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Financial Statements of ACEA S.p.A.

Consolidated Financial Statements of the ACEA Group

for the year 2011

2

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

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

3

The ACEA Group 8

Corporate bodies 10

Partecipazioni detenute da Amministratori e Sindaci 10

Letter to shareholders 11

Group operating review 15

Networks Industrial Area 15

Energy Industrial Area 36

Water Industrial Area 46

Environment Industrial Area 55

Economic and financial review 63

ACEA Group economic results 64

Risultati patrimoniali e finanziari 71

Other information 81

ACEA S.p.A activities 81

Performance of the international stock markets and of the ACEA share 81

Significant events in 2011 84

Significant events after the balance sheet date 93

Purchase of the Site 93

ACEA Ato5 Arbitration 93

Orvieto - SAO Regulator Plan 93

Approval of the ACEA Group’s 2012 - 2016 Business Plan 93

CIP (Interdepartmental Price Commission) 6/92 incentives - ARIA 94

Breakdown of ATI 1 and 2 tariff 94

ACEA Ato5 2012 tariff determination 94

Campania Region-EASV-GORI settlement agreement 95

Risks and uncertainties 96

Regulatory risks 96

Legislative risks 98

Strategic risks 98

Photovoltaic risks 100

Operational risks 100

Litigation risks 102

Operating (and financial) outlook 109

Resolutions on profit for the year and distribution to shareholders 111

ContentsReport on operations

4

Report of the Board of Statutory Auditors 199

Independent auditors’ report 210

Certification of separate financial statements in accordance with art. 154-bis of Legislative Decree 58/98 212

Income Statement 114

Statement of Comprehensive Income 114

Balance Sheet - Activities 115

Balance Sheet - Liabilities 116

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) 196


Contents

5

Consolidated Income Statement 216

Consolidated Statement of Comprehensive Income 217

Consolidated Balance Sheet 218

Consolidated Cash Flow Statement 219

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

Update on major disputes and litigation 326

Additional disclosures on financial instruments and risk management policies 336

Commitments and contingencies 348

Annexes 350

A. List of consolidated companies 352

B. Reconciliation of shareholders’ equity and net profit – consolidated 354

C. Remuneration of Directors, Statutory Auditors and Key Managers 355

D. Information provided pursuant to CONSOB Ruling no. 6064293 357

E. Segment information: balance sheet and income statement 362

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

Consolidated Financial Statements

Contents

Report on operations

8 2011 | Report on operations

The ACEA Group

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

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

Municipality of Rome

Market

Caltagirone

GDF Suez

15%

12%

22%

51%

92011 | Report on operations

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

ACEA HOLdinG

96% Acea Ato 2

94% Acea Ato 5

96% Sarnese Vesuviano37% Gori

100% Crea Gestioni

40% Umbra Acque

55% Acque Blu

55% Acea Gori Servizi

85% Ombrone40% Acquedotto del Fiora

69% Acque Blu Arno Basso45% Acque

69% Acque Blu Fiorentine40% Publiacqua

35% Intesa Aretina46% Nuove Acque

1% Ingegnerie Toscane

25% Consorcio Agua Azul

51% Aguazul Bogotà

100% Acea Dominicana

100% Acea Energia Holding100% Acea Produzione

100% Acea Energia

100% Acea8cento

100% Acea Risorse e Impianti per l’Ambiente

84% Aquaser

50% Ecomed

50% Apice

100% Acea Reti e Servizi Energetici50% Acea Distribuzione

51% Ecogena

100% Acea Illuminazione Pubbllica

50% Acea Distribuzione 100% LaboratoRI

wATER EnERGy EnViROnMEnT

nETwORkS

OTHER SERViCES


Corporate bodies

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

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

Paolo Gallo

Enrico Laghi Chairman

Corrado Gatti Standing Auditor

Alberto Romano Standing Auditor

Gianluca Marini Alternate Auditor

Leonardo Quagliata Alternate Auditor

Reconta Ernst & Young S.p.A.

Giovanni Barberis

BOARd OF diRECTORS 1

GEnERAL MAnAGER

BOARd OF STATUTORy AUdiTORS 1

indEPEndEnT AUdiTORS

ExECUTiVE RESPOnSiBLE FOR FinAnCiAL REPORTinG


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 economic-financial 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

The Chairman

www.acea.it


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


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.


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


Group operating review

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

quirements, whilst the remaining 13.7% was covered by

imports. As regards the contributions to total production,

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

droelectric sources and, lastly, 7.3% from geothermal

and wind/PV sources.

networks industrial AreaElectricity demand in Italy in 2011 increased by 0.6%

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

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

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

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

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

at 12.00.

1.1.2011 31.12.2011

1.1.2010 31.12.2010

Change 2011-2010

Gwh Gwh %

net production

Hydroelectric 47,672 53,795 –11.4

Thermoelectric 217,369 220,984 –1.6

Geothermal 5,307 5,047 +5.2

Wind power 9,560 9,048 +5.7

Photovoltaic 9,258 1,874 +394.0

Total net production 289,166 290,748 –0.5

(of which: CIP 6 production) 26,639 36,939 –27.9

Import 47,349 45,987 +3.0

Export 1,723 1,827 –5.7

Balance of imports 45,626 44,160 +3.3

Consumption for pumping systems 2,518 4,453 –43.5

Electricity demand 332,274 330,455 +0.6


Peak demand on the Acea Distribuzione network in 2011

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

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

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

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

crease in the number of insignificant plants2 installed and the

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

Electricity transmissionIn 2011, the total electricity injected into ACEA Distribuzione’s

network (from the National Transmission Grid, from gener-

ating plants directly connected to the ACEA Distribuzione

network and from ENEL Distribuzione’s interconnected net-

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

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

vious year1.

200

150

100

50

0

MW

p

potenza installata di cui fotovoltaico

2006 2007 2008 2009

213,0

20112010

199,5

119,1

22,5 33,7541,94 42,78

55,93

98,323,71

4,41

12,60 17,05

31,58

73,83

Electricity demand recorded on Acea Distribuzione’s net-

work in 2011 was affected in various ways by weather

conditions (with particular relevance in July, September

and December), and a lower number of working days

(two less working days than the last3 calendar year).

Weather conditions affected demand significantly in May

and June, during which increases in temperature led to

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

mand. The opposite effect was recorded in July in which

milder weather conditions and less working days than in

2010 generated a reduction in the electricity load (down

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

tions had a significant impact in September, causing an

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

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

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

peratures and one less working day.

The graph below shows the trend in the reference tem-

perature4 recorded in 2011 and the average monthly dif-

ference of said parameter calculated in the correspond-

ing months of 2011 and 2010.

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.


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 1,043.70 953.76 995.44 893.22 919.74 972.59 1,196.37 969.21 971.48 960.87 970.03 1,054.31 11,900.72

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%

These electricity amounts were intended to cover the

needs of the utilities supplied by the above-mentioned

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

markets and of the market subject to additional safe-

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

which are represented by the electricity company of the

municipality of Saracinesco. There are also sales and

injections of energy between the ACEA Distribuzione’s

network and ENEL Distribuzione’s networks at some LV,

MV and HV interconnection points.

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

following table illustrates the above-mentioned aspects,

with further specification of the contribution given by Ac-

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

Market subject to additional safeguards

Free market Underlying distributors

Total

AU Source

Gwh

Other Sources

Gwh

Gwh 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

ACEA Distribuzione signed an agreement with the Vati-

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

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

optimised management of imported electricity assigned

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

cations provided by the Italian Authority for Electricity

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

Productive Activities – now the Ministry for Economic

Development - that sets out the assignment of transmis-

sion capacity shares to the interconnection with foreign

countries for the Vatican City State and the Republic of

San Marino).


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

ity data and the calculation of starting and trend lev-

els for distribution companies, pursuant to paragraph

30.1 of the Integrated Code, which opted for three-

year levels of continuity indicators, instead of two-

year levels;

• postponementof thedeadlinesandobligationspro-

vided for with regard to service continuity, which are

relevant for the procedure concerning service conti-

nuity for 2008;

• exclusionofoutagesduetotheftsfromelectricitydis-

tribution plants, from Title 7 of the Integrated Code.

Reporting activities in 2010 were concluded within the

deadlines established beforehand by the Regulator (by

31 March 2011).

The results of the aforesaid reporting were ratified by

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

vember 2011.

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

2011, an AEEG inspection office carried out an inspection

at ACEA Distribuzione regarding the timely recording of

data relating to continuity of the electricity service.

The inspection concluded positively (in this regard, see

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

with no penalties for the company.

Regulatory Framework12 January 2011 – Consulting document dCO

1/11: Automatic compensation for the seller’s

failure to periodically issue invoices for electric-

ity and natural gas for reasons attributable to

the distributor.

The Italian Authority for Electricity and Gas proposed

the introduction of compensation on the account of dis-

tribution companies in case the failure to provide me-

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

ing frequency. The Italian Electricity and Gas Authority

proposes a limitation of the charges on the distributor’s

account only to the cases of switching, with failure to

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

related to the switching date:

• meteringdatadefinedbytheregulationaccordingto

the treatment (hourly treatment, time period treat-

ment or single time treatment);

Service qualityOn 24 December 2007 the Italian Authority for Electricity

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

regulatory period from 2008 until 2011.

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

ent types of regulation, amending the two pre-existing

ones and supplementing the current legislation:

1. Regulation of prolonged or extended outages;

2. Individual standards regarding the number of out-

ages for MV customers;

3. Regulation of the total duration of long outages with-

out advance warning;

4. Regulation of the average number of long and short

outages.

On 27 April 2009, the Authority then issued consulting

document DCO 9/09 “Electricity distribution service con-

tinuity - Urgent review of some provisions concerning

the regulation of the number of outages without advance

warning and the 2008-2011 trend levels”.

Following the end of the consultation process, the Au-

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

ments the observations received from the entities con-

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

of 19 December 2007, with the postponement of the

relevant deadlines for the termination of the procedure

pursuant to paragraph 22.4, Annex A for 2008 and the

deadlines pursuant to point 2 of Authority Resolution no.

ARG/elt 168/08 of 25 November 2008.

The main changes, with respect to the previous regula-

tory period, can be summarised as follows:

• changeintheselectionruleofexceptional longout-

ages starting in “periods of perturbed conditions”,

with the introduction of a threshold for the number of

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

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

distinction between low voltage and medium voltage;

• exclusionofalllongoutageswithoutadvancewarning

which start in periods of perturbed conditions, with

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

visions in force for short and temporary outages;

• extensionof theabove-mentionedprovisions to the

duration of outages, excluding all long outages start-

ing in periods of perturbed conditions;

• postponementof thedeadlinessetout inpoint2of


tion to call auditions and make documents available for

consultation to acquire useful knowledge for the cre-

ation and adoption of the provisions.

7 February 2011 – imposition of a fine pursu-

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

no. 481 of 14 november 1995, towards A2A Reti

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

national Electricity Grid (Resolution ViS 16/11),

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

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

posed fines on some distribution companies, including

Acea Distribuzione and Terna, for breaches that pre-

vented the correct provision of the dispatching service

in the years 2005, 2006 and 2007.

For the distribution companies, the breaches concern:

• themanagement of supply points’ customer infor-

mation;

• theaggregationofwithdrawalmeasurementsforthe

dispatching service.

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

Distribuzione.

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

surement and ranking of the pilot projects re-

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

control systems for active MT networks (smart grids)

connected with the incentive treatment, which for 12

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

invested capital in the tariff.

ACEA Distribuzione presented a pilot project that was

admitted to the incentive treatment, regarding a sig-

nificant portion of its secondary distribution network,

which envisages the predisposition of an accumulation

system integrated with a recharge station for electric

vehicles (corporate fleets) and features a solar power

plant; in particular the project:

• historicalmetering data referred to the period be-

tween the thirteenth and the second month before

the switching date.

With reference to the effectiveness of the compensa-

tion on the distributors’ account, the Italian Electricity

and Gas Authority proposes a differentiation based on

the billing frequency defined in contractual conditions,

for the provision to be effective:

• from1 September 2011 for final customerswith a

billing frequency of at least twice a month;

• from1March2012forfinalcustomerswithmonthly

billing.

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

of procedure for setting up arrangements on the

tariffs for the electricity transmission, distribu-

tion and metering services and the economic

conditions for delivery of the connection servic-

es, for the regulatory period 2012-2015.

Aside from the application of a single national tariff,

the resolution to launch the procedure of tariff regula-

tion for the fourth regulatory period revealed the Italian

Electricity and Gas Authority’s intention to reconsider

a tariff regulation by company for ascertained distribu-

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

Authority included among its objectives the definition

of provisions regarding:

• verificationof the investmentcapitalisationandef-

ficiency criteria;

• the investment effectiveness and indebtedness

monitoring indicators.

Furthermore, the provision on the tariff will include is-

sues relating to:

• the technical and economic regulation of reactive

energy transports on transmission and distribution

grids;

• the increase inthepowerthatcanbetaken in low

load hours by domestic users;

• thepromotionanddevelopmentof thesmartgrids

under resolution ARG/elt 39/10;

• the implementation of special provisions and the

start of the pilot projects to recharge electric vehi-

cles under resolution ARG/elt 242/10.

The Italian Electricity and Gas Authority stated its inten-


tomatic reading of the customer who takes over the

POD.

In addition, the Italian Electricity and Gas Authority in-

tends to start some actions to attain and maintain the

alignment of the information contained in the master

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

low the correct population of the Integrated Informa-

tion System (so-called SII).

21 April 2011 – Consulting document dCO 13/11:

Tariff adjustment of power and reactive energy

withdrawals and inputs in the supply points and

interconnection points between networks.

AEEG proposed measures substantially revising the

regulation regarding power and reactive energy ab-

sorption, aimed at making end customers responsible

by having them reduce withdrawals of reactive energy

by installing power factor correction equipment.

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

old value for the application of fees for reactive energy

absorption be increased.

Furthermore, the fee should compensate costs incurred

by distribution companies, in order to cover:

• the effects on network infrastructures, with reve-

nues included within the obligation of effective rev-

enues for the distribution service;

• theeffectscausedbytheincreaseinnetworklosses,

with revenues included within the balance of loss dif-

ferential equalisation.

AEEG assesses that approximately 20% of the total fee

may be attributed to compensation for the increase in

network losses, and the remaining part to the compen-

sation of infrastructure costs.

The provisions should become effective as of 1 January

2016, in order to enable:

• endcustomerstoprocureandinstallthepowerfac-

tor correction equipment;

• distributioncompaniestoadapt their invoicingsys-

tems as well as to reprogram the meters that are

currently installed.

• ranked2ndafter theEnelDistribuzioneproject, for

the indication of the expected benefits, scoring 73

points;

• ranked 4th with reference to the priority indicator

(ratio between expected benefits and cost of the pi-

lot project), with 660 points.

In detail, the Italian Electricity and Gas Authority as-

sessed that the pilot project presented by ACEA Dis-

tribuzione is characterised by:

• aconsiderable levelof innovation,particularlywith

reference to the enhancement of the automation

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

nificant improvement of continuity levels and service

quality;

• fairfeasibilitytimes;

• ahighlevelofrepeatabilityonalargescale.

16 March 2011 – Consulting document dCO 4/11:

Completion of the regulation concerning the ex-

ecution of the electricity and natural gas sales

contracts in case of supply/delivery points al-

ready active and of alignment of the data in the

availability of the various operators.

The Italian Electricity and Gas Authority presented pro-

posals referring to the electricity and gas sectors in

order to define procedures that facilitate the subscrip-

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

change of the identification data on the supply point

(so-called transfer).

In particular, it proposes the introduction of the follow-

ing provisions:

• request tosubscribeasalescontractcertifying the

ownership of the POD through the indication to the

seller of the registration details of the lease agree-

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

ject to supply;

• withdrawalfromasalescontractcompulsorilyasso-

ciated to a POD deactivation request, except for the

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

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

activation);

• collection of the metering data for invoicing pur-

poses, carried out by the distribution company with

electronic meters or by the new seller through au-


revenue equalisation amounts for the low-volt-

age metering service for the year 2008.

With reference to the equalisation of revenues from the

low-voltage metering service, AEEG noted:

• the adjustment amount compared to the amount

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

2008;

• theamountsetforthfortheyear2009.

ACEA Distribuzione’s adjustment for the year 2008

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

1,238,361.03 euros, for a total of 2,543,054.07 to be re-

ceived.

7 July 2011 – Consulting document dCO 25/11:

implementation of article 20 of decree of the

Ministry of Economic development, in agree-

ment with the Ministry for the Protection of the

Environment, Land and Sea, dated 5 May 2011,

for the purposes of incentivisation of the pro-

duction of electricity from photovoltaic plants.

AEEG formulated proposals to implement the provi-

sions set out in article 20 of the Interministerial Decree

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

with particular reference:

• tothecoverageofresourcesfortheprovisionofin-

centives and for the management of the activities

defined by the decree, particularly as regards the

preparation of unique master records for photovol-

taic plants by GSE (National Grid Operator);

• tomaking network operators responsible again for

the metering service for energy produced;

• totheremunerationofcertificationactivitiesasre-

gards the completion of works performed by net-

work operators.

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

ments to Tables 1 and 2 of AEEG resolution ARG/

elt 74/11 of 16 June 2011, relating to the recal-

culation of the balance of revenue equalisation

amounts for the low-voltage metering service

for the year 2008.

AEEG adjusted the balancing amounts relating to me-

tering equalisation for the year 2008 set out by resolu-

tion ARG/elt 74/11.

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

of the procedure to review the conventional per-

centage factors of electricity loss on the distri-

bution and transmission networks.

AEEG intends to review the conventional loss factors

based on changes made to some system parameters

which had determined their establishment in 2004.

Specifically, AEEG deems that the percentage factor re-

view must account for:

• the development of distributed generation, which

could cause an increase in network losses;

• theprocessofstreamliningelectricalnetworks,also

from the operational point of view, which caused a

decrease in network losses.

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

procedure against ACEA distribuzione S.p.A. for

the investigation of a violation regarding record-

ing electricity distribution service outages.

A penalty proceeding has been initiated against ACEA

Distribuzione for the alleged violation of the following

regulations regarding recording:

• thebeginningoflongoutageswithoutadvancewarn-

ing originating on the LV network by noting the date,

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

by telephone call, on the dedicated list;

• allofthetelephonecallsreceivedtoreportfailures,

also if an outage did not occur (requests).

The AEEG investigation is taking place following a com-

plaint referring to a failure on the LV network (which oc-

curred between 22 and 23 August 2009). The complaint

was forwarded to ACEA Distribuzione by the Consumer

Protection Office, which had requested information

from that company about how reports of failures from

end customers were managed. ACEA Distribuzione re-

plied indicating, inter alia, that requests for reports al-

ready entered are not managed in the system.

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

mination of the amount of revenue equalisation

for the low voltage metering service pursuant

to article 40 of Annex A of AEEG resolution no.

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

the year 2009. Redetermination of the balance of


- enabled for the timely recording of low voltage cus-

tomers affected by outages - on 31 October 2011, the

deadline was set, within which distribution companies

that presented applications for the incentive for reach-

ing the aforementioned objective can waive the incen-

tive, through written communication to the Authority’s

Consumer and Service Quality Department.

15 September 2011 – Consulting document dCO

35/11: Launch of the integrated information Sys-

tem (iiS).

AEEG set out the process for activation and the imple-

mentation of the IIS, with particular reference to the

different phases of implementation of the process and

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

phase 1).

DCO 35/11 indicates, in particular:

• processesthatwillbemanagedbytheIIS;

• theroleperformedbytheIISOperatorthat,depend-

ing on the Processes, will be:

- the official certifier of information flows between

operators (distribution companies, sellers and

Terna);

- responsible for carrying out given activities, cur-

rently performed by distribution companies;

- the agent for centralised communications, in the

event in which the data involved in the informa-

tion flows channelled through the IIS, will not be

the object of the RCU, but the IIS Operator will be

limited to tracking and conserving the data input

by the third parties responsible for performing ac-

tions through the IIS.

• alternativeassumptions fordevelopmentof the IIS,

outlining, in particular, the development of processes

in parallel with the setting up of a database (Official

Central Database);

• implementation plan, for which, in particular, the

completion of the preparatory phase is envisaged

(accreditation of operators, standardisation of flows

and population of the Official Central Database) and

launch of phase 1 within 9 months from publication

of the regulations governing IIS functioning (still to be

issued).

With respect to the previous calculation, the amount

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

ros, given that in the previous resolution the penalty

amount was charged twice, whose 2008 equalisation

amount is now 1,307,476 euros.

4 August 2011 – Consulting document dCO 32/11:

Regulations governing the functioning of the in-

demnity System pursuant to Annex B of AEEG

resolution ARG/191/09 of 11 december 2009.

AEEG formulated certain proposals for the completion

of regulations governing the indemnity system, tar-

geted, in particular, at protecting sellers - as incoming

sales operators - from the credit risk deriving from the

acquisition following the switching of an end customer

from which the Cmor indemnity payment has not been

collected, which said customer would have had to pay

in relation to the delinquency assessed relating to a

previous seller (so-called outgoing seller).

Specifically, provision was made for the introduction of

a return mechanism, which the incoming sales opera-

tor can avail of for the recognition of the Cmor amount

in the event given conditions occur (suspension or re-

quested suspension, deactivation or transfer).

The above-mentioned mechanism envisages the in-

volvement of distributors in identifying and managing

flows of information with the other players involved

(sellers, Sole Buyer as indemnity system operator,

CCSE).

15 September– Resolution ARG/elt 121/11: dead-

line for waiving the incentive set out under para-

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

dated 18 december 2006 for distribution compa-

nies that use electronic meters and remote con-

trol systems for the recording of LV customers

affected by electricity service outages starting

from 1 January 2011 and acceptance of renun-

ciations from distribution companies Società

Elettrica Ponzese S.p.A. and Consorzio Elettrico

di Storo Soc. Coop.

With reference to the objective of the commissioning,

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

of the total of active withdrawal points as at same date


tion regarding metering data for unscheduled with-

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

for the period included between 1 July 2007 and 28

February 2009. Specifically, AEEG verified the incom-

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

tronic format for the transmission to all sellers and

non-compliance with the deadline for the transmis-

sion for the data required by the regulations;

• failure to apply the scheduled system to all supply

points with available power of over 55 kW (envisaged

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

additional prescriptive measure, asking that applica-

tion of the scheduled system be completed within

120 days from notification of the measure (next 8

February).

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

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

non-compliance with the deadline for the transmission

to sellers of information regarding metering data for un-

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

vice Code), verifying the breach for the period between

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

to October 2009.

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

Provisions for the alignment of the master re-

cord data of withdrawal and redelivery points

in the availability of the different operators and

amendments to the contents of information

used in the request for access to the natural

gas distribution service, in cases involving the

replacement in the supply of a redelivery point

(switching), with additions to similar regula-

tions in the electricity sector.

AEEG introduced a procedure targeted as resolving the

misalignments between the data in the master records

of distribution companies and the data in the master

records of sellers (operators subject to additional safe-

guards and dispatching users) for withdrawal (for the

electricity sector) and redelivery (for the gas sector)

points, which makes provision for:

• an initial alignment procedure, which will consist

of correcting the content in the master records of

withdrawal points held by distribution companies

15 September 2011 – Consulting document dCO

36/11: Standardisation of flows of measure-

ments of electricity withdrawals.

AEEG presented its final guidelines regarding standard

flows of metering data, together with the definition of

amendments to the regulations governing the provision

of measurements by distribution companies.

The amendments to the regulations outlined will deter-

mine the introduction of the following additional obliga-

tions for distribution companies in respect of sellers:

• monthly transmission of adjustments to metering

data relating to the calendar year in progress for un-

scheduled withdrawal points;

• yearly transmissionof“late”adjustments tometer-

ing data for unscheduled withdrawal points;

• monthly transmission of adjustments for metering

data for scheduled withdrawal points, in addition to

half-yearly and yearly sessions of communication of

adjustments currently provided for by the regula-

tions.

As regards communication flows, AEEG proposes the

definition of standards for the transmission of “special-

ised” metering data according to the type of transmis-

sion or the nature of the content.

In addition, AEEG:

• indicates the obligation for distribution companies

with more than 100,000 withdrawal points to use the

portal as a communication tool;

• clarifiesthattheproposedsolutionsareplannedby

taking into account that the function of providing

measurements of withdrawals of electricity will be

performed by the Integrated Information System in

the future.

6 October 2011 – Resolutions ViS 91/11 and ViS

92/11: imposition of fines and the adoption of

provisions pursuant to article 2, paragraph 20,

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

against Acea distribuzione S.p.A. and SET dis-

tribuzione S.p.A.

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

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

2009) following verification:

• ofbreachesinthetransmissiontosellersofinforma-


In order to manage the connection process more ef-

fectively, AEEG referred to the provision which requires

network operators to prepare, by 31 December 2011,

an IT portal targeted at the exchange of information

and/or documents between the entity requesting con-

nection and the network operator.

The report on the closing of the enquiry also outlined

Enel’s observations relating to criticalities deriving from

constant adjustments to the relevant regulations.

Lastly, AEEG showed that, two inspections were con-

ducted alongside the enquiry: at Acea Distribuzione and

Enel Distribuzione.

As regards Acea Distribuzione, the inspection conclud-

ed positively, while the inspection at Enel Distribuzione

is still in progress.

17 november 2011 – Resolution ViS 104/11: Start

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

AGSM distribuzione S.p.A. and AGSM Energie

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

ulations governing functional and accounting

unbundling obligations and tariffs.

AEEG launched penalty proceedings against the compa-

nies AGSM Verona, AGSM Distribuzione and AGSM En-

ergie. The violations disputed concern, in particular, the

application of the obligations set out in the regulations

governing unbundling, and specifically, non-compliance

with the regulations:

• governing functional unbundling, put in place to

monitor the guarantee of independence in the man-

agement of distribution activities;

• governing accounting unbundling, targeted at pre-

venting discrimination and cross transfers of re-

sources between activities and conduct within the

Group.

In addition, AEEG identified additional tariff breaches,

especially in relation to:

• theapplicationoftheregulationsrelatingtoemploy-

ee discounts;

• non-adjustment of the amounts due for temporary

connections applied to end customers.

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

Integrated Code) based on updating the data sent by

sellers;

• the introduction of a continuous alignment proce-

dure, by sellers in respect of distribution companies,

to communicate changes in the identification data of

the supply point. This procedure, already present in

the gas sector, was also extended to the electricity

sector.

3 november 2011 – Resolution EEn 10/11: As-

sessment of the fulfilment of specific updated

energy-saving objectives for liable distributors

in 2010 and provisions to the Electricity Sector

Equalisation Fund regarding the payment of the

tariff contribution to those distributors that

were fully or partially compliant..

AEEG determined the size of the tariff contribution to

be paid to distribution companies for fulfilment of the

primary energy-saving objective set for 2010.

With reference to Acea Distribuzione, an amount of

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

within 30 days from notification of this provision.

3 november 2011 – Resolution ViS 99/11: Closing

of the enquiry launched by means of AEEG reso-

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

sion of the grid connection service for electric-

ity production plants by the grid operators.

The enquiry conducted by AEEG through the request

for information from grid operators (Terna and distri-

bution companies) showed a significant increase in re-

cent years of requests for the connection of production

plants. Considering the volumes, AEEG judged the regu-

latory measures and work performed by network op-

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

• someanomalies,includingadelayinprovidingcon-

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).


• for2011,equaltothedifferencebetweentheamount

requested, before interest, and the respective final

amounts defined.

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

determination of continuity recovery amounts

of electricity distribution services for 2010.

AEEG calculated the amounts relating to application of

the incentive regulation for distribution service continu-

ity for 2010.

As regards Acea Distribuzione, the incentive came to

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

December 2011.

This amount is the result of the incentive delivered

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

spect of the application of the ceiling on incentives

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

to 1,737,238.06 euros).

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

sults of the inspections carried out at the distribution

companies. As regards Acea Distribuzione, the outcome

was positive, with the values of the precision, accuracy

and registration system indexes approaching 100%.

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

disbursement of the reduced bonus, set forth

in paragraph 12.5, of Annex A of resolution no.

292/06 of 18 december 2006 for distribution com-

panies that use electronic meters and remote

control systems for the recording of LV custom-

ers affected by electricity service outages start-

ing from 1 January 2011.

AEEG identified the distribution companies to which to

provide the bonus for reaching the objective of the com-

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

meters out of the total of active withdrawal points as at

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

tomers affected by outages, effective as of 1 January

2011. In addition, AEEG:

• acceptedthewaivingofthebonusbysomedistribu-

tion companies (including Acea Distribuzione);

• identified the distribution companies that, despite

having requested the incentive, showed non-com-

pliance with the checks performed by AEEG at the

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

Review of low-voltage metering service revenue

equalisation mechanism pursuant to article 40

of the Transport Code for the years 2010 and

2011. Amendments to the integrated Code con-

taining the provisions of the italian Authority for

Electricity and Gas for the delivery of electric-

ity transmission, distribution and metering ser-

vices for the regulatory period 2008-2011 (Trans-

port Code).

AEEG defined the methods for calculating the amounts

relating to the low-voltage metering service equalisa-

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

sion was necessary to clear up the anomalies deriving

from the previous calculation mechanism (as regards

the breakdown of revenue, distributors with the longest

delay in installing electronic meters benefitted).

Furthermore, the possibility was introduced, to ask

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

amounts for the years 2010 and 2011, which CCSE

will pay before 31 December 2011, in order to mitigate

the effects of the delay regarding quantification of the

equalisation amounts for the year 2010, for an amount

no higher than the advance for the year 2010 and at a

rate equal to the 1-month Euribor, 360 basis, plus 215

basis points, applied as of the date of disbursement of

the advance and up until 30 November 2012 (date on

which disbursement is expected to take place of the

amount for the year 2011 which should be communi-

cated by CCSE by 30/09/2012).

Therefore, AEEG envisaged, in the form of an advance

and with the exception of equalisation, that distribution

companies for which a positive amount was defined for

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

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

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

sation for the year 2010.

If the final amount defined is lower than expected, the

return must occur within 30 days from the communica-

tion and for an amount:

• for2010,equaltothedifferencebetweentheamount

received in the form of an advance and the amount

of final equalisation, plus interest and effective from

the date of disbursement of the advances;



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

company-specific correction factor for the rev-

enues admitted to cover distribution costs in

accordance with Annex A of AEEG resolution

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

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

the adjustment of the company-specific correc-

tion factor for the revenues admitted to cover

distribution costs, relating to 2009, for Acea dis-

tribuzione S.p.A.

The company-specific correction factor was adjusted

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

increased from 0.2153 to 0.2230. The change was made

following the appropriate request formulated by Acea

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

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

one, the company-specific correction factor for 2010

was set at 0.2136.


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

tional percentage factors of electricity losses on

the networks with the obligation of third-party

connection, pursuant to table 4, of Annex A of

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

The Italian Authority for Electricity and Gas arranged for

a reduction in the standard loss factors on HV and HHV

networks and, subsequently, of the values of standard

losses on MV and LV networks.

The decision was adopted following a study conducted

by the Milan Polytechnic, which showed that the net-

works falling under the National Grid adhered to a con-

stant streamlining process which led to a reduction in

typical technical losses.

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

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

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

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.

relevant site.

Distribution companies that waived the incentive and

those that did not comply with the checks performed

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

native methods set out in TIQE (Integrated Code to

regulate the quality of electricity distribution, sales and

measurement service) for the recording of low voltage

customer outages, valid for the 2007-2011 regulatory

period. This decision must be communicated to AEEG

during the annual transmission of service continuity

data.


Amendments and additions to italian Author-

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

regarding technical and economic conditions

for connecting to networks with the obligation

of third-party connection to production plants

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

coming the problem of the virtual saturation of

electricity networks.

AEEG intervened again on the subject of the virtual

saturation of electricity networks (quotes accepted, not

followed by the construction of the connection plant,

the subsequent occupation of network capacity: so-

called critical areas), by reintroducing an amount for

the reservation of network capacity in areas and lines

identified as critical based on network maps published

periodically by network operators.

AEEG subsequently also regulated other aspects re-

garding active connections, establishing:

• the introduction of an automatic indemnity in the

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

owing to a service provided that does not meet the

standards;

• the introduction of an automatic indemnity in the

event of a delay in the transmission of the operating

regulations;

• themodificationoftheexpirydatesandinformation

content of annual data collections.


With reference to the modifications regarding commercial

quality, the following should be pointed out in particular:

• theintroductionoftheso-calledrapidquote,onthe

basis of which, during the first telephone call or first

contact, the seller must inform the LV customer of

the charges and service performance times. This

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

cerns requests up to an available power of 6.6 kW

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

supply);

• theintroductionofastandardtimeframeforthede-

ferred execution of activation and deactivation ser-

vices;

• theextension to temporaryconnectionsofspecific

promptness indicators relating to activation services,

deactivation services (according to rules set forth for

deferred execution), simple and complex works;

• theincreaseintheamountofautomaticindemnities

to be disbursed in the event of a delay;

• theintroductionofanewprocedureandanewspe-

cific indicator relating to verification of the metering

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

cific indicator for the replacement of the faulty meter

(from 1 January 2013);

• theintroductionofanewprocedureandanewspe-

cific indicator relating to verification of the voltage

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

cific indicator for the restoration of the correct volt-

age value (1 January 2013).


Provisions of the italian Authority for Electricity

and Gas for the delivery of electricity transmis-

sion, distribution and metering services for the

regulatory period 2012-2015 and provisions re-

garding economic conditions for the supply of the

connection service (Annex A - Transport Code).

With reference to new rules relating to distribution ser-

vice tariffs for the 2012-2015 regulatory period, AEEG

defined, in particular:

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

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

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

tering service;


Regulation of the quality of electricity distribu-

tion and metering services during regulatory

period 2012-2015 (Part i - Service continuity and

voltage quality).

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

also extended the regulation governing service continu-

ity and voltage quality to owners of production plants.

With reference to outages on LV networks, it should be

noted that AEEG:

• introducedtheright-fordistributioncompaniesthat

requested and then waived the incentive relating

to the use of electronic meters for the recording of

outages affecting LV customers (resolution ARG/elt

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

one of the alternative methods set forth in TIQE, valid

for the 2007-2011 regulatory period;

• modified the provisions regarding the recording

of outage reports, making provision, in particular,

for the recording “for each case in which the user

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

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

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

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

January 2013);

With reference to outages on MV networks, AEEG:

• extendedtheindividualregulationofMVcustomers

also to short outages, with the subsequent redefini-

tion of specific levels of continuity;

• introducedtheinterruptedpowersupplytothecal-

culation of penalties, granting the right to continue to

use the average interrupted power supply for 2012;

• increasedtheceilingswithinwhichdistributioncom-

panies are required to pay penalties for MV outages;

• modifiedthecalculationcriteriaforthespecifictar-

iff component applied to MV users with inadequate

plants;

• introducedtheuseofthewebsiteforthetransmis-

sion of communications to MV customers.


Regulation of the quality of electricity distribu-

tion and metering services for regulatory period

2012-2015 (Part ii - Commercial quality).


will be carried out through subsequent provisions,

for which distribution companies are currently re-

sponsible for carrying out the entire measurement

service;

• the introductionofa tariffcomponent tocover the

residual non-depreciated value of electro-mechan-

ical meters replaced with electronic meters before

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

billed to LV end customers.

29 december 2011 – Resolution ARG/elt 199/11

(Annex C – integrated Connection Code – TiC).

The provisions regarding the financial conditions for the

supply of connection services to passive users are essen-

tially the same as those in the previous regulatory period.

However, of note is the introduction of the obligation to

provide separate accounting evidence of contributions

for connections and payments for specific services reg-

ulated by the provision, separately per voltage level and

service type.


Provisions governing switching of end custom-

ers in the electricity and gas sectors, in imple-

mentation of Legislative decree no. 93 of 1 June

2011.

AEEG acknowledges the provisions of primary legis-

lation regarding the obligation to effect switching re-

quests within three weeks. As regards this timescale, it

must be ensured that the start of supply coincides with

the first day of the month.

However, the acknowledgement represents merely a

formal obligation at present, given that the introduction

of application methods is deferred to the transfer of op-

erational management of the switching service to the

Integrated Information System.

Energy Services, Public Lighting and digital Meters projectIn the Energy services sector, the activities of the com-

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

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

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

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

• for connection contributions, the inclusion of con-

tributions set forth by TICA (code for active connec-

tions) for the connection of injection points among

those deducted from the gross value of the invest-

ment and elimination of the revenue guarantee

mechanism;

• theincreaseinthereturnoninvestmentsforthedis-

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

vestments implemented up until 31 December 2011,

and to 8.6% for investments that will be implement-

ed in the 1 January 2012 - 31 December 2015 period

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

fect from 1 January 2012 is due to the recognition of

the regulatory lag);

• updatingoftherateofreturnoninvestmentsby30

November 2013, applicable to the years 2014 and

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

return of assets with no risk (annual average of gross

return of 10-year Italian Government Bond);

• the introduction of new types of investments for

which an increase is recognised in the return on in-

vestments, equal to 1.5% for 12 years for the “re-

newal and enhancement of MV networks in historic

centres” and “enhancement of the transformation

capacities of primary stations in critical areas”;

• the elimination of equalisation for marketing ac-

tivities and introduction of payments for standard

national costs, differentiated on the basis of the

provision of the sale service subject to additional

safeguards in “integrated” form or functionally sepa-

rate from the distribution service.

29 december 2011 – Resolution ARG/elt 199/11

(Annex B – integrated Metering Code – TiME).

For the 2012-2015 regulatory period, AEEG decided to

remove the section on the metering service from the

Transport Code, outlining subsequent provisions with

which it will rationalise the relevant regulations. How-

ever, some amendments and additions were introduced

in 2012, including:

• thetransfertoTernaofthemeasurementcollection,

recording and validation service relating to intercon-

nection points between the networks of distribution

companies and the National Grid; this amendment


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

ate to focus on the monitoring of existing projects re-

porting, with special attention to projects with a final

certification.

At legislative level, we are still awaiting the new decree

which extends and supplements the energy saving sys-

tem through White Certificates, Yearunced before the

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

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

“Implementation of directive 2009/28/EC on promotion

of the use of renewable energy, containing the amend-

ment and subsequent repeal of directives 2001/77/EC

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

try of Economic Development.

The acquisitions of type I and II bonds are described in

Figure 1, while those regarding type III bonds are shown

in Table 2.

EnERGy SAVinGSThe Italian Authority for Electricity and Gas, by means

of resolution no. 9/11, introduced some amendments

to the guidelines which should help improve the current

difficult situation faced by distribution companies in ful-

filling the obligations set forth by the decree on white

certificates, by increasing the availability of recognised

and marketable bonds.

Within this framework, as already outlined previously,

ACEA Distribuzione is not affected by this negative eco-

nomic situation thanks to the availability of bonds result-

ing from energy saving initiatives undertaken with ARSE.

Furthermore, ENEL DISTRIBUZIONE made a direct re-

quest to Arse for additional sales of EEBs as an advance

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

did ASM TERNI.

Subsequently, no energy saving initiatives were under-

Fig. 1 – Performance of Type i and ii EEBs (Energy Efficiency Bonds), resulting from the initiatives reported

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

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

EEBs

2005

22,733

3,897

18,836

2006

58,988

7,850

69,974

2007

127,148

15,596

181,526

2008

223,074

49,131

355,469

2009

226,859

73,335

508,993

2010

215,185

99,149

625,029

2011

169,430

143,702

650,757

EEBs produced

EEBs per Acea D. objective

EEBs exceeding cumulated totals

2012

100,270

163,776

587,251


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

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

Total Type ii bonds exchanged on the market 1,300,481


100

90

80

70

60

50

40

30

20

10

0

Pri

ce

60,000

50,000

40,000

30,000

20,000

10,000

0

EEB

s ex

chan

ged

Price

EEBs exchanged

14.0

3.06

30.0

5.06

28.1

1.06

27.0

2.07

15.0

5.07

07.0

8.07

06.1

1.07

05.0

2.08

29.0

4.08

15.0

7.08

14.1

0.08

20.0

1.09

07.0

4.09

16.0

6.09

15.0

9.09

01.1

2.09

09.0

3.10

25.0

5.10

24.0

8.10

16.1

1.10

100

90

80

70

60

50

40

30

20

10

0

Pri

ce

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

EEB

s ex

chan

ged

EEBs exchanged

28.0

3.06

10.1

0.06

13.0

2.07

22.0

5.07

28.0

8.07

27.1

1.07

18.0

3.08

17.0

6.08

16.0

9.08

25.1

1.08

03.0

3.09

19.0

5.09

28.0

7.09

27.1

0.09

02.0

2.10

20.0

4.10

06.0

7.10

12.1

0.10

Price


Fig. 3c - Average price trend of EEBs - Type iii

Total Type iii bonds exchanged on the market 352,130


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

Total EEBs 2,522,177 1,208,977 284,701 4,015,855

100

90

80

70

60

50

40

30

20

10

0

Pri

ce

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

EEB

s ex

chan

ged

Price

28.0

3.06

08.0

7.08

23.0

9.08

11.1

1.08

27.0

1.09

17.0

3.09

05.0

5.09

01.0

7.09

01.0

9.09

27.1

0.09

15.1

2.09

23.0

2.10

13.0

4.10

01.0

6.10

20.0

7.10

28.0

9.10

16.1

1.10

EEBs exchanged


Works were completed during the same period (with the

relative connection to the electricity network) on plants

constructed under the EPC contract in Calabria and in

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

ferent types of plant (table 7).

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

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

ed include the introduction of a new procedure for the

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

A dedicated log managed by GSE has been established,

where the energy account requests for that type of plant

must be recorded.

As expected, GSE did not reopen the terms for recording

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

cost threshold established was already reached. Thus, as

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

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

PV POwER As regards the Photovoltaic sector, all currently connect-

ed plants are operating normally, and performed brilliant-

ly this year in terms of production, thanks to favourable

weather conditions and efficient management.

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

over-production of 6 GWh.

The Giuliano di Roma and Villa Latina plants were added

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

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

incentive tariff. The last plant to be connected was Parco

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

the phase of activation of the procedure for the recogni-

tion of the incentive tariff is currently underway.

The total current installed power on behalf of Acea

amounts to more than 46 MWp distributed throughout

the area, as illustrated in table 6.

Tab. 6 - Summary of PV connection status (kwp)

GEnERAL TOTAL 100% 46.183

Plants connected in 2008 6% 2,562




By geographical area

Puglia 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 515


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

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

city plant in Rome was inaugurated (5 MWp on cantilever

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

ping centre of the same name, adjacent to the structures

of the new Fiera di Roma. This plant allows the produc-

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

CO2 reduction of approximately 2,766,000 Kg.

The considerable growth in both Acea owned plants

and plants constructed on behalf of third parties made

it necessary to review, modify and enlarge the organ-

isational structure for the management of said plants.

In fact, this management makes provision for the daily

monitoring of the running of the plants (the status of all

switches are remote controlled), testing of production

meters and network exchange (250 meters currently

managed), functioning of safety systems and the asso-

ciated remote control of images from sites and, lastly,

the management of ordinary (according to precise time

schedules) and extraordinary maintenance works.

COGEnERATiOnAs regards the Cogeneration sector, the joint venture

between ACEA S.p.A. and ASTRIM S.p.A. was estab-

lished in September 2007, aimed at the marketing and

creation of energy cogeneration plants, called Ecogena.

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

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

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

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

and the Jacorossi e Parnasi Group have a holding.

Company activities continued in line with those sched-

uled.

In this scenario, activities continued for the construction

of the cogeneration plan for the Europarco Complex, for

which, through an internal invitation to tender process,

three leading companies were selected to supply plant

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

expected to be selected by March 2012.

The client also started the main excavation and restruc-

turing works in the areas dedicated to the construction

of the new “Laurentino” shopping centre for which the

company has already obtained the building contract for

the trigeneration plant to the latter’s benefit.

The energy service contract was signed last July with

SOGEI, while the contract with Cinecittà Parchi is ex-

pected to be signed in the next few months. These

plants will contribute a total of 3.6 Mwe.

Assessments were also carried out for further develop-

ment with both the Auditorium della Musica di Roma

designed by Renzo Piano, and a residential-commercial

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

GEnERAL TOTAL 100.0% 25,655

Plants connected in 2008 1.6% 422

Plants connected in 2009 0.2% 58

Plants connected in 2010 9.7% 2,487

Plants connected in 2011 88.4% 22,688

By geographical area

Abruzzo – AQ 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


PUBLiC LiGHTinGPublic Lighting service management activities, without

interruption and as per instructions from the Parent

Company, were carried out as part of the new Service

Contract, defined with Roman Council Resolution no. 130

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

The programmes focused on a series of operating guide-

lines, the majority of which were realised and included in

the Lighting Plan.

The main programmes are as follows:

• the replacement of 2.7 kV circuits was definitively

completed in 2011;

• network modernisation: in 2011, works were com-

pleted which involved the renovation of 1,167 lighting

points, often including maintenance, also carried out

on the power supply network;

• remotecontrolofPublicLightingPlants:in2011,100

remote control modules were installed in the power

supply panels of new plants, those already in opera-

tion and stock panels available in the warehouse for

the next operational upgrading activities and new

constructions;

• Decommissioningofthe8.4kVnetwork:modernisa-

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

tinue with the programme that makes provision for

the activation of electrical LV supplies, with the gradu-

al phasing out of the 8.4 kV power supply network;

• Plant Repairs: involves the inspection, extraordinary

maintenance and possible renovation to class II of

lighting points managed on behalf of Roma Capitale;

• plant maintenance: maintenance activities primarily

took the form of planned, emergency and extraordi-

nary maintenance;

• artisticmaintenance: in 2011,workwas carriedout

on the Villa Paganini, Villa Leopardi, Parco Simone

Bolivar and Piazza del Campidoglio plants, the Castel

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 light-

ing points using LED technology, and plants on Isola

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

pality of Marino.

In addition, the company successfully concluded the

assessment by client Cinecittà Parchi for the construc-

tion and subsequent management of a plant, powered

by renewable energy for 1.6 Mwe, to service the first

phase of the amusement park on the theme of cinema

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

technical and legal departments, in agreement with the

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

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.

Development activities also continued positively at

investee company Eur Power, that carried out both

planned commercial and authorisation activities, ob-

taining the initial permit to perform civil works at the

first Adenauer cogeneration plant, which will serve the

INPS complex and BNL and Unicredit buildings.

The services conference will also soon be called for the

building permit of the second cogeneration plant Eu-

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

vola) and adjoining hotel, together with other important

users in close proximity.

The activities managed by the Air Quality sector

“Sanacaldaia” and “Caldaie Sicure” were exer-

cised in accordance with the contractual extension

from 31 July 2007; the latest extension covered the

period from 30 June 2011 to 31 December 2011. The

service was granted again under the same contractual

terms and conditions as previously and using prevailing

tariffs defined by the Managerial Directive 1425 of 2006.

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

the tender with Roma Capitale.


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

roughly 100,000 meters and 101 concentrator cabinets

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

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

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

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

In addition, system maintenance and fine-tuning was

completed to make it easier to reach and read meters.

Tiberina and Cavour bridge for a total of 116 lighting

points. A total of 525 lighting points were upgraded.

Extraordinary maintenance on various historically and

archaeologically important sites was also ensured;

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

stall LED technology covers on new plants continued,

and some of the sodium covers on already operation-

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

points were installed;

• newplantworks:atotalof3,899lightingpointswere

constructed for Roma Capitale, with requests coming

in mainly from Department IX and SIMU;

• districts:2newagreementswithdistrictswerestipu-

lated and include maintenance contracts subject to

the condition precedent that the related works must

be completed.


the introduction of new tariff support mechanisms or

competitive procedures. The regulations intend to guar-

antee a fair return for investment and running costs for

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

ing constant incentives. The incentive will be allocated

through private law contracts between GSE and the en-

tity responsible for the plant and will concern new plants

(including those created following full reconstruction),

redeveloped plants, limited to additional production

capacity and hybrid plants, restricted to the portion of

energy produced from renewable sources. The Decree,

for plants that will commence operations from 1 January

2013, makes provision for diversified incentive mecha-

nisms (administered tariff or Dutch auction procedure)

on the basis of different power thresholds.

Dutch auctions will be managed by GSE and broken

down by source and technology, on a periodic basis.

As regards energy produced by plants that come into

operation before 31 December 2012, the current incen-

tive mechanism remains in force. The regulations make

provision, starting from 2013, for the mandatory amount

to decrease on a linear basis in each of the subsequent

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

until reaching 0.00% in 2015.

As regards rebuilding work, the incentive is granted

through power quotas to production by plants subject

to full or partial rebuilding, in compliance with certain

criteria, such as the conventional useful life of the plant

in operation.

Specific provisions contained in the regulations will be

implemented through further decrees.

Criteria and methods for the supply to end

customers of information on the composition of

the energy mix used for the production of the

electricity supplied, and on the environmental

impact of production, decree of 31 July 2009 of

the Ministry of Economic development - Update

to Resolution ARG/elt 104/11.

The regulations introduce a series of rules for guaran-

teeing 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

Energy industrial AreaRoughly 15 years from the launch of EU energy policies,

with the adoption of the Terzo Pacchetto Energia (Third

Energy Package), the European Union provided further

stimulus to the liberalisation and integration processes

in the electricity and gas markets.

Il Terzo Pacchetto Energia (Third Energy Package),

composed of five legislative measures (Regulation no.

713/2009 which establishes an Agency for cooperation

between Member States; Directives 2009/72/EC and

2009/73/EC governing electricity and natural gas and

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

cess to transmission/transportation infrastructures),

was incorporated into Italian law by means of Legisla-

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

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

nomic Development) of the job of monitoring (at least

every two years) the performance and developments in

the retail market and existence of effective competitive

conditions, as well as the provision of additional tools to

protect consumers including:

• the reduction of switching times (compared to the

current 2 months - maximum time) to a maximum of

3 weeks;

• theobligation, fordistributioncompanies, toensure

the full availability of customer consumption data to

sellers, guaranteeing data quality and promptness;

• completetransparencyontariffsandcontractualcon-

ditions for end customers.

A strict measure is also in place for companies that sell

electricity on the free market and the market subject

to additional safeguards in order to avoid confusion be-

tween the business units over the service supplied and

to derive a competitive advantage. The regulation makes

provision for the restructuring of the communication

processes and models of said companies, in respect of

which an exact expiry date has not yet been set.

Legislative decree of 28 March 2011 on the

promotion of energy from renewable sources.

By means of Legislative Decree of 28 March 2011, pro-

vision was made for the replacement of the current

renewable energy incentive system based on Green

Certificates, applied to traditional producers, through


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

eral and automatic nature of the extension of the con-

cessions asserting the “non-proportionality of the exten-

sion of all concessions without a distinction being made

between guarantees expired in December 2010 and

those expiring in subsequent years, and with no evalua-

tion being performed on the investments actually carried

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

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

stitutional Court declared the unconstitutionality of the

5-year extension of hydroelectric concessions for large-

scale abstraction (increased to 7 for companies at least

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

inces) established by 2010 Provision (Decree Law no.

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

targeted at recouping the cost of investments in mod-

ernisation work carried out by concessionaires, was con-

sidered to have been aimed at ensuring the temporary

situation already achieved, by subsequent paragraph 6

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

continue to manage the branching-off until the replace-

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

concession, the process of identifying the new operator

has still not been completed.

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

are inconsistent with the general principles established

by government legislation, the temporary nature of con-

cessions and opening up to competition, and are not in

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

if only in the medium-term, they restrict “access by other

potential economic market operators, putting up barriers

to entry as such to alter competition between entrepre-

neurs”.

Capacity payment. Provisions governing the

adequacy of the production capacity of the

domestic electricity system.

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

tends to implement a new payment system in respect of

the electricity production capacity following in the foot-

steps of systems already operational in other countries,

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

ers and improve market competition.

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

certification system does not appear to be suitable for

guaranteeing the tracking of green energy. It should be

noted that the RECS project (Renewable Energy Certifi-

cate System) was created in the European domain for

promoting the development, on the basis of a standard

certification, of a voluntary, international market for

Green Certificates that certify the production of elec-

tricity from renewable sources for a minimum output

of 1 MWh, and favour the production of electricity from

renewable sources by plants that otherwise would not

have the economic conditions to continue to produce

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

guished by the physical provision of electricity and their

issuing makes it possible to market said certificates also

separately from the electricity which certify production.

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

the only valid certification system for certifying the origin

and traceability of green energy underlying a sale con-

tract, is represented by guarantees of origin established

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

Pending the entry into force of additional regulatory pro-

visions, the “guarantee of origin” certificate envisaged by

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

signed by GSE to producers of electricity generated from

renewable sources, in relation to electricity produced

and injected into the network each calendar year. There-

fore, CO-FER bonds will be transferred from producers

to sellers according to transparency principles in such

a way as to ensure that each certification is owned by

only one entity.

Hydroelectric concessions on large-scale

abstraction Constitutional Court Ruling no. 1/08,

published in the Official Journal on 23 January

2008. Update.

In March 2011, the European Commission issued the

Italian government a formal notice of default, with the

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

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

in implementation of the recent regulations adopted

regarding hydroelectric concessions (art. 15, paragraph

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

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

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


Formation of provisions relating to regulation

of the dispatching service - Resolution ARG/elt

160/11.

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

jective of overcoming problems relating to heavy com-

petition in terms of production from renewable sources

through the appropriate regulatory measures which al-

low network operators to effectively and safely manage

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

ducing costs, launched a procedure for issuing provisions,

with particular reference to improving the efficiency and

cost-effectiveness of the dispatching service, essential

for maintaining the electricity system in a constantly

balanced position. Intervention from the Regulator was

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

tem providing the driving force for the sharp increase in

production from renewable energy sources which has

led to the extremely rapid development of wind power

plants - mainly connected to the high voltage national

grid - and photovoltaic plants, predominantly connected

to the medium and low voltage distribution networks.

The provisions will be issued in 2012 through specific

consultations and resolutions.

Recognition activities regarding non-requested

contracts for the supply of electricity and/or

natural gas: Resolution Vis 76/11.

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

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

consumers are fraudulently, or unwittingly, persuaded

to transfer from one provider to another or transfer

from the service subject to additional safeguards to the

free market. This phenomenon developed over recent

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

especially widespread in all those cases where the sale

activities of given customer segments is entrusted to

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

which materialised into genuine commercial malprac-

tice, make consumers wary of the free market and the

companies operating in the market, damaging the en-

tire system.

To this end, by means of Resolution VIS 76/11, AEEG

launched a formal enquiry in order to assess the scale

electric plants currently operating and those to be con-

structed, the capacity payment mechanism from 2017,

requiring tenders for obtaining incentives to have been

conducted at least 4 years earlier. The mechanism will

involve an annual premium for the operator for power

provided and any positive differences between the price

of electricity sold on the markets (reference price) and

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

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

amounts must be paid by operators in Terna and will be

earmarked for reducing costs for final consumers. Ten-

ders will take place through the purchase, by the grid

operator, of production capacity options for quantities

equal to an objective, fixed annually, through the proper

contracts.

The quantities will be determined on the basis of ex-

pected consumption and reserve needs, also taking into

account the effects of energy efficiency measures and

production from renewable sources.

The legislation is currently awaiting specifications for

functioning of the mechanism.

Emission Trading Scheme post 2012 Regulations.

The competent national Authority, by means of Resolu-

tion no. 26/2011, began to collect the necessary data

for determining the quantity of quotas to assign free of

charge for the post 2012 period (moment in which the

insolvency proceedings for assignment of CO2 quotas

will take place).

This data collection concerned all plants in possession of

an authorisation to emit greenhouse gas issued in accor-

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

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

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

the support in the management of project activities of

the Kyoto Protocol.

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

companied by the methodological report containing the

description of the plant, the method applied for filling in

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

different steps in the calculations and any assumptions

made in order to obtain free assignments of emissions.


between market operators. Operators registered in the

Indemnity System can, through the aforementioned

registration, request an indemnity to partially cover ar-

rears left by customers that changed supplier, through

the request to the system for application of the CMor

component. This component will be applied by the

distributor to the incoming seller which, in turn, will

reverse the component to the acquired customer. In

addition, solely sellers registered in the Indemnity Sys-

tem will have access to information flows regarding re-

quests for the CMor component that will be applied to

them, as incoming seller, by distributors and requested

by other outgoing sellers registered in the system.

Energy MarketAs regards the italian Electricity Exchange, on one

hand, 2011 saw a consolidation of growth in the sup-

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

phase of economic stagnation, registered another de-

crease in energy requirements which also caused li-

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-

ternational markets (Dated Brent over 40%), determined

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

change (PUN) which, after essentially remaining stable

intheprevioustwoyears,roseto72.2€/MWh(up12.6%)

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

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

quintupled over 2010 (up 403.8%).

of the phenomenon and identify both preventive and

restorative measures.

In October and December 2011, the main stakeholders

were summoned to a hearing at the Authority, for the

purpose of collecting as much information as possible

on the frequency of the cases under review, and then

identifying solutions and deterrents. At the end of the

year, AEEG published Consultation Document 46/11, in

which it presented some initial proposals with both pre-

ventive and restorative objectives:

• Adoption of internal self-regulation codes for each

company meeting the minimum requirements estab-

lished by AEEG;

• Creationofblacklistsand/orwhitelistswhichreport

any fraudulent conduct or the absence of said con-

duct with reference to each company;

• Stricter controls on the work performed by sales

agencies;

• ActiveroleoftheConsumerProtectionOffice;

• Provisionof specificmethods to restore the status

quo ante of the customer affected by the aggressive

practice.

Containment of credit risk for the retail electricity

market and setting up of an indemnity system:

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

The Indemnity System entered into operation in 2011.

This involves an initial transitory phase while waiting

for said system to be incorporated in the Integrated

Information System for the management of relations


The increases recorded in fuels only had a partial effect

on the prices of the main European electricity exchang-

es, which showed a mild recovery compared to the low

levels registered in the previous two years. In central-

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

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

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

(up 34.9%).

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

inItalythepriceroseto72.23 €/MWh(up12.6%),mark-

ing growth partially lessened by the considerable level of

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

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

acceleration in prices of national gas, the reference fuel

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

of the plants and different trend in the cost of reference

fuels aids the new, minor widening in the differential

between the Italian price and Transalpine prices, which

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

2012, data on forward exchange prices at European level

showed slight or moderate growth in prices, signalling

a markedly winter trend in French and German profiles.

Liquidity on the dAM

AsregardstheItalianelectricityexchange,theaveragepurchasepriceforelectricity(PUN)stoodat72.23 €/MWh,an

increaseof8.11€/MWhover2010(up12.6%).

national Standard Price

350

300

250

200

150

100

50

0

TWh

70.0%

68.5%

67.0%

65.5%

64.0%

62.5%

61.0%

59.5%

58.0%

Liq

uid

ity

power exchange off-exchange trading liquidity dx scale

2005 2006 2007 2008 2009

203.0

120.2

196.5

133.3

221.3232.6

104.3

213.0

100.4

2009

199.5

119.1108.7

62.8%

59.6%

67.1%

69.0%

68.0%

62.6%

€��/M

Wh

120

100

80

60

40

peak off-peakbaseload

2005 2006 2007 2008 2009 2010

43.18

57.06 53.00

72.53

53.4157.34

58.59

74.7570.99

86.99

63.72 64.12

87.80

108.73104.90

114.38

83.05

76.77


As regards the gas market in Italy, 2011 closed with

gas demand markedly down compared to the previ-

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

2009 levels. The decrease is essentially due to weather

factors, borne out by the fall in domestic consump-

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

sources which led to a huge decrease in thermoelectric

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

Solely consumption in the Industrial Area bucked this

trend which, despite a sizeable trend-based reduction

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

crease of 2% YoY. Lower demand was tackled through

both a decrease in imports and greater use of stock-

piles. The decrease in imports mainly concerned Afri-

can gas pipelines, especially those coming from Libya,

which were shut down due to the civil war. Domestic

production, which accounts for 11% of supply, remained

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

registering significant trend-based growth in December

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

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

the price recorded on the Virtual Exchange Point con-

tinuedtogrow,reaching28.27 €/MWh(up21%),almost

returningto2008levels(29.11 €/MWh).Thisincreaseis

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

€/M

Wh

2007 2008 2009 2010 2011

10

20

30

40

50

60

70

80

90

€/M

Wh

3.2011 6.2011 9.2011 12.2011 3.2012 6.2012 9.2012 12.2012

10

20

30

40

50

60

70

80

90

Source: Electricity Market Operator – Monthly trading report – December 2011.

IPEX: the Italian Power Exchange;

EEX: European Energy Exchange, the German Power Exchange;

PowerNext: the French Power Exchange;

OMEL: Compañía Operadora del Mercado Español de Electricidad, the Spanish Power Exchange;

NordPool: the Scandinavian Power Exchange (Norway, Sweden, Den-mark, Finland)


4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

12.000

10

15

20

25

30

35

MCM

0301

€/MWh

01 02 03 04 05 06 07 08 09 10 11 1205 07 09 11

incorporatedwithinacontextofsimilarrisesinthemainEuropeanhubs,althoughtheItalianpriceisaround5€/MWh

higher than the average reference prices in continental Europe.

italian Gas Market

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

crease in the prices of all fuels, consolidating the trend

recorded in 2010. The increases appear to be larger on

the crude oil markets and its refinement products mar-

ket, where prices reached a historic high.

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

to 2010), greatly exceeding the markedly bullish ex-

pectations expressed by the markets in the previous

year. Down the line, forward markets expect oil prices

to remain essentially stable in 2012, recording a slight

decrease only in the second half of 2012. International

crude oil felt the effects of the differentiation between

traditionally aligned European and US prices.

The changes recorded by fuels underwent only a slight

downward readjustment as regards the conversion of

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

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

wave of reductions following the exploits of 2008.

Total withdrawn/injected PSV

2011 2010 2009


dated Brent price trend

As regards the electricity production market, Acea

Produzione is responsible for carrying out electricity

generation activities.

The company’s production system is now made up of

a collection of generation plants, with a total installed

power of 344.8 MW, composed of five hydroelectric

plants (including those located in Lazio, one in Umbria

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

plants, Cecchina and Madonna del Rosario, two thermo-

electric plants, Montemartini and Tor di Valle (the latter

equipped with a combined cycle module and a turbogas

module with thermal energy recovery, which provides

the district heating service in the areas of Torrino Sud

and Mostacciano, in the Municipality of Rome).

The hydroelectric area recorded production of 174.5

GWh, heavily impacted by the marginal contribution

from production in the period from the Salisano plant

which underwent “complete renovation”. Production in

the Castel Madama, Mandela and Orte plants was es-

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

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

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

high level of overall availability.

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

7.7%), which stood at 91.5 GWh, fell when compared to

the ten-year averages.

The company’s thermoelectric production stood at 13.1

GWh as at 31 December 2011.

2011 saw a continuation of the negative trend in pro-

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

no longer suitable for sustaining the market impact

due to the efficiency gap with respect to modern latest

generation combined cycles which is accentuated by

market prices which show a net decrease. In addition,

particularly low market prices also shaped production

in the cogeneration section, which recorded a further

decrease in production compared to past use; due to

the restriction placed on the TG3 units of the cogenera-

tion section on maximum NOx emissions, it was there-

fore necessary to use auxiliary boilers to produce heat

for district heating.

2011 was the fourth year of operation of the Montemar-

tini plant as a generating unit that is essential to the

security of the National Electricity System, pursuant to

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

140

130

120

110

100

90

80

70

60

50

40

30

20

2,4

2,3

2,2

2,1

2,0

1,9

1,8

1,7

1,6

1,5

1,4

1,3

1,2

Brent Iranian Light WTI Tasso di cambio $/€ (scala dx)

$/bb

l

20082007

$/€

01 02 03 04 05 06 07 08 09 10 11 122009 2010 2011


328,356 withdrawal points as at 31 December 2011.

The number of customers totalled 218,105, of which

190,000 Acea Energia customers and the remaining

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

number of users switching from the regulated to the

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

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

ers acquired by other wholesalers, whilst the remaining

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

sold 96.2 million standard cubic metres of gas to final

customers and wholesalers.

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

the new corporate structure following the termination

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

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

Energy Area, responsible for carrying out trading activi-

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

These are necessary for the functioning of Group op-

erations, with particular regard to sellers (Acea Energia

SpA) and production companies (Acea Produzione SpA).

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

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

heat, methane gas and other fuels and energy carriers

for the national and international markets.

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

its average turnover comes from supplies of the above-

mentioned goods to companies subject to a dominant

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

relations, a financial holding or international regula-

tions, may act directly as the contractor, pursuant to

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

respect of the relative supply contracts from the afore-

mentioned companies which are also the contracting

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

Legislative Decree.

To this end, the company makes provision for the direct

or indirect stipulation of dispatching, transportation and

storage contracts with operators of the national trans-

port network and institutional market operators, all in

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

sociates in accordance with art. 2359 of the Italian Civil

Code and/or third parties.

Electricity System Security Plan – Emergency Plan for

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

were subject to dispatching orders from Terna, except

for short periods of maintenance and black start-up

testing. Plant production was therefore limited exclu-

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

duction functional in the testing activities. The econom-

ic result was, however, guaranteed by the reintegration

of costs recognised by the Italian Authority for Electric-

ity and Gas.

The management strategy as regards the availability of

CO2 emission securities to cover the risk of volatility of

the price on the Emission Trading market, implemented

with the sale of total available accumulated securities

and the repurchase of items corresponding solely to

quantities of energy actually sold as part of the con-

tracts stipulated, represented an additional element of

growth in the total economic result due to a balance

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

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

continued its expansion throughout Italy by means of

synergies with established local players boasting a well-

known brand, strong local roots and a well-established

customer base. These alliances enabled local partners

to benefit from the size and reputation of Acea Ener-

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

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

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

free market customers may take advantage of the ser-

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

and profitable solutions.

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

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

reduction of 13.1% over 2010. The number of customers

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

The decrease is linked to the opening up of the market

following completion of the liberalisation process.

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

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

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

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


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

in response to energy requirements of 15 TWh, roughly

12 TWh was purchased from Group companies (Ace-

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

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

nies no longer possessed this availability - the total en-

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

roughly 12 TWh) was procured entirely from the whole-

sale market and national and international producers.

Furthermore, the company operates in favour of its

subsidiaries in particular (Acea Energia SpA and Acea

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

tivities:

• marketingofelectricityproducedbytheTordiValle

and Montemartini thermoelectric plants and the S.

Angelo hydroelectric plant

• thenegotiationofcontractsfortheprocurementof

fuels for generating plants;

• procurementofnaturalgasandelectricityforcom-

panies selling to end customers;

• themarketingofenvironmentalbonds(greencertifi-

cates, emission rights and certificates for production

from renewable sources) Acea Energia S.p.A. and

Acea Produzione S.p.A.;

• optimisationoftheportfolioofferedasregardssup-

plies of electricity and management of the risk pro-

file 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 pro-

duced 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.


• On18January2011,toallowworkstobecompleted

to improve the water service in the Castelli Romani

area, water was cut off in the section of the new Sim-

brivio Castelli aqueduct that supplies the municipali-

ties of Albano Laziale, Ariccia, Genzano di Roma, Cas-

tel Gandolfo and Lanuvio;

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

urbanisation works included in the Laurentino Urban

Recovery Plan, the pipeline on via Laurentina near via

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

tella, Giuliano Dalmata and Colle della Strega;

• On20February2011,duetoanunexpectedfaulton

the main DN 800 course of the new Simbrivio Cas-

telli aqueduct, drops in pressure and a water short-

age were recorded in the municipalities served by the

aforementioned pipeline. Normal operating conditions

were restored on the morning of 21/02/2011;

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

unexpected damage to the Peschiera aqueduct af-

ter an accident in the section in the municipality of

Sant’Angelo, Acea Ato2 intervened immediately by

carrying out stabilising measures on the supply sys-

tem, restoring normal running conditions on the water

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

in the area of Santa Lucia in the municipality of Fonte

Nuova, for which the tanker truck system was imple-

mented. Repair works on the damaged section were

difficult and completed in the first few days of April.

Consequently, it was possible to restore normal water

abstraction structures in the entire metropolitan area;

• InMarch,majorruptureswerediscoveredonsections

of the Simbrivio aqueduct, some of which attributable

to landslides caused by heavy rain, which affected the

pipes. The company intervened immediately, restoring

the water service as quickly as possible and ensuring

the emergency water tanker service during the sus-

pension of the water service. As regards landslides,

these concerned the institutional bodies responsible

for finding a definitive solution to the problems of

stability on slopes on which the water aqueduct net-

works managed by this company rest;

• On26May2011,toordertoallowthecommissioning

of the new Pozzo San Pietro drinking water purifica-

tion plant and the new lifting system at the Vascucce

water industrial Area

Management of water services in Lazio and Campania

Acea Ato 2 S.p.A.

Since 2007 the acquisition of contracts with the mu-

nicipalities involved has slowed. This has been caused

by local authorities’ natural political alternation and

internal difficulties within the authorities themselves.

Moreover, based on assessments carried out, certain

municipalities still have problems relating to the state

of treatment plants and lack of authorisation for waste

disposal.

No other Integrated Water Service management was

acquired in 2011.

Drinking water

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

water distribution services including collection and ab-

straction, as well as retail and wholesale distribution.

Water is abstracted from sources on the basis of long-

term concessions.

Ten water sources – including five sources (Peschiera,

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

fields (Pantano Borghese, Finocchio, Torre Angela and

Torre Spaccata) and the Lake Bracciano Aqueduct –

supply approximately 3,000,000 people in Rome and

Fiumicino, as well as more than 60 municipalities in the

Lazio region, via four aqueducts and a hierarchical sys-

tem of pressurised pipes.

Three further sources of supply provide non-drinking

water used in the sprinkler system of Rome.

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

aqueduct, which supplies water to 54 municipalities

and 3 consortia, the Laurentino aqueduct (formerly

CASMEZ Lazio Regional Authority), which supplies the

municipalities of Pomezia, Ardea and the Campoleone

area in the municipality of Lanuvio, the Doganella aq-

ueduct, serving 8 municipalities in the Castelli Romani

area, and the distribution of water in 73 municipalities

in addition to Rome.

With regard to major disruptions, the most significant

ones are detailed below.


population, in agreement with the municipal admin-

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

addition, Acea Ato2 realised supply points distributed

throughout the areas concerned in which it is possible

to procure water resources in compliance with Legisla-

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

eral water in schools. As regards the vanadium, Acea

ATO2 completed works for the restoration and, in any

case, in December 2011, the Ministry of Health changed

the value of the vanadium parameter from 80 micro-

grams/litre to 140 micrograms/litre.

Sewerage and waste water treatment

The sewerage service comprises a sewage network of

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

network serving the municipality of Rome) and more

than 300 km of collectors.

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

system and pumping stations that serve the network and

sewage collectors. Some of them are quite large, with

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

some cases they also provide flood protection.

In 2011 the main waste water treatment plants handled

around 599 million cubic metres, an increase of around

2.0% compared with the previous year.

Sludge, sand and grating production for all managed

plants was equal to 150,885 tonnes, up approximately

10.3% compared to the previous year.

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

aged a total of 489 sewage pumping stations, including

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

water treatment plants, including 35 in the municipality

of Rome.

Research and development

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

velopment activities continued, in terms of the analysis

of distribution networks and research of leaks according

to the district metering approach set out in Ministerial

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

nicipalities of Monterotondo, Grottaferrata, Riano, Fiano,

Santa Severa in the municipality of Santa Marinella, Cer-

veteri, Subiaco.

water plant, it was necessary to suspend the water

flow in the Municipality of Velletri. Normal operating

conditions were restored on the night of 26 May 2011;

• On24and31Julyand7August2011,aspartofthe

construction of the new Tiburtina station and re-

lated works, suspensions to the water service were

effected on 6 important abstraction pipelines called

Acqua Marcia siphons which supply the central area

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

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

interference with the new Tiburtina station, a shifting

operation was carried out and simultaneous repairs

on the pipes. This involved the design and completion

of large infrastructural, construction and hydraulic

works consisting of flyover tunnels on the railway line

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

connection of the abstraction network serving Rome,

it was possible to contain the effects of the temporary

disruption to users;

• On13November2011,inordertoallowthecomple-

tion of significant safety works on the new Simbrivio

Castelli aqueduct and to improve the water service,

water was shut off on said aqueduct which concerned

33 ATO2 municipalities, in agreement with the authori-

ties and area organisations and in coordination with

the Prefecture of Rome.

In addition, the main works completed in 2011 included

the commissioning of the Santa Palomba water plant

and its activation to serve the municipality of Albano La-

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

plant in the municipality of Albano Laziale.

As regards exceptions relating to water quality, these

currently refer to a population of around 23,000 in-

habitants for arsenic and roughly 27,000 inhabitants

for fluorine. The exception provisions, or the Decree

of the President of the Lazio Region T0258 of 29 July

2011 for arsenic and Presidential Decree T0076 of 11

March 2011 for fluorine, make provision for the return

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

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

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

neously, an information campaign was targeted at the


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

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

tariff structure (see tables: “Annex 1 to resolution

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

proved by the Mayors’ Conference (the single tariff

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

tariff and three surpluses for domestic users, as well

as a basic tariff and three surpluses for non-domestic

users. Moreover, the minimum commitment for do-

mestic users will be cancelled, with a consequent in-

crease in the fixed amount and maintenance of the

minimum commitment for non-domestic users);

• toadoptagoverningimplementationofthesingletar-

iff structure;

• toestablishadivisionintoinstalmentsofthebillsfor

the households from those municipalities affected by

an increase of more than 40% between the old and

the new tariff, for specific consumption hypotheses;

• toapplya10%discount(forthefirstyearofadoption)

on the bills of domestic users affected by an increase

in annual expenses of more than 20%, given specific

consumption hypotheses;

• toapplyasingletarifftothosemunicipalitieswhose

integrated water service will be transferred (entirely

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

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

Acea Ato 5 S.p.A.

The company manages the integrated water services in

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

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

tered into with the Area Authority. The company is also

responsible for all other related, resulting or associated

activities.

The management of the integrated water service in the

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

municipalities (management still remains to be surveyed

for the municipalities of Atina, Paliano and Cassino Cen-

tro Urbano as regards water services only) for a total

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

inhabitants supplied and a number of end users equal to

around 188,900.

No new purchases were formalised in the January-De-

Adoption of a single tariff

As is well known, the Technical Regulations attached

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

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

like the initial tariff structure, the current tariff structure

should have been adopted in each municipality. More-

over, these structures would have been unified with re-

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

Moreover, the Mayors’ Conference with resolution no.

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

gence of pre-existing tariffs for services managed by the

municipalities acquired in line with the Area Plan, within

a maximum term of six years from 2003 (transitory pe-

riod).

The tariff convergence plan cited above envisaged that

the acquisition of all municipalities of the ATO would be

finished by 31 December 2005, guaranteeing the last mu-

nicipalities to join a tariff adjustment period of at least

three years (up to 31 December 2008).

Given the plan to acquire municipal management of the

services was not completed within the prescribed time

frame, with resolution no. 02/06 of 23 February 2006 the

Mayors’ Conference extended conclusion of the acquisi-

tion phase to 31 December 2007.

Consequently, and in line with the criteria established by

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

adjustment of the average, individual municipal tariffs in

line with the average area tariff was extended to 2010.

In addition, the conference resolved to approve the

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

without prejudice to the need to guarantee the operator

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

revenue).

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

cember 2010, the minimum commitment for domestic

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

117/2008 and that this commitment was also reaffirmed

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

deemed applicable also for the Management in which

the Ministerial Decree of approval of the Standardised

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

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

olution no. 6/10, to:

• adopt,asof1 January2011, in themunicipalitiesof


Updates were completed during the year to the techni-

cal documentation relating to the water treatment plants

managed by the company.

As at 31.12.2011 – pursuant to Legislative Decree no.

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

performed on the drinking water sources, tanks and net-

works.

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

destined for human consumption.

As regards the search for water leaks, activities contin-

ued to be focused on areas rendered especially critical

in view of adverse weather conditions which involved a

drop in sources.

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

Unit, completed activities to modernise and adapt chlo-

rination systems and measuring plants to comply with

regulations throughout the area.

For more information on the tariff applied, please refer to

the appropriate section “Risks and Uncertainties” in the

Report to the 2011 Consolidated Financial Statements.

Gori

GORI provides integrated water services in 76 municipali-

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

of a thirty-year agreement signed on 30 September 2002

by the company and the Sarnese Vesuviano Area Author-

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

fee to the grantor (the Sarnese Vesuviano Area Authority)

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

vices is effectively acquired. The perimeter managed has

remained essentially unchanged compared to the pre-

vious year, since the process of acquiring management

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

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

of the Campania Region.

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

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

5, the General Meeting of the Sarnese Vesuviano Area

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

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

cember 2010 period. Following organisational restruc-

turing of technical management, aimed at rationalising

resources, a new organisational structure was launched,

divided into 3 operating centres called Area Nord, Area

centro and Area Sud (Northern, Central and Southern Ar-

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

single Coordinator.

The drinking water system comprises supply and distri-

bution plants and networks that use 6 main sources from

which 6 aqueduct systems originate (Northern supply,

Southern supply); minor plants serve certain local sys-

tems.

The coverage of this service amounts to about 97%.

The sewerage-purification system comprises a network

of collectors and sewerage trunk lines connected to ter-

minal treatment plants of urban waste waters.

Following the recognition and the associated assess-

ment of the users connected to the sewerage system

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

coverage of this service is equal to approximately 68%

with respect to aqueduct users.

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

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

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

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

ment a plan of measures aimed at resolving severe plant

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

erage, considerable infrastructural gaps.

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

extremely poor state of repair, forcing the operator to

carry out continuous, large-scale extraordinary mainte-

nance works.

Water treatment plants are subject to targeted systemat-

ic upgrading and/or adjustment into line with applicable

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

tine collection, transportation and final disposal of solid

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

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

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

tonnes in 2010).


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

ties, it was extremely important for the Area Authority

to quickly complete the process for the review of the

Plan in order to be able to definitively determine, among

other things:

• total costs to be recognised in the integrated water

service tariff for 2011;

• total costs to be recognised in the integrated wa-

ter service tariff for 2009 and 2010 and subsequent

equalisation;

• total costs to be recognised in the integrated water

service tariff for the subsequent 2012-2014 regulatory

period;

• an adequate tariff plan which allows the recovery

of previous equalisation accumulated throughout all

of 2011 and a repayment plan for the debt accrued,

above all, in respect of the Campania region for water

supplies and waste water treatment services, so as to

standardise relations;

• guaranteed revenues for 2011.

The approval of resolution of 2 August removed the need

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

taining to 2011, instead included in the accounting situ-

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

non-recognition of estimated revenues, while waiting for

a review of the area plan currently being drawn up.

The 40 million euros bridge loan which matured on 30

June 2011 is related to the Area Plan review.

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

Area Authority to transform the loan into a long-term

mortgage.

As part of the repeatedly mentioned extraordinary re-

view, the debt situation towards the Campania Region

must be definitively settled with regard to drinking water

supplies: for more information on said dispute, please

see the appropriate section “Update on major disputes

and litigation”.

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

longed tariff circumstances, also in relation to the recov-

ery of the significant amount of equalisations (147 million

proved by said Board of Directors on 30 December 2010

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

resolved, among other things:

• toinviteGORItosignastreamliningplanfortheman-

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

which involves an amount of total tariff costs relating

to 2011 (operating costs, modernisation and return on

already invested capital) of no more than 130 million

euros (Group share 48.2 million euros). The resolution

of the Board of Directors of December 2010 envisaged

an amount of revenues equal to 136 million euros

(Group share 50.4 million euros),

• toapprovethefollowingtariffsystem,deemedsuited

to cover the aforementioned total tariff costs, with the

exception of equalisation upon approval of the tariff

system following the review of the area plan in prog-

ress:

- tariff basins: the breakdown of the municipalities of

A.T.O. 3 into two tariff basins was confirmed as per

resolution no. 9 of the General Meeting on 10 July

2009; with the following tariff system:

- basicbasin“A”tariff:Basictariff=€/m31.3210

- Basicbasin“B”tariff:Basictariff=€/m31.1719

• Tariffstructurecoefficientbeforedomesticusebrack-

et: 0.6 which cancels and replaces the corresponding

coefficient of 0.5 in the tariff structure approved by

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

July 2009,

• Theaverageareavalueofthebasictariffsinforcein

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

the general meeting of 10 July 2009 stands at 1.2795

€/m3(itwassetat1.3210€/m3intheresolutionofthe

Board of Directors in December 2010).

It should be pointed out that the new revenue forecast

(130 million euros) is neither in line with the value of

costs to be recognised in the integrated water service

tariff for 2011, in compliance with the review criteria

set forth in the applicable Area Plan, whose application

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

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

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

Directors by means of the aforementioned resolution

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

drafted by the Area Authority’s Planning Department.


Management of water services in Tuscany and Umbria

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

signed the twenty-year management agreement, which

came into force on 1 January 2002. In accordance with

that agreement, the Management Body took over the ex-

clusive integrated water service of ATO 2, comprising all

the public water collection, abstraction and distribution

services for civil use, sewage systems and the treatment

of urban waste water. The Area includes 57 municipali-

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

a fee to all the municipalities, including accumulated li-

abilities incurred prior to award of the related contracts.

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

cember 2008, the General Meeting of the Area Author-

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

in which checks were performed on the actual volume

of investments carried out, operating costs, revenues

generated, the amounts billed and the technical and or-

ganisational standards achieved. Based on the results of

these checks, the adjustment was calculated (positive

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

more than 0.5% lower than those forecast in the Area

Plan.

Penalties were also applied during the revision, as pro-

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

tain technical and organisational standards.

During the second tariff review, the new Investment Plan

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

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

thority in March 2009.

In October 2006, the Operator signed a contract with a

syndicate of banks which provides for a total loan of 255

million euros to cover the financial needs of the invest-

ment plan from 2005 to 2021 of around 670 million eu-

ros. 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 Au-

thority approved the 2010-2021 tariff development. The

Board of Directors was entrusted by the General Meeting

euros, of which the Group’s portion is 54.5 million euros

as at 31 December 2011), and the settlement of the debt

to the Campania Region, the company’s financial posi-

tion caused the Directors to carefully assess GORI’s busi-

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

million euros was set aside.

In relation to the problems concerning ruling no. 335 of

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

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

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

treatment plants and the associated amounts to be re-

imbursed, authorising GORI to carry out the relevant pub-

lication and go ahead with the subsequent reimburse-

ment to entitled parties, with reference to the period

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

with the provisions of the Decree of the Ministry of the

Environment dated 30 September 2009 and art. 2033 of

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

tablished that the charges deriving from the application

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

sis, by the residual amounts allocated to the provisions

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

subsequent amendments and additions and pertaining

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

event in which said sums are insufficient to cover the

expenses to be reimbursed, additional extraordinary

tariff measures must be implemented beforehand - also

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

Method - which ensure the required economic-financial

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

aforementioned ruling concerned the write-off of receiv-

ables relating to water treatment amounts not due, for

an amount of around 3.3 million euros (Group share of

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

the provisions of art. 14.


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

ject of the resolution is a matter for the General Meeting

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

the analysis of the criticalities of the service and invest-

ment objectives, and, therefore, incompleteness of the

document, also shown by the absence of the definition

of investments to be carried out. Also in the regulatory

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

ter Resources) also filed a second-instance appeal with

the Council of State against the Regional Administrative

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

December 2010, cancelled that Committee’s resolution

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

gitimacy of the settlement agreed by the Area Authority

and Publiacqua. This was designed to resolve numerous

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

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

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

Regional Administrative Court of Tuscany. By means of

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

General Meeting resolved to amend article 49 of the sup-

ply regulation, decisively changing the procedures for

calculating and applying the guarantee deposit, introduc-

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

lution envisaged the adjustment into line with the new

criteria during the year, which Publiacqua complied with.

In July, the Board of Directors of the Area Authority ap-

proved the Economic-Financial Plan, therefore only par-

tially supplementing the revision of the Area Plan, but

still failing to update the service criticalities and invest-

ment objectives, also a preparatory analysis for the iden-

tification of the level and type of investment. Given the

Economic-Financial Plan is an agreement document, and

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

proval a matter for the Area Authority, Publiacqua pre-

sented additional grounds for the appeal already filed

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

As regards tariffs, the Area Authority formally communi-

cated to the operator the legitimacy of the tariffs applied,

also in light of the referendum vote, while awaiting the

necessary legislative amendments.

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

ing comments and details concerning the approved tariff

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

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

no. 152/2006.

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

proved document did not contain the economic-financial

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

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

lines adopted by the Authority in defining the tariff de-

velopment:

• estimateof86millioncubicmetresbilledeachyear,

as compared to 88.6 million cubic metres as in previ-

ous forecasts;

• recognitioninthetariffofcostsalreadyallocatedand

those expected in the future for the dispute with staff

regarding career advancement;

• penaltieschargedtotheoperatorfor2.7millioneuros

due to the failure to reach standards for the 2005 -

2009 period, as a reduction of the revenues from the

tariff in the 2010-2012 three-year period;

• tariffadjustmentsforthe2002-2009periodfor26.9

million euros;

• non-recognition of part of the new adjustments for

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

of the 6 year prescription of the new agreement.

The Area Authority provided for 10.2 million euros to

be allocated in order to cover reimbursement requests

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

nected to the sewerage network or are connected to

a plant that is temporarily inactive. This amount covers

approximately 50% of the maximum amount estimated

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

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

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

ference shall be used to reduce adjustments on past lost

revenues.

If the opposite is true (requests exceeding expectations),

the operator may request an adjustment in the subse-

quent review.

Publiacqua filed an appeal with the Regional Administra-

tive Court of Tuscany against the resolution of the Area

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


among other things, advisors’ express wishes.

In terms of the financial-equity position, the operator

continues to work, with the support of the competent

corporate structures of ACEA, towards defining a proj-

ect financing transaction that will support the borrowing

requirements of the Company until the end of the con-

cession, ensuring the realisation of the entire Investment

Plan.

In the meantime, in the short-term, the operator has cov-

ered its investment requirements by drawing down the

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

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

Centrobanca - Banca di Credito Finanziario e Mobiliare

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

In ATO 1 Toscana Nord the ACEA Group is present

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

which holds shares in GEAL (manager of integrated wa-

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

Lunigiana Acque.

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

liquidation in accordance with the joint provisions of art.

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

Civil Code.

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

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

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

method” pursuant to Decree of the Ministry of Public

Works of 01.08.1996 (Standardised Method) for tariff re-

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

based on the decisions of the Interministerial Economic

Planning Committee (CIPE).

On 11 March 2011, following the Board of Directors

resolution, an agreement was signed with the cleaning

Consortium Auser-Bientina, in accordance with Tuscany

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

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

2011 for waste water drainage and removal due by the

integrated water service manager, which charged them

to the users served in accordance with art. 16 paragraph

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

termined in this manner were published in the Official

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

Through a merger of equals of Acque Ingegneria and

Publiacqua Ingegnerie on 27 December 2010, Ingegnerie

Toscane srl was formed, in which Publiacqua, Acque,

Acquedotto del Fiora and ACEA are shareholders.

The company brings together the skills and expertise

developed over the years, ensuring significant syner-

gies both for the development of planning and works

management activities in the water services field and in

terms of acquiring higher operating efficiency margins.

As regards ATO 6 Ombrone, based on the management

agreement signed on 28 December 2001, the operator

(Acquedotto del Fiora) is to supply integrated water

services on an exclusive basis in ATO 6, consisting of

public services covering the collection, abstraction and

distribution of water for civil use, sewerage and waste

water treatment.

The concession term is twenty-five years from 1 January

2002.

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

completed its acquisition of a stake in the company.

The year 2011 began with preparations for the tariff re-

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

quent review of the Area Plan in line with the principles

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

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

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

ing forward the normal terms set forth in the agreement

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

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

nation between the Area Plan and the Banks’ Economic

and Financial Plan.

The already mentioned uncertainties connected to the

outcomes of the Referendum June did, however, deter-

mine a slowdown with respect to the programme, which

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

Area Authority General Meeting’s approval of the three-

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

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

year operating plan).

The new Area Plan acknowledges the desired align-

ment of planning of water sale volumes with the op-

erator’s forecasts, acknowledged in Project Financing’s

FEP which is currently being structured, incorporating,


document targeted at updating the area plan in force.

These resolutions identified both the proposing and

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

bria Region as the competent party plus all other compe-

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

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

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

quent amendments and additions and art. 5 of Regional

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

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

of the preliminary document for the purposes of the Stra-

tegic Environmental Evaluation was concluded. There-

fore, as the identification phase has been completed,

the actual Plan documents will be drafted, according to

the recommendations pursuant to CONVIRI Resolution

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

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

force is therefore taking place very slowly, preventing the

company from establishing greater equilibrium from an

economic-financial point of view and a renewed invest-

ment capacity.

In ATO 2 Terni, management of the company Umbriadue

scarl, which is a minority shareholder in the integrated

water service company SII scpa, continues through sub-

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

AceaRieti through a merger by incorporation, effective

from 1 January 2011 for accounting and tax purposes.

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

2010 and the liquidators were authorised to continue to

operate temporarily, also in order to ensure the conti-

nuity and correct management of integrated water ser-

vices beyond the expiry of 31 December 2010 and until

replacement by the new operator. Consultations are cur-

rently underway between the Area Authority (now the

Tuscan Water Authority), the municipality of Pontremoli

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

transfer to the latter of management of the integrated

water service which has not yet been completed.

