

Reclass.

Additions/ Reductions

Impair./ Losses

31.12.2011

ACEA DISTRIBUZIONE S.p.A.

344,152

0

ACEA ATO2 S.p.A.

585,442

585,442

0

0

Subsidiaries

ACQUA ITALIA S.p.A. ACEA TRASMISSIONE S.p.A.

344,152

0

0

Acea 8 Cento (formerly VOINOI)

1,080

42

CONSORCIO AGUA AZUL Sa

5,055

382

UTILITAS Srl (in liquidation)

521

517 5,437

0

0

4,024

4,024

ZETEMA Srl

0

0

CARTESIA S.p.A (in liquidation)

0

0

ACEA LUCE S.p.A.

0

0

ECOMED Srl

0

LaboratoRi S.p.A.


160,984

0 116,262

277,245

ACEA & CO ARMENIAN UTILITY Scrl

0

0

E.CO.INT Srl

0

0

ACEA ATO5 S.p.A. MONTENERO ENERGIA Srl AGUAZUL BOGOTA’ SA CONSORCIO ACEA TRADEXCO ACEA DOMINICANA S.A.

1,358

8,675

6,157

0

3,877 0

793

19

812

43

43

600

0

600

ACQUE BLU ARNO BASSO S.p.A.

13,132

13,132

OMBRONE S.p.A.

17,430

17,430

LUCE NAPOLI SCRL

0

0

DYNA GREEN Srl

0

0

354,295

354,295

ARSE S.p.A. AceaRieti

100

100

0

ACQUE BLU FIORENTINE SpA

39,697

39,697

ARIA S.p.A.

22,136

22,136

UMBRA ACQUE

6,851

AQUASER Srl

3,512

ELEKTRON SIGMA

0

IDRECO SCARL

0

CREA SPA

0

6,851 950

4,462 0 0 0

CREA GESTIONI

5,925

4,104

CREA PARTECIPAZIONI

4,004

4,004

ACEA GORI SERVIZI

1,659

2,000

0 1,659

ACQUA BLU

461

22

APICE

150

142

EBLACEA S.p.A. SARNESE VESUVIANO Srl ACEA ILLUMINAZIONE PUBBLICA

0

Ingegnerie Toscane S.r.l. TOTAL SUBSIDIARIES

483

0

0 21,247

120

120 203

203

58 1,594,306

0 8

21,247

Acea Servizi Acque

0 8,029

0 58

117,415

0

0

6,914

7,363

1,711,271


187

Annex 2 – Statement of movements in investments at 31 December 2011

MOVEMENTS IN 2011 31.12.2010

Purchases

Disposals

Reclass.


Impair./ Losses

31.12.2011

Associates ACQUE POTABILI S.p.A.

0

AGUAS DE S. PEDRO Honduras Sa

0

1,964

AGAC Y OTROS DYNA GREEN Srl

54

2,018

0

0

355

355

TIRANA ACQUE Scarl

0

0

PORT UTILITIES S.p.A.

0

0

318

318

Umbria distribuzione Gas MARCO POLO S.p.A. INTESA ARETINA EBLACEA S.p.A. CITELUM NAPOLI PUBBLICA ILLUMINAZIONE Scarl SIENERGIA

294

294

11,505

11,505

0

0

306

306

42

TOTAL ASSOCIATES

14,784

42 0

0

Purchases

Disposals

0

54

0


Impair./ Losses

14,839

MOVEMENTS IN 2011 31.12.2010

Reclass.

31.12.2011

Other companies AMGA S.p.A.

0

0

POLO TECNOLOGICO S.p.A.

2,542

2,542

WRc Plc

1,255

Centro Agroalimentare Roma S.p.A. CSM S.p.A. Umbria distribuzione Gas

TOTAL OTHER COMPANIES

188


1,293 0

838

838

0

Orione TESIMA S.p.A (in liquidation)

38

0

0 0

0

0 4,635

0 0

0

0

0

38

4,673

Annex 3 - Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 INCOME STATEMENT Revenue from sales and services Other revenues and proceeds Net revenue Staff costs Costs of materials and overheads

31.12.2011

Related parties

% impact

31.12.2010

Related parties

163,764

156,771

96%

140,545

137,670

98%

23,219

8,868

590

7%

24,840

4,971

20%

(15,973)

172,632

157,362

165,385

142,641

47,648 91,198

Operating costs

206,788


(34,156)


57%


7,247

39,525

159,140


% impact

8,122

139,916

74,925

91,198

179,442

74,925

27,346

66,164

(14,056)

67,716

(20,100)

76,512

54%

28,561

19,224

47,952

(110,669)

66,164


5,580

80,755

Ordinary finance (costs)/income

5,580

(34,970)

40,550

0

0

(0)

Exceptional finance (costs)/income Profit/(loss) on investments

200,175

200,175


95,086

347,093

Taxation

(13,550)

(61,297)

108,636

408,390

Net profit/(loss) from continuing operations Net profit/(loss) from discontinued operations Net profit/(loss) for the period

0 108,636

1447%

100%

452%

(42,617)

67,716

(34,970)

(32,854)

85,832

85,832

8,245

120,694

(25,571)

(78,794)

33,816

199,488

0 408,390

33,816

(68,051) 94%

100%

40,550

114,343 86,841

308%

12,021 74,820 0

199,488

74,820


189

Annex 3 - Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 ASSETS Property, plant and equipment

31.12.2011

% impact

31.12.2010

Related parties

% impact


52,434

52,577

(144)

2,993

3,148

(154)

Goodwill

0

0

0

Concessions

0

49,707

(49,707)

Investment property

Other intangible assets Investments in subsidiaries and associates

10,399

11,652

(1,254)

1,726,110

1,609,090

117,020

Other investments

4,673

4,635

38

Deferred tax assets

36,283

22,683

13,600

Financial assets

1,380,229

Other non-current assets Non-current assets held for sale Non-current assets

Intercompany trade receivables

1,326,506

96%

193,550

175,369

91%

1,186,679

35,034

35,034

100%

(35,034)

1,982,802

210,403

724

725

0 3,213,844

Inventories Trade receivables

1,326,506

0 37,672

625

2%

102,756

102,756

100%

(1) 1,231,042

0

0

25,880

11,792

92,395

92,395

100%

10,360


28,005

19,840

8,164


27,289

14,647

12,642

Intercompany current financial assets Current tax assets

248,529

248,529

100%

1,178,424

1,178,424

0

(929,896)

35,407

12,779

36%

63,443

52,416

83%

(28,035)

Deferred tax assets Cash and cash equivalents

0

0

0

284,227

251,407

32,820

0

0

Current assets held for sale

190

Related parties

0

Current assets

763,884

364,688

1,646,037

1,323,235

(882,153)

TOTAL ASSETS

3,977,728

1,691,193

3,628,838

1,533,639

348,890


Annex 3 - Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 LIABILITIES

31.12.2011

Related parties

% impact

31.12.2010

Related parties

% impact


Shareholders’ equity share capital

1,098,899

1,098,899

0

legal reserve

68,919

67,228

1,691

0

0

0

89,427

160,963

(71,536)

63

782

(720)

reserve for treasury shares other reserves profit (loss) pertaining to previous years profit (loss) for the period Total shareholders’ equity

49,123

33,816

15,307

1,306,430

1,361,688

(55,258)

23,551

23,634

(83)

Staff termination benefits and other defined benefit plans Provision for liabilities and charges Borrowings and financial liabilities

70,680

25,430

45,250

1,784,429

1,788,288

(3,859)

5,269

6,888

(1,619)

12,873

8,997

3,876

Other liabilities Provisions for deferred tax liabilities Non-current liabilities held for sale Non-current liabilities

0

0

0

1,896,803

1,853,237

43,565

Borrowings

491,959

194,756

40%

138,607

32,069

23%

Trade payables

199,416

132,747

67%

164,355

110,412

67%

35,061

Tax payables

55,925

17,116

31%

90,012

6,156

7%

(34,086)


27,195

Current liabilities held for sale

0

Current liabilities TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

20,939

353,352

6,256

0

0

774,496

344,620

413,913

148,637

360,583

3,977,728

344,620

3,628,838

148,637

348,890

Annex 3 - Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 31.12.2011 Non-current financial assets Intercompany non-current financial assets Non-current borrowings and financial liabilities Financial assets/(liabilities) deriving from measurement of derivative instruments Net medium/long-term debt Cash and cash equivalents and securities Short-term bank borrowing Current financial assets/(liabilities) Intercompany current financial assets/(liabilities) Net short-term debt Total net debt

Related parties

31.12.2010

1,326,506

175,369

281 1,326,506

Related parties


175,369

1,151,136

256

(1,808,214)

0

(1,779,682)

(28,532)

23,784

0

(8,606)

32,391

(457,643)

1,326,506

(1,612,663)

175,369

1,154,995

284,227

251,407

(297,198)

(106,483)

32,820 (429)

27,283

14,591

12,692

53,772

53,772

1,146,355

1,146,355

(1,092,583)

68,085

53,772

1,305,871

1,146,355

(1,047,500)

(389,558)

1,380,278

(306,792)

1,321,725

107,495


191

Annex 3 - Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006


31.12.2011

Related parties

251,407

0

Cash flow from operating activities Profit before taxes Amortisation/depreciation Revaluations/impairment charges

95,086 11,921 (78,602)


45,250

Net movement in staff termination benefits

(1,185)

Realised gains Net financial interest expense

0 (5,580)

Income taxes paid

(53,190)


13,700


(26,381)

103,381

35,061

132,747

Increase/decrease in current liabilities Increase/(decrease) in inventories Movement in working capital

0

0 8,680

236,128

Changes in other assets/liabilities during the period

40,324

0

TOTAL CASH FLOW FROM OPERATING ACTIVITIES

62,704

236,128

Cash flow from investing activities Purchase/sale of property, plant and equipment and intangible assets Investments Proceeds/payments deriving from other investments Dividends received Interest income received TOTAL

(10,370) 811 (216,729)

(2,928,827)

112,976 (22,813)

57,677

(136,125)

(2,871,150)

Cash flow from financing activities Repayment of mortgages and long-term borrowings Provision of mortgages/other medium/long-term borrowings

0


353,352

162,687


(60,782)

(802)

Dividends paid

(155,160)

TOTAL CASH FLOW

106,241

Changes in shareholders’ equity after net profit Cash flows for the year

192

(31,169)

161,885

0

0

32,820

(2,473,137)


251,407

0


284,227

(2,473,137)


% impact

31.12.2010

Related parties

% impact


43,818

207,589

8,245

86,841

12,986

(1,065)

12,229

(90,831)

(34,644)

79,894

(2,583)

1,398

9,471

(9,471)

(52,978)

47,398

(7,402)

(45,788)

(54,676)

68,376

-392%

(22,638)

67,832

-300%

(3,743)

379%

15,723

105,117

669%

19,338

0

0

(6,915)

172,949

15,595

76,139

0

(35,815)

14,548

172,949

48,156

(25,431)

15,061

8,164 1351%

(61,909)

-253%

(7,353) (2,130,079)

3441%

(154,820)

28,263

43,515

154%

(51,076)

37,034

(2,086,564)

87,948

25,028

(173,159)

(22,605)

(8,565)

651,422

(651,422)

46%

(483,302)

30,173

-6%

1%

(43,131)

(1,738,262)

4030%

0 102,385

(17,651) (155,160)

(1,708,089)

53,622 153,967

836,654

3,856 (53,622)

(3,621,704)

(121,147)

43,818

0

207,589

251,407

(3,621,704)

32,820


193

Annex 4 - Non-recurring material transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006 It should be noted that there were no significant non-recurring transactions carried out in the period.

194


Annex 5 - Positions or transactions deriving from unusual and/or exceptional transactions Pursuant to the CONSOB Ruling of 28 July 2006, we hereby declare that during 2011 ACEA S.p.A did not enter into any exceptional and/or unusual transactions as defined by the above Ruling.


195

Annex 6 - Segment information (IAS 14) Public Lighting

Corporate

Total continuing operations

Discontinuing operations

Total

Investments

0

10,463

10,463

0

10,463

Segment assets

0


0

55,427

55,427

0

55,427

Intangible assets

0

10,399

10,399

0

10,399

Non-current financial assets

0

1,730,783

1,730,783

0

1,730,783

Other non-current trading assets

0

37,006

37,006

0

71,462

1,308,767

1,380,229

Other non-current financial assets Raw materials

0

0

0

0

0

Trade receivables

10,657

27,015

37,672

0

37,672

Trade receivables due from Parent Company

37,394

8,865

46,260

0

46,260

112

56,383

56,496

0

56,496

120,257

155,560

275,817

0

275,817

Receivables due from subsidiaries / associates Other current trading assets Other current financial assets Bank deposits Total assets

196

37,006 1,380,229


63,412

284,227 3,977,728

Annex 6 - Segment information (IAS 14) Public Lighting

Corporate



0

Total

Segment liabilities Trade payables Trade payables due to Parent Company Trade payables due to subsidiaries and associates

6,679

68,412

75,091

0

31,395

31,395

31,395

75,091

82,631

99,609

182,240

92,930

Other current trading liabilities

83,120

Other current financial liabilities

491,959

DEFINED-BENEFIT OBLIGATIONS

0

23,551

23,551

OTHER PROVISIONS

0

70,680

70,680

0

23,551 70,680

PROVISIONS FOR DEFERRED TAXES

12,873

Other non-current trading liabilities

5,269

Other non-current financial liabilities

1,784,429


1,306,430

Total liabilities

3,977,728


197

Annex 6 - Segment information (IAS 14) Public Lighting Third party revenues Inter-segment sales Staff costs



Total

77,890

9,269

87,159

0

87,159

0

85,473

85,473

0

85,473

0

(47,648)

(47,648)

0

(47,648)

(81,453)

(77,688)

(159,140)

0

(159,140)

(3,545)

(30,612)

(34,156)

0

(34,156)

Amortisation, depreciation and provisions for the impairment of receivables

0

(76,512)

(76,512)

0

(76,512)

Impairment charges/Reversal of impairment charges on non-current assets

0

0

0

(3,545)

(107,124)

(110,669)

Cost of materials and overheads Gross Operating Profit

Operating profit/(loss) Finance (costs)/income Profit/(loss) on investments Net profit/(loss) from discontinued operations Profit/(loss) before tax Taxation Net profit/(loss) for the period

198

Corporate


0 0

(110,669) 5,580 200,175 0 95,086 13,550 108,636


199

200



201

202



203

204



205

206



207

208



209

210

211

212



213

Consolidated Financial Statements at 31 December 2011

Consolidated Statement of Comprehensive Income Notes Ref . 1 2

Revenue from sales and services Other revenues and proceeds Consolidated net revenue

3

Staff costs

4

Costs of materials and overheads

5

Net income/(costs) from commodity risk management

Consolidated operating costs

Gross Operating Profit 6

7


31.12.2011

31.12.2010



3,217,123

2,460,690

756,433

30.7%

71,035

79,845

(8,810)

-11.0%

3,288,158

2,540,535

747,623

29.4%

277,933

264,968

12,965

4.9%

2,266,145

1,177,277

1,088,868

92.5%

2,544,078

1,442,245

1,101,833

76.4%

297

3,152

(2,855)

-90.6%

744,377

1,101,442

(357,065)

-32.4%

425,984

320,593

105,391

32.9%


318,393

780,850

(462,456)

-59.2%


(118,422)

(88,932)

(29,490)

33.2%

(118,422)

(88,932)

(29,490)

33.2%

0

0

0

0.0%

Ordinary finance (costs)/income Extraordinary finance (costs)/income 8


9,295

2,572

6,722

261.4%


209,266

694,490

(485,224)

-69.9%

9

Taxation

60,737

69,844

(9,107)

-13.0%

148,529

624,646

(476,117)

-76.2%

Net profit/(loss) from discontinued operations

(55,009)

(524,626)

469,617

-89.5%


93,521

100,020

(6,500)

-6.5%

7,563

7,872

(310)

-3.9%

85,958

92,148

(6,190)

-6.7%

Basic

0.4036

0.4327

(0.0291)

Diluted

0.4036

0.4327

(0.0291)

Basic

0.6619

2.8961

(2.2342)

Diluted

0.6619

2.8961

(2.2342)

Net profit/(loss) from continuing operations 10

Profit/(loss) attributable to minority interests Net profit/(loss) attributable to the Group 11

Earnings (loss) per share attributable to the shareholders’ of the Parent Company

Earnings (loss) per share of continuing operations attributable to the shareholders’ of the Parent Company:


216

2011 | Consolidated Financial Statements of the Acea Group

Consolidated Comprehensive Income Statement

Net profit/(loss) for the period Profit/(Loss) from Conversion of Foreign Financial Statements Profit/(Loss) From the Redetermination of Financial Assets Available for Sale Profit/(Loss) From the Effective Portion on Hedging Instruments Actuarial Profit/(Loss) on Defined Benefit Pension Plans Taxation

31.12.2011

31.12.2010



93,521

100,020

(6,500)

-6%

833

1,384

(551)

0

0

0

(21,623)

(2,772)

(18,851)

0

0

0

5,944

1,155

4,789

Total Consolidated Operating Profits Net of Tax

(14,846)

(233)

(14,613)

Total operating profit net of tax

78,674

99,788

(21,113)

21%

Consolidated Operating Profit/(Loss) Net of Tax attributable to: Third Parties Group

6,910

7,598

(688)

71,764

92,189

(20,425)



217

Statement of Consolidated Financial Position Notes Ref .

ASSETS

12


13

Investment property

14

Goodwill

15

Concessions

16


17

Investments in subsidiaries and associates

18

Other investments

19

Deferred tax assets

20

Financial assets

21

Other assets NON-CURRENT ASSETS Inventories Trade receivables Other current assets Current tax assets Current financial assets Cash and cash equivalents

22 23

CURRENT ASSETS Non-current assets held for sale TOTAL ASSETS

Notes Ref .

LIABILITIES

31 December 2011

31 December 2010



2,021,364

1,904,563

116,801

6.1%

2,993

3,148

(154)

-4.9% 667.0%

151,244

19,718

131,525

1,553,946

1,418,071

135,875

9.6%

115,067

67,350

47,717

70.8%

14,795

32,066

(17,270)

-53.9%

4,686

3,650

1,035

28.4%

353,648

267,520

86,128

32.2%

19,939

7,553

12,386

164.0%

63,189

26,212

36,977

141.1%

4,300,870

3,749,850

551,020

14.7%

66,106

58,039

8,066

13.9%

1,510,012

1,144,811

365,201

31.9%

189,518

77,337

112,180

145.1%

57,089

42,437

14,652

34.5%

172,768

321,384

(148,616)

-46.2%

321,022

281,742

39,280

13.9%

2,316,514

1,925,750

390,763

20.3%

0

704,013

(704,013)

-100.0%

6,617,384

6,379,614

237,770

3.7%

31 December 2011

31 December 2010



1,098,899

1,098,899

0

0.0%

Shareholders’ equity share capital legal reserve other reserves profit (loss) pertaining to previous years profit (loss) for the period Total Group shareholders’ equity Minority interests

111,785

1,946

1.7%

(272,132)

(103,670)

38.1%

314,009

276,004

38,006

13.8%

85,958

92,148

(6,190)

-6.7%

1,236,795

1,306,704

(69,908)

-5.3%

74,661

74,623

39

0.1%

1,311,457

1,381,326

(69,870)

-5.1%

24


25

Staff termination benefits and other defined benefit plans

104,776

106,934

(2,158)

-2.0%

26

Provision for liabilities and charges

250,892

191,683

59,209

30.9%

2,298,916

2,299,463

(548)

0.0%

278,415

227,478

50,937

22.4% 27.7%

27

Borrowings and financial liabilities

28

Other liabilities

29


98,826

77,410

21,416

3,031,825

2,902,969

128,856

4.4%

1,344,785

883,498

461,287

52.2%


286,441

259,620

26,821

10.3%

Borrowings

540,645

250,045

290,599

116.2%

NON-CURRENT LIABILITIES Trade payables

Tax payables 30 23

CURRENT LIABILITIES Liabilities directly associated to assets held for sale TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

218

113,731 (375,802)


102,232

120,786

(18,554)

-15.4%

2,274,102

1,513,948

760,154

50.2%

0

581.371

(581.371)

-100,0%

6,617,384

6,379,614

237,770

3.7%

Consolidated Cash Flow Statement €

31.12.2011

31.12.2010


209,266

694,490

(485,224)

Profit before tax from discontinued operations

(50,174)

(509,071)

458,897


250,453

230,818

19,634

(2,044)

61,319

(63,363) 92,236

Cash flow from operating activities Profit before tax from continuing operations

Revaluations/impairment charges Movement in provisions for liabilities Net movement in staff termination benefits Realised gains Net financial interest expense

50,179

(42,057)

(12,554)

(12,540)

(14)

0

9,466

(9,466)

120,574

98,895

21,679

Income taxes paid

(139,540)

(40,866)

(98,674)


426,160

490,454

(64,294)


(289,129)

(196,781)

(92,348)

314,398

74,476

239,922

Increase/decrease in current liabilities Increase/(decrease) in inventories Movement in working capital Changes in other assets/liabilities during the period TOTAL CASH FLOW FROM OPERATING ACTIVITIES

6,322

(19,572)

25,895

31,591

(141,877)

173,468

(124,780)

97,606

(222,386)

332,972

446,183

(113,211)

Cash flow from investing activities Purchase/sale of property, plant and equipment

(86,311)

(192,414)

106,103

(380,155)

(227,343)

(152,811)

Investments

(13,210)

1,168

(14,379)

Proceeds/payments deriving from other investments

230,233

64,652

165,581

2,048

0

2,048

22,609

20,214

2,395

(224,787)

(333,723)

108.937

Purchase/sale of intangible assets

Dividends received Interest income received TOTAL Cash flow from financing activities Minority interests in capital increases by subsidiaries

0

0

0

Repayment of mortgages and long-term borrowings

(41,552)

(69,238)

27,685

Provision of mortgages/other medium/long-term borrowings

0

680,337

(680,337)

237,019

(429,636)

666,655


(119,622)

(96,808)

(22,813)

Dividends paid

(159,530)

(2,851)

(156,678)

TOTAL CASH FLOW

(83,685)

81,803

(165,489)

24,500

194,263

(169,763)


296,522

102,258

194,263


321,022

296,522

24,500


Cash flows for the year



219

Statement of changes in consolidated shareholders’ equity

Balances at 01 January 2010

Share capital

Legal reserve

Other reserves

Profit for the period

Total

Minority interests


1,098,899

107,096

32,022

(22,998)

1,215,019

71,705

1,286,725

92,148

92,148

7,872

100,020

41

41

(274)

(233)

92,189

92,189

7,598

99,788

22,998

0

Operating profit Other comprehensive profits (losses) Total comprehensive profit (loss) Appropriation of result for 2009

4,689

(27,686)

402

402

(1,399)

(1,399)

(506)

(3,684)

(4,190)

Distribution of dividends Change in basis of consolidation Balances at 31 December 2010

(506) 1,098,899

111,785

3,830

92,189

1,306,704

74,623

1,381,326

Share capital

Legal reserve

Other reserves

Profit for the period

Total

Minority interests


1,098,899

111,785

3,830

92,189

1,306,704

74,623

1,381,326

85,958

85,958

7,563

93,521

(14,193)

(14,193)

(653)

(14,846)

0

71,764

71,764

6,910

78,674

6,906

85,283

(92,189)

0

0

0

0

(155,348)

0

(155,348)

(5,835)

(161,183)

(4,960)

18,635

0

13,675

(1,036)

12,639

113,731

(47,599)

71,764

1,236,795

74,661

1,311,457


Balances at 01 January 2011 Operating profit Other comprehensive profits (losses) Total comprehensive profit (loss)

0

Appropriation of result for 2010

0

Distribution of dividends Change in basis of consolidation Balances at 31 December 2011

1,098,899


220


Notes Basis of Presentation and Consolidation

The figures in these consolidated financial statements

General information

Alternative performance indicators

The consolidated financial statements of the ACEA

In line with recommendation CESR/05-178b, the content

Group for the year ended 31 December 2011 were

and meaning of non-GAAP measures of performance

approved by the Board of Directors’ resolution on 21

and other alternative performance indicators used in

March 2011. The Parent Company, ACEA SpA, is an Ital-

these financial statements are described below:

are comparable to the figures in the previous period.

ian joint-stock company, with its registered office in

1. gross operating profit is used by the ACEA Group as

Rome, at Piazzale Ostiense 2, and whose shares are

an indicator of operating performance and is cal-

traded on the Milan Stock Exchange.

culated by adding “Amortisation, depreciation, pro-

The ACEA Group’s principal areas of activity are de-

visions and impairment charges” to the operating

scribed in the Management Operations’ Report.

result; 2. net debt indicates the state of the Acea Group’s

Compliance with IAS/IFRS

financial structure and is obtained by adding non-

The consolidated financial statements have been pre-

current borrowings and financial liabilities, less

pared under the IFRS effective at the end of the report-

non-current financial assets (loans and receivables

ing period, and as approved by the International Ac-

and securities other than investments), to current

counting Standards Board (IASB) and adopted by the

borrowings and other current liabilities, less cur-

European Union. The standards consist of International

rent financial assets and cash and cash equiva-

Financial Reporting Standards (IFRS), International Ac-

lents;

counting Standards (IAS) and the interpretations of the

3. net invested capital is the sum of “Current assets”,

International Financial Reporting Interpretations Com-

“Non-current assets” and assets and liabilities held

mittee (IFRIC) and of the Standing Interpretations Com-

for sale, less “Current liabilities” and “Non-current

mittee (SIC), collectively referred to as “IFRS”.

liabilities”, excluding items taken into account in calculating net debt.

Basis of presentation The consolidated financial statements consists of the

Use of estimates

consolidated balance sheet, consolidated income state-

In application of IFRS, preparation of the consolidated

ment, statement of consolidated comprehensive in-

financial statements required management to make

come, consolidated cash flow statement and the state-

estimates and assumptions that affect the reported

ment of changes in consolidated shareholders’ equity.

amounts of revenues, costs, assets and liabilities and

The Report also includes notes prepared under the IAS/

the disclosure of contingent assets and liabilities at the

IFRS currently in effect.

end of the reporting period. The actual amounts may dif-

The income statement is classified on the basis of the

fer from such estimates. Estimates are used in order to

nature of expenses, the balance sheet is based on the

make provisions for credit risk, obsolescent inventories,

liquidity method by dividing between current and non-

impairment charges incurred on assets, employee ben-

current items, whilst the cash flow statement is pre-

efits, fair value of derivatives, taxes and other provisions.

sented using the indirect method.

The original estimates and assumptions are periodically reviewed and the impact of any change is recognised in

The consolidated financial statements have been pre-

the income statement.

pared in euros and all amounts have been rounded off

In addition, it should be noted that said evaluation pro-

to the nearest thousand euros, unless otherwise indi-

cesses, in particular the more complex ones such as the

cated.

calculation of any impairments of non-current assets, are


221

generally carried out fully during drafting of the financial

the fair value of the identifiable assets, liabilities and con-

statements, except where there are impairment indica-

tingent liabilities acquired. This goodwill is not amortised,

tors that call for an immediate evaluation of losses of

but is tested for impairment. If, on the other hand, the

value.

Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost


of the acquisition, the relevant amounts are re-determined. If the Group’s interest in the resulting fair value of the identifiable assets, liabilities and contingent liabilities

The most significant accounting standards and policies

still exceeds the cost of the acquisition, the difference is

are described below.

immediately recognised in the income statement. For every business combination, the purchaser must val-

Business combinations

ue any minority stake in the acquired entity at fair value

Acquisitions of subsidiaries are accounted for under

or in proportion to the share of the minority interest in

the acquisition method. The cost of the acquisition is

net identifiable assets of the acquired entity.

determined as the sum of the fair value, at the date of acquired, and the financial instruments issued by the

Non-current assets held for sale and discontinued operations

Group in exchange for control of the acquired company.


The identifiable assets, liabilities and contingent liabili-

groups) classified as held for sale are accounted for at

ties of the acquired company that meet the conditions

the lower of their previous carrying amount and their fair

for recognition under IFRS 3 are accounted for at fair

value less costs to sell.

value at the date of acquisition, with the exception of


non-current assets (or disposal groups), which are clas-

groups) are classified as held for sale when their carry-

sified as held for sale under IFRS 5 and accounted for at

ing amount is expected to be recovered through a sale

fair value less costs to sell.

transaction rather than through their continued use. This

If the business combination is recognised in several

condition is only met when the sale is highly probable, the

phases, the purchaser has to recalculate the fair value of

asset (or asset included in a disposal group) is available for

the investment previously held (in case of equity method

immediate sale in its present condition and management

valuation) or the group of net assets attributable to the

is committed to the sale, which is expected to take place

subsidiary (in case of consolidation according to the pro-

within twelve months of the classification of this item.

portional method) and recognise any resulting profit or

In the case of discontinued operations, the post-tax gain or

loss in the income statement.

loss on disposal and the matching comparative amounts

The purchaser has to recognise any contingent consid-

for the previous year are shown separately in a specific

eration at the fair value, at the date of acquisition. The

item in the income statement.

exchange, of the assets given, the liabilities incurred or

change in fair value of the contingent consideration clas-

222

sified as asset or liability will be recognized according to

Goodwill

the provisions included in IAS 39, in the income state-

Goodwill from business combinations (among which, as

ment or in other comprehensive income. If the contin-

an example only, the acquisition of subsidiaries, jointly

gent consideration is classified in the shareholders’ equi-

controlled entities, or the acquisition of business units or

ty, its value has not to be recalculated until its settlement

other extraordinary transactions) represents the excess

is recognised to the shareholders’ equity.

of the cost of the acquisition over the Group’s interest in

Goodwill arising on acquisition is recognised as an asset

the fair value of the identifiable assets, liabilities and con-

and initially valued at cost, represented by the excess of

tingent liabilities of the subsidiary or jointly controlled

the cost of the acquisition over the Group’s interest in

entity at the date of the acquisition. Goodwill is recog-


nised as an asset and is subject to an annual impairment

are translated into the Parent Company’s presentation

review. Any impairment charges are immediately recog-

currency at closing rates, whilst income and expenses

nised in the income statement and are not subsequently

are translated at average rates for the period or at the

reversed.

rates ruling at the date of the related transactions. Ex-

Goodwill emerging at the date of acquisition is allocated

change differences, resulting from the use of different

to each of the cash-generating units expected to benefit

rates to translate income and expenses as opposed to

from the synergies deriving from the acquisition. Impair-

assets and liabilities, are taken directly to shareholders’

ment charges are identified via tests that assess the ca-

equity and recognised as a separate component of eq-

pacity of each unit to generate cash sufficient to recover

uity. On disposal of a foreign economic activity, the cu-

the portion of goodwill allocated to it. Should the recov-

mulative exchange differences deferred in a separate

erable amount of the cash-generating unit be less than

component of shareholders’ equity are recognised in the

the allocated carrying amount, an impairment charge is

income statement.

recognised. On the sale of a subsidiary or jointly controlled entity, any

Revenue recognition

unamortised goodwill attributable to it is included in the

Revenue is recognised when the amount of revenue can

calculation of the gain or loss on disposal.

be reliably measured and it is probable that the economic benefits associated with the transaction will flow to the

Conversion of foreign financial statement items

Group. Depending on the type of transaction, revenue is recognised on the basis of the following specific criteria.

ACEA SpA and its European subsidiaries have adopted the euro as their functional and presentation currency.

Sale of goods

Foreign currency transactions are initially recognised at

Revenue is recognised when the significant risks and re-

the spot rate on the date of the transaction. Foreign cur-

wards of ownership of the goods have been transferred

rency monetary assets and liabilities are translated into

to the buyer, the revenue can be reliably measured and

the functional currency at the exchange rate at the end

collectability is probable.

of the reporting period. Exchange differences are recognised in the consolidated income statement, with the

Provision of services

exception of differences deriving from foreign currency

Revenue is recognised with reference to the stage of

loans taken out in order to hedge a net investment in a

completion of the transaction based on the same crite-

foreign entity. Such exchange differences are taken di-

ria used for contract work in progress. When the amount

rectly to shareholders’ equity until disposal of the net in-

of the revenue cannot be reliably determined, revenue

vestment, at which time any differences are recognised

is recognised only to the extent of the expenses recog-

as income or expenses in the income statement. The tax

nised that are recoverable.

effect and tax credits attributable to exchange differenc-

In particular, revenue from the sale and transport

es deriving from this type of loan are also taken directly

of electricity and gas is recognised at the time the

to shareholders’ equity. Foreign currency non-monetary

service is provided, even when yet to be billed, and in-

items accounted for at historical cost are translated at

cludes an estimate of the quantities supplied to custom-

the exchange rate on the date the transaction was ini-

ers between their last meter reading and the end of the

tially recorded. Non-monetary items accounted for at fair

period. Revenue is calculated on the basis of the related

value are translated at the exchange rate at the date the

laws, provisions contained in Electricity and Gas Author-

value was determined.

ity resolutions in effect during the period and existing

The functional currency used by the Group’s Latin Ameri-

provisions regarding equalisation.

can companies is the US dollar. At the end of the report-

Revenue from integrated water services is recog-

ing period the assets and liabilities of these companies

nised on the basis of the quantities supplied during the


223

period, even if such quantities have not yet been meas-

Grants

ured on the basis of meter readings or billed by the end

Grants related to plant investments received from both

of the period, and applying the tariffs in force, including

public and private entities are accounted for at fair value

any approved increases for the area of operation con-

when there is reasonable assurance that they will be re-

cerned.

ceived and that the conditions attaching to them will be

Any differences between revenue billed and the amount

complied with.

guaranteed by the corresponding Area Plan, in compli-

Water connection grants are recognised as non-current

ance with art. 11, paragraph 2.b of the Galli Law, or art.

liabilities and taken to the income statement over the life

151, paragraph 2.c of Legislative Decree no. 152/2006,

of the asset to which they refer if they relate to an invest-

are also recognised in revenue for the period. The water

ment, or recognised in full as income if matched by costs

company’s failure to account for the so-called regulatory

incurred during the period.

assets deriving from tariff adjustments would distort the

Grants related to income (disbursed in order to provide

effect on the financial statements.

an enterprise with immediate financial aid or as compensation for expenses and losses incurred in a previous pe-

Finance income

riod) are recognised in the income statement in full once

Interest income is recognised on a time proportion ba-

the conditions for recognition have been complied with.

sis that takes account of the effective yield on the asset (the rate of interest required to discount the stream of

Construction contracts

future cash receipts expected over the life of the asset

Construction contracts are accounted for on the basis

to equate to the initial carrying amount of the asset). In-

of the contractual payments accrued with reasonable

terest is accounted for as an increase in the value of the

certainty, according to the percentage of completion

financial assets recorded in the accounts.

method (cost to cost), attributing revenue and profits on the contract to the individual reporting periods in pro-

Dividend income

portion to the stage of contract completion. Any posi-

Dividend income is recognised when the shareholder’s

tive or negative difference between contract revenue

right to receive payment is established.

and any prepayments received is recognised in assets

Dividend income is classified as a component of finance

or liabilities.

income in the income statement.

In addition to contract fees, contract revenue includes variations, price changes and the payment of incentives to the extent that it is probable that they will form part of actual revenue and that they can be reliably determined. Expected losses are recognised regardless of the stage of contract completion.

Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of the asset until it is ready for use or sale. Income on the temporary investment of the borrowings is deducted from the capitalised borrowing costs. All other borrowing costs are recognised as an expense in the period in which they are incurred.

224


Employee benefits

lease payments. The underlying liability to the lessor is

Post-employment employee benefits in the form of de-

included in the balance sheet as an obligation to pay

fined benefit and defined contribution plans (such as

future lease payments. Lease payments are apportioned

staff termination benefits, bonuses, tariff subsidies, as

between the capital element and the interest element,

described in the notes) or other long-term benefits are

in such a way as to produce a constant periodic rate of

recognised in the period the related right accrues: the

interest on the remaining balance of the liability.

valuation of the liabilities is performed by independent

Finance costs, whether certain or estimated, are recog-

actuaries. Such funds and benefits are not financed.

nised on an accruals basis unless they are directly at-

The cost of the benefits involved in the various plans is

tributable to the acquisition, construction or production

determined separately for each plan based on the actu-

of an asset, which justifies their capitalisation.

arial valuation method, using the projected unit credit

Lease payments under operating leases are recognised

method to carry out actuarial valuations at the end of

as an expense in the income statement on a straight-

the reporting period.

line basis over the lease term. The benefits received or

Actuarial gains and losses are recognised as income or

to be received as an incentive for entering into operat-

expense if the net cumulative unrecognised actuarial

ing leases are also recognised on a straight-line basis

gains and losses for each plan at the end of the previous

over the lease term.

reporting period exceeded the greater of 10% of the present value of the defined benefit obligation or 10% of the

Taxation

fair value of any plan assets at that date (the so-called

Income taxes for the period represent the aggregate

corridor method). Such gains and losses are recognised

amount of current and deferred taxes.

on the basis of the expected average remaining working

Current taxes are based on the taxable profit (tax loss)

lives of the employees participating in the plan.

for the period. Taxable profit (tax loss) differs from the accounting profit or loss as it excludes positive and

Share-based payment transactions (stock options)

negative components that will be taxable or deductible

The Group is required to recognise the goods or services

er be taxable or deductible. Current tax liabilities are

received in a share-based payment transaction at the

calculated using the tax rates enacted or substantively

date the goods or services are consumed. The Group is

enacted at the end of the reporting period, and taking

required to recognise a corresponding increase in share-

account of tax instruments permitted by tax legisla-

holders’ equity if the goods or services are received on

tion (the domestic tax consolidation regime and/or tax

the basis of a share-based payment transaction settled

transparency).

by the issuance of equity, or as a liability if the goods or

Deferred taxes are the taxes expected to be paid or re-

services are acquired on the basis of a share-based pay-

covered on temporary differences between the carrying

ment transaction settled by the issuance of cash.

amounts of assets and liabilities in the balance sheet

in other periods and also excludes items that will nev-

and the corresponding tax bases, accounted for using

Leases

the liability method. Deferred tax liabilities are generally

Leases are classified as finance leases when the terms

recognised on all taxable temporary differences, whilst

of the contract substantially transfer all the risks and

deferred tax assets are recognised to the extent that it

benefits of ownership of an asset to the lessee. All other

is probable that future taxable profit will be available

leases are operating leases.

against which the temporary difference can be utilised.

Assets held under a finance lease are recognised as

Deferred tax assets and liabilities are not recognised if

assets belonging to the Group and accounted for at

the temporary differences derive from goodwill or the

amounts equal to fair value at the inception of the

initial recognition of an asset or liability in a transaction,

lease or, if lower, at the present value of the minimum

other than a business combination, that at the time of


225

the transaction affects neither accounting nor taxable

Plant and machinery used in operations

profit nor loss.

Other plant and machinery

Deferred tax liabilities are recognised on taxable tempo-


rary differences arising on investments in subsidiaries,

used in operations

associates and jointly controlled entities, unless the tim-

Other industrial and commercial equipment

6,67%;

ing of the reversal of the temporary difference is con-

Other assets used in operations

12,5%;

trolled by the Group and it is probable that the tempo-

Other assets

rary difference will not reverse in the foreseeable future.

Motor vehicles used in operations

The carrying amount of deferred tax assets is reviewed

Other motor vehicles

1,25%-6,67%; 4%;

2,5%-6,67%;

6,67%-19,00%; 8,33%; 16,67%.

at the end of each reporting period and reduced to the extent that, based on the plans approved by the Par-

Plant and machinery in the course of construction for

ent Company’s Board of Directors, it is no longer prob-

use in operations, or for purposes yet to be determined,

able that sufficient future taxable profit will be available

is stated at cost, less any impairment charges. The cost

against which all or part of the assets can be recovered.

includes any professional fees and, if applicable, interest

Deferred taxes are determined using tax rates that are

expense capitalised. Depreciation of such assets, in line

expected to apply to the period in which the asset is

with all the other assets, begins when they are ready

realised or the liability settled. Deferred taxes are taken

for use. In the case of certain complex assets subject to

directly to the income statement, with the exception of

performance tests, which may be of a prolonged nature,

those relating to items taken directly to shareholders’

readiness for use is recognised on completion of the re-

equity, in which case the related deferred taxes are also

lated tests.

taken to equity.

An asset held under a finance lease is depreciated


over its expected useful life, in line with assets that are owned, or, if lower, over the lease term.

Property, plant and equipment is stated at historical

Gains and losses deriving from the disposal or retire-

cost, including any directly attributable costs of making

ment of an asset are determined as the difference be-

the asset ready for its intended use, less accumulated

tween the estimated net disposal proceeds and the car-

depreciation and any accumulated impairment charges.

rying amount of the asset and are recognised as income

The cost includes the costs of dismantling and removing

or expense in the income statement.

the asset and cleaning up the site at which the asset was located, if covered by the provisions of IAS 37. The

Investment property

matching liability is accounted for in provisions for li-

Investment property, represented by property held to

abilities and charges. Each component of an asset with

earn rentals or for capital appreciation or both, is stated

a cost that is significant in relation to the total cost of

at cost, including any negotiating costs less accumulat-

the item, and having a different useful life, is depreci-

ed depreciation and any impairment charges.

ated separately.


Land, whether free of constructions or annexed to civil

the expected useful life of the asset. The rates ap-

and industrial buildings, is not depreciated as it has an

plied range from a minimum of 1.67% to a maximum of

unlimited useful life.

11.11%.


Investment property is eliminated from the accounts

the expected useful life of the asset, applying the fol-

when sold or when the property is unusable over the

lowing rates:

long-term and its sale is not expected to provide future economic benefits. Sale and lease-back transactions are accounted for based on the substance of the transaction. Reference

226


should therefore be made to the policy adopted for

of so-called “incidental public property” for fresh and

leases.

waste water services. This right is amortised over the

Any gain or loss deriving from the elimination of an in-

residual concession term (thirty years from 1998). The

vestment property is recognised as income or expense

residual amortisation period is in line with the average

in the income statement in the period in which the elimi-

term of contracts awarded by public tender.

nation takes place.

This item also includes: • the net value at 1 January 2004 of the goodwill deriving from the transfer of sewerage services to

Intangible assets

ACEA Ato2 by Roma Capitale with effect from 1 September 2002;

Intangible assets acquired separately or

• the net value at 1 January 2004 of goodwill deriv-

deriving from a business combination

ing from the acquisition of the Acque di Pisa Group

Intangible assets acquired separately are capitalised at

by the subsidiary ABAB;

cost, whilst those deriving from a business combination

• the net value at 1 January 2005 of goodwill deriv-

are capitalised at fair value at the date of acquisition.

ing from the acquisition of G.O.R.I. SpA by the sub-

After initial recognition, an intangible asset is carried at cost. The useful life of an intangible asset may be de-

sidiary, Sarnese Vesuviano; • the goodwill, attributable to this item, deriving

fined as finite or indefinite.

from the acquisition of Publiacqua by Acque Blu

Intangible assets are tested for impairment annually: the

Fiorentine;

tests are conducted in respect of each intangible asset or, if necessary, in respect of each cash-generating unit.

• the goodwill, attributable to this item, deriving from ACEA’s acquisition of Umbra Acque,

Amortisation is calculated on a straight-line basis over

• the goodwill, attributable to this item, deriving

the expected useful life of the asset, which is reviewed

from the acquisition of the A.R.I.A. Group, with par-

annually and any resulting changes, if possible, applied

ticular reference to SAO, the company that man-

prospectively. Amortisation begins when the intangible

ages the waste dump in Orvieto;

asset is ready for use. Gains and losses deriving from the disposal of an intan-

• the goodwill, attributable to this item, deriving from Acea’s acquisition of ACEA Ato5.

gible asset are determined as the difference between

Concessions are amortised on a straight-line basis over

the estimated net disposal proceeds and the carrying

the residual term of each concession.

amount of the asset and are recognised as income or expense in the income statement.

Right on infrastructures Pursuant to IFRIC 12, this item includes the aggregate

Brands and patents

amount of tangible infrastructures used for the manage-

These assets are initially recognised at cost and amor-

ment of the water service.

tised on a straight-line basis over the useful life of the

With reference to the application of IFRIC 12 to the con-

asset.

cession of public lighting, the signing of the supplementary agreement, taking place on 15 March 2011 and

Concessions

effective from 1 January 2011, led to the full adoption of

This item includes the value of the thirty-year right of

the financial assets model, also with reference to the re-

Concession granted by Roma Capitale, regarding the use

sidual right deriving from the public lighting concession.

of fresh and waste water assets, formerly conferred to

It should also be remembered that, as described in the

ACEA and subsequently transferred, as of 31 December

Consolidated Financial Statements 2010, based on the

1999, to the spun-off company, ACEA Ato2, and relat-

analyses carried out in last year concerning the refer-

ing to publicly owned assets belonging to the category

ence legislative and concession framework to assess


227

the applicability of the interpretation in question, in

If the recoverable amount of an asset (or cash-gen-

2010 the ACEA Group chose to adopt a mixed method

erating unit) is estimated to be less than its carrying

that in particular envisages the application of the intan-

amount, the carrying amount is reduced to its recover-

gible model, and therefore the posting under intangible

able amount. An impairment charge is immediately rec-

assets of the residual right on the infrastructure that can

ognised as an expense in the income statement, unless

be recovered with the cash flows generated by the ser-

the asset is represented by land or buildings, other than

vice contract after 30 May 2015.

investment property, carried at a revalued amount, in

Since the expiry of supplementary agreement coincides

which case the impairment charge is treated as a re-

with the concession and the cash flows are thus guar-

valuation decrease.

anteed by the contract until that date, the item “Rights

When an impairment no longer exists, the carrying

on the infrastructure”, classified under intangible assets,

amount of the asset (or cash-generating unit), with the

was reclassified to financial receivables amounting to

exception of goodwill, is increased to its new estimat-

the value of the right on the infrastructure at 1 January

ed recoverable amount. The reversal must not exceed

2011, taking into account the effect generated by the

the carrying amount that would have been determined

new contract duration.

(net of amortisation or depreciation) had no impairment

As regards the rates used, the costs of intellectual prop-

charge been recognised for the asset in prior periods.

erty, included under intangible assets, are amortised

The reversal of an impairment charge is recognised im-

over an estimated useful life of three years.

mediately as income in the income statement, unless the asset is carried at a revalued amount, in which case

Impairment of assets

the reversal is treated as a revaluation increase.

At each end of the reporting period, the Group reviews

Where an impairment charge is recognised in the in-

the value of its property, plant and equipment and intan-

come statement, it is included among amortisation, de-

gible assets to assess whether there is any indication

preciation and impairment charges.

that an asset may be impaired (impairment test). If any amount of the asset in order to determine the impair-

Emission allowances and green certificates

ment charge.

Different accounting policies are applied to allowances

When it is not possible to estimate the recoverable

or certificates held for own use in the “Industrial Portfo-

amount of the individual asset, the Group estimates

lio”, and those held for trading purposes in the “Trading

the recoverable amount of the cash-generating unit to

Portfolio”.

which the asset belongs.

Surplus allowances or certificates held for own use,

Intangible assets with indefinite useful lives, including

which are in excess of the company’s requirement in re-

goodwill, are tested for impairment annually and each

lation to the obligations accruing at the end of the year,

time there is any indication that an asset may be im-

are accounted for at cost in other intangible assets. Al-

paired, in order to determine the impairment charge.

lowances or certificates assigned free of charge are ac-

The test consists of a comparison between the carry-

counted for at a zero value. Given that these are assets

ing amount of the asset and its estimated recoverable

for instant use, they are not amortised but are tested

amount.

for impairment. The recoverable amount is the higher of

The recoverable amount is the higher of an asset’s fair

the asset’s value in use and its market value. If, on the

value less costs to sell and value in use. In calculating

other hand, there is a deficit, because the requirement

value in use, future cash flow estimates are discounted

exceeds the allowances or certificates in portfolio at the

using a pre-tax rate that reflects current market assess-

end of the reporting period, provisions are made in the

ments of the time value of money and the risks specific

financial statements for the charge needed to meet the

to the business.

residual obligation; this is estimated on the basis of any

indication exists, the Group estimates the recoverable

228


spot or forward purchase contracts already signed at

Financial assets

the end of the reporting period; otherwise, on the basis

Financial assets are recognised and derecognised at the

of market prices.

trade date and initially recognised at cost, including any

Allowances or certificates held for trading in the “Trad-

directly attributable acquisition costs.

ing Portfolio” are accounted for in inventories and meas-

At each future balance sheet date, the financial assets

ured at the lower of purchase cost and estimated realis-

that the Group has a positive intention and ability to hold

able value, based on market trends.

to maturity (held-to-maturity financial assets)are rec-

Allowances or certificates assigned free of charge are

ognised at amortised cost using the effective interest

accounted for at a zero value. Market value is estab-

method, less any impairment charges applied to reflect

lished on the basis of any spot or forward sales con-

impairments.

tracts already signed at the end of the reporting period;

Financial assets other than those held to maturity are

otherwise, on the basis of market prices.

classified as held for trading or as available for sale, and are stated at fair value at the end of each period.

Inventories

When financial assets are held for trading, , gains

Inventories are valued at the lower of cost and net re-

and losses deriving from changes in fair value are rec-

alisable value. The cost comprises all materials and,

ognised in the income statement for the period. In the

where applicable, direct labour, production overheads

case of financial assets that are available for sale,

and all other costs incurred in bringing the inventories to

gains and losses deriving from changes in fair value are

their present location and condition. The cost is calcu-

recognised directly in a separate item of shareholders’

lated using the weighted average cost method. The net

equity until they are sold or impaired. At this time, the

realisable value is the estimated selling price less the

total gains and losses previously recognised in equity

estimated costs of completion and the estimated costs

are recycled through the income statement for the pe-

necessary in order to make the sale.

riod. The total loss must equal the difference between

Impairment charges incurred on inventories, given their

the acquisition cost and current fair value.

nature, are either recognised in the form of specific pro-

The fair value of financial instruments traded in active

visions, consisting of a reduction in assets, or, on an item

markets is based on quoted market prices (bid prices) at

by item basis, as an expense in the income statement in

the end of the reporting period. The fair value of invest-

the period the impairment charge occurs.

ments that are not traded in an active market is determined on the basis of quoted market prices for substan-

Financial instruments

tially similar instruments, or calculated on the basis of

Financial assets and liabilities are recognised at the time

estimated future cash flows generated by the net assets

the Group becomes party to the contract terms applica-

underlying the investment.

ble to the instrument.

Purchases and sales of financial assets, which imply delivery within a timescale generally defined by the regula-

Trade receivables and other assets

tions and practice of the market in which the exchange

Trade receivables, which have normal commercial

takes place, are recognised at the trade date, which is

terms, are recognised at face value less estimated pro-

the date the Group commits to either purchase or sell

visions for the impairment of receivables.

the asset.

The estimate of uncollectible amounts is made when

Non-derivative financial assets with fixed or determina-

collection of the full amount is no longer probable.

ble payments that are not quoted in an active market

Trade receivables refer to the invoiced amount which,

are initially stated at fair value.

at the date of these financial statements, is still to be

After initial recognition, they are carried at amortised

collected, as well as the receivables for revenues for the

cost using the effective interest method. The amortised

period relating to invoices that will be issued later.

cost of a financial asset means the amount recognised


229

initially, less principal repayments and plus or minus

Financial liabilities

accumulated amortisation using the effective interest

Financial liabilities are stated at amortised cost. Borrow-

method of the difference between the initial amount

ing costs (transaction costs) and any issue premiums or

and the maturity amount, after any reductions. The ef-

discounts are recognised as direct adjustments to the

fective interest method is a method of calculating the

nominal value of the borrowing. Net finance costs are

amortised cost of a financial asset (or group of financial

consequently re-determined using the effective rate

assets) and allocating the interest income or expense

method.

over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash

Derivative financial instruments

payments or receipts over the expected life, or contrac-

Derivative financial instruments are initially recognised

tual term if shorter, of the financial instrument to the net

at cost and then re-measured to fair value at subse-

carrying amount of the financial asset.

quent end of the reporting periods. They are designated

In the case of financial assets stated at amortised cost,

as hedging instruments when the hedging relationship

the income statement and balance sheet are adjusted

is formally documented at its inception and the periodi-

to take account of the difference between the payment

cally verified effectiveness of the hedge is expected to

or receipt calculated on the basis of the effective inter-

be high.

est rate and the coupon interest to be collected/paid,

Fair value hedges are recognised at fair value and any

recognised on the basis of the nominal rate of the in-

gains or losses recognised in the income statement. Any

strument.

gains or losses resulting from the fair value measure-

At each end of the reporting period, the Group assesses

ment of the hedged asset or liability are similarly recog-

if there has been an impairment for a financial asset, or

nised in the income statement.

a group of financial assets. A financial asset or a group

In the case of cash flow hedges, the portion of any fair

of financial assets is subject to impairment if there is

value gains or losses on the hedging instrument that is

evidence of an impairment, as a consequence of one

determined to be an effective hedge is recognised in

or more events occurred after initial recognition (when

shareholders’ equity, whilst the ineffective portion is

there is a “loss event”) and this loss event has an impact

recognised directly in the income statement.

- which can be reliably estimated - on future estimated

If the hedged contract commitment or forecast transac-

cash flows of the financial asset or group of financial

tion results in recognition of an asset or a liability, the

assets. An impairment can be represented by indicators

gains and losses on the instrument previously recog-

such as financial difficulties, failure to meet obligations,

nised directly in shareholders’ equity are transferred

non-payment of significant amounts, the probability

from equity and included in the initial measurement of

that the debtor goes bankrupt or is subject to another

the cost or carrying amount of the asset or liability.

form of financial reorganisation, and if data shows that

In the case of cash flow hedges that do not result in

there is a measurable decrease in future estimated cash

recognition of an asset or a liability, the amounts rec-

flows, such as changes in situations or economic condi-

ognised directly in shareholders’ equity are included in

tions linked with obligations.

the income statement in the same period in which the hedged contract commitment or forecast transaction is


ultimately recognised in the income statement.

Cash and cash equivalents include cash at bank and in

In the case of fair value hedges, the hedged item is

hand, demand deposits and highly liquid short-term in-

adjusted for changes in fair value attributable to the

vestments, which are readily convertible into cash and

hedged risk and the resulting gain or loss recognised in

are subject to an insignificant risk of changes in value.

the income statement. Gains and losses deriving from measurement of the derivative instrument are also recognised in the income statement.

230


do not qualify for hedge accounting are recognised in


the income statement for the period in which they oc-

Provisions for liabilities and charges are made when the

cur, with the exception of derivative instruments whose

Group has a present (legal or constructive) obligation as

fair value is not reasonably determinable.

a result of a past event, if it is more likely than not that

Hedge accounting is discontinued when the hedging in-

an outflow of resources will be required to settle the

strument expires or is sold, terminated or exercised, or

obligation and the related amount can be reliably esti-

when the instrument no longer meets hedge account-

mated.

ing criteria. At this time, accumulated gains and losses

Provisions are measured on the basis of management’s

on the hedging instrument recognised directly in share-

best estimate of the expenditure required to settle the

holders’ equity are retained in equity until the forecast

present obligation at the end of the reporting period,

transaction effectively occurs. If the forecast transaction

and are discounted when the effect is significant. When

is no longer expected to occur, the accumulated gains

the liability regards the cost of dismantling and/or re-

and losses recognised directly in shareholders’ equity

pairing an item of property, plant and equipment, the

are immediately taken to the income statement for the

initial provisions are accounted for as a contra entry in

period.

respect of the asset to which they refer. The provisions

Changes in the fair value of derivative instruments that

are released to the income statement through depreTrade payables

ciation of the item of property, plant and equipment to

Trade payables, which have normal commercial terms,

which the charge refers

are stated at face value. Derecognition of financial instruments Financial assets are derecognised when the Group has transferred all the related risks and the right to receive cash flows from the investments. A financial liability (or portion of a financial liability) is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is either fulfilled, cancelled or expires. If a previously issued debt instrument is repurchased, the debt is extinguished, even if the Group intends to resell it in the near future. The difference between the carrying amount and the amount paid is recognised in the income statement


231


liability extinguished. Any profit or loss is immediately recognised in the income statement.

the IASB and approved by the European Union, came into

Amendments to IFRS 1 and IFRS 7 – Limited exemption from comparative IFRS 7 Disclosure for first-time adopters

force on 1 January 2011, and contain amendments to the

This document was issued in January 2010 and approved

international accounting standards:

on 19 July 2010. It came into force on 1 January 2011..

Change to IAS 32 – Classification of rights issued

IAS 24 (Revised in 2009) – Related party disclosures

The document was issued in October 2009 and approved


The following documents, already previously issued by

on 23 December 2009. It came into force on 1 February

approved on 19 July 2010, came into force on 1 Janu-

2010. This standard includes an amendment to the defi-

ary 2011. This standard includes an amendment to the

nition of financial liability for the classification of rights

definition of related party in order to simplify it and, in

issues in foreign currency (and of some options and war-

particular, to ensure symmetry in the identification of re-

rants) as equity instruments when those instruments are

lated parties..

issued pro rata to all shareholders in the same class of a purchase of a fixed amount of the entity’s equity instru-

Improvements to IFRS (May 2010)

ments for a fixed amount of currency.

In May 2010, IASB issued improvements to IFRS, with a

(non-derivative) equity instrument of an entity, or for the

set of amendments to the standards. The following are

Changes to IFRIC 14 – Prepayments of a minimum funding requirement The document, that was issued in November 2009 and

the most important for the ACEA Group • IFRS 3 Business Combinations; • IFRS 7 Financial Instruments; additional disclosures;

approved on 19 July 2010, came into force on 1 January

• IAS 1 Presentation of Financial Statements;

2011. This amendment provides guidelines in order to

• IAS 27 Consolidated and Separate Financial State-

define the recoverable value of the net assets of a pension fund. This amendment allows an entity to recognise prepayments for a minimum funding contribution as an

ments; • IFRIC 13 Customer Loyalty Programmes. The improvements were approved on 18 February 2011.

asset. It should be noted that the ACEA Group has applied the

IFRIC 19 – Extinguishing financial liabilities with equity instruments

amendments introduced to the international account-

This document was issued in November 2009 and ap-

provements to these Consolidated Financial Statements.

proved on 23 July 2010, and became effective for finan-

The adoption did not have a significant impact on the

cial years that begin on or after 1 July 2010. The inter-

Group’s financial position and operating result.

pretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as a fee paid. The equity instruments issued are measured at the fair value. If the fair value is not reliably determinable, the instruments are measured at the fair value of the

232


ing standards shown above as well as the additional im-

Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance by the Group

IFRS 10 – Consolidated Financial Statements IFRS 12 – Disclosure of interests in Other Entities The documents were issued on 12 May 2011 as part of the IASB project aimed at incorporating two consolida-

Only amendments to IFRS 7 regarding disclosures to be

tion criteria present in IAS 27 (more focused on control)

made in the event of the full or partial transfer of finan-

and SIC 12 (more focused on risks and benefits) into a

cial assets were approved during the year (see below).

single standard, and therefore providing the most com-

Numerous standards and amendments are still pending

plete guidelines for establishing under what conditions

the completion of the approval process; the most signifi-

an SPE or an entity whose majority of voting rights (also

cant are described hereafter.

potential) is not held should be consolidated or not. In summary, a situation of control occurs when it can be

Change to IFRS 7 – Disclosures – Transfer of financial assets

demonstrated that the investor has the power to make

The amendments made to IFRS 7 intend to provide great-

he has invested and when the investor is exposed to the

er transparency in relation to risks connected with trans-

variability of that company’s returns, and therefore is

actions in which, in respect of the transfers of financial

able to use his power to influence its returns.

decisions about the business of the company in which

assets, the transferor retains some level of exposure to (a situation generally defined as “continuing involve-

IFRS 11 – Joint Arrangements

ment, translated with the term “coinvolgimento residuo”

The document was issued on 12 May 2011, and is in-

in the Italian version of the regulations for the approval of

tended to replace the current IAS 31. IFRS 11 is based on

international accounting standards). Additional informa-

the following core principles:

the risks associated with the financial assets transferred

tion is also required in the event of transfers of financial

• Classification of arrangements in only two man-

assets at particular times (e.g. near the end of the year).

ners (joint operation and joint venture) instead of

The amendments to IFRS 7 specify that the disclosure requirements apply to total or partial transfers of financial assets in cases in which the entity: • transfers all contractual rights to receive cash flows from a financial assets, • retains all contractual rights to receive cash flows

the three set forth in IAS 31 • Distinction between the two types of arrangement based on their content • Reporting of contractual rights and obligations resulting from the arrangement on the basis of its content

from a financial asset, but assumes a contractual

• Assessment of the investment in a joint venture

obligation to pay said cash flows to another benefi-

based on the shareholders’ equity method instead

ciary.

of the proportionate method, which is no longer

The amendments to the standard were approved and must be applied from 1 January 2012.

permitted The new standard sets forth that: 1. if the assets and liabilities are not contained in a special vehicle, the joint arrangement is a joint operation 2. if the arrangement’s assets and liabilities are contained in any vehicle (partnership, joint stock company, consortium, etc.) the joint arrangement may be either a joint operation or a joint venture.


233

In a nutshell, a joint arrangement is a joint venture if: • the arrangement’s assets and liabilities are con-

hence allowing entities to apply the new IFRS 9 in its entirety.

tained in a vehicle whose legal form does not

An additional amendment made to IFRS 9 makes it pos-

grant the parties rights to the assets and obliga-

sible not to make a retrospective adjustment to appli-

tions for the liabilities contained in the vehicle,

cation of the standard in the comparative period at the

• contractual agreements do not change the vehi-

date of first adoption of IFRS 9, however, requiring the

cle’s legal form and • the vehicle is able to operate independently from the parties.

following additional information in the year of first application of IFRS 9 (Amendment to IFRS 7): • information on the change of classification of fi-

The IASB requires IFRS 10, 11 and 12 (and subsequently

nancial assets and liabilities, showing the changes

the amendments to IAS 27 and 28) to be adopted from

in the net carrying out amount separately, using

1 January 2013.

both IAS 39 and IFRS 9 measurement criteria,

As of today, the approval process is still underway and

• for financial assets and liabilities that are reclas-

EFRAG has published a first draft of the endorsement

sified and value at amortised cost: the fair value

advice, in respect of which it requires any comments by

of said assets/liabilities at the end of the year, the

next 11 March.

profit/loss that would have been booked to the income statement in the event the instruments had

IFRS 13 – Fair Value Measurement The document was issued on 12 May 2011 and aims to:

not been reclassified, • the effective interest rate determined at the date

- clarify the definition of fair value;

of reclassification and the amount of interest re-

- establish a single benchmark framework to meas-

corded in the income statement.

ure the fair value applicable to all IAS/IFRS which indicate fair value as the applicable measurement criteria; - provide clarifications and operating guidelines to

Amendments to IAS 32 and IFRS 7: “Offsetting Financial Assets and Financial Liabilities”

determine fair value (also in illiquid or inactive

On 16 December 2011, IASB published an amendment

market situations).

to IAS 32 Financial Instruments: Presentation and to

Mandatory adoption is required by 1 January 2013: as of

IFRS 7 Financial Instruments: Disclosures with refer-

today, the approval process is still underway.

ence to rules for the offsetting of financial assets and liabilities.

234

Amendments to IFRS 9 and IFRS 7: “Mandatory Effective Date and Transition Disclosures”

The joint IASB-FASB project on the offsetting of financial

On 16 December 2011, IASB published the document

with regard to the offsetting of financial instruments.

“Mandatory Effective Date and Transition Disclosures

The FASB decided to maintain its current position, pre-

(Amendments to IFRS 9 and IFRS 7)” , changing the date

sent in US GAAPs, eliminating the possibility of conver-

of mandatory application of IFRS 9 to years starting on

gence; therefore, the Boards elected to jointly focus on

or after 1 January 2015 (the date of mandatory applica-

the request for information in order to allow users of

tion was previously for years on or after 1 January 2013),

financial statements to more easily compare the pres-

leaving the possibility of early adoption unaltered.

entation of financial instruments according to IFRS and

The Board deferred the mandatory application of IFRS

US GAAPs.

assets and liabilities intends to eliminate current differences between the respective accounting standards,

9 following the recent amendment to the timescale for

Mandatory adoption is required by 1 January 2013 for

completion of the remaining phase of the project to

IFRS 7 and 1 January 2014 for IAS 32: as of today the

review the standard relating to financial instruments,

approval process is still underway.


Amendments to IAS 19: “Employee Benefits”

Thirdly, the new standard requires additional disclosures,

On 16 June 2011, the IASB issued an amended version of


to be provided in the notes.

IAS 19 “Employee Benefits”.

ments for years starting on or after 1 January 2013; early

Said document modifies the accounting of defined ben-

adoption is permitted. Retrospective application is re-

efit plans and termination benefits.

quired with certain exceptions and comparative sensitiv-

In the first place, it eliminated the possibility of using

ity analysis for financial years starting before 1 January

the “corridor method” for recording actuarial profits and

2014. As of today, the approval process is still underway

losses. In particular, all actuarial profits and losses must be recorded in the Statement of Other Comprehensive

cit in the balance sheet. During the transition in line with

Amendments to IAS 1: Presentations of Items of Other Comprehensive Income

the requirements of the amended standard, an entity that

On 16 June 2011, the IASB issued the document “Pres-

currently uses the “corridor method” may have to record

entations of Items of Other Comprehensive Income

a higher liability/lower asset in the balance sheet (with a

(amendments to IAS 1)”, the result of joint work carried

matching entry in the Statement of Other Comprehensive

out with the FASB, which provides a guide on the presen-

Income and, therefore, Equity). When fully applied, said

tation and classification of items contained in the State-

amendment will generate higher volatility in the balance

ment of Other Comprehensive Income (“OCI”).

sheet and in the Statement of Other Comprehensive In-

The standard does not modify the possibility of present-

come, but the income statement will no longer be affect-

ing all revenue and cost items recorded in one financial

ed by the amortisation of actuarial profits/losses.

year in a single statement of comprehensive income, or

Secondly, provision is made for a new approach to the

in two statements: one statement which shows profit

presentation and accounting of changes in the following

(loss) components for the year (separate income state-

components of defined benefit obligations and plan as-

ment) and a second statement which starts with profits

sets in the income statement and the Statement of Other

(losses) for the year and shows the items of the State-

Comprehensive Income:

ment of Other Comprehensive Income.

Income (“OCI”), with no other option available, in order to show the complete net balance of the plan surplus/defi-

• Service costs are charged to the income statement:

The standard requires the grouping together of items of

they include costs for services provided in the year,

the Statement of Other Comprehensive Income into two

effects generated by past service costs and curtail-

categories, depending on whether they can be reclassi-

ments (both now recorded immediately in the year

fied or not, in the income statement in a future period.

they occur) and profits/losses generated by settle-


ment of the plan (in particular, generated by pay-

ments for years starting on or after 1 July 2012, with ret-

ments not in keeping with the terms of the plan, for

rospective application. As of today, the approval process

example, early termination of the plan),

is still underway.

• Net interests which are recorded in the income statement, • Remeasurements which are booked to the Statement of Other Comprehensive Income: these include, among other things, actuarial profits/losses on plan liabilities. Remeasurements are never reclassified to the income statement, but can be transferred to shareholders’ equity (e.g. among profit reserves).