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

2011. Despite being in liquidation, management contin-

ued in order to ensure continuity in the provision of an

essential public service, while awaiting the assignment

of the integrated water service to a new operator.

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

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

Meeting of the Area Authority and will take effect on 1

April 2012. Therefore, Lunigiana Acque’s management

will cease definitively on 31 March 2012.

The grantor is obliged to reimburse the costs incurred,

i.e. the net carrying amount of the works carried out,

plants and equipment, at its own expense.

As regards the investments in the Umbria region, in

December 2007 ACEA was definitively selected by the

Area Authority for ATO 1 Perugia as the private industrial

shareholder to take a minority interest in Umbra Acque

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 Mu-

nicipalities 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 con-

tinue. By means of resolution no. 10 of 31 March 2010,

the Authority approved to launch the operational activi-

ties 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


nomic operator that was the winning bidder in the initial

selection procedure. This required a re-planning of the

supply terms of the turbine, involving a different, specific

contract relationship, to be installed in the plant follow-

ing revamping works, and the need to identify a different

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

tract was signed in October 2011, which envisages the

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

the time schedule presented by the new contractor. This

meant the plant shutdown stretched throughout 2011.

The following activities are also underway:

• thecontinuationofscheduledmaintenanceworkper-

formed directly by plant personnel;

• theexpectedstartofauthorisationactivitiestoobtain

a new AIA (Integrated Environmental Authorisation)

for the extension of authorised fuels.

PALiAnO RdF PROdUCTiOn PLAnT: the Paliano RDF

production plant possesses an ordinary authorisation for

the production of RDF, expiring on 30 June 2018.

This authorisation certainly represents a significant as-

set, especially if we consider the difficulties connected

with locating, realising and authorising activities in the

environmental sector, and in particular, waste treatment.

In line with the provisions of the business plan, reduced

RDF production recommenced in the last few days of Au-

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

S.p.A. plants; this allowed the definition of RDF according

to UNI 9903 regulations, which requires 5 consecutive

weeks of analysis.

The company is currently completing upgrading work

linked to the safety of plant infrastructures.

These activities, performed alongside works to upgrade

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

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

quarter of this year at the latest.

The technical details of the activities performed are

shown below:

Environment industrial Area

A.R.i.A.

With a view to the simplification, optimisation and ratio-

nalisation of the corporate structure and in compliance

with the guidelines of the 2011-2013 strategic plan,

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

seemed appropriate and convenient, effective from 1

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

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

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

Completion of this corporate restructuring and sim-

plification project led to significant organisational ra-

tionalisation, a reduction in company operating costs,

simplification of the flow of human resources and ma-

terials between the different companies, elimination of

recharge flows, and rationalisation of property assets

used by the various industrial companies.

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

2011 were characterised, until the end of August, by

the coordination and provision of services to the sub-

sidiaries.

Subsequently, due to the aforementioned merger by

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

ment of the assets deriving from the incorporated com-

panies.

The operating activities performed by the different

plants are commented on below.

TERni wASTE-TO-EnERGy PLAnT: the waste-to-ener-

gy plant operates in electricity production from renew-

able sources, and specifically the paper mill pulp waste

to energy sector.

Due to the plant revamping works which began in 2010,

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

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

rently operational and in 2011 it generated 442,255.80

kW of electricity.

Plant “revamping works”, already commenced on Oc-

tober 2010, stopped as a result of the company’s with-

drawal, 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-


SAn ViTTORE dEL LAZiO wASTE-TO-EnERGy

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

operates in electricity production from renewable sourc-

es, and specifically from RDF.

2011 saw the completion of the revamping project

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

while works commenced for the complete renovation of

line 1, whose activities ended in March.

This determined a complex plant situation, characterised

by an operating period essentially combined between

the final management period of line 1 and the launch of

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

The main operational data is shown below. The compari-

son between the same period in the previous year, in

technical and economic terms, is purely indicative, given

that it relates to two different productive and managerial

situations.

year 2011 year 2010

Dry waste ton 3,285 2,072

Incoming RDF ton 0 0

Other incoming special waste ton 0 204

TOTALS ton 3,285 2,276

2011 2010

Ln 1 Ln 2 Ln 3 TOT

Directly operational hours in parallel h 1,868 5,417 3,787 11,072 8,051

Electricity generated MWh 16,954 77,289 55,180 149,423 80,171

Electricity sold MWh 14,562 66,019 47,707 128,288 70,603

RDF delivered by SAF 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

An examination of the operating figures highlights a sig-

nificant increase in the quantity of RDF delivered by third

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

and the increase in the potential productivity (MWh sold/

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

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

These figures allow the performances of the new plant to

be viewed in a positive light.

As outlined above, April saw the conclusion of the imple-

mentation of line 2 and start of the phase of assisted

management which extended until the end of November.

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

while the associated phase of assisted management ex-

tended until the end of December.

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

plant upgrading project was launched, in order to reach

the following objectives:

• enhancement of energy performances (with equal

thermal potential of the oven and equal quantity of

fuel treated);

• enhancementofenvironmentperformances;

• improvement of the operating and management

structure of fuels.

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

tivities. During the last quarter, an authorisation request

was presented targeted at environmental upgrading for

the architectural-functional redevelopment of the site as

a whole, and the completion of civil works strictly related

to the plant.


• application of the tariff plan provided by the agree-

ment between SAO and ATO4 on 13 August 2007, that

regulates management of the public service of selec-

tion, treatment and disposal of solid urban waste and

similar products from the ATI4 municipalities and the

special waste resulting from treatment of the afore-

said urban waste.

The quantities of waste input and treated at the Orvieto

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

SAO

The company SAO owns the waste dump located in the

municipality of Orvieto and manages urban and special

waste.

The following events took place in 2011:

• pursuanttoprovisionsenvisagedintheIntegratedEn-

vironmental Authorisation issued by the Umbria Re-

gion with Managerial Directive no. 210 of 19 January

2010, the transfers of special non-hazardous waste

continued;

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 tonnes 0 4,068

TOTALS 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

AQUASER

The company was set up in order to manage ancillary

services associated with the integrated water cycle, car-

rying out the recovery and disposal of sludge from bio-

logical treatment and waste produced from water treat-

ment, treating effluent and liquid waste and providing

the services connected thereto.

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

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

the operator of integrated water services in ATO5 along

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

tor of integrated water services in ATO6 Ombrone, ATO2

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

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

ter services in ATO5 Lazio. Moreover, starting from year

2010, the Company carries out the transportation and

recovery services of treatment sludge on behalf of the

company UMBRA ACQUE S.p.A.

The recovery is mainly carried out by spreading sludge

in farming based on clearances, mostly from third par-

ties, and the delivery to composting plants, also mainly

owned by third parties.

With the acquisition of control of the companies So-

lemme Spa and Kyklos Srl, taking place in the previous


tance and closely complements the activities performed

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

production chain managed by AQUASER and the devel-

opment of tools acquired through the acquisition of the

ACEA RIETI business unit, which took place in previous

years.

In February 2011, the Board of Directors approved the

company’s business plan, which identifies two paths of

development that the company intends to pursue:

a) consolidation of the perimeter currently managed and

expansion of the service to other ACEA group compa-

nies that manage the integrated water service;

b) strengthening of owned plants and development of

new initiatives in the regions of interest.

As regards the first area, procedures are being defined

to transform AQUASER into a joint company of the ACEA

Group’s integrated water management companies, by

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

gards the second point, initiatives to expand the KYKLOS

and SOLEMME plants and due diligence activities to pur-

chase plants in the Lazio and Tuscany regions are being

implemented. In particular, the due diligence activities

for SAMACE were completed in respect of the Lazio re-

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

plant system set out in the new waste management plan

of the Lazio region and dedicated to the composting of

sludge from sanitation, organic waste and green waste,

with the production of compost used in the farming and

floriculture market in the Lazio region. The reference area

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

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

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

in synergy, and the acquisition of the former will allow

AQUASER to consolidate its leadership in the treatment

of organic waste in the Lazio region. The acquisition of

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

allow AQUASER to increase its competitive advantage in

the environmental sector in which local suitability and

authorisation procedures constitute a huge obstacle. The

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

tonnes/year of compostable and liquid waste

The operation is expected to be completed in the first

half of 2012.

years, AQUASER started a positioning process on the

reference market, by acquiring own plants enabling it to

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

duce fluctuations in prices for waste treatment, which

are highly volatile and subject to speculation.

The location of the plants is also extremely important

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

cesses the sludge transferred under the contract with

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

processes the sludge transferred under the contracts

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

transport costs.

Plant ownership strengthens the role of AQUASER as a

qualified operator in its own sphere of reference, with a

goal of ever increasing freedom from reliance on plants

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

service already provided continuously to its own clients/

partners.

Over the previous years, the company has obtained

three authorisations for the recycling of sludge in the

agricultural sector. Direct ownership of the authorisa-

tions for the recycling of sludge in the agricultural sector

makes the company more independent from third-party

suppliers. Activities are currently underway to obtain ad-

ditional authorisations for the recovery of sludge in the

agricultural sector.

Operations in 2011 confirms the consolidation of the

company both in terms of turnover and management

yield.

The market in which the Company operates was marked

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

posal sites and increased transport costs. Despite this,

however, thanks to the sales initiatives created in the

area of identifying and contractually signing up plants,

and to the stipulation of transport contracts, the Com-

pany has managed to limit its effect, thereby maintaining

its profits at similar levels.

From a strictly operational point of view, the Company

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

vices provided to it by the shareholders; this process

was completed with the acquisition of an interest in the

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

logistics and transportation activities and, therefore,

represents a strategic element of fundamental impor-


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

ince of Latina issued the authorisation in accordance

with art. 208 for the implementation of some substan-

tial variations (closure of the maturation facility, cover-

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

treatment plant, installation of the screening plant with

deplastification) necessary for streamlining the manage-

ment process.

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

to reduce the environmental impact of its activities to

a minimum, by optimising the high quality and manage-

ment standards already ensured.

The associated activities are still in progress.

SOLEMME

The company operates in the waste recycling sector

through the composting of organic waste, in particular

sludge from civil waste water treatment.

The purchase by Aquaser during the course of the pre-

vious year has opened direct access to the market for

sludge produced by integrated water service opera-

tors in the ACEA Group to the Company, with special

reference to the Tuscany Region. In addition it enables

the creation of positive synergies related to the experi-

ence built up by Aquaser in the Kyklos subsidiary, which

owns a similar plant.

Out of all composting plants set forth in the Grosseto

province waste plan, this is the only one constructed

and operating to date.

The reference market is represented by urban sanita-

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

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

provinces of Grosseto and Siena, and by the treatment

of waste from sorted collection.

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

antee the recovery of the quantities currently produced

for which there is a forecast increase in accordance

with increased urban effluent treatment activity.

The company, also by availing itself of synergies with

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

moved to clarify the interpretation of method of fertil-

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

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

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

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

forms transportation and logistics activities, and is there-

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

ket consolidation and an increase in profits, particularly

with reference to the management of the transportation

segment, which is fully outsourced at present.

kykLOS

The company operates in the waste treatment sector. It

produces and markets moulds, soil conditioners and or-

ganic fertilisers and carries out its activities in the areas

of Nettuno Ferriere in Aprilia on the basis of an authori-

sation obtained from the Lazio Region for the recovery of

66,000 tonnes/year.

The purchase by Aquaser has opened direct access for

the company to the market for sludge produced by in-

tegrated water service operators in the ACEA Group to

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

tive synergies related to the experience of Aquaser in the

Solemme subsidiary, which owns a similar plant. Special

attention was and will be given to the development of

the synergy resulting from the professional competence

and experience of the long-standing shareholders with

the potential offered by the ACEA Group.

The year ending on 31 December 2011, represented the

second year of operation of the plant after the increase

in treatable quantities, and saw the consolidation of the

company in the market and its strengthening in strate-

gic terms. The company increased and consolidated the

waste volumes recovered within its plant, while increas-

ing its turnover.

In the period in question, the substantial absence of

other similar plants in the regional territory made Kyklos

the reference plant for the Provinces of Rome and Lati-

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

averted any organic waste emergency.

In order to strengthen the leadership acquired, on 8 June

2010, the clearance process was started for the adjust-

ment of the current plant and the enlargement of its ca-

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

tion of a biogas plant with recovery of electricity and

heat energy.


respectively.

In February 2012, during the decision-making services

conference, the Province of Grosseto approved the con-

struction and operation of the plant with the potential

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

town planning procedures.

In fact, the positive conclusion of the services confer-

ence for SOLEMME made it possible to carry out the

proposed essential plant upgrading, in order to ensure

the business continuity of the company, even though

SOLEMME is first required to actually conclude proce-

dures relating to approval of the implementation plan.

In this sense, however, the company already started the

authorisation procedure in August 2011, as part of au-

thorisation activities pursuant to art. 208 of Legislative

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

tions governing plant upgrading as a whole.

In addition, Municipal Administration, which had suspend-

ed the review of the implementation plan, re-commenced

its own procedure on request of SOLEMME, which had

requested the immediate recommencement of the proce-

dure, highlighting the illegitimate suspension.

Therefore, plant upgrading activities are expected to

start in September 2012.

iSA

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

capital of ISA S.r.l.

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

ticular, transportation and in devising solutions relating

to civil and industrial works, including through the use

of computerised networks and systems, in order to im-

prove the logistics service, and in the management of

complex mechanical and electrical systems.

A combination of the experience built up by the com-

pany and the requirements of new shareholder Aquaser

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

carry out its services more independently, not just trans-

portation services, but those relating to other connected

and complementary activities such as the spreading of

sludge in farming, maintenance of drying beds and auto-

discharge services, led to a significant increase in activi-

ties performed.

commence full production as soon as possible.

In any case, in October 2010 the delivery of biological

treatment sludge recommenced in respect of the initial

mix percentages with reference to the weight/weight

as sampled, leading, however, to a substantial decrease

in the volumes of sludge transferable to the plant with

respect to the volume set out in the authorisation which

also concerned 2011.

The new business plan sets forth the expansion of the

current composting plant, which, when operational,

has an input capacity of 26,100 tonnes of compostable

waste and whose potential is not completely exploit-

able as of today, in addition to the existing anaerobic

treatment plant and the expansion of treatment poten-

tial, guaranteeing the management of 15,000 tonnes

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

ment sludge, 15,000 tonnes of agroindustrial sludge

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

tonnes per year. A capacity of approximately 0.5 MW of

electricity production is also expected.

An investment of approximately 12 million euros, to be

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

pansion of the current plant.

The procedure commenced in August 2010 for the au-

thorisation of the upgrade of the current plant, with an

increase in treatment potential to 70,000 tonnes per

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

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

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

seto extended the plant operating authorisation until 7

January 2012.

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

Council excluded the initiative proposed by Solemme

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

accordance with art. 49 of Tuscany Regional Law no.

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

of the new plant’s construction and operating authori-

sation was re-initiated.

Individual citizens, associations and the Municipality of

Monterotondo Marittimo submitted an appeal to the

Regional Administrative Court of Tuscany against the

provision of exclusion from the Environmental Impact

Assessment procedure of 1 June 2011, relating to plant

upgrading, notified to the company on 3 and 4 October


“pending procedures for the issue of the Integrated En-

vironmental Authorisation”.

This Integrated Environmental Authorisation, in accor-

dance with Legislative Decree no. 56/05 was then is-

sued, by the Territorial Department of the Lazio Region,

with ruling no. B3694 of 13 August 2009.

In June 2009, the preliminary agreement with GSE was

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

tricity that will be produced by the plant in Albano.

The order, by which the environmental compatibility

was approved, and the related authorisations for the

plant, were disputed before the Regional Administrative

Court of Lazio by certain local committees.

The order to suspend the aforesaid environmental com-

patibility order was rejected by the Regional Adminis-

trative Court of Lazio in March 2009.

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

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

start the work before the ruling of the Regional Admin-

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

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

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

it is an entity with a public majority equity investment

and urgent public utility work which cannot be delayed)

to carry out the activities commenced, insofar as they

are expressly authorised and (II) any detrimental event

shall not be charged to the Lazio Region”. Obligations

set out by the Waste Regulatory Plan were also recalled

“and the need for completing the intervention within

the terms of authorisations granted”.

No further reply was received from the Lazio Region.

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

not carry out the works externally and materially, while

it developed all the additional activities necessary to be

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

going administrative dispute, without any delay to the

construction of the plant while recovering the time lost.

In this regard, the Regional Administrative Court of Lazio

combined the administrative appeals and, after the

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

visions issued on 13 and 14 December 2010, cancelled

Environmental Impact Assessment index no. 177177 of

8 October 2010, Environmental Impact Assessment in-

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

ECOMEd

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

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

CO.E.MA Consortium.

COEMA

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

established on 30 January 2007 as a partnership be-

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

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

be extended if the Consortium so decides.

The objective of the Consortium is to establish a com-

mon organisation to plan, build and manage a biomass

and/or waste electricity production plant for the eco-

logical treatment and transformation of solid urban,

industrial and special waste in general, with energy

recovery, including energy recovery plants from waste

through combustion, pyrolysis and gasification process-

es, and management of all related preliminary activities.

The project for this plant with an electrical power of

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

gion responsible.

In particular, the Commissioner appointed for the Waste

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

of 28 December 2007, approved the aforesaid defini-

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

2008, he approved the “State of implementation of the

actions carried out to overcome the emergency stage

declared by the Decree of the President of the Council

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

fies the plant for the production of electricity in ques-

tion, as the reference plant in the context of regional

plant availability.

On 8 October 2008, the Territorial Department, Regional

Division for Environment and Cooperation of the pub-

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

the environmental compatibility of the repeatedly men-

tioned plant, in accordance with article 23 of Legislative

Decree no. 152/06.

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

Chairman of the Lazio Region, ordered the Massimetta

Ecological Consortium CO.E.MA. to implement the

project pursuant to Commission Decree no. 147/2007,


APiCE

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

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

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

within the sphere of waste recycling and treatment, with

the purpose of producing electricity, and related ancillary

work such as the purchase, sale, conversion, construc-

tion and management of industrial plants in the sector.

The company is currently inoperative.

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

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

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

In January 2012, the Lazio Region approved the Waste

Management Plan, which also includes the Albano gas-

ification plant among the plants to be constructed, with

operations expected to start in 2014.


Economic and financial review

Alternative performance indicatorsIn line with recommendation CESR/05-178b, the content

and meaning of non-GAAP measures of performance

and other alternative performance indicators used in

these financial statements are described below:

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

an indicator of operating performance and is calculat-

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 non-

current borrowings and financial liabilities, less non-

current financial assets (loans and receivables and

securities other than investments), to current bor-

rowings and other current liabilities, less current fi-

nancial 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 li-

abilities”, excluding items taken into account in cal-

culating net debt.

introductionThe income statement and balance sheet and the asso-

ciated comments contained in this section describe the

ACEA Group’s performance in 2011, also including the

economic data as at 31 March 2011 of companies sold as

part of the Framework Agreement executed by the end

of the first quarter, targeted at terminating the 2002 joint

venture agreement.


ACEA Group economic results

Euro thousand income statement

Reclassified 31/12/2011

31.12.2010 increase/ (decrease)

increase/ (decrease) %

Revenue from sales and services 3,464.7 3,517.5 (52.7) -1.5%

Other revenues and proceeds 73.3 88.2 (14.9) -16.9%

Consolidated net revenue 3,538.0 3,605.7 (67.7) -1.9%

Staff costs 280.6 274.9 5.7 2.1%

Costs of materials and overheads 2,599.9 2,672.9 (73.0) -2.7%

Consolidated operating costs 2,880.5 2,947.8 (67.3) -2.3%

net income/(costs) from commodity risk management

(1.7) 8.7 (10.3) -119.1%

Gross Operating Profit 655.8 666.5 (10.7) -1.6%

Amortisation, depreciation, provisions and impairment charges 433.3 348.6 84.7 24.3%

Operating profit/(loss) 222.6 317.9 (95.4) -30.0%

Finance (costs)/income (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%

Profit/(loss) attributable to minority interests 7.6 7.9 (0.3) -3.9%

net profit/(loss) attributable to the Group 86.0 128.3 (42.4) -33%

Fair value adjustment of discontinued operations 0.0 (36.2) 36.2 100.0%

net profit/(loss) attributable to the Group net of fair value measurement of discontinued operations

86.0 92.1 (6.2) -6.7%

The consolidated income statement shown above is dis-

played gross of IFRS 5 reclassifications, that is, including

the economic data of the companies sold in the figures

for the period.

The Organisational Order of 25 January 2011 changed

the macrostructure of ACEA S.p.A..

The main changes referring to the Industrial Areas are

as follows:

• Industrial Energy Area: the company Acea8cento, pre-

viously under the Personnel and Service Department,

was placed under the responsibility of this area,

• Water Industrial Area: the water companies operating

abroad and previously under the Development and

Special Projects Department, were placed under the

responsibility of this area,

• Environment and Energy Industrial Area: the name

was changed to Environment Industrial Area; the re-

sponsibilities referring to the managed businesses re-

mained unchanged,

• Furthermore, worth mentioning is that the Develop-

ment and Special Projects Department changed its

name to Engineering and Services Department.

With a subsequent order, the coordination of the com-

pany AceaGori Servizi was entrusted to the Water Indus-

trial Area.

The operations and financial position by Industrial Area

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

and that of the same period in 2010 was reclassified for

the purposes of a homogeneous comparison.

Since the economic data are strongly influenced by the

change in the basis of consolidation, the tables below set

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

noted that the figures in question only include elimina-

tions within the same business area.


31/12/2011 31/12/2010 increase/ (decrease)

Consolidated gross operating profit 655,830 666,527 (10,697)

Change in consolidation:

Energy: 0 42,605 (42,605)

Production 0 34,097 (34,097)

Trading 0 21,429 (21,429)

Sales 0 (12,921) 12,921

water: 11,491 0 11,491

Lazio - Campania (142) 0 (142)

Tuscany - Umbria 11,633 0 11,633

Environment 221 0 221

Total change in consolidation 11,712 42,605 (30,893)

PRO-FORMA GROSS OPERATinG PROFiT OF CHAnGES in BASiS OF COnSOLidATiOn

644,118 623,922 20,196

networks industrial AreaThe EBITDA in 2011 came out at 269.6 million euros, an

overall increase of 19.3 million euros due to the com-

bination of macro-phenomena indicated hereafter by

company.

Concerning Arse, worth mentioning is an increase in the

gross operating profit of 14.6 million euros chiefly pro-

duced 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-

count gained in the period. ACEA Distribuzione recorded

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

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

able to the recovery in equalisation revenues of previ-

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

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

ergy distribution operating costs (up 8 million euros) and

lower user accessory revenues (down 5.7 million euros).

Public lighting recorded a drop in the gross operating

profit of 13.8 million euros deriving from the new con-

tract with Roma Capitale.

Energy industrial AreaThe comparison of the results of this Area is affected by

the dissolution performed on 31 March 2011.

The economic data of the companies in the Area were

accounted for under proportionate consolidation, based

on the proportion effectively held in the first quarter of

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

CHAnGE in GROSS OPERATinG PROFiT On A LikE-FOR-LikE BASiS 31/12/2011 31/12/2010 increase/ (decrease)

EnERGy nETwORkS 269,627 250,328 19,299

EnERGy 61,384 79,352 (17,968)

Production 15,563 35,743 (20,180)

Trading 6,806 6,124 682

Sales 39,015 37,485 1,529

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


views in 2011 and 2010 respectively.

The gross operating profit of this area felt the effects of

higher expenses (up 2.6 million euros) deriving from the

seizure of some of ACEA Ato2’s treatment plants.

OverseasThe contribution to the area’s EBITDA amounted to 4.3

million euros, generated mainly by AguaAzul Bogotà as

a result of the consolidation of Conazul and the stipu-

lation of the new commercial management contract in

Bogotà’s zone 1.

Environment industrial AreaEBITDA in the area as at 31 December 2011 stood at 31.5

million euros, up 8.4 million euros compared to the previ-

ous year, mainly attributable to ARIA, which recorded a

gross operating profit of 18.5 million euros, an increase

due to higher revenues generated by the second and

third lines of the San Vittore del Lazio WTE plant, which

mitigated the non-production of the first line of the

plant and of the Terni plant, shut down due to repower-

ing. Furthermore, Aquaser registered an increase in the

gross operating profit, attributable to higher quantities

of sludge treated for the ATO2 contract and the acquisi-

tion of some new contracts. In respect of said increase

in revenues, a significant decrease was also recorded in

disposal/recovery costs, generating an increase of 53.2%

in the gross operating profit compared to the same pe-

riod of the previous year.

CorporateACEA closed the period in question with an EBITDA level

that was negative by 30.6 million euros (including con-

solidation adjustments), down by 5.4 million euros com-

pared to 31 December 2011, essentially as a result of the

increase in costs relating to personnel and to the com-

pany Marco Polo.

A brief illustration of the main changes in the consoli-

dated income statement is shown below.

basis since 1 April 2011; the economic data therefore are

not immediately comparable with the data from the pre-

vious year.

The financial position and cash flow are affected by the

deconsolidation of the transferred companies and the

consolidation of the financial position and cash flow

related to the additional shares acquired by GDF SUEZ

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

eliminations made necessary). These therefore take ac-

count of the proprietary structure post-closing: please

refer to the basis of consolidation for more details. Thus

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

euros. On a like-for-like basis, a decrease of 18 million

was recorded in the operating profit, attributable mainly

to generation activities as a result of lower quantities

produced due to plant shutdown for the repowering of

hydroelectric plants. Trading and sales activities, by con-

trast, were essentially in line with 2010.

water industrial Area (including therein the Engineering and Services department) The Area’s EBITDA totalled 323.8 million euros, an in-

crease of 27.4 million euros compared to last year. The

increase is broken down as follows:

• Engineeringandservices+1.1millioneuros

• ManagementofwaterservicesinLazioandCampania

+2millioneuros

• ManagementofwaterservicesinTuscanyandUmbria

+20millioneuros

• Managementofoverseaswaterservices+4.3million

euros.

italyThe positive impact on EBITDA is due to the change in ba-

sis of consolidation, with the consolidation of Acquedot-

to del Fiora and Acea Servizi Acqua amounting to 11.5

million euros, and to the increase in integrated water

service revenues as a result of the natural increase in

tariffs, also following the Acque and Publiacqua tariff re-


sale of CO2 rights and green certificates due to the

change in the basis of consolidation produced by the

companies sold, ii) the increase of 1.9 million euros

from energy efficiency certificates generated by ACEA

Distribuzione.

• revenues from services to customers amounted

to 185.9 million euros, marking a 22.1 million euros

increase mainly as a result of: i) the change in Arse’s

contract work in progress which relates to works as-

signed to third parties for the construction of photo-

voltaic plants in the sites at Cassano, Villa Piana, Or-

somarso and Scalea, not finished as at 31 December

2011 (up 10.6 million euros), ii)activities performed by

Arse involving the marketing and installation of photo-

voltaic panels on behalf of third parties (up 7.8 million

euros), and Public Lighting revenues in the municipali-

ties of Naples (up 3.7 million euros) and Rome (up 6.6

million euros). This increase was partially offset by the

reduction in services carried out by ACEA Ato2 on re-

quest of third parties (down 2.5 million euros).

• revenues from the delivery of waste and waste

dump management amounted to 28.9 million eu-

ros, in line with the previous period, achieved by the

Aquaser Group (8.2 million euros), down 0.5 million

euros compared to the previous year, and by ARIA

Group companies (20.8 million euros), up 1.3 million

euros. The trend is related to the quantity/price effect.

• connection fees totalling 36.3 million euros, mark-

ing an increase of 4.4 million euros.

Other revenues, standing at 73.3 million euros, regis-

tered a decrease of 14.9 million euros compared to the

same period in 2010. This change reflects opposing fac-

tors:

• the increase in the energy account (11 million euros),

mainly due to the entry into operation of some PV

plants owned by Arse,

• the decrease in gains on the disposal of assets which,

in 2010, included the profit generated by the sale of

the Parent Company’s car fleet for 9.5 million euros,

• the reduction of 10.3 million euros in contingent as-

sets - essentially due to energy items - also deter-

mined by the change in the basis of consolidation.

Consolidated net Revenue: - 3,538.0 million euros

Revenue from sales and services amounted to

3,464.7 million euros and relates to:

• revenue from electricity and gas sales and ser-

vices totalling 2,440.5 million euros. This item record-

ed a decrease of 114.8 million euros compared to 31

December 2010, due to the change in the basis of con-

solidation (down 101.9 million euros) On a like-for-like

basis, the change is attributable mainly to lower rev-

enues from generation activities as a result of lower

quantities produced due to plant shutdown for the re-

powering of the Salisano and Orte hydroelectric plants.

As regards activities regulated by distribution, an in-

crease was recorded in revenues generated by the

combined effect of a reduction in electricity inject-

ed into the network and the different mix of energy

distributed between the types, and a different value

of tariff parameters. It should be pointed out that

2011 benefitted from the recognition of a significant

amount of revenues relating to the recovery of gen-

eral equalisation of previous years (15.3 million euros).

This balance included higher revenues deriving from

energy produced by plants owned by the A.R.I.A.

Group, due to the entry into operation of two new

lines of the San Vittore plant, partially offset by lower

revenues resulting from the shutdown of the Terni

plant (from 6 August 2010) and of the first line of the

San Vittore plant.

• revenues from the management of water

services in italy and overseas amounted to

753.3 million euros, marking an increase of 62.4

million euros: i) due to the different method of con-

solidation of Acquedotto del Fiora (up 29.5 million

euros), ii) the tariff review of Acque (up 3.6 mil-

lion euros) and Publiacqua (up 4.7 million euros),

iii) the tariff increase of Ato2 (up 7.3 million euros).

Furthermore, Aguazul Bogotá also recorded growth of

12.3 million euros as a result of the consolidated per-

formance of Conazul, established in the second half

of 2010.

• revenues from the sale of certificates and

rights totalled 19.7 million euros, a reduction of 27.7

million euros, whose breakdown is shown below, i)

the decrease of 29.5 million euros in income from the


(down 30.6 million euros).

• the costs of materials came to 104 million euros

as at 31 December 2011, an increase of 24.1 million

euros due mainly to: movements in photovoltaic pan-

els used to produce proprietary plants or destined for

sale (up 16 million euros) and as a result of require-

ments generated in the fourth quarter by the start of

activities set out in the “Lighting Plan” project, com-

missioned by Roma Capitale as part of the public light-

ing service contract (up 5.7 million euros); the follow-

ing companies contributed to the variation: Aguazul

Bogotà (due to Conazul) for 3 million euros, Acquedot-

to del Fiora for 0.9 million euros and ASA and ISA for

0.4 million euros.

• costs for the provision of services amounted

to 331.5 million euros at December 2011 and regis-

tered an increase of 8 million euros over the same

period in 2010. This was a result of the change in the

basis of consolidation: (i) due to the consolidation of

Acquedotto del Fiora with the proportionate method

from 1 January 2011, for 9.4 million euros, (ii) the con-

solidation of Conazul for 1.9 million euros, (iii) for the

acquisition of Acea Servizi Acque for 0.4 million eu-

ros and Innovazione Sostenibilità Ambientale for 0.4

million euros. Furthermore, the effect of the termina-

tion of the joint venture with GDF Suez Energia also

had a significant impact, leading to a change in the

percentage of consolidation of Acea Energia Holding

and its subsidiaries (up 10.7 million euros in total), off-

set by costs incurred by the companies transferred.

This item benefitted, when compared to the previous

year, from the reduction brought about by the rec-

ognition, in 2010, of costs related to the termination

of the joint venture, amounting to 3.5 million euros.

The costs of contract works performed registered

an increase of 2.8 million euros, attributable to ACEA

Distribuzione and the Parent Company for the activi-

ties performed as part of the public lighting service,

partially offset by less maintenance works carried

out by the water companies (down 8.6 million euros).

The costs of electricity, water and gas con-

sumption fell, following the change in the

consolidation percentage of Acea Energia.

In contrast, the following should be noted: i) the in-

Consolidated operating costs - 2,880.5 million

euros

The costs include:

• the cost of personnel which amounted to 280.6

million euros, in respect of average staff numbers of

7,136 in the period. The increase of 5.7 million eu-

ros compared to 31 December 2010 reflects natural

growth (up 511 average units) due to the change in

the basis of consolidation, partially offset by the vol-

untary redundancy programmes implemented by the

larger companies in the Group, and increase in av-

erage per capita costs as a result of the renewal of

employment contracts and salary policies. Changes in

the perimeter relate to:

- Acquedotto del Fiora for 5 million euros,

- Aguazul Bogotá for 3.5 million euros, as a result of

the expansion of the activities carried out by the

foreign subsidiary, including therein those provided

by Conazul,

- Acea Servizi Acqua and ISA totalling 1.6 million eu-

ros and 0.4 million euros,

- companies acquired as part of the termination of

the joint venture totalling 8.1 million euros. The

result produced, as at 31 December 2010, by the

companies sold should be deducted from this

change, owing to the different period of owner-

ship in the two years being compared (7.9 mil-

lion euros). A negative net change was recorded

amounting to 0.2 million euros. Staff costs for the

transferred companies were 2.9 million euros at 31

December 2011.

• energy, gas and fuel costs amounted to 2,034.1

million euros, a reduction of 108.5 million euros com-

pared to the corresponding period in the previous year.

The change reflects the variation in basis of consolida-

tion and includes: (i) expenses relating to the supply of

electricity for the protected and free markets, and the

market subject to additional safeguards and the as-

sociated transportation costs (up 304.4 million euros),

(ii) the cost of the purchase of gas destined for resale

and production of electricity and the cost of other fu-

els used by the plants during the period (down 378.3

million euros), (iii) expenses relating to the purchase

of green certificates, CO2 rights and white certificates


nancial contracts stipulated in 2011 by Acea Energia (up

0.3 million euros) that, following the termination of the

joint venture, assumed the role of energy management.

depreciation of property, plant and equipment

and amortisation of intangible assets as at 31 De-

cember 2011 totalled 264.7 million euros and comprises

amortisation/depreciation of 250.5 million euros (up 19.6

million euros), additional write-downs of 8.9 million eu-

ros (up 5.5 million euros) recorded by ARIA in relation

to plant parts that will be disposed of upon repowering

and the impairment of the value of goodwill and other

intangible assets of 5.4 million euros (up 2 million euros).

The increase in amortisation/depreciation is a result of

both the level of investments and the change in the basis

of consolidation.

The impairment of receivables amounted to 55.1

million euros as at 31 December 2011, marking a de-

crease of 8.8 million euros, caused mainly by lower pro-

visions made by water companies (10.9 million euros).

crease in the costs of Facility management services

provided by Marco Polo to the Parent Company (up

4.4 million euros), ii) technical and administrative ser-

vices (up 5.9 million euros) attributable to ACEA Ener-

gia and Acea8cento.

• concession fees, standing at 61 million euros, regis-

tered an increase of 3.5 million euros compared to the

previous year, for Acquedotto del Fiora (up 2.1 million

euros) and Publiacqua (up 1.6 million euros),

• costs for the use of third party assets stood at

33.3 million euros, down by 0.6 million euros over 31

December 2010 as a result of higher costs incurred for

rental expenses (up 0.8 million euros) and lower charg-

es for other hiring and leases (down 1.4 million euros);

• sundry operating costs amounted to 36.1 million

euros, essentially in line with 2010.

net income from management of commodity risk

was a negative 1.7 million euros, and refers to fair value

changes relating to the companies transferred (down 2

million euros) and to the fair value measurement of fi-

Provisions totalled 113.5 million euros and are composed as shown in the table below.

nature of the provision

Euro millions

Fy 2011 Fy 2010 increase/ (decrease)

Legal reserve 9.3 8.5 0.7

Tax reserve 0.8 0.0 0.8

Regulatory water risks 51.6 0.0 51.6

Contribution risks 8.0 2.4 5.6

Redundancy and retirement 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)

Total 101.8 37.2 64.6

Restoration charges - IFRIC12 11.7 9.9 1.7

TOTAL PROViSiOnS 113.5 47.2 66.3

With reference to GORI and ACEA Ato5, as a result of

significant events which occurred in 2011 (please see

the Consolidated Financial Statements for a description),

ACEA believes that the problem of uncertainty over the

business continuity of the aforementioned companies

has still not been overcome. For this reason, an alloca-

tion of 44.1 million euros was made to cover the risk of

uncertainty in respect of GORI and 4.8 million euros on

top of the provisions made by ACEA Ato5 to take account

of the measure issued by the Commissioner for deeds


net income from investments totalled 57.1 million

euros and mainly includes gains from the termination of

the joint venture with GDF Suez Energia Italia (47.8 mil-

lion euros) and the positive result from the fair value as-

sessment of the Acea Energia shareholding already held

by the Group (7.5 million euros).

Taxation in the period was estimated at 65.6 million

euros, with an incidence on the pre-tax result of 41.2%,

compared to an incidence of 38.5% as at 31 December

2010.

Therefore, net Group profit came to 86 million euros.

(4.8 million euros augmenting the provision of 25 million

euros allocated in 2009).

net financial expenses amounted to 120.6 million eu-

ros, marking an increase of 21.7 million euros compared

to 31 December 2010, due essentially to (i) charges re-

sulting from the discounting of receivables for 11.2 mil-

lion euros (of which 9.3 million euros relating to public

lighting and 1.8 million euros to the estimated timescale

for collection of the tariff adjustments of ACEA Ato5), (ii)

increase in the costs of the non-recourse factoring of re-

ceivables (13.4 million euros), (iii) increase in medium/

long-term debt charges (7.5 million euros), with particu-

lar 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 rec-

ognition in 2010 of interest expenses on tax disputes (3.8

million euros).


Group financial position and cash flows

ACEA GROUP

BALAnCE SHEET

31.12.2011 31.12.2010 increase/ (decrease)

increase/ (decrease)

(amounts in thousands of euros) (a) (b) (a) - (b) %

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%

- due to the municipality of Rome 160.1 113.6 46.4 40.9%

Inventories 66.1 86.0 (19.9) -23.1%

Other current assets 246.6 166.2 80.4 48.4%

Current payables (1,344.8) (1,103.1) (241.6) 21.9%

- due to Suppliers (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%

Investments 19.5 35.8 (16.3) -45.6%

Other non-current assets 416.8 299.9 116.9 39.0%

Staff termination benefits and other defined-benefit plans (104.8) (110.8) 6.0 -5.4%

Provisions for liabilities and charges (250.9) (200.8) (50.1) 24.9%

Other non-current liabilities (377.2) (333.3) (43.9) 13.2%

inVESTEd CAPiTAL 3,637.3 3,585.0 52.2 1.5%

nET dEBT (2,325.8) (2,203.7) (122.1) 5.5%

Medium/long-term loans and receivables 19.9 15.2 4.7 31.1%

Medium/long-term borrowings (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 components of invested capital and the correspond-

ing funding.

In particular, the net carrying amounts of non-current

assets and net working capital, consisting of current

receivables, other receivables, inventories, current pay-

ables and the short-term portion of long-term debt have

been added together.

The figure obtained for invested capital is then compared

with the corresponding amounts for shareholders’ eq-

uity and the net debt, thereby showing the proportions

of equity and debt used.

The financial position and cash flow, as mentioned above,

are affected by the deconsolidation of the transferred

companies as part of the Framework Agreement and the

consolidation of the financial position and cash flow re-

lating to additional shares acquired from GDF SUEZ Ener-

gia Italia S.p.A. (net of the greater intercompany elimina-

tions made necessary).

The ACEA Group’s balance sheet reports an increase in

invested capital of 52.2 million euros compared to 31 De-

cember 2010 (up 1.5%).This is the result of the increase

in net working capital (16.3 million euros), and net fixed

assets (36 million euros).


This item is primarily influenced by the change in the

consolidation basis of Acquedotto del Fiora (from the eq-

uity method to proportionate consolidation), which led

to an increase in fixed assets for 57.8 million euros at 1

January 2011.

Investments in the period for 413 million euros, net of

depreciation and amortisation and impairment (264.7

million euros), contributed to the change. Compared to

the same period of the previous year, investments in the

year fell by 60.2 million euros. The table below shows,

per Industrial Area and Company, the level of invest-

ments at 31 December 2011, compared with the same

period in the previous year.

The balance of non-current assets and liabilities

amounted to 3,548 million euros (up 36 million euros

compared to 31 December 2010, equal to 1%).

In particular:

• property, plant and equipment and intangible

assets amounted to 3,844.6 million euros, and in-

creased by 23.4 million euros over the end of the pre-

vious year.

This item is significantly influenced by the dissolution,

which led to a reduction of 103.5 million euros in the

value of fixed assets and represents the net effect of the

deconsolidation of the transferred companies and the

consolidation of the additional interest purchased from

GDF SUEZ Energia Italia S.p.A.


industrial Area Company 31.12.2011 31.12.2010 increase/ (decrease)

networks Acea Distribuzione 101.2 97.6 3.7

Acea S.p.A. – Public Lighting 0.0 8.8 (8.8)

Arse 26.3 53.3 (27.0)

Ecogena 1.5 1.4 0.0

Total networks Area 129.0 161.1 (32.1)

Energy AceaElectrabel Produzione 0.0 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)

Acea Produzione 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

Acea800 0.1 0.0 0.1

Total Energy Area 22.5 48.7 (26.2)

Environment 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)

water ACEA Ato2 149.1 133.5 15.6

ACEA Ato5 5.7 4.5 1.2

GORI 5.4 6.2 (0.8)

minor entities 0.8 0.7 0.1

Total water services - Lazio/Campania 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 0.9 0.3 0.6

Total water services – Tuscany/Umbria 68.6 56.1 12.5

Overseas Water Services 0.2 0.8 (0.6)

Total water Area 229.9 202.0 27.9

Engineering and Services

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)

ACEA GROUP TOTAL 413.0 473.2 (60.2)


ing service contract, which represents the overall in-

vestments carried out until 31 December 2010 linked

to the same service, from applying IFRIC 12 with the

financial method, and accrued income and prepay-

ments (7.1 million euros), mainly referring to white

certificate production activities.

The balance of the item, compared to the previous

year, increased by 116.9 million euros (equal to 39.0%)

mainly due to (i) the reclassification of the rights on in-

frastructure as a consequence of the entry into effect

of the supplementary agreement signed in March (49.7

million euros) and (ii) the reporting of greater deferred

tax assets (86.1 million euros) deriving from both the

provisions of the period and, especially, from the acqui-

sition of 40.59% of Acea Energia,

• €defined Benefit plans amounting to 104.8 million

euros recorded a decrease of 6 million euros com-

pared to the end of the previous year, as a result of

the net effect of:

- 3.4 million euros relating to staff termination ben-

efits,

- - 3.9 million euros relating to tariff subsidies,

- and, lastly, up 1.1 million relating to the medium/

long term Incentive Scheme

The performance of the first two items was hugely influ-

enced by both the provision for the period of 16.5 million

euros and payments made during the period resulting

from the implementation of the voluntary redundancy

procedures of ACEA, Ato2 and ACEA Distribuzione,

• the provision for liabilities and charges con-

tributed 250.9 million euros to net invested capital,

increasing by 50.1 million euros compared to the

previous year, mainly due to provisions for the period

(113.5 million euros), net of uses (totalling 64.2 million

euros) of sums set aside in previous years to cover

mobility, disputes and litigation and tender risks. For

more details on the type of provisions made during

the period, please see note no. 4 of the Consolidated

Income Statement.

As at 31 December 2011 the provision for liabilities and

charges mainly included: (i) 27.8 million euros for the

assessment of legal and tax risks (litigation matters, dis-

putes, etc.), (ii) 78 million euros for the estimate of risks

related to the management of subsidiaries and/or for-

The change is determined by the decrease in the invest-

ments of all Industrial Areas (88.1 million in total), with

the exception of the Water Area which made higher in-

vestments of 27.9 million euros compared to the same

period in the previous year. The increase is mainly at-

tributable to companies operating in the Lazio - Campa-

nia area, particularly ACEA Ato2 (up 15.6 million euros);

companies operating in the Umbria - Tuscany area also

recorded an increase in investments, essentially due to

the consolidation of Acquedotto del Fiora (9.2 million

euros).

The Networks Area recorded a decrease of 32.1 million

euro, mainly relating to the start of marketing of pho-

tovoltaic panels, with a reduction of activities involving

the acquisition of ARSE assets (down 27 million euros);

investments were also eliminated relating to the Public

Lighting Contract, due to the definitive adoption of the

financial model in place of the mixed model (IFRIC 12).

Investments in the Energy Area fell by 26.2 million eu-

ros due to the deconsolidation of the companies trans-

ferred. The investments made in 2011 by Acea Produz-

ione total 11.2 million euros, and mainly refer to the

repowering of the hydroelectric plants of Orte and Sali-

sano and district heating.

The Environment Area recorded a reduction in invest-

ments compared to 31 December 2010 (down 27.8 mil-

lion euros) due to the entry into operation of the second

and third lines of the San Vittore del Lazio WTE plant.

Parent Company investments refer to investments in

hardware needed for projects for the improvement and

development of the IT network, implementation of the

site video surveillance system and enhancement of

websites and the billing system in use at some subsid-

iaries.

• €investments stood at 19.5 million euros, and de-

creased by 16.3 million euros mainly due to change

in the consolidation criteria of Acquedotto del Fiora,

from the equity method to proportionate consolida-

tion. The value of the investment entered at 31 De-

cember 2010 amounted to 18.5 million euros,

• €thebalanceofother non-current assets (equalling

416.8 million euros) is mainly made up of deferred tax

assets (353.6 million euros), long-term receivables

of 53.4 million euros deriving from the Public Light-


As at 31 December 2011, net working capital

amounted to 89.3 million euros, an increase of 16.3 mil-

lion euros compared to 31 December 2010. The growth

is linked both to the 185.5 million euros increase in

current receivables (14%) and the 80.4 million euros

increase in other current assets (up 48.4%) and to the

increase in current debt of 241.6 million euros (21.9%),

the increase in other current liabilities of 11.9 million

euros (3%) and reduction in inventories of 19.9 million

euros (23.1%).

As regards the breakdown of receivables, please note

the increase in users and customers of 133.8 million

euros, equal to 11.4%, and the increase in trade receiv-

ables from the municipality of Rome of 46.4 million eu-

ros (40.9%).

The change of the net working capital is affected by the

dissolution.

• €Withreferencetothe133.8millioneurosincreasein

receivables due from end users and custom-

ers, please note that:

- the Networks Area companies increased their re-

ceivables by a total of 7.8 million euros, including

up 29.8 million euros due to Arse and - 23.3 mil-

lion euros due to ACEA Distribuzione. Three non-

recourse factoring operations were completed dur-

ing the year for 27.9 million euros, and receivables

deemed uncollectible written off amounting to 19.5

million euros;

- with reference to the Energy Area, please note that

the trend of the period is substantially affected

by the change in the basis of consolidation. The

amount of receivables fell by 51 million euros as

at 31 December 2010; this variation is due to (i) the

elimination of the receivables of the transferred

companies (for a total of 179.6 million euros) and

(ii) the increase in receivables of the Acea Ener-

gia Group due to the greater consolidated share

compared to 2010 (up 317.5 million euros). ACEA

Energia carried out the non-recourse factoring of

receivables for a total of 695.8 million euros, and

wrote off uncollectible receivables, which are fully

covered by the Provision for the impairment of re-

ceivables for 16.7 million euros.

mer subsidiaries, including the risks related to the situ-

ation of uncertainty and recovery of tariff adjustments

of ACEA Ato5 and GORI (73.9 million euros) (iii) 25.6 mil-

lion euros for potential liabilities and charges related

to staff, including therein disputes over contributions;

(iv) 8.5 million euros for risks for possible disputes with

suppliers or losses on contracts; (v) 15.4 million euros

essentially relating to the evaluation of post-closure

charges connected with the management of the SAO

waste dump (Orvieto), (vi) 11.7 million euros for total

borrowings that Gori is bound to pay to the municipali-

ties in accordance with the Area Plan; (vii) 12.6 million

euros deriving from charges relating to redundancy

schemes; (viii) 1.4 million euros for risks related to the

recovery of plant efficiency; (ix) 2.7 million euros for the

litigation that arose between GORI and the Campania

Region related to water supply; (x) 4.3 million euros

for risks linked to projects to be carried out (suppliers);

(xi) 54.5 million euros for the allocation to the provi-

sion for restoration charges pursuant to IFRIC 12. ACEA

maintains that the settlement of ongoing disputes and

other potential disputes should not create any addi-

tional 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 more information, please refer to the Notes to the

2011 Financial Statements, and in particular, the section

entitled “Update on major disputes and litigation”,

• €other non-current liabilities contribute 377.2million

euros to the reduction in net invested capital and,

compared to 31 December 2010, increased by 43.9

million euros (up 13.2%). This item consists of:

- provision for deferred taxes of 98.8 million euros

(down 6.9 million euros)

- advances of 130 million euros (up 34 million euros):

this item includes the amount of guarantee depos-

its and consumption advance subject to adjust-

ment by water service companies,

- grants related to assets of 66.8 million euros (up

9.2 million euros due to the proportionate consoli-

dation of Acquedotto del Fiora),

- long-term deferred income of 26.7 million euros

(up 3.2 million euros).


by other receivables (up 109.6 million euros) and

(iii) 9.5 million for accrued income and prepayments

(down 5.6 million euros) and for 0.7 million euros from

receivables deriving from the fair value measurement

of commodities.

- Current tax assets decreased substantially due

to the elimination of tax credits posted in the trans-

ferred companies, which leads to a change of -28.4

million euros.

- Other receivables changed substantially com-

pared to the end of the previous year, and were

affected by the change in the basis of consolidation

linked to the dissolution of the joint venture. Spe-

cifically, the item decreased for a total of 16.4 mil-

lion euros due to the deconsolidation of the trans-

ferred companies and increased by 28.1 million

euros as a result of the line-by-line consolidation

of the ACEA Energia Holding group companies; fur-

thermore, other receivables of Acea Ato5 recorded

an increase of 58.1 million euros, in relation to the

amount of tariff adjustments - classified under re-

ceivables due from customers in 2010 – quantified

definitively by the measure of the Commissioner

for deeds, which ACEA Ato5 was informed of on

9 March 2012. As at 31 December 2010, the post-

netting amount of ACEA Distribuzione receivables

due from ACEA Energia, totalling 10.9 million eu-

ros, was also included in the balance of other re-

ceivables, and was generated by the return of the

amount that was paid to the Equalisation Fund and

the Electricity Operator in the name and on behalf

of ACEA Energia.

Please see note 22 of the Consolidated Financial State-

ments for the analysis of the other receivables item.

In relation to current payables, standing at 1,344.8

million euros, the increase of 241.6 million euros com-

pared to the previous year reflects:

• the 198.5 million euros increase in trade payables,

which amounts to 1,185 million euros due both to the

deconsolidation of the transferred companies, which

led to an overall decrease in payables of 219.6 million

euros, and to the decrease in trade payables for all

Industrial Areas, particularly the Networks Area (down

- companies in the Water Area recorded an overall

decrease of 47.1 million euros, due essentially to

ACEA Ato2 (down 49.7 million euros), Acea Ato2

(down 12.5 million euros), partially offset by GORI

(up 7.7 million euros); a rise of 3.6 million euros was

also recorded in the receivables of water compa-

nies in Tuscany and Umbria, of which 11.4 million

euros refer to Acquedotto del Fiora, 3.1 million eu-

ros to Acque, 1.4 million euros to Umbra Acque, par-

tially offset by Publiacqua for - 11.2 million euros.

In the January – December period, ACEA Ato2 car-

ried out the non-recourse factoring of receivables

for a total of 284.7 million euros and wrote off re-

ceivables totalling 7.1 million euros;

- the Environment Area companies contribute to the

growth of receivables for 27.4 million euros; this

change is influenced mainly by the Aria Group (up

27.9 million euros), deriving essentially from the

sale of electricity to GSE.

• As regards amounts due from and to Roma Capi-

tale (including financial items) net receivables of 144

million euros due to the Group from Roma Capitale

were recorded, which stood at 113.7 million euros at

the end of the previous year. For more details on the

formation and change in the position towards Roma

Capitale, please see note no. 22 of the notes to the

Consolidated Balance Sheet.

• inventories reached 66.1 million euros, down by 19.9

million euros, due to the deconsolidation of the trans-

ferred companies, which implies an overall decrease

of 26 million euros, particularly for the gas stored in

the AceaElectrabel Trading warehouse (down 18.5

million euros) and Tirreno Power’s available stocks

(down 8.9 million euros). The Networks Area recorded

an increase of 5.7 million euros, mainly due to activi-

ties underway for the construction of Arse’s photovol-

taic plants (up 7.4 million euros).

• Other current assets, amounting to 246.6 million

euros, increased by 80.4 million euros and are com-

posed as follows (i) 57.1 million euros for current tax

assets (up 14.4 million euros) (ii) 179.3 million euros


net debt was a negative 2,325.8 million euros as at 31

December 2011, marking an increase of 122.1 million

euros compared to 31 December 2010.

The breakdown is shown in the following table:

55.9 million euros),

• the increase in amounts due to Roma Capitale

(36.6 million euros); for more information, please see

the comments in note no. 22 to the Consolidated Bal-

ance Sheet.

Other current liabilities stood at 388.7 million euros

at the end of the year, which is an increase of 11.9 mil-

lion euros since the end of the previous year (3%).

COnSOLidATEd nET dEBT

Euro millions 31.12.2011 (a) 31.12.2010 (b) increase/ (decrease) (a)-(b)

Non-current financial assets/(liabilities) 1.9 10.2 (8.3)

Intercompany non-current financial assets/(liabilities) 18.0 5.0 13.0

Non-current borrowings and financial liabilities (2,298.9) (2,490.7) 191.8

Medium/long-term borrowings (2,279.0) (2,475.5) 196.5

Cash and cash equivalents and securities 321.1 297.8 23.3

Short-term bank borrowing (448.9) (208.8) (240.1)

Current financial assets/(liabilities) (26.8) (87.8) 61.0

Intercompany current financial assets/(liabilities) 107.7 270.6 (162.9)

net short-term debt (46.9) 271.8 (318.7)

Total net debt (2,325.8) (2,203.7) (122.1)

The dissolution of the JV with GDF SUEZ Energia Italia

significantly affected the result of the financial expo-

sure of the ACEA Group.

The overall impact of the operation on consolidated net

debt, stands at 208.5 million, including the cash-ins and

cash-outs set out in the Framework Agreement: the

amount also includes the effects of minimum tempo-

rary adjustments and does not include the non-financial

items that were equalised (other debt like).

More specifically, the deconsolidation of transferred

companies decreased net debt by a total of 366.5 mil-

lion euros; conversely, the consolidation of additional

shareholdings acquired led to a 151.5 million euros

increase in the Group’s debt. This is in addition to the

ACEA’s net outlay of 8.2 million euros and net receiv-

ables deriving from minimum temporary adjustments of

1.7 million euros.

Excluding the effect described above, growth of 330.6

million euros is recorded, of which 37.5 million euros re-

fers to the change in the basis of consolidation caused

by Acquedotto del Fiora.

The difference of 187.2 million euros mainly derives from

covering the need due to dividends distributed (126.2

million euros), for investments in the PV area and in

waste-to-energy, the payment of 11 million euros as an

advance on the purchase of the site and implementation

of the redundancy scheme, which involved outgoings of

14.5 million euros in 2011.

The individual components break down as follows.

Medium/long-term borrowings are composed of:

• €non-currentfinancialassets/(liabilities)amountingto

1.9 million euros, which fell by 8.3 million euros with


As at 31 December 2010, the balance of 5 million eu-

ros included loans granted to Group companies and

the balance was reduced to zero as a result of the

different basis of consolidation.

• €Non-current borrowings and financial liabilities

amounted to 2,298.9 million euros, including the fair

value of hedging instruments for a positive 11.1 mil-

lion euros.

The table below shows the breakdown of the item net of

the fair value of hedging instruments.

respect to 2010, mainly due to the deconsolidation of

Tirreno Power’s VAT credit,

• €intercompanyfinancialassets/(liabilities)of18million

euros, and include financial receivables 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 receivable relates to the long-term por-

tion deriving from application of the financial method

as per IFRIC 12 regarding concession arrangements.

Euro millions 31.12.2011 31.12.2010 increase/ (decrease)

Bonds 988.7 978.7 9.9

Medium/long–term loans 1,310.3 1,509.2 (198.9)

Medium/long–term loans from third parties 0.0 2.8 (2.8)

Total 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 31/12/2011 31/12/2010 increase/ (decrease)

ACEA 1,784.4 1,788.3 (3.9)

Networks 363.7 378.6 (14.9)

Energy 0.0 191.2 (191.2)

Water 144.5 124.8 19.7

Environment 6.3 7.8 (1.6)

TOTAL 2,298.9 2,490.7 (191.8)

BondsBonds equal 988.7 million euros and include the instru-

ments already existing at the end of the previous ac-

counting year, in particular:

• €303.2millioneurosrefertothebond loan issuedby

ACEA in 2004, with interest of 6.5 million euros ac-

crued in the period,

• €517.3millioneuros(includingtheaccrualofaccrued

interest due) due to the bond loan issued by ACEA

in March 2010 with a 10-year duration and maturity

term on 16 March 2020,

• €200million euros relating to the Private Placement

which, net of the fair value of the hedging instrument,

a positive 34.7 million euros, amounts to 165.3 million

euros. As at 31 December 2011, this fair value was

allocated to a specific shareholders’ equity reserve.

The exchange rate difference, a negative 15.5 million

euros, of the hedged instrument calculated at 31 De-

cember 2011 was therefore allocated to an exchange

provision. The exchange rate as at 31 December 2011

stood at 100.20, whilst it stood at 108.65 as at 31 De-

cember 2010; various fluctuations were recorded dur-

ing the year: in March it was 117.61, 116.25 in June

and 103.79 in September.

• €2.8millioneurosregardingtheissueofthebondloan

issued by Consorcio Agua Azul.


result of the proportionate consolidation of the Compa-

ny Acquedotto del Fiora, the medium–long term loans of

the ACEA Group grew by 6.7 million euros.

The following table shows medium/long–term borrow-

ings by term to maturity and type of interest rate:

Medium/long-term loans and receivablesThe item at 31 December 2010 included medium–long

term loans and the related hedges stipulated with the

companies being transferred, such as Tirreno Power (for

144.1 million euros), Voghera Energia (for 43.5 million

euros) and Longano Eolica (for 2.6 million euros). As a

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

Total 1,384.6 74.4 720.5 589.8

Medium/long–term loans from third parties

At 31 December 2011, medium/long–term loans from

third parties are completely eliminated, as a conse-

quence of the dissolution.

As at 31 December 2011, the short-term debt was

negative, and contributed to the increase of 46.9 million

euros in net debt. With respect to 31 December 2010, a

decrease of 318.6 million euros was recorded, caused

by:

• €an increase of 23.3million euros in cash and cash

equivalents,

• €growthinshort-termbankdebtof240.1millioneuros

due to the increase registered by ACEA (190.4 mil-

lion euros), which stipulated new lines of bank credit,

debt contributed by the proportionate consolidation

of Acquedotto del Fiora (34.7 million euros) and the

growth of the Acea Energia Group (8 million euros),

• €the reduction of 61million euros in the balance of

current financial liabilities as a result of the change in

the basis of consolidation, with particular reference

to companies transferred (down 91.6 million euros),

partially offset by the increase in payables deriving

from the consolidation of greater equity investments

acquired for total payables of 26.8 million euros;

• €reducedintercompanycurrentfinancialassets(162.9

million euros) due to the changed basis of consoli-

dation connected with the termination of the joint

venture with GDF SUEZ Energia Italia. In fact, at the

closing date, the shareholder loans granted by ACEA

to Roselectra and Voghera (which amounted to 33.7

million euros at 31 December 2010) and AceaElectra-

bel Trading (for 1 million euros) were settled, as well

as the inter-company current account balances with

the Parent Company that, at the end of 2010, equalled

18.1 million euros. ACEA loans and receivables from

Roma Capitale for the management of public lighting

were recorded under said item (114.7 million euros).

The performance of debt in the individual Industrial Ar-

eas is summarised in the table below:


industrial Area 31/12/2011 31/12/2010 increase/ (decrease)

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 218.7 200.8 18.0

TOTAL 2,325.9 2,203.7 122.2

networks industrial AreaNet debt in the period came to 853.8 million euros, an

increase of 94 million euros over the end of the previous

year as a result of the following macro events: increase

in receivables due from the municipality of Rome for the

public lighting service, increase in ACEA Distribuzione re-

ceivables and higher requirement in relation to the pur-

chase of Arse’s photovoltaic panels.

Energy industrial AreaNet 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 ven-

ture with GDF SUEZ Energia Italia;; the financial exposure

of the companies transferred as at 31 December 2010

amounted to 313.9 million euros

The total impact of the operation on the Area’s net debt

at the closing date was 202 million euros, including the

cash-in set forth in the Framework Agreement: this

amount partially includes the effects of the adjustments,

currently being defined, and does not include non-finan-

cial items subject to equalisation (other debt like).

water industrial Area (including therein the Engineering and Services department)The Management of water Services in italy closed

the year with a level of net debt equal to 626.5 million

euros: the 108 million euros increase over the end of the

previous year is mainly a result of the consolidation of

Acquedotto del Fiora, which contributed 37.5 million eu-

ros in debt. The remaining part of the increase is due to

67.7 million euros from ACEA Ato2 (need generated by

investments and distribution of dividends in 2010) and

17.3 million euros in investments made by Acque.

The net debt of overseas companies was zero, falling

by 1.7 million euros compared to the end of the previous

year, mainly due to Aguazul Bogotà.

So, overall, the area’s debt came to 633.8 million euros

and grew by 110.2 million euros over the end of the pre-

vious year. The increase is broken down as follows:

• Management of water services in Lazio and Campania

+60.0millioneuros

• Management of water services in Tuscany and Umbria

+47.9millioneuros

• Management of Overseas Water Services

- 1.7 million euros

• Engineering and services

+3.9millioneuros.

Environment industrial AreaNet debt for the period amounts to 218.7 million euros

and is up by 18 million euros compared to the end of the

previous year, mainly due to the requirement resulting

from the construction of the second and third lines of the

San Vittore plant.

Interest expense accrued during the year on the medium/

long-term line of 9.1 million euros, including 2 million eu-

ros capitalised on the I, II and III lines of the San Vittore

plant.

CorporateNet debt in the period totalled 389.6 million euros, up

by 82.9 million euros due to: i) dividends of 95.8 million

euros distributed during the year relating to 2010 and

30.4 million euros for the 2011 advance, ii) payment of

the advance for the site purchase for 11 million euros,

iii) payment of the expenses relating to redundancy pro-

cedures of 2.9 million euros and (iv) payment of instal-

ments due in respect of the tax settlement for a total of

13.4 million euros.


Other Information

Performance of the international stock markets and of the ACEA shareInternational stock markets recorded a negative trend

in 2011, primarily as a result of the sovereign debt cri-

sis in certain countries and risk of recession. The US

stock market bucked the trend, where the Dow Jones

recorded growth of more than 5%.

The year just ended was characterised by the follow-

ing main socio-political events which had a significant

impact on the global economy and performance of the

stock markets: (i) political unrest in the Middle East and

North Africa; (ii) the violent earthquake which struck

Japan and the resulting nuclear catastrophe in Fuku-

shima, which forced governments worldwide to recon-

sider atomic energy policies; (iii) the killing of Osama Bin

Laden in May.

These events determined, among other things, a rise in

the price of oil, which contributed to the slowdown in

the recovery of the global economy.

In 2011, the sovereign debt ratings of certain countries

continued to be downgraded by the three main ratings

agencies: Moody’s, Standard & Poor’s and Fitch. The

revision of credit ratings, political and economic ten-

sions in the Euro zone, the crisis in the financial sector

and fears over Greece’s potential default heightened

the emergency regarding European sovereign debt.

This situation led, in the second half of the year, to a

significant increase in “country risk” in Italy, causing a

significant increase in the return differential between

10-year Italian government bonds and the correspond-

ing German securities by more than 500 basis points.

The spread performance and political ups and downs

which concerned Italy adversely impacted the Stock

Market, which recorded an extremely high level of vola-

tility and the FTSE MIB fell by more than 25%. More spe-

cifically, the Italian Stock Market underperformed the

international stock market lists, recording the following

changes: FTSE Italia All Share -24.3%, FTSE MIB -25.2%

and FTSE Italia Mid Cap -26.6%.

inTERnATiOnAL STOCk MARkETSWith reference to the US Stock Market, as at 31 De-

cember 2011 (compared to 31 December 2010), the

ACEA S.p.A activities ACEA S.p.A., in its role of industrial holding, defines the

strategic objectives at Group and subsidiary level and co-

ordinates their activities.

Within the Group, ACEA S.p.A acts as a centralised trea-

surer for the largest subsidiaries.

Intercompany relations are conducted on the basis of:

• thesettingupofamedium/long-termcreditlinefora

pre-established amount to cover requirements gener-

ated by investments.

• Thecredit line (i)hasa three-year termstartingon1

January 2011, (i) generates interest at a rate which is

updated annually, equal to the 3-year IRS plus a spread

in line with that of a bond issued on the equities market

with a BBB rating and (ii) makes provision for an annual

credit line commission calculated on the ceiling,

• theestablishingofageneralpurposecreditfacilityto

cover the company’s current needs.

The credit line (i) has a three-year term starting on 1 Janu-

ary 2011, (i) generates interest at a rate which is updated

annually, equal to the 3-year IRS plus a spread in line with

that of a bond issued on the equities market with a BBB

rating and an active rate calculated on the basis of the

arithmetic mean of the daily 3-month EURIBOR rates in

each calendar quarter less a spread of 5 basis points and

(ii) makes provision for an annual credit line commission

calculated on the ceiling.

It should be pointed out that ACEA SpA also acts as guar-

antor for Group companies: in this regard, the contract

that regulates the general purpose credit line establishes

a ceiling for guarantees and a cost split between bank

guarantees and company guarantees.

ACEA SpA also provides administrative, financial, legal,

logistics, management and technical services to subsid-

iaries and associated companies in order to optimise the

use of the company’s existing resources and know-how

in an economically advantageous manner. These ser-

vices are regulated by the necessary service contracts:

those in force are effective from 1 January 2011, have

a term of three years with the possibility of automatic

renewal and the annual payment is based on contractual

prices and the quantities actually supplied.


lating the water tariff, based on the return on invested

capital; 2) repeal of art. 23 bis of Legislative Decree no.

112/2008 (so-called “Ronchi” decree) which made provi-

sion for the privatisation of the water sector and which

offered Italian local utilities opportunities for develop-

ment.

After the Referendum, the financial community ex-

pressed worries about the reduction in visibility regard-

ing regulation of the water market, highlighting the need

for prompt legislative intervention by the government.

Within said context, ACEA’s share price stood at 4.888

euros as at 31 December 2011 (capitalisation: 1,041.0

million euros), down 41.97% compared to 31/12/10. In

2011, a high of 8.5797 euros was recorded on 11 May,

with a low of 4.596 euros recorded on 20 December.

During the year subject to analysis, average daily traded

volumes amounted to 251,780, a considerable decrease

compared to 2010 (515,410).

Dow Jones recorded growth of 5.5%, the Nasdaq C. a

decrease of 1.8%, while the S&P500 remained essen-

tially unchanged.

The Asian Stock Market indexes recorded the follow-

ing performances: Nikkei 225 -17.3%, Hang Seng Hong

Kong -20.0%.

In Europe, the Paris Stock Exchange lost 17.0%, the

London Stock Exchange 5.6% and the Frankfurt Stock

Exchange 14.6%.

ACEA SHARE PERFORMAnCEThe extreme fragility of the Italian economic situation

also affected securities which belong to the utilities sec-

tor, that have always been considered “defensive”.

In the second half of the year, Acea’s share performance

was also adversely affected by the outcome of the Refer-

endum on 12/13 June, relating to the Water Area, which

involved: 1) the repeal of the current method of calcu-

Euro

02.2010 04.2010 06.2010 08.2010 10.2010 12.201012.2009

9.5

9.0

8.5

8.0

7.5

7.0

6.5

Acea

Acea shares

(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.

The normalised graph of ACEA’s share performance is shown below, compared with Stock Market indexes.

(graph normalised at Acea values – Source: Bloomberg)

Euro

02.2010 04.2010 06.2010 08.2010 10.2010 12.201012.2009

10.0

9.5

9.0

8.5

8.0

7.5

7.0

6.5

6.0

5.5

5.0

4.5

4.0

Acea

FTSE Italia Mid Cap

FTSE Italia All Share

FTSE Mib


Significant events in 2011

dends resolved by Eblacea for 1.8 million euros;

c. ACEA purchased from GSEI the financial receivables

due to the latter from AEP against a fee, equal to the

value of the principal and interest accrued until the

Date of Execution, of 25.1 million euros.

As part of the dissolution of the JV, the Framework Agree-

ment envisages a series of additional understandings. In

particular:

1) aside from the necessary authorisations of the com-

petent public entities within the limits these authori-

sations are necessary pursuant to applicable regula-

tions, ACEA granted GSEI a right of first offer on the

hydroelectric plants of Castel Madama, Cecchina, M.

del Rosario, Mandela, Orte, Salisano, Sant’Angelo in

the event of sale within 3 years from the Date of Ex-

ecution. On the Date of Execution GSEI paid ACEA 5.0

million euros as the fee for the transfer of the above

mentioned right of first offer,

2) GSEI will have the right to participate in the project be-

ing studied only with regard to the CHP unit of the Tor

di Valle plant, as amended, and any other repowering

project regarding the Tor di Valle plant, with the sole

exception of district heating-related activities, if the

project is started within two years from the Date of

Execution,

3) Aside from the necessary authorisations of the com-

petent public entities within the limits these authori-

sations are necessary pursuant to applicable regula-

tions, ACEA granted GSEI a right of first offer on the

investment owned by ACEA through Acea Energia

Holding in Acea Energia, in the event of sale within

3 years from the Date of Execution. On the Date of

Execution GSEI paid ACEA 2.5 million euros as the fee

for the transfer of the above mentioned right of first

offer,

4) GSEI granted ACEA an irrevocable and unconditional

option, to be exercised by 30 September 2011, to

subscribe a five-year electricity supply agreement for

5TWh per year.

The sale of Eblacea and Tirreno Power as well as that

of the AceaElectrabel Produzione group, and the acquisi-

tion of 40.59% of the Acea Energia Holding Group, are

subject to adjustment in compliance with the Frame-

work Agreement.

Termination of the joint venture agreement between ACEA and GdF Suez Energia italiaThe joint venture agreement signed between ACEA and

GDF Suez Energia Italia (GSEI) in 2002 was terminated on

31 March 2011.

The Framework Agreement, signed on 16 December

2010 between ACEA and GSEI, envisaged the execution

of a series of operations to be implemented in a single

context.

In particular at the Date of Execution (i) ACEA purchased

from GSEI an interest representing 40.59% of the share

capital of Acea Energia Holding S.p.A.; (ii) following the

non-proportional demerger of GDF SUEZ Produzione

S.p.A. (formerly AceaElectrabel Produzione S.p.A.), the

assets and activities that are functional to manage the

hydroelectric plants and thermoelectric plants of Tor di

Valle and Montermartini were allocated to the company

established at the same time, Acea Produzione S.p.A.,

whose share capital is entirely held by Acea Energia

Holding S.p.A.; (iii) ACEA transferred to GSEI an interest

representing 30% of the share capital of GDF SUEZ Hold-

ing di Partecipazioni S.p.A. (formerly Eblacea S.p.A.), in

turn holder of 50% of the share capital of Tirreno Power

S.p.A.; and (iv) Acea Energia Holding S.p.A. transferred to

GSEI an interest representing 84.17% of the share capital

of GDF SUEZ Energy Management S.p.A. (formerly Ace-

aElectrabel Trading S.p.A.).

Regarding the value of the interest sold and purchased,

please note that:

a. for the purchase of 40.59% of the share capital of

Acea Energia Holding, ACEA paid GSEI 123.9 million

euros,

b. for the sale of 30% of the share capital of Eblacea,

ACEA collected from GSEI a fee of 108.2 million euros;

c. for the sale of 84.17% of the share capital of AET, Acea

Energia Holding collected from GSEI a fee of 33.7 mil-

lion euros.

Additional transactions were as follows:

a. ACEA transferred to GSEI the loans and receivables

due from Roselectra, Voghera and AET against a fee,

equal to the value of the principal and interest accrued

until the Date of Execution, of 49.2 million euros;

b. ACEA transferred to GSEI the receivables for the divi-


model for the public lighting service in the municipality

of Rome is currently being redesigned and the tender

contract in place with the Parent Company is being ad-

justed.

Piano della Luce (Lighting Plan)In the period under observation, towards the end of last

year, activities were launched by the Rome Municipal Ad-

ministration and ACEA top management relating to the

so-called Lighting Plan for Roma Capitale.

On 3 August 2010, Municipal resolution no. 252 defined

and officially approved the purposes and implementa-

tion timing of the Plan, which should affect streets, ar-

eas and locations in the municipality of Rome (previously

registered) which are partially or totally lacking lighting,

or that have lighting systems that should be improved,

in order to guarantee mobility and safety to residents.

Approximately 3,600 public lighting facilities, distrib-

uted along a network of over 1,400 km were identified,

including roughly 52,000 lighting points according to a

tentative estimate. In addition, in implementation of the

Directives regarding energy savings and environmen-

tal pollution, the Plan makes provision, where possible,

for favouring the use of LED technology, given that said

decision - please see the text of the Resolution: “owing

to its improved lighting efficiency, its chromatic perfor-

mance and the longer duration over time of LED equip-

ment, allows for decreasing both energy consumption

together with the emission of CO2 into the atmosphere,

and system management and maintenance costs”. Be-

tween 23 August 2011 and 31 December 2011, the Plant

Development Organisational Unit implemented systems

on 133 streets pertaining to the 5th, 13th and 20th sub-

municipalities of the municipality of Rome, carrying out

excavation works extending more than 61km, part of

which performed using non-invasive technology known

as “microtunneling” (which allows a smaller excavation

section, reduced extension sites with discernible advan-

tages in terms of the road network and reduction in dis-

ruption caused to citizens).

The total number of lamps installed came to 3,137, 876

of which with LED technology, the remainder with SAP

(high pressure sodium) technology, with power of be-

tween 100 and 250 W.

Activities related to calculating that adjustment are still

ongoing, since the parties are currently analysing the

different respective items.

This transaction, that exceeds the thresholds of rele-

vance set out by the Company with regard to Related

party transactions, was approved by the Board of Di-

rectors during the meeting held on 25 November 2010,

having obtained the favourable opinion of the Commit-

tee for related party transactions beforehand.

Relations with Roma Capitale: Public lighting serviceOn 15 March 2011 ACEA and Roma Capitale agreed an

adjustment to the Public Lighting Service Contract.

The key points of the renegotiations are:

• extension of the contract until 2027, making it con-

sistent with the concession, therefore extending the

remaining term from 4 years and 5 months to 17

years;

• the revision of the contractual parameters, bringing

them into line with the CONSIP specifications of the

“Servizio Luce 2” tender;

• the certainty of the entity to be able to directly carry

out activities related to network expansion which, in

line with the previous version of the contract, were

subject to tender for Roma Capitale;

• the recognition, on maturity of the contract, whether

natural or not, of the non-amortised value of the in-

vestments made by Acea (no provision was made for

said recognition in the previous version);

• the sterilisation of the so-called “risk-price” of elec-

tricity to power the public lighting plant; in 2011,

the clause allowed the recovery of around 3 million

euros which, with the previous version of the con-

tract, would have had a negative impact for the same

amount on the operating result;

• the provision of an indemnity in favour of Acea in

the event of the early termination of the contract

by Roma Capitale, calculated on the basis of mar-

gins discounted for the years until maturity (or 31

December 2027).

In light of the new contractual structure and organ-

isational changes made in the Group, the operating


type of resources used). Said provision also introduced

a 4% increase in the surcharge rate for the three-year

2011-2013 period (from 6.5% to 10.5%).

In the event the parameters set forth by said law are

exceeded, the surcharge in question will therefore apply

to ACEA Distribuzione and ARSE plus Acea Produzione,

Acea Energia and ARIA.

Said amendment, calculated on the potential perimeter,

involves a higher annual expense for the ACEA Group,

estimated in current tax terms at around 13 million euros

for the three-year 2011-2013 period.

Medium/long–term incentive plansBy means of a resolution adopted on 16 September

2010, the Remuneration Committee approved the sec-

ond cycle (2010–2012) of the Long-Term Incentive Plan

set up in 2007.

The structure of the plan and premium calculation meth-

ods remains unchanged, while the perimeter of benefi-

ciaries of the plan was redefined following the organisa-

tional changes which occurred at the start of the first

cycle.

This long-term incentive plan is aimed at the ACEA

Group’s top management and executives; the Plan’s

goals are as follows:

a. providing incentives for management to achieve eco-

nomic and financial targets at the Group level for the

benefit of shareholders, thereby bringing manage-

ment’s objectives into line with those of the Group’s

shareholders; and

b. boosting management loyalty.

The Plan envisages a cash payment to be calculated as

a percentage of the Gross Annual Remuneration (GAR) of

beneficiaries (the CEO and ACEA S.p.A.’s senior execu-

tives) and based on the achievement of pre-established

economic and financial targets. The amount of benefits

will be (i) based on the GAR at 31 December of each year

of the relevant cycle; (ii) cumulative over the three years

of each cycle; and (iii) eventually paid only at the end of

the third year of each cycle.

Receipt of the benefits is dependent on the achievement

of performance targets to be established each year by

the Remuneration Committee, and is subject to benefi-

With the exception of a section of Via Ara delle Rose

(which envisaged the completion of a pre-existing sec-

tion with steel posts), fibreglass supports were used, a

material which ensures better resistance to corrosion

than traditional steel posts.

During the execution of the works, audits were conduct-

ed to verify the level of site safety. Only slight non-con-

formities were recorded, which were quickly resolved.

As at December 2011, no “near misses” were recorded

at any of the sites managed.

Aside from the works realised, a further 360 lighting

points were planned, which cannot be completed at

present due to technical reasons unrelated to the struc-

ture, such as, for example, authorisations not granted

by third party entities (Arsial) or works that, as a result

of the geological surveys, can only be performed after

obtaining express authorisation from Roma Capitale as

regards coverage of the necessary higher expenses.

Advance on 2011 dividend As at 29 November 2011, ACEA SpA’s Board of Directors

resolved the distribution of an advance on the ordinary

2011 dividend of 0.28 per share.

This decision regarding the advance on the 2011 dividend

was taken on the basis of the accounting situation of the

Acea Group as at 30 September 2011 in light of the busi-

ness outlook for the year in progress.

On 29 November 2011, Independent Auditors Reconta

Ernst & Young issued a judgment as set forth by article

2433 of the Italian Civil Code.

Robin Hood TaxOn 14 September 2011, Decree Law no. 138 of 13 August

2011, the so-called “manovra correttiva bis” (corrective

financial measure) was converted to law, which makes

provision, inter alia, for the amendment to the regulation

of the IRES surcharge (so-called “Robin Hood Tax”).

The law extended the IRES surcharge of 6.5%, in addition

to the sectors already hit by the tax, to other operators in

the electricity transmission, dispatching and transporta-

tion sectors and to entities operating in the production

of electricity from renewable sources (regardless of the


stating that the analysis of the documents collected

showed the essentially correct application of the provi-

sions subject to inspection.

In VIS 99/11, on closing of the enquiry launched by

means of AEEG resolution VIS 42/11 of 16 March 2011 on

the provision of the grid connection service for electric-

ity production plants by the grid operators, AEEG com-

municated, with Vis 44/11, that “the inspection at Acea

concluded successfully, with no significant anomalies

identified”.

ViS 60/11With resolution VIS 60/11 of 26 May 2011, submitted to

ACEA Distribuzione on 22 June 2011, AEEG launched a

proceeding against the company for the investigation of

violations related to recording electricity distribution ser-

vice outages.

This proceeding was generated by reports made by

some customers to AEEG and to the Consumer Protec-

tion Office related to outages without advance warning

in the supply of electricity for condominium use, which

occurred on 22 August 2009. As a result of the requests

for information submitted by the Consumer Protection

Office, ACEA Distribuzione submitted documentation

many times regarding the recording of outages relative

to the users in question, as well as detailed news on the

status of the plants involved and the technical reasons

for the outage.

The Consumer Protection Office transmitted this infor-

mation to the applicable AEEG offices, which recognised

sufficient grounds for the opening of the case being

discussed. The company intends to prepare a defence

document on the occurrence, to be provided to the same

AEEG Offices. The proceeding is still in progress.

ViS 24/10VIS 24/10 of 19 April 2010 replaced VIS 72/09 of 17 July

2009 as regards the disputes over the completeness and

promptness of transmissions of metering data to suppli-

ers, and on the adequacy of the IT media used for said

purpose, representing an additional cause for non-com-

pliance owing to the alleged delay in the time treatment

ciaries meeting certain conditions.

In particular, the first cycle envisages payment of a bonus

for each indicator based on achievement of the perfor-

mance target set.

The indicators are:

• GrossOperatingProfit,

• ROIC,

• the creation of shareholder value, evaluated via a

comparison of Acea’s performance with a basket of

utilities stocks.

With reference to the first cycle, in 2010 the Remunera-

tion Committee established that the objectives were

not met.

Authority’s supervisory and control department controlsViS 44/11On 17 and 18 May 2011, AEEG’s Markets Department and

Supervisory and Control Department, with the support of

the Special Market Protection Unit of the Italian Financial

Police, conducted the inspection preannounced by reso-

lution VIS 44/11 “Approval of the inspection programme

towards two grid operators concerning the provision of

the electricity grid connection service for production

plants” and the special notice of 10 May 2011, delivered

to ACEA Distribuzione.

In the case in question, the various ACEA Distribuzione

offices involved in the active connection application

management process cooperated to reply to requests

for information and data contained in the checklist pre-

pared by AEEG and, therefore, to collect and organise

documentation regarding:

• 5casesregardingpunctualclaims;

• 52 cases sampledby the inspectionoffice (outof a

total of approximately 4,000);

• 5casessampledbytheinspectionoffice(outofatotal

of 275) amongst those compensated or not compen-

sated, even if requested by the applicant.

A copy of the aforementioned documentation was pro-

vided to the inspection office, which obtained it for its

subsequent analyses.

By means of letter dated 2 August 2011, AEEG informed

Acea Distribuzione of the outcomes of the inspection,


nuity of the electricity service. The inspections were per-

formed in accordance with the aforementioned resolu-

tion AEEG VIS 59/11 and after AEEG’s formal notification

to ACEA Distribuzione by registered letter no. 0018066 of

5 July 2011. The inspection concluded positively (in this

regard, see also Resolution ARG/elt 170/11 of 24 Novem-

ber 2011, which shows the definitive results approved by

AEEG), with no penalties for the company, and confirmed

the correctness and accuracy of the processes for the

treatment and recording of continuity data currently in

place.

Ohsas Certification 18001:2007The process of certification of Acea Distribuzione S.p.A.

in line with Ohsas 18001:2007 standards (Safety Man-

agement System), commenced in August 2009, was

completed on 14/05/2010.

In fact, following several on-site documentary and sys-

tem application inspections, certification body Lloyd’s

Register issued the Certificate of Approval which certi-

fies that Acea Distribuzione S.p.A. is compliant with the

Ohsas 18001:2007 standard.

This certificate was delivered to the Chairman of Acea

Distribuzione S.p.A. by the CEO of Lloyd’s Register on 9

July 2010.

As part of the process of retaining the Safety Manage-

ment System Certification, implemented according

to the Ohsas 18001:2007 standard, certification body

Lloyd’s Register Quality Assurance carried out 3 days

of inspections (1st supervisory inspection) in December

2010, in order to verify the SMS implementation, execu-

tion and improvement status. The final outcome of these

inspections was positive.

As part of the process of retaining the Safety Manage-

ment System Certification, implemented according

to the Ohsas 18001:2007 standard, certification body

Lloyd’s Register Quality Assurance carried out 3 days of

inspections (2nd supervisory inspection) in December

2011, in order to verify the SMS implementation, execu-

tion and improvement status.

The final outcome of these inspections was positive. The

next supervisory inspection (third) is set for May 2012.

of users with potential available power of higher than

55 kW.

On 21 June 2010, a defensive brief was sent to the Au-

thority’s Legal Department, which originated from the ar-

gument already presented in previous briefs as regards

the points of overlapping with VIS 72/09 and, as regards

the additional exception, justified the delay in the time

treatment of users with potential available power of

higher than 55 kW with the irrepressibility of the techni-

cal times required for manufacturing of the appropriate

meter.

By means of resolution VIS 91/11 of 6 October 2011, the

Authority’s Legal Department essentially rejected, all de-

fensive arguments expressed in the brief and imposed

a financial penalty on the company of 243,000 euros

(two hundred and forty-three thousand), and set forth

the provision to comply with the time treatment for all

users with potential available power of higher than 55

kW, within 120 days from the date of notification of said

resolution.

The company paid the fine and, on the prescribed expiry

of 8 February 2012, provided evidence to the Authority’s

Legal Department of compliance, within the required

terms, of the actual application of the time treatment

of entitled users, notwithstanding some residual cases,

with objective difficulties of access, for which additional

attempts have been planned, whose positive outcome

will be subject to the proper communication to the

aforementioned Department.

ViS 59/11On 23 June 2011, the AEEG Supervisory and Control De-

partment served ACEA Distribuzione resolution VIS 59/11

of 19 May 2011 “Approval of the inspection programme

regarding electricity distribution companies in relation

to service continuity data submitted to the AEEG (Italian

Authority for Electricity and Gas) in 2011”. The summons

establishes the company’s de facto involvement in the

inspection referred to.

On the 12th and 13th of July 2011, an AEEG inspection of-

fice, supported by the Italian Financial Police, carried out

the aforementioned inspection at ACEA Distribuzione

regarding the timely recording of data relating to conti-


in-depth meeting was then held with the scientific com-

mission of the Ministry, after which Acea Distribuzione

presented a report to better highlight the content and

the innovative nature of the initiative and to acknowl-

edge certain guidelines suggested by said Ministry.

Smart Grid pilot projectOn 9 November 2010, Acea Distribuzione S.p.A. sent

the Italian Authority for Electricity and Gas an applica-

tion for incentive treatment relative to resolution ARG/elt

no. 39/10, with reference to the Smart Grid pilot project,

which will be developed in 2011 and 2012.

The aforementioned project, for a total of roughly 4.9 mil-

lion euros, is divided into various sub-projects aimed at

developing innovative solutions as regards the manage-

ment of improvements to service continuity and, at the

same time, development of new criteria for the manage-

ment of the distribution network, overseeing changes to

said network and in line with the guidelines and general

provisions established by the Authority.

By means of resolution ARG/elt 12/11, published on 8

February 2011, the Authority admitted the project pre-

sented by Acea Distribuzione to incentive treatment. The

development of the project is proceeding as set forth in

the timetable.

new tariff cycle 2012 / 2015By means of Resolution ARG/elt 6/11 of 31 January 2011,

the Italian Authority for Electricity and Gas started up the

procedure for creating measures related to the tariffs for

the provision of electricity transmission, distribution and

metering services and the economic conditions for deliv-

ery of the connection services, for the regulatory period

2012 -2015. As part of this proceeding, it published con-

sulting documents:

DCO 5/11: Final guidelines in relation to the hypothesis of

increasing the power that can be taken for the domestic

electricity users;

DCO 13/11: Tariff adjustment of power and reactive en-

ergy withdrawals and inputs in the supply points and in-

terconnection points between networks;

DCO 29/11: Criteria for the definition of tariffs for the pro-

new excavation and COSAP (occupation of public space) regulationRoman Administration, after declaring order 266/2010

on road works to have been cancelled, issued a new

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-

ters - 04/12/2011 extended the emergency traffic plan

to Rome until said date). It should be noted that the

Roman Administration updated, by means of resolution

30/07/2010, COSAP (increase of 35%) tariffs, effective

retroactively from 1 January 2010.

Technological innovation projects Smart network Management SystemIn June of 2010, Acea Distribuzione S.p.A. sent the Min-

istry of Economic Development the application for ac-

cess to financial subsidies involving the technological

innovation fund, according to the procedures set out by

law, with reference to a project entitled “Smart Network

Management System: technological development in the

management of the electricity distribution network”.

The preliminary and setup phases were launched in July

2010. The aforementioned project, for a total of roughly

12.7 million euros (around 11.0 million of which subsi-

disable), with a duration of three years, is divided into

various sub-projects aimed at enhancing and further

developing the initiatives already implemented by Acea

Distribuzione S.p.A. to improve the continuity of the elec-

tricity service and to increase the operating efficiency in

line with the general and special provisions established

by the sector Authority.

In December of 2010, the Ministry of Economic Devel-

opment formalised its authorisation for going ahead

with the procedure set forth by Ministerial Decree of 14

December 2009. In the first half of 2011, the operating

activities of the various sub-projects and the systematic

monitoring thereof were launched.

In May 2011, the Ministry requested that ACEA Dis-

tribuzione communicate the technical and banking ref-

erences for the imminent initiation of the negotiation

phase, which occurred in the last quarter of the year. An


- confirmation of the rules of updating operating

costs through efficiency recovery mechanisms (x-

factor) fixed at 2.8% for distribution activities and

7.1% for metering activities;

- confirmation and extension of higher return invest-

ment categories (incentivised investments);

- identification of a metering component to cover

the residual non-amortised amount of electrome-

chanical meters replaced with electronic meters

pursuant to resolution no. 292/06, and possibility to

request an advance of said revenues for the entire

regulatory period.

The reference tariffs per company will be published by

31 March of each year of the regulatory period and be-

fore 30 April for 2012.

Relations with AATO 5 On 1 June 2011, by means of note no. AT/1461, AATO

notified the company of the request for enforcement of

the bank surety of 2,843 thousand euros through which

the Area Authority (represented by the Chairman and the

Director of STO - Technical Secretariat) sent Unicredit a

request for enforcement of the bank surety - equal to

2,843 thousand euros - given by the company, pursuant

to art. 31 of the Management Agreement, to guarantee

the proper fulfilment of its obligations.

In particular, the request for enforcement of the surety

sent by the Area Authority would be justified by the com-

pany’s failure to pay the concession fee.

In this regard, it is believed that the provision adopted by

the Area Authority is definitely unjust and illegitimate -

in consideration of the fact that the non-payment of the

concession fee, far from being attributable to liability on

the part of the company, is, instead, a direct result of the

Area Authority’s inactivity and non-fulfilment of obliga-

tions regarding the determination of tariffs.

In response to the aforementioned request, the company

submitted an appeal to the Court of Rome in accordance

with art. 700 of the c.p.c (Code of Criminal Procedure), so

that it ascertained the non-existence of the right of the

Area Authority to enforce the surety policy. The afore-

mentioned appeal was rejected by the honourable court,

vision of electricity transmission, distribution and meter-

ing services for the 2012-2015 period - general frame-

work of the proceeding and criteria for calculating the

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

mechanisms for incentivising structural investments;

DCO 42/11: Criteria for the definition of tariffs for the

provision of electricity transmission, distribution and

metering services for the 2012-2015 period - criteria for

the allocation of costs, tariffs, revenue restrictions and

equalisation;

DCO 45/11: Criteria for the definition of tariffs for the pro-

vision of electricity transmission, distribution and meter-

ing services for the 2012-2015 period - final guidelines.

The main changes in the final document are:

• Replacementofthecurrentmechanism,whichmakes

provision for an average national tariff supplemented

by general and company-specific equalisation, with a

tariff per company, established to take account of spe-

cific company characteristics, in the following ways:

- recognition of invested capital of the company with

a parametric criterion for medium and low voltage

capital in 2007 and recognition of effective capital

for high voltage and, starting from 2008, the accu-

rate recognition of increases in company capital;

- recognition of company operating costs on the ba-

sis of an adjustment coefficient of the average na-

tional costs established using AEEG parameters, in

relation to 2010 variables of scale of the company;

- maintenance of the metering equalisation and re-

peal of equalisation of business costs, envisaging

the coverage of average national costs differentiat-

ed between companies that set up a separate sell-

ing company with respect to those still integrated;

- confirmation of the rules up updating of invested

capital, envisaging an increase in the WACC of the

3rd regulatory period from 7% to 7.6% for capital

invested as at 31 December 2011 and to 8.6% for

subsequent capital increases. The increase of 1% is

fixed to take into consideration the 2-year delay in

the tariff recognition of capital increases (so-called

regulatory lag);


Water Service Operator and that for said specific case

of non-fulfilment, the contractual tools in place between

the parties did not make provision for any penalty; nor

was said circumstance included in the causes of the ex-

press termination of the Management Agreement.

With reference to the criminal proceedings opened

against some ACEA executives, it should be noted that,

on 11 May 2011, the judge for preliminary investigations

at the Court of Frosinone, announced and published the

operative part of the judgment, with which it declared

that “there is no need to give a decision” against ACEA

senior management with the ruling “because the act did

not take place”

The reasons for the ruling were made known on 8 Sep-

tember.

In recognising the non-existence of the offence relating

to the three accused managers, important aspects were

highlighted which shed light on the propriety of the com-

pany’s operations.

1. Abuse of office

- 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 retroac-

tivity of the tariff highlighted

2. Fraud

- Non-attributability of operating inefficiencies to the

Operator ascertained

- Incorrect drafting of the original Area Plan con-

firmed

3. Fraud in public supplies

- Contradictoriness of the disputes against the com-

pany which undermines the grounds for the ac-

cusation ascertained: on one hand, the offence

of fraud is contested as a result of having earned

an unlawful profit from the investments made; on

the other, the offence of fraud is contested as the

Operator would have failed to carry out the invest-

ments which he was obliged to make and indicated

in the Area Plan.

therefore, on 8 September 2011 Acea Ato5 S.p.A filed a

complaint against the rejection order.

At the same time, by means of note no. 30762 of 16 Sep-

tember 2011, the company notified AATO5 of the pay-

ment of 10,700 thousand euros as per the legal settle-

ment deed of 27 February 2007.

The aforementioned complaint was rejected by the

Court of Rome by means of order no. 18950 of 21 No-

vember 2011. At the same time as the appeal, pursu-

ant to art. 700 c.p.c. the company also filed an additional

appeal to the Regional Administrative Court of Lazio for

the cancellation of the provision for enforcement of the

surety policy.

The Administrative Court Judge, by means of order no.

6352/2011, arranged for transmission of the trial bundle

to the President of the Regional Administrative Court of

Lazio, so that he identified the competent section of the

Regional Administrative Court of Lazio, and did not rec-

ognise the existence of the conditions for the adoption of

precautionary measures.

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 aforemen-

tioned hearing, the Administrative Court Judge, with or-

der 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, Uni-

credit 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.

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 pro-

ceed, while awaiting the definitive decisions of the Com-

missioner for deeds, with re-establishing the underlying

guarantee.

This should also be viewed in light of in-depth judicial-

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


The public tenders process is in progress, conducted

through the functions of Parent Company ACEA S.p.A.,

targeted at assigning the works relating to the revamp-

ing of the waste treatment plant.

In September 2011, the company challenged, by means

of hierarchical appeal, before the Ministero per i Beni e le

Attività Culturali (Ministry of Cultural Heritage and Activi-

ties), the binding provision, and with an appeal before the

Regional Administrative Court, the ruling of environmen-

tal compatibility (Environmental Impact Assessment), as

regards the part in which said ruling was limited to the

revamping of the plant and raising of the waste dump,

excluding the so-called third ravine.

In August 2011, ATI 4 asked SAO and ASM Terni to re-

view the Economic-Financial Plan of the respective proj-

ects on the basis of different waste flows and a different

plant setup. The company prepared the review of the

Economic-Financial Plan and of the project requested by

ATI 4 with the support of the competent Parent Compa-

ny structures and re-issued said documentation to ATI 4.

Checks and in-depth examination of said documentation

by ATI 4 are still in progress.

In 2011, the company successfully passed an audit re-

garding confirmation of environmental certification

UNI EN ISO 14001:2004 and safety certification OHSAS

18001:2007. In addition, in September 2011, the compa-

ny obtained the registration of EMAS certification for all

activities from the Ecolabel – Ecoaudit Committee, EMAS

Italia section.

On 20 December 2011, the Ministero per i Beni e le At-

tività Culturali upheld the above-mentioned hierarchical

appeal filed by SAO, cancelling the protection provision

relating to the third ravine.

Revamping of waste Treatment PlantIn June 2010, SAO S.p.A. presented an Environmental

Impact Assessment request to the Umbria Region, co-

ordinated with the Integrated Environmental Authorisa-

tion, for the project of revamping of the waste treatment

plant and expansion of the non-hazardous waste dump

located in the district of Pian del Vantaggio 35/a, Orvieto.

During the authorisation procedure, the Direzione Regio-

nale per i Beni Architettonici e Paesaggistici dell’Umbria

(Umbria Superintendency for Environmental and Archi-

tectural Assets) launched proceedings for the direct pro-

tection of the areas affected by expansion of the waste

dump, pursuant to Legislative Decree no. 42/2004.

In June 2011, the company obtained the environmental

compatibility order for the project from the Environmen-

tal Impact Assessment service, with the exclusion of

phase 2 of the waste dump expansion (in the area of

the so-called third ravine). Due to the decisions of the

Environmental Impact Assessment service, the Province

of Terni asked the company to re-adjust the Economic-

Financial Plan for the project, with the removal of the

phase 2 expansion of the waste dump.

On 4 August 2011, the Direzione Regionale per i Beni Ar-

chitettonici e Paesaggistici dell’Umbria notified the com-

pany of the Binding Decree, issued in accordance with

art. 13 of Legislative Decree no. 42/2004, under which

the area allocated for the phase 2 expansion of the

waste dump (so-called third ravine) was subject to direct

protection, as it is “of special historical, monumental and

ethnoantropological importance”.

On 11 August 2011, the Province of Terni issued the com-

pany with the Integrated Environmental Authorisation for

the project for the REVAMPING OF THE WASTE TREAT-

MENT PLANT AND EXPANSION OF THE NON-HAZARDOUS

WASTE DUMP, presented by the company, with the exclu-

sion of the phase 2 expansion of the waste dump (com-

monly 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 com-

pleted by April 2012, except in the case of unforeseen

events or adverse weather conditions.


Significant events after the balance sheet date

modification of some town planning zones, including a

part of the area owned by the company which will ac-

commodate the additional phase (phase 2), in respect of

the phase currently in progress, of the project to expand

the waste dump located in Orvieto, Loc. Pian del Van-

taggio 35/A. Said area is reclassified from an F2A Town

Planning Zone (general services and territorial techno-

logical plants) to an E category Town Planning Zone (ag-

ricultural).

The relevant regional legislation envisages that the pro-

cedure regarding town planning variations, once adopt-

ed by the municipality, and once the inspection phase

has been completed by the Province, concludes with the

definitive approval by the municipality.

Approval of the ACEA Group’s 2012 - 2016 Business PlanOn 22 February 2012, ACEA S.p.A.’s Board of Directors

approved the Group’s Business Plan for the 2012-2016

period.

The 2012-2016 Strategic-Business Plan realised through

the definition of solid and realistic objectives which gen-

erate an increase in value for shareholders. The business

plan describes the strategic guidelines and pre-estab-

lished objectives for the next five-year period: natural

growth in all business segments, with particular focus

on regulated activities which currently generate around

80% of consolidated EBITDA; strong commitment to op-

erational and organisational efficiency, and improvement

in the quality of services; consolidation of the Group as

an efficient area operator, with a sharp focus on sustain-

ability and development of opportunities for expansion.

ACEA’s corporate strategy, through adequate strategic

planning focused on optimising resources and forecast-

ing and managing future industry changes, has chan-

nelled the Group’s development through the following

main strategic guidelines:

• implementation of projects already started in the En-

vironment Area and development of new initiatives

with particular focus on the Lazio Region, also in order

to overcome the imminent waste emergency;

• focus on energy efficiency aimed at reducing energy

consumption and the development of new technolo-

gies (smart grids, accumulator batteries,...);

Purchase of the SiteOn 23 January 2012, the purchase of the Piazzale Os-

tiense site was completed, taking advantage of the op-

portunity presented by the disposal carried out by Beni

Stabili, by exercising the right of first offer set out in the

lease. The purchase price amounted to 110 million euros.

ACEA Ato5 ArbitrationOn 24 January 2012, ACEA Ato5 notified AATO 5 of the

request for arbitration pursuant to art. 36, paragraph 2

of the Management Agreement. With said request, ACEA

Ato5 asked the Board to “assess and declare that AATO

owes the company the sum of 10,700,000.00, as set out

in art. 4 of the legal settlement dated 27.02.2007 and to

that effect, to hold AATO 5 liable, in the person of the

temporary legal representative, to pay Acea Ato 5 the

above amount or a larger or smaller sum considered to

be equitable in accordance with art. 1226 of the Italian

Civil Code”. Conversely, AATO 5, formulated a motion to

contest the arbitration request, disputing and challeng-

ing all opposing pleas, arguments and claims given un-

founded in fact and in law.

The company recently presented a petition for injunction

to the Court of Frosinone to obtain the amount due, and

the Judge ordered A.ATO 5 to pay ACEA Ato5 immedi-

ately and without delay the sum of 10,700,000.00 euros,

plus legal interest, from the request until fulfilment, as

well as appeal proceedings costs which it settles at a

total of 14,898.00 euros, of which 1,449.00 euros in the

form of charges, 11,135.00 euros for fees, 1,557.00 euros

for 12.5% of general office expenses, 714.00 euros for

advances and all possible future expenses, plus VAT and

C.P.A. (Lawyers’ National Insurance Fund) as per law.

The Court also authorised the temporary execution of

the decree, notifying the debtor of the possibility of lodg-

ing an objection within the term of forty days from noti-

fication of the decree.

Orvieto - SAO Regulator PlanIn January 2012, SAO S.p.A. challenged, with an appeal

submitted to the Regional Administrative Court, the reso-

lution of the Orvieto Municipal Council of 7 November

2011, regarding a partial variation of the General Regu-

lator Plan, part structural and part operational, for the


ACEA Ato5 2012 tariff determinationOn 8 March 2012, following an affirmative response con-

tained in corporate order dated 13 February 2012, the

Commissioner for deeds signed a decree on the “Deter-

mination of the integrated water service tariff applicable

for 2012 in ATO 5 Southern Lazio – Frosinone” which the

company was informed of on 9 March 2012.

The determination of the real average tariff for 2012 -

equal to 1.359 m3 - was carried out to quickly deal with a

service economic-financial imbalance, caused by the fail-

ure to update the tariff based on the trend in inflation and

forecasts in the area plan and management agreement.

Therefore, determination of the 2012 real average tariff

is limited to restabilising normal contractual conditions of

continuity of management and does not take into account

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-

nary and extraordinary review.

At present, the review of other important matters has

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 guar-

anteed and (iii) the obtainment of the financial resources

needed to cover expenses deriving from the obligation to

return the undue portion of the tariff to users relating to

the water treatment service.

The decree also identifies the structure of the 2012 tariff

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.

Therefore, this document is valuable in definitively quan-

tifying the amount of receivables for tariff equalisation re-

lating to the variation between real revenues from billing

and those “guaranteed” with respect to the “Original area

plan”, currently defined as the “sole contractual reference

in force between the parties”. Whilst additional receiv-

ables, deriving from the differences between plan fore-

casts 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 activities.

Operator equalisation will be calculated and any payment

methods will also be defined during said phase.

• potential partnership with the winner of the tender for

the gas distribution management service in the city

of Rome;

• strengthening of the “customer relationship”, with

“customer satisfaction & loyalty” tools to improve the

service offered, also by evaluating partnerships with

specialised operators with a view to selective out-

sourcing;

• development of the position of leadership in the water

sector in Italy and enhancement of operational excel-

lence in electricity distribution activities;

• “coverage” of retail sales through agreements and/

or evaluations of the opportunities the Italian market

may offer in the upstream energy sector.

CiP (interdepartmental Price Commission) 6/92 incentives - ARiABy means of note dated 24 February 2012, on conclusion

of the preliminary phase, GSE sent ARIA the draft of the

definitive agreement to be signed for CIP 6/92 incentives.

Breakdown of ATi 1 and 2 tariffAs regards UMBRA ACQUE S.p.A., the start of 2012 saw

the approval of the tariff breakdown for 2012 resolved

by the Single General Meeting of the competent Inte-

grated Area Authorities (ATI) no. 1 and no. 2 which, in

recognising the applicability, as regards tariffs, of the

provisions still in force, particularly art. 154 of the Envi-

ronmental Code, art. 117 del T.U.E.L. (Consolidation Act

of Local Government) and Ministerial Decree of 1 August

1996, maintained all tariff components of the Integrated

Water Service which must ensure certain management

economic-financial equilibrium, with particular reference

to the recovery of all costs and, therefore, of those nec-

essary for the realisation of investments, to protect the

same public interest related to implementation of the

Area Plan and the necessary economic-financial cover-

age to be guaranteed for the operator.


The agreement scheme makes provision for a significant

writing off of GORI’s debt to the Campania Region, whose

natural consequence is an almost equal reduction in the

tariff adjustments accrued (as at 31 December 2011, a to-

tal of 147 million euros - Group share 54.5 million euros);

the agreement scheme also makes provision for the divi-

sion into instalments of the amount of debt recognised

in line with the recovery of residual tariff adjustments in

the Area Plan subject to review by the Area Authority.

Campania Region-EASV-GORi settlement agreementIt should be noted that, on 9 March 2012, GORI, the Area

Authority and the Campania Region signed a report, un-

der which the parties, having positively evaluated the

agreement scheme, which is attached to said report, (i)

undertake to present to the respective bodies for ap-

proval before March 2012 (GORI Board of Directors, Area

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-

tion of the Area Authority’s General Meeting, are under-

stood to be immediately effective and binding.


Risks and Uncertainties

the sector and their application within the Group, on

the basis of the guidelines laid down by top company

management and based on the requirements set out

by the top management of each company, availing

themselves of the support of the competent Depart-

ments and Functions within the interested compa-

nies;

• ManagementofrelationswithTradeAssociationsand

companies in the sector;

• Single representation of the positions of the Group

in the management of relations with the Regulatory

Authorities, relating to technical-economic regulation

and industry legislation;

• Acquisition of the evaluation and judgment of the

companies concerned by technical-economic implica-

tions, as well as the strategic, economic-financial and

legal effects of the application of regulatory measures

in the sector.

Technical-legislative support is targeted at ensuring the

monitoring of the following processes:

• Monitoring and control of the technical-regulatory

activities of the Regulatory Authorities and simulta-

neous technical analysis of the documents issued by

these parties, also through the drafting of judgments,

responses or proposed amendments in support of the

decisions agreed with the companies;

• Reviewandplanningofinitiativesinrelationtolegis-

lative resolutions and provisions with an operational

impact on electricity and gas;

• Participation inworkgroupssetupat theRegulator

or Trade Associations, in order to formulate and dis-

close positions agreed regarding individual provisions

or technical-legal actions with a direct impact on the

Group’s areas of interest;

• Coordinationofthepositionsrepresentedbythecom-

panies regarding each provision with an operational

impact, in order to coordinate the single position tak-

en with respect to outside the Group.

Monitoring and reporting activities are structured into

a process of constant internal updating on legislative

changes, through the preparation of specific reports to

be directed to the parties involved and updating of the

agenda of legislative expiries.

Information on the main risks and uncertainties to which

the Group is exposed, including the disclosures required

by Legislative Decree no. 195/2007, which has amended

paragraph 5 of Article 154 bis (Executive Responsible for

Financial Reporting) of Legislative Decree no. 58 of 24

February 1998, taking account of the CONSOB consulta-

tion document of 7 July 2008, is provided in this docu-

ment and in the Management Reports as at 31 Decem-

ber 2010 of the individual ACEA Group companies.

Moreover, further information on foreign exchange risk,

market risk, liquidity risk and interest rate risk is provided

in the section “Additional disclosures on financial instru-

ments and risk management policies” in the notes to the

consolidated financial statements for the year ended 31

December 2011, to which reference should be made for

more information.

At the date of preparation of this management report,

we do not expect the Acea Group to be exposed to fur-

ther risks and uncertainties that may have a significant

impact on its results of operations or financial position,

other than those mentioned in this document.

Regulatory risksACEA S.p.A., through the Regulatory Department, moni-

tors regulatory developments. This involves providing

support both with regard to the preparation of com-

ments and observations on Consultation Documents,

in line with the interests of Group companies, and the

consistent application of regulations in corporate pro-

cedures and within the electricity and gas businesses.

Management of regulatory risk takes the following form:

• Themanagementofrelationsofatechnicalandinsti-

tutional nature;

• Technicalandregulatorysupportinrespectofactivi-

ties subject to regulation and control;

• Reportingonandmonitoringregulatorycompliance.

Technical-institutional relations are targeted at ensuring

the completeness, clarity and consistency of information

within the Group. In particular, these are broken down

into:

• ManagementofrelationswiththeRegulatoryAuthori-

ties regarding issued connected with the regulation of


cial costs for 2008 and set out the criteria to be adopted

for the determination of the aforementioned equalisa-

tion. In fact, since the Italian Authority for Electricity and

Gas has still not recognised the 2009 value and collected

the data for the years 2010 and 2011, a risk still exists

over equalisation amounts deriving from the possibility

that commercial costs are not fully recognised by the

Italian Authority for Electricity and Gas in accordance

with evaluations that are currently not foreseeable.

The determination of the new tariff per company is cur-

rently underway at AEEG and the formulation process

must be completed by 30 April 2012, with publication of

the new amounts. Although uncertainty will remain until

publication of the new tariffs, the new tariff cycle must

guarantee the full recognition of invested capital and op-

erating costs.

Resolution no. 196/11 of 29 December 2011 makes pro-

vision for the review, starting in 2012, of conventional

percentage factors of electricity losses on the networks

with the obligation of third-party connection. The provi-

sion envisages a lowering of standard losses on high volt-

age, assessed by AEEG on the basis of a technical study

drafted by the Polytechnic of Milan. In 2012, through con-

sultation documents, AEEG will pursue the objective of

redetermining standard losses on the medium and high

voltage chain and defining new methods for calculating

the equalisation of surplus losses which take account of

the territorial diversification of operators. This collection

of provisions could generate economic and technical

risks for the current structure of equalisation of surplus

losses.

Constitutional Court sentence 335/2008Details are provided in the section “Service concession

arrangements” of the Consolidated Financial Statements.

decree Law “Stabilisation”Details are provided in the section “Service concession


During the third regulatory period for the energy Net-

works market, the Italian Authority for Electricity and

Gas introduced various new regulations governing tariffs,

which continue to give rise to a number of uncertainties.

This may represent a risk for the Company’s econom-

ic result, and requires further specific analyses that, in

most cases, have already been launched together with

the Authority’s technical departments.

As regards Company Specific Equalisation, the 2008,

2009 and 2010 company-specific correction factor

makes it possible to greatly reduce the risk of forecast

amounts of company specific equalisation for 2011.

With regard to 2011, the company-specific correction

factor was updated by applying the rules set out in the

Integrated Code containing the provisions of the Ital-

ian Authority for Electricity and Gas for the delivery of

electricity transmission, distribution and metering ser-

vices for the regulatory period 2008-2011 (resolution no.

348/07 and subsequent updates), Annex A, Article 42.5.

Any deviations with respect to the estimates could de-

rive from the application interpretations of Art. 42.5 by

AEEG, which are currently not identifiable.

There is also a degree of uncertainty regarding the gen-

eral equalisation mechanisms, introduced during the cur-

rent regulatory period, particularly for the costs incurred

in the development of electronic metering systems and

the marketing of transport services.

With regard to the equalisation of the costs incurred

for electronic metering systems (equalisation of meter-

ing), the limited reliability of projections of the economic

impact are linked to the weight assigned, in the related

analytical formulation, to the creation of specific system

parameters, exclusively developed by the Authority and,

therefore, not retroactively available to individual opera-

tors. The information gap was not filled with the review

of the mechanism for the determination of metering

equalisation for the years 2010 and 2011 contained in

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 miti-

gated by the publication of resolution ARG/elt/227/10

which determined the equalisation amount of commer-


The impact of said risk factor on the economic, equity

and financial position will be high, also in relation to

the forecast scale of the problem relating to sludge dis-

posal over the next few years.

Legislative risks

Abrogative referendums of 12 and 13 June 2011Details are provided in the section “Service concession


Elimination of the national agency for water regulation and monitoring and of Co.n.Vi.Ri (national Commission for Monitoring water Resources)Details are provided in the section “Service concession


Elimination of the Area AuthoritiesDetails are provided in the section “Service concession


Strategic risks

incompleteness of the acquisition process of the municipalities included in ATO 2The 2002 Concession Agreement set out the award of

the Integrated Water services for 111 municipalities

(which later became 112) to Acea Ato 2 Spa, with the

aim of completing the acquisition process in the three

years following the signing of the Agreement. However,

the problems that emerged during the years led to a

partial acquisition of the municipalities. Today, Acea

Ato2 delivers services to 76 municipalities.

In particular, since 2007 the acquisition of contracts

with the municipalities involved has slowed. This has

been mainly caused by local authorities, natural political

alternation and internal difficulties within the authori-

ties themselves. Moreover, based on the assessments

carried out, certain municipalities still have problems

ACEA Ato5 - TariffDetails are provided in the sections “Service concession

arrangements” and “Update on major disputes and litiga-

tion” of the Consolidated Financial Statements.

Provisions relating to the landfill waste eligibility criteria (sewage sludge)The Interministerial Decree “Definition of landfill waste

eligibility criteria”, implementing Legislative Decree no.

36/2003, published in Official Journal no. 201 of 30 Au-

gust 2005, not only reiterates the provisions of the pre-

vious Ministerial Decree of 13 March 2003 in relation to

the concentration of dry waste (which must be no lower

than 25%), but requires that the landfill eligibility crite-

ria established for non-hazardous waste are complied

with (with particular reference to levels of T.O.C. (total

organic carbon).

Based on said Decree, effective from 1 January 2009,

it is no longer possible to transfer solid matrixes pro-

duced by treatment plants to the landfills, if the extraor-

dinary conditions envisaged are not met.

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% in-

crease, on average, in disposal costs.

In addition, the saturation of plant availability in the

Lazio Region and neighbouring regions – Umbria and

Tuscany – and the difficulty in obtaining agricultural au-

thorisations in the Tuscany region, have made it neces-

sary to use distance disposal solutions, more than 500

km from the point of production of the sludge. This has

resulted in a greater incidence of transport costs, also

in relation to significant growth in fuel prices.

In order to contain the effects of said risk factor, Acea

ATO2 S.p.A. has undertaken a series of initiatives aimed,

on one hand, at reducing the production of sludge and

cut volumes through the installation of drying systems

at Roma Nord and Roma Est (Rome North and Rome

East) purification plants; on the other, it has adopted

initiatives targeted at monitoring the entire integrated

production/transportation/final disposal cycle (com-

posting plant recovery, spreading for farm-related pur-

poses and/or landfill disposal).


that are subsequently classified as non-compliant, he

has to make them compliant with technical, manage-

ment and regulatory provisions for their intended oper-

ation. As a matter of fact, the operator has dealt several

times with this problem, with operating (shutdowns,

malfunctions) and economic consequences (increase in

management and maintenance costs). Moreover, dur-

ing the summer of 2008, the District Attorney’s Office

launched a series of investigations on the Gari and Mel-

fa basins to assess non-conformities reported following

complaints; the investigation concerned around 12 Gari

plants and roughly 19 Melfa plants and are still ongo-

ing. However, in order to limit the consequences of such

risk factor, controls have been adopted concerning the

mapping of non-compliant plants, in order to plan any

restoration work, as well as studies for network con-

trolling and monitoring of parameters at the plant input.

2009 saw the normalisation of activities related to the

transportation and disposal of waste produced at the

water treatment plants through a contract signed with

AQUASER srl. In the first half of this year, as detailed

previously, activities were implemented relating to the

obtainment of usage authorisations. 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.

Economic consequences of non-compliant landfills: shutdowns, efficiency, management costs, maintenance costsThe Galli Law aims at constantly improving Integrated

Water Services, through both a quality service for users

and compliance with current legislation. For this reason,

if, during acquisition, the operator acquires plants that

are subsequently classified as non-compliant, said op-

erator has to make them compliant with technical, man-

agement and regulatory pro

visions for their intended operation. However, the op-

erator has dealt several times with this problem, with

operating (shutdowns, malfunctions) and economic con-

sequences (increase in management and maintenance

costs), as in the case of the seizure of the treatment

plants in Castelnuovo di Porto. In order to limit the con-

relating to the state of treatment plants and lack of au-

thorisation for waste disposal.

This led to the need for subordinating the assignment

of municipalities to the actual compliance of plants with

the existing environmental regulations.

In this way, on the one hand the impact of other litiga-

tion risks for Acea Ato 2 is limited, on the other, there

could be an increased incompleteness risk concerning

the acquisition process, with a significant impact on the

corporate strategic requirements.

incompleteness of the acquisition process of the municipalities included in ATO 5The 2003 Concession Agreement set out the award of

the Integrated Water services for 85 municipalities (in

addition to two other municipalities located outside the

Area) to Acea Ato5 S.p.A., by immediately completing

the acquisition process and establishing a safeguard-

ing period for some of them. To date, three municipali-

ties are awaiting completion of the said process: Atina,

Cassino centro and Paliano, as a result of problems that

have occurred over the years.

More specifically, failure to acquire the plants of Atina

and Cassino centro was due to the policies adopted by

Municipal Authorities, in clear contrast to the original

forecasts of the area plans submitted in the tender and,

more generally, the provisions of the reference legisla-

tive framework. With regard to the Paliano plants – for

which the failed acquisition was initially due to alleged

extensions of safeguarding periods – the activities relat-

ed to the transfer of the Integrated Water Services were

commenced upon conclusion of the assessments of the

locations and works to be transferred (November 2009).

The activities connected with the commercial, adminis-

trative, logistics and HR sector are still to be completed.

Economic consequences of non-compliant

landfills: shutdowns, efficiency, management

costs, maintenance costs

The Galli Law aims at constantly improving Integrated

Water Services, through both a quality service for users

and compliance with current legislation. For this reason,

if – during acquisition – the operator acquires plants


a. risks relating to the effectiveness of the investments

in replacement/renewal of grids, as regards expected

effects on the improvement of service continuity indi-

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 or-

der to obtain the prescribed authorisations, regarding

both the realisation and commissioning of plants (pur-

suant to Regional Law no. 42/90 and related regula-

tions) and the carrying out of works (authorisations

of municipalities and other similar authorisations),

according to the need to develop and enhance the

plants in light of growing demand.

The risk listed under letter a) above arises basically

from the increasingly stringent regulation of service

continuity of the Italian Authority for Electricity and

Gas outlined in the previous sections (the new regula-

tions published recently by the Authority, following a

consultation process, confirm said Authority’s intention

to continue with the process of improvement already

started in previous cycles). To tackle this risk, Acea Dis-

tribuzione has strengthened the tools for analysing the

functioning of the networks in order to make increas-

ingly better use of investments (e.g. ORBT project) and

applied new technologies (automation of medium volt-

age network, smart grid, etc.).

As far as the risk linked to work quality (letter b) is con-

cerned, Acea Distribuzione implemented operational,

technical and quality control systems, including the cre-

ation of the Works Inspection Unit, which forms part of

the Quality and Safety department. The results of the

inspections, which are processed electronically and

analysed statistically, give rise to rankings (reputational

indicators) with a vendor rating system, developed in

collaboration with the University of Tor Vergata (Rome).

This system ranks contractors according to their repu-

tations, scored on the basis of their ability to meet the

quality and safety standards for contract work.

Furthermore, this system makes it possible to recognise

and apply penalties which could, in the case of serious

non-compliance, even cause the contractor’s activities

to be suspended. In 2011, as a result of 962 inspections

sequences of said risk factor, controls have been adopt-

ed concerning the mapping of non-compliant plants, in

order to plan any restoration work, as well as studies for

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.

Photovoltaic risksPhotovoltaic activities highlight two types of risk:

• uncertainty over the actual acquisition of incentive

tariffs and their value, for plants subject to the proce-

dure of insertion in the log (“large plants”).

• vagueness of authorisation times, especially regarding

connection to the electricity network of constructed

plants, which adds an additional element of uncer-

tainty to economic evaluations, also for plants that do

not fall within the scope of the log, particularly in con-

sideration of the strong downward monthly trend in

the value of grants, envisaged over the coming years.

Operational risksWith regard to the Energy Area, the main operational

risks linked to the activities of the Group subsidiaries

(Acea Energia SpA and Acea Produzione SpA) may re-

gard material damage (damage to assets, the short-

comings of suppliers, negligence), damage due to lost

output, human resources and damage deriving from

external systems and events.

To mitigate these operational risks, the companies

have, since they began operating, took out a series of

insurance policies with leading insurance companies

covering Property Damage, Business Interruption and

Third Party Liability. Particular attention has been de-

voted by the companies to the training of their employ-

ees, as well as the definition of internal organisational

procedures and the drafting of specific job descriptions.

The main risks falling under the networks Area can

be classified as follows:


Said risk has been mitigated by the implementation

of the proper organisation of works management and

monitoring aimed at controlling the times and quality of

the work carried out.

By contrast, as regards the operational phase, any inter-

ruption to the waste-to-energy activities carried out at

the Terni and San Vittore plants or to the waste treat-

ment activities of SAO, based on the fact that they are

linked to the production of electricity under the CIP

6/92 regime and to the provision of public services,

could have negative repercussions.

Any impact would be reflected in both the companies’

economic results and in terms of their commitments

to public and private waste management customers. In

this context, an unscheduled plant shutdown puts the

companies’ ability to achieve their business objectives

at real risk.

The waste-to-energy plants, but also, though to a lesser

extent, the waste treatment plants, are highly complex

from a technical point of view, requiring the compa-

nies to employ qualified personnel and organisational

structures with a high level of know-how. The need to

maintain the plants’ technical performance levels and

to prevent personnel with specific expertise (who are

difficult to recruit) leaving the companies represent real

risks.

The companies in this area have mitigated these risks

by implementing specific maintenance and manage-

ment programmes and protocols, drawn up partly on

the basis of their experience in managing the plants

involved.

Moreover, the plants and the related activities are de-

signed to handle certain types of waste. The failure of

incoming material to meet the necessary specifications

could lead to tangible operational problems, such as to

compromise the operational continuity of the plants

and give rise to risks of a legal nature.

For this reason, specific procedures have been adopted

for monitoring and controlling incoming materials via

spot checks and the analysis of samples pursuant to

the legislation in force.

made in said period, 16 companies, covering 33 sites,

had their activities suspended due to non-compliance

with safety measures.

During the year, additional general improvement was

recorded in the reputational indicator of companies op-

erating on behalf of Acea Distribuzione, up from 90% to

91.5% recorded in December 2011.

A similar project was launched in relation to the ser-

vices assigned to the external professionals involved in

works planning and execution activities.

The risk listed under letter c) above arises from the

number of entities which have to be addressed in the

authorisation procedures and from the enormous un-

certainties linked to the response times by these enti-

ties; the risk lies in the possibility of denials and/or in

the technical conditions set by the above entities (such

as the realisation of underground instead of “above-

ground” plants, with a subsequent increase in plant and

operating costs). It should also be noted that lengthy

proceedings result in higher operating costs, are diffi-

cult to deal with for operating structures (drafting and

presentation of in-depth project examinations, environ-

mental assessments, etc.) and require participation in

service conferences and technical meetings at the com-

petent offices. However, the risk is essentially linked to

the non-obtainment of authorisations, with the result

being the inability to upgrade plants and subsequent

greater risk linked to the technical performances of the

service (the procedure for the construction of the new

Parco dei Medici primary station, for the upgrading of

the high voltage network in the Litorale area and for re-

development of the high voltage network in the North-

ern area are currently experiencing difficulties). Lengthy

response times from certain administrative bodies con-

sulted represents a particularly critical element.

As regards Environment Area companies, the Terni

and San Vittore del Lazio plants are involved in opti-

misation and revamping projects which present the

risks typical of the realisation of complex industrial in-

frastructures. Said risks present the real possibility of

delays in construction or imperfections in the execu-

tion of works commissioned, as regards the revamping

activities underway.


ACEA LuceBy means of deed notified on 7 February 2011, the com-

panies Manutencoop Facility Management (“MFM”) and

SMAIL (formerly ACEA Luce) submitted an request for

arbitration against ACEA and ARSE, pro-quota sellers of

100% of the share capital of ACEA LUCE: the applicants

are requesting a ruling against ACEA and ARSE due to

the (alleged) non-fulfilment or negligence as regards

contractual obligations and, therefore, the termination of

the purchase contract and subsequent return of the sum

paid (3 million euros), plus additional costs, and compen-

sation for damages of roughly 7 million euros.

In support of the requests, MFM essentially believes that

the elevated number of claims raised by said party after

the transfer, due to an alleged breach of the contractual

guarantees, would demonstrate actual divergence be-

tween the facts in the summary obtained and the con-

tents of first the due diligence and later the contract.

It can only be pointed out that ACEA and ARSE, in check-

ing the claim notices presented by the acquiring party

from the acquisition until the present day have, in some

cases, accepted responsibility for the facts revealed

therein, by paying, or undertaking to pay at the time the

associated obligation assumes a definitive nature, some

amounts, although modest in said context.

Otherwise, the purchase contract for the equity interest

envisages, on one hand, that the financial compensa-

tion constitutes the only solution actionable by the ac-

quiring parties in the event of an incomplete or incor-

rect declaration and, on the other, that the associated

liability of the grantors is restricted to a maximum limit

of 1,250,000 euros, to be enforced in accordance with

the methods and timeframes better detailed in said act.

However, ACEA actioned, by way of a counterclaim, its

receivables due from SMAIL for around 6.5 million eu-

ros, deriving from electricity provided and still not paid.

In the first few weeks of 2012, therefore after the close

of the year, the parties commenced amicable negotia-

tions to settle the dispute, negotiations currently being

formalised, which essentially make provision for the fi-

nal settlement of claims by MFM/SMAIL against the pay-

ment of an amount contained in the forecasts drawn up

Litigation risks

Antitrust Authority investigation of the acquisition of PubliacquaOn 28 November 2007, ACEA was notified of the Anti-

trust Authority’s ruling, in which, following an enquiry

which lasted around eighteen months on potential vio-

lations on the part of ACEA, Suez Environnement and

Publiacqua regarding competition regulations (art. 101

EU Treaty, formerly art. 81 of Treaty of Rome - anti-com-

petitive agreements) in relation to the joint acquisition

of a 40% stake with SUEZ, in Publiacqua, ATO operator in

Florence, it essentially:

• deemedthatahorizontalagreementexistedbetween

ACEA and SUEZ in the integrated water services sec-

tor, which is managed by a public-private partnership

in which the private partner is selected via a tender

process;

• ruledthatthepartiesshouldtakeactionstoavoidrep-

etition of the sanctioned behaviour, with the Authority

to be notified of the nature of such actions within 90

days, and also amend the rules governing the partner-

ship regarding the part deemed to be in violation of

competition regulations;

• orderedACEAandSUEZtopayfinesof8.3millioneu-

ros and 3 million euros, (the difference in the amounts

derives from their respective turnovers in the relevant

sector in Italy).

ACEA submitted an appeal to the Regional Administra-

tive Court of Lazio against said ruling: on 7 May 2008

the court announced the related sentence, finding in

ACEA’s favour and cancelling all the rulings and the fine

imposed. Details of the sentence, upholding all of the ap-

pellant’s arguments, were published at the end of June.

In the corresponding enforcement, on 11 June 2009, the

Ministry of Economy and Finance ordered the return of

the penalty of 8.3 million euros paid by ACEA in February

2008.

The Antitrust Authority submitted an appeal against

the decision of the Lazio Regional Administrative Court,

against whom ACEA opposed the cross-appeal (due to

the failure to consider, in the first instance ruling, some

of its grounds for appeal) and the hearing for the associ-

ated discussions was set for May 2012.


biofiltration plant, carried out entirely with public funds,

to request that ACEA and ACEA Ato2 be ordered to pay

over 8 million euros for reservations.

The request is in and of itself indefensible due to the in-

admissibility and ungrounded nature of the reservations,

since the counterclaim of ACEA - that filed a formal ap-

pearance 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.

ACEA/SASi ProceedingsIn 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-

drawal of water from the Verde river. ACEA was awarded

9 million euros, plus interest accrued from 14 June 2001

until 30 July 2013 as compensation for damages.

The sentence, which is not temporarily executive, was

appealed by SASI before the TSAP and ACEA filed a

cross-appeal. The proceedings are ongoing.

A.S.A. – Acea Servizi AcquaBy means of summons notified in autumn 2011, ACEA

was summoned to court to respond to the presumed

damages that its even more strongly alleged non-compli-

ance with unproven and inexistent obligations which are

assumed to have been adopted under the shareholders’

agreement relating to subsidiary A.S.A. – Acea Servizi Ac-

qua – would have produced for minority shareholders of

the latter, and their respective shareholders. The claim

appears to be manifestly devoid of merit, and inadmis-

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

is, by contrast, indicated as an “objective” of the compa-

ny and not the shareholders. Therefore, it is not believed

by ACEA, payment by SMAIL of the amount due for the

above-mentioned supply, waiving of any additional claim

and withdrawal from the dispute.

E.On. Produzione S.p.A. proceedings launched against ACEA, ACEA Ato2 and AceaElectrabel ProduzioneThese proceedings were launched by E.ON. 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-

duzione) for payment of the subtension indemnity (or

compensation for damages incurred due to illegitimate

subtension), which remained frozen in respect of that

defendant in the 1980s, amounting to 48.8 million euros

(plus the sums due for 2008 and later) or alternatively

payment of the sum of 36.2 million euros.

The question of the amount and the assumptions ap-

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 cal-

culation according to which the claims actioned in the

proceedings, even when unfounded - which is dubious,

because the documents containing the metering pa-

rameters of the compensation are still deemed to be

applicable and effective - would be greatly altered, sub-

stantially reducing the amount of equalisation already

estimated by the company.

Vianini Lavori ArbitrationVianini Lavori S.p.A. (in a temporary consortium with the

French STEREAU) proposed a formal request for arbitra-

tion with reference to works to build the South Rome


upholding the objection raised, asked the Constitutional

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

(article 14, paragraph 4 bis, Law no. 537/93).

The hearing at the Constitutional Court was held on 8

February 2011 and the issue of legitimacy submitted for

its judgement was declared inadmissible under the as-

sumption that “...the remitting tax commission, in raising

these questions, would have had to preliminarily confirm

– also by solely providing a brief justification on the mat-

ter – the lack of grounds for the aforementioned appeal,

because, if upheld, they would have led to the cancel-

lation of the tax assessment notices contested and the

subsequent irrelevance of said matters....

At the hearing on 4 October 2011, the Judge put the case

back to January 2012, in order to find out the outcomes

of the criminal proceedings at the Court of Perugia re-

garding the delivery of waste by the Campania Region.

It should be noted that, with reference to the cited

proceedings, S.A.O. submitted a request for cancel-

lation, by own determination, of assessment notices

872030100244, 872030100245 and 872080100477 l,

following the ruling of the Court of Perugia on 29 No-

vember 2011, which established that it did not need to

continue, with regard to all offences and all defendants,

with the proceedings relating to the delivery of waste

from the Campania Region in 2003 and 2004 (forming the

basis of the relevant assessment notice) due to expiry

of the limitation period. As regards the claim, adequate

grounds were given regarding the fact that the acquittal

pronounced in the criminal proceedings eliminates the

conditions for applicability of the prohibition of deduct-

ibility of costs arising from the offence, on which the rel-

evant assessment notice was based, as interpreted by

the Direzione Centrale Normativa e Contenzioso (Central

Legislative and Disputes Department) of the Tax Authori-

ties in Circular no. 42/E of 2005.

It has been deemed that the acts of the Tax Authorities

are illegitimate and that there is a remote risk of pay-

ment of the entire sum for which the previous share-

holder is liable (Enertad now Erg Renew) on the basis

that too large a claim of more than 10 million euros mer-

its consideration.

Tax moratoriumThe appeals presented by ACEA against the payment de-

mands of 2007 and the 2009 tax assessments were re-

jected by the Provincial Tax Commission.

The Regional Tax Commission also rejected the appeal

against the first instance ruling against the 2007 demands.

SAO tax inspectionIn October 2008 the tax authorities issued two notices

of assessment to the company, amounting to 5.8 million

euros in taxes and 5.7 million euros in penalties.

These notices of assessment regard the 2003 and 2004

tax years and derive from criminal proceedings launched

by the Orvieto District Attorney’s Office. This action,

which is still pending before the Court of Perugia, re-

gards transfers of waste from the Campania region in

the aforementioned 2003–2004 period, based on a plan-

ning agreement executed at that time by the presidents

of the Campania and Umbria regional authorities and the

subsequent management of the Orvieto landfill.

Although one of the years involved in the tax inspection

notices (2004) was already subject to a tax inspection,

the Tax Authorities deemed that it was possible to re-

open the inspection, following the ruling under which the

Court of Orvieto, in criminal proceedings, declared the

Court of Perugia to instead hold competence.

The notices of assessment regard taxation of the costs

incurred during the two years in relation to the above

transfers of waste, based on the fact that such transfers

are now considered illegal on the basis of the mere ex-

istence of criminal proceedings and despite the absence

of provisions from the Judge regarding the verification of

the existence of the offences for which to proceed.

On 12 December 2008 the company submitted separate

appeals against the notices of assessment.

In May 2009, the tax commission upheld the requests

for the suspension of the notices of assessment submit-

ted by the company and, in November 2009, at the first

hearing on the matter, combined the two appeals and, in


GdF Suez Energy Management (formerly AceaElectrabel Trading) tax inspectionOn 15 September 2010 the Guardia di Finanza – Nu-

cleo Polizia Tributaria di Roma (Italian Financial Police

– Rome Tax Squad) opened a tax inspection relating to

direct taxes for 2008, subsequently extended to the

years 2005, 2006, 2007 and 2009 with reference to the

so-called off-balance sheet transactions (article 112 of

Income Tax Consolidation Act).

In November 2010, tax inspections were concluded for

the 2005 tax year and the Guardia di Finanza notified

GdF Suez Energy Management and ACEA, as the con-

solidating entity, of a Report on Findings, ascertaining a

higher taxable base, (Ires and Irap – corporate income

tax and regional business tax) of 14.2 million euros, re-

lating to the fair value of solely hedging instruments

with a positive fair value as at 31 December 2005, pro-

ducing effects over subsequent years. In substance, the

tax inspector confirmed that the disclosures made by

no IAS adopters - GdF Suez Energy Management is one

– in their financial statements in compliance with OIC

3 assume tax relevance pursuant to and in accordance

with article 112 of the Income Tax Consolidation Act.

On 5 July 2011, ACEA, as the consolidating entity, re-

ceived a report on findings, ascertaining a higher tax-

able base for the tax years 2006, 2007, 2008 and 2009

of 128.9 million euros relative to the positive fair value

of hedging instruments existing at the end of the years

being audited.

On the basis of the Framework Agreement signed in

December by ACEA and GDF Suez Energia Italia, ACEA

is indemnified and held harmless in relation to any

amount it is required to pay, also temporarily, as con-

solidating entity.

ARSE tax inspectionOn 19 July 2011, the Italian Financial Police began an in-

spection to check the correct use of the VAT tax ware-

house 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

of the guarantees issued in the purchase/sale contract

and the provisions in the arbitration award issued by the

Board of Arbitrators set up, upon request of ACEA S.p.A.,

in accordance with said contract.

It should also be noted, for the purposes of complete-

ness, that SAO challenged measure no. 2008/27753 of 27

November 2008 by which the competent Tax Authorities

suspended the disbursement of a VAT rebate claimed by

the Company for the 2003 tax period. Said rebate, to-

talling 1,256,000.00 euros, was recognised by the Inland

Revenue, even though for precautionary reasons due to

the above assessments its disbursement was suspend-

ed. The Tax Commission, with Ruling issued following the

hearing held in March 2010, upheld the appeal lodged by

our Company, thus cancelling the cited measure against

the aforementioned ruling. The Tax Authorities submit-

ted an appeal in September 2010. The proceedings are in

progress. It should be noted that the receivable involved

in the cited VAT reimbursement was settled via payment

in July 2010. The assignee presented an appeal with a

simultaneous request for discussion at a public hearing,

for the cancellation of measure 73747/2011 with which

the Terni Provincial Department of the Tax Authorities

declared the transfer of said VAT credit from SAO to said

assignee to be unacceptable.

Tax inspection on Marco PoloOn 23 June 2010, the Tax Authorities notified the associ-

ated company Marco Polo of a Report of Findings relat-

ing to the general tax inspection started in March 2010.

The irregularities found by the Tax Authorities totalled

6.4 million euros, (plus interest and fines) and essentially

concern objections to the equalisation calculation meth-

od of fees due to Shareholders of ACEA and AMA, based

on the service contracts stipulated.

The proper defence briefs and preliminary documen-

tation were presented to the Tax Authorities aimed at

eliminating the most significant irregularities.


Tax inspection of other Group companiesOn 15 November 2011, ACEA Ato2 was notified of a re-

port on findings, drafted by the Italian Financial Police

as a result of an inspection opened in July, concerning

IRES and IRAP for 2008. The company complied with the

report on findings pursuant to article 5 bis, of Legislative

Decree no. 218/1997 through the presentation of the ap-

propriate request in December 2011, and paid 329,532

euros.

It should also be noted that, on 9 February 2012, a gen-

eral inspection (IRES, IRAP and VAT) was opened by the

Tax Authorities for the year 2009 against Sarnese Vesuvi-

ano and, 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 date of incorpora-

tion in ARIA.

Aria GroupThe disputes involving companies in the Environment

Area can be divided into three types:

• normalcommercial(customersandsuppliers),labour

and tax disputes that any business might encounter;

• disputes over authorisations, deriving from actions

brought, normally before administrative courts, by

persons or entities affected by the activities of the

Companies in this area;

• administrativedisputesderivingfromtheapplication

of environmental regulations and the related fines.

In October 2005, A.R.I.A. launched arbitration proceed-

ings for the recovery 2,400,000 euros due to them from

a company on the basis of a contract signed in July 2003.

The counterparty did not attend the legal proceedings.

The arbitrator, by means of arbitration award issued on

30 November 2005, ordered the defendant to pay the

sum demanded by A.R.I.A.. S.p.A., plus interest, legal and

other costs. A.R.I.A. S.p.A. launched subsequent legal

action to recover the amount owed, still in progress, by

obtaining a temporary injunction from the Court of Milan,

opposed by the counterparty, and proceeded with the

subsequent enforcement procedure, and in particular,

2012, with the extension of the controls to the years 2010

and 2011.

The system under review makes it possible to suspend

the payment of VAT at the time of import, by entering the

goods in so-called VAT warehouses, i.e. facilities managed

by third parties and subject to specific forms of control

and monitoring. The tax, where due, is paid when the good

is extracted through a reverse charge mechanism, with

the offsetting of VAT credits/debits recorded.

Control activities are targeted at ascertaining cases of

abuse of the mechanism, i.e. cases in which legal non-

existence or warehouse simulation are found, in line with

the instructions already recommended in turn by the Cus-

toms Agency (see Resolution no. 23321/2009).

The subject is especially well-known and debated given

that several parties have recorded an extremely restric-

tive attitude on the part of inspectors who tend, contrary

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

warehouse has not remained in the storage area for a

minimum period.

As at today’s date, the company received no report on

findings and deems that all conditions in fact and in law

set forth by the legislation for the use of VAT warehouses,

as interpreted by said Customs Agency, have been fully

satisfied.

GORi tax inspectionDuring the year, the Tax Authorities carried out an inspec-

tion for the year 2008. At the end of the inspection, in-

spectors contested the payment of roughly an additional

1 million euros in taxes with the company (plus inter-

est and fines). In respect of the irregularities identified,

the company is evaluating whether to lodge an appeal

against the assessment notice, which has not yet been

notified as yet, or, alternatively, to formulate a tax settle-

ment proposal in accordance with art. 6, paragraph 1, of

Legislative Decree no. 218/97.


ber of administrative actions brought by third parties

in 2002 are pending before the Regional Administrative

Court of Lazio. The plaintiffs have contested the Mas-

ter Plan for waste management, insofar as it applies to

waste-to-energy plants with energy recovery, approved

by the Lazio Region in January 2002 and by the Mana-

gerial Directive issued by the Province of Frosinone in

April 2002, which authorised construction and operation

of the said plant. The requests for preliminary injunctions

filed by the plaintiffs have been rejected by the Regional

Administrative Court of Lazio, and, where appeals were

filed, by the Council of State. Starting from 2007 the Com-

missioner assigned responsibility for the environmental

emergency in the Lazio region issued a specific Integrat-

ed Environmental Authorisation, pursuant to Legislative

Decree no. 59/2005, covering the activities carried out by

the waste-to-energy plant, and its upgrade and repower-

ing. The Authorisation was subsequently extended in the

first half of 2008.

It should be recalled that during 2003, a company, act-

ing on behalf of a consortium of municipalities, brought

an action against incorporated company E.A.L.L. aiming

at obtaining the payment of damages (9,916,800.00 eu-

ros) for an alleged breach of contract by incorporated

company EALL. During 2005, the Consortium, which had

in the meantime been converted into a joint-stock com-

pany, brought an action supporting the claims put for-

ward by the original plaintiff. With Ruling no. 300/2010

of 27/04/2010, the Court rejected the appeal filed in by

the plaintiff and the Consortium, and forced the coun-

terparty to pay legal costs borne by our company. The

aforementioned Consortium, now a joint-stock company,

challenged the aforementioned ruling. The company ap-

peared before the court. The hearing for the presentation

of closing statements at the Rome Court of Appeal has

been set for June 2016.

In April 2011, the contractor of the works relating to the

contract for the execution of civil works on the first line

of the San Vittore del Lazio plant, signed in December

1997, submitted a request for arbitration for the recogni-

tion of the amounts relating to the reservations append-

ed to the 9th SAL (progress report) of June 2002. The sum

with the seizure of some property assets of the defen-

dant. The enforcement actions, still in progress, have not

produced substantial results. It should be noted that the

receivable involved in the case was settled via payment

in July 2010.

An appeal brought by incorporated company Terni En.A.

S.p.A. before the Umbria Regional Administrative Court

in March 2004, against the resolution passed by the Terni

Provincial Council in December 2003, is still pending. The

resolution approved, pursuant to Article 20 of Legislative

Decree no. 22/97, the identification of areas not suitable

for the location of a waste treatment and recycling plant,

introducing a complex procedure that should also be ap-

plied to plants, such as the WTE plant located in Terni, al-

ready approved and located. Umbria Regional Authority,

with Managerial Directive 11879 of 19 December 2008,

issued the related Integrated Environmental Authorisa-

tion, pursuant to Legislative Decree no. 59/2005. This is

valid for 8 years and covers the activities of the above

waste-to-energy plant in Terni.

The action brought by a company against incorporated

company Terni En.A. S.p.A. in April 2006, regarding al-

leged breach of a contract governing the transfer of fuel

to the Terni waste-to-energy plant, is still pending. The

plaintiff has filed a claim for damages of approximately

800,000 euros. Our company contests the arguments put

forward by the plaintiff. The case is currently at the pre-

liminary stage.

In March 2011, the company that won the integrated

tender for the executive planning and revamping works

for the company’s existing energy recovery plant, First

Lot, submitted an appeal to the Regional Administrative

Court of Umbria against the withdrawal measure as-

sumed by Terni En.A. pursuant to Legislative Decree no.

490 of 8 August 1994 and Presidential Decree no. 252 of

3 June 1998. No suspension provision was issued against

the aforementioned measure by the competent judicial

body. The hearing on the matter has not been set.

With regard to the San Vittore del Lazio waste-to-energy

plant owned by incorporated company EALL S.r.l., a num-


As regards the RDF production plant in Paliano, a number

of administrative appeals brought by third parties in 2003

against incorporated company Enercombustibili S.r.l. are

still pending, regarding the appeal against the resolution

of the implementing party of the Extraordinary Commis-

sioner for Waste Emergency in Lazio no. 66 of 30 July

2003 and related acts, involving the authorisation of said

plant, and the agreement stipulated by the company with

the Municipal Administration of Paliano. Applications for

the suspension of the provisions submitted by the ap-

plicants were all rejected by means of first and second

instance rulings. The proceedings are still pending before

the competent Judicial Authorities.

requested in relation to the aforementioned reservations

is equal to around 1,200,000.00 euros. The Board of Arbi-

tration has been appointed. The Board of Arbitration has

been installed and has started its activities.

The company, through its appointed legal representative,

is preparing all necessary defence action.

In March 2011, GSE S.p.A. requested a total of

1,128,570.52 euros plus VAT from incorporated company

EALL Srl, deeming the final quantification of the num-

ber of green certificates issued to said company for the

years 2006, 2007, 2008 and 2009 to be incorrect. In May

2011, the company submitted an appeal to the compe-

tent Regional Administrative Court, requesting cancella-

tion of the GSE S.p.A. provision.


Operating (and financial) outlook

During the year, the tariff development set out in the

different Regulatory Plans relating to the Integrated Wa-

ter Service was regularly maintained. The Energy Area

recorded better profits thanks to the good performance

by sellers. The Environment Area likewise recorded a

better result than forecasted, thanks to the entry into

operation of the two new production lines of the San

Vittore plant and greater quantities treated.

ACEA will continue to commit to doing all in its power to

achieve the goals set in the new Business Plan through-

out 2011. The substantial Investment Plan is confirmed

in particular, which, over its term, envisages almost 2.3

billion euros in investments, dedicating (i) about 46%

of the Investment Plan to the Water Area, which will

guarantee the expected tariff development, (ii) 32% to

electricity distribution and the Renewable Energy Area,

both PV power and cogeneration, confirming the com-

mitment to constantly improving service quality and

continuity, (iii) 12% to the Environment Area, where the

Group is particularly committed by increasing and de-

veloping its waste-to-energy capacity and widening its

capacity in the disposal of biological sludge, in biomass

and special waste treatment, (iv) 7% to the Energy Area,

particularly for the process of revamping its thermal

and hydroelectric plants and (v) 3% to the Group’s IT

development and maintenance of its property portfolio.

Net working capital of 89 million euros recorded as at

31 December 2011 takes into account the new basis

of consolidation, including the 100% acquisition of the

electricity sale company and the proportionate consoli-

dation of the company Acquedotto del Fiora. Net debt

was also in line with the budget, standing at 2.3 billion

euros at the end of 2011, which includes 60 million eu-

ros in the form of the advance on dividends distributed

at the end of 2011.

As is well-known, the financial restructuring project

was completed in March 2010 with the issue of a new

bond for 500 million euros at a 4.50% fixed rate, which

represented the completion of the project to convert

all debts to long-term. This project protected the Group

from an extremely strict credit situation, and from the

2011 was a very important year for the Group, during

which, all personnel were especially focused on reach-

ing the efficiency objectives set out in the ambitious

budget. The new 2012-2016 Business Plan approved in

2011 also appears to strike a good balance between

management, efficiency and development. In 2011 too,

objectives were reached in full, where at consolidated

EBITDA level, the budget targets were exceeded by

more than 40 million euros, which is mainly a result

of (i) the recovery of metering equalisation of previous

years by the Networks Area (8 million euros) not set out

in the budget, (ii) higher revenues generated by the En-

ergy Area and (iii) savings obtained on purchases, ser-

vices and consultancy.

The consolidated financial statements as at 31 Decem-

ber 2011 present a gross profit of 655.8 million euros,

a slight decrease compared to 666.5 million euros

achieved in the same period of 2010, due to the differ-

ent basis of consolidation resulting from the dissolution

of the joint venture with GdF-Suez in the Energy Area

on 31 March 2011. By contrast, on a like-for-like basis,

2011 recorded growth of 20.2 million euros compared

to the previous year.

Consolidated net profit was essentially in line with

the expectations, at 93.5 million euros before minori-

ties, compared to 100 million euros in December 2010,

marking a decrease of 6.5 million euros. This result in-

corporates not only the effects of the above-mentioned

termination of the joint venture with GDF – Suez, but

the provisions relating to companies GORI and ACEA

Ato5 amounting to 48.9 million euros, prudentially re-

corded to cover any regulatory risks, as amply detailed

in the Report on Operations, pending formalisation of

the agreements between ATO and the Campania Region

in order to determine new tariffs which will make it pos-

sible to maintain the company’s economic and financial

equilibrium, as set forth by the Galli Law.

On an economic level, net of the effects of the cited JV,

the new public lighting contract and the entry of the

company Acquedotto del Fiora, all of the business areas

are in line with or exceed the budget.


The solidity of our business, 80% of which is regulated,

the results achieved so far, combined with the strong

financial structure referred to above, have allowed the

Ratings agencies to grant Acea the following long-term

ratings as at the balance sheet date:

• Standard&Poor’s:“BBB+”;

• Fitch“A-”

• Moody’s“Baa1”

Only a few companies in Europe chose to receive a

judgment from all three main Ratings Agencies, espe-

cially in light of the critical and persistent international

financial crisis. The current rating, recently reviewed by

the Agencies, is the highest in the sector and equal to

or better than the rating assigned to Italy.

real explosion in spreads.

The first expiry will fall in 2013, solely involving the

amount of 200 million euros, but given that the Group

fixed rates and loans two years ago, it did suffer at a

financial level from the crisis in progress. Consequently,

the average global cost of borrowing stands at 3.71%.

40% of total debt is floating rate: of this 80% with spread

fixed in previous years. In 2012, the Group will refinance

committed three-year back-up credit lines of 500 mil-

lion euros in advance, which helped reduce the cost of

borrowing in 2011.

The financial structure of the ACEA Group is therefore

very solid for the upcoming years, as the entire debt

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.


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


for the year ended 31 December 2011

114 2011 | Financial statements of Acea S.p.A.

Income Statement of ACEA S.p.A. for the year ended 31 December 2011

Notes Ref. INCOME STATEMENT 31.12.2011 31.12.2010 Increase/ (Decrease)

1 Revenue from sales and services 163,764 140,545 23,219

2 Other revenues and proceeds 8,868 24,840 (15,973)

Net revenue 172,632 165,385 7,247

3 Staff costs 47,648 39,525 8,122

4 Costs of materials and overheads 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

Operating profit/(loss) (110,669) (42,617) (68,051)

6 Finance (costs)/income 5,580 (34,970) 40,550

Ordinary finance (costs)/income 5,580 (34,970) 40,550

Exceptional finance (costs)/income 0 0 (0)

7 Profit/(loss) on investments 200,175 85,832 114,343

Profit/(loss) before tax 95,086 8,245 86,841

8 Taxation (13,550) (25,571) 12,021

Net profit/(loss) from continuing operations 108,636 33,816 74,820

Net profit/(loss) from discontinued operation 0 0 0

Net profit/(loss) for the period 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 31.12.2011 31.12.2010 Increase/ (Decrease)

Net profit/(loss) for the period 108,636 33,816 74,820

Profit/(Loss) From the Redetermination of Financial Assets Available for Salea

0 0 0

Profit/loss from the effective portion of hedging instruments

(12,048) 5,837 (17,884)

Actuarial Profit/(Loss) on Defined Benefit Pension Plans 0 0 0

Taxation (956) (1,605) 649

Total Consolidated Operating Profits Net of Tax

95,633 38,048 57,585


1152011 | Financial statements of Acea S.p.A.

Balance Sheet of ACEA S.p.A. for the year ended 31 December 2011

Notes Ref. ASSETS 31.12.2011 31.12.2010 Increase/ (Decrease)

9 Property, plant and equipment 52,434 52,577 (144)

10 Investment property 2,993 3,148 (154)

Goodwill 0 0 0

11 Concessions 0 49,707 (49,707)

Other intangible assets 10,399 11,652 (1,254)

12 nvestments in subsidiaries and associates 1,726,110 1,609,090 117,020

13 Other investments 4,673 4,635 38

14 Deferred tax assets 36,283 22,683 13,600

15 Financial assets 1,380,229 193,550 1,186,679

16 Other non-current assets 724 725 (1)

Non-current assets held for sale 0 35,034 (35,034)

NON-CURRENT ASSETS 3,213,844 1,982,802 1,231,042

17.a Inventories (0) 0 (0)

17.b Trade receivables 37,672 25,880 11,792

17.c Intercompany trade receivables 102,756 92,395 10,360

17.d Other current assets 28,005 19,840 8,164

17.e Current financial assets 27,289 14,647 12,642

17.f Intercompany current financial assets 248,529 1,178,424 (929,896)

17.g Current tax assets 35,407 63,443 (28,035)

Deferred tax assets 0 0 0

17.h Cash and cash equivalents 284,227 251,407 32,820

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



Balance Sheet of ACEA S.p.A. for the year ended 31 December 2011

Notes Ref. LIABILITIES 31.12.2011 31.12.2010 Increase/ (Decrease)

Shareholders’ equity

share capital 1,098,899 1,098,899 0

legal reserve 68,919 67,228 1,691

reserve for treasury shares 0 0 0

other reserves 89,427 160,963 (71,536)

profit (loss) pertaining to previous years 63 782 (720)

profit (loss) for the period 49,123 33,816 15,307

18 Total shareholders’ equity 1,306,430 1,361,688 (55,258)

19 Staff termination benefits and other defined benefit plans 23,551 23,634 (83)

20 Provision for liabilities and charges 70,680 25,430 45,250

21 Borrowings and financial liabilities 1,784,429 1,788,288 (3,859)

22 Other liabilities 5,269 6,888 (1,619)

23 Provisions for deferred tax liabilities 12,873 8,997 3,876

Non-current liabilities held for sale 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 Other current liabilities 27,195 20,939 6,256

Current liabilities held for sale 0 0 0

24 CURRENT LIABILITIES 774,496 413,913 360,583

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 3,977,728 3,628,838 348,890



Cash Flow Statement of Acea S.p.A. for the year ended 31 December 2011

31.12.2011 31.12.2010 Increase/ (Decrease)

Cash and cash equivalents at beginning of period 251,407 43,818 207,589

Cash flow from operating activities

Profit before taxes 95,086 8,245 86,841

Amortisation/depreciation 11,921 12,986 (1,065)

Revaluations/impairment charges (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

Realised gains 0 9,471 (9,471)

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)

Increase/decrease in current liabilities 35,061 15,723 19,338

Increase/(decrease) in inventories 0 0 0

Movement in working capital 8,680 (6,915) 15,595

Changes in other assets/liabilities during the period 40,324 76,139 (35,815)

TOTAL CASH FLOW FROM OPERATING ACTIVITIES 62,704 14,548 48,156

Cash flow from investing activities

Purchase/sale of property, plant and equipment and intangible assets (10,370) (25,431) 15,061

Investments 811 8,164 (7,353)

Proceeds/payments deriving from other investments (216,729) (61,909) (154,820)

Dividends received 112,976 87,948 25,028

Interest income received (22,813) 28,263 (51,076)

TOTAL (136,125) 37,034 (173,159)

Cash flow from financing activities

Repayment of mortgages and long-term borrowings (31,169) (22,605) (8,565)

Provision of mortgages/other medium/long-term borrowings 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

Changes in shareholders’ equity after net profit 0 53,622 (53,622)

Cash flows for the period 32,820 153,967 (121,147)


Cash and cash equivalents at end of period 284,227 251,407 32,820



Statement of changes in shareholders’ equity of ACEA S.p.A. for the year ended 31 December 2011

Share capital Legal reserve Demerger reserve

Reserve for exchange

differences

Reserve from valuation of financial

instruments

Other reserves Accumulated profit/(loss)

Profit/(loss) for the period

Total shareholders’ equity

RESTATED BALANCES AT 1 JANUARY 2010 1,098,899 67,228 220,025 0 (5,645) (4,027) 533 (53,372) 1,323,641

Appropriation of result for 2009:

Distribution of dividends 0

Legal reserve 0

Retaining earnings/Loss coverage (53,622) 53,622 0

Other movements 250 (250) 0

Total profit (loss) recorded in the period:

Profit and losses booked directly to Shareholders’ equity (13,720) 17,952 4,232

Profit for the year 33,816 33,816

TOTAL AS AT 31 DECEMBER 2010 1,098,899 67,228 166,403 (13,720) 12,307 (4,027) 782 33,816 1,361,688


Share capital Legal reserve Demerger reserve Reserve for exchange

differences


instruments




BALANCES AS AT 1 JANUARY 2011 1,098,899 67,228 166,403 (13,720) 12,307 (4,027) 782 33,816 1,361,688


Distribution of dividends (63,764) (188) (31,882) (95,834)

Legal reserve 1,691 (1,691) 0

Retaining earnings/Loss coverage (71) 1,034 (532) (243) 188

Other movements 0


Profit and losses booked directly to Shareholders’ equity (11,255) 2,520 (8,735)

Distribution of advance on 2011 dividends (59,513) (59,513)





Share capital Legal reserve Demerger reserve

Reserve for exchange

differences


instruments




RESTATED BALANCES AT 1 JANUARY 2010 1,098,899 67,228 220,025 0 (5,645) (4,027) 533 (53,372) 1,323,641


Distribution of dividends 0

Legal reserve 0

Retaining earnings/Loss coverage (53,622) 53,622 0

Other movements 250 (250) 0


Profit and losses booked directly to Shareholders’ equity (13,720) 17,952 4,232




Share capital Legal reserve Demerger reserve Reserve for exchange

differences


instruments




BALANCES AS AT 1 JANUARY 2011 1,098,899 67,228 166,403 (13,720) 12,307 (4,027) 782 33,816 1,361,688


Distribution of dividends (63,764) (188) (31,882) (95,834)

Legal reserve 1,691 (1,691) 0

Retaining earnings/Loss coverage (71) 1,034 (532) (243) 188

Other movements 0


Profit and losses booked directly to Shareholders’ equity (11,255) 2,520 (8,735)

Distribution of advance on 2011 dividends (59,513) (59,513)





Notes

Use of estimatesIn application of IFRS, preparation of the financial state-

ments for the year ended 31 December 2011 required

management to make estimates and assumptions that

affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities

at the balance sheet date. The actual amounts may dif-

fer from such estimates. Estimates are used in order to

make provisions for credit risk, obsolescent inventories,

asset write-downs, employee benefits, taxes and other

provisions. The original estimates and assumptions are

periodically reviewed and the impact of any change is

recognised in the income statement.

Accounting standards and policies

The most significant accounting standards and policies

are described below.

Non-current assets held for sale Non-current assets (and assets included in disposal

groups) classified as held for sale are accounted for at

the lower of their previous carrying amount and their

market value less sale costs.

Non-current assets (and assets included in disposal

groups) are classified as held for sale when their carry-

ing amount is expected to be recovered through a sale

transaction rather than through their continued use. This

condition is only met when the sale is highly probable,

the asset (or asset included in a disposal group) is availa-

ble for immediate sale in its present condition and man-

agement is committed to the sale, which is expected to

take place within twelve months of the classification of

this item.

Conversion of foreign financial statement itemsAcea SpA and its European subsidiaries have adopted

the euro (€) as their functional and presentation currency.

Foreign currency transactions are initially recognised at

the spot rate on the date of the transaction. Foreign cur-

rency monetary assets and liabilities are translated into

Form and structure of the financial statements for the year ended 31 December 2011

General informationACEA S.p.A’s financial statements for the year ended 31

December 2011 were approved by the Board of Direc-

tors’ resolution on 21 March 2012. ACEA SpA, is an Ital-

ian company whose shares are traded on the Milan stock

exchange.

Compliance with IAS/IFRSThe financial statements have been prepared under

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

Committee (IFRIC) and Standing Interpretations Commit-

tee (SIC), collectively referred to as “IFRS”.

Acea SpA has adopted International Financial Reporting

Standards (IFRS) as of 2006, with the date of transition

to IFRS established as 1 January 2005. The last financial

statements prepared under Italian accounting standards

relate to 31 December 2005.

Basis of presentationThe financial statements for the year ended 31 Decem-

ber 2011 consist of the balance sheet, income state-

ment, statement of comprehensive income, cash flow

statement and statement of changes in shareholders’

equity, all of which have been prepared under IAS 1. They

also include notes prepared under the IAS/IFRS currently

in effect.

The income statement is classified on the basis of the

nature of expenses, whilst the cash flow statement is

presented using the indirect method.

The financial statements for the year ended 31 Decem-

ber 2011 have been prepared in euros and all amounts

have been rounded off to the nearest thousand euros,

unless otherwise indicated.


Rendering of services

Revenue is recognised with reference to the stage of

completion of the transaction based on the same crite-

ria used for contract work in progress. When the amount

of the revenue cannot be reliably determined, revenue

is recognised only to the extent of the expenses recog-

nised that are recoverable.

Finance income

Interest income is recognised on a time proportion basis

that takes account of the effective yield on the asset

(the rate of interest required to discount the stream of

future cash receipts expected over the life of the asset

to equate to the initial carrying amount of the asset).

Interest is accounted for as an increase in the value of

the financial assets recorded in the accounts.

Dividend income

Dividend income is recognised when the shareholder’s

right to receive payment is established.

Dividend income is classified as a component of finance

income in the income statement.

GrantsGrants related to plant investments received from both

public and private entities are accounted for at fair value

when there is reasonable assurance that they will be

received and that the conditions attaching to them will

be complied with.

Grants related to specific plants whose value is record-

ed under plant, property and equipment are recognised

as non-current liabilities and progressively recognised in

the income statement on a straight-line basis over the

useful life of the asset to which they refer.

Grants related to income (disbursed in order to provide

an enterprise with immediate financial aid or as com-

pensation for expenses and losses incurred in a previ-

ous period) are recognised in the income statement in

full once the conditions for recognition have been com-

plied with.

the functional currency at the exchange rate at the end

of the reporting period. Exchange differences are recog-

nised in the income statement, with the exception of dif-

ferences deriving from foreign currency loans taken out

in order to hedge a net investment in a foreign entity.

Such exchange differences are taken directly to share-

holders’ equity until disposal of the net investment, at

which time any differences are recognised as income or

expenses in the income statement. The tax effect and

tax credits attributable to exchange differences deriving

from this type of loan are also taken directly to share-

holders’ equity. Foreign currency non-monetary items

accounted for at historical cost are translated at the ex-

change rate on the date the transaction was initially re-

corded. Non-monetary items accounted for at fair value

are translated at the exchange rate at the date the value

was determined.

The functional currency used by the Group’s Latin Amer-

ican companies is the US dollar. At the balance sheet

date the assets and liabilities of these companies are

translated into ACEA SpA’s presentation currency at

closing rates, whilst income and expenses are translat-

ed at average rates for the period or at the rates ruling at

the date of the related transactions. Exchange differenc-

es, resulting from the use of different rates to translate

income and expenses as opposed to assets and liabili-

ties, are taken directly to shareholders’ equity and rec-

ognised as a separate component of equity. On disposal

of a foreign economic activity, the cumulative exchange

differences deferred in a separate component of share-

holders’ equity are recognised in the income statement.

Revenue recognitionRevenue is recognised when the amount of revenue can

be reliably measured and it is probable that the eco-

nomic benefits associated with the transaction will flow

to Acea SpA. Depending on the type of transaction, rev-

enue is recognised on the basis of the following specific

criteria:

Sale of goods

Revenue is recognised when the significant risks and re-

wards of ownership of the goods have been transferred

to the buyer.


the present value of the defined benefit obligation or

10% of the fair value of any plan assets at that date

(the so-called corridor method). Such gains and losses

are recognised on the basis of the expected average

remaining working lives of the employees participating

in the plan.

Share-based payment transactions (stock options)The Group is required to recognise the goods or ser-

vices received in a share-based payment transaction

at the date the goods or services are consumed. The

Group is required to recognise a corresponding in-

crease in shareholders’ equity if the goods or services

are received on the basis of a share-based payment

transaction settled by the issuance of equity, or as a

liability if the goods or services are acquired on the

basis of a share-based payment transaction settled by

the issuance of cash.

ACEA SpA has opted to apply IFRS 2 on a prospective

basis from 1 January 2005.

With effect from 2000, Acea SpA introduced annual

stock option plans, with the aim of equipping the Com-

pany with a means of boosting management incentives

and loyalty.

LeasesLeases are classified as finance leases when the terms

of the contract substantially transfer all the risks and

benefits of ownership of an asset to the lessee. All oth-

er leases are operating leases.

The Company as lessor

Assets held under a finance lease are presented as re-

ceivables at an amount equal to ACEA SpA’s net invest-

ment in the leased asset. Finance income is recognised

on the basis of a pattern reflecting a constant periodic

rate of return on ACEA SpA’s residual net investment.

Lease income from operating leases is recognised on

a straight-line basis over the lease term. Initial direct

costs incurred in respect of negotiating and securing

the operating lease are added to the carrying amount

of the leased assets and recognised on a straight-line

basis over the lease term.

Construction contractsConstruction contracts are accounted for on the basis

of the contractual payments accrued with reasonable

certainty, according to the percentage of completion

method (cost to cost), attributing revenue and profits

on the contract to the individual reporting periods in

proportion to the stage of contract completion. Any

positive or negative difference between contract rev-

enue and any prepayments received is recognised in

assets or liabilities.

In addition to contract fees, contract revenue includes

variations, price changes and the payment of incen-

tives to the extent that it is probable that they will form

part of actual revenue and that they can be reliably de-

termined. 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 pe-

riod 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 invest-

ment of the borrowings is deducted from the capital-

ised borrowing costs.

All other borrowing costs are recognised as an expense

in the period in which they are incurred.

Employee benefitsPost-employment employee benefits in the form of de-

fined benefit plans (such as staff termination benefits,

bonuses, tariff subsidies) or other long-term benefits

are recognised in the period the related right accrues:

Such funds and benefits are not financed.

The cost of the benefits involved in the various plans

is determined separately for each plan based on the

actuarial valuation method, using the projected unit

credit method to carry out actuarial valuations at the

end of the reporting period.

Actuarial gains and losses are recognised as income or

expense if the net cumulative unrecognised actuarial

gains and losses for each plan at the end of the previ-

ous reporting period exceeded the greater of 10% of


is probable that future taxable profit will be available

against which the temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed

at each balance sheet date and reduced to the extent

that, based on the plans approved by the Board of Direc-

tors, it is no longer probable that sufficient future taxable

profit will be available against which all or part of the

assets can be recovered.

Deferred taxes are determined using tax rates that are

expected to apply to the period in which the asset is re-

alised or the liability settled. Deferred taxes are taken

directly to the income statement, with the exception of

those relating to items taken directly to shareholders’

equity, in which case the related deferred taxes are also

taken to equity.

Property, plant and equipmentProperty, plant and equipment is stated at cost, including

any directly attributable costs of making the asset ready

for its intended use, less accumulated depreciation and

any accumulated impairment charges.

The cost includes the costs of dismantling and removing

the asset and cleaning up the site at which the asset

was located, if covered by the provisions of IAS 37. Each

component of an asset with a cost that is significant in

relation to the total cost of the item, and having a differ-

ent useful life, is depreciated separately.

Land, whether free of constructions or annexed to civil

and industrial buildings, is not depreciated as it has an

unlimited useful life.

Depreciation is calculated on a straight-line basis over

the expected useful life of the asset, applying the follow-

ing rates:

The Company as lessee

Assets held under a finance lease are recognised as

assets belonging to ACEA SpA and accounted for at

amounts equal to fair value at the inception of the lease

or, if lower, at the present value of the minimum lease

payments. The underlying liability to the lessor is includ-

ed in the balance sheet as an obligation to pay future

lease payments. Lease payments are apportioned be-

tween the capital element and the interest element, in

such a way as to produce a constant periodic rate of

interest on the remaining balance of the liability.

Finance costs, whether certain or estimated, are recog-

nised on an accruals basis unless they are directly at-

tributable to the acquisition, construction or production

of an asset, which justifies their capitalisation.

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

to be received as an incentive for entering into operat-

ing leases are also recognised on a straight-line basis

over the lease term.

Taxation Income taxes for the period represent the aggregate

amount of current (under the tax consolidation arrange-

ment) and deferred taxes.

Current taxes are based on the taxable profit (tax loss)

for the period. Taxable profit (tax loss) differs from the

accounting profit or loss as it excludes positive and

negative components that will be taxable or deductible

in other periods and also excludes items that will nev-

er be taxable or deductible. Current tax liabilities are

calculated using the tax rates enacted or substantively

enacted at the end of the reporting period, and taking

account of tax instruments permitted by tax legislation

(the domestic tax consolidation regime, tax transpar-

ency).

Deferred taxes are the taxes expected to be paid or re-

covered 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


Investment property is eliminated from the accounts

when sold or when the property is unusable over the

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 should

therefore be made to the policy adopted for leases.

Any gain or loss deriving from the elimination of an in-

vestment property is recognised as income or expense

in the income statement in the period in which the

elimination takes place.

Intangible assets

Intangible assets acquired separately

or deriving from a business combination

Intangible assets acquired separately are capitalised at

cost, whilst those deriving from a business combination

are capitalised at fair value at the date of acquisition.

After initial recognition, an intangible asset is carried

at cost. The useful life of an intangible asset may be

defined as finite or indefinite.

Intangible assets are tested for impairment annually:

the tests are conducted in respect of each intangible

asset or, if necessary, in respect of each cash-generat-

ing unit.

The useful life of an asset is reviewed annually and,

where applicable, any adjustments are made on a pro-

spective basis.

Plant and machinery in the course of construction for

use in operations, or for purposes yet to be determined,

is stated at cost, less any impairment charges. The cost

includes any professional fees and, in the case of cer-

tain assets, interest expense capitalised in accordance

with the Company’s accounting policies. Depreciation

of such assets, in line with all the other assets, begins

when they are ready for use. In the case of certain com-

plex assets subject to performance tests, which may be

of a prolonged nature, readiness for use is recognised

on completion of the related tests.

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.

Gains and losses deriving from the disposal or retire-

ment of an asset are determined as the difference be-

tween the estimated net disposal proceeds and the

carrying amount of the asset and are recognised as in-

come or expense in the income statement.

Investment propertyInvestment property, represented by property held to

earn rentals or for capital appreciation or both, is stated

at cost, including any negotiating costs less accumu-

lated depreciation and any impairment charges.


the expected useful life of the asset. The rates applied

range from a minimum of 1.67% to a maximum of

11.11%.

DESCRIPTION ECONOMIC/TECHNICAL RATE

Min Max

Plant and machinery used in operations 1.25% 6.67%

Other plant and machinery 4%

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%


Impairment of assetsAt each balance sheet date, ACEA S.p.A. reviews the

value of its tangible and intangible assets to assess

whether there is any indication that an asset may be

impaired. If any indication exists, the Group estimates

the recoverable amount of the asset in order to deter-

mine the impairment charge.

When it is not possible to estimate the recoverable

amount of the individual asset, ACEA SpA estimates

the recoverable amount of the cash-generating unit to

which the asset belongs.

Intangible assets with indefinite useful lives, including

goodwill, are tested for impairment annually and each

time there is any indication that an asset may be im-

paired, in order to determine the impairment charge.

The recoverable amount is the higher of an asset’s fair

value less costs to sell and value in use. In calculating

value in use, future cash flow estimates are discounted

using a pre-tax rate that reflects current market assess-

ments of the time value of money and the risks specific

to the business.

If the recoverable amount of an asset (or cash-gen-

erating unit) is estimated to be less than its carrying

amount, the carrying amount is reduced to its recov-

erable amount. An impairment charge is immediately

recognised as an expense in the income statement, un-

less the asset is represented by land or buildings, other

than investment property, carried at a revalued amount,

in which case the impairment charge is treated as a

revaluation decrease.

When an impairment no longer exists, the carrying

amount of the asset (or cash-generating unit), with the

exception of goodwill, is increased to its new estimat-

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 im-

mediately 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 in-

come statement, it is included among amortisation, de-

preciation and impairment charges.

Gains and losses deriving from the disposal of an intan-

gible asset are determined as the difference between

the estimated net disposal proceeds and the carrying

amount of the asset and are recognised as income or

expense in the income statement.

Research and development costs

Research and development costs are recognised as an

expense during the period in which they are incurred.

Development costs incurred in relation to a specific

project are capitalised when there is reasonable assur-

ance that they will be recovered in future periods. After

initial recognition, such costs are carried at cost, which

may be reduced by any accumulated amortisation or

accumulated impairment charges.

Each capitalised development cost is amortised

throughout the period in which the related project is

expected to generate future economic benefits.

The carrying amount of development costs is subject to

an annual impairment review when the asset is not yet

in use, or more frequently when an indicator during the

period raises doubts about whether or not the carrying

amount is recoverable.

Brands and patents

These assets are initially recognised at cost and amor-

tised on a straight-line basis over the useful life of the

asset.

With regard to the rates of depreciation, the following

is noted:

- development costs are amortised on a straight-

line basis over a period of five years based on the

expected residual useful life of the asset,

- intellectual property is amortised over an estimat-

ed useful life of three years.


Treasury shares

The cost of purchasing treasury shares is accounted for

as a reduction of shareholders’ equity. The effects of any

subsequent transactions involving the shares are also

recognised directly in shareholders’ equity.

InventoriesInventories are valued at the lower of cost and net realis-

able value. The cost comprises all materials and, where

applicable, direct labour, production overheads and all

other costs incurred in bringing the inventories to their

present location and condition. The cost is calculated us-

ing the weighted average cost formula. The net realisable

value is the estimated selling price less the estimated

costs of completion and the estimated costs necessary

in order to make the sale.

Impairment charges incurred on inventories, given their

nature, are either recognised in the form of specific pro-

visions, consisting of a reduction in assets, or, on an item

by item basis, as an expense in the income statement in

the period the impairment charge occurs.

Financial instrumentsFinancial assets and liabilities are recognised at the time

ACEA SpA becomes party to the contract terms applica-

ble to the instrument.

Trade receivables and other assetsTrade receivables, which have normal commercial terms,

are recognised at face value less estimated provisions

for the impairment of receivables.

The estimate of uncollectible amounts is made when col-

lection of the full amount is no longer probable.

Trade receivables refer to the invoiced amount which,

at the date of these financial statements, is still to be

collected, as well as the receivables for revenues for the

period relating to invoices that will be issued later.

Investments

Investments in subsidiaries and associates are recog-

nised in the balance sheet at cost, after taking account

of any impairment of the value of individual investments.

The purchase or subscription cost, in the case of invest-

ments transferred, corresponds to the value estimated

by independent experts in accordance with art. 2343 of

the Italian Civil Code.

Any excess of the cost of the acquisition over the Com-

pany’s interest in the fair value of the investee compa-

ny’s shareholders’ equity at the date of the acquisition is

recognised as goodwill. Goodwill is included in the car-

rying amount of the investment and subject to impair-

ment reviews. Any resulting impairment charges are not

reversed if the circumstances that led to the impairment

no longer exist.

The portion of an impairment that exceeds the value of

shareholders’ equity is posted to provisions for liabili-

ties and charges, despite the existence of receivables

due and until the claim on such receivables is formally

waived. The cost of liquidating investments is taken into

account in the measurement of the investments them-

selves, regardless of any provisions posted in the finan-

cial statements of the related companies.

Investments in other companies, held as non-current fi-

nancial assets and not for trading, are accounted for at

fair value if determinable: in this case, fair value gains

and losses are recognised directly in shareholders’ equi-

ty until the investment is sold, when all the accumulated

gains and losses are recognised in the income statement

for the period.

Investments in other companies for which the fair val-

ue is not known are accounted for at cost and written

down in the event of anything other than a temporary

impairment. Dividend income is recognised in the in-

come statement when the right to receive payment is

established and when deriving from distributions of

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.


cost of a financial asset means the amount recognised

initially, less principal repayments and plus or minus

accumulated amortisation using the effective interest

method of the difference between the initial amount and

the maturity amount, after any reductions. The effective

interest method is a method of calculating the amor-

tised cost of a financial asset (or group of financial as-

sets) and allocating the interest income or expense over

the relevant period. The effective interest rate is the rate

that exactly discounts estimated future cash payments

or receipts over the expected life, or contractual term

if shorter, of the financial instrument to the net carrying

amount of the financial asset.

In the case of financial assets stated at amortised cost,

the income statement and balance sheet are adjusted to

take account of the difference between the payment or

receipt calculated on the basis of the effective interest

rate and the coupon interest to be collected/paid, recog-

nised on the basis of the nominal rate of the instrument.

Cash and cash equivalentsCash and cash equivalents include cash at bank and in

hand, demand deposits and highly liquid short-term in-

vestments, which are readily convertible into cash and

are subject to an insignificant risk of changes in value.

Financial liabilitiesThey are stated at amortised cost. Borrowing costs

(transaction costs) and any issue premiums or discounts

are recognised as direct adjustments to the nominal val-

ue of the borrowing. Net finance costs are consequently

re-determined using the effective rate method.

Financial assetsFinancial assets are recognised and derecognised at the

trade date and initially recognised at cost, including any

directly attributable acquisition costs.

At each future balance sheet date, the financial assets

ACEA SpA has a positive intention and ability to hold to

maturity (held-to-maturity financial assets) are rec-

ognised at amortised cost using the effective interest

method, less any impairment charges applied to reflect

impairments.

Financial assets other than those held to maturity are

classified as held for trading or as available for sale, and

are stated at fair value at the end of each period.

When financial assets are held for trading, gains and

losses deriving from changes in fair value are recognised

in the income statement for the period. In the case of

financial assets that are available for sale, gains and

losses deriving from changes in fair value are recognised

directly in a separate item of shareholders’ equity until

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

loss must equal the difference between the acquisition

cost and current fair value.

The fair value of financial instruments traded in active

markets is based on quoted market prices (bid prices) at

the end of the reporting period. The fair value of invest-

ments that are not traded in an active market is deter-

mined on the basis of quoted market prices for substan-

tially similar instruments, or calculated on the basis of

estimated future cash flows generated by the net assets

underlying the investment.

Purchases and sales of financial assets, which imply de-

livery within a timescale generally defined by the regula-

tions 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 determina-

ble 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


when the instrument no longer meets hedge account-

ing criteria. At this time, accumulated gains and losses

on the hedging instrument recognised directly in share-

holders’ equity are retained in equity until the forecast

transaction effectively occurs. If the forecast transac-

tion is no longer expected to occur, the accumulated

gains and losses recognised directly in shareholders’

equity are immediately taken to the income statement

for the period.