235

Amendments to IAS 12: Recovery of underlying assets

Consolidation policies and procedures

The amendment clarifies the determination of deferred taxes on property investments carried at fair value. The

Consolidation policies

amendment introduces the relative presumption (rebuttable) that deferred taxes on property investments

Subsidiaries

valued at fair value according to IAS 40 should be calcu-

The basis of consolidation includes the Parent Com-

lated on the basis of the fact that the carrying amount

pany, ACEA S.p.A., and the companies over which it di-

will recovered through sale. Furthermore, it introduces

rectly or indirectly exercises control via a majority of

the requirement that deferred taxes on non-amortisable

the voting rights.

assets which are measured according to the restated

Subsidiaries are consolidated from the date on which

cost method defined by IAS 16, are always calculated

control is effectively transferred to the Group and are

on the basis of the sale of the asset. The amendment is

deconsolidated from the date on which control is trans-

effective for years starting on or after 1 January 2012.

ferred out of the Group. Where there is loss of control of a consolidated company, the consolidated financial

236

Exposure Draft 2011/6 relating to the new version of the Exposure Draft 2010/6 “Revenue from Contracts with Customers”

statements include the results for the part of the re-

On 14 November 2011 the IASB published a new version

Joint ventures

of the Exposure Draft 2010/6 “Revenue from Contracts

A joint venture is a contractual arrangement whereby

with Customers”. A similar document was published by

the Group and other parties undertake an economic

the FASB.

activity that is subject to joint control. This is the con-

The core principle of the Exposure Draft 2011/6 coin-

tractually agreed sharing of control over an economic

cides with the one set out in the Exposure Draft 2010/6:

activity and only exists when strategic, financial and op-

the entity must record revenues at the time the assets or

erating policy decisions regarding the activity require

services are transferred to the customer (the concept of

the unanimous agreement of the parties who share

“control” is used to determine when the transfer occurs);

control. The consolidated financial statements include

the amount of revenues to be recorded corresponds to

the Group’s share of the income and expenses of jointly

the consideration promised by the customer in exchange

controlled entities, accounted for under proportionate

for the goods or services. However, in order to take ac-

consolidation. The application of proportionate consoli-

count of numerous letters of comment received by the

dation thus means that the consolidated financial state-

IASB on the Exposure Draft 2010/6, and the results of

ments include the Group’s share of all the jointly con-

the extended “outreach activity”, the Boards decided to

trolled entities’ assets, liabilities, income and expenses,

improve the original proposals.

classified according to their nature. When a Group com-

Comments on the Exposure Draft may be submitted until

pany operates directly via joint venture agreements,

13 March 2012; the final accounting standard is expect-

the liabilities and costs incurred directly in respect of

ed by the end of 2012 and will be applicable for financial

the jointly controlled activities are recognised on an ac-

statements for years starting on or after 1 January 2015.

crual basis. The share of profits deriving from the sale or

Early application will be permitted.

use of resources produced by the joint venture, net of

At present, the Group is analysing the standards and in-

the related share of the expenses, is recognised when

terpretations given, as well as assessing whether their

it is likely that the economic benefits deriving from the

adoption will have a significant effect on the financial

transaction will be received by the Group and their val-

statements.

ue can be reliably measured.


porting period during which the ACEA Group has control.

Where joint venture agreements involve the establish-

Consolidation procedures

ment of a separate entity, the Group’s share of the jointly controlled entities’ assets, liabilities, income and

General procedure

expenses is combined with the similar items in its con-

The financial statements of the Group’s subsidiaries, as-

solidated financial statements on a line-by-line basis.

sociates and joint ventures are prepared for the same

Unrealised profits and losses on transactions between

accounting period and using the same accounting stand-

the Group and a jointly controlled entity are eliminated

ards as those adopted by the Parent Company. Consoli-

to the extent of the Group’s interest in the jointly con-

dation adjustments are made to bring into line any dis-

trolled entity, unless the unrealised losses provide evi-

similar accounting policies that may exist.

dence of an impairment of the asset transferred.

All inter-company balances and transactions, including any unrealised profits on intra-group transactions, are

Associates

eliminated in full. Unrealised losses are eliminated un-

An associate is a company over which the Group exercis-

less costs cannot be subsequently recovered.

es significant influence, via its power to participate in the

The carrying amount of investments in subsidiaries is

financial and operating policy decisions of the associate

eliminated against the corresponding share of the share-

which is, however, neither a subsidiary nor a joint ven-

holders’ equity of each subsidiary, including any adjust-

ture. The consolidated financial statements include the

ments to reflect fair values at the acquisition date. The

Group’s share of the income and expenses of associates,

excess of the cost of acquisition over the fair value of the

accounted for using the equity method, unless they are

Group’s share of the identifiable net assets acquired is

classified as held for sale, from the date it begins to exert

recorded as goodwill, for the purposes of IFRS 3.

significant influence until the date it ceases to exert such

The minority interest in the net assets of consolidated

influence.

subsidiaries is shown separately with respect to share-

When the Group’s share of an associate’s losses exceeds

holders’ equity attributable to the Group. The minority

the carrying amount of its investment, the interest is re-

interest is determined on the basis of the minority’s pro-

duced to zero and any additional losses are provided for,

portion of the fair value of assets and liabilities at the

and a liability is recognised, only to the extent that the

date of acquisition and of any changes in shareholders’

Group has incurred legal or constructive obligations or

equity after this date. Losses attributable to the minority

made payments on behalf of the associate. Any excess

interest in excess of the related share of shareholders’

of the cost of the acquisition over the Group’s interest in

equity are subsequently attributed to shareholders’ eq-

the fair value of the associate’s identifiable assets, liabili-

uity attributable to the Group, unless the minority has

ties and contingent liabilities at the date of the acquisi-

a binding obligation and is able to invest further in the

tion is recognised as goodwill. Goodwill is included in the

company to cover the losses.

carrying amount of the investment and subject to an impairment test. Any excess of the Group’s interest in the

Consolidation procedure for assets and

fair value of the associate’s identifiable assets, liabilities

liabilities held for sale (IFRS5)

and contingent liabilities at the date of the acquisition

Non-current assets and liabilities are classified as held

over the cost of the acquisition is recognised as negative

for sale, in accordance with the provisions of IFRS 5.

goodwill and recognised in the income statement in the period of acquisition.

Consolidation of foreign operations

Unrealised profits and losses on transactions between

All the assets and liabilities of foreign operations denom-

the Group and an associate are eliminated to the extent

inated in a currency other than the euro are translated

of the Group’s interest in the associate, unless the unre-

using the exchange rates at the end of the reporting pe-

alised losses provide evidence of an impairment of the

riod.

asset transferred.

Income and expenses are translated using average ex-


237

change rates for the period. Any translation differences

For more information please refer to paragraph

are recognised in a separate component of sharehold-

“Assets held for sale, or discontinuing or discon-

ers’ equity until the investment is sold.

tinued operations” as well as the Information

On initial application of IFRS, accumulated translation dif-

Document drawn up pursuant to article 71 of the

ferences deriving from the consolidation of foreign op-

Governing implementation of Legislative Decree

erations were reduced to zero. The reserve accounted

no. 58 of 24 February 1998 adopted by CONSOB

for in the consolidated financial statements only includes

with resolution no. 11971 of 14 May 1999 and sub-

gains or losses generated from 1 January 2004.

sequent amendments and article 5 of the regula-

Foreign currency transactions are initially recognised

tion adopted with CONSOB resolution no. 17221 of

at the spot rate on the date of the transaction. Foreign currency assets and liabilities are translated at the exchange rate at the end of the reporting period. Transla-

12 March 2010, published on 15 April 2011. As a consequence of the closing of the Operation, the basis of consolidation is amended as follows:

tion differences and those arising on disposal of the op-

• the economic data include

eration are recognised as finance income or costs in the

(i) for the first quarter of 2011, those of the compa-

income statement.

nies in the Energy Area, accounted for under proportionate consolidation, based on the proportion

Basis of Consolidation

effectively held in the quarter or - →concerning the transferred companies: a. 29.71% of AceaElectrabel Produzione S.p.A. ex-

The ACEA Group’s consolidated financial statements in-

cluding the portion of assets and liabilities at-

clude the financial statements of the Parent Company,

tributable to Acea Produzione S.p.A., the newly

ACEA S.p.A., and the financial statements of its Italian

established company that is the beneficiary of

and foreign subsidiaries, over which it directly or indi-

the partial non proportional demerger;

rectly exercises control via a majority of the voting rights at ordinary general meetings, giving it the power to gov-

b. 29.71% of Voghera Energia S.p.A. and Roselectra S.p.A.;

ern the financial and operating policies and obtain the

c. 15.15% of Longano Eolica S.p.A.;

related benefits. Entities that the Parent Company jointly

d. 50% of AceaElectrabel Trading S.p.A.;

controls with other parties are accounted for under pro-

e. 30% of Eblacea S.p.A. and, indirectly, through it,

portionate consolidation. The Group’s basis of consolidation is divided into areas:

15% of Gruppo Tirreno Power S.p.A. - →concerning the acquired companies: a. 59.41% of Acea Energia Holding S.p.A. (formerly

A) Changes in basis of consolidation The basis of consolidation as at 31 December 2011 has changed since the 2010 consolidated financial statements due to • the change of the Acquedotto del Fiora consolidation criterion from net equity to proportionate consolidation, due to the signing of new shareholders’ agreements among the public and private shareholders: • the termination, on 31 March 2011, of the joint

238

AceaElectrabel); b. 59.41% of Acea Energia S.p.A. (formerly AceaElectrabel Elettricità); c. 29.71% of Umbria Energy S.p.A. and Voghera Energia Vendite S.p.A.; d. 29.11% of Elga Sud S.p.A. and Estra Elettricità S.p.A.; e. 29.71% of Acea Produzione S.p.A., the newly established company that is the beneficiary of the partial non proportional demerger.

venture agreement signed in 2002 and mutual re-

(ii) for the last three quarters of 2011, the eco-

lations, positions, rights and obligations connected

nomic data of the consolidated acquired com-

to it.

paniesi


a. line-by-line as regards Acea Energia Holding,

Therefore, the economic data may not be directly compared with those at 31 December 2010.

Acea Energia and Acea Produzione b. accounted for under proportionate consolida-

The following table summarises the consolidation of eco-

tion, based on the proportion effectively held in

nomic data of the companies involved in the joint ven-

the quarter or

ture agreement termination.

1. 50% of Umbria Energy S.p.A. and Voghera Energia Vendite S.p.A.; 2. 49% of Elga Sud S.p.A; 3. 49% of Estra Elettricità S.p.A. since 1 April 2011 and until the date that it was no longer part of the shareholder structure, which took place on 6 May 2011. Economic data of the first quarter of 2011 Transferred companies

Economic data for the April December 2011 period

Percentage held

Method of Consolidation

Percentage held


Eblacea

30.00%

Proportionate

0.00%

None

Tirreno Power

15.00%

Proportionate

0.00%

None


29.71%

Proportionate

0.00%

None

Voghera Energia

29.71%

Proportionate

0.00%

None

Roselectra

29.71%

Proportionate

0.00%

None

Longano

15.15%

Proportionate

0.00%

None


50.00%

Proportionate

0.00%

None

Economic data of the first quarter of 2011

Economic data for the April December 2011 period

Percentage held


Percentage held



59.41%

Proportionate

100.00%

Line-by-line

Acea Energia

59.41%

Proportionate

100.00%

Line-by-line

Voghera Energia Vendite

29.71%

Proportionate

50.00%

Proportionate

Umbria Energy

29.71%

Proportionate

50.00%

Proportionate

Elga Sud

29.11%

Proportionate

49.00%

Proportionate

29.11% 29.71%

Companies acquired

Estra Elettricità

1

Acea Produzione

Proportionate

49.00%

1

Proportionate

Proportionate

100.00%

Line-by-line

1 Until 6 May 2011


239

• on the other hand, the financial position and cash

merger is effective from 1 January 2011 for tax and

flow are affected by the deconsolidation of the

accounting purposes. The operation did not lead to

transferred companies and the consolidation of

a change of share capital or registered office. As a

the financial position and cash flow relating to ad-

result of the merger, the investments held by Crea

ditional shares acquired from GDF SUEZ Energia

Partecipazioni and Acea Rieti were transferred to

Italia S.p.A. (excluding the greater intercompany

Crea Gestioni; more specifically:

eliminations made necessary); in particular:

- investment of 59.67% of GE.SE.SA.

a. 40.59% of Acea Energia Holding S.p.A.;

➢ investment of 49% of SO.GE.A.

b. 70.29% of Acea Produzione S.p.A. due to the

➢ investment of 34% of Umbriadue Servizi Idrici

non proportional demerger of AceaElectrabel

Scarl.

Produzione S.p.A. and the already mentioned acquisition of Acea Energia Holding S.p.A.;

B) Unconsolidated investments

c. 40.59% of Acea Energia S.p.A. through the total

During application of the above methods of consolida-

purchase of the share capital of Acea Energia

tion and of the equity method, the following subsidiaries

Holding S.p.A.;

and associates, which are accounted for at cost, were

d. 20.29% of the subsidiaries of Acea Energia, Um-

excluded. It was possible to resort to this applied simpli-

bria Energy S.p.A. and Voghera Energia Vendita

fication by taking account of the fact that the subsidiar-

S.p.A., through the total purchase of the share

ies listed below are not in operations (all of them are in

capital of Acea Energia Holding S.p.A.; ;

liquidation) and/or are not significant, considered either

e. 19.89% of the subsidiaries of Acea Energia, Estra Elettricità S.p.A. and Elga Sud S.p.A., through the total purchase of the share capital of Acea Energia Holding S.p.A.; Thus the financial position and cash flow are not immediately comparable with those at 31 December 2010. • ACEA’s purchase in March 2011 of 70% of Acea

individually and on an aggregated basis taking account of qualitative and quantitative factors: 1) Luce Napoli, 70% owned by ACEA. It is pointed out that the company was placed into liquidation in November 2008; 2) Tirana Acque S.c.a.r.l. in liquidation, 40% owned by ACEA.

Servizi Acqua S.r.l. from Smeco Lazio S.r.l., • Aquaser’s purchase at the end of March 2011 of 40% of the company Innovazione Sostenibilità Ambientale S.r.l.. (ISA), • the merger by incorporation into ARIA, effective

Financial Highlights of Companies accounted for under Proportionate Consolidation

from 1 September 2011, of its subsidiaries Eall, Terni Ena, Enercombustibili and Ergo Ena. The operation did not lead to a change of ARIA’s share capital, registered office or management body. The merger by incorporation uses the equity values of participating companies as at 31 December 2010 as a reference and the merger is effective from the start of the current year for tax and accounting purposes, • the merger by incorporation of Crea Partecipazioni and Acea Rieti into Crea Gestioni, effective from 1 September 2011. The merger by incorporation uses the equity values of participating companies as at 31 December 2010 as a reference and the

240


The table is shown in the annexes.

Segment information

areas. The 2010 and 2011 economic data of the AceaElectrabel Produzione Group was shown net

Please note the following for a greater understanding of

of that referring to the business division subject

this section:

to non-proportional demerger and booked under

- generation, trading and sales refer to the Ener-

discontinued operations.

gy Industrial Area responsible, in organisational

2010 and 2011 balance sheets and income statements

terms, (i) until 31 March 2011 for AceaElectrabel

are included in the annexes.

Produzione, Roselectra, Voghera Energia, Longano, Eblacea and Tirreno Power, AceaElectrabel Trading, (ii) until 6 May for Estra Elettricità and (iii) as well as the companies Acea Energia Holding, Acea Energia, Umbria Energy, Voghera Energia Vendite, Elga Sud and Acea Produzione, - distribution, public lighting (Rome and Naples) and PV power are included in the Networks Industrial Area which, under the organisation structure, includes ACEA Distribuzione, ARSE and Ecogena - analysis and research services refer to the Engineering and Special Projects Department, responsible, under the organisation structure, for Laboratori S.p.A. and the research consortia. - overseas water services refers to the Water Industrial Area responsible, under the organisation structure, for water companies operating abroad - Italian water management refers to the Water Industrial Area, responsible, under the organisation structure, for water companies operating in Lazio, Campania, Tuscany and Umbria, and AceaGori

Notes to the Consolidated Income Statement As already described in the section “Basis of consolidation”, as a result of the termination of the joint venture agreement between ACEA and GdF-Suez on 31 March 2011, and the transfer of Estra Elettricità on 6 May 2011, the economic data for 2011 are not directly comparable with those of the same period of the previous year due to the different contribution to the consolidated income statement of the companies involved in the transaction. Where the impact is significant, the economic data from 2010 have been presented pro forma to enable an analysis of variations on a like-for-like basis. The 2010 and 2011 income statements have been reclassified pursuant to IFRS5: the 2010 income statement differs from the one published due to the reclassification of Estra Elettricità costs and revenues plus reclassifications carried out to enable a homogeneous comparison.

Servizi; - environment refers to the Industrial Area of the same name, responsible, under the organisation structure, for the Companies in the A.R.I.A. Group and the Aquaser Group. To facilitate reading, please be advised that: • the total revenues shown in the tables below differs from the amount reported for consolidated net revenues in the Consolidated Income Statement, as a result of the inclusion of the income from fair value deriving from commodity risk management, • the economic data for the 2010 and 2011 referring to Eblacea, Tirreno Power, AceaElectrabel Trading and Estra Elettricità was reclassified in the dedicated line of the income statement, in the related


241

Consolidated net revenue As at 31 December 2011 these amounted to 3,288,158 thousand euros (2,540,535 thousand euros at 31 December 2010), representing an increase of 747,623 thousand (29.4%) thousand euros over the previous year, and are broken down as follows.

Revenue from sales and services

31.12.2011

31.12.2010

Absolute Increase/ (Decrease)

3,217,123

2,460,690

756,433

30.7%

71,035

79,845

(8,810)

-11.0%

3,288,158

2,540,535

747,623

29.4%

Other revenues and proceeds Consolidated net revenue

Increase/ (decrease) %


The change is essentially a result of:

• the growth in other revenue items (up 18,100 thou-

• the increase in revenues from the sale of electricity

sand euros), mainly due to the increase in revenues

and gas by 663,526 thousand euros, due to the change

from customer services as a result of Arse’s photovol-

in the basis of consolidation and higher average sale

taic panel marketing activities and the energy account

prices mitigated by the decrease in quantities sold,

(totalling + 29,505 thousand euros), partially mitigated

• increased revenues from water companies in Italy

by the fall generated by the recognition in the previ-

and overseas (up 62,445 thousand euros) as a result

ous year of the gain deriving from the sale of a prop-

of the rise in tariffs of 21,149 thousand euros and

erty by ACEA (down 9,466 thousand euros).

the change generated by the amended consolidation criterion of Acquedotto del Fiora: this company con-

The overall change of the period for Acquedotto del Fiora

tributed revenues from the integrated water service

concerns consolidated net revenues for 30,795 thousand

of 29,504 thousand euros during the year. It should

euros.

also be noted that Aguazul Bogotá grew by 12,289 thousand euros as a result of the consolidated performance of Conazul, established in the second half of 2010, • the increase of 2,714 thousand euros in revenues from the sale of certificates and rights, essentially due to the combined effect of the increase in revenues from white certificates and CO2 rights (totalling +3,039 thousand euros) and the change in the basis of consolidation generated by transferred companies, • essentially unchanged revenues regarding the companies of the ARIA Group (up 838 thousand euros) due to the shutdown of the Terni Ena plants (since 6 August 2010) and the first line of Eall (since 20 March 2011), only partially mitigated by the entry into operation of the second and third Eall lines,

242


1. Revenue from sales and services – 3,217,123 thousand euros This item registered an increase of 756,433 thousand euros compared to 31 December 2010 (up 29.8%), which closed with a total of 2,460,690 thousand euros. They are composed as follows

31.12.2011

31.12.2010



2,154,666

1,508,027

646,638

42.9%

Gas sales revenues

39,274

22,386

16,888

75.4%

Revenues from the sale of certificates and rights

18,753

16,038

2,714

16.9%

717,458

667,328

50,130

7.5%

Overseas Water Services

35,889

23,574

12,315

52.2%

Revenues from biomass transfer and waste management

28,943

28,105

838

3.0%

Revenues from services to customers

185,794

163,242

22,552

13.8%

Connection contributions

36,347

31,990

4,358

13.6%

3,217,123

2,460,690

756,433

30.7%

Electricity sales and services revenues

Revenues from integrated water services

Revenue from sales and services amounts in thousands of euros

Electricity sales and services revenues

down between types and general equalisation;

Electricity sales and services revenues amounted to

injections to the networks registered a decrease

2,154,666 thousand euros and, excluding intercompany

in quantities of 0.24% in the period, highlighting

eliminations, essentially include following:

growth of withdrawals of free market customers

• 28,510 thousand euros (5,724 thousand euros as

of 7.8% and a 13.3% decrease in energy injected

at 31 December 2010) related to electricity and

for customers in the market subject to additional

heat generation with particular reference to the

safeguards. Estimated general equalisation for the

Acea Produzione thermoelectric and hydroelec-

period, including amounts relating to recoveries

tric plants. The quantities produced by said plants

of previous years, was a positive 20,412 thousand

in 2011 totalled 320.7 GWh, down by 341.4 GWh

euros, marking growth of 20,818 thousand euros

compared to 2010, as a result of the shutdown

compared to 2010; the change is attributable to (i)

of the Salisano and Orte hydroelectric plants for

5,823 thousand euros for the estimate of general

repowering,

equalisation for the January - December 2011 pe-

• 334,775 thousand euros (304,995 thousand euros

riod, with particular reference to the tariff update

as at 31 December 2010) relating to the transport

to the component relating to application of D2-D3

and metering of electricity for the free and protect-

tariffs for domestic use, metering component and

ed categories market and market subject to addi-

lump-sum connection contributions (not present

tional safeguards: this type of revenues, including

in the 2010 financial statements) and (ii) 14,995

recoveries of equalisation of previous years, in-

thousand euros relating to recoveries of amounts

creased by 29,780 thousand euros, essentially due

for previous years, essentially deriving from ad-

to the tariff update, change in number of users,

justments to metering equalisation for previous

less electricity distributed and the different break-

years.


243

• Furthermore, calculation of the amounts for gen-

legislation and parameter estimates (contained in

eral equalisation is based on technical and eco-

the updated formulae) still to be published by the

nomic parameters linked to the national electric-

Italian Authority for Electricity and Gas,

ity system (k factor), which are defined by the

• 1,719,691 thousand euros deriving from energy

Electricity and Gas Authority, in accordance with

sales to the free and protected categories mar-

the regulations in force, in the years subsequent

kets: these activities recorded growth of 591,089

to the one to which the equalisation refers. The re-

thousand euros, attributable essentially to the

ported figures for equalisation thus represent the

change in the basis of consolidation. The volume

best estimate based on the information available.

sold on the free market by the Acea Energia Group

These estimates may change as a result of deci-

stood at GWh 12,926, down by roughly 16% com-

sions taken by the Authority.

pared to 2010.

In terms of the markets served, the free market saw an increase in the amount distributed of

Electricity sales and services revenue also includes:

7.7%, from 6,937.9 GWh at 31 December 2010 to

• €revenues from the energy produced by the plants

the current level of 7,471.3 GWh. In contrast, the

owned by the A.R.I.A. Group. (Terni ENA and EALL)

volume of electricity distributed to customers in

equal to 26,545 thousand euros. These revenues

the protected categories market (3,660.8 GWh)

essentially derive from the sale of electricity to

is down around 13% compared with the previous

GSE between January and December and are up

year (4,214.7 GWh), essentially due to the consid-

by 4,180 thousand euros. This variation is the re-

erable decrease of the market following liberalisa-

sult of the entry into operation of the second and

tion.

third lines of the San Vittore plant (in April and July

The period witnessed a 0.86% increase in the av-

2011 respectively), partially offset by lower rev-

erage number of end customers in the area served

enues resulting from the shutdown of the Terni

by ACEA Distribuzione,

plant (from 6 August 2010) and of the first line

• 39,507 thousand euros regarding the estimate for

of the San Vittore plant (from 20 March 2011). It

the company-specific equalisation for 2011. This

should be noted that the CIP6 Contract for the

is additional to tariff revenues for distribution ac-

two new San Vittore lines will soon be signed with

tivities, which offsets failure to cover the corre-

GSE.

sponding actual costs paid due to the effects of

Other revenues from this area have been allocat-

external factors, i.e. not under direct control of

ed to item Revenues from biomass transfer and

the company and therefore not related to inef-

waste management,

ficiencies in the performance of the service. The

• €the revenues obtained by Arse and Ecogena for

amount is down by 2,893 thousand euros com-

the transfer of the energy produced by PV and co-

pared to the previous year due to the increase

generation plants (overall 5,478 thousand euros)

in revenues included in the equalisation, and the

which recorded an increase of 3,167 thousand eu-

different estimate of the Csa coefficient for 2011,

ros compared to 31 December 2011.

in line with the update instructions for the years 2009-2011 contained in resolution no. 30/08. The

Gas sales revenues

estimated amount for 2011 is based on calcula-

These amounted to a total of 39,274 thousand euros, an

tions performed for the updating of actual costs

increase of 16,888 thousand euros compared to 31 De-

paid to ACEA Distribuzione for distribution activi-

cember 2010, due to the effect of higher quantities sold

ties in the third regulatory period, on the basis of

by the Acea Energia Group and the change in the basis

updated criteria and formulae contained in the

of consolidation.

resolutions, indications taken from the reference

244


Revenues from the sale of certificates

The reduction recorded by GORI is a result of the recogni-

and rights

tion of revenues of 130 million euros (Group share 48.2

These amounted to 18,753 thousand euros, marking an

million euros), as established by the resolution adopted

increase of 2,714 thousand euros compared to 2010

by the Area Authority in the first few days of August 2011.

due to (i) the elimination of income from green certifi-

The increases recorded by Publiacqua and Acque re-

cates which generated a decrease of 325 thousand eu-

flect the tariff reviews which took place in December

ros compared to the previous year, (ii) the increase of

2010 and December 2011 respectively.

1,857 thousand euros from white certificates (17,091

As regards the issue of the tariff problems of ACEA Ato5

thousand euros) and (iii) the increase of 1,182 thousand

and GORI, please see the paragraph “Update on major

euros in revenue from the sale of CO2 rights (1,660

disputes and litigation” and “Service Concession Ar-

thousand euros.

rangements” in these financial statements.

Revenues from integrated


water services

This item amounts to 35,889 thousand euros, marking

Revenues from integrated water services are generated

an increase of 12,315 thousand euros on the previous

by water companies operating in Tuscany, Umbria, Lazio

year (23,574 thousand euros).

and Campania.

The change is essentially due to the consolidation of

These revenues amounted to 717,458 thousand euros,

Conazul, a consortium set up by Aguazul Bogotá and lo-

up 50,130 thousand euros (up 7.5%) compared with the

cal entrepreneurs to perform a contract in Peru, which

previous year (667,328 thousand euros).

the vehicle company had been awarded through a ten-

The Companies operating in the Lazio and Campania

der called by the Peruvian municipality. The share at-

regions report total revenues of 538,940 thousand eu-

tributable to Aguazul Bogotá in this consortium is 60%.

ros (up 10,366 thousand euros), whilst the Tuscany and

These revenues were earned as follows: (i) 30,814 thou-

Umbria Companies ended the period with revenues of

sand euros by Aguazul Bogotà, including Conazul’s

178,519 thousand euros (up 39,764 thousand euros, in-

share (up 12,289 thousand euros); (ii) 2,628 thousand

cluding 29,504 thousand euros contributed by Acque-

euros by Acea Dominicana; and (iii) 2,447 thousand

dotto del Fiora).

euros by Consorcio Agua Azul, essentially unchanged

Details of the breakdown by company are given below.

since 31 December 2010.

31.12.2011

31.12.2010



ACEA Ato2

438,073

427,663

10,409

2.4%

Publiacqua

69,308

64,561

4,747

7.4%

Gori

48,165

50,018

(1,853)

-3.7%

Acque

46,749

43,137

3,613

8.4%

ACEA Ato5

43,351

42,128

1,223

2.9%

Umbra Acque

24,306

23,560

746

3.2%

Nuove Acque

6,654

6,036

618

10.2%

Gesesa

5,714

5,393

320

5.9%

Other minor entities

5,635

4,833

802

16.6%

687,954

667,328

20,626

3.1%

Revenues from integrated water services on a like-for-like basis Acquedotto del Fiora Revenues from integrated water services

29,504

0

29,504

100.00%

717,458

667,328

50,130

7.5%



245

Revenues from biomass transfer and waste management

solidation resulting from the termination of the joint venture,

This item amounts to 28,943 thousand euros, marking

• 59,317 thousand euros in income achieved by Arse

an increase of 838 thousand euros on the previous year

for photovoltaic panel marketing and installation


on behalf of third parties. This component recorded

These revenues regard Aquaser Group for 8,160 thou-

an increase of 18,456 thousand euros compared to

sand euros (down 500 thousand euros) and A.R.I.A.

2010, when the figure was 40,861 thousand euros,

Group companies for a total of 20,783 thousand euros

• 7,265 thousand euros in revenues deriving from

(up 1,338 thousand euros). The trend in the period was mainly due to the increase in quantities transferred and the average price.

cemetery lighting management, essentially unchanged with respect to 2010, • 16,311 thousand euros in revenues from other services to customers, broken down by Industrial Area

Revenues from services to customers

as follows:

This item amounted to 185,794 thousand euros (163,242

- Networks: 1,147 thousand euros


- Energy: 781 thousand euros

crease of 22,552 thousand euros.

- Water: 11,963 thousand euros

This type of revenue comprises:

- Environment: 2,018 thousand euros

• 71,299 thousand euros in income from public light-

- ACEA: 401 thousand euros.

ing provided to Roma Capitale: this item recorded an increase of 5,609 thousand euros compared to

Connection contributions

31 December 2010, essentially as a consequence

This item totals 36,347 thousand euros, marking an in-

of the (i) reduced lump-sum payment (down 11,857

crease of 4,358 thousand euros. They are broken down

thousand euros) produced by the supplementary

as follows:

agreement signed in March and effective from the

• free and protected categories market and market

start of 2011, mitigated by (ii) the growth in reve-

subject to additional safeguards: 29,686 thousand

nues from services provided on request (up 11,790

euros (up 3,774 thousand euros compared to 31

thousand euros), including the Lighting Plan,

December 2010),

• 6,592 thousand euros of income from the contract

• water services: 6,661 thousand euros (up 584 thou-

for the management of the public lighting service in

sand euros over the previous year, including 255

the municipality of Naples. This contract produced

thousand euros posted by Acquedotto del Fiora).

its effects from the second half of 2010; revenues were recorded in the 2010 consolidated financial

2. Other revenues and proceeds – 71,035 thousand euros

statements. Revenues at 31 December 2011 also

This item registered a reduction of 8,810 thousand eu-

include the recharging of electricity used for the

ros (down 11%) compared to 31 December 2010, which

service management,

closed with a total of 79,845 thousand euros.

of this category amounting to 2,908 thousand euros

• 12,408 thousand euros in revenues from services provided on request of third parties: this category

(i) the increase in the energy account of 11,049 thou-

of income saw a decrease of 1,839 thousand euros

sand euros, mainly due to the entry into operation

essentially due to ACEA Ato2,

246

The change compared to 2010 is a result of

of some PV plants owned by Arse,

• 12,705 thousand euros in revenues from service

(ii) the recognition of the gain amounting to 9,466

contracts and other intercompany services: this

thousand euros in the previous year concerning

component registered a decrease of 3,577 thou-

the sale of a property owned by the Parent Com-

sand euros due to the change in the basis of con-

pany,


(iii) the reduction of 579 thousand euros in income

to the recognition of energy items concerning previ-

from heating system inspections given the contract

ous years, whose amount cannot be estimated. This

was terminated,

item also includes the amount of 2,357 thousand

(iv) the decrease of 1,398 thousand euros in reim-

euros (2,292 thousand euros at the end of 2010)

bursements for damages and penalties for different

concerning the margin estimate on construction

methods of charging rent on public land by ACEA,

activities of plants under concession and, therefore,

(v) the reduction of 7,618 thousand euros in the item

which are included in the scope of IFRIC 12.

contingent assets and other revenues, mainly due

A breakdown, compared with 2010, is as follows.

31.12.2011

31.12.2010



Property income

2,566

2,994

(428)

-14.3%

Income from end users

1,048

2,019

(971)

-48.1%

125

9,512

(9,386)

-98.7% -52.2%

Gains on asset disposals Heating systems

530

1,109

(579)

1,663

978

685

70.0%

23,185

30,803

(7,618)

-24.7%

Reimbursement for damages, penalties and fines

5,379

6,777

(1,398)

-20.6%

Service continuity bonuses

5,338

7,024

(1,686)

-24.0%

87

73

15

20.6%

4,184

4,098

86

2.1%

Coverage of costs for tariff subsidies for employees Contingent assets and other revenues

Electricity and water use accessory revenues Government grant (Decree of the President of the Council of Ministers of 23/04/04) Regional grants

6,378

4,708

1,669

35.5%

Energy Account

17,836

6,787

11,049

162.8%

Seconded staff

1,913

2,092

(178)

-8.5%

802

873

(71)

-8.1%

71,035

79,845

(8,810)

-11.0%

Recharged cost of governance bodies Other revenues and proceeds amounts in thousands of euros

Consolidated operating costs

The change in the period was significantly impacted by

As at 31 December 2011 these amounted to 2,544,078

the variation in the basis of consolidation, with particular

thousand euros (1,442,245 thousand euros at 31 De-

reference to the dissolution of the joint venture. Acque-

cember 2010), representing an increase of 1,101,833 (up

dotto del Fiora contributed 18,032 thousand euros to the

76.4%) thousand euros over the previous year, and are

variation.

broken down as follows.

Staff costs Cost of materials and overheads Consolidated operating costs

31.12.2011

31.12.2010



277,933

264,968

12,965

4.9%

2,266,145

1,177,277

1,088,868

92.5%

2,544,078

1,442,245

1,101,833

76.4%



247

3. Staff costs – 277,933 thousand euros 31.12.2011

31.12.2010

Staff costs including capitalised portion

325,294

321,995

3,299

1.0%

Capitalised costs

(66,054)

(57,027)

(9,026)

15.8%

259,241

264,968

(5,727)

(2.2%)

11,867

0

11,867

100.0%

Capitalised costs

(1,316)

0

(1,316)

100.0%

Change in basis of consolidation due to new arrivals

10,551

0

10,551

100.0%

8,141

100.0%

Staff costs on a like-for-like basis Staff costs including capitalised portion

Change in basis of consolidation produced by companies acquired as part of the dissolution Total change in the basis of consolidation Staff costs


8,141


18,692

0

18,692

100.0%

277.933

264.968

12.965

4,9%


The increase in staff costs including capitalised costs,

in autumn 2010, envisages a cash payment at the end

and on a like-for-like basis, stands at 3,299 thousand

of the period, calculated as a percentage of the Gross

euros and is substantially determined by ACEA, partially

Annual Remuneration of beneficiaries, based on the

mitigated by the reduction of water companies, with

achievement of pre–established economic and financial

special reference to ACEA Ato2 (1,916 thousand euros).

targets. In 2010, an amount of 1,122 thousand euros

The Industrial Area is broken down as follows:

was set aside for said plan.

Networks

91,118 thousand euros

As regards capitalised costs, growth of 9,026 thousand

(essentially unchanged compared to 2010)

euros was recorded (on a like-for-like basis), essentially

15,169 thousand euros (up 521 thousand euros)

caused by the water companies, with particular refer-

Energy Water services Italy

154,963 thousand euros

ence to ACEA Ato2, ACEA Ato5 and Publiacqua.

(down 2,851 thousand euros); Overseas water services Environment

7,187 thousand euros (unchanged);

At 31 December 2011, changes to the perimeter

9,235 thousand euros (up 594 thousand euros);

amounted to 20,008 thousand euros, including capital-

Parent Company

47,708 thousand euros (up 5,037 thousand euros).

ised costs, mainly relating to: • Acquedotto del Fiora for 6,219 thousand euros, • Aguazul Bogotá for 3,491 thousand euros, as a re-

Staff costs in the year were affected mainly by the in-

sult of the expansion of the activities carried out

crease in ACEA’s workforce and increase in average per

by the foreign subsidiary, including therein those

capita costs as a result of the renewal of employment

provided by Conazul,

contracts and salary policies. The change was also partly influenced by voluntary redundancy procedures - those

• Acea Servizi Acqua and ISA totalling 2,071 thousand euros and, lastly,

already finished and in progress - which led to a reduc-

• companies acquired as part of the termination of

tion in the workforce at the largest subsidiaries (ACEA

the joint venture totalling 8,141 thousand euros.

Distribuzione and ACEA Ato2).

248

Staff costs of the Parent Company include the amount

The following table shows the average number of staff

of 1,159 thousand euros corresponding to the assess-

by Industrial Area, compared to same period of the pre-

ment of the second cycle of the three-year medium/

vious year. The figure for the end of the period is also

long-term incentive plan (2010-2012). That plan, set up

shown.


Industrial area

Average number of employees 31.12.2011

31.12.2010

D

1,516

1,578

(62)

489

400

89

4,382

3,931

451

Lazio-Campania

2,232

2,260

(28)

Tuscany-Umbria

865

714

151

1,137

813

324

Networks Energy Water

Overseas

148

144

4

Environment

engineering and se rvices

197

180

17

Parent Company

552

536

16

7,136

6,626

511

TOTAL

Industrial area

Final number of employees

Networks Energy Water

31.12.2011

31.12.2010

D

1,465

1,543

(78)

489

395

94

4,334

4,170

164

Lazio-Campania

2,189

2,217

(28)

Tuscany-Umbria

853

716

137

1,142

1,090

52

150

147

3

202

181

21

Overseas engineering and services Environment Parent Company TOTAL

560

534

26

7,050

6,822

227

4. Cost of materials and overheads – 2,266,045 thousand euros

The increase is mainly due to the change in the basis

This item registered an increase of 1,088,868 thou-

Energy, gas and fuels.

sand euros (up 92.5%) compared to 31 December 2010,

It should be noted that the items Materials and Services

which closed with a total of 1,177,277 thousand euros.

were affected by the marketing and supply of photovol-

of consolidation, with particular reference to the item,

taic panels by ARSE.

Electricity, gas and fuel

31.12.2011

31.12.2010



1,707,255

677,231

1,030,024

152.1%

Materials

103,611

78,098

25,513

32.7%

Services

327,155

301,518

25,636

8.5%

Concession fees

60,953

57,418

3,535

6.2%

Lease expense

33,103

33,323

(220)

-0.7%

Other operating costs

34,068

29,689

4,379

14.7%

2,266,145

1,177,277

1,088,868

92.5%

Consolidated operating costs amounts in thousands of euros


249

Electricity, gas and fuel

The trend in said item is essentially determined by the

This item includes:

change in the basis of consolidation (4,311 thousand

• the cost of procuring electricity for the regulated and

euros) and the growth of ARSE and ACEA Distribuzi-

free markets and the market subject to additional

one (totalling 17,918 thousand euros) and ACEA (5,663

safeguards and the related transport costs, totalling

thousand euros) for materials used for Roma Capitale’s

1,668,599 thousand euros, compared with 666,016

Lighting Plan.

thousand euros at 31 December 2010. The costs

The change in the basis of consolidation comprises (i)

relating to the Single Buyer, excluding the effect of

3,023 thousand euros from Aguazul Bogotà due to Con-

energy equalisation, amounting to 264,004 thousand

azul, (ii) 887 thousand euros from Acquedotto del Fiora

euros (195,899 thousand euros at 31 December 2010

and (iii) 401 thousand euros from ISA and ASA.

and 329,741 on a like-for-like basis in respect of the

The item purchases of materials before capitalised

previous year); the equalisation of electricity destined

costs increased by 13,442 thousand euros, and the

for the regulated market in the year led to an increase

same considerations as above essentially apply.

in costs of 4,057 thousand euros, compared to 11,776

By contrast, capitalised costs recorded a decrease of

thousand euros in 2010 (19,821 thousand euros on a

12,070 thousand euros, again essentially due to ARSE

like-for-like basis). This item also includes expenses

(down 15,255 thousand euros) which, in 2011, used

relating to energy efficiency, UC6 and CTS (special tar-

photovoltaic panels mainly for marketing and supply for

iff component) paid by the distributor totalling 5,668

third parties; ARSE’s decrease was partially lessened by

thousand euros (7,372 thousand euros in 2010),

the growth in water service companies (totalling 2,354

• the cost of purchasing gas for resale and the pro-

thousand euros).

duction of electricity, and the cost of other fuels

Therefore, costs of materials incurred by the various

consumed in the period by the plants (33,416 thou-

business areas during the period are as follows.

sand euros against 8,098 thousand euros at 31 December 2010). This item’s performance is affected

Networks

by the price trends and the quantities produced in

Energy

the period.

Water services Italy

70,639 thousand euros (up 18,228 thousand euros); 551 thousand euros (down 221 thousand euros); 17,725 thousand euros

This item also includes the cost of purchasing green cer-

tificates, CO2 rights and white certificates (5,240 thou-

Overseas water services

sand euros, compared with 3,117 thousand euros at 31

December 2010).

Environment

(down 1,509 thousand euros); 6,079 thousand euros (up 3,045 thousand euros); 2,517 thousand euros (up 308 thousand euros);

Parent Company


Materials The cost of materials is 103,611 thousand euros and rep-

Services and contract work

resents the cost of materials used during the period less

This item amounts to 327,155 million euros, marking an

costs allocated to investments, as the table below dis-

increase of 25,636 thousand euros on the 301,518 thou-

plays..

sand euros at 31 December 2010. 31.12.2011

31.12.2010


Purchase of materials

134,641

139,915

(5,275)

-3.8%

Changes in inventories

11,445

(7,272)

18,717

-257.4%

146,085

132,643

13,442

10.1%

(42,475)

(54,545)

12,070

-22.1%

103,611

78,098

25,513

32.7%

Total Capitalised costs TOTAL amounts in thousands of euros

250



This was a result of the change in the basis of consolida-

lating to facility management services provided by

tion: (i) due to the consolidation of Acquedotto del Fiora

Marco Polo: the total cost of these services to the

with the proportionate method from 1 January 2011,

Parent Company came to 13,200 thousand euros

for 9,373 thousand euros, (ii) for the acquisition of Acea

(9,000 thousand euros at 31 December 2010). In-

Servizi Acque for 431 thousand euros and Innovazione

tercompany services also include services provid-

Sostenibilità Ambientale for 370 thousand euros. Fur-

ed by the consortium which has managed public

thermore, the effect of the termination of the joint ven-

lighting contract works in Naples since July 2010:

ture with GDF Suez Energia also had a significant impact,

costs of this nature accrued in the period came to

leading to a change in the percentage of consolidation

4,968 thousand euros, up 3,611 thousand euros

of Acea Energia Holding and its subsidiaries (totalling -

over 2010. The change was also affected by the dif-

8,916 thousand euros).

ferent percentage consolidation of Acea Energia,

An analysis of the breakdown reveals the following: • works amounted to 70,355 thousand euros, marking an increase of 2,801 thousand euros on the

• services for staff, totalling 17,771 thousand euros (down 152 thousand euros compared to 31 December 2010),

previous year. The change is mainly attributable

• telecommunications, printing, postage and bank

to growth recorded by ACEA Distribuzione and

charges totalling 17,484 thousand euros (up 895

the Parent company for public lighting activities

thousand euros); the change is essentially due to

in Rome and Naples (totally 9,599 thousand eu-

telecommunications and data transmission (up

ros) and foreign companies (up 1,144 thousand

1,249 thousand euros),

euros), particularly with reference to Aguazul Bo-

• disposal and transport of sludge, waste, ash and

gotá, which consolidates 60% of Conazul’s costs;

refuse, and cleaning and porterage, totalling 37,003

on the other hand, the amount of works incurred

thousand euros (up 2,057 thousand euros). The var-

by water companies decreased (down 8,624 thou-

iation is determined mainly by additional expenses

sand euros) as a result of the decreased volumes

incurred by ACEA Ato2 as a result of the seizure of

of performed maintenance and Terni Ena and Eall

a sanitation plant,

(overall – 1,024 thousand). With reference to the change in the basis of consolidation, Acquedotto del Fiora contributed 2,451 thousand euros,

• insurance for 13,322 thousand euros (up 2,144 thousand euros), • technical and administrative services (including

• electricity, water and gas consumption of 48,723

consultants’ fees and the cost of freelance work-

thousand euros (down 4,246 thousand euros). The

ers), amounting to 46,077 thousand euros (up 9,771

change owes to contrasting elements: on one hand,

thousand euros). The change was caused by (i) 677

the 8,876 thousand euros increase recorded by the

thousand euros from ACEA, mainly for IT consult-

water companies working in Tuscany (including

ing related to innovative investments that became

3,433 thousand euros relative to Acquedotto del

operative and support for projects to improve cor-

Fiora), offset by a lower contribution (13,719 thou-

porate administrative, financial and tax reporting, (ii)

sand euros) to the consolidated result by that type

4,462 thousand euros from Acea Energia for costs

of cost of the water companies working in Lazio,

related to the development of the portfolio on the

ACEA Distribuzione and the parent company due

free market plus the change in the basis of consoli-

to more rounding of costs generated by contracts

dation (iii) 3,041 thousand euros from Acea8cento

with Acea Energia following the change in the per-

for the technical services of outsourcers (manage-

centage of consolidation,

ment of call overflow) and (iv) 2,433 thousand euros

• intercompany services amounted to 17,554 thousand euros (up 4,434 thousand euros compared to 31 December 2010): said item included costs re-

from water service companies, with particular reference to Publiacqua, • internal use of electricity, totalling 6,801 thousand


251

euros (up 1,468 thousand euros). The change origi-

• staff seconded by unconsolidated Group Companies and/or third party entities and companies totalling

nated from ACEA Ato2,

766 thousand euros (up 161 thousand euros).

• advertising and sponsorship, amounting to 8,205 thousand euros (down 269 thousand euros),

In addition to the above, additional service costs were

• cost of meter readings, equalling 1,910 thousand

incurred by companies from the (i) Energy area (907

euros (down 1,259 thousand euros). The variation

thousand euros, down 751 thousand euros); (ii) that man-

was generated by ACEA Ato2 (792 thousand euros)

age water services (13,691 thousand euros, down 917

and by ACEA Distribuzione (335 thousand euros),

thousand euros), (iii) Environment area (2,762 thousand

• maintenance fees of 4,026 thousand euros (up

euros, down 716 thousand euros), and (iv) ACEA (1,848 thousand euros).

2,709 thousand euros), • travel and transfer expenses, amounting to 1,083

The item also includes the remuneration paid to the Group’s governance bodies, amounting to 4.0 million eu-

thousand euros, • stock management costs incurred by ACEA Dis-

ros.

tribuzione, totalling 2,133 thousand euros (up 198

The table showing the remuneration of directors, statu-

thousand euros),

tory auditors and key managers of the Parent Company

• costs of bill printing totalling 6,295 thousand euros

is provided in an annex to these notes.

(up 2,216 thousand euros). The change derives pri-

As required by article 149 duodecies of the CONSOB

marily from the different percentage consolidation

Regulations for Issuers, the fees paid to the Independent

of Acea Energia,

Auditors, Reconta Ernst & Young, are as follows.

Company and reference period Acea S.p.A. 2011 Gruppo Acea 2011 ACEA S.p.A. and Group total

Audit Related Service

Audit Services

Non Audit Services

Total

132,700

85,000

-

217,700

876,023

150,545

279,000

1,305,568

1,008,723

235,545

279,000

1,523,268


Concession fees

paid by companies that manage integrated water servic-

These fees amount to 60,953 thousand euros (up 3,535

es under concession in certain areas of Lazio and Cam-

thousand euros compared to 31 December 2010, when

pania, Tuscany and Umbria. The following table shows a

the figure was 57,418 thousand euros) and regard fees

breakdown by Company, compared with previous year. 31.12.2011

31.12.2010


ACEA Ato2

33,014

32,713

301 1,634

Publiacqua

11,753

10,119

ACEA Ato5

5,489

5,489

0

Acque

4,469

4,483

(15)

Umbra Acque

1,602

2,122

(520)

Gori

1,310

1,268

42

Nuove Acque

733

733

0

Gesesa

345

368

(23)

Other minor entities

127

123

4

58,840

57,418

1,422

Acquedotto del Fiora Concession fees amounts in thousands of euros

252


2,113

0

2,113

60,953

57,418

3,535

Lease expense

• amounts relating to exceptional events due to the

This item amounts to 33,103 thousand euros, essentially

Equalisation Fund, totalling 1,306 thousand euros

unchanged compared to the previous year (33,323 thou-

(up 1,189 thousand euros),

sand euros).

• losses deriving from the disposal of company as-

The change generated by companies consolidated for the first time in 2011 amounted to 248 thousand euros.

sets amounting to 766 thousand euros (up 418 thousand euros),

This item contains rental expenses of 19,018 thousand

• the adjustment of estimates made in previous

euros, which increased by 1,044 thousand euros mainly

years amounting to 8,448 thousand euros (down

due to the higher contribution of Acea Energia Holding.

3,243 thousand euros).

It also contains costs and other fees and rentals totalling

The contribution of the Parent Company and Acquedotto

14,085 thousand euros, which fell by 1,264 thousand eu-

del Fiora amounted to 6,272 thousand euros (up 2,224

ros compared to the previous year, and are broken down

thousand euros compared to 2010) and 450 thousand

as follows

euros respectively.

Networks

5,239 thousand euros (up 668 thousand euros);

Water services Italy 6,668 thousand euros (down 615 thousand euros);

5. Net income/(costs) from commodity risk management

Overseas water services

782 thousand euros (up 145 thousand euros));

At 31 December 2011 the change in the fair value meas-

Environment

811 thousand euros (up 350 thousand euros);

urement of these financial contracts posted in the con-

13,237 thousand euros (down 3,217 thousand euros).

solidated income statement is positive by 297 thousand

Energy

Parent Company

6,367 thousand euros (up 2,450 thousand euros);

euros. ACEA contributed 13,237 thousand euros (down 3,217

This amount regards contracts stipulated by Acea En-

thousand euros): the variation derives mainly from the

ergia with the support of AceaElectrabel Trading in rela-

different methods of calculating the recharging of ab-

tion to the dissolved joint venture and contracts entered

straction fees and a small reduction in lease payments

into by Acea Energia Holding, which assumed the energy

generated mainly by the decision to purchase the com-

management role in 2011.

pany headquarters, which led to a decrease in the aver-

Further information about these contracts is provided in

age annual rent.

the section “Additional disclosures on financial instruments and risk management policies”.

Other operating costs Other operating costs at 31 December 2011 amounted to 34,068 thousand euros, marking an increase of 4,379 thousand compared to the previous year, which closed with 29,689 thousand euros. This item is primarily made up of (i) taxes and duties for 9,298 thousand euros (up 1,859 thousand euros) and (ii) general expenses for 24,770 thousand euros (up 2,520 thousand euros), including: • contributions made to confederations and nonprofit organisations of 3,256 thousand euros (up 562 thousand euros), • compensation for damages and outlays for legal disputes amounting to 2,578 thousand euros (up 1,954 thousand euros),


253

6. Amortisation, depreciation, impairment charges and provisions 425,984 thousand euros

Amortisation and depreciation of intangible and tangible assets Provisions for impairment of receivables Provisions for liabilities TOTAL

31.12.2011

31.12.2010

Increase/

257,439

211,239

46,200

55,059

63,591

(8,532)

113,487

45,762

67,724

425,984

320,593

105,391


Amortisation and depreciation of intangible and

89,164 thousand euros (up 20,265 thousand euros):

tangible assets

the increase was mainly due to 9,878 thousand eu-

The increase in amortisation/depreciation of 46,200

ros coming from companies operating in Lazio and

thousand euros was caused by (i) the volume of invest-

Campania and 10,079 thousand euros from compa-

ments of 21,211 thousand euros, especially connected

nies in Tuscany and Umbria; Acquedotto del Fiora

with water and electricity distribution plants of previ-

accounts for 5,049 thousand euros and overseas

ous years and the entry into operation of some plants, particularly with reference to those in the photovoltaic area realised by Arse and the second and third lines

thousand euros,

of the San Vittore WTE plant, (ii) 5,543 thousand euros

• Environment: amortisation/depreciation and im-

relating to additional write-downs to those recognised

pairment amounted to 20,597 thousand euros (up

in the 2010 financial statements (2,793 thousand eu-

5,593 thousand euros) and 8,387 thousand euros

ros), carried out by ARIA for the Terni WTE plant and the

(up 5,594 thousand euros) respectively; the in-

first line of the San Vittore plant, with reference to the

crease in depreciation derives mainly from the en-

sections of the plant that will be disposed of as part of

try into operation of the second and third lines of

upgrading works, (iii) 2,030 thousand euros relating to

the San Vittore plant in April and July respectively,

reductions in the value of goodwill and other intangi-

• ACEA recorded amortisation/depreciation and im-

ble assets, (iv) 5,860 thousand euros relating to the in-

pairment of 11,935 thousand euros (down 1,051

crease generated by the change in the basis of consoli-

thousand euros) and 77 thousand euros (down

dation following the amendment to the Acquedotto del

3,371 thousand euros) respectively. Write-downs

Fiora criterion and entry of ASA and Isa and (v) 11,498

in 2010 related mainly to goodwill recorded as a

thousand euros due to the increase of generation and

result of the acquisition of Crea.

sales companies as a result, essentially, of the addition-

At the end of 2011, impairment amounted to 13,805

al stake acquired as part of the dissolution operation.


The performance of said item for the year is shown by

2010) and are broken down as follows:

industrial area below.

• 8,336 thousand euros relating to write-downs of

• Networks: this area recorded a total of 105,150

sections of the plant subject to repowering: at the

thousand euros, marking an increase of 6,879 thou-

end of the previous year the amount recorded

sand euros, due to ACEA Distribuzione (3,309 thousand euros) and ARSE (3,499 thousand euros),

was 2,793 thousand euros, • 3,561 thousand euros resulting from the record-

• Energy: the companies in this area report deprecia-

ing of impairment (3,371 thousand euros as at 31

tion and amortisation of 21,363 thousand euros,

December 2010); the write-downs effected mainly

• Water services: this area registered a total of

254

companies 308 thousand euros; • Engineering and services: these amounted to 777


regard Gesesa and ASA,

• 1,841 thousand euros relating to the write-down of the beneficial interest acquired from Sarnese Vesuviano on the shares of a GORI shareholder.

- Acea Energia 878 thousand euros, - Acea Produzione 838 thousand euros. • for 44,100 thousand euros for allocations to cover GORI’s risk of the non-recognition of tariff adjust-

Provisions for impairment of receivables

ments and financial risk, pending approval and

This item amounted to 55,059 thousand euros, a de-

signing of the agreement to settle the dispute with

crease of 8,532 thousand euros, as a result of contrast-

the Campania Region and the Area Authority,

ing elements. On one hand, an increase was recorded

• for an allocation of 4,800 thousand euros relating

by (i) water service companies operating in Tuscany and

to ACEA Ato5 as a result of provision adopted by

Umbria amounting to 2,405 thousand euros, with par-

the Commissioner for deeds which involved the

ticular reference to Acque (584 thousand euros), Umbra

recalculation of the provision already allocated in

Acque (591 thousand euros), Publiacqua (392 thousand

2009 (25,000 thousand euros); the provision sets

euros) and Acquedotto del Fiora (993 thousand euros), (ii)

forth, among other things, the real average tariff for

by ACEA amounting to 1,001 thousand euros and (iii) by

the 2006-2011 period, starting from the tariff deter-

ACEA Distribuzione equalling 387 thousand euros; while

mined at the contract stage and applying planned

water service companies operating in Lazio and Campa-

accrued inflation in order to determine and struc-

nia registered a significant decrease (13,890 thousand

ture the 2012 real average tariff, while waiting for

euros in total), with particular reference to ACEA Ato2

the ordinary and extraordinary review activities to


be carried out as part of the original Area Plan,

As regards Acea Energia and subsidiaries, write-downs

• for an allocation of 2,720 thousand euros made by

in 2011 amounted to 20,112 thousand euros, up by

Publiacqua in relation to the preliminary inspection

1,346 thousand euros; however, the change recorded on

of the correct drafting of the ordinary review of the

a like-for-like basis saw a total decrease of 8,834 thou-

Area Plan performed by general management in

sand euros.

order to protect the area and water resources in respect of the tariff review,

Water service companies recorded write-downs totalling 27,014 thousand euros and, net of the change generated by Acquedotto del Fiora (993 thousand euros), said item falls by 10,928 thousand euros.

• higher provisions for contribution risks of 5,619 thousand euros, • lower allocations recognised to cover contract and supply risks (down 9,751 thousand euros), including 6,710 thousand euros posted by Acea Energia

Provisions

in 2010.

This item amounts to a total of 113,487 thousand euros at 31 December 2011, an increase of 67,724 thousand euros, essentially due to: • the posting of 26,600 thousand euros (7,686 thousand euros at 31 December 2010) for costs generated by voluntary redundancy and resignation/ retirement procedures launched during the period under observation and expiring before 31 December 2012. The details of these charges by company are shown below: - ACEA 3,874 thousand euros; - ACEA Distribuzione 11,840 thousand euros, - ACEA Ato2 9,170 thousand euros,


255

A breakdown of allocations by type is shown in the table below. Nature of the provision

FY 2011

FY 2010


9,267

8,223

1,043

784

0

784

51,627

0

51,627

8,004

2,385

5,619

27,471

7,686

19,784

Contracts and supplies

1,958

12,053

(10,095)

Insurance excesses

1,077

322

754


1,639

5,169

(3,531)

101,817

35,839

65,978

Legal Tax Regulatory water risks Contribution risks Redundancy and retirement

Total Restoration charges - IFRIC12 TOTAL PROVISIONS

11,669

9,923

1,747

113,487

45,762

67,724

31/12/2011

31/12/2010


74,333

67,933

6,400


Further information is provided in the section “Update on major disputes and litigation”.

7. Finance (costs)/ income - (118,422 thousand euros)

Finance Costs/ (Income) related to debt (A) Costs (Income) on interest rate swaps

6,642

6,701

(59)

Interest on bond loans

42,181

36,771

5,411

Interest on medium/long-term borrowings

38,550

35,657

2,893

8,063

6,181

1,882

0

0

0

(14,844)

(7,036)

(7,808)

Interest on short-term borrowings Finance costs/income on forward transactions Interest on amounts due from customers Interest on loans and receivables

(5,109)

(7,387)

2,278

Bank interest

(1,150)

(2,954)

1,803

44,089

20,999

23,090

Interest payable to end users

Other finance (costs)/income (B)

1,055

1,650

(596)

Default and deferred interest

3,434

1,058

2,376

Interest costs less actuarial gains and losses

5,030

4,537

492

23,631

10,263

13,368 (3,788)

Factoring fees Interest on delayed payment for tax disputes Interest on other receivables Other costs / (income)

3,788 (1,376)

755

380

1,078

(698)

Costs from discounting receivables

11,180

0

11,180

Net finance costs (A) + (B)

118,422

88,932

29,490


256

0 (620)


Net finance costs amounted to 118,422 thousand euros

margin applied to the customer. The sale commis-

are up by 29,490 thousand euros over the previous year.

sion, i.e. premium paid for transferring the credit

As a whole, said increase is due to:

risk, ranges between 0.3% and 1% depending on

• the impact of applying IFRIC 12 on public light-

the quality of the debtor transferred.

ing receivables, classified as “financial” after the

The average “all in” global cost of the ACEA Group’s

supplemental contract between ACEA and Roma

debt (including components from discontinued opera-

Capitale was signed, which aligned the expiry

tions) increased from 3.52% in 2010 to 3.71% in 2011.

of the service agreement with the expiry of the

With regard to finance costs related to borrowings, the

concession agreement (2027). The discounting

following is noted:

of these receivables caused a still figurative in-

• net swap costs (6,642 thousand euros) are gener-

crease of 9,346 thousand euros in the finance

ated by the flows exchanged during the year for

costs item,

cash flow hedge instruments which hedge inter-

• expenses (1,833 thousand euros) for discount-

est and exchange rate risk,

ing receivables for ACEA Ato5 tariff adjustments

• interest on bond loans increased by 5,411 thou-

relating to the variation between real revenues

sand euros, amounting to 42,181 thousand euros,

from billing and those “guaranteed” with respect

essentially due to the stipulation of contracts in

to the “Original area plan” for the 2006 - 2011

March 2010, and are essentially composed of:

period. These receivables were quantified defini-

- bond loan amounting to 300,000 euros at fixed

tively by provision of the Commissioner for deeds,

rate, placed by ACEA in 2004 (10-year bullet re-

communicated to ACEA Ato5 on 9 March 2012,

payment): 14,625 thousand euros,

• higher interest accrued on short and long-term

- bond loan amounting to 500,000 thousand eu-

debt which, on the whole, registered a variation

ros at fixed rate, placed by ACEA in March 2010

of 10,186 thousand euros, due to the higher debt

(10-year bullet repayment): 22,451 thousand

recorded in the year and the increase in the cost of borrowing which characterises the macroeconomic phase,

euros, - private placement of 20 billion yen carried out by ACEA in March 2010 (15-year bullet repay-

• higher expenses deriving from transfers of re-

ment): 4,625 thousand euros without consid-

ceivables (up 13,638 thousand euros, up 10,606

ering hedges allocated to the item net swap

thousand euros on a like-for-like basis), which ac-

expenses,

knowledges the effect of the change in the basis of consolidation resulting from the purchase of 100% of Acea Energia and greater volumes trans-

• interest

on

medium/long-term

borrowings

amounts to 38,550 thousand euros, up by 2,893 thousand euros;

ferred, mainly relating to receivables due from the

• interest on short-term bank borrowings from and

Public Administration. It should be noted that in

other financial borrowings totalled 8,063 thou-

2011, in order to reduce the credit risk in respect

sand euros, of which 6,818 thousand euros was

of Public Administration, a series of recourse fac-

attributable to ACEA.

toring transactions were carried out, with noti-

In relation to expenses deriving from transfers of re-

fication by means of notarial deed, relating to a

ceivables, the breakdown by company is shown below:

portion of receivables accrued and past due from

• ACEA Distribuzione 1,827 thousand euros (2,123

the Public Administration. The associated cost incurred is represented almost entirely by the interest component (DSO), i.e. invoice payment time

thousand euros at 31 December 2010); • ACEA Ato2 5,469 thousand euros (3,294 thousand euros on 31 December 2010);

estimated by the Bank. Therefore, it is a cost the

• ACEA Energia 16,335 thousand euros (4,845 thou-

Group would have incurred and is part of the sales

sand euros at 31 December 2010, 7,608 thousand


257

Lastly, growth was recorded (i) in income from custom-

8. (Profit)/ loss on investments – (9,295 thousand euros)

ers and on financial receivables (totalling 5,530 thou-

Net profit on investments amounted to 9,295 thousand

sand euros), resulting from the increase in interest ap-

euros as at 31 December 2011 and 1,837 thousand euros

plied by Acea Energia to its customers ACEA and Roma

resulted from the consolidation according to the equity

Capitale and (ii) default and deferred interest (2,376

method of some Group companies. In particular:

euros on a like-for-like basis).

thousand euros) due mainly to the recognition of the

• profit of 2,075 thousand euros mainly relating to

amount applied by Equitalia on seizures pursuant to ar-

the measurement of Agua de San Pedro (1,653

ticle 48 bis and on divisions into instalments targeted

thousand euros), Umbria2 (125 thousand euros),

for the end of the year.

Umbria Distribuzione Gas (101 thousand euros),

With reference to the breakdown per industrial area,

Sienergia (76 thousand euros) and Sogea (74 thou-

please note:

sand euros) using the equity method,

• Networks: the net finance costs equal 24,855 thou-

• expenses of 188 thousand euros essentially related

sand euros (down 177 thousand euros); the change

to losses deriving from the closure of the liquida-

is mainly due to the lower costs of factoring receivables compared to 2010, Energy: the companies in this area report net interest expense of 9,529 thousand euros (up 7,285

tion procedures of some Group companies. This item includes the positive result from the fair value assessment of the Acea Energia shareholding already held by the Group (7,458 thousand euros).

thousand on the previous year). The growth is due to both the increase in commission deriving from

9. Taxation - 60,737 thousand euros

the transfer of receivables, and the effect of the

Tax expenses for the period with regard to continuing

change in the percentage of consolidation; on a

operations amount to 60,737 thousand euros (69,844

like-for-like basis the increase amounts to 5,989

thousand euros in the previous year).

thousand euros,

In order to make the comparison more useful, the com-

Water: these amounted to 11,903 thousand euros

ment on provisions for current and deferred taxes (in-

(up 2,444 thousand euros). The increase is essen-

cluding discontinued operations) is provided below.

tially due to Acquedotto del Fiora (1,514 thousand

Income taxes were estimated at 65,572 thousand euros

euros) and ACEA Ato5 (1,028 thousand euros), due

(85,398 thousand euros as at 31 December 2010) and are

to the effect of the discounting of receivables from

essentially made up of:

tariff adjustments recognised in respect of the Area Authority, Environment: these amounted to 530 thousand euros, essentially in line with the figure at 31 December 2010 (up 83 thousand euros);

• Current taxes: 107,674 thousand euros (105,001 thousand euros on 31 December 2010), • Net deferred/prepaid taxes: down 42,625 thousand euros (down 19,603 thousand euros in 2010). La riduzione complessiva registrata nell’esercizio, pari a

ACEA closed the period with a negative result of

euro 19.827 mila, deriva dall’effetto combinato della di-


minuzione dell’utile ante imposte e da eventi straordinari.

The change is explained above.

The overall reduction recorded in the period, equal to 19,827 thousand euros, derives from the combined effect of the decrease in the profit before tax and extraordinary events. The most positive effect derives from the recognition of capital gains from the sale of the companies subject to the Framework Agreement signed between ACEA and GSEI that satisfy the requirements of article 87 of

258


Presidential Decree 917/1986 for the application of the

impact amounted to around 11 million euros.

participation exemption: in short, taxation is applied on

Taxes in the year benefitted from the accounting of the

5% of the income generated.

incentive deriving from the tax reduction for investments

This is in addition to the increased tax rate caused by the

in plants and machinery (so-called Tremonti ter) for the

entry of provisions for liabilities and charges related to:

years 2009 and 2010, in total equal to 9.2 million euros,

• the uncertain situation of the company GORI -

related to the second and third lines of the EALL San Vit-

overall totalling 44,100 thousand euros - 24,100

tore plant. In fact, it is worth mentioning is that Legisla-

thousand euros of which was estimated as non-

tive Decree no. 28/2011, published on 28 March, defini-

deductible for IRES (Corporate Income Tax) and

tively clarified the compatibility or possible accumulation

IRAP (regional business tax) purposes since they

of the green certificates (or other forms of incentive

are allocations relative to investment risks;

tariffs such as CIP6) with the easing measures of Trem-

• employees - especially for redundancy, equalling

onti ter: article 26, paragraph 3, of the mentioned decree

26,600 thousand euros - which is definitively non-

contains an authentic interpretation of paragraph 152 of

deductible for IRAP purposes.

article 2 of the 2008 Finance Act, in this way superseding

It should be noted that article 7 of Law Decree no. 138

the interpretation provided by the Ministry of Economic

of 13 August 2011, converted to Law no. 148 of 14 Sep-

Development to GSE and Inland Revenue.

tember 2011, extended the IRES surcharge of 6.5%, in

It is worth remembering that the methods of the MSE

addition to the sectors already hit by the tax, to other

had implied the elimination of the benefit from the con-

operators in the electricity transmission, dispatching

solidated income statement of the previous year begin-

and distribution sectors and to entities operating in

ning from the statement as at 30 September 2010.

the production of electricity from photovoltaic or wind

Furthermore, it should be noted that during the conver-

power. Said provision also introduced a 4% increase in

sion of Law Decree 98 of 2011, an increase of 0.30% was

the surcharge rate for the three-year 2011-2013 period.

established in the ordinary IRAP rate for concessionaires

The legislative amendment described did not involve

other than motorway and tunnel construction and man-

any significant impact on the consolidated income

agement companies for the 2011 tax year. In particular,

statement given that the higher current taxes - with

for the Lazio and Umbria regions, the IRAP rate to be ap-

particular reference to those of ACEA Distribuzione -

plied for 2011 is 5.12% (i.e. 4.82% + 0.30%).

were offset by the redetermination of the effects of de-

The table below shows the breakdown of taxes for the

ferred taxes. It should be noted that the neutral impact

period and the correlated percentage weight calculated

referred to at income statement level is limited solely to

on consolidated income before taxes.

the year closed, whilst, from a financial point of view, the

2011 Profit before tax from continuing and discontinued operations Expected tax charge at 27.5% on profit before tax (A)

%

159,092

2010

%

221,590

43,750

27.5%

60,937

27.5%

(42,625)

-26.8%

(19,603)

-8.8%

Permanent and additional differences (C)

24,934

15.7%

4,583

2.1%

IRES (corporate income tax) for the year (D) = (A) + (B) + (C)

26,060

16.4%

45,918

20.7%

IRAP (REGIONAL INCOME TAX) (E)

32,801

20.6%

32,771

14.8%

6,710

4.2%

6,710

3.0%

65,572

41.2%

85,399

38.5%

Net deferred taxation (B)

Tax Asset (F) Tax on continuing and discontinued operations (D) + (E) + (F) amounts in thousands of euros

The tax rate for the year is 41.2% (38.5% in 2010).