Trade payablesTrade payables, which have normal commercial terms,

are stated at face value.

Derecognition of financial instrumentsFinancial assets are derecognised when ACEA SpA 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.

Provisions for liabilities and chargesProvisions for liabilities and charges are made when

ACEA SpA has a present (legal or implicit) obligation to

meet as a result of a past event, should it be probable

that an outflow of resources be required to settle the

obligation and the related amount have been reliably es-

timated.

Provisions are measured on the basis of management’s

best estimate of the expenditure required to settle the

present obligation at the balance sheet date, and are dis-

counted when the effect is significant.

Derivative financial instrumentsDerivative financial instruments are initially recognised

at cost and then re-measured to fair value at subse-

quent end of the reporting periods. They are designated

as hedging instruments when the hedging relationship

is formally documented at its inception and the periodi-

cally verified effectiveness of the hedge is expected to

be high.

Fair value hedges are recognised at fair value and any

gains or losses recognised in the income statement.

Any gains or losses resulting from the fair value meas-

urement of the hedged asset or liability are similarly


In the case of cash flow hedges, the portion of any fair

value gains or losses on the hedging instrument that

is determined to be an effective hedge is recognised

in shareholders’ equity, whilst the ineffective portion is

recognised directly in the income statement.

If the hedged contract commitment or forecast trans-

action results in recognition of an asset or a liability,

the gains and losses on the instrument previously rec-

ognised directly in shareholders’ equity are transferred

from equity and included in the initial measurement of

the cost or carrying amount of the asset or liability.

In the case of cash flow hedges that do not result in

recognition of an asset or a liability, the amounts rec-

ognised directly in shareholders’ equity are included in

the income statement in the same period in which the

hedged contract commitment or forecast transaction is

ultimately recognised in the income statement.

In the case of fair value hedges, the hedged item is

adjusted for changes in fair value attributable to the

hedged risk and the resulting gain or loss recognised in

the income statement. Gains and losses deriving from

measurement of the derivative instrument are also rec-

ognised in the income statement.

Changes in the fair value of derivative instruments that

do not qualify for hedge accounting are recognised in

the income statement for the period in which they oc-

cur, with the exception of derivative instruments whose

fair value is not reasonably determinable.

Hedge accounting is discontinued when the hedging in-

strument expires or is sold, terminated or exercised, or


liability extinguished. Any profit or loss is immediately


Amendments to IFRS 1 and IFRS 7 – Limited exemption from comparative IFRS 7 Disclosure for first-time adoptersThis document was issued in January 2010 and approved

on 19 July 2010. It came into force on 1 January 2011.

IAS 24 (Revised in 2009) – Related party disclosuresThe document, that was issued in November 2009 and

approved on 19 July 2010, came into force on 1 Janu-

ary 2011. This standard includes an amendment to the

definition of related party in order to simplify it and, in

particular, to ensure symmetry in the identification of re-

lated parties.

Improvements to IFRS (May 2010)In May 2010, IASB issued improvements to IFRS, with a

set of amendments to the standards. The following are

the most important for ACEA

• IFRS 3 Business Combinations,

• IFRS 7 Financial Instruments; additional disclo-

sures,

• IAS 1 Presentation of Financial Statements,

• IAS 27 Consolidated and Separate Financial State-

ments,

• IFRIC 13 Customer Loyalty Programmes.

It should be noted that ACEA has applied the amend-

ments introduced to the international accounting stand-

ards shown above as well as the additional improve-

ments to these Financial Statements.

The adoption did not have a significant impact on the

company’s financial position and operating result.

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

The following documents, already previously issued by

the IASB and approved by the European Union, came into

force on 1 January 2011, and contain amendments to the

international accounting standards:

Change to IAS 32 –Classification of rights issuedThe document was issued in October 2009 and approved

on 23 December 2009. It came into force on 1 February

2010. This standard includes an amendment to the defi-

nition of financial liability for the classification of rights

issues in foreign currency (and of some options and war-

rants) as equity instruments when those instruments are

issued pro rata to all shareholders in the same class of a

(non-derivative) equity instrument of an entity, or for the

purchase of a fixed amount of the entity’s equity instru-

ments for a fixed amount of currency.

Changes to IFRIC 14 – Prepayments of a minimum funding requirementThe document, that was issued in November 2009 and

approved on 19 July 2010, came into force on 1 January

2011. This amendment provides guidelines in order to

define the recoverable value of the net assets of a pen-

sion fund. This amendment allows an entity to recognise

prepayments for a minimum funding contribution as an

asset.

IFRIC 19 – Extinguishing financial liabilities with equity instrumentsThis document was issued in November 2009 and ap-

proved on 23 July 2010, and became effective for finan-

cial years that begin on or after 1 July 2010. The inter-

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


IFRS 10 – Consolidated Financial StatementsIFRS 12 – Disclosure of interests in Other EntitiesThe documents were issued on 12 May 2011 as part of

the IASB project aimed at incorporating two consolida-

tion criteria present in IAS 27 (more focused on control)

and SIC 12 (more focused on risks and benefits) into a

single standard, and therefore providing the most com-

plete guidelines for establishing under what conditions

an SPE or an entity whose majority of voting rights (also

potential) is not held should be consolidated or not.

In summary, a situation of control occurs when it can be

demonstrated that the investor has the power to make

decisions about the business of the company in which

he has invested and when the investor is exposed to

the variability of that company’s returns, and therefore

is able to use his power to influence its returns.

IFRS 11 – Joint ArrangementsThe document was issued on 12 May 2011, and is in-

tended to replace the current IAS 31. IFRS 11 is based

on the following core principles:

• Classification of arrangements in only two man-

ners (joint operation and joint venture) instead of

the three set forth in IAS 31

• Distinction between the two types of arrange-

ment based on their content

Reporting of contractual rights and obligations re-

sulting from the arrangement on the basis of its

content

• Assessment of the investment in a joint venture

based on the shareholders’ equity method in-

stead of the proportionate method, which is no

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.

Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance

Only amendments to IFRS 7 regarding disclosures to be

made in the event of the full or partial transfer of finan-

cial assets were approved during the year (see below).

Numerous standards and amendments are still pending

the completion of the approval process; the most signifi-

cant are described hereafter.

Change to IFRS 7 – Disclosures – Transfer of financial assetsThe amendments made to IFRS 7 intend to provide great-

er transparency in relation to risks connected with trans-

actions in which, in respect of the transfers of financial

assets, the transferor retains some level of exposure to

the risks associated with the financial assets transferred

(a situation generally defined as “continuing involve-

ment, translated with the term “coinvolgimento residuo”

in the Italian version of the regulations for the approval of

international accounting standards). Additional informa-

tion is also required in the event of transfers of financial

assets at particular times (e.g. near the end of the year).

The amendments to IFRS 7 specify that the disclosure re-

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 benefi-

ciary.

The amendments to the standard were approved and

must be applied from 1 January 2012.


review the standard relating to financial instruments,

hence allowing entities to apply the new IFRS 9 in its

entirety.

An additional amendment made to IFRS 9 makes it pos-

sible not to make a retrospective adjustment to applica-

tion of the standard in the comparative period at the

date of first adoption of IFRS 9, however, requiring the

following additional information in the year of first ap-

plication of IFRS 9 (Amendment to IFRS 7):

• information on the change of classification of fi-

nancial assets and liabilities, showing the changes

in the net carrying out amount separately, using

both IAS 39 and IFRS 9 measurement criteria,

• for financial assets and liabilities that are reclas-

sified and value at amortised cost: the fair value

of said assets/liabilities at the end of the year, the

profit/loss that would have been booked to the in-

come statement in the event the instruments had

not been reclassified,

• the effective interest rate determined at the date

of reclassification and the amount of interest re-

corded in the income statement.

Amendments to IAS 32 and IFRS 7: “Offsetting Financial Assets and Financial Liabilities”On 16 December 2011, IASB published an amendment to

IAS 32 Financial Instruments: Presentation and to IFRS

7 Financial Instruments: Disclosures with reference to

rules for the offsetting of financial assets and liabilities.

The joint IASB-FASB project on the offsetting of financial

assets and liabilities intends to eliminate current differ-

ences between the respective accounting standards,

with regard to the offsetting of financial instruments.

The FASB decided to maintain its current position, pre-

sent in US GAAPs, eliminating the possibility of conver-

gence; therefore, the Boards elected to jointly focus on

the request for information in order to allow users of

financial statements to more easily compare the pres-

entation of financial instruments according to IFRS and

US GAAPs.

Mandatory adoption is required by 1 January 2013 for

IFRS 7 and 1 January 2014 for IAS 32: as of today the ap-

proval process is still underway.

In a nutshell, a joint arrangement is a joint ven-

ture if:

• the arrangement’s assets and liabilities are con-

tained in a vehicle whose legal form does not grant

the parties rights to the assets and obligations for

the liabilities contained in the vehicle;

• contractual agreements do not change the vehi-

cle’s legal form and

• the vehicle is able to operate independently from

the parties.

The IASB requires IFRS 10, 11 and 12 (and subsequently

the amendments to IAS 27 and 28) to be adopted from

1 January 2013.

As of today, the approval process is still underway and

EFRAG has published a first draft of the endorsement

advice, in respect of which it requires any comments by

next 11 March.

IFRS 13 – Fair Value MeasurementThe document was issued on 12 May 2011 and aims to:

- clarify the definition of fair value;

- establish a single benchmark framework to meas-

ure the fair value applicable to all IAS/IFRS which

indicate fair value as the applicable measurement

criteria;

- provide clarifications and operating guidelines to

determine fair value (also in illiquid or inactive

market situations).

Mandatory adoption is required by 1 January 2013: as of

today, the approval process is still underway.

Amendments to IFRS 9 and IFRS 7: “Mandatory Effective Date and Transition Disclosures”On 16 December 2011, IASB published the document

“Mandatory Effective Date and Transition Disclosures

(Amendments to IFRS 9 and IFRS 7)”, changing the date

of mandatory application of IFRS 9 to years starting on

or after 1 January 2015 (the date of mandatory applica-

tion was previously for years on or after 1 January 2013),

leaving the possibility of early adoption unaltered.

The Board deferred the mandatory application of IFRS

9 following the recent amendment to the timescale for

completion of the remaining phase of the project to


Thirdly, the new standard requires additional disclosures,

to be provided in the notes.

The amendments must be applied to financial state-

ments for years starting on or after 1 January 2013; early

adoption is permitted. Retrospective application is re-

quired with certain exceptions and comparative sensitiv-

ity analysis for financial years starting before 1 January

2014. As of today, the approval process is still underway.

Amendments to IAS 1: Presentations of Items of Other Comprehensive IncomeOn 16 June 2011, the IASB issued the document “Pres-

entations of Items of Other Comprehensive Income

(amendments to IAS 1)”, the result of joint work carried

out with the FASB, which provides a guide on the presen-

tation and classification of items contained in the State-

ment of Other Comprehensive Income (“OCI”).

The standard does not modify the possibility of present-

ing all revenue and cost items recorded in one financial

year in a single statement of comprehensive income, or

in two statements: one statement which shows profit

(loss) components for the year (separate income state-

ment) and a second statement which starts with profits

(losses) for the year and shows the items of the State-

ment of Other Comprehensive Income.

The standard requires the grouping together of items of

the Statement of Other Comprehensive Income into two

categories, depending on whether they can be reclassi-

fied or not, in the income statement in a future period.


ments for years starting on or after 1 July 2012, with ret-

rospective application. As of today, the approval process

is still underway.

Amendments to IAS 19: “Employee Benefits”On 16 June 2011, the IASB issued an amended version of

IAS 19 “Employee Benefits”.

Said document modifies the accounting of defined benefit

plans and termination benefits.

In the first place, it eliminated the possibility of using

the “corridor method” for recording actuarial profits and

losses. In particular, all actuarial profits and losses must

be recorded in the Statement of Other Comprehensive

Income (“OCI”), with no other option available, in order

to show the complete net balance of the plan surplus/

deficit in the balance sheet. During the transition in line

with the requirements of the amended standard, an en-

tity that currently uses the “corridor method” may have to

record a higher liability/lower asset in the balance sheet

(with a matching entry in the Statement of Other Compre-

hensive Income and, therefore, Equity). When fully applied,

said amendment will generate higher volatility in the bal-

ance sheet and in the Statement of Other Comprehensive

Income, but the income statement will no longer be af-

fected by the amortisation of actuarial profits/losses.

Secondly, provision is made for a new approach to the

presentation and accounting of changes in the following

components of defined benefit obligations and plan as-

sets in the income statement and the Statement of Other

Comprehensive Income:

• Service costs are charged to the income statement:

they include costs for services provided in the year,

effects generated by past service costs and curtail-

ments (both now recorded immediately in the year

they occur) and profits/losses generated by settle-

ment of the plan (in particular, generated by pay-

ments not in keeping with the terms of the plan, for

example, early termination of the plan),

• Net interests which are recorded in the income

statement,

• Remeasurements which are booked to the State-

ment of Other Comprehensive Income: these in-

clude, 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).


Notes to the Income Statement

Net revenues down 172,632 thousand euros

1. Revenue from sales and services amounted to

163,764 thousand euros and relates to:

• revenues from the provision of services to sub-

sidiaries and associates totalling 85,473 thousand

euros, an increase of 13,492 thousand euros com-

pared to 31 December 2010: this change is attribut-

able to the review of amounts due for services that

the Parent Company provides to Group companies,

with particular attention to administrative, finan-

cial, legal and technical services,

• revenues from services and work carried out for

third parties totalled 78,292 thousand euros: this

type of revenue includes income from the manage-

ment and construction of public lighting systems

for the Municipalities of Rome and Naples. The

increase of 9,727 thousand euros reflects the fol-

lowing: (i) the increase of 2,443 thousand euros in

revenues from the signing of the new tender con-

tract for the management of the public lighting ser-

vice in the Municipality of Naples and (ii) increase

of 5,609 thousand euros deriving from the public

lighting service in the Municipality of Rome. As re-

gards the latter service, the change reflects the fol-

lowing contrasting phenomena: on one hand, the

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 thou-

sand 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 thou-

sand euros).

2. Other revenue and proceeds amounted to 8,868

thousand euros, representing a reduction of 15,973 thou-

sand euros compared with 31 December 2010 (24,840

thousand euros).

A breakdown of said item is shown in the table below:

Exposure Draft 2011/6 relating to the new version of the Exposure Draft 2010/6 “Revenue from Contracts with Customers”On 14 November 2011 the IASB published a new version

of the Exposure Draft 2010/6 “Revenue from Contracts

with Customers”. A similar document was published by

the FASB.

The core principle of the Exposure Draft 2011/6 coin-

cides with the one set out in the Exposure Draft 2010/6:

the entity must record revenues at the time the assets or

services are transferred to the customer (the concept of

“control” is used to determine when the transfer occurs);

the amount of revenues to be recorded corresponds to

the consideration promised by the customer in exchange

for the goods or services. However, in order to take ac-

count of numerous letters of comment received by the

IASB on the Exposure Draft 2010/6, and the results of

the extended “outreach activity”, the Boards decided to

improve the original proposals.

Comments on the Exposure Draft may be submitted until

13 March 2012; the final accounting standard is expect-

ed by the end of 2012 and will be applicable for financial

statements for years starting on or after 1 January 2015.

Early application will be permitted.

At present, Acea SpA is analysing the standards and in-

terpretations given, as well as assessing whether their

adoption will have a significant effect on the financial

statements.


rent paid by the contractor who has taken over the

Group’s stock management on the storage space

used. This item also includes the rent paid by Labo-

ratori for use of the Grottarossa laboratory.

• As at 31 December 2010, gains on asset dispos-

als included the profit generated by the sale of the

company’s car fleet, amounting to 9,471 thousand

euros.

Operating costs – 206,788 thousand euros

3. IStaff costs amount to 47,648 thousand euros at the

end of 2011, marking an increase of 8,122 thousand eu-

ros compared to 31 December 2010 (the total was 39,525

thousand euros). In 2010, the cost of wages and salaries

felt the effects of adjustments recorded against the non-

recognition of estimates due to incentive policies and

performance bonuses assessed in previous years.

The table below shows the breakdown of staff costs, and

indicates the effect of changes in the year:

• The recharged cost of governance bodies amounts

to 2,502 thousand euros and regards fees payable

to managers of ACEA as members of subsidiaries’

boards of directors.

• Income from seconded staff amounts to 2,337

thousand euros (compared with 2,005 thousand

euros at 31 December 2010) and relates to recov-

ery of the costs of ACEA personnel seconded to

other Group companies.

• Contingent assets and other revenues include (i)

contractual servicing fees set out in the contract

for the securitisation of Acea Energia and Acea

Ato2 receivables (for 1,254 thousand euros); (ii)

contingent assets from the recognition of higher

costs set aside in previous financial years (599

thousand euros). At the end of the previous year,

the balance included the recognition of contingent

assets deriving from the write-off of prescribed li-

abilities for 5,633 thousand euros.

• The item property income, which is substantially

in line with 31 December 2010, primarily relates to


Property income 1,723 1,735 (12)

Income from end users 0 0 0

Gains on asset disposals 0 9,471 (9,471)

Contingent assets and other revenues 2,237 9,016 (6,779)

Reimbursement for damages, penalties, compensation 68 272 (204)

Recharged cost of governance bodies 2,502 2,341 161

Seconded staff 2,337 2,005 332

TOTAL 8,868 24,840 (15,973)

31.12.2011 31.12.2010 Increase (Decrease)

Staff costs 47,648 39,525 8,122

- including estimated differences due to incentive policies and performance bonuses (445) (3,003) 2,558

- including the release of liabilities - Medium/long–term incentive plan (2007-2009) 0 (3,004) 3,004

Net wages and salaries 33,960 31,341 2,619

Capitalised costs (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)

- including the medium/long–term incentive plan (2010-2012) 1,159 1,122 37

TOTAL 48,093 45,532 2,561


of the period, to be calculated as a percentage of the

Gross Annual Remuneration of beneficiaries, based on

the achievement of pre-established operating and finan-

cial targets. In 2010, costs felt the effects of the reversal

of liabilities allocated in 2009, following the negative out-

come of the check performed on whether the objectives

underlying the first cycle (2007-2009) were reached.

The following table shows the average number of staff

by category, compared with the corresponding period in

the previous year. The final amount as at 31 December

2011 is also shown.

The net change of 2,561 thousand euros compared to

the previous year is the joint result of:

• the increase in average per capita costs as a result

of the renewal of employment contracts and salary

policies,

• the trend in the average size (554 average units as

at 31 December 2011 compared to 537 in 2010),

Staff costs include the amount of 1,159 thousand euros

corresponding to the assessment of the second cycle of

the three-year medium/long-term incentive plan (2010-

2012). This Plan envisages a cash payment at the end

Average number of employees Employees

Classification 31.12.2011 31.12.2010 Increase/ (Decrease) 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 10 10 0 10

TOTAL 552 537 15 560

4. Costs of materials and overheads amounts to a

total of 159,140 thousand euros, an increase of 19,224

compared to 31 December 2010. This item consists of:


Materials 7,127 599 6,528

Services 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)

TOTAL 159,140 139,916 19,224

• The costs of materials came to 7,127 thousand

euros, a significant increase as a result of the re-

quirements generated in the fourth quarter by the

start of activities set out in the “Lighting Plan” pro-

ject, commissioned by Roma Capitale as part of the

public lighting service contract.

• costs for services and contract works amount to

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-

crease in services in relation to (i) public lighting

activities in Rome and Naples (up 7,984 thousand

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 Com-

pany (up 2,246 thousand euros), (v) costs for sur-

veillance services, earlier included in the payment


made to Marco Polo, (up 1,855 thousand euros), (vi)

rent costs paid to third parties for the maintenance

of hardware and software that entered operation

at the end of the previous year (up 1,569 thousand

euros) and (vii) higher costs incurred by administra-

tive services performed by Group companies for

the Parent Company (up 921 thousand euros).

In contrast, the reductions in the following should

be noted, (i) cost of freelance and professional

work of coordinated and continuous collabora-

tions (down 3,039 thousand euros) which in 2010

included the tax and administrative judgments re-

quired linked to the dissolution of the joint venture

with GdF-Suez (3,615 thousand euros), (ii) reduc-

tion in costs incurred in relation to sponsorships

(down 2,032 thousand euros) and (iii) decrease in

postal and bank expenses (down 390 thousand eu-

ros) due to the benefits of the project for the bank

channelling of collections.

The breakdown of service costs is as follows:


Intercompany services 67,108 54,109 12,999

- of which Public Lighting services - municipality of Rome 46,486 42,304 4,183

- of which Public Lighting services - municipality of Naples 6,283 2,482 3,801

- of which service contract with Marco Polo 13,200 9,000 4,200

Electricity and water consumption 24,159 19,802 4,357

- of which electricity consumption of Public Lighting service 21,664 17,465 4,199

Professional freelance work 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)

Technical and administrative services 90 112 (22)

Cleaning, transport and porterage expenses 27 24 2

Total costs for services 132,245 115,065 17,180


In addition, pursuant to article 149-duodecies of the

CONSOB Issuers’ Regulations, the fees accruing to the

Independent Auditors, Ernest & Young, totalled 218 thou-

sand euros, of which 133 thousand euros for the audit-

ing of ACEA’s accounts and 85 thousand euros for other

audit-related services,

• Lease expense amounted to 13,237 thousand eu-

ros (15,438 thousand euros at 31 December 2010)

and refer to the following:

- 4,876 thousand euros for rental expenses for

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 Re-

mote Control Centre);

- for 1,050 thousand euros to rent for use of public

land for production plants which is reversed to

the company Acea Ato2; in this regard, it should

be noted that this value fell by 1,434 thousand

euros compared to 31 December 2010 due to

the effect of the different method of recharging

Group companies;

- for 1,008 thousand euros for the cost of leasing

the area that houses the company’s car fleet.

The following table shows a breakdown of the type of services provided by Group companies:

Description 31.12.2011 31.12.2010 Increase/ (Decrease)

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 0 8 (8)

TOTAL 91,198 73,868 17,330

The contract for the sale of the property com-

plex, completed on 22 December 2010, made

provision for the maintenance of use of the

property by ACEA up until full payment of the

price due for the sale;

- for 856 thousand euros for the costs of hiring

cars for company use;

- for 425 thousand euros for the fee due to Mar-

co Polo for the occupation of spaces in the so-

called Sedina which ACEA uses for some of its

company functions;

- for 208 thousand euros for costs of renting ac-

commodation 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-

chased the company’s historic headquarters in Piazzale

Ostiense, Rome, for a price of 110,000 thousand euros,

strengthening the 100-year old links with the local area

and the citizens of the city of Rome. The company took

advantage of the opportunity presented by the disposal

carried out by the Beni Stabili Gestioni SpA SGR real es-

tate fund, by exercising the right of first offer set out in

the lease.

On 19 December 2011, the company paid Beni Stabili


5. Amortisation/depreciation and impairment

charges amount to 76,512 thousand euros, marking

an increase of 47,952 thousand euros compared to 2010

(28,561 thousand euros). The breakdown is as follows:

Gestioni S.p.A. SGR an amount of 11,000 thousand euros

as an advance for the purchase of the building with ad-

joining garage.

• Sundry operating expenses, amounting to 4,957

thousand euros (7,022 thousand euros as at 31

December 2010), include taxes and duties of 1,082

thousand euros (989 thousand euros as at 31 De-

cember 2010) and general expenses of 3,875 thou-

sand euros (6,033 thousand euros).

Sundry operating expenses include (i) refuse col-

lection tax and other taxes (892 thousand euros);

(ii) contributions paid to industry organisations

(666 thousand euros), (iii) CONSOB (187 thousand

euros), (iv) payments to charity (478 thousand eu-

ros), (v) purchase of periodicals and publications

(408 thousand euros), (vi) release of costs incurred

in 2009 for the project to construct and manage a

cogeneration plant powered by biomass in Massa

Martana (PG), for which the feasibility of the same

did not materialise (375 thousand euros), (vii) other

insurance amounts (268 thousand euros), (viii) costs

incurred for dividends distributed (256 thousand

euros) which, in 2011 related to the distribution of

2010 profits and payment of the advance on 2011

dividends resolved by the Board of Directors at the

meeting on 29 November 2011, (ix) municipal prop-

erty tax and charges for the occupation of public

space (160 thousand euros).

The reduction in general expenses of 2,158 thou-

sand euros, due (i) to the end of activities linked

to the redevelopment of areas adjacent to the

headquarters (Headquarters Project), totalling 158

thousand euros at the end of the year, compared

to 1,130 thousand euros as at 31 December 2010,

and (ii) losses on receivables in the 2010 balance

recorded following the transactions concluded for

1,225 thousand euros.


Amortisation and depreciation of intangible and tangible assets

11,921 12,986 (1,065)

Provisions for impairment of receivables

4,232 10,113 (5,881)

Provisions for liabilities 60,359 5,462 54,897

TOTAL 76,512 28,561 47,952

Amortisation and depreciation to 11,921 thousand eu-

ros: 6,232 thousand euros of intangible assets and 5,689

thousand euros of tangible assets. The reduction in am-

ortisation is a result of the completion of the process of

amortisation of certain intangible assets, with particular

reference to software developed internally.

Provisions for liabilities amounted to 4,232 thousand eu-

ros in the year, and relates to the risks connected with

the recoverability of the amounts due from some Group

companies and public counterparties, including therein

Roma Capitale. In the period under comparison, write-

downs relate to the risks of non-collectability of receiva-

bles due from customers that are not users which ACEA

took on following the exit of Acea Luce from the Group.

Provisions for liabilities amounted to 60,359 thousand

euros (5,462 thousand euros at 31 December 2010) and

refer to the following:

• for 44,100 thousand euros for allocations to cover

GORI’s risk of the non-recognition of tariff adjust-

ments and financial risk, pending approval and

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,


Net finance income/(costs) and from investments – 205,755 thousand euros

6. Net finance income/(costs) amount to 5,580 thou-

sand euros, marking an increase of 40,550 thousand eu-

ros on the previous year, when the figure was 34,970

thousand euros.

The breakdown is as follows:

• for 3,874 thousand euros to the expenses needed

to cover the voluntary redundancy programme

started in the year, effective June 2011 - December

2012,

• 1,752 thousand euros for legal liabilities and poten-

tial disputes with suppliers,

• 807 thousand euros relating to staff, above all li-

abilities regarding contributions.

OPERATING FINANCIAL MANAGEMENT 31/12/2011 31/12/2010 Increase/ (Decrease)

Finance costs 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

Costs from discounting Public Lighting service receivables 9,346 0 9,346

Expenses/(Income) on interest rate swaps 6,406 6,550 (144)


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

Finance income 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

Other income 0 0 0

Foreign exchange profit/(loss) 460 (1,377) 1,837

TOTAL FINANCE (COSTS)/INCOME 5,580 (34,970) 40,550


Finance costs also recorded an increase over 31 De-

cember 2010, amounting to 81,920 thousand euros at

the end of 2011, compared to 64,189 thousand euros

in the previous year, and their breakdown is as follows:

• interest on bonds in issue, totalling 42,181 thou-

sand euros (36,771 thousand euros as at 31 De-

cember 2010), with particular reference to bonds

issued in March 2010;

• interest accrued on medium/long-term borrow-

ings of 15,460 thousand euros, marking an in-

crease over the previous year due to higher rates

applied by banks starting in the second half of

2011;

• discounting expenses - even though figurative -

amounting to 9,346 thousand euros, due to the

impact of application of IFRIC 12 on public light-

ing service receivables, classified as “financial”

after the supplemental contract between ACEA

and Roma Capitale was signed, which aligned the

expiry of the service agreement with the expiry of

the concession agreement (2027);

• net charges on interest swaps of 6,406 thousand

euros relating to swaps on the AFLAC Bond (3,641

thousand euros) and on the loan with Cassa

Depositi e Prestiti (2,765 thousand euros);

• 5,570 thousand euros relating to interest on short-

term borrowings reflecting the increase in interest

rates applied by credit institutions, due to the pe-

riod of financial instability the company finds itself

in.

The average rate of interest paid by ACEA on its to-

tal medium/long-term borrowings as at 31 December

2011 is 3.40%, compared with 3.175 as at 31 December

2010. This indicator was calculated on the basis of the

contractual conditions obtained during negotiation of

each loan in the overall portfolio, taking account of all

cash flows generated by the various instruments in the

portfolio, and the overall outstanding debt (in nominal

terms) and the interest rate payable at the valuation

date.

The weighted average rate of interest payable on the

Parent Company’s short-term borrowings is 3.518%,

compared with 1.055% of the previous year.

As regards income, amounting to 87,040 thousand euros

(30,597 thousand euros as at 31 December 2010), the

considerable growth over the previous year is a result of

the review, effective as of 1 January 2011, of the econom-

ic conditions of treasury contracts.

In particular, the changes concerned:

• the origination of the financial requirements need-

ed for fulfilment of Group company activities. In this

regard, two credit lines were taken out, a medium/

long-term line (investment line) aimed to cover

financial needs generated by investments and a

short-term line (general purpose) to cover ordinary

liquidity requirements;

• the economic conditions applied. In particular,

ACEA applies a 3-year IRS rate plus a spread of

3.08% to credit positions, and a rate equal to the

average of three-month Euribor rates less a spread

of 0.05% on debt positions. In 2010, the remunera-

tion of cash pooling with Group companies ACEA

occurred on the basis of the arithmetic mean of

the daily 3-month Euribor rates plus (or minus) a

spread ranging between +0.8% and +1.50% on as-

sets and -0.05% and -0.20% on liabilities.

The breakdown of finance income is shown below:

• interest from cash pooling transactions with some

subsidiaries, calculated according to new param-

eters (66,962 thousand euros);

• credit facility fees due from Group companies on

the ceilings of investment lines, set forth in the

centralised treasury contract, calculated on the

basis of requirements correlated to investments

envisaged in the Business Plans (10,024 thousand

euros);

• default interest towards the municipality of Rome

(3,484 thousand euros) resulting from delays in

the payment of invoices issued;

• income envisaged in the treasury contract and

deriving from the recharging of costs incurred by

ACEA for sureties requested and given to subsidi-

aries (3,149 thousand euros);

• interest on loans granted to subsidiaries not man-

aged by cash pooling relations (1,236 thousand

euros);


87,662 thousand euros, partially offset by impairment

charges or investment losses amounting to 6,419 thou-

sand euros. The impairment of investments came to

3,175 thousand euros for ACEA Ato5, 2,000 thousand

euros for Crea Gestioni, 520 thousand euros for Acea-

8cento and 482 thousand euros for Acque Blu.

7. Profit/(loss) on investments amounted to 200,175

thousand euros (85,832 thousand euros as at 31 Decem-

ber 2010) and include dividends distributed by subsidiar-

ies, associates and other companies for 117,340 thou-

sand euros and gains from the dissolution of the joint

venture between GDF Suez Energia Italia and ACEA for


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

Dividend income 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

Intesa Aretina 97 0 97

Acea Energia Holding 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)

Gain on the sale of investments 87,662 0 87,662

Gain on the transfer of the public lighting business 1,591 1,591 (0)

TOTAL 200,175 85,832 114,343


(1,026 thousand euros) relating to the taxable portion

of the dividends collected and provisions for the period

(1,016 thousand euros).

Tax expense and income

These amounted to 61,297 thousand euros and repre-

sent the balance of tax expense due from the Parent

Company to companies included in the tax consolida-

tion in return for the transfer of tax losses (5,387 thou-

sand euros) and tax income represented by taxable

income transferred to the tax consolidation (66,684

thousand euros).

In accordance with the Group’s general tax consolida-

tion rules, the value of the loss is determined by ap-

plying the current IRES rate at the time to the total tax

losses transferred.

Moreover, it is noted that, as of FY 2010, the items con-

solidated expense and income include remuneration of

interest expense and/or exceeding EBITDA transferred

to tax consolidation and offset as part of this procedure.

The following table provides a reconciliation of the the-

oretical and effective tax charges.

8. Income taxes equalled 13,550 thousand euros at

the end of 2011, compared to 25,571 thousand euros

in 2010.

Total tax is the algebraic sum of the following compo-

nents.

Current taxes

As at 31 December 2011, current taxes amounted to

56,461 thousand euros (56,555 thousand euros as at

31 December 2010) for consolidated IRES (corporate in-

come tax) expense, representing the sum of the taxable

income and tax losses reported by companies included

in the tax consolidation arrangement.

Deferred taxes

Deferred tax assets of 8,704 thousand euros represent

the algebraic sum of provisions (10,965 thousand eu-

ros) made primarily with regard to provisions for liabili-

ties and provisions for impairment of receivables and

provisions for defined-benefit plans, and uses (2,262

thousand euros). Deferred tax liabilities totalling 10

thousand euros represent the algebraic sum of uses

% %

Profit before tax from continuing operations 95,086 8,245

IRES (corporate income tax) for the year including deferred taxation 26,149 0 2,267 0

Permanent differences (39,303) (0) (27,505) (0)

Art. 24 of Law Decree no. 185/2008 (2008 and 2009) 0 0 17 0

IRES (corporate income tax) for the year including deferred taxation (13,154) (0) (25,221) (0)

Other taxes 0 0 0 0

IRAP (regional income tax) (396) (0) (350) (0)

Tax on continuing operations (13,551) (0) (25,571) (0)


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.


Earnings per shareEarnings per share, determined in accordance with IAS 33, are shown below:


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

Weighted average number of ordinary shares in issue for the purposes of determining earnings per share

- basic (B) 212,965 212,965 0

- diluted (C) 212,965 212,965 0

Earnings/(loss) (€)

- basic (A/B) 0.5101 0.1588 0.3513

- diluted (A/C) 0.5101 0.1588 0.3513


Land and buildings 18,961 19,364 (403)

Plant and machinery 14,935 15,938 (1,003)

Industrial and commercial equipment 2,046 2,393 (348)

Other assets 13,375 13,425 (51)

Fixed assets in progress and prepayments 3,117 1,458 1,660

TOTAL PROPERTY, PLANT AND EQUIPMENT 52,434 52,577 (144)

The change compared to 31 December 2010 relates

to the net effect between investments in the period,

amounting to 5,485 thousand euros and amounts of de-

preciation in the period amounting to 5,629 thousand

euros.

The most significant movements compared with the pre-

vious year are described below

Land and buildings

At 31 December 2011, the item stood at 18,961 thousand

euros, the decrease of 403 thousand euros compared to

the previous year (19,364 thousand euros), due mainly to

depreciation during the year (405 thousand euros).

Plant and machinery

These amount to 14,935 thousand euros and mainly refer

to extraordinary maintenance costs for leased proper-

ties, such as the registered office and the Data Process-

ing and Remote Control Centre. This item also includes

the carrying amount of the Grottarossa laboratory use by

Group company Laboratori S.p.A..

The decrease of 1,003 thousand euros compared with

the previous year is mainly due to:

• extraordinary maintenance on buildings leased by

Acea, such as its headquarters and the Data Process-

ing and Remote Control Centre (746 thousand euros);

• depreciation for the period (1,748 thousand euros).


Fixed assets in progress

This item totals 3,117 thousand euros (1,458 thousand

euros at 31 December 2010), marking a net increase of

1,660 thousand euros compared with the previous year.

This deviation is a result of the entry into operation of

assets (down 1,125 thousand euros) and increases in the

period amounting to 2,785 thousand euros and relate to

hardware investments needed for IT network improve-

ment and development projects

Accumulated depreciation amounts to 55,949 thou-

sand euros at the end of the year and covers 51.62%

of the value of properties in operation at 31 December

2011. An analysis of movements during the year is pro-

vided in the following table.

Industrial and commercial equipment

This item, totalling 2,046 thousand euros, decreased by

a net 348 thousand euros due to depreciation for the

period.

Other assets

This item, totalling 13,375 thousand euros (13,425 thou-

sand euros at 31 December 2010) is essentially in line

with the previous year due to the combined effect of

investments in the year (1,953 thousand euros) in new

furniture and electronic office equipment and reclassifi-

cations from assets in the course of construction (1,125

thousand euros), less depreciation for the period (3,128

thousand euros).

31.12.2010 MOVEMENTS DURING THE PERIOD 31.12.2011

Property, plant and equipment Historical cost Accumul. deprec Net carrying amount

Increases Reclassifications Revaluations/Impairments

Disposals Depreciation Cost Accumul. deprec.

Net carrying amount

Land and buildings 24,149 (4,786) 19,364 2 0 0 (405) 24,151 (5,190) 18,961

Plant and machinery 24,975 (9,037) 15,938 746 0 0 0 (1,748) 25,720 (10,785) 14,935

Industrial and commercial equipment 15,018 (12,625) 2,393 0 0 0 (348) 15,018 (12,973) 2,046

Other assets 37,297 (23,872) 13,425 1,953 1,125 0 0 (3,128) 40,375 (27,000) 13,375

Fixed assets in progress and prepayments 1,458 0 1,458 2,785 (1,125) 0 0 0 3,117 0 3,117

TOTAL PROPERTY, PLANT AND EQUIPMENT 102,897 (50,320) 52,577 5,485 0 0 0 (5,629) 108,382 (55,949) 52,434


Industrial patents

These amounted to 5,434 thousand euros (9,714 thou-

sand euros at 31 December 2010), and are amortised

over three years. With regard to the investments for

the period and at the end of the projects that have

been started in previous financial years, it is noted that

increases mainly refer to: project involving the imple-

mentation and improvement of websites, implementa-

tion and upgrading of the current billing system of some

subsidiaries and upgrading projects involving general IT

services and software developed internally and the ac-

quisition of software to support planning, control and

administration activities.


Property, plant and equipment Historical cost Accumul. deprec Net carrying amount


Disposals Depreciation Cost Accumul. deprec.

Net carrying amount

Land and buildings 24,149 (4,786) 19,364 2 0 0 (405) 24,151 (5,190) 18,961

Plant and machinery 24,975 (9,037) 15,938 746 0 0 0 (1,748) 25,720 (10,785) 14,935

Industrial and commercial equipment 15,018 (12,625) 2,393 0 0 0 (348) 15,018 (12,973) 2,046

Other assets 37,297 (23,872) 13,425 1,953 1,125 0 0 (3,128) 40,375 (27,000) 13,375

Fixed assets in progress and prepayments 1,458 0 1,458 2,785 (1,125) 0 0 0 3,117 0 3,117

TOTAL PROPERTY, PLANT AND EQUIPMENT 102,897 (50,320) 52,577 5,485 0 0 0 (5,629) 108,382 (55,949) 52,434

10. Investment property amounts to 2,993 thousand


primarily includes land and buildings not used in opera-

tions and held for rental.

The decrease compared with the previous year was the

result of the sale of a property for a total amount of 94

thousand euros and depreciation for the period of 61

thousand euros.

11. Concessions and other intangible assets

amounted to 10,399 thousand euros, after amortisation

for the period totalling 6,232 thousand euros, compared

to 61,360 thousand euros as at 31 December 2010.


Industrial patents and intellectual property rights 5,434 9,714 (4,280)

Concessions, licences, trademarks and similar rights 0 49,707 (49,707)

Fixed assets in progress and prepayments 4,528 1,914 2,614

Other 436 24 412

TOTAL INTANGIBLE ASSETS 10,399 61,360 (50,961)


Other intangible assets

The amount booked to the financial statements at 31 De-

cember 2011 stood at 436 thousand euros (24 thousand

euros at 31 December 2010) and it mainly refers to the

NSIU system that has been developed internally.

Intangible assets in progress

This item amounted to 4,528 thousand euros at 31 De-

cember 2011, compared with 1,914 thousand euros at

31 December 2010, and regards new information tech-

nology projects to be completed. In particular, ACEA in-

vested 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:

Concession right

The item showed a zero balance, and amounted to

49,707 thousand euros as at 31 December 2010. The

change with respect to the previous year is due to the

reclassification of that amount in the item “Non-current

receivables” due to the definitive adoption of the finan-

cial model to represent the public lighting contract as

set forth in the supplemental agreement signed between

ACEA and Roma Capitale on 15 March 2011 and in force

from the beginning of this year.


Other intangible assets Net carrying amount


Disposals Amortis Net carrying amount

Industrial patents and intellectual property rights

9,714 1,284 661 0 0 (6,224) 5,434

Concessions 49,707 0 (49,707) 0 0

Other fixed assets 24 420 0 0 (8) 436

Fixed assets in progress 1,914 3,275 (661) 0 0 0 4,528

TOTAL OTHER INTANGIBLE ASSETS

61,360 4,978 (49,707) 0 0 (6,232) 10,399

12. Investments in subsidiaries and associates

amounts to a total of 1,726,110 thousand euros (1,609,090

thousand euros as at 31 December 2010).


Investments in subsidiaries

1,711,271 1,594,306 116,965

Investments in associates

14,838 14,784 54

TOTAL INVESTMENTS 1,726,110 1,609,090 117,020

Investments in subsidiaries

These amounted to 1,711,271 thousand euros compared

with 1,594,305 thousand euros at the close of the previ-

ous year, marking an increase of 116,965 thousand eu-

ros.

The most important transactions during the year are de-

scribed in the table below:


Investments in subsidiaries Historical cost Reclassifications Revaluations/Impairments

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 0

- reclassifications 0

- impairments (9,266) (9,266)

Total movements in 2011 126,231 0 (9,266) 0 116,965

VALUES AT 31 DECEMBER 2011 2,717,495 893 (57,024) (950,094) 1,711,270

The most significant increases in the year concerned:

• Acea Energia Holding: completion of the dis-

solution of the joint venture between ACEA e

GDF Suez Energia Italia involved the purchase of

40.59% of the company’s share capital for a price

of 116,262 thousand euros including the temporary

minimum adjustment of around 7,640 thousand

euros; the sale price established by the Framework

Agreement signed in December 2010 and paid to

the transferor came to 123,901 thousand euros;

• ACEA Ato5: resolutions adopted by the extraor-

dinary shareholders’ meetings determined the re-

cording of the commitment to pay the company the

amount of 8,675 thousand euros, in respect of the

provision to cover future losses,

• Aquaser: in October, an additional 10% stake in

the company was purchased for 950 thousand eu-

ros,

• Acea Servizi Acqua: in March 2011, ACEA pur-

chased 70% of the company’s share capital for 203

thousand euros. Acea Servizi Acqua’s company

objective is the performance, execution, manage-

ment and maintenance of works and network-

related services, with particular reference to the

integrated water service,

Impairments/revaluations concerned:

• ACcea Ato5: the investment was written down in

consideration of the loss achieved by the company

in 2011 (ACEA share of 6,157 thousand euros);

• Crea Gestioni: following the merger by incorpora-

tion of Crea Partecipazioni and Acea Rieti, effective

as of 1 January 2011, the carrying amount in the

financial statements amounts to 8,029 thousand

euros, net of the impairment of 2,000 thousand

euros resulting from impairment testing conducted

by the company,

• Acea8cento: the value of the investment was as-

sessed, adjusting it into line with the shareholders’

equity value as at 31 December 2011, writing said

investment down by 521 thousand euros. On 28

July 2011, the extraordinary shareholders’ meeting

resolved to cover losses generated as at 30 June

(324 thousand euros) by eliminating share capital

and using the hedge reserve paid by ACEA in pre-

vious years, and reconstituting share capital (120

thousand euros) and establishing a non-distributa-

ble extraordinary reserve to cover future losses,

• Acque Blu: during the phase of approval of the

financial statements for the year ended 31 Decem-

ber 2010, the Board of Directors noted the essen-

tial inactivity of the company, which reports losses

and requests for financing in the future share capi-

tal increase account owing to the company’s mod-

est capitalisation from shareholders. Therefore, the

decision was taken to fully write down the value

of the investment held by ACEA, equal to 55% of

share capital (482 thousand euros),

• Acea Servizi Acque: as a result of sizeable losses

of the company acquired at the start of the year,

the extraordinary shareholders’ meeting resolved

the winding up of the same, which involved the

impairment of the value recorded (203 thousand

euros),


ment as at 31 December 2010 was classified under the

item “Non-current assets held for sale”, in compli-

ance with IFRS 5.

Investments in associates

At 31 December 2011 this amounted to 14,838 thousand

euros, almost unchanged with respect to the previous

year. The change of 54 thousand euros reflects the valua-

tion of overseas companies at the current exchange rate.

• Overseas companies: investments held in over-

seas companies were written back, by adjusting

the values into line with the current exchange rate

(up 401 thousand euros).

The agreement to dissolve the joint venture between

ACEA and GDF Suez Energia Italia involved the sale of

the investment held in Eblacea, amounting to 35,034

thousand euros, at a price of 108,158 thousand euros,

generating a gain of 73,124 thousand euros. The invest-

Investments in associates Historical cost Reclassifications Revaluations/Impairments

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 0 0 54 0 54

VALUES AT 31 DECEMBER 2011 92,558 2,957 (79,565) (1,112) 14,838

13. Other investments amounted to 4,673 thousand

euros and are almost unchanged compared with to 31

December 2010. The item “Other investments” refers to

equity interests that do not qualify as subsidiaries, asso-

ciates or joint ventures. These investments are account-

ed for at fair value.

14. At 31 December 2011, deferred tax assets

amounted to 36,283 thousand euros (22,683 thousand

euros at 31 December 2010).

The item is composed as follows; 8,203 thousand euros

for taxed provisions for liabilities (2,884 thousand euros

at 31 December 2010); 3,940 thousand euros for impair-

ment of receivables (3,303 thousand euros at 31 Decem-

ber 2010) and the item includes provisions of deferred

taxation on exchange risks; 6,946 thousand euros for

defined benefit/contribution plans and 17,008 thousand

euros for other provisions. Following the fair value meas-

urement of the hedging derivative instrument deferred

tax assets of 4,896 thousand euros have been recog-

nised with a matching entry in shareholders’ equity.

With regard to the recoverability of prepaid taxes, it is

noted that deferred tax assets are reviewed on the basis

of ACEA SpA’s business plans and a reasonable estimate

of the period in which the related difference is expected

to reverse.

The following table shows movements in both non-cur-

rent and current deferred tax assets.

The following table shows movements in deferred tax

assets:


Receivables due from Roma Capitale (18,019 thou-

sand euros) relate to investments in the Public Lighting

service, such as plant upgrading, energy savings, legis-

lative adjustments and technological innovation, which

will be paid to ACEA, for an amount equal to tax am-

ortisation, after 2012, in compliance with the terms of

the Supplementary Agreement to the service contract

signed on 15 March 2011.

The item receivables due from subsidiaries, , stand-

ing at 1,308,486 thousand euros, is broken down as fol-

lows:

15. Non-current financial assets amounted to

1,380,229 thousand euros (193,550 thousand euros at

31 December 2010) and break down as follows:

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

Directors’ fees 45 (45) 13 13

Provisions for liabilities and charges 2,884 (1,753) 7,071 8,203

Impairment of investments 0 0 0 0


3,003 0 937 3,940


131 0 41 173

Amortisation of goodwill 0 0 0 0

Defined benefit and defined-contribution plans

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


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

NET TOTAL 13,685 (1,236) 1,011 9,950 23,410


Amounts due from Roma Capitale

18,019 0 18,019

Receivables due from subsidiaries

1,308,486 175,369 1,133,117

Amounts due from others 53,723 18,181 35,543

NON-CURRENT FINANCIAL ASSETS

1,380,229 193,550 1,186,679


Allocated infrastructure rights in 2010 under intangible

fixed assets totalling 49,707 thousand euros.

This item also includes amounts due from Frama (125

thousand euros) for the payment of the relevant portion

made to ACEA Ato5. Repayment of this receivable will

take place via ACEA’s collection from future distribution

of dividends.

16. Non-current assets amounted to 724 thousand

euros at the end of the year, with no significant changes

recorded with respect to the previous year. These refer

to amounts owed for long-term deposits paid.

17. Current assets

These amount to 763,884 thousand euros as at 31 De-

cember 2011, marking a decrease of 882,153 thousand

euros compared with the previous year, amounting to

1,646,037 thousand euros in 2010.

The breakdown is as follows.

17.a - Inventories

The company held no warehouse inventories as at 31

December 2011.

The change of 1,133,117 thousand euros with respect to

the previous year results from:

• the reclassification in “Current financial assets” of

amounts falling due within the next 12 months of

6,035 thousand euros,

• the setting up of new Investment Credit Lines for

intercompany running accounts, as established by

the stipulation of new treasury contracts. The total

value of 1,299,086 thousand euros (159,934 thou-

sand euros) includes not only interest accrued as

at 31 December 2011, but the non-interest bearing

and irrevocable 30-year loan disbursed to subsidi-

ary ACEA Ato5 of 52,719 thousand euros.

The item other receivables, amounting to 53,723 thou-

sand euros (18,181 thousand euros as at 31 December

2010), relates mainly to the receivable recorded in compli-

ance with the financial assets model envisaged by IFRIC

12 with regard to service concession arrangements. This

receivable, amounting to 53,443 thousand euros (17,925

thousand euros at 31 December 2010) represents total in-

vestments made up to 31 December 2010 connected to

said service and includes the reclassification of the item


Receivables for mortgages taken out

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)

Total 9,400 15,435 (6,035)

Loan receivables

ACEA Ato 5 52,719 52,719 0

A.R.I.A. (former EALL "Linea Costruzione” - construction line ) 0 107,215 (107,215)

Total 52,719 159,934 (107,215)

Intercompany running account - Investments Line

Ecoenergie 1,443 0 1,443

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 135,948 0 135,948

TOTAL NON-CURRENT FINANCIAL RECEIVABLES DUE FROM SUBSIDIARIES

1,308,486 175,369 1,133,117


It should be noted that in the third quarter of 2011, the

receivables of the largest companies in the ACEA Group,

whose prospects of recovery and essentially nil, were

subject to a cancellation procedure in order to obtain a

simpler and more immediate picture of the general cred-

it situation, and more rational planning of recovery ac-

tivities. On 22 February 2012, ACEA’s Board of Directors

resolved the cancellation of gross receivables totalling

17,363 thousand euros, fully covered by the Provision for

the Impairment of Receivables.

The breakdown of trade receivables due from customers

as at 31 December 2011 is shown below.

Receivables from other customers

At 31 December 2011, this item amounted to 17,100

thousand euros (5,325 thousand euros at 31 December

2010) net of the provision for the impairment of receiva-

bles of 16,913 thousand euros. This item includes receiv-

ables relating to accrued amounts due from private and

public parties for services, with particular reference to

public lighting.

This item includes bills to be issued amounting to 3,725

thousand euros.

The change compared to the previous year derives, for

6,078 thousand euros, from the non-recourse acquisition,

by Acea Energia, of receivables accrued from Manuten-

zione Illuminazione S.p.A. as at 31 March 2011. (SMAIL

S.p.A.), completed on 6 April 2011 and for the remaining

5,697 thousand euros, to normal operations in the period.

The balance essentially consists of the following catego-

ries of customer:

17.b - Trade receivables

Trade receivables amounted to 37,672 thousand euros

(25,880 thousand euros at 31 December 2010) and are

broken down as follows.


Receivables from other customers

17,100 5,325 11,775

Disputed receivables 20,573 20,555 17

TOTAL TRADE RECEIVABLES

37,672 25,880 11,792

• Private customers: 10,599 thousand euros (4,387

thousand euros),

• the State: 4,550 thousand euros (4,337 thousand

euros),

• Municipalities: 13,636 thousand euros (9,581 thou-

sand euros at 31 December 2010). These relate to

amounts owed to the Municipality of Naples (3,715

thousand euros) and amounts due from municipali-

ties inherited from Acea Luce (5,866 thousand euros).

Disputed receivables

Disputed receivables amounted to 27,013 thousand eu-

ros at 31 December 2011, before the provision for the

impairment of receivables and did not undergo signifi-

cant changes compared with the previous year.

Said receivables included 20,555 thousand euros due

from the Vatican City which, being a sovereign state,

deems the fees charged for fresh and waste water ser-

vices to be inapplicable. Following publication of the im-

plementation decree provided for by article 3, paragraph

13 of the Finance Act for 2004, the receivables posted in

the accounts relate to the period prior to 1998 and are

matched by a corresponding debt payable to the munici-

pality of Rome as the provider of waste water and sewer-

age services through to 31 December 1997. It should be

noted that ACEA is not obliged to settle the debt payable

to the Municipality of Rome before collection of the re-

ceivables due from the Vatican City.

Other disputed receivables of 6,458 thousand euros in-

clude amounts due for which legal recovery actions have

been launched and from consortia set up by government

bodies and municipalities and municipalities in financial

difficulty. These receivables have been almost fully writ-

ten down.

Provisions for the impairment of receivables

No further write-downs of trade receivables were ef-

fected and the value of the provision at 31 December

2011 was unchanged with respect to the previous year,

amounting to 23,354 thousand euros.

Provisions for the impairment of receivables are based

on analytical assessments, supplemented by assess-

ments based on historical analyses of amounts due from

end users and customers broken down according to the



Trade receivables due from Roma Capitale totalled

46,260 thousand euros at 31 December 2011 (38,320

thousand euros at 31 December 2010).

The following table presents an analysis of the ACEA

Group’s relations with the municipality of Rome regard-

ing both receivables and payables, including those of a

financial nature described in the specific section of this

document (Note 24).

default period, the type of action undertaken to recover

the amount due and the status of the receivable con-

cerned (ordinary, disputed, etc.).

17.c - Intercompany trade receivables

Intercompany trade receivables amounted to 102,756


2010) and are broken down as follows:



46,260 38,320 7,939


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


RECEIVABLES 178,938 136,832 42,106

PAYABLES 47,384 33,607 13,777

BALANCE 131,554 103,225 28,329

Amounts due from Roma Capitale 31.12.2011 31.12.2010 Increase/ (Decrease

Utility receivables 3,289 3,289 0

Contract work 24,514 18,082 6,432

Receivables for services 907 907 0

Other receivables 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

Other 1,482 1,482 0

Total trade receivables 46,260 38,320 7,939

Financial receivables for the public lighting service 114,659 98,512 16,147

TOTAL RECEIVABLES DUE WITHIN ONE YEAR (A) 160,919 136,832 24,087

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 to Roma Capitale 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

Total trade payables 10,879 10,879 0

Borrowings (including dividends) 15,989 2,213 13,777

Total borrowings 15,989 2,213 13,777

Total payables due within one year (B) 26,868 13,091 13,777

Total (A) - (B) 134,051 123,741 10,310

Medium/long-term loans and receivables for Public Lighting 18,019 0 18,019

Vatican City disputed amounts (20,516) (20,516) 0

NET BALANCE 131,554 103,225 28,329


Trade receivables increased by 7,939 thousand euros

compared with 31 December 2010 due to invoices is-

sued for works requested by the municipality during the

year.

These receivables include items relating to the public

lighting contract that were posted under trade receiv-

ables, in compliance with the financial model set out

in IFRIC 12. These amounted to 114,659 thousand euros

(98,512 thousand euros at the end of the previous year).

Residual amounts from the advance on 2011 dividends

were recorded under payables.

During the period, administrative offsets were effected

with regard to amounts due from Roma Capitale, total-

ling 48,175 thousand euros and payables totalling 65,513

thousand euros relating to dividends on 2010 profit and

the advance on 2011 dividends.

It should be noted that balances as at 31 December 2011

(and those in the previous year) also include the net ex-

posure in relation to Administration established by the

Central Government, totalling 44,488 thousand euros.

Further information on relationships with Roma Capitale,

including those with the Companies of the Gruppo Co-

mune di Roma (municipality of Rome Group), is provided

in the section “Related party transactions”.


This item amounts to a total of 50,555 thousand euros,

a decrease of 1,400 thousand euros compared to 31 De-

cember 2010. They relate mainly to services provided

under service contracts.



Acea Distribuzione 23,582 24,647 (1,066)

Acea ATO5 9,316 5,501 3,815

Crea Gestioni 4,411 3,056 1,355

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)

Agua Azul Bogotà 567 790 (223)

Publiacqua 472 0 472

LaboratoRI 449 136 314

A.R.I.A. 412 576 (164)

Acque 407 175 232

Gori 403 320 83

Acea Energia Holding 306 975 (669)

Ingegnerie Toscane 258 0 258

Aquaser 186 63 123

Kyklos 176 79 97

Acea Gori Servizi 166 9 157

Solemme 162 64 98

Ecomed 124 89 35

Crea 139 10 130

Ecogena 125 52 73

Luce Napoli 112 340 (227)

Ameatad 86 31 55

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

Consorzio Acea Ricerca Perdite (ACEA Leak Identification Consortium)

47 0 47

Acea Produzione 40 0 40

Consorcio Agua Azul 37 34 2

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)

AceaElectrabel Produzione 0 980 (980)

Acque servizi 0 (3) 3

Ecoenergie 0 (5) 5

Voghera Energia 0 51 (51)

TOTAL 50,555 49,155 1,400



This item amounts to a total of 5,940 thousand euros, an

increase of 1,021 thousand euros compared to 31 De-

cember 2010. The breakdown is shown below.


This item amounts to a total of 5,940 thousand euros, an


cember 2010. The breakdown is shown below.


Marco Polo 2,785 2,055 730

Agua de San Pedro 1,252 1,591 (339)

Sogea 604 220 383

Sienergia 583 379 204

Acquedotto del Fiora 525 345 180

Tirana Acque 155 255 (100)

Umbriadue 30 60 (30)

Jonica 3 3 (0)

Geal 4 11 (7)

TOTAL 5,940 4,919 1,021


Marco Polo 2,785 2,055 730

Agua de San Pedro 1,252 1,591 (339)

Sogea 604 220 383

Sienergia 583 379 204

Acquedotto del Fiora 525 345 180

Tirana Acque 155 255 (100)

Umbriadue 30 60 (30)

Jonica 3 3 (0)

Geal 4 11 (7)

TOTAL 5,940 4,919 1,021

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 de-

riving from the seizure of the assets of public bodies pur-

suant to art. 48 bis of Presidential Decree 602 of 29 Sep-

tember 1973. These collections have been used to pay

a tax payment notice concerning lower alleged VAT pay-

ments charged to ACEA’s VAT consolidation; an appeal

was filed against said payment notice before the Provin-

cial Tax Commission of Rome, resulting in a suspension

of the notice. ACEA believes there is a good chance of

obtaining the reimbursement of the assets seized.

Amounts due from assignee Autoparco were re-

corded at the end of 2010 as a result of the sale of the

property. The collection of the consideration was expect-

ed by 22 December 2011. ACEA began the normal proce-

dures to recover the remaining amounts due.

Accrued income and prepayments prepayments re-

late essentially to rent paid for the long-term use of pub-

lic land, the lease of the Company’s headquarters, the

Data Processing and Remote Control Centre, the prop-

erty complex in Valleranello and maintenance fees.

17.e – Current financial assets

Current financial assets amounted to 27,289 thousand


include:


Receivables from dissolution of Joint Venture

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

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)

TOTAL 27,289 14,647 12,642


Receivables due from parent companies

The item includes amounts due from Roma Capitale, for

invoices issued (112,999 thousand euros) and invoices to

be issued (1,660 thousand euros), relating to the Public

Lighting Service Contract and plant maintenance, as set

out in the Intercompany Trade Receivables section in this

document.


At 31 December 2011 these receivables amounted to

131,043 thousand euros (1,077,013 thousand euros at 31

December 2010) and are broken down as follows:

This is attributable mainly to:

• 14,678 thousand euros generated by the temporary

minimum equalisation of the transaction terminat-

ing the joint venture with GDF-Suez Energia Italia,

• collection of the remaining credit on 12 July 2011,

relating to the term deposit paid in since December

2002, in compliance with the cash collateral issued

to cover the commitments of Atlanet and its minor-

ity shareholders in respect of IPSE 2000.

17.f - Intercompany current financial assets

The item totals 248,529 thousand euros (1,178,424 thou-

sand euros at 31 December 2010) and is broken down

as follows.


Receivables for cash pooling transactions - General Purpose Line 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 commission on guarantees given 2,976 0 2,976

TOTAL 131,043 1,077,013 (945,970)

The financial exposure registered a decrease as regards

all inherent items, with the exception of the recognition

in 2011 of considerations for commission on guarantees

given, a condition required by the new centralised treas-

ury contract. The remaining change of 948,946 thousand

euros is a result of the following:

• Receivables for loans granted to subsidiaries fell by

232,959 thousand euros due, on one hand, to the

effect of the settlement, at the date of closing of

the dissolution, of loans granted to Roselectra and

Voghera which amounted to 47,991 thousand at

31 December 2010, and to AceaElectrabel Trading

(for 2,000 thousand euros) and, on the other, the

reclassification of receivables due from companies

included in the scope of the centralised treasury

service under non-current intercompany financial

assets for Investment Lines (181,272 thousand eu-

ros).

• Receivables for centralised treasury management

transactions fell by 710,024 thousand euros, also

due to the reclassification of a portion of receiva-

bles into the Investments Line (for 802,868 thou-

sand euros),

• current accrued finance income corresponds to the

portion of interest accrued but still not paid on the

General Purpose line and on loans granted to sub-

sidiaries, The reduction of 6,606 thousand euros is

a direct consequence of the different classification

of the receivables recorded, long and short term,

and lower ordinary requirements of service compa-

nies. On cash pooling transactions (so-called Gen-

eral Purpose Lines) ACEA applies a creditor interest

rate equal to the 3-year IRS plus a spread in line

with that of a bond issued on the equities market

(3.08%) and a debtor rate calculated on the basis of

the arithmetic mean of the daily 3-month EURIBOR

rates in each calendar quarter less a spread of 5

basis points.


17.g – Current tax assets

“Tax receivables” amounted to 35,407 thousand euros

are relate mainly to: (i) receivables for IRES under the

tax consolidation arrangement (13,264 thousand euros),

(ii) and receivables relating to Group VAT (5,944 thou-

sand euros), (iii) amounts due to ACEA SpA from its sub-

sidiaries who take part in the tax consolidation. These

amounts regard IRES and VAT transferred from the indi-

vidual companies (12,779 thousand euros), (iv) IRES re-

ceivables for which a refund has been requested (1,968

thousand euros).

17.h - Cash and cash equivalents

At the end of the year, cash and cash equivalents amount-

ed to 284,227 thousand euros (251,407 thousand euros

at 31 December 2010). This item represents the balance

of bank and post office current accounts held with vari-

ous institutions, including the Italian Postal Service.

It should be noted that the balance includes the amount

of 79,200 thousand euros relating to cash deposits which

amounted to 164,500 thousand euros as at 31 December

2010.

Receivables due from subsidiaries include (i) dividends

to be collected, specifically from Abab (1,225 thousand

euros), Acque Blu Fiorentine (2,411 thousand euros) and

to Sarnese Vesuviano (447 thousand euros), (ii) other fi-

nancial receivables due from Acea Ato2 (780 thousand

euros) and from Acea Energy (2,231 thousand euros)

concerning servicing fees due with regard to the se-

curitisation contract, and to (iii) receivables for finance

advances, linked to the liquidation procedure, due from

Luce Napoli (1,300 thousand euros).


At 31 December 2011 this amounted to 2,826 thousand

euros and, at the end of 2010 totalled 2,900 thousand

euros and relate to:

• the loan to Sienergia for 2,500 thousand euros,

granted in 2010 in order to cover liquidity needs

linked to some investment projects, including the

construction of PV plants. This loan accrues inter-

est equal to the 3-month Euribor plus a spread of

1.5% p.a.;

• 322 thousand euros due from Consorzio Citelum

Napoli Illuminazione Pubblica which handles the

operational management of the contract of the

same name.


Profit for the period, amounting to 108,636 thousand eu-

ros, 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).

During the phase of approval of the financial statements

for the year ended 31 December 2010, on 11 May 2011,

shareholders resolved the distribution of the profit

achieved of 33,816 thousand euros, the coverage of the

reserve generated as at 1 January 2009 by the retrospec-

tive application of IFRIC 12, amounting to 1,016 thousand

euros and, lastly, the withdrawal and distribution from

the demerger reserve of dividends of 63,889 thousand

euros (corresponding to a unit dividend of 0.30 euros).

This reserve was formed by the gain generated in 1999

by transfers performed from ACEA Distribuzione and

ACEA Ato 2.

The breakdown per item and relevant movements are

shown below:

Share capital

This amounted to 1,098,899 thousand euros, represent-

ed by 212,964,900 ordinary shares with a value of 5.16

each, as per the Shareholders’ Register and is currently

subscribed and paid in as follows:

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:


Share capital 1,098,899 1,098,899 0

Legal reserve 68,919 67,228 1,691

Reserve for treasury shares in portfolio 0 0 0

Other reserves 89,427 160,963 (71,536)

Other reserves 63 782 (720)

Profit/(loss) for the period 49,123 33,816 15,307

TOTAL 1,306,430 1,361,688 (55,258)

• Municipality of Rome: 108,611,150 shares for a to-

tal 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

par value of 2,152 thousand euros.

Legal reserve

This reserve reflects the allocation of 5% of net profit for

previous years, in accordance with article 2430 of the

Italian civil code.

At 31 December 2011, this amounted to 68,919 thousand

euros, an increase of 1,691 thousand euros compared to

31 December 2010, due to the allocation of 2010 profit.

Reserve for treasury shares in portfolio

The reserve for treasury shares in portfolio amounted to


Pursuant to art. 2428 of the Italian Civil Code, the treas-

ury shares in portfolio, as at 31 December 2011, consist

of 416,993 shares with a par value of 5.16 euros each,

representing 0.196% of share capital.

The balance of the reserve offsets the value of the treas-

ury shares accounted for as a reduction of shareholders’

equity in compliance with IAS 32.


sidiaries on the above gain, or in correspondence with

any proceeds from sales to third parties.

Reserve for exchange differences

At the end of the year, the reserve for exchange differ-

ences has a negative balance of 24,975 thousand euros,

net of deferred taxation of 9,473 thousand euros. This

was established due to the effect of the evaluation at the

exchange rate at the end of the observation period of the

private placement in YEN stipulated with AFLAC in 2010.

Cash flow hedge reserve

This reserve recorded a positive balance of 20,451 thou-

sand euros as at 31 December 2011, 14,827 thousand

euros net of deferred taxes of 5,624 thousand euros. At

the end of the previous year, the balance was a positive

16,975 thousand euros (12,307 thousand euros net of

the related deferred tax).

This reserve is composed as follows:

• 34,672 thousand euros from the positive fair value

of the cross currency on the bond loan in yen, and

• 10,887 thousand euros from the negative fair val-

ue of the IRS on the 100 million euros from Cassa

Depositi e Prestiti.

The amount accounted for in the financial statements

derives from application of IAS 39 and assessment of the

effectiveness of the hedging instrument in accordance

with Hedge Accounting. Under this method, the effective

portion of the cash flow hedge is recognised in share-

holders’ equity, whilst the ineffective portion is recog-

nised in the income statement.

The tests carried out during the year revealed that the

cross currency is 100% effective and the interest rate

swap is 99.86% effective, resulting in an impact on share-

holders’ equity only.

The following table shows distributable and undistribut-

able reserves:

Other reserves - 89,427 thousand euros

Extraordinary reserve

The amount of 180 thousand euros was recorded in the

financial statements, and corresponds to the portion of

profit allocated therein during the distribution of profit

at 31 December 2010. A total of 162 thousand euros

recorded at 31 December 2010 was used to cover the

negative reserve established during the restatement of

IFRIC 12 on 1 January 2009.

Demerger reserve

This reserve is fully available to cover losses, for the

share capital increase and for distribution to sharehold-

ers, as established at the General Shareholders’ Meet-

ing on 29 April 2009, which approved the 2009 Financial

Statements and overcome the restriction on the distrib-

utability of dividends established by the General Share-

holders’ Meeting on 29 April 2000.

At 31 December 2011 this amounted to 102,567 thou-

sand euros, down by 63,835 thousand euros compared

to the previous year, corresponding to the amount with-

drawn and distributed in compliance with the resolution

of the General Shareholders’ Meeting on 11 May 2011.

This reserve consists of (i) the gain recognised in the in-

come statement for 1999 deriving from the transfers of

assets carried out by ACEA SpA to ACEA Distribuzione

and ACEA Ato2, (ii) the after-tax gain on the transfer of

the “customer services” division to VoiNoi (in liquidation),

totalling 14,216 thousand euros. This latter component

was used in full to cover losses deriving from the Com-

pany’s first-time adoption of IAS.

The first gain, which contributed in its entirety to the op-

erating result for 1999, was entirely covered by the same

tax exemption applicable to other revenue components

recorded in the financial statements for the year ended

31 December 1999. The General Shareholders’ Meet-

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 corre-

spondence with annual amortisation charged by the sub-


were calculated in accordance with actuarial criteria; the

second type instead includes tariff subsidies for pension-

ers. This method is based on the projected unit credit

method, which measures the company’s liability at the

end of the reporting period on the basis of the average

present value of future services reproportioned on the

basis of the service performed by the worker at the time

of calculation, with respect to that at the time of pay-

ment for the service.

The following table shows the breakdown of the item.

19. Staff termination benefits and other defined

benefit plans

At 31 December 2011 said items totalled 23,551 thou-

sand euros (23,634 thousand euros at 31 December

2010) and represent termination and other benefits pay-

able to employees on retirement or termination of em-

ployment.

These obligations include defined benefit and defined

contribution plans. The first obligations relate to staff ter-

mination benefits and employee tariff subsidies which

Nature/description Amount Potential use Available portion

Summary of uses during previous three years

To cover losses Other purposes

Capital reserves: 0

Revenue reserves from income statement:

Legal reserve 68,919 B 68,919

Purchased goodwill attributable to Umbra Acque (3,173) (3,173)

Available reserve for treasury shares 0 A, B, C 0

Reserve for treasury shares in portfolio 3,853 To guarantee treasury shares

3,853

Extraordinary reserve 180 A, B, C 180

Demerger reserve 102,567 A, B, C 102,567 53,622 119,260

Reserve for IFRIC 12 FTA 0 0

Retained earnings 63 A, B, C 63

Revenue reserves from O.C.I.:

Cash flow hedge reserve 14,827 B 14,827

Reserve for exchange differences (24,975) (24,975)

TOTAL 162,262 162,262

Undistributable portion 59,452

Remaining distributable portion 102,810


Termination benefits

- Staff termination benefits 7,620 7,511 109

- Monthly bonuses 778 738 40

- Long-term incentive plans (LTIPs) 2,346 1,136 1,210

Total 10,744 9,384 1,360

Post-employment benefits

- Tariff subsidies 12,807 14,250 (1,442)

TOTAL 23,551 23,634 (83)


the securities of major companies listed on the same fi-

nancial market as ACEA, and on the return on govern-

ment bonds in circulation at the same date that have

terms to maturity approximating to the residual term

of the related liability. In order to ensure consistency of

valuation and comply with the provisions of IAS 19, the

same basis has been used for the various types of plan.

20. Provision for liabilities and charges

At 31 December 2011 this item amounted to 70,680


2010). The movement in the provision represents the al-

gebraic sum of uses and allocations in the period.

In calculating the entity of the provisions, account is

taken both of the estimated costs that may derive from

litigation or other disputes arising during the year and

an update of estimates of the potential liabilities deriv-

ing from the litigation involving the Company in previous

years.

The following table shows a breakdown of provisions

and movements during 2011:

The two comparative periods are essentially in line and

the change of 83 thousand euros reflects, on one hand,

the net effect of staff leaving the Company, the transfer of

staff to a number of subsidiaries, the effect of tariff subsi-

dies for staff and release of provisions for tariff subsidies

for pensioners and, on the other, from the provision set

aside of 1,210 thousand euros for the Long-Term Incen-

tive Plan for the 2010-2012 period which makes provision

for the disbursement to Acea Top Management of a cash

payment made at the end of the reference period, to be

calculated as a percentage of gross annual remuneration,

based on the achievement of pre-established economic

and financial targets. In this regard, it should be noted

that, as at 31 December 2010, the item was affected by

the release, due to non-payment, of the provision set

aside in previous years for the Long-Term Incentive Plan

for the 2007-2009 period (3,003 thousand euros) against

a provision in 2010 of 1,122 thousand euros.

As required by paragraph 78 of IAS 19, the interest rate

used to calculate the present value of the obligation is

based on returns, at the end of the reporting period, on

31.12.2010 Uses Reclassifications Provisions Alloc. on investments

31.12.2011

Provisions for liabilities 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

TOTAL PROVISIONS 25,430 (12,126) (2,982) 6,433 53,926 70,680

At the end of the year, the provision for liabilities and

charges included: (i) 53,926 million euros for the cover-

age of risks related to the uncertainty ACEA Ato5 (9,826

thousand euro) and GORI (44,100 thousand euro) find

themselves in, (ii) 5,177 thousand euros for potential li-

abilities and charges relating to staff including disputes

over contributions, (iii) 4,663 thousand euros for the eval-

uation of legal risks (disputes, litigation, etc..), (iv) 3,216

thousand euros relating to the provision set aside for

redundancy and resignation/retirement plans, (v) 2,222

thousand euros for potential risks resulting from liabili-

ties inherited from former subsidiaries, (vi) 1,464 thou-

sand euros for the estimate of risks connected to invest-

ment management.

The principal movements in the year are as follows:

• uses, amounting to 12,126 thousand euros, pri-

marily include:

- 3,631 thousand euros for the closure of legal

disputes that arose relating to previous em-

ployment contracts and with contracting com-

panies,

- 3,063 thousand euros to cover risks of ex-

penses relating to contributions. As a result

of enforcement actions implemented by INPS

through Equitalia for the sole purpose of avoid-

ing the effects of the seizures performed pur-

suant to art. 48 bis of Presidential Decree no.

602/1973, ACEA broke the payment requests


Bonds

These amounted to 985,821 thousand euros and include:

• 305,854 thousand euros to the bond loan issued

by ACEA in 2004 and placed on the international

Eurobond market. Interest accrued during the pe-

riod amounts to 14,625 thousand euros. The bond

has a term to maturity of ten years and yields a

nominal fixed rate of 4.875%. Redemption will take

the form of a lump-sum payment at par value, un-

less the bonds are called prior to maturity. It should

be noted that the terms and conditions include

standard international Eurobond market conditions

regarding Negative Pledge and Events of Default,

including a Cross Default clause should the other

financial debt of the Company or its principal sub-

sidiaries, totalling more than 15 million euros, be-

come immediately repayable,

• 514,634 thousand euros due to the bond loan is-

sued by ACEA of 500 million euros in March 2010

with a 10-year duration and maturity term on 16

March 2020. Interest accrued during the period

amounts to 22,451 thousand euros. The bonds

have a minimum denomination of 50 thousand

euros, and pay one gross coupon annually of 4.5%

and were placed at an issue price of 99.779. The

actual gross rate of return upon expiry is therefore

equal to 4.528% corresponding to a return of 120

base points on top of the reference rate (mid-swap

at 10 years). The bonds are subject to British law.

The settlement date is 16 March 2010. The bond

loan was given a rating by Standard & Poor’s and

Fitch of A- and A+, respectively.

• 165,333 thousand euros refer to the Private Place-

ment and related hedge. At the end of the year, the

fair value of the hedging instrument is a positive

by 34,672 thousand euros and was recognised in

a special reserve of shareholders’ equity, together

with the negative differential of 3.3 million euros

resulting from the delta of conversion rates be-

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-

issued by INPS relating to unpaid contributions

down into instalments. The total amount split

into instalments came to 3,063 thousand euros,

- 2,922 thousand euros to cover the require-

ments generated by the voluntary redundancy

and retirement procedure, started in the previ-

ous year,

- 1,302 thousand euros for the use for coverage

of the losses of Acea ATO5,

- 1,208 thousand euros for the use for coverage

of the losses of other subsidiaries,

• provisions, amounting to 60,359 thousand eu-

ros, primarily include:

- 44,100 thousand euros to GORI, as a result of

the evaluation of risks related to the non-rec-

ognition of tariff adjustments and financial risk,

pending approval and signing of the agreement

to settle the dispute with the Campania Region

and the Area Authority,

- for 9,826 thousand euros to ACEA Ato5, relat-

ing to the risks of future losses connected with

recovery of tariff adjustments, and the financial

risk connected with the situation of uncertain-

ty the subsidiary finds itself in,

- for 3,874 thousand euros to the expenses

needed to cover the voluntary redundancy and

retirement programme started in the year,

- 1,751 thousand euros for legal liabilities and

potential disputes with suppliers,

- 807 thousand euros relating to staff, above all

liabilities regarding contributions.

21. Non-current borrowings and financial

liabilities

They total 1,784,429 thousand euros (1,788,288 thou-

sand euros at 31 December 2010) and are broken down

as follows:


Bonds 985,821 975,647 10,175

Medium/long–term loans

798,608 812,642 (14,033)

TOTAL 1,784,429 1,788,288 (3,859)


comes 17.5 basis points), with interest due every

six months and bullet repayment of the principal

on maturity (4 August 2013). The spread may vary

based on any changes to the rating assigned to

ACEA. The loan is not subject to covenants and

the agreement contains standard Negative Pledge

and Acceleration Events clauses.

• an unsecured loan of an original amount of 77,469

thousand euros and a residual value of 16,139

thousand euros; the interest rate is equal to the

3-month Euribor less 15 basis points and the term

to maturity is 15 years (a grace period of 3 years)

expiring on 3 June 2014;

• an unsecured loan of an original amount of 51,646

thousand euros and a residual value of 3,495

thousand euros; the loan is subject to a fixed rate

of interest of 4.45% and has a term to maturity of

15 years (a grace period of 3 years);

• an unsecured loan for a residual amount of 1,407

thousand euros; the original amount stood at

25,143 thousand euros and is handled by the Ban-

ca di Roma. The loan is subject to a fixed rate of

interest of 5.48% and has a term to maturity of 15

years;

• loan stipulated on 25 August 2008 for 200,000

thousand euros for the water services segment

investment plan (Acea Ato2) with a term of 15

years. The first tranche of 150,000 thousand euros

was disbursed in August 2008; the interest rate is

equal to the 6-month Euribor plus a spread of 7.8

basis points. In 2009, a second tranche was dis-

bursed for 50,000 thousand euros with an interest

rate equal to the 6-month Euribor plus a spread of

0.646%, maturing on 15 June 2019;

• a loan of 200,000 thousand euros drawn down on

10 October 2008 and maturing in March 2016. The

interest rate applied by the bank is equal to the

3-month Euribor plus a spread of 50 basis points;

• a loan for an initial amount of 100,000 thousand

euros drawn down on 31 March 2008 and ma-

turing on 21 December 2021. The bank applies a

floating rate of interest, with repayments to be

made every six months from 30 June 2010. The

residual loan value at 31 December 2011 amounts

located to an exchange provision. This relates to a

private bond loan (Private Placement) for 20 billion

Japanese Yen and 15-year maturity term (2025).

The Private Placement was entirely subscribed by

a single investor (AFLAC). The coupons are paid on

a deferred half-yearly basis every 3 March and 3

September applying a fixed rate in Yen of 2.5%. At

the same time, a cross currency transaction was

carried out to transform from yens to euros and

the yen rate applied to a fixed euro rate. The cross

currency transaction provides that the bank pays

ACEA, on a deferred half-yearly basis, 2.5% on 20

billion Japanese Yen, while ACEA has to pay the

bank the coupons on a deferred quarterly basis,

at a fixed rate of 5.025%. The loan agreement and

the hedge contract contain an option, in favour of

the investor and the agent bank respectively, con-

nected to the trigger rating: the payable and its de-

rivative instrument can be fully recalled if ACEA’s

rating falls below the investment grade level or if

the debt instrument loses its rating. At the end of

the year, no conditions occurred for the exercise of

the option.

Medium/long–term loans

These totalled 798,608 thousand euros (812,642 thou-

sand euros at 31 December 2010) and represent princi-

pal outstanding at the balance sheet date and falling due

after 12 months. The reduction of 14,033 thousand eu-

ros in amounts due is attributable to the reclassification

of amounts to be paid within 12 months (down 16,396

thousand euros), net of the deterioration of the valuation

of the fair value of the hedging instrument on the loan

granted by Cassa Depositi e Prestiti of 100,000 thousand

euros (up 2,281 thousand euros).

The main mortgages, whose values at 31 December

were stated inclusive of short-term portions, and are de-

scribed below:

• an unsecured loan of 200,000 thousand euros.

Disbursement of 159,763 thousand euros took

place on 11/09/06. The remaining portion was dis-

bursed on 27/06/07. The loan is subject to interest

equal to the 6-month Euribor plus a spread of 15

basis points (from the sixth year the spread be-


In relation to said loan, on 23 January 2012, the

disbursement of an additional 100,000 thousand

euros was completed, needed to cover the re-

quirements of the four-year investment plan for

the strengthening and expansion of the electric-

ity distribution network in Rome, subject to the

issuing of a guarantee. The repayment plan will

involve six-monthly principal repayments on a

straight-line basis starting on 15 December 2015

up until 15 December 2026. The terms provide for

a floating interest rate equal to the 6-month Eu-

ribor plus a spread of 130.1 basis points per an-

num, the guarantee will accrue commission of 145

basis points per annum, to be calculated on the

amount of the remaining debt according to the re-

payment plan.

The following table shows a breakdown of borrowings by

type of interest rate and term to maturity. The table also

includes short-term portions falling due within 31 De-

cember 2012 and classified under item 24 of these notes.

to 83,333 thousand euros. Interest rate risk asso-

ciated with the loan has been hedged via an Inter-

est Rate Swap, with the aim of converting the un-

derlying loan from floating to fixed rate. The swap

matches the underlying loan repayment schedule.

Based on IAS 19, the Company has tested the ef-

fectiveness of the hedge using Hedge Accounting

under the Cash Flow Hedge model. The test re-

vealed that the hedge is 99.86% effective, mean-

ing that there was no ineffective portion to take

to the income statement. The negative fair value

of the hedging instrument (10,887 thousand eu-

ros) was recognised in a separate component of

shareholders’ equity;

• a loan stipulated in 2009 for 100,000 thousand eu-

ros aimed at supporting the four-year electricity

network investment plan (2008-2011) in the mu-

nicipality of Rome. The interest rate is the 6-month

Euribor plus a spread of 0.665% maturing in June

2018.

Bank Loans: TOTAL RESIDUAL DEBT

DUE BY 31.12.2011

FALLING DUE BETWEEN 31.12.2011

and 31.12.2016

DUE AFTER 31.12.2016

fixed rate 4,903 1,606 3,296 0

floating rate 799,901 15,477 595,244 189,180

TOTAL 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”.


Short-term bank lines of credit

These amounted to 280,115 thousand euros (89,716

thousand euros at 31 December 2010), marking an in-

crease of 190,400 thousand euros due to the compa-

ny’s higher financial over the short term.

Interest expense accrued over the entire year amount-

ed to 5,570 thousand euros.

These lines of credit are not committed and are unse-

cured.

Bank borrowings - mortgages

Bank borrowings totalled 17,083 thousand euros and

regard the short-term portion of bank borrowings fall-

ing due within twelve months. Further details are pro-

vided in note 21 of this report.

Due to the parent company Roma Capitale

As at 31 December 2011, these amounted to 15,989

thousand, marking an increase over the previous year

due to ACEA’s remaining debt regarding the distribu-

tion of the advance on 2011 dividends, resolved by the

Board of Directors on 29 November 2011. For further

information on the composition and movements of the

item, reference should be made to the corresponding

item in assets.

22. Other non-current liabilities

These totalled 5,269 thousand euros (6,888 thousand

euros at 31 December 2010) and refer to deferment of

the gain generated in 2005 by the transfer of the pub-

lic lighting business to ACEA Distribuzione. The amount

accounted for in the year booked to the financial state-

ments came to 1,591 thousand euros and is calculated

on the basis of the term of the old service contract with

the municipality of Rome (ten years).

23. Provisions for deferred tax

At 31 December 2011 the provision totalled 12,873 thou-

sand euros (8,997 thousand euros at 31 December 2010).

This provision above all regards deferred tax liabilities

linked with the measurement at fair value of Sharehold-

ers’ equity hedging financial instruments (9,535 thou-

sand euros), taxation on the payment in instalments of

the gain on the sale of properties (1,727 thousand euros),

and provisions for deferred tax liabilities on dividends yet

to be collected (155 thousand euros).

24. Current liabilities

They total 774,496 thousand euros at 31 December 2011


broken down as follows:


Short-term bank lines of credit 280,115 89,716 190,400

Bank borrowings - mortgages 17,083 16,767 316

Amounts due to Roma Capitale 15,989 2,213 13,777

Amounts due to subsidiaries and associates 178,767 29,856 148,911

Due to others 5 56 (50)

TOTAL 491,959 138,607 353,352


Borrowings 491,959 138,607 353,352

Debt to suppliers 199,416 164,355 35,061

Tax payables 55,925 90,012 (34,086)

Other current liabilities 27,195 20,939 6,256

TOTAL 774,496 413,913 360,583

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 com-

panies (up 339,311 thousand euros). This item includes:


The balances of the intercompany current account held

by ACEA and a number of subsidiaries is used to settle

financial transactions regarding ordinary activities on

behalf of or authorised by the subsidiaries; the biggest

changes concerned ACEA Ato2 (up 81,221 thousand eu-

ros), 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 bal-

ance 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-

holders’ Meeting to make payments to the provision to

cover future losses.

Other borrowings include interest accrued as at 31 De-

cember 2011, and amounts due to companies not includ-

ed in the perimeter of service of the centralised treasury;

these include the amount due, unchanged with respect

to 2010, to Crea Gestioni, deriving from the split of Crea

S.p.A., which occurred in 2008, amounting to 1,854 thou-

sand euros.

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 bal-

ance sheet date (29,856 thousand euros at 31 Decem-

ber 2010) and is composed as follows:


Payables for cash pooling transactions 165,877 27,355 138,523

Amounts due to ACEA Ato 5 to cover losses 9,920 0 9,920

Other borrowings 2,969 2,502 468

TOTAL 178,767 29,856 148,911

24.b - Trade payables

These amounted to 199,416 thousand euros, marking an

increase of 35,061 thousand euros, and are composed as

follows.


Amounts due to third-party suppliers

68,412 55,641 12,771

Amounts due to Roma Capitale

31,395 31,395 0


99,609 77,319 22,290

TOTAL 199,416 164,355 35,061


Bills received 22,953 20,918 2,034

Bills to be received 45,459 34,723 10,736

TOTAL 68,412 55,641 12,771

Amounts due to third-party suppliers amounted to

68,412 thousand euros (up 12,771 thousand euros com-

pared with 31 December 2010) and are broken down as

follows:

This item includes payables calculated to adjust the Isa

fee of the company headquarters, recalculated by tak-

ing 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



Amounts due to subsidiaries and associates amounts to

a total of 99,609 thousand euros, an increase of 22,290

thousand euros compared to 31 December 2010 (77,319

thousand euros). The breakdown is shown below:

Amounts due to Roma Capitale did not register any

change with respect to the previous year, with notes pro-

vided on these and trade receivables in section 17.c of

these notes.


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 8cento 6,475 6,886 (411)

Amounts due to Citelum Acea Napoli 2,929 1,357 1,573

Amounts due to Acea 8cento 2,616 0 2,616

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)

TOTAL 99,609 77,319 22,290

• the recognition of payables for bills to be received

from subsidiary Acea Produzione (2,616 thousand

euros) for district heating activities;

• higher payables due to associate Citelum Napoli

Pubblica Illuminazione of 1,573 thousand euros

linked to the service contract for management of

public lighting in the municipality of Rome.

The change compared with the previous financial year

has been influenced:

• by the increase in amounts due to ACEA Distribuzi-

one (up 12,769 thousand euros), which amounted

to 74,856 thousand euros, due to higher allocations

linked to new constructions and the upgrading of

Public Lighting plants 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),


Liabilities due to subsidiaries and associates, unchanged

with respect to last year, relate to amounts due recorded

in respect of personnel transferred.

For greater clarity, the financial statements do not report

payables falling due after five years, other than those al-

ready mentioned in the item Borrowings.

The item “other current liabilities” (22,907 thousand

euros) includes amounts due to employees of 9,390

thousand euros, to be paid for holidays accrued and not

taken, bonuses, additional monthly pay, etc. and collec-

tions from end users totalling 13,516 thousand euros for

which the normal allocation/reimbursement checks are

being carried out.

24.c – Tax payables


sand euros in the financial statements at 31 December

2010).

The breakdown of this item is shown in the following ta-

ble.


Deferred VAT 19,970 12,844 7,126

Withholding taxes 1,745 1,629 116

Ires/Irap for the year 0 36,198 (36,198)

Group Ires and VAT payables 17,116 6,156 10,960

Other tax payables 17,094 33,185 (16,090)

TOTAL 55,925 90,012 (34,086)

The difference compared to the exposure in the previ-

ous year reflects the absence of the tax payable due to

the tax authorities, advances paid in 2011 that were suf-

ficient, and the reduction in the amount due relating to

the tax assessment, recorded under the provision for li-

abilities 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 2,591 2,144 447

Other current liabilities due to subsidiaries and associates 1,698 1,698 0


TOTAL 27,195 20,939 6,256


Moreover, it has been established that qualitative/quan-

titative parameters shall be renegotiated in 2018.

Upon natural or anticipated expiry, ACEA will be award-

ed an allowance corresponding to the residual carry-

ing amount, that will be paid by the Municipality or the

incoming operator if this obligation is expressly set out

in the call for tenders for the selection of the new op-

erator.

Lastly, the Supplementary Agreement sets out a list of

events that constitute cause for the early revocation of

the concession and/or resolution of the contract by the

will of the parties. Among these events, importance is

attached to newly arising needs linked with public inter-

ests, expressly including the one set out in Article 23 bis

of Law Decree 112/2008, according to which ACEA has

the right to receive an allowance according to the dis-

counted product of the percentage of the annual con-

tractual amount and the number of years until expiry of

the concession.

Based on the fact that the supplementary agreement

exceeds the reference thresholds set out by the Com-

pany with regard to Related party transactions, it was

approved by the Board of Directors and authorised dur-

ing the meeting held on 1 February 2011, having ob-

tained the favourable opinion of the Committee for re-

lated party transactions.

As a local authority, Roma Capitale has the power to

regulate municipal taxes and duties that the Group

companies are required to pay and which fall under its

territorial jurisdiction. However, in no case ACEA is the

sole payer of any of these taxes and duties within the

Municipality of Rome. The reciprocal receivables and

payables – with regard to payment terms and condi-

tions – are governed by each single contract:

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 le-

gal 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 Ministry of Public Works and the Ministry of

Economy and Finance;

b) with reference to all other service contracts, the

payment term for Roma Capitale as regards ser-

Related party transactions

Parent Company: ROMA CAPITALEThe parent holds a controlling interest via its 51% hold-

ing in ACEA SpA.

Trading relations between ACEA SpA and ROMA CAPI-

TALE include the provision of maintenance and upgrad-

ing of public lighting by the Parent Company to the

municipality. Further details are provided in the section

“Service concession arrangements”.

With regard to public lighting, the Group provides public

lighting services on an exclusive basis within the Rome

area. As part of the thirty-year free concession granted

by the municipality of Rome in 1998, the economic terms

of the concession services were renegotiated with the

Supplementary Agreement signed in March 2011. The

renegotiations centred on the following elements:

• alignment of the term of the service contract with

the expiry of the concession (2027), given that the

contract is merely additional to the agreement;

• annual update of the compensation concerning

consumption of electricity and maintenance;

• annual increase in the lump-sum payment with

regard to the new lighting points installed.

The lump-sum payment was redetermined on the basis

of the quantities of public lighting plants at 31 Decem-

ber 2009 and pays compensation for electricity supply,

management, running and maintenance.

The ordinary fee is updated quarterly, in the assump-

tion that the unit price covers the purchase of the en-

ergy quota (50%) and maintenance costs (the remaining

50%).

As regards investments regarding the service, they may

be (i) requested and financed by the municipality or (ii)

financed by ACEA: in the first case, these measures will

be recognised in respect of ACEA, corresponding to an

annual sum to cover the investment and/or annual ac-

crual of the investment calculated in accordance with

the tax amortisation mechanism and repaid on the

basis of a floating rate on the IRS base; in the second

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, accord-

ing to pre-established methods.


vice contracts is sixty days of receipt of an in-

voice, 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 be-

tween ACEA SpA and Roma Capitale in 2011.

REVENUES COSTS

31.12.2011 31.12.2010 31.12.2011 31.12.2010

Public lighting service contract 44,002 55,859 0 0

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 rela-

tions with entities owned by the Roma Capitale Group.

Revenues Costs Receivables Payables

2011 2010 2011 2010 2011 2010 2011 2010

Cotral Group 0 0 0 0 0 0 0

Trambus 0 0 0 0 0

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


antor for Group companies: in this regard, the contract

that regulates the general purpose credit line establishes

a ceiling for guarantees and a cost split between bank

guarantees and company guarantees.

Further information is provided in “Commitments and

contingencies”.

The above relations also include the dividends paid by

subsidiaries, and receivables and payables deriving from

tax consolidation.

Trading relations

ACEA SpA provides administrative, financial, legal, logis-

tical, management and technical services to subsidiaries

and associated companies in order to optimise the use

of existing resources and know-how in an economically

advantageous manner. These services are governed by

the appropriate annual service contracts.

Relations with the principal associatesUp until 31 December 2011, i.e. the natural expiry date of

the business unit lease, Marco Polo carried out facility

management services.

The supply of services to ACEA is conducted on an arm’s

length basis.

Similarly, Marco Polo is provided with administrative ser-

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 (thousand of euros)

for revenues, costs, receivables and payables deriving

from relations between ACEA and the company Marco

Polo.

Relations with the subsidiaries

Financial relations

Within the Group, ACEA S.p.A acts as a centralised treas-

urer for the largest subsidiaries. New “Centralised Treas-

ury” agreements were formalised with Group companies

on 1 January 2011.

Intercompany relations are conducted on the basis of:

• the setting up of a medium/long-term credit line for

a pre-established amount to cover requirements

generated by investments.

The credit line (i) has a three-year term starting

on 1 January 2011, (i) generates interest at a rate

which is updated annually, equal to the 3-year IRS

plus a spread in line with that of a bond issued on

the equities market with a BBB rating and (ii) makes

provision for an annual credit line commission cal-

culated on the ceiling,

• the establishing of a general purpose credit facility

to cover the company’s current needs.

The credit line (i) has a three-year term starting

on 1 January 2011, (ii) generates interest at a rate

which is updated annually, equal to the 3-year IRS

plus a spread in line with that of a bond issued on

the equities market with a BBB rating and an active

rate calculated on the basis of the arithmetic mean

of the daily 3-month EURIBOR rates in each calen-

dar quarter less a spread of 5 basis points and (iii)

makes provision for an annual credit line commis-

sion calculated on the ceiling.

It should be pointed out that ACEA SpA also acts as guar-

REVENUES COSTS RECEIVABLES PAYABLES

2011 2010 2011 2010 2011 2010 2011 2010

Marco Polo 1,961 1,965 13,947 9,648 2,386 2,061 12,162 7,725


Update on major disputes and litigation

Social security issues

INPDAP (National Social Insurance

Institute for Civil Servants) contributions

The Group employs staff registered with both Inpdap and

Inps pension funds. Certain contribution rates applied by

the two entities differ greatly; these include those for

family allowance payments, for which Inpdap applies a

rate that is 3.72% higher than that applied by Inps.

In response to the failure to pass legislation bringing the

pension and social security contributions into line, the

Group companies decided that from November 2002 it

would pay such contributions at the lower rate. On the

other hand, the underlying legal basis is rather unclear:

Inps circular no. 103 of 16 June 2002 reiterated that,

whilst awaiting clarification from the Ministry of Econ-

omy and Finance and the Ministry of Labour, the rate of

6.20% applied to staff registered with the Inpdap pen-

sion fund, reduced by 4.15% for 2011 (although the dif-

ferential remained unchanged, with respect to the rate

of 3.72% for staff registered with the INPS pension fund)

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 En-

ergia Italia are shown below:


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

GDF SUEZ PRODUZIONE 386 0 36 0

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

the administrative courts, started legal action. The judge-

ments handed down at first instance during the second

half of 2006 found in favour of Laboratori and ACEA Luce

(the latter being an ACEA Group company at the time),

whilst the appeals submitted by ACEA, ACEA Distribuzi-

one and ACEA Ato2 were turned down.

The second instance proceedings, launched by the com-

panies or INPS in cases where the latter objected to the

first instance rulings, met with the same unfavourable

ruling for ACEA Group companies.

Appeals were submitted to the Supreme Court for Labo-

ratori, Acea Energia (formerly AceaElectrabel Elettricità

spa) and Acea Produzione (through succession of rela-

tions established by transferred company AceaElectra-

bel Produzione).

A similar problem regards contributions for maternity

benefits, where the difference in the cost to companies,

based on taxable pay, is 0.57 percentage points higher

for staff covered by Inpdap compared with those cov-

ered by Inps. The ACEA Group applied a reduced rate as

of October 2003 for said contribution too. It should be


where the payment of this benefit is assured by law or by

collective labour agreements by the employer or other

bodies, to an extent either equal to or greater than what

is established by collective labour agreements.

However, Inps started to request payment of the con-

tribution from the entry into force of Law no. 41 of 28

February 1986 (1986 Finance Act), which reformed the

health and social welfare contribution system, reduc-

ing the rate for the sickness benefit, abolishing the ad-

ditional rate of the old sickness contribution, establishing

the contribution for the National Health Service and the

welfare contribution.

This initiative led to a great deal of legal activity involv-

ing the companies which considered the contribution

undue, with favourable and unfavourable outcomes to

said proceedings.

By means of Supreme Court (joint session) ruling no.

10232 of 27 June 2003, promoted by INPS, the principle

diametrically opposed to the one provided for by law

was sanctioned, making the contribution due from com-

panies of a solidaristic rather than welfare nature.

However, companies are still awaiting legislation which

would fully regulate the previous one, realised with the

issue of law no. 133 of 6 August 2008, converting Law

Decree 112/2008.

The law definitively provided an authentic interpretation

of the second paragraph of article 6 of law no. 138 dated

11 January 1943, establishing that employers are not

obliged to pay health insurance contributions in cases

where they have, by law or under the provisions of a col-

lective labour agreement, paid sick pay, thus amending

previous periods and providing for the payment obliga-

tion to take effect from 1 January 2009.

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

the change to collective agreement regulations to the

date law no. 133 of 2008 was issued.

In fact, the new contracts for electricity sector personnel

of August 2006 and for gas-water personnel of April 2007

regulated the sickness benefit paid by companies as a

supplement to indemnities paid by the insurers (INPS) to

the provider and paid, by said companies, at the normal

salary payment dates.

noted that as regards said contribution legislation was

introduced with Law Decree no. 112 of 25/6/2008 con-

verted with amendments into law no. 133 of 6/8/2008,

where paragraph 2 of article 20 regulates, effective from

1 January 2009, uniformity of contributions for private

employers across the board.

ACEA, ACEA Ato2, ACEA Ato5 S.p.A., ACEA Distribuzione,

Arse, Acea Energia and Acea Produzione filed appeals

which, although turned down, gave rise to the presenta-

tion of an appeal request which also ended unfavour-

ably for said parties. Appeals lodged by Laboratori and

ACEA Luce met with favourable outcomes, while under

appeal these companies also met with an unfavourable

outcome.

Following a series of unfavourable outcomes for Group

companies, a Court of First Instance (in Brescia) has up-

held the position taken by a former municipalised utility,

recognising the company’s right to pay the above con-

tributions at the reduced rate and declaring the tax de-

mands issued by Inps to have no basis in law. The court’s

opinion appears to be substantially in line with the argu-

ments adopted in the appeals submitted by Group com-

panies.

The Group made the necessary allocations to cover the

risk related to these problems.

As a result of enforcement actions implemented by INPS

through Equitalia for the sole purpose of avoiding the ef-

fects of the seizures performed pursuant to art. 48 bis

of Presidential Decree 602/1973, in November 2011,

ACEA, ACEA Ato2, ACEA Distribuzione, Acea Energia and

Laboratori broke the payment requests issued by INPS

relating to unpaid contributions down into instalments.

The total amount split into instalments for ACEA came to


Health insurance contributions

Si tratta di una questione riguardante il contributo del

The case concerns certain health insurance contribu-

tions levied at a rate of 2.22% on the salaries of blue

collar workers. Acea argues that the obligation of Inps to

pay certain sickness benefits, which is the reason under-

lying the employer’s obligation to pay the contribution

involved in this dispute, is expressly excluded by art. 6,

paragraph 2 of Law no. 138 of 11 January 1943 in cases


Tax issues

Tax moratorium

The appeals presented by ACEA against the payment

demands of 2007 and the 2009 tax assessments were

rejected by the Provincial Tax Commission.


against the first instance ruling against the 2007 de-

mands.

Other problems

ACEA Ato5 - Tariff

Concerning the well known issue of the tariff for the

integrated water services of ATO 5 (southern Lazio

– Frosinone) and the related results of operations of

ACEA Ato5, please note the indications below.

With resolution no. 7/2008, Co.N.Vi.R.I. (Supervisory

Committee for the Use of Water Resources) carried out

some surveys concerning the legitimacy of the revised

tariffs arranged by the Area Authority with resolution

no. 4/2007. In the company’s opinion, Co.N.Vi.R.I.’s Res-

olution no. 7/2008 appears to be entirely illegitimate, so

much so that the company filed an appeal against the

ruling before the Lazio Regional Administrative Court

(TAR), which is still pending.

In short, Co.N.Vi.R.I.’s opinion as regards the above

mentioned measure appears to be entirely illegitimate

as it is evidently in contrast with art. 154 of Legislative

Decree 152/2006, in accordance with which the tariff

“constitutes the price for integrated water services and

is fixed taking account of the quality of water resources

and of the service provided, the necessary infrastruc-

ture and upgrading work, the cost of operating the in-

frastructure, 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

Unemployment and mobility contributions

This is the contribution companies have to pay due to

INPS, to finance the income support fund for workers

that have become unemployed; it is decidedly insur-

ance-related in nature, for which only the previously in-

sured provider has the right to performance.

The obligation exists toward all employees in general,

with some exceptions, e.g. for those who benefit from

the guarantee of job security (art. 40 of Royal Decree

no. 1827/35) given they are employees of public admin-

istrations, public companies or exercise public services

where the element of stability is based on norms regu-

lating the legal status and remuneration of personnel or

ensured, upon request, by a provision from the Ministry

of Labour.

Despite altering the legal and economic nature of the

company since 1999, the requirement of job stability

was however met by the collective labour agreement

applied to personnel, which for companies operating in

both the electricity and water services segments con-

sisted of the national collective labour agreement of

9/7/1996 for employees working in local electricity com-

panies.

Stipulation of the sole agreement of the electricity sec-

tor in July 2001, and the subsequent succession and in-

terpretation agreement of April 2002 and the agreement

of contractual migration from electricity to water, in July

2001 too, led to periods without job stability before the

companies adopted regulations aimed at restoring the

requirement of employment stability.

Favourable first and second instance rulings were ap-

pealed by INPS; the hearing set for 7 February 2011 was

put back to 9 January 2012.


tion could be completed, with that Administration bear-

ing the relative expenses.

With reference to that deadline set to the Area Author-

ity, ACEA decided to settle ACEA Ato5’s losses by recon-

stituting the share capital and establishing a provision

to cover losses that are expected to arise until determi-

nation of the tariffs.

Considering that the Area Authority did not conclude

the proceedings within the deadline prescribed by the

Administrative Court, the Commissioner for deeds ac-

cepted the task until the end of October 2011.

In December 2011, as a result of a specific request

made by ACEA Ato5, the Commissioner for deeds asked

the Regional Administrative Court of Lazio “whether the

determination of the tariff in the area plan for the years

2006-2012 was an activity that conformed to the man-

date received under ruling no. 529/2011”; and in the

assumption that the review of the area plan and sub-

sequent determination of the real average tariff for the

remaining assignment period, according to the indica-

tions of the aforementioned ruling, constitutes a com-

plex activity given that it essentially presumes the accu-

rate recognition of the previous service management.

Following an affirmative response contained in corpo-

rate order dated 13 February 2012, the Commissioner

for deeds signed on 8 March 2012 a decree on the “De-

termination of the integrated water service tariff ap-

plicable for 2012 in ATO 5 Southern Lazio – Frosinone”

which the company was informed of on 9 March 2012.


equal to 1.359 m3 - was carried out to quickly deal with

a service economic-financial imbalance, caused by the

failure to update the tariff based on the trend in infla-

tion and forecasts in the area plan and management

agreement. Therefore, determination of the 2012 real

average tariff is limited to restabilising normal contrac-

tual conditions of continuity of management and does

not take into account 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 ordinary and extraordinary review.


been postponed, such as (i) the outcomes of the ab-

rogative referendum of article 154 of Legislative Decree

reasons) before the Lazio Regional Administrative

Court, Latina section, which recently issued sentence

no. 357/2011, thus rejecting the appeal filed by the

company and confirming the full legitimacy of the res-

olutions of AATO 5 concerning the cancellation of the

previous tariff review resolutions.

The above mentioned sentence – for which the Com-

pany is considering a possible appeal with the Council

of State – defined the issue on a mainly legal basis, fac-

ing it only incidentally.

The indications above on the one hand would suggest

the possible filing of an appeal with the Council of State

to obtain the ruling to be amended; on the other hand,

it does not prevent the possibility for the company to

bring civil proceedings to assert the contractual and/

or non-contractual obligations of the Area Authority to

ACEA Ato5 and obtain compensation for all damages

incurred by the operator.

Finally, worth mentioning is that, following the cancel-

lation of the 2006-2009 tariffs as ruled by the Area Au-

thority, the tariffs have not yet been re-determined, nor

have the definitive tariffs for 2010 and 2011.

Against this persisting inertia, the Company filed an in-

dependent appeal before the Lazio Regional Adminis-

trative Court, Latina section, against the non fulfilment

by the Authority of its obligations (namely: the determi-

nation of the tariff for the years 2006-2009, determina-

tion of the definitive tariff for 2010, review of the 2011-

2013 Area Plan and 2011 tariff determination).

The hearing was held in May and, on 20 June of this

year, the judgement was published whereby the Lazio

Regional Administrative Court, Latina section, upheld

the appeal filed by the company and “... by effect, or-

dered Area Authority 5, as per art. 117 of Italian Legisla-

tive Decree no. 104 of 2 July 2010, to conclude the pro-

ceeding for determining the integrated water service

tariff by the deadline of 120 days from the notification

or communication by administrative procedure of the

aforementioned decision”.

Furthermore, in upholding the specific request put forth

by the Company, the Regional Administrative Court also

appointed a Commissioner for deeds - if the awarding

Authority continued not to act - represented by the

Chairman of Co.N.Vi.Ri., so that the procedure in ques-





therefore, on 8 September 2011 Acea Ato5 filed a com-

plaint against the rejection order.







surety policy.

The Administrative Court Judge, by means of order no.







On 01/12/2011, 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 protec-

tion, ruling the appeal to be inadmissible due to a lack of

jurisdiction.

As a result, by means of note dated 14/12/2011, Unicred-

it issued a communication to the effect it had paid the

Area Authority the enforced sum of 2,843,622.02 euros,

also requesting that the amounts pledged in favour of

said surety be returned.







guarantee.






Water Service Operator and that for said specific case of

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

users 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.

Therefore, this document is valuable in definitively

quantifying the amount of receivables for tariff equali-

sation relating to the variation between real revenues

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

be calculated and any payment methods will also be

defined during said phase.

Pending the outcomes of the tariff review that the Com-

missioner must fulfil pursuant to ruling no. 529/2011 of

the Regional Administrative Court of Lazio, ACEA deems

it necessary to allocate a provision of 10 million euros,

which represents the best estimate of additional risk

related to the situation of uncertainty.

ACEA Ato5 – Enforcement of guarantee

On 1 June 2011, on the basis of the assumption that the

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

not been paid” and also requested the automatic and

immediate recovery of said cautionary deposit.





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-

tion of the Area Authority’s General Meeting, are under-

stood to be immediately effective and binding.

The agreement scheme makes provision for a signifi-

cant writing off of GORI’s debt to the Campania Region,

whose natural consequence is an almost equal reduc-

tion in the tariff adjustments accrued (as at 31 Decem-

ber 2011, a total of 147 million euros - Group share 54.5

million euros); the agreement scheme also makes pro-

vision for the division into instalments of the amount

of debt recognised in line with the recovery of residual

tariff adjustments in the Area Plan subject to review by

the Area Authority.

Signing of the aforementioned agreement allows GORI

to guarantee the business continuity and possibility of

planning its own financial requirements on the basis of

the area plan forecast, once reviewed.

Therefore, although the situation developed positively,

ACEA deemed it appropriate to allocate a provision of

44.1 million euros.

Lastly, the Regional Administrative Court of Campania

- Naples, by means of ruling no. 6003/2011 issued fol-

lowing the appeal against the injunction of the Commis-

sioner appointed for the Sarno River drainage basin so-

cial-economic-environmental emergency, ordered GORI

to pay the sum of 5,514,749.87. However, an appeal is

being prepared against said ruling before the Council of

State.

Antitrust Authority investigation

of the acquisition of Publiacqua

On 28 November 2007, ACEA was notified of the Anti-








Florence, it essentially.

non-fulfilment, the contractual tools in place between




Gori – Contenzioso per forniture idriche

In relation to the dispute with ARIN S.p.A., ion 11

April 2011, as a result of ruling no. 806/2011 of the

Court of Naples, GORI had already paid ARIN the sum of

3,133,159.63, with all the broadest privileges, whereas

it has already contested said ruling under appeal. In

this regard, it should be noted that the outcomes of

the preliminary enquiry performed as part of the spe-

cific Services Conference called by the Area Authority to

regulate interdisciplinary interference in relation to the

transfer of water resources, confirmed the arguments

proposed by the companies against ARIN’s claims, also

in legal proceedings.

In relation to the dispute with the Campania Region,

negotiations are underway to normalise relations,

through the definition of a plan to resolve the debt po-

sition, the definition of ordinary supply conditions and

the subsequent resolution of the ongoing dispute. In

particular, in confirmation of the negotiations underway,

provision has been made for an initial specific agree-

ment between the Region and the Area Authority, which

will see the sum of 5,257,459.27 (equivalent of capital

= 4,612,496.26 plus legal interest accrued) split into in-

stalments, in the form of an advance and while awaiting

completion of the aforementioned repayment plan to be

devised as part of the Area Plan review.

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

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.

It should be noted that, on 9 March 2012, GORI, the Area



agreement scheme, which is attached to said report, (i)



































E.ON. Produzione S.p.A. proceedings

launched against ACEA, ACEA Ato2

and AceaElectrabel Produzione

These proceedings were launched by E.ON. Produzione







• 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).






pellant’s arguments, were published at the end of June.

In the corresponding enforcement, on 11 June 2009, the



2008.






ated discussions was set for May 2012..

ACEA Luce

By means of deed notified on 7 February 2011, the com-












ACEA/SASI Proceedings

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-


9 million euros, plus interest accrued from 14 June 2001

until 30 July 2013 as compensation for damages.




A.S.A. – Acea Servizi Acqua

By means of summons notified in autumn 2011, ACEA


















its consideration.









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.

Vianini Lavori Arbitration

Vianini Lavori S.p.A. (in a temporary consortium with the













just started.


Additional disclosures on financial instruments and risk management policies

Classes of financial instrumentThe following table shows the breakdown of financial assets and liabilities required by IFRS 7 based on the categories

defined by IAS 39.

€ Financial instruments

held for trading at fair

value

Loans and receivables

Available-for-sale financial instruments

Carrying amount

Notes

Non-current assets 0 1,308,767 4,673 1,313,441

Other investments 4,673 4,673 13

Financial assets due from the Parent Company, subsidiaries and associates

1,308,486 1,308,486 15

Financial assets due from third parties 281 281 15

Current assets 0 685,794 0 685,794

Trade receivables due from customers 37,672 37,672 17

Trade receivables due from related parties 102,756 102,756 17


248,529 248,529 17

Financial assets due from third parties 12,610 12,610 17

Cash and cash equivalents 284,227 284,227 17

TOTAL FINANCIAL ASSETS 0 1,994,561 4,673 1,999,234


€ Financial instruments held

for trading

Liabilities at amortised cost

Carrying amount Notes

Non-current liabilities 0 1,784,429 1,784,429

Bonds 985,821 985,821 21

Bank borrowings (non-current portion) 798,608 798,608 21

Financial liabilities due to related parties 0 0 21

Current liabilities 0 674,292 674,292

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

Trade payables due to suppliers 68,412 68,412 24

Trade payables due to the Parent Company, subsidiaries and associates

131,004 131,004 24

TOTAL FINANCIAL LIABILITIES 0 2,458,722 2,458,722



ber 2012 and (ii) the remainder is available until the first

quarter of 2013; the contracts entered into provide for

the payment of a fee for non-use (minimum of 0.28% -

maximum of 0.35% per annum) plus an upfront fee paid

at the time 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 31.12.2011, 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 dis-

bursement date.

The abundance of lines (committed and revocable)

allowed the parent company to handle temporary in-

creases in short-term requirements with no impact on

operations.

At the end of the year, ACEA had loans - term deposits

and similar transactions - totalling 79.2 million euros in

place.

Interest rate risk

ACEA’s approach to managing interest rate risk, which

takes account of the structure of assets and the sta-

bility of the Group’s cash flows, has essentially been

targeted, up to now, at hedging borrowing costs and

stabilising cash flows, in such a way as to safeguard

margins and ensure the certainty of cash flows deriving

from ordinary activities.

The Group’s approach to managing interest rate risk is,

therefore, prudent and the methods used tend to be

static in nature.

A static (as opposed to a dynamic) approach means

Fair value of financial assets and liabilitiesThe fair value of financial instruments that are not traded

in an active market is determined using valuation mod-

els and techniques that make maximum use of market

inputs or using the price supplied by a range of independ-

ent counterparties.

The fair value of medium/long-term financial assets and

liabilities is calculated on the basis of the risk-free and the

adjusted risk-free interest rate curves.

The fair value of trade receivables and payables falling due

within twelve months is not calculated as their carrying

amount approximates to fair value.

In addition, fair value is not calculated when the fair value

of financial assets and liabilities cannot be objectively de-

termined.

Type of financial risks and related hedging policies

Foreign exchange risk

ACEA is not particularly exposed to this type of risk,

which is concentrated in the translation of the financial

statements of its overseas subsidiaries.

Rischio di liquidità

ACEA SpA’s liquidity risk management policy is based

on ensuring the availability of significant bank lines

of credit. Such facilities exceed the average require-

ment necessary to fund planned expenditure and en-

able the Group to minimise the risk of extraordinary

outflows. In order to minimise liquidity risk, ACEA has

adopted a centralised treasury management system,

which includes the most important Group companies,

and provides financial assistance to the companies

(subsidiaries and associates) not covered by a treasury

management contract.

As at 31 December 2011, the Parent Company held

committed and uncommitted lines of credit totalling

1,061 million euros and 400 million euros respectively.

No guarantees were issued to obtain said credit lines.

The committed lines of credit are revolving with a

three-year term from subscription. A total of (i) 100 mil-

lion euros of said credit lines is available until Decem-


by governance bodies and in accordance with the

specific nature of the business,

• manage derivatives transactions solely for hedg-

ing purposes, should the Group decide to use

them, in respect of the decisions of the Board of

Directors and, therefore, the approved strategies

and taking into account (in advance) the impact

on the income statement and balance sheet of

said transactions, giving preference to instru-

ments that qualify for hedge accounting (typically

cash flow hedges and, under given conditions, fair

value hedges).

It should be noted that ACEA:

• swappato swapped the 100 million euros loan

obtained on 27 December 2007 for a fixed rate.

The swap, a plain vanilla IRS, was stipulated on 24

April 2008, effective as of 31 March 2008 (date of

drawdown of the underlying loan) and expires on

21 December 2021,

• completed a cross currency transaction to trans-

form to euro – through a plain vanilla DCS swap

– the currency of the private placement (yen) and

the yen rate applied to a fixed euro rate through a

plain vanilla IRS swap,

All the derivative instruments taken out by Acea are

non-speculative and the total fair value of these is 10.9,

up 34.7 million euros.

The fair value of medium/long-term debt is calculated

on the basis of the risk-free and the risk-adjusted inter-

est rate curves.

The table does not contain the liabilities relating to

companies held for sale.

adopting a type of interest rate risk management that

does not require daily activity in the markets, but pe-

riodic analysis and control of positions based on spe-

cific needs. This type of management therefore involves

daily activity in the markets, not for trading purposes

but in order to hedge the identified exposure over the

medium/long term.

ACEA has, up to now, opted to minimise interest rate

risk by choosing a mix of fixed and floating rate debt

instruments.

As previously noted, fixed rate debt protects a bor-

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.

In fact, an analysis of the consolidated debt position

shows that the risk ACEA is exposed to is mainly in the

form of fair value risk, composed as at 31 December

2011 of fixed rate borrowings (64.7%). With reference

to the current portfolio make-up, the Group is partly

exposed to the risk of fluctuation in future cash flows

and, by contrast, to a greater extent than changes in

fair value.

Given the current mix of fixed and floating rate debt

and also taking account of the trend in market interest

rates in a predominantly recessionary macroeconomic

phase, essentially not due to sudden rises, an increase

in the percentage of medium-term floating rate debt

is not ruled out, which would make it possible to take

advantage of lower short-term rates, thus partially con-

taining the sharp rise in spreads as a result of notable

events linked to the worsening in guaranteed returns

on the debt of certain sovereign European states, in-

cluding Italy.

ACEA is bringing consistency to its decisions regarding

interest rate risk management that essentially aims to

both control and manage this risk and optimise borrow-

ing 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 ob-

jectives 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


As regards the type of hedges for which the fair value is

calculated and with reference to the hierarchies required

by the IASB, given they are composite instruments, they

are categorised as level 2 in the fair value hierarchy.

Sensitivity analysis has been carried out on medium/

long-term financial liabilities using stress testing, thus

applying a constant spread over the term structure of

the risk-free interest rate curve (for the Euro area at

31 December 2010). 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%.

Amortised cost Risk-free FV Increase/ (Decrease) Risk-adjusted FV Increase/ (Decrease)

(A) (B) (A) - (B) (C) (A) – (C)

Bonds 985,821 1,023,636 (37,814) 1,024,684 (38,863)

Fixed rate 4,903 6,900 (1,997) 4,566 336

Floating rate 799,901 838,314 (38,413) 815,383 (15,482)

TOTAL 1,790,625 1,868,850 (78,225) 1,844,633 (54,008)

Constant spread applied

Movements in Present Value (€m)

-1.50% (145.7)

-1.00% (94.9)

-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

Commitments and contingencies

These totalled 880,845 thousand euros at 31 December

2011 (993,677 thousand euros at 31 December 2010).

A description of the items that underwent significant

movements is given below.

Liens and sureties issued

and received

A net positive balance of 68,796 thousand euros was re-

ported between liens and sureties issued (119,765 thou-

sand euros) and those received (50,969 thousand euros).

These are guarantees granted by ACEA SpA to third par-

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 re-

garding a tender in the Campania region. The latter was

issued to the Agency for ATO Sarnese Vesuviano in order

to take part in the tender process to select a partner in

G.O.R.I S.p.A..

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 rela-

tion to a contract to carry out a “Project to repair

water leaks in the Catania distribution network”.


ity the enforced sum, also requesting that the amounts

pledged in favour of said surety be returned. Given the

illegitimate grounds, shown in the court acts, for enforce-

ment of the surety set out by the President of AATO and

the risk of future repeated, groundless and arbitrary en-

forcements, the company decided not to proceed, while

awaiting the definitive decisions of the Commissioner for

deeds, with re-establishing the underlying guarantee.

Third-party assets held under concession

Such assets amount to 86,077 thousand euros at 31 De-

cember 2011 and did not undergo significant changes

with respect to the end of the previous year. They refer

to public lighting assets. Such assets amount to 86,077

thousand euros at 31 December 2011 and did not un-

dergo significant changes with respect to the end of the

previous year. They refer to public lighting assets.

Property leases

By means of notarial deed of 23 January 2012, ACEA took

advantage of the opportunity presented by the disposal

carried out by the Beni Stabili Gestioni SpA SGR real es-

tate fund, by exercising the right of first offer set out in

the lease.

On 19 December 2011, the company paid Beni Stabili

Gestioni S.p.A. SGR an amount of 11,000 thousand euros

as an advance for the purchase of the building with ad-

joining garage.

The commitments recorded in the financial statements,

which ended on the date of formalisation of the pur-

chase, amounted to 898 thousand euros.

Liens and sureties received from third parties regard

guarantees received from third parties in relation to con-

tract work and/or supplies provided, or for bids called.

Letters of patronage issued and received

A net positive balance of 563,550 thousand euros is the

result of letters of patronage issued, totalling 563,753

thousand euros, and letters of patronage received,

amounting to 203 thousand euros.

Those issued include:

- 424,206 thousand euros in favour of ACEA Dis-

tribuzione SpA and in the interests of Cassa

Depositi e Prestiti as a back-to-back guarantee for

the new loan granted,

- 50,278 thousand euros in favour of Acea Energia

and in the interests of Enel Distribuzione S.p.A. as

a back-to-back guarantee for the transport of elec-

tricity,

- 1,470 thousand euros in favour of Aquaser to guar-

antee the credit line granted by MPS to Solemme,

- 68,277 thousand euros to Acquirente Unico (Sole

Buyer) and in the interest of Acea Energia S.p.A. as

a back-to-back guarantee relating to the electricity

sale contract signed by the parties.

It should be noted that the guarantee of 2,675 thousand

euros issued to Banca di Roma in the interest of Acea

Ato5 as a back-to-back guarantee for the definitive de-

posit of 2,844 thousand euros issued by the aforemen-

tioned bank in favour of the Agency for Ato5 (southern

Lazio) was eliminated. On 1 June 2011, on the basis of

the assumption that the Operator committed breach

with respect to the payment of concession fees, the

Area Authority requested that UniCredit Corporate &

Investment Banking enforce the cautionary deposit pro-

vided 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 submit-

ted 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-

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 Resolu-

tion 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)

ANNExES TO THE NOTES


for the year ended 31 December 2011


Annex 1: Analysis of net debt at 31.12.2011


Non-current financial assets 281 256 25

Intercompany non-current financial assets 1,326,506 175,369 1,151,136

Non-current borrowings and financial liabilities (1,808,214) (1,779,682) (28,532)

Financial assets/(liabilities) deriving from measurement of derivative instruments

23,784 (8,606) 32,391

Net medium/long-term debt (457,643) (1,612,663) 1,155,020

Cash and cash equivalents and securities 284,227 251,407 32,820

Short-term bank borrowing (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)

Net short-term debt 68,085 1,305,871 (1,237,786)

TOTAL NET DEBT (389,558) (306,792) (82,766)


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

Subsidiaries

ACEA DISTRIBUZIONE S.p.A. 344,152 0 344,152

ACEA ATO2 S.p.A. 585,442 585,442

ACQUA ITALIA S.p.A. 0 0

ACEA TRASMISSIONE S.p.A. 0 0

Acea 8 Cento (formerly VOINOI) 1,080 42 521 517

CONSORCIO AGUA AZUL Sa 5,055 382 5,437

UTILITAS Srl (in liquidation) 0 0

LaboratoRi S.p.A. 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 0

Acea Energia Holding S.p.A. 160,984 116,262 277,245

ACEA & CO ARMENIAN UTILITY Scrl 0 0

E.CO.INT Srl 0 0

ACEA ATO5 S.p.A. 1,358 8,675 6,157 3,877

MONTENERO ENERGIA Srl 0 0

AGUAZUL BOGOTA’ SA 793 19 812

CONSORCIO ACEA TRADEXCO 43 43

ACEA DOMINICANA S.A. 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

ARSE S.p.A. 354,295 354,295

AceaRieti 100 100 0

ACQUE BLU FIORENTINE SpA 39,697 39,697

ARIA S.p.A. 22,136 22,136

UMBRA ACQUE 6,851 6,851

AQUASER Srl 3,512 950 4,462

ELEKTRON SIGMA 0 0

IDRECO SCARL 0 0

CREA SPA 0 0 0

CREA GESTIONI 5,925 4,104 2,000 8,029

CREA PARTECIPAZIONI 4,004 4,004 0

ACEA GORI SERVIZI 1,659 1,659

ACQUA BLU 461 22 483 0

APICE 150 142 8

EBLACEA S.p.A. 0 0 0

SARNESE VESUVIANO Srl 21,247 21,247

ACEA ILLUMINAZIONE PUBBLICA 120 120

Acea Servizi Acque 203 203 0

Ingegnerie Toscane S.r.l. 58 58

TOTAL SUBSIDIARIES 1,594,306 117,415 0 0 6,914 7,363 1,711,271


Annex 2 – Statement of movements in investments at 31 December 2011

MOVEMENTS IN 2011


Impair./ Losses

31.12.2011

Associates

ACQUE POTABILI S.p.A. 0 0

AGUAS DE S. PEDRO Honduras Sa 1,964 54 2,018

AGAC Y OTROS 0 0

DYNA GREEN Srl 355 355

TIRANA ACQUE Scarl 0 0

PORT UTILITIES S.p.A. 0 0

Umbria distribuzione Gas 318 318

MARCO POLO S.p.A. 294 294

INTESA ARETINA 11,505 11,505

EBLACEA S.p.A. 0 0

CITELUM NAPOLI PUBBLICA ILLUMINAZIONE Scarl

306 306

SIENERGIA 42 42

TOTAL ASSOCIATES 14,784 0 0 0 54 0 14,839

MOVEMENTS IN 2011


Impair./ Losses

31.12.2011

Other companies

AMGA S.p.A. 0 0

POLO TECNOLOGICO S.p.A. 2,542 2,542

WRc Plc 1,255 38 1,293

Centro Agroalimentare Roma S.p.A. 0 0

CSM S.p.A. 838 838

Umbria distribuzione Gas 0 0

Orione 0 0

TESIMA S.p.A (in liquidation) 0 0

TOTAL OTHER COMPANIES 4,635 0 0 0 0 38 4,673


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

INCOME STATEMENT 31.12.2011 Related parties

% impact 31.12.2010 Related parties

% impact Increase/ (Decrease)

Revenue from sales and services 163,764 156,771 96% 140,545 137,670 98% 23,219

Other revenues and proceeds 8,868 590 7% 24,840 4,971 20% (15,973)

Net revenue 172,632 157,362 165,385 142,641 7,247

Staff costs 47,648 39,525 8,122

Costs of materials and overheads 159,140 91,198 57% 139,916 74,925 54% 19,224

Operating costs 206,788 91,198 179,442 74,925 27,346

Gross Operating Profit (34,156) 66,164 (14,056) 67,716 (20,100)

Amortisation, depreciation, provisions and impairment charges

76,512 28,561 47,952

Operating profit/(loss) (110,669) 66,164 (42,617) 67,716 (68,051)

Finance (costs)/income 5,580 80,755 1447% (34,970) (32,854) 94% 40,550

Ordinary finance (costs)/income 5,580 (34,970) 40,550

Exceptional finance (costs)/income 0 0 (0)

Profit/(loss) on investments 200,175 200,175 100% 85,832 85,832 100% 114,343

Profit/(loss) before tax 95,086 347,093 8,245 120,694 86,841

Taxation (13,550) (61,297) 452% (25,571) (78,794) 308% 12,021

Net profit/(loss) from continuing operations

108,636 408,390 33,816 199,488 74,820

Net profit/(loss) from discontinued operations

0 0 0

NET PROFIT/(LOSS) FOR THE PERIOD

108,636 408,390 33,816 199,488 74,820



ASSETS 31.12.2011 Related parties



Property, plant and equipment 52,434 52,577 (144)

Investment property 2,993 3,148 (154)

Goodwill 0 0 0

Concessions 0 49,707 (49,707)

Other intangible assets 10,399 11,652 (1,254)

Investments in subsidiaries and associates

1,726,110 1,609,090 117,020


Deferred tax assets 36,283 22,683 13,600

Financial assets 1,380,229 1,326,506 96% 193,550 175,369 91% 1,186,679

Other non-current assets 724 725 (1)

Non-current assets held for sale 0 35,034 35,034 100% (35,034)

Non-current assets 3,213,844 1,326,506 1,982,802 210,403 1,231,042

Inventories 0 0 0

Trade receivables 37,672 625 2% 25,880 11,792

Intercompany trade receivables 102,756 102,756 100% 92,395 92,395 100% 10,360

Other current assets 28,005 19,840 8,164

Current financial assets 27,289 14,647 12,642

Intercompany current financial assets

248,529 248,529 100% 1,178,424 1,178,424 0 (929,896)

Current tax assets 35,407 12,779 36% 63,443 52,416 83% (28,035)

Deferred tax assets 0 0 0

Cash and cash equivalents 284,227 251,407 32,820

Current assets held for sale 0 0 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



LIABILITIES 31.12.2011 Related parties




share capital 1,098,899 1,098,899 0

legal reserve 68,919 67,228 1,691

reserve for treasury shares 0 0 0

other reserves 89,427 160,963 (71,536)

profit (loss) pertaining to previous years

63 782 (720)

profit (loss) for the period 49,123 33,816 15,307

Total shareholders’ equity 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

Borrowings and financial liabilities 1,784,429 1,788,288 (3,859)

Other liabilities 5,269 6,888 (1,619)

Provisions for deferred tax liabilities

12,873 8,997 3,876

Non-current liabilities held for sale 0 0 0

Non-current liabilities 1,896,803 1,853,237 43,565

Borrowings 491,959 194,756 40% 138,607 32,069 23% 353,352

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)


Current liabilities held for sale 0 0 0

Current liabilities 774,496 344,620 413,913 148,637 360,583

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

3,977,728 344,620 3,628,838 148,637 348,890


31.12.2011 Related parties

31.12.2010 Related parties

Increase/ (Decrease)

Non-current financial assets 281 256 0

Intercompany non-current financial assets 1,326,506 1,326,506 175,369 175,369 1,151,136

Non-current borrowings and financial liabilities (1,808,214) (1,779,682) (28,532)

Financial assets/(liabilities) deriving from measurement of derivative instruments

23,784 0 (8,606) 32,391

Net medium/long-term debt (457,643) 1,326,506 (1,612,663) 175,369 1,154,995

Cash and cash equivalents and securities 284,227 251,407 32,820

Short-term bank borrowing (297,198) (106,483) (429)

Current financial assets/(liabilities) 27,283 14,591 12,692

Intercompany current financial assets/(liabilities) 53,772 53,772 1,146,355 1,146,355 (1,092,583)

Net short-term debt 68,085 53,772 1,305,871 1,146,355 (1,047,500)

TOTAL NET DEBT (389,558) 1,380,278 (306,792) 1,321,725 107,495



31.12.2011 Related parties % impact 31.12.2010 Related parties % impact Increase/ (Decrease)

Cash and cash equivalents at beginning of period 251,407 0 43,818 207,589










Cash generated by operations before movements in working capital 13,700 0 (54,676) 68,376

Increase in current receivables (26,381) 103,381 -392% (22,638) 67,832 -300% (3,743)

Increase/decrease in current liabilities 35,061 132,747 379% 15,723 105,117 669% 19,338


Movement in working capital 8,680 236,128 (6,915) 172,949 15,595

Changes in other assets/liabilities during the period 40,324 0 76,139 0 (35,815)

TOTAL CASH FLOW FROM OPERATING ACTIVITIES 62,704 236,128 14,548 172,949 48,156



Investments 811 8,164 (7,353)

Proceeds/payments deriving from other investments (216,729) (2,928,827) 1351% (61,909) (2,130,079) 3441% (154,820)


Interest income received (22,813) 57,677 -253% 28,263 43,515 154% (51,076)

TOTAL (136,125) (2,871,150) 37,034 (2,086,564) (173,159)




Decrease/increase in other short-term borrowings 353,352 162,687 46% (483,302) 30,173 -6% 836,654

Interest expenses paid (60,782) (802) 1% (43,131) (1,738,262) 4030% (17,651)

Dividends paid (155,160) 0 (155,160)

TOTAL CASH FLOW 106,241 161,885 102,385 (1,708,089) 3,856

Changes in shareholders’ equity after net profit 0 0 53,622 (53,622)

Cash flows for the year 32,820 (2,473,137) 153,967 (3,621,704) (121,147)

Cash and cash equivalents at beginning of period 251,407 0 43,818 0 207,589

Cash and cash equivalents at end of period 284,227 (2,473,137) 251,407 (3,621,704) 32,820


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.


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.


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

Property, plant and equipment 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 37,006

Other non-current financial assets 71,462 1,308,767 1,380,229 1,380,229

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

Receivables due from subsidiaries / associates 112 56,383 56,496 0 56,496

Other current trading assets 63,412

Other current financial assets 120,257 155,560 275,817 0 275,817

Bank deposits 284,227

TOTAL ASSETS 3,977,728



Public

Lighting Corporate Total continuing operations


Total

Segment liabilities

Trade payables 6,679 68,412 75,091 0 75,091

Trade payables due to Parent Company 0 31,395 31,395 31,395

Trade payables due to subsidiaries and associates 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 0 23,551

OTHER PROVISIONS 0 70,680 70,680 70,680

PROVISIONS FOR DEFERRED TAXES 12,873

Other non-current trading liabilities 5,269

Other non-current financial liabilities 1,784,429

Shareholders’ equity 1,306,430

TOTAL LIABILITIES 3,977,728



Public

Lighting Corporate Total continuing operations


Total

Third party revenues 77,890 9,269 87,159 0 87,159

Inter-segment sales 0 85,473 85,473 0 85,473

Staff costs 0 (47,648) (47,648) 0 (47,648)

Cost of materials and overheads (81,453) (77,688) (159,140) 0 (159,140)

Gross Operating Profit (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 0

Operating profit/(loss) (3,545) (107,124) (110,669) 0 (110,669)

Finance (costs)/income 5,580

Profit/(loss) on investments 200,175

Net profit/(loss) from discontinued operations 0

Profit/(loss) before tax 95,086

Taxation 13,550

Net profit/(loss) for the period 108,636


at 31 December 2011

216 2011 | Consolidated Financial Statements of the Acea Group

Consolidated Statement of Comprehensive Income

Notes Ref .


Increase/ (Decrease) %

1 Revenue from sales and services 3,217,123 2,460,690 756,433 30.7%

2 Other revenues and proceeds 71,035 19,840 (8,810) -11.0%

Consolidated net revenue 3,288,158 2,540,535 747,623 29.4%

3 Staff costs 277,933 264,968 12,965 4.9%

4 Costs of materials and overheads 2,266,145 1,177,277 1,088,868 92.5%

Consolidated operating costs 2,544,078 1,442,245 1,101,833 76.4%

5 Net income/(costs) from commodity risk management 297 3,152 (2,855) -90.6%

Gross Operating Profit 744,377 1,101,442 (357,065) -32.4%

6 Amortisation, depreciation, provisions and impairment charges 425,984 320,593 105,391 32.9%

Operating profit/(loss) 318,393 74,820 (462,456) -59.2%

7 Finance (costs)/income (118,422) (88,932) (29,490) 33.2%

Ordinary finance (costs)/income (118,422) (88,932) (29,490) 33.2%

Extraordinary finance (costs)/income 0 0 0 0.0%

8 Profit/(loss) on investments 9,295 2,572 6,722 261.4%

Profit/(loss) before tax 209,266 694,490 (485,224) -69.9%

9 Taxation 60,737 69,844 (9,107) -13.0%

Net profit/(loss) from continuing operations 148,529 624,646 (476,117) -76.2%

10 Net profit/(loss) from discontinued operations (55,009) (524,626) 469,617 -89.5%

Net profit/(loss) for the period 93,521 100,020 (6,500) -6.5%

Profit/(loss) attributable to minority interests 7,563 7,872 (310) -3.9%

Net profit/(loss) attributable to the Group 85,958 92,148 (6,190) -6.7%

11 Earnings (loss) per share attributable to the shareholders’ of the Parent Company

Basic 0.4036 0.4327 (0.0291)

Diluted 0.4036 0.4327 (0.0291)

Earnings (loss) per share of continuing operations attributable to the shareholders’ of the Parent Company:

Basic 0.6619 2.8961 (2.2342)

Diluted 0.6619 2.8961 (2.2342)


2172011 | Consolidated Financial Statements of the Acea Group

Consolidated Comprehensive Income Statement



Net profit/(loss) for the period 93,521 100,020 (6,500) -6%

Profit/(Loss) from Conversion of Foreign Financial Statements 833 1,384 (551)

Profit/(Loss) From the Redetermination of Financial Assets Available for Sale 0 0 0

Profit/(Loss) From the Effective Portion on Hedging Instruments (21,623) (2,772) (18,851)

Actuarial Profit/(Loss) on Defined Benefit Pension Plans 0 0 0

Taxation 5,944 1,155 4,789

Total Consolidated Operating Profits Net of Tax (14,846) (233) (14,613)

Total operating profit net of tax 28,474 99,788 (21,113) 21%

Consolidated Operating Profit/(Loss) Net of Tax attributable to:

Third Parties 6,910 7,598 (688)

Group 71,764 92,189 (20,425)



Statement of Consolidated Financial Position

Notes Ref .

ASSETS 31 December 2011

31 December 2010



12 Property, plant and equipment 2,021,364 1,904,563 116,801 6.1%

13 Investment property 2,993 3,148 (154) -4.9%

14 Goodwill 151,244 19,718 131,525 667.0%

15 Concessions 1,553,946 1,418,071 135,875 9.6%

16 Other intangible assets 115,067 67,350 47,717 70.8%

17 Investments in subsidiaries and associates 14,795 32,066 (17,270) -53.9%

18 Other investments 4,686 3,650 1,035 28.4%

19 Deferred tax assets 353,648 267,520 86,128 32.2%

20 Financial assets 19,939 7,553 12,386 164.0%

21 Other assets 63,189 26,212 36,977 141.1%

NON-CURRENT ASSETS 4,300,870 3,749,850 551,020 14.7%

Inventories 66,106 58,039 8,066 13.9%

Trade receivables 1,510,012 1,144,811 365,201 31.9%

Other current assets 189,518 77,337 112,180 145.1%

Current tax assets 57,089 42,437 14,652 34.5%

Current financial assets 172,768 321,384 (148,616) -46.2%

Cash and cash equivalents 321,022 281,742 39,280 13.9%

22 CURRENT ASSETS 2,316,514 1,925,750 390,763 20.3%

23 Non-current assets held for sale 0 704,013 (704,013) -100.0%

TOTAL ASSETS 6,617,384 6,379,614 237,770 3.7%

Notes Ref .

LIABILITIES 31 December 2011

31 December 2010




share capital 1,098,899 1,098,899 0 0.0%

legal reserve 113,731 111,785 1,946 1.7%

other reserves (375,802) (272,132) (103,670) 38.1%

profit (loss) pertaining to previous years 314,009 276,004 38,006 13.8%

profit (loss) for the period 85,958 92,148 (6,190) -6.7%

Total Group shareholders’ equity 1,236,795 1,306,704 (69,908) -5.3%

Minority interests 74,661 74,623 39 0.1%

24 Total shareholders’ equity 1,311,457 1,381,326 (69,870) -5.1%

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%

27 Borrowings and financial liabilities 2,298,916 2,299,463 (548) 0.0%

28 Other liabilities 278,415 227,478 50,937 22.4%

29 Provisions for deferred tax liabilities 98,826 77,319 21,416 27.7%

NON-CURRENT LIABILITIES 3,031,825 2,902,969 128,856 4.4%

Trade payables 1,344,785 883,498 461,287 52.2%

Other current liabilities 286,441 259,620 26,821 10.3%

Borrowings 540,645 250,045 290,599 116.2%

Tax payables 102,232 120,786 (18,554) -15.4%

30 CURRENT LIABILITIES 2,274,102 1,513,948 760,154 50.2%

23 Liabilities directly associated to assets held for sale 0 581.371 (581.371) -100,0%

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,617,384 6,379,614 237,770 3.7%


Consolidated Cash Flow Statement

€ 31.12.2011 31.12.2010 Increase/ (Decrease)


Profit before tax from continuing operations 209,266 694,490 (485,224)

Profit before tax from discontinued operations (50,174) (509,071) 458,897

Amortisation/depreciation 250,453 230,818 19,634



Net movement in staff termination benefits (12,554) (12,540) (14)


Net financial interest expense 120,574 98,895 21,679


Cash generated by operations before movements in working capital 426,160 490,454 (64,294)

Increase in current receivables (289,129) (196,781) (92,348)

Increase/decrease in current liabilities 314,398 74,476 239,922

Increase/(decrease) in inventories 6,322 (19,572) 25,895

Movement in working capital 31,591 (141,877) 173,468

Changes in other assets/liabilities during the period (124,780) 97,606 (222,386)

TOTAL CASH FLOW FROM OPERATING ACTIVITIES 332,972 446,183 (113,211)


Purchase/sale of property, plant and equipment (86,311) (192,414) 106,103

Purchase/sale of intangible assets (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

Dividends received 2,048 0 2,048

Interest income received 22,609 20,214 2,395

TOTAL (224,787) (333,723) 108.937


Minority interests in capital increases by subsidiaries 0 0 0

Repayment of mortgages and long-term borrowings (41,552) (69,238) 27,685


Decrease/increase in other short-term borrowings 237,019 (429,636) 666,655

Interest expenses paid (119,622) (96,808) (22,813)

Dividends paid (159,530) (2,851) (156,678)

TOTAL CASH FLOW (83,685) 81,803 (165,489)

Cash flows for the year 24,500 194,263 (169,763)


Cash and cash equivalents at end of period 321,022 296,522 24,500



Statement of changes in consolidated shareholders’ equity

Share capital

Legal reserve

Other reserves

Profit for the period

Total Minority interests

Total shareholders’

equity

Balances at 01 January 2010 1,098,899 107,096 32,022 (22,998) 1,215,019 71,705 1,286,725

Operating profit 92,148 92,148 7,872 100,020

Other comprehensive profits (losses) 41 41 (274) (233)

Total comprehensive profit (loss) 92,189 92,189 7,598 99,788

Appropriation of result for 2009 4,689 (27,686) 22,998 0 402 402

Distribution of dividends (1,399) (1,399)

Change in basis of consolidation (506) (506) (3,684) (4,190)

Balances at 31 December 2010 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

Total shareholders’

equity

Balances at 01 January 2011 1,098,899 111,785 3,830 92,189 1,306,704 74,623 1,381,326

Operating profit 85,958 85,958 7,563 93,521

Other comprehensive profits (losses) (14,193) (14,193) (653) (14,846)

Total comprehensive profit (loss) 0 0 0 71,764 71,764 6,910 78,674

Appropriation of result for 2010 6,906 85,283 (92,189) 0 0 0

Distribution of dividends 0 (155,348) 0 (155,348) (5,835) (161,183)

Change in basis of consolidation (4,960) 18,635 0 13,675 (1,036) 12,639

Balances at 31 December 2011 1,098,899 113,731 (47,599) 71,764 1,236,795 74,661 1,311,457



Notes

The figures in these consolidated financial statements

are comparable to the figures in the previous period.

Alternative performance indicatorsIn line with recommendation CESR/05-178b, the content

and meaning of non-GAAP measures of performance

and other alternative performance indicators used in

these financial statements are described below:

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

an indicator of operating performance and is cal-

culated by adding “Amortisation, depreciation, pro-

visions 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 non-

current borrowings and financial liabilities, less

non-current financial assets (loans and receivables

and securities other than investments), to current

borrowings and other current liabilities, less cur-

rent financial assets and cash and cash equiva-

lents;

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.

Use of estimatesIn application of IFRS, preparation of the consolidated

financial statements required management to make

estimates and assumptions that affect the reported

amounts of revenues, costs, assets and liabilities and

the disclosure of contingent assets and liabilities at the

end of the reporting period. The actual amounts may dif-

fer from such estimates. Estimates are used in order to

make provisions for credit risk, obsolescent inventories,

impairment charges incurred on assets, employee ben-

efits, fair value of derivatives, taxes and other provisions.

The original estimates and assumptions are periodically

reviewed and the impact of any change is recognised in

the income statement.

In addition, it should be noted that said evaluation pro-

cesses, in particular the more complex ones such as the

calculation of any impairments of non-current assets, are

Basis of Presentation and Consolidation

General informationThe consolidated financial statements of the ACEA

Group for the year ended 31 December 2011 were

approved by the Board of Directors’ resolution on 21

March 2011. The Parent Company, ACEA SpA, is an Ital-

ian joint-stock company, with its registered office in

Rome, at Piazzale Ostiense 2, and whose shares are

traded on the Milan Stock Exchange.

The ACEA Group’s principal areas of activity are de-

scribed in the Management Operations’ Report.

Compliance with IAS/IFRSThe consolidated financial statements have been pre-

pared under the IFRS effective at the end of the report-

ing period, and as approved by the International Ac-

counting Standards Board (IASB) and adopted by the

European Union. The standards consist of International

Financial Reporting Standards (IFRS), International Ac-

counting Standards (IAS) and the interpretations of the

International Financial Reporting Interpretations Com-

mittee (IFRIC) and of the Standing Interpretations Com-

mittee (SIC), collectively referred to as “IFRS”.

Basis of presentationThe consolidated financial statements consists of the

consolidated balance sheet, consolidated income state-

ment, statement of consolidated comprehensive in-

come, consolidated cash flow statement and the state-

ment of changes in consolidated shareholders’ equity.

The Report also includes notes prepared under the IAS/

IFRS currently in effect.

The income statement is classified on the basis of the

nature of expenses, the balance sheet is based on the

liquidity method by dividing between current and non-

current items, whilst the cash flow statement is pre-

sented using the indirect method.

The consolidated financial statements have been pre-

pared in euros and all amounts have been rounded off

to the nearest thousand euros, unless otherwise indi-

cated.


the fair value of the identifiable assets, liabilities and con-

tingent liabilities acquired. This goodwill is not amortised,

but is tested for impairment. If, on the other hand, the

Group’s interest in the fair value of the identifiable as-

sets, liabilities and contingent liabilities exceeds the cost

of the acquisition, the relevant amounts are re-deter-

mined. If the Group’s interest in the resulting fair value of

the identifiable assets, liabilities and contingent liabilities

still exceeds the cost of the acquisition, the difference is

immediately recognised in the income statement.

For every business combination, the purchaser must val-

ue any minority stake in the acquired entity at fair value

or in proportion to the share of the minority interest in

net identifiable assets of the acquired entity.

Non-current assets held for sale and discontinued operationsNon-current assets (and assets included in disposal

groups) classified as held for sale are accounted for at

the lower of their previous carrying amount and their fair

value less costs to sell.

Non-current assets (and assets included in disposal

groups) are classified as held for sale when their carry-

ing amount is expected to be recovered through a sale

transaction rather than through their continued use. This

condition is only met when the sale is highly probable, the

asset (or asset included in a disposal group) is available for

immediate sale in its present condition and management

is committed to the sale, which is expected to take place

within twelve months of the classification of this item.

In the case of discontinued operations, the post-tax gain or

loss on disposal and the matching comparative amounts

for the previous year are shown separately in a specific

item in the income statement.

GoodwillGoodwill from business combinations (among which, as

an example only, the acquisition of subsidiaries, jointly

controlled entities, or the acquisition of business units or

other extraordinary transactions) represents the excess

of the cost of the acquisition over the Group’s interest in

the fair value of the identifiable assets, liabilities and con-

tingent liabilities of the subsidiary or jointly controlled

entity at the date of the acquisition. Goodwill is recog-

generally carried out fully during drafting of the financial

statements, except where there are impairment indica-

tors that call for an immediate evaluation of losses of

value.

Accounting standards and policies

The most significant accounting standards and policies

are described below.

Business combinationsAcquisitions of subsidiaries are accounted for under

the acquisition method. The cost of the acquisition is

determined as the sum of the fair value, at the date of

exchange, of the assets given, the liabilities incurred or

acquired, and the financial instruments issued by the

Group in exchange for control of the acquired company.

The identifiable assets, liabilities and contingent liabili-

ties of the acquired company that meet the conditions

for recognition under IFRS 3 are accounted for at fair

value at the date of acquisition, with the exception of

non-current assets (or disposal groups), which are clas-

sified as held for sale under IFRS 5 and accounted for at

fair value less costs to sell.

If the business combination is recognised in several

phases, the purchaser has to recalculate the fair value of

the investment previously held (in case of equity method

valuation) or the group of net assets attributable to the

subsidiary (in case of consolidation according to the pro-

portional method) and recognise any resulting profit or

loss in the income statement.

The purchaser has to recognise any contingent consid-

eration at the fair value, at the date of acquisition. The

change in fair value of the contingent consideration clas-

sified as asset or liability will be recognized according to

the provisions included in IAS 39, in the income state-

ment or in other comprehensive income. If the contin-

gent consideration is classified in the shareholders’ equi-

ty, its value has not to be recalculated until its settlement

is recognised to the shareholders’ equity.

Goodwill arising on acquisition is recognised as an asset

and initially valued at cost, represented by the excess of

the cost of the acquisition over the Group’s interest in


are translated into the Parent Company’s presentation

currency at closing rates, whilst income and expenses

are translated at average rates for the period or at the

rates ruling at the date of the related transactions. Ex-

change differences, resulting from the use of different

rates to translate income and expenses as opposed to

assets and liabilities, are taken directly to shareholders’

equity and recognised as a separate component of eq-

uity. On disposal of a foreign economic activity, the cu-

mulative exchange differences deferred in a separate

component of shareholders’ equity are recognised in the

income statement.

Revenue recognitionRevenue is recognised when the amount of revenue can

be reliably measured and it is probable that the economic

benefits associated with the transaction will flow to the

Group. Depending on the type of transaction, revenue is

recognised on the basis of the following specific criteria.

Sale of goods

Revenue is recognised when the significant risks and re-

wards of ownership of the goods have been transferred

to the buyer, the revenue can be reliably measured and

collectability is probable.

Provision of services

Revenue is recognised with reference to the stage of

completion of the transaction based on the same crite-

ria used for contract work in progress. When the amount

of the revenue cannot be reliably determined, revenue

is recognised only to the extent of the expenses recog-

nised that are recoverable.

In particular, revenue from the sale and transport

of electricity and gas is recognised at the time the

service is provided, even when yet to be billed, and in-

cludes an estimate of the quantities supplied to custom-

ers between their last meter reading and the end of the

period. Revenue is calculated on the basis of the related

laws, provisions contained in Electricity and Gas Author-

ity resolutions in effect during the period and existing

provisions regarding equalisation.

Revenue from integrated water services is recog-

nised on the basis of the quantities supplied during the

nised as an asset and is subject to an annual impairment

review. Any impairment charges are immediately recog-

nised in the income statement and are not subsequently

reversed.

Goodwill emerging at the date of acquisition is allocated

to each of the cash-generating units expected to benefit

from the synergies deriving from the acquisition. Impair-

ment charges are identified via tests that assess the ca-

pacity of each unit to generate cash sufficient to recover

the portion of goodwill allocated to it. Should the recov-

erable amount of the cash-generating unit be less than

the allocated carrying amount, an impairment charge is

recognised.

On the sale of a subsidiary or jointly controlled entity, any

unamortised goodwill attributable to it is included in the

calculation of the gain or loss on disposal.

Conversion of foreign financial statement itemsACEA SpA and its European subsidiaries have adopted

the euro as their functional and presentation currency.

Foreign currency transactions are initially recognised at

the spot rate on the date of the transaction. Foreign cur-

rency monetary assets and liabilities are translated into

the functional currency at the exchange rate at the end

of the reporting period. Exchange differences are recog-

nised in the consolidated income statement, with the

exception of differences deriving from foreign currency

loans taken out in order to hedge a net investment in a

foreign entity. Such exchange differences are taken di-

rectly to shareholders’ equity until disposal of the net in-

vestment, at which time any differences are recognised

as income or expenses in the income statement. The tax

effect and tax credits attributable to exchange differenc-

es deriving from this type of loan are also taken directly

to shareholders’ equity. Foreign currency non-monetary

items accounted for at historical cost are translated at

the exchange rate on the date the transaction was ini-

tially recorded. Non-monetary items accounted for at fair

value are translated at the exchange rate at the date the

value was determined.

The functional currency used by the Group’s Latin Ameri-

can companies is the US dollar. At the end of the report-

ing period the assets and liabilities of these companies


GrantsGrants related to plant investments received from both

public and private entities are accounted for at fair value

when there is reasonable assurance that they will be re-

ceived and that the conditions attaching to them will be

complied with.

Water connection grants are recognised as non-current

liabilities and taken to the income statement over the life

of the asset to which they refer if they relate to an invest-

ment, or recognised in full as income if matched by costs

incurred during the period.

Grants related to income (disbursed in order to provide

an enterprise with immediate financial aid or as compen-

sation for expenses and losses incurred in a previous pe-

riod) are recognised in the income statement in full once

the conditions for recognition have been complied with.

Construction contractsConstruction contracts are accounted for on the basis

of the contractual payments accrued with reasonable

certainty, according to the percentage of completion

method (cost to cost), attributing revenue and profits on

the contract to the individual reporting periods in pro-

portion to the stage of contract completion. Any posi-

tive or negative difference between contract revenue

and any prepayments received is recognised in assets

or liabilities.

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 deter-

mined. Expected losses are recognised regardless of the

stage of contract completion.

Borrowing costs Borrowing costs that are directly attributable to the acqui-

sition, 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.

period, even if such quantities have not yet been meas-

ured on the basis of meter readings or billed by the end

of the period, and applying the tariffs in force, including

any approved increases for the area of operation con-

cerned.

Any differences between revenue billed and the amount

guaranteed by the corresponding Area Plan, in compli-

ance with art. 11, paragraph 2.b of the Galli Law, or art.

151, paragraph 2.c of Legislative Decree no. 152/2006,

are also recognised in revenue for the period. The water

company’s failure to account for the so-called regulatory

assets deriving from tariff adjustments would distort the

effect on the financial statements.

Finance income

Interest income is recognised on a time proportion ba-

sis that takes account of the effective yield on the asset

(the rate of interest required to discount the stream of

future cash receipts expected over the life of the asset

to equate to the initial carrying amount of the asset). In-

terest is accounted for as an increase in the value of the

financial assets recorded in the accounts.

Dividend income

Dividend income is recognised when the shareholder’s

right to receive payment is established.

Dividend income is classified as a component of finance

income in the income statement.


lease payments. The underlying liability to the lessor is

included in the balance sheet as an obligation to pay

future lease payments. Lease payments are apportioned

between the capital element and the interest element,

in such a way as to produce a constant periodic rate of

interest on the remaining balance of the liability.

Finance costs, whether certain or estimated, are recog-

nised on an accruals basis unless they are directly at-

tributable to the acquisition, construction or production

of an asset, which justifies their capitalisation.

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

to be received as an incentive for entering into operat-

ing leases are also recognised on a straight-line basis

over the lease term.

TaxationIncome taxes for the period represent the aggregate

amount of current and deferred taxes.

Current taxes are based on the taxable profit (tax loss)

for the period. Taxable profit (tax loss) differs from the

accounting profit or loss as it excludes positive and

negative components that will be taxable or deductible

in other periods and also excludes items that will nev-

er be taxable or deductible. Current tax liabilities are

calculated using the tax rates enacted or substantively

enacted at the end of the reporting period, and taking

account of tax instruments permitted by tax legisla-

tion (the domestic tax consolidation regime and/or tax

transparency).

Deferred taxes are the taxes expected to be paid or re-

covered 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

is probable that future taxable profit will be available

against which the temporary difference can be utilised.

Deferred tax assets and liabilities are not recognised if

the temporary differences derive from goodwill or the

initial recognition of an asset or liability in a transaction,

other than a business combination, that at the time of

Employee benefitsPost-employment employee benefits in the form of de-

fined benefit and defined contribution plans (such as

staff termination benefits, bonuses, tariff subsidies, as

described in the notes) or other long-term benefits are

recognised in the period the related right accrues: the

valuation of the liabilities is performed by independent

actuaries. Such funds and benefits are not financed.

The cost of the benefits involved in the various plans is

determined separately for each plan based on the actu-

arial valuation method, using the projected unit credit

method to carry out actuarial valuations at the end of

the reporting period.

Actuarial gains and losses are recognised as income or

expense if the net cumulative unrecognised actuarial

gains and losses for each plan at the end of the previous

reporting period exceeded the greater of 10% of the pre-

sent value of the defined benefit obligation or 10% of the

fair value of any plan assets at that date (the so-called

corridor method). Such gains and losses are recognised

on the basis of the expected average remaining working

lives of the employees participating in the plan.

Share-based payment transactions (stock options)The Group is required to recognise the goods or services

received in a share-based payment transaction at the

date the goods or services are consumed. The Group is

required to recognise a corresponding increase in share-

holders’ equity if the goods or services are received on

the basis of a share-based payment transaction settled

by the issuance of equity, or as a liability if the goods or

services are acquired on the basis of a share-based pay-

ment transaction settled by the issuance of cash.

LeasesLeases are classified as finance leases when the terms

of the contract substantially transfer all the risks and

benefits of ownership of an asset to the lessee. All other

leases are operating leases.

Assets held under a finance lease are recognised as

assets belonging to the Group and accounted for at

amounts equal to fair value at the inception of the

lease or, if lower, at the present value of the minimum


Plant and machinery used in operations 1,25%-6,67%;

Other plant and machinery 4%;

Industrial and commercial equipment

used in operations 2,5%-6,67%;

Other industrial and commercial equipment 6,67%;

Other assets used in operations 12,5%;

Other assets 6,67%-19,00%;

Motor vehicles used in operations 8,33%;

Other motor vehicles 16,67%.

Plant and machinery in the course of construction for

use in operations, or for purposes yet to be determined,

is stated at cost, less any impairment charges. The cost

includes any professional fees and, if applicable, interest

expense capitalised. Depreciation of such assets, in line

with all the other assets, begins when they are ready

for use. In the case of certain complex assets subject to

performance tests, which may be of a prolonged nature,

readiness for use is recognised on completion of the re-

lated tests.

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.

Gains and losses deriving from the disposal or retire-

ment of an asset are determined as the difference be-

tween the estimated net disposal proceeds and the car-

rying amount of the asset and are recognised as income

or expense in the income statement.

Investment propertyInvestment property, represented by property held to

earn rentals or for capital appreciation or both, is stated

at cost, including any negotiating costs less accumulat-

ed depreciation and any impairment charges.


the expected useful life of the asset. The rates ap-

plied range from a minimum of 1.67% to a maximum of

11.11%.

Investment property is eliminated from the accounts

when sold or when the property is unusable over the

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

the transaction affects neither accounting nor taxable

profit nor loss.

Deferred tax liabilities are recognised on taxable tempo-

rary differences arising on investments in subsidiaries,

associates and jointly controlled entities, unless the tim-

ing of the reversal of the temporary difference is con-

trolled by the Group and it is probable that the tempo-

rary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed

at the end of each reporting period and reduced to the

extent that, based on the plans approved by the Par-

ent Company’s Board of Directors, it is no longer prob-

able that sufficient future taxable profit will be available

against which all or part of the assets can be recovered.

Deferred taxes are determined using tax rates that are

expected to apply to the period in which the asset is

realised or the liability settled. Deferred taxes are taken

directly to the income statement, with the exception of

those relating to items taken directly to shareholders’

equity, in which case the related deferred taxes are also

taken to equity.

Property, plant and equipmentProperty, plant and equipment is stated at historical

cost, including any directly attributable costs of making

the asset ready for its intended use, less accumulated

depreciation and any accumulated impairment charges.

The cost includes the costs of dismantling and removing

the asset and cleaning up the site at which the asset

was located, if covered by the provisions of IAS 37. The

matching liability is accounted for in provisions for li-

abilities and charges. Each component of an asset with

a cost that is significant in relation to the total cost of

the item, and having a different useful life, is depreci-

ated separately.

Land, whether free of constructions or annexed to civil

and industrial buildings, is not depreciated as it has an

unlimited useful life.


the expected useful life of the asset, applying the fol-

lowing rates:


of so-called “incidental public property” for fresh and

waste water services. This right is amortised over the

residual concession term (thirty years from 1998). The

residual amortisation period is in line with the average

term of contracts awarded by public tender.

This item also includes:

• the net value at 1 January 2004 of the goodwill

deriving from the transfer of sewerage services to

ACEA Ato2 by Roma Capitale with effect from 1

September 2002;

• thenetvalueat1January2004ofgoodwillderiv-

ing from the acquisition of the Acque di Pisa Group

by the subsidiary ABAB;

• thenetvalueat1January2005ofgoodwillderiv-

ing from the acquisition of G.O.R.I. SpA by the sub-

sidiary, Sarnese Vesuviano;

• the goodwill, attributable to this item, deriving

from the acquisition of Publiacqua by Acque Blu

Fiorentine;


from ACEA’s acquisition of Umbra Acque,


from the acquisition of the A.R.I.A. Group, with par-

ticular reference to SAO, the company that man-

ages the waste dump in Orvieto;


from Acea’s acquisition of ACEA Ato5.

Concessions are amortised on a straight-line basis over

the residual term of each concession.

Right on infrastructures

Pursuant to IFRIC 12, this item includes the aggregate

amount of tangible infrastructures used for the manage-

ment of the water service.

With reference to the application of IFRIC 12 to the con-

cession of public lighting, the signing of the supple-

mentary agreement, taking place on 15 March 2011 and

effectivefrom1January2011,ledtothefulladoptionof

the financial assets model, also with reference to the re-

sidual right deriving from the public lighting concession.

It should also be remembered that, as described in the

Consolidated Financial Statements 2010, based on the

analyses carried out in last year concerning the refer-

ence legislative and concession framework to assess

should therefore be made to the policy adopted for

leases.

Any gain or loss deriving from the elimination of an in-

vestment property is recognised as income or expense

in the income statement in the period in which the elimi-

nation takes place.

Intangible assets

Intangible assets acquired separately or

deriving from a business combination

Intangible assets acquired separately are capitalised at

cost, whilst those deriving from a business combination

are capitalised at fair value at the date of acquisition.

After initial recognition, an intangible asset is carried at

cost. The useful life of an intangible asset may be de-

fined as finite or indefinite.

Intangible assets are tested for impairment annually: the

tests are conducted in respect of each intangible asset

or, if necessary, in respect of each cash-generating unit.

Amortisation is calculated on a straight-line basis over

the expected useful life of the asset, which is reviewed

annually and any resulting changes, if possible, applied

prospectively. Amortisation begins when the intangible

asset is ready for use.

Gains and losses deriving from the disposal of an intan-

gible asset are determined as the difference between

the estimated net disposal proceeds and the carrying

amount of the asset and are recognised as income or

expense in the income statement.

Brands and patents

These assets are initially recognised at cost and amor-

tised on a straight-line basis over the useful life of the

asset.

Concessions

This item includes the value of the thirty-year right of

Concession granted by Roma Capitale, regarding the use

of fresh and waste water assets, formerly conferred to

ACEA and subsequently transferred, as of 31 December

1999, to the spun-off company, ACEA Ato2, and relat-

ing to publicly owned assets belonging to the category


If the recoverable amount of an asset (or cash-gen-

erating unit) is estimated to be less than its carrying

amount, the carrying amount is reduced to its recover-

able amount. An impairment charge is immediately rec-

ognised as an expense in the income statement, unless

the asset is represented by land or buildings, other than

investment property, carried at a revalued amount, in

which case the impairment charge is treated as a re-

valuation decrease.

When an impairment no longer exists, the carrying

amount of the asset (or cash-generating unit), with the

exception of goodwill, is increased to its new estimat-

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 im-

mediately 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 in-

come statement, it is included among amortisation, de-

preciation and impairment charges.

Emission allowances and green certificatesDifferent accounting policies are applied to allowances

or certificates held for own use in the “Industrial Portfo-

lio”, and those held for trading purposes in the “Trading

Portfolio”.

Surplus allowances or certificates held for own use,

which are in excess of the company’s requirement in re-

lation to the obligations accruing at the end of the year,

are accounted for at cost in other intangible assets. Al-

lowances or certificates assigned free of charge are ac-

counted for at a zero value. Given that these are assets

for instant use, they are not amortised but are tested

for impairment. The recoverable amount is the higher of

the asset’s value in use and its market value. If, on the

other hand, there is a deficit, because the requirement

exceeds the allowances or certificates in portfolio at the

end of the reporting period, provisions are made in the

financial statements for the charge needed to meet the

residual obligation; this is estimated on the basis of any

the applicability of the interpretation in question, in

2010 the ACEA Group chose to adopt a mixed method

that in particular envisages the application of the intan-

gible model, and therefore the posting under intangible

assets of the residual right on the infrastructure that can

be recovered with the cash flows generated by the ser-

vice contract after 30 May 2015.

Since the expiry of supplementary agreement coincides

with the concession and the cash flows are thus guar-

anteed by the contract until that date, the item “Rights

on the infrastructure”, classified under intangible assets,

was reclassified to financial receivables amounting to

thevalueoftherightontheinfrastructureat1January

2011, taking into account the effect generated by the

new contract duration.

As regards the rates used, the costs of intellectual prop-

erty, included under intangible assets, are amortised

over an estimated useful life of three years.

Impairment of assetsAt each end of the reporting period, the Group reviews

the value of its property, plant and equipment and intan-

gible assets to assess whether there is any indication

that an asset may be impaired (impairment test). If any

indication exists, the Group estimates the recoverable

amount of the asset in order to determine the impair-

ment charge.

When it is not possible to estimate the recoverable

amount of the individual asset, the Group estimates

the recoverable amount of the cash-generating unit to

which the asset belongs.

Intangible assets with indefinite useful lives, including

goodwill, are tested for impairment annually and each

time there is any indication that an asset may be im-

paired, in order to determine the impairment charge.

The test consists of a comparison between the carry-

ing amount of the asset and its estimated recoverable

amount.

The recoverable amount is the higher of an asset’s fair

value less costs to sell and value in use. In calculating

value in use, future cash flow estimates are discounted

using a pre-tax rate that reflects current market assess-

ments of the time value of money and the risks specific

to the business.


Financial assets

Financial assets are recognised and derecognised at the

trade date and initially recognised at cost, including any

directly attributable acquisition costs.

At each future balance sheet date, the financial assets

that the Group has a positive intention and ability to hold

to maturity (held-to-maturity financial assets)are rec-

ognised at amortised cost using the effective interest

method, less any impairment charges applied to reflect

impairments.

Financial assets other than those held to maturity are

classified as held for trading or as available for sale, and

are stated at fair value at the end of each period.

When financial assets are held for trading, , gains

and losses deriving from changes in fair value are rec-

ognised in the income statement for the period. In the

case of financial assets that are available for sale,

gains and losses deriving from changes in fair value are

recognised directly in a separate item of shareholders’

equity until 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 pe-

riod. The total loss must equal the difference between

the acquisition cost and current fair value.

The fair value of financial instruments traded in active

markets is based on quoted market prices (bid prices) at

the end of the reporting period. The fair value of invest-

ments that are not traded in an active market is deter-

mined on the basis of quoted market prices for substan-

tially similar instruments, or calculated on the basis of

estimated future cash flows generated by the net assets

underlying the investment.

Purchases and sales of financial assets, which imply de-

livery within a timescale generally defined by the regula-

tions and practice of the market in which the exchange

takes place, are recognised at the trade date, which is

the date the Group commits to either purchase or sell

the asset.

Non-derivative financial assets with fixed or determina-

ble 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

cost of a financial asset means the amount recognised

spot or forward purchase contracts already signed at

the end of the reporting period; otherwise, on the basis

of market prices.

Allowances or certificates held for trading in the “Trad-

ing Portfolio” are accounted for in inventories and meas-

ured at the lower of purchase cost and estimated realis-

able value, based on market trends.

Allowances or certificates assigned free of charge are

accounted for at a zero value. Market value is estab-

lished on the basis of any spot or forward sales con-

tracts already signed at the end of the reporting period;

otherwise, on the basis of market prices.

InventoriesInventories are valued at the lower of cost and net re-

alisable value. The cost comprises all materials and,

where applicable, direct labour, production overheads

and all other costs incurred in bringing the inventories to

their present location and condition. The cost is calcu-

lated using the weighted average cost method. The net

realisable value is the estimated selling price less the

estimated costs of completion and the estimated costs

necessary in order to make the sale.

Impairment charges incurred on inventories, given their

nature, are either recognised in the form of specific pro-

visions, consisting of a reduction in assets, or, on an item

by item basis, as an expense in the income statement in

the period the impairment charge occurs.

Financial instrumentsFinancial assets and liabilities are recognised at the time

the Group becomes party to the contract terms applica-

ble to the instrument.

Trade receivables and other assets

Trade receivables, which have normal commercial

terms, are recognised at face value less estimated pro-

visions for the impairment of receivables.

The estimate of uncollectible amounts is made when

collection of the full amount is no longer probable.

Trade receivables refer to the invoiced amount which,

at the date of these financial statements, is still to be

collected, as well as the receivables for revenues for the

period relating to invoices that will be issued later.


Financial liabilities

Financial liabilities are stated at amortised cost. Borrow-

ing costs (transaction costs) and any issue premiums or

discounts are recognised as direct adjustments to the

nominal value of the borrowing. Net finance costs are

consequently re-determined using the effective rate

method.

Derivative financial instruments

Derivative financial instruments are initially recognised

at cost and then re-measured to fair value at subse-

quent end of the reporting periods. They are designated

as hedging instruments when the hedging relationship

is formally documented at its inception and the periodi-

cally verified effectiveness of the hedge is expected to

be high.

Fair value hedges are recognised at fair value and any

gains or losses recognised in the income statement. Any

gains or losses resulting from the fair value measure-

ment of the hedged asset or liability are similarly recog-

nised in the income statement.

In the case of cash flow hedges, the portion of any fair

value gains or losses on the hedging instrument that is

determined to be an effective hedge is recognised in

shareholders’ equity, whilst the ineffective portion is

recognised directly in the income statement.

If the hedged contract commitment or forecast transac-

tion results in recognition of an asset or a liability, the

gains and losses on the instrument previously recog-

nised directly in shareholders’ equity are transferred

from equity and included in the initial measurement of

the cost or carrying amount of the asset or liability.

In the case of cash flow hedges that do not result in

recognition of an asset or a liability, the amounts rec-

ognised directly in shareholders’ equity are included in

the income statement in the same period in which the

hedged contract commitment or forecast transaction is

ultimately recognised in the income statement.

In the case of fair value hedges, the hedged item is

adjusted for changes in fair value attributable to the

hedged risk and the resulting gain or loss recognised in

the income statement. Gains and losses deriving from

measurement of the derivative instrument are also rec-

ognised in the income statement.

initially, less principal repayments and plus or minus

accumulated amortisation using the effective interest

method of the difference between the initial amount

and the maturity amount, after any reductions. The ef-

fective interest method is a method of calculating the

amortised cost of a financial asset (or group of financial

assets) and allocating the interest income or expense

over the relevant period. The effective interest rate is

the rate that exactly discounts estimated future cash

payments or receipts over the expected life, or contrac-

tual term if shorter, of the financial instrument to the net

carrying amount of the financial asset.

In the case of financial assets stated at amortised cost,

the income statement and balance sheet are adjusted

to take account of the difference between the payment

or receipt calculated on the basis of the effective inter-

est rate and the coupon interest to be collected/paid,

recognised on the basis of the nominal rate of the in-

strument.

At each end of the reporting period, the Group assesses

if there has been an impairment for a financial asset, or

a group of financial assets. A financial asset or a group

of financial assets is subject to impairment if there is

evidence of an impairment, as a consequence of one

or more events occurred after initial recognition (when

there is a “loss event”) and this loss event has an impact

- which can be reliably estimated - on future estimated

cash flows of the financial asset or group of financial

assets. An impairment can be represented by indicators

such as financial difficulties, failure to meet obligations,

non-payment of significant amounts, the probability

that the debtor goes bankrupt or is subject to another

form of financial reorganisation, and if data shows that

there is a measurable decrease in future estimated cash

flows, such as changes in situations or economic condi-

tions linked with obligations.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in

hand, demand deposits and highly liquid short-term in-

vestments, which are readily convertible into cash and

are subject to an insignificant risk of changes in value.


Provisions for liabilities and chargesProvisions for liabilities and charges are made when the

Group has a present (legal or constructive) obligation as

a result of a past event, if it is more likely than not that

an outflow of resources will be required to settle the

obligation and the related amount can be reliably esti-

mated.

Provisions are measured on the basis of management’s

best estimate of the expenditure required to settle the

present obligation at the end of the reporting period,

and are discounted when the effect is significant. When

the liability regards the cost of dismantling and/or re-

pairing an item of property, plant and equipment, the

initial provisions are accounted for as a contra entry in

respect of the asset to which they refer. The provisions

are released to the income statement through depre-

ciation of the item of property, plant and equipment to

which the charge refers

Changes in the fair value of derivative instruments that

do not qualify for hedge accounting are recognised in

the income statement for the period in which they oc-

cur, with the exception of derivative instruments whose

fair value is not reasonably determinable.

Hedge accounting is discontinued when the hedging in-

strument expires or is sold, terminated or exercised, or

when the instrument no longer meets hedge account-

ing criteria. At this time, accumulated gains and losses

on the hedging instrument recognised directly in share-

holders’ equity are retained in equity until the forecast

transaction effectively occurs. If the forecast transaction

is no longer expected to occur, the accumulated gains

and losses recognised directly in shareholders’ equity

are immediately taken to the income statement for the

period.

Trade payables

Trade payables, which have normal commercial terms,

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 ei-

ther 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


liability extinguished. Any profit or loss is immediately


Amendments to IFRS 1 and IFRS 7 –Limited exemption from comparative IFRS 7 Disclosure for first-time adoptersThisdocumentwasissuedinJanuary2010andapproved

on19July2010.Itcameintoforceon1January2011..

IAS 24 (Revised in 2009) – Related party disclosuresThe document, that was issued in November 2009 and

approvedon19 July 2010, came into forceon 1 Janu-

ary 2011. This standard includes an amendment to the

definition of related party in order to simplify it and, in

particular, to ensure symmetry in the identification of re-

lated parties..

Improvements to IFRS (May 2010)In May 2010, IASB issued improvements to IFRS, with a

set of amendments to the standards. The following are

the most important for the ACEA Group

• IFRS3BusinessCombinations;

• IFRS 7 Financial Instruments; additional disclo-

sures;

• IAS1PresentationofFinancialStatements;

• IAS27ConsolidatedandSeparateFinancialState-

ments;

• IFRIC13CustomerLoyaltyProgrammes.

The improvements were approved on 18 February 2011.

It should be noted that the ACEA Group has applied the

amendments introduced to the international account-

ing standards shown above as well as the additional im-

provements to these Consolidated Financial Statements.

The adoption did not have a significant impact on the

Group’s financial position and operating result.

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

The following documents, already previously issued by

the IASB and approved by the European Union, came into

forceon1January2011,andcontainamendmentstothe

international accounting standards:

Change to IAS 32 –Classification of rights issuedThe document was issued in October 2009 and approved

on 23 December 2009. It came into force on 1 February

2010. This standard includes an amendment to the defi-

nition of financial liability for the classification of rights

issues in foreign currency (and of some options and war-

rants) as equity instruments when those instruments are

issued pro rata to all shareholders in the same class of a

(non-derivative) equity instrument of an entity, or for the

purchase of a fixed amount of the entity’s equity instru-

ments for a fixed amount of currency.

Changes to IFRIC 14 –Prepayments of a minimum fundingrequirementThe document, that was issued in November 2009 and

approvedon19July2010,cameintoforceon1January

2011. This amendment provides guidelines in order to

define the recoverable value of the net assets of a pen-

sion fund. This amendment allows an entity to recognise

prepayments for a minimum funding contribution as an

asset.

IFRIC 19 – Extinguishing financial liabilities with equity instrumentsThis document was issued in November 2009 and ap-

provedon23July2010,andbecameeffectiveforfinan-

cialyears thatbeginonorafter1 July2010.The inter-

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


IFRS 10 – Consolidated Financial StatementsIFRS 12 – Disclosure of interests in Other EntitiesThe documents were issued on 12 May 2011 as part of

the IASB project aimed at incorporating two consolida-

tion criteria present in IAS 27 (more focused on control)

and SIC 12 (more focused on risks and benefits) into a

single standard, and therefore providing the most com-

plete guidelines for establishing under what conditions

an SPE or an entity whose majority of voting rights (also

potential) is not held should be consolidated or not.

In summary, a situation of control occurs when it can be

demonstrated that the investor has the power to make

decisions about the business of the company in which

he has invested and when the investor is exposed to the

variability of that company’s returns, and therefore is

able to use his power to influence its returns.

IFRS 11 – Joint ArrangementsThe document was issued on 12 May 2011, and is in-

tended to replace the current IAS 31. IFRS 11 is based on

the following core principles:

• Classification of arrangements in only two man-

ners (joint operation and joint venture) instead of

the three set forth in IAS 31

• Distinctionbetweenthetwotypesofarrangement

based on their content

• Reportingofcontractualrightsandobligationsre-

sulting from the arrangement on the basis of its

content

• Assessment of the investment in a joint venture

based on the shareholders’ equity method instead

of the proportionate method, which is no 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 op-

eration

2. if the arrangement’s assets and liabilities are con-

tained in any vehicle (partnership, joint stock com-

pany, consortium, etc.) the joint arrangement may

be either a joint operation or a joint venture.

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

Only amendments to IFRS 7 regarding disclosures to be

made in the event of the full or partial transfer of finan-

cial assets were approved during the year (see below).

Numerous standards and amendments are still pending

the completion of the approval process; the most signifi-

cant are described hereafter.

Change to IFRS 7 – Disclosures – Transfer of financial assetsThe amendments made to IFRS 7 intend to provide great-

er transparency in relation to risks connected with trans-

actions in which, in respect of the transfers of financial

assets, the transferor retains some level of exposure to

the risks associated with the financial assets transferred

(a situation generally defined as “continuing involve-

ment, translated with the term “coinvolgimento residuo”

in the Italian version of the regulations for the approval of

international accounting standards). Additional informa-

tion is also required in the event of transfers of financial

assets at particular times (e.g. near the end of the year).

The amendments to IFRS 7 specify that the disclosure re-

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,

• retainsallcontractualrightstoreceivecashflows

from a financial asset, but assumes a contractual

obligation to pay said cash flows to another benefi-

ciary.

The amendments to the standard were approved and

mustbeappliedfrom1January2012.


hence allowing entities to apply the new IFRS 9 in its

entirety.