259

10. Non-current assets held for sale and discontinuing or discontinued operations

b. ACEA transferred to GSEI the receivables for the

The Framework Agreement, signed on 16 December 2010

c. ACEA purchased from GSEI the finance receivables

between ACEA and GSEI, envisaged the execution of a se-

due to the latter from AEP against a fee, equal to

ries of operations to be implemented in a single context.

the value of the principal and interest accrued until

In particular at the Date of Execution (i) ACEA purchased

the Date of Execution, of 25,069,870.42 euros;

ros;

from GSEI an interest representing 40.59% of the share

As part of the dissolution of the JV, the Framework Agree-

capital of Acea Energia Holding S.p.A. (formerly AceaElec-

ment envisages a series of additional understandings. In

trabel S.p.A. or “AEH”); (ii) following the non proportional

particular:

demerger of GDF SUEZ Produzione S.p.A. (formerly Ace-

1) Notwithstanding the necessary authorisations

aElectrabel Produzione S.p.A. or “AEP”), the assets and

of the competent public entities within the limits

activities that are functional to manage the hydroelec-

these authorisations are necessary pursuant to

tric plants and thermoelectric plants of Tor di Valle and

applicable regulations, ACEA granted GSEI a right

Montermartini (the “AEP Basis Subject of demerger”) were

of first offer on the hydroelectric plants of Castel

allocated to the company established at the same time,

Madama, Cecchina, M. del Rosario, Mandela, Orte,

Acea Produzione S.p.A.; at the time of perfecting the de-

Salisano, Sant’Angelo in the event of sale within 3

merger, Acea Produzione S.p.A. was established, whose

years from the Date of Execution. On the Date of

share capital is entirely held by Acea Energia Holding

Execution GSEI paid ACEA 5,000,000.00 euros as

S.p.A.; (iii) ACEA transferred to GSEI an interest represent-

the fee for the transfer of the above mentioned

ing 30% of the share capital of GDF SUEZ Holding di Parte-

right of first offer,

cipazioni S.p.A. (formerly Eblacea S.p.A.), in turn holder of

2) GSEI will have the right to participate in the project

50% of the share capital of Tirreno Power S.p.A.; and (iv)

being studied only with regard to the CHP unit of

Acea Energia Holding S.p.A. transferred to GSEI an interest

the Tor di Valle plant, as amended, and any other

representing 84.17% of the share capital of GDF SUEZ En-

repowering project regarding the Tor di Valle plant,

ergy Management S.p.A. (formerly AceaElectrabel Trading

with the sole exception of district heating-related

S.p.A. or “AET”).

activities, if the project is started within two years

Regarding the value of the interest sold and purchased, please note that:

from the Date of Execution, 3) aside from the necessary authorisations of the

a. for the purchase of 40.59% of the share capi-

competent public entities within the limits these

tal of Acea Energia Holding, ACEA paid GSEI

authorisations are necessary pursuant to applica-

123,901,405.71 euros;

ble regulations, ACEA granted GSEI a right of first

b. for the sale of 30% of the share capital of Eblacea,

offer on the investment owned by ACEA through

ACEA collected from GSEI a fee of 108,158,152.57

Acea Energia Holding in Acea Energia, in the

euros;

event of sale within 3 years from the Date of Ex-

c. for the sale of 84.17% of the share capital of AET,

ecution. On the Date of Execution GSEI paid ACEA

Acea Energia Holding collected from GSEI a fee of

2,500,000.00 euros as the fee for the transfer of the

33,668,000.00 euros; Additional transactions were as follows:

above mentioned right of first offer; 4) GSEI granted ACEA an irrevocable and uncondition-

a. ACEA transferred to GSEI the loans and receivables

al option, to be exercised by 30 September 2011, to

due from Roselectra, Voghera and AET against a fee,

subscribe a five-year electricity supply agreement

equal to the value of the principal and interest ac-

260

dividends resolved by Eblacea for 1,813,968.00 eu-

for 5TWh per year.

crued until the Date of Execution, of 49,202,667.50

The Income Statement and balance sheet of discontin-

euros;

ued operations as at 31 March 2011 are shown below, in-


cluding therein Estra Elettricità, which is no longer part of

Eblacea and Tirreno Power

the shareholder structure as of 6 May 2011. Please note

The economic and asset data is represented pro rata,

that the economic data are compared with the results

based on the percentage of interest directly and indirect-

of the companies transferred as at 31 December 2010.

ly held by ACEA as assignor company.

31/12/2011

31/12/2010

increase/ (Decrease)

Operating revenues

0

6

(6)

Staff costs

0

0

0

Operating costs GROSS OPERATING PROFIT Amortisation, depreciation and impairment charges Operating profit/(loss) Financial management Profit before tax Taxation Net profit/(loss) for the period TOTAL CONSOLIDATION ADJUSTMENTS TOTAL EBLACEA

25

43

(18)

(25)

(36)

11

0

0

0

(25)

(36)

11

(0)

0

(0)

(25)

(36)

11

0

86

(86)

(25)

50

(75)

0

(2,621)

2,621

(25)

(2,571)

2,546

31/12/2011

31/12/2010


33,618

200,266

(166,648)


Operating revenues Staff costs

1,629

6,239

(4,610)

Operating costs

30,433

157,308

(126,875)

GROSS OPERATING PROFIT

1,556

36,719

(35,163)

Amortisation, depreciation and impairment charges Operating profit/(loss) Financial management Profit before tax Taxation

3,510

14,504

(10,994)

(1,954)

22,215

(24,169)

797

(5,283)

6,080

(2,751)

16,932

(19,683)

825

(7,079)

7,904


(1,926)

9,853

(11,779)

TOTAL CONSOLIDATION ADJUSTMENTS

(5,733)

(23,123)

17,390



261

Net transferred assets Property, plant and equipment Intangible assets Investments Inventories Prepaid taxes

31/03/2011 171,358 65,357 0 10,019 3,896

Trade receivables

18,186

Other receivables

14,287

Loans Cash and cash equivalents Staff termination benefits and other defined-benefit plans

9,236 5,790 (3,427)


(22,259)


(7,947)

Tax payables Trade payables due to suppliers Other payables

(2,336) (19,273) (10,177)

Bank borrowings

(157,822)

Other borrowings

(2,532)

Allocated goodwill Total Eblacea and Tirreno Power Gain (loss) on transfer Investment price

0 72,354 35,804 108,158

Loan repayment Total

108,158

paid as so: Cash

108,158

Net cash flow from the transfer

102,368

Cash collection Transferred cash and cash equivalents amounts in thousands of euros

262


108,158 5,790


The asset data is represented pro rata, based on the per-

The economic data is represented pro rata, based on the

centage of interest held by Acea Energia Holding as the

percentages of interest indirectly held by ACEA (50%).

assignor company.

Operating revenues Staff costs Operating costs GROSS OPERATING PROFIT Amortisation, depreciation and impairment charges Operating profit/(loss) Financial management Profit before tax Taxation Net profit/(loss) for the period

31/12/2011

31/12/2010


359,020

1,602,426

(1,243,406)

411

1,319

(908)

351,803

1,573,554

(1,221,751)

6,806

27,553

(20,747)

37

150

(112)

6,769

27,403

(20,634)

197

(676)

873

6,572

26,727

(20,156)

(3,046)

(9,369)

6,323

3,525

17,358

(13,833)


(103,550)

(496,574)

393,025

TOTAL AET

(100,025)

(479,217)

379,192


Net transferred assets Property, plant and equipment

31/03/2011 19

Intangible assets

3,770

Inventories

9,899

Prepaid taxes Trade receivables Other receivables Loans Cash and cash equivalents Staff termination benefits and other defined-benefit plans Provisions for deferred tax liabilities Provisions for liabilities and charges Tax payables Trade payables due to suppliers Payables to the Parent Company ACEA Other payables

3,075 348,439 19,769 371,881 85,645 (107) (6,508) (42) (14,344) (256,240) (1,097) (14,238)

Bank borrowings

0

Other borrowings

(512,007)

Allocated goodwill

0

Total AceaElectrabel Trading

37,914

Gain (loss) on transfer

(4,246)

Investment price

33,668


33,668

paid as so: Cash Net cash flow from the transfer

33,668 (51,977)

Cash collection

33,668

Transferred cash and cash equivalents

85,645



263

AceaElectrabel Produzione Group The economic data is represented pro rata, based on the percentage of interest indirectly held by ACEA.

31/12/2011

31/12/2010

increase/(Decrease)

26,341

111,851

(85,510)

463

1,851

(1,387)

Operating costs

24,826

101,836

(77,009)


1,051

8,164

(7,113)

2,095

6,567

(4,472)

(1,044)

1,597

(2,641)

640

(1,394)

2,034

(1,683)

203

(1,886)


Amortisation, depreciation and impairment charges Operating profit/(loss) Financial management Profit before tax Taxation Net profit/(loss) for the period

884

(2,381)

3,265

(799)

(2,178)

1,379


313

(48,524)

48,837

TOTAL Acea Electrabel Produzione

(486)

(50,702)

50,216

31/12/2011

31/12/2010

increase/(Decrease)

10,469

53,650

(43,181)



0

0

0

9,958

47,876

(37,918)


511

5,774

(5,263)

Amortisation, depreciation and impairment charges

764

3,209

(2,445)

(252)

2,565

(2,817)

Operating costs

Operating profit/(loss) Financial management Profit before tax Taxation

328

(1,231)

1,559

(581)

1,334

(1,915)

0

(717)

717


(581)

617

(1,198)


1,564

6,543

(4,979)

984

7,160

(6,177)

31/12/2011

31/12/2010

increase/(Decrease)

2,139

8,346

(6,206)

105

445

(340)

TOTAL ROSELECTRA amounts in thousands of euros

Operating revenues Staff costs Operating costs

827

2,895

(2,068)

1,207

5,006

(3,799)


779

3,137

(2,358)


428

1,868

(1,441)

Financial management

496

(2,040)

2,536

Profit before tax

(68)

(172)

104 (74)


Taxation

0

74

(68)

(98)

30


(1,835)

(7,413)

5,578

TOTAL VOGHERA

(1,903)

(7,511)

5,608



264


Operating revenues Staff costs Operating costs GROSS OPERATING PROFIT Amortisation, depreciation and impairment charges Operating profit/(loss) Financial management Profit before tax Taxation

31/12/2011

31/12/2010

increase/(Decrease)

236

979

(743)

2

9

(6)

39

172

(133)

195

798

(604)

61

177

(117)

134

621

(487)

32

(147)

179

102

474

(372)

0

(147)

147


102

327

(225)


(71)

(491)

419

31

(163)

194

TOTAL LONGANO amounts in thousands of euros

Net transferred assets Property, plant and equipment Intangible assets Investments Inventories Prepaid taxes

31/03/2011 194,703 3,010 0 658 2,676

Trade receivables

61,509

Other receivables

34,926


4,374 11,989 (189)


(3,943)


(1,121)

Tax payables

(11,097)

Trade payables due to suppliers

(53,758)

Other payables

(2,379)

Bank borrowings

(50,556)

Other borrowings

(118,434)

Allocated goodwill Total AceaElectrabel Produzione Group Gain (loss) on transfer Investment price

3,146 75,514 (36,961) 38,553


38,553

paid as so: Cash Net cash flow from the transfer

0 (11,989)

Cash collection Transferred cash and cash equivalents

11,989



265

Estra Elettricità The economic data is represented pro rata, based on the percentage of interest indirectly held by ACEA.

Operating revenues Staff costs Operating costs GROSS OPERATING PROFIT

31/12/2011

31/12/2010

increase/(Decrease)

13,773

32,336

(18,562)

44

57

(13)

13,654

32,149

(18,495)

76

130

(54)


31

387

(356)


45

(257)

302

Financial management

23

(72)

95

Profit before tax

22

(185)

207

0

65

(65)

22

(120)

142

Taxation Net profit/(loss) for the period TOTAL CONSOLIDATION ADJUSTMENTS

9,744

27,854

(18,110)

TOTAL Estra Elettricità

9,765

27,734

(17,969)


Net transferred assets Property, plant and equipment Intangible assets Inventories Advances

06/05/2011 0 12 0 0

Trade receivables

15,781

Other receivables

1,394


0 (1,392) (6)


0


(126)

Tax payables

(2,637)

Trade payables due to suppliers

(8,706)

Payables to the Parent Company ACEA Other payables

0 (396)

Bank borrowings

(3,925)

Other borrowings

0

Allocated goodwill Total Estra Elettricità Gain (loss) on transfer

0 (0)

Investment price Loan repayment Total

0

paid as so: Cash Net cash flow from the transfer Cash collection Transferred cash and cash equivalents amounts in thousands of euros

266


1,392 0 (1,392)

The sale of Eblacea and Tirreno Power as well as that

Given the parties did not reach an agreement on the dif-

of the AceaElectrabel Produzione group, and the acquisi-

ferent positions, ACEA presented an appeal to the Court

tion of 40.59% of the Acea Energia Holding Group, are

of Milan for the appointment of an arbitrator pursuant

subject to adjustment in compliance with the Frame-

to the Framework Agreement; said arbitrator was ap-

work Agreement signed between ACEA and GSEI. The

pointed in January and the appointment formalities are

minimum amount of those adjustments has almost no

currently being carried out ACEA and GSEI.

impact from a financial perspective, while the economic effects amount to approximately 7 million euros in rela-

11. Earnings per share

tion to the differential of the Eblacea/Tirreno Power sale

Earnings per share, determined in accordance with IAS

price.

33, are shown below:

al 31.12.2011

al 31.12.2010

increase/(Decrease)

Net profit attributable to the Group from continuing operations (€/000)

140,967

616,774

(475,807)

Net profit attributable to ordinary equity holders of the Group (€/000) (A)

140,967

616,774

(475,807)

Weighted average number of ordinary shares in issue for the purposes of determining earnings per share - basic (B)

212,964,900

212,964,900

0

- diluted (C)

212,964,900

212,964,900

0

- basic (A/B)

0.6619

2.8961

(2.2342)

- diluted (A/C)

0.6619

2.8961

(2.2342)

Earnings/(loss) per share (€)


al 31.12.2011

al 31.12.2010

increase/(Decrease)

Net profit attributable to the Group (€/000)

85,958

92,148

(6,190)

Net profit attributable to ordinary equity holders of the Group (€/000) (A)

85,958

92,148

(6,190)

Weighted average number of ordinary shares in issue for the purposes of determining earnings per share - basic (B)

212,964,900

212,964,900

0

- diluted (C)

212,964,900

212,964,900

0

- basic (A/B)

0.4036

0.4327

(0.0291)

- diluted (A/C)

0.4036

0.4327

(0.0291)

Earnings/(loss) per share (€)



267

Notes to the Statement of Consolidated Balance Sheet Assets As at 31 December 2011 these amounted to 6,617,384 thousand euros (6,379,614 thousand euros at 31 December 2010), representing an increase of 237,770 thousand euros (3.7%) over the previous year, and are broken down as follows.

31.12.2011

31.12.2010



Non-current assets

4,300,870

3,749,850

551,020

14.7%

Current assets

2,316,514

1,925,750

390,763

20.3%

0

704,013

(704,013)

-100%

6.617.384

6,379,614

237,770

3.7%

Non-current assets held for sale Total assets amounts in thousands of euros

12. Property, plant and equipment - 2,021,364 thousand euros As at 31 December 2011, this item amounted to 2,021,364 thousand euros (1,904,563 thousand euros at 31 December 2010) and relates to assets used in operations. The following table shows a breakdown and movements during the period:

Land and buildings

31.12.2010

Assets for sale

Investments / Acquisitions

199,914

0

11,200

Plant and machinery

1,102,982

0

58,792

Industrial equipment

377,417

0

40,314

Other assets

35,520

0

6,315


169,064

0

44,040

Assets to be relinquished

19,665

0

241

1,904,563

0

160,903

Property, plant and equipment amounts in thousands of euros

Increase (Decrease) Basis of Consolidation Land and buildings

Disposals and Other movements

31.12.2011

5,696

(10,281)

60,806

267,336

Plant and machinery

100,460

(117,233)

107,244

1,252,245

Industrial equipment

2,038

(15,324)

505

404,949

Other assets Fixed assets in progress Assets to be relinquished Property, plant and equipment amounts in thousands of euros

268

Amortisation/ depreciation


2,087

(9,677)

4,789

39,034

12,261

0

(179,346)

46,019

0

(1,368)

(6,770)

11,770

122,542

(153,883)

(12,771)

2,021,364

The ACEA Group carried out investments totalling

• ARIA: 15,083 thousand euros related to invest-

160,903 thousand euros in the period, mainly due to the

ments aimed at strengthening the waste-to-energy

following industrial areas:

plant in the municipality of San Vittore del Lazio,

• Networks: 118,068 thousand euros, • Environment: 19,103 thousand euros, • Energy: 11,336 thousand euros, • Corporate – ACEA : 5,485 thousand euros, • Water services in Tuscany and Umbria: 4,438 thousand euros, • Water services in Lazio and Campania: 2,157 thousand euros,

• Acea Produzione for 10,946 thousand euros basically related to works to repower the hydroelectric plants in Orte and Salisano, • ACEA for 5,485 thousand euros, which mainly refers to the purchase of furniture and electronic office equipment and to investments in the hardware necessary for IT network improvement and development projects.

• Overseas water services: 194 thousand euros, • Engineering and services: 120 thousand euros.

Depreciation/amortisation amounts to 153,883 thousand euros and relates primarily to the following industrial

The main investments were carried out by the following companies in 2011: • ACEA Distribuzione: 90,352 thousand euros spent primarily on extension and renovation of its HV, MV and LV networks, the construction of electricity substations and LV connections; this investment is

areas: • Networks: 97,910 thousand euros, including 91,276 thousand euros from ACEA Distribuzione and 6,475 thousand euros from Arse, • Energy: 21,345 thousand euros, including 13,111 thousand euros from ACEA Produzione,

essentially in line with the priorities set out in the

• Environment: 19,363 thousand euros, including

Regulator Plan and the operating needs arising dur-

14,123 thousand euros from ARIA, 3,026 thousand

ing the period. The above investment breaks down

euros from SAO and 1,295 thousand euros from

as follows: - land and buildings: 3,506 thousand euros (4,588 thousand euros at 31 December 2010), - plant and machinery: 43,053 thousand euros (37,148 thousand euros at 31 December 2010), - industrial and commercial equipment: 38,658 thousand euros (44,492 thousand euros at 31

Kyklos, • Water: 9,215 thousand euros, of which Lazio – Campania amount to 2,720 thousand euros, Tuscany – Umbria 5,807 thousand euros and Overseas to 689 thousand euros, • Engineering and services: 413 thousand euros, • Corporate – ACEA : 5,697 thousand euros.

December 2010), - other assets: 2,000 thousand euros (523 thousand euros at 31 December 2010), - fixed assets in progress and prepayments: 3,134 thousand euros (1,598 thousand euros at 31 December 2010).

Other movements refer to reclassifications due to the commissioning of fixed assets in progress and disposals and divestments of assets. Specifically, please note: • the commissioning of the “II and III lines of the WTE plant” in the municipality of San Vittore del Lazio,

• ARSE: 26,251 thousand euros, which essentially

which involved a 116,567 thousand euros reclas-

refers to the purchase of land and the launch of

sification of fixed assets in progress to the items

new projects to install photovoltaic plants in the

“land and buildings” for 58,361 thousand euros and

Salentino area, particularly in the municipalities

“plant and machinery” for 58,207 thousand euros,

of Alessano and Leverano, in the municipality of

• the commissioning of the Arse photovoltaic plants,

Giuliano di Roma and in the Villa Latina and Com-

totalling 56,112 thousand euros. In particular, the

mercity plants for a nominal power of approxi-

plants located in the municipalities of Santi Cosma

mately 21.4 MWp,

e Damiano, Giuliano di Roma, Castrignano, Foggia,


269

ASI Latina, Caputo, Quattromini and Q8 Formia e

The tangible assets of companies whose consolidation

Valle Galeria, for a total of about 11 MWp of nomi-

method has changed during the year are posted in the

nal power,

Change in Basis of Consolidation section; in detail,

• the 2,367 thousand euros impairment of the boiler

this refers to Acquedotto del Fiora, now consolidated

oven of the Terni ENA waste-to-energy plant (shut

proportionately (8,180 thousand euros), ACEA Produzi-

down for revamping) due to an update in the recov-

one (114,003 thousand euros) and the other ACEA Ener-

erability of its components,

gia Holding Group companies (167 thousand euros) and

• the write-down of 5,969 thousand euros made by

the newly acquired companies Innovazione Sostenibilità

ARIA as a result of the start of revamping works on

Ambientale, ISA (103 thousand euros) and Acea Servizi

the I line of the San Vittore del Lazio WTE plant.

Acque, ASA (90 thousand euros).

13. Investment property – 2,993 thousand euros Investment property primarily includes land and buildings not used in operations and held for rental. The decrease compared to the end of the previous year is due to ACEA’s depreciation and amortisation (61 thousand euros) and disposals (94 thousand euros). The following table shows movements during the period:

Investment property Investment property

31.12.2010

Assets held for sale


3,148

0

0

3,148

0

0


Increase/ (Decrease) Basis of Consolidation

Amortisation/ depreciation

0

(61)

(94)

2,993

3,148

(61)

(94)

2,993

Investment property Investment property

Disposals and

31.12.2011

Other movements


270

14. Goodwill – 151,244 thousand euros

cluding the amount generated by the fair value meas-

At 31 December 2011 goodwill amounted to 151,244

Produzione, amounting to 94,457 thousand euros.

thousand euros (19,718 thousand euros at 31 Decem-

Furthermore, as a result of the acquisition of 40.59% of

ber 2010). The 131,525 thousand euros change from

Acea Energia, this item increased by 7,619 thousand eu-

the previous year is mainly due to (i) the goodwill values

ros with reference to the goodwill posted to the subsidi-

posted following the closing of the termination of the

ary.

joint venture between ACEA and GdF-Suez, particularly

The table below shows the individual CGUs per Indus-

for ACEA Energia, totalling 37,162 thousand euros, in-

trial Area and movements between 2010 and 2011.


urement of the quota already possessed and for ACEA

Energy: Acea Produzione

31.12.2010

Acquisitions

Impairments/ Revaluations

Other movements

Total

1,831

131,781

6,839

25

140,476

0

94,457

0

0

94,457

Acea Energia

520

37,324

7,458

25

45,327


692

0

0

0

692

Acea8cento

619

0

(619)

0

0

8,966

546

(2,781)

(4,835)

1,896

Umbra Acque

4,628

0

0

(4,628)

0

Gesesa

3,335

0

(2,005)

(207)

1,123

230

0

(230)

0

0

0

546

(546)

0

0

Water:

Acque Blu ASA Laboratori

773

0

0

0

773

8,921

1

(50)

0

8,872

ARIA

7,744

0

0

0

7,744

Aquaser Group

1,127

1

0

0

1,128

Environment:

APICE Goodwill

50

0

(50)

0

0

19,718

131,782

4,554

(4,810)

151,244


IAS 36 provides that said balance sheet item, given that

Cash Flow method, by discounting operating cash flows

it is an intangible asset with an indefinite useful life, is no

net of interest rates resulting from economic and finan-

longer subject to amortisation, but subject to an analysis

cial projections based on assumptions in the budget plan

of congruity on an annual basis or more frequently where

drafted by management.

events occur or there is a change of circumstances that

For the discounting of these flows, an explicit time pe-

may lead to impairments.

riod consistent with said forecasts was considered, i.e.

Goodwill emerging at the date of acquisition is allocated

with the average useful life of the assets, or with the du-

to each of the cash-generating units expected to benefit

ration of the concessions.

from the synergies deriving from the acquisition. Impair-

Use of the Discounted Cash Flow method provides for

ment charges are identified via tests that assess the ca-

the discounting of estimate future cash flows, using the

pacity of each unit to generate cash sufficient to recover

proper discount rate that reflects the current market as-

the portion of goodwill allocated to it.

sessments of the time value of money and risks specific

IAS 36 envisages that the estimated recoverable amount

to the asset (WACC).

of goodwill recorded in the balance sheet is realised by

The cash flow deriving from disposal at the end of the

using the higher of the fair value less costs to sell and

useful life (Terminal Value), prudentially estimated at zero

value in use of a group of assets that identifies the com-

or the sum of the estimate of the prospective value of

pany or group of companies to which it belongs: Cash

fixed assets, net working capital and provisions.

Generating Unit (or group of Cash Generating Units). The fair value is determined, taking into account informa-

The table below shows some of the CGUs to which is

tion available to company management, on the basis of

allocated a significant goodwill value compared with the

the amount obtainable from the sale of an asset in an

overall value of goodwill recorded in the balance sheet,

arm’s length transaction between knowledgeable, will-

specifying the discount rates used and time period of

ing parties.

cash flows for each type of recoverable value consid-

The value in use is determined using the Discounted

ered.


271

Operating area / CGU

Amoun millions

Recoverable value

Weighted average cost of capital *

Terminal value

Cash flow period

Acea Produzione

94.5

Value

7.0%

Invested capital at year-end

End of useful life of assets

Acea Energia

45.3

Value

8.7%

Perpetuity without growth

2016

7.7

Value

6.1%

Invested capital at year-end

End of useful life of assets

Energy:

Environment: ARIA * Post-tax discount rate

15. Concessions and Rights on Infrastructure – 1,553,946 thousand euros

service concession was transferred between the

At 31 December 2011, this item amounted to 1,553,946

The value includes the sum of 600 thousand euros

thousand euros (1,418,071 thousand euros at 31 Decem-

relating to the right deriving from the 2009 take-

ber 2010) and includes the values of concessions received

over of the integrated water service management

from the municipalities (266,271 thousand euros at 31

in the municipality of Formello, previously entrust-

December 2011) and, pursuant to IFRIC 12, the aggregate

ed to Crea Gestioni,

amount of tangible infrastructures used for the manage-

same companies from 1 September 2002. The concessions are amortised over their residual terms.

• 18,553 thousand euros relating to Gori for the con-

ment of the water service (1,287,675 thousand euros).

cession and recording of the costs of integrated

The change of 135,875 thousand euros reflects opposing

water service loan repayment plans relating to new

factors:

mortgages assessed by the Area Authority,

• lthe item decreased by 49,707 thousand euros due to the reclassification of that amount of the right on

• 29,187 thousand euros relating to companies operating in Tuscany, including Acquedotto del Fiora.

the infrastructure to the item Non-current receiv-

This item also includes goodwill arising from consoli-

ables due to the definitive adoption of the financial

dation representing goodwill attributable to integrated

model to represent the public lighting contract as

water service contracts and the A.R.I.A. Group, above all

set forth in the supplemental agreement signed be-

with regard to SAO (5,095 thousand euros).

tween ACEA and Roma Capitale on 15 March 2011 and in force from the beginning of this year,

amount to 1,287,675 thousand euros (1,152,936 thou-

lation to the value of the concession and the right

sand euros as at 31 December 2010) and include tan-

on infrastructure as at 1 January 2011 of Acquedotto

gible infrastructures used for the management of the

del Fiora, due to the change in its consolidation cri-

integrated water service. Values are broken down below

teria.

by Company:

The remaining part of the change is due to investments of 206,330 thousand euros and depreciation and amortisation of 77,480 thousand euros in the year. More specifically, Concessions (amounting to 266,271 thousand euros) refer to: • the value of the thirty-year concession from Roma

• A• ACEA Ato2 861,572 thousand euros (737,740 thousand euros on 31 December 2010), • ACEA Ato5 47,273 thousand euros (42,929 thousand euros on 31 December 2010), • GORI for 57,726 thousand euros (57,322 thousand euros at 31 December 2010),

Capitale relating to water, treatment and sewerage

• Acquedotto del Fiora for 20,919 thousand euros,

plants of the ATO2 (including goodwill) of 212,410

• Acque for 120,257 thousand euros (112,237 thou-

thousand euros. This fresh water and water treatment concession was transferred from ACEA to ACEA Ato2 at the end of 1999, whilst the sewerage

272

Rights on infrastructure posted in the accounts

• the item increased by 28,471 thousand euros in re-


sand euros at 31 December 2010), • Publiacqua for 136,134 thousand euros (124,050 thousand euros at 31 December 2010),

• Umbra Acque for 29,662 thousand euros (28,950

- Fixed assets under construction amount to 49,085 thousand euros and mainly refer to

thousand euros at 31 December 2010).

transportation plants (abstraction pipes and Investments relating to said item amounted to 206,512

feeder mains totalling 32,692 thousand euros),

thousand euros, made by the following:

water treatment plants (12,223 thousand euros),

• ACEA Ato2 for 144,458 thousand euros referring

water and operating centres (2,600 thousand euros) and new connections (1,801 thousand

primarily to: - Land and Buildings for 1,150 thousand euros and

euros) under construction.

mainly refer to extraordinary maintenance and

• ACEA Ato5 for 5,275 thousand euros, relating to ex-

construction of buildings at water centres (676

traordinary maintenance on buildings at the various

thousand euros), works belonging to sources

water centres and investments carried out on fresh

(449 thousand euros) and compensation for the

water and sewer pipes in the various municipalities,

land needed to build aqueducts (25 thousand

• Acque for 17,605 thousand euros, referring to work on the distribution, sewer and water treatment net-

euros), - Plant and Machinery for 74,862 thousand euros,

work,

relates mainly to the clean-up and enlargement

• Publiacqua for 24,177 thousand euros relating to

of water and sewer pipes in the various munici-

new connections, extraordinary maintenance and

palities, and extraordinary maintenance at water

extensions and expansions of water pipelines, sew-

centres (44,764 thousand euros) and work on

er networks and treatment plants, • Gori for 2,379 thousand euros for work on exten-

treatment plants (29,692 thousand euros), - Industrial and commercial equipment amount-

sion and modernisation of fresh water and sewer

ing to 18,827 thousand euros, regarding new

networks, and on water treatment plants in the area

connections, following the completion of work

served,

carried out in the municipality of Rome (11,044

• Acquedotto del Fiora for 3,627 thousand euros,

thousand euros) and the various municipalities

• Umbra Acque for 493 thousand euros.

acquired (7,258 thousand euros), and the purchase of equipment for water and operating

The following tables shows changes in this item by geo-

centres (524 thousand euros),

graphical area.

Lazio Tuscany – Umbria Campania Overseas Concessions and Rights on Infrastructure

31.12.2010



1,061,651

0

149,371

280,141

0

52,648

76,279

0

4,492

0

0

0

1,418,071

0

206,512

Amortisation / depreciation


31.12.2011


Increase/ (Decrease) Basis of Consolidation Lazio

0

(40,133)

(49,707)

1,121,182

28,471

(26,883)

21,032

355,409

Campania

0

(3,416)

0

77,355

Overseas

0

0

0

0

28,471

(77,432)

(28,675)

1,553,946

Tuscany – Umbria

Concessions and Rights on Infrastructure amounts in thousands of euros


273

16. Other intangible assets – 115,067 thousand euros These amounted to 115,067 thousand euros (67,350 thousand euros as at 31 December 2010), marking an increase of 47,717 thousand euros and are broken down as follows. The change was caused by investments for the year equalling 45,817 thousand euros and the effects of the change in the basis of consolidation amounting to 39,797 thousand euros, the latter related to the change in Acquedotto del Fiora’s consolidation method.

31.12.2010



Patent rights

29,829

0

19,859


17,771

0

13,501


19,750

0

12,457

67,350

0

45,817


Amortisation / depreciation


31.12.2011

4,366

(18,988)

15,586

50,651

28,872

(6,647)

(10,189)

43,317

Other intangible assets amounts in thousands of euros

Patent rights Other intangible assets Fixed assets in progress Other intangible assets

6,559

0

(17,658)

21,108

39,797

(25,635)

(12,261)

115,067


274

Investments carried out in the period refer to (i) Acque

sewer networks and for the user geolocalisation project.

for 6,286 thousand euros, (ii) ACEA Ato2 for 3,476 thou-

Intangible assets of ACEA Distribuzione include the costs

sand euros, (iii) ACEA Distribuzione for 10,892 thousand

incurred for the re-engineering project for information

euros, (iv) Acquedotto del Fiora for 5,531 thousand euros,

and commercial systems in the distribution area (7,035

(v) Acea Energia for 9,456 thousand euros, (vi) Acea Ener-

thousand euros) and the standardisation of systems

gia Holding for 1,319 thousand euros (vii) ARIA for 1,052

used in meter reading (3,644 thousand euros).

thousand euros and (viii) the Parent Company for 4,978

The Parent Company’s investments mainly concern im-

thousand euros.

provements made to the utilities system, the launch of

ACEA Ato2’s investments relate mainly to costs for stud-

additional IT projects, as well as the server virtualisation

ies and research on water resources, drinking water and

project.


17. Investments in unconsolidated subsidiaries and associates – 14,795 thousand euros The ACEA Group’s investment portfolio amounts to 14,795 thousand euros, compared to 32,066 thousand euros at the end of 2010. It is broken down as follows.

Historical cost

Revaluations

Impairments

Movements/ Reclassifications

Net

Values at 31 December 2010

162,617

43,263

(97,439)

(76,376)

32,066

Balances at 1 January 2011

162,617

43,263

(97,439)

(76,376)

32,066

(18,514)

(18,319)

Movements in 2011: acquisitions

195

revaluations

1,203

impairments Total movements in 2011 Values at 31 December 2011

1,203 (154)

(154)

195

1,203

(154)

(18,514)

(17,270)

162,812

44,466

(97,593)

(94,890)

14,795


The breakdown of movements during the period is as follows:

19. Deferred tax assets – 353,648 thousand euros

• Write-downs: these relate to the measurement,

These amounted to 353,648 thousand euros at 31 De-

using the equity method, of investments in So.ge.a,

cember 2011 (267,520 thousand euros at 31 December

Azga Nord and Eur Power,

2010) and relate essentially to (i) the temporary differ-

• Revaluations: these refer essentially to the valu-

ences between the carrying amounts accounted for in

ation according to the equity method of the invest-

the financial statements of subsidiaries, following trans-

ments in Agua de San Pedro (854 thousand euros),

fers of business units, and the corresponding amounts

Umbria2 (125 thousand euros), Umbria Distribuzi-

accounted for in the consolidated financial statements,

one Gas (101 thousand euros), Sienergia (76 thou-

amounting to 60,022 thousand euros (67,067 thousand

sand euros) and in GEAL (28 thousand euros),

euros at 31 December 2010), (ii) lower tax repayments

• Acquisitions: these relate to entries of invest-

of 130,118 thousand euros (80,962 thousand euros at 31

ments held by Acquedotto del Fiora (195 thousand

December 2010), (iii) provisions for tax liabilities of 46,854

euros).

thousand euros (32,320 thousand euros at 31 December 2010), (iv) provision for write-downs of receivables

18. Other investments – 4,686 thousand euros

amounting to 56,713 thousand euros (40,976 thousand

This item, totalling 4,685 thousand euros (3,650 thousand

rate adjustments (16,889 thousand euros) for companies

euros at the end of the previous year), consists of equity

that are or will be subject to the IRES surcharge from the

interests that do not qualify as subsidiaries, associates

start of 2011 or in later years.

or joint ventures. These investments are accounted for

Movements in this item are as follows.

euros at 31 December 2010). These provisions include

at fair value.


275

2010 Balance

2011 movements


Adjustments/ Reclassifications

251

0

(116)

36

95

880


32,320

3,943

(2,543)

Impairments of receivables and investments

40,976

13,295

3,147

Movements in shareholders’ equity

Uses

Provisions for IRES/IRAP

Balance

0

(26)

3,187

3,296

0

(86)

142

1,066

0

(12,265)

25,399

46,854

0

(12,000)

11,296

56,713

Prepaid taxes Tax losses Fees to members of the Board of Directors


80,962

10,683

(94)

0

(1,523)

40,091

130,118

Defined benefit and defined contribution plans

12,350

175

(182)

0

(775)

1,004

12,572

Tax assets on consolidation adjustments

67,067

0

(335)

0

(6,710)

0

60,022

9,128

53

164

5,965

(130)

137

15,316

Fair value of commodities and other financial instruments Other

24,430

1,195

(765)

0

(1,242)

4,073

27,691

Total

267,520

29,438

155

5,965

(34,759)

85,328

353,648

66,057

7,064

(2,015)

0

(1,822)

10,240

79,524

Defined benefit and defined contribution plans

4,506

79

(138)

0

(37)

434

4,844

Fair value of commodities and other financial instruments

4,665

0

3,705

8

(1)

436

8,814

Deferred taxes Amortisation/depreciation

Other

2,182

172

3,136

0

(1,045)

1,200

5,644

Total

77,410

7,315

4,689

8

(2,905)

12,310

98,826

190,110

22,124

(4,533)

5,957

(31,853)

73,018

254,823

Net total


connection fees.

20. Non-current financial assets – 19,939 thousand euros

The Group recognises deferred tax assets based on earn-


ings forecasts in the Group’s business plans, which con-

sand euros at 31 December 2010), marking a decrease of

firm the probability that sufficient future taxable profit


will be available against which all of the assets can be

More specifically, this item is composed as follows:

The item “Other” includes deferred taxation concerning

recovered.

• financial receivables of 18,019 thousand euros due from Roma Capitale relating to plant upgrades in terms of safety and legislation and new constructions as set out in the addendum to the Public Lighting contract, carried out in 2011. This receiv-

276


able relates to the long-term portion deriving from

As at 31 December 2010, the item included the receiva-

application of the financial method as per IFRIC 12

bles from proportionately consolidated subsidiaries, such

regarding concession arrangements,

as the interest bearing loans granted to Voghera Energia

• Receivables for non-current concession fees due to

(1,531 thousand euros) and the receivables generated by

the State amounting to 997 thousand euros, relat-

loans granted to AceaElectrabel Trading (1,000 thousand

ing to the return of expenses paid as a result of Law

euros), collected by the parent company during the termi-

266/05, subsequently supplemented by Supreme

nation of the joint venture as set forth in the Framework

Court ruling 1/2008,

Agreement signed with GDF-Suez, as well as receivables

• VAT credits of 909 thousand euros for which a refund has been requested.

from AceaElectrabel Produzione referring to shares of EIB loans taken out by ACEA, now transferred to Acea Produzione, consolidated on a line-by-line basis.

21. Other non-current assets – 63,189 thousand euros At 31 December 2011, there were composed as follows:

Amounts due from the State Advances and deposits Other Other non-current assets

31.12.2011

31.12.2010


170

138

32

1,133

702

431

61,885

25,371

36,514

63,189

26,211

36,978


Amounts due from the State

Other

These amounts due totalled 170 thousand euros and re-

This item totals 61,885 thousand euros (25,371 thousand

gard the advance of withholding taxes paid at a rate of

euros at 31 December 2010). The item consists of 7,074

3.89% on staff termination benefits.

thousand euros in prepayments of costs incurred by

These receivables were used to offset withholding tax-

Group companies (1,759 thousand euros by ARSE, 1,516

es due on staff termination benefits and advances dis-

thousand euros by the Acque Group) deriving from the

bursed at 1 January 2000, as allowed by the relevant

management of White Certificates and the Metro and

legislation. Moreover, such amounts were utilised to pay

Cemetery Lighting contracts, relating to revenues that

capital gains tax on revaluations of staff termination ben-

will be collected in future years, and 3,536 thousand eu-

efits introduced by the 2000 Finance Act.

ros relating to Nuove Acque for deferrals relating to con-

The receivables in question are subject to revaluations at

cession fees paid early.

the end of each year, with any revaluations recognised in

That item also includes the long-term receivables gener-

the income statement as finance income.

ated by the public lighting service agreement in the city of Rome amounting to 53,723 thousand euros (17,925

Advances and deposits

thousand euros as at 31 December 2010), which repre-

These items total 1,133 thousand euros and regard guar-

sents the overall investments made until 31 December

antee deposits and advances to staff.

2010 linked to that service, as a result of the adoption of the financial method approved by IFRIC 12 as a result of the supplements agreed upon between ACEA and Roma Capitale in the service agreement. The change of 35,518 thousand euros from 31 December 2010 therefore represents the reclassification of rights on infrastructure.


277

22. Current assets - 2,316,514 thousand euros They total 2,316,514 thousand euros (1,925,750 thousand euros at 31 December 2010) and are broken down as follows:

Inventories

31.12.2011

31.12.2010


66,106

58,039

8,066

1,304,691

991,265

313,426

160,060

113,572

46,488

45,261

39,973

5,288

1,510,012

1,144,811

365,201

Trade receivables: Amounts due from customers Amounts due from the parent company Amounts due from subsidiaries and associates TOTAL TRADE RECEIVABLES Other receivables and current assets

189,518

77,337

112,181


172,768

321,384

(148,616)

57,089

42,437

14,652

Current tax assets Cash and cash equivalents CURRENT ASSETS

321,022

281,742

39,280

2,316,514

1,925,750

390,764


Inventories

incomplete at 31 December 2011 (up 7,406 thousand

These totalled 66,106 thousand euros (up 8,046 thou-

euros compared to 31 December 2010), (ii) the change

sand euros compared to 31 December 2010) and are

in the basis of consolidation concerning, in particular,

broken down into the following industrial areas:

the warehouse stocks of Acea Produzione which, as a

• Networks: 47,376 thousand euros (up 5,711 thousand euros compared to 31 December 2010),

result of the termination of the joint venture, increased by 1,693 thousand euros and (iii) Acquedotto del Fiora

• Energy: 2,926 thousand euros (up 2,210 thousand euros compared to the end of the previous year),

which, due to proportionate consolidation, contributed 216 thousand euros to the increase in said item.

• Water: 12,998 thousand euros (up 234 thousand euros compared to 31 December 2010), including

Trade receivables

Overseas for 1,831 thousand euros,

These amounted to 1,510,012 thousand euros, marking

• Environment: 2,806 thousand euros (essentially unchanged compared to 31 December 2010).

year, when the figure was 1,144,811 thousand euros.

The increase is determined by: (i) ARSE for contract

This item was affected in particular by the change in the

works in progress relating to awards obtained from third

basis of consolidation, with reference to the amend-

parties for the construction of photovoltaic plants in

ment to the consolidation criteria for electricity produc-

the Cassano, Villa Piana, Orsomarso and Scalea 1 sites,

tion and sales companies and Acquedotto del Fiora.

Amounts due from customers Amounts due from Roma Capitale Amounts due from subsidiaries and associates Total trade receivables amounts in thousands of euros

278

an increase of 365,201 thousand euros on the previous


31.12.2011

31.12.2010



1,304,691

991,265

313,426

31.6%

160,060

113,572

46,488

40.9%

45,261

39,973

5,288

13.2%

1,510,012

1,144,811

365,201

31.9%

Amounts due from customers 31.12.2011

31.12.2010


End users for bills issued

626,204

409,706

216,498

End users for bills to be issued

392,621

399,386

(6,765)

1,018,825

809,092

209,733

256,890

153,211

103,679

28,976

28,962

14

1,304,691

991,265

313,426

Total receivables due from end users Receivables from other customers Disputed receivables Total receivables amounts in thousands of euros

The growth of 313,426 thousand euros reported since 31

of 130,507 thousand euros, including 106,406 thou-

December 2010, is due to the change in the basis of con-

sand euros from ACEA Energia,

solidation as well as the increase in utility and non-utility

• the Water Area recorded a reduction of 46,946 thou-

receivables in all industrial areas; the changes specifically

sand euros, due entirely to ACEA Ato5, as better

regarded:

explained later in the document, net of the contribution from Acquedotto del Fiora (11,415 thousand

• the Energy Area reported an increase of 313,123 thou-

euros) due to a change in the consolidation criterion,

sand euros, since the amount of receivables increased from 299,776 thousand euros as at 31 December 2010

• the Networks Area + 7,794 thousand euros,

to 614,392 thousand euros at the end of 2011, due to

• the Environment Area + 27,379 thousand euros,

(i) the change in the basis of consolidation amounting

• the Parent Company + 12,075 thousand euros.

to 184,109 thousand euros; comparing the values on a

The table below summarises the changes by industrial

like-for-like basis, the Energy Area reports an increase

area:

Industrial Area ACEA

31/12/2011

31/12/2010


31/12/2010 Pro forma


Change in consolidation

38,901

26,826

12,075

26,826

12,075

0

Networks

101,251

93,456

7,794

75,947

25,304

(17,509)

Energy

612,899

299,776

313,123

483,885

129,014

184,109

Water

491,387

538,333

(46,946)

538,333

(46,946)

0

Environment TOTAL

60,253

32,874

27,379

32,874

27,379

0

1,304,691

991,265

313,426

1,157,865

146,826

166,600

Networks industrial area receivables

issued (13,993 thousand euros). It should be noted

These receivables totalled 101,251 thousand euros (up

that in December provision was made for the writ-

7,794 thousand euros on the previous year). These include:

ing off of prescribed receivables, past due before

• 27,928 thousand euros due from end users (down

31 December 2005; write-offs amounted to a to-

2,664 thousand euros on the previous year). The

tal of 19,491 thousand euros, including receivables

item includes receivables generated by transport

due from end users of 16,341 thousand euros.

to free market customers. The overall change in

• 73,330 thousand euros from other customers (up

receivables due from users is due to the decrease

10,466 thousand euros compared to 31 December

in receivables for bills issued for 34,207 thousand

2010). This item includes receivables due to ARSE

euro, partially offset by the increase in bills to be

(65,219 thousand euros at 31 December 2011) de-


279

riving essentially from contracts linked to air qual-

securitisation contract signed in 2009, receivables due

ity, photovoltaic power, as well as to the disposal of

from private entities amounting to 536,505 thousand

Energy Efficiency Bonds – EEB (white certificates).

euros and entered into spot transfer operations which

The increase is mainly due to the marketing and

involved the transfer of receivables due from Public Ad-

commissioning of PV modules.

ministration amounting to 159,272 thousand euros.

The provision for impairment of receivables for this area totals 5,053 thousand euros, down by 16,512 thousand

Water industrial area receivables

euros, due mainly to ACEA Distribuzione as a result of

This item amounts to a total of 491,387 thousand euros,

use for the above write-offs.

a decrease of 46,946 compared to 31 December 2010.

During the year, four extraordinary, non-recourse factor-

The change was generated by the following companies:

ing of amounts due from wholesalers were concluded,

• ACEA Ato2 (down 12,451 thousand euros). The

for a total amount of 27,866 thousand euros. An amount

company recorded total receivables of 209,030

of 19,628 thousand euros was also transferred as part

thousand euros, of which 190,911 thousand euros

of the contractual extension, completed in December,

(down 15,374 thousand euros) due from end us-

of the securitisation entered into at the end of 2009.

ers and 18,119 thousand euros (up 2,923 thousand euros) due from other customers. The decrease

Energy industrial area receivables

represents the combined effect of the following

These receivables are generated by sales of energy to

phenomena:

customers in the free market and the protected catego-

- the increase in receivables for bills issued

ries market, as well as to gas customers and amount

(27,511 thousand euros) is due to the rise in

to 612,899 thousand euros. They recorded an increase

turnover which also concerned pre-2011 fees,

of 313,123 thousand euros over the previous year: the

allowing a significant reduction receivables for

change is essentially due to Acea Energia (up 287,400

bills to be issued. Provision was made for the

thousand euros), also as a result of the change in the

writing off of some receivables (7,112 thousand

percentage held by that company which involves an

euros), whose prospects for recovery are es-

increase of 182,487 thousand euros (on a like-for-like

- decrease in receivables for bills to be issued

by 106,406 thousand euros). The contribution to receiv-

(44,911 thousand euros), owing to the reasons

ables due to ACEA Produzione (9,699 thousand euros

given in the previous point. Revenues still not

as at 31 December 2011) should be considered in the

billed pertaining to 2011 total 17,058 thousand

change in the basis of consolidation. This was gener-

euros;

ated by the non-proportionate spin-off of the former as-

- the provision for impairment of receivables de-

sociate AceaElectrabel Produzione.

creased by 1,008 thousand euros, standing at

Acea Energia wrote off receivables totalling 16,700

18,994 thousand euros (20,002 thousand euros

thousand euros and use the provision for the impair-

at 31 December 2010).

ment of receivables for the same amount, given fully

During 2011, ACEA Ato2 transferred, as part of the

written down assets.

securitisation contract signed in 2009, receivables

The provision for impairment of receivables at 31 De-

due from private entities amounting to 249,833

cember 2010 amounts to 84,898 thousand euros, up

thousand euros and entered into spot transfer

by 29,820 thousand euros compared to 31 December

operations which involved the transfer of receiva-

2011, net of uses. This increase was caused by alloca-

bles due from Public Administration amounting to

tions for the year and the change in the basis of consolidation. During 2011, ACEA Energia transferred, as part of the

280

sentially zero,

basis, the company’s receivables would have increased


34,988 thousand euros. • Acquedotto del Fiora (up 11,415 thousand euros): the increase refers entirely to the change in the

basis of consolidation,

• The Publiacqua Group (down 11,233 thousand

• At year end, GORI’s receivables amount to 107,982

euros). At the end of the year, these receivables

thousand euros, of which 60,221 thousand euros

amounted to 27,244 thousand euros (including

to be issued, with an increase of 7,658 thousand

20,832 thousand euros due from end users), com-

euros, of which 7,953 thousand euros for invoices

pared to 38,477 thousand euros at 31 December

to be issued. This change reported by the Company

2010,

is significantly caused by the problems linked with

• AceaGori Servizi (up 1,275 thousand euros). As at

corrective tariff measure authorisation timescales,

31 December 2011, they totalled 7,420 thousand

which create tariff adjustments for the differences

euros from third-party clients, compared to 6,145

between the Plan actual tariff and the average tar-

thousand euros at the end of last year.

iff, or the temporary one, that has been assigned

This area also includes the receivables of the companies

whilst awaiting the review of the Area Plan. The

Gesesa, Lunigiana and Crea Gestioni, which equalled

tariff adjustments, included in the amount of bills

18,371 thousand euros at the end of the period (up 1,262

to be issued, amount to 54.5 million euros,

thousand euros), and the receivables from the Overseas

• ACEA Ato5 (down 49,713 thousand euros). Re-

Water Services area, totalling 6,160 thousand euros

ceivables amount to 62,716 thousand euros,

(4,289 thousand euros at 31 December 2010), which re-

with 57,788 thousand euros due from end users

corded an increase of 1,871 thousand euros, chiefly at-

(107,996 thousand euros at the end of the previ-

tributable to Aguazul Bogotà.

ous year). Invoices to be issued to users at the

The balance of receivables due from customers in the

end of the year amount to 36,640 thousand euros,

Water Industrial area includes 439,287 thousand euros

down by 41,172 thousand euros. The change in re-

in amounts due from end users and 52,150 thousand eu-

ceivables is due to the combined effect of (i) the re-

ros due from other customers. The provision for the im-

duction in receivables for bills issued (down 5,222

pairment of receivables for this area amounts to 78,145

thousand euros) due to recovery actions carried

thousand euros.

out in the year, (ii) the decrease in receivables for bills to be issued (41,172 thousand euros) mainly

Environment area receivables

as a result of the reclassification to the item Other

These amounted to 60,253 thousand euros, an increase

receivables of an amount of 59,875 thousand eu-

of 27,379 thousand euros compared to 31 December

ros relating to the variation between real revenues

2010, essentially as a result of the growth in ARIA Group

from billing and guarantee revenues with respect

receivables (up 27,290 thousand euros), basically due

to the original area plan for the 2006-2011 period,

to the sale of electricity produced by the II and III lines

assessed by the Commissioner for deeds in the

of the San Vittore WTE plant to GSE and the transfer of

provision dated March 2012. Further information is

RDF to the disposal treatment plant. The CIP6 contract

provided in the section “Update on major disputes

which regulates the withdrawal of electricity of the two

and litigation”,

lines is being finalised.

• The Acque Group (up 2,590 thousand euros). At 31

The contribution to receivables of the newly acquired

December 2010, these receivables amounted to

Società Innovazione Sostenibilità Ambientale should

25,539 thousand euros (including 21,943 thousand

also be pointed out (20 thousand euros).

euros due from end users), compared to 22,949 thousand euros at 31 December 2011,

ACEA receivables

• Umbra Acque (up 1,363 thousand euros). At the

They equalled 38,901 thousand euros (up 12,075 thou-

end of the period, receivables amounted to 12,060

sand euros compared to the end of 2010). The increase

thousand euros, compared to 10,698 thousand eu-

was caused by the non-recourse acquisition of the re-

ros at 31 December 2010,

ceivables due from the company Manutenzione Illumi-


281

nazione S.p.A. to Acea Energia, for a nominal value of

Receivables due from the parent company Roma

6,536 thousand euros and the remaining 5,539 thou-

Capitale

sand euros, relating to normal operations carried out in

Trade receivables due from Roma Capitale totalled

the year, with particular reference to the public lighting

160,059 thousand euros at 31 December 2011 (113,572

service in Naples.

thousand euros at 31 December 2010).

As at 31 December 2011, disputed receivables, includ-

The total amount of receivables, including financial re-

ing the provisions for impairment of receivables, came

ceivables resulting from the public lighting contract,

to 27,013 thousand euros, which is in line with the end

both short and medium/long-term, is equal to 292,737

of 2010.

thousand euros (212,084 thousand euros in the previous

The Group’s provision for impairment of receivables

year).

amounted to 193,884 thousand euros (compared to

The following table presents an analysis of the ACEA

173,192 thousand euros at 31 December 2010) and the

Group’s relations with Roma Capitale regarding both

amount allocated stood at 55,059 thousand euros.

receivables and payables, including those of a financial

Provisions were made for risks on receivables due from

nature.

end users and other customers. Provisions for the impairment of receivables are based

31.12.2011

31.12.2010

on analytical assessments, supplemented by assess-


ments based on historical analyses of amounts due

RECEIVABLES

292,737

212,084

80,653

from end users and customers broken down according

PAYABLES (including dividends)

148,785

98,416

50,369

143,952

113,668

30,284

to the default period, the type of action undertaken to

BALANCE

recover the amount due and the status of the receiv-


able concerned (ordinary, disputed, etc.). For more information related to credit ageing, please see the tables attached to this document.

The individual Group companies report the following net balances: Parent Company: up 131,554 thousand euros ACEA Distribuzione: 4,309 thousand euros ACEA Ato2: 23,049 thousand euros ACEA Energia: - 14,960 thousand euros

(up 28,329 thousand euros compared to 2010) (up 782 thousand euros compared to 2010) (up 7,811 thousand euros compared to 2010) (up 952 thousand euros compared to 2010).

The following tables also provide a breakdown of Group receivables/payables due from/to Roma Capitale.

282



31.12.2011 (a)

31.12.2010 (b)

Increase/ (decrease (a) - (b)

Utility receivables

70,083

35,742

34,341

Contract work

44,418

36,995

7,423

Services

9,134

5,635

3,499

Other

1,369

1,546

(177)

125,003

79,917

45,086

Grants due

14,086

14,086

0

Surcharges

0

0

0

Total services requested

139,089

94,003

45,086

Total services to be billed

Total services billed

17,421

17,335

86

Advances

2,101

0

2,101

New regulations for street cables

1,449

2,235

(786)

160,059

113,572

46,487

114,659

98,512

16,147

274,718

212,084

62,634

Total trade receivables Financial receivables for the public lighting service Total receivables due within one year (A)


31.12.2011 (a)

31.12.2010

(b)

Increase/ (decrease (a) - (b)

Sewerage and water treatment payables

32,681

32,696

(16)

Electricity surtax

52,772

24,181

28,591

1,488

1,494

(6)

New regulations for street cables

822

1,177

(355)

Charges for the occupation of public space

411

411

0

0

0

0

Other

Charges for rental of company offices Payables in concession fees Total trade payables Financial liabilities (including dividends) Total payables due within one year (B)

Total (A) - (B)

Medium/long-term loans and receivables for Public Lighting

24,106

15,728

8,378

112,280

75,688

36,592

15,989

2,213

13,777

128,269

77,900

50,369

146,449

134,184

12,265

18,019

0

18,019

Vatican City disputed amounts

(20,516)

(20,516)

0

Net balance

143,952

113,668

30,284


283

At the end of the year, there was a significant increase in

During the year, 97,397 thousand euros was collected

both receivables (62,634 thousand euros) and payables

through administrative offsets.

(50,369 thousand euros) falling due within one year, the

Collected receivables refer to (i) ACEA for 48,875 thou-

effect of which is partly due to the line-by-line consolida-

sand euros; (ii) Acea Energia for 20,726 thousand euros

tion of ACEA Energia. On a like-for-like basis, the changes

(iii) ACEA Ato2 for 27,757 thousand euros and (iv) ACEA

on the net exposure toward Roma Capitale would be +

Distribuzione for 38 thousand euros.

36,014 thousand euros, with + 69,865 thousand euros

With regard to the type of receivable, please note that

in credit exposure and + 33,852 thousand euros in debt

collections refer to utilities for 48,175 thousand euros

exposure.

(of which 20,726 thousand euros for electricity and

The change in receivables for amounts billed (up 45,086

27,449 thousand euros for water), as well as to works

thousand euros compared to the previous year) is attrib-

and services for 49,222 thousand euros.

utable to:

With regard to the type of payables that have been set

(i) higher utility receivables totalling 34,341 thousand

off, the following is noted:

euros, including 12,425 thousand euros of ACEA

• euro 14.678 mila riguardano addizionali elettriche

Ato2; as regards Acea Energia, the increase regis-

14,678 thousand euros regards electricity surtax-

tered came to 21,916 thousand euros which falls to

es due from Acea Energia,

11,077 thousand euros on a like-for-like basis,

• 15,121 thousand euros for the concession fees

(ii) the increase in receivables for works and services,

due by ACEA Ato2,

with special reference to new public lighting plants

• 50,960 thousand euros relating to dividends of

(up 6,432 thousand euros), works for the comple-

ACEA and ACEA Ato2 from 2010.

tion of the hydro-sanitary network and works for

• 16,638 thousand euros for the advance on 2011

the moving of pipelines and utilities installation

dividends distributed by ACEA.

amounting to 1,982 thousand euros and receiva-

Please note that the receivables and payables set forth

bles for the fountain maintenance contract of 1,460

in the table also include those related to the Adminis-

thousand euros. The amount of bills to be issued

tration established by the Central Government, which

came out at 17,421 thousand euros, marking an in-

are currently being disseminated to Roma Capitale of-

crease of 86 thousand euros.

fices. These receivables amounted to 82.4 million euros

It should be underlined that financial receivables

and payables are estimated at 29.7 million euros.

amount to 132,678 thousand euros (including 18,019

For further information on the contracts signed be-

thousand euros falling due after one year), marking an

tween the companies of the ACEA Group and Roma

increase of 34,166 thousand euros: these were gener-

Capitale, as well as on billing methods and collection/

ated by the management of the public lighting service

payment terms - including relationships with the Com-

as part of the service contract in force from 1 January

panies of the Roma Capitale Group – reference is made

2011. Default interest of around 7 million euros is also

to the section “Related party transactions”.

included in financial receivables.

Trade receivables due from subsidiaries and associates

Amounts due from associates Amounts due from subsidiaries Total amounts due from subsidiaries and associates amounts in thousands of euros

284


31.12.2011

31.12.2010



7,385

7,492

(107)

-1.4%

37,876

32,481

5,395

16.6%

45,261

39,973

5,288

13.2%

Receivables due from subsidiaries


They amount to 37,876 thousand euros (32,481 thousand

These receivables totalled 7,385 thousand euros (7,492

euros as at 31 December 2010), an increase of 5,395 thou-

thousand euros at 31 December 2010) and primarily

sand euros, and refer to receivables due from companies

refer to amounts due from Marco Polo (391 thousand

consolidated proportionately; in this regard, the change

euros, down 519 thousand euros), Agua de San Pedro

was affected by the line-by-line consolidation of Acea En-

(1,252 thousand euros, down 339 thousand euros) and

ergia and the subsequent change in the percentage of

Tirana Acque, in liquidation (155 thousand euros, down

consolidation of its subsidiaries. Specifically, the item es-

100 thousand euros).

sentially includes the receivables posted (i) by ACEA for

The remaining balance is made up of receivables due

1,111 thousand euros (down 3,694 thousand euros), (ii) by

from the associates of Crea Gestioni for 1,667 thousand

ACEA Energia from its subsidiaries for 32,329 thousand

euros (down 276 thousand euros) and receivables due

euros (up 8,399 thousand euros) and (iii) by Sarnese Ve-

from SAO amounting to 308 thousand euros (up 73 thou-

suviano from GORI for 4,347 thousand euros (up 1,027

sand euros).

thousand euros). Other current receivables and assets

Amounts due from others Accrued income and prepayments

31.12.2011

31.12.2010

Absolute increase/ (Decrease)


179,338

66,594

112,744

169.3%

9,470

10,743

(1,273)

-11.8%

710

0

710

100.0%

189,518

77,337

112,180

145.1%

Receivables deriving from commodity contracts Total other receivables and current assets amounts in thousands of euros

Amounts due from others

in question were discounted to take into account

These totalled 179,338 thousand euros and the main

collection times: the related expenses amounted

items that make up this balance are as follows:

to 1,833 thousand euros,

• 58,221 thousand euros for ACEA Ato5 refer to

• 22,299 thousand euros at ACEA Distribuzione for

tariff adjustments - classified under amounts due

advances to suppliers composed mainly (21,700

from others in 2010 - relating to the variation be-

thousand euros) of the amount paid to GSE for the

tween real revenues from billing and those “guar-

A3 component of August 2011; this advance was

anteed” with respect to the “Original area plan”

recovered on expiry of the month of February,

for the 2006 - 2011 period. These receivables were

• 3,645 thousand euros represents ACEA Distribuzi-

definitively quantified by the provision of the Com-

one’s amounts due from the Electricity sector

missioner for deeds communicated to ACEA Ato5

equalisation fund and relating to the specific

on 9 March 2012: during the ordinary and extraor-

equalisation of 2009 and 2010. It should be noted

dinary review of the area plan, methods of offset-

that during the year, receivables were transferred

ting will also be defined and receivables deriving

for equalisation relation to the 1 January - 22 De-

from the differences between plan forecasts and

cember period for a total of 38,504 thousand eu-

the actual performance of management in the

ros. A total of 80% of this amount was transferred

previous years will be subject to an evaluation as

(30,803 thousand euros) under non-recourse fac-

part of ordinary review activities. The receivables

toring, and the remaining 20% (7,701 thousand


285

euros) under recourse factoring. The cost of trans-

The increase of 112,744 thousand euros over 2010 is

ferring 2011 receivables came to 1,696 thousand

mainly attributable to the change in the basis of consoli-

euro,

dation and recognition of ACEA Ato5’s receivables men-

• 13,422 thousand euros for ACEA Distribuzione

tioned previously, the advance on the A3 component

represents the share of receivables relating to

paid by ACEA Distribuzione to GSE and the advance paid

company-specific equalisation for the years 2010

by ACEA for the purchase of the headquarters.

and 2011 which were transferred to Unicredit Factoring under recourse factoring.

Accrued income and prepayments

• 10,250 thousand euros recorded by ACEA in 2010


resulting from the disposal of the property that

sand euros at 31 December 2010) and refer mainly to

housed the company’s car fleet. The amount rep-

rent on public land, rentals and insurance.

resents the price of the aforementioned disposal

The decrease (down 1,273 thousand euros) is a result

that the assignee would have had to pay by 31

of the reduction at Nuove Acque of 3,325 thousand eu-

December 2011: legal action was launched for the

ros, partially offset by Acquedotto del Fiora for + 1,153

recovery of the credit,

thousand euros (change in basis of consolidation) and

• 11,000 million euros paid by ACEA to Beni Stabili as an account advance for the price for the pur-

by Acea Energia Holding and its subsidiaries for a total of 1,659 thousand euros.

chase of the company headquarters, which took place in January 2012,

Receivables deriving from commodity contracts

• 3,294 thousand euros for ACEA Distribuzione re-

The fair value of commodity contracts as at 31 Decem-

lating to receivables due from the Public Adminis-

ber 2011 equalled 710 thousand euros and refers to the

tration seized by Gerit Spa as a result of proceed-

company ACEA Energia Holding (561 thousand euros)

ings at the settlement phase,

and Acea Energia (148 thousand euros).

• 3,940 thousand euros for ACEA for amounts due

For more information please see the section “Additional

from Equitalia Gerit relating to collections deriv-

disclosures on financial instruments and risk manage-

ing from the seizure of the assets of public admin-

ment policies”.

istrations pursuant to art. 48 bis of Presidential Decree 602 of 29 September 1973. These collec-

Current tax assets

tions have been used to pay a tax payment notice


concerning lower alleged VAT payments charged

sand euros at 31 December 2010).

to ACEA’s VAT consolidation; an appeal was filed

The item essentially includes VAT credits amounting to

against said payment notice before the Provincial

26,803 thousand euros for which rebates have not been

Tax Commission of Rome, which is still pending,

claimed, IRES (corporate income tax) credits totalling

given that a technical appraisal is being conducted

13,087 thousand euros and IRAP (regional income tax)

by a CTU (court-appointed expert). ACEA believes

credits of 3,114 thousand euros respectively due from

there is a good chance of obtaining the reimburse-

the Tax Authorities. The change is due mainly to IRES

ment of the assets seized;

relating to the tax consolidation of ACEA, which closed

• 8,490 thousand euros relating to amounts due to the subsidiary Gori, including 7,050 thousand euros due from municipalities of the ATO for funds allocated by article 14 of Law 36/1994, • 7,167 thousand euros relating to receivables which Publiacqua has to collect from users (still uncollected) in the form of the guarantee deposit.

286


2011 with a credit position.

Current financial assets 31.12.2011 Loans and Receivables due from the parent company Loans and receivables due from subsidiaries and associates Loans and receivables due from third parties Total current financial assets

31.12.2010

Absolute increase/ (Decrease)


114,659

98,512

16,147

16.4%

9,073

175,800

(166,807)

-94.8%

49,036

46,992

2,044

4.3%

172,768

321,384

(148,616)

-46.2%


Loans and Receivables due from the parent com-

with GDF-Suez, ACEA recognised a portion of the lines

pany

of credit due to GDF Energia Italia, since they were bor-

They amount to 114,659 thousand euros (98,512 thou-

rowings of Acea Produzione.

sand euros at 31 December 2010) and represent the unconditional right to receive cash flows, in line with the

Loans and receivables due from third parties

methods and timing provided for in the service contract

These receivables totalled 49,036 thousand euros

for management of the public lighting service. Further

(46,992 thousand euros at 31 December 2010) and are

details are provided in the comments on the item “Re-

mainly broken down as follows:

ceivables due from parent company Roma Capitale”.

• 8,735 thousand euros due from ENEL to ACEA Distribuzione representing Inps contributions paid by

Loans and receivables due from subsidiaries and

ACEA Distribuzione for the years 2001 and 2002

associates

pursuant to article 41, paragraph 2.A of Law 488


of 23 December 1999. The company believes that

sand euros at 31 December 2010). More specifically, they

such amounts regard obligations dating back to be-

are broken down as follows:

fore the date of effectiveness of the purchase of

• 1,258 thousand euros relating to amounts owed

ENEL’s former business unit (1 July 2001) and has

in dividends from companies accounted for under

therefore requested payment from ENEL Distribuzi-

proportionate consolidation,

one;

• 2,500 thousand euros recorded in ACEA and re-

• 10,700 thousand euros payable to ACEA Ato5 by

lated to the loan granted to Sienergia in November

the Area Authority is to be paid in three annual in-

2010 in order to face financial needs linked to some

stalments by 31 December of each year, with the

investment projects, among which the construc-

first instalment due before 31 December 2007. The

tion of PV plants; interest accrues on that item at

deed of settlement signed by the company and

the Euribor 3-month rate increased by 1.5% yearly,

the Area Authority concerned the resolution of the

• 2,363 thousand euros due from Umbriadue and re-

problem relating to higher operating costs incurred

corded by Crea Gestioni.

in the 2003-2005 three-year period: recognition of

The change from the previous year is a result of the

higher costs net of sums relating to (i) the tariff por-

change in the basis of consolidation. As at 31 Decem-

tion - corresponding to amortisation/depreciation

ber 2010, the item included centralised treasury receiv-

and return on inflated invested capital - relating to

ables due from ACEA Energia, now consolidated on a

the investments set out in the Area Plan and not

line-by-line basis and the parent company’s receivables

carried out in the first three-year period (ii) the por-

for EIB loans taken out and for interest bearing loans

tion of inflation accrued on concession fees and (iii)

issued to the former subsidiary AceaElectrabel Produzi-

fines for the non-fulfilment of contractual obliga-

one. On the basis of the Framework Agreement signed

tions in the three-year period.