An additional amendment made to IFRS 9 makes it pos-

sible not to make a retrospective adjustment to appli-

cation of the standard in the comparative period at the

date of first adoption of IFRS 9, however, requiring the

following additional information in the year of first ap-

plication of IFRS 9 (Amendment to IFRS 7):

• informationon thechangeof classificationof fi-

nancial assets and liabilities, showing the changes

in the net carrying out amount separately, using

both IAS 39 and IFRS 9 measurement criteria,

• for financialassetsand liabilitiesthatarereclas-

sified and value at amortised cost: the fair value

of said assets/liabilities at the end of the year, the

profit/loss that would have been booked to the in-

come statement in the event the instruments had

not been reclassified,

• theeffectiveinterestratedeterminedatthedate

of reclassification and the amount of interest re-

corded in the income statement.

Amendments to IAS 32 and IFRS 7: “Offsetting Financial Assets and Financial Liabilities”On 16 December 2011, IASB published an amendment

to IAS 32 Financial Instruments: Presentation and to

IFRS 7 Financial Instruments: Disclosures with refer-

ence to rules for the offsetting of financial assets and

liabilities.

The joint IASB-FASB project on the offsetting of financial

assets and liabilities intends to eliminate current differ-

ences between the respective accounting standards,

with regard to the offsetting of financial instruments.

The FASB decided to maintain its current position, pre-

sent in US GAAPs, eliminating the possibility of conver-

gence; therefore, the Boards elected to jointly focus on

the request for information in order to allow users of

financial statements to more easily compare the pres-

entation of financial instruments according to IFRS and

US GAAPs.

Mandatoryadoption is requiredby1 January2013 for

IFRS7and1 January2014 for IAS32:asof today the

approval process is still underway.

In a nutshell, a joint arrangement is a joint venture if:

• the arrangement’s assets and liabilities are con-

tained in a vehicle whose legal form does not

grant the parties rights to the assets and obliga-

tions for the liabilities contained in the vehicle,

• contractualagreementsdonotchange thevehi-

cle’s legal form and

• thevehicleisabletooperateindependentlyfrom

the parties.

The IASB requires IFRS 10, 11 and 12 (and subsequently

the amendments to IAS 27 and 28) to be adopted from

1January2013.

As of today, the approval process is still underway and

EFRAG has published a first draft of the endorsement

advice, in respect of which it requires any comments by

next 11 March.

IFRS 13 – Fair Value MeasurementThe document was issued on 12 May 2011 and aims to:

- clarify the definition of fair value;

- establish a single benchmark framework to meas-

ure the fair value applicable to all IAS/IFRS which

indicate fair value as the applicable measurement

criteria;

- provide clarifications and operating guidelines to

determine fair value (also in illiquid or inactive

market situations).

Mandatoryadoptionisrequiredby1January2013:asof

today, the approval process is still underway.

Amendments to IFRS 9 and IFRS 7: “Mandatory Effective Date and Transition Disclosures”On 16 December 2011, IASB published the document

“Mandatory Effective Date and Transition Disclosures

(Amendments to IFRS 9 and IFRS 7)” , changing the date

of mandatory application of IFRS 9 to years starting on

orafter1January2015(thedateofmandatoryapplica-

tionwaspreviouslyforyearsonorafter1January2013),

leaving the possibility of early adoption unaltered.

The Board deferred the mandatory application of IFRS

9 following the recent amendment to the timescale for

completion of the remaining phase of the project to

review the standard relating to financial instruments,


Thirdly, the new standard requires additional disclosures,

to be provided in the notes.


mentsforyearsstartingonorafter1January2013;early

adoption is permitted. Retrospective application is re-

quired with certain exceptions and comparative sensitiv-

ityanalysisforfinancialyearsstartingbefore1January

2014. As of today, the approval process is still underway

Amendments to IAS 1: Presentations of Items of Other Comprehensive IncomeOn16June2011,theIASBissuedthedocument“Pres-

entations of Items of Other Comprehensive Income

(amendments to IAS 1)”, the result of joint work carried

out with the FASB, which provides a guide on the presen-

tation and classification of items contained in the State-

ment of Other Comprehensive Income (“OCI”).

The standard does not modify the possibility of present-

ing all revenue and cost items recorded in one financial

year in a single statement of comprehensive income, or

in two statements: one statement which shows profit

(loss) components for the year (separate income state-

ment) and a second statement which starts with profits

(losses) for the year and shows the items of the State-

ment of Other Comprehensive Income.

The standard requires the grouping together of items of

the Statement of Other Comprehensive Income into two

categories, depending on whether they can be reclassi-

fied or not, in the income statement in a future period.


mentsforyearsstartingonorafter1July2012,withret-

rospective application. As of today, the approval process

is still underway.

Amendments to IAS 19: “Employee Benefits”On16June2011,theIASBissuedanamendedversionof

IAS 19 “Employee Benefits”.

Said document modifies the accounting of defined ben-

efit plans and termination benefits.

In the first place, it eliminated the possibility of using

the “corridor method” for recording actuarial profits and

losses. In particular, all actuarial profits and losses must

be recorded in the Statement of Other Comprehensive

Income (“OCI”), with no other option available, in order to

show the complete net balance of the plan surplus/defi-

cit in the balance sheet. During the transition in line with

the requirements of the amended standard, an entity that

currently uses the “corridor method” may have to record

a higher liability/lower asset in the balance sheet (with a

matching entry in the Statement of Other Comprehensive

Income and, therefore, Equity). When fully applied, said

amendment will generate higher volatility in the balance

sheet and in the Statement of Other Comprehensive In-

come, but the income statement will no longer be affect-

ed by the amortisation of actuarial profits/losses.

Secondly, provision is made for a new approach to the

presentation and accounting of changes in the following

components of defined benefit obligations and plan as-

sets in the income statement and the Statement of Other

Comprehensive Income:

• Servicecostsarechargedtotheincomestatement:

they include costs for services provided in the year,

effects generated by past service costs and curtail-

ments (both now recorded immediately in the year

they occur) and profits/losses generated by settle-

ment of the plan (in particular, generated by pay-

ments not in keeping with the terms of the plan, for

example, early termination of the plan),

• Net interests which are recorded in the income

statement,

• Remeasurementswhicharebooked to theState-

ment of Other Comprehensive Income: these in-

clude, 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).


Consolidation policies and procedures

Consolidation policies

Subsidiaries

The basis of consolidation includes the Parent Com-

pany, ACEA S.p.A., and the companies over which it di-

rectly or indirectly exercises control via a majority of

the voting rights.

Subsidiaries are consolidated from the date on which

control is effectively transferred to the Group and are

deconsolidated from the date on which control is trans-

ferred out of the Group. Where there is loss of control

of a consolidated company, the consolidated financial

statements include the results for the part of the re-

porting period during which the ACEA Group has con-

trol.

Joint ventures

A joint venture is a contractual arrangement whereby

the Group and other parties undertake an economic

activity that is subject to joint control. This is the con-

tractually agreed sharing of control over an economic

activity and only exists when strategic, financial and op-

erating policy decisions regarding the activity require

the unanimous agreement of the parties who share

control. The consolidated financial statements include

the Group’s share of the income and expenses of jointly

controlled entities, accounted for under proportionate

consolidation. The application of proportionate consoli-

dation thus means that the consolidated financial state-

ments include the Group’s share of all the jointly con-

trolled entities’ assets, liabilities, income and expenses,

classified according to their nature. When a Group com-

pany operates directly via joint venture agreements,

the liabilities and costs incurred directly in respect of

the jointly controlled activities are recognised on an ac-

crual basis. The share of profits deriving from the sale or

use of resources produced by the joint venture, net of

the related share of the expenses, is recognised when

it is likely that the economic benefits deriving from the

transaction will be received by the Group and their val-

ue can be reliably measured.

Amendments to IAS 12: Recovery of underlying assetsThe amendment clarifies the determination of deferred

taxes on property investments carried at fair value. The

amendment introduces the relative presumption (re-

buttable) that deferred taxes on property investments

valued at fair value according to IAS 40 should be calcu-

lated on the basis of the fact that the carrying amount

will recovered through sale. Furthermore, it introduces

the requirement that deferred taxes on non-amortisable

assets which are measured according to the restated

cost method defined by IAS 16, are always calculated

on the basis of the sale of the asset. The amendment is

effectiveforyearsstartingonorafter1January2012.

Exposure Draft 2011/6 relating to the new version of the Exposure Draft 2010/6 “Revenue from Contracts with Customers”On 14 November 2011 the IASB published a new version

of the Exposure Draft 2010/6 “Revenue from Contracts

with Customers”. A similar document was published by

the FASB.

The core principle of the Exposure Draft 2011/6 coin-

cides with the one set out in the Exposure Draft 2010/6:

the entity must record revenues at the time the assets or

services are transferred to the customer (the concept of

“control” is used to determine when the transfer occurs);

the amount of revenues to be recorded corresponds to

the consideration promised by the customer in exchange

for the goods or services. However, in order to take ac-

count of numerous letters of comment received by the

IASB on the Exposure Draft 2010/6, and the results of

the extended “outreach activity”, the Boards decided to

improve the original proposals.

Comments on the Exposure Draft may be submitted until

13 March 2012; the final accounting standard is expect-

ed by the end of 2012 and will be applicable for financial

statementsforyearsstartingonorafter1January2015.

Early application will be permitted.

At present, the Group is analysing the standards and in-

terpretations given, as well as assessing whether their

adoption will have a significant effect on the financial

statements.


Consolidation procedures

General procedure

The financial statements of the Group’s subsidiaries, as-

sociates and joint ventures are prepared for the same

accounting period and using the same accounting stand-

ards as those adopted by the Parent Company. Consoli-

dation adjustments are made to bring into line any dis-

similar accounting policies that may exist.

All inter-company balances and transactions, including

any unrealised profits on intra-group transactions, are

eliminated in full. Unrealised losses are eliminated un-

less costs cannot be subsequently recovered.

The carrying amount of investments in subsidiaries is

eliminated against the corresponding share of the share-

holders’ equity of each subsidiary, including any adjust-

ments to reflect fair values at the acquisition date. The

excess of the cost of acquisition over the fair value of the

Group’s share of the identifiable net assets acquired is

recorded as goodwill, for the purposes of IFRS 3.

The minority interest in the net assets of consolidated

subsidiaries is shown separately with respect to share-

holders’ equity attributable to the Group. The minority

interest is determined on the basis of the minority’s pro-

portion of the fair value of assets and liabilities at the

date of acquisition and of any changes in shareholders’

equity after this date. Losses attributable to the minority

interest in excess of the related share of shareholders’

equity are subsequently attributed to shareholders’ eq-

uity attributable to the Group, unless the minority has

a binding obligation and is able to invest further in the

company to cover the losses.

Consolidation procedure for assets and

liabilities held for sale (IFRS5)

Non-current assets and liabilities are classified as held

for sale, in accordance with the provisions of IFRS 5.

Consolidation of foreign operations

All the assets and liabilities of foreign operations denom-

inated in a currency other than the euro are translated

using the exchange rates at the end of the reporting pe-

riod.

Income and expenses are translated using average ex-

Where joint venture agreements involve the establish-

ment of a separate entity, the Group’s share of the

jointly controlled entities’ assets, liabilities, income and

expenses is combined with the similar items in its con-

solidated financial statements on a line-by-line basis.

Unrealised profits and losses on transactions between

the Group and a jointly controlled entity are eliminated

to the extent of the Group’s interest in the jointly con-

trolled entity, unless the unrealised losses provide evi-

dence of an impairment of the asset transferred.

Associates

An associate is a company over which the Group exercis-

es significant influence, via its power to participate in the

financial and operating policy decisions of the associate

which is, however, neither a subsidiary nor a joint ven-

ture. The consolidated financial statements include the

Group’s share of the income and expenses of associates,

accounted for using the equity method, unless they are

classified as held for sale, from the date it begins to exert

significant influence until the date it ceases to exert such

influence.

When the Group’s share of an associate’s losses exceeds

the carrying amount of its investment, the interest is re-

duced to zero and any additional losses are provided for,

and a liability is recognised, only to the extent that the

Group has incurred legal or constructive obligations or

made payments on behalf of the associate. Any excess

of the cost of the acquisition over the Group’s interest in

the fair value of the associate’s identifiable assets, liabili-

ties and contingent liabilities at the date of the acquisi-

tion is recognised as goodwill. Goodwill is included in the

carrying amount of the investment and subject to an im-

pairment test. Any excess of the Group’s interest in the

fair value of the associate’s identifiable assets, liabilities

and contingent liabilities at the date of the acquisition

over the cost of the acquisition is recognised as negative

goodwill and recognised in the income statement in the

period of acquisition.

Unrealised profits and losses on transactions between

the Group and an associate are eliminated to the extent

of the Group’s interest in the associate, unless the unre-

alised losses provide evidence of an impairment of the

asset transferred.


For more information please refer to paragraph

“Assets held for sale, or discontinuing or discon-

tinued operations” as well as the Information

Document drawn up pursuant to article 71 of the

Governing implementation of Legislative Decree

no. 58 of 24 February 1998 adopted by CONSOB

with resolution no. 11971 of 14 May 1999 and sub-

sequent amendments and article 5 of the regula-

tion adopted with CONSOB resolution no. 17221 of

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:

• theeconomicdatainclude

(i) for the first quarter of 2011, those of the compa-

nies in the Energy Area, accounted for under pro-

portionate consolidation, based on the proportion

effectively held in the quarter or

- €concerning the transferred companies:

a. 29.71% of AceaElectrabel Produzione S.p.A. ex-

cluding the portion of assets and liabilities at-

tributable to Acea Produzione S.p.A., the newly

established company that is the beneficiary of

the partial non proportional demerger;

b. 29.71% of Voghera Energia S.p.A. and Roselec-

tra S.p.A.;

c. 15.15% of Longano Eolica S.p.A.;

d. 50% of AceaElectrabel Trading S.p.A.;

e. 30% of Eblacea S.p.A. and, indirectly, through it,

15% of Gruppo Tirreno Power S.p.A.

- €concerning the acquired companies:

a. 59.41% of Acea Energia Holding S.p.A. (formerly

AceaElectrabel);

b. 59.41% of Acea Energia S.p.A. (formerly AceaE-

lectrabel 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.

(ii) for the last three quarters of 2011, the eco-

nomic data of the consolidated acquired com-

paniesi

change rates for the period. Any translation differences

are recognised in a separate component of sharehold-

ers’ equity until the investment is sold.

On initial application of IFRS, accumulated translation dif-

ferences deriving from the consolidation of foreign op-

erations were reduced to zero. The reserve accounted

for in the consolidated financial statements only includes

gainsorlossesgeneratedfrom1January2004.

Foreign currency transactions are initially recognised

at the spot rate on the date of the transaction. Foreign

currency assets and liabilities are translated at the ex-

change rate at the end of the reporting period. Transla-

tion differences and those arising on disposal of the op-

eration are recognised as finance income or costs in the

income statement.

Basis of Consolidation

The ACEA Group’s consolidated financial statements in-

clude the financial statements of the Parent Company,

ACEA S.p.A., and the financial statements of its Italian

and foreign subsidiaries, over which it directly or indi-

rectly exercises control via a majority of the voting rights

at ordinary general meetings, giving it the power to gov-

ern the financial and operating policies and obtain the

related benefits. Entities that the Parent Company jointly

controls with other parties are accounted for under pro-

portionate consolidation.

The Group’s basis of consolidation is divided into areas:

A) Changes in basis of consolidationThe basis of consolidation as at 31 December 2011 has

changed since the 2010 consolidated financial state-

ments due to

• thechangeoftheAcquedottodelFioraconsolida-

tion criterion from net equity to proportionate con-

solidation, due to the signing of new shareholders’

agreements among the public and private share-

holders:

• the termination, on 31 March 2011, of the joint

venture agreement signed in 2002 and mutual re-

lations, positions, rights and obligations connected

to it.


Therefore, the economic data may not be directly com-

pared with those at 31 December 2010.

The following table summarises the consolidation of eco-

nomic data of the companies involved in the joint ven-

ture agreement termination.

a. line-by-line as regards Acea Energia Holding,

Acea Energia and Acea Produzione

b. accounted for under proportionate consolida-

tion, based on the proportion effectively held in

the quarter or

1. 50% of Umbria Energy S.p.A. and Voghera Ener-

gia 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 Economic data for the April - December 2011 period

Transferred companies Percentage held

Method of Consolidation

Percentage held


Eblacea 30.00% Proportionate 0.00% None

Tirreno Power 15.00% Proportionate 0.00% None

AceaElectrabel Produzione 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

AceaElectrabel Trading 50.00% Proportionate 0.00% None

Economic data of the first quarter of 2011 Economic data for the April - December 2011 period

Companies acquired Percentage held


Percentage held


Acea Energia Holding 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

Estra Elettricità 1 29.11% Proportionate 49.00% 1 Proportionate

Acea Produzione 29.71% Proportionate 100.00% Line-by-line

1 Until 6 May 2011


mergeriseffectivefrom1January2011fortaxand

accounting purposes. The operation did not lead to

a change of share capital or registered office. As a

result of the merger, the investments held by Crea

Partecipazioni and Acea Rieti were transferred to

Crea Gestioni; more specifically:

- investment of 59.67% of GE.SE.SA.

➢ investmentof49%ofSO.GE.A.

➢ investment of 34% of Umbriadue Servizi Idrici

Scarl.

B) Unconsolidated investmentsDuring application of the above methods of consolida-

tion and of the equity method, the following subsidiaries

and associates, which are accounted for at cost, were

excluded. It was possible to resort to this applied simpli-

fication by taking account of the fact that the subsidiar-

ies listed below are not in operations (all of them are in

liquidation) and/or are not significant, considered either

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.

Financial Highlights of Companies accounted for under Proportionate Consolidation

The table is shown in the annexes.

• ontheotherhand,thefinancialpositionandcash

flow are affected by the deconsolidation of the

transferred companies and the consolidation of

the financial position and cash flow relating to ad-

ditional shares acquired from GDF SUEZ Energia

Italia S.p.A. (excluding the greater intercompany

eliminations made necessary); in particular:

a. 40.59% of Acea Energia Holding S.p.A.;

b. 70.29% of Acea Produzione S.p.A. due to the

non proportional demerger of AceaElectrabel

Produzione S.p.A. and the already mentioned

acquisition of Acea Energia Holding S.p.A.;

c. 40.59% of Acea Energia S.p.A. through the total

purchase of the share capital of Acea Energia

Holding S.p.A.;

d. 20.29% of the subsidiaries of Acea Energia, Um-

bria Energy S.p.A. and Voghera Energia Vendita

S.p.A., through the total purchase of the share

capital of Acea Energia Holding S.p.A.; ;

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 Ener-

gia Holding S.p.A.;

Thus the financial position and cash flow are not immedi-

ately comparable with those at 31 December 2010.

• ACEA’s purchase in March 2011 of 70% of Acea

Servizi Acqua S.r.l. from Smeco Lazio S.r.l.,

• Aquaser’s purchase at the endofMarch 2011of

40% of the company Innovazione Sostenibilità Am-

bientale S.r.l.. (ISA),

• the merger by incorporation into ARIA, effective

from 1 September 2011, of its subsidiaries Eall, Ter-

ni Ena, Enercombustibili and Ergo Ena. The opera-

tion 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 partici-

pating companies as at 31 December 2010 as a ref-

erence and the merger is effective from the start of

the current year for tax and accounting purposes,

• themergerbyincorporationofCreaPartecipazioni

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


areas. The 2010 and 2011 economic data of the

AceaElectrabel Produzione Group was shown net

of that referring to the business division subject

to non-proportional demerger and booked under

discontinued operations.

2010 and 2011 balance sheets and income statements

are included in the annexes.

Notes to the Consolidated Income Statement

As already described in the section “Basis of consolida-

tion”, 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 analy-

sis of variations on a like-for-like basis.

The 2010 and 2011 income statements have been reclas-

sified pursuant to IFRS5: the 2010 income statement dif-

fers from the one published due to the reclassification of

Estra Elettricità costs and revenues plus reclassifications

carried out to enable a homogeneous comparison.

Segment information

Please note the following for a greater understanding of

this section:

- generation, trading and sales refer to the Ener-

gy Industrial Area responsible, in organisational

terms, (i) until 31 March 2011 for AceaElectrabel

Produzione, Roselectra, Voghera Energia, Longano,

Eblacea and Tirreno Power, AceaElectrabel Trad-

ing, (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, in-

cludes ACEA Distribuzione, ARSE and Ecogena

- analysis and research services refer to the Engi-

neering and Special Projects Department, respon-

sible, under the organisation structure, for Labora-

tori S.p.A. and the research consortia.

- overseas water services refers to the Water In-

dustrial Area responsible, under the organisation

structure, for water companies operating abroad

- Italian water management refers to the Water In-

dustrial Area, responsible, under the organisation

structure, for water companies operating in Lazio,

Campania, Tuscany and Umbria, and AceaGori

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:

• thetotalrevenuesshowninthetablesbelowdif-

fers from the amount reported for consolidated

net revenues in the Consolidated Income State-

ment, as a result of the inclusion of the income

from fair value deriving from commodity risk man-

agement,

• theeconomicdataforthe2010and2011referring

to Eblacea, Tirreno Power, AceaElectrabel Trading

and Estra Elettricità was reclassified in the dedi-

cated line of the income statement, in the related


The change is essentially a result of:

• the increase in revenues fromthesaleofelectricity

and gas by 663,526 thousand euros, due to the change

in the basis of consolidation and higher average sale

prices mitigated by the decrease in quantities sold,

• increased revenues from water companies in Italy

and overseas (up 62,445 thousand euros) as a result

of the rise in tariffs of 21,149 thousand euros and

the change generated by the amended consolidation

criterion of Acquedotto del Fiora: this company con-

tributed revenues from the integrated water service

of 29,504 thousand euros during the year. It should

also be noted that Aguazul Bogotá grew by 12,289

thousand euros as a result of the consolidated perfor-

mance 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 reve-

nues from white certificates and CO2 rights (totalling

+3,039 thousand euros) and the change in the basis of

consolidation generated by transferred companies,

• essentiallyunchangedrevenuesregardingthecompa-

nies 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,

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.

31.12.2011 31.12.2010 Absolute Increase/ (Decrease)

Increase/ (decrease) %

Revenue from sales and services 3,217,123 2,460,690 756,433 30.7%

Other revenues and proceeds 71,035 79,845 (8,810) -11.0%

CONSOLIDATED NET REVENUE 3,288,158 2,540,535 747,623 29.4%


• thegrowth inother revenue items (up18,100 thou-

sand euros), mainly due to the increase in revenues

from customer services as a result of Arse’s photovol-

taic panel marketing activities and the energy account

(totalling + 29,505 thousand euros), partially mitigated

by the fall generated by the recognition in the previ-

ous year of the gain deriving from the sale of a prop-

erty by ACEA (down 9,466 thousand euros).

The overall change of the period for Acquedotto del Fiora

concerns consolidated net revenues for 30,795 thousand

euros.


Electricity sales and services revenues

Electricity sales and services revenues amounted to

2,154,666 thousand euros and, excluding intercompany

eliminations, essentially include following:

• 28,510thousandeuros(5,724thousandeurosas

at 31 December 2010) related to electricity and

heat generation with particular reference to the

Acea Produzione thermoelectric and hydroelec-

tric plants. The quantities produced by said plants

in 2011 totalled 320.7 GWh, down by 341.4 GWh

compared to 2010, as a result of the shutdown

of the Salisano and Orte hydroelectric plants for

repowering,

• 334,775thousandeuros(304,995thousandeuros

as at 31 December 2010) relating to the transport

and metering of electricity for the free and protect-

ed categories market and market subject to addi-

tional safeguards: this type of revenues, including

recoveries of equalisation of previous years, in-

creased by 29,780 thousand euros, essentially due

to the tariff update, change in number of users,

less electricity distributed and the different break-

1. Revenue from sales and services – 3,217,123 thousand eurosThis 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



Electricity sales and services revenues 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%

Revenues from integrated water services 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%

REVENUE FROM SALES AND SERVICES 3,217,123 2,460,690 756,433 30.7%


down between types and general equalisation;

injections to the networks registered a decrease

in quantities of 0.24% in the period, highlighting

growth of withdrawals of free market customers

of 7.8% and a 13.3% decrease in energy injected

for customers in the market subject to additional

safeguards. Estimated general equalisation for the

period, including amounts relating to recoveries

of previous years, was a positive 20,412 thousand

euros, marking growth of 20,818 thousand euros

compared to 2010; the change is attributable to (i)

5,823 thousand euros for the estimate of general

equalisationfortheJanuary-December2011pe-

riod, with particular reference to the tariff update

to the component relating to application of D2-D3

tariffs for domestic use, metering component and

lump-sum connection contributions (not present

in the 2010 financial statements) and (ii) 14,995

thousand euros relating to recoveries of amounts

for previous years, essentially deriving from ad-

justments to metering equalisation for previous

years.


legislation and parameter estimates (contained in

the updated formulae) still to be published by the

Italian Authority for Electricity and Gas,

• 1,719,691 thousand euros deriving from energy

sales to the free and protected categories mar-

kets: these activities recorded growth of 591,089

thousand euros, attributable essentially to the

change in the basis of consolidation. The volume

sold on the free market by the Acea Energia Group

stood at GWh 12,926, down by roughly 16% com-

pared to 2010.

Electricity sales and services revenue also includes:

• ➢revenuesfromtheenergyproducedbytheplants

owned by the A.R.I.A. Group. (Terni ENA and EALL)

equal to 26,545 thousand euros. These revenues

essentially derive from the sale of electricity to

GSEbetween JanuaryandDecemberandareup

by 4,180 thousand euros. This variation is the re-

sult of the entry into operation of the second and

thirdlinesoftheSanVittoreplant(inAprilandJuly

2011 respectively), partially offset by lower rev-

enues resulting from the shutdown of the Terni

plant (from 6 August 2010) and of the first line

of the San Vittore plant (from 20 March 2011). It

should be noted that the CIP6 Contract for the

two new San Vittore lines will soon be signed with

GSE.

Other revenues from this area have been allocat-

ed to item Revenues from biomass transfer and

waste management,

• ➢the revenues obtained byArse and Ecogena for

the transfer of the energy produced by PV and co-

generation plants (overall 5,478 thousand euros)

which recorded an increase of 3,167 thousand eu-

ros compared to 31 December 2011.

Gas sales revenues

These amounted to a total of 39,274 thousand euros, an


cember 2010, due to the effect of higher quantities sold

by the Acea Energia Group and the change in the basis

of consolidation.

• Furthermore,calculationoftheamountsforgen-

eral equalisation is based on technical and eco-

nomic parameters linked to the national electric-

ity system (k factor), which are defined by the

Electricity and Gas Authority, in accordance with

the regulations in force, in the years subsequent

to the one to which the equalisation refers. The re-

ported figures for equalisation thus represent the

best estimate based on the information available.

These estimates may change as a result of deci-

sions taken by the Authority.

In terms of the markets served, the free market

saw an increase in the amount distributed of

7.7%, from 6,937.9 GWh at 31 December 2010 to

the current level of 7,471.3 GWh. In contrast, the

volume of electricity distributed to customers in

the protected categories market (3,660.8 GWh)

is down around 13% compared with the previous

year (4,214.7 GWh), essentially due to the consid-

erable decrease of the market following liberalisa-

tion.

The period witnessed a 0.86% increase in the av-

erage number of end customers in the area served

by ACEA Distribuzione,

• 39,507thousandeurosregardingtheestimatefor

the company-specific equalisation for 2011. This

is additional to tariff revenues for distribution ac-

tivities, which offsets failure to cover the corre-

sponding actual costs paid due to the effects of

external factors, i.e. not under direct control of

the company and therefore not related to inef-

ficiencies in the performance of the service. The

amount is down by 2,893 thousand euros com-

pared to the previous year due to the increase

in revenues included in the equalisation, and the

different estimate of the Csa coefficient for 2011,

in line with the update instructions for the years

2009-2011 contained in resolution no. 30/08. The

estimated amount for 2011 is based on calcula-

tions performed for the updating of actual costs

paid to ACEA Distribuzione for distribution activi-

ties in the third regulatory period, on the basis of

updated criteria and formulae contained in the

resolutions, indications taken from the reference


Revenues from the sale of certificates

and rights

These amounted to 18,753 thousand euros, marking an

increase of 2,714 thousand euros compared to 2010

due to (i) the elimination of income from green certifi-

cates which generated a decrease of 325 thousand eu-

ros compared to the previous year, (ii) the increase of

1,857 thousand euros from white certificates (17,091

thousand euros) and (iii) the increase of 1,182 thousand

euros in revenue from the sale of CO2 rights (1,660

thousand euros.

Revenues from integrated

water services

Revenues from integrated water services are generated

by water companies operating in Tuscany, Umbria, Lazio

and Campania.

These revenues amounted to 717,458 thousand euros,

up 50,130 thousand euros (up 7.5%) compared with the

previous year (667,328 thousand euros).

The Companies operating in the Lazio and Campania

regions report total revenues of 538,940 thousand eu-

ros (up 10,366 thousand euros), whilst the Tuscany and

Umbria Companies ended the period with revenues of

178,519 thousand euros (up 39,764 thousand euros, in-

cluding 29,504 thousand euros contributed by Acque-

dotto del Fiora).

Details of the breakdown by company are given below.

The reduction recorded by GORI is a result of the recogni-

tion of revenues of 130 million euros (Group share 48.2

million euros), as established by the resolution adopted

by the Area Authority in the first few days of August 2011.

The increases recorded by Publiacqua and Acque re-

flect the tariff reviews which took place in December

2010 and December 2011 respectively.

As regards the issue of the tariff problems of ACEA Ato5

and GORI, please see the paragraph “Update on major

disputes and litigation” and “Service Concession Ar-

rangements” in these financial statements.

Overseas Water Services

This item amounts to 35,889 thousand euros, marking

an increase of 12,315 thousand euros on the previous

year (23,574 thousand euros).

The change is essentially due to the consolidation of

Conazul, a consortium set up by Aguazul Bogotá and lo-

cal entrepreneurs to perform a contract in Peru, which

the vehicle company had been awarded through a ten-

der called by the Peruvian municipality. The share at-

tributable to Aguazul Bogotá in this consortium is 60%.

These revenues were earned as follows: (i) 30,814 thou-

sand euros by Aguazul Bogotà, including Conazul’s

share (up 12,289 thousand euros); (ii) 2,628 thousand

euros by Acea Dominicana; and (iii) 2,447 thousand

euros by Consorcio Agua Azul, essentially unchanged

since 31 December 2010.

31.12.2011 31.12.2010 Absolute Increase/(Decrease)


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%

Revenues from integrated water services on a like-for-like basis

687,954 667,328 20,626 3.1%

Acquedotto del Fiora 29,504 0 29,504 100.00%

REVENUES FROM INTEGRATED WATER SERVICES 717,458 667,328 50,130 7.5%



solidation resulting from the termination of the joint

venture,

• 59,317thousandeurosinincomeachievedbyArse

for photovoltaic panel marketing and installation

on behalf of third parties. This component recorded

an increase of 18,456 thousand euros compared to

2010, when the figure was 40,861 thousand euros,

• 7,265 thousand euros in revenues deriving from

cemetery lighting management, essentially un-

changed with respect to 2010,

• 16,311thousandeurosinrevenuesfromotherser-

vices to customers, broken down by Industrial Area

as follows:

- Networks: 1,147 thousand euros

- Energy: 781 thousand euros

- Water: 11,963 thousand euros

- Environment: 2,018 thousand euros

- ACEA: 401 thousand euros.

Connection contributions

This item totals 36,347 thousand euros, marking an in-

crease of 4,358 thousand euros. They are broken down

as follows:

• freeandprotectedcategoriesmarketandmarket

subject to additional safeguards: 29,686 thousand

euros (up 3,774 thousand euros compared to 31

December 2010),

• waterservices:6,661thousandeuros(up584thou-

sand euros over the previous year, including 255

thousand euros posted by Acquedotto del Fiora).

2. Other revenues and proceeds – 71,035 thousand eurosThis item registered a reduction of 8,810 thousand eu-

ros (down 11%) compared to 31 December 2010, which

closed with a total of 79,845 thousand euros.

The change compared to 2010 is a result of

(i) the increase in the energy account of 11,049 thou-

sand euros, mainly due to the entry into operation

of some PV plants owned by Arse,

(ii) the recognition of the gain amounting to 9,466

thousand euros in the previous year concerning

the sale of a property owned by the Parent Com-

pany,

Revenues from biomass transfer and waste

management

This item amounts to 28,943 thousand euros, marking

an increase of 838 thousand euros on the previous year


These revenues regard Aquaser Group for 8,160 thou-

sand euros (down 500 thousand euros) and A.R.I.A.

Group companies for a total of 20,783 thousand euros

(up 1,338 thousand euros).

The trend in the period was mainly due to the increase in

quantities transferred and the average price.

Revenues from services to customers

This item amounted to 185,794 thousand euros (163,242


crease of 22,552 thousand euros.

This type of revenue comprises:

• 71,299thousandeurosinincomefrompubliclight-

ing provided to Roma Capitale: this item recorded

an increase of 5,609 thousand euros compared to

31 December 2010, essentially as a consequence

of the (i) reduced lump-sum payment (down 11,857

thousand euros) produced by the supplementary

agreement signed in March and effective from the

start of 2011, mitigated by (ii) the growth in reve-

nues from services provided on request (up 11,790

thousand euros), including the Lighting Plan,

• 6,592thousandeurosofincomefromthecontract

for the management of the public lighting service in

the municipality of Naples. This contract produced

its effects from the second half of 2010; revenues

of this category amounting to 2,908 thousand euros

were recorded in the 2010 consolidated financial

statements. Revenues at 31 December 2011 also

include the recharging of electricity used for the

service management,

• 12,408 thousandeuros in revenues fromservices

provided on request of third parties: this category

of income saw a decrease of 1,839 thousand euros

essentially due to ACEA Ato2,

• 12,705 thousand euros in revenues from service

contracts and other intercompany services: this

component registered a decrease of 3,577 thou-

sand euros due to the change in the basis of con-


Consolidated operating costs

As at 31 December 2011 these amounted to 2,544,078

thousand euros (1,442,245 thousand euros at 31 De-

cember 2010), representing an increase of 1,101,833 (up

76.4%) thousand euros over the previous year, and are

broken down as follows.

(iii) the reduction of 579 thousand euros in income

from heating system inspections given the contract

was terminated,

(iv) the decrease of 1,398 thousand euros in reim-

bursements for damages and penalties for different

methods of charging rent on public land by ACEA,

(v) the reduction of 7,618 thousand euros in the item

contingent assets and other revenues, mainly due



Property income

Income from end users 1,048 2,019 (971) -48.1%

Gains on asset disposals 125 9,512 (9,386) -98.7%

Heating systems 530 1,109 (579) -52.2%

Coverage of costs for tariff subsidies for employees 1,663 978 685 70.0%

Contingent assets and other revenues 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%

Electricity and water use accessory revenues 87 73 15 20.6%

Government grant (Decree of the President of the Council of Ministers of 23/04/04)

4,184 4,098 86 2.1%

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%

Recharged cost of governance bodies 802 873 (71) -8.1%

OTHER REVENUES AND PROCEEDS 71,035 79,845 (8,810) -11.0%




Staff costs 277,933 264,968 12,965 4.9%

Cost of materials and overheads 2,266,145 1,177,277 1,088,868 92.5%

CONSOLIDATED OPERATING COSTS 2,544,078 1,442,245 1,101,833 76.4%


The change in the period was significantly impacted by

the variation in the basis of consolidation, with particular

reference to the dissolution of the joint venture. Acque-

dotto del Fiora contributed 18,032 thousand euros to the

variation.

to the recognition of energy items concerning previ-

ous years, whose amount cannot be estimated. This

item also includes the amount of 2,357 thousand

euros (2,292 thousand euros at the end of 2010)

concerning the margin estimate on construction

activities of plants under concession and, therefore,

which are included in the scope of IFRIC 12.

A breakdown, compared with 2010, is as follows.


The increase in staff costs including capitalised costs,

and on a like-for-like basis, stands at 3,299 thousand

euros and is substantially determined by ACEA, partially

mitigated by the reduction of water companies, with

special reference to ACEA Ato2 (1,916 thousand euros).

The Industrial Area is broken down as follows:

Networks 91,118 thousand euros

(essentially unchanged compared to 2010)

Energy 15,169 thousand euros (up 521 thousand euros)

Water services Italy 154,963 thousand euros

(down 2,851 thousand euros);

Overseas water services 7,187 thousand euros (unchanged);

Environment 9,235 thousand euros (up 594 thousand euros);

Parent Company 47,708 thousand euros

(up 5,037 thousand euros).

Staff costs in the year were affected mainly by the in-

crease in ACEA’s workforce and increase in average per

capita costs as a result of the renewal of employment

contracts and salary policies. The change was also partly

influenced by voluntary redundancy procedures - those

already finished and in progress - which led to a reduc-

tion in the workforce at the largest subsidiaries (ACEA

Distribuzione and ACEA Ato2).

Staff costs of the Parent Company include the amount

of 1,159 thousand euros corresponding to the assess-

ment of the second cycle of the three-year medium/

long-term incentive plan (2010-2012). That plan, set up

3. Staff costs – 277,933 thousand euros



Staff costs including capitalised portion 325,294 321,995 3,299 1.0%

Capitalised costs (66,054) (57,027) (9,026) 15.8%

Staff costs on a like-for-like basis 259,241 264,968 (5,727) (2.2%)

Staff costs including capitalised portion 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%

Change in basis of consolidation produced by companies acquired as part of the dissolution

8,141 8,141 100.0%

Total change in the basis of consolidation 18,692 0 18,692 100.0%

STAFF COSTS 277.933 264.968 12.965 4,9%


in autumn 2010, envisages a cash payment at the end

of the period, calculated as a percentage of the Gross

Annual Remuneration of beneficiaries, based on the

achievement of pre–established economic and financial

targets. In 2010, an amount of 1,122 thousand euros

was set aside for said plan.

As regards capitalised costs, growth of 9,026 thousand

euros was recorded (on a like-for-like basis), essentially

caused by the water companies, with particular refer-

ence to ACEA Ato2, ACEA Ato5 and Publiacqua.

At 31 December 2011, changes to the perimeter

amounted to 20,008 thousand euros, including capital-

ised costs, mainly relating to:

• AcquedottodelFiorafor6,219thousandeuros,

• AguazulBogotáfor3,491thousandeuros,asare-

sult of the expansion of the activities carried out

by the foreign subsidiary, including therein those

provided by Conazul,

• Acea Servizi Acqua and ISA totalling 2,071 thou-

sand euros and, lastly,

• companiesacquiredaspartof the terminationof

the joint venture totalling 8,141 thousand euros.

The following table shows the average number of staff

by Industrial Area, compared to same period of the pre-

vious year. The figure for the end of the period is also

shown.


4. Cost of materials and overheads – 2,266,045 thousand eurosThis item registered an increase of 1,088,868 thou-

sand euros (up 92.5%) compared to 31 December 2010,

which closed with a total of 1,177,277 thousand euros.

Industrial area Average number of employees

31.12.2011 31.12.2010 D

Networks 1,516 1,578 (62)

Energy 489 400 89

Water 4,382 3,931 451

Lazio-Campania 2,232 2,260 (28)

Tuscany-Umbria 865 714 151

Overseas 1,137 813 324

engineering and services 148 144 4


Parent Company 552 536 16

TOTAL 7,136 6,626 511

Industrial area Final number of employees

31.12.2011 31.12.2010 D

Networks 1,465 1,543 (78)

Energy 489 395 94

Water 4,334 4,170 164

Lazio-Campania 2,189 2,217 (28)

Tuscany-Umbria 853 716 137

Overseas 1,142 1,090 52

engineering and services 150 147 3


Parent Company 560 534 26

TOTAL 7,050 6,822 227

31.12.2011 31.12.2010 Variazioni assolute Variazioni %

Electricity, gas and fuel 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%

CONSOLIDATED OPERATING COSTS 2,266,145 1,177,277 1,088,868 92.5%


The increase is mainly due to the change in the basis

of consolidation, with particular reference to the item,

Energy, gas and fuels.

It should be noted that the items Materials and Services

were affected by the marketing and supply of photovol-

taic panels by ARSE.


The trend in said item is essentially determined by the

change in the basis of consolidation (4,311 thousand

euros) and the growth of ARSE and ACEA Distribuzi-

one (totalling 17,918 thousand euros) and ACEA (5,663

thousand euros) for materials used for Roma Capitale’s

Lighting Plan.

The change in the basis of consolidation comprises (i)

3,023 thousand euros from Aguazul Bogotà due to Con-

azul, (ii) 887 thousand euros from Acquedotto del Fiora

and (iii) 401 thousand euros from ISA and ASA.

The item purchases of materials before capitalised

costs increased by 13,442 thousand euros, and the

same considerations as above essentially apply.

By contrast, capitalised costs recorded a decrease of

12,070 thousand euros, again essentially due to ARSE

(down 15,255 thousand euros) which, in 2011, used

photovoltaic panels mainly for marketing and supply for

third parties; ARSE’s decrease was partially lessened by

the growth in water service companies (totalling 2,354

thousand euros).

Therefore, costs of materials incurred by the various

business areas during the period are as follows.

Networks 70,639 thousand euros (up 18,228 thousand euros);

Energy 551 thousand euros (down 221 thousand euros);

Water services Italy 17,725 thousand euros

(down 1,509 thousand euros);

Overseas water services 6,079 thousand euros

(up 3,045 thousand euros);

Environment 2,517 thousand euros (up 308 thousand euros);

Parent Company 6,100 thousand euros (up 5,663 thousand euros).

Services and contract work

This item amounts to 327,155 million euros, marking an

increase of 25,636 thousand euros on the 301,518 thou-

sand euros at 31 December 2010.

Electricity, gas and fuel

This item includes:

• thecostofprocuringelectricityfortheregulatedand

free markets and the market subject to additional

safeguards and the related transport costs, totalling

1,668,599 thousand euros, compared with 666,016

thousand euros at 31 December 2010. The costs

relating to the Single Buyer, excluding the effect of

energy equalisation, amounting to 264,004 thousand

euros (195,899 thousand euros at 31 December 2010

and 329,741 on a like-for-like basis in respect of the

previous year); the equalisation of electricity destined

for the regulated market in the year led to an increase

in costs of 4,057 thousand euros, compared to 11,776

thousand euros in 2010 (19,821 thousand euros on a

like-for-like basis). This item also includes expenses

relating to energy efficiency, UC6 and CTS (special tar-

iff component) paid by the distributor totalling 5,668

thousand euros (7,372 thousand euros in 2010),

• thecostofpurchasinggasforresaleandthepro-

duction of electricity, and the cost of other fuels

consumed in the period by the plants (33,416 thou-

sand euros against 8,098 thousand euros at 31 De-

cember 2010). This item’s performance is affected

by the price trends and the quantities produced in

the period.

This item also includes the cost of purchasing green cer-

tificates, CO2 rights and white certificates (5,240 thou-

sand euros, compared with 3,117 thousand euros at 31

December 2010).

Materials

The cost of materials is 103,611 thousand euros and rep-

resents the cost of materials used during the period less

costs allocated to investments, as the table below dis-

plays..



Purchase of materials 134,641 139,915 (5,275) -3.8%

Changes in inventories 11,445 (7,272) 18,717 -257.4%

Total 146,085 132,643 13,442 10.1%

Capitalised costs (42,475) (54,545) 12,070 -22.1%

TOTAL 103,611 78,098 25,513 32.7%



lating to facility management services provided by

Marco Polo: the total cost of these services to the

Parent Company came to 13,200 thousand euros

(9,000 thousand euros at 31 December 2010). In-

tercompany services also include services provid-

ed by the consortium which has managed public

lightingcontractworks inNaplessinceJuly2010:

costs of this nature accrued in the period came to

4,968 thousand euros, up 3,611 thousand euros

over 2010. The change was also affected by the dif-

ferent percentage consolidation of Acea Energia,

• services forstaff, totalling17,771 thousandeuros

(down 152 thousand euros compared to 31 Decem-

ber 2010),

• telecommunications, printing, postage and bank

charges totalling 17,484 thousand euros (up 895

thousand euros); the change is essentially due to

telecommunications and data transmission (up


• disposal and transport of sludge,waste, ash and

refuse, and cleaning and porterage, totalling 37,003

thousand euros (up 2,057 thousand euros). The var-

iation is determined mainly by additional expenses

incurred by ACEA Ato2 as a result of the seizure of

a sanitation plant,

• insurance for 13,322 thousand euros (up 2,144

thousand euros),

• technical and administrative services (including

consultants’ fees and the cost of freelance work-

ers), amounting to 46,077 thousand euros (up 9,771

thousand euros). The change was caused by (i) 677

thousand euros from ACEA, mainly for IT consult-

ing related to innovative investments that became

operative and support for projects to improve cor-

porate administrative, financial and tax reporting, (ii)

4,462 thousand euros from Acea Energia for costs

related to the development of the portfolio on the

free market plus the change in the basis of consoli-

dation (iii) 3,041 thousand euros from Acea8cento

for the technical services of outsourcers (manage-

ment of call overflow) and (iv) 2,433 thousand euros

from water service companies, with particular ref-

erence to Publiacqua,

• internaluseofelectricity,totalling6,801thousand

This was a result of the change in the basis of consolida-

tion: (i) due to the consolidation of Acquedotto del Fiora

with the proportionate method from 1 January 2011,

for 9,373 thousand euros, (ii) for the acquisition of Acea

Servizi Acque for 431 thousand euros and Innovazione

Sostenibilità Ambientale for 370 thousand euros. Fur-

thermore, the effect of the termination of the joint ven-

ture with GDF Suez Energia also had a significant impact,

leading to a change in the percentage of consolidation

of Acea Energia Holding and its subsidiaries (totalling -

8,916 thousand euros).

An analysis of the breakdown reveals the following:

• worksamountedto70,355thousandeuros,mark-

ing an increase of 2,801 thousand euros on the

previous year. The change is mainly attributable

to growth recorded by ACEA Distribuzione and

the Parent company for public lighting activities

in Rome and Naples (totally 9,599 thousand eu-

ros) and foreign companies (up 1,144 thousand

euros), particularly with reference to Aguazul Bo-

gotá, which consolidates 60% of Conazul’s costs;

on the other hand, the amount of works incurred

by water companies decreased (down 8,624 thou-

sand euros) as a result of the decreased volumes

of performed maintenance and Terni Ena and Eall

(overall – 1,024 thousand). With reference to the

change in the basis of consolidation, Acquedotto

del Fiora contributed 2,451 thousand euros,

• electricity,water and gas consumption of 48,723

thousand euros (down 4,246 thousand euros). The

change owes to contrasting elements: on one hand,

the 8,876 thousand euros increase recorded by the

water companies working in Tuscany (including

3,433 thousand euros relative to Acquedotto del

Fiora), offset by a lower contribution (13,719 thou-

sand euros) to the consolidated result by that type

of cost of the water companies working in Lazio,

ACEA Distribuzione and the parent company due

to more rounding of costs generated by contracts

with Acea Energia following the change in the per-

centage of consolidation,

• intercompanyservicesamounted to17,554 thou-

sand euros (up 4,434 thousand euros compared to

31 December 2010): said item included costs re-


• staffsecondedbyunconsolidatedGroupCompanies

and/or third party entities and companies totalling

766 thousand euros (up 161 thousand euros).

In addition to the above, additional service costs were

incurred by companies from the (i) Energy area (907

thousand euros, down 751 thousand euros); (ii) that man-

age water services (13,691 thousand euros, down 917

thousand euros), (iii) Environment area (2,762 thousand

euros, down 716 thousand euros), and (iv) ACEA (1,848

thousand euros).

The item also includes the remuneration paid to the

Group’s governance bodies, amounting to 4.0 million eu-

ros.

The table showing the remuneration of directors, statu-

tory auditors and key managers of the Parent Company

is provided in an annex to these notes.

As required by article 149 duodecies of the CONSOB

Regulations for Issuers, the fees paid to the Independent

Auditors, Reconta Ernst & Young, are as follows.

euros (up 1,468 thousand euros). The change origi-

nated from ACEA Ato2,

• advertising and sponsorship, amounting to 8,205

thousand euros (down 269 thousand euros),

• cost ofmeter readings, equalling 1,910 thousand

euros (down 1,259 thousand euros). The variation

was generated by ACEA Ato2 (792 thousand euros)

and by ACEA Distribuzione (335 thousand euros),

• maintenance fees of 4,026 thousand euros (up


• traveland transferexpenses,amounting to1,083

thousand euros,

• stock management costs incurred by ACEA Dis-

tribuzione, totalling 2,133 thousand euros (up 198

thousand euros),

• costsofbillprintingtotalling6,295thousandeuros

(up 2,216 thousand euros). The change derives pri-

marily from the different percentage consolidation

of Acea Energia,

Company and reference period Audit Related Service Audit Services Non Audit Services Total

Acea S.p.A. 2011 132,700 85,000 - 217,700

Gruppo Acea 2011 876,023 150,545 279,000 1,305,568

ACEA S.P.A. AND GROUP TOTAL 1,008,723 235,545 279,000 1,523,268



ACEA Ato2 33,014 32,713 301

Publiacqua 11,753 10,119 1,634

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 2,113 0 2,113

CONCESSION FEES 60,953 57,418 3,535


Concession fees

These fees amount to 60,953 thousand euros (up 3,535

thousand euros compared to 31 December 2010, when

the figure was 57,418 thousand euros) and regard fees

paid by companies that manage integrated water servic-

es under concession in certain areas of Lazio and Cam-

pania, Tuscany and Umbria. The following table shows a

breakdown by Company, compared with previous year.


• amountsrelatingtoexceptionaleventsduetothe

Equalisation Fund, totalling 1,306 thousand euros

(up 1,189 thousand euros),

• lossesderiving from thedisposalof companyas-

sets amounting to 766 thousand euros (up 418

thousand euros),

• the adjustment of estimates made in previous

years amounting to 8,448 thousand euros (down

3,243 thousand euros).

The contribution of the Parent Company and Acquedotto

del Fiora amounted to 6,272 thousand euros (up 2,224

thousand euros compared to 2010) and 450 thousand

euros respectively.

5. Net income/(costs) from commodity risk managementAt 31 December 2011 the change in the fair value meas-

urement of these financial contracts posted in the con-

solidated income statement is positive by 297 thousand

euros.

This amount regards contracts stipulated by Acea En-

ergia with the support of AceaElectrabel Trading in rela-

tion to the dissolved joint venture and contracts entered

into by Acea Energia Holding, which assumed the energy

management role in 2011.

Further information about these contracts is provided in

the section “Additional disclosures on financial instru-

ments and risk management policies”.

Lease expense

This item amounts to 33,103 thousand euros, essentially

unchanged compared to the previous year (33,323 thou-

sand euros).

The change generated by companies consolidated for

the first time in 2011 amounted to 248 thousand euros.

This item contains rental expenses of 19,018 thousand

euros, which increased by 1,044 thousand euros mainly

due to the higher contribution of Acea Energia Holding.

It also contains costs and other fees and rentals totalling

14,085 thousand euros, which fell by 1,264 thousand eu-

ros compared to the previous year, and are broken down

as follows

Networks 5,239 thousand euros (up 668 thousand euros);

Energy 6,367 thousand euros (up 2,450 thousand euros);

Water services Italy 6,668 thousand euros (down 615 thousand euros);

Overseas water services 782 thousand euros (up 145 thousand euros));

Environment 811 thousand euros (up 350 thousand euros);

Parent Company 13,237 thousand euros (down 3,217 thousand euros).

ACEA contributed 13,237 thousand euros (down 3,217

thousand euros): the variation derives mainly from the

different methods of calculating the recharging of ab-

straction fees and a small reduction in lease payments

generated mainly by the decision to purchase the com-

pany headquarters, which led to a decrease in the aver-

age annual rent.

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 non-

profit 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



6. Amortisation, depreciation, impairment charges and provisions 425,984 thousand euros

31.12.2011 31.12.2010 Increase/

Amortisation and depreciation of intangible and tangible assets 257,439 211,239 46,200

Provisions for impairment of receivables 55,059 63,591 (8,532)

Provisions for liabilities 113,487 45,762 67,724

TOTAL 425,984 320,593 105,391


Amortisation and depreciation of intangible and

tangible assets

The increase in amortisation/depreciation of 46,200

thousand euros was caused by (i) the volume of invest-

ments of 21,211 thousand euros, especially connected

with water and electricity distribution plants of previ-

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

of the San Vittore WTE plant, (ii) 5,543 thousand euros

relating to additional write-downs to those recognised

in the 2010 financial statements (2,793 thousand eu-

ros), carried out by ARIA for the Terni WTE plant and the

first line of the San Vittore plant, with reference to the

sections of the plant that will be disposed of as part of

upgrading works, (iii) 2,030 thousand euros relating to

reductions in the value of goodwill and other intangi-

ble assets, (iv) 5,860 thousand euros relating to the in-

crease generated by the change in the basis of consoli-

dation following the amendment to the Acquedotto del

Fiora criterion and entry of ASA and Isa and (v) 11,498

thousand euros due to the increase of generation and

sales companies as a result, essentially, of the addition-

al stake acquired as part of the dissolution operation.

The performance of said item for the year is shown by

industrial area below.

• Networks: this area recorded a total of 105,150

thousand euros, marking an increase of 6,879 thou-

sand euros, due to ACEA Distribuzione (3,309 thou-

sand euros) and ARSE (3,499 thousand euros),

• Energy:thecompaniesinthisareareportdeprecia-

tion and amortisation of 21,363 thousand euros,

• Water services: this area registered a total of

89,164 thousand euros (up 20,265 thousand euros):

the increase was mainly due to 9,878 thousand eu-

ros coming from companies operating in Lazio and

Campania and 10,079 thousand euros from compa-

nies in Tuscany and Umbria; Acquedotto del Fiora

accounts for 5,049 thousand euros and overseas

companies 308 thousand euros;

• Engineeringandservices: theseamountedto777

thousand euros,

• Environment: amortisation/depreciation and im-

pairment amounted to 20,597 thousand euros (up

5,593 thousand euros) and 8,387 thousand euros

(up 5,594 thousand euros) respectively; the in-

crease in depreciation derives mainly from the en-

try into operation of the second and third lines of

theSanVittoreplantinAprilandJulyrespectively,

• ACEArecordedamortisation/depreciationandim-

pairment of 11,935 thousand euros (down 1,051

thousand euros) and 77 thousand euros (down

3,371 thousand euros) respectively. Write-downs

in 2010 related mainly to goodwill recorded as a

result of the acquisition of Crea.

At the end of 2011, impairment amounted to 13,805



• 8,336 thousandeuros relating towrite-downsof

sections of the plant subject to repowering: at the

end of the previous year the amount recorded

was 2,793 thousand euros,

• 3,561 thousandeuros resulting from the record-

ing of impairment (3,371 thousand euros as at 31

December 2010); the write-downs effected mainly

regard Gesesa and ASA,


- Acea Energia 878 thousand euros,

- Acea Produzione 838 thousand euros.

• for44,100thousandeurosforallocationstocover

GORI’s risk of the non-recognition of tariff adjust-

ments and financial risk, pending approval and

signing of the agreement to settle the dispute with

the Campania Region and the Area Authority,

• foranallocationof4,800thousandeurosrelating

to ACEA Ato5 as a result of provision adopted by

the Commissioner for deeds which involved the

recalculation of the provision already allocated in

2009 (25,000 thousand euros); the provision sets

forth, among other things, the real average tariff for

the 2006-2011 period, starting from the tariff deter-

mined at the contract stage and applying planned

accrued inflation in order to determine and struc-

ture the 2012 real average tariff, while waiting for

the ordinary and extraordinary review activities to

be carried out as part of the original Area Plan,

• foranallocationof2,720thousandeurosmadeby

Publiacqua in relation to the preliminary inspection

of the correct drafting of the ordinary review of the

Area Plan performed by general management in

order to protect the area and water resources in

respect of the tariff review,

• higher provisions for contribution risks of 5,619

thousand euros,

• lowerallocationsrecognisedtocovercontractand

supply risks (down 9,751 thousand euros), includ-

ing 6,710 thousand euros posted by Acea Energia

in 2010.

• 1,841thousandeurosrelatingtothewrite-down

of the beneficial interest acquired from Sarnese

Vesuviano on the shares of a GORI shareholder.


This item amounted to 55,059 thousand euros, a de-

crease of 8,532 thousand euros, as a result of contrast-

ing elements. On one hand, an increase was recorded

by (i) water service companies operating in Tuscany and

Umbria amounting to 2,405 thousand euros, with par-

ticular reference to Acque (584 thousand euros), Umbra

Acque (591 thousand euros), Publiacqua (392 thousand

euros) and Acquedotto del Fiora (993 thousand euros), (ii)

by ACEA amounting to 1,001 thousand euros and (iii) by

ACEA Distribuzione equalling 387 thousand euros; while

water service companies operating in Lazio and Campa-

nia registered a significant decrease (13,890 thousand

euros in total), with particular reference to ACEA Ato2


As regards Acea Energia and subsidiaries, write-downs

in 2011 amounted to 20,112 thousand euros, up by

1,346 thousand euros; however, the change recorded on

a like-for-like basis saw a total decrease of 8,834 thou-

sand euros.

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.

Provisions

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:

• thepostingof26,600thousandeuros(7,686thou-

sand euros at 31 December 2010) for costs gen-

erated by voluntary redundancy and resignation/

retirement procedures launched during the period

under observation and expiring before 31 Decem-

ber 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,


Further information is provided in the section “Update on major disputes and litigation”.

A breakdown of allocations by type is shown in the table below.

7. Finance (costs)/ income - (118,422 thousand euros)

31/12/2011 31/12/2010 Increase/ (Decrease)

Finance Costs/ (Income) related to debt (A) 74,333 67,933 6,400

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


Finance costs/income on forward transactions 0 0 0

Interest on amounts due from customers (14,844) (7,036) (7,808)

Interest on loans and receivables (5,109) (7,387) 2,278

Bank interest (1,150) (2,954) 1,803

Other finance (costs)/income (B) 44,089 20,999 23,090

Interest payable to end users 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

Factoring fees 23,631 10,263 13,368

Interest on delayed payment for tax disputes 0 3,788 (3,788)

Interest on other receivables (620) (1,376) 755

Other costs / (income) 380 1,078 (698)

Costs from discounting receivables 11,180 0 11,180

NET FINANCE COSTS (A) + (B) 118,422 88,932 29,490


Nature of the provision FY 2011 FY 2010 Increase/ (Decrease)

Legal 9,267 8,203 1,043

Tax 784 0 784

Regulatory water risks 51,627 0 51,627

Contribution risks 8,004 2,385 5,619

Redundancy and retirement 27,471 7,686 19,784

Contracts and supplies 1,958 12,053 (10,095)

Insurance excesses 1,077 322 754

Other liabilities and charges 1,639 5,169 (3,531)

Total 101,817 35,839 65,978

Restoration charges - IFRIC12 11,669 9,923 1,747

TOTAL PROVISIONS 113,487 45,762 67,724



margin applied to the customer. The sale commis-

sion, i.e. premium paid for transferring the credit

risk, ranges between 0.3% and 1% depending on

the quality of the debtor transferred.

The average “all in” global cost of the ACEA Group’s

debt (including components from discontinued opera-

tions) increased from 3.52% in 2010 to 3.71% in 2011.

With regard to finance costs related to borrowings, the

following is noted:

• netswapcosts(6,642thousandeuros)aregener-

ated by the flows exchanged during the year for

cash flow hedge instruments which hedge inter-

est and exchange rate risk,

• interestonbond loans increasedby5,411thou-

sand euros, amounting to 42,181 thousand euros,

essentially due to the stipulation of contracts in

March 2010, and are essentially composed of:

- bond loan amounting to 300,000 euros at fixed

rate, placed by ACEA in 2004 (10-year bullet re-

payment): 14,625 thousand euros,

- bond loan amounting to 500,000 euros at fixed

rate, placed by ACEA in March 2010 (10-year

bullet repayment): 22,451 thousand euros,

- private placement of 20 billion yen carried out

by ACEA in March 2010 (15-year bullet repay-

ment): 4,625 thousand euros without consid-

ering hedges allocated to the item net swap

expenses,

• interest on medium/long-term borrowings

amounts to 38,550 thousand euros, up by 2,893

thousand euros;

• interestonshort-termbankborrowingsfromand

other financial borrowings totalled 8,063 thou-

sand euros, of which 6,818 thousand euros was

attributable to ACEA.

In relation to expenses deriving from transfers of re-

ceivables, the breakdown by company is shown below:

• ACEADistribuzione1,827thousandeuros(2,123

thousand euros at 31 December 2010);

• ACEAAto25,469thousandeuros(3,294thousand

euros on 31 December 2010);

• ACEAEnergia16,335thousandeuros(4,845thou-

sand euros at 31 December 2010, 7,608 thousand

euros on a like-for-like basis).

Net finance costs amounted to 118,422 thousand euros

are up by 29,490 thousand euros over the previous year.

As a whole, said increase is due to:

• the impact of applying IFRIC 12 on public light-

ing receivables, classified as “financial” after the

supplemental contract between ACEA and Roma

Capitale was signed, which aligned the expiry

of the service agreement with the expiry of the

concession agreement (2027). The discounting

of these receivables caused a still figurative in-

crease of 9,346 thousand euros in the finance

costs item,

• expenses (1,833 thousand euros) for discount-

ing receivables for ACEA Ato5 tariff adjustments

relating to the variation between real revenues

from billing and those “guaranteed” with respect

to the “Original area plan” for the 2006 - 2011

period. These receivables were quantified defini-

tively by provision of the Commissioner for deeds,

communicated to ACEA Ato5 on 9 March 2012,

• higher interest accrued on short and long-term

debt which, on the whole, registered a variation

of 10,186 thousand euros, due to the higher debt

recorded in the year and the increase in the cost

of borrowing which characterises the macroeco-

nomic phase,

• higher expenses deriving from transfers of re-

ceivables (up 13,638 thousand euros, up 10,606

thousand euros on a like-for-like basis), which ac-

knowledges the effect of the change in the basis

of consolidation resulting from the purchase of

100% of Acea Energia and greater volumes trans-

ferred, mainly relating to receivables due from the

Public Administration. It should be noted that in

2011, in order to reduce the credit risk in respect

of Public Administration, a series of recourse fac-

toring transactions were carried out, with noti-

fication by means of notarial deed, relating to a

portion of receivables accrued and past due from

the Public Administration. The associated cost in-

curred is represented almost entirely by the inter-

est component (DSO), i.e. invoice payment time

estimated by the Bank. Therefore, it is a cost the

Group would have incurred and is part of the sales


8. (Profit)/ loss on investments – (9,295 thousand euros)Net profit on investments amounted to 9,295 thousand

euros as at 31 December 2011 and 1,837 thousand euros

resulted from the consolidation according to the equity

method of some Group companies. In particular:

• profit of 2,075 thousand eurosmainly relating to

the measurement of Agua de San Pedro (1,653

thousand euros), Umbria2 (125 thousand euros),

Umbria Distribuzione Gas (101 thousand euros),

Sienergia (76 thousand euros) and Sogea (74 thou-

sand euros) using the equity method,

• expensesof188thousandeurosessentiallyrelated

to losses deriving from the closure of the liquida-

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).

9. Taxation - 60,737 thousand eurosTax expenses for the period with regard to continuing

operations amount to 60,737 thousand euros (69,844

thousand euros in the previous year).

In order to make the comparison more useful, the com-

ment on provisions for current and deferred taxes (in-

cluding discontinued operations) is provided below.

Income taxes were estimated at 65,572 thousand euros

(85,398 thousand euros as at 31 December 2010) and are

essentially made up of:

• Current taxes: 107,674 thousand euros (105,001

thousand euros on 31 December 2010),

• Netdeferred/prepaidtaxes:down42,625thousand

euros (down 19,603 thousand euros in 2010).

La riduzione complessiva registrata nell’esercizio, pari a

euro 19.827 mila, deriva dall’effetto combinato della di-

minuzione dell’utile ante imposte e da eventi straordinari.

The overall reduction recorded in the period, equal to

19,827 thousand euros, derives from the combined ef-

fect of the decrease in the profit before tax and extraor-

dinary 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

Lastly, growth was recorded (i) in income from custom-

ers and on financial receivables (totalling 5,530 thousand

euros), resulting from the increase in interest applied by

Acea Energia to its customers ACEA and Roma Capitale

and (ii) default and deferred interest (2,376 thousand eu-

ros) due mainly to the recognition of the amount applied

by Equitalia on seizures pursuant to article 48 bis and

on divisions into instalments targeted for the end of the

year.

With reference to the breakdown per industrial area,

please note:

• Networks:thenetfinancecostsequal24,855thou-

sand euros (down 177 thousand euros); the change

is mainly due to the lower costs of factoring receiv-

ables compared to 2010,

Energy: the companies in this area report net inter-

est expense of 9,529 thousand euros (up 7,285 on

the previous year). The growth is due to both the

increase in commission deriving from the transfer

of receivables, and the effect of the change in the

percentage of consolidation; on a like-for-like basis

the increase amounts to 5,989 thousand euros,

Water: these amounted to 11,903 thousand euros

(up 2,444 thousand euros). The increase is essen-

tially due to Acquedotto del Fiora (1,514 thousand

euros) and ACEA Ato5 (1,028 thousand euros), due

to the effect of the discounting of receivables from

tariff adjustments recognised in respect of the Area

Authority,

Environment: these amounted to 530 thousand eu-

ros, essentially in line with the figure at 31 Decem-

ber 2010 (up 83 thousand euros);

ACEA closed the period with a negative result of

71,191 thousand euros (up 19,205 thousand euros).

The change is explained above.


impact amounted to around 11 million euros.

Taxes in the year benefitted from the accounting of the

incentive deriving from the tax reduction for investments

in plants and machinery (so-called Tremonti ter) for the

years 2009 and 2010, in total equal to 9.2 million euros,

related to the second and third lines of the EALL San Vit-

tore plant. In fact, it is worth mentioning is that Legisla-

tive Decree no. 28/2011, published on 28 March, defini-

tively clarified the compatibility or possible accumulation

of the green certificates (or other forms of incentive

tariffs such as CIP6) with the easing measures of Trem-

onti ter: article 26, paragraph 3, of the mentioned decree

contains an authentic interpretation of paragraph 152 of

article 2 of the 2008 Finance Act, in this way superseding

the interpretation provided by the Ministry of Economic

Development to GSE and Inland Revenue.

It is worth remembering that the methods of the MSE

had implied the elimination of the benefit from the con-

solidated income statement of the previous year begin-

ning from the statement as at 30 September 2010.

Furthermore, it should be noted that during the conver-

sion of Law Decree 98 of 2011, an increase of 0.30% was

established in the ordinary IRAP rate for concessionaires

other than motorway and tunnel construction and man-

agement companies for the 2011 tax year. In particular,

for the Lazio and Umbria regions, the IRAP rate to be ap-

plied for 2011 is 5.12% (i.e. 4.82% + 0.30%).

The table below shows the breakdown of taxes for the

period and the correlated percentage weight calculated

on consolidated income before taxes.

Presidential Decree 917/1986 for the application of the

participation exemption: in short, taxation is applied on

5% of the income generated.

This is in addition to the increased tax rate caused by the

entry of provisions for liabilities and charges related to:

• the uncertain situation of the company GORI -

overall totalling 44,100 thousand euros - 24,100

thousand euros of which was estimated as non-

deductible for IRES (Corporate Income Tax) and

IRAP (regional business tax) purposes since they

are allocations relative to investment risks;

• employees -especially for redundancy,equalling

26,600 thousand euros - which is definitively non-

deductible for IRAP purposes.

It should be noted that article 7 of Law Decree no. 138

of 13 August 2011, converted to Law no. 148 of 14 Sep-

tember 2011, extended the IRES surcharge of 6.5%, in

addition to the sectors already hit by the tax, to other

operators in the electricity transmission, dispatching

and distribution sectors and to entities operating in

the production of electricity from photovoltaic or wind

power. Said provision also introduced a 4% increase in

the surcharge rate for the three-year 2011-2013 period.

The legislative amendment described did not involve

any significant impact on the consolidated income

statement given that the higher current taxes - with

particular reference to those of ACEA Distribuzione -

were offset by the redetermination of the effects of de-

ferred taxes. It should be noted that the neutral impact

referred to at income statement level is limited solely to

the year closed, whilst, from a financial point of view, the

2011 % 2010 %

Profit before tax from continuing and discontinued operations 159,092 221,590

Expected tax charge at 27.5% on profit before tax (A) 43,750 27.5% 60,937 27.5%

Net deferred taxation (B) (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%

Tax Asset (F) 6,710 4.2% 6,710 3.0%

TAx ON CONTINUING AND DISCONTINUED OPERATIONS (D) + (E) + (F) 65,572 41.2% 85,399 38.5%


The tax rate for the year is 41.2% (38.5% in 2010).


b. ACEA transferred to GSEI the receivables for the

dividends resolved by Eblacea for 1,813,968.00 eu-

ros;

c. ACEA purchased from GSEI the finance receivables

due to the latter from AEP against a fee, equal to

the value of the principal and interest accrued until

the Date of Execution, of 25,069,870.42 euros;

AspartofthedissolutionoftheJV,theFrameworkAgree-

ment envisages a series of additional understandings. In

particular:

1) Notwithstanding the necessary authorisations

of the competent public entities within the limits

these authorisations are necessary pursuant to

applicable regulations, ACEA granted GSEI a right

of first offer on the hydroelectric plants of Castel

Madama, Cecchina, M. del Rosario, Mandela, Orte,

Salisano, Sant’Angelo in the event of sale within 3

years from the Date of Execution. On the Date of

Execution GSEI paid ACEA 5,000,000.00 euros as

the fee for the transfer of the above mentioned

right of first offer,

2) GSEI will have the right to participate in the project

being studied only with regard to the CHP unit of

the Tor di Valle plant, as amended, and any other

repowering project regarding the Tor di Valle plant,

with the sole exception of district heating-related

activities, if the project is started within two years

from the Date of Execution,

3) aside from the necessary authorisations of the

competent public entities within the limits these

authorisations are necessary pursuant to applica-

ble regulations, ACEA granted GSEI a right of first

offer on the investment owned by ACEA through

Acea Energia Holding in Acea Energia, in the

event of sale within 3 years from the Date of Ex-

ecution. On the Date of Execution GSEI paid ACEA

2,500,000.00 euros as the fee for the transfer of the

above mentioned right of first offer;

4) GSEI granted ACEA an irrevocable and uncondition-

al option, to be exercised by 30 September 2011, to

subscribe a five-year electricity supply agreement

for 5TWh per year.

The Income Statement and balance sheet of discontin-

ued operations as at 31 March 2011 are shown below, in-

10. Non-current assets held for sale and discontinuing or discontinued operationsThe Framework Agreement, signed on 16 December 2010

between ACEA and GSEI, envisaged the execution of a se-

ries of operations to be implemented in a single context.

In particular at the Date of Execution (i) ACEA purchased

from GSEI an interest representing 40.59% of the share

capital of Acea Energia Holding S.p.A. (formerly AceaElec-

trabel S.p.A. or “AEH”); (ii) following the non proportional

demerger of GDF SUEZ Produzione S.p.A. (formerly Ace-

aElectrabel Produzione S.p.A. or “AEP”), the assets and

activities that are functional to manage the hydroelec-

tric plants and thermoelectric plants of Tor di Valle and

Montermartini (the “AEP Basis Subject of demerger”) were

allocated to the company established at the same time,

Acea Produzione S.p.A.; at the time of perfecting the de-

merger, Acea Produzione S.p.A. was established, whose

share capital is entirely held by Acea Energia Holding

S.p.A.; (iii) ACEA transferred to GSEI an interest represent-

ing 30% of the share capital of GDF SUEZ Holding di Parte-

cipazioni S.p.A. (formerly Eblacea S.p.A.), in turn holder of

50% of the share capital of Tirreno Power S.p.A.; and (iv)

Acea Energia Holding S.p.A. transferred to GSEI an interest

representing 84.17% of the share capital of GDF SUEZ En-

ergy Management S.p.A. (formerly AceaElectrabel Trading

S.p.A. or “AET”).

Regarding the value of the interest sold and purchased,

please note that:

a. for the purchase of 40.59% of the share capi-

tal of Acea Energia Holding, ACEA paid GSEI

123,901,405.71 euros;

b. for the sale of 30% of the share capital of Eblacea,

ACEA collected from GSEI a fee of 108,158,152.57

euros;

c. for the sale of 84.17% of the share capital of AET,

Acea Energia Holding collected from GSEI a fee of

33,668,000.00 euros;

Additional transactions were as follows:

a. ACEA transferred to GSEI the loans and receivables

due from Roselectra, Voghera and AET against a fee,

equal to the value of the principal and interest ac-

crued until the Date of Execution, of 49,202,667.50

euros;


cluding therein Estra Elettricità, which is no longer part of

the shareholder structure as of 6 May 2011. Please note

that the economic data are compared with the results

of the companies transferred as at 31 December 2010.

Eblacea and Tirreno Power

The economic and asset data is represented pro rata,

based on the percentage of interest directly and indirect-

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 25 43 (18)

GROSS OPERATING PROFIT (25) (36) 11

Amortisation, depreciation and impairment charges 0 0 0

Operating profit/(loss) (25) (36) 11

Financial management (0) 0 (0)

Profit before tax (25) (36) 11

Taxation 0 86 (86)

Net profit/(loss) for the period (25) 50 (75)

TOTAL CONSOLIDATION ADJUSTMENTS 0 (2,621) 2,621

TOTAL EBLACEA (25) (2,571) 2,546



Operating revenues 33,618 200,266 (166,648)

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 3,510 14,504 (10,994)

Operating profit/(loss) (1,954) 22,215 (24,169)

Financial management 797 (5,283) 6,080

Profit before tax (2,751) 16,932 (19,683)

Taxation 825 (7,079) 7,904

Net profit/(loss) for the period (1,926) 9,853 (11,779)

TOTAL CONSOLIDATION ADJUSTMENTS (5,733) (23,123) 17,390



Net transferred assets 31/03/2011

Property, plant and equipment 171,358

Intangible assets 65,357

Investments 0

Inventories 10,019

Prepaid taxes 3,896

Trade receivables 18,186

Other receivables 14,287

Loans 9,236

Cash and cash equivalents 5,790

Staff termination benefits and other defined-benefit plans (3,427)

Provisions for deferred tax liabilities (22,259)

Provisions for liabilities and charges (7,947)

Tax payables (2,336)

Trade payables due to suppliers (19,273)

Other payables (10,177)

Bank borrowings (157,822)

Other borrowings (2,532)

Allocated goodwill 0

TOTAL EBLACEA AND TIRRENO POWER 72,354

Gain (loss) on transfer 35,804

Investment price 108,158

Loan repayment

Total 108,158

paid as so:

Cash 108,158

Net cash flow from the transfer 102,368

Cash collection 108,158

Transferred cash and cash equivalents 5,790



The asset data is represented pro rata, based on the per-

centage of interest held by Acea Energia Holding as the

assignor company.

AceaElectrabel Trading

The economic data is represented pro rata, based on the

percentages of interest indirectly held by ACEA (50%).


Operating revenues 359,020 1,602,426 (1,243,406)

Staff costs 411 1,319 (908)

Operating costs 351,803 1,573,554 (1,221,751)


Amortisation, depreciation and impairment charges 37 150 (112)

Operating profit/(loss) 6,769 27,403 (20,634)

Financial management 197 (676) 873

Profit before tax 6,572 26,727 (20,156)

Taxation (3,046) (9,369) 6,323

Net profit/(loss) for the period 3,525 17,358 (13,833)


TOTAL AET (100,025) (479,217) 379,192



Property, plant and equipment 19


Inventories 9,899

Prepaid taxes 3,075



Loans 371,881


Staff termination benefits and other defined-benefit plans (107)


Provisions for liabilities and charges (42)



Payables to the Parent Company ACEA (1,097)


Bank borrowings 0


Allocated goodwill 0

TOTAL ACEAELECTRABEL TRADING 37,914

Gain (loss) on transfer (4,246)


Loan repayment

Total 33,668

paid as so:

Cash 33,668

Net cash flow from the transfer (51,977)

Cash collection 33,668




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)


Staff costs 463 1,851 (1,387)

Operating costs 24,826 101,836 (77,009)


Amortisation, depreciation and impairment charges 2,095 6,567 (4,472)

Operating profit/(loss) (1,044) 1,597 (2,641)


Profit before tax (1,683) 203 (1,886)

Taxation 884 (2,381) 3,265

Net profit/(loss) for the period (799) (2,178) 1,379

TOTAL CONSOLIDATION ADJUSTMENTS 313 (48,524) 48,837

TOTAL ACEA ELECTRABEL PRODUzIONE (486) (50,702) 50,216




Staff costs 0 0 0

Operating costs 9,958 47,876 (37,918)

GROSS OPERATING PROFIT 511 5,774 (5,263)

Amortisation, depreciation and impairment charges 764 3,209 (2,445)

Operating profit/(loss) (252) 2,565 (2,817)


Profit before tax (581) 1,334 (1,915)

Taxation 0 (717) 717

Net profit/(loss) for the period (581) 617 (1,198)

TOTAL CONSOLIDATION ADJUSTMENTS 1,564 6,543 (4,979)

TOTAL ROSELECTRA 984 7,160 (6,177)




Staff costs 105 445 (340)

Operating costs 827 2,895 (2,068)


Amortisation, depreciation and impairment charges 779 3,137 (2,358)

Operating profit/(loss) 428 1,868 (1,441)


Profit before tax (68) (172) 104

Taxation 0 74 (74)

Net profit/(loss) for the period (68) (98) 30


TOTAL VOGHERA (1,903) (7,511) 5,608




Property, plant and equipment 194,703


Investments 0

Inventories 658

Prepaid taxes 2,676



Loans 4,374




Provisions for liabilities and charges (1,121)






Allocated goodwill 3,146

TOTAL ACEAELECTRABEL PRODUzIONE GROUP 75,514

Gain (loss) on transfer (36,961)


Loan repayment

Total 38,553

paid as so:

Cash 0

Net cash flow from the transfer (11,989)

Cash collection




Operating revenues 236 979 (743)

Staff costs 2 9 (6)

Operating costs 39 172 (133)

GROSS OPERATING PROFIT 195 798 (604)


Operating profit/(loss) 134 621 (487)


Profit before tax 102 474 (372)

Taxation 0 (147) 147

Net profit/(loss) for the period 102 327 (225)

TOTAL CONSOLIDATION ADJUSTMENTS (71) (491) 419

TOTAL LONGANO 31 (163) 194



Estra Elettricità

The economic data is represented pro rata, based on the percentage of interest indirectly held by ACEA.



Staff costs 44 57 (13)

Operating costs 13,654 32,149 (18,495)

GROSS OPERATING PROFIT 76 130 (54)


Operating profit/(loss) 45 (257) 302


Profit before tax 22 (185) 207

Taxation 0 65 (65)

Net profit/(loss) for the period 22 (120) 142

TOTAL CONSOLIDATION ADJUSTMENTS 9,744 27,854 (18,110)

TOTAL ESTRA ELETTRICITà 9,765 27,734 (17,969)



Property, plant and equipment 0

Intangible assets 12

Inventories 0

Advances 0



Loans 0

Cash and cash equivalents (1,392)


Provisions for deferred tax liabilities 0

Provisions for liabilities and charges (126)



Payables to the Parent Company ACEA 0

Other payables (396)


Other borrowings 0

Allocated goodwill

TOTAL ESTRA ELETTRICITà 0

Gain (loss) on transfer (0)

Investment price

Loan repayment

Total 0

paid as so:

Cash

Net cash flow from the transfer 1,392

Cash collection 0

Transferred cash and cash equivalents (1,392)



The sale of Eblacea and Tirreno Power as well as that

of the AceaElectrabel Produzione group, and the acquisi-

tion of 40.59% of the Acea Energia Holding Group, are

subject to adjustment in compliance with the Frame-

work Agreement signed between ACEA and GSEI. The

minimum amount of those adjustments has almost no

impact from a financial perspective, while the economic

effects amount to approximately 7 million euros in rela-

tion to the differential of the Eblacea/Tirreno Power sale

price.

Given the parties did not reach an agreement on the dif-

ferent positions, ACEA presented an appeal to the Court

of Milan for the appointment of an arbitrator pursuant

to the Framework Agreement; said arbitrator was ap-

pointedinJanuaryandtheappointmentformalitiesare

currently being carried out ACEA and GSEI.

11. Earnings per shareEarnings per share, determined in accordance with IAS

33, are shown below:

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)


- basic (B) 212,964,900 212,964,900 0

- diluted (C) 212,964,900 212,964,900 0

Earnings/(loss) per share (€)

- basic (A/B) 0.4036 0.4327 (0.0291)

- diluted (A/C) 0.4036 0.4327 (0.0291)


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)


- basic (B) 212,964,900 212,964,900 0

- diluted (C) 212,964,900 212,964,900 0

Earnings/(loss) per share (€)

- basic (A/B) 0.6619 2.8961 (2.2342)

- diluted (A/C) 0.6619 2.8961 (2.2342)



Notes to the Statement of Consolidated Balance Sheet



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%

Non-current assets held for sale 0 704,013 (704,013) -100%

TOTAL ASSETS 6.617.384 6,379,614 237,770 3.7%


12. Property, plant and equipment - 2,021,364 thousand eurosAs 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:

31.12.2010 Assets for sale Investments / Acquisitions

Land and buildings 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

Fixed assets in progress 169,064 0 44,040

Assets to be relinquished 19,665 0 241

PROPERTY, PLANT AND EQUIPMENT 1,904,563 0 160,903


Increase (Decrease) Basis

of Consolidation

Amortisation/depreciation

Disposals and Other movements

31.12.2011

Land and buildings 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 2,087 (9,677) 4,789 39,034

Fixed assets in progress 12,261 0 (179,346) 46,019

Assets to be relinquished 0 (1,368) (6,770) 11,770

PROPERTY, PLANT AND EQUIPMENT 122,542 (153,883) (12,771) 2,021,364


AssetsAs 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 fol-

lows.


• ARIA: 15,083 thousand euros related to invest-

ments aimed at strengthening the waste-to-energy

plant in the municipality of San Vittore del Lazio,

• AceaProduzione for10,946thousandeurosbasi-

cally related to works to repower the hydroelectric

plants in Orte and Salisano,

• ACEAfor5,485thousandeuros,whichmainly re-

fers to the purchase of furniture and electronic of-

fice equipment and to investments in the hardware

necessary for IT network improvement and devel-

opment projects.

Depreciation/amortisation amounts to 153,883 thou-

sand euros and relates primarily to the following industrial

areas:

• Networks:97,910thousandeuros,including91,276

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,

• Environment: 19,363 thousand euros, including

14,123 thousand euros from ARIA, 3,026 thousand

euros from SAO and 1,295 thousand euros from

Kyklos,

• Water:9,215thousandeuros,ofwhichLazio–Cam-

pania amount to 2,720 thousand euros, Tuscany –

Umbria 5,807 thousand euros and Overseas to 689

thousand euros,

• Engineeringandservices:413thousandeuros,

• Corporate–ACEA:5,697thousandeuros.

Other movements refer to reclassifications due to the

commissioning of fixed assets in progress and disposals

and divestments of assets. Specifically, please note:

• thecommissioningofthe“IIandIIIlinesoftheWTE

plant” in the municipality of San Vittore del Lazio,

which involved a 116,567 thousand euros reclas-

sification of fixed assets in progress to the items

“land and buildings” for 58,361 thousand euros and

“plant and machinery” for 58,207 thousand euros,

• thecommissioningoftheArsephotovoltaicplants,

totalling 56,112 thousand euros. In particular, the

plants located in the municipalities of Santi Cosma

e Damiano, Giuliano di Roma, Castrignano, Foggia,

The ACEA Group carried out investments totalling

160,903 thousand euros in the period, mainly due to the

following industrial areas:

• Networks:118,068thousandeuros,

• Environment:19,103thousandeuros,

• Energy:11,336thousandeuros,

• Corporate–ACEA:5,485thousandeuros,

• WaterservicesinTuscanyandUmbria:4,438thou-

sand euros,

• WaterservicesinLazioandCampania:2,157thou-

sand euros,

• Overseaswaterservices:194thousandeuros,

• Engineeringandservices:120thousandeuros.

The main investments were carried out by the follow-

ing companies in 2011:

• ACEADistribuzione:90,352thousandeurosspent

primarily on extension and renovation of its HV,

MV and LV networks, the construction of electricity

substations and LV connections; this investment is

essentially in line with the priorities set out in the

Regulator Plan and the operating needs arising dur-

ing the period. The above investment breaks down

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

December 2010),

- other assets: 2,000 thousand euros (523 thou-

sand euros at 31 December 2010),

- fixed assets in progress and prepayments: 3,134

thousand euros (1,598 thousand euros at 31 De-

cember 2010).

• ARSE: 26,251 thousand euros, which essentially

refers to the purchase of land and the launch of

new projects to install photovoltaic plants in the

Salentino area, particularly in the municipalities

of Alessano and Leverano, in the municipality of

Giuliano di Roma and in the Villa Latina and Com-

mercity plants for a nominal power of approxi-

mately 21.4 MWp,


ASI Latina, Caputo, Quattromini and Q8 Formia e

Valle Galeria, for a total of about 11 MWp of nomi-

nal power,

• the2,367thousandeurosimpairmentoftheboiler

oven of the Terni ENA waste-to-energy plant (shut

down for revamping) due to an update in the recov-

erability of its components,

• thewrite-downof5,969thousandeurosmadeby

ARIA as a result of the start of revamping works on

the I line of the San Vittore del Lazio WTE plant.

31.12.2010 Assets held for sale Investments / Acquisitions

Investment property 3,148 0 0

INVESTMENT PROPERTY 3,148 0 0


Increase/ (Decrease)Basis

of Consolidation

Amortisation/depreciation

Disposals and

Other movements

31.12.2011

Investment property 0 (61) (94) 2,993

INVESTMENT PROPERTY 3,148 (61) (94) 2,993


The tangible assets of companies whose consolidation

method has changed during the year are posted in the

Change in Basis of Consolidation section; in detail,

this refers to Acquedotto del Fiora, now consolidated

proportionately (8,180 thousand euros), ACEA Produzi-

one (114,003 thousand euros) and the other ACEA Ener-

gia Holding Group companies (167 thousand euros) and

the newly acquired companies Innovazione Sostenibilità

Ambientale, ISA (103 thousand euros) and Acea Servizi

Acque, ASA (90 thousand euros).

13. Investment property – 2,993 thousand eurosInvestment property primarily includes land and buildings not used in operations and held for rental. The decrease com-

pared 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:

14. Goodwill – 151,244 thousand eurosAt 31 December 2011 goodwill amounted to 151,244

thousand euros (19,718 thousand euros at 31 Decem-

ber 2010). The 131,525 thousand euros change from

the previous year is mainly due to (i) the goodwill values

posted following the closing of the termination of the

joint venture between ACEA and GdF-Suez, particularly

for ACEA Energia, totalling 37,162 thousand euros, in-

cluding the amount generated by the fair value meas-

urement of the quota already possessed and for ACEA

Produzione, amounting to 94,457 thousand euros.

Furthermore, as a result of the acquisition of 40.59% of

Acea Energia, this item increased by 7,619 thousand eu-

ros with reference to the goodwill posted to the subsidi-

ary.

The table below shows the individual CGUs per Indus-

trial Area and movements between 2010 and 2011.


Cash Flow method, by discounting operating cash flows

net of interest rates resulting from economic and finan-

cial projections based on assumptions in the budget plan

drafted by management.

For the discounting of these flows, an explicit time pe-

riod consistent with said forecasts was considered, i.e.

with the average useful life of the assets, or with the du-

ration of the concessions.

Use of the Discounted Cash Flow method provides for

the discounting of estimate future cash flows, using the

proper discount rate that reflects the current market as-

sessments of the time value of money and risks specific

to the asset (WACC).

The cash flow deriving from disposal at the end of the

useful life (Terminal Value), prudentially estimated at zero

or the sum of the estimate of the prospective value of

fixed assets, net working capital and provisions.

The table below shows some of the CGUs to which is

allocated a significant goodwill value compared with the

overall value of goodwill recorded in the balance sheet,

specifying the discount rates used and time period of

cash flows for each type of recoverable value consid-

ered.

IAS 36 provides that said balance sheet item, given that

it is an intangible asset with an indefinite useful life, is no

longer subject to amortisation, but subject to an analysis

of congruity on an annual basis or more frequently where

events occur or there is a change of circumstances that

may lead to impairments.

Goodwill emerging at the date of acquisition is allocated

to each of the cash-generating units expected to benefit

from the synergies deriving from the acquisition. Impair-

ment charges are identified via tests that assess the ca-

pacity of each unit to generate cash sufficient to recover

the portion of goodwill allocated to it.

IAS 36 envisages that the estimated recoverable amount

of goodwill recorded in the balance sheet is realised by

using the higher of the fair value less costs to sell and

value in use of a group of assets that identifies the com-

pany or group of companies to which it belongs: Cash

Generating Unit (or group of Cash Generating Units).