287

• 14,678 thousand euros to ACEA for receivables generated by the temporary minimum equalisation of the transaction terminating the joint venture with GDF-Suez • 6,000 thousand euros due from the assignee of the Laurentina area to ACEA, • 5,598 thousand euros concerning the receivables resulting from the management of the public light-

The increase of 39,280 thousand euros is composed as follows: • + 32,819 thousand euros for ACEA for the balance of bank and post office current accounts held with various institutions, including the Italian Postal Service. In addition, it should be noted that the amount of 164,500 thousand euros was used, relating to cash deposits opened during 2010,

ing service (5,544 thousand euros at 31 December

• + 7,979 thousand euros of water service compa-

2010), representing the unconditional right to re-

nies, particularly owing to the different method of

ceive cash flows, consistently with the methods and

consolidation of Acquedotto del Fiora (up 3,987

timing provided for in the same service contract,

thousand euros), the reduction in payments to sup-

• 1,584 thousand euros at Crea Gestioni relating to

pliers at Publiacqua (up 3,907 thousand euros), the

financial receivables deriving from the sale of in-

collection of dividends relating to 2010 from the

vestment of SOGEAS.

company Acque SpA (up 2,019 thousand euros),

It should be noted that an amount of 1,761 thousand

overseas companies (up 1,947 thousand euros),

euros recorded in the 2010 consolidated financial state-

partially offset by the reduction in available funds

ments as a residual amount of the cash collateral established for the well-known IPSE operation was collected in 2011 and so the guarantee given was extinguished.

by Acea Ato5, • lower cash available in the Environment area (down 1,645 thousand euros) attributable to the closure of bank and postal current accounts of the


companies of the ARIA Group, as a consequence of

This item amounted to 321,022 thousand euros (281,742

the extension of the centralised treasury service to


said companies.

crease of 39,280 thousand euros. They represent the closing balance for the period of bank current accounts and postal accounts, opened at the various financial institutions and Post Offices, of consolidated companies, except for those held for sale. A breakdown and movements in this item by area are shown in the table below:

Networks Energy Water Overseas

31.12.2010 (b)

Variazioni (a)-(b)

282

21

261

401

535

(134)

34,507

26,527

7,979

5,465

3,519

1,947

Lazio and Campania

6,904

11,738

(4,834)

Tuscany and Umbria

22,137

11,271

10,867

1,605

3,250

(1,645)

284,227

251,408

32,819

321,022

281,742

39,280

Environment Corporate TOTAL amounts in thousands of euros

288

31.12.2011


23. Non-current assets held for sale / Liabilities directly associated with assets held for sale – zero

Other reserves and retained earnings

At the end of the year, the Group did not hold these types

31 December 2010). The decrease of 66,665 thousand

of assets and liabilities.

euros is mainly due to the change in the Cash flow hedge

The balance at 31 December 2010, 122,642 thousand eu-

reserve related to financial instruments. In particular fi-

ros, was represented by assets net of liabilities referring

nancial instruments refer to (i) the swap hedging the loan

to companies transferred on 31 March 2011 in compli-

granted to ACEA by Cassa Depositi e Prestiti (the move-

ance with the Framework Agreement.

ment is represented by an increase of 1,654 thousand

This item reported a negative figure of 61,793 thousand euros at the end of the year (3,871 thousand euros at

euros); (ii) the cross currency transaction on the bond loan (the change was a decrease of 7,081 thousand eu-

Liabilities

ros), (iii) the swaps hedging the loan obtained by Acque (the movement is represented by a decrease of 4,153

24. Shareholders’ equity – 1,311,457 thousand euros

thousand euros), (iv) the swap hedging the loan granted to Nuove Acque (the movement is represented by a

At 31 December 2011, shareholders’ equity amounted to

reduction of 856 thousand euros) and (v) the effective

1,311,457 thousand euros (1,381,326 thousand euros at

portion of the fair value measurement of the derivative

31 December 2010).

contracts of Acea Energia Holding (the change was a de-

Changes in shareholders’ equity during the period are

crease of 1,961 thousand euros).

shown in the appropriate statement.

The remainder of the change is due to the allocation of the profit from 2010 and the distribution of the advance

Share capital

on the 2011 dividend, as well as the change in the basis

The share capital totals 1,098,899 thousand euros, repre-

of consolidation caused by the companies subject to the

sented by 212,964,900 ordinary shares with a par value

Framework Agreement.

of 5.16 euros each, as shown in the Shareholders’ Register. The share capital is subscribed and paid-up in the

At 31 December 2011 ACEA holds 416,993 treasury

following manner:

shares to be used for future medium/long-term incentive

- Roma Capitale: 108,611,150 150 shares with a total par value of 560,433 thousand euros;

schemes. At this time there are no medium/long-term share incentive schemes planned.

- Free float: 103,936,757 shares for a total par value of 536,314 thousand euros; - Treasury shares: 416,993 ordinary shares for a total par value of 2,152 thousand euros.

Minority interests Minority interests total 74,661 thousand euros, essentially unchanged. The difference between the two periods compared mainly reflects the combined effect of the

Legal reserve

portion of net profit attributable to minority interests and

This reserve reflects the allocation of 5% of net profit for

the decrease in shareholders’ equity as a result of the

previous years, in accordance with article 2430 of the

distribution of dividends from net profit for 2010 and the

Italian civil code.

change in the basis of consolidation.

This reserve has risen from 111,785 thousand euros at 31 December 2010 to 113,731 thousand euros at 31 December 2011, an increase of 1,946 thousand euros due essentially to the increase in the legal reserve of companies that reported a profit in 2010. The legal reserve of the Parent Company amounts to 68,919 thousand euros.


289

25. Staff termination benefits and other defined benefit plans – 104,776 thousand euros

which measures the company’s liability at the end of

At 31 December 2011, said item totalled 104,776 thou-

rates that have terms to maturity approximating to the

sand euros (106,934 thousand euros as at 31 December

terms of the related liabilities.

2010) and represents termination and other benefits

By contrast, staff termination benefits and tariff subsi-

payable to employees on retirement or termination of

dies for employees are considered defined-contribution

employment.

obligations and so calculated according to actuarial cri-

This item includes the defined-benefit obligation ‘tar-

teria.

iff subsidies for pensioners’; therefore, the calculation

The following table shows the change in actuarial liabili-

method is based on the projected unit credit method,

ties during the year.

the reporting period on the basis of the average present value of estimated future cash outflows, using interest

31.12.2011

31.12.2010


Termination benefits - Staff termination benefits

70,640

72,229

(1,589)

- Monthly bonuses

6,575

6,108

467

- Long-term incentive plans (LTIPs)

2,346

1,136

1,210

25,216

27,461

(2,245)

104,776

106,934

(2,158)

Post-employment benefits - Tariff subsidies TOTAL amounts in thousands of euros

The decrease of 2,158 thousand euros compared to

terms to maturity approximating to the residual term

31 December 2010 is essentially a result of staff ter-

of the related liability. In order to ensure consistency of

mination benefit allocations in 2011 (totalling 16,514

valuation and comply with the provisions of IAS 19, the

thousand euros) net of uses and allocations against the

same basis has been used for the various types of plan.

long-term incentive plan.

In particular, as regards the economic and financial sce-

As required by paragraph 78 of IAS 19, the interest rate

nario, the parameters used for the calculation are as

used to calculate the present value of the obligation is

follows: December 2011

based on returns, at the end of the reporting period, on

290

the securities of major companies listed on the same

Discount rate

financial market as ACEA, and on the return on govern-

Rate of return growth (average)

1.6%

ment bonds in circulation at the same date that have

Long-term inflation

2.0%


4.50%

26. Provisions for liabilities and charges – 250,892 thousand euros

where the potential liability arising from a negative out-

At 31 December 2011, these provisions total 250,892

In calculating the size of the provisions, account is tak-

thousand euros (191,683 thousand euros at 31 Decem-

en both of the estimated costs that may derive from

ber 2010) and are intended to cover potential liabilities

litigation or other disputes arising during the year and

that may derive from litigation currently underway, on

an update of estimates of the potential liabilities deriv-

the basis of information provided by the Company’s in-

ing from the litigation involving the Company in previ-

ternal and external legal advisors. The provisions do not

ous years.

take account of the effects of litigation that is expected

The following table shows a breakdown of provisions

to be concluded in the Company’s favour or of litigation

and movements in the period:

come is solely held to be possible.


31.12.2010

Basis of Consolidation (-)

Uses (-)

Provisions (+)

31.12.2011


131,595

8,384

47,651

75,537

167,864

Sundry provisions

18,523

0

16,634

26,600

28,488

Provisions for restoration charges

41,565

1,533

(90)

11,350

54,539

191,683

9,917

64,195

113,487

250,892

Total provisions amounts in thousands of euros

The major movements are as follows: • uses, amounting to 64,195 thousand euros, primarily include

- 2,920 thousand euros at ACEA Ato2 for the conclusion of activities to reconcile credit and debit items with Mediofactoring,

- 16,634 thousand euros used by a number of

- 1,176 thousand euros at ACEA Distribuzione for

companies relating to the provision to cover re-

risks deriving from the management of sales to

dundancy and retirement costs, essentially due

end customers,

to ACEA Distribuzione (8,153 thousand euros),

• the change in the basis of consolidation to-

ACEA Ato2 (5,555 thousand euros) and ACEA

tals 9,917 thousand euros, and mainly refers to:

(2,900 thousand euros),

- 8,384 thousand euros relates to the effects of

- 23,800 thousand euros relating to the use for

the termination of the joint venture with GdF

seizures carried out by Equitalia, pursuant to ar-

Suez Energia Italia, which led to a different per-

ticle 48 bis of Presidential Decree no. 602/1973,

centage of consolidation for the Energy compa-

in respect of tax demands issued on behalf

nies, and different method of consolidation of

of INPS and for the division into instalments

Acquedotto del Fiora, starting from 1 January

granted by said Equitalia; in particular, said use

2011, accounted for using proportionate con-

concerns ACEA Distribuzione (9,800 thousand

solidation,

euros), ACEA Ato2 (9,537 thousand euros) and ACEA (3,063 thousand euros), - 5,563 thousand euros of provisions used by the Parent Company and certain subsidiaries in relation to litigation, - 10,114 thousand euros at Acea Energia essentially due to uses relating to liabilities allocated to cover disputes with suppliers,

- 1,533 thousand euros, relative to the change in the basis of consolidation, in the provision for restoration costs of Acquedotto del Fiora allocated in compliance with IFRIC 12. • allocations, amounting to 113,487 thousand euros, primarily include: - 35,474 thousand euros for staff provisions, including:


291

- the posting of 26,600 thousand euros for costs

- for 44,100 thousand euros for allocations to

generated by voluntary redundancy and retire-

cover GORI’s risk of the non-recognition of tar-

ment procedures launched during the period

iff adjustments and financial risk, pending ap-

under observation (or to be commenced); spe-

proval and signing of the agreement to settle

cifically:

the dispute with the Campania Region and the

- ACEA Distribuzione 11,840 thousand euros, - ACEA Ato2 9,170 thousand euros and

Area Authority, - 1,510 thousand euros regarding charges con-

- ACEA 3,874 thousand euros

nected with works carried out for the Vatican

- 8,000 thousand euros for allocations connected

City,

with contribution issues,

- 1,076 thousand euros relating to estimated

- 9,266 thousand euros for provisions for legal

insurance excesses for ongoing disputes (700

disputes; in particular, expenses relating to

thousand euros at GORI, 226 thousand euros in

the abstraction of drinking water at ACEA Ato2

ACEA Ato2 and 140 thousand euros in Acque).

(4,316 thousand euros) and contingent liabilities for the legal disputes of companies and the

Finally, this item includes the amount of 11,669 thou-

Parent Company (4,951 thousand euros). These

sand euros concerning the costs necessary to keep the

allocations were made on the basis of instruc-

infrastructure used for water service management in a

tions from internal and external legal advisors,

good state of repair.

- 7,520 thousand euros for allocations to cover

Therefore, at 31 December 2011, the provision for li-

regulatory risks deriving from management of

abilities and charges essentially included the types in

the water service in Frosinone (4,800 thousand

the table.

euros) and Florence (2,720 thousand euros),

Type of provision

FY 2011

FY 2010


25,392

22,035

3,357

2,351

3,243

391

Investee

78,022

27,584

49,155

Contribution risks

25,602

40,129

(14,526)

Redundancy and retirement

12,642

3,436

9,206

Post closure

15,400

15,428

(29)

Concession fees

11,765

10,613

1,152


25,179

27,648

(2,470)

196,352

150,116

46,236

54,539

41,567

12,972

250,892

191,683

59,209

Legal Tax

TOTAL Provisions for restoration charges TOTAL PROVISION amounts in thousands of euros

ACEA maintains that the settlement of ongoing disputes and other potential disputes should not create any additional charges for Group companies, with respect to the amounts set aside, which represent the best estimate possible on the basis of elements available as of today. For further information refer to the section ‘Update on major disputes and litigation’.

292


27. Borrowings and other non-current financial liabilities – 2,298,916 thousand euros 31.12.2011

31.12.2010


988,657

978,275

9,932


1,310,259

1,320,738

(10,479)

Borrowings and other non-current financial liabilities

2,298,916

2,299,463

(548)

Bonds


The figures in the table include the fair value, at the balance sheet date, of hedging instruments stipulated by ACEA and certain Group companies which are shown separately from the hedged instrument in the table below.

Hedged instrument

Derivative fair value

31.12.2011

Hedged instrument

Derivative fair value

31.12.2010

Bonds

1,023,329

(34,672)

988,657

1,007,640

(28,915)

978,725


1,286,722

23,537

1,310,259

1,306,699

14,039

1,320,738

Borrowings and other noncurrent financial liabilities

2,310,051

(11,135)

2,298,916

2,314,339

(14,876)

2,299,463


Bonds

maturity term on 16 March 2020.The bonds have

These amounted to 1,023,239 thousand euros (1,007,615

a minimum denomination of 50 thousand euros,

thousand euros at 31 December 2010) and refer to the

and pay one gross coupon annually of 4.5% and

following:

were placed at an issue price of 99.779; the actual

• 303,236 thousand euros to the bond loan issued

gross rate of return upon expiry is therefore equal

by ACEA on 23 July 2004 and placed on the inter-

to 4.528%. The bonds are subject to British law. The

national Eurobond market. The bond has a term to

settlement date is 16 March 2010. The bond loan

maturity of ten years and yields a nominal fixed

was assigned ratings by Standard & Poor’s and

rate of 4.875%. Redemption will take the form of a

Fitch of A- and A+, respectively. Interest accrued

lump-sum payment at par value, unless the bonds

during the period amounts to 22,451 thousand eu-

are called prior to maturity. It should be noted that

ros,

the terms and conditions include standard inter-

• 200,004 thousand euros (165,333 thousand euros

national Eurobond market conditions regarding

including the fair value of the hedging derivative)

Negative Pledge and Events of Default, including

relating to a private bond loan (Private Placement)

a Cross Default clause should the other financial

for 20 billion Japanese Yen and 15-year maturity

debt of the Company or its principal subsidiaries,

term (2025). The Private Placement was entirely

totalling more than 15 million euros, become im-

subscribed by a single investor. The coupons are

mediately repayable. Interest accrued during the

paid on a deferred half-yearly basis every 3 March

period amounts to 14,625 thousand euros,

and 3 September applying a fixed rate in Yen of

• 517,252 thousand euros (including the accrual of

2.5%. At the same time, a cross currency trans-

accrued interest due) due to the bond loan issued

action was carried out to transform from the cur-

by ACEA in March 2010 with a 10-year duration and

rency from yen to euros and the yen rate applied


293

to a fixed euro rate. The cross currency transaction

• 2,836 thousand euros regarding the issue of the

provides that the bank pays ACEA, on a deferred

bond loan by Consorcio Agua Azul. This bond loan

half-yearly basis, 2.5% on 20 billion Japanese yen,

was issued in three tranches, totalling 34 million

while ACEA has to pay the bank the coupons on a

dollars. They pay an average interest rate of 8.6%,

deferred quarterly basis, starting from 3 June 2010,

have a term to maturity of 12 years and make no

at a fixed rate of 5.025%. As at 31 December 2011,

provision for the issuing of guarantees by share-

the fair value of the hedging instrument was a posi-

holders.

tive 34,671 thousand euros and allocated to a specific shareholders’ equity reserve. The exchange

Medium/long–term loans (including short-term

rate difference, a negative 15,523 thousand euros,

portions)

of the hedged instrument calculated at 31 Decem-

They totalled 1,384,613 thousand euros (1,377,797

ber 2011 was therefore allocated to an exchange

thousand euros at 31 December 2010) and represent (i)

provision. The exchange rate as at 31 December

principal outstanding at the end of the year and falling

2011 stood at 100.20, whilst it stood at 108.65 as

due after 12 months, amounting to 1,310,259 thousand

at 31 December 2010.Interest accrued during the

euros (1,320,738 at 31 December 2010) (ii) the portions

period amounts to 4,626 thousand euros. The loan

of the same borrowings falling due in the subsequent 12

agreement and the hedge contract contain an op-

months, totalling 74,355 thousand euros (57,058 thou-

tion, in favour of the investor and the agent bank

sand euros in 2010) and (iii) the fair value, a negative

respectively, connected to the trigger rating: the

23,537 thousand euros, of the derivative instruments

payable and its derivative instrument can be fully

taken out to hedge the interest rate and exchange rate.

recalled if ACEA’s rating falls below the investment

The following table shows medium/long–term borrow-

grade level or if the debt instrument loses its rating.

ings by term to maturity and type of interest rate:

TOTAL RESIDUAL DEBT

DUE BY 31.12.2012

fixed rate

411,930

floating rate

706,174

floating rate to fixed rate Total

FROM 31.12.2012 TO 31.12.2016


40,107

89,556

282,268

33,173

564,668

108,334

266,509

1,075

66,231

199,203

1,384,613

74,355

720,455

589,804


The table below shows the fair values of the hedging instruments by company, compared with the previous year.

Acque

31.12.2010


(10,655)

(4,927)

(5,728)

Nuove Acque

(1,181)

0

(1,181)

Umbra Acque

(814)

(506)

(308)

ACEA Total amounts in thousands of euros

294

31.12.2011


(10,887)

(8,606)

(2,281)

(23,537)

(14,039)

(9,498)

• Acque has swapped the interest rate on 80% of the loan obtained at the end of 2006 for a fixed rate. The company has subscribed two different instruments with an estimated fair value of 10,655 thousand euros (4,927 million euros at 31 December 2010), which has been allocated to a special reserve of consolidated shareholders’ equity, • Nuove Acque swapped the project financing sub-

The loan agreements entered into by the Parent Company envisage: •➢ standard Negative Pledge and Acceleration Events clauses; •➢ clauses requiring compulsory credit rating monitoring by at least two major agencies; •➢ clauses requiring the Company to maintain a credit rating above certain levels;

scribed in 2005 relating to the basic and revolving

•➢ the obligation to arrange insurance cover and main-

line for a fixed rate. The duration of the swap runs

tain ownership, possession and usage of the works,

from 15 March 2005 to 15 September 2021 with

plant and machinery financed by the loan through to

a fixed rate of 4.115%. At 31 December 2011 this

the maturity date;

value amounted to 1,181 thousand euros and is al-

•➢ periodic reporting requirements;

located to a special reserve of shareholders’ equity,

•➢ clauses giving lenders the right to call in the loans on

• ACEA has swapped the interest rate on the loan

the occurrence of a certain event (i.e. serious errors

(100,000 thousand euros) agreed on 27 December

in the documentation provided when negotiating

2007 for a fixed rate. The swap was stipulated on

the agreement, default on repayments, the suspen-

24 April 2008, effective as of 31 March 2008 (date

sion of payments), giving the bank the right to call in

of drawdown of the underlying loan) and expires on

all or a part of the loan.

21 December 2021. The negative fair value of this in-

During the year there was no evidence that any of the

strument is 10,887 thousand euros (8,606 thousand

covenants had not been complied with.

euros at 31 December 2010), which has been rec-

Information on the fair value of the above borrowings is

ognised in a separate component of shareholders’

provided in the section “Additional disclosures on finan-

equity,

cial instruments and risk management policies”.

• Umbra Acque: the negative fair value is 814 thousand euros, which has been recognised in financial management in the income statement. The Group’s principal medium/long-term borrowings are subject to covenants to be complied with by the borrowing companies, in accordance with normal international practice. In particular, the loan to ACEA Distribuzione is subject to a financial covenant based on a debt ratio of 0.65 (ratio between net debt and the sum of net debt and shareholders’ equity) , which must not be exceeded at each end of the reporting period; this ratio must be complied with by both the borrowing company and the ACEA Group.


295

28. Other non-current liabilities - 278,415 thousand euros 31.12.2011

31.12.2010


129,989

95,831

34,158

Water connection fees

54,929

50,570

4,360

Grants related to assets

93,497

81,077

12,420

278,415

227,478

50,937

Advances

Other non-current liabilities amounts in thousands of euros

Advances

Water connection fees

Advances from users regarding the supply of fresh wa-


ter are not interest-bearing, whilst those regarding the

sand euros at 31 December 2010) and consist of:

distribution and sale of electricity and urban heating dis-

• 26,675 thousand euros attributable to water ser-

tribution accrue interest according to the conditions es-

vice companies in Lazio and Campania (up 665

tablished by Electricity and Gas Authority Resolution no. 204/99 and the Supply Regulations, respectively.

thousand euros compared to 31 December 2010), • 28,254 thousand euros regarding water service

Advances break down as follows according to the vari-

companies in Tuscany and Umbria (up 5,024 thou-

ous areas of business:

sand euros compared to 31 December 2010, in-

• networks: 21,026 thousand euros,

cluding +3,823 thousand euros due to the propor-

• energy: 29,738 thousand euros,

tionate consolidation of Acquedotto del Fiora).

• water: 79,202 thousand euros. The increase over December 2010 is mainly due to: • 17,742 thousand euros to Arse for higher advances

At 31 December 2011 these grants amounted to 93,497

billed, as provided for in the contracts, relating to

thousand euros (up 12,420 thousand euros on 31 De-

awards obtained from third parties for the con-

cember 2010) and referred to grants received. The grants

struction of photovoltaic plants in the sites of Cass-

are accounted for in liabilities and progressively recog-

ano, Orsomarso, Scalea and Villa Piana, incomplete

nised in the income statement each year over the dura-

as at 31 December 2011.

tion of the investment to which the grant is connected.

• 18,237 thousand euros to Acea Energia essentially

The amount recognised as income is determined on the

due to higher user guarantee deposits, also follow-

basis of the useful life of the asset to which it refers.

ing the change in the consolidation percentage,

A breakdown per business area is provided below:

• 5,215 thousand euros to water service companies, especially Publiacqua (2,211 thousand euros) for

• networks: 17,365 thousand euros (17,061 thousand euros at 31 December 2010),

the increase in the payment of advances by users

• water services in Lazio and Campania: 38,784 thou-

as a result of ATO’s redefinition of the guarantee

sand euros (39,214 thousand euros at 31 Decem-

deposit amount, • Acquedotto del Fiora (1,793 thousand euros) owing to the different method of consolidation and • ACEA Ato2 (1,438 thousand euros) for advances on drinking water consumption paid by users.

296

Grants related to assets


ber 2010), • water services in Tuscany and Umbria: 37,046 thousand euros (24,431 thousand euros at 31 December 2010).

29. Deferred tax provisions – 98,826 thousand euros

riod totalling 2,905 thousand euros and provisions of

At 31 December 2011 provisions for deferred taxes to-

latter item also includes 4,608 thousand euros relating

talled 98,826 thousand euros (77,410 thousand euros at

to rate adjustments and reclassifications which take in

31 December 2010). These provisions above all regard

the deferred amounts on the division into instalments

the difference between economic and technical rates

of the tax gain on the sale of properties. See note 19

of depreciation and tax-related rates. Uses in the pe-

for details.

12,310 thousand euros contributed to said item; the

30. Current liabilities – 2,274,102 thousand euros At 31 December 2011 current liabilities totalled 2,274,102 thousand euros (1,513,948 thousand euros at 31 December 2010) and are broken down as follows:

Borrowings Trade payables Tax payables Other current liabilities TOTAL

31.12.2011

31.12.2010


540,645

250,045

290,599

1,344,785

883,498

461,287

102,232

120,786

(18,554)

286,441

259,620

26,821

2,274,102

1,513,948

760,154


Borrowings Borrowings totalled 540,645 thousand euros (250,045 thousand euros at 31 December 2010) and break down as follows: 31.12.2011

31.12.2010



374,534

142,141

232,393


74,355

57,058

17,297

Due to the municipality of Rome

15,989

2,213

13,776

Due to subsidiaries and associates Payables due to third parties TOTAL

16

1,568

(1,552)

15,781

47,066

28,685

540,645

250,045

290,599



297


Payables due to third parties

They amount to 374,534 thousand euros (142,141 thou-


sand euros as at 31 December 2010) and show an in-

sand euros at 31 December 2010). The breakdown of this

crease of 232,393 thousand euros, due mainly to ACEA

item mainly reflects:

(up 190,379 thousand euros) due to higher drawdowns

• 57,267 thousand euros relating to amounts that

and Acquedotto del Fiora (up 34,790 thousand euros)

must be repaid to factors for receivables trans-

owing to a different method of consolidation.

ferred and collected after the transfer by (i) Acea

At the end of 2011 the Parent Company held cash and

Energia for 36,569 thousand euros (up 13,769 thou-

cash equivalents of 284,227 thousand euros (compared

sand euros), (ii) ACEA Ato2 for 16,369 thousand

to 251,407 thousand euros at 31 December 2010): there-

euros (up 7,920 thousand euros) and (iii) ACEA

fore, a negative balance of 90,310 thousand euros was

Distribuzione for 4,339 thousand euros (up 2,789

recorded at 31 December 2011 compared with a positive balance of 109,266 thousand euros at the end of the previous year.

thousand euros). • 4,321 thousand euros relating to amounts owed in dividends to third party shareholders,

Interest accrued by the Parent Company at 31 Decem-

• 12,957 thousand euros representing the minimum

ber 2011 amounted to 5,366 thousand euros, reflecting a

amount of the credit/debit item as regulated by

weighted average interest rate of 3.52%.

art. 3 of the demerger deed. The definition of said

This item also includes the amount of 34,740 thousand

item is put back to the evaluation of the arbitrator

euros related to Acquedotto Fiora’s bridge loan falling

whose appointment is currently being formalised.

due in March 2012.

The change compared with 2010 (up 28,685 thousand euros) essentially reflects amounts due to assignees of


receivables sold by the largest Group companies.

These totalled 74,355 thousand euros and regard the short-term portion of bank borrowings (mortgages) fall-

Lastly, it should be noted that the carrying amount of all

ing due within twelve months. Further details are pro-

short-term borrowings approximates to fair value at the

vided in note 27 of this report.

end of the reporting period.

Due to the parent company Roma Capitale These payables total 15,989 thousand euros and relate to amounts due for the distribution of the advance on dividends amounting to 13,777 thousand euros and interest on repayment of the Parent Company’s debt deriving from the conferral for 2,212 thousand euros. Due to subsidiaries and associates These totalled 16 thousand euros (1,568 thousand euros at 31 December 2010). As at 31 December 2010 this item includes the amount deriving from centralised treasury management relations managed by the Parent Company ACEA with companies accounted for under proportionate consolidation.

298


Trade payables – 1,344,785 thousand euros consist of:

Amounts due to third-party suppliers Due to the parent company Roma Capitale Due to subsidiaries and associates TOTAL

31.12.2011

31.12.2010


1,184,975

766,854

418,121

132,796

96,204

36,592

27,014

20,439

6,575

1,344,785

883,498

461,288


Amounts due to third-party suppliers

payment times, and to Gori,

Trade payables amounted to 1,184,975 thousand euros,

• Water Industrial Area, Tuscany-Umbria: trade paya-

marking an increase of 418,121 thousand euros. This

bles amounted to 73,358 thousand euros; the bal-

variation is the result of contrasting factors:

ance therefore shows an increase of 17,782 thou-

• Networks Industrial Area: amounts due to suppliers

sand euros, caused by Acquedotto del Fiora for

amounted to 285,625 thousand euros, marking an

10,912 thousand euros and Publiacqua for 8,082

increase of 55,897 thousand euros, due to higher

thousand euros,

payables of ACEA Distribuzione (up 51,504 thou-

• Overseas Water Services Area: receivables were

sand euros) and Arse (up 3,806 thousand euros)

essentially consistent with the figure recorded at

which increased due to the progress of various so-

31 December 2010, amounting to 1,682 thousand

lar power projects carried out and those currently being implemented, • Energy Industrial Area: the companies that carry out these activities closed the period with payables

euros, • Engineering and Services: trade payables were in line with the previous year, amounting to 2,085 thousand euros at 31 December 2011,

of 430,021 thousand euros, marking higher closing

• Environment Industrial Area: this area of business

payables compared to the previous period (317,536

recorded trade payables of 36,178 thousand eu-

thousand euros). This item mainly includes paya-

ros, marking a decrease of 1,701 thousand euros.

bles linked to the procurement of electricity and

This is due mainly to A.R.I.A.’s decreased exposure

the associated transportation costs. The change is

(down 3,986 thousand euros), partially offset by

broken down as follows: Acea Energia for 284,886

higher payables resulting from the consolidation of

thousand euros linked to both the change in the

Innovazione e Sostenibilità Ambientale (1,718 thou-

basis of consolidation for 71,261 thousand euros

sand euros).

and the deferment of some trade payables, (ii) Acea

The Parent Company, ACEA, reports trade payables of

Energia Holding for 19,530 thousand euros (includ-

68,632 thousand euros, marking an increase of 12,800

ing 2,668 thousand euros due to the change in

thousand euros.

the basis of consolidation) deriving from payables relating to the purchase of energy items for 3,320

Trade payables due to the parent company Roma

thousand euros, (iii) Acea Produzione for 10,849

Capitale

thousand euros,

These payables total 132,796 thousand euros. Details are

• Water Industrial Area, Lazio-Campania: trade paya-

provided in Note 23 on trade receivables.

bles totalled 287,393 thousand euros, an increase of 16,379 thousand euros compared to 31 December 2010. This increase was essentially due to ACEA Ato2, as a result of the volume of investments and


299

Trade payables due to subsidiaries and associates 31.12.2011

31.12.2010


Payables due to subsidiaries

4,915

2,891

2,023

Payables due to associates

22,099

17,548

4,551

27,014

20,439

6,575

Total amounts due to subsidiaries and associates amounts in thousands of euros

Due to subsidiaries

Tax payables – 102,232 thousand euros

Payables due to subsidiaries include payables of Acque

These amounted to 102,232 thousand euros (120,786

due to the companies Billing Solutions and ICT Solutions.

thousand euros at 31 December 2010), and include the tax burden for the year relating to IRAP (7,340 thousand

Due to associates

euros) and VAT (52,200 thousand euros). The remainder

These essentially include payables due to Marco Polo

includes 19,431 thousand euros and 5,467 thousand eu-

for cleaning services and building maintenance at ACEA

ros for the remaining amounts due for tax settlements

(10,466 thousand euros) and ACEA Distribuzione (2,410

split into instalments for ACEA and ACEA Energia respec-

thousand euros) and payables due to associate Citelum

tively. The direct tax payables of other companies com-

Napoli Pubblica Illuminazione (2,929 thousand euros).

plete the balance.

The balance shows a general increase of 4,551 thousand euros compared to 31 December 2010 and refers to the increase in payables due to associate Marco Polo.

Other current liabilities - 286,441 thousand euros

Social security contributions

31.12.2011

31.12.2010

Increase/ (Decrease) 1,969

20,098

18,129

Amounts due to end users for tariff restrictions

4,538

4,535

3

Payables deriving from commodity contracts

3,203

36

3,167

Other current liabilities TOTAL

258,601

236,920

21,681

286,441

259,620

26,821


Social security contributions These amounted to 20,098 thousand euros (18,129 thousand euros at 31 December 2010) and are broken down by industrial area:

• Environment and Energy: 555 thousand euros (502 thousand euros at 31 December 2010), • Corporate: 2,591 thousand euros (2,144 thousand euros at 31 December 2010).

• Networks: 5,791 thousand euros (5,380 thousand euros at 31 December 2010), • Energy: 1,418 thousand euros (382 thousand euros at 31 December 2010), • Water: 9,269 thousand euros (9,186 thousand euros at 31 December 2010), 300


Amounts due to end users for tariff restrictions This item includes amounts due to customers in the protected categories and free markets for the reimbursement of excess revenues. The total amount of 4,538 thousand euros relates to excess revenues for 2001 to

be reimbursed to customers in the regulated market. In

• collections from end users totalling 27,899 thou-

accordance with Italian Electricity and Gas Authority Res-

sand euros (up 7,773 thousand euros). These are

olution no. 180/2002, this payable is still not certain to be

collections which, as per normal, are in the process

incurred as the Authority has yet to define the average

of being allocated or reimbursed;

cost of fuel for 2001, on the basis of which distributors

• amounts due to the various municipalities total-

can finally calculate their liability to regulated customers.

ling 88,001 thousand euros. The balance includes

It is plausible to believe that, following the publication of

54,452 thousand euros relating to the concession

the elements needed for the definition, Acea Energia will

fees of (i) ACEA Ato2 (17,316 thousand euros), (ii)

proceed with the reimbursement.

ACEA Ato5 (19,718 thousand euros) and (iii) Publiac-

The application of excess revenues ended with the sec-

qua (11,318 thousand euros) due to the municipali-

ond regulatory period.

ties of the respective areas. The remainder is represented by 19,738 thousand euros in Gori payables

Payables deriving from commodity contracts

due to third parties for water treatment, sewerage

This item amounted to 3,203 thousand euros and repre-

and trunk lines (13,722 thousand euros) and for

sents the fair value of certain financial contracts stipu-

water treatment in East Naples (6,016 thousand

lated by Acea Energia Holding.

euros). The balance also includes 1,926 thousand

For more information please see the section “Additional

euros of payables for the “environmental premium”

disclosures on financial instruments and risk manage-

which, as regulated by Art. 10 of the ATI4 agree-

ment policies”.

ment of 13 August 2007, the company pays to the municipality of Orvieto and the Municipalities that


are part of the same ATI (Temporary Joint Ventures).

These amounted to 258,601 thousand euros and record-

This amount results from the increase in the “pre-

ed an increase of 21,681 thousand euros with respect to

mium” component of the tariff, as provided for by

31 December 2010. This item essentially consists of: • amounts due to the Equalisation Fund, totalling 40,819 thousand euros (down 11,133 thousand euros), • amounts due to staff, totalling 38,363 thousand euros (up 3,617 thousand euros),

the article of the same Agreement, • payables split into instalments due to Equitalia recorded by ACEA and ACEA Ato2 (7,945 thousand euros), • current accruals and deferrals of 4,621 thousand euros (9,417 thousand euros at 31 December 2010).


301

Acquisition of the Acea Energia Holding Group For more details on the acquired companies, please refer to note 10, which describes the main understandings of the above-mentioned Framework Agreement.

Acea Energia Holding: Share acquired by ACEA 40.59% Net assets acquired

Fair value adjustments

Fair value


490.5

490.5

Intangible assets

607.3

607.3

Investments Inventories Prepaid taxes Trade receivables Other receivables Loans Cash and cash equivalents Staff termination benefits and other defined-benefit plans

102,563.6

6,933.9

109,497.5

0.0

0.0

42.4

42.4

1,377.2

1,377.2

833.0

833.0

16,222.7

16,222.7

93.9

93.9

(256.0)

(256.0)


12.5

12.5


(49.9)

(49.9)

Tax payables

(75.9)

(75.9)

Trade payables

(3,930.4)

(3,930.4)

Other payables

(409.8)

(409.8)

Bank borrowings

0.0

0.0

Other borrowings

(553.7)

(553.7)

0.0

0.0

Allocated goodwill NET BALANCE attributable to minority interests Goodwill Investment price Repayment of borrowings

116,967.5

6,933.9

123,901.4 0.0 0.0 123,901.4 0.0

Total disbursement

(123,901.4)

Net cash outflow for acquisition Cash paid on purchase price

(123,807.5)

Payment of purchase price in cash Acquired cash and cash equivalents amounts in thousands of euros

302

Carrying value of the acquired entity


(123,901.4) 93.9

Acea Energia Group: Share acquired by ACEA 40.59% Net assets acquired




Fair value

138.9

138.9

13,742.7

13,742.7

Investments

2.3

2.3

Inventories

0.0

0.0

Intangible assets

Prepaid taxes

24,855.1

24,855.1

Trade receivables

247,878.1

247,878.1

Other receivables

14,233.0

14,233.0

182,055.5

182,055.5


1,192.8

1,192.8

(1,506.4)

(1,506.4)


(111.7)

(111.7)


(4,445.7)

(4,445.7)

(12,549.3)

(12,549.3)

Trade payables

(152,649.7)

(152,649.7)

Other payables

(45,304.2)

(45,304.2)

Bank borrowings

(5,384.1)

(5,384.1)

Other borrowings

(235,025.4)

(235,025.4)

Tax payables

Allocated goodwill Total

0.0

0.0

27,121.9

27,121.9

attributable to minority interests

0.0

Goodwill Investment price

29,704.1

56,826.0

Total disbursement

(56,826.0)


1,192.8

Repayment of borrowings

Payment of purchase price in cash Acquired cash and cash equivalents

1,192.8


The price of 56.8 million euros is included in the price for the acquisition of 40.59% of Acea Energia Holding. In compliance with IFRS 3, the share already held was also measured at fair value: total goodwill deriving from the acquisition of Acea Energia came to 37.2 million euros.


303

Acea Produzione: the values below represent 100% of the Company. Net assets acquired


Property, plant and equipment Intangible assets Investments


Fair value

162,939.5

162,939.5

1,272.0

1,272.0

0.0

0.0

Inventories

2,707.0

2,707.0

Prepaid taxes

3,368.6

3,368.6

Trade receivables

0.0

0.0

Other receivables

3.8

3.8

9,618.8

9,618.8

Loans Cash and cash equivalents

0.0

0.0

(2,098.7)

(2,098.7)


(10,030.1)

(10,030.1)


(1,164.8)

(1,164.8)

0.0

0.0


Tax payables Trade payables

0.0

0.0

Other payables

(313.0)

(313.0)

Bank borrowings

0.0

0.0

Other borrowings

(130,995.8)

(130,995.8)

Allocated goodwill Total

0.0

0.0

35,308.1

35,308.1

attributable to minority interests Goodwill

94,456.6

Investment price

129,764.7

Repayment of borrowings Total disbursement

0.00


0.00

Payment of purchase price in cash

0.00

Acquired cash and cash equivalents

0.00


The price portion corresponding to 40.59% of Acea

was acquired through the non-proportional demerger

Produzione equals 52.7 million euros and is included in

of AceaElectrabel Produzione.

the price for the acquisition of 40.59% of Acea Energia

For the adjustments, please refer to note 10.

Holding.

All the acquisitions are to be considered as definitive.

The remaining part did not result in any outlays as it

304


Service Concession Arrangements

conflicts with the above unitary nature of the system, in that it introduces a payment obligation not matched by

The Acea Group operates water, environmental and pub-

provision of a corresponding service”.

lic lighting services under concession. It also manages

In implementation of the Constitutional Court sentence

the selection, treatment and disposal of urban waste

and to make up for the resulting regulatory gap, Law no.

produced in municipalities in ATO 4 Ternano–Orvietano

13 of 27 February 2009 was approved. Article 8 sexies of

via the TAD Group company, SAO.

this legislation, “Measures regarding integrated water services”, contains an all-round solution to be included

Before going on to describe the individual service con-

in the tariff criteria ratified by the Consolidated Envi-

cessions, this section provides information on key issues

ronment Act and the so-called Standardised Method

regarding waste water treatment tariffs and the regula-

(Ministerial Decree of 1 August 1996), and, above all, by

tion of local public services, with particular reference to

Articles 149 and 151 of Legislative Decree no. 152/2006,

the Abrogative referendums of 12 and 13 June 2011.

which confirm the Area Authority’s obligation to safeguard the operator’s financial position within the ATO. In this sense, the above Article 8 sexies contains a defi-

Constitutional Court sentence no. 335/2008

nition of the tariff component regarding waste water

La Corte Costituzionale, con la sentenza n. 335 del 10

in providing the services. In particular, it introduces

otConstitutional Court sentence no. 335 of 10 October

a new binding component, consisting of the sum of

2008 declared Article 14, paragraph 1 of Law 36/94 to

the charges incurred, as expressly identified and pro-

be unconstitutional, following inclusion of this article in

grammed in the area plans, in carrying out the over-

the Consolidated Environment Act, under Article 155,

all activities involved in water treatment, including the

paragraph 1 of Legislative Decree no. 152/2006. This

design, construction and completion of plants and the

legislation establishes that the tariff component cov-

related investments. This new component “is payable

ering waste water treatment is payable by end users

to the operator by end users, in cases where there are

“even if there are no treatment plants or such plants

no treatment plants or such plants are temporarily inac-

are temporarily inactive”.

tive, from the start-up of the tender procedures for the

The judgement is based on the opinion that the inte-

design or completion of the infrastructure necessary in

grated water services tariff represents payment for

order to provide the treatment service, provided that

services provided under contract and not a form of

such procedures are implemented in accordance with

taxation. On this basis, the Court has, therefore, found

the established schedule”.

fault with the part of the above provisions that estab-

The second paragraph of article 8 sexies also regulates,

lishes that the tariff component regarding waste water

in compliance with the Constitutional Court sentence,

treatment is to be paid by end users even if there is

the methods of reimbursement of sums to users: (i) the

no “direct link between the payment of this component

operator must reimburse the tariff component not due,

and effective provision of the service for which the pay-

either in a lump sum or in instalments, within five years

ment is due”. Basically, the Supreme Court ruled that

as from 1 October 2009; (ii) the design, construction and

“the congruity of a system for financing integrated wa-

completion costs incurred are to be deducted from the

ter services, created on a unitary basis by lawmakers

rebate; and (iii) the rebate must be calculated by the op-

based on the concept of reciprocity, on the sufficiency

erator’s Area Authority within 120 days of the date the

of a utility contract to establish a payment obligation

legislation comes into force (by the end of June 2009).

and, therefore, on a single tariff is, in conclusion, preju-

Moreover, within two months of the law coming into

diced by the application, as a method of financing, of a

force, at the proposal of the Supervisory Committee for

compulsory charge, the reason for which unjustifiably

the Use of Water Resources, the Ministry for the Pro-

treatment linking it with the entire process involved


305

tection of the Environment, Land and Sea is to issue

rectness of the information sent by the Operator

decrees establishing the criteria and parameters for

– establishes the amount (including interests) to be

implementing the rebate. The decrees must also estab-

returned to each single eligible applicant and sets

lish the minimum information that individual operators

out the timetable for the rebate, that should be car-

must periodically send to end users regarding the plan

ried out within five years from 1 October 2009;

for the construction, completion, upgrading and rollout

• the Area Authority is authorised to make extraor-

of the treatment plants provided for in the respective

dinary tariff amendments, also in derogation from

Area Plan, and the state of progress in implementing

the price “K” limits, in order to cover the rebate

the plan, in addition to the related forms of publication,

charges and, it should be reiterated, to avoid preju-

including indication in water bills.

dicing the full coverage of the investment and oper-

In September 2009, the Ministry for the Protection of

ating costs necessary for the realisation of the Area

the Environment, Land and Sea issued a decree (pub-

Plan.

lished in the Official Gazette no. 31 dated 8 February 2010) concerning the “Identification of criteria and pa-

The procedure included in the decree – which complies

rameters for the rebate to end users of the tariff com-

with the general principles that regulate the integrated

ponent not due for water treatment services”. This de-

water services with regard to the obligations of the Area

cree – that defines the methods for the rebate of the

Authorities and operators, and to any related right – un-

water treatment tariff for the users connected to the

derlines that the charges resulting from the rebate ob-

sewerage network but not served by treatment plants

ligation (that are being identified by the Authorities for

according to the said Article 8 sexies, paragraph 4 – sets

some water companies) should be fully covered by the

out three relevant points:

tariff measures that the Area Authorities will adopt in or-

• the prescription period for the reimbursement request is five years; • the rebate is subject to the user’s request supported by relevant documents; • the rebate must not be to the detriment of the full coverage of the investment and operating costs necessary for the realisation of the Area Plan and, as a result, the Area Authorities are authorised to make extraordinary tariff changes and, under specific conditions, as an exception to the price “K” limit. With regard to procedure, the decree sets out the following: • the operator makes available to the Area Authority any relevant information in order for the Authority to calculate the rebate amount, i.e. (i) the list of users connected to the sewerage network but not served by treatment plants or plants that are temporarily inactive; (ii) the tariff component covering water treatment charged to each user; and (iii) any information that is useful to calculate deductible charges pursuant to Article 5 of the decree, • the Area Authority – after having assessed the cor-

306


der to find all financial resources needed. Therefore, the regulatory assets resulting from the right to receive an extraordinary tariff will determine the liability linked to the rebate obligation.

Local public services

Finally, it must be noted that, in the assessment of the effects of the referendum abrogations, the amendment

Abrogative referendums of 12 and 13 June 2011

to the regulation on the topic which occurred as a result

Following the referenda carried out on 12 and 13 June

of Law Decree no. 70/2011, converted with amendments

2011, article 23 bis of Law Decree no. 112/2008, enacted

to Law no. 106 of 12 July 2011, must be taken into con-

with Law no. 133/2008 as amended and supplemented

sideration. This established the National agency for wa-

by article 15, paragraph 1, of Law Decree no. 135/2009,

ter regulation and supervision, redefining responsibilities

enacted with Law no. 166/2009, regarding economically

and methods for determining integrated water service

significant local public services, as well as article 154,

tariffs.

paragraph 1, of Legislative Decree no. 152/2006 (Environ-

In fact, based on the new regulation, the Agency should

mental Code), the part which referred to “the adequacy

define the elements of cost in order to determine the

of the remuneration of the invested capital” amongst the

water tariff and should prepare the consequent tariff

criteria for determining the water tariff, were abrogated.

method, also accounting for “in compliance with the

Furthermore, the approved referendum petitions require

principles set forth by EC regulations, the financial cost

the abolition of Italian Presidential Decree no. 168 of 7

of the service supply and the relative environmental and

December 2010, including the regulation implement-

resource costs, in order to fully realise the principle of

ing the regulation pursuant to cited article 23 bis, while

cost recovery and the principle that ‘the polluter pays’”.

they left the current temporary provisions of article 170

Therefore, in light of these considerations, it must be

of Legislative Decree no. 152/2006 (not subject to refer-

deemed that the integrated water service tariff, estab-

endum) unchanged, which involve the application of the

lished in compliance with the regulation dictated by Min-

Standardised Method pursuant to Ministerial Decree of 1

isterial Decree of 1 August 1996, shall remain in force

August 1996, until the adoption of a new tariff methodol-

until the new tariff regulation is issued by the National

ogy, which as of today has not taken place.

Agency, which shall be implemented in compliance with

In general, the effects of the referendum abrogation,

the criteria set forth by article 154 of the Environmental

which in accordance with Law 352/1970 is declared by

Code, as annulled by the outcome of the referendum and

the President of the Italian Republic with his own de-

by Law Decree no. 70/2011.

cree of 20 July 2011, do not cause any restoration of the standards that may have been annulled by the legisla-

Decree Law “Stabilisation”

tive provisions that were then abrogated as a result of

Law Decree no. 138 of 13 August 2011 “Additional urgent

the referendum (rulings of the Constitutional Court nos.

measures for financial stabilisation and development”,

24/2011, 31/2000 and 40/1997) and they are effective ex

as per amendments made by Decree Law no. 1/2012, in

nunc according to the provisions of article 75 of the Con-

respect of the regulation of economically important local

stitution.

public services. In particular, under art. 4 (Adjustment of

In consideration of the aforementioned circumstanc-

the regulations of local public services to the people’s

es, it must be deemed that the lack of the transitional

referendum and EU legislation) the legislator, exclud-

regime of the assignments existing prior, provided by

ing the integrated water service from the application of

cited article 23 bis, also caused the lack of the complex

said article (with the exception of provisions governing

of causes for transfer of the same, with particular refer-

incompatibility), as well as the electricity and natural gas

ence to in-house management, management assigned

distribution service and management of municipal phar-

directly to mixed companies in which selection by ten-

macies but confirming the application of the legislation

der did not consider both the quality of the partner and

to the public lighting service, reintroduced to the legisla-

the attribution of operating tasks, as well as direct as-

tive scenario almost all provisions previously contained

signments as of 1 October 2003 to listed companies or

in art. 23 bis and in the implementing regulations of the

their subsidiaries.

same (Presidential Decree no. 168/2010).


307

Provision is made for verification of the potential reali-

establishes the minimum provincial basin within which,

sation of the competitive management of economically

by 30 June 2012, the Regions must organise the perfor-

important local public services and the assignment of

mance of local public services. The minimum dimensions

exclusive rights to cases in which, on the basis of mar-

also affect the priority allocation of government loans,

ket analysis, unregulated private economic initiative

“without prejudice to loans for projects relating to eco-

is not adequate for guaranteeing a service that meets

nomically important local public services co-financed

the needs of the community. Upon the outcome of the

with European funds”.

verification the authority adopts a framework resolution (which for area authorities with a population of more

Elimination of the national agency for water reg-

than 10,000 inhabitants must be accompanied by a

ulation and monitoring and of Co.N.Vi.Ri (Nation-

mandatory judgment from the Antitrust Authority) which

al Commission for Monitoring Water Resources)

illustrates the preliminary enquiry conducted and high-

Law Decree no. 201 of 6 December 2011, converted to

lights, for sectors removed from liberalisation, the rea-

Law no. 214/2011 introducing urgent provisions for the

sons for the decision.

growth, fairness and consolidation of public accounts

The in-house assignment procedure may only be carried

makes provision, under art. 21, for the elimination of cer-

out if the annual economic value of the service subject to

tain entities and bodies from the date of entry into force

assignment does not exceed 200,000 euros.

of said decree. Table “A”, attached to the Law Decree and

The provision for the temporary system of non-compliant

relating to the authorities eliminated, also includes the

assignments, already identified in repealed art. 23 bis,

national agency for water regulation and monitoring. The

was restored, with the simple postponement of expiry

Decree establishes that the functions assigned to the

dates and the introduction of an exemption for early ter-

authorities eliminated, the financial resources and oper-

mination of in-house or direct management which are

ating resources including therein income and expense

combined with the possibility of assignment to a new

generating legal relations, are transferred - without the

operator for a maximum of three years. Paragraph 32,

undertaking of any liquidation proceedings - to the cor-

letter d) is significant for the ACEA Group in respect of

responding administrative bodies indicated in said an-

which “direct assignments approved as at 1 October

nex. Paragraph 19 of art. 21 envisages that “with regard

2003 to publicly owned companies already listed on the

to the national agency for water regulation and moni-

stock market at said date and to subsidiaries of the latter

toring, functions regarding the regulation and control of

pursuant to article 2359 of the Italian Civil Code, cease

water services are transferred to the Italian Authority for

on the expiry date set out in the service contract, pro-

Electricity and Gas, which are exercised with the same

vided that the investment held by public shareholders as

powers assigned to said Authority by Law no. 481 of 14

at 13 August 2011, i.e. the syndicated one, is gradually re-

November 1995”. The functions to be transferred are

duced, through public tenders or forms of private place-

identified by the Decree of the President of the Council

ment with qualified investors and industrial operators,

of Ministers on proposal of the Ministry for the Protec-

to a stake no higher than 40% before 30 June 2013 and

tion of the Environment, Land and Sea, to be adopted

no higher than 30% by 31 December 2015; where these

within 90 days from the date this Decree becomes effec-

conditions are not met, the assignments cease, without

tive. Subsequent paragraph 20 makes provision, at the

any extension or proper resolutions by the grantor, on 30

same time, without further indications, for the elimina-

June 2013 or 31 December 2015 respectively”.

tion of Co.N.Vi.Ri (National Commission for Monitoring

Article 3 bis of the regulations in question not only makes

Water Resources).

provision for a further restriction for in-house operators

308

in respect of being subject to both the internal stability

Elimination of the Area Authorities

pact and public law-related regulations for the purchase

Law no. 42 of 26 March 2010 – “Urgent interventions con-

of goods and services and for the hiring of personnel, but

cerning local authorities and regions” – includes art. 186


bis into the 2010 Finance Act (Law no. 191/2009). This

responsibilities previously held by the Area Authorities

sets out that, after one year from the entry into force of

and, as at 1 January 2012, which took on all income and

this law (i.e. as of 1 January 2011), the Area Authorities

expense generating legal relations of the eliminated au-

for the management of water resources and the urban

thorities (art. 52). The AIT will be structured into 6 re-

waste integrated management referred to in articles 148

gional conferences (art. 13) which accurately mirror the

and 201 of Legislative Decree no. 152/2006, are elimi-

regional structure of the 6 eliminated authorities. Art. 50

nated. At the same time, Regions can award, by way of

of said law requires the authorities’ bodies to be set up

law, the functions that were exercised by the Authorities,

by 30 June 2012 and, effective from 1 January 2012, until

in compliance with the principles of subsidiarity, diversifi-

the authorities’ bodies are actually set up, requires the

cation and adequacy.

functions of said bodies to be performed by six com-

On 26 February 2011, Law no. 10/2011 was published

missioners identified as the Chairmen of the Boards of

(which converted Law Decree no. 225 of 29 December

Directors of the eliminated authorities in office at 31 De-

2010, the so–called “mille proroghe”), which extends the

cember 2011, who each operate in the relevant area,

terms set out in legislation and the urgent interventions

availing themselves of the technical support of the di-

concerning tax matters and support to companies and

rectors of said eliminated authorities as at 31 December

households. Article 1, paragraph 1 sets out the extension,

2011.

until 31 March 2011, of the term for the elimination of the Area Authority. Paragraph 2 of the same article sets

Services under concession

out the possibility to envisage – by means of one or more

The grantor in the case of public lighting services is

decrees of the President of the Council of Ministers, in

Roma Capitale under a thirty-year concession arrange-

accordance with the Ministry of Economy and Finance -

ment (effective from 1 January 1998), for which no fee is

a further extension of the above-mentioned terms until

paid. The concession is implemented through signing the

31 December 2011. By decree of the President of the

appropriate service contracts: the agreement in force

Council of Ministers on 25 March 2011, the deadline of

until 31 December 2010, which regulated the period

31 March 2011 was extended until 31 December 2011.

from June 2005 to May 2015, was recently amended by

The subsequent “Decreto Mille proroghe” (Law Decree

adding a supplemental agreement signed on 15 March

no. 216 of 29 December 2011), makes provision for the

2011, which shall become effective at the beginning of

deferment of the expiry of the Area Authorities handling

the year.

the integrated water service and integrated waste man-

The supplements regard the following elements:

agement from 31 December 2011 to 31 December 2012,

• the term of the service contract should be aligned

based on the necessary guarantee of continuity in the

with the expiry of the concession (2027), given that

provision of local public services and guarantee of an

the contract is merely additional to the agreement;

“additional transitory period”, for the transfer of func-


tions from the Area Authorities to new operators identified by the Regions, and for the adoption of the relevant proper coordination initiatives”.

consumption of electricity and maintenance; • annual increase in the lump-sum payment with regard to the new lighting points installed. In addition, investments regarding the service may be

Despite said term being extended, at the end of 2011,

(i) requested and financed by the municipality or (ii) fi-

by one year, the Tuscany Region passed legislation on

nanced by ACEA: in the first case, such interventions will

the subject, totally restructuring the integrated water

be paid based on a price list agreed by the parties (and

service, starting with the reassignment of functions and

subject to review every two years) and will result in a

powers, now resting with the Area Authorities. In fact,

percentage decrease of the ordinary fee. In the second

Regional Law no. 69 of 28/12/2011 established the Tus-

case, the municipality is not bound to pay any extra fee;

cany Water Authority which assumed all functions and

however, ACEA will be awarded all, or part of the saving


309

expected in both energy and economic terms, accord-

- Tuscany, there the ACEA Group operates in the

ing to pre-established methods.

province of Pisa, through Acque S.p.A., in the prov-

Moreover, it has been established that qualitative/quan-

ince of Florence, through Publiacqua S.p.A., and in

titative parameters shall be renegotiated in 2018.

the provinces of Siena and Grosseto, through Ac-

Upon natural or early expiry - also due to cases envis-

quedotto del Fiora S.p.A. It also provides the ser-

aged under Law Decree no. 138/2011 - ACEA will be

vice in Lucca and province of Lucca through the

awarded an allowance corresponding to the residual

companies Geal, Lunigiana and Azga,

carrying amount, that will be paid by the Municipality or

- Umbria, where the Group operates in the province of Perugia, through Umbra Acque S.p.A..

the incoming operator if this obligation is expressly set out in the call for tenders for the selection of the new operator.

Lazio – ACEA Ato2 S.p.A.

Finally, the contract sets out a list of events that repre-

(Ato2 - Central Lazio - Rome)

sent a reason of anticipated revocation of the conces-

Acea Ato 2 svolge il servizio idrico integrato sulla base

sion and/or resolution of contract by the will of the par-

di ACEA Ato2 provides integrated water services on

ties. Among these events, reference is made to newly

the basis of a thirty-year agreement signed on 6 Au-

arising needs linked with public interests, according to

gust 2002 by the company and Rome Provincial Author-

which ACEA has the right to receive an allowance ac-

ity (representing the Authority for the ATO comprising

cording to the product, that is discounted based on the

111 municipalities, including Roma Capitale). In respect

percentage of the annual contractual amount and the

of the award of the service, ACEA Ato2 pays a conces-

number of years until expiry of the concession.

sion fee to all municipalities based on the date of actual

On the basis of the number of public lighting plants as

acquisition of management which is expected to take

at 31 December 2009, the supplemental agreement es-

place gradually: as of today, the survey work (includ-

tablishes the ordinary annual fee as 39.6 million euros,

ing that for municipalities already taken over) has been

including all costs relative to the provision of electricity

completed for 101 municipalities, equivalent to around

to supply the plants, ordinary operations and ongoing

3,800,000 resident inhabitants (source ISTAT), equal to

and extraordinary maintenance.

about 98.2% of the total.

Further information is provided in the section “Related

As of 1 January 2011, the single area tariff is in place,

Party Transactions”.

which was adopted by the Mayors’ Conference at the

In relation to the effects of the abrogation of article 23

meeting on 14 December 2010 session (resolution no.

bis on the ACEA concession, expiring on 31 December

6/2010).

2027, please see the paragraph relative to the abroga-

During the same meeting, the Mayors’ Conference also

tive referendums of 12 and 13 June 2011 and the sec-

approved a further increase in investments equal to 45

tion on the Stabilisation Decree.

million euros for the 2011–2013 three-year period. As a consequence, the revenues ensured for that same

Integrated water-environmental services are pro-

three-year period were increased, and the Average Tar-

vided under concession in the following regions:

iff for 2011 was updated.

- Lazio, where ACEA Ato2 S.p.A. and ACEA Ato5 SpA

The Mayor’s Conference approved, in the same resolu-

provide services in the provinces of Rome and

tion, the new average tariff increase for 2011 (2.49%),

Frosinone, respectively,

calculated on the basis of the amounts of the previous

- Campania, where G.O.R.I. S.p.A. provides services

310

year.

in the area of the Sorrento Peninsula and Capri

Activities are underway relating to the tariff review

island, the Vesuvio area, the Monti Lattari Area,

which will involve the determination of the Average Tar-

as well as in the hydrographic basin of the Sarno

iff for the 2012-2014 regulatory period.

river,

With reference to the effects of ruling no. 335/2008,


it should be noted that on 3 October 2011, the Opera-

The maximum total amount of potential reimbursements

tional-Technical Secretariat of the ATO 2 Authority sent

is around 11 million euros before deductible costs.

ACEA Ato2 the appropriate document which makes

The Area Authority must also identify the methods and

provision for the quantification of the unitary deductible

timescales of repayments, as well as the related tariff

expenses in relation to untreated waste, whose elimi-

coverage.

nation requires investments in treatment plants. Said quantification was carried out for each individual

For information regarding the requirements of abrogated

plant, taking into account (i) the date of assignment (in

article 23 bis and the effects on the expiries of the ACEA

relation to the acquisition of management of the ref-

Ato2 concession, expiring on 31 December 2032, please

erence municipality), (ii) date of elimination of the un-

see the section dedicated to the referendums conducted

treated waste as a result of the entry into operation of

on 12 and 13 June 2011.

the investment targeted at its elimination. As a result of said quantification for the 16 October

Lazio – ACEA Ato5 S.p.A.

2003 - 15 October 2008 period, users will be entitled,

(Ato5 – Southern Lazio - Frosinone)

upon specific request to be made on the basis of de-

ACEA Ato5 provides integrated water services on the ba-

fined methods, to the reimbursement as follows:

sis of a thirty-year agreement signed on 27 June 2003 by

• in the case of users not relating to untreated

the company and Frosinone Provincial Authority (repre-

waste analytically identified by the STO and the

senting the Authority for the ATO comprising 86 munici-

operator, the reimbursement, for each year of the

palities). In return for award of the concession ACEA Ato

treatment tariff applied to the user multiplied by

5 pays a fee to all the municipalities based on the date

the consumption in cubic metres billed,

the right to manage the related services is effectively ac-

• in the case of users relating to untreated waste

quired.

analytically identified by the STO and the operator,

The management of the integrated water service in the

the reimbursement, for each year of the treatment

territory of ATO 5 Lazio Frosinone involves a total of 85

tariff applied to the user, less expenses relating to

municipalities (management still remains to be surveyed

each year for the corresponding year and the cor-

for the municipalities of Atina, Paliano and Cassino Cen-

responding waste, multiplied by the consumption

tro Urbano as regards water services only) for a total

in cubic metres billed.

population of around 480,000 inhabitants, about 450,000

In the event in which the deductible expense is higher

inhabitants supplied and a number of end users equal to

than the treatment tariff, the user is not entitled to any

around 188,900.

reimbursement.

No new acquisitions were formalised in the period.

As regards the tariff portion due by 16 October 2008,

The Mayor’s Conference of 14 January 2009 approved

users not served by waste treatment must pay for the

the exit from the ATO5 – Southern Lazio of the munici-

treatment service:

pality of San Biagio Saracinisco; a formal document for

• in the case of users not relating to untreated

the handover of the integrated water services was then

waste analytically identified by the STO and the

signed on 6 October 2009.

operator, no amount will be charged,

The agreement requires that the price charged to each

• in the case of users relating to untreated waste

municipality should converge towards the price applied

analytically identified by the STO and the operator,

throughout the ATO within three years of acquisition of

the tariff shown in STO’s communication is multi-

the contract, and that, as of that same year, there will be

plied by the consumption in cubic metres billed.

a tariff review every three years that takes account of

In the event the tariff is higher than the treatment

the operating costs incurred and the capital expenditure

tariff in force in the municipality in the relevant

carried out. On application of the price for each year the

year, the user will be required to pay the latter.

average tariff is adjusted by the total inflation rate, deriv-


311

ing from target annual inflation rates for each year since

to make provision for this actioning no later than thirty

acquisition of the related contract.

days from notification of this decision. Solely in the event

Throughout the concession term, the operator is respon-

of further inertia will substitute powers be exercised,

sible for the maintenance and upgrading of all regula-

within the term of thirty days, by the Ministry for the Pro-

tory assets and of any assets subsequently constructed

tection of the Environment, Land and Sea, through the

in compliance with the provisions of the Area Plan. New

appointment of a Commissioner for deeds.

plants constructed in accordance with the Area Plan, which forms an integral part of the agreement, remain

As a result of the events mentioned related to tariff legiti-

the exclusive property of the company and, pursuant to

macy, regarding which reference should be made to the

art. 35, paragraph 4 of the agreement, on expiry of the

section “Update on major disputes and litigation”, for bill-

concession or in the event of its early termination, the

ing purposes, up until 31 December 2011, the company

company shall be paid an indemnity equal to the value of

applied the tariff that was published for 2005, in compli-

the assets yet to be depreciated. Such assets regard net-

ance with the body’s instructions. However, it assesses

works or portions thereof, plants and the related equip-

its revenues on the basis of the minimum volumes guar-

ment constructed in accordance with investment plans.

anteed by the project put out to tender valued at the real average tariff, equal to that of the bid, plus forecast and

As regards the effects of ruling no. 335/2008 of the Con-

compound inflation.

stitutional Court, identification activities were essential-

312

ly concluded: the portion of the water treatment tariff

By contrast, for the year 2012, on the basis of “Decree

debited in the 2003-2008 period from active end users

note no. F66 of 8 March 2012 - Determination of the in-

connected solely to the sewerage network amounted

tegrated water service tariff applicable for 2012 in ATO

to 1.7 million euros. This amount does not take into ac-

5 Southern Lazio-Frosinone” of the Commissioner for

count the estimated deductible charges due from end

deeds appointed by the Regional Administrative Court of

users according to the provisions of article 8 sexies of

Latina, ACEA Ato5 will bill on the basis of the average

Law no. 13 of 28 February 2009 and article 5 of the De-

real tariff and the associated tariff structure defined “in

cree of the Ministry of the Environment of 30 Septem-

compliance with the regulations and applicable contrac-

ber 2009, published in the Official Gazette on 8 February

tual relations”.

2010, which the Area Authority is obliged to calculate.

More specifically, “this was carried out to quickly deal

Thus, this amount represents the maximum estimated

with a service economic-financial imbalance, caused by

repayments which ACEA Ato5 must pay following identi-

the failure to update the tariff based on the trend in in-

fication, by the Area Authority, of the quantification, the

flation and forecasts in the area plan and management

methods and timescales of the repayments and the tariff

agreement. Therefore, determination of the real average

coverage.

tariff is limited to restabilising normal contractual con-

As regards the obligations set forth by the legislation to

ditions of continuity of management and does not take

be fulfilled by the Area Authority, in January 2012, the

into account the difference between planned and actual

Regional Administrative Court of Latina upheld the ap-

investments and, in general, area plan forecasts and the

peal filed by Consumer Association CODICI regarding the

actual trend in the management of previous years given

non-implementation of Constitutional Court ruling no.

these obligations are to be fulfilled during the review

335/2008 by the Area Authority.

phase. However, this does not involve any prejudice with

In particular, the Regional Administrative Court of Latina,

respect to additional and subsequent reviews of area

in upholding the appeal submitted by Codici, ascertained

planning which will be adopted by the Commissioner for

the non-fulfilment of obligations by AATO, as it did not

deeds, in which all obligations deriving from the ordinary

action the substitute powers pursuant to art. 152 of the

and extraordinary review will be fulfilled”.

Environmental Code and stated the region’s obligation

The Commissioner for deeds reconstructed the trend


in the tariff curve from 2003 to 2012 at current values, applying the cumulative inflation factor relating to each

nues equal to 136 million euros (Group share 50.4 million euros),

year of actual management to the values of the real aver-

• to approve the following tariff system, deemed

age tariff set out in the original area plan. Consequently,

suited to cover the aforementioned total tariff

the real average tariff for 2012 was identified by the

costs, with the exception of equalisation upon ap-

commissioner for deeds on the basis of the original area

proval of the tariff system following the review of

plan, at 1.359 €/m3.

the area plan in progress:

This involved, for the years 2006-2011, the recalculation

- tariff basins: the breakdown of the municipalities

of the differential between revenues recognised in the

of A.T.O. 3 into two tariff basins was confirmed

financial statements and those deriving from application

as per resolution no. 9 of the General Meeting on

of the real average tariff in the above-mentioned provi-

10 July 2009; with the following tariff system.

sion (totalling 5 million euros, in addition to the allocation

- basic basin “A” tariff: Basic tariff = €/m3 1.3210

to the provision for liabilities of 25 million euros).

- Basic basin “B” tariff: Basic tariff = €/m3 1.1719 - Tariff structure coefficient before domestic use

Campania – GORI S.p.A. (Sarnese Vesuviano)

bracket: 0.6 which cancels and replaces the cor-

GORI provides integrated water services in 76 municipali-

responding coefficient of 0.5 in the tariff struc-

ties in the provinces of Naples and Salerno, on the basis

ture approved by means of resolution no. 9 of

of a thirty-year agreement signed on 30 September 2002

the general meeting of 10 July 2009,

by the company and the Sarnese Vesuviano Area Author-

- The average area value of the basic tariffs in

ity. In return for award of the concession GORI pays a

force in “basin A” and “basin B” pursuant to res-

fee to the grantor (the Sarnese Vesuviano Area Authority)

olution no. 9 of the general meeting of 10 July

based on the date the right to manage the related ser-

2009 stands at 1.2795 €/m3 (it was set at 1.3210

vices is effectively acquired. The perimeter managed has

€/m3 in the resolution of the Board of Directors in

remained essentially unchanged compared to the pre-

December 2010).

vious year, since the process of acquiring management

It should be pointed out that the new revenue forecast

is, by now, complete. In fact, there are 76 municipalities

(130 million euros) is neither in line with the value of costs

managed, and that is, all of those falling within ATO no. 3

to be recognised in the integrated water service tariff for

of the Campania Region.

2011, in compliance with the review criteria set forth in

With reference to the tariff problems, it should be not-

the applicable Area Plan, whose application would, by

ed that, on 2 August 2011, by means of resolution no.

contrast, lead to a value of around 145 million euros, nor

5, the General Meeting of the Sarnese Vesuviano Area

let alone with the value of 136 million euros, a value al-

Authority (EASV) approved, with a prior amendment, the

ready approved, after all, by EASV’s Board of Directors

proposed tariff plan of EASV’s Board of Directors, as ap-

by means of the aforementioned resolution 34/2010, on

proved by said Board of Directors on 30 December 2010

the basis of a specific preliminary report drafted by the

with resolution no. 34. In particular, said General Meeting

Area Authority’s Planning Department. Owing to these

resolved, among other things:

reasons, and in order to avoid uncertainties, it was ex-

• to invite GORI to sign a streamlining plan for the

tremely important for the Area Authority to quickly com-

management of the integrated water service of

plete the process for the review of the Plan in order to be

A.T.O. 3 which involves an amount of total tariff

able to definitively determine, among other things:

costs relating to 2011 (operating costs, modernisation and return on already invested capital) of no

• total costs to be recognised in the integrated water service tariff for 2011;

more than 130 million euros (Group share 48.2 mil-


lion euros). The resolution of the Board of Directors

ter service tariff for 2009 and 2010 and subsequent

of December 2010 envisaged an amount of reve-

equalisation;


313


question also established that the charges deriving from

ter service tariff for the subsequent 2012-2014

the application of ruling no. 335/2008 must be covered,

regulatory period;

on a priority basis, by the residual amounts allocated to

• an adequate tariff plan which allows the recovery

the provisions set up in accordance with art. 14 of Law

of previous equalisation accumulated throughout

no. 36/1994 and subsequent amendments and additions

all of 2011 and a repayment plan for the debt ac-

and pertaining to the integrated water service operator

crued, above all, in respect of the Campania region

(GORI); in the event in which said sums are insufficient

for water supplies and waste water treatment ser-

to cover the expenses to be reimbursed, additional ex-

vices, so as to standardise relations;

traordinary tariff measures must be implemented be-

• guaranteed revenues for 2011.

forehand - also as an exception to limit “k” set out by the Standardised Method - which ensure the required

The approval of resolution of 2 August removed the need

economic-financial funding. In 2011, the charges record-

to set aside a provision for risks for tariff equalisation

ed as a result of the aforementioned ruling concerned

pertaining to 2011 (5.9 million euros), instead included

the write-off of receivables relating to water treatment

in the accounts for the first half of 2011 in relation to

amounts not due, for an amount of around 3.3 million

the assumed non-recognition of estimated revenues,

euros (Group share of 1.2 million euros), fully covered by

while waiting for a review of the area plan currently be-

using the sums as per the provisions of art. 14.

ing drawn up. Toscana – Acque S.p.A. (Ato2 – Basso Valdarno) The 40 million euro bridge loan which matured on 30

The management agreement, which came into force on

June 2011 is related to the Area Plan review.

1 January 2002, with a twenty-year duration, was signed

At the current state of play, GORI is working with the

on 28 December 2001. In accordance with that agree-

Area Authority to transform the loan into a long-term

ment, the Management Body took over the exclusive

mortgage.

integrated water service of ATO 2, comprising all the public water collection, abstraction and distribution ser-

314

As part of the repeatedly mentioned extraordinary re-

vices for civil use, sewage systems and the treatment of

view, the debt situation towards the Campania Region

urban waste water. The Area includes 57 municipalities.

must be definitively settled with regard to drinking

In return for award of the concession, Acque pays a fee

water supplies: for more information on said dispute,

to all the municipalities, including accumulated liabilities

please see the appropriate section “Update on major

incurred prior to award of the related contracts.

disputes and litigation”.

Based on the provisions of the concession, on 22 Decem-

ber 2008, the General Meeting of the Area Authority ap-

In relation to the problems concerning ruling no. 335

proved the tariff review for the years 2005-2007, in which

of 2008, it should be noted that, on 2 August 2011, the

checks were performed on the actual volume of invest-

General Meeting of the Area Authority, by means of

ments carried out, operating costs, revenues generated,

resolution no. 6, approved the lists of users not served

the amounts billed and the technical and organisational

by water treatment plants and the associated amounts

standards achieved. Based on the results of these checks,

to be reimbursed, authorising GORI to carry out the rel-

the adjustment was calculated (positive for the operator)

evant publication and go ahead with the subsequent

for lost revenues for 2005-2007, given more than 0.5%

reimbursement to the entitled parties, with reference

lower than those forecast in the Area Plan.

to the period running from 16/10/2003 to 15/10/2008,

Penalties were also applied during the revision, as pro-

in compliance with the provisions of the Decree of the

vided for in the Agreement, for the failure to achieve

Ministry of the Environment dated 30 September 2009

certain technical and organisational standards.

and art. 2033 of the Italian Civil Code. The resolution in

During the second tariff review, the new Investment


Plan was defined, later described in detail in the new

investments while they are consistent in all other as-

three-year operating plan for 2008-2010 approved by

pects, including the tariff to be applied in the first three-

the Authority in March 2009.

year period (2011-2013).

On 6 December 2011, the Authority’s General Meeting

Plan 2021, which makes provision in the first three-year

approved the third tariff review for the years 2008-2010.

period for higher amortisation due to the lower duration

During the review, checks were performed on the ac-

of financial amortisation, so that limit K of the increase

tual volume of investments carried out, operating costs,

in the fixed tariff set by the Normalised Method at 5% is

revenues generated and collections made, the amounts

not exceeded, envisages the reduction of the fee paid

billed and the technical and organisational standards

to the municipalities with recovery in subsequent years.

achieved. Based on the results of these checks, the ad-

In October 2006, the Operator signed a contract with

justment was calculated (positive for the operator) for

a syndicate of banks which provides for a total loan of

lost revenues for 2008-2010, as well as the tariff rec-

255 million euros to cover the financial needs of the in-

ognition for lost collections booked under losses in the

vestment plan from 2005 to 2021 of around 670 million

2008-2010 financial statements and reimbursements

euros. As of 31 December 2011, the operator has drawn

requested by entitled parties up until 31/12/2010 due

down 187 million euros.

to Constitutional Court ruling no. 335/2008. The reimbursement envisaged by Acque for the 2011-2013

With regard to the impact of Constitutional Court sen-

three-year period is a little over 0.3 million euros. In the

tence no. 335/2008, relating to the legitimacy of billing

third review, provision was made for increasing oper-

the tariff component covering waste water treatment

ating costs for the years starting from 2012. Penalties

to end users in areas where there are no treatment

were also applied during the revision, as provided for in

plants or where the plants are inactive, from October

the Agreement, for the failure to achieve certain techni-

2008 the company has stopped including the waste wa-

cal and organisational standards.

ter treatment component in bills for end users identi-

The tariff review was accompanied by a revision of the

fied as falling within this category. The Area Authority

Area Plan which was structured into two separate hy-

has intervened to ensure application, in 2009, of the

potheses. The first (2026 Plan) makes provision for an

Average Tariff provided for in the Area Plan.

extension of the concession by 5 years (until 2026) with

In 2010, the lists of end users entitled to return have

an increase in forecast investments by around 250 mil-

been published on the websites of Acque and of the

lion euros in the 2011-2026 period. The second (2021

Area Authority. In the same year, the Authority ap-

Plan) makes provision for an unchanged amount of in-

proved guidelines to carry out repayments, according to

vestments with respect to the original plan and already

which these will be made following the request of the

financed, but with a restructuring which ensures that

user and the five-year prescription will be calculated as

the 2011-2013 three-year period coincides with that in

of the date the request was submitted. According to

the previous hypothesis and a subsequent reduction in

this resolution, the total potential debt not prescribed

the period remaining.

at December 2010 amounts to approximately 6.5 mil-

In the 2011-2013 three-year period, roughly 40 million

lion euros (Group share 2.9 million euros).

euros more in investments are expected than in the

At December 2010, 1,139 requests have been submit-

original plan.

ted by entitled users, for a total of 0.4 million euros,

The 2026 Plan will only become effective following:

to be reimbursed taking account of deductible charges.

• approval by the current Lenders

The Authority included this amount in the tariff review

• verification of the financeability of said plan

and the repayment is expected to be carried out in the

In the event the above conditions are met, the 2021

three-year period 2011-2013. Further requests totalling

Plan will become effective.

around 43,000 were then received, whose reimburse-

The two plans only differ as regards the part relating to

ment has not yet been resolved by the Authority.


315

As regards the effects of the referendum consultation,

plants or where the plants are inactive, the company

a legal opinion was requested, as part of the above-

geared up to immediately acknowledge the indications

mentioned financing, which excluded effects relating to

from AATO. Therefore, effective as of October 2008, the

the first question regarding the legitimacy and duration

portion of treatment water for known situations which

of the concession, and reiterated that, since the effect

fall under said cases was not billed, and from 2009,

of the abrogation does not extend to Ministerial Decree

AATO updated tariffs to guarantee the application of the

of 1 August 1996 containing the normalised method,

average tariff established.

this must be considered applicable until substitute pro-

As regards the matter, AATO intervened with General

visions are issued by the body responsible (now AEEG).

Meeting Resolution no. 13 of 29/11/2010, according to

Said interpretation was also confirmed by the Area Au-

which it approved the Extraordinary Review in order

thority which applied the normalised method in the tar-

to return to users not served by water treatment the

iff review completed in December 2011.

water treatment tariff not due pursuant to the aforementioned Ministerial Decree dated 30/09/2009. Thus,

Tuscany – Acquedotto del Fiora S.p.A.

AATO reviewed the Plan tariff until 2014, in order to en-

(Ato6 – Ombrone)

sure the repayment of sums to those entitled to receive

Based on the agreement signed on 28 December 2001,

them, except any future review effect of the whole Plan

the operator (Acquedotto del Fiora) is to supply inte-

that could arise from the three-year review that is cur-

grated water services on an exclusive basis in ATO 6,

rently being carried out.

consisting of public services covering the collection, ab-

Following said General Meeting Resolution from AATO,

straction and distribution of water for civil use, sewer-

the latter’s Board of Directors finally implemented Res-

age and waste water treatment.

olution no. 25 of 20/12/2010, in which it established

The concession term is twenty-five years from 1 Janu-

the average tariff applicable for 2011 by Acquedotto

ary 2002.

del Fiora Sp at 1.977 €/m3, including forecast inflation

In August 2004, ACEA – via the vehicle, Ombrone SpA

of 1.5% (in line with the latest Government DPEF - It-

– completed its acquisition of a stake in the company.

aly’s Economic and Financial Planning Document) and

In December 2011, the Area Authority approved the

already net of the return of a portion of the water treat-

new Tariff Review for the 2008-2010 Three-Year Period

ment fee for entitled users pursuant to art. 7 of Ministe-

and the review of the Area Plan and 2011-2026 Invest-

rial Decree dated 30/09/2009.

ment Plan in line with the principles of sustainability of the medium/long term economic-financial balance.

On the financial front, the Operator, on 5 March 2012,

In this context, AATO took the opportunity, something

signed the extension, for an additional 18 months, i.e.

that ADF had requested for a long time, to eliminate the

up until September 2013, of the bridge loan agreement

discrepancies still existing between the planning of the

which increased from 80 million euros to 92.8 million

Operator (Economic-financial plan to obtain the Project

euros, with a additional 12.8 million being disbursed.

Financing) and that of the Regulator (AATO economic-

The Operator continues to work towards defining a

financial plan).

project financing transaction that will support the bor-

The volumes of water sold, included by the Authority

rowing requirements of the Company until the end of

in the new Area Plan are, therefore, in line with Acque-

the concession, ensuring the realisation of the entire

dotto del Fiora expectations.

Investment Plan.

With regard to the impact of Constitutional Court sentence no. 335/2008, relating to the legitimacy of billing the tariff component covering waste water treatment to end users in areas where there are no treatment

316


Tuscany – Publiacqua S.p.A.

for the years 2002 -2003 (1.5 million euros), in

(Ato3 – Medio Valdarno)

application of the 6 year prescription of the new

The management agreement, which came into force

agreement.

on 1 January 2002, with a twenty-year duration, was

The Area Authority provided for 10.2 million euros to

signed on 20 December 2001. In accordance with that

be allocated in order to cover reimbursement requests

agreement, the Management Body took over the ex-

of the water treatment tariff by users who are not con-

clusive integrated water service of Ato3, comprising all

nected to the sewerage network or are connected to a

the public water collection, abstraction and distribution

plant that is temporarily inactive. This amount covers

services for civil use, sewage systems and the treat-

approximately 50% of the maximum amount estimated

ment of urban waste water.

to be reimbursed (21.6 million euros, including VAT). If

The Area includes 49 municipalities, of which 6 man-

this tariff amount is lower than that actually paid by the

aged via agreements inherited from the previous opera-

operator to the users, the difference shall be used to re-

tor, Fiorentinagas. In return for award of the concession

duce adjustments on past lost revenues. If the requests

the operator pays a fee to all the municipalities, includ-

exceed expectations, the operator may request an ad-

ing accumulated liabilities incurred prior to award of

justment in the subsequent Review.

the related contracts.

Publiacqua filed an appeal with the Regional Adminis-

In June 2006, ACEA - via the vehicle, Acque Blu Fioren-

trative Court of Tuscany against the resolution of the

tine S.p.A. – completed its acquisition of a stake in the

Area Authority Board of Directors. The appeal is based

company.

on various factors such as the lack of jurisdiction (given

Please note that, on 17 December 2010, the general

the object of the resolution is a matter for the General

meeting of the Area Authority approved the 2010-2021

Meeting and not the Board of Directors), the non-adjust-

tariff development. The Board of Directors was entrust-

ment of the analysis of service criticalities and invest-

ed by the Meeting to draw up the new Chapter 6 of the

ment objectives, and, therefore, incompleteness of the

Area Plan, containing comments and details concerning

document, also shown by the absence of the definition

the approved tariff profile, as well as the tables of the

of investments to be carried out.

economic-financial plan set out in art. 149, paragraph 4 of Legislative Decree no. 152/2006.

Also in the regulatory area, Conviri (Supervisory Com-

This document was partially approved (the economic-

mittee for the Use of Water Resources) also filed a sec-

financial plan is not yet approved) by Area Authority

ond-instance appeal with the Council of State against

Board of Directors’ resolution no. 4/2011 of 23 February

the Regional Administrative Court of Florence’s judg-

2011. The following were the main lines adopted by the

ment which, by ruling no. 6863 of 23 December 2010,

Authority in defining the tariff development:

cancelled that Committee’s resolution 3 of 16 July 2008.

• estimate of 86 million cubic meters billed each

The resolution challenged the legitimacy of the settle-

year, as compared to 88.6 of the previous year;

ment agreed by the Area Authority and Publiacqua. This

• recognition in the tariff of costs already allocated

was designed to resolve numerous disputed items that,

and those expected in the future for the dispute

in the end, gave rise to the payment of 6.2 million euros

with staff regarding career advancement;

to the operator. Ruling no. 5788 of the Council of State

• penalties charged to the operator for 2.7 million

of 27/10/2011 overturned the judgment of the Regional

euros due to the failure to reach standards for the

Administrative Court of Tuscany.

2005 - 2009 period, as a reduction of the revenues

The Regional Water Authority communicated that, in its

from the tariff in the 2010-2012 three-year period;

opinion, the ruling of the Council of State mentioned

• tariff adjustments for the 2002 - 2009 period for

previously relating to the settlement agreement signed

26.9 million euros; • non recognition of part of the new adjustments

between the Area Authority and Publiacqua in 2007 nullifies said agreement, also stating its desire to pro-


317

ceed with the extraordinary tariff review for the recov-

agement economies realised in the three-year pe-

ery of the sums involved in said settlement agreement.

riod preceding the review between the operator

Against said decision, Publiacqua asked that the provi-

and end user,

sions of art. 43 of the Assignment Agreement be en-

• exclusion from the tariff calculation of the compo-

forced for the resolution of the disputes via arbitration.

nent of the return on invested capital relating to fixed assets in progress with subsequent damage

Lastly, another important move regards the decision of the Area Authority’s General Meeting (resolution no.

on the actual coverage of costs connected with the realisation of the works,

1 of 16 March 2011) to amend article 49 of the sup-

• modification of the term within which the opera-

ply regulation, decisively changing the procedures for

tor has the right to update actual revenues within

calculating and applying the guarantee deposit, intro-

a maximum of three years,

ducing a criterion based on user payment times. The

• elimination of the recognition of losses on receiv-

resolution requires that the deposit be adapted to the

ables up to a maximum of 2% per annum which

new calculation criteria by June 2011. Since it is techni-

determine a deviation between the forecast and

cally impossible to comply with that timing, Publiacqua

actual collection,

appealed that resolution before the Regional Administrative Court, and asked that it be suspended. Follow-

• elimination of extraordinary contingent assets and liabilities from the cost calculation,

ing the appeal, the Area Authority’s Board of Directors

• modification of the system for the calculation of

resolved on a proposal to the Authority’s General Meet-

the compensation due to the operator at the end

ing to partially amend article 49, deeming Publiacqua’s

of the assignment, therefore a matter which does

reasoning well-founded. The Area Authority’s General

not fall within the scope of the evaluation of the

Meeting met on 30 June and postponed the obligation

Plan as it involved in the composition of the aver-

to adapt invoicing systems until 31 October. On 13 July

age tariff, excluding the monetary revaluation of

2011, Publiacqua therefore withdrew the appeal due to lack of interest.

non-amortised capital, exclusion from the tariff calculation of components of amortisation and remuneration of con-

As regards tariffs, the Area Authority formally communicated to the operator the legitimacy of the tariffs ap-

nections carried out in the 2005-2007 period and not covered grants.

plied, also in light of the referendum vote, pending the

Lastly, it should be noted that said preliminary enquiry

necessary legislative amendments. The Regional Water

concluded with the disapproval of the fees to munici-

Authority confirmed said decision in resolving the 2012

palities which are not linked to the actual coverage of

tariff.

instalments of previous mortgages taken out for water works.

In January, the general management for protection of

The provisions contained, many of which already the

the area and water resources, concluded the prelimi-

subject of checks in other area plans by Conviri with-

nary check on the proper drafting of the ordinary review

out similar disapprovals, concern matters which are not

of the Area Plan of ATO 3 medio Valdarno, publishing it

defined by industry legislation but which do, therefore,

on Conviri’s website.

fall under the scope of the agreement powers of the

Certain provisions were made in the decision; the main

parties. Publiacqua intends to submit an application for

ones in terms of the impact on the company’s econom-

internal review against said decree and, if this does not

ic-financial capacity are as follows:

lead to the cancellation of the act, will file an appeal.

• modification of the method of calculating the real average tariff excluding profit-sharing from said calculation, i.e. the system of distribution of man-

318


In terms of the bridge loans, on 24 February 2011, the

in the current concession assignment.

company renewed the bridge loan for 6 months, until

On 29 December 2011, within a context of new and

24 August 2011. On expiry, the loan was renewed again

clearer relations with the Area Authority as a result of

for 15 months, expiring on 24 November 2012. The loan

the settlement of the dispute, GEAL signed a Memo-

was stipulated for an amount of 60 million euros, and

randum of Understanding with the Area Authority and

envisages a total pre-amortisation of 5 million euros to

the municipality of Lucca, under which planning powers

be disbursed on 24 February 2012 (2.5 million euros)

were transferred to the Area Authority (however, to be

and the remainder on 24 August 2012.

exercised in agreement with the municipality of Lucca) and powers for the control of management throughout

Tuscany – GEAL S.p.A., Azga Nord S.p.A.

the municipality of Lucca, in respect of the introduction,

and Lunigiana Acque S.p.A. (Ato1 –Tuscany

for GEAL, of the tariff method based on DM LL.PP (Minis-

Nord)

try of Public Works Decree) of 01.08.1996, replacing the now ceased ex lege based on CIPE (Interdepartmental

GEAL S.p.A.

Committee for Economic Planning) resolutions, so as to

The company GEAL S.p.A., operator of the integrated

guarantee conditions of growth and development for

water service, is not the Territorial management body

the company in the future too.

in accordance with Law no. 36/1994 (now Legislative

As regards the 2011 financial statements, despite GEAL

Decree no. 152/06), and therefore the “standardised

having significantly increased its gross operating profit

method” pursuant to DM LL.PP (Ministry of Public Works

compared to the financial statements of the previous

Decree) of 01.08.1996 for tariff review does not apply

year and budget forecasts, the net income was adverse-

to it, but the entire method applies, based on the deci-

ly impacted by extraordinary expenses, determined by

sions of the Interdepartmental Committee for Econom-

the return to the Tax Authorities of State aid known as

ic Planning (CIPE).

the “tax moratorium” which concerned the company

Said tariff methodology, as mentioned above, applies

for the years 1995 and 1996.

to GEAL, as to all operators operating on the basis of concession agreements stipulated with the individual

Lunigiana Acque S.p.A. in liquidation

municipal administrations and not with the Area Au-

The current concession arrangements with Lunigiana

thorities, came to a definitive end following the entry

Acque S.p.A. as regards the Integrated Water Service

into force of art. 10, paragraph 28 of Law Decree no.

in the municipalities of Aulla, Podenzana and Tresana

70/2011 converted to Law no. 106/2011.

(MS), all ended early at 31.12.2010 as established by the

At the end of a lengthy debate with the Area Authority1,

Decision of the Director of the Area Authority no. 104 of

in 2011, also following the repeal of art. 23 bis of Law

21.10.2010, pursuant to art. 23 bis, paragraph 8, letter

Decree no. 112/2008 converted to Law no. 133/2008

e) of Law Decree no. 112/2008 converted to Law no.

and subsequent amendments which occurred follow-

133/2008 and subsequent amendments and additions.

ing the referendum consultation of 12 and 13 June last

It should be noted that the referendum consultation of

year, definitively consolidated its management in the

12 and 13 June had no effect on the early termination,

area of the municipality of Lucca, ensuring, within the

whereas at the moment of abrogation of art. 23 bis said

current legislative framework, operational continuity

regulation had already produced its legal effects on the

until its natural expiry on 31 December 2025 contained

concessions held by Lunigiana Acque, with said abrogation having no retro effective impact.

1 The dispute was launched given that Area Authority no. 1 “Toscana Nord” (North Tuscany), by means of the resolutions of its consortium meeting nos. 18 and 19 of 25.11.2004, had included the municipal area of Lucca, whose water service is managed by GEALL, in the perimeter subject to the assignment to the company GAIA, the latter wholly owned by Local Authorities (excluding the Municipality of Lucca).

Due to the cancellation of the assignments and the company’s equity situation, Lunigiana Acque was placed into liquidation by means of Extraordinary Shareholders’ Meeting Resolution of 28 July 2011.


319

Despite being in liquidation, management continued in

As with Lunigiana Acque, the grantor is obliged to reim-

order to ensure continuity in the provision of an essen-

burse the costs incurred, i.e. the net carrying amount

tial public service, while awaiting the assignment of the

of the works carried out, plants and equipment, at its

integrated water service to a new operator.

own expense.

This assignment was transferred to GAIA S.p.A. following resolution no. 17 of 6 December 2011 of the General

Umbria – Umbra Acque S.p.A.

Meeting of the Area Authority and will take effect on 1

(Ato1 – Umbria 1)

April 2012. Therefore, Lunigiana Acque’s management

On 26 November 2007 ACEA S.p.A. was definitively

will cease definitively on 31 March 2012.

awarded the tender called by the Area Authority for

The grantor is obliged to reimburse the costs incurred,

selection of the minority private business partner of

i.e. the net carrying amount of the works carried out,

Umbra Acque S.p.A. The tender procedure requires the

plants and equipment, at its own expense.

successful bidder to subscribe a 11.335% increase in the share capital of Umbra Acque S.p.A. post-increase

AZGA Nord S.p.A. in liquidation

and to purchase 4,457,339 shares owned by outgoing

Analogamente al caso di Lunigiana Acque, anche per la

private shareholders (ACEA already holds a stake in

Similar to the case of Lunigiana Acque, also for AZGA

Umbra Acque through its subsidiary Crea), correspond-

Nord, operator of the Integrated Water Service in the

ing to 28.665% of the share capital of Umbra Acque

municipality of Pontremoli (MS), the concession ar-

S.p.A. post-increase.

rangements all ended early at 31 December 2010 as

Before the end of 2007, ACEA completed the subscrip-

established by the Decision of the Director of the Area

tions of the share capital increase and the purchase of

Authority no. 105 of 21.10.2010, pursuant to art. 23 bis,

shares owned by outgoing private shareholders, thus

paragraph 8, letter e) of Law Decree no. 112/2008 con-

acquiring ownership of 40.00000257% of the share cap-

verted to Law no. 133/2008 and subsequent amend-

ital of Umbra Acque S.p.A.

ments and additions. In this case too, the referendum consultation of 12 and

By means of General Meeting decision dated 21/02/2011,

13 June had no effect on the early termination of the

the Area Authority approved 2011 tariffs, by establish-

concessions, whereas at the moment of abrogation of

ing a 1.25% increase, plus the planned inflation rate of

art. 23 bis said regulation had already produced its legal

1.5%. Therefore, the overall increase is 2.75%.

effects, with said abrogation having no retro effective

320

impact.

The Area Plan was approved by the Meeting of Repre-

Due to the cancellation of the assignments and the

sentatives in 2004, however, maintaining the structure

company’s equity situation, AZGA Nord was placed into

of the pre-existing plan, approved in 2002. During 2008,

liquidation by means of Extraordinary Shareholders’

Umbra Acque underlined the need to carry out a total

Meeting Resolution of 15 December 2010.

review of the current Plan, in consideration of both the

Despite being in liquidation, management continued in

new national (Legislative Decree no. 152/06) and re-

order to ensure continuity in the provision of an essen-

gional regulations (Regional Plan for water protection in

tial public service, while awaiting the assignment of the

Umbria, sewage Directive, Regional Regulator Plan for

integrated water service to a new operator.

Umbria aqueducts and Regional Law no. 25/09 “Rules

Consultations are currently underway between the

for the protection and safeguard of water resources”)

Area Authority (now the Tuscan Water Authority), the

– according to which the programme of works included

municipality of Pontremoli (majority shareholder of

in the existing Area Plan will be adjusted, in order to

AZGA Nord) and GAIA, for the transfer to the latter of

achieve the pre-defined objectives concerning water

management of the integrated water service which has

quality and aquifer protection – and in the light of the

not yet been completed.

increase in several cost items (in particular, electricity


consumption and sludge disposal costs) that hinder the achievement of the economic-financial balance, as set out in the Standardised Method. During 2011, these ad-

consumption of electricity and maintenance; • annual increase in the lump-sum payment with regard to the new lighting points installed.

ditional costs further increased, due to both new cost

In addition, investments regarding the service may be

items that were not included in the current Plan and the

(i) requested and financed by the municipality or (ii) fi-

increase in tariffs for the services used by the Company.

nanced by ACEA: in the first case, such interventions

Please note that the tariff review process, which start-

will be paid based on a price list agreed by the parties

ed some time ago, is not yet complete.

(and subject to review every two years) and will result in a percentage decrease of the ordinary fee. In the sec-

Related Party Transactions ACEA GROUP AND ROMA CAPITALE

ond case, the municipality is not bound to pay any extra fee; however, ACEA will be awarded all, or part of the saving expected in both energy and economic terms, according to pre-established methods.

Trading relations between ACEA Group companies and

Moreover, it has been established that qualitative/quan-

Roma Capitale include the supply of electricity and wa-

titative parameters shall be renegotiated in 2018.

ter and provision of services to the Municipality.

Upon natural or anticipated expiry, ACEA will be award-

Among the principal services are the management,

ed an allowance corresponding to the residual carry-

maintenance and upgrading of public lighting facilities

ing amount, which will be paid by the Municipality or

and, with regard to environmental–water services, the

the incoming operator if this obligation is expressly set

maintenance of fountains and drinking fountains, the

out in the call for tenders for the selection of the new

additional water service, as well as contract work.

operator.

Such relations are governed by appropriate service con-

The contract sets out a list of events that represent

tracts and the supply of water and electricity is con-

a reason of anticipated revocation of the concession

ducted on an arm’s length basis.

and/or resolution of contract by the will of the parties.

ACEA and ACEA Ato 2, respectively, provide public light-

Among these events, reference is made to newly aris-

ing and integrated water services under the terms of

ing needs linked with public interests, including the one

two thirty–year concessions. Further details are provid-

set out in Article 23 bis of Law Decree no. 112/2008,

ed in the section “Service concession arrangements”.

repealed following the referendum of 12 and 13 June

With regard to public lighting, the Group provides pub-

2011, according to which ACEA has the right to receive

lic lighting services on an exclusive basis within the

an allowance according to the product, that is discount-

Rome area. As part of the thirty-year free concession

ed based on the percentage of the annual contractual

granted by the Municipality of Rome in 1998, the eco-

amount and the number of years until expiry of the con-

nomic terms of the concession services are currently

cession.

governed by a service contract signed by the parties,

Based on the fact that the supplementary agreement

effective as of May 2005 until the concession expiry (31

exceeds the reference thresholds set out by the Com-

December 2027). On 15 March 2011, ACEA and Roma

pany with regard to Related party transactions, it was

Capitale signed a supplemental agreement effective as

analysed by the Board of Directors and approved during

of the beginning of the year.

the meeting held on 1 February 2011, having obtained

The supplements regard the following elements:

the favourable opinion of the Committee for related

• the term of the service contract should be aligned

party transactions.

with the expiry of the concession (2027), given that the contract is merely additional to the agree-

The current contract, as amended by the supplemental

ment;

agreement, involves a lump-sum payment which pays


a compensation for ordinary operations, ongoing and


321

extraordinary maintenance and the supply of electricity.

Capitale must settle the remaining balance by

The annual payment, calculated on the basis of lighting

June of the following year. In the case of late pay-

points as at 31 December 2009, amounts to 39.6 million

ment for electricity or water sales, interest shall

euros and is billed in monthly instalments with payment

be paid under the terms of the provisions issued

set at 60 days.

by the Electricity and Gas Authority at the time,

The new constructions and investments contribute to

d) the prices applied to sales of electricity to free

the increase in the lump-sum figure due to the annual

market users are in line with the commercial

accrual calculated according to the capital allowance

policies of Acea Energia. Payment terms are sixty

mechanism envisaged for the plants underlying the

days and, in case of delay, a default interest rate

specific operation as well as the percentage reduction

will be applied,

of the ordinary fee due by Roma Capitale, the amount

e) the terms of payment for the ACEA Group relating

of which is defined in the technical-economic project

to fees for the water services concession and the

document.

rental on its head office premises are set at thirty

A variable interest rate is applied to the invested capital.

days from receipt of the invoice, and in the case of

As a local authority, Roma Capitale has the power to

late payment interest shall be paid in accordance

regulate municipal taxes and duties that the Group

with the current bank rate at the time.

companies are required to pay and which fall under

For further information regarding relations between

its territorial jurisdiction. However, the Group - with re-

the ACEA Group and Roma Capitale, reference should

spect to other companies operating in the municipality

be made to the disclosures regarding receivables and

– is in no case the sole payer of any of these taxes and

payables in note 23.

duties. The following table shows details of revenues and costs The reciprocal receivables and payables – with regard

for 2011 of the ACEA Group (compared with those for

to payment terms and conditions – are governed by

the same period of the previous year) deriving from the

each single contract:

most significant financial relations.

a) for the public lighting service contract, payment shall take place within sixty days of receipt of the invoice and, in case of delayed payment, the legal interest rate will be applied for the first sixty days, after which the default interest rate will be applied, as set out from year to year by a Decree of the Minister of Public Works and the Minister of Economy and Finance; b) with reference to all other service contracts, the payment term for Roma Capitale as regards service contracts is sixty days of receipt of an invoice, and in case of late payment the parties have agreed to apply the current bank rate at the time; c) for the supply of electricity and water to Roma Capitale (solely with reference to users of the regulated market), it is stipulated that Roma Capitale shall make an advance payment of 90% within 40 days of receiving a summarised list of the invoices issued by Group companies. Moreover, Roma

322


31.12.2011

31.12.2010

28,821

27,423

Supply of fresh water Sewerage service

31.12.2011

31.12.2010 0

0

Supply of electricity

18,655

12,608

Public lighting service contract

44,002

55,859

Water maintenance service contract

615

899

Monumental fountain service contract

615

899

0

0

Upgrading of water services in the suburbs of Rome Concession fee

20,297

19,162

Rental expenses

54

54

Taxes and duties

3,108

2,662


ACEA and Roma Capitale intend to set up a work group

supply of electricity and water.

to reconcile mutual credit and debit items and identify

The supply of services to entities owned by the Roma

the methods for re-establishing a net credit position for

Capitale Group is conducted on an arm’s length basis.

the ACEA Group.

The prices applied to sales of electricity to free market users are in line with the commercial policies of Acea Energia.

ACEA GROUP AND ROMA CAPITALE GROUP

The following table shows amounts (in thousand of eu-

AThe ACEA Group also maintains trading relations with

ros) for revenues, costs, receivables and payables deriv-

other companies, special companies (aziende speciali)

ing from relations between the ACEA Group and entities

and bodies owned by Roma Capitale, concerning the

owned by the Roma Capitale Group.

Revenues

Costs

31.12.2011

31.12.2010

50

1,005

Ama

3,974

3,241

1,248

Atac

8,836

16,738

4

Cotral Group Trambus

31.12.2011

17

Receivables

Payables

31.12.2010

31.12.2011

31.12.2010

31.12.2011

31.12.2010

0

196

1,307

0

0

26

77

2

1,347

7,377

8,716

1,813

773

0

42,429

15,361

19

0

0

Musica per Roma

43

40

0

62

45

0

0

Risorse per Roma

10

88

0

208

133

0

0

12,913

21,128

1,347

50,271

25,588

1,909

775

Total

1,252



323

The following table summarises receivables and payables due from and to entities owned by the Roma Capitale Group. 31.12.2011

31.12.2010


Trade receivables

210,330

139,161

71,170

Trade payables

134,705

96,979

37,726

Net balance of trade items

75,625

42,181

33,444


132,678

98,512

34,166

15,989

2,213

13,777

Net balance of financial items

116,689

96,299

20,390

NET BALANCE

192,314

138,481

53,834

Borrowings


The significant change recorded between the two situ-

of the business unit lease, Marco Polo carried out fa-

ations set out for comparison was mainly due to the

cility management services.

change in the basis of consolidation, with particular ref-

The supply of services to ACEA Group companies is

erence to the increased interest in Acea Energia due

conducted on an arm’s length basis.

to the termination of the joint venture agreement be-

Similarly, Marco Polo is provided with administrative ser-

tween ACEA and GdF-Suez.

vices from ACEA under an annual service contract. This supply of services is conducted on an arm’s length basis. The following table shows amounts (thousands of eu-

THE ACEA GROUP AND ITS MAIN ASSOCIATES

ros) for revenues, costs, receivables and payables de-

Up until 31 December 2011, i.e. the natural expiry date

company Marco Polo.

Revenues

Marco Polo

riving from relations between the ACEA Group and the

Costs

Receivables

Payables

31.12.2011

31.12.2010

31.12.2011

31.12.2010

31.12.2011

31.12.2010

31.12.2011

31.12.2010

2,363

2,086

11,611

11,428

3,138

2,185

15,946

22,762


Activities are underway for the perimeterisation of the ACEA business unit which became part of the perimeter again from 1 January 2012 as a result of the expiry of the rental agreement.

324


ACEA GROUP AND MAIN GdF-Suez GROUP COMPANIES

The aforementioned agreements continue regularly in

As a result of the termination of the joint venture be-

established in the Framework Agreement, each con-

tween ACEA and Electrabel (now GdF-Suez) on 31 March

tracting party signed amendment deeds for the Tor di

2011, the contracts between the companies owned ex-

Valle gas supply contract and the sub-rental contracts.

clusively by ACEA and those acquired by GdF-Suez were

Furthermore, the following agreements were signed on

redefined in the Framework Agreement.

the Date of Execution:

compliance with their relative terms and conditions. As

Relations undertaken by ACEA or its direct or indirect

• and AEP;

subsidiaries with Acea Energia Holding, Acea Energia,

• an agreement for the provision of administrative, IT,

AEP, AET and Eblacea, existing when the termination

Tor di Valle AEP office management and personnel

was carried out and which continued subsequent to its

management services, with a duration of 6 months,

formalisation, include:

extendable for another two. The agreement was signed by ACEA on one side and AEP and AET on

• the staff administration service agreement, signed

the other;

between ACEA and Tirreno Power S.p.A.;

• remote control management contract signed be-

• the energy purchase agreement, signed between

tween Acea Produzione and AEP lasting 6 months,

AET and Acea Energia;

extendable for another two.

• the Tor di Valle gas supply agreement, signed be-

The following table shows amounts (in thousands of eu-

tween AET and AEP; • sub-rental agreements signed by Acea Energia

ros) for revenues, costs, receivables and payables deriv-

Holding on one side, and AEP and AET, respectively

ing from relations between the ACEA Group and principal

on the other.

companies in the GdF-Suez Group. REVENUES

GAZ DE FRANCE GDF SUEZ Energia Italia

RECEIVABLES

PAYABLES

31.12.2010

31.12.2011

31.12.2010

31.12.2011

31.12.2010

31.12.2011

31.12.2010

4,146

69,914

14,924

138,503

0

24,752

611

15,403

53,029

0

662,884

15,282

5,247

0

160,429

108,268

6

95

74

297

0

67

0

8

3,246

0

137

0

1,539

0

0

0

ROSEN GDF Suez Produzione

COSTS

31.12.2011

Roselectra

258

0

0

0

130

0

0

0

Tirreno Power

204

0

0

0

60

0

0

0

0

0

0

197

0

0

0

104

LABORELEC amounts in thousands of euros


325


based on taxable pay, is 0.57 percentage points higher for staff covered by Inpdap compared with those covered by Inps. The ACEA Group applied a reduced rate as

Social security issues

of October 2003 for said contribution too. It should be noted that as regards said contribution legislation was

INPDAP (National Social Insurance Institute for

introduced with Law Decree no. 112 of 25/6/2008 con-

Civil Servants) contributions.

verted with amendments into Law no. 133 of 6/8/2008,

The Group employs staff registered with both Inpdap and

where paragraph 2 of article 20 regulates, effective from

Inps pension funds. Certain contribution rates applied by

1 January 2009, uniformity of contributions for private

the two entities differ greatly; these include those for

employers across the board.

family allowance payments, for which Inpdap applies a

ACEA, ACEA Ato2, ACEA Ato5, ACEA Distribuzione, Arse,

rate that is 3.72% higher than that applied by Inps.

Acea Energia and Acea Produzione filed appeals which,

In response to the failure to pass legislation bringing the

although turned down, gave rise to the presentation of

pension and social security contributions into line be-

an appeal request which also ended unfavourably for

tween various institutions, the Group companies decided

said parties. Appeals lodged by Laboratori and ACEA Luce

that from November 2002 it would pay such contribu-

met with favourable outcomes, while under appeal these

tions at the lower rate. On the other hand, the underly-

companies also met with an unfavourable outcome.

ing legal basis is rather unclear: Inps circular no. 103 of

Following a series of unfavourable outcomes for Group

16 June 2002 reiterated that, whilst awaiting clarification

companies, a Court of First Instance (in Brescia) has up-

from the Ministry of Economy and Finance and the Min-

held the position taken by a former municipalised utility,

istry of Labour, the rate of 6.20% applied to staff regis-

recognising the company’s right to pay the above con-

tered with the Inpdap pension fund, reduced by 4.15%

tributions at the reduced rate and declaring the tax de-

for 2011 (although the differential remained unchanged,

mands issued by Inps to have no basis in law. The court’s

with respect to the rate of 3.72% for staff registered with

opinion appears to be substantially in line with the argu-

the INPS pension fund) was to be considered provisional.

ments adopted in the appeals submitted by Group com-

In terms of legal action, ACEA, ACEA Distribuzione, ACEA

panies.

Ato2, Laboratori and ACEA Luce, after appealing through

The Group made the necessary allocations to cover the

the administrative courts, started legal action. The judge-

risk related to these problems.

ments handed down at first instance during the second half of 2006 found in favour of Laboratori and ACEA Luce

As a result of enforcement actions implemented by INPS

(the latter being an ACEA Group company at the time),

through Equitalia for the sole purpose of avoiding the ef-

whilst the appeals submitted by ACEA, ACEA Distribuzi-

fects of the seizures performed pursuant to art. 48 bis

one and ACEA Ato2 were turned down.

of Presidential Decree no. 602/1973, in November 2011,

The second instance proceedings, launched by the com-

ACEA, ACEA Ato2, ACEA Distribuzione, Acea Energia and

panies or INPS in cases where the latter objected to the

Laboratori broke the payment requests issued by INPS

first instance rulings, met with the same unfavourable

relating to unpaid contributions down into instalments.

ruling for ACEA Group companies.

The total amount split into instalments came to 16.9 mil-

Appeals were submitted to the Supreme Court for Labo-

lion euros.

ratori, Acea Energia (formerly AceaElectrabel Elettricità spa) and Acea Produzione (through succession of relations established by transferred company AceaElectrabel Produzione). A similar problem regards contributions for maternity benefits, where the difference in the cost to companies,

326


Health insurance contributions

the change to collective agreement regulations to the

The case concerns certain health insurance contribu-

date law no. 133 of 2008 was issued.

tions levied at a rate of 2.22% on the salaries of blue

In fact, the new contracts for electricity sector personnel

collar workers. Acea argues that the obligation of Inps to

of August 2006 and for gas-water personnel of April 2007

pay certain sickness benefits, which is the reason under-

regulated the sickness benefit paid by companies as a

lying the employer’s obligation to pay the contribution

supplement to indemnities paid by the insurers (INPS) to

involved in this dispute, is expressly excluded by art. 6,

the provider and paid, by said companies, at the normal

paragraph 2 of Law no. 138 of 11 January 1943 in cases

salary payment dates.

where the payment of this benefit is assured by law or by collective labour agreements by the employer or other

Unemployment and mobility contributions

bodies, to an extent either equal to or greater than what

This is the contribution companies have to pay due to

is established by collective labour agreements.

INPS, to finance the income support fund for workers

However, Inps started to request payment of the con-

that have become unemployed; it is decidedly insurance-

tribution from the entry into force of Law no. 41 of 28

related in nature, for which only the previously insured

February 1986 (1986 Finance Act), which reformed the

provider has the right to performance.

health and social welfare contribution system, reduc-

The obligation exists toward all employees in general,

ing the rate for the sickness benefit, abolishing the ad-

with some exceptions, e.g. for those who benefit from

ditional rate of the old sickness contribution, establishing

the guarantee of job security (art. 40 no. 2 of Royal De-

the contribution for the National Health Service and the

cree no. 1827/35) given they are employees of public

welfare contribution.

administrations, public companies or exercise public ser-

This initiative led to a great deal of legal activity involv-

vices where the element of stability is based on norms

ing the companies which considered the contribution

regulating the legal status and remuneration of person-

undue, with favourable and unfavourable outcomes to

nel or ensured, upon request, by a provision from the

said proceedings.

Ministry of Labour.

By means of Supreme Court (joint session) ruling no.

Despite altering the legal and economic nature of the

10232 of 27 June 2003, promoted by INPS, the principle

company, the requirement of job stability was however

diametrically opposed to the one provided for by law

met by the collective labour agreement applied to per-

was sanctioned, making the contribution due from com-

sonnel, which for companies operating in both the elec-

panies of a solidaristic rather than welfare nature.

tricity and water services areas consisted of the national

However, companies are still awaiting legislation which

collective labour agreement of 9/7/1996 for employees

would fully regulate the previous one, realised with the

working in local electricity companies.

issue of Law no. 133 of 6 August 2008, converting Law

Stipulation of the sole agreement of the electricity sec-

Decree no. 112/2008.

tor in July 2001, and the subsequent succession and in-

The law definitively provided an authentic interpretation

terpretation agreement of April 2002 and the agreement

of the second paragraph of article 6 of law no. 138 dated

of contractual migration from electricity to water, in July

11 January 1943, establishing that employers are not

2001 too, led to periods without job stability before the

obliged to pay health insurance contributions in cases

companies adopted regulations aimed at restoring the

where they have, by law or under the provisions of a col-

requirement of employment stability.

lective labour agreement, paid sick pay, thus amending

Favourable first and second instance rulings were ap-

previous periods and providing for the payment obliga-

pealed by INPS; the hearing set for 7 February 2011 was

tion to take effect from 1 January 2009.

put back to 9 January 2012.

Therefore, ACEA Group companies started to pay health insurance contributions from January 2009; the provision set aside relates to the period running from the date of


327

Tax issues

and, in upholding the objection raised, asked the Constitutional Court to rule on the issue of legitimacy re-

Tax moratorium

garding the legislation which generated the costs, non-

The appeals presented by ACEA against the payment

deductible for tax purposes, incurred in the years 2003

demands of 2007 and the 2009 tax assessments were

and 2004 (article 14, paragraph 4 bis, Law no. 537/93).

rejected by the Provincial Tax Commission.

The hearing at the Constitutional Court was held on 8


February 2011 and the issue of legitimacy submitted for

against the first instance ruling against the 2007 de-

its judgement was declared inadmissible under the as-

mands.

sumption that “...the remitting tax commission, in raising these questions, would have had to preliminarily

SAO tax inspection

confirm – also by solely providing a brief justification on

In October 2008 the tax authorities issued two notices

the matter – the lack of grounds for the aforementioned

of assessment to the company, amounting to 5.8 million

appeal, because, if upheld, they would have led to the

euros in taxes and 5.7 million euros in penalties.

cancellation of the tax assessment notices contested

These notices of assessment regard the 2003 and

and the subsequent irrelevance of said matters....

2004 tax years and derive from criminal proceedings

At the hearing on 4 October 2011, the Judge put the

launched by the Orvieto District Attorney’s Office. This

case back to January 2012, in order to find out the out-

action, which is still pending before the Court of Pe-

comes of the criminal proceedings at the Court of Pe-

rugia, regards transfers of waste from the Campania

rugia regarding the delivery of waste by the Campania

region in the aforementioned 2003–2004 period, based

Region.

on a planning agreement executed at that time by the presidents of the Campania and Umbria regional au-

It should be noted that, with reference to the cited

thorities and the subsequent management of the Or-

proceedings, S.A.O. submitted a request for cancel-

vieto landfill.

lation, by own determination, of assessment notices

Although one of the years involved in the tax inspection

872030100244, 872030100245 and 872080100477,

notices (2004) was already subject to a tax inspection,

following the ruling of the Court of Perugia on 29 No-

the Tax Authorities deemed that it was possible to re-

vember 2011, which established that it did not need to

open the inspection, following the ruling under which

continue, with regard to all offences and all defendants,

the Court of Orvieto, in criminal proceedings, declared

with the proceedings relating to the delivery of waste

the Court of Perugia to instead hold competence.

from the Campania Region in 2003 and 2004 (forming

The notices of assessment regard taxation of the costs

the basis of the relevant assessment notice) due to

incurred during the two years in relation to the above

expiry of the limitation period. As regards the claim,

transfers of waste, based on the fact that such trans-

adequate grounds were given regarding the fact that

fers are now considered illegal on the basis of the mere

the acquittal pronounced in the criminal proceedings

existence of criminal proceedings and despite the ab-

eliminates the conditions for applicability of the prohi-

sence of provisions from the Judge regarding the veri-

bition of deductibility of costs arising from the offence,

fication of the existence of the offences for which to

on which the relevant assessment notice was based, as

proceed.

interpreted by the Direzione Centrale Normativa e Con-

On 12 December 2008 the company submitted sepa-

tenzioso (Central Legislative and Disputes Department)

rate appeals against the notices of assessment.

of the Tax Authorities in Circular no. 42/E of 2005.

In May 2009, the tax commission upheld the requests

328

for the suspension of the notices of assessment sub-

It has been deemed that the acts of the Tax Authorities

mitted by the company and, in November 2009, at the

are illegitimate and that there is a remote risk of pay-

first hearing on the matter, combined the two appeals

ment of the entire sum for which the previous share-


holder is liable (Enertad now Erg Renew) on the basis

GdF Suez Energy Management (formerly

of the guarantees issued in the purchase/sale contract

AceaElectrabel Trading) tax inspection)

and the provisions in the arbitration award issued by

On 15 September 2010 the Guardia di Finanza – Nucleo

the Board of Arbitrators set up, upon request of ACEA

Polizia Tributaria di Roma (Italian Financial Police – Rome

S.p.A., in accordance with said contract.

Tax Squad) opened a tax inspection relating to direct taxes for 2008, subsequently extended to the years 2005,

In January 2009, It should also be noted, for the purpos-

2006, 2007 and 2009 with reference to the so-called off-

es of completeness, that SAO challenged measure no.

balance sheet transactions (article 112 of Income Tax

2008/27753 of 27 November 2008 by which the com-

Consolidation Act).

petent Tax Authorities suspended the disbursement of

In November 2010, tax inspections were concluded for

a VAT rebate claimed by the Company for the 2003 tax

the 2005 tax year and the Guardia di Finanza notified GdF

period. Said rebate, totalling 1,256,000.00 euros, was

Suez Energy Management and ACEA, as the consolidat-

recognised by the Inland Revenue, even though for pre-

ing entity, of a Report on Findings, ascertaining a higher

cautionary reasons due to the above assessments its

taxable base, (Ires and Irap – corporate income tax and

disbursement was suspended. The Tax Commission,

regional business tax) of 14.2 million euros, relating to

with Ruling issued following the hearing held in March

the fair value of solely hedging instruments with a posi-

2010, upheld the appeal lodged by our Company, thus

tive fair value as at 31 December 2005, producing effects

cancelling the cited measure against the aforemen-

over subsequent years. In substance, the tax inspector

tioned ruling. The Tax Authorities submitted an appeal

confirmed that the disclosures made by no IAS adopters

in September 2010. The proceedings are in progress.

- GdF Suez Energy Management is one – in their financial

It should be noted that the receivable involved in the

statements in compliance with OIC 3 assume tax rele-

cited VAT reimbursement was settled via payment in

vance pursuant to and in accordance with article 112 of

July 2010. The assignee presented an appeal with a si-

the Income Tax Consolidation Act.

multaneous request for discussion at a public hearing,

On 5 July 2011, ACEA, as the consolidating entity, re-

for the cancellation of measure 73747/2011 with which

ceived a report on findings, ascertaining a higher tax-

the Terni Provincial Department of the Tax Authorities

able base for the tax years 2006, 2007, 2008 and 2009

declared the transfer of said VAT credit from SAO to

of 128.9 million euros relative to the positive fair value

said assignee to be unacceptable.

of hedging instruments existing at the end of the years being audited.

Tax inspection on Marco Polo

On the basis of the Framework Agreement signed in De-

On 23 June 2010, the Tax Authorities notified the associ-

cember by ACEA and GDF Suez Energia Italia, ACEA is

ated company Marco Polo of a Report of Findings relat-

indemnified and held harmless in relation to any amount

ing to the general tax inspection started in March 2010.

it is required to pay, also temporarily, as consolidating

The irregularities found by the Tax Authorities totalled

entity.

6.4 million euros, (plus interest and fines) and essentially concern objections to the equalisation calculation

ARSE tax inspection

method of fees due to Shareholders of ACEA and AMA,

On 19 July 2011, the Italian Financial Police began an in-

based on the service contracts stipulated.

spection to check the correct use of the VAT tax ware-

The proper defence briefs and preliminary documen-

house system pursuant to article 50 bis of Decree Law

tation were presented to the Tax Authorities aimed at

no. 331 of 30 August 1993 (“VAT Warehouses”), relat-

eliminating the most significant irregularities.

ing to certain assets imported by the company. The inspection, suspended on 27 July 2011, re-commenced on 9 February 2012, with the extension of the controls to the years 2010 and 2011.


329

The system under review makes it possible to suspend

as a result of an inspection opened in July, concerning

the payment of VAT at the time of import, by entering

IRES and IRAP for 2008. The company complied with the

the goods in so-called VAT warehouses, i.e. facilities

report on findings pursuant to article 5 bis, of Legislative

managed by third parties and subject to specific forms

Decree no. 218/1997 through the presentation of the ap-

of control and monitoring. The tax, where due, is paid

propriate request in December 2011, and paid 329,532

when the good is extracted through a reverse charge

euros.

mechanism, with the offsetting of VAT credits/debits recorded.

It should also be noted that,

Control activities are targeted at ascertaining cases of

• on 9 February 2012, a general inspection (IRES,

abuse of the mechanism, i.e. cases in which legal non-

IRAP and VAT) was opened by the Tax Authorities

existence or warehouse simulation are found, in line

for the year 2009 against Sarnese Vesuviano and,

with the instructions already recommended in turn by the Customs Agency (see Resolution no. 23321/2009).

• on 17 February 2012, the Italian Financial Police opened a general inspection (IRES, IRAP and VAT) against EALL, for the years 2010/2011 until the

The subject is particularly well-known and debated

date of incorporation into ARIA.

given that several parties have recorded an extremely restrictive attitude on the part of inspectors who tend, contrary to what has been repeatedly affirmed by said

Other problems

Customs Agency, to recognise the aforementioned nonexistence/simulation in all cases where the good deliv-

ACEA Ato5 - Tariffs

ered to the warehouse has not remained in the storage

Concerning the well known issue of the tariff for the

area for a minimum period.

integrated water services of ATO 5 (southern Lazio – Frosinone) and the related results of operations of ACEA

As at today’s date, the company received no report on

Ato5, please note the indications below.

findings and deems that all conditions in fact and in law set forth by the legislation for the use of VAT warehous-

With resolution no. 7/2008, Co.N.Vi.R.I. (Supervisory

es, as interpreted by said Customs Agency, have been

Committee for the Use of Water Resources) carried out

fully satisfied.

some surveys concerning the legitimacy of the revised tariffs arranged by the Area Authority with resolution no.

GORI tax inspection

4/2007. In the company’s opinion, Co.N.Vi.R.I.’s Resolu-

During the year, the Tax Authorities carried out an in-

tion no. 7/2008 appears to be entirely illegitimate, so

spection for the year 2008. At the end of the inspec-

much so that the company filed an appeal against the

tion, inspectors contested the payment of roughly an

ruling before the Lazio Regional Administrative Court

additional 1 million euros in taxes with the company

(TAR), which is still pending.

(plus interest and fines). In respect of the irregularities

In short, Co.N.Vi.R.I.’s opinion as regards the above men-

identified, the company is evaluating whether to lodge

tioned measure appears to be entirely illegitimate as it is

an appeal against the assessment notice, which has not

evidently in contrast with art. 154 of Legislative Decree

yet been notified as yet, or, alternatively, to formulate a

no. 152/2006, in accordance with which the tariff “consti-

tax settlement proposal in accordance with art. 6, para-

tutes the price for integrated water services and is fixed

graph 1, of Legislative Decree no. 218/97.

taking account of the quality of water resources and of the service provided, the necessary infrastructure and

330

Tax inspection of other Group companies

upgrading work, the cost of operating the infrastructure,

On 15 November 2011, ACEA Ato2 was notified of a re-

an adequate return on invested capital and the operating

port on findings, drafted by the Italian Financial Police

costs for protected areas, in addition to a portion of the


operating costs incurred by the Area Authority, in such a

thority 5, as per art. 117 of Italian Legislative Decree no.

way as to guarantee full coverage of investment and op-

104 of 2 July 2010, to conclude the proceeding for deter-

erating costs according to the cost recovery principle…”;

mining the integrated water service tariff by the deadline of 120 days from the notification or communication by

AATO 5 subsequently decided to implement the above

administrative procedure of the aforementioned deci-

mentioned resolution.

sion”. Furthermore, in upholding the specific request put forth

However, the latest measures have also been disputed

by the Company, the Regional Administrative Court also

by the company that filed the appeal (with additional

appointed a Commissioner for deeds - if the awarding

reasons) before the Lazio Regional Administrative Court,

Authority continued not to act - represented by the

Latina section, which recently issued sentence no.

Chairman of Co.N.Vi.Ri., so that the procedure in ques-

357/2011, thus rejecting the appeal filed by the company

tion could be completed, with that Administration bear-

and confirming the full legitimacy of the resolutions of

ing the relative expenses.

AATO 5 concerning the cancellation of the previous tariff

With reference to that deadline set to the Area Authority,

review resolutions.

ACEA decided to settle ACEA Ato5’s losses by reconstituting the share capital and establishing a provision to

The above mentioned sentence – for which the Company

cover losses that are expected to arise until determina-

is considering a possible appeal with the Council of State

tion of the tariffs.

– defined the issue on a mainly legal basis, facing it only

Considering that the Area Authority did not conclude

incidentally.

the proceedings within the deadline prescribed by the

The indications above on the one hand would suggest

Administrative Court, the Commissioner for deeds ac-

the possible filing of an appeal with the Council of State

cepted the task until the end of October 2011.

to obtain the ruling to be amended; on the other hand, it

In December 2011, as a result of a specific request made

does not prevent the possibility for the company to bring

by ACEA Ato5, the Commissioner for deeds asked the

civil proceedings to assert the contractual and/or non-

Regional Administrative Court of Lazio “whether the de-

contractual obligations of the Area Authority to ACEA

termination of the tariff in the area plan for the years

Ato5 and obtain compensation for all damages incurred

2006-2012 was an activity that conformed to the man-

by the operator.

date received under ruling no. 529/2011”; and in the assumption that the review of the area plan and sub-

Finally, worth mentioning is that, following the cancella-

sequent determination of the real average tariff for the

tion of the 2006-2009 tariffs as ruled by the Area Author-

remaining assignment period, according to the indica-

ity, the tariffs have not yet been re-determined, nor have

tions of the aforementioned ruling, constitutes a com-

the definitive tariffs for 2010 and 2011.

plex activity given that it essentially presumes the ac-

Against this persisting inertia, the Company filed an inde-

curate recognition of the previous service management.

pendent appeal before the Lazio Regional Administrative

Following an affirmative response contained in corpo-

Court, Latina section, against the non fulfilment by the

rate order dated 13 February 2012, the Commissioner for

Authority of its obligations (namely: the determination of

deeds signed on 8 March 2012 a decree on the “Deter-

the tariff for the years 2006-2009, determination of the

mination of the integrated water service tariff applicable

definitive tariff for 2010, review of the 2011-2013 Area

for 2012 in ATO 5 Southern Lazio – Frosinone” which the

Plan and 2011 tariff determination).

company was informed of on 9 March 2012.

The hearing was held in May and, on 20 June of this year,


the judgement was published whereby the Lazio Region-

equal to 1.359 m3 - was carried out to quickly deal with

al Administrative Court, Latina section, upheld the appeal

a service economic-financial imbalance, caused by the

filed by the company and “... by effect, ordered Area Au-

failure to update the tariff based on the trend in inflation


331

and forecasts in the area plan and management agree-

the cautionary deposit provided by ACEA Ato5 through

ment. Therefore, determination of the 2012 real average

the “immediate payment of 2,843,622.02 euros, which

tariff is limited to restabilising normal contractual con-

equals the amount of the guarantee provided, to partially

ditions of continuity of management and does not take

recover concession fees that, as of today, have not been

into account the difference between the area plan fore-

paid” and also requested the automatic and immediate

casts and the actual trend in the management of previ-

recovery of said cautionary deposit.

ous years given these activities are to be carried out as part of the ordinary and extraordinary review.




been postponed, such as (i) the outcomes of the abroga-


tive referendum of article 154 of Legislative Decree no.


152/2006, (ii) the exceeding of the minimum amount


guaranteed and (iii) the obtainment of the financial re-


sources needed to cover expenses deriving from the ob-

therefore, on 8 September 2011 Acea Ato5 filed a com-

ligation to return the undue portion of the tariff to users

plaint against the rejection order.

relating to the water treatment service. The decree also identifies the structure of the 2012 tar-


iff and the real average tariff of each year from 2003 to


2011, therefore including therein the years concerned by


the cancellation of the 2007 tariff review.

ant to art. 700 c.p.c. the company also filed an additional appeal to the Regional Administrative Court of Lazio for

Therefore, this document is valuable in definitively quan-


tifying the amount of receivables for tariff equalisation

surety policy.

relating to the variation between real revenues from billing and those “guaranteed” with respect to the “Original


area plan”, currently defined as the “sole contractual ref-


erence in force between the parties”. Whilst additional


receivables, deriving from the differences between plan


forecasts and the actual performance of management in


the previous years, will be subject to an evaluation as part


of the area plan ordinary and extraordinary review activi-


ties. Operator equalisation will be calculated and any payment methods will also be defined during said phase.

On 01/12/2011, a hearing was held, set following the transfer of the case to the Regional Administrative Court

In light of the content of the decree of the Commissioner

of Lazio - Latina Section. Following the aforementioned

for deeds, a total of 5 million euros was allocated to the

hearing, the Administrative Court Judge, with order no.

provision for liabilities, augmenting the allocation of 25

497/2011, rejected the request for precautionary protec-

million euros made in 2009.

tion, ruling the appeal to be inadmissible due to a lack of jurisdiction.

332

ACEA Ato5 – Enforcement of guarantee

As a result, by means of note dated 14/12/2011, Uni-

On 1 June 2011, on the basis of the assumption that the

credit issued a communication to the effect it had paid

Operator committed breach with respect to the pay-

the Area Authority the enforced sum of 2.8 million euros,

ment of concession fees, the Area Authority requested


that UniCredit Corporate & Investment Banking enforce

said surety be returned.



Moreover, for the above purposes (normalisation of re-


lations, definition of repayment plan, dispute resolution


and determination of the criteria underlying the proce-


dures for the transfer of regional works regarding the


Integrated Water Service and falling with the scope of


A.T.O. n. 3), GORI - also on the basis of the decisions

guarantee.

reached by the technical work group established by the


Region and the Area Authority and still in existence - for-

legal evaluations which showed that the failure and/or

malised the proposal for a general agreement scheme.

delay in respect of reconstitution of the aforementioned


guarantee is the equivalent of the mere non-fulfilment


of a contractual obligation on the part of the Integrated


Water Service Operator and that for said specific case

agreement scheme, which is attached to said report,

of non-fulfilment, the contractual tools in place between

undertake to present it to the respective bodies for ap-




Authority’s Board of Directors and Regional Council) sub-


ject to which the provisions of the agreement scheme, not strictly reserved to the jurisdiction of the Area Au-

GORI – Dispute over water supplies

thority’s General Meeting, are understood to be immedi-

In relation to the dispute with ARIN S.p.A., ., on 11 April

ately effective and binding.

2011, as a result of ruling no. 806/2011 of the Court of Na-

The agreement scheme makes provision for a significant

ples, GORI had already paid ARIN the sum of 3.1 million eu-

writing off of GORI’s debt to the Campania Region, whose

ros, with all the broadest privileges, whereas it has already

natural consequence is an almost equal reduction in the

contested said ruling under appeal. In this regard, it should

tariff adjustments accrued (as at 31 December 2011, a to-

be noted that the outcomes of the preliminary enquiry

tal of 147 million euros - Group share 54.5 million euros);

performed as part of the specific Services Conference

the agreement scheme also makes provision for the divi-

called by the Area Authority to regulate interdisciplinary

sion into instalments of the amount of debt recognised

interference in relation to the transfer of water resources,

in line with the recovery of residual tariff adjustments in

confirmed the arguments proposed by the companies

the Area Plan subject to review by the Area Authority.

against ARIN’s claims, also in legal proceedings. Signing of the aforementioned agreement, once apIn relation to the dispute with the Campania Region, ne-

proved by the competent bodies of the parties involved,

gotiations are underway to normalise relations, through

will allow GORI to guarantee the business continuity and

the definition of a plan to resolve the debt position, the

possibility of planning its own financial requirements on

definition of ordinary supply conditions and the subse-

the basis of the area plan forecast, once reviewed.

quent resolution of the ongoing dispute. In particular, in

Pending approval and signing of the aforementioned

confirmation of the negotiations underway, provision has

agreement, ACEA believes it appropriate to allocate, in

been made for an initial specific agreement between the

line with the amount set aside in the interim financial

Region and the Area Authority, which will see the sum of

statements, the amount of 44.1 million euros to cover the

5.3 million euros (equivalent of capital = 4.6 million euros

risk of recovery of tariff adjustments and financial risks.

plus legal interest accrued) split into instalments, in the form of an advance and while awaiting completion of the

Lastly, the Regional Administrative Court of Campania

aforementioned repayment plan to be devised as part of

- Naples, by means of ruling no. 6003/2011 issued fol-

the Area Plan review.

lowing the appeal against the injunction of the Commis-


333

sioner appointed for the Sarno River drainage basin so-


cial-economic-environmental emergency, ordered GORI


to pay the sum of 5.5 million euros. However, an appeal


is being prepared against said ruling before the Council

ated discussions was set for May 2012.

of State. ACEA Luce Antitrust Authority investigation of the

By means of deed notified on 7 February 2011, the com-

acquisition of Publiacqua

panies Manutencoop Facility Management (“MFM”) and

















Florence, it essentially.


• deemed that a horizontal agreement existed be-


tween ACEA and SUEZ in the integrated water ser-


vices sector, which is managed by a public-private


partnership in which the private partner is selected


via a tender process;


• ruled that the parties should take actions to avoid repetition of the sanctioned behaviour, with the Au-


thority to be notified of the nature of such actions


within 90 days, and also amend the rules governing


the partnership regarding the part deemed to be in


violation of competition regulations;


• ordered ACEA and SUEZ to pay fines of 8.3 million

334



euros and 3 million euros, (the difference in the


amounts derives from their respective turnovers in


the relevant sector in Italy).




















2008.












over 8 million euros for reservations.

by ACEA, payment by SMAIL of the amount due for the

The request is in and of itself indefensible due to the in-

above-mentioned supply, waiving of any additional claim

admissibility and ungrounded nature of the reservations,


since the counterclaim of ACEA - that filed a formal appearance before the court - will blame the temporary

E.ON Proceedings. E.ON. Produzione S.p.A.

consortium for the significant deficiencies in the building

proceedings launched against ACEA, ACEA Ato2

of the plant, which decreased its functionality.

and AceaElectrabel Produzione

The arbitration is currently underway, and the CTU has


just started.

S.p.A., as successor to ENEL regarding a number of concessions for the abstraction of public water from the


Peschiera water sources for electricity production, to

In ruling no. 6/10, TRAP (Regional Court of Public Waters)

obtain an order against the jointly and severally liable

accepted the request submitted by ACEA against the So-

defendants (ACEA, ACEA Ato2 and AceaElectrabel Pro-

cietà Abruzzese per il Servizio Integrato S.p.A. (SASI) for


the compensation for damages from the illegitimate with-













pears to be based on dubious grounds and, in any case, the early stage of the proceedings does not allow for


forecasts.


The only significant development of note is the decision of


the TRAP (Regional Court of Public Waters), before which


a ruling is pending regarding the matter in question, to


arrange for CTU (court-appointed expert) as regards the


values of subtension for branching off, and subsequent


reduction in hydroelectric production, and indemnities


due. The expert’s report shows a calculation according to


which the claims actioned in the proceedings, even when


unfounded - which is dubious, because the documents

sible in practice. In fact, firstly, the plaintiffs are lacking

containing the metering parameters of the compensation

legal standing, given bearers of only indirect and medi-

are still deemed to be applicable and effective - would

ated interests; in this regard, full reading of the text of

be greatly altered, substantially reducing the amount of

the contract invoked rules out burdening the companies

equalisation already estimated by the company.

in the ACEA Group with the obligation of assigning contracts and works to its subsidiary, an assignment which








its consideration.


335

Additional disclosures on financial instruments and risk management policies Classes of financial instrument The following table shows the breakdown of financial assets and liabilities required by IFRS 7 based on the categories defined by IAS 39. 31 December 11

Non-current assets

Financial instruments held for trading at fair value


Available-forsale financial instruments

Carrying amount

0

19,939

4,686

24,625

Other investments

4,686


18,033

Financial assets due from third parties Current assets

1,906 0

Trade receivables due from customers Trade receivables due from related parties

2,057,493

0

Other current assets: electricity and company-specific equalisation Other current assets: subsidiaries

18 20

1,906

20

2,057,493 1,304,691

23

167,445

167,445

23

0

23

710

710

23

18,310

18,310

23

37,876

37,876

23


123,732

123,732

23

Financial assets due from third parties: derivatives designated as hedges with changes recognised in shareholders’ equity (**)

34,672

34,672

23

0

23

49,036

49,036

23

321,022

321,022

23

Financial assets due from third parties: derivatives not designated as hedges with changes recognised in the income statement (**) Financial assets due from third parties Cash and cash equivalents TOTAL FINANCIAL ASSETS

336

4,686 18,033

1,304,691

Other current assets fair value measurement of contracts for difference and commodity swaps with changes recognised in shareholders’ equity (*) Other current assets: fair value measurement of contracts for difference and commodity swaps with changes recognised in the income statement (*)

Notes

0


2,077,432

4,686

2,082,118

31 December 11


Financial instruments held for trading

Liabilities at amortised cost

Carrying amount

0

2,298,917

2,298,917

Bonds Bank borrowings (non-current portion) Financial liabilities due to related parties

Notes

988,657

988,657

27

1,310,259

1,310,259

27 27

0

0

1,912,170

1,912,170

448,889

448,889

30

Payables due to third parties

18,379

18,379

30

Financial liabilities due to factoring companies

57,372

57,372

30

Financial liabilities due from third parties: derivatives designated as hedges with changes recognised in shareholders’ equity (**)

22,723

22,723

30

814

814

30

Current liabilities

0

Bank borrowings

Financial liabilities due from third parties: derivatives not designated as hedges with changes recognised in the income statement (**) Financial liabilities due to subsidiaries and associates Trade payables Trade payables due to the Parent Company, subsidiaries and associates Other current liabilities: fair value measurement of contracts for difference and commodity swaps with changes recognised in shareholders’ equity (*) Other current liabilities: fair value measurement of contracts for difference and commodity swaps with changes recognised in the income statement (*) TOTAL FINANCIAL LIABILITIES

0

16,005

16,005

30

1,184,975

1,184,975

30

159,810

159,810

30

2,705

2,705

30

498

498

30

4,211,087

4,211,087

(*) This refers to the fair value measurement of contracts to purchase or sell commodities that qualify for application of IAS 39, with changes recognised through the income statement or in shareholders’ equity. (**) This refers to interest rate swaps, with changes in fair value recognised in shareholders’ equity or through the income statement as shown in the table.