The fair value is determined, taking into account informa-

tion available to company management, on the basis of

the amount obtainable from the sale of an asset in an

arm’s length transaction between knowledgeable, will-

ing parties.

The value in use is determined using the Discounted

31.12.2010 Acquisitions Impairments/Revaluations

Other movements

Total

Energy: 1,831 131,781 6,839 25 140,476

Acea Produzione 0 94,457 0 0 94,457

Acea Energia 520 37,324 7,458 25 45,327

Acea Energia Holding 692 0 0 0 692

Acea8cento 619 0 (619) 0 0

Water: 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

Acque Blu 230 0 (230) 0 0

ASA 0 546 (546) 0 0

Laboratori 773 0 0 0 773

Environment: 8,921 1 (50) 0 8,872

ARIA 7,744 0 0 0 7,744

Aquaser Group 1,127 1 0 0 1,128

APICE 50 0 (50) 0 0

GOODWILL 19,718 131,782 4,554 (4,810) 151,244



service concession was transferred between the

same companies from 1 September 2002. The con-

cessions are amortised over their residual terms.

The value includes the sum of 600 thousand euros

relating to the right deriving from the 2009 take-

over of the integrated water service management

in the municipality of Formello, previously entrust-

ed to Crea Gestioni,

• 18,553thousandeurosrelatingtoGoriforthecon-

cession and recording of the costs of integrated

water service loan repayment plans relating to new

mortgages assessed by the Area Authority,

• 29,187thousandeurosrelatingtocompaniesoper-

ating in Tuscany, including Acquedotto del Fiora.

This item also includes goodwill arising from consoli-

dation representing goodwill attributable to integrated

water service contracts and the A.R.I.A. Group, above all

with regard to SAO (5,095 thousand euros).

Rights on infrastructure posted in the accounts

amount to 1,287,675 thousand euros (1,152,936 thou-

sand euros as at 31 December 2010) and include tan-

gible infrastructures used for the management of the

integrated water service. Values are broken down below

by Company:

• A•ACEA Ato2 861,572 thousand euros (737,740

thousand euros on 31 December 2010),

• ACEAAto5 47,273 thousand euros (42,929 thou-

sand euros on 31 December 2010),

• GORIfor57,726thousandeuros(57,322thousand

euros at 31 December 2010),


• Acquefor120,257thousandeuros(112,237thou-


• Publiacqua for 136,134 thousand euros (124,050


15. Concessions and Rights on Infrastructure – 1,553,946 thousand eurosAt 31 December 2011, this item amounted to 1,553,946

thousand euros (1,418,071 thousand euros at 31 Decem-

ber 2010) and includes the values of concessions received

from the municipalities (266,271 thousand euros at 31

December 2011) and, pursuant to IFRIC 12, the aggregate

amount of tangible infrastructures used for the manage-

ment of the water service (1,287,675 thousand euros).

The change of 135,875 thousand euros reflects opposing

factors:

• ltheitemdecreasedby49,707thousandeurosdue

to the reclassification of that amount of the right on

the infrastructure to the item Non-current receiv-

ables due to the definitive adoption of the financial

model to represent the public lighting contract as

set forth in the supplemental agreement signed be-

tween ACEA and Roma Capitale on 15 March 2011

and in force from the beginning of this year,

• theitemincreasedby28,471thousandeurosinre-

lation to the value of the concession and the right

oninfrastructureasat1January2011ofAcquedotto

del Fiora, due to the change in its consolidation cri-

teria.

The remaining part of the change is due to investments

of 206,330 thousand euros and depreciation and amorti-

sation of 77,480 thousand euros in the year.

More specifically, Concessions (amounting to 266,271

thousand euros) refer to:

• thevalueofthethirty-yearconcessionfromRoma

Capitale relating to water, treatment and sewerage

plants of the ATO2 (including goodwill) of 212,410

thousand euros. This fresh water and water treat-

ment concession was transferred from ACEA to

ACEA Ato2 at the end of 1999, whilst the sewerage

Operating area / CGU Amoun millions

Recoverable value

Weighted average cost

of capital *

Terminal value Cash flow period

Energy:

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

Environment:

ARIA 7.7 Value 6.1% Invested capital at year-end End of useful life of assets

* Post-tax discount rate


- Fixed assets under construction amount to

49,085 thousand euros and mainly refer to

transportation plants (abstraction pipes and

feeder mains totalling 32,692 thousand euros),

water treatment plants (12,223 thousand euros),

water and operating centres (2,600 thousand

euros) and new connections (1,801 thousand

euros) under construction.

• ACEAAto5for5,275thousandeuros,relatingtoex-

traordinary maintenance on buildings at the various

water centres and investments carried out on fresh

water and sewer pipes in the various municipalities,

• Acquefor17,605thousandeuros,referringtowork

on the distribution, sewer and water treatment net-

work,

• Publiacqua for 24,177 thousand euros relating to

new connections, extraordinary maintenance and

extensions and expansions of water pipelines, sew-

er networks and treatment plants,

• Gori for 2,379 thousandeuros forwork on exten-

sion and modernisation of fresh water and sewer

networks, and on water treatment plants in the area

served,


• UmbraAcquefor493thousandeuros.

The following tables shows changes in this item by geo-

graphical area.

• UmbraAcque for 29,662 thousand euros (28,950


Investments relating to said item amounted to 206,512

thousand euros, made by the following:

• ACEAAto2 for 144,458 thousand euros referring

primarily to:

- Land and Buildings for 1,150 thousand euros and

mainly refer to extraordinary maintenance and

construction of buildings at water centres (676

thousand euros), works belonging to sources

(449 thousand euros) and compensation for the

land needed to build aqueducts (25 thousand

euros),

- Plant and Machinery for 74,862 thousand euros,

relates mainly to the clean-up and enlargement

of water and sewer pipes in the various munici-

palities, and extraordinary maintenance at water

centres (44,764 thousand euros) and work on

treatment plants (29,692 thousand euros),

- Industrial and commercial equipment amount-

ing to 18,827 thousand euros, regarding new

connections, following the completion of work

carried out in the municipality of Rome (11,044

thousand euros) and the various municipalities

acquired (7,258 thousand euros), and the pur-

chase of equipment for water and operating

centres (524 thousand euros),

31.12.2010 Assets held for sale

Investments / Acquisitions

Lazio 1,061,651 0 149,371

Tuscany – Umbria 280,141 0 52,648

Campania 76,279 0 4,492

Overseas 0 0 0

CONCESSIONS AND RIGHTS ON INFRASTRUCTURE 1,418,071 0 206,512


Increase/ (Decrease) Basis

of Consolidation

Amortisation /depreciation


31.12.2011

Lazio 0 (40,133) (49,707) 1,121,182

Tuscany – Umbria 28,471 (26,883) 21,032 355,409

Campania 0 (3,416) 0 77,355

Overseas 0 0 0 0

CONCESSIONS AND RIGHTS ON INFRASTRUCTURE

28,471 (77,432) (28,675) 1,553,946



16. Other intangible assets – 115,067 thousand eurosThese 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 Assets held for sale

Investments / Acquisitions

Patent rights 29,829 0 19,859

Other intangible assets 17,771 0 13,501

Fixed assets in progress 19,750 0 12,457

OTHER INTANGIBLE ASSETS 67,350 0 45,817


Increase/ (Decrease) Basis

of Consolidation

Amortisation /depreciation


31.12.2011

Patent rights 4,366 (18,988) 15,586 50,651

Other intangible assets 28,872 (6,647) (10,189) 43,317

Fixed assets in progress 6,559 0 (17,658) 21,108

OTHER INTANGIBLE ASSETS 39,797 (25,635) (12,261) 115,067


Investments carried out in the period refer to (i) Acque

for 6,286 thousand euros, (ii) ACEA Ato2 for 3,476 thou-

sand euros, (iii) ACEA Distribuzione for 10,892 thousand

euros, (iv) Acquedotto del Fiora for 5,531 thousand euros,

(v) Acea Energia for 9,456 thousand euros, (vi) Acea Ener-

gia Holding for 1,319 thousand euros (vii) ARIA for 1,052

thousand euros and (viii) the Parent Company for 4,978

thousand euros.

ACEA Ato2’s investments relate mainly to costs for stud-

ies and research on water resources, drinking water and

sewer networks and for the user geolocalisation project.

Intangible assets of ACEA Distribuzione include the costs

incurred for the re-engineering project for information

and commercial systems in the distribution area (13,509

thousand euros) and the standardisation of systems

used in meter reading (3,644 thousand euros).

The Parent Company’s investments mainly concern im-

provements made to the utilities system, the launch of

additional IT projects, as well as the server virtualisation

project.


17. Investments in unconsolidated subsidiaries and associates – 14,795 thousand eurosThe 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

Movements in 2011:

acquisitions 195 (18,514) (18,319)

revaluations 1,203 1,203

impairments (154) (154)

Total movements in 2011 195 1,203 (154) (18,514) (17,270)

VALUES AT 31 DECEMBER 2011 162,812 44,466 (97,593) (94,890) 14,795


The breakdown of movements during the period is as

follows:

• Write-downs: these relate to the measurement,

using the equity method, of investments in So.ge.a,

Azga Nord and Eur Power,

• Revaluations: these refer essentially to the valu-

ation according to the equity method of the invest-

ments in Agua de San Pedro (854 thousand euros),

Umbria2 (125 thousand euros), Umbria Distribuzi-

one Gas (101 thousand euros), Sienergia (76 thou-

sand euros) and in GEAL (28 thousand euros),

• Acquisitions: these relate to entries of invest-

ments held by Acquedotto del Fiora (195 thousand

euros).

18. Other investments –4,686 thousand eurosThis item, totalling 4,685 thousand euros (3,650 thousand

euros at the end of the previous year), consists of equity

interests that do not qualify as subsidiaries, associates

or joint ventures. These investments are accounted for

at fair value.

19. Deferred tax assets – 353,648 thousand eurosThese amounted to 353,648 thousand euros at 31 De-

cember 2011 (267,520 thousand euros at 31 December

2010) and relate essentially to (i) the temporary differ-

ences between the carrying amounts accounted for in

the financial statements of subsidiaries, following trans-

fers of business units, and the corresponding amounts

accounted for in the consolidated financial statements,

amounting to 60,022 thousand euros (67,067 thousand

euros at 31 December 2010), (ii) lower tax repayments

of 130,118 thousand euros (80,962 thousand euros at 31

December 2010), (iii) provisions for tax liabilities of 46,854


ber 2010), (iv) provision for write-downs of receivables

amounting to 56,713 thousand euros (40,976 thousand

euros at 31 December 2010). These provisions include

rate adjustments (16,889 thousand euros) for companies

that are or will be subject to the IRES surcharge from the

start of 2011 or in later years.

Movements in this item are as follows.


20. Non-current financial assets – 19,939 thousand eurosThese amounted to 19,939 thousand euros (7,553 thou-

sand euros at 31 December 2010), marking a decrease of


More specifically, this item is composed as follows:

• financialreceivablesof18,019thousandeurosdue

from Roma Capitale relating to plant upgrades in

terms of safety and legislation and new construc-

tions as set out in the addendum to the Public

Lighting contract, carried out in 2011. This receiv-

The item “Other” includes deferred taxation concerning

connection fees.

The Group recognises deferred tax assets based on earn-

ings forecasts in the Group’s business plans, which con-

firm the probability that sufficient future taxable profit

will be available against which all of the assets can be

recovered.

2010 2011 movements

Balance Increase/ (Decrease)

Basis of Consolidation

Adjustments/Reclassifications

Movements in shareholders’

equity

Uses Provisions for IRES/IRAP

Balance

Prepaid taxes

Tax losses 251 0 (116) 0 (26) 3,187 3,296

Fees to members of the Board of Directors

36 95 880 0 (86) 142 1,066

Provisions for liabilities and charges

32,320 3,943 (2,543) 0 (12,265) 25,399 46,854

Impairments of receivables and investments

40,976 13,295 3,147 0 (12,000) 11,296 56,713

Amortisation/depreciation 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

Fair value of commodities and other financial instruments

9,128 53 164 5,965 (130) 137 15,316

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

Deferred taxes

Amortisation/depreciation 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

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

NET TOTAL 190,110 22,124 (4,533) 5,957 (31,853) 73,018 254,823



As at 31 December 2010, the item included the receiva-

bles from proportionately consolidated subsidiaries, such

as the interest bearing loans granted to Voghera Energia

(1,531 thousand euros) and the receivables generated by

loans granted to AceaElectrabel Trading (1,000 thousand

euros), collected by the parent company during the termi-

nation of the joint venture as set forth in the Framework

Agreement signed with GDF-Suez, as well as receivables

from AceaElectrabel Produzione referring to shares of EIB

loans taken out by ACEA, now transferred to Acea Pro-

duzione, consolidated on a line-by-line basis.

able relates to the long-term portion deriving from

application of the financial method as per IFRIC 12

regarding concession arrangements,

• Receivablesfornon-currentconcessionfeesdueto

the State amounting to 997 thousand euros, relat-

ing to the return of expenses paid as a result of Law

266/05, subsequently supplemented by Supreme

Court ruling 1/2008,

• VATcreditsof909thousandeurosforwhichare-

fund has been requested.

21. Other non-current assets – 63,189 thousand eurosAt 31 December 2011, there were composed as follows:


Amounts due from the State 170 138 32

Advances and deposits 1,133 702 431

Other 61,885 25,371 36,514

OTHER NON-CURRENT ASSETS 63,189 26,211 36,978


Amounts due from the State

These amounts due totalled 170 thousand euros and re-

gard the advance of withholding taxes paid at a rate of

3.89% on staff termination benefits.

These receivables were used to offset withholding tax-

es due on staff termination benefits and advances dis-

bursed at 1 January 2000, as allowed by the relevant

legislation. Moreover, such amounts were utilised to pay

capital gains tax on revaluations of staff termination ben-

efits introduced by the 2000 Finance Act.

The receivables in question are subject to revaluations at

the end of each year, with any revaluations recognised in

the income statement as finance income.

Advances and deposits

These items total 1,133 thousand euros and regard guar-

antee deposits and advances to staff.

Other

This item totals 61,885 thousand euros (25,371 thousand

euros at 31 December 2010). The item consists of 7,074

thousand euros in prepayments of costs incurred by

Group companies (1,759 thousand euros by ARSE, 1,516

thousand euros by the Acque Group) deriving from the

management of White Certificates and the Metro and

Cemetery Lighting contracts, relating to revenues that

will be collected in future years, and 3,536 thousand eu-

ros relating to Nuove Acque for deferrals relating to con-

cession fees paid early.

That item also includes the long-term receivables gener-

ated by the public lighting service agreement in the city

of Rome amounting to 53,723 thousand euros (17,925

thousand euros as at 31 December 2010), which repre-

sents the overall investments made until 31 December

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 repre-

sents the reclassification of rights on infrastructure.


22. Current assets - 2,316,514 thousand eurosThey total 2,316,514 thousand euros (1,925,750 thousand euros at 31 December 2010) and are broken down as follows:


Inventories 66,106 58,039 8,066

Trade receivables:

Amounts due from customers 1,304,691 991,265 313,426

Amounts due from the parent company 160,060 113,572 46,488

Amounts due from subsidiaries and associates 45,261 39,973 5,288

TOTAL TRADE RECEIVABLES 1,510,012 1,144,811 365,201

Other receivables and current assets 189,518 77,337 112,181

Current financial assets 172,768 321,384 (148,616)

Current tax assets 57,089 42,437 14,652

Cash and cash equivalents 321,022 281,742 39,280

CURRENT ASSETS 2,316,514 1,925,750 390,764


Inventories

These totalled 66,106 thousand euros (up 8,046 thou-

sand euros compared to 31 December 2010) and are

broken down into the following industrial areas:

• Networks:47,376thousandeuros(up5,711thou-

sand euros compared to 31 December 2010),

• Energy:2,926thousandeuros(up2,210thousand

euros compared to the end of the previous year),

• Water: 12,998 thousand euros (up 234 thousand

euros compared to 31 December 2010), including

Overseas for 1,831 thousand euros,

• Environment:2,806thousandeuros(essentiallyun-

changed compared to 31 December 2010).

The increase is determined by: (i) ARSE for contract

works in progress relating to awards obtained from third

parties for the construction of photovoltaic plants in

the Cassano, Villa Piana, Orsomarso and Scalea 1 sites,

incomplete at 31 December 2011 (up 7,406 thousand

euros compared to 31 December 2010), (ii) the change

in the basis of consolidation concerning, in particular,

the warehouse stocks of Acea Produzione which, as a

result of the termination of the joint venture, increased

by 1,693 thousand euros and (iii) Acquedotto del Fiora

which, due to proportionate consolidation, contributed

216 thousand euros to the increase in said item.

Trade receivables

These amounted to 1,510,012 thousand euros, marking

an increase of 365,201 thousand euros on the previous

year, when the figure was 1,144,811 thousand euros.

This item was affected in particular by the change in the

basis of consolidation, with reference to the amend-

ment to the consolidation criteria for electricity produc-

tion and sales companies and Acquedotto del Fiora.

31.12.2011 31.12.2010 Absolute Increase/

(Decrease)


Amounts due from customers 1,304,691 991,265 313,426 31.6%

Amounts due from Roma Capitale 160,060 113,572 46,488 40.9%

Amounts due from subsidiaries and associates 45,261 39,973 5,288 13.2%

TOTAL TRADE RECEIVABLES 1,510,012 1,144,811 365,201 31.9%



The growth of 313,426 thousand euros reported since 31

December 2010, is due to the change in the basis of con-

solidation as well as the increase in utility and non-utility

receivables in all industrial areas; the changes specifically

regarded:

• theEnergyAreareportedanincreaseof313,123thou-

sand euros, since the amount of receivables increased

from 299,776 thousand euros as at 31 December 2010

to 612,899 thousand euros at the end of 2011, due to

(i) the change in the basis of consolidation amounting

to 184,109 thousand euros; comparing the values on a

like-for-like basis, the Energy Area reports an increase

Amounts due from customers


End users for bills issued 626,204 409,706 216,498

End users for bills to be issued 392,621 399,386 (6,765)

Total receivables due from end users 1,018,825 809,092 209,733

Receivables from other customers 256,890 153,211 103,679

Disputed receivables 28,976 28,962 14

TOTAL RECEIVABLES 1,304,691 991,265 313,426


of 130,507 thousand euros, including 106,406 thou-

sand euros from ACEA Energia,

• theWaterArearecordedareductionof46,946thou-

sand euros, due entirely to ACEA Ato5, as better

explained later in the document, net of the contri-

bution from Acquedotto del Fiora (11,415 thousand

euros) due to a change in the consolidation criterion,

• theNetworksArea+7,794thousandeuros,

• theEnvironmentArea+27,379thousandeuros,

• theParentCompany+12,075thousandeuros.

The table below summarises the changes by industrial

area:

Industrial Area 31/12/2011 31/12/2010 Increase/ (Decrease)

31/12/2010 Pro forma


Change in consolidation

ACEA 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 60,253 32,874 27,379 32,874 27,379 0

TOTAL 1,304,691 991,265 313,426 1,157,865 146,826 166,600

Networks industrial area receivables

These receivables totalled 101,251 thousand euros (up

7,794 thousand euros on the previous year). These include:

• 27,928thousandeurosduefromendusers(down

2,664 thousand euros on the previous year). The

item includes receivables generated by transport

to free market customers. The overall change in

receivables due from users is due to the decrease

in receivables for bills issued for 34,207 thousand

euro, partially offset by the increase in bills to be

issued (13,993 thousand euros). It should be noted

that in December provision was made for the writ-

ing off of prescribed receivables, past due before

31 December 2005; write-offs amounted to a to-

tal of 19,491 thousand euros, including receivables

due from end users of 16,341 thousand euros.

• 73,330 thousandeuros fromothercustomers (up

10,466 thousand euros compared to 31 December

2010). This item includes receivables due to ARSE

(65,219 thousand euros at 31 December 2011) de-


securitisation contract signed in 2009, receivables due

from private entities amounting to 536,505 thousand

euros and entered into spot transfer operations which

involved the transfer of receivables due from Public Ad-

ministration amounting to 159,272 thousand euros.

Water industrial area receivables

This item amounts to a total of 491,387 thousand euros,

a decrease of 46,946 compared to 31 December 2010.

The change was generated by the following companies:

• ACEA Ato2 (down 12,451 thousand euros). The

company recorded total receivables of 209,030

thousand euros, of which 190,911 thousand euros

(down 15,374 thousand euros) due from end us-

ers and 18,119 thousand euros (up 2,923 thousand

euros) due from other customers. The decrease

represents the combined effect of the following

phenomena:

- the increase in receivables for bills issued

(27,511 thousand euros) is due to the rise in

turnover which also concerned pre-2011 fees,

allowing a significant reduction receivables for

bills to be issued. Provision was made for the

writing off of some receivables (7,112 thousand

euros), whose prospects for recovery are es-

sentially zero,

- decrease in receivables for bills to be issued

(44,911 thousand euros), owing to the reasons

given in the previous point. Revenues still not

billed pertaining to 2011 total 17,058 thousand

euros;

- the provision for impairment of receivables de-

creased by 1,008 thousand euros, standing at

18,994 thousand euros (20,002 thousand euros

at 31 December 2010).

During 2011, ACEA Ato2 transferred, as part of the

securitisation contract signed in 2009, receivables

due from private entities amounting to 249,833

thousand euros and entered into spot transfer

operations which involved the transfer of receiva-

bles due from Public Administration amounting to


• AcquedottodelFiora(up11,415thousandeuros):

the increase refers entirely to the change in the

riving essentially from contracts linked to air qual-

ity, photovoltaic power, as well as to the disposal of

Energy Efficiency Bonds – EEB (white certificates).

The increase is mainly due to the marketing and

commissioning of PV modules.

The provision for impairment of receivables for this area

totals 5,053 thousand euros, down by 16,512 thousand

euros, due mainly to ACEA Distribuzione as a result of

use for the above write-offs.

During the year, four extraordinary, non-recourse factor-

ing of amounts due from wholesalers were concluded,

for a total amount of 27,866 thousand euros. An amount

of 19,628 thousand euros was also transferred as part

of the contractual extension, completed in December,

of the securitisation entered into at the end of 2009.

Energy industrial area receivables

These receivables are generated by sales of energy to

customers in the free market and the protected catego-

ries market, as well as to gas customers and amount

to 612,899 thousand euros. They recorded an increase

of 313,123 thousand euros over the previous year: the

change is essentially due to Acea Energia (up 287,400

thousand euros), also as a result of the change in the

percentage held by that company which involves an

increase of 182,487 thousand euros (on a like-for-like

basis, the company’s receivables would have increased

by 106,406 thousand euros). The contribution to receiv-

ables due to ACEA Produzione (9,699 thousand euros

as at 31 December 2011) should be considered in the

change in the basis of consolidation. This was gener-

ated by the non-proportionate spin-off of the former as-

sociate AceaElectrabel Produzione.

Acea Energia wrote off receivables totalling 16,700

thousand euros and use the provision for the impair-

ment of receivables for the same amount, given fully

written down assets.

The provision for impairment of receivables at 31 De-

cember 2011 amounts to 84,898 thousand euros, up

by 29,820 thousand euros compared to 31 December

2011, net of uses. This increase was caused by alloca-

tions for the year and the change in the basis of con-

solidation.

During 2011, ACEA Energia transferred, as part of the


• The Publiacqua Group (down 11,233 thousand

euros). At the end of the year, these receivables

amounted to 27,244 thousand euros (including

20,832 thousand euros due from end users), com-

pared to 38,477 thousand euros at 31 December

2010,

• AceaGoriServizi(up1,275thousandeuros).Asat

31 December 2011, they totalled 7,420 thousand

euros from third-party clients, compared to 6,145

thousand euros at the end of last year.

This area also includes the receivables of the companies

Gesesa, Lunigiana and Crea Gestioni, which equalled

18,371 thousand euros at the end of the period (up 1,262

thousand euros), and the receivables from the Overseas

Water Services area, totalling 6,160 thousand euros

(4,289 thousand euros at 31 December 2010), which re-

corded an increase of 1,871 thousand euros, chiefly at-

tributable to Aguazul Bogotà.

The balance of receivables due from customers in the

Water Industrial area includes 439,287 thousand euros

in amounts due from end users and 52,150 thousand eu-

ros due from other customers. The provision for the im-

pairment of receivables for this area amounts to 78,145

thousand euros.

Environment area receivables

These amounted to 60,253 thousand euros, an increase

of 27,379 thousand euros compared to 31 December

2010, essentially as a result of the growth in ARIA Group

receivables (up 27,290 thousand euros), basically due

to the sale of electricity produced by the II and III lines

of the San Vittore WTE plant to GSE and the transfer of

RDF to the disposal treatment plant. The CIP6 contract

which regulates the withdrawal of electricity of the two

lines is being finalised.

The contribution to receivables of the newly acquired

Società Innovazione Sostenibilità Ambientale should

also be pointed out (20 thousand euros).

ACEA receivables

They equalled 38,901 thousand euros (up 12,075 thou-

sand euros compared to the end of 2010). The increase

was caused by the non-recourse acquisition of the re-

ceivables due from the company Manutenzione Illumi-

basis of consolidation,

• Atyearend,GORI’sreceivablesamountto107,982

thousand euros, of which 60,221 thousand euros

to be issued, with an increase of 7,658 thousand

euros, of which 7,953 thousand euros for invoices

to be issued. This change reported by the Company

is significantly caused by the problems linked with

corrective tariff measure authorisation timescales,

which create tariff adjustments for the differences

between the Plan actual tariff and the average tar-

iff, or the temporary one, that has been assigned

whilst awaiting the review of the Area Plan. The

tariff adjustments, included in the amount of bills

to be issued, amount to 54.5 million euros,

• ACEA Ato5 (down 49,713 thousand euros). Re-

ceivables amount to 62,716 thousand euros,

with 57,788 thousand euros due from end users

(107,996 thousand euros at the end of the previ-

ous year). Invoices to be issued to users at the

end of the year amount to 36,640 thousand euros,

down by 41,172 thousand euros. The change in re-

ceivables is due to the combined effect of (i) the re-

duction in receivables for bills issued (down 5,222

thousand euros) due to recovery actions carried

out in the year, (ii) the decrease in receivables for

bills to be issued (41,172 thousand euros) mainly

as a result of the reclassification to the item Other

receivables of an amount of 59,875 thousand eu-

ros relating to the variation between real revenues

from billing and guarantee revenues with respect

to the original area plan for the 2006-2011 period,

assessed by the Commissioner for deeds in the

provision dated March 2012. Further information is

provided in the section “Update on major disputes

and litigation”,

• TheAcqueGroup(up2,590thousandeuros).At31

December 2011, these receivables amounted to

25,539 thousand euros (including 21,943 thousand

euros due from end users), compared to 22,949

thousand euros at 31 December 2011,

• UmbraAcque (up 1,363 thousand euros).At the

end of the period, receivables amounted to 12,060

thousand euros, compared to 10,698 thousand eu-

ros at 31 December 2010,


nazione S.p.A. to Acea Energia, for a nominal value of

6,536 thousand euros and the remaining 5,539 thou-

sand euros, relating to normal operations carried out in

the year, with particular reference to the public lighting

service in Naples.

As at 31 December 2011, disputed receivables, includ-

ing the provisions for impairment of receivables, came

to 27,013 thousand euros, which is in line with the end

of 2010.

The Group’s provision for impairment of receivables

amounted to 193,884 thousand euros (compared to

173,192 thousand euros at 31 December 2010) and the

amount allocated stood at 55,059 thousand euros.

Provisions were made for risks on receivables due from

end users and other customers.

Provisions for the impairment of receivables are based

on analytical assessments, supplemented by assess-

ments based on historical analyses of amounts due

from end users and customers broken down according

to the default period, the type of action undertaken to

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.


RECEIVABLES 292,737 212,084 80,653

PAYABLES (including dividends)

148,785 98,416 50,369

BALANCE 143,952 113,668 30,284


Receivables due from the parent company Roma

Capitale

Trade receivables due from Roma Capitale totalled

160,059 thousand euros at 31 December 2011 (113,572


The total amount of receivables, including financial re-

ceivables resulting from the public lighting contract,

both short and medium/long-term, is equal to 292,737

thousand euros (212,084 thousand euros in the previous

year).

The following table presents an analysis of the ACEA

Group’s relations with Roma Capitale regarding both

receivables and payables, including those of a financial

nature.

The individual Group companies report the following net balances:

Parent Company: up 131,554 thousand euros (up 28,329 thousand euros compared to 2010)

ACEA Distribuzione: - 4,309 thousand euros (up 782 thousand euros compared to 2010)

ACEA Ato2: - 23,049 thousand euros (up 7,811 thousand euros compared to 2010)

ACEA Energia: - 14,960 thousand euros (up 952 thousand euros compared to 2010).

The following tables also provide a breakdown of Group receivables/payables due from/to Roma Capitale.


Amounts due from Roma Capitale 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)

Total services billed 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 17,421 17,335 86

Advances 2,101 0 2,101

New regulations for street cables 1,449 2,235 (786)

Total trade receivables 160,059 113,572 46,487

Financial receivables for the public lighting service 114,659 98,512 16,147

TOTAL RECEIVABLES DUE WITHIN ONE YEAR (A) 274,718 212,084 62,634

Amounts due to Roma Capitale 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

Other 1,488 1,494 (6)

New regulations for street cables 822 1,177 (355)

Charges for the occupation of public space 411 411 0

Charges for rental of company offices 0 0 0

Payables in concession fees 24,106 15,728 8,378

Total trade payables 112,280 75,688 36,592

Financial liabilities (including dividends) 15,989 2,213 13,777

Total payables due within one year (B) 128,269 77,900 50,369

TOTAL (A) - (B) 146,449 134,184 12,265

Medium/long-term loans and receivables for Public Lighting 18,019 0 18,019

Vatican City disputed amounts (20,516) (20,516) 0

NET BALANCE 143,952 113,668 30,284


Trade receivables due from subsidiaries and associates

During the year, 97,397 thousand euros was collected

through administrative offsets.

Collected receivables refer to (i) ACEA for 48,875 thou-

sand euros; (ii) Acea Energia for 20,726 thousand euros

(iii) ACEA Ato2 for 27,757 thousand euros and (iv) ACEA

Distribuzione for 38 thousand euros.

With regard to the type of receivable, please note that

collections refer to utilities for 48,175 thousand euros

(of which 20,726 thousand euros for electricity and

27,449 thousand euros for water), as well as to works

and services for 49,222 thousand euros.

With regard to the type of payables that have been set

off, the following is noted:

• euro14.678milariguardanoaddizionalielettriche

14,678 thousand euros regards electricity surtax-

es due from Acea Energia,

• 15,121 thousand euros for the concession fees

due by ACEA Ato2,

• 50,960 thousand euros relating to dividends of

ACEA and ACEA Ato2 from 2010.

• 16,638 thousandeuros for theadvanceon2011

dividends distributed by ACEA.

Please note that the receivables and payables set forth

in the table also include those related to the Adminis-

tration established by the Central Government, which

are currently being disseminated to Roma Capitale of-

fices. These receivables amounted to 82.4 million euros

and payables are estimated at 29.7 million euros.

For further information on the contracts signed be-

tween the companies of the ACEA Group and Roma

Capitale, as well as on billing methods and collection/

payment terms - including relationships with the Com-

panies of the Roma Capitale Group – reference is made

to the section “Related party transactions”.

At the end of the year, there was a significant increase in

both receivables (62,634 thousand euros) and payables

(50,369 thousand euros) falling due within one year, the

effect of which is partly due to the line-by-line consolida-

tion of ACEA Energia. On a like-for-like basis, the changes

on the net exposure toward Roma Capitale would be +

36,014 thousand euros, with + 69,865 thousand euros

in credit exposure and + 33,852 thousand euros in debt

exposure.

The change in receivables for amounts billed (up 45,086

thousand euros compared to the previous year) is attrib-

utable to:

(i) higher utility receivables totalling 34,341 thousand

euros, including 12,425 thousand euros of ACEA

Ato2; as regards Acea Energia, the increase regis-

tered came to 21,916 thousand euros which falls to

11,077 thousand euros on a like-for-like basis,

(ii) the increase in receivables for works and services,

with special reference to new public lighting plants

(up 6,432 thousand euros), works for the comple-

tion of the hydro-sanitary network and works for

the moving of pipelines and utilities installation

amounting to 1,982 thousand euros and receiva-

bles for the fountain maintenance contract of 1,460

thousand euros. The amount of bills to be issued

came out at 17,421 thousand euros, marking an in-

crease of 86 thousand euros.

It should be underlined that financial receivables

amount to 132,678 thousand euros (including 18,019

thousand euros falling due after one year), marking an

increase of 34,166 thousand euros: these were gener-

ated by the management of the public lighting service

aspartoftheservicecontractinforcefrom1January

2011. Default interest of around 7 million euros is also

included in financial receivables.

31.12.2011 31.12.2010 Absolute Increase/

(Decrease)


Amounts due from associates 7,385 7,492 (107) -1.4%

Amounts due from subsidiaries 37,876 32,481 5,395 16.6%

TOTAL AMOUNTS DUE FROM SUBSIDIARIES AND ASSOCIATES

45,261 39,973 5,288 13.2%




They amount to 37,876 thousand euros (32,481 thousand

euros as at 31 December 2010), an increase of 5,395 thou-

sand euros, and refer to receivables due from companies

consolidated proportionately; in this regard, the change

was affected by the line-by-line consolidation of Acea En-

ergia and the subsequent change in the percentage of

consolidation of its subsidiaries. Specifically, the item es-

sentially includes the receivables posted (i) by ACEA for

1,111 thousand euros (down 3,694 thousand euros), (ii) by

ACEA Energia from its subsidiaries for 32,329 thousand

euros (up 8,399 thousand euros) and (iii) by Sarnese Ve-

suviano from GORI for 4,347 thousand euros (up 1,027

thousand euros).


These receivables totalled 7,385 thousand euros (7,492

thousand euros at 31 December 2010) and primarily

refer to amounts due from Marco Polo (391 thousand

euros, down 519 thousand euros), Agua de San Pedro

(1,252 thousand euros, down 339 thousand euros) and

Tirana Acque, in liquidation (155 thousand euros, down

100 thousand euros).

The remaining balance is made up of receivables due

from the associates of Crea Gestioni for 1,667 thousand

euros (down 276 thousand euros) and receivables due

from SAO amounting to 308 thousand euros (up 73 thou-

sand euros).

Other current receivables and assets

31.12.2011 31.12.2010 Absolute increase/ (Decrease)


Amounts due from others 179,338 66,594 112,744 169.3%

Accrued income and prepayments 9,470 10,743 (1,273) -11.8%

Receivables deriving from commodity contracts 710 0 710 100.0%

TOTAL OTHER RECEIVABLES AND CURRENT ASSETS

189,518 77,337 112,180 145.1%


Amounts due from others

These totalled 179,338 thousand euros and the main

items that make up this balance are as follows:

• 58,221 thousand euros for ACEA Ato5 refer to

tariff adjustments - classified under amounts due

from others in 2010 - relating to the variation be-

tween real revenues from billing and those “guar-

anteed” with respect to the “Original area plan”

for the 2006 - 2011 period. These receivables were

definitively quantified by the provision of the Com-

missioner for deeds communicated to ACEA Ato5

on 9 March 2012: during the ordinary and extraor-

dinary review of the area plan, methods of offset-

ting will also be defined and 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 ordinary review activities. The receivables

in question were discounted to take into account

collection times: the related expenses amounted

to 1,833 thousand euros,

• 22,299thousandeurosatACEADistribuzionefor

advances to suppliers composed mainly (21,700

thousand euros) of the amount paid to GSE for the

A3 component of August 2011; this advance was

recovered on expiry of the month of February,

• 3,645thousandeurosrepresentsACEADistribuzi-

one’s amounts due from the Electricity sector

equalisation fund and relating to the specific

equalisation of 2009 and 2010. It should be noted

that during the year, receivables were transferred

forequalisationrelationtothe1January-22De-

cember period for a total of 38,504 thousand eu-

ros. A total of 80% of this amount was transferred

(30,803 thousand euros) under non-recourse fac-

toring, and the remaining 20% (7,701 thousand


The increase of 112,744 thousand euros over 2010 is

mainly attributable to the change in the basis of consoli-

dation and recognition of ACEA Ato5’s receivables men-

tioned previously, the advance on the A3 component

paid by ACEA Distribuzione to GSE and the advance paid

by ACEA for the purchase of the headquarters.

Accrued income and prepayments


sand euros at 31 December 2010) and refer mainly to

rent on public land, rentals and insurance.

The decrease (down 1,273 thousand euros) is a result

of the reduction at Nuove Acque of 3,325 thousand eu-

ros, partially offset by Acquedotto del Fiora for + 1,153

thousand euros (change in basis of consolidation) and

by Acea Energia Holding and its subsidiaries for a total of


Receivables deriving from commodity contracts

The fair value of commodity contracts as at 31 Decem-

ber 2011 equalled 710 thousand euros and refers to the

company ACEA Energia Holding (561 thousand euros)

and Acea Energia (148 thousand euros).

For more information please see the section “Additional

disclosures on financial instruments and risk manage-

ment policies”.

Current tax assets


sand euros at 31 December 2010).

The item essentially includes VAT credits amounting to

26,803 thousand euros for which rebates have not been

claimed, IRES (corporate income tax) credits totalling

13,087 thousand euros and IRAP (regional income tax)

credits of 3,114 thousand euros respectively due from

the Tax Authorities. The change is due mainly to IRES

relating to the tax consolidation of ACEA, which closed

2011 with a credit position.

euros) under recourse factoring. The cost of trans-

ferring 2011 receivables came to 1,696 thousand

euro,

• 13,422 thousand euros for ACEA Distribuzione

represents the share of receivables relating to

company-specific equalisation for the years 2010

and 2011 which were transferred to Unicredit Fac-

toring under recourse factoring.

• 10,250thousandeurosrecordedbyACEAin2010

resulting from the disposal of the property that

housed the company’s car fleet. The amount rep-

resents the price of the aforementioned disposal

that the assignee would have had to pay by 31

December 2011: legal action was launched for the

recovery of the credit,

• 11,000millioneurospaidbyACEAtoBeniStabili

as an account advance for the price for the pur-

chase of the company headquarters, which took

placeinJanuary2012,

• 3,294 thousandeuros forACEADistribuzionere-

lating to receivables due from the Public Adminis-

tration seized by Gerit Spa as a result of proceed-

ings at the settlement phase,

• 3,940thousandeurosforACEAforamountsdue

from Equitalia Gerit relating to collections deriv-

ing from the seizure of the assets of public admin-

istrations pursuant to art. 48 bis of Presidential

Decree 602 of 29 September 1973. These collec-

tions have been used to pay a tax payment notice

concerning lower alleged VAT payments charged

to ACEA’s VAT consolidation; an appeal was filed

against said payment notice before the Provincial

Tax Commission of Rome, which is still pending,

given that a technical appraisal is being conducted

by a CTU (court-appointed expert). ACEA believes

there is a good chance of obtaining the reimburse-

ment of the assets seized;

• 8,490thousandeurosrelatingtoamountsdueto

the subsidiary Gori, including 7,050 thousand eu-

ros 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.


Loans and Receivables due from the parent com-

pany

They amount to 114,659 thousand euros (98,512 thou-

sand euros at 31 December 2010) and represent the un-

conditional right to receive cash flows, in line with the

methods and timing provided for in the service contract

for management of the public lighting service. Further

details are provided in the comments on the item “Re-

ceivables due from parent company Roma Capitale”.

Loans and receivables due from subsidiaries and

associates


sand euros at 31 December 2010). More specifically, they

are broken down as follows:

• 1,258 thousand euros relating to amounts owed

in dividends from companies accounted for under

proportionate consolidation,

• 2,500 thousand euros recorded in ACEA and re-

lated to the loan granted to Sienergia in November

2010 in order to face financial needs linked to some

investment projects, among which the construc-

tion of PV plants; interest accrues on that item at

the Euribor 3-month rate increased by 1.5% yearly,

• 2,363thousandeurosduefromUmbriadueandre-

corded by Crea Gestioni.

The change from the previous year is a result of the

change in the basis of consolidation. As at 31 Decem-

ber 2010, the item included centralised treasury receiv-

ables due from ACEA Energia, now consolidated on a

line-by-line basis and the parent company’s receivables

for EIB loans taken out and for interest bearing loans

issued to the former subsidiary AceaElectrabel Produzi-

one. On the basis of the Framework Agreement signed

Current financial assets

31.12.2011 31.12.2010 Absolute increase/ (Decrease)


Loans and Receivables due from the parent company 114,659 98,512 16,147 16.4%

Loans and receivables due from subsidiaries and associates 9,073 175,800 (166,807) -94.8%

Loans and receivables due from third parties 49,036 46,992 2,044 4.3%

TOTAL CURRENT FINANCIAL ASSETS 172,768 321,384 (148,616) -46.2%


with GDF-Suez, ACEA recognised a portion of the lines

of credit due to GDF Energia Italia, since they were bor-

rowings of Acea Produzione.

Loans and receivables due from third parties

These receivables totalled 49,036 thousand euros


mainly broken down as follows:

• 8,735thousandeurosduefromENELtoACEADis-

tribuzione representing Inps contributions paid by

ACEA Distribuzione for the years 2001 and 2002

pursuant to article 41, paragraph 2.A of Law 488

of 23 December 1999. The company believes that

such amounts regard obligations dating back to be-

fore the date of effectiveness of the purchase of

ENEL’sformerbusinessunit (1July2001)andhas

therefore requested payment from ENEL Distribuzi-

one;

• 10,700 thousand euros payable toACEAAto5 by

the Area Authority is to be paid in three annual in-

stalments by 31 December of each year, with the

first instalment due before 31 December 2007. The

deed of settlement signed by the company and

the Area Authority concerned the resolution of the

problem relating to higher operating costs incurred

in the 2003-2005 three-year period: recognition of

higher costs net of sums relating to (i) the tariff por-

tion - corresponding to amortisation/depreciation

and return on inflated invested capital - relating to

the investments set out in the Area Plan and not

carried out in the first three-year period (ii) the por-

tion of inflation accrued on concession fees and (iii)

fines for the non-fulfilment of contractual obliga-

tions in the three-year period.


The increase of 39,280 thousand euros is composed as

follows:

• +32,819thousandeurosforACEAforthebalance

of bank and post office current accounts held with

various institutions, including the Italian Postal Ser-

vice. In addition, it should be noted that the amount

of 164,500 thousand euros was used, relating to

cash deposits opened during 2010,

• + 7,979 thousandeurosofwater service compa-

nies, particularly owing to the different method of

consolidation of Acquedotto del Fiora (up 3,987

thousand euros), the reduction in payments to sup-

pliers at Publiacqua (up 3,907 thousand euros), the

collection of dividends relating to 2010 from the

company Acque SpA (up 2,019 thousand euros),

overseas companies (up 1,947 thousand euros),

partially offset by the reduction in available funds

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

the extension of the centralised treasury service to

said companies.

• 14,678 thousand euros to ACEA for receivables

generated by the temporary minimum equalisation

of the transaction terminating the joint venture

with GDF-Suez

• 6,000thousandeurosduefromtheassigneeofthe

Laurentina area to ACEA,

• 5,598 thousand euros concerning the receivables

resulting from the management of the public light-

ing service (5,544 thousand euros at 31 December

2010), representing the unconditional right to re-

ceive cash flows, consistently with the methods and

timing provided for in the same service contract,

• 1,584thousandeurosatCreaGestionirelatingto

financial receivables deriving from the sale of in-

vestment of SOGEAS.

It should be noted that an amount of 1,761 thousand

euros recorded in the 2010 consolidated financial state-

ments as a residual amount of the cash collateral estab-

lished for the well-known IPSE operation was collected in

2011 and so the guarantee given was extinguished.

Cash and cash equivalents

This item amounted to 321,022 thousand euros (281,742


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 in-

stitutions 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:

31.12.2011 31.12.2010 (b) Variazioni (a)-(b)

Networks 282 21 261

Energy 401 535 (134)

Water 34,507 26,527 7,979

Overseas 5,465 3,519 1,947

Lazio and Campania 6,904 11,738 (4,834)

Tuscany and Umbria 22,137 11,271 10,867

Environment 1,605 3,250 (1,645)

Corporate 284,227 251,408 32,819

TOTAL 321,022 281,742 39,280



Other reserves and retained earnings

This item reported a negative figure of 61,793 thousand

euros at the end of the year (3,871 thousand euros at

31 December 2010). The decrease of 66,665 thousand

euros is mainly due to the change in the Cash flow hedge

reserve related to financial instruments. In particular fi-

nancial instruments refer to (i) the swap hedging the loan

granted to ACEA by Cassa Depositi e Prestiti (the move-

ment is represented by an increase of 1,654 thousand

euros); (ii) the cross currency transaction on the bond

loan (the change was a decrease of 7,081 thousand eu-

ros), (iii) the swaps hedging the loan obtained by Acque

(the movement is represented by a decrease of 4,153

thousand euros), (iv) the swap hedging the loan grant-

ed to Nuove Acque (the movement is represented by a

reduction of 856 thousand euros) and (v) the effective

portion of the fair value measurement of the derivative

contracts of Acea Energia Holding (the change was a de-

crease of 1,961 thousand euros).

The remainder of the change is due to the allocation of

the profit from 2010 and the distribution of the advance

on the 2011 dividend, as well as the change in the basis

of consolidation caused by the companies subject to the

Framework Agreement.

At 31 December 2011 ACEA holds 416,993 treasury

shares to be used for future medium/long-term incentive

schemes. At this time there are no medium/long-term

share incentive schemes planned.

Minority interests

Minority interests total 74,661 thousand euros, essen-

tially unchanged. The difference between the two peri-

ods compared mainly reflects the combined effect of the

portion of net profit attributable to minority interests and

the decrease in shareholders’ equity as a result of the

distribution of dividends from net profit for 2010 and the

change in the basis of consolidation.

23. Non-current assets held for sale /Liabilities directly associated with assets held for sale – zeroAt the end of the year, the Group did not hold these types

of assets and liabilities.

The balance at 31 December 2010, 122,642 thousand eu-

ros, was represented by assets net of liabilities referring

to companies transferred on 31 March 2011 in compli-

ance with the Framework Agreement.

Liabilities

24. Shareholders’ equity – 1,311,457 thousand eurosAt 31 December 2011, shareholders’ equity amounted to

1,311,457 thousand euros (1,381,326 thousand euros at

31 December 2010).

Changes in shareholders’ equity during the period are

shown in the appropriate statement.

Share capital

The share capital totals 1,098,899 thousand euros, repre-

sented by 212,964,900 ordinary shares with a par value

of 5.16 euros each, as shown in the Shareholders’ Reg-

ister. The share capital is subscribed and paid-up in the

following manner:

- Roma Capitale: 108,611,150 150 shares with 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 par value of 2,152 thousand euros.

Legal reserve

This reserve reflects the allocation of 5% of net profit for

previous years, in accordance with article 2430 of the

Italian civil code.

This reserve has risen from 111,785 thousand euros at

31 December 2010 to 113,731 thousand euros at 31 De-

cember 2011, an increase of 1,946 thousand euros due

essentially to the increase in the legal reserve of compa-

nies that reported a profit in 2010. The legal reserve of

the Parent Company amounts to 68,919 thousand euros.


The decrease of 2,158 thousand euros compared to

31 December 2010 is essentially a result of staff ter-

mination benefit allocations in 2011 (totalling 16,514

thousand euros) net of uses and allocations against the

long-term incentive plan.

As required by paragraph 78 of IAS 19, the interest rate

used to calculate the present value of the obligation is

based on returns, at the end of the reporting period, on

the securities of major companies listed on the same

financial market as ACEA, and on the return on govern-

ment bonds in circulation at the same date that have

terms to maturity approximating to the residual term

of the related liability. In order to ensure consistency of

valuation and comply with the provisions of IAS 19, the

same basis has been used for the various types of plan.

In particular, as regards the economic and financial sce-

nario, the parameters used for the calculation are as

follows:

25. Staff termination benefits and other defined benefit plans – 104,776 thousand eurosAt 31 December 2011, said item totalled 104,776 thou-

sand euros (106,934 thousand euros as at 31 December

2010) and represents termination and other benefits

payable to employees on retirement or termination of

employment.

This item includes the defined-benefit obligation ‘tar-

iff subsidies for pensioners’; therefore, the calculation

method is based on the projected unit credit method,

which measures the company’s liability at the end of

the reporting period on the basis of the average present

value of estimated future cash outflows, using interest

rates that have terms to maturity approximating to the

terms of the related liabilities.

By contrast, staff termination benefits and tariff subsi-

dies for employees are considered defined-contribution

obligations and so calculated according to actuarial cri-

teria.

The following table shows the change in actuarial liabili-

ties during the year.


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

Post-employment benefits

- Tariff subsidies 25,216 27,461 (2,245)

TOTAL 104,776 106,934 (2,158)


December 2011

Discount rate 4.50%

Rate of return growth (average) 1.6%

Long-term inflation 2.0%


where the potential liability arising from a negative out-

come is solely held to be possible.

In calculating the size of the provisions, account is tak-

en both of the estimated costs that may derive from

litigation or other disputes arising during the year and

an update of estimates of the potential liabilities deriv-

ing from the litigation involving the Company in previ-

ous years.

The following table shows a breakdown of provisions

and movements in the period:

26. Provisions for liabilities and charges – 250,892 thousand eurosAt 31 December 2011, these provisions total 250,892


ber 2010) and are intended to cover potential liabilities

that may derive from litigation currently underway, on

the basis of information provided by the Company’s in-

ternal and external legal advisors. The provisions do not

take account of the effects of litigation that is expected

to be concluded in the Company’s favour or of litigation


31.12.2010 Basis of Consolidation (-)

Uses (-) Provisions (+) 31.12.2011

Provisions for liabilities 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

TOTAL PROVISIONS 191,683 9,917 64,195 113,487 250,892


The major movements are as follows:

• uses, amounting to 64,195 thousand euros, pri-

marily include

- 16,634 thousand euros used by a number of

companies relating to the provision to cover re-

dundancy and retirement costs, essentially due

to ACEA Distribuzione (8,153 thousand euros),

ACEA Ato2 (5,555 thousand euros) and ACEA

(2,900 thousand euros),

- 23,800 thousand euros relating to the use for

seizures carried out by Equitalia, pursuant to ar-

ticle 48 bis of Presidential Decree no. 602/1973,

in respect of tax demands issued on behalf

of INPS and for the division into instalments

granted by said Equitalia; in particular, said use

concerns ACEA Distribuzione (9,800 thousand

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 rela-

tion to litigation,

- 10,114 thousand euros at Acea Energia essen-

tially due to uses relating to liabilities allocated

to cover disputes with suppliers,

- 2,920 thousand euros at ACEA Ato2 for the con-

clusion of activities to reconcile credit and debit

items with Mediofactoring,

- 1,176 thousand euros at ACEA Distribuzione for

risks deriving from the management of sales to

end customers,

• thechange in the basis of consolidation to-

tals 9,917 thousand euros, and mainly refers to:

- 8,384 thousand euros relates to the effects of

the termination of the joint venture with GdF

Suez Energia Italia, which led to a different per-

centage of consolidation for the Energy compa-

nies, and different method of consolidation of

Acquedotto del Fiora, starting from 1 January

2011, accounted for using proportionate con-

solidation,

- 1,533 thousand euros, relative to the change in

the basis of consolidation, in the provision for

restoration costs of Acquedotto del Fiora allo-

cated in compliance with IFRIC 12.

• allocations, amounting to 113,487 thousand eu-

ros, primarily include:

- 35,474 thousand euros for staff provisions, in-

cluding:


- for 44,100 thousand euros for allocations to

cover GORI’s risk of the non-recognition of tar-

iff adjustments and financial risk, pending ap-

proval and signing of the agreement to settle

the dispute with the Campania Region and the

Area Authority,

- 1,510 thousand euros regarding charges con-

nected with works carried out for the Vatican

City,

- 1,076 thousand euros relating to estimated

insurance excesses for ongoing disputes (700

thousand euros at GORI, 226 thousand euros in

ACEA Ato2 and 140 thousand euros in Acque).

Finally, this item includes the amount of 11,669 thou-

sand euros concerning the costs necessary to keep the

infrastructure used for water service management in a

good state of repair.

Therefore, at 31 December 2011, the provision for li-

abilities and charges essentially included the types in

the table.

- the posting of 26,600 thousand euros for costs

generated by voluntary redundancy and retire-

ment procedures launched during the period

under observation (or to be commenced); spe-

cifically:

- ACEA Distribuzione 11,840 thousand euros,

- ACEA Ato2 9,170 thousand euros and

- ACEA 3,874 thousand euros

- 8,000 thousand euros for allocations connected

with contribution issues,

- 9,266 thousand euros for provisions for legal

disputes; in particular, expenses relating to

the abstraction of drinking water at ACEA Ato2

(4,316 thousand euros) and contingent liabili-

ties for the legal disputes of companies and the

Parent Company (4,951 thousand euros). These

allocations were made on the basis of instruc-

tions from internal and external legal advisors,

- 7,520 thousand euros for allocations to cover

regulatory risks deriving from management of

the water service in Frosinone (4,800 thousand

euros) and Florence (2,720 thousand euros),

Type of provision FY 2011 FY 2010 Increase/ (Decrease)

Legal 25,392 22,035 3,357

Tax 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

Other liabilities and charges 25,179 27,648 (2,470)

TOTAL 196,352 150,116 46,236

Provisions for restoration charges 54,539 41,567 12,972

TOTAL PROVISION 250,892 191,683 59,209


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’.


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.

27. Borrowings and other non-current financial liabilities – 2,298,916 thousand euros


Bonds 988,657 978,275 9,932

Medium/long–term loans 1,310,259 1,320,738 (10,479)

BORROWINGS AND OTHER NON-CURRENT FINANCIAL LIABILITIES

2,298,916 2,299,463 (548)


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

Medium/long–term loans 1,286,722 23,537 1,310,259 1,306,699 14,039 1,320,738

BORROWINGS AND OTHER NON-CURRENT FINANCIAL LIABILITIES

2,310,051 (11,135) 2,298,916 2,314,339 (14,876) 2,299,463


Bonds

These amounted to 1,023,239 thousand euros (1,007,615

thousand euros at 31 December 2010) and refer to the

following:

• 303,236 thousand euros to the bond loan issued

byACEAon23July2004andplacedontheinter-

national Eurobond market. The bond has a term to

maturity of ten years and yields a nominal fixed

rate of 4.875%. Redemption will take the form of a

lump-sum payment at par value, unless the bonds

are called prior to maturity. It should be noted that

the terms and conditions include standard inter-

national Eurobond market conditions regarding

Negative Pledge and Events of Default, including

a Cross Default clause should the other financial

debt of the Company or its principal subsidiaries,

totalling more than 15 million euros, become im-

mediately repayable. Interest accrued during the

period amounts to 14,625 thousand euros,

• 517,252 thousand euros (including the accrual of

accrued interest due) due to the bond loan issued

by ACEA in March 2010 with a 10-year duration and

maturity term on 16 March 2020.The bonds have

a minimum denomination of 50 thousand euros,

and pay one gross coupon annually of 4.5% and

were placed at an issue price of 99.779; the actual

gross rate of return upon expiry is therefore equal

to 4.528%. The bonds are subject to British law. The

settlement date is 16 March 2010. The bond loan

was assigned ratings by Standard & Poor’s and

Fitch of A- and A+, respectively. Interest accrued

during the period amounts to 22,451 thousand eu-

ros,

• 200,004thousandeuros (165,333thousandeuros

including the fair value of the hedging derivative)

relating to a private bond loan (Private Placement)

for 20 billion JapaneseYen and 15-yearmaturity

term (2025). The Private Placement was entirely

subscribed by a single investor. The coupons are

paid on a deferred half-yearly basis every 3 March

and 3 September applying a fixed rate in Yen of

2.5%. At the same time, a cross currency trans-

action was carried out to transform from the cur-

rency from yen to euros and the yen rate applied


• 2,836 thousand euros regarding the issue of the

bond loan by Consorcio Agua Azul. This bond loan

was issued in three tranches, totalling 34 million

dollars. They pay an average interest rate of 8.6%,

have a term to maturity of 12 years and make no

provision for the issuing of guarantees by share-

holders.

Medium/long–term loans (including short-term

portions)

They totalled 1,384,613 thousand euros (1,377,797

thousand euros at 31 December 2010) and represent (i)

principal outstanding at the end of the year and falling

due after 12 months, amounting to 1,310,259 thousand

euros (1,320,738 at 31 December 2010) (ii) the portions

of the same borrowings falling due in the subsequent 12

months, totalling 74,355 thousand euros (57,058 thou-

sand euros in 2010) and (iii) the fair value, a negative

23,537 thousand euros, of the derivative instruments

taken out to hedge the interest rate and exchange rate.

The following table shows medium/long–term borrow-

ings by term to maturity and type of interest rate:

to a fixed euro rate. The cross currency transaction

provides that the bank pays ACEA, on a deferred

half-yearlybasis,2.5%on20billionJapaneseyen,

while ACEA has to pay the bank the coupons on a

deferredquarterlybasis,startingfrom3June2010,

at a fixed rate of 5.025%. As at 31 December 2011,

the fair value of the hedging instrument was a posi-

tive 34,671 thousand euros and allocated to a spe-

cific shareholders’ equity reserve. The exchange

rate difference, a negative 15,523 thousand euros,

of the hedged instrument calculated at 31 Decem-

ber 2011 was therefore allocated to an exchange

provision. The exchange rate as at 31 December

2011 stood at 100.20, whilst it stood at 108.65 as

at 31 December 2010.Interest accrued during the

period amounts to 4,626 thousand euros. The loan

agreement and the hedge contract contain an op-

tion, in favour of the investor and the agent bank

respectively, connected to the trigger rating: the

payable and its derivative instrument can be fully

recalled if ACEA’s rating falls below the investment

grade level or if the debt instrument loses its rating.

TOTAL RESIDUAL DEBT

DUE BY 31.12.2012

FROM 31.12.2012 TO 31.12.2016

DUE AFTER 31.12.2016

fixed rate 411,930 40,107 89,556 282,268

floating rate 706,174 33,173 564,668 108,334

floating rate to fixed rate 266,509 1,075 66,231 199,203

TOTAL 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 (10,655) (4,927) (5,728)

Nuove Acque (1,181) 0 (1,181)

Umbra Acque (814) (506) (308)

ACEA (10,887) (8,606) (2,281)

TOTAL (23,537) (14,039) (9,498)



The loan agreements entered into by the Parent Company

envisage:

•➢ standardNegativePledgeandAccelerationEvents

clauses;

•➢ clausesrequiringcompulsorycreditratingmonitor-

ing by at least two major agencies;

•➢ clausesrequiringtheCompanytomaintainacredit

rating above certain levels;

•➢ theobligationtoarrangeinsurancecoverandmain-

tain ownership, possession and usage of the works,

plant and machinery financed by the loan through to

the maturity date;

•➢ periodicreportingrequirements;

•➢ clausesgivinglenderstherighttocallintheloanson

the occurrence of a certain event (i.e. serious errors

in the documentation provided when negotiating

the agreement, default on repayments, the suspen-

sion of payments), giving the bank the right to call in

all or a part of the loan.

During the year there was no evidence that any of the

covenants had not been complied with.

Information on the fair value of the above borrowings is

provided in the section “Additional disclosures on finan-

cial instruments and risk management policies”.

• Acquehasswappedtheinterestrateon80%ofthe

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,

• NuoveAcque swapped the project financing sub-

scribed in 2005 relating to the basic and revolving

line for a fixed rate. The duration of the swap runs

from 15 March 2005 to 15 September 2021 with

a fixed rate of 4.115%. At 31 December 2011 this

value amounted to 1,181 thousand euros and is al-

located to a special reserve of shareholders’ equity,

• ACEA has swapped the interest rate on the loan

(100,000 thousand euros) agreed on 27 December

2007 for a fixed rate. The swap was stipulated on

24 April 2008, effective as of 31 March 2008 (date

of drawdown of the underlying loan) and expires on

21 December 2021. The negative fair value of this in-

strument is 10,887 thousand euros (8,606 thousand

euros at 31 December 2010), which has been rec-

ognised in a separate component of shareholders’

equity,

• UmbraAcque: thenegative fair value is814 thou-

sand 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 borrow-

ing 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 be-

tween 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.


Advances

Advances from users regarding the supply of fresh wa-

ter are not interest-bearing, whilst those regarding the

distribution and sale of electricity and urban heating dis-

tribution accrue interest according to the conditions es-

tablished by Electricity and Gas Authority Resolution no.

204/99 and the Supply Regulations, respectively.

Advances break down as follows according to the vari-

ous areas of business:

• networks:21,026thousandeuros,

• energy:29,738thousandeuros,

• water:79,202thousandeuros.

The increase over December 2010 is mainly due to:

• 17,742thousandeurostoArseforhigheradvances

billed, as provided for in the contracts, relating to

awards obtained from third parties for the con-

struction of photovoltaic plants in the sites of Cass-

ano, Orsomarso, Scalea and Villa Piana, incomplete

as at 31 December 2011.

• 18,237thousandeurostoAceaEnergiaessentially

due to higher user guarantee deposits, also follow-

ing the change in the consolidation percentage,

• 5,215thousandeurostowaterservicecompanies,

especially Publiacqua (2,211 thousand euros) for

the increase in the payment of advances by users

as a result of ATO’s redefinition of the guarantee

deposit amount,

• AcquedottodelFiora(1,793thousandeuros)owing

to the different method of consolidation and

• ACEAAto2(1,438thousandeuros)foradvanceson

drinking water consumption paid by users.

28. Other non-current liabilities - 278,415 thousand euros


Advances 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

OTHER NON-CURRENT LIABILITIES 278,415 227,478 50,937


Water connection fees


sand euros at 31 December 2010) and consist of:

• 26,675 thousand euros attributable towater ser-

vice companies in Lazio and Campania (up 665

thousand euros compared to 31 December 2010),

• 28,254 thousand euros regarding water service

companies in Tuscany and Umbria (up 5,024 thou-

sand euros compared to 31 December 2010, in-

cluding +3,823 thousand euros due to the propor-

tionate consolidation of Acquedotto del Fiora).

Grants related to assets

At 31 December 2011 these grants amounted to 93,497

thousand euros (up 12,420 thousand euros on 31 De-

cember 2010) and referred to grants received. The grants

are accounted for in liabilities and progressively recog-

nised in the income statement each year over the dura-

tion of the investment to which the grant is connected.

The amount recognised as income is determined on the

basis of the useful life of the asset to which it refers.

A breakdown per business area is provided below:

• networks: 17,365 thousand euros (17,061 thou-


• waterservicesinLazioandCampania:38,784thou-

sand euros (39,214 thousand euros at 31 Decem-

ber 2010),

• waterservicesinTuscanyandUmbria:37,046thou-

sand euros (24,431 thousand euros at 31 Decem-

ber 2010).


riod totalling 2,905 thousand euros and provisions of

12,310 thousand euros contributed to said item; the

latter item also includes 4,608 thousand euros relating

to rate adjustments and reclassifications which take in

the deferred amounts on the division into instalments

of the tax gain on the sale of properties. See note 19

for details.

29. Deferred tax provisions – 98,826 thousand eurosAt 31 December 2011 provisions for deferred taxes to-

talled 98,826 thousand euros (77,410 thousand euros at

31 December 2010). These provisions above all regard

the difference between economic and technical rates

of depreciation and tax-related rates. Uses in the pe-

30. Current liabilities – 2,274,102 thousand eurosAt 31 December 2011 current liabilities totalled 2,274,102 thousand euros (1,513,948 thousand euros at 31 December



Borrowings 540,645 250,045 290,599

Trade payables 1,344,785 883,498 461,287

Tax payables 102,232 120,786 (18,554)


TOTAL 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 fol-

lows:


Short-term bank lines of credit 374,534 142,141 232,393

Bank borrowings - mortgages 74,355 57,058 17,297

Due to the municipality of Rome 15,989 2,213 13,776

Due to subsidiaries and associates 16 1,568 (1,552)

Payables due to third parties 15,781 47,066 28,685

TOTAL 540,645 250,045 290,599



Payables due to third parties


sand euros at 31 December 2010). The breakdown of this

item mainly reflects:

• 57,267 thousand euros relating to amounts that

must be repaid to factors for receivables trans-

ferred and collected after the transfer by (i) Acea

Energia for 36,569 thousand euros (up 13,769 thou-

sand euros), (ii) ACEA Ato2 for 16,369 thousand

euros (up 7,920 thousand euros) and (iii) ACEA

Distribuzione for 4,339 thousand euros (up 2,789

thousand euros).

• 4,321thousandeurosrelatingtoamountsowedin

dividends to third party shareholders,

• 12,957thousandeurosrepresentingtheminimum

amount of the credit/debit item as regulated by

art. 3 of the demerger deed. The definition of said

item is put back to the evaluation of the arbitrator

whose appointment is currently being formalised.

The change compared with 2010 (up 28,685 thousand

euros) essentially reflects amounts due to assignees of

receivables sold by the largest Group companies.

Lastly, it should be noted that the carrying amount of all

short-term borrowings approximates to fair value at the

end of the reporting period.

Short-term bank lines of credit

They amount to 374,534 thousand euros (142,141 thou-

sand euros as at 31 December 2010) and show an in-

crease of 232,393 thousand euros, due mainly to ACEA

(up 190,379 thousand euros) due to higher drawdowns

and Acquedotto del Fiora (up 34,790 thousand euros)

owing to a different method of consolidation.

At the end of 2011 the Parent Company held cash and

cash equivalents of 284,227 thousand euros (compared

to 251,407 thousand euros at 31 December 2010): there-

fore, a negative balance of 90,310 thousand euros was

recorded at 31 December 2011 compared with a posi-

tive balance of 109,266 thousand euros at the end of the

previous year.

Interest accrued by the Parent Company at 31 Decem-

ber 2011 amounted to 5,366 thousand euros, reflecting a

weighted average interest rate of 3.52%.

This item also includes the amount of 34,740 thousand

euros related to Acquedotto Fiora’s bridge loan falling

due in March 2012.

Bank borrowings - mortgages

These totalled 74,355 thousand euros and regard the

short-term portion of bank borrowings (mortgages) fall-

ing due within twelve months. Further details are pro-

vided in note 27 of this report.

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 in-

terest on repayment of the Parent Company’s debt deriv-

ing from the conferral for 2,212 thousand euros.


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 proportion-

ate consolidation.


Amounts due to third-party suppliers

Trade payables amounted to 1,184,975 thousand euros,

marking an increase of 418,121 thousand euros. This

variation is the result of contrasting factors:

• NetworksIndustrialArea:amountsduetosuppliers

amounted to 285,625 thousand euros, marking an

increase of 55,897 thousand euros, due to higher

payables of ACEA Distribuzione (up 51,504 thou-

sand euros) and Arse (up 3,806 thousand euros)

which increased due to the progress of various so-

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

of 430,021 thousand euros, marking higher closing

payables compared to the previous period (317,536

thousand euros). This item mainly includes paya-

bles linked to the procurement of electricity and

the associated transportation costs. The change is

broken down as follows: Acea Energia for 284,886

thousand euros linked to both the change in the

basis of consolidation for 71,261 thousand euros

and the deferment of some trade payables, (ii) Acea

Energia Holding for 19,530 thousand euros (includ-

ing 2,668 thousand euros due to the change in

the basis of consolidation) deriving from payables

relating to the purchase of energy items for 3,320

thousand euros, (iii) Acea Produzione for 10,849

thousand euros,

• WaterIndustrialArea,Lazio-Campania:tradepaya-

bles totalled 287,393 thousand euros, an increase

of 16,379 thousand euros compared to 31 Decem-

ber 2010. This increase was essentially due to ACEA

Ato2, as a result of the volume of investments and

Trade payables – 1,344,785 thousand euros

consist of:


Amounts due to third-party suppliers 1,184,975 766,854 418,121

Due to the parent company Roma Capitale 132,796 96,204 36,592

Due to subsidiaries and associates 27,014 20,439 6,575

TOTAL 1,344,785 883,498 461,288


payment times, and to Gori,

• WaterIndustrialArea,Tuscany-Umbria:tradepaya-

bles amounted to 73,358 thousand euros; the bal-

ance therefore shows an increase of 17,782 thou-

sand euros, caused by Acquedotto del Fiora for

10,912 thousand euros and Publiacqua for 8,082

thousand euros,

• Overseas Water Services Area: receivables were

essentially consistent with the figure recorded at

31 December 2010, amounting to 1,682 thousand

euros,

• EngineeringandServices: tradepayableswere in

line with the previous year, amounting to 2,085

thousand euros at 31 December 2011,

• EnvironmentIndustrialArea:thisareaofbusiness

recorded trade payables of 36,178 thousand eu-

ros, marking a decrease of 1,701 thousand euros.

This is due mainly to A.R.I.A.’s decreased exposure

(down 3,986 thousand euros), partially offset by

higher payables resulting from the consolidation of

Innovazione e Sostenibilità Ambientale (1,718 thou-

sand euros).

The Parent Company, ACEA, reports trade payables of

68,632 thousand euros, marking an increase of 12,800

thousand euros.

Trade payables due to the parent company Roma

Capitale

These payables total 132,796 thousand euros. Details are

provided in Note 23 on trade receivables.


Due to subsidiaries

Payables due to subsidiaries include payables of Acque

due to the companies Billing Solutions and ICT Solutions.

Due to associates

These essentially include payables due to Marco Polo

for cleaning services and building maintenance at ACEA

(10,466 thousand euros) and ACEA Distribuzione (2,410

thousand euros) and payables due to associate Citelum

Napoli Pubblica Illuminazione (2,929 thousand euros).

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.

Trade payables due to subsidiaries and associates


Payables due to subsidiaries 4,915 2,891 2,023

Payables due to associates 22,099 17,548 4,551

TOTAL AMOUNTS DUE TO SUBSIDIARIES AND ASSOCIATES 27,014 20,439 6,575



Social security contributions 20,098 18,129 1,969

Amounts due to end users for tariff restrictions 4,538 4,535 3

Payables deriving from commodity contracts 3,203 36 3,167


TOTAL 286,441 259,620 26,821


Tax payables – 102,232 thousand euros

These amounted to 102,232 thousand euros (120,786

thousand euros at 31 December 2010), and include the

tax burden for the year relating to IRAP (7,340 thousand

euros) and VAT (52,200 thousand euros). The remainder

includes 19,431 thousand euros and 5,467 thousand eu-

ros for the remaining amounts due for tax settlements

split into instalments for ACEA and ACEA Energia respec-

tively. The direct tax payables of other companies com-

plete the balance.

Other current liabilities - 286,441 thousand euros

Social security contributions


sand euros at 31 December 2010) and are broken down

by industrial area:

• Networks: 5,791 thousandeuros (5,380 thousand

euros at 31 December 2010),

• Energy:1,418thousandeuros(382thousandeuros

at 31 December 2010),

• Water:9,269thousandeuros (9,186thousandeu-

ros at 31 December 2010),

• EnvironmentandEnergy:555thousandeuros(502


• Corporate:2,591thousandeuros (2,144thousand


Amounts due to end users for tariff restrictions

This item includes amounts due to customers in the pro-

tected categories and free markets for the reimburse-

ment of excess revenues. The total amount of 4,538

thousand euros relates to excess revenues for 2001 to


• collections from end users totalling 27,899 thou-

sand euros (up 7,773 thousand euros). These are

collections which, as per normal, are in the process

of being allocated or reimbursed;

• amounts due to the various municipalities total-

ling 88,001 thousand euros. The balance includes

54,452 thousand euros relating to the concession

fees of (i) ACEA Ato2 (17,316 thousand euros), (ii)

ACEA Ato5 (19,718 thousand euros) and (iii) Publiac-

qua (11,318 thousand euros) due to the municipali-

ties of the respective areas. The remainder is repre-

sented by 19,738 thousand euros in Gori payables

due to third parties for water treatment, sewerage

and trunk lines (13,722 thousand euros) and for

water treatment in East Naples (6,016 thousand

euros). The balance also includes 1,926 thousand

euros of payables for the “environmental premium”

which, as regulated by Art. 10 of the ATI4 agree-

ment of 13 August 2007, the company pays to the

municipality of Orvieto and the Municipalities that

arepartofthesameATI(TemporaryJointVentures).

This amount results from the increase in the “pre-

mium” component of the tariff, as provided for by

the article of the same Agreement,

• payablessplitintoinstalmentsduetoEquitaliare-

corded 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).

be reimbursed to customers in the regulated market. In

accordance with Italian Electricity and Gas Authority Res-

olution no. 180/2002, this payable is still not certain to be

incurred as the Authority has yet to define the average

cost of fuel for 2001, on the basis of which distributors

can finally calculate their liability to regulated customers.

It is plausible to believe that, following the publication of

the elements needed for the definition, Acea Energia will

proceed with the reimbursement.

The application of excess revenues ended with the sec-

ond regulatory period.

Payables deriving from commodity contracts

This item amounted to 3,203 thousand euros and repre-

sents the fair value of certain financial contracts stipu-

lated by Acea Energia Holding.

For more information please see the section “Additional

disclosures on financial instruments and risk manage-

ment policies”.

Other current liabilities

These amounted to 258,601 thousand euros and record-

ed an increase of 21,681 thousand euros with respect to

31 December 2010.

This item essentially consists of:

• amounts due to the Equalisation Fund, totalling

40,819 thousand euros (down 11,133 thousand eu-

ros),

• amountsduetostaff,totalling38,363thousandeu-

ros (up 3,617 thousand euros),


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 Carrying value of the acquired entity

Fair value adjustments

Fair value

Property, plant and equipment 490.5 490.5

Intangible assets 607.3 607.3

Investments 102,563.6 6,933.9 109,497.5

Inventories 0.0 0.0

Prepaid taxes 42.4 42.4

Trade receivables 1,377.2 1,377.2

Other receivables 833.0 833.0

Loans 16,222.7 16,222.7

Cash and cash equivalents 93.9 93.9

Staff termination benefits and other defined-benefit plans (256.0) (256.0)

Provisions for deferred tax liabilities 12.5 12.5

Provisions for liabilities and charges (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)

Allocated goodwill 0.0 0.0

NET BALANCE 116,967.5 6,933.9 123,901.4

attributable to minority interests 0.0

Goodwill 0.0

INVESTMENT PRICE 123,901.4

Repayment of borrowings 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 (123,901.4)

Acquired cash and cash equivalents 93.9



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.

Acea Energia Group: Share acquired by ACEA 40.59%



Fair value

Property, plant and equipment 138.9 138.9

Intangible assets 13,742.7 13,742.7

Investments 2.3 2.3

Inventories 0.0 0.0

Prepaid taxes 24,855.1 24,855.1

Trade receivables 247,878.1 247,878.1

Other receivables 14,233.0 14,233.0

Loans 182,055.5 182,055.5

Cash and cash equivalents 1,192.8 1,192.8

Staff termination benefits and other defined-benefit plans (1,506.4) (1,506.4)

Provisions for deferred tax liabilities (111.7) (111.7)

Provisions for liabilities and charges (4,445.7) (4,445.7)

Tax payables (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)


Total 27,121.9 27,121.9

attributable to minority interests 0.0

Goodwill 29,704.1


Repayment of borrowings

TOTAL DISBURSEMENT (56,826.0)


1,192.8

Payment of purchase price in cash

Acquired cash and cash equivalents 1,192.8



Acea Produzione: the values below represent 100% of the Company.



Fair value

Property, plant and equipment 162,939.5 162,939.5

Intangible assets 1,272.0 1,272.0

Investments 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

Loans 9,618.8 9,618.8

Cash and cash equivalents 0.0 0.0

Staff termination benefits and other defined-benefit plans (2,098.7) (2,098.7)

Provisions for deferred tax liabilities (10,030.1) (10,030.1)

Provisions for liabilities and charges (1,164.8) (1,164.8)

Tax payables 0.0 0.0

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)


Total 35,308.1 35,308.1

attributable to minority interests

Goodwill 94,456.6


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

Produzione equals 52.7 million euros and is included in

the price for the acquisition of 40.59% of Acea Energia

Holding.

The remaining part did not result in any outlays as it

was acquired through the non-proportional demerger

of AceaElectrabel Produzione.

For the adjustments, please refer to note 10.

All the acquisitions are to be considered as definitive.


conflicts with the above unitary nature of the system, in

that it introduces a payment obligation not matched by

provision of a corresponding service”.

In implementation of the Constitutional Court sentence

and to make up for the resulting regulatory gap, Law no.

13 of 27 February 2009 was approved. Article 8 sexies of

this legislation, “Measures regarding integrated water

services”, contains an all-round solution to be included

in the tariff criteria ratified by the Consolidated Envi-

ronment Act and the so-called Standardised Method

(Ministerial Decree of 1 August 1996), and, above all, by

Articles 149 and 151 of Legislative Decree no. 152/2006,

which confirm the Area Authority’s obligation to safe-

guard the operator’s financial position within the ATO.

In this sense, the above Article 8 sexies contains a defi-

nition of the tariff component regarding waste water

treatment linking it with the entire process involved

in providing the services. In particular, it introduces

a new binding component, consisting of the sum of

the charges incurred, as expressly identified and pro-

grammed in the area plans, in carrying out the over-

all activities involved in water treatment, including the

design, construction and completion of plants and the

related investments. This new component “is payable

to the operator by end users, in cases where there are

no treatment plants or such plants are temporarily inac-

tive, from the start-up of the tender procedures for the

design or completion of the infrastructure necessary in

order to provide the treatment service, provided that

such procedures are implemented in accordance with

the established schedule”.

The second paragraph of article 8 sexies also regulates,

in compliance with the Constitutional Court sentence,

the methods of reimbursement of sums to users: (i) the

operator must reimburse the tariff component not due,

either in a lump sum or in instalments, within five years

as from 1 October 2009; (ii) the design, construction and

completion costs incurred are to be deducted from the

rebate; and (iii) the rebate must be calculated by the op-

erator’s Area Authority within 120 days of the date the

legislationcomesintoforce(bytheendofJune2009).

Moreover, within two months of the law coming into

force, at the proposal of the Supervisory Committee for

the Use of Water Resources, the Ministry for the Pro-

Service Concession Arrangements

The Acea Group operates water, environmental and pub-

lic lighting services under concession. It also manages

the selection, treatment and disposal of urban waste

produced in municipalities in ATO 4 Ternano–Orvietano

via the TAD Group company, SAO.

Before going on to describe the individual service con-

cessions, this section provides information on key issues

regarding waste water treatment tariffs and the regula-

tion of local public services, with particular reference to

theAbrogativereferendumsof12and13June2011.

Constitutional Court sentence no. 335/2008La Corte Costituzionale, con la sentenza n. 335 del 10

otConstitutional Court sentence no. 335 of 10 October

2008 declared Article 14, paragraph 1 of Law 36/94 to

be unconstitutional, following inclusion of this article in

the Consolidated Environment Act, under Article 155,

paragraph 1 of Legislative Decree no. 152/2006. This

legislation establishes that the tariff component cov-

ering waste water treatment is payable by end users

“even if there are no treatment plants or such plants

are temporarily inactive”.

The judgement is based on the opinion that the inte-

grated water services tariff represents payment for

services provided under contract and not a form of

taxation. On this basis, the Court has, therefore, found

fault with the part of the above provisions that estab-

lishes that the tariff component regarding waste water

treatment is to be paid by end users even if there is

no “direct link between the payment of this component

and effective provision of the service for which the pay-

ment is due”. Basically, the Supreme Court ruled that

“the congruity of a system for financing integrated wa-

ter services, created on a unitary basis by lawmakers

based on the concept of reciprocity, on the sufficiency

of a utility contract to establish a payment obligation

and, therefore, on a single tariff is, in conclusion, preju-

diced by the application, as a method of financing, of a

compulsory charge, the reason for which unjustifiably


rectness of the information sent by the Operator

– establishes the amount (including interests) to be

returned to each single eligible applicant and sets

out the timetable for the rebate, that should be car-

ried out within five years from 1 October 2009;

• theAreaAuthority isauthorised tomakeextraor-

dinary tariff amendments, also in derogation from

the price “K” limits, in order to cover the rebate

charges and, it should be reiterated, to avoid preju-

dicing the full coverage of the investment and oper-

ating costs necessary for the realisation of the Area

Plan.

The procedure included in the decree – which complies

with the general principles that regulate the integrated

water services with regard to the obligations of the Area

Authorities and operators, and to any related right – un-

derlines that the charges resulting from the rebate ob-

ligation (that are being identified by the Authorities for

some water companies) should be fully covered by the

tariff measures that the Area Authorities will adopt in or-

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.

tection of the Environment, Land and Sea is to issue

decrees establishing the criteria and parameters for

implementing the rebate. The decrees must also estab-

lish the minimum information that individual operators

must periodically send to end users regarding the plan

for the construction, completion, upgrading and rollout

of the treatment plants provided for in the respective

Area Plan, and the state of progress in implementing

the plan, in addition to the related forms of publication,

including indication in water bills.

In September 2009, the Ministry for the Protection of

the Environment, Land and Sea issued a decree (pub-

lished in the Official Gazette no. 31 dated 8 February

2010) concerning the “Identification of criteria and pa-

rameters for the rebate to end users of the tariff com-

ponent not due for water treatment services”. This de-

cree – that defines the methods for the rebate of the

water treatment tariff for the users connected to the

sewerage network but not served by treatment plants

according to the said Article 8 sexies, paragraph 4 – sets

out three relevant points:

• theprescriptionperiodforthereimbursementre-

quest is five years;

• therebateissubjecttotheuser’srequestsupport-

ed by relevant documents;

• therebatemustnotbetothedetrimentofthefull

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 spe-

cific conditions, as an exception to the price “K”

limit.

With regard to procedure, the decree sets out the fol-

lowing:

• theoperatormakesavailabletotheAreaAuthority

any relevant information in order for the Author-

ity 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 tem-

porarily 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,

• theAreaAuthority–afterhavingassessedthecor-


Finally, it must be noted that, in the assessment of the

effects of the referendum abrogations, the amendment

to the regulation on the topic which occurred as a result

of Law Decree no. 70/2011, converted with amendments

toLawno.106of12July2011,mustbetakenintocon-

sideration. This established the National agency for wa-

ter regulation and supervision, redefining responsibilities

and methods for determining integrated water service

tariffs.

In fact, based on the new regulation, the Agency should

define the elements of cost in order to determine the

water tariff and should prepare the consequent tariff

method, also accounting for “in compliance with the

principles set forth by EC regulations, the financial cost

of the service supply and the relative environmental and

resource costs, in order to fully realise the principle of

cost recovery and the principle that ‘the polluter pays’”.

Therefore, in light of these considerations, it must be

deemed that the integrated water service tariff, estab-

lished in compliance with the regulation dictated by Min-

isterial Decree of 1 August 1996, shall remain in force

until the new tariff regulation is issued by the National

Agency, which shall be implemented in compliance with

the criteria set forth by article 154 of the Environmental

Code, as annulled by the outcome of the referendum and

by Law Decree no. 70/2011.

Decree Law “Stabilisation”

Law Decree no. 138 of 13 August 2011 “Additional urgent

measures for financial stabilisation and development”,

as per amendments made by Decree Law no. 1/2012, in

respect of the regulation of economically important local

public services. In particular, under art. 4 (Adjustment of

the regulations of local public services to the people’s

referendum and EU legislation) the legislator, exclud-

ing the integrated water service from the application of

said article (with the exception of provisions governing

incompatibility), as well as the electricity and natural gas

distribution service and management of municipal phar-

macies but confirming the application of the legislation

to the public lighting service, reintroduced to the legisla-

tive scenario almost all provisions previously contained

in art. 23 bis and in the implementing regulations of the

same (Presidential Decree no. 168/2010).

Local public services

Abrogative referendums of 12 and 13 June 2011

Followingthereferendacarriedouton12and13June

2011, article 23 bis of Law Decree no. 112/2008, enacted

with Law no. 133/2008 as amended and supplemented

by article 15, paragraph 1, of Law Decree no. 135/2009,

enacted with Law no. 166/2009, regarding economically

significant local public services, as well as article 154,

paragraph 1, of Legislative Decree no. 152/2006 (Environ-

mental Code), the part which referred to “the adequacy

of the remuneration of the invested capital” amongst the

criteria for determining the water tariff, were abrogated.

Furthermore, the approved referendum petitions require

the abolition of Italian Presidential Decree no. 168 of 7

December 2010, including the regulation implement-

ing the regulation pursuant to cited article 23 bis, while

they left the current temporary provisions of article 170

of Legislative Decree no. 152/2006 (not subject to refer-

endum) unchanged, which involve the application of the

Standardised Method pursuant to Ministerial Decree of 1

August 1996, until the adoption of a new tariff methodol-

ogy, which as of today has not taken place.

In general, the effects of the referendum abrogation,

which in accordance with Law 352/1970 is declared by

the President of the Italian Republic with his own de-

creeof20July2011,donotcauseanyrestorationofthe

standards that may have been annulled by the legisla-

tive provisions that were then abrogated as a result of

the referendum (rulings of the Constitutional Court nos.

24/2011, 31/2000 and 40/1997) and they are effective ex

nunc according to the provisions of article 75 of the Con-

stitution.

In consideration of the aforementioned circumstanc-

es, it must be deemed that the lack of the transitional

regime of the assignments existing prior, provided by

cited article 23 bis, also caused the lack of the complex

of causes for transfer of the same, with particular refer-

ence to in-house management, management assigned

directly to mixed companies in which selection by ten-

der did not consider both the quality of the partner and

the attribution of operating tasks, as well as direct as-

signments as of 1 October 2003 to listed companies or

their subsidiaries.


establishes the minimum provincial basin within which,

by30June2012,theRegionsmustorganisetheperfor-

mance of local public services. The minimum dimensions

also affect the priority allocation of government loans,

“without prejudice to loans for projects relating to eco-

nomically important local public services co-financed

with European funds”.

Elimination of the national agency for water reg-

ulation and monitoring and of Co.N.Vi.Ri (Nation-

al Commission for Monitoring Water Resources)

Law Decree no. 201 of 6 December 2011, converted to

Law no. 214/2011 introducing urgent provisions for the

growth, fairness and consolidation of public accounts

makes provision, under art. 21, for the elimination of cer-

tain entities and bodies from the date of entry into force

of said decree. Table “A”, attached to the Law Decree and

relating to the authorities eliminated, also includes the

national agency for water regulation and monitoring. The

Decree establishes that the functions assigned to the

authorities eliminated, the financial resources and oper-

ating resources including therein income and expense

generating legal relations, are transferred - without the

undertaking of any liquidation proceedings - to the cor-

responding administrative bodies indicated in said an-

nex. Paragraph 19 of art. 21 envisages that “with regard

to the national agency for water regulation and moni-

toring, functions regarding the regulation and control of

water services are transferred to the Italian Authority for

Electricity and Gas, which are exercised with the same

powers assigned to said Authority by Law no. 481 of 14

November 1995”. The functions to be transferred are

identified by the Decree of the President of the Council

of Ministers on proposal of the Ministry for the Protec-

tion of the Environment, Land and Sea, to be adopted

within 90 days from the date this Decree becomes effec-

tive. Subsequent paragraph 20 makes provision, at the

same time, without further indications, for the elimina-

tion of Co.N.Vi.Ri (National Commission for Monitoring

Water Resources).

Elimination of the Area Authorities

Law no. 42 of 26 March 2010 – “Urgent interventions con-

cerning local authorities and regions” – includes art. 186

Provision is made for verification of the potential reali-

sation of the competitive management of economically

important local public services and the assignment of

exclusive rights to cases in which, on the basis of mar-

ket analysis, unregulated private economic initiative

is not adequate for guaranteeing a service that meets

the needs of the community. Upon the outcome of the

verification the authority adopts a framework resolution

(which for area authorities with a population of more

than 10,000 inhabitants must be accompanied by a

mandatory judgment from the Antitrust Authority) which

illustrates the preliminary enquiry conducted and high-

lights, for sectors removed from liberalisation, the rea-

sons for the decision.

The in-house assignment procedure may only be carried

out if the annual economic value of the service subject to

assignment does not exceed 200,000 euros.

The provision for the temporary system of non-compliant

assignments, already identified in repealed art. 23 bis,

was restored, with the simple postponement of expiry

dates and the introduction of an exemption for early ter-

mination of in-house or direct management which are

combined with the possibility of assignment to a new

operator for a maximum of three years. Paragraph 32,

letter d) is significant for the ACEA Group in respect of

which “direct assignments approved as at 1 October

2003 to publicly owned companies already listed on the

stock market at said date and to subsidiaries of the latter

pursuant to article 2359 of the Italian Civil Code, cease

on the expiry date set out in the service contract, pro-

vided that the investment held by public shareholders as

at 13 August 2011, i.e. the syndicated one, is gradually re-

duced, through public tenders or forms of private place-

ment with qualified investors and industrial operators,

toastakenohigherthan40%before30June2013and

no higher than 30% by 31 December 2015; where these

conditions are not met, the assignments cease, without

any extension or proper resolutions by the grantor, on 30

June2013or31December2015respectively”.