337

Fair value of financial assets and liabilities

ACEA’s Internal Control System and with the Risk Man-

The fair value of financial instruments that are not

Risk analysis and management is performed accord-

traded in an active market is determined using valua-

ing to a Risk Management process which involves the

tion models and techniques that make maximum use of

execution of activities throughout the entire year, on

market inputs or using the price supplied by a range of

the basis of different frequencies (annual, monthly and

independent counterparties.

weekly). These activities are shared between the Risk

The fair value of medium/long-term financial assets and

Control and Energy Management units.

liabilities is calculated on the basis of the risk-free and

In particular:

the adjusted risk-free interest rate curves.

agement Manuals of ACEA’s Energy Industrial Area.

• on an annual basis, measurements of risk indica-

The fair value of trade receivables and payables falling

tors, i.e. limits, must be defined, which must be

due within twelve months is not calculated as their car-

complied with in the management of the portfolio.

rying amount approximates to fair value.

These activities are the responsibility of the Risk

In addition, fair value is not calculated when the fair

Committee which approves the Risk Control pro-

value of financial assets and liabilities cannot be objec-

posal.

tively determined.

• On a monthly basis, the Risk Control Unit is required to check the portfolio’s exposure to risk

Type of financial risks and related hedging policies

and check compliance with the limits defined. As

The ACEA Group’s activities expose it to a variety of fi-

Control Unit is responsible for sending ACEA’s In-

nancial risks, including interest rate and price risk.

ternal Audit Department the required information

The Group uses derivative instruments to hedge certain

in the proper format.

required by the Internal Control System, the Risk

risk exposures, whilst such derivative or similar instruments are not generally used or held solely for trading

The risk limits of the Energy Industrial Area are defined

purposes.

in such a way as to: • minimise the overall risk of the entire area,

Foreign exchange risk

• guarantee the necessary operating flexibility in trading and hedging activities,

The Group is not particularly exposed to this type of risk, which is concentrated in the translation of the fi-

• reduce the possibility of over-hedging deriving

nancial statements of its overseas subsidiaries.

from the variation in expected volumes for the

As regards the 20 billion yen private placement, the

definition of hedges.

exchange rate risk is hedged through a cross currency

Market risk is distinguished from price risk, i.e. the risk

swap described in the section on interest rate risk.

related to the variation in commodity prices, and volume risk, i.e. the risk connected with the variation in

Market risk

volumes produced and sold.

The Group is exposed to market risk, represented by the risk that the fair value or future cash flows of a financial

Risk analysis and management objectives are as fol-

instrument fluctuate as a result of market price move-

lows:

ments, above all in relation to the risk of movements in the prices of commodities in which the Group trades.

reduction of volatility,

Acea Energia Holding, through the Risk Control Unit,

• to protect the primary margin against unforeseen

ensures the analysis and measurement of exposure to

and unfavourable short-term shocks in the energy

market risks, interacting with the Energy Management

market which affect revenues or costs,

Unit and Acea Energia, in line with the guidelines of

338

• to protect the primary margin, also through the


• to stabilise the primary margin in the time neces-

sary to re-adjust activities in line with permanent

pany drafts specific documentation demonstrating the

changes in the energy market,

prospective effectiveness of the hedge. This is done

• to identify, measure, manage and represent the ex-

via simulation of what are assumed to be representa-

posure to risk of all ACEA operating companies in

tive movements in the forward price curve for the re-

the Energy Industrial Area,

spective indices, and the related comparison between

• to reduce risks through the preparation and appli-

movements in the fair values of the actual and hypo-

cation of adequate internal controls, procedures,

thetical derivative instruments, where the latter rep-

information systems and expertise,

resents a derivative financial instrument with contract

• delegate risk owners with the job of defining the

terms matching those applicable to the physical con-

necessary strategies for hedging individual risks, in

tract. Power portfolio transactions qualify as effective

respect of pre-established minimum and maximum

when the hedging relationship, calculated on the basis

levels,

of the ratio in absolute terms of movements in the actual derivative instrument and those in the hypothetical

The evaluation of risk exposure involves the following

derivative instrument, lies within a range of 80%-125%,

activities:

as defined by IAS 39. The retrospective and prospective

• aggregation of commodities and architecture of risk books,

effectiveness test applied to these transactions at the end of the year confirmed the hedging relationship.

• identification of hedging markers, decomposition of positions, restructuring on the basis of hedging

However, should the derivative instrument, at the time

markers and insertion of restructured positions in

of execution, be designated as a hedge of purchases of

risk books,

electricity in the form of contracts for difference (CFD),

• evaluation of basis risk, or the natural risk deriv-

the company does not prepare specific documentation

ing from imperfect hedging of lower level hedging

demonstrating the effectiveness of the hedge. In fact,

markers,

the Group treats CFDs as financial instruments, which

• creation of reference scenarios (prices, indexes),

are activated when the relevant contractual condition

• evaluation of commercial proposals which modify

is met, i.e. when at a certain hour of a certain day the

the risk profile.

price on the electricity exchange is higher or lower than the strike price (reference parameter). As a result, these

Derivative transactions are entered into for the purpose

transactions do not qualify as contracts that may be de-

of hedging the risk of fluctuations in commodity prices

fined as hedging physical underlying transactions pur-

and in compliance with the provisions of Risk Manage-

suant to IAS 39.

ment Manuals for the Energy Industrial Area.

With reference to said contracts, the economic man-

As regards the commitments undertaken, for the com-

agement of market risk, and the associated accounting

ing year, the main goal of all Group financial transactions

effects are guaranteed by the fact that both contracts,

is cash flow hedging: stabilising cash flows in relation

in the case of both CFDs and derivative instruments, are

to the composition of its sale and purchase portfolio.

measured at fair value with the fair value differences

The financial instruments used fall under swaps and

recorded in the income statement. The fair value of the

contracts for difference (CFD). It should be noted that

CFDs at the end of the year was a positive 561 thou-

the hedges effected on the purchases portfolio were

sand euros.

conducted with the leading operators in the financial market.

Following the dissolution of the joint venture with GdfSuez Acea, Energia Holding started the process of re-

Acea Energia Holding designates the hedge in respect

building Energy Management activities and the associ-

of commitments to buy and sell electricity. The com-

ated risk control and management activities. At present,


339

the situation does not permit an accurate quantification

sets in the hedge. The remaining financial instruments

of unfavourable events such as the effects of a stress

not accounted for under hedge accounting, despite not

sensitivity analysis on the portfolio falling under IAS 39.

fully satisfying the requirements of IAS 39 for hedge ac-

However, compared to the position at 31 December

counting (cash flow hedge), are however, exposed to

2010, the ACEA Group recorded a significant change

risk factors in contrast to those affecting physical port-

in derivative transactions, both in terms of values and

folios for purchase/sale, in such a way as to balance

complexity. For example, as at said date, a speculative

their potential variations with a view to “operational”

commodity trading portfolio was not re-established.

hedging in line with company guidelines.

In addition, the portfolio of financial instruments accounted for under hedge accounting, which represents

Shown below is all the information necessary for the

the main component of the entire portfolio, is perfectly

description of transactions entered into, aggregated by

balanced in terms of the risks from the underlying as-

index hedged with validity effective as of 1 January 2012.

Swap

Purpose

Purchases/Sales

Fair Value

Amount to shareholders’ equity

Amount to income statement

ITRemix

Hedge power portfolio

electricity purchase/sale

(2,161)

(1,650)

(511) 13

GRP901



(368)

(380)

GRP903



(85)

(85)

0

ITEC



(590)

(590)

(0)

PUN



572

0

572

PNX



(0)

0

(0)

EEX



(10)

0

(10)

(2,642)

(2,705)

63


In March 2009, the IASB issued an amendment to IFRS

It should be noted that, as regards the types of commod-

7, introducing a series of changes aimed at adequate-

ity whose fair value is calculated,

ly meeting the need for greater transparency resulting

• for derivatives on single commodities (PUN - unique

from the financial crisis and linked to elevated uncer-

national price - standard base load products, Peak/

tainty over market prices. These changes included the

Off Peak, …) the fair value level is 1 given they are

establishing of the fair value hierarchy. In particular, the amendment defines three levels of fair value (IFRS 7, parag. 27A): • level 1: if the financial instrument is listed on an active market;

ucts, ….) the fair value level is 2 given these derivatives are the result of formulas containing a mix of commodities listed on active markets.

• level 2: if the fair value is measured using evalua-

• For certain components of complex indexes, the

tion techniques that assess parameters, other than

fair value level is 3 as they do not derive from list-

listings of the financial instrument, observable from

ing on active markets but, instead, estimates.

the market; • level 3: if the fair value is calculated using evaluation techniques that assess parameters not observable on the market.

340

listed on active markets, • for complex indexes (ITRemix, PUN profiled prod-


Liquidity risk

The abundance of lines (committed and revocable) al-

ACEA SpA’s liquidity risk management policy is based on

lowed the parent company to handle temporary increas-

ensuring the availability of significant bank lines of credit.

es in short-term requirements with no impact on opera-

Such facilities exceed the average requirement neces-

tions.

sary to fund planned expenditure and enable the Group

At the end of the year, ACEA had loans - term deposits

to minimise the risk of extraordinary outflows. In order

and similar transactions - totalling 79.2 million euros in

to minimise liquidity risk, the ACEA Group has adopted

place.

a centralised treasury management system, which includes the most important Group companies, and pro-

With reference to some water companies operating in

vides financial assistance to the companies (subsidiaries

Tuscany and Campania it should be pointed out that:

and associates) not covered by a treasury management

• Publiacqua renewed the bridge loan of 60 million

contract.

euros taken out in August 2008 which expired in

As at 31 December 2011, the Parent Company held com-

August 2011. The renewal was made for a further

mitted and uncommitted lines of credit totalling 1,061 million euros and 400 million euros respectively. No guar-

15 months, • Gori: a process is currently underway for the re-

antees were issued to obtain said credit lines.

newal and medium-term and restructuring of the

The committed lines of credit are revolving with a three-

bridge loan of 40 million euros maturing in June

year term from subscription. A total of (i) 100 million eu-

2011,

ros of said credit lines is available until December 2012

• Acquedotto del Fiora signed an extension of the

and (ii) the remainder is available until the first quarter of

bridge loan for a further eighteen months (expiry:

2013; the contracts entered into provide for the payment

September 2013) and obtained an increase of 12.8

of a fee for non-use (minimum of 0.28% - maximum of

million euros, increasing the loan to 92.8 million

0.35% per annum) plus an upfront fee paid at the time

euros.

the credit lines are opened. On the amounts drawn down, ACEA pays an interest rate equal to the one, two, three or six month Euribor (depending on the period of use chosen beforehand), plus a spread which, in some cases, may vary in line with the rating assigned to the Parent Company. Furthermore, as at 31 December 2011, it should be noted that ACEA has a medium/long-term committed credit line of 100 million euros in place, stipulated in September 2009, which has not been used as at the close of the financial year. At the time of drafting this document, the aforementioned line was entirely used (i.e. 100 million euros) in order to optimise the management of short-term lines at the start of 2012, given the date for requested disbursement was also set for September 2012; the company chose to apply a floating rate with repayments made in six-monthly instalments, the first of which must be paid no later than the fourth year and the last no later than the fifteenth year from the disbursement date.


341

The graph below depicts the future development of total cash flows based on the situation at the end of the year.

2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 –250 2011

2012

2013

2014

2015

2016

2017

2018

2020

2021

2022

2023

2024

2025

2026

2027

Interest rate risk

shows that the risk the ACEA Group is exposed to is

The ACEA Group’s approach to managing interest rate

mainly in the form of fair value risk, composed as at 31

risk, which takes account of the structure of assets and

December 2011 of fixed rate borrowings (64.7%). With

the stability of the Group’s cash flows, has essentially

reference to the current portfolio make-up, the Group is

been targeted, up to now, at hedging borrowing costs

partly exposed to the risk of fluctuation in future cash

and stabilising cash flows, in such a way as to safeguard

flows and, by contrast, to a greater extent than changes

margins and ensure the certainty of cash flows deriving

in fair value.

from ordinary activities.

Given the current mix of fixed and floating rate debt

The Group’s approach to managing interest rate risk is,

and also taking account of the trend in market interest

therefore, prudent and the methods used tend to be

rates in a predominantly recessionary macroeconomic

static in nature.

phase, essentially not due to sudden rises, an increase

A static (as opposed to a dynamic) approach means

in the percentage of medium-term floating rate debt

adopting a type of interest rate risk management that

is not ruled out, which would make it possible to take

does not require daily activity in the markets, but peri-

advantage of lower short-term rates, thus partially con-

odic analysis and control of positions based on specific

taining the sharp rise in spreads as a result of notable

needs. This type of management therefore involves daily

events linked to the worsening in guaranteed returns

activity in the markets, not for trading purposes but in

on the debt of certain sovereign European states, in-

order to hedge the identified exposure over the medium/

cluding Italy.

long term.

ACEA is bringing consistency to its decisions regarding

ACEA has, up to now, opted to minimise interest rate risk

interest rate risk management that essentially aims to

by choosing a mix of fixed and floating rate debt instru-

both control and manage this risk and optimise borrow-

ments.

ing costs, taking account of stakeholder interests and

As previously noted, fixed rate debt protects a borrower

the nature of the Group’s activities, and based on the

from cash flow risk in that it stabilises financial outflows,

prudence principle and best market practices. The objec-

whilst heightening exposure to fair value risk in terms of

tives of these guidelines are as follows:

changes in the market value of the debt. In fact, an analysis of the consolidated debt position

342

2019


• to identify, from time to time, the optimum mix of fixed and floating rate debt,

• to pursue a potential optimisation of the Group’s

• ACEA has:

borrowing costs within the risk limits established

- swapped the 100 million euro loan obtained on

by governance bodies and in accordance with the

27 December 2007 for a fixed rate. The swap, a

specific nature of the business,

plain vanilla IRS, was stipulated on 24 April 2008,

• to manage derivatives transactions solely for

effective as of 31 March 2008 (date of draw-

hedging purposes, should the Group decide to use

down of the underlying loan) and expires on 21

them, in respect of the decisions of the Board of

December 2021,

Directors and, therefore, the approved strategies

- completed a cross currency transaction to

and taking into account (in advance) the impact on

transform to euro – through a plain vanilla DCS

the income statement and balance sheet of said

swap – the currency of the private placement

transactions, giving preference to instruments that

(yen) and the yen rate applied to a fixed euro

qualify for hedge accounting (typically cash flow hedges and, under given conditions, fair value

rate through a plain vanilla IRS swap, • Umbra Acque swapped a medium/long term loan for a fixed rate.

hedges).

All the derivative instruments taken out by ACEA listed The Group currently uses derivative instruments to

above are non-speculative and the total fair value of

hedge interest rate risk exposure for the following com-

these was a negative 10.9 million euros and a positive

panies:

34.7 million euros respectively.

• Acque has swapped the interest rate on 80% of the loan obtained at the end of 2006 for a fixed

The fair value of medium/long-term debt is calculated on

rate. The company executed two different swap

the basis of the risk-free and the risk-adjusted interest

contracts with the same notional value,

rate curves.

Bank Loans:

Amortised cost

RISK-FREE FV


RISK ADJUSTED FV


(A)

(B)

(A)-(B)

(C )

(A)-(C )

Bonds

988,657

1,026,472

(37,814)

1,027,766

(39,109)

fixed rate

411,930

471,498

(59,568)

435,906

(23,976)

floating rate

706,174

743,791

(37,617)

720,819

(14,645)

floating rate to fixed rate

266,509

244,949

21,560

244,989

21,520

2,373,271

2,486,710

(113,439)

2,429,481

(56,210)

Total amounts in thousands of euros

Sensitivity analysis has been carried out on medium/long-

Constant spread applied

Movements in Present Value

a constant spread over the term structure of the risk-free

-1.50%

(145.7)

interest rate curve (for the Euro area at 31 December 2011).

-1.00%

(94.9)

term financial liabilities using stress testing, thus applying

The following table shows overall movements in terms of the fair value of liabilities based on parallel shifts (positive and negative) between –1.5% and +1.5%.

-0.50%

(46.4)

-0.25%

(22.9)8

0.00%

0.0

0.25%

22.5

0.50%

44.5

1.00%

87.1

1.50%

127.9

amounts in millions of euros


343

As regards the type of hedges for which the fair value is

or knowledge of the individual reseller through the con-

calculated and with reference to the hierarchies required

stant analysis of payment attitudes/habits and is sub-

by the IASB, given they are composite instruments, they

sequently implemented through a series of targeted

are categorised as level 2 in the fair value hierarchy.

actions ranging from phone collection activities carried out in-house, remainders sent electronically, sending of notice letters via registered post, as provided under res-

Credit risk

olution ARG/elt 4/08, to termination of the transportation

ACEA issued credit policy guidelines which identified

contract.

different strategies in line with the customer centric approach: through flexibility criteria and on the strength of

As regards sales of electricity, credit risk was meas-

the activities managed, as well as customer segmenta-

ured beforehand, especially in relation to the sale of gas

tion, credit risk is managed by taking into account both

and electricity to industrial and business customers.

the customer type (public or private) and the non-uniform

The activity was performed in accordance with Credit Risk

behaviour of individual customers (behavioural scores).

Policy Manual rules, through an in-house process involv-

The key principles on which the risk management strate-

ing the evaluation of credit reliability, assignment of an

gies are based are as follows:

internal rating and recognition of the maximum limits of

• definition of the customer cluster categories through

financial exposure to the counterparty.

the abovementioned segmentation criteria; • standard cluster management in ACEA Group companies, based on the same risks and commercial

Customer evaluation

characteristics, of defaulting end users;

For Acea Energia, credit risk management is differentiated

• collection methods and instruments used;

based on discriminating factors of customer segment (in-

•➢ uniformity of standard criteria regarding the applica-

dustrial, business, retail, domestic) and customer category

tion of default interest;

(prospect, contract stipulated).

• division into instalments of credit;

In the case of offers from the industrial or business seg-

•➢ definition of the necessary responsibilities/authori-

ment with contractual values higher than a set amount

sations for any exceptions. •➢ adequate reporting and training of dedicated staff.

and/or credit equivalent threshold (maximum potential credit exposure), for all counterparties, Acea Energia personnel must ask the Risk Control Unit to perform an

With regards to electricity distribution activities the

assessment of the customer/counterparty. An in-depth

wholesalers represent credit risk: billing of the latter re-

report drawn up by a company with expertise in risk as-

lates to the transportation of electricity on the distribution

sessment may be attached to said request.

network and services performed for end customers.

The assessment is carried out through the following types

The key principles on which the credit risk management

of analysis:

strategies are based are as follows: • homogeneous management of sellers’ receivables, deemed of equal risk, • uniformity of standard criteria for the application of default interest; • mitigation of credit risk through the signing of a guarantee by sellers;

- commercial (segment, country, company) - corporate (strategic, management evaluation, transparency) A judgment on the level of risk is provided for each level of analysis. The overall customer rating is also provided; this identi-

• adequate monitoring through credit ageing reporting;

fies the unsecured credit limit. In the event said unse-

• training of dedicated staff.

cured credit limit is exceeded with respect to the credit

Credit management starts with the “behavioural score”

344

- financial (asset, profitability, cash flow)


equivalent limit, this is provided for in a contract except in

the case of obtainment of specific credit hedges (gener-

increase in the expenses incurred by the customer.

ally bank or corporate guarantees), indicated by the Risk

As regards credits relating to utility services discontinued

Control Unit at the time of transmission of the evaluation

for a total amount lower than 20,000 euros, two months

outcome, or authorisation by the Risk Committee.

after the end of services, the job of recovering the credit

In the case of offers from the industrial or business seg-

by extra-judicial means is entrusted to specialised credit

ment with contractual values lower than a set amount

recovery agencies. Where cases are closed unfavourably

and/or credit equivalent threshold, a risk evaluation is re-

by the recovery agencies, procedures are launched for

quested from specialised companies.

recovery by legal means where it is deemed to be eco-

For each request, the rating agency indicates the rating,

nomically advantageous.

which corresponds to a judgment of reliability which can

A lodgement of claims is carried out for bankrupt

be very high, high, average or high risk. Based on the rat-

customers.

ing, a decision is taken on whether or not to request the issue of a guarantee. In extreme cases no contract is stip-

With regards to the supply of water, the implementa-

ulated with the customer.

tion of credit risk management strategies started with a macro-distinction between public sector end users (municipalities, public administrations, etc.) and private sec-

Credit Recovery

tor end users (industrial, commercial, condominium, etc.),

For customers in the industrial area, in the event of non-

given that said categories present different levels of risk,

payment a few days after expiry of the invoice, a reminder

in particular:

letter is sent out to the customer, followed by telephone contact. If the payment delinquency persists, a letter of default is sent and, if payment or a proposed repayment plan has not been received from the customer a further

• low risk of insolvency and high risk of late payment for public sector end users • variable risk of insolvency and late payment risk for private sector end users

5 days after delivery of said letter, a request is made to

As regards credits due from public sector end users, they

the distributor for suspension through default. Six months

are converted to cash through the without-recourse fac-

after expiry of the first invoice, the case is passed to an ex-

toring to financial partners and a residual portion is man-

ternal legal office that proposes a repayment plan to the

aged directly through the offsetting of receivables/paya-

customer; if an agreement is not reached or in the event

bles or by means of settlement agreements.

of non-compliance with the plan, the legal office proceeds

Credit management for private sector end users starts

with the coercive recovery of the credit with a subsequent

with behavioural scores or “knowledge in terms of the

increase in costs and fees for the customer.

probability of default of each individual customer through

In the case of Business and Retail segment customers:

the constant analysis of payment attitudes/habits”, and is

- A reminder letter is sent twenty days after the invoice expiry; - A registered letter of default and a notice of suspen-

subsequently implemented through a series of targeted actions ranging from reminder letters, assignment to specialised companies for credit recovery via phone collec-

sion of supply are sent forty days after the invoice

tion, to detachment of the defaulting end users.

expiry;

The water area is also characterised by a significant

- Distributors are asked to suspend supply;

amount of invoices to be issued which are determined by

- The Supply Contract is resolved.

the characteristics of the business.

As regards credits relating to utility services discontinued for a total amount exceeding 20,000 euros the customer is placed in default by registered letter. If payment delinquency persists, procedures are launched for the recovery of the credit by legal means with, if necessary, an


345

The following table summarises the different types of receivable described in Note 22 – Trade receivables.

Situation at 31 December 2011

Total receivables

Due

Past-due for >

0-30 days

30-90 days

90-180 days

over 180 days

775,595

5,043

3,758

2,391

1,145

118

105

8,801

5,043

3,758

2,391

1,145

118

105

Current assets Outstanding amounts due from customers (A + B)

1,168,216

Total amounts due from customers (A + B + C)

1,018,825

End users for bills issued: (A) Networks Energy Energy Generation Sales

472,634 1,398

701

697

151

140

384

23

471,235

190,443

280,792

22,185

70,653

33,335

154,620

Engineering and services

0

0

Water

294,160

Lazio-Campania

237,233

58,236

178,997

13,722

13,927

24,520

126,827

Tuscany-Umbria

56,927

11,039

45,889

9,730

7,165

3,985

25,008

Environment and Energy

0

Corporate

0

End users for bills to be issued: (B) Networks Energy

392,621

Sales

0

0 0 392,621

23,042

23,042

164,443

164,443

Energy Generation

0

0

164,443

164,443


0

0

Water

205,136

205,136

Lazio-Campania

173,163

173,163

Tuscany-Umbria

31,973

31,973


0

0

Corporate

0

0

Provisions for impairment of receivables: (C) Networks Energy

(149,391) (3,916) (85,416)

Energy Generation Sales

0 (85,416)


346

0

0

Water

(60,059)

Lazio-Campania

(47,813)

Tuscany-Umbria

(12,246)


0

Corporate

0


Situation at 31 December 2011

Total receivables

Due

Past-due for >

0-30 days

30-90 days

90-180 days

over 180 days

Current assets Outstanding amounts due from customers (A + B)

330,359

Total amounts due from customers (A + B + C)

285,866

End users for bills issued: (A)

239,103

11,660

159,981

7,537

40,380

12,636

99,427

Networks

55,658

3,604

52,054

496

26,776

1,208

23,574

Energy

19,896

Energy Generation Sales Engineering and services

0

438

438

0

19,458

318

19,140

13,089

932

3,236

1,883

1,786

0

1,786

28

247

49

1,462

157

3,491

32,836

484

323

3,798

Water

47,567

Lazio-Campania

37,078

594

36,484

0

Tuscany-Umbria

8,262

2,075

6,186

1,582


2,228

460

1,768

920

487

361


55,674

7,230

48,444

6,937

11,569

10,474

19,464

Corporate

58,523

827

57,696

76

1,788

905

54,927

91,256

91,256

End users for bills to be issued: (B) Networks

18,802

18,802

Energy

42,325

42,325

7,863

7,863

34,463

34,463

Energy Generation Sales Engineering and services

420

420

Water

20,463

20,463

Lazio-Campania

12,430

12,430

Tuscany-Umbria

3,898

3,898


4,134

4,134


5,513

5,513

Corporate

3,731

3,731

Provisions for impairment of receivables: (C) Networks Energy Energy Generation Sales Engineering and services Water

(44,493) (1,137) (982) 0 (982) (566) (17,520)

Lazio-Campania

(8,898)

Tuscany-Umbria

(8,420)


(202)


(935)

Corporate

(23,354)


347

Commitments and contingencies

(37,027 thousand euros); • 50,000 thousand euros in favour of Acea Energia

Corporate liens, sureties and guarantees

and in the interests of Enel Distribuzione S.p.A.

These amounted to 377,039 thousand euros. Worthy of

electricity;

mention are:

as a back-to-back guarantee for the transport of • 68,277 thousand euros to Acquirente Unico (Sole

• 425 thousand euros for the back-to-back guaran-

Buyer) and in the interest of Acea Energia S.p.A. as

tee issued for Acea Energia Holding for the new

a back-to-back guarantee relating to the electric-

office lease contract;

ity sale contract signed by the parties;

• 38,387 thousand euros for the bank guarantees

• 5,936 thousand euros issued by insurance insti-

issued by Acea Energia, mostly in favour of Terna

tutions on behalf of Aria SpA to the Umbria Re-

relative to the electricity dispatch service con-

gion (1,320 thousand euros) as guarantee for the

tract;

authorisation of the management of the Paliano

• 53,666 thousand euros in the form of a bank guar-

plant and the Lazio Region (3,829 thousand euros)

antee issued by ACEA to Cassa Depositi e Pres-

for exercising authorisations on the I and II lines of

titi in relation to refinancing of the loan issued to

the San Vittore del Lazio plant;

ACEA Distribuzione. This is a sole guarantee giving

• 17,158 thousand euros issued by insurance insti-

the lender first claim and covering all obligations

tutions on behalf of SAO in favour of the Province

linked to the original loan (493 million euros). The

of Terni for the management of landfill operations

sum of 53,666 thousand euros refers to the guar-

and post-closure operations (12,166 thousand eu-

anteed portion exceeding the loan originally dis-

ros) and waste disposal (3,157 thousand euros).

bursed (439 million euros); • a surety of 7,747 thousand euros issued by ACEA

It should be noted that the guarantee of 2,884 thou-

Ato2 to the Area Authority, guaranteeing the cor-

sand euros issued in the interest of Acea Ato5 re-

rect fulfilment of the obligations undertaken as

quired by art. 31 of the Technical Regulations, issued

part of the concession agreement. This surety

by Banca di Roma, in favour of the Authority for Ato5

runs out on 6 August 2007 and is renewable;

– Southern Lazio, was eliminated. On 1 June 2011, on

• a surety of 3,425 thousand euros issued by ACEA

the basis of the assumption that the Operator commit-

with regard to the selection of a partner for Publi-

ted breach with respect to the payment of concession

acqua in the municipality of Florence;

fees, the Area Authority requested that UniCredit Cor-

• 1,471 thousand euros issued by ACEA to Aquaser to guarantee the credit line granted to Solemme;

348

porate & Investment Banking enforce the cautionary deposit provided by ACEA Ato5 through the “immedi-

• 3,783 thousand euros issued in favour of ARIA

ate payment of 2,843,622.02 euros, which equals the

SPA, which replaced EALL following the merger

amount of the guarantee provided, to partially recover

by incorporation on 1 August 2011, to Terna as a

concession fees that, as of today, have not been paid”

guarantee for the hedging of direct and indirect

and also requested the automatic and immediate re-

risks and charges deriving from works that the lat-

covery of said cautionary deposit. As a result of the re-

ter will have to carry out for the connection to the

jection of the appeal submitted by the company to the

national grid of the San Vittore del Lazio waste-to-

Regional Administrative Court of Lazio for cancellation

energy plant;

of the provision of enforcement of the surety policy,

• 46,185 thousand euros to the Inland Revenue,

Unicredit issued a communication on 14/12/2011 to the

to guarantee the splitting into instalments of the

effect it had paid the Area Authority the enforced sum,

sums due as a result of tax settlements of Acea


Energia (9,158 thousand euros) and ACEA S.p.A.

said surety be returned. Given the illegitimate grounds,


shown in the court acts, for enforcement of the surety set out by the President of AATO and the risk of future repeated, groundless and arbitrary enforcements, the company decided not to proceed, while awaiting the definitive decisions of the Commissioner for deeds, with re-establishing the underlying guarantee. Sureties issued also include those issued by ACEA to Sidra S.p.A., totalling 6,830 thousand euros, in relation to a contract to carry out a “Project to repair water leaks in the Catania distribution network” and sureties amounting to 5,165 thousand euros issued to the Sarnese Vesuviano Area Authority in order to take part in the tender process to select a partner to take an interest in G.O.R.I. S.p.A.


349

annexes A. List of consolidated companies B. Reconciliation of shareholders’ equity and net profit – consolidated C. Remuneration of Directors, Statutory Auditors and Key Managers D. Information provided pursuant to CONSOB Ruling no. 6064293 E. Segment information: balance sheet and income statement F. Financial Highlights of Companies accounted for under Proportionate Consolidation G. List of significant investments at 31 December 2011 - art. 120, paragraph 4, Legislative Decree no. 58/98

Consolidated Financial Statements at 31 December 2011

A. List of consolidated companies

352

Name

Registered office

Share capital

% interest

Group’s consolidated interest


ACEA Distribuzione S.p.A. ACEA Ato2 S.p.A.

P.le Ostiense, 2 - Rome

345,000,000

100.00%

100.00%

Line-by-line


362,834,320

96.46%

100.00%

Line-by-line

Acea Reti e Servizi Energetici S.p.A.


300,120,000

100.00%

100.00%

Line-by-line

Acque Blu Arno Basso S.p.A.


8,000,000

69.00%

100.00%

Line-by-line

Acque Blu Fiorentine S.p.A.


15,153,400

69.00%

100.00%

Line-by-line

Ombrone S.p.A.


6,500,000

84.57%

100.00%

Line-by-line

LaboratoRI S.p.A.

Via Vitorchiano – Rome

2,444,000

100.00%

100.00%

Line-by-line

ACEA Ato5 S.p.A.

Viale Roma - Frosinone

120,000

94.48%

100.00%

Line-by-line

Sarnese Vesuviano S.r.l.


6,735,053

95.79%

100.00%

Line-by-line

CREA S.p.A.


2,678,958

100.00%

100.00%

Line-by-line

Crea Gestioni S.r.l.


100,000

100.00%

100.00%

Line-by-line

Gesesa S.p.A.

Z.I. Pezzapiana - Benevento

520,632

59.67%

100.00%

Line-by-line

Lunigiana S.p.A.

Via Nazionale 173/A – Aulla (MS)

750,000

95.79%

100.00%

Line-by-line

Aguaazul Bogotà S.A. Esp

Bogotà- Colombia

1,516,174

51.00%

100.00%

Line-by-line

Acea Dominicana

Santo Domingo

644,937

100.00%

100.00%

Line-by-line

ARIA S.p.A.

Via g. Bruno 7- Terni

2,224,992

100.00%

100.00%

Line-by-line

S.A.O. S.p.A.

Piazza del Commercio no. 21 - Orvieto

7,524,400

100.00%

100.00%

Line-by-line

Ecoenergie S.r.l.

Via San Francesco d'Assisi 15 C Paliano (FR)

10,000

90.00%

100.00%

Line-by-line

Aquaser S.r.l.

Via dei Sarti, 15 – Volterra (PI)

3,050,000

84.21%

100.00%

Line-by-line

Kyklos S.r.L

Via Ferriere – Nettuno n. km 15 Aprilia (LT)

500,000

51.00%

100.00%

Line-by-line

Solemme S.p.A.

Località Carboni in Monterotondo Marittimo (GR)

761,400

100.00%

100.00%

Line-by-line

Acea8cento S.p.A.


120,000

100.00%

100.00%

Line-by-line

Consorzio Acea Ricerca e Perdite


10,000

67.00%

100.00%

Line-by-line

Acea Gori Servizi Scarl

Via ex Aeroporto s.n.c. località Area "Consorzio Sole" - Pomigliano d'Arco

1,000,000

69.82%

100.00%

Line-by-line

Acea Illuminazione Pubblica S.p.A.


120,000

100.00%

100.00%

Line-by-line

Acea Produzione S.p.A.



Via dell’Aeronautica, 7 – Rome

Acea Energia S.p.A. Acea Servizi Acqua S.r.l.

5,000,000

100.00%

100.00%

Line-by-line

153,500,000

100.00%

100.00%

Line-by-line


45,000,000

100.00%

100.00%

Line-by-line


10,000

70.00%

100.00%

Line-by-line

Acque Blu S.r.l.

Via U.Bassi, 34 - Montecatini Terme

10,000

55.00%

100.00%

Line-by-line

Innovazione Sostenibilità Ambientale S.r.l.

Via Ravano K.m. 2,400 - Pontecorvo (FR)

91,800

40.00%

100.00%

Line-by-line


Name

Registered office

Share capital (in Euro)

% interest

Group’s consolidated interest


Acque S.p.A.

Via Bellatalla, 1- Pisa

9,953,116

45.00%

45.00%[1]

Proportionate Proportionate

Acque Industriali S.r.l.


100,000

100.00%

45.00%[2]

Acque Servizi S.r.l.


400,000

100.00%

45.00%4

Proportionate

Consorcio Agua Azul

Los Pinos 399 – 27 Lima - Peru

17,380,827

25.50%

25.50%

Proportionate

Umbria Energy S.p.A.

Via B. Capponi, 100- Terni

1,000,000

50.00%

50.00%[3]

Proportionate

Voghera Energia Vendita S.p.A.

Largo Toscanini, 5 – Voghera (PV)

250,000

50.00%

50.00%5

Proportionate

Elga Sud S.p.A.

Via Montegrappa, 6 – Trani

250,000

49.00%

49.00%5

Proportionate Proportionate

Ecogena S.p.A.


1,000,000

51.00%

51.00%[4]

Ecomed S.r.l.


50,094

50.00%

50.00%

Proportionate

Publiacqua S.p.A.

Via Villamagna 90/c - Florence

150,280,000

40.00%

40.00%[5]

Proportionate

Publiutenti S.r.l.

Via Villamagna 90/c - Florence

100,000

100.00%

40.00%[6]

Proportionate

GORI S.p.A.

Via Dante, 1 – Torre Annunziata

44,999,971

37.05%

37.05%[7]

Proportionate

Umbra Acque S.p.A.

Via G. Benucci, 162 (PG)

15,549,889

40.00%

40.00%

Proportionate

A.P.I.C.E S.r.l.


200,000

50.00%

50.00%

Proportionate

Intesa Aretina Scarl.

Via F. Petrarca, 22A - Milan

18,112,000

35.00%

35.00%

Proportionate

Nuove Acque S.p.A.

Loc. Cuculo - Arezzo

34,450,389

46.16%

16.16%[8]

Proportionate

Ingegnerie Toscane S.r.l.

Via Bellatalla,1- Florence

100,000

43.01%

43.01%

Proportionate

CONSORCIO AZB-HCI (Conazul)

Cal. 21 Nro. 751- San Sidro Lima-Peru

750,786

60.00%

60.00%

Proportionate

Acquedotto del Fiora S.p.A.

Via Mameli, 10 Grosseto

1,730,520

40.00%

40.00%[9]

Proportionate

The following companies are consolidated using the equity method: Name

Registered office

Share capital (in Euro)

% interest

SI(E)NERGIA S.p.A.

Str. S.ta Lucia 1/ter – Perugia

132,000

42.08%

Cesap Vendita Gas S.p.A.

Str. S.ta Lucia 1/ter – Perugia

80,000

42.08%

Azga Nord S.p.A.

P.zza Repubblica – Pontremoli (Massa Carrara)

Geal S.p.A.

Viale Leporini, 1348 - LUCCA

Sogea S.p.A.

Via Mercatanti, 8 - RIETI

Aguas de San Pedro SA

Las Palmas, 3 - San Pedro (Honduras)

Umbriadue Servizi Idrici scarl

Strada Sabbione ona ind. A72 - TERNI

100,000

34.00%

Dyna Green S.r.l.

V.le Bianca Maria 24 - Milan

30,000

33.00%

Coema


10,000

33.50%

AMEA S.p.A.

Via San Francesco d'Assisi 15 C -Frosinone

2,635,000

33.00%

Arkesia S.p.A.

Via San Francesco d'Assisi 17 C -Frosinone

170,827

33.00%

Citelum Napoli Pubblica

Via Monteverdi, 11 Milano

90.000

32,18%

217,500

49.00%

1,450,000

28.80%

260,000

49.00%

6,162,657

31.00%

Illuminazione scarl

Via Monteverdi, 11 - Milan

90,000

32.18%

Eur power S.r.l.


50,000

25.00%

B.S.Billing Solution scarl

Via Garigliano,1 - Empoli

120,000

30.50%

ICT Solutions scarl

Via Garigliano,1 - Empoli

115,000

26.55%


353

B. Reconciliation of shareholders’ equity and statutory profit – consolidated Net profit 31.12.2011

31.12.2010

31.12.2011

31.12.2010

108,636

33,816

1,306,430

1,361,688

Goodwill deriving from comparison of fair value of shareholders’ equity and net profit with carrying amounts

73,360

154,385

141,535

186,307

Elimination of effects of business combination of entities under common control

(2,886)

(2,433)

(16,082)

(13,196)

Elimination of tax effects, including those from previous years

(1,591)

(1,616)

(1,591)

(1,616)

accounted for using the equity method

(6,710)

(6,710)

40,523

47,233 44,363

Balances in ACEA’s statutory financial statements

Elimination of dividends Acea ATO2 Acea Distribuzione Acea Energia goodwill Elimination of extraordinary items Balances in consolidated financial statements Balances in consolidated financial statements amounts in thousands of euros

354



1,878

3,088

46,241

(119,355)

(115,758)

0

0

34,090

32,565

(278,797)

(312,887)

(1,464)

(5,189)

(1,464)

(5,189)

85,958

92,148

1,236,795

1,306,704

C. Remuneration of Directors, Statutory Auditors and Key Managers Board of Directors Name and Surname

Office

Effective

Termination

Giancarlo Cremonesi

Chairman

29/04/2010

Expiry of office (1)

Marco Staderini

CEO

29/04/2010

(1)

Paolo Giorgio Bassi

Director

29/04/2010

(1)


Director

29/04/2010

(1)


Director

29/04/2010

(1)

Aldo Chiarini

Director

29/04/2010

10/11/2011

Giovanni Giani

Director

29/11/2011

(1)

Paolo di Benedetto

Director

29/04/2010

(1)

Luigi Pelaggi

Director

29/04/2010

(1)

Andrea Peruzy

Director

29/04/2010

(1)

(1) Until approval of the financial statements for the year ended 31 December 2012

Remuneration (€000) Name and Surname

Office

Remuneration of position held

Giancarlo Cremonesi

Chairman

36

Marco Staderini

CEO

36

Paolo Giorgio Bassi

Director

Nonmonetary benefits

Bonuses and other incentives (2)

Other remuneration (3)

Total

264

300

287

324

36

58

94 81

1


Director

36

45


Director

36

0

36

Aldo Chiarini

Director

33

31

64

Giovanni Giani

Director

3

0

3

Paolo di Benedetto

Director

36

53

89

Luigi Pelaggi

Director

36

95

131

Andrea Peruzy

Director

36

102

138

(2) Amounts paid in 2011 (3) The item “other remuneration” includes, for the Chairman and CEO, the fees pursuant to art. 2389, paragraph 3, of the Italian Civil Code. For the other directors, said item includes the fees for participating in Committees (fee for the fulfilment of office and/or attendance fees). amounts in thousands of euros

The non-monetary benefits granted to the CEO include supplementary pension provision and health insurance.


355

Key Managers Fees paid to executives with strategic responsibilities dur-

Said executives with strategic responsibilities also enjoy

ing the year amount to:

non-monetary benefits including supplementary pen-

• salaries and bonuses (including contributions), 2,217 thousand euros,

sion, health insurance and unlimited use of company cars.

• non-monetary benefits, 84 thousand euros.

The information set forth above includes data relative to the General Manager, Paolo Gallo, appointed by the

Remuneration paid to key managers is established by

Board of Directors in October 2010 and in office as of 1

the Remuneration Committee based on average levels of

February 2011.

pay in the labour market.

Board of Statutory Auditors (elected 29 April 2010) NAME

POSITION

NAME AND SURNAME

OFFICE HELD

Enrico Laghi Corrado Gatti Alberto Romano

REMUNERATION (€000) TERM OF OFFICE

REMUNERATION OF POSITION HELD

BENEFICI NON MONETARI

BONUS E ALTRI INCENTIVI

ALTRI COMPENSI

Chairman

(1)

211

0

0

41

Statutory auditor

(1)

140

0

0

0

Statutory auditor

(1)

TOTAL Board of Statutory Auditors (1) Until approval of the financial statements for the year ended 31 December 2012 (2) Represents remuneration accrued in 2011 amounts in thousands of euros

356


147

0

0

0

498

0

0

41

D. Information provided pursuant to CONSOB Ruling no. 6064293

Consolidated net revenues Consolidated net revenue Total cost of materials and overheads Total cost of materials and overheads Gross Operating Profit Amortisation, depreciation, provisions and impairment charges

31.12.2011

Of which related party transactions

Impact

31.12.2010


Impact

3,288,954

258,219

7.85%

2,540,535

371,199

14.61%

3,288,954

258,219

7.85%

2,540,535

371,199

14.61%

2,544,576

773,189

30.39%

1,439,092

174,248

12.11%

2,544,576

773,189

30.39%

1,439,092

174,248

12.11%

744,377

(514,971)

-69.18%

1,101,442

196,951

17.88%

0.00%

320,593

0

0.00%

425,984


318,393

(514,971)

-161.74%

780,850

196,951

25.22%

Total finance (costs)/income

(118,422)

33

-0.03%

(88,932)

4,047

-4.55%

0.00%

2,572

(514,938)

-245.81%

694,490

200,998

28.94%

Total profit/(loss) on investments Profit/(loss) before tax Taxation

9,295 209,266 60,737

0.00%

0.00%

69,844

Net profit/(loss) from continuing operations

148,529

(514,938)

-346.69%

624,646

200,998

32.18%

0.00%

Net profit/(loss) from discontinued operations

(55,009)

(21,636)

39.33%

(524,626)

(163,228)

31.11%


93,521

(536,574)

-573.75%

100,020

37,770

37.76%



357

Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006. ASSETS

Property, plant and equipment Investment property Goodwill and consolidation differences Concessions Other intangible assets Investments in subsidiaries and associates Other investments Deferred tax assets

31 December 2011

Other current assets Current financial assets

5,028

66.57%

3,749,850

5,028

0.13%

704,013

43,262

1,904,563 3,148

1,553,946

1,418,071

115,067

67,350

14,795

32,066

4,686

3,650

353,648

267,520 18,033

90.44%

7,553 26,212

4,300,870

18,033

0

0

0.42%

66,106

58,039

1,510,012

269,944

189,518

60

57,089

123,732

17.88%

216.73%

1,144,811

195,819

17.10%

77,337

10,964

14.18%

321,384

274,392

85.38%

6,033

14.22%

Current tax assets

172,768

42,437


321,022

281,742

CURRENT ASSETS

2,316,514

393,736

17.00%

1,925,750

530,470

27.55%

TOTAL ASSETS

6,617,384

411,768

6.22%

6,379,614

578,760

9.07%

€amounts in thousands of euros

358

Impact

19,718

63,189

Trade receivables


151,244

Other assets

Inventories

31 December 2010

2,993

19,939


Impact

2,021,364

Financial assets

NON-CURRENT ASSETS



Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006. LIABILITIES €000

31 December 2011


Impact

31 December 2010


Impact

Shareholders’ equity share capital

1,098,899

legal reserve

113,731

111,785

(375,802)

(272,132)

314,009

276,004

other reserves profit (loss) pertaining to previous years profit (loss) for the period Total Group shareholders’ equity Shareholders’ equity attributable to minority interests Total shareholders’ equity Staff termination benefits and other defined benefit plans Provisions for liabilities and charges Borrowings and financial liabilities Other liabilities Provisions for deferred tax liabilities NON-CURRENT LIABILITIES Non-current liabilities held for sale Trade payables

85,958

92,148

1,236,795

1,306,704

74,661

74,623

1,311,457

1,381,326

104,776

106,934

250,892

191,683

2,298,916

2,299,463

278,415

227,478

98,826 3,031,825

77,410 0

0 1,344,785


286,441

Borrowings

540,645

Tax payables

1,098,899

331,215

16,005

24.63%

2.96%

2,902,969

0

581,371

153,612

883,498

148,292

16.78%

259,620

36

0.01%

250,045

8,926

3.57%

102,232

80

0.08%

120,786

484

0.40%

CURRENT LIABILITIES

2,274,102

347,300

15.27%

1,513,948

157,738

10.42%

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

6,617,384

347,300

5.25%

6,379,614

311,350

4.88%



359

Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006. 31.12.2011 Non-current financial assets/(liabilities) Intercompany non-current financial assets/(liabilities) Non-current borrowings and financial liabilities Net medium/long-term debt

Related parties

1,907 18,033

18,033

5,028

18,033

(2,291,910)

Short-term bank borrowing Current financial assets/(liabilities) Intercompany current financial assets/(liabilities) Net short-term debt


360


5,028

(183,576) 321,093

283,009

(448,889)

(199,199)

(26,787)

(1,341)

(5,145)

107,727

107,727

270,612

270,612

(46,855)

107,727

353,081

265,467

(81,316)

(100,364)

(2,203,722)

170,130

Net short-term debt (Discontinued operations) Total net debt

5,028

(2,299,463)

Net long-term debt (Discontinued operations) Cash and cash equivalents and securities

Related parties

2,525

(2,298,916) (2,278,976)

31.12.2010

(2,325,831)

125,760

Related party transactions pursuant to CONSOB Resolution no. 15519 of 27 July 2006. €

31.12.2011

Related parties

Impact

31.12.2010

Related parties

Impact

Cash flow from operating activities Profit before taxes and financial management of continuing operations

209,266

694,490

Profit before taxes and financial management of discontinued operations

(50,174)

(509,071)


250,453

230,818

Revaluations/impairment charges

(2,044)

61,319


50,179

(42,057)

(12,554)

(12,540)

Net movement in staff termination benefits Realised gains

0

9,466

120,574

98,895

Income taxes paid

(139,540)

(40,866)


426,160

490,454


(289,129)

13,866

(4.8%)

(196,781)

63,333

(32.2%)

314,398

129,155

41.1%

74,476

(36,254)

(48.7%)

104,537

161.7%

Net financial interest expense

Increase/decrease in current liabilities Increase/(decrease) in inventories Movement in working capital Changes in other assets/liabilities during the period TOTAL CASH FLOW FROM OPERATING ACTIVITIES

6,322

(19,572)

31,591

(141,877)

(124,780)

97,606

332,972

446,183

(86,311)

(192,414)

(380,155)

(227,343)

Cash flow from investing activities Purchase/Sale of property, plant and equipment Purchase/sale of intangible assets Investments

(13,210)

Proceeds/payments deriving from other investments

230,233

Dividends received Interest income received TOTAL

1,168 (137,655)

(59.8%)

64,652

2,048

0

22,609

20,214

(224,787)

(333,723)

Cash flow from financing activities Minority interests in capital increases by subsidiaries

0

0

Repayment of mortgages and long-term borrowings

(41,552)

(69,238)

0

680,337

Provision of mortgages/other medium/long-term borrowings Decrease/increase in other short-term borrowings

237,019

(98,430)

(41.53%)

(429,636)

9,230

(2.1%)


(119,622)

580

(0.48%)

(96,808)

741

(0.8%)

Dividends paid

(159,530)

TOTAL CASH FLOW

(83,685)

81,803


296,522

102,258

24,500

194,263

321,022

296,522

Cash flows for the year Cash and cash equivalents at end of period

(2,851)



361

E. Segment information: balance sheet and income statement 2010 Balance Sheet

Investments

GENERATION E.E.

DISTRIBUTION

SALES

TRADING

PUBLIC LIGHTING

ITALIAN WATER SERVICES

3,693

99,000

5,400

8,800

201,100

48,937

1,356,829

929

198

64,416

542

110,591

23,194

56,799

1,552,857

0

0

0

Segment assets Property, plant and equipment Intangible assets Non-current financial assets accounted for at Equity Non-current financial assets

Other non-current trading assets

Other non-current financial assets

Inventories

696

0

5,075

15,787

100,106

323,888

2,353

531,244


20,081

0

55,336

55,821


25,240

0

0

5,367

Trade receivables due from third parties

Other current trading assets

Other current financial assets



507,772

Total assets

557,946


362

20,885


119,761

2,225,493

248,172 1,633,732

348,010

248,172

OVERSEAS

WATER SERVICES ANALYSIS AND RESEARCH

CORPORATE

ENVIRONMENT

PV POWER

TOTAL

CONSOLIDATION ADJUSTMENTS

GROUP TOTAL

800

900

12,100

48,500

53,300

0

0

0

2,517

3,535

56,155

209,891

123,783

1,867,189

40,522

1,907,710

8,141

891

12,423

7,264

0

1,773,002

(267,863)

1,505,139,198

0

0

0

0

32,066 3,650 293,732 7,553

1,040

0

(0)

2,914

15,705

62,102

(4,063)

58,039

4,287

24,683

26,128

44,788

19,657

1,077,133

(85,868)

991,265

0

3,636

8,864

86

0

143,823

(30,250)

113,572

0

395

32,686

461

0

64,150

(24,177)

39,973 119,775 321,384 281,742

16,285

33,139

136,257

265,403

159,145

755,944

(51,931)

704,013

5,743,343

(423,630)

6,379,614


363

2010 Balance Sheet GENERATION

DISTRIBUTION

SALES

TRADING

PUBLIC LIGHTING


Segment liabilities 149,741

183,905

36,314

369,372

Trade payables due to Parent Company

Trade payables due to third parties

4,646

28,937

0

51,569

Trade payables due to subsidiaries and associates

2,984

2

4,061

10,352

Other current trading liabilities Other current financial liabilities Staff termination benefits and other defined-benefit plans

505

31,295

2,538

3,837

39,411

Other provisions

291

20,473

8,232

2,167

119,582

46,379

590,286

Provisions for deferred tax liabilities Other non-current trading liabilities Other non-current financial liabilities Liabilities directly associated with assets for sale

82,181

207,932

Shareholders’ equity Total liabilities and shareholders’ equity

82,977


364


209,138

223,614

207,932

OVERSEAS


CORPORATE

ENVIRONMENT

PV POWER

2,078 548 93

TOTAL


GROUP TOTAL

3,383

56,596

39,356

201

31,395

931

55,668

896,412

(129,557)

766,854

0

118,227

(22,023)

96,204

654

13,131

340

24

31,642

(11,202)

20,439

380,406

250,045

177

2,862

24,384

1,634

276

106,919

15

106,934

0

2,610

25,477

17,722

67

196,621

(4,938)

191,683

77,410

227,478

2.299,463

291,258

581,371

290,112

1.381,326

2,896

9,710

150,983

59,983

56,035

1.639,933

123,553

6,379,614


365

2010 Income Statement GENERATION

DISTRIBUTION

SALES

TRADING

PUBLIC LIGHTING


Third party revenues

7,088

159,146

Inter-segment sales

10,145

257,536

168,920

71,371

722,143

1,200,938

16

Staff costs

1,275

62,503

9,485

2,437

9,094

123,783

Energy purchase

5,386

61,458

1,326,035

0

27

Sundry materials and overheads

2,544

71,483

38,586

42,504

316,078

Gross operating profit/ (loss)

8,028

221,237

(4,249)

0

19,790

284,691


5,804

104,713

28,749

1,937

131,290


2,225

116,525

(32,998)

0

17,853

153,401

(17)

545

2,225

116,507

(32,453)

0

17,853

156,128

27,734

17,358

Finance (costs)/income Investments accounted for using equity method Profit/(loss) on investments Profit/(loss) before tax

2,727

Taxation Profit/(loss) from continuing operations Net profit/(loss) from discontinued operations

(23,455)

Net profit/(loss) for the period €amounts in thousands of euros

366


OVERSEAS


ENVIRONMENT

PV POWER

CORPORATE

Total assets

Consolidation adjustments

CONSOLIDATED TOTAL

23,704

565

76,075

49,446

22,800

1,301,257

(55,842)

1,245,415

0

26,124

76

0

74,532

1,571,803

(276,683)

1,295,120

7,099

11,328

8,281

603

46,417

279,868

(14,900)

264,968

0

0

2,429

0

142

1,395,476

(718,245)

677,231

12,183

8,090

42,357

39,542

71,814

645,181

(148,286)

496,895

4,423

7,270

23,084

9,301

(21,041)

552,535

548,907

1,101,441

887

1,189

18,954

3,009

22,130

318,661

1,931

320,592

3,536

6,081

4,130

6,292

(43,171)

233,874

546,976

780,849 (88,932)

1,088 4,624

(179) 6,081

3,951

6,292

(1,591)

2,572

(44,762)

236,446

2,572 458,046

694,490 69,844 624,646

(3,541)

18,095

(542,721)

(524,626) 100,020


367

2011 Balance Sheet

Investments

GENERATION E.E.

DISTRIBUTION

SALES

PUBLIC LIGHTING


11,240

103,600

11,250

0

229,700

160,775

1,356,688

2,234

0

62,563

1,304

116,938

33,500

0

1,739,304

0

0

0

Segment assets Property, plant and equipment Intangible assets Non-current financial assets accounted for using the equity method Non-current financial assets Other non-current trading assets Other non-current financial assets Inventories

2,926

16,601

0

7,068

13,656

10,864

142,288

642,359

10,666

489,451


0

4,596

38,903

37,349

76,674


0

13,517

32,988

224

7,520

175,869

1,650,629

749,983

55,307

2,389,168

Trade receivables due from third parties

Other current trading assets Other current financial assets Cash and cash equivalents Total assets €amounts in thousands of euros

368


OVERSEAS


CORPORATE

ENVIRONMENT

PV POWER

TOTAL


GROUP TOTAL

200

400

10,500

20,600

25,400

412,956

0

412,956

2,061

1,814

55,419

204,580

143,488

1,989,623

34,723

2,024,346

7,906

290

10,393

9,576

0

1,919,211

(98,945)

1,820,267

0

0

0

0

14,795 4,685 416,837 19,940

1,831

0

(0)

2,806

23,706

68,594

(2,489)

66,106

6,160

22,636

27,977

77,189

63,662

1,493,252

(188,561)

1,304,691

0

72

8,865

105

0

166,564

(6,504)

160,060

92

60

53,659

140

0

108,200

(62,939)

45,261 246,607 172,768 321,022

18,050

24,873

156,313

294,395

230,857

5,745,444

(324,714)

6,617,384


369

2011 Balance Sheet GENERATION E.E.

DISTRIBUTION

SALES

PUBLIC LIGHTING


OVERSEAS

11,434

169,461

516,132

73,416

430,766

1,682

Trade payables due to Parent Company

725

15,796

56,547

0

66,958

567

Trade payables due to subsidiaries and associates

0

3,468

824

8,537

10,277

15


1,857

28,471

4,576

3,754

37,892

221

Other provisions

1,428

15,842

3,257

1,799

145,308

690

15,444

233,039

581,335

87,506

691,202

3,174

Segment liabilities Trade payables due to third parties

Other current trading liabilities Other current financial liabilities

Provisions for deferred tax liabilities Other non-current trading liabilities Other non-current financial liabilities Shareholders’ equity Total liabilities and shareholders’ equity €amounts in thousands of euros

370



CORPORATE

ENVIRONMENT

PV POWER

TOTAL


GROUP TOTAL

2,092

61,720

39,369

58,637

1,364,708

(179,733)

1,184,975

497

31,395

877

0

173,361

(40,565)

132,796

323

16,785

534

0

40,763

(13,750)

27,014 388,673 540,645

2,552

23,551

1,901

0

104,776

0

104,776

2,355

70,680

19,293

0

260,650

(9,758)

250,892 98,826 278,415 2,298,916 1,311,457

7,818

204,131

61,974

58,637

1,944,259

(243,806)

6,617,384


371

2011 Income Statement GENERATION E.E. (SEGM.)

DISTRIBUTION (SEGM.)

Third party revenues

9,999

196,841

290,986

Inter-segment sales

18,552

246,245

1,792,482

Staff costs

4,597

61,420

18,712

Energy purchase

5,814

63,757

1,971,418

Sundry materials and overheads

7,071

80,622

64,077

11,068

237,286

15,682

118,570

(4,614)

118,716

144

7,458

(4,614)

118,861

Gross operating profit/(loss) Amortisation, depreciation and impairment charges Operating profit/(loss)

SALES (SEGM.)

TRADING (SEGM.)

PUBLIC LIGHTING (SEGM.)

ITALIAN WATER SERVICES (SEGM.)

0

4,176

768,023

0

77,890

5,408

0

11,163

123,591

0

0

263

0

64,938

342,481

29,260

0

5,966

307,096

28,030

0

2

156,361

1,230

0

5,964

150,734

8,688

0

5,964

150,773

22

3,525

Finance (costs)/income Profit/(loss) on investments Profit/(loss) before tax

39

Taxation Net profit/(loss) from continuing operations Net profit/(loss) from discontinued operations

(6,616)

Net profit/(loss) for the period €amounts in thousands of euros

372


OVERSEAS

WATER SERVICES ANALYSIS AND RESEARCH (SEGM.)

ENVIRONMENT AND ENERGY

PV POWER

CORPORATE

TOTAL ASSETS

Consolidation adjustments

CONSOLIDATED TOTAL

36,093

751

84,037

83,593

89,387

1,563,885

(64,837)

1,499,048

178

22,964

75

0

5,355

2,169,149

(379,243)

1,789,906

10,678

8,669

8,739

182

47,648

295,401

(17,468)

277,933

0

0

1,165

0

442

2,042,859

(335,604)

1,707,255

16,896

7,095

42,530

57,008

77,291

760,008

(200,620)

559,388

8,697

7,951

31,677

26,403

(30,639)

634,765

109,612

744,377

1,773

980

31,195

6,716

66,700

426,010

(26)

425,984

6,924

6,970

482

19,687

(97,339)

208,755

109,638

318,393 (118,422)

1,653 8,577

6,970

482

19,687

(97,339)

9,295

9,295

218,050

209,266 60,737 148,529

(3,069)

(51,940)

(55,009) 93,521


373

F. Financial Highlights of Companies accounted for under Proportionate Consolidation €

Acque

Acque Industriali

Acque Servizi

Publiutenti

Publiacqua

Gori

Voghera Vendite

Total net revenues

56,843

2,688

11,217

51

76,688

52,418

39,721

Total operating costs

29,852

2,256

9,914

90

46,775

36,243

39,296


26,991

431

1,303

(39)

29,914

16,175

425

(0)

Income statement

% of Revenues

0

0

0


(16,342)

(192)

(506)


10,649

240

797

5,155

116

116,586

1,789


0

0

0

(18,934)

(11,244)

(345)

(39)

10,979

4,931

80

437

(28)

6,976

2,561

6

3,625

(252)

103,236

43,185

6,438

Balance sheet Net invested capital Current assets

33,448

1,316

8,539

72

47,060

118,174

15,380

Current liabilities

(36,744)

(1,015)

(5,262)

(318)

(48,936)

(104,293)

(9,113)

Net current assets/(liabilities)

(3,296)

301

3,278

(246)

(1,877)

13,881

6,267

Non-current assets

158,143

1,660

895

159,293

83,863

299 (129)


(38,261)

(171)

(548)

(6)

(54,181)

(54,559)

Net non-current assets/(liabilities)

119,883

1,488

347

(6)

105,113

29,304

170


(23,838)

(552)

(1,904)

10

(71,066)

(28,828)

(195)

Net funds/(debt)

(92,748)

(1,238)

(1,721)

242

(32,170)

(14,357)

(6,243)

2,760

67

377

242

9,885

4,499

4

Current financial liabilities

(1,561)

(379)

(1,971)

(29,466)

(18,856)

(6,247)

Total net current financial assets/ (liabilities)

1,200

(312)

(1,594)

(19,581)

(14,357)

(6,243)

(93,947)

(926)

(127)

(93,947)

(926)

(127)

0

0


242

Non-current financial assets Non-current financial liabilities Total net non-current financial assets/(liabilities)

23


374


(12,612) 0

(12,589)

Umbria Energy

Elga Sud

Ecogena

Overseas

Umbra Acque

Apice

Ecomed

57,428

28,172

1,754

2,463

24,791

56,667

27,818

1,517

715

762

354

236

1,748

0

7,344

7,671

30,857

18,006

59

159

4,679

5,878

19,224

6,786

(59)

(159)

2,665

1,793

11,633

0

(1)

0

0

0

0

0

(940)

(352)

(160)

(480)

(4,871)

(179)

3

77

1,268

1,915

(59)

(245)

(27)

7

783

357

5,204

2,569

4,440

8,960

23,507

Nuove Acque

Ingegnerie Toscane srl


0

0

0

(1,373)

(257)

(6,147)

(159)

1,292

1,536

5,487

(61)

(163)

436

1,036

2,211

(34)

(194)

15,683

5,030

48,827

18,767

8,663

2,680

290

16,396

15

47

2,263

10,774

16,230

(14,190)

(6,086)

(2,618)

(214)

(17,310)

(49)

(245)

(2,558)

(6,140)

(16,350)

4,577

2,577

62

76

(914)

(34)

(198)

(295)

4,633

(120)

1,232

11

6,701

8,884

36,467

0

3

20,079

735

66,136

(605)

(19)

(2,323)

(4,100)

(339)

(17,189)

627

(8)

4,378

8,884

24,421

0

3

15,979

396

48,947

(1,013)

(113)

(353)

(6,536)

(7,924)

22

(3)

(5,861)

(3,060)

(11,353)

(4,190)

(2,456)

(4,086)

(2,323)

(15,583)

12

198

(9,823)

(1,970)

(37,474)

152

0

325

1,011

515

12

236

1,846

(91)

3,987

(4,343)

(2,456)

(523)

(498)

(5,555)

(0)

(38)

(1,880)

(35,626)

(4,190)

(2,456)

(198)

513

(5,040)

12

198

(1,970)

(31,639)

57

0

(4,315)

(2,836)

(10,599)

(11,669)

(3,889)

(2,836)

(10,543)

(12,046)

427

0

0

0

0

1,846

(11,668)

(5,834) 0

(5,834)


375

G. List of significant investments at 31.12.11 – art.120, paragraph 4, legislative decree no. 58/98 – ACEA S.p.A. Nome and registered office

Acea Ato 2 S.p.A. p.le Ostiense, 2

Share capital

Total no. of ACEA shares or holdings

Percentage of share capital

Percentage of shares or holdings with voting rights

Title (Ownership, possession etc.)

Type of investments (direct/indirect)

362,834,320.00 euros

35,000,000.00

96.46%

96.46%

Ownership

Direct

120,000.00 euros

11,338.00

94.48%

94.48%

Ownership

Direct

30,000,000.00

239.904,00

Pesos

par value of 125.00 Pesos

99.96%

99.96%

Ownership

Direct

1,000,000.00 euros

Holding equal to 550,000.00 euros

55%

Ownership

Direct

Direct


40%

10,0000.00 euros €

Holding equal to 7,000.00 euros€

70%

70%

Ownership

Direct

8,000,000.00 euros€

5,520,000.00

69%

69%

Ownership

Direct

69%

69%

Ownership

Direct

00154 Rome

par value of 10.00 euros

TAX CODE AND VAT no. 05848061007 Acea ATO 5 S.p.A. via Roma, snc 03100 Frosinone Tax Code and VAT no. 02267050603 Acea Dominicana SA avenida Las Americas Esquina Mazoneria, Ensanche Ozama 11501 Santo Domingo Dominican Republic AceaGori Servizi Scarl via ex Aeroporto, s.n.c. località Area “Consorzio Sole” Pomigliano d’Arco Tax Code and VAT no. 10104851000

Acea Servizi Acqua S.r.l. in liq.

Indirect through GORI S.p.A., which is 37.05% owned through Sarnese Vesuviano S.r.l. (a company in which ACEA S.p.A. has an equity interest of 95.79%)

p.le Ostiense, 2 00154 Rome Tax Code and VAT no. 11339421007 Acque Blu Arno Basso S.p.A. (“ABAB”) p.le Ostiense, 2

par value of 1.00 euro

00154 Rome

€

Tax Code and VAT no. 07692511004 Acque Blu Fiorentine S.p.A. p.le Ostiense, 2

15,153,400.00 euros€

10,445,746.00 par value of 1.00 euro

00154 Rome Tax Code and VAT no. 089297010044

376


€

Nome and registered office

Acque Blu S.r.l.

Share capital




10,000.00 euros €


55%

9,953,116.00 euros€

4,478,902.00

via Ugo Bassi, 34



55%

Ownership

Direct

45%

45%

Ownership

Indirect through ABAB S.p.A., in which ACEA has an equity interest of 69%

40%

40%

Ownership

Indirect through Ombrone S.p.A., a company in which ACEA has an equity interest of 84.57%

31%

31%

Ownership

Direct

51%

51%

Ownership

Direct

49%

49%

Ownership

Indirect through

51016 Montecatini Terme (PT) Tel . 06/57996837 Tax Code and VAT no. 10260331003 Acque S.p.A. via Garigliano, 1 50053 Empoli


Tax Code and VAT no. 05175700482 Acquedotto del Fiora S.p.A.

1,730,520.00 euros

via G. Mameli, 10

76,912.00 par value of 9.00 euros

58100 Grosseto Tax Code and VAT no. 00304790538 Aguas de San Pedro SA de CV

159,900,000.00

49,569.00

Lempiras

par value of 1,000.00 Lempiras

Las Palmas, 3 Avenida, 20y 27 calle, S.E. Apto Postal no 261 21104 San Pedro Sula Honduras Aguazul Bogotà S.A. calle 82 n. 19°-34 110221 Bogotà - Colombia

4,000,000,000.00

2,040.00

Pesos

par value of 1,000,000.00 Pesos

AZGA NORD S.p.A. in liquidation

217,500.00 euros

106,575.00 par value of 1.00 euro

piazza Repubblica, Palazzo Comunale

CREA SpA in liquidation, of which Acea is the sole shareholder

54027 Pontremoli (MS) Tel. 0187/833378 Tax Code and VAT no. 00563050459 Consorcio Agua Azul SA calle Amador Merino Reina, 307 Lima 27 Peru

PEN 69,001,000.00

17,595,255.00

25.5%

25.5%

Ownership

Direct

*the fully paid-up share capital is PEN 69,001,000. Peruvian law provides for the revaluation of equity, and the resulting carrying amount for the share capital is PEN 74,349,963..


377


Crea Gestioni S.r.l. p.le Ostiense, 2

Share capital






1100,000.00 euros


100%

100%

Ownership

Direct

2,678,958.00 euros

2,678,958.00

100%

100%

Ownership

Direct

37.05%

Ownership

Indirect through Sarnese Vesuviano S.r.l. (a company in which ACEA S.p.A. has an equity interest of 95.79%)

59.67%

59.67%

Ownership

Indirect through CREA Gestioni S.r.l., of which Acea is the sole shareholder

28.80%

28.80%

Ownership

Indirect through CREA SpA in liquidation, of which Acea is the sole shareholder

00154 Rome Tel. 06/57991 Tax Code and VAT no. 10200211000 Crea - Costruzione Riordino Esercizio Acquedotti S.p.A. in liquidation


p.le Ostiense, 2 00154 Rome Tel. 06/57996837 Tax Code and VAT no. 00496300013 Gori S.p.A. via Trentola, 211 80056 Ercolano - NA

44,999,970.75 euros


37.05%

Tax Code and VAT no. 07599620635 GE.SE.SA. S.p.A.

519,340.75 euros

zona Industriale Pezzapiana lotto 11/12 82100 Benevento


Tel. 0824/320311 Tax Code and VAT no. 00934000621 G.E.A.L. S.p.A. v.le Luporini, 1348 55100 Lucca

1,450,000.00 euros€€

417,600.00 par value of 1.00 euro

Tel. 0583/540218 Tax Code and VAT no. 01494020462

378


€


Ingegnerie Toscane S.r.l.

Share capital




100,000.00 euros€€


1%

1%

Holding equal to 2,564 euros

2.564%

2.564%

via di Villamagna, 90/c 50126, Florence



1%

Direct

Ownership

Indirect through Acquedotto del Fiora S.p.A., in which ACEA has an equity interest of 40% through Ombrone S.p.A., in which ACEA has a stake of 84.57%

Tax Code and VAT no. 06111950488

InDirect tramite Acque S.p.A. di cui Acea detiene il 45% per il tramite di Acque Blu Arno Basso S.p.A. di cui Acea detiene il 69%

Intesa Aretina Scarl via F. Petrarca, 22/A

18,112,000.00 euros

20123 Milan

Quota pari a 48.218 €

48.218%

Holding equal to 48,218 euros €

48.218%

48.218%

Ownership

Holding equal to

35%

35%

Ownership

Direct

95.79%

95.79%

Ownership

Indirect through

48.218%

Ownership Indirect through Acque S.p.A., in which ACEA has an equity interest of 45% through Acque Blu Arno Basso S.p.A., in which ACEA has a stake of 69%

6,339,200.00 euros

Tel : 02-43982187 Tax Code and VAT no. 12739990153 LUNIGIANA ACQUE S.p.A.

750,000.00 euros

718,400.00 par value of 1.00 euros €

in liquidation

CREA SpA in liquidation, of which Acea is the sole shareholder

via Nazionale, 173/175 54011 Massa Carrara Tel. 0187/421650 Tax Code and VAT no. 00550440457 Nuove Acque S.p.A. Sede Legale Patrignone, loc. Cuculo 52100 Arezzo

34,450,389.12 euros

3,081,997.00 par value of 5.16 euros

46.16 %

46.16 %

Ownership

Indirect through Intesa Aretina Scarl, a company in which ACEA S.p.A. has an equity interest of 35%

Tel : 0575-3391 Tax Code and VAT no. 01616760516


379


Ombrone S.p.A. p.le Ostiense, 2

Share capital




6,500,000.00 euros

5,497,350.00

84.57%

150,280,056.72 euros

11,649,617.00

6,735,053.48 euros

Holding equal to

00154 Rome



84.57%

Ownership

Direct

40%

40%

Ownership

Indirect through Acque Blu Fiorentine S.p.A., a company in which ACEA has an equity interest of 69%

95.79%

95.79%

Ownership

Direct

49%

49%

Ownership


40%

40%

Ownership

Direct

40%

40%

Ownership

Direct


Tax Code and VAT no. 07749101007 Publiacqua S.p.A. via Villamagna 50100 Florence


Tax Code and VAT no. 05040110487 Sarnese Vesuviano S.r.l. p.le Ostiense, 2

6,451,345.00 euros

00154 Rome Tel. 06/57991 Tax Code and VAT no. 06901261005 S.O.G.E.A. S.p.A. via Mercatanti, 8

260,000.00 euros€€

02100 Rieti


Tel. 0746/204256 Tax Code and VAT no. 00689390573 Tirana Acque Scarl in liquidation

95,000.00 euros


via SS. Giacomo e Filippo, 7 16122 Genoa Tax Code and VAT no. 01230550996 Umbra Acque S.p.A. via Benucci, 162

15,549,889.00 euros

6,219,956.00

100,000.00 euros


34%

34%

Ownership

Indirect through Crea Gestioni S.r.l., a wholly owned subsidiary of ACEA S.p.A. (100%)

345,000,000.00 euros

172,500,001.00 euros

50%

50%

Ownership

Direct

50%

50%

06087 Ponte San Giovanni (PG)


Tel. 075/50593969 Tax Code and VAT no. 02634920546 Umbriadue Servizi Idrici Scarl strada Sabbione zona ind. A72 05100 Terni Tax Code and VAT no. 02357250980 Acea Distribuzione S.p.A. p.le Ostiense, 2 00154 Rome TAX Code and VAT no. 05816611007

380


Indirect through Acea Reti e Servizi Energetici S.p.A., of which ACEA is the sole shareholder


Acea Illuminazione Pubblica S.p.A.

Share capital

120,000.00 euros






120,000.00

100%

100%

Ownership

Direct


p.le Ostiense, 2 00154 Rome Tel. 06 57993562 Tax Code and VAT no. 10832791007 Acea Reti e Servizi Energetici S.p.A.

300,120,000.00 euros

300,120,000.00

100%

100%

Ownership

Direct

80,000.00 euros


100%

100%

Ownership

Indirect through SI(E) NERGIA S.p.A., in which ACEA has an interest of 42.08%

90,000.00 euros€€


32.18%

32.18%

Ownership

Direct

1,000,000.00 euros

510,000.00 euros

51%

51%

Ownership

Indirect through Acea Reti e Servizi Energetici S.p.A., of which ACEA is the sole shareholder

Holding equal to

49%

49%

Ownership

Indirect through Ecogena S.p.A., in which ACEA holds a stake of 51% through Acea Reti e Servizi Energetici S.p.A., of which ACEA is the sole shareholder

70%

70%

Ownership

Direct

p.le Ostiense , 2 00154 Rome Tax Code and VAT no. 01239150996 CESAP Vendita Gas S.r.l. via del Teatro, s.n.c. 06083 Bastia Umbra (PG) Tel. 075/ 8010703 Tax Code and VAT no. 02635250547 Citelum Acea Napoli P.I. S.c.a.r.l. via Monteverdi Claudio, 11 20131 Milan Tel. 02 29414900 Tax Code and VAT no. 06378350968 Ecogena S.p.A. p.le Ostiense, 2 00154 Rome Tax Code and VAT no. 09651601008 Eur Power S.r.l. largo Virgilio Testa, 23,

1,000,0000.00 euros€

490,000.00 euros

Rome Tel. 06 54252176 Tax Code and VAT no. 10857241003 Luce Napoli Scarl in liquidation p.le Ostiense, 2 00154 Rome

10,000.00 euros€€

Holding equal to 490,000.00 euros Holding equal to 7,000.00 euros



381


SI(E)NERGIA S.p.A. (formerly CESAP S.p.A.)

Share capital






132,000.00 euros

55,551.00

42.08%

42.08%

Ownership

Direct

2,120,000.00 euros

318,000.00

15%

15%

Ownership

Direct

1153,500,000.00 euros€€

153,500,000.00 euros

100%

100%

Ownership

Direct

45,000,000.00 euros

5,000,000.00

100%

100%

Ownership

Indirect through Acea Energia Holding S.p.A., (in which ACEA is the sole shareholder)

via Fratelli Cairoli, 24 06125 Perugia Tel. 075/ 5006050 Tax Code and VAT no. 01175590544 Umbria Distribuzione Gas S.p.A. via Capponi, 100 05100 Terni Tax Code and VAT no. 01356930550 AceaEnergia Holding S.p.A. viale dell’Aeronautica, 7 00144 Rome Tax Code and VAT no. 05863631007 Acea Energia S.p.A. p.le Ostiense, 2 00154 Rome


Tax Code and VAT no. 07305361003 Acea Produzione S.p.A.

€ 5,000,000.00 euros

5,000,000.00 euros

100%

100%

Ownership

Indirect through Acea Energia Holding S.p.A., (in which ACEA S.p.A. is the sole shareholder)

120,000.00 euros

120,000.00

100%

100%

Ownership

Direct

30,000.00 euros

Holding equal to

33.33%

33.33%

Ownership

Direct

49%

49%

Ownership

Indirect through Acea Energia S.p.A, (company 100% owned by Acea Energia Holding S.p.A., in which ACEA S.p.A. is the sole shareholder)

p.le Ostiense, 2 00154 Rome Tax Code and VAT no. 11381121000 Acea8cento S.p.A. p.le Ostiense, 2 00154 Rome Tax Code and VAT no. 06098121004 Dyna Green S.r.l. in liquidation

10,000.00 euros

v.le Bianca Maria 24 20129 Milan Tax Code and VAT no. 04495440960 Elga Sud S.p.A.

250,000.00 euros

122,500.00

via Montegrappa, 6 70059 Trani Tax Code and VAT no. 06517750722

382



Share capital




Energy Molise Scarl in liquidation

10,000.00 euros

Holding equal to

50%

50%



Ownership

Indirect through

5,000.00 euros

Acea Energia S.p.A, (company 100% owned by Acea Energia Holding S.p.A., in which ACEA S.p.A. is the sole shareholder)

via Flaminia, 133/137 00100 Rome Tax Code and VAT no. 07481601008 Umbria Energy S.p.A. via Bruno Capponi, 100

1,000,000.00 euros

500,000.00

250,000.00 euros

125,000.00

50%

50%

Ownership

Acea Energia S.p.A, (company 100% owned by Acea Energia Holding S.p.A., in which ACEA S.p.A. is the sole shareholder)

05100 Terni Tax Code and VAT no. 01313790550 Voghera Energia Vendita S.p.A.

50%

50%

Ownership

Indirect through Acea Energia S.p.A, (company 100% owned by Acea Energia Holding S.p.A., in which ACEA S.p.A. is the sole shareholder)

largo Toscanini, 5 27058 Voghera (PV) Tax Code and VAT no. 02104880188 A.PI.C.E. S.r.l.

Indirect through

86,112.00 euros

43,056.00

50%

50%

Ownership

Direct

p.le Ostiense, 2 00154 Rome Tel. 06/57996685 Tax Code and VAT no. 09991771008 Acea Risorse e Impianti per l’Ambiente S.p.A., in sigla anche ARIA S.p.A.

2,224,992.00 euros

4,312.00

100%

100%

Ownership

Direct


via G. Bruno, 7 05100 Terni Tax Code and VAT no. 12070130153 Ame@tad S.r.l. in liquidation

10,000.00 euros


55%

55%

Ownership

Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder

2,635,000.00 euros

869,552.00

33%

33%

Ownership

Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder.

v.le San Francesco d’Assisi, 15/C 03018 Paliano (FR) Tax Code and VAT no. 02301100604 AMEA S.p.A. (Azienda Multiservizi Energia Ambiente) v.le San Francesco d’Assisi, 15C 03018 Paliano (FR) Tax Code and VAT no. 02066710605


383


Aquaser S.r.l. via dei Sarti, 15

Share capital




3,050,000.00 euros

Holding equal to 2,568,000.00 euros

84.21%

170,827.00 euros

56,373.00

10,000.00 euros

56048 Volterra (PI) Tel. 0588/81499



84.21%

Ownership

Direct

33%

33%

Ownership


Holding equal to 9,000.00 euros €

90,0%

90,0%

Ownership


Holding equal to

5%

5%

Ownership

Indirect through Arkesia S.p.A., in which ACEA has an equity interest of 33% through A.R.I.A. S.p.A., of which ACEA is the sole shareholder.

5%

5%

Ownership

Indirect through Amea S.p.A., in which ACEA has an equity interest of 33% through A.R.I.A. S.p.A., of which ACEA is the sole shareholder. S.p.A.

50%

50%

Ownership

Direct

Tax Code and VAT no. 01554210508 ARKESIA S.p.A. (Arkesia Energia e Gas) via Garibaldi, 7/E 03018 Paliano (FR) Tax Code and VAT no. 02268360605 Ecoenergie S.r.l. v.le San Francesco d’Assisi, 15/C 03018 Paliano (FR)

500.00 euros€


Holding equal to 500.00 euros

Ecomed S.r.l. p.le Ostiense, 2

50,094.00 euros


00154 Rome Tax Code and VAT no. 04890771001 I.S.A. Innovazione Sostenibilità Ambientale S.r.l.

91,800.00 euros


40%

40%

Ownership

Indirect through Aquaser S.r.l., in which ACEA has an equity interest of 84.21%

500,000.00 euros


51%

51%

Ownership


103,292.00 euros


14%

14%

Ownership

Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder

via Ravano Km. 2+400 Pontecorvo (FR) Tax Code and VAT no. 01729740603 Kyklos S.r.l. via Ferriere Nettuno, Km15 04011 (LT) Tax Code and VAT no. 01988700595 R.E.C.L.A.S. (Recupero Ecologico Lazio Sud) S.p.A. in liquidation via Ortella, Km.3 03043 Frosinone Tax Code and VAT no. 01812680609

384



SAO Servizi Ambientali Orvieto S.p.A.

Share capital

7,524,400.00 euros






144,700.00

100%

100%

Ownership



piazza del Commercio, 21 05019 Orvieto Tax Code and VAT no. 00570380550 Solemme S.p.A.

761,400.00 euros

761,400.00 euros

100%

100%

Ownership


2,444,000.00 euros

4,700,000.00

100%

100%

Ownership

Direct

GBP 500,000.00, fully paid-up

80,000.00

16%

16%

Ownership

Direct

12,000.00

60%

60%

Ownership

Direct

59.9%

59.9%

Ownership


19,20%

19,20%

Ownership

Direct

33%

33%

Ownership

Direct

località Carboli Monterotondo Marittimo 58025 (GR) Tax Code and VAT no. 01266270535 LaboratoRI S.p.A. via Vitorchiano, 165 00189 Rome


Tax Code and VAT no. 04284731009 WRc Plc Frankland Road Blagrove Swindon, Wiltshire SN5 8YF England (UK) Hydreco S.c.a.r.l. in liquidation

10,200.00 euros


via M. L. King, 4 c/o Studio Barone 87036 CS Tel. 0984/464222 Tax Code and VAT no. 02090690799 S.C.I.M.E.R. S.r.l. in liquidation

10,400.00 euros


via M. O. Garana, 8 96100 Siracusa

Tax Code and VAT no. 00977930890 Te.Si.Ma S.p.A. in liquidation

103,200.00 euros


piazza Della Libertà, 10 Tax Code and VAT no. 03625451004 Marco Polo S.p.A.

894,000.00 euros

294,000.00

via Marco Polo, 31 00154 Rome Tax Code and VAT no. 07141681002


385


Share capital






Acea Servizi Acqua S.r.l. on 07/03/2011 index nos. 28259 and 28260 – register nos. 15674 and 15675, Acea purchased a 70% stake in the company. In the same year, on 30 November, index no. 93812 - register no. 23312, the company was placed into liquidation. Acea Rieti S.r.l. on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Acearieti srl and Crea Partecipazioni srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Azga Nord S.p.A. in liquidation, on 08/06/2011 the company CREA S.p.A., which has shares in Azga Nord, was placed into liquidation. Crea Gestioni S.r.l., on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Acearieti Srl and Crea Partecipazioni srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Crea Partecipazioni S.r.l., on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Crea Partecipazioni srl and Acearieti Srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Crea S.p.A. in liquidation, on 08/06/2011, the company was placed into liquidation. G.O.R.I. S.p.A., changed its company name on 30/07/2007. GE.SE.SA. S.p.A., on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Crea Partecipazioni srl and Acearieti Srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Therefore, due to said merger, Ge.se.sa.’s shareholder is no longer Crea Partecipazioni Srl but Crea Gestioni Srl. G.E.A.L. S.p.A., on 08/06/2011, the company Crea Spa, a G.E.A.L. shareholder, was placed into liquidation. Lunigiana Acque S.p.A. in liquidat, on 08/06/2011, the company Crea Spa, a Lunigiana Acque shareholder, was placed into liquidation and on 28/07/2011, said company Lunigiana Acque S.p.A. was placed into liquidation. S.O.G.E.A. S.p.A., on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Crea Partecipazioni srl and Acearieti Srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Therefore, due to said merger, S.O.G.E.A.’s shareholder is no longer Crea Partecipazioni Srl but Crea Gestioni Srl. Umbriadue Servizi Idrici Scarl, on 25/07/2011 index no. 93317 - register no. 23077, the merger by incorporation of companies Crea Partecipazioni srl and Acearieti Srl into Crea Gestioni srl was completed, effective as of 01/09/2011. Therefore, due to said merger, Umbria due Servizi’s shareholder is no longer Acearieti Srl but Crea Gestioni Srl. Acea Energia Holding S.p.A. within the context of the dissolution of the ACEA SpA – GdF Suez Energie Italia SpA joint venture agreements, which occurred on 31 March 2011, GdF Suez sold its stake in the share capital of then AceaElectrabel S.p.A. (equal to 40.59%) to Acea S.p.A. which subsequently became the sole shareholder of AceaElectrabel S.p.A. On the same date, the latter’s Ordinary and Extraordinary Shareholders’ Meetings resolved, among other things, to change the company name to “Acea Energia Holding S.p.A.”. Acea Energia S.p.A., at the Ordinary and Extraordinary Shareholders Meetings on 31/03/2011, changed its company name from AceaElectrabel Elettricità SpA to Acea Energia. Acea Produzione S.p.A., on 31 March 2011, the partial non-proportional demerger of AceaElectrabel Produzione S.p.A. took place, by means of notarial deed drawn up by Giovanni Giuliani of Rome, Index no. 56895, Register no. 20085, and the incorporation of the company Acea Produzione S.p.A. Dyna Green S.r.l. in liquidation, on 20/04/2011, the company was placed into liquidation. Elga Sud S.p.A. the shareholder is Acea Energia SpA, formerly AceaElectrabel Elettricità SpA (see above). Energy Molise S.c.a.r.l. in liquidation: the shareholder is Acea Energia SpA, formerly AceaElectrabel Elettricità SpA (see above). Umbria Energy S.p.A. the shareholder is Acea Energia SpA, formerly AceaElectrabel Elettricità SpA (see above). Voghera Energia Vendita S.p.A.: the shareholder is Acea Energia SpA, formerly AceaElectrabel Elettricità SpA (see above). Acea Electrabel Trading S.p.A. on 31/03/2011 the sale took place of an 84.17% stake from AceaElecreabel SpA to GdF SUEZ ENERGIA ITALIA Estra Elettricità S.p.A.: during the shareholders’ meeting of Estra Elettricità S.p.A. on 6 May 2011, shareholder Acea Energia S.p.A approved the share capital increase with the simultaneous waiving of the option right on subscription of the reconstituted share capital, hence losing the position as Estra Elettricità SpA shareholder. Roselectra S.p.A., on 31/03/2011, following the partial non-proportional demerger of AceaElectrabel Produzione S.p.A., Roselectra SpA was not included in the company perimeter transferred to Acea Produzione SpA (see above Acea Produzione SpA) Voghera Energia S.p.A., on 31/03/2011, following the partial non-proportional demerger of AceaElectrabel Produzione S.p.A., Roselectra SpA was not included in the company perimeter transferred to Acea Produzione SpA (see above Acea Produzione SpA). Longano Eolica S.p.A., on 31/03/2011, following the partial non-proportional demerger of AceaElectrabel Produzione S.p.A., Roselectra SpA was not included in the company perimeter transferred to Acea Produzione SpA (see above Acea Produzione SpA) Eblacea S.p.A. on 31/03/2011 Acea SpA sold its stake (equal to 30%) in share capital to GdF SUEZ ENERGIA ITALIA. Tirreno Power S.p.A. on 31/03/2011, was transferred due to the sale of Eblacea to GdF SUEZ ENERGIA ITALIA. A.PI.C.E. S.r.l. on 28/04/2011 index no. 92897 - register no. 22877, resolved to reduce share capital and change the company from a joint-stock company to a limited liability company. AQUASER S.r.l. on 21/10/2011 ACEA purchased a 10% stake in INTESA SPA. E.A.L.L. S.r.l. on 01/08/2011 index no. 93370/23100, the merger by incorporation into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011..

386



Share capital






Ecoenergie S.r.l. on 01/08/2011 index no. 93370/23100, the merger by incorporation of Enercombustibili S.r.l. into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011. Therefore, shareholder A.R.I.A. increased its stake from 64.80% to 90%. Enercombustibili S.r.l. on 01/08/2011 index no. 93370/23100, the merger by incorporation into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011. Ergo Ena S.r.l. on 01/08/2011 index no. 93370/23100, the merger by incorporation into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011. I.S.A. Innovazione Sostenibilità Ambientale S.r.l. on 30/03/2011, Aquaser purchased a 40% stake in the share capital of I.S.A., effective as of 01/04/2011, and on 21/10/2011, Acea increased its indirect stake in Aquaser by 10%. Kyklos S.r.l. on 21/10/2011, ACEA increased its indirect stake in Aquaser by 10%. R.E.C.L.A.S. S.p.A. in liquidation on 01/08/2011 index no. 93370/23100, the merger by incorporation of E.A.L.L. S.r.l. into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011. Therefore, due to this merger by incorporation, shareholder EALL S.r.l. was replaced by ARIA S.p.A.. Recupera S.r.l. in liquidation on 15 November 2011 the shareholders’ meeting approved the closing liquidation financial statements and resolved to cancel the company from the Companies’ Register (the aforementioned cancellation was recorded in the competent Companies’ Register on 3 January 2012). Solemme S.r.l. on 21/10/2011, ACEA increased its indirect stake in Aquaser by 10%. Terni En.A. S.p.A on 01/08/2011 index no. 93370/23100, the merger by incorporation into direct Parent Company A.R.I.A. S.p.A. was completed, effective as of 01/09/2011..


387

388



389

390



391

Corporate governance and ownership structure Relazione sullareport gestione pursuant to article 123-bis Finance Consolidation Act (TUF)

Contents 1. ISSUER’S PROFILE

396

2. OWNERSHIP STRUCTURE INFORMATION (as per art. 123-bis TUF, par. 1)

397

a. S hare capital structure (as per art. 123-bis TUF, lett. a)

397

b. Restrictions on stock transfers (as per art. 123-bis TUF, lett. b)

397

c. Relevant equity holdings (as per art. 123-bis TUF, lett. c)

397

d. Stocks with special rights (as per art. 123-bis TUF, lett. d)

397

e. E mployee equity holdings: mechanism of exercising voting rights (as per art. 123 bis TUF, lett. e) 397 f.

Restrictions on voting rights (as per art. 123-bis TUF, lett. f)

397

g. Shareholders’ agreements (as per art. 123-bis TUF, lett. g)

397

h. C hange of control clauses (as per art. 123-bis TUF, lett. h) and regulatory provisions concerning tender offers (as per art. 104, c.1.-ter, and 104-bis, c.1)

398

i.

Authority to increase share capital as per art. 2443 Italian Civil Code, directors’ authorities to issue participatory financial instruments and authorisations for the purchase of treasury shares (as per art. 123-bis TUF, lett. m) 398

j. Management and co-ordination (as per art. 2497 et seq. of the Italian Civil Code)

394

398

3. COMPLIANCE

399

4. BOARD OF DIRECTORS

399

4.1. APPOINTMENT AND REPLACEMENT (as per art. 123 bis, par. 1, lett. l), Finance Consolidation Act (TUF)

399

Termination of Director

400

Replacement of Director

400

Majorities required to make changes to the Articles of Association

400

Contents 4.2. COMPOSITION Maximum positions held in other Companies 4.3. ROLE OF THE BOARD OF DIRECTORS Function 4.4. DELEGATED BODIES

401 402 403 405 405

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM OF THE FINANCIAL DISCLOSURES PROCESS (art. 123-bis, par. 2, lett. b TUF)

417

a. Phases

418

b. Roles and responsibilities

420

11.1. EXECUTIVE DIRECTOR IN CHARGE OF THE ICSI

421

11.2. PERSON IN CHARGE OF INTERNAL CONTROL

421


405

Chairman

406

Joint authorities of the Chairman and Chief Executive Officer

406

General Manager

406

11.3. ORGANISATIONAL MODEL as per Italian Legislative Decree 231/2001 422

Board disclosures

407

11.4. AUDITING FIRM

422

4.5. OTHER EXECUTIVE DIRECTORS

407

4.6. INDEPENDENT DIRECTORS

407

11.5. EXECUTIVE RESPONSIBLE FOR FINANCIAL REPORTING

423

4.7. LEAD INDEPENDENT DIRECTOR

407

12. DIRECTORS’ INTERESTS AND TRANSACTIONS WITH RELATED PARTIES

424

5. MARKET DISCLOSURES OF COMPANY INFORMATION

408

13. APPOINTMENT OF STATUTORY AUDITORS 425

6. COMMITTEES WITHIN THE BOARD

408

14. STATUTORY AUDITORS

426

7. NOMINATIONS COMMITTEE

408

15. RELATIONS WITH SHAREHOLDERS

428

8. REMUNERATION COMMITTEE

409

16. GENERAL MEETINGS

429

9. REMUNERATION OF DIRECTORS

410

17. FURTHER CORPORATE GOVERNANCE PRACTICES

432

18. CHANGES SINCE YEAR-END CLOSE

432

Director indemnity in the event of resignation, dismissal or termination of contract following a take-over bid 411

TABLES

10. INTERNAL AUDIT COMMITTEE

412

11. INTERNAL CONTROL SYSTEM (ICS)

414

Tab. 2: Structure of the BoD and Committees 436

414

Tab. 3: Structure of the Board of Statutory Auditors

comprehensive INTERNAL CONTROL SYSTEM

a. Roles and tasks of various ICS parties 414 b. Risk Management system

414

c. Internal control system qualifying elements

415

d. Information flow system

417

e. Comprehensive evaluation of ICS adequacy

417

Tab. 1: Information on ownership structure 434

438

Chart 1: Other positions held by Directors 439

395

1. ISSUER’S PROFILE This report (hereafter “Report”) shows the corporate

trol system and the administrative-accounting system of

governance system adopted by ACEA S.p.A. (“ACEA” or

the company, supervises the legal audit of the separate

the “Company”).

and consolidated accounting, as well as on the indepen-

This system is arranged into a series of principles, rules

dence of the independent auditors, checks the methods

and procedures that are in line with the terms of the

of correct implementation of the corporate governance

Corporate Governance Code of Italian listed companies

rules set out by the Corporate Governance Code and the

issued by Borsa Italiana S.p.A., as well as with the recom-

observance of the procedure adopted by the company

mendations formulated by CONSOB on the subject and

concerning transactions with related parties.

with the national and international best practices.

The Independent Auditors in charge of the legal audit of

ACEA’s corporate governance structure is arranged ac-

the accounts, are obliged by law to check the regular

cording to the traditional organisational model and con-

corporate accounting and the correct reporting of opera-

sists of the following bodies: General meeting of share-

tional transactions in accounting entries, as well as the

holders, Board of Directors (assisted by the Committees

compliance of the separate and consolidated financial

set up as part of the same Board), Board of Statutory

statements to the regulations which govern the prepa-

Auditors and Auditing Firm.

ration and correct and truthful representation of the fi-

The General Meeting is the body which, with its resolu-

nancial situation and the net profit/loss for the period,

tions, expresses the will of the shareholders. The reso-

by expressing on this point a judgement on the financial

lutions taken in compliance with the laws and Articles

statements and on the consistency of the report on op-

of Association bind all the shareholders, including those

erations with the same financial statements. In addition,

absent or dissenting, notwithstanding the right of with-

the independent auditor is obliged by law to check some

drawal in the cases allowed. The meeting is convened,

accounting information contained in the Report on Cor-

according to the legal requirements and regulations en-

porate Governance and Ownership Structure.

visaged for companies with shares listed on regulated

This Report has been prepared using the “Format for the

markets, to resolve on the subjects reserved to it by the

corporate governance and ownership structure report”,

laws and Articles of Association.

issued by Borsa Italiana, in the version published in Feb-

The Board of Directors has the task of defining the Com-

ruary 2012.

pany’s and Group’s strategic guidelines and is respon-

The information in this Report, for 2011, has been up-

sible for governing their management. To this end, it is

dated to 21 March 2012, the date it was approved by the

vested with the broadest powers to fulfil all the deeds,

Board of Directors, with reference to specific matters.

and requirements, which it deems suitable to attain the corporate purpose, with the sole exclusion of those

396

which the law and the Articles of Association expressly

Regulatory profile 2011

reserve to the General Meeting. The Board has delegat-

As regards legal issues in 2011, significant provisions

ed, as shown in the paragraphs below, part of its mana-

were issued with legally binding or regulatory effect. For

gerial competence to the Chief Executive Officer and has

example: Consob communication DEM 11012984 of 24

appointed two Committees, which have consulting and

February 2011, whereby listed companies are, among

proposal functions: the Internal Audit Committee and the

other things, requested for information on the compen-

Remuneration Committee.

sation given for the early termination of relations with

The Board of Statutory Auditors supervises on the ob-

directors; law no. 120 of 12 July 2011 setting the quo-

servance of the law and the articles of association, as

tas for the composition of the corporate bodies of listed

well on the compliance of the principles of correct man-

companies; the new Corporate Governance Code issued

agement in performing the corporate activities, controls

in December, which will be applied by the end of the year

the process of financial disclosures, as well as the ad-

which begins in 2012 (see paragraph 3); Consob resolu-

equacy of the organisational structure, the internal con-

tion no. 18049 of 23 December 2011, in force from 31

2011 | Corporate governance report

December 2011, which, as per art. 123-ter, Legislative

shareholders’ meeting convened for the approval of the

Decree no. 58/1998, led to some amendments to the

financial statements at 31.12.2011, the Remuneration

Regulations for Issuers concerning the transparency of

Report of the members of the administration bodies, the

the remuneration of directors of listed companies, from

general manager and the managers with key responsi-

which the obligation derives for ACEA to submit to the

bilities.

2. OWNERSHIP STRUCTURE INFORMATION (art. 123-bis TUF, par. 1)

a) Share capital structure (as per art. 123-bis TUF, par. 1, lett. a) The Company’s share capital, which is 1,098,898,884.00

e) Employee equity holdings: mechanism of exercising voting rights (art. 123-bis TUF, par. 1, lett. e)

euros, fully issued and paid up, is divided into 212,964,900

In compliance with what is set forth by art. 13 of the Ar-

ordinary shares with a nominal value of 5.16 euros each;

ticles of Association, in order to facilitate the collection

51% of the share capital is held by Roma Capitale, while

of proxies from shareholders who are employees of the

the remaining 49% of the shares have been listed on the

Company or its subsidiaries, who adhere to sharehold-

electronic equity market (MTA) organised and managed

ers’ associations which meet the requisites dictated by

by Borsa Italiana since 16 July 1999.

the effective applicable regulation, appropriate spaces

There are no shares with limited voting rights or without

have been made available for notification and for carry-

voting rights, except for 416,993 treasury shares with

ing out the proxy collection process.

suspended voting rights, in accordance with art. 2357ter of the Italian Civil Code.

f) Restrictions on voting rights (as per art. 123-bis TUF, par. 1, lett. f)

b) Restrictions on stock transfers (as per art. 123-bis TUF, par. 1, lett. b)

Article 6 of the Articles of Association restricts an equity

There are no restrictions on stock transfers, except for

ception of the Municipality of Rome (today Roma Capi-

individual restrictions for individual shareholders.

tale); the Company shall be notified if this limit is exceed-

investment to 8% of the share capital, with the sole ex-

ed. This limit shall be considered reached, both in direct

c) Relevant equity holdings (as per art. 123-bis TUF, par. 1, lett. c)

and indirect terms, as better specified in paragraphs 2

Direct or indirect relevant equity holdings, as per art. 120

“General Meeting” chapter of this Report. If it is violated,

TUF, are listed in Table 1 based on the information re-

the shareholder shall be prohibited to exercise the voting

ported as at 16 March 2012 on the CONSOB site, notices

right for shares exceeding the indicated measure and, in

sent in accordance with the same article.

the event that a resolution was made with the determin-

and 3 of the cited article and as described below in the

ing vote originating from the shares exceeding that per-

d) Stocks with special rights (as per art. 123-bis TUF, par. 1, lett. d)

centage, the resolution shall become contestable.

No shares were issued that grant special control rights.


397

g) Shareholders’ agreements (as per art. 123-bis TUF, par. 1, lett. g) As far as the Company is aware, there are no shareholder agreements as per art. 122 TUF, special vetoes or any other arrangements involving special influence on decisions not directly related to shareholdings in the Company.

i) Authority to increase share capital as per art. 2443 of the Italian Civil Code or authority held by directors to issue participatory financial instruments and authorisations for the purchase of treasury shares (art. 123-bis TUF par. 1, lett. m) As at 31.12.2011, and also at the date of this report, the

h) Change of control clauses (as per art. 123-bis TUF, par. 1, lett. h) and regulatory provisions concerning tender offers (as per art. 104, paragraph 1-ter, and 104-bis, paragraph 1)

BoD does not hold the authority to increase share capital

Acea S.p.A. – Astrim S.p.A. Agreement of 25 June 2007

thorised by a resolution made by the ordinary general

(Ecogena JVA)

meeting on 23 October 1999, amended by a resolution

The agreement, still in force, regards the establishment

made by the ordinary general meeting on 29 April 2000,

of a joint company for the realisation and management/

re-approved with ordinary general meeting resolution

maintenance of co-generative/regenerative power gen-

on 31 October 2001 and supplemented by a resolution

eration facilities in small heat pump plants with geother-

made by the ordinary general meeting of 30 April 2002.

or to purchase Company treasury shares. Moreover, as already indicated, as of today the Company holds 416,993 treasury shares with suspended voting rights in accordance with art. 2357-ter of the Italian Civil Code, remaining from purchases of treasury shares, au-

mal integration.

involved in Acea’s share structure, moreover gaining

j) Management and co-ordination (as per art. 2497 et seq. of the Italian Civil Code)

ownership of proxies even if not necessarily holding a

Article 2497 et seq. of the Italian Civil Code is not ap-

position of control, and if the Parties have not found a

plicable since ACEA autonomously defines its own stra-

solution by an established date, Astrim can begin an exit

tegic policies and is endowed with full organisational,

process pursuant to art. 17 of the same JVA.

management and business autonomy, not being subject

Article 17 regulates the sales proposal phase of one par-

to any management and co-ordination activity.

Article 9.6 sets forth that if, while the contract is effective, an Astrim competitor (in specific sectors) becomes

ty regarding the other and the effect is alternatively: i) pro quota division; ii) sale of one’s own quota; iii) acquisition of the remaining quota. Both cases shall lead to the dissolution of the JV. The articles of association do not include any provision concerning tender offers.

398


3. COMPLIANCE

(as per art. 123 bis, par. 2, lett. a), Finance Consolidation Act (TUF) ACEA had adhered to the Code of Conduct (“Code”) for

the committees within the Board and the rationalisation

listed companies in the version issued in 2001, and has

of the internal control and risk management system by

subsequently adapted and incorporated the principles

the end of the year that starts in 2012.

contained in the Code of Conduct approved in March

The Code, approved by the Corporate Governance Com-

2006, and amended in March 2010, only for art. 7 relat-

mittee and published by Borsa Italiana S.p.A., contains a

ing to the remuneration of the directors and managers

well developed series of best practice recommendations

with key responsibilities. In relation to the new Corporate

for the management and control of listed companies.

Governance Code issued in December 2011, ACEA start-

Its text is available at website www.borsaitaliana.it.

ed the procedure to apply the amendments included

The methods for incorporating what is set forth by the

therein, mainly regarding the organisation and tasks of

Code are illustrated in the various Sections of the Report.

4. BOARD OF DIRECTORS 4.1 APPOINTMENT AND REPLACEMENT (art. 123-bis, par.1, lett. l) TUF)

• the appointment occurs as follows: A. half plus one of the directors to be appointed shall be taken from the list which obtained the

The appointment and replacement of Directors are reg-

majority of votes (“Majority Shareholder List”),

ulated by the effective regulation, as incorporated and

in numerical order, rounding down to the lesser

integrated, within the allowed limits, by the Articles of

unit in the event of a fractional number;

Association, prepared in adherence to and compliance

B. without prejudice to compliance with legal regu-

with the requisites of the Code of Conduct for listed

lations and the Articles of Association provisions

companies.

regarding limits of relation with the majority

According to the Company’s Articles of Association, the

shareholder list, the remaining directors shall

Board of Directors consists of a number of members not

be taken from the other lists. To this end, the

lower than five and not higher than nine, appointed by

votes that the lists receive shall be divided, for

the ordinary general meeting of shareholders (which de-

each list, subsequently by 1, 2, 4 and 8 up to the

termines the number within these limits) for a period not

number of directors to be elected. The quotients

exceeding three years, who can be re-elected at the ex-

obtained in this way shall be progressively as-

piration of their term.

signed to the candidates of each of those lists,

Directors may be elected who possess the requirements

according to the list order respectively assigned

according to the law and regulatory provisions.

to the candidates. The quotients so allocated to

The appointment of the directors is governed by art. 15.1

the candidates from the various lists shall be

of the Articles of Association, which establishes that:

arranged in a single decreasing ranking. Those

• for Directors, the election is made based on the lists in which the candidates shall be listed in numerical

who have obtained the highest quotients shall be elected.

order in accordance with the positions be filled; each

In the event that more than one candidate ob-

list is required to indicate at least two candidates

tains the same quotient, the candidate from

who qualify as independent in accordance with the

the list that did not elect any director or which

law; the first independent candidate shall not be

elected the lowest number of directors shall be

placed beyond the second position on the list and

appointed.

the second candidate not beyond the fourth position;


399

In the event that none of these lists has yet

original list. In case the retiring Director belonged to a

appointed a director, or all have appointed the

list different from the Majority List, the non-relation re-

same number of directors, from among these

quirement with the Majority List shall not be observed.

lists, the candidate from the list that received

If the retiring Director met all independence require-

the highest number of votes shall be appointed.

ments, and, because of his retirement, the number of

In the event that the list votes are equal, and the

independent directors was reduced to below the mini-

quotients are equal, a new vote shall be carried

mum number required by law, the first unelected can-

out by the entire general meeting, and the can-

didate on the list to which the retiring Director meeting

didate who receives a simple majority of votes

the independence requirements belonged shall be co-

shall be appointed.

opted. Directors so appointed shall remain in office until

In any case, if only one regular list is presented

the first subsequent general meeting.”

other than the majority shareholder list, the candidates shall be elected from this one, according

Replacement of Director:

to the order of presentation”.

In accordance with art. 15.4: “When appointing Directors

The election mechanism introduced guarantees the ap-

to replace any Directors who stepped down during the

pointment of at least one director representing the mi-

year, by majority vote the meeting will choose the Direc-

nority shareholders as well as the appointment of the

tor to be replaced, where possible, from the unelected

minimum number of independent directors in accor-

candidates on the list that the outgoing Director formed

dance with law (one if the Board has less than seven

part of, who had confirmed his or her candidature in writ-

members, two if the Board has more than seven mem-

ing at least ten days prior to the date scheduled for the

bers) as per art. 147-ter, par. 4 TUF.

meeting, along with the statements regarding the fact

The lists shall be submitted “at least twenty and twenty-

that there are no reasons for which he or she would be

five days respectively, before the date set for the first

ineligible or there would be any incompatibly, and that

meeting by the exiting Directors or by the Shareholders

the requirements provided by prevailing law of the Ar-

who alone or together with other shareholders, repre-

ticles of Association for the position were fulfilled.

sent at least one percent of the shares entitled to vote at

If the Director cannot be replaced using this method, a

the ordinary general meeting.”

resolution must be passed by majority vote, however in

No party can be a candidate in more than one list and

accordance with requirements regarding minority repre-

each shareholder has the right to vote for only one list.

sentation and minimum number of independent Direc-

The lists of candidates shall be deposited at the regis-

tors.

tered office and the Company shall ensure that they are

The Directors appointed in this manner will remain in of-

publicised and published in three national daily newspa-

fice for the same duration as the other Directors.

pers, at its own expense.

If, for any reason, the number of Directors in office is reduced to less than half, the entire Board of Directors will

Termination of Director:

be understood to have been terminated, and the Meet-

In accordance with art. 15.3: “If during the financial

ing must be called at the earliest opportunity to re-estab-

year a Director appointed according to the list sys-

lish it. However, the Board will remain in office to carry

tem described above is no longer able to perform his/

out ordinary administration duties only, until the Meeting

her function, the Board shall replace him/her, through

has decided on its re-establishment, and at least half of

co-optation pursuant to Article 2386 of the Italian Civil

the new Directors have been accepted for the position

Code, with the first non elected of the list to which also

at least.”

the ceased Director belonged or, in case such list does not have any other candidate, with the first candidate among the non elected ones, irrespective of his/her

400


Majorities required to make changes to the Articles of Association

Marco Staderini: born 11 July 1946 in Rome, a civil

In accordance with article 12 of the Articles of Associa-

Monte dei Paschi Capital Services Banca per l’Impresa

tion, to make changes to the articles of associations, the

and Director of RAI. He held the position of CEO-General

Extraordinary shareholders’ meeting resolves with the

Manager and then Chairman of Lottomatica.

majorities set forth by law.

Elected in accordance with list no. 1 presented by the

engineering graduate, he was the deputy chairman of

above-mentioned Municipality of Rome. Appointed Chief Executive Officer in the Board of Directors meeting of 3

4.2 COMPOSITION (as per art. 123 bis, par. 2, lett. d), Finance Consolidation Act (TUF)

May 2010.

The meeting dated 29 April 2010 appointed a 9-mem-

has a degree in Sociology, with physics and business ad-

ber Board of Directors that is in place up to the date

ministration studies completed in France and the United

of the General Meeting called to approve the financial

States. Has been the director of several companies in the

statements for the 2012 financial year, consisting as so:

financial sector. He was also Chairman of Banca Popolare

Giancarlo Cremonesi (Chairman), Marco Staderini (CEO),

di Milano. Until 2006 he was a lecturer in Economics and

Paolo Giorgio Bassi, Luigi Pelaggi, Andrea Peruzy, Frances-

company organisation at the degree course in IT, Faculty

co Caltagirone, Paolo di Benedetto, Jean Louis Chaussade

of Science, Mathematics, Physics and Nature of the Uni-

and Aldo Chiarini. The latter resigned on 10 November

versità degli Studi di Milano/Bicocca.

2011 and in his replacement, in the meeting of the BoD of


29 November 2011, Giovanni Giani was co-opted.

above-mentioned Municipality of Rome.

Paolo Giorgio Bassi: born on 15 April 1950 in Ferrara,

Of the aforesaid directors in office, 2 are executive Directors (the Chairman and the CEO), to which the Board has

Luigi Pelaggi: born in Catanzaro on 30/09/1954, a law

delegated individual management authorities, while the

graduate. Lawyer and Councillor of the Minister for the

remaining 7 Directors are non-executive and do not have

Environment and the protection of the territory and sea.

individual management authority.

He was head of the Technical Secretariat of the Minister

The following provides a summarised personal and pro-

for the Environment and the protection of the territory

fessional profile of the Directors in office as at 31.12.2011:

and sea and Chairman of the “Commission for the evaluation of investments and for support to the planning and

Giancarlo Cremonesi: born 16 April 1947 in Rome, a

management of environmental actions – COVIS”. He is a

law and political science graduate, registered in the Reg-

member of the Board of Directors of Sogesid S.p.A. and

ister of lawyers of Rome. He is currently the President

Special Commissioner for the emergency in the Aeolian

of the Chamber of Commerce of Rome, President of

Islands. He carried out, for leading Italian companies,

Confservizi, member of CNEL [State Institute of Economy

consultancy activities for “Institutional Relations”, with

and Labour], member of the board of management of As-

special reference to energy and environmental issues.

sonime, member of the executive junta and the Listed


Companies Committee of Federutility. He was the Chair-


man of ACER and a member of the Commission for the Future of Rome the Capital.

Andrea Peruzy: born in Rome on 07/06/1962, a law


graduate, he is a member of the Board of Directors in

Municipality of Rome (containing: no. 1 Giancarlo Cremo-

companies operating in the industrial, financial and real

nesi, no. 2 Paolo Giorgio Bassi, no. 3 Marco Staderini, no. 4

estate sector.

Luigi Pelaggi, no. 5 Andrea Peruzy); the appointment pro-


posal obtained a vote in favour by 74.317% of the voters.



401

Francesco Caltagirone: born in Rome on 29 October

Co-opted by the Board of Directors of ACEA on 29 No-

1968. Currently Chairman of the Board of Directors of

vember 2011, replacing the resigning Aldo Chiarini, pur-

Cementir Holding, Deputy chairman of the Board of Di-

suant to art. 2386 of the Italian Civil Code, paragraph 1

rectors of Banca Antonveneta S.p.A and Director in the

and article 15, paragraph 3, of the Articles of Association,

following S.p.A.s: Banca Finnat Euramerica, Caltagirone

as the first of the unelected from the list presented by

and Caltagirone Editore.

the shareholder Ondeo Italia during the General Meeting

Elected on the basis of list no. 2 presented by Fincal SpA,

on 29 April 2010.

owner, at the time of the shareholders’ meeting for the no. 1 Francesco Caltagirone, no. 2 Paolo di Benedetto,

Maximum positions held in other Companies

no. 3 Marco Maria Bianconi, no. 4 Mario Delfini) and who

The BoD in its session on 23 March 2011, subject to the

obtained the vote in favour by 13.0077% of the voters

favourable opinion of the Internal Audit Committee, re-

with a quotient of 19,216,739.

solved that the maximum number of positions that each

appointment, of 3.897% of the share capital (containing

Director can hold in listed companies is 10, including the Paolo di Benedetto: born on 21 October 1947 in Rome,

one held in ACEA, so that maximum availability to carry

a law graduate with a diploma in administration, lawyer.

out the role is ensured (Application criteria 1.C.3.).

He was Chief Executive Officer of BancoPosta Fondi SGR,

The nature of Directors’ responsibilities requires that

from 2003 to 2010 a CONSOB member and a temporary

they have sufficient time to pursue their duties; the na-

lecturer in stock market law at the University LUISS in

ture and number of other positions held by serving Direc-

Rome and the University of Rome Tor Vergata. Presently

tors must permit them to perform their duties to the best

he is the Chairman of the Fondo Nazionale di Garanzia

of their ability.

among the brokers and a board member of Banca Finnat

From the communications made by the directors of the

Euramerica S.p.A.

company, as well as the assessments made by the Board

Elected in accordance with list no. 2 presented by

of Directors, most recently during the meeting on 21

the above-mentioned Fincal SpA, with a quotient of

March 2012, it emerged that each of ACEA’s directors

9,608,369.5.

holds a number of tasks in the administration and control bodies of other listed companies, which is compatible

Jean Louis Chaussade: born on 2 December 1951 in

with the maximum number resolved in the above men-

Chalons-sur–Marne (France), engineer, is a Member of

tioned meeting.

the Supervisory Board of GDF Suez and Chief Operating

More detailed information on the number of positions

Officer in Suez Environnement Company.

held by the members of the Board with reference to

Elected on the basis of list No. 3 presented by Ondeo

the resolution on the number of positions is available in

Italia SpA, holder, at the time of the shareholders’ nomi-

Chart 1 attached to this Report.

nations meeting, of 4.99% of the share capital (containing no. 1 Jean Louis Chaussade, no. 2 Aldo Chiarini, no. 3 Giovanni Giani, no. 4 Jean-Francois Carriere, no. 5 Mauro Alfieri, no. 6 Agostino Scornajenchi, no. 7 Luca Manna, no. 8 Luca Valerio Camerano, no. 9 Olivier Jacquier) who obtained the vote in favour by 11.5324% of the voters with a quotient of 17,037,192. Giovanni Giani: born in Lecco on 14/01/1950, engineer, he is the Chairman and CEO of Ondeo Italia, the Italian holding company of Suez Environnement.

402


4.3 ROLE OF THE BOARD OF DIRECTORS

lion euros if not included in the budget (Application criteria 1.C.1., f);

Pursuant to art. 19 of the Articles of Association, the Board

• adopt, with the assistance of the Internal Audit Com-

of Directors is vested with exclusive powers to manage

mittee, measures aimed to ensure that the opera-

the Company, apart from the actions reserved by law to

tions in which a director holds an interest, on his/her

the General Meetings.

own behalf or of third parties, and those existing with

Pursuant to article 20 of the Articles of Association and ac-

related parties are carried out in a transparent man-

cording to what was reserved to the same Board the reso-

ner and in compliance with the criteria of substan-

lution of 3 May 2010 and in compliance with the Applica-

tial and procedural correctness (Application criteria

tion criteria 1.C.1., let. a, other than the subjects pursuant to art. 2381, par. 4, of the Italian Civil Code, the following tasks are reserved to the Board of Directors:

1.C.1., f); • establish, upon proposal by the appropriate Committee and in consultation with the Board of Statutory

• establish the strategic and general management

Auditors, the remuneration of the Chairman, the CEO

guidelines and development areas for the Company;

and the other Directors that carry out specific duties,

economic and financial co-ordination of group activi-

and the amount due to the members of the Board

ties by approving multi-year strategic plans including

Committees, and payment for top management (Ap-

guidance on Group development, investment plans,

plication criteria 1.C.1., d);

financial plans, and annual budgets; making and dis-

• with the assistance of the Internal Audit Committee

posing of equity investments, excluding infra-group

(hereinafter also “IAC”), details of which can be found

transactions;

in chapter 10, define the guidelines for the internal

• approve and change internal regulations for what

control system in such a way that the principal risks

concerns the Company’s general organisational

to which Acea SpA and its subsidiaries are exposed

structure, the Group’s macrostructure and any sig-

are correctly identified, and adequately measured,

nificant changes;

managed and monitored, and determining criteria to

• appoint the General Manager;

assess the compatibility of such risks with a sound

• establish the Committees set forth by the Code of

and correct management of the business (Applica-

Conduct; appointing directors to the Internal Control

tion criteria 8.C.1 a);

and Remuneration Committees and to other BoD

• assess the adequacy of the organisational, adminis-

Committees and approving the Regulations for com-

trative and accounting structures of ACEA and of its

mittee operations;

subsidiaries of strategic importance as drawn up by

• adopting the Organisation and Management Models

the Chief Executive Officer, with particular reference

in accordance with and for the effects pursuant to

to the internal control system and management of

Italian Legislative Decree 231/2001;

conflicts of interest affecting the business (Applica-

• as far as ACEA is responsible, designate directors and

tion criteria 1.C.1 b);

statutory auditors for significant subsidiaries, under-

• assess general business performance (art. 2381 of

stood as those listed on regulated markets and those

the Italian Civil Code), particularly taking into account

which require capital commitments, shareholder fi-

information received from delegated bodies, and pe-

nancing or guarantees of more than 10 million euros;

riodically comparing the actual results with targets

• attribute and revoke CEO delegations, defining their limits and methods of exercise (Application criteria 1.C.1., c);

(Application criteria 1.C.1. e); • appoint and terminate: - in consultation with the IAC, the Chief Executive

• reserve and exercise the authority on behalf of Acea

Officer as the executive Director with responsi-

and its subsidiaries for amounts of more than 7.5 mil-

bility for supervising the activities of the internal

lion euros if in line with the budget, and over 1 mil-

control system (Application criteria 8.C.1. b);


403

- upon the proposal of the Chief Executive Officer

The Board of Directors has provided for fulfilling

and in consultation with the Internal Audit Com-

the aforesaid tasks in these ways, among others:

mittee, a Person in charge of Internal Control

• evaluated the general performance during 2011,

(Criteria 8.C.1), who is also the Audit segment

when preparing the accounting reports [draft fi-

manager (Criteria 8.C.7);

nancial statements for the year and consolidated

- if the general meeting has not provided for this

financial statements as of and for the year ended

and considering the Board of Statutory Auditors’

31/12/10; half-year financial reports; intermediary

judgement, an executive responsible for finan-

directors’ report for the 1st and 3rd quarter of the

cial reporting (as per Articles of Association art.

financial year], particularly taking into consider-

22-ter) and supervising the adequacy of authori-

ation information received from delegated bod-

ties and resources for exercising the tasks at-

ies, as well as periodically comparing the results

tributed to him (art.154-bis of the TUF);

achieved with those budgeted (Application criteria

• based on the activities carried out by Board Committees, assess and approve all matters for which they have been assigned responsibility;

1.C.1., e); • approved the new organisational macro-structure of the company resulting in introduction of the

• establish corporate procedures for personal or

role of General Manager, effective as of 1 February

confidential third-party data treatment and prepar-

2011, which the Chief Executive Officer authorised

ing an annual security programme document (as per Italian Legislative Decree 196/2003); • adopt the procedures necessary to protect the

to take over the operations management; • resolved at the meeting on 21 December 2011, the remuneration policy, pursuant to art. 123-ter of

health of workers and appointing parties to over-

TUF, paragraph 2.

see occupational safety (as per Legislative Decree

On 21 March 2012, the BoD:

81/2008);

• evaluated the effectiveness and effective op-

• with the support of the preliminary activities car-

erations of the internal control system (hereafter

ried out by the Internal Audit Committee, at least

“ICS”) (Application criteria 8.C.1 c) as well as the

annually evaluate the adequacy, effectiveness and

adequacy of the organisational, administrative

effective operations of the internal control system

and general accounting structure of the Company

(Application criteria 8.C.1 c) and express its evalu-

and of the subsidiaries with strategic importance

ation on the system’s comprehensive adequacy in

drawn up by the CEO, with particular reference to

the corporate governance report (Application crite-

the management of conflict of interests, retaining

ria 8.C.1 d);

that Acea’s internal control system is comprehen-

• work to establish continuous dialogue with shareholders founded on a reciprocal understanding of roles (Principle 11.P.2);

sively suitable for enabling the pursuit of company objectives. • carried out, as an integral part of the aforesaid

• promote initiatives aimed at favouring the broad-

evaluation process, a self-assessment of the com-

est possible participation of shareholders in gen-

position and operations of the Board and its inter-

eral meetings and facilitating the exercise of share-

nal Committees (Application criteria 1.C. 1 lett. g).

holder rights (Principle 11.P.1);

This evaluation regarded the independence, struc-

• at least once a year, carry out a self-assessment

ture and composition of the Board of Directors, the

of its size, composition, functions (Application cri-

operations of the Committees and the Board and

teria 1.C.1.g) and independence (Application crite-

the information flows received by the Board and

ria 3.C.1).

by its Committees in exercising their functions. To fulfil the evaluation tasks, the Board made use of the set of information collected while carrying

404


out its own policy-making and supervision activi-

resolution proposals from the Managers for the specific

ties established by the reference regulation and,

subjects at least 15 days prior to the BoD meeting.

through specific Internal Audit Committee activi-

At least 6 days before the date set for the Board’s ses-

ties, the contribution of management and the Per-

sion, the business segment secretary submits the res-

son in charge of Internal Control.

olution proposals and disclosures along with the draft

Particularly, we note the adequacy of the structure

Agenda, already seen by the CEO, to the BoD Chairman

and its makeup, both regarding the size and the

for approval.

ratio between executive, non-executive and inde-

The Chairman draws up the Agenda, also inserting pro-

pendent directors, and regarding the competen-

posals and topics within his sphere of responsibility,

cies located therein and that we have arrived at a

which, at least 3 days before the date set for the Board

similar result regarding the committees.

session, is transmitted to the individual Directors and

The results are also positive with reference to the

to the members of the Board of Statutory Auditors, to-

maximum number of offices held by directors and

gether with all of the documentation prepared by the

the consequent availability for the time neces-

Company’s units.

sary to effectively fulfil their responsibilities within

Company (or Group company) managers or consultants

Acea.

may be invited to participate in the phase of discussing the points of the Agenda, but they must exit the meeting

Function

before the Board makes a resolution.

In compliance with the terms provided for by law and with the timetable, the Board meets regularly, organising itself and operating so as to guarantee that it will

4.4 DELEGATED BODIES

effectively and efficiently carry out its functions. During 2011 the Board of Directors held 11 meetings,


each lasting about 3 hours on average, with the regular

In compliance with art. 20 of the Articles of Association,

participation of the directors and the attendance of the

the Board has delegated to the Chief Executive Officer

Board of Statutory Auditors.

all powers of management, signature, legal and court

The participation of each director in the Board meetings

representation as well as all related powers, within cer-

is reported in Table 2.

tain limits.

For 2012, four BoD meetings for the approval of period

As decided at the BoD meeting of 3 May 2010, the Chief

financial reports have been planned and communicated

Executive Officer will:

to the market. To date, 2 meetings have been held.

• perform his duties based on long-term plans and

The Board works in accordance with an operations regu-

annual budgets approved by the Board and as-

lation which has been in effect since 22 April 2003, and

suring and verifying compliance with operating

governs the methods for guaranteeing timely and com-

guidelines. Those powers have been delegated to

plete pre-meeting disclosures; the regulation provides

the Chief Executive Officer for ACEA and its sub-

that resolution proposals and disclosures should be sent

sidiaries, with respect to transactions of 7.5 million

to the business segment secretary, together with all the

euros or less (tender contracts, purchases, leases,

useful documentation checked by the General Manager

disposals, participation in tenders, etc.) if in line

and the Managers for the specific subjects, at least 10

with the budget and up to 1 million euros if it is

calendar days before the date set for the Board’s ses-

outside of the budget; for Group subsidiaries work-

sion. The segment then submits these without delay

ing in the electric energy and gas markets, the

to the CEO for approval, for the purpose of drafting the

authorities granted to the CEO include: i) issuing

Agenda.

guarantees or other sureties for up to 12 million

For this purpose, the General Manager must receive the

euros if budgeted and up to 2 million euros if not


405

budgeted; ii) issuing all guarantees or other obliga-

The BoD’s activities are co-ordinated by the Chairman,

tory sureties to the AEGG [Italian Electric Energy

who calls board meetings, sets their agendas and chairs

and Gas Authority], GME [Energy Market Manager,

the meetings, ensuring that the directors are provided

Terna SpA and the Single Buyer;

with the documentation and information necessary in a

• organisational and procedural implementation of

timely manner - except for in necessary or urgent cases

the Parent Company’s operations in compliance

- so that the Board can express a knowledgeable opinion

with guidelines approved by the Board of Directors;

on the subjects submitted for examination.

• acting and coordinating the Management CommitCompany managers, and is responsible for moni-

Joint authorities of the Chairman and Chief Executive Officer

toring the Group’s operating performance and indi-

With a BoD resolution on 3 May 2010, joint proxy was

vidual areas of business, as well as any failures to

also granted to the Chairman and the CEO, in the event

meet targets;

of proven urgency and necessity, with the right to im-

tee, a Consulting Committee that is comprised of

• ensures the correct management of corporate in-

plement acts normally reserved to the BoD regarding

formation (Application criteria 4.C.1). Please refer

contract work, purchases, company transformation, par-

to chapter 5 “Market Disclosures of Company Infor-

ticipation in tenders and issuing of guarantees when ur-

mation” for more details.

gency does not allow for calling the BoD. In the first sub-

Furthermore, with resolution of 15 September 2009, the

sequent meeting they are required to inform the Board,

CEO was granted the role of executive director responsi-

which shall verify that the requirements of necessity

ble for supervising the operations of the internal control

and urgency were fulfilled, to appoint the members of

system, allocating him the tasks indicated in paragraph

the Board of Statutory Auditors and the members of the

11 (Application criteria 8.C.1.b).

Board of Directors of the subsidiaries, and most significant associated companies, intended as the following:

Chairman Pursuant to art. 20 of the Articles of Association, the Chairman is the Company’s legal representative and signatory and, furthermore, may convene and chair Board and General Meetings.

• listed on regulated markets or with publicly traded shares pursuant to art. 116 of Legis. Decree 58\98 of the Consolidated Finance Act; • that require capital commitments, shareholder loans or guarantees of more than 10 million euros.

With a resolution made on 3 May 2010, the Board del-

In addition, the Chairman and the CEO will appoint the

egated certain institutional policy and control duties to

members of the Board of Statutory Auditors and the

the Chairman, granting him the corresponding manage-

Boards of Directors of Group Companies of Acea S.p.A.

ment delegations, particularly:

that are not considered to be the “most significant.”

• monitoring Group operations and verifying the implementation of Board resolutions and corporate

General Manager

governance rules;

The General Manager, Mr. Paolo Gallo, appointed by the

• verifying corporate activities and procedures with

took office on 1 February 2011.

ceived, environmental impact and social sustain-

The Chief Executive Officer granted the same, by special

ability;

power of attorney, in compliance with the resolutions of

• supervising and co-ordinating the strategic committee, still being revised; • supervising the BoD secretary and all related activi-

406

BoD pursuant to art. 20 of the Articles of Association,

respect to the quality of services provided and re-

the BoD, the powers of ordinary management of the Parent company and the individual businesses, excluding the activities reserved to him.

ties, including the co-ordination of the Board secre-

The General Manager works, within the limits of his/her

taries for subsidiaries.

responsibility and within the scope of the order by the


CEO, long-term plans and annual budgets approved by

ruzy, Paolo di Benedetto, and Jean Louis Chaussade (see

the Board of Directors.

table 2).

The powers granted to the General Manager are exer-

The procedure followed by the Board to verify the inde-

cised for ACEA and its subsidiaries with a spending limit

pendence provides for the existence of the requirement

of 5 million euros (tender contracts, purchases, leases,

to be declared by the Director when presenting the list

disposals, participation in tenders, etc.) if in line with the

as well as at the time of accepting the appointment, and

budget and up to 500,000.00 euros if outside the bud-

to be ascertained by the Board of Directors in the first

get; for Group subsidiaries working in the electric energy

meeting following the appointment. The independent

and gas markets, the authorities granted to the General

director also undertakes to promptly communicate to

Manager include: i) issuing guarantees or other sureties

the Board of Directors the occurrence of any situation

for up to 8 million euros if budgeted and up to 1.5 million

that make this requirement cease to apply.

euros if not budgeted; ii) issuing all guarantees or other

The directors were assessed as independent pursuant

obligatory sureties to the AEGG [Italian Electric Energy

to law and art. 3 of the Corporate Governance Code.

and Gas Authority], GME [Energy Market Manager, Terna

Therefore, based on the information provided by the

SpA and the Single Buyer.

individual subjects concerned or in any case available to the Company, immediately after the appointment,

Board disclosures

in March 2011 and, most recently, in March 2012, the

Pursuant to art. 20 of the Articles of Association and in

Board of Directors certified the existence of the re-

compliance with legal dispositions, the BoD, as well as

quirement of independence included in the Corporate

the Board of Statutory Auditors, shall receive constant

Governance Code for the above mentioned directors.

and exhaustive disclosures from the Chairman and

The Board of Statutory Auditors, in compliance with the

the CEO regarding activities carried out while exercis-

provisions contained in art. 3 of the Code, verified the

ing proxies, reported on an at least quarterly basis in

correct application of the criteria and procedures ad-

a dedicated report regarding the general business per-

opted by the Board of Directors to assess the indepen-

formance and its foreseeable outlook. Particularly, for

dence of its members.

what concerns all of the more important transactions

The Independent Directors met on 21 March 2012 and

carried out in the context of their own authorities (in-

expressed their own independent evaluation on the

cluding therein any atypical transactions or transactions

BoD’s operations, judging its organisation to be positive,

with related parties, whose approval is not reserved to

furthermore expressing appreciation for the compre-

the BoD), the Chief Executive Officer and the Chairman

hensive organisational structure of the Internal Control

shall refer to the Board about the characteristics of those

System, the general performance of business and man-

transactions, the subjects involved and any relation to

agement independence.

the Group, the methods of determination and the related economic and equity effects.

4.5 OTHER EXECUTIVE DIRECTORS There are no other executive directors.

4.7 LEAD INDEPENDENT DIRECTOR On 21 March 2012, as in previous years, the BoD confirmed that the requisites set forth by the Code of Conduct for establishing a lead independent director position are still unfulfilled, taking into account that the Chairman

4.6 INDEPENDENT DIRECTORS As at 31.12.2011 and to date, there are 5 independent

of the Board does not hold the main role of company manager (chief executive officer) nor does he have a controlling interest in the company’s share capital.

non-executive directors in the Board of Directors, specifically: Paolo Giorgio Bassi, Luigi Pelaggi, Andrea Pe-


407

5. MARKET DISCLOSURES OF COMPANY INFORMATION Since September 2006, upon proposal of the CEO,

A List of persons who have access to Privileged In-

ACEA’s BoD has adopted a Regulation for the internal

formation has been kept since the same year, as per art.

management and market disclosure of company

115-bis of the Finance Consolidation Act (TUF). Privileged

documents and information (Application criteria

Information for these purposes is defined as information,

4.C.1), which can be consulted on www.acea.it (in the

pursuant to art. 181 of the TUF, which is not in the public

corporate governance section), which:

domain, and relates directly or indirectly to ACEA and/

• establishes the methods of processing and distributing company information within the Group;

or its Subsidiaries and that, if made public, would have a material effect on the price of the Company’s shares.

• establishes the confidentiality obligations for the

In addition an Internal Dealing regulation was ad-

Company’s employees who come into possession

opted in compliance with the provisions under art. 114

of information whose imprudent dissemination

par. 7 of the Finance Consolidation Act (TUF) which, upon

could be damaging to the Company’s and/or its

request of relevant parties who assign the relative task,

shareholders’ assets; establishes the Company’s

sets forth that ACEA may make legal notifications on

obligation, in certain circumstances, to provide

their behalf regarding transactions on financial instru-

timely and full information to the markets;

ments related to the Company which they have carried

• The regulations also govern announcements of

out or which people closely related to them have carried

Price Sensitive information in order to avoid distor-

out, if these transactions exceed 5,000.00 euros over the

tions and misstatements.

course of the year.

6. COMMITTEES WITHIN THE BOARD

(as per art. 123-bis, par. 2, lett. d), Finance Consolidation Act (TUF) The BoD has established two internal committees with

On 11 November 2010 the BoD also created the Commit-

proposal and consulting functions: the Internal Audit

tee to inspect Transactions with Related Parties (OPC),

Committee and the Remuneration Committee.

according to the procedure approved by the same BoD,

The composition, duties and functioning of the commit-

in compliance with the “Regulation containing provisions

tees are regulated by specific regulations, approved by

regarding transactions with related parties” pursuant

the BoD.

to Consob resolution no. 17221 of 12 March 2010 as

The Committees comprise not less than three non-exec-

amended, which took effect as of 1 January 2011 (see

utive directors, the majority of whom are independent.

paragraph 12).

7. NOMINATIONS COMMITTEE

408

It was decided not to establish a Nominations Commit-

directors who resign during the financial year with the

tee, considering the fact that voting by list for the ap-

replacement by co-optation in accordance with art. 2386

pointment of the BoD and the Board of Statutory Au-

Italian Civil Code with the first unelected from the list

ditors is already governed in art. 15 of the Articles of

containing the outgoing director or, if that list does not

Association, as previously described, and furthermore,

contain the candidate, with the first of those unelected

because the same article sets out the replacement of

regardless of the list they were on.


8. REMUNERATION COMMITTEE As at 31 December 2011, the Remuneration Commit-

The tasks of the Committee were not amended in 2011

tee is made up of four non-executive (Principle 7.P.3.)

and thus remain confirmed with the provisions of the

independent (Application criteria 7.P.3) directors, spe-

regulations.

cifically: Paolo di Benedetto (as co-ordinator), Jean Louis

The Directors shall not participate in Committee meet-

Chaussade, Luigi Pelaggi and Andrea Peruzy.

ings in which proposals to the BoD are formulated re-

The composition and function of the Committee were

garding its own remuneration.

not subject to amendments during 2011 and are gov-

The Committee can have access to the necessary infor-

erned by suitable Regulations approved by the BoD. The

mation for carrying out its tasks, including through cor-

Committee does not currently include members with

porate segments, and using external consultants within

knowledge and experience on accountancy and financial

the terms defined by the BoD (Application criteria 5.C.1.,

matters.

lett. e).