Article 3 bis of the regulations in question not only makes

provision for a further restriction for in-house operators

in respect of being subject to both the internal stability

pact and public law-related regulations for the purchase

of goods and services and for the hiring of personnel, but


responsibilities previously held by the Area Authorities

and,asat1January2012,whichtookonallincomeand

expense generating legal relations of the eliminated au-

thorities (art. 52). The AIT will be structured into 6 re-

gional conferences (art. 13) which accurately mirror the

regional structure of the 6 eliminated authorities. Art. 50

of said law requires the authorities’ bodies to be set up

by30June2012and,effectivefrom1January2012,until

the authorities’ bodies are actually set up, requires the

functions of said bodies to be performed by six com-

missioners identified as the Chairmen of the Boards of

Directors of the eliminated authorities in office at 31 De-

cember 2011, who each operate in the relevant area,

availing themselves of the technical support of the di-

rectors of said eliminated authorities as at 31 December

2011.

Services under concession

The grantor in the case of public lighting services is

Roma Capitale under a thirty-year concession arrange-

ment(effectivefrom1January1998),forwhichnofeeis

paid. The concession is implemented through signing the

appropriate service contracts: the agreement in force

until 31 December 2010, which regulated the period

fromJune2005toMay2015,wasrecentlyamendedby

adding a supplemental agreement signed on 15 March

2011, which shall become effective at the beginning of

the year.

The supplements regard the following elements:

• thetermoftheservicecontractshouldbealigned

with the expiry of the concession (2027), given that

the contract is merely additional to the agreement;



• annualincreaseinthelump-sumpaymentwithre-

gard to the new lighting points installed.

In addition, investments regarding the service may be

(i) requested and financed by the municipality or (ii) fi-

nanced by ACEA: in the first case, such interventions will

be paid based on a price list agreed by the parties (and

subject to review every two years) and will result in a

percentage decrease of the ordinary fee. In the second

case, the municipality is not bound to pay any extra fee;

however, ACEA will be awarded all, or part of the saving

bis into the 2010 Finance Act (Law no. 191/2009). This

sets out that, after one year from the entry into force of

thislaw(i.e.asof1January2011),theAreaAuthorities

for the management of water resources and the urban

waste integrated management referred to in articles 148

and 201 of Legislative Decree no. 152/2006, are elimi-

nated. At the same time, Regions can award, by way of

law, the functions that were exercised by the Authorities,

in compliance with the principles of subsidiarity, diversifi-

cation and adequacy.

On 26 February 2011, Law no. 10/2011 was published

(which converted Law Decree no. 225 of 29 December

2010, the so–called “mille proroghe”), which extends the

terms set out in legislation and the urgent interventions

concerning tax matters and support to companies and

households. Article 1, paragraph 1 sets out the extension,

until 31 March 2011, of the term for the elimination of

the Area Authority. Paragraph 2 of the same article sets

out the possibility to envisage – by means of one or more

decrees of the President of the Council of Ministers, in

accordance with the Ministry of Economy and Finance -

a further extension of the above-mentioned terms until

31 December 2011. By decree of the President of the

Council of Ministers on 25 March 2011, the deadline of

31 March 2011 was extended until 31 December 2011.

The subsequent “Decreto Mille proroghe” (Law Decree

no. 216 of 29 December 2011), makes provision for the

deferment of the expiry of the Area Authorities handling

the integrated water service and integrated waste man-

agement from 31 December 2011 to 31 December 2012,

based on the necessary guarantee of continuity in the

provision of local public services and guarantee of an

“additional transitory period”, for the transfer of func-

tions from the Area Authorities to new operators identi-

fied by the Regions, and for the adoption of the relevant

proper coordination initiatives”.

Despite said term being extended, at the end of 2011,

by one year, the Tuscany Region passed legislation on

the subject, totally restructuring the integrated water

service, starting with the reassignment of functions and

powers, now resting with the Area Authorities. In fact,

Regional Law no. 69 of 28/12/2011 established the Tus-

cany Water Authority which assumed all functions and


- Tuscany, there the ACEA Group operates in the

province of Pisa, through Acque S.p.A., in the prov-

ince of Florence, through Publiacqua S.p.A., and in

the provinces of Siena and Grosseto, through Ac-

quedotto del Fiora S.p.A. It also provides the ser-

vice in Lucca and province of Lucca through the

companies Geal, Lunigiana and Azga,

- Umbria, where the Group operates in the province

of Perugia, through Umbra Acque S.p.A..

Lazio – ACEA Ato2 S.p.A.

(Ato2 - Central Lazio - Rome)

Acea Ato 2 svolge il servizio idrico integrato sulla base

di ACEA Ato2 provides integrated water services on

the basis of a thirty-year agreement signed on 6 Au-

gust 2002 by the company and Rome Provincial Author-

ity (representing the Authority for the ATO comprising

111 municipalities, including Roma Capitale). In respect

of the award of the service, ACEA Ato2 pays a conces-

sion fee to all municipalities based on the date of actual

acquisition of management which is expected to take

place gradually: as of today, the survey work (includ-

ing that for municipalities already taken over) has been

completed for 101 municipalities, equivalent to around

3,800,000 resident inhabitants (source ISTAT), equal to

about 98.2% of the total.

Asof1January2011,thesingleareatariff is inplace,

which was adopted by the Mayors’ Conference at the

meeting on 14 December 2010 session (resolution no.

6/2010).

During the same meeting, the Mayors’ Conference also

approved a further increase in investments equal to 45

million euros for the 2011–2013 three-year period. As

a consequence, the revenues ensured for that same

three-year period were increased, and the Average Tar-

iff for 2011 was updated.

The Mayor’s Conference approved, in the same resolu-

tion, the new average tariff increase for 2011 (2.49%),

calculated on the basis of the amounts of the previous

year.

Activities are underway relating to the tariff review

which will involve the determination of the Average Tar-

iff for the 2012-2014 regulatory period.

With reference to the effects of ruling no. 335/2008,

expected in both energy and economic terms, accord-

ing to pre-established methods.



Upon natural or early expiry - also due to cases envis-

aged under Law Decree no. 138/2011 - ACEA will be

awarded an allowance corresponding to the residual

carrying amount, that will be paid by the Municipality or

the incoming operator if this obligation is expressly set

out in the call for tenders for the selection of the new

operator.

Finally, the contract sets out a list of events that repre-

sent a reason of anticipated revocation of the conces-

sion and/or resolution of contract by the will of the par-

ties. Among these events, reference is made to newly

arising needs linked with public interests, according to

which ACEA has the right to receive an allowance ac-

cording to the product, that is discounted based on the

percentage of the annual contractual amount and the

number of years until expiry of the concession.

On the basis of the number of public lighting plants as

at 31 December 2009, the supplemental agreement es-

tablishes the ordinary annual fee as 39.6 million euros,

including all costs relative to the provision of electricity

to supply the plants, ordinary operations and ongoing

and extraordinary maintenance.

Further information is provided in the section “Related

Party Transactions”.

In relation to the effects of the abrogation of article 23

bis on the ACEA concession, expiring on 31 December

2027, please see the paragraph relative to the abroga-

tivereferendumsof12and13June2011andthesec-

tion on the Stabilisation Decree.

Integrated water-environmental services are pro-

vided under concession in the following regions:

- Lazio, where ACEA Ato2 S.p.A. and ACEA Ato5 SpA

provide services in the provinces of Rome and

Frosinone, respectively,

- Campania, where G.O.R.I. S.p.A. provides services

in the area of the Sorrento Peninsula and Capri

island, the Vesuvio area, the Monti Lattari Area,

as well as in the hydrographic basin of the Sarno

river,


The maximum total amount of potential reimbursements

is around 11 million euros before deductible costs.

The Area Authority must also identify the methods and

timescales of repayments, as well as the related tariff

coverage.

For information regarding the requirements of abrogated

article 23 bis and the effects on the expiries of the ACEA

Ato2 concession, expiring on 31 December 2032, please

see the section dedicated to the referendums conducted

on12and13June2011.

Lazio – ACEA Ato5 S.p.A.

(Ato5 – Southern Lazio - Frosinone)

ACEA Ato5 provides integrated water services on the ba-

sisofathirty-yearagreementsignedon27June2003by

the company and Frosinone Provincial Authority (repre-

senting the Authority for the ATO comprising 86 munici-

palities). In return for award of the concession ACEA Ato

5 pays a fee to all the municipalities based on the date

the right to manage the related services is effectively ac-

quired.

The management of the integrated water service in the

territory of ATO 5 Lazio Frosinone involves a total of 85

municipalities (management still remains to be surveyed

for the municipalities of Atina, Paliano and Cassino Cen-

tro Urbano as regards water services only) for a total

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

inhabitants supplied and a number of end users equal to

around 188,900.

No new acquisitions were formalised in the period.

TheMayor’s Conference of 14 January 2009 approved

the exit from the ATO5 – Southern Lazio of the munici-

pality of San Biagio Saracinisco; a formal document for

the handover of the integrated water services was then

signed on 6 October 2009.

The agreement requires that the price charged to each

municipality should converge towards the price applied

throughout the ATO within three years of acquisition of

the contract, and that, as of that same year, there will be

a tariff review every three years that takes account of

the operating costs incurred and the capital expenditure

carried out. On application of the price for each year the

average tariff is adjusted by the total inflation rate, deriv-

it should be noted that on 3 October 2011, the Opera-

tional-Technical Secretariat of the ATO 2 Authority sent

ACEA Ato2 the appropriate document which makes

provision for the quantification of the unitary deductible

expenses in relation to untreated waste, whose elimi-

nation requires investments in treatment plants.

Said quantification was carried out for each individual

plant, taking into account (i) the date of assignment (in

relation to the acquisition of management of the ref-

erence municipality), (ii) date of elimination of the un-

treated waste as a result of the entry into operation of

the investment targeted at its elimination.

As a result of said quantification for the 16 October

2003 - 15 October 2008 period, users will be entitled,

upon specific request to be made on the basis of de-

fined methods, to the reimbursement as follows:

• in the case of users not relating to untreated

waste analytically identified by the STO and the

operator, the reimbursement, for each year of the

treatment tariff applied to the user multiplied by

the consumption in cubic metres billed,

• in the caseof users relating tountreatedwaste

analytically identified by the STO and the operator,

the reimbursement, for each year of the treatment

tariff applied to the user, less expenses relating to

each year for the corresponding year and the cor-

responding waste, multiplied by the consumption

in cubic metres billed.

In the event in which the deductible expense is higher

than the treatment tariff, the user is not entitled to any

reimbursement.

As regards the tariff portion due by 16 October 2008,

users not served by waste treatment must pay for the

treatment service:

• in the case of users not relating to untreated

waste analytically identified by the STO and the

operator, no amount will be charged,

• in the caseof users relating tountreatedwaste

analytically identified by the STO and the operator,

the tariff shown in STO’s communication is multi-

plied by the consumption in cubic metres billed.

In the event the tariff is higher than the treatment

tariff in force in the municipality in the relevant

year, the user will be required to pay the latter.


to make provision for this actioning no later than thirty

days from notification of this decision. Solely in the event

of further inertia will substitute powers be exercised,

within the term of thirty days, by the Ministry for the Pro-

tection of the Environment, Land and Sea, through the

appointment of a Commissioner for deeds.

As a result of the events mentioned related to tariff legiti-

macy, regarding which reference should be made to the

section “Update on major disputes and litigation”, for bill-

ing purposes, up until 31 December 2011, the company

applied the tariff that was published for 2005, in compli-

ance with the body’s instructions. However, it assesses

its revenues on the basis of the minimum volumes guar-

anteed by the project put out to tender valued at the real

average tariff, equal to that of the bid, plus forecast and

compound inflation.

By contrast, for the year 2012, on the basis of “Decree

note no. F66 of 8 March 2012 - Determination of the in-

tegrated water service tariff applicable for 2012 in ATO

5 Southern Lazio-Frosinone” of the Commissioner for

deeds appointed by the Regional Administrative Court of

Latina, ACEA Ato5 will bill on the basis of the average

real tariff and the associated tariff structure defined “in

compliance with the regulations and applicable contrac-

tual relations”.

More specifically, “this was carried out to quickly deal

with a service economic-financial imbalance, caused by

the failure to update the tariff based on the trend in in-

flation and forecasts in the area plan and management

agreement. Therefore, determination of the real average

tariff is limited to restabilising normal contractual con-

ditions of continuity of management and does not take

into account the difference between planned and actual

investments and, in general, area plan forecasts and the

actual trend in the management of previous years given

these obligations are to be fulfilled during the review

phase. However, this does not involve any prejudice with

respect to additional and subsequent reviews of area

planning which will be adopted by the Commissioner for

deeds, in which all obligations deriving from the ordinary

and extraordinary review will be fulfilled”.

The Commissioner for deeds reconstructed the trend

ing from target annual inflation rates for each year since

acquisition of the related contract.

Throughout the concession term, the operator is respon-

sible for the maintenance and upgrading of all regula-

tory assets and of any assets subsequently constructed

in compliance with the provisions of the Area Plan. New

plants constructed in accordance with the Area Plan,

which forms an integral part of the agreement, remain

the exclusive property of the company and, pursuant to

art. 35, paragraph 4 of the agreement, on expiry of the

concession or in the event of its early termination, the

company shall be paid an indemnity equal to the value of

the assets yet to be depreciated. Such assets regard net-

works or portions thereof, plants and the related equip-

ment constructed in accordance with investment plans.

As regards the effects of ruling no. 335/2008 of the Con-

stitutional Court, identification activities were essential-

ly concluded: the portion of the water treatment tariff

debited in the 2003-2008 period from active end users

connected solely to the sewerage network amounted

to 1.7 million euros. This amount does not take into ac-

count the estimated deductible charges due from end

users according to the provisions of article 8 sexies of

Law no. 13 of 28 February 2009 and article 5 of the De-

cree of the Ministry of the Environment of 30 Septem-

ber 2009, published in the Official Gazette on 8 February

2010, which the Area Authority is obliged to calculate.

Thus, this amount represents the maximum estimated

repayments which ACEA Ato5 must pay following identi-

fication, by the Area Authority, of the quantification, the

methods and timescales of the repayments and the tariff

coverage.

As regards the obligations set forth by the legislation to

be fulfilled by theAreaAuthority, in January 2012, the

Regional Administrative Court of Latina upheld the ap-

peal filed by Consumer Association CODICI regarding the

non-implementation of Constitutional Court ruling no.

335/2008 by the Area Authority.

In particular, the Regional Administrative Court of Latina,

in upholding the appeal submitted by Codici, ascertained

the non-fulfilment of obligations by AATO, as it did not

action the substitute powers pursuant to art. 152 of the

Environmental Code and stated the region’s obligation


nues equal to 136 million euros (Group share 50.4

million euros),

• to approve the following tariff system, deemed

suited to cover the aforementioned total tariff

costs, with the exception of equalisation upon ap-

proval of the tariff system following the review of

the area plan in progress:

- tariff basins: the breakdown of the municipalities

of A.T.O. 3 into two tariff basins was confirmed

as per resolution no. 9 of the General Meeting on

10July2009;withthefollowingtariffsystem.

-basicbasin“A”tariff:Basictariff=➢/m31.3210

-Basicbasin“B”tariff:Basictariff=➢/m31.1719

- Tariff structure coefficient before domestic use

bracket: 0.6 which cancels and replaces the cor-

responding coefficient of 0.5 in the tariff struc-

ture approved by means of resolution no. 9 of

thegeneralmeetingof10July2009,

- The average area value of the basic tariffs in

force in “basin A” and “basin B” pursuant to res-

olutionno.9of thegeneralmeetingof10 July

2009standsat1.2795➢/m3(itwassetat1.3210

➢/m3intheresolutionoftheBoardofDirectorsin

December 2010).

It should be pointed out that the new revenue forecast

(130 million euros) is neither in line with the value of costs

to be recognised in the integrated water service tariff for

2011, in compliance with the review criteria set forth in

the applicable Area Plan, whose application would, by

contrast, lead to a value of around 145 million euros, nor

let alone with the value of 136 million euros, a value al-

ready approved, after all, by EASV’s Board of Directors

by means of the aforementioned resolution 34/2010, on

the basis of a specific preliminary report drafted by the

Area Authority’s Planning Department. Owing to these

reasons, and in order to avoid uncertainties, it was ex-

tremely important for the Area Authority to quickly com-

plete the process for the review of the Plan in order to be

able to definitively determine, among other things:

• totalcoststoberecognisedintheintegratedwa-

ter service tariff for 2011;


ter service tariff for 2009 and 2010 and subsequent

equalisation;

in the tariff curve from 2003 to 2012 at current values,

applying the cumulative inflation factor relating to each

year of actual management to the values of the real aver-

age tariff set out in the original area plan. Consequently,

the real average tariff for 2012 was identified by the

commissioner for deeds on the basis of the original area

plan,at1.359➢/m3.

This involved, for the years 2006-2011, the recalculation

of the differential between revenues recognised in the

financial statements and those deriving from application

of the real average tariff in the above-mentioned provi-

sion (totalling 5 million euros, in addition to the allocation

to the provision for liabilities of 25 million euros).

Campania – GORI S.p.A. (Sarnese Vesuviano)

GORI provides integrated water services in 76 municipali-

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

of a thirty-year agreement signed on 30 September 2002

by the company and the Sarnese Vesuviano Area Author-

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

fee to the grantor (the Sarnese Vesuviano Area Authority)

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

vices is effectively acquired. The perimeter managed has

remained essentially unchanged compared to the pre-

vious year, since the process of acquiring management

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

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

of the Campania Region.

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

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

5, the General Meeting of the Sarnese Vesuviano Area

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

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

proved by said Board of Directors on 30 December 2010

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

resolved, among other things:

• to inviteGORI to sign a streamlining plan for the

management of the integrated water service of

A.T.O. 3 which involves an amount of total tariff

costs relating to 2011 (operating costs, modernisa-

tion and return on already invested capital) of no

more than 130 million euros (Group share 48.2 mil-

lion euros). The resolution of the Board of Directors

of December 2010 envisaged an amount of reve-


question also established that the charges deriving from

the application of ruling no. 335/2008 must be covered,

on a priority basis, by the residual amounts allocated to

the provisions set up in accordance with art. 14 of Law

no. 36/1994 and subsequent amendments and additions

and pertaining to the integrated water service operator

(GORI); in the event in which said sums are insufficient

to cover the expenses to be reimbursed, additional ex-

traordinary tariff measures must be implemented be-

forehand - also as an exception to limit “k” set out by

the Standardised Method - which ensure the required

economic-financial funding. In 2011, the charges record-

ed as a result of the aforementioned ruling concerned

the write-off of receivables relating to water treatment

amounts not due, for an amount of around 3.3 million

euros (Group share of 1.2 million euros), fully covered by

using the sums as per the provisions of art. 14.

Toscana – Acque S.p.A. (Ato2 – Basso Valdarno)

The management agreement, which came into force on

1January2002,withatwenty-yearduration,wassigned

on 28 December 2001. In accordance with that agree-

ment, the Management Body took over the exclusive

integrated water service of ATO 2, comprising all the

public water collection, abstraction and distribution ser-

vices for civil use, sewage systems and the treatment of

urban waste water. The Area includes 57 municipalities.

In return for award of the concession, Acque pays a fee

to all the municipalities, including accumulated liabilities

incurred prior to award of the related contracts.

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

ber 2008, the General Meeting of the Area Authority ap-

proved the tariff review for the years 2005-2007, in which

checks were performed on the actual volume of invest-

ments carried out, operating costs, revenues generated,

the amounts billed and the technical and organisational

standards achieved. Based on the results of these checks,

the adjustment was calculated (positive for the operator)

for lost revenues for 2005-2007, given more than 0.5%

lower than those forecast in the Area Plan.

Penalties were also applied during the revision, as pro-

vided for in the Agreement, for the failure to achieve

certain technical and organisational standards.

During the second tariff review, the new Investment


ter service tariff for the subsequent 2012-2014

regulatory period;

• anadequatetariffplanwhichallowstherecovery

of previous equalisation accumulated throughout

all of 2011 and a repayment plan for the debt ac-

crued, above all, in respect of the Campania region

for water supplies and waste water treatment ser-

vices, so as to standardise relations;

• guaranteedrevenuesfor2011.

The approval of resolution of 2 August removed the need

to set aside a provision for risks for tariff equalisation

pertaining to 2011 (5.9 million euros), instead included

in the accounts for the first half of 2011 in relation to

the assumed non-recognition of estimated revenues,

while waiting for a review of the area plan currently be-

ing drawn up.

The 40 million euro bridge loan which matured on 30

June2011isrelatedtotheAreaPlanreview.

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

Area Authority to transform the loan into a long-term

mortgage.

As part of the repeatedly mentioned extraordinary re-

view, the debt situation towards the Campania Region

must be definitively settled with regard to drinking

water supplies: for more information on said dispute,

please see the appropriate section “Update on major

disputes and litigation”.

In relation to the problems concerning ruling no. 335

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

General Meeting of the Area Authority, by means of

resolution no. 6, approved the lists of users not served

by water treatment plants and the associated amounts

to be reimbursed, authorising GORI to carry out the rel-

evant publication and go ahead with the subsequent

reimbursement to the entitled parties, with reference

to the period running from 16/10/2003 to 15/10/2008,

in compliance with the provisions of the Decree of the

Ministry of the Environment dated 30 September 2009

and art. 2033 of the Italian Civil Code. The resolution in


investments while they are consistent in all other as-

pects, including the tariff to be applied in the first three-

year period (2011-2013).

Plan 2021, which makes provision in the first three-year

period for higher amortisation due to the lower duration

of financial amortisation, so that limit K of the increase

in the fixed tariff set by the Normalised Method at 5% is

not exceeded, envisages the reduction of the fee paid

to the municipalities with recovery in subsequent years.

In October 2006, the Operator signed a contract with

a syndicate of banks which provides for a total loan of

255 million euros to cover the financial needs of the in-

vestment plan from 2005 to 2021 of around 670 million

euros. As of 31 December 2011, the operator has drawn

down 187 million euros.

With regard to the impact of Constitutional Court sen-

tence 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

plants or where the plants are inactive, from October

2008 the company has stopped including the waste wa-

ter treatment component in bills for end users identi-

fied as falling within this category. The Area Authority

has intervened to ensure application, in 2009, of the

Average Tariff provided for in the Area Plan.

In 2010, the lists of end users entitled to return have

been published on the websites of Acque and of the

Area Authority. In the same year, the Authority ap-

proved guidelines to carry out repayments, according to

which these will be made following the request of the

user and the five-year prescription will be calculated as

of the date the request was submitted. According to

this resolution, the total potential debt not prescribed

at December 2010 amounts to approximately 6.5 mil-

lion euros (Group share 2.9 million euros).

At December 2010, 1,139 requests have been submit-

ted by entitled users, for a total of 0.4 million euros,

to be reimbursed taking account of deductible charges.

The Authority included this amount in the tariff review

and the repayment is expected to be carried out in the

three-year period 2011-2013. Further requests totalling

around 43,000 were then received, whose reimburse-

ment has not yet been resolved by the Authority.

Plan was defined, later described in detail in the new

three-year operating plan for 2008-2010 approved by

the Authority in March 2009.

On 6 December 2011, the Authority’s General Meeting

approved the third tariff review for the years 2008-2010.

During the review, checks were performed on the ac-

tual volume of investments carried out, operating costs,

revenues generated and collections made, the amounts

billed and the technical and organisational standards

achieved. Based on the results of these checks, the ad-

justment was calculated (positive for the operator) for

lost revenues for 2008-2010, as well as the tariff rec-

ognition for lost collections booked under losses in the

2008-2010 financial statements and reimbursements

requested by entitled parties up until 31/12/2010 due

to Constitutional Court ruling no. 335/2008. The re-

imbursement envisaged by Acque for the 2011-2013

three-year period is a little over 0.3 million euros. In the

third review, provision was made for increasing oper-

ating costs for the years starting from 2012. Penalties

were also applied during the revision, as provided for in

the Agreement, for the failure to achieve certain techni-

cal and organisational standards.

The tariff review was accompanied by a revision of the

Area Plan which was structured into two separate hy-

potheses. The first (2026 Plan) makes provision for an

extension of the concession by 5 years (until 2026) with

an increase in forecast investments by around 250 mil-

lion euros in the 2011-2026 period. The second (2021

Plan) makes provision for an unchanged amount of in-

vestments with respect to the original plan and already

financed, but with a restructuring which ensures that

the 2011-2013 three-year period coincides with that in

the previous hypothesis and a subsequent reduction in

the period remaining.

In the 2011-2013 three-year period, roughly 40 million

euros more in investments are expected than in the

original plan.

The 2026 Plan will only become effective following:

• approvalbythecurrentLenders

• verificationofthefinanceabilityofsaidplan

In the event the above conditions are met, the 2021

Plan will become effective.

The two plans only differ as regards the part relating to


plants or where the plants are inactive, the company

geared up to immediately acknowledge the indications

from AATO. Therefore, effective as of October 2008, the

portion of treatment water for known situations which

fall under said cases was not billed, and from 2009,

AATO updated tariffs to guarantee the application of the

average tariff established.

As regards the matter, AATO intervened with General

Meeting Resolution no. 13 of 29/11/2010, according to

which it approved the Extraordinary Review in order

to return to users not served by water treatment the

water treatment tariff not due pursuant to the afore-

mentioned Ministerial Decree dated 30/09/2009. Thus,

AATO reviewed the Plan tariff until 2014, in order to en-

sure the repayment of sums to those entitled to receive

them, except any future review effect of the whole Plan

that could arise from the three-year review that is cur-

rently being carried out.

Following said General Meeting Resolution from AATO,

the latter’s Board of Directors finally implemented Res-

olution no. 25 of 20/12/2010, in which it established

the average tariff applicable for 2011 by Acquedotto

del Fiora Sp at 1.977 ➢/m3, including forecast inflation

of 1.5% (in line with the latest Government DPEF - It-

aly’s Economic and Financial Planning Document) and

already net of the return of a portion of the water treat-

ment fee for entitled users pursuant to art. 7 of Ministe-

rial Decree dated 30/09/2009.

On the financial front, the Operator, on 5 March 2012,

signed the extension, for an additional 18 months, i.e.

up until September 2013, of the bridge loan agreement

which increased from 80 million euros to 92.8 million

euros, with a additional 12.8 million being disbursed.

The Operator continues to work towards defining a

project financing transaction that will support the bor-

rowing requirements of the Company until the end of

the concession, ensuring the realisation of the entire

Investment Plan.

As regards the effects of the referendum consultation,

a legal opinion was requested, as part of the above-

mentioned financing, which excluded effects relating to

the first question regarding the legitimacy and duration

of the concession, and reiterated that, since the effect

of the abrogation does not extend to Ministerial Decree

of 1 August 1996 containing the normalised method,

this must be considered applicable until substitute pro-

visions are issued by the body responsible (now AEEG).

Said interpretation was also confirmed by the Area Au-

thority which applied the normalised method in the tar-

iff review completed in December 2011.

Tuscany – Acquedotto del Fiora S.p.A.

(Ato6 – Ombrone)

Based on the agreement signed on 28 December 2001,

the operator (Acquedotto del Fiora) is to supply inte-

grated water services on an exclusive basis in ATO 6,

consisting of public services covering the collection, ab-

straction and distribution of water for civil use, sewer-

age and waste water treatment.

Theconcessiontermistwenty-fiveyearsfrom1Janu-

ary 2002.

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

– completed its acquisition of a stake in the company.

In December 2011, the Area Authority approved the

new Tariff Review for the 2008-2010 Three-Year Period

and the review of the Area Plan and 2011-2026 Invest-

ment Plan in line with the principles of sustainability

of the medium/long term economic-financial balance.

In this context, AATO took the opportunity, something

that ADF had requested for a long time, to eliminate the

discrepancies still existing between the planning of the

Operator (Economic-financial plan to obtain the Project

Financing) and that of the Regulator (AATO economic-

financial plan).

The volumes of water sold, included by the Authority

in the new Area Plan are, therefore, in line with Acque-

dotto del Fiora expectations.

With regard to the impact of Constitutional Court sen-

tence 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


• non recognition of part of the new adjustments

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

application of the 6 year prescription of the new

agreement.

The Area Authority provided for 10.2 million euros to

be allocated in order to cover reimbursement requests

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

nected to the sewerage network or are connected to a

plant that is temporarily inactive. This amount covers

approximately 50% of the maximum amount estimated

to be reimbursed (21.6 million euros, including VAT). If

this tariff amount is lower than that actually paid by the

operator to the users, the difference shall be used to re-

duce adjustments on past lost revenues. If the requests

exceed expectations, the operator may request an ad-

justment in the subsequent Review.

Publiacqua filed an appeal with the Regional Adminis-

trative Court of Tuscany against the resolution of the

Area Authority Board of Directors. The appeal is based

on various factors such as the lack of jurisdiction (given

the object of the resolution is a matter for the General

Meeting and not the Board of Directors), the non-adjust-

ment of the analysis of service criticalities and invest-

ment objectives, and, therefore, incompleteness of the

document, also shown by the absence of the definition

of investments to be carried out.

Also in the regulatory area, Conviri (Supervisory Com-

mittee for the Use of Water Resources) also filed a sec-

ond-instance appeal with the Council of State against

the Regional Administrative Court of Florence’s judg-

ment which, by ruling no. 6863 of 23 December 2010,

cancelledthatCommittee’sresolution3of16July2008.

The resolution challenged the legitimacy of the settle-

ment agreed by the Area Authority and Publiacqua. This

was designed to resolve numerous disputed items that,

in the end, gave rise to the payment of 6.2 million euros

to the operator. Ruling no. 5788 of the Council of State

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

Administrative Court of Tuscany.

The Regional Water Authority communicated that, in its

opinion, the ruling of the Council of State mentioned

previously relating to the settlement agreement signed

between the Area Authority and Publiacqua in 2007

Tuscany – Publiacqua S.p.A.

(Ato3 – Medio Valdarno)

In data 20 dicembre 2001 è stata sottoscritta la conThe

management agreement, which came into force on 1

January2002,withatwenty-yearduration,wassigned

on 20 December 2001. In accordance with that agree-

ment, the Management Body took over the exclusive

integrated water service of ATO 2, comprising all the

public water collection, abstraction and distribution

services for civil use, sewage systems and the treat-

ment of urban waste water.

The Area includes 49 municipalities, of which 6 man-

aged via agreements inherited from the previous opera-

tor, Fiorentinagas. In return for award of the concession

the operator pays a fee to all the municipalities, includ-

ing accumulated liabilities incurred prior to award of

the related contracts.

InJune2006,ACEA-viathevehicle,AcqueBluFioren-

tine S.p.A. – completed its acquisition of a stake in the

company.

Please note that, on 17 December 2010, the general

meeting of the Area Authority approved the 2010-2021

tariff development. The Board of Directors was entrust-

ed by the Meeting to draw up the new Chapter 6 of the

Area Plan, containing comments and details concerning

the approved tariff profile, as well as the tables of the

economic-financial plan set out in art. 149, paragraph 4

of Legislative Decree no. 152/2006.

This document was partially approved (the economic-

financial plan is not yet approved) by Area Authority

Board of Directors’ resolution no. 4/2011 of 23 February

2011. The following were the main lines adopted by the

Authority in defining the tariff development:

• estimate of 86 million cubic meters billed each

year, as compared to 88.6 of the previous year;

• recognitioninthetariffofcostsalreadyallocated

and those expected in the future for the dispute

with staff regarding career advancement;

• penaltiescharged to theoperator for2.7million

euros due to the failure to reach standards for the

2005 - 2009 period, as a reduction of the revenues

from the tariff in the 2010-2012 three-year period;

• tariffadjustments for the2002 -2009period for

26.9 million euros;


calculation, i.e. the system of distribution of man-

agement economies realised in the three-year pe-

riod preceding the review between the operator

and end user,

• exclusionfromthetariffcalculationofthecompo-

nent of the return on invested capital relating to

fixed assets in progress with subsequent damage

on the actual coverage of costs connected with

the realisation of the works,

• modificationofthetermwithinwhichtheopera-

tor has the right to update actual revenues within

a maximum of three years,

• eliminationoftherecognitionoflossesonreceiv-

ables up to a maximum of 2% per annum which

determine a deviation between the forecast and

actual collection,

• elimination of extraordinary contingent assets

and liabilities from the cost calculation,

• modificationof thesystemfor thecalculationof

the compensation due to the operator at the end

of the assignment, therefore a matter which does

not fall within the scope of the evaluation of the

Plan as it involved in the composition of the aver-

age tariff, excluding the monetary revaluation of

non-amortised capital,

exclusion from the tariff calculation of compo-

nents of amortisation and remuneration of con-

nections carried out in the 2005-2007 period and

not covered grants.

Lastly, it should be noted that said preliminary enquiry

concluded with the disapproval of the fees to munici-

palities which are not linked to the actual coverage of

instalments of previous mortgages taken out for water

works.

The provisions contained, many of which already the

subject of checks in other area plans by Conviri with-

out similar disapprovals, concern matters which are not

defined by industry legislation but which do, therefore,

fall under the scope of the agreement powers of the

parties. Publiacqua intends to submit an application for

internal review against said decree and, if this does not

lead to the cancellation of the act, will file an appeal.

nullifies said agreement, also stating its desire to pro-

ceed with the extraordinary tariff review for the recov-

ery of the sums involved in said settlement agreement.

Against said decision, Publiacqua asked that the provi-

sions of art. 43 of the Assignment Agreement be en-

forced for the resolution of the disputes via arbitration.

Lastly, another important move regards the decision

of the Area Authority’s General Meeting (resolution no.

1 of 16 March 2011) to amend article 49 of the sup-

ply regulation, decisively changing the procedures for

calculating and applying the guarantee deposit, intro-

ducing a criterion based on user payment times. The

resolution requires that the deposit be adapted to the

newcalculationcriteriabyJune2011.Sinceitistechni-

cally impossible to comply with that timing, Publiacqua

appealed that resolution before the Regional Adminis-

trative Court, and asked that it be suspended. Follow-

ing the appeal, the Area Authority’s Board of Directors

resolved on a proposal to the Authority’s General Meet-

ing to partially amend article 49, deeming Publiacqua’s

reasoning well-founded. The Area Authority’s General

Meetingmeton30Juneandpostponedtheobligation

toadaptinvoicingsystemsuntil31October.On13July

2011, Publiacqua therefore withdrew the appeal due to

lack of interest.

As regards tariffs, the Area Authority formally commu-

nicated to the operator the legitimacy of the tariffs ap-

plied, also in light of the referendum vote, pending the

necessary legislative amendments. The Regional Water

Authority confirmed said decision in resolving the 2012

tariff.

In January, the generalmanagement for protection of

the area and water resources, concluded the prelimi-

nary check on the proper drafting of the ordinary review

of the Area Plan of ATO 3 medio Valdarno, publishing it

on Conviri’s website.

Certain provisions were made in the decision; the main

ones in terms of the impact on the company’s econom-

ic-financial capacity are as follows:

• modificationofthemethodofcalculatingthereal

average tariff excluding profit-sharing from said


in the current concession assignment.

On 29 December 2011, within a context of new and

clearer relations with the Area Authority as a result of

the settlement of the dispute, GEAL signed a Memo-

randum of Understanding with the Area Authority and

the municipality of Lucca, under which planning powers

were transferred to the Area Authority (however, to be

exercised in agreement with the municipality of Lucca)

and powers for the control of management throughout

the municipality of Lucca, in respect of the introduction,

for GEAL, of the tariff method based on DM LL.PP (Minis-

try of Public Works Decree) of 01.08.1996, replacing the

now ceased ex lege based on CIPE (Interdepartmental

Committee for Economic Planning) resolutions, so as to

guarantee conditions of growth and development for

the company in the future too.

As regards the 2011 financial statements, despite GEAL

having significantly increased its gross operating profit

compared to the financial statements of the previous

year and budget forecasts, the net income was adverse-

ly impacted by extraordinary expenses, determined by

the return to the Tax Authorities of State aid known as

the “tax moratorium” which concerned the company

for the years 1995 and 1996.

Lunigiana Acque S.p.A. in liquidation

The current concession arrangements with Lunigiana

Acque S.p.A. as regards the Integrated Water Service

in the municipalities of Aulla, Podenzana and Tresana

(MS), all ended early at 31.12.2010 as established by the

Decision of the Director of the Area Authority no. 104 of

21.10.2010, pursuant to art. 23 bis, paragraph 8, letter

e) of Law Decree no. 112/2008 converted to Law no.

133/2008 and subsequent amendments and additions.

It should be noted that the referendum consultation of

12and13Junehadnoeffectontheearlytermination,

whereas at the moment of abrogation of art. 23 bis said

regulation had already produced its legal effects on the

concessions held by Lunigiana Acque, with said abroga-

tion having no retro effective impact.

Due to the cancellation of the assignments and the com-

pany’s equity situation, Lunigiana Acque was placed

into liquidation by means of Extraordinary Sharehold-

ers’MeetingResolutionof28July2011.

In terms of the bridge loans, on 24 February 2011, the

company renewed the bridge loan for 6 months, until

24 August 2011. On expiry, the loan was renewed again

for 15 months, expiring on 24 November 2012. The loan

was stipulated for an amount of 60 million euros, and

envisages a total pre-amortisation of 5 million euros to

be disbursed on 24 February 2012 (2.5 million euros)

and the remainder on 24 August 2012.

Tuscany – GEAL S.p.A., Azga Nord S.p.A.

and Lunigiana Acque S.p.A. (Ato1 –Tuscany

Nord)

GEAL S.p.A.

The company GEAL S.p.A., operator of the integrated

water service, is not the Territorial management body

in accordance with Law no. 36/1994 (now Legislative

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

method” pursuant to DM LL.PP (Ministry of Public Works

Decree) of 01.08.1996 for tariff review does not apply

to it, but the entire method applies, based on the deci-

sions of the Interdepartmental Committee for Econom-

ic Planning (CIPE).

Said tariff methodology, as mentioned above, applies

to GEAL, as to all operators operating on the basis of

concession agreements stipulated with the individual

municipal administrations and not with the Area Au-

thorities, came to a definitive end following the entry

into force of art. 10, paragraph 28 of Law Decree no.

70/2011 converted to Law no. 106/2011.

At the end of a lengthy debate with the Area Authority1,

in 2011, also following the repeal of art. 23 bis of Law

Decree no. 112/2008 converted to Law no. 133/2008

and subsequent amendments which occurred follow-

ingthereferendumconsultationof12and13Junelast

year, definitively consolidated its management in the

area of the municipality of Lucca, ensuring, within the

current legislative framework, operational continuity

until its natural expiry on 31 December 2025 contained

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).


As with Lunigiana Acque, the grantor is obliged to reim-

burse the costs incurred, i.e. the net carrying amount

of the works carried out, plants and equipment, at its

own expense.

Umbria – Umbra Acque S.p.A.

(Ato1 – Umbria 1)

On 26 November 2007 ACEA S.p.A. was definitively

awarded the tender called by the Area Authority for

selection of the minority private business partner of

Umbra Acque S.p.A. The tender procedure requires the

successful bidder to subscribe a 11.335% increase in

the share capital of Umbra Acque S.p.A. post-increase

and to purchase 4,457,339 shares owned by outgoing

private shareholders (ACEA already holds a stake in

Umbra Acque through its subsidiary Crea), correspond-

ing to 28.665% of the share capital of Umbra Acque

S.p.A. post-increase.

Before the end of 2007, ACEA completed the subscrip-

tions of the share capital increase and the purchase of

shares owned by outgoing private shareholders, thus

acquiring ownership of 40.00000257% of the share cap-

ital of Umbra Acque S.p.A.

By means of General Meeting decision dated 21/02/2011,

the Area Authority approved 2011 tariffs, by establish-

ing a 1.25% increase, plus the planned inflation rate of

1.5%. Therefore, the overall increase is 2.75%.

The Area Plan was approved by the Meeting of Repre-

sentatives in 2004, however, maintaining the structure

of the pre-existing plan, approved in 2002. During 2008,

Umbra Acque underlined the need to carry out a total

review of the current Plan, in consideration of both the

new national (Legislative Decree no. 152/06) and re-

gional regulations (Regional Plan for water protection in

Umbria, sewage Directive, Regional Regulator Plan for

Umbria aqueducts and Regional Law no. 25/09 “Rules

for the protection and safeguard of water resources”)

– according to which the programme of works included

in the existing Area Plan will be adjusted, in order to

achieve the pre-defined objectives concerning water

quality and aquifer protection – and in the light of the

increase in several cost items (in particular, electricity

Despite being in liquidation, management continued in

order to ensure continuity in the provision of an essen-

tial public service, while awaiting the assignment of the

integrated water service to a new operator.

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

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

Meeting of the Area Authority and will take effect on 1

April 2012. Therefore, Lunigiana Acque’s management

will cease definitively on 31 March 2012.

The grantor is obliged to reimburse the costs incurred,

i.e. the net carrying amount of the works carried out,

plants and equipment, at its own expense.

AZGA Nord S.p.A. in liquidation

Analogamente al caso di Lunigiana Acque, anche per la

Similar to the case of Lunigiana Acque, also for AZGA

Nord, operator of the Integrated Water Service in the

municipality of Pontremoli (MS), the concession ar-

rangements all ended early at 31 December 2010 as

established by the Decision of the Director of the Area

Authority no. 105 of 21.10.2010, pursuant to art. 23 bis,

paragraph 8, letter e) of Law Decree no. 112/2008 con-

verted to Law no. 133/2008 and subsequent amend-

ments and additions.

In this case too, the referendum consultation of 12 and

13 Junehadnoeffecton theearly terminationof the

concessions, whereas at the moment of abrogation of

art. 23 bis said regulation had already produced its legal

effects, with said abrogation having no retro effective

impact.

Due to the cancellation of the assignments and the

company’s equity situation, AZGA Nord was placed into

liquidation by means of Extraordinary Shareholders’

Meeting Resolution of 15 December 2010.

Despite being in liquidation, management continued in

order to ensure continuity in the provision of an essen-

tial public service, while awaiting the assignment of the

integrated water service to a new operator.

Consultations are currently underway between the

Area Authority (now the Tuscan Water Authority), the

municipality of Pontremoli (majority shareholder of

AZGA Nord) and GAIA, for the transfer to the latter of

management of the integrated water service which has

not yet been completed.



• annual increase in the lump-sum payment with

regard to the new lighting points installed.

In addition, investments regarding the service may be

(i) requested and financed by the municipality or (ii) fi-

nanced by ACEA: in the first case, such interventions

will be paid based on a price list agreed by the parties

(and subject to review every two years) and will result

in a percentage decrease of the ordinary fee. In the sec-

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.



Upon natural or anticipated expiry, ACEA will be award-

ed an allowance corresponding to the residual carry-

ing amount, which will be paid by the Municipality or

the incoming operator if this obligation is expressly set

out in the call for tenders for the selection of the new

operator.

The contract sets out a list of events that represent

a reason of anticipated revocation of the concession

and/or resolution of contract by the will of the parties.

Among these events, reference is made to newly aris-

ing needs linked with public interests, including the one

set out in Article 23 bis of Law Decree no. 112/2008,

repealed following the referendumof 12 and13 June

2011, according to which ACEA has the right to receive

an allowance according to the product, that is discount-

ed based on the percentage of the annual contractual

amount and the number of years until expiry of the con-

cession.

Based on the fact that the supplementary agreement

exceeds the reference thresholds set out by the Com-

pany with regard to Related party transactions, it was

analysed by the Board of Directors and approved during

the meeting held on 1 February 2011, having obtained

the favourable opinion of the Committee for related

party transactions.

The current contract, as amended by the supplemental

agreement, involves a lump-sum payment which pays

a compensation for ordinary operations, ongoing and

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-

ditional costs further increased, due to both new cost

items that were not included in the current Plan and the

increase in tariffs for the services used by the Company.

Please note that the tariff review process, which start-

ed some time ago, is not yet complete.

Related Party Transactions

ACEA GROUP AND ROMA CAPITALETrading relations between ACEA Group companies and

Roma Capitale include the supply of electricity and wa-

ter and provision of services to the Municipality.

Among the principal services are the management,

maintenance and upgrading of public lighting facilities

and, with regard to environmental–water services, the

maintenance of fountains and drinking fountains, the

additional water service, as well as contract work.

Such relations are governed by appropriate service con-

tracts and the supply of water and electricity is con-

ducted on an arm’s length basis.

ACEA and ACEA Ato 2, respectively, provide public light-

ing and integrated water services under the terms of

two thirty–year concessions. Further details are provid-

ed in the section “Service concession arrangements”.

With regard to public lighting, the Group provides pub-

lic lighting services on an exclusive basis within the

Rome area. As part of the thirty-year free concession

granted by the Municipality of Rome in 1998, the eco-

nomic terms of the concession services are currently

governed by a service contract signed by the parties,

effective as of May 2005 until the concession expiry (31

December 2027). On 15 March 2011, ACEA and Roma

Capitale signed a supplemental agreement effective as

of the beginning of the year.

The supplements regard the following elements:

• thetermoftheservicecontractshouldbealigned

with the expiry of the concession (2027), given

that the contract is merely additional to the agree-

ment;



Capitale must settle the remaining balance by

Juneofthefollowingyear.Inthecaseoflatepay-

ment for electricity or water sales, interest shall

be paid under the terms of the provisions issued

by the Electricity and Gas Authority at the time,

d) the prices applied to sales of electricity to free

market users are in line with the commercial

policies of Acea Energia. Payment terms are sixty

days and, in case of delay, a default interest rate

will be applied,

e) the terms of payment for the ACEA Group relating

to fees for the water services concession and the

rental on its head office premises are set at thirty

days from receipt of the invoice, and in the case of

late payment interest shall be paid in accordance

with the current bank rate at the time.

For further information regarding relations between

the ACEA Group and Roma Capitale, reference should

be made to the disclosures regarding receivables and

payables in note 23.

The following table shows details of revenues and costs

for 2011 of the ACEA Group (compared with those for

the same period of the previous year) deriving from the

most significant financial relations.

extraordinary maintenance and the supply of electricity.

The annual payment, calculated on the basis of lighting

points as at 31 December 2009, amounts to 39.6 million

euros and is billed in monthly instalments with payment

set at 60 days.

The new constructions and investments contribute to

the increase in the lump-sum figure due to the annual

accrual calculated according to the capital allowance

mechanism envisaged for the plants underlying the

specific operation as well as the percentage reduction

of the ordinary fee due by Roma Capitale, the amount

of which is defined in the technical-economic project

document.

A variable interest rate is applied to the invested capital.

As a local authority, Roma Capitale has the power to

regulate municipal taxes and duties that the Group

companies are required to pay and which fall under

its territorial jurisdiction. However, the Group - with re-

spect to other companies operating in the municipality

– is in no case the sole payer of any of these taxes and

duties.

The reciprocal receivables and payables – with regard

to payment terms and conditions – are governed by

each single contract:

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 le-

gal 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 ser-

vice contracts is sixty days of receipt of an in-

voice, 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 reg-

ulated market), it is stipulated that Roma Capitale

shall make an advance payment of 90% within 40

days of receiving a summarised list of the invoic-

es issued by Group companies. Moreover, Roma


supply of electricity and water.

The supply of services to entities owned by the Roma

Capitale Group is conducted on an arm’s length basis.

The prices applied to sales of electricity to free market

users are in line with the commercial policies of Acea

Energia.

The following table shows amounts (in thousand of eu-

ros) for revenues, costs, receivables and payables deriv-

ing from relations between the ACEA Group and entities

owned by the Roma Capitale Group.

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.

ACEA GROUP AND ROMA CAPITALE GROUPAThe ACEA Group also maintains trading relations with

other companies, special companies (aziende speciali)

and bodies owned by Roma Capitale, concerning the

31.12.2011 31.12.2010 31.12.2011 31.12.2010

Supply of fresh water 28,821 27,423 0

Sewerage service 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

Upgrading of water services in the suburbs of Rome 0 0

Concession fee 20,297 19,162

Rental expenses 54 54

Taxes and duties 3,108 2,662


Revenues 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

Cotral Group 50 1,005 0 196 1,307 0 0

Trambus 17 0 26 77 2

Ama 3,974 3,241 1,248 1,347 7,377 8,716 1,813 773

Atac 8,866 16,738 4 0 42,429 15,361 19 0

Musica per Roma 43 40 0 62 45 0 0

Risorse per Roma 10 88 0 208 133 0 0

TOTAL 12,913 21,128 1,252 1,347 50,271 25,588 1,909 775



The significant change recorded between the two situ-

ations set out for comparison was mainly due to the

change in the basis of consolidation, with particular ref-

erence to the increased interest in Acea Energia due

to the termination of the joint venture agreement be-

tween ACEA and GdF-Suez.

THE ACEA GROUP AND ITS MAIN ASSOCIATESUp until 31 December 2011, i.e. the natural expiry date

The following table summarises receivables and payables due from and to entities owned by the Roma Capitale

Group.


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

Loans and receivables 132,678 98,512 34,166

Borrowings 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



31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010

Marco Polo 2,363 2,086 11,611 11,428 3,138 2,185 15,946 22,762


of the business unit lease, Marco Polo carried out fa-

cility management services.

The supply of services to ACEA Group companies is

conducted on an arm’s length basis.

Similarly, Marco Polo is provided with administrative ser-

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-

ros) for revenues, costs, receivables and payables de-

riving from relations between the ACEA Group and the

company Marco Polo.

Activities are underway for the perimeterisation of the ACEA business unit which became part of the perimeter again

from1January2012asaresultoftheexpiryoftherentalagreement.


The aforementioned agreements continue regularly in

compliance with their relative terms and conditions. As

established in the Framework Agreement, each con-

tracting party signed amendment deeds for the Tor di

Valle gas supply contract and the sub-rental contracts.

Furthermore, the following agreements were signed on

the Date of Execution:

• ➢andAEP;

• anagreementfortheprovisionofadministrative,IT,

Tor di Valle AEP office management and personnel

management services, with a duration of 6 months,

extendable for another two. The agreement was

signed by ACEA on one side and AEP and AET on

the other;

• remote controlmanagement contract signed be-

tween Acea Produzione and AEP lasting 6 months,

extendable for another two.

The following table shows amounts (in thousands of eu-

ros) for revenues, costs, receivables and payables deriv-

ing from relations between the ACEA Group and principal

companies in the GdF-Suez Group.

ACEA GROUP AND MAIN GdF-Suez GROUP COMPANIESAs a result of the termination of the joint venture be-

tween ACEA and Electrabel (now GdF-Suez) on 31 March

2011, the contracts between the companies owned ex-

clusively by ACEA and those acquired by GdF-Suez were

redefined in the Framework Agreement.

Relations undertaken by ACEA or its direct or indirect

subsidiaries with Acea Energia Holding, Acea Energia,

AEP, AET and Eblacea, existing when the termination

was carried out and which continued subsequent to its

formalisation, include:

• ➢thestaffadministrationserviceagreement,signed

between ACEA and Tirreno Power S.p.A.;

• the energy purchase agreement, signedbetween

AET and Acea Energia;

• theTordiVallegassupplyagreement,signedbe-

tween AET and AEP;

• sub-rental agreements signed by Acea Energia

Holding on one side, and AEP and AET, respectively

on the other.


31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010

GAZ DE FRANCE

4,146 69,914 14,924 138,503 0 24,752 611 15,403

GDF SUEZ Energia Italia

53,029 0 662,884 15,282 5,247 0 160,429 108,268

ROSEN 6 95 74 297 0 67 0 8

GDF Suez Produzione

3,246 0 137 0 1,539 0 0 0

Roselectra 258 0 0 0 130 0 0 0

Tirreno Power 204 0 0 0 60 0 0 0

LABORELEC 0 0 0 197 0 0 0 104



based on taxable pay, is 0.57 percentage points higher

for staff covered by Inpdap compared with those cov-

ered by Inps. The ACEA Group applied a reduced rate as

of October 2003 for said contribution too. It should be

noted that as regards said contribution legislation was

introduced with Law Decree no. 112 of 25/6/2008 con-

verted with amendments into Law no. 133 of 6/8/2008,

where paragraph 2 of article 20 regulates, effective from

1 January 2009, uniformity of contributions for private

employers across the board.

ACEA, ACEA Ato2, ACEA Ato5, ACEA Distribuzione, Arse,

Acea Energia and Acea Produzione filed appeals which,

although turned down, gave rise to the presentation of

an appeal request which also ended unfavourably for

said parties. Appeals lodged by Laboratori and ACEA Luce

met with favourable outcomes, while under appeal these

companies also met with an unfavourable outcome.

Following a series of unfavourable outcomes for Group

companies, a Court of First Instance (in Brescia) has up-

held the position taken by a former municipalised utility,

recognising the company’s right to pay the above con-

tributions at the reduced rate and declaring the tax de-

mands issued by Inps to have no basis in law. The court’s

opinion appears to be substantially in line with the argu-

ments adopted in the appeals submitted by Group com-

panies.

The Group made the necessary allocations to cover the

risk related to these problems.

As a result of enforcement actions implemented by INPS

through Equitalia for the sole purpose of avoiding the ef-

fects of the seizures performed pursuant to art. 48 bis

of Presidential Decree no. 602/1973, in November 2011,

ACEA, ACEA Ato2, ACEA Distribuzione, Acea Energia and

Laboratori broke the payment requests issued by INPS

relating to unpaid contributions down into instalments.

The total amount split into instalments came to 16.9 mil-

lion euros.

Update on major disputes and litigation

Social security issues

INPDAP (National Social Insurance Institute for

Civil Servants) contributions.

The Group employs staff registered with both Inpdap and

Inps pension funds. Certain contribution rates applied by

the two entities differ greatly; these include those for

family allowance payments, for which Inpdap applies a

rate that is 3.72% higher than that applied by Inps.

In response to the failure to pass legislation bringing the

pension and social security contributions into line be-

tween various institutions, the Group companies decided

that from November 2002 it would pay such contribu-

tions at the lower rate. On the other hand, the underly-

ing legal basis is rather unclear: Inps circular no. 103 of

16June2002reiteratedthat,whilstawaitingclarification

from the Ministry of Economy and Finance and the Min-

istry of Labour, the rate of 6.20% applied to staff regis-

tered with the Inpdap pension fund, reduced by 4.15%

for 2011 (although the differential remained unchanged,

with respect to the rate of 3.72% for staff registered with

the INPS pension fund) was to be considered provisional.

In terms of legal action, ACEA, ACEA Distribuzione, ACEA

Ato2, Laboratori and ACEA Luce, after appealing through

the administrative courts, started legal action. The judge-

ments handed down at first instance during the second

half of 2006 found in favour of Laboratori and ACEA Luce

(the latter being an ACEA Group company at the time),

whilst the appeals submitted by ACEA, ACEA Distribuzi-

one and ACEA Ato2 were turned down.

The second instance proceedings, launched by the com-

panies or INPS in cases where the latter objected to the

first instance rulings, met with the same unfavourable

ruling for ACEA Group companies.

Appeals were submitted to the Supreme Court for Labo-

ratori, Acea Energia (formerly AceaElectrabel Elettricità

spa) and Acea Produzione (through succession of rela-

tions established by transferred company AceaElectra-

bel Produzione).

A similar problem regards contributions for maternity

benefits, where the difference in the cost to companies,


the change to collective agreement regulations to the

date law no. 133 of 2008 was issued.

In fact, the new contracts for electricity sector personnel

of August 2006 and for gas-water personnel of April 2007

regulated the sickness benefit paid by companies as a

supplement to indemnities paid by the insurers (INPS) to

the provider and paid, by said companies, at the normal

salary payment dates.

Unemployment and mobility contributions

This is the contribution companies have to pay due to

INPS, to finance the income support fund for workers

that have become unemployed; it is decidedly insurance-

related in nature, for which only the previously insured

provider has the right to performance.

The obligation exists toward all employees in general,

with some exceptions, e.g. for those who benefit from

the guarantee of job security (art. 40 no. 2 of Royal De-

cree no. 1827/35) given they are employees of public

administrations, public companies or exercise public ser-

vices where the element of stability is based on norms

regulating the legal status and remuneration of person-

nel or ensured, upon request, by a provision from the

Ministry of Labour.

Despite altering the legal and economic nature of the

company, the requirement of job stability was however

met by the collective labour agreement applied to per-

sonnel, which for companies operating in both the elec-

tricity and water services areas consisted of the national

collective labour agreement of 9/7/1996 for employees

working in local electricity companies.

Stipulation of the sole agreement of the electricity sec-

torinJuly2001,andthesubsequentsuccessionandin-

terpretation agreement of April 2002 and the agreement

ofcontractualmigrationfromelectricitytowater,inJuly

2001 too, led to periods without job stability before the

companies adopted regulations aimed at restoring the

requirement of employment stability.

Favourable first and second instance rulings were ap-

pealed by INPS; the hearing set for 7 February 2011 was

putbackto9January2012.

Health insurance contributions

The case concerns certain health insurance contribu-

tions levied at a rate of 2.22% on the salaries of blue

collar workers. Acea argues that the obligation of Inps to

pay certain sickness benefits, which is the reason under-

lying the employer’s obligation to pay the contribution

involved in this dispute, is expressly excluded by art. 6,

paragraph2ofLawno.138of11January1943incases

where the payment of this benefit is assured by law or by

collective labour agreements by the employer or other

bodies, to an extent either equal to or greater than what

is established by collective labour agreements.

However, Inps started to request payment of the con-

tribution from the entry into force of Law no. 41 of 28

February 1986 (1986 Finance Act), which reformed the

health and social welfare contribution system, reduc-

ing the rate for the sickness benefit, abolishing the ad-

ditional rate of the old sickness contribution, establishing

the contribution for the National Health Service and the

welfare contribution.

This initiative led to a great deal of legal activity involv-

ing the companies which considered the contribution

undue, with favourable and unfavourable outcomes to

said proceedings.

By means of Supreme Court (joint session) ruling no.

10232of27June2003,promotedbyINPS,theprinciple

diametrically opposed to the one provided for by law

was sanctioned, making the contribution due from com-

panies of a solidaristic rather than welfare nature.

However, companies are still awaiting legislation which

would fully regulate the previous one, realised with the

issue of Law no. 133 of 6 August 2008, converting Law

Decree no. 112/2008.

The law definitively provided an authentic interpretation

of the second paragraph of article 6 of law no. 138 dated

11 January 1943, establishing that employers are not

obliged to pay health insurance contributions in cases

where they have, by law or under the provisions of a col-

lective labour agreement, paid sick pay, thus amending

previous periods and providing for the payment obliga-

tiontotakeeffectfrom1January2009.

Therefore, ACEA Group companies started to pay health

insurancecontributionsfromJanuary2009;theprovision

set aside relates to the period running from the date of


and, in upholding the objection raised, asked the Con-

stitutional Court to rule on the issue of legitimacy re-

garding the legislation which generated the costs, non-

deductible for tax purposes, incurred in the years 2003

and 2004 (article 14, paragraph 4 bis, Law no. 537/93).

The hearing at the Constitutional Court was held on 8

February 2011 and the issue of legitimacy submitted for

its judgement was declared inadmissible under the as-

sumption that “...the remitting tax commission, in rais-

ing 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, because, if upheld, they would have led to the

cancellation of the tax assessment notices contested

and the subsequent irrelevance of said matters....

At the hearing on 4October 2011, the Judge put the

casebacktoJanuary2012,inordertofindouttheout-

comes of the criminal proceedings at the Court of Pe-

rugia regarding the delivery of waste by the Campania

Region.

It should be noted that, with reference to the cited

proceedings, S.A.O. submitted a request for cancel-

lation, by own determination, of assessment notices

872030100244, 872030100245 and 872080100477,

following the ruling of the Court of Perugia on 29 No-

vember 2011, which established that it did not need to

continue, with regard to all offences and all defendants,

with the proceedings relating to the delivery of waste

from the Campania Region in 2003 and 2004 (forming

the basis of the relevant assessment notice) due to

expiry of the limitation period. As regards the claim,

adequate grounds were given regarding the fact that

the acquittal pronounced in the criminal proceedings

eliminates the conditions for applicability of the prohi-

bition of deductibility of costs arising from the offence,

on which the relevant assessment notice was based, as

interpreted by the Direzione Centrale Normativa e Con-

tenzioso (Central Legislative and Disputes Department)

of the Tax Authorities in Circular no. 42/E of 2005.

It has been deemed that the acts of the Tax Authorities

are illegitimate and that there is a remote risk of pay-

ment of the entire sum for which the previous share-

Tax issues

Tax moratorium

The appeals presented by ACEA against the payment

demands of 2007 and the 2009 tax assessments were

rejected by the Provincial Tax Commission.


against the first instance ruling against the 2007 de-

mands.

SAO tax inspection

In October 2008 the tax authorities issued two notices

of assessment to the company, amounting to 5.8 million

euros in taxes and 5.7 million euros in penalties.

These notices of assessment regard the 2003 and

2004 tax years and derive from criminal proceedings

launched by the Orvieto District Attorney’s Office. This

action, which is still pending before the Court of Pe-

rugia, regards transfers of waste from the Campania

region in the aforementioned 2003–2004 period, based

on a planning agreement executed at that time by the

presidents of the Campania and Umbria regional au-

thorities and the subsequent management of the Or-

vieto landfill.

Although one of the years involved in the tax inspection

notices (2004) was already subject to a tax inspection,

the Tax Authorities deemed that it was possible to re-

open the inspection, following the ruling under which

the Court of Orvieto, in criminal proceedings, declared

the Court of Perugia to instead hold competence.

The notices of assessment regard taxation of the costs

incurred during the two years in relation to the above

transfers of waste, based on the fact that such trans-

fers are now considered illegal on the basis of the mere

existence of criminal proceedings and despite the ab-

senceofprovisionsfromtheJudgeregardingtheveri-

fication of the existence of the offences for which to

proceed.

On 12 December 2008 the company submitted sepa-

rate appeals against the notices of assessment.

In May 2009, the tax commission upheld the requests

for the suspension of the notices of assessment sub-

mitted by the company and, in November 2009, at the

first hearing on the matter, combined the two appeals


GdF Suez Energy Management (formerly

AceaElectrabel Trading) tax inspection)

On 15 September 2010 the Guardia di Finanza – Nucleo

Polizia Tributaria di Roma (Italian Financial Police – Rome

Tax Squad) opened a tax inspection relating to direct tax-

es for 2008, subsequently extended to the years 2005,

2006, 2007 and 2009 with reference to the so-called off-

balance sheet transactions (article 112 of Income Tax

Consolidation Act).

In November 2010, tax inspections were concluded for

the 2005 tax year and the Guardia di Finanza notified GdF

Suez Energy Management and ACEA, as the consolidat-

ing entity, of a Report on Findings, ascertaining a higher

taxable base, (Ires and Irap – corporate income tax and

regional business tax) of 14.2 million euros, relating to

the fair value of solely hedging instruments with a posi-

tive fair value as at 31 December 2005, producing effects

over subsequent years. In substance, the tax inspector

confirmed that the disclosures made by no IAS adopters

- GdF Suez Energy Management is one – in their financial

statements in compliance with OIC 3 assume tax rele-

vance pursuant to and in accordance with article 112 of

the Income Tax Consolidation Act.

On 5 July 2011, ACEA, as the consolidating entity, re-

ceived a report on findings, ascertaining a higher tax-

able base for the tax years 2006, 2007, 2008 and 2009

of 128.9 million euros relative to the positive fair value

of hedging instruments existing at the end of the years

being audited.

On the basis of the Framework Agreement signed in De-

cember by ACEA and GDF Suez Energia Italia, ACEA is

indemnified and held harmless in relation to any amount

it is required to pay, also temporarily, as consolidating

entity.

ARSE tax inspection

On19July2011,theItalianFinancialPolicebegananin-

spection to check the correct use of the VAT tax ware-

house system pursuant to article 50 bis of Decree Law

no. 331 of 30 August 1993 (“VAT Warehouses”), relat-

ing to certain assets imported by the company. The in-

spection,suspendedon27July2011,re-commencedon

9 February 2012, with the extension of the controls to

the years 2010 and 2011.

holder is liable (Enertad now Erg Renew) on the basis

of the guarantees issued in the purchase/sale contract

and the provisions in the arbitration award issued by

the Board of Arbitrators set up, upon request of ACEA

S.p.A., in accordance with said contract.

InJanuary2009,Itshouldalsobenoted,forthepurpos-

es of completeness, that SAO challenged measure no.

2008/27753 of 27 November 2008 by which the com-

petent Tax Authorities suspended the disbursement of

a VAT rebate claimed by the Company for the 2003 tax

period. Said rebate, totalling 1,256,000.00 euros, was

recognised by the Inland Revenue, even though for pre-

cautionary reasons due to the above assessments its

disbursement was suspended. The Tax Commission,

with Ruling issued following the hearing held in March

2010, upheld the appeal lodged by our Company, thus

cancelling the cited measure against the aforemen-

tioned ruling. The Tax Authorities submitted an appeal

in September 2010. The proceedings are in progress.

It should be noted that the receivable involved in the

cited VAT reimbursement was settled via payment in

July2010.Theassigneepresentedanappealwithasi-

multaneous request for discussion at a public hearing,

for the cancellation of measure 73747/2011 with which

the Terni Provincial Department of the Tax Authorities

declared the transfer of said VAT credit from SAO to

said assignee to be unacceptable.

Tax inspection on Marco Polo

On23June2010,theTaxAuthoritiesnotifiedtheassoci-

ated company Marco Polo of a Report of Findings relat-

ing to the general tax inspection started in March 2010.

The irregularities found by the Tax Authorities totalled

6.4 million euros, (plus interest and fines) and essen-

tially concern objections to the equalisation calculation

method of fees due to Shareholders of ACEA and AMA,

based on the service contracts stipulated.

The proper defence briefs and preliminary documen-

tation were presented to the Tax Authorities aimed at

eliminating the most significant irregularities.


asaresultofan inspectionopenedinJuly,concerning

IRES and IRAP for 2008. The company complied with the

report on findings pursuant to article 5 bis, of Legislative

Decree no. 218/1997 through the presentation of the ap-

propriate request in December 2011, and paid 329,532

euros.

It should also be noted that,

• on 9 February 2012, a general inspection (IRES,

IRAP and VAT) was opened by the Tax Authorities

for the year 2009 against Sarnese Vesuviano and,

• 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

date of incorporation into ARIA.

Other problems

ACEA Ato5 - Tariffs

Concerning the well known issue of the tariff for the

integrated water services of ATO 5 (southern Lazio –

Frosinone) and the related results of operations of ACEA

Ato5, please note the indications below.

With resolution no. 7/2008, Co.N.Vi.R.I. (Supervisory

Committee for the Use of Water Resources) carried out

some surveys concerning the legitimacy of the revised

tariffs arranged by the Area Authority with resolution no.

4/2007. In the company’s opinion, Co.N.Vi.R.I.’s Resolu-

tion no. 7/2008 appears to be entirely illegitimate, so

much so that the company filed an appeal against the

ruling before the Lazio Regional Administrative Court

(TAR), which is still pending.

In short, Co.N.Vi.R.I.’s opinion as regards the above men-

tioned measure appears to be entirely illegitimate as it is

evidently in contrast with art. 154 of Legislative Decree

no. 152/2006, in accordance with which the tariff “consti-

tutes the price for integrated water services and is fixed

taking account of the quality of water resources 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

The system under review makes it possible to suspend

the payment of VAT at the time of import, by entering

the goods in so-called VAT warehouses, i.e. facilities

managed by third parties and subject to specific forms

of control and monitoring. The tax, where due, is paid

when the good is extracted through a reverse charge

mechanism, with the offsetting of VAT credits/debits re-

corded.

Control activities are targeted at ascertaining cases of

abuse of the mechanism, i.e. cases in which legal non-

existence or warehouse simulation are found, in line

with the instructions already recommended in turn by

the Customs Agency (see Resolution no. 23321/2009).

The subject is particularly well-known and debated

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

Customs Agency, to recognise the aforementioned non-

existence/simulation in all cases where the good deliv-

ered to the warehouse has not remained in the storage

area for a minimum period.

As at today’s date, the company received no report on

findings and deems that all conditions in fact and in law

set forth by the legislation for the use of VAT warehous-

es, as interpreted by said Customs Agency, have been

fully satisfied.

GORI tax inspection

During the year, the Tax Authorities carried out an in-

spection for the year 2008. At the end of the inspec-

tion, inspectors contested the payment of roughly an

additional 1 million euros in taxes with the company

(plus interest and fines). In respect of the irregularities

identified, the company is evaluating whether to lodge

an appeal against the assessment notice, which has not

yet been notified as yet, or, alternatively, to formulate a

tax settlement proposal in accordance with art. 6, para-

graph 1, of Legislative Decree no. 218/97.

Tax inspection of other Group companies

On 15 November 2011, ACEA Ato2 was notified of a re-

port on findings, drafted by the Italian Financial Police


thority 5, as per art. 117 of Italian Legislative Decree no.

104 of 2 July 2010, to conclude the proceeding for deter-

mining the integrated water service tariff by the deadline

of 120 days from the notification or communication by

administrative procedure of the aforementioned deci-

sion”.

Furthermore, in upholding the specific request put forth

by the Company, the Regional Administrative Court also

appointed a Commissioner for deeds - if the awarding

Authority continued not to act - represented by the

Chairman of Co.N.Vi.Ri., so that the procedure in ques-

tion could be completed, with that Administration bear-

ing the relative expenses.

With reference to that deadline set to the Area Authority,

ACEA decided to settle ACEA Ato5’s losses by reconsti-

tuting the share capital and establishing a provision to

cover losses that are expected to arise until determina-

tion of the tariffs.

Considering that the Area Authority did not conclude

the proceedings within the deadline prescribed by the

Administrative Court, the Commissioner for deeds ac-

cepted the task until the end of October 2011.

In December 2011, as a result of a specific request made

by ACEA Ato5, the Commissioner for deeds asked the

Regional Administrative Court of Lazio “whether the de-

termination of the tariff in the area plan for the years

2006-2012 was an activity that conformed to the man-

date received under ruling no. 529/2011”; and in the

assumption that the review of the area plan and sub-

sequent determination of the real average tariff for the

remaining assignment period, according to the indica-

tions of the aforementioned ruling, constitutes a com-

plex activity given that it essentially presumes the ac-

curate recognition of the previous service management.

Following an affirmative response contained in corpo-

rate order dated 13 February 2012, the Commissioner for

deeds signed on 8 March 2012 a decree on the “Deter-

mination of the integrated water service tariff applicable

for 2012 in ATO 5 Southern Lazio – Frosinone” which the

company was informed of on 9 March 2012.


equal to 1.359 m3 - was carried out to quickly deal with

a service economic-financial imbalance, caused by the

failure to update the tariff based on the trend in inflation

operating costs incurred by the Area Authority, in such a

way as to guarantee full coverage of investment and op-

erating 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

reasons) before the Lazio Regional Administrative Court,

Latina section, which recently issued sentence no.

357/2011, thus rejecting the appeal filed by the company

and confirming the full legitimacy of the resolutions of

AATO 5 concerning the cancellation of the previous tariff

review resolutions.

The above mentioned sentence – for which the Company

is considering a possible appeal with the Council of State

– defined the issue on a mainly legal basis, facing it only

incidentally.

The indications above on the one hand would suggest

the possible filing of an appeal with the Council of State

to obtain the ruling to be amended; on the other hand, it

does not prevent the possibility for the company to bring

civil proceedings to assert the contractual and/or non-

contractual obligations of the Area Authority to ACEA

Ato5 and obtain compensation for all damages incurred

by the operator.

Finally, worth mentioning is that, following the cancella-

tion of the 2006-2009 tariffs as ruled by the Area Author-

ity, the tariffs have not yet been re-determined, nor have

the definitive tariffs for 2010 and 2011.

Against this persisting inertia, the Company filed an inde-

pendent appeal before the Lazio Regional Administrative

Court, Latina section, against the non fulfilment by the

Authority of its obligations (namely: the determination of

the tariff for the years 2006-2009, determination of the

definitive tariff for 2010, review of the 2011-2013 Area

Plan and 2011 tariff determination).

ThehearingwasheldinMayand,on20Juneofthisyear,

the judgement was published whereby the Lazio Region-

al Administrative Court, Latina section, upheld the appeal

filed by the company and “... by effect, ordered Area Au-


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.







therefore, on 8 September 2011 Acea Ato5 filed a com-

plaint against the rejection order.







surety policy.

TheAdministrativeCourt Judge,bymeansoforderno.







On 01/12/2011, a hearing was held, set following the

transfer of the case to the Regional Administrative Court

of Lazio - Latina Section. Following the aforementioned

hearing, theAdministrativeCourt Judge,withorderno.

497/2011, rejected the request for precautionary protec-

tion, ruling the appeal to be inadmissible due to a lack of

jurisdiction.

As a result, by means of note dated 14/12/2011, Uni-

credit issued a communication to the effect it had paid

the Area Authority the enforced sum of 2.8 million euros,


said surety be returned.

and forecasts in the area plan and management agree-

ment. Therefore, determination of the 2012 real average

tariff is limited to restabilising normal contractual con-

ditions of continuity of management and does not take

into account the difference between the area plan fore-

casts and the actual trend in the management of previ-

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-

ligation to return the undue portion of the tariff to users

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.

Therefore, this document is valuable in definitively quan-

tifying the amount of receivables for tariff equalisation

relating to the variation between real revenues from bill-

ing 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 pay-

ment methods will also be defined during said phase.

In light of the content of the decree of the Commissioner

for deeds, a total of 5 million euros was allocated to the

provision for liabilities, augmenting the allocation of 25

million euros made in 2009.

ACEA Ato5 – Enforcement of guarantee

On1June2011,onthebasisoftheassumptionthatthe

Operator committed breach with respect to the pay-

ment of concession fees, the Area Authority requested

that UniCredit Corporate & Investment Banking enforce


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

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.

It should be noted that, on 9 March 2012, GORI, the Area



agreement scheme, which is attached to said report,

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-

thority’s General Meeting, are understood to be immedi-

ately effective and binding.

The agreement scheme makes provision for a significant

writing off of GORI’s debt to the Campania Region, whose

natural consequence is an almost equal reduction in the

tariff adjustments accrued (as at 31 December 2011, a to-

tal of 147 million euros - Group share 54.5 million euros);

the agreement scheme also makes provision for the divi-

sion into instalments of the amount of debt recognised

in line with the recovery of residual tariff adjustments in

the Area Plan subject to review by the Area Authority.

Signing of the aforementioned agreement, once ap-

proved by the competent bodies of the parties involved,

will allow GORI to guarantee the business continuity and

possibility of planning its own financial requirements on

the basis of the area plan forecast, once reviewed.

Pending approval and signing of the aforementioned

agreement, ACEA believes it appropriate to allocate, in

line with the amount set aside in the interim financial

statements, the amount of 44.1 million euros to cover the

risk of recovery of tariff adjustments and financial risks.

Lastly, the Regional Administrative Court of Campania

- Naples, by means of ruling no. 6003/2011 issued fol-

lowing the appeal against the injunction of the Commis-







guarantee.






Water Service Operator and that for said specific case

of non-fulfilment, the contractual tools in place between




GORI – Dispute over water supplies

In relation to the dispute with ARIN S.p.A., ., on 11 April

2011, as a result of ruling no. 806/2011 of the Court of Na-

ples, GORI had already paid ARIN the sum of 3.1 million eu-

ros, with all the broadest privileges, whereas it has already

contested said ruling under appeal. In this regard, it should

be noted that the outcomes of the preliminary enquiry

performed as part of the specific Services Conference

called by the Area Authority to regulate interdisciplinary

interference in relation to the transfer of water resources,

confirmed the arguments proposed by the companies

against ARIN’s claims, also in legal proceedings.

In relation to the dispute with the Campania Region, ne-

gotiations are underway to normalise relations, through

the definition of a plan to resolve the debt position, the

definition of ordinary supply conditions and the subse-

quent resolution of the ongoing dispute. In particular, in

confirmation of the negotiations underway, provision has

been made for an initial specific agreement between the

Region and the Area Authority, which will see the sum of

5.3 million euros (equivalent of capital = 4.6 million euros

plus legal interest accrued) split into instalments, in the

form of an advance and while awaiting completion of the

aforementioned repayment plan to be devised as part of

the Area Plan review.





ated discussions was set for May 2012.

ACEA Luce

By means of deed notified on 7 February 2011, the com-






































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

of State.

Antitrust Authority investigation of the

acquisition of Publiacqua

On 28 November 2007, ACEA was notified of the Anti-








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;

• ruledthatthepartiesshouldtakeactionstoavoid

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;

• orderedACEAandSUEZtopayfinesof8.3million

euros and 3 million euros, (the difference in the

amounts derives from their respective turnovers in

the relevant sector in Italy).






pellant’sarguments,werepublishedattheendofJune.

Inthecorrespondingenforcement,on11June2009,the



2008.














just started.

ACEA/SASI Proceedings

In ruling no. 6/10, TRAP (Regional Court of Public Waters)

accepted the request submitted by ACEA against the So-

cietà Abruzzese per il Servizio Integrato S.p.A. (SASI) for

the compensation for damages from the illegitimate with-


9millioneuros,plusinterestaccruedfrom14June2001

until30July2013ascompensationfordamages.




A.S.A. – Acea Servizi Acqua

By means of summons notified in autumn 2011, ACEA


















its consideration.







E.ON Proceedings. E.ON. Produzione S.p.A.

proceedings launched against ACEA, ACEA Ato2

and AceaElectrabel Produzione

These proceedings were launched by E.ON. Produzione















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

containing the metering parameters of the compensation

are still deemed to be applicable and effective - would

be greatly altered, substantially reducing the amount of

equalisation already estimated by the company.

Vianini Lavori Arbitration

Vianini Lavori S.p.A. (in a temporary consortium with the




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 Financial instruments

held for trading at fair value

Loans and receivables

Available-for-sale financial instruments

Carrying amount

Notes

Non-current assets 0 19,939 4,686 24,625



18,033 18,033 20


Current assets 0 2,057,493 0 2,057,493

Trade receivables due from customers 1,304,691 1,304,691 23

Trade receivables due from related parties 167,445 167,445 23

Other current assets fair value measurement of contracts for difference and commodity swaps with changes recognised in shareholders’ equity (*)

0 23

Other current assets: fair value measurement of contracts for difference and commodity swaps with changes recognised in the income statement (*)

710 710 23

Other current assets: electricity and company-specific equalisation

18,310 18,310 23

Other current assets: subsidiaries 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

Financial assets due from third parties: derivatives not designated as hedges with changes recognised in the income statement (**)

0 23


Cash and cash equivalents 321,022 321,022 23

TOTAL FINANCIAL ASSETS 0 2,077,432 4,686 2,082,118


31 December 11 Financial instruments

held for trading

Liabilities at amortised cost

Carrying amount

Notes

Non-current liabilities 0 2,298,917 2,298,917

Bonds 988,657 988,657 27

Bank borrowings (non-current portion) 1,310,259 1,310,259 27

Financial liabilities due to related parties 0 0 27

Current liabilities 0 1,912,170 1,912,170

Bank borrowings 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

Financial liabilities due from third parties: derivatives not designated as hedges with changes recognised in the income statement (**)

814 814 30

Financial liabilities due to subsidiaries and associates 16,005 16,005 30

Trade payables 1,184,975 1,184,975 30

Trade payables due to the Parent Company, subsidiaries and associates

159,810 159,810 30

Other current liabilities: fair value measurement of contracts for difference and commodity swaps with changes recognised in shareholders’ equity (*)

2,705 2,705 30

Other current liabilities: fair value measurement of contracts for difference and commodity swaps with changes recognised in the income statement (*)

498 498 30

TOTAL FINANCIAL LIABILITIES 0 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.


ACEA’s Internal Control System and with the Risk Man-

agement Manuals of ACEA’s Energy Industrial Area.

Risk analysis and management is performed accord-

ing to a Risk Management process which involves the

execution of activities throughout the entire year, on

the basis of different frequencies (annual, monthly and

weekly). These activities are shared between the Risk

Control and Energy Management units.

In particular:

• onanannualbasis,measurementsofriskindica-

tors, i.e. limits, must be defined, which must be

complied with in the management of the portfolio.

These activities are the responsibility of the Risk

Committee which approves the Risk Control pro-

posal.

• On amonthly basis, the Risk Control Unit is re-

quired to check the portfolio’s exposure to risk

and check compliance with the limits defined. As

required by the Internal Control System, the Risk

Control Unit is responsible for sending ACEA’s In-

ternal Audit Department the required information

in the proper format.

The risk limits of the Energy Industrial Area are defined

in such a way as to:

• minimisetheoverallriskoftheentirearea,

• guarantee the necessary operating flexibility in

trading and hedging activities,

• reduce the possibility of over-hedging deriving

from the variation in expected volumes for the

definition of hedges.

Market risk is distinguished from price risk, i.e. the risk

related to the variation in commodity prices, and vol-

ume risk, i.e. the risk connected with the variation in

volumes produced and sold.

Risk analysis and management objectives are as fol-

lows:

• to protect the primarymargin, also through the

reduction of volatility,

• toprotecttheprimarymarginagainstunforeseen

and unfavourable short-term shocks in the energy

market which affect revenues or costs,

• tostabilisetheprimarymargininthetimeneces-

Fair value of financial assets and liabilitiesThe fair value of financial instruments that are not

traded in an active market is determined using valua-

tion models and techniques that make maximum use of

market inputs or using the price supplied by a range of

independent counterparties.

The fair value of medium/long-term financial assets and

liabilities is calculated on the basis of the risk-free and

the adjusted risk-free interest rate curves.

The fair value of trade receivables and payables falling

due within twelve months is not calculated as their car-

rying amount approximates to fair value.

In addition, fair value is not calculated when the fair

value of financial assets and liabilities cannot be objec-

tively determined.

Type of financial risks and related hedging policiesThe ACEA Group’s activities expose it to a variety of fi-

nancial risks, including interest rate and price risk.

The Group uses derivative instruments to hedge certain

risk exposures, whilst such derivative or similar instru-

ments are not generally used or held solely for trading

purposes.

Foreign exchange risk

The Group is not particularly exposed to this type of

risk, which is concentrated in the translation of the fi-

nancial statements of its overseas subsidiaries.

As regards the 20 billion yen private placement, the

exchange rate risk is hedged through a cross currency

swap described in the section on interest rate risk.

Market risk

The Group is exposed to market risk, represented by the

risk that the fair value or future cash flows of a financial

instrument fluctuate as a result of market price move-

ments, above all in relation to the risk of movements in

the prices of commodities in which the Group trades.

Acea Energia Holding, through the Risk Control Unit,

ensures the analysis and measurement of exposure to

market risks, interacting with the Energy Management

Unit and Acea Energia, in line with the guidelines of


pany drafts specific documentation demonstrating the

prospective effectiveness of the hedge. This is done

via simulation of what are assumed to be representa-

tive movements in the forward price curve for the re-

spective indices, and the related comparison between

movements in the fair values of the actual and hypo-

thetical derivative instruments, where the latter rep-

resents a derivative financial instrument with contract

terms matching those applicable to the physical con-

tract. Power portfolio transactions qualify as effective

when the hedging relationship, calculated on the basis

of the ratio in absolute terms of movements in the ac-

tual derivative instrument and those in the hypothetical

derivative instrument, lies within a range of 80%-125%,

as defined by IAS 39. The retrospective and prospective

effectiveness test applied to these transactions at the

end of the year confirmed the hedging relationship.

However, should the derivative instrument, at the time

of execution, be designated as a hedge of purchases of

electricity in the form of contracts for difference (CFD),

the company does not prepare specific documentation

demonstrating the effectiveness of the hedge. In fact,

the Group treats CFDs as financial instruments, which

are activated when the relevant contractual condition

is met, i.e. when at a certain hour of a certain day the

price on the electricity exchange is higher or lower than

the strike price (reference parameter). As a result, these

transactions do not qualify as contracts that may be de-

fined as hedging physical underlying transactions pur-

suant to IAS 39.

With reference to said contracts, the economic man-

agement of market risk, and the associated accounting

effects are guaranteed by the fact that both contracts,

in the case of both CFDs and derivative instruments, are

measured at fair value with the fair value differences

recorded in the income statement. The fair value of the

CFDs at the end of the year was a positive 561 thou-

sand euros.

Following the dissolution of the joint venture with Gdf-

Suez Acea, Energia Holding started the process of re-

building Energy Management activities and the associ-

ated risk control and management activities. At present,

sary to re-adjust activities in line with permanent

changes in the energy market,

• toidentify,measure,manageandrepresenttheex-

posure to risk of all ACEA operating companies in

the Energy Industrial Area,

• toreducerisksthroughthepreparationandappli-

cation of adequate internal controls, procedures,

information systems and expertise,

• delegate riskownerswith the jobofdefining the

necessary strategies for hedging individual risks, in

respect of pre-established minimum and maximum

levels,

The evaluation of risk exposure involves the following

activities:

• aggregation of commodities and architecture of

risk books,

• identification of hedging markers, decomposition

of positions, restructuring on the basis of hedging

markers and insertion of restructured positions in

risk books,

• evaluation of basis risk, or the natural risk deriv-

ing from imperfect hedging of lower level hedging

markers,

• creationofreferencescenarios(prices,indexes),

• evaluationofcommercialproposalswhichmodify

the risk profile.

Derivative transactions are entered into for the purpose

of hedging the risk of fluctuations in commodity prices

and in compliance with the provisions of Risk Manage-

ment Manuals for the Energy Industrial Area.

As regards the commitments undertaken, for the com-

ing year, the main goal of all Group financial transactions

is cash flow hedging: stabilising cash flows in relation

to the composition of its sale and purchase portfolio.

The financial instruments used fall under swaps and

contracts for difference (CFD). It should be noted that

the hedges effected on the purchases portfolio were

conducted with the leading operators in the financial

market.

Acea Energia Holding designates the hedge in respect

of commitments to buy and sell electricity. The com-


sets in the hedge. The remaining financial instruments

not accounted for under hedge accounting, despite not

fully satisfying the requirements of IAS 39 for hedge ac-

counting (cash flow hedge), are however, exposed to

risk factors in contrast to those affecting physical port-

folios for purchase/sale, in such a way as to balance

their potential variations with a view to “operational”

hedging in line with company guidelines.

Shown below is all the information necessary for the

description of transactions entered into, aggregated by

indexhedgedwithvalidityeffectiveasof1January2012.

the situation does not permit an accurate quantification

of unfavourable events such as the effects of a stress

sensitivity analysis on the portfolio falling under IAS 39.

However, compared to the position at 31 December

2010, the ACEA Group recorded a significant change

in derivative transactions, both in terms of values and

complexity. For example, as at said date, a speculative

commodity trading portfolio was not re-established.

In addition, the portfolio of financial instruments ac-

counted for under hedge accounting, which represents

the main component of the entire portfolio, is perfectly

balanced in terms of the risks from the underlying as-

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)

GRP901 Hedge power portfolio electricity purchase/sale (368) (380) 13

GRP903 Hedge power portfolio electricity purchase/sale (85) (85) 0

ITEC Hedge power portfolio electricity purchase/sale (590) (590) (0)

PUN Hedge power portfolio electricity purchase/sale 572 0 572

PNX Hedge power portfolio electricity purchase/sale (0) 0 (0)

EEX Hedge power portfolio electricity purchase/sale (10) 0 (10)

(2,642) (2,705) 63


In March 2009, the IASB issued an amendment to IFRS

7, introducing a series of changes aimed at adequate-

ly meeting the need for greater transparency resulting

from the financial crisis and linked to elevated uncer-

tainty over market prices. These changes included the

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;

• level 2: if the fair value is measured using evalua-

tion techniques that assess parameters, other than

listings of the financial instrument, observable from

the market;

• level 3: if the fair value is calculated using evalu-

ation techniques that assess parameters not ob-

servable on the market.

It should be noted that, as regards the types of commod-

ity whose fair value is calculated,

• forderivativesonsinglecommodities(PUN-unique

national price - standard base load products, Peak/

Off Peak, …) the fair value level is 1 given they are

listed on active markets,

• forcomplex indexes (ITRemix,PUNprofiledprod-

ucts, ….) the fair value level is 2 given these deriva-

tives are the result of formulas containing a mix of

commodities listed on active markets.

• For certain components of complex indexes, the

fair value level is 3 as they do not derive from list-

ing on active markets but, instead, estimates.


The abundance of lines (committed and revocable) al-

lowed the parent company to handle temporary increas-

es in short-term requirements with no impact on opera-

tions.

At the end of the year, ACEA had loans - term deposits

and similar transactions - totalling 79.2 million euros in

place.

With reference to some water companies operating in

Tuscany and Campania it should be pointed out that:

• Publiacquarenewedthebridge loanof60million

euros taken out in August 2008 which expired in

August 2011. The renewal was made for a further

15 months,

• Gori: a process is currently underway for the re-

newal and medium-term and restructuring of the

bridge loan of 40 million euros maturing in June

2011,

• Acquedotto del Fiora signed an extensionof the

bridge loan for a further eighteen months (expiry:

September 2013) and obtained an increase of 12.8

million euros, increasing the loan to 92.8 million

euros.

Liquidity risk

ACEA SpA’s liquidity risk management policy is based on

ensuring the availability of significant bank lines of credit.

Such facilities exceed the average requirement neces-

sary to fund planned expenditure and enable the Group

to minimise the risk of extraordinary outflows. In order

to minimise liquidity risk, the ACEA Group has adopted

a centralised treasury management system, which in-

cludes the most important Group companies, and pro-

vides financial assistance to the companies (subsidiaries

and associates) not covered by a treasury management

contract