During 2011, the Committee held 4 meetings, in which

During 2011, the Committee:

minutes were regularly taken and the members regularly

1. Ratified the aggregation of the variable incentive

participated. They lasted for an average of 2.00 hours

part (Financial year 2010) and acknowledged the

each (Application criteria 5.C.1., lett. d).

achievement of the economic-financial targets, of

As set forth in the regulation approved by the BoD, the Remuneration Committee fulfils the following tasks:

the figures of the Group’s top management; 2. Assessed the criteria adopted with regard to the

a) making recommendations to the Board of Direc-

selection, choice and remuneration of a manager

tors regarding the remuneration of chief executive

with key responsibilities, in the role of the new

officers and other executive Directors, monitoring

Director of Personnel and Organisation. Likewise

application of the decisions taken by the Board

assessed the criteria adopted with regard to the

(Principle 7.P.4.);

selection, choice and remuneration of the new ICT

b) periodically assessing the criteria adopted with re-

Manager;

gard to the remuneration and appraisal of key man-

3. Examined and approved the text of the Report to

agers, overseeing their application on the basis of

the Internal Audit Committee and the Board of Di-

the information provided by the Chief Executive Of-

rectors which refers to the activities carried out in

ficer and making general recommendations to the

the 2nd half of 2010 (3 May - 31 December 2010)

Board of Directors regarding such matters (Applica-

and relating to the 1st half of 2011;

tion criteria 7.C.5.);

4. Redefined the scope of interest of the Committee

c) proposing appropriate management incentive plans

by reviewing the roles of the Managers in positions

to the top management (including share option

of strategic importance whose remuneration is as-

plans and other share-based payments) for direc-

sessed by the Committee;

tors and managers with strategic responsibilities

5. Proposed to formalise the assignment phase for

and monitoring the development and application

the DPO 2011 objectives for the figures of interest

over time of the plans approved by the General

of the Committee by acknowledging the economic-

Meeting at the proposal of the Board;

financial indicators related to 2011 presented by

d) preparing a report to be sent to the Internal Audit Committee and the Board of Directors regarding the work carried out on a half-yearly basis. The reports must be placed in the minutes register; e) at least once a year, carrying out a self-assessment of its size, composition, functions and indepen-

the Manager of the Administration, Finance and Control Segment; 6. Appointed the Secretary of the Committee for Remuneration to replace the previous Secretary (Manager of the Personnel and Organisation segment);

dence in relation to the tasks set forth in its regulation (Application criteria 1.C.1.g and 3.C.1).


409

7. Resolved to propose to the next BoD meeting for

Starting from September 2011, the newly recruited man-

approval the presentation of the policies for the

ager of the Personnel and Organisation segment partici-

remuneration of the Executive Directors and the

pated in all the Committee meetings.

Managers with key responsibilities (Principle 7.P.4);

The Board of Directors confirmed an annual budget of

8. Resolved to propose the presentation at the next

25,000.00 euros for each Board Committee in order to

BoD of the new company policy concerning the

enable them, where necessary, to hire external consul-

management resignations.

tants to support the activities of each Committee. No meetings were held by the Committee between 1 January 2012 and today’s date.

9. REMUNERATION OF DIRECTORS

410

The fees received by the directors and the comprehen-

sibilities is linked to the economic results that the Com-

sive fees received by managers with strategic responsi-

pany achieves and, possibly, to reaching specific goals

bilities over the course of the financial year are shown in

which are previously indicated by the Board itself (Prin-

the document “Remuneration Report” approved by the

ciple 7.P.2.).

BoD on 21 March 2012 which will be submitted to the

Furthermore, the payment of a long-term (three-year)

General Meeting in 2012, pursuant to art. 123-ter TUF.

monetary incentive from 2010 to 2012 for the CEO and

The compensation of the BoD members is determined

other senior management (the top managers) is deter-

by the General Meeting, and additional payments for

mined, with specific reference to the total shareholder

members of the Committees with consulting and pro-

return and Acea’s share performance compared with a

posal functions established within the BoD is set by the

basket of comparables. This type of monetary incentive

Board itself, upon proposal of the Remuneration Com-

is basically the same as by the Long Term Incentive Plan

mittee and acknowledging the opinion of the Board of

for 2007-2009 in terms of set-up and bonus calculation

Statutory Auditors.

procedures; the only difference was the replacement of

Specifically regarding the BoD currently in office, the

the net profit indicator with the gross operating profit.

General Meeting of 29 April 2010 confirmed 36,000 euros

It is a monetary type scheme that envisages a cash pay-

annually gross as the remuneration due to each Director,

ment, calculated as a percentage of Gross Annual Remu-

other than the reimbursement of expenses necessary for

neration, to be paid at the end of the reference period

carrying out the tasks of their office.

in accordance with the achievement of pre-established

The overall amount due to the Chairman and the CEO, in

economic and financial targets. The aim of the Plan is

accordance with art. 2389, par. 3, of the Italian Civil Code,

to provide an incentive to management to pursue the

and what was set out by the General Meeting of 29 April

economic/financial results of the Group in the interest of

2010, and approved by the BoD.

the shareholders.

On 12 May 2010, upon proposal by the Remuneration

The Company, for the purpose of aligning to the provi-

Committee and in association with the Board of Statu-

sions of art. 7 of the Corporate Governance Code, imple-

tory Auditors, the Board decided on the remuneration

mented with the entry into effect of Consob regulation

due to the CEO and the Chairman, in accordance with

- art. 123-ter paragraphs 7 and 8 of Legis. Decree no.

the same terms as the previous contracts.

58/1998, amending Legis. Decree no. 259/2010 - anal-

Currently, a significant part of remuneration for Company

ysed its remuneration policy for the Executive Directors

Executive Directors and managers with strategic respon-

and the Managers with key responsibilities. This policy


figures in question was analysed in detail: in short the re-

Director indemnity in the event of resignation, dismissal or termination of contract following a take-over bid (art. 123-bis, par. 1, lett. i, TUF)

muneration system currently provides for the fixed part

With reference to the salaries due to directors in the

of the remuneration to be combined with a significant

event that relations are terminated, if relations with the

part of the remuneration linked to achieving specific per-

Chairman are terminated early by the Company (basi-

formance targets, as expressly requested by the Corpo-

cally termination of his position without just cause) with

rate Governance Code.

respect to expiry of the mandate established by the Gen-

The Long Term Incentive Plan – LTIP – actually envisages

eral Meeting on 29 April 2010, he will have the right to

a postponement mechanism for the entire bonus with

the entire annual fixed and variable amounts that would

respect to the time of accrual, for a timescale deemed

have been due to him up to the natural expiry of the

suitable and in line with the company’s risk profile: the

mandate.

bonus may be disbursed at the end of the three-year

His annual salary is paid in deferred monthly instalments;

reference period for the achievement of the economic

with respect to the variable portion, an “annual variable

financial objectives preset in the Plan.

gross payment of up to a maximum of 40% of his an-

This policy is illustrated in detail and adopted as part of

nual remuneration, in accordance with the achievement

the mentioned “Remuneration Report”, which will be

of the management and income goals established by the

available on the web site www.acea.it and subject to ad-

Remuneration Committee for the reference year” is pro-

visory vote of the General Meeting which will be called to

vided for.

approve the 2011 financial statements in 2012.

To date, there are no incentive plans based on financial

Non-executive directors’ remuneration is not linked to

instruments or to pay in cash.

the economic results achieved by the Company, and is

There are currently no agreements in place that pro-

commensurate with the commitment required of them,

vide for non-monetary benefits for directors that have

and their participation in one or more Committees; the

terminated their appointments, or to create consultancy

participation in internal Committees with consulting and

contracts for a period following termination of the work

proposal functions will be paid with amounts established

relationship, or there are no agreements that provide for

by the BoD, upon proposal of the remuneration Commit-

payment for non-competition commitments (non-com-

tee and in association with the Board of Statutory Audi-

petition agreements).

was summarised in a document approved by the BoD on 21 December 2011. The current remuneration system applied by Acea to the

tors. None of the non-executive Directors participates in share incentive plans.


411

10. INTERNAL AUDIT COMMITTEE Acea’s Internal Audit Committee is the essential body

• expressing an assessment to the Board of Directors

of the internal control system, as also established in ar-

on the proposed appointment and remuneration of

ticles 8, 9 and 10 of the Code of Conduct.

the Person in charge of Internal Control (Applica-

The composition and functioning of the committees are

tion criteria 8.C.1), with regard to the requirements

regulated by a specific regulation, approved by the BoD.

of professionalism and independence;

The following directors are members of the Internal Au-

• examines the work plan prepared by the Person in

dit Committee: Paolo Giorgio Bassi (Chairman), Frances-

charge of Internal Control as well as the periodic

co Caltagirone, Aldo Chiarini (resigned on 10 November

reports prepared by the same (Application criteria

2011), Andrea Peruzy, Luigi Pelaggi, Giovanni Giani (ap-

8.C.3., lett. c);

pointed by the BoD on 21 December 2011) all non-exec-

the BoD’s evaluations and decisions about:

Application criteria 5.C.1.,lett. a).

- the internal control system, for the purpose of

The director Paolo Giorgio Bassi has accounting and fi-

preparing the financial statements with particu-

nance experience which was retained adequate by the

lar regard for the effective respect of administra-

Board when he was appointed (Principle 8.P.4.).

tive and accounting procedures as per art. 154-

The Committee met 10 times; the Chairman of the Board

bis of the Finance Consolidation Act (TUF), the

of Statutory Auditors, Prof. Enrico Laghi, also participated

approval of the annual reports and consolidated

in the meetings (Application criteria 8.C.4). In addition to

and half-year reports. To this end, together with

Directors who are members of the Internal Audit Com-

the Executive in charge and the auditors, the

mittee and the Chairman of the Board of Statutory Audi-

Internal Audit Committee evaluates the correct

tors, the Chairman and the Chief Executive Officer have

use of accounting principles and their consisten-

the right to participate in meetings. Upon invitation by

cy within the Group for the purpose of preparing

the Internal Audit Committee, other parties also attend-

the consolidated financial statements (Applica-

ed to explain single points of the agenda (Application criteria 5.C.1., lett. f).

tion criteria 8.C.3., lett. a); - relations with the audit firm in charge of audit-

Minutes were regularly taken during the Internal Audit

ing the annual and consolidated financial state-

Committee meetings, which lasted 2.00 hours each on

ments, evaluating results shown in the report

average (Application criteria 5.C.1., lett. d).

and in any letter of suggestion (Application cri-

As set forth in the regulation, the Internal Audit Commit-

teria 8.C.3., lett. d);

tee fulfils the following tasks:

- the internal control system for the purpose of

• assisting the Board of Directors in defining the

effective and efficient business operations, the

guidelines for the internal control system, in such

maintenance of company assets, as well as re-

a way that the principal risks to which Acea SpA

spect for Laws and regulations (Principle 8.P.2

and its subsidiaries are exposed are correctly iden-

412

• ensuring adequate preliminary activities to support

utive and the majority independent (Principle 8.P.4 and

and 8.P.4).

tified, and adequately measured, managed and

• assisting the BoD in establishing the way to ap-

monitored, and determining the criteria for assess-

prove and perform the operations put in place by

ing the compatibility of such risks with a sound and

ACEA or its subsidiaries with related parties. In

correct management of the business (Application

addition, accomplish the tasks defined based on

criteria 8.C.1). Where requested by the CEO, the In-

the aforementioned methods in compliance with

ternal Audit Committee expresses its assessment

the procedure approved by the BoD which, start-

of specific aspects inherent to identifying principal

ing from 1 January 2011, cancelled and superseded

business risks as well as planning, carrying out and

the previous procedure approved with resolution

managing the internal control system (Application

of the BoD on 10 April 2008 (Application criteria

criteria 8.C.3 lett. b);

9.C.1) and in adopting measures aimed at ensur-


ing that the transactions in which a director holds

In 2011, the Internal Audit Committee carried out the

interest, on his own behalf or on behalf of third par-

above-mentioned duties, also through meetings with the

ties, put in place by the company with one or more

General Manager, the managers of the Industrial Areas

related parties, are carried out transparently and

and the Corporate Segments regarding the performance

in compliance with the criteria of substantive and

of the businesses, and with the audit segment manag-

procedural fairness;

ers with respect to the Internal Control System and the

• makes half-yearly reports to the BoD upon approv-

Auditing carried out.

al of the financial statements and the half-yearly

The Internal Audit Committee can have access to infor-

reports: a) on the activities carried out, specifying

mation and corporate functions necessary for carrying

among other things, the number of meetings held

out its tasks as well as make use of external consultants,

and the relative participation percentage of each

within the terms defined by the Board (Application cri-

member, and the adequacy of the internal control

teria 5.C.1., lett. e) with respect to the internal control

system (Application Criteria 8.C.3.g);

and internal auditing systems, accounting standards, le-

• at least once a year, carrying out a self-assessment

gal and tax, or other type, as long as necessary to carry

of its size, composition, functions and indepen-

out its duties.

dence in relation to the tasks set forth in its regula-

The Board of Directors confirmed to allocate an annual

tion (

budget of 25,000.00 euros for the Committee in order to

).

enable it, where necessary, to hire external consultants to support the activities of each Committee.


413

11. INTERNAL CONTROL SYSTEM (ICS) Acea’s Internal Control System, an essential element of the Group’s corporate governance system, consists

COMPREHENSIVE INTERNAL CONTROL SYSTEM

of a structured set of bodies, rules, procedures and orimpact of unexpected events and enable the Company

a) Roles and tasks of various ICS parties

to achieve its strategic and operating objectives, ensure

The governance and implementation of the comprehen-

legal and regulatory compliance and provide correct and

sive ICS require the involvement of parties with different

transparent internal and external reporting.

business roles (governance and control bodies, business

With the Internal Audit Committee’s support, in its meet-

structures, management and employees).

ing of 29 March 2010, the Board of Directors approved

For a description of the roles and tasks of the Bodies,

the document “Guidelines for the Internal Control Sys-

please see the specific sections of this report (BoD, Inter-

tem”, which defines:

nal Committees, CEO, Person in charge of Internal Con-

ganisational structures that aim to prevent or limit the

• the tasks of various parties who are involved with

trol, Director in charge, Supervisory Body).

the ICS on different levels and with specific roles. In

The role of the Ethics Committee is described in para-

particular, along with the Guidelines, body regula-

graph 17, “Further corporate governance procedures.”

tions containing the tasks reported in the various

The Group’s management has the responsibility to define,

paragraphs of this report were resolved;

implement and maintain an effective risk management

• the risk management model, which ensures com-

process that is able to carry out plans and reach stra-

patibility of these latter with sound and correct

tegic objectives. In their daily operations, Acea S.p.A.’s

business management;

Industrial Areas and other Corporate functions are each

• the control system to oversee risks and the specific principles which make up its foundation; • the information flows system to support evaluating

specifically responsible for implementing actions which enable reaching expected business results and for managing related risks.

the ICS’s adequacy and effective operations;

Employees have the responsibility to work in compli-

In 2011, the company, in agreement with the principles

ance with internal and external regulations, procedures

stated in the guidelines, continued in its intention to con-

and management directives, and, also with the support

tinuously improve the Internal Control System. Periodic

of appropriate training courses, to increase their skills

reports are prepared by company segments of the Par-

and professionalism necessary for effectively carrying

ent Company in charge of continuous monitoring, con-

out controls, as defined in the Group’s internal control

taining analyses carried out to identify and evaluate the

system.

main risks and supporting mitigation systems for special risk categories, and also in compliance with specific legal

b) Risk Management system

requirements. The goal is to ensure that the risk mitiga-

The risk management system adopted by ACEA provides

tion actions are adequately identified and put in place

for distributed responsibility and involvement of parties

by the organisation and by the persons who are respon-

at every level of the organisation.

sible for doing so, and are in line with the strategic goals.

More specifically, the risk management process imple-

The reports are drafted in accordance with a reference

mented in ACEA includes the identification, evalua-

model which describes the minimum contents, and are

tion, mitigation and monitoring of risks.

addressed to top management, the Person in charge of Internal Control and the Supervisory Bodies.

• Identification: given the specificity of the business and its sector, the risk categories which are most relevant for the Group are identified, and an internal risks taxonomy is defined. • Evaluation is based on measuring the impact and probability of occurrence of the events which

414


may generate risks and opportunities for the company and uses a structured Control Risk Self-As-

c) Internal control system qualifying elements

sessment (CRSA) model with the goal of defining the main risks, the intervention priorities and

Pervasive ICS elements

mitigation policies to bring residual risk back

A fundamental highlight of Acea’s control system is the

to a level which is considered acceptable by the

pervasive elements which make up the infrastructural

top management. The management of company

foundation of the system itself; among these the follow-

structures participates actively in the evaluation

ing aspects merit particular attention.

process, coordinated by the Person in charge of

• the definition of ethical values and criteria of con-

Internal Control with the support of the Risk

duct, which should inspire the behaviour of employ-

Control and Internal Controls organisational unit of

ees and all those who operate in pursuit of the com-

the Audit Segment.

pany’s goals, is ensured by the correct internal and

Responsibility for the controls is arranged into three complementary levels:

external communication of the Code of Ethics’ provisions. The tools and models to monitor its applica-

First level controls, aimed at ensuring the cor-

tion are defined to track and respond to violation re-

rect execution of business processes in order to

ports, and penalising measures are set forth in the

prevent and manage risks by opportune mitigating

event that an infraction is ascertained; in 2011, with

actions, whose responsibility is granted to regular

the purpose of integrating in a single document the

operational structures.

pre-existing ethical regulations of the company and

Second level controls, aimed at verifying that

to confirm new or better defined reference ethical

the controls defined for carrying out business op-

principles, a new Code of Ethics was prepared, cur-

erations are effective and operative through con-

rently being assessed by the Ethics Committee.

tinuous monitoring activities with the purpose of

• the roles and responsibilities as well as relations

ensuring that the risk mitigating actions are ade-

between corporate functions are defined clearly

quately identified and implemented within the or-

within the adopted organisational structure, sig-

ganisation by those responsible for implementing

natory powers and internal delegations are con-

them.

sistent with the hierarchical level, the supervised

Third level controls, assigned to the AUDIT

organisational unit and the assigned goals.

Segment, are made up of independent assess-

To this end, organisational charts and other or-

ments on the design and functioning of the com-

ganisational devices, the organisation and man-

prehensive ICS, and on the monitoring over the

agement model as per Italian legislative decree

implementation of improvement plans defined by

231/01, business procedures and the delegations

management. The AUDIT Segment reports to the

and authorities system are formalised, updated

Chairman of Acea and has no operational role. It

in a timely manner and adequately distributed

reports to the Chairman, the CEO, the Internal Audit

and communicated; in 2011, in implementing the

Committee and the Board of Statutory Auditors on

macro-structure of the company approved by the

the functioning, adequacy and effectiveness of the

BoD on 25 January 2011 and with the purpose of

Internal Audit Committee. The Segment operates

strengthening the management, coordination and

in accordance with a work plan defined with risk-

control role of the holding company, the main or-

based methodologies and approved by the Chair-

ganisational provisions were issued of the corpo-

man and the Internal Audit Committee.

rate functions and the related organisational guidelines which define flows and responsibilities as part of the processes entrusted to different corporate structures or companies of the Group.


415

• the internal control system is inspired by criteria

a consequence of the exposure of the Receivables

of comprehensive efficiency and therefore the bal-

from customers, in 2011 the company placed, as

ance between control costs and control effective-

part of the Management Planning and Control Seg-

ness must be ensured.

ment, the Credit Management unit that is in charge of processing the credit management policies,

Central monitoring supervision for particular risk

checking their accurate implementation and moni-

categories

toring the credit and outstanding trend for all the

Central monitoring supervision for particular risk cate-

customers of the Group. The flows and responsi-

gories represents the method by which it is possible to

bilities in the management of credit were regulated

view risks and the related control systems across differ-

and the Group’s Credit Policy was adopted, which

ent internal processes within the Group. The main areas

defines the guidelines to improve the processes

subject to central monitoring supervision are described

of management and collection of receivables of

below.

a commercial nature, as well as the methods and

• Financial risks. The approach of the Acea Group to managing the interest rate risk is based on the

for the continuous monitoring

type of asset structure and the stability of the

• Security and asset protection risks. Within

Group’s cash flow; the activity, entrusted to the

the macro-structure of the company that was ap-

Administration, Finance and Control Segment, is

proved on 25 January 2011, the duties of the “Se-

therefore essentially prudent and aims to hedge

curity and Protection” segment were confirmed,

borrowing costs and stabilise cash flows deriving

which will report directly to the General Manager

from ordinary activities. The primary objective, con-

in order to ensure more efficient contacts with the

sidering the needs expressed in the strategic plan,

operating structures of the company. The segment

is the optimisation of the Group’ cost of debt and

will have to guarantee the following, in line with the

the related limitation of the effects caused by the

strategic guidelines of the Group:

exposure to the interest rate risk while identifying

- defining and controlling the implementation of

the optimal combination between fixed and vari-

policies regarding occupational health and secu-

able rates. The risk appetite and the related lim-

rity and physical (physical company structures)

its are defined by the Board of Directors, through

and logical (intangible assets) protection of com-

the approval of the single financing operations

pany assets through the development and su-

affecting the interest rate risk and any hedging

pervision of specific control models;

transactions. Concerning the management of the

- together with the competent business Seg-

commodity risks, in place as part of the Energy

ments, drawing up the Group’s management

segment, 2011 featured the dissolution of the JV

regulations and the relative operating processes

with the shareholder GdF Suez and the consequent

aimed at guaranteeing respect for compliance

restructuring of the business in the Segment. To

regulations and effective laws;

control the commodity and counterparty risks, a specific project was started which was entrusted

- developing and governing the Quality Management System.

to the Risk Control unit of the company Acea Ener-

• Compliance Risks pursuant to Legislative

gia Holding, which has the task of processing and

Decree 231/2001. The Organisation and Manage-

proposing guidelines and policies to manage the

ment Model was adopted, a description of which

above mentioned risks, which must be adopted by

can be found in paragraph 11.3.

the companies as well as monitoring the compliance of the policies approved and the predefined exposure limits. To control and monitor the risk as

416

production schedules for the accounting needed


tory risks in order to pursue the Group goals. As

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM OF THE FINANCIAL DISCLOSURES PROCESS (art. 123-bis, par. 2, lett. b), Finance Consolidation Act (TUF)

required by the macrostructure resolved on by the

Within the Internal Control System, the Administrative-

BoD on 25 January 2011, the mission, responsibili-

Accounting Organisational Model is very significant

ties and the internal organisation were defined of

with respect to financial reporting. This was implement-

the Regulatory segment, which will report directly

ed when the Group Internal Control System was being

to the General Manager. The segment aims to mi-

revised to reflect the provisions set out by Law 262/05.

nimise the regulatory risk by monitoring the evo-

More specifically, in 2007, Acea undertook a journey

lution of the regulatory framework and identifying

of adaptation to the requirements set forth by Law

the related consequences on the planned objec-

262/2005 aimed at planning an effective Group Internal

tives and the company processes. In addition, in

Control over Financial Reporting (ICFR) System, which

agreement with the relevant companies and seg-

is subject to continuous improvement and adaptation

ments, it has the task of identifying the measures

to the evolution of company activities, and which can

to be adopted to valorise any opportunities, miti-

enable the executive responsible for financial report-

gate the effects of any negative consequences, and

ing (ER) and the CEO of Acea S.p.A. (Acea) to issue the

ensure full compliance of the company activities to

reports required by art. 154-bis of the TUF.

the provisions of the Watchdog.

This system is defined as the set of activities for iden-

• Regulatory Risks. The main businesses of the Acea Group form part of regulated segments, since they are based on the use of networks and provide essential services. It is therefore of fundamental importance to adequately supervise the regula-

• Financial disclosure process risks. The super-

tifying risks/controls and defining specific procedures

vision of risks is one of the responsibilities of the

and tools adopted by Acea to ensure with reasonable

executive responsible for financial reporting (par.

certainty that the objectives of reliability, accuracy,

11.5). 11.5). A risk management and internal con-

integrity and timeliness as regards financial reporting

trol system has been adopted, and is described in

shall be reached.

the paragraph below.

In order to regulate the set of activities described above,

d) Information flow system

Acea has defined and implemented the “Group management and control model as per Law 262” (Model)

Structured information flows are defined among Bodies

with the objective of defining guidance, methodologi-

and between the Company’s Bodies and units in charge

cal references and responsibilities in the context of the

of monitoring special types of risk as identified by the

definition, maintenance and monitoring of ICFR, as well

Guidelines of the Internal Control System, with the aim of

as for the evaluation of its effectiveness.

supporting the Board in its comprehensive evaluation of

The Model is developed under the assumption that ICFR

the control system, facilitating the effective exchange of

is part of the broader Internal Control System (ICS), an

information between various Company bodies and mak-

essential element of Acea’s corporate governance, and

ing the information collected by the centralised monitor-

that the reliability of the information communicated to

ing structures supervisors, and available in an organised

the market on the company’s position and results is a

and concise way.

fundamental element for all stakeholders. The Model is made up of a set of documents, approved

e) Comprehensive evaluation of ICS adequacy

by Acea’s Board of Directors on 20 February 2008, dis-

Please see what is indicated in paragraph 4.3 about the

fundamental aspects of the system:

tributed to the Group companies, which define all of the

Board of Directors.


417

• ER Regulation;

The scope of analysis is initially determined based on the

• Guidelines for Model implementation;

weight of each Group Reporting Unit on the consolidated

• Periodic Group reporting for implementing the in-

financial statements, taking into account the relevance

formation flow.

that significant accounts and administrative–accounting

The Model is supplemented by a specific set of docu-

processes linked with them have on the same; subse-

ments made up, inter alia, of the Group’s accounting prin-

quently the results of that analysis are integrated with

ciples manual and the Guide for closing the consolidated

qualitative considerations to take into account both the

accounts, including detailed operating instructions, with

Group structure and the characteristics of specific finan-

the goal of establishing a periodic flow of financial infor-

cial statements items.

mation exchange on standard and shared bases.

Analysis of risks and process controls. The ap-

The risk management and internal control system have

proach that Acea has adopted allows for identifying

been implemented in relation to the Group’s financial re-

“key” points of risk and control which are considered

porting, also through subsequent adaptations, moreover

significant in reference to the consolidated financial

considering the guidance supplied by some category

statements. To this end, control objectives and the

bodies regarding the Director in charge’s activities, par-

relative risks are defined for each process and activity;

ticularly:

that is:

• Andaf Position Paper: “The executive responsible for financial reporting”; • AIIA Position Paper “Internal Audit’s contribution in implementing a good corporate governance process and in organising information flow with the Executive responsible for financial reporting”;

• financial statements: an element which needs to be respected in reporting company affairs for the purpose of representing them in a true and correct way in the financial statements; • theoretical risk: risk identified at an “inherent level”, so, not taking into account the existence and

• Guidance issued by Italian Manufacturers’ Federa-

effective operation of specific control techniques

tion “Guidelines for carrying out the activities of the

aimed at eliminating the risk itself and at reducing

executive responsible for financial reporting pursu-

it to an acceptable level;

ant to art. 154-bis TUF.”

• specific control objective: objective which must be guaranteed by carrying out control activities.

Main characteristics of the current risk manage-

Specifically, the financial statements considered within

ment and internal control system in relation to

the Model are:

the financial reporting process.

• Existence and occurrence (the company’s assets

The Model defines reference guidelines for instituting

and liabilities exist at a certain date and the record-

and managing the administrative and accounting pro-

ed transactions represent events which actually

cedures system (see activity/risks/controls matrices) for

occurred during a specific period);

Acea and for the significant consolidated companies for

• Completeness (all of the transactions, assets and

the purpose of Law 262 (companies), regulating the main

liabilities to be represented have been effectively

phases and responsibilities.

included in the financial statements); • Rights and obligations (the company’s assets and

418

a) Phases

liabilities represent the company’s rights and obli-

Definition of the scope of analysis. Acea annually

gations, respectively, at a certain date);

updates the scope of analysis of the administrative-ac-

• Valuation and reporting (the assets, liabilities, net

counting control systems and monitoring of underlying

shareholders’ equity, revenues and costs are post-

processes to guarantee that this is able to cover risks

ed in the financial statements at their correct value,

regarding the financial reporting of the most significant

in accordance with generally accepted accounting

account items within the consolidation perimeter.

principles);


• Presentation and disclosure (the financial state-

Corrective interventions plan. Where, based on the

ments items have been correctly named, classified

analyses carried out by the lines, the “key” controls do

and demonstrated).

not exist, are not documented or are not carried out cor-

For each specific risk/control objective, the so-called key

rectly according to company procedures, the managers

controls are identified, which allow for reporting the ex-

of the involved organisational unit up to the level of the

isting control systems (manual/automatic controls; pre-

Delegated Administrative Bodies for Group companies

ventive/subsequent) in relation to each material process,

shall define and carry out a remedial plan, indicating the

aimed at enabling meeting the control objective and ef-

timescales and responsibilities for carrying out correc-

fectively mitigating the risk.

tive actions. The corrective plan is submitted to the ER in order to comprehensively evaluate the system and co-

Valuation of controls against identified risks. The

ordination of the corrective actions, and it shall be up-

valuation of the control plans entered into administra-

dated every six months by the responsible parties.

tive and accounting procedures is aimed at analysing how individual control activities are structured and de-

Comprehensive evaluation. To allow for Acea’s ER

fined in relation to the objective of covering the risk of

and CEO to issue the statements necessary pursuant to

committing errors in the financial statements. The valua-

art. 154-bis of the TUF, a system of internal “chain” cer-

tion is carried out taking into account the objective that

tifications, more extensively described in the next para-

the control aims to satisfy; in other words, if the risk is

graph, has been instituted with the objective of ensuring

mitigated (“adequate/inadequate” control).

a suitable internal formalisation of responsibilities for the

The separate Lines are responsible for valuating control

adequacy and effective application of administrative and

plans, starting from the hierarchical level above the con-

accounting procedures, to prepare and communicate

trol manager up to the Delegated Administrative Body

the plan for corrective actions, where applicable, and to

level in the case of Group companies.

update the procedures (please see point b) Roles and Re-

The valuation of controls operations found within ad-

sponsibilities).

ministrative and accounting procedures is also in turn

The ER’s comprehensive evaluation is therefore based

subject to specific analysis by the Lines. Indeed, for con-

on a complex evaluation process which considers:

trols whose plan is valuated as adequate, it is necessary

• the evaluation of the design of existing controls

to proceed with evaluating their operations (“operative/

and the evaluation of their functioning, carried

non-operative” control).

out by Acea’s management and by the Delegated

The control operation, certified by the Lines, is corrobo-

Administrative Bodies of the companies, together

rated by implementing independent monitoring carried

with the corrective plans;

out through an ER periodic testing plan. The testing plan

• the analysis of test’s results;

is defined according to priority and rotation based on

• the final analysis of areas for improvement which

which a specific underset of controls to be tested is se-

emerge with reference to their importance for fi-

lected for each reference period, in order to examine the

nancial statements reporting.

main controls used in the procedures.

Where it is retained necessary within the scope of the

The ER implements a process of sharing and distributing

evaluation process, the adopted methodology indicates

the results of testing activities so that reference man-

that it is possible to design and carry out compensa-

agement can implement the necessary corrective ac-

tory controls and verifications. Significant gaps which

tions in their own units.

may emerge shall be communicated to the supervisory bodies, according to the methods set forth by the ER Regulation.


419

b) Roles and Responsibilities The Model is based on the clear internal allocation of

Point represents the reference point at the Group

responsibilities for planning, evaluating and maintaining

companies for all activities necessary for allowing

the ICFR over time, without prejudice to the ER and Del-

ACEA’s ER to issue the attestation; he is respon-

egated Administrative Body responsibilities assigned by

sible for consolidating all information received from

legal regulations. To this end, Reporting instituted within

subprocess managers and assembling the compre-

the Acea Group is based on an internal “chain” system

hensive evaluation of the design and functioning of

of certifications which has the goal of ensuring adequate

controls for reference companies, submitting it to

internal formalisation of responsibilities for the adequacy

the company’s Delegated Administrative Body; fur-

and effective application of administrative and account-

thermore, is responsible for guaranteeing informa-

ing procedures, monitoring the corrective actions plan,

tion flow from and to the ER.

where applicable, and capturing in a timely manner any

• The companies’ Delegated Administrative

changes in control which are the responsibility of the

Body is responsible for evaluating the company’s

lines and change factors/risks which emerged during the

control design and functioning and sending the

course of normal process operations and could influence

internal attestation to the ER, according to the

the ICFR’s adequacy.

defined format, together with the appropriately

The ER and CEO evaluation process, based on which the

validated corrective actions plan, moreover com-

financial statements are issued according to the CON-

municating any change factors/risks which have

SOB model, therefore sets forth internal reporting (re-

taken place in the reference period and could af-

porting forms) issued by the Managers of relevant Acea

fect the ICFR’s adequacy.

processes and by the Delegated Administrative Bodies

Finally, with reference to the other governance and con-

for the companies. Specifically, through Reporting, Acea

trols Bodies within and outside of the Group, Acea has

has regulated roles and responsibilities, activities to be

established a virtuous process of information exchange

carried out for each involved party, the calendar, instruc-

from and to the ER, structured and formulated for the

tions for filling out the reporting forms and methods for

purpose of favouring a comprehensive view to those

updating administrative and accounting procedures.

bodies of the Internal Control System which is as exten-

ACEA has identified the main actors in the financial re-

sive as possible.

porting process, other than the ER and the Delegated Administrative Bodies, with their relative responsibilities. • The Control Manager is the party responsible for carrying out and attesting to the execution of controls within his scope of responsibility to the Subprocess Manager according to the methods and timing set forth by the administrative and accounting procedures, and for providing the informational basis of the reporting flow; • The Subprocess Manager is the party responsible for a correlated set of operating activities necessary for reaching one specific control objective; he is responsible for carrying out the comprehensive evaluation of the design and functioning of controls in relation to the applicable subprocess; furthermore, he is responsible for updating and ensuring the implementation of the corrective actions plan.

420

• The companies 262 Administrative Reference


11.1 EXECUTIVE DIRECTOR IN CHARGE OF THE ICS

as well as the Executive Director responsible for the ICS

With a resolution dated 29 March 2010, the BoD con-

The Person in charge verifies that the ICS is always ad-

firmed granting the supervision of the Internal Control

equate, fully effective and functioning in accordance

System’s operations to the CEO, as the Executive Direc-

with the procedures provided under the regulation, and

tor (Application criteria 8.C.1., lett. b).

on this basis, expressing his evaluation of the internal

The CEO ensured that main company risks have been

control system’s suitability for achieving an acceptable

identified, also making use of the support of the Person

comprehensive risk profile.

in charge of Internal Control (Application criteria 8.C.5.,

The Person in charge of Internal Control will support the

lett. a), and has implemented the guidelines defined by

CEO and the control bodies in the identification and eval-

the Board, implementing and managing the Internal Con-

uation of the main risks to the Group, and related control

trol System, continuously verifying its comprehensive

systems, assisting the relevant segments in establishing

adequacy, effectiveness and efficiency and ensuring its

mitigation procedures and monitoring their implementa-

adaptation to the evolution of operating conditions and

tion.

the legislative and regulatory landscape (Application cri-

The Person in charge of Internal Control carried out the

teria 8.C.5, letter b).

following activities in 2011:

(Application criteria 8.C.6., lett. e).

• analysis of the main risks of Acea SpA and the Group companies carried out through the Control Risk Self Assessment, which requires the involve-

11.2 PERSON IN CHARGE OF INTERNAL CONTROL

ment of the company’s top management and the collaboration of the operating activities managers;

At the proposal of the CEO (Application criteria 8.C.5.,

• identification of what had to be done to fully imple-

lett. c) and acknowledging the assessment of the Inter-

ment the guidelines and support the segments in-

nal Audit Committee (Application criteria 8.C.1.), with a

volved;

resolution on 15 September 2009, ACEA’s BoD identified

• monitoring the implementation of the projects and

Attorney Giuseppe Del Villano, the AUDIT Segment man-

work carried out by the corporate structures for

ager, as the Person in charge of Internal Control, provid-

the continuous improvement of the ICS;

ing for his appointment (Application criteria 8.C.6., lett. a)

• audits carried out based on the work plan present-

and the definition of his remuneration (Application crite-

ed to the Internal Audit Committee, and follow-ups

ria 8.C.1.) in line with firm policies.

and monitoring of the action plans agreed upon

The BoD of Acea approved a Regulation regarding the

with management during audit reporting.

Person in charge of Internal Control on 29 March 2010,

In accordance with the results achieved, the Person in

confirming what had already been decided, and govern-

charge of Internal Control will draft a report on the work

ing duties, independence and remuneration.

carried out by the ICS, which will be provided to the BoD,

More specifically, the Person in charge of Internal Con-

the CEO, the Internal Audit Committee and the Board of

trol, who coincides with the Audit Segment Manager, is

Statutory Auditors, giving its evaluation regarding the ex-

not responsible for operational areas nor does he de-

istence and operation of the basic instruments needed

pend on the hierarchical structure of operational area

to achieve the compliance, efficiency and effectiveness

Managers since he reports to the ACEA Chairman (Ap-

objectives in the work, and reliability of information, in

plication 8.C.6., lett. b).

addition to proposing actions for the continued improve-

The Person in charge has direct access to all information

ment of the ICS.

necessary for carrying out his office (Application criteria

Adequate financial resources are available for the Per-

8.C.6., lett. c), referring about his work to the Internal

son in charge of Internal Control to carry out its tasks in

Audit Committee and the Board of Statutory Auditors

2011, quantified as 25,000 euros.


421

11.3 ORGANISATIONAL MODEL as per Italian Legislative Decree 231/2001

the Organisational Model, in order to prevent the risk of

The current Organisational Model (hereinafter “MOG”)

tive responsibility. The Body supervises the MOG’s effec-

as per Italian Legislative Decree 231/2001, approved by

tiveness and adequacy by monitoring its progress and

ACEA’s BoD on 12 May 2010, which updated the Model

proposing the necessary updates to the BoD. In addition,

in effect previously in order to take into account the of-

it has the task of notifying the relevant ACEA bodies of

fences introduced by Law no. 94 of 15 July 2009, law no.

any breaches of the Organisational Model which could

99 of 23 July 2009 and law no. 116 of 3 August 2009, and

imply responsibility of the Company.

changes in the company’s organisation. The BoD also

As at 31 December 2011, the Supervisory Body is made

granted the Chairman the mandate to transmit Acea

up as follows: Paolo di Benedetto (Chairman), Enrico

SpA’s MOG to the Group companies so they would pre-

Laghi (Deputy Chairman), Andrea Peruzy, Luigi Pelaggi

pare and approve their MOG in line with the parent com-

(independent directors), Antonio Caporale (Secretary of

pany’s. In 2011, the main subsidiaries, with the support

the Board of Directors of Acea S.p.A.) and Giuseppe Del

of the Audit Segment and based on the guidelines issued

Villano (Person in charge of AUDIT segment).

by the Parent company, adjusted their Model, consider-

Adequate financial resources are available for the Super-

ing Legis. Decree 121/2011, which introduced the envi-

visory Body to carry out its tasks; in 2011, 25,000 euros

ronmental offences among the predicate offences under

was available.

offences which could imply the Company’s administra-

Legis. Decree 231/01. Acea’s MOG and the MOGs of its subsidiaries were developed with dedicated project initiatives that involved the

11.4 AUDITING FIRM

management of the Group and the subsidiaries and the

The General meeting of shareholders, which met on 29

Audit Segment; these were drawn up following a thor-

April 2008, granted the 9-year assignment of auditing

ough analysis of the Company’s activities, with the aim

the half-year report, annual financial statements and

of identifying potential risks of committing unlawful acts

the consolidated financial statements to the company

provided under Legis. Decree 231/01. The model consists

Reconta Ernst & Young S.p.A., expiring in 2016, along

of a set of general principles, rules of conduct and spe-

with the audit throughout the year of regular corporate

cific control standards, to ensure, as far as possible, that

accounting and correct reporting of operational transac-

unlawful acts are prevented from being committed.

tions in ACEA’s accounting entries.

Following the update of the Organisation and Management Model, and in order to ensure its full implementation, especially with respect to the provisions regarding the information obligations with respect to the Supervisory Body, the direct flows to the Supervisory Body were redefined and re-organised, which include information on significant and relevant operations falling under the areas defined to be at risk of being committed pursuant to Legis. Decree 231/01. This information was gathered and managed through a specific information support and comes together with risk indicators that are able to highlight potentially abnormal transactions. The Supervisory Body, established in accordance with Italian Legislative Decree 231/01, has full and independent authorities of initiative, intervention and control over the functioning, effectiveness and observance of

422


11.5 EXECUTIVE RESPONSIBLE FOR FINANCIAL REPORTING

More specifically, he will have the following duties, pur-

On 13 November 2006, ACEA changed its Articles of

February 2008:

suant to the Regulations approved by the BoD on 20

Association to adopt the figure of Executive in charge,

• prepares adequate administrative and account-

introduced by the regulator with Law 262/05, which re-

ing procedures for drawing up the financial state-

quires his appointment by the BoD. (art.154 bis, par. 4

ments, the consolidated financial statements and

TUF).

the abbreviated half-year report;

Subject to the opinion of the control body in compliance

• ensures that the financial statements are drawn

with regulations, and based on specific requisites of

up in compliance with applicable international ac-

professionalism, on 3 May 2010, the BoD appointed Mr.

counting principles;

Giovanni Barberis, currently director of the Administra-

• ensures that the Company’s deeds and commu-

tive, Finance, Planning and Control segment, as Execu-

nications to the market and related accounting

tive in charge. Adequate authorities and resources have

disclosures, as well as interim disclosures, cor-

been granted to him in order to fulfil the office.

respond to the documented results, the registers

The Executive in charge is responsible for establishing

and the accounting entries;

and maintaining the Internal Control System on Finan-

• ascertains, together with the Internal Audit Com-

cial Reporting and for issuing a dedicated certification

mittee, (a) the propriety of the accounting policies

according to the model distributed by CONSOB, together

adopted, and, (b) their suitability for the prepara-

with the CEO.

tion of consolidated financial statements. The appointed Executive in charge, together with the CEO, has provided for issuing the certification since the 2009 half-year report, pursuant to art. 154-bis of the TUF, without reporting important elements.


423

12. DIRECTORS’ INTERESTS AND TRANSACTIONS WITH RELATED PARTIES The procedure for transactions with related parties, is-

• transactions of lower significance, which include

sued in accordance with article 2391-bis of the Italian

all transactions with related parties not included in

Civil Code and recommendations (article 9.C.1) of the

the transactions of major significance or in the low

code of conduct of listed companies (2006 edition), was

amount transactions.

adopted in compliance with the principles set by the

Prior to approval of transactions of major significance or

“Regulation containing provisions regarding transactions

of lower significance with related parties, the procedure

with related parties” pursuant to Consob resolution no.

provides that a special committee for transactions with

17221 of 12 March 2010 as amended.

related parties should express its opinion on the inter-

The new procedure came into effect on 1 January 2011

ests of the company in carrying out the transaction, and

and cancelled and superseded the previous resolution

on its advantages and the substantial fairness of the rela-

issued in 2008.

tive terms. To date, the Committee for Transactions with

It is applied to transactions carried out directly by Acea,

related parties comprises the three following indepen-

or by its subsidiaries with direct individual control and/or

dent directors: Paolo Giorgio Bassi, as co-ordinator, Luigi

indirectly, with related parties.

Pelaggi and Andrea Peruzy.

The transactions are divided out as follows, in accor-

If one or more of the members of the Committee for

dance with the amount involved:

transactions with related parties is related, non related

• transactions of major significance, in which at least

independent directors that are members of the Board of

one of the significance indicators in Annex 3 of the

Directors will join the committee. If not, the transactions

aforesaid Consob resolution no. 17221 of 12 March

with related parties will be approved subject to the non-

2010 as amended, is higher than the 5% threshold

binding opinion of an independent expert in the transac-

for which approval is reserved to the BoD of Acea

tions of lower significance, or subject to the binding opin-

SpA;

ion of an independent expert in the event of transactions

• low amount transactions with a value of no more than 100,000.00 euros (one hundred thousand);

of major significance. Please refer to the “Rules and Values” menu and the “Corporate Governance” sub-menu of the Internet site www.acea.it for more information.

424


13. APPOINTMENT OF STATUTORY AUDITORS According to the requirements of law and the company’s

be appointed by the minority shareholders. If an Auditor

Articles of Association, the Board of Statutory Auditors

resigns during the year, he/she shall be replaced by an al-

is composed of three auditors and two alternates, ap-

ternate from the same list as the Auditor to be replaced.

pointed by the ordinary general meeting of shareholders

For the appointment of the members of the Board of

for a period of three years, who can be re-elected at the

Statutory Auditors who have not been elected, for any

expiration of their term.

reason, the General Meeting shall pass a resolution with

The Board of Statutory Auditors is elected in compliance

the majority of votes provided for by the law.

with art. 22 of the Articles of Association. The same pro-

The General Meeting shall elect the Chairman from

cedures apply as those for the appointment of directors.

within the group of Auditors appointed by the minority

Half plus one of the eligible auditors and one alternate

shareholders.

are taken from the list which obtained the majority of

Therefore, as of now, this elective system requires that

votes, in the progressive order as they are presented

the lists be presented by shareholders who, alone or

on the list, rounding down in the event of a fractional

together with other shareholders, represent at least

number.

1% of the share capital. “The lists shall be submitted at

For the other members of the Board of Statutory Audi-

least twenty and twenty-five days respectively, before

tors, those who obtained the first and second highest

the date set for the first meeting by the exiting Direc-

quotient from the minority lists shall be appointed Audi-

tors or by the Shareholders who alone or together with

tor and Alternate Auditor; in accordance with the rules

other shareholders, represent at least one percent of the

set forth by art. 15 and 22 of the Articles of Association, if

shares entitled to vote at the ordinary general meeting.”

there is an equal quotient, the person from the minority

The lists shall be presented to the registered office, and

shareholder list which obtained the most votes shall be

ACEA is responsible for publishing them in three daily

appointed Auditor. In any event, at least one Auditor shall

national newspapers.


425

14. STATUTORY AUDITORS

(as per art. 123 bis, par. 2, lett. d), Finance Consolidation Act (TUF) The current Board of Statutory Auditors was appointed by

tors and the Register of Accountants; he has lectured

the ordinary general meeting of 29 April 2010, and shall

in finance at the LUISS Guido Carli University of Rome;

expire at the approval of the financial statements for the

• Leonardo Quagliata, alternate auditor. An Eco-

year 2012.

nomics and Commerce graduate from the University

During the meeting held to make the appointments, three

of Rome, chartered accountant. Registered on the Reg-

lists were presented: List no. 1 presented by the Munici-

ister of Auditors and the Register of Chartered Accoun-

pality of Rome with three candidates, Alberto Romano,

tants.

Corrado Gatti and Leonardo Quagliata, List no. 2 presented by the shareholder FINCAL Spa with two candidates,

The auditors are chosen from people who are qualified

Enrico Laghi and Carlo Schiavone; List no. 3 presented by

as independent and shall act autonomously and inde-

the shareholder ONDEO ITALIA Spa with five candidates,

pendently also as regards the shareholders who elected

Gianluca Marini, Franco Biancani, Davide Carelli, Roberto

them.

Ammendola and Stefano Bassi. 74.1601% of voters voted

In Acea, an auditor is considered independent in accor-

for List no. 1, 13.0043% voted for List no. 2 and 11.5327%

dance with the law and art. 3 of the Code.

of voters voted for List no. 3.

After the appointment of an auditor who is qualified as in-

According to the appointments made in that meeting and

dependent and subsequently at least once a year, based

as described in Table no. 3, the Board of Statutory Audi-

on the information provided by the involved party or in

tors is made up of the members below, of whom, pursu-

any case available to Acea, the Board of Statutory Audi-

ant to art. 144 – decies of the CONSOB Regulations for

tors shall evaluate the relations which could be or appear

Issuers, a brief summary of their experience is provided:

to be able to compromise that auditor’s independent

• Enrico Laghi, Chairman, elected with a quotient

judgement [Application criteria 10.C.2.].

of 19,211,099. Registered on the Register of Audi-

During board meetings, the Board of Statutory Auditors

tors, the Register of Chartered Accountants of Rome

obtains information from the Board of Directors on its ac-

and member of the Technical Consultants of the Court

tivities. This is done via the Board of Statutory Auditors’

of Rome. He is currently a lecturer in corporate eco-

direct participation in the meetings and via the receipt,

nomics at the University of Rome, La Sapienza, is a

prior to such meetings, of material illustrating items on

member of the Standards Advice Review Group

the meeting’s agenda in the form and with the same tim-

of the European Commission, a consultancy

ing as applied to the documentation made available to

body on international accounting standards; he

Directors.

is also a council member of the Italian Account-

The Board of Statutory Auditors exercises its powers and

ing Management Body;

fulfils its duties set out by current provisions. In particular,

• Alberto Romano, auditor. An Economics and Commerce graduate from the University of Parma, chartered accountant. Registered on the Register of Auditors and the Register of Chartered Accountants;

nance Code, the Board: • supervised the observance of the law and the deed of incorporation;

• Corrado Gatti, auditor. An Economics and Com-

• supervised the observance of the legal regulations

merce graduate from the University of Rome. Regis-

inherent to the formation and presentation of the

tered on the Register of Auditors. Associate Professor

financial statements and consolidated financial

of Economics and Corporate Management at the Uni-

statements and the operations report;

versity of Rome, “La Sapienza”; • Gianluca Marini, alternate auditor, elected with

426

with reference to the provisions of the Corporate Gover-

• supervised compliance with the principles of correct management;

a quotient of 17,037,192. An Economics and Com-

• supervised the adequacy of the company’s organ-

merce graduate from the University of Rome, char-

isational structure for aspects within its responsi-

tered accountant. Registered on the Register of Audi-

bility, the Internal Control System and the admin-


istrative-accounting system as well as the latter’s

In carrying out its activity, the Board of Statutory Auditors

reliability in correctly representing operational

co-ordinated with the Audit segment mainly through pe-

transactions;

riodic meetings which discussed the independent moni-

• supervised the observance of rules which ensure

toring work plan and the results of the main operations

transparency and the substantive and procedural

carried out throughout the year.

fairness of transactions with related parties;

Moreover, the Board co-ordinated with the Internal Audit

• verified the correct application of the criteria and

Committee through the participation of its Chairman in

procedures adopted by the Board of Directors to as-

meetings.

sess the independence of its members;

During the financial year, the Board met 9 times, with

• verified the independence of its members after appointment and at the end of the financial year; • supervised the effective implementation of the

each meeting lasting an average of 2 hours. As at the date of this report, the Board has met 4 times, and each meeting lasted for an average of 2 hours.

code of conduct; • verified the independence of the Auditing Firm and verified compliance with the related regulations, the nature and the entity of services other than the audit of the financial statements provided to the issuer and its subsidiaries by the Auditing Firm and by entities belonging to its network.


427

15. RELATIONS WITH SHAREHOLDERS The main information concerning the Company, its per-

organises special conference calls with institutional in-

formance and related events is promptlydisclosed to the

vestors and financial analysts.

market and the applicable Supervisory Authorities, and

In 2011 the following were held:

is made available in a document at the Company’s registered office and on its website at www.acea.it, where continuously updated information is posted and remains without any time limit (Application criteria 11.C.1.). ACEA’s organisational structure includes an Investor

428

• meetings and conference calls with analysts who cover Acea’s shares; • conference calls and presentations to the financial community timed to coincide with approval of the annual and interim results;

relations segment (Application criteria 11.C.2), which

• more comprehensive presentations for Italian and

reports to the CEO, for which the manager is Ms. Elvira

international institutional investors (roadshow in

Angrisani.

the main financial centres of Italy and Europe);

At the time of the approving of the annual, half-year and

• numerous one-to-one meetings with Italian and

quarterly results and the Industrial plan and upon the oc-

international institutional investors (approximately

currence of any price-sensitive operation, the Company

60 meetings).


16. GENERAL MEETINGS

(as per art. 123 bis, par. 2, lett. c), Finance Consolidation Act (TUF) The functioning regulation of the general meeting is con-

Moreover, art. 11.3 indicates that “both the ordinary and

tained in ACEA S.p.A.’s Articles of Association, and, other

extraordinary general meetings shall be convened when

than referring to legal requirements, dedicates articles

so requested by a number of Shareholders represent-

10, 11, 12, 13 and 14 to the general meeting of share-

ing the percentages set forth in the laws in force, which

holders.

Shareholders, must also the topics to discuss when mak-

In its meeting of 27 October 2010, the BoD amended the

ing the request, or when the request is made by the

Articles of Association to reflect the provisions intro-

Board of Statutory Auditors or its members as foreseen

duced by Legislative Decree no. 27 of 27 January 2010

by the law.

transposing Directive 2007/36/EC of 11 July 2007 into

Additionally, the number of Shareholders representing

Italian law, and added the provision, as per the new ar-

the percentages set out in the dispositions of the law in

ticle 135-novies of the TUF, of having at least one way

force may request, in accordance with the terms estab-

of notifying the Company, by computer means, of the

lished by prevailing law, to add to the items on the agen-

proxies issued by shareholders to be represented at the

da, indicating the further topics to discuss in the request.

General meetings.

The Shareholders’ Meeting may not be convened nor the

Specifically, as at 31.12.2011, and to date, art. 10 sets

supplement request to the published agenda considered

forth the methods of calling the General Meeting, indi-

upon the request of the Shareholders to transact busi-

cating at 10.3 that “Without prejudice to the power of

ness in respect of which the passing of resolutions may

convening a meeting established by specific provisions

only take place upon the proposal of the Directors or on

of law, the Shareholders’ Meeting, both ordinary and ex-

the basis of a project or a report to be prepared by them.”

traordinary, shall be convened by the Board of Directors

Article 12 of the Articles of Association expressly sets

through notice which shall contain the day, the venue

forth that the majorities necessary for validating the or-

and the time of the meeting and the agenda of the busi-

dinary and extraordinary general meeting’s constitution

ness to be transacted.” In paragraph 4 of the same ar-

and resolutions be those set forth by the law.

ticle, it is furthermore confirmed that the notice may be

Article 13.1 of the General Meeting rules establishes

given also outside of the registered office, provided it is

that “the right to participate at the General meetings

in Italy.

and exercise of the right to vote will be confirmed by a

“Notice must be given on the Internet site of the Com-

notification to the issuer, made by the intermediary, in

pany, and on the Official Gazette of the Republic of Italy,

accordance with the accounting records, in favour of the

or on the Il Sole - 24 Ore newspaper in compliance with

party who has the right to vote in accordance with the

the terms established be the effective regulation. There

methods and terms provided by prevailing law.”

may be calls for meetings following the second call. The

Art. 13.2 instead sets forth that it is possible for any

notice of a meeting may foresee, for different days, the

shareholder entitled to participate at the meeting to be

second, third and possible subsequent meetings to be

represented pursuant to the law

held in the event of a failure to reach a quorum according

Furthermore, the same paragraph of article 13 sets forth

to the law in each of the previous meetings” (art. 10.4 of

that “with the exception of the Municipality of Rome, or

the Articles of Association).

subsidiaries thereof, which have acquired the capacity of

Art. 11.1 sets forth that the “General Meeting is convened

Shareholders, the voting right may not be exercised for

at least once a year to approve the financial statements

more than 8% of the share capital, even by proxy.”

within 120 days from the close of the corporate year, or

To that end, note the provisions of article 6 of the Ar-

within 180 days from the above mentioned close if the

ticles of Association which provides for the following:

conditions under art. 2364 of the Italian Civil Code apply”

“with the exception of the Municipality of Rome and its

Art. 11.2 sets forth that “the Extraordinary General Meet-

subsidiaries that become shareholders, no shareholder

ing shall be convened any time it is necessary to pass a

may hold a shareholding of more than 8% of the share

resolution which the law reserves to its competence.”

capital. In the event of breach, the relevant shareholder


429

may not exercise the voting rights on the shareholding

shall notify such circumstance to the Company in writ-

that exceeds said limit, and the resolutions passed with

ing within twenty days of completion of the transaction

the decisive vote of such exceeding shares which are not

through which the threshold was crossed.”

entitled to cast votes pursuant to this Art. 6 may be re-

Another restriction set by article 6 in point number 5 is

scinded pursuant to article 2377 of the Italian Civil Code.

that which sets forth that “those Shareholders who have

The shares which are not entitled to cast votes are in any

not participated in approving the resolutions concern-

case computed to determine a quorum for the meeting.”

ing the introduction or removal of the restrictions on the

(art. 6.1 of the Articles of Association)

transfer of the shares shall not be entitled to withdraw.”

“The aforesaid limit also applies to the interests held

Article 13.3 sets out: “In order to facilitate the collec-

by the group to which each Shareholder belongs, there

tion of proxies from shareholders who are employees of

deeming to be a group in respect of:

the Company or its subsidiaries, associates who adhere

- that formed by the persons, whether natural or

to shareholders’ associations that meet the requisites

legal, which directly or indirectly control, are con-

dictated by the effective applicable regulations, in ac-

trolled by or fall under common control with the

cordance with the terms and procedures established by

shareholder;

the Board of Directors directly or through its authorised

- that formed by entities connected to the share-

persons, appropriate areas will be made available for no-

holder, even though not having corporate form;

tification and carrying out the proxy collection process.

- that formed by persons, whether natural or legal,

If the proxy is made via computer, in accordance with the

which directly or indirectly, explicitly or by means

procedures provided by prevailing law, each time, notifi-

of conclusive behaviour, have entered into or other-

cation of the aforesaid proxy may be made by using the

wise adhere to arrangements of the kind described

company Internet site in accordance with the methods

in article 122 of the Italian Legislative Decree 58/98,

provided in the meeting notice.”

to the extent that such arrangements concern at

On 3 November 2000, the General Meeting of sharehold-

least 8% of the voting share capital.

ers approved the adoption of a regulation (which can be

Control and connection, for the purposes of this article 6,

obtained at the registered offices or on the company

shall be deemed to exist in the instances laid out in ar-

website www.acea.it) which regulates the orderly exe-

ticle 2359 of the Italian Civil Code.” (art. 6.2 of the Articles

cution of General Meetings (Application criteria 11.C.5.).

of Association)

The approved Regulation is the result of detailed studies

Point no. 3 of article 6 sets forth that the limit pursuant to

of texts prepared by various study Commissions estab-

art. 6 point 1 applies also with reference to:

lished in different trade associations, and is particularly

- shares held by the family of the shareholder, where

inspired by the studies carried out by Assonime. Specifi-

family shall be deemed to include the shareholder

cally, article 7.3 of the aforesaid regulation regulates the

itself, its non-divorced spouse and the co-living

methods by which the shareholders’ right to speak on

and/or tax-deductible children;

the subjects set for discussion is guaranteed:

- shares beneficially held by a natural or legal person

“The request to intervene on individual agenda topics

through controlled entities, trustees, intermediar-

can be presented at the chair’s (of the general meet-

ies;

ing) table from the moment that the general meeting is

- shares directly or indirectly held, as pledge or usu-

established and until when the general meeting’s Chair-

fruct, in the event that the voting right vests upon

man has closed the discussion on the relative agenda

the pledgee or the usufructuary;

topic. In inviting people to speak, by regulation, the Gen-

- shares being subject to repo arrangements, to be

430

eral Meeting Chairman follows the order in which the

considered in respect of both parties thereto.”

intervention requests were made. Each shareholder can

Point 4 of article 6 furthermore sets forth that “whoever

make just one intervention on each agenda topic, within

holds shares in excess of the 8% of the share capital

the time limit of ten (10) minutes.”


During the general meeting, the Board of Directors re-

During the 2011 financial year, and as of today, significant

ported on activities carried out following company pro-

changes in the capitalisation of ACEA shares and in the

grammes. This obviously provides the shareholders with

composition of its company structure which damage the

correct information about the elements necessary to

prerogatives of minority interests have not taken place.

ensure that they can make informed decisions on topics

In accordance with article no. 15 of the Articles of Asso-

reserved to the meeting’s competence.

ciation, the General Meeting shall determine the number

The Board of Directors considers General Meetings to be

of directors to be elected (from 5 to 9).

of great importance to investor relations. The Directors,

Also in accordance with the same article, it is the ab-

therefore, act to the best of their ability to encourage and

solute responsibility of the General Meeting to appoint

facilitate a participation as wide as possible in General

Directors.

Meetings (Application criteria 11.C.3).


431

17. FURTHER CORPORATE GOVERNANCE PRACTICES (as per art. 123 bis, par. 2, lett. a), Finance Consolidation Act (TUF)

432

Ethics Committee

assists Acea in ensuring correct application of the

With a Board of Directors resolution on 26 July 2001, the

Code of Conduct standards and criteria; develops and

Ethics Committee was established, assigned full and

spreads awareness of the procedures necessary to en-

independent authorities of action and delegated con-

sure the aims and compliance with the Code principles;

trol to supervise the implementation and observance

controls any breach of the standards of conduct of the

of the behavioural principles and rules expressed in the

Code, and propose penalties in accordance with the

code of ethics adopted by Acea.

work contracts. Finally, the Committee prepares a re-

The composition and functioning of the Committee are

port on the work carried out, to be sent to the Super-

regulated by specific regulations approved by the BoD.

visory Body, the Board of Directors, the Internal Audit

The members of the Committee are the following as

Committee and proposes any amendments needed to

at 31 December 2011: Andrea Peruzy (Chairman), Fran-

improve the Code principles. To this end, during the

cesco Caltagirone and two externally appointed mem-

year the Committee resolved to start a project to re-

bers, Cesare San Mauro and Andrea Mondello, both

view the Acea’s rules concerning ethics, with the ob-

appointed in the BoD meeting of 14 June 2011. The Di-

jective of integrating in a single document, ‘the new

rector Aldo Chiarini, who is also a member of the Com-

Code of Ethics’, the Values Charter, the Code of Ethics

mittee, resigned on 10 November 2011.

in force and the Code of Ethics on Contract Work as

In accordance with the responsibilities attributed by

well as introduce new or improved reference ethical

the Code of Ethics and the mentioned Regulation, the

principles. The new Code of Ethics was approved in the

Committee spreads awareness of the Code of Ethics

meeting of 22 February.

within the Group; heightens the awareness of manag-

When carrying out its duties, the Committee will coor-

ers and employees of Acea S.p.A. to ethical matters;

dinate its work with the work of the Supervisory Body.


18. CHANGES SINCE YEAR-END CLOSE Changes which occurred after year-end close and until today’s date have been described in the specific sections.

On behalf of the Board of Directors

The Chairman

Giancarlo Cremonesi


433

TABLE 1: INFORMATION ON OWNERSHIP STRUCTURE

SHARE CAPITAL STRUCTURE

Ordinary shares

No. of Shares

% w.r.t. share capital

Borsa Italiana automated stock market Listing

212,964,000

100%

49%

Shares with limited voting rights

------

Shares without voting rights

------

Rights and obligations

OTHER FINANCIAL INSTRUMENTS (attributing the right to subscribe newly issued shares) Listed (indicate the markets) / unlisted

No. of instruments in circulation

Category of shares for the service of conversion/ financial year

No. of shares for the service of conversion/ financial year

Bonds

-----

-----

-----

-----

Warrants

-----

-----

Convertible

RELEVANT SHAREHOLDINGS From the Consob site dated 21 March 2012 Declarant

Share % of the ordinary capital

Roma Capitale GDF Suez SA Caltagirone Francesco Gaetano

434


Share % of the voting capital

51%

51%

Ondeo Italia S.p.A%

6.524%

11.5154%

Gdf Suez Energia Italia S.p.A

4.991%

Fincal S.p.A

5.785%

Viapar S.r.l.

3.300%

Finanziaria Italia SpA

1.737%

So.fi.cos. S.r.l.

2.687%

Viafin S.r.l.

1.526%

15.035%


435

TABLE 2: STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES AS AT 31.12.2011

BOARD OF DIRECTORS Required quorum for the presentation of lists at the last appointment: 1% of the shares with voting right Office

Members

In office since

In office up to

List (M/m) (1)

Exec.

Chairman CEO

Giancarlo Cremonesi

GM 29/04/10

31/12/2012

M

X

Marco Staderini

GM 29/04/09

31/12/2012

M

X

BoD 03/05/10 (and CEO) Director

Paolo Giorgio Bassi

GM 29/04/10

31/12/2012

M

Director

Andrea Peruzy

GM 29/04/10

31/12/2012

M

Director.re

Luigi Pelaggi

GM 29/04/10

31/12/2012

M

Director


GM 29/04/10

31/12/2012

m

Director

Paolo di Benedetto

GM 29/04/10

31/12/2012

m

Director


GM 29/04/10

31/12/2012

m

Director

Giovanni Giani

Co-opted on 29/11/11

31/12/2012

m

NOTES (1) M/m indicates that the member was appointed from the majority list (M) or the minority list (m). (2) No. of presences at the meetings of the BoD and the committees respectively (no. of presences/ no. of meetings carried out during the effective period in which the involved party was in office) (3) An “X” is placed in this column if the BoD member belongs to the committee.

DIRECTORS WHO RESIGNED DURING THE 2011 FINANCIAL YEAR

BOARD OF DIRECTORS Required quorum for the presentation of lists at the last appointment: 1% of the shares with voting rights Office

Members

Director

Aldo Chiarini

In office since

In office up to

List (M/m) (1)

GM 29/04/10

10/11/11 due to resignation

m

NOTES (1) M/m indicates that the member was appointed from the majority list (M) or the minority list (m). (2) No. of presences at the meetings of the BoD and the committees respectively (no. of presences/ no. of meetings carried out during the effective period in which the involved party was in office). (3) An “X” is placed in this column if the BoD member belongs to the committee.

436


Exec.

Internal Control Committee NonExec.

Indep. acc. to Code

Indep. acc. to TUF

(2)

Remuneration Committee

(3)

(2)

(3)

(2)

11/11 11/11 x

x

x

11/11

X

10/10

x

x

x

11/11

X

10/10

x

4/4

x

x

x

9/10

X

9/10

x

4/4

x

x

x

10/11

X

8/10

x

x

x

10/11

x

4/4

x

x

x

3/11

x

0/4

1/1

X

x

Internal Control Committee NonExec. X

Indep. acc. to Code

Indep. acc. to TUF

(2)

(3)

(2)

8/9

X

4/9


437

TABLE 3: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS AS AT 31.12.2011

Board of Statutory Auditors Required quorum for the presentation of lists at the last appointment: 1% of the shares with voting rights Office

Members

In office since

In office up to

List (M/m)* (1)

Independence according to Code

Chairman

Enrico Laghi

29/04/10

31/12/2012

m

x

Statutory auditor

Alberto Romano

29/04/10

31/12/2012

M

x

Statutory auditor

Corrado Gatti

29/04/10

31/12/2012

M

** (2)

Number of other positions (3)

1 ----

Alternate auditor

Gianluca Marini

29/04/10

31/12/2012

m

x

Alternate auditor

Leonardo Quagliata

29/04/10

31/12/2012

M

x

----

NOTES (1) M/m indicates that the member was appointed from the majority list (M) or the minority list (m). (2) This column indicates the participation of the auditors in the Board of Statutory Auditors meetings (no. of presences/no. of meetings held during the effective period in which the involved party was in office). (3) This column indicates the number of positions of director or auditor covered by the concerned party reported in accordance with art. 148-bis of the TUF. The complete list of positions is attached, in accordance with art. 144-quinquiesdecies of the CONSOB Issuer’s Regulation, to the report on supervisory activity, prepared by the auditors in accordance with article 153, paragraph 1 of the TUF.

438


Chart 1. Composition of the ACEA Board of Directors and positions held by Directors in other companies

Role

Name

Position

Other positions

Chairman

Giancarlo Cremonesi

Executive Director

Chamber of Commerce (P) Imprebanca SpA (C) Ag. Regionale Sviluppo Lazio Spa (C)


Marco Staderini

Executive Director

--------------

Director

Luigi Pelaggi

Amministratore indipendente

--------------

Director

Paolo Giorgio Bassi

Independent Director

Eurocastle Investment Ltd (C) Ciccolella Spa (C) TAS Spa (P) Equita Sim Spa (C) Centrale Attività Finanziarie SpA (CEO

Director

Paolo Di Benedetto


Director



Banca Finnat Euramerica (C) Fondo Nazionale di garanzia (P)) Suez Environnement Company (DC) Lyonnaise des Eaux France (P) Sita France (P) Institut de Prospective Economique du Monde Méditerranéen IPEMED (P Supervisory Body) Aguas de Barcelona (Permanent representative SUEZ ENVIRONNEMENT Espana S.L. Director) SUEZ ENVIRONNEMENT Espana S.L (CEO) Hisusa (P) Criteria CaixaHolding S.A.U. (C) Sino-French Holdings (P)

Director

Andrea Peruzy


Carivit (C)

Director

Giovanni Giani

Non-independent director

--------------

Director


Non-independent director

Cementir Holding SpA (P)

Amundi RE Italia SGR SpA (C)

Banca Antonveneta SpA (C) Cimentas A.S. (C) Cimbeton A.S. (C) Aalborg Portland A.S. (P) Unicon A.S. (P) Banca Finnat Euramerica SpA (C) Caltagirone SpA (C) Caltagirone Editore SpA (C) * Positions held in companies with which Acea has established and operates a structural partnership, in order to pursue alliances that do not restrict management of the Company.


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Acea SpA Piazzale Ostiense 2 – 00154 Rome Tel. +39 06 57991 www.acea.it

Financial Statements of ACEA S.p.A. Consolidated Financial ...

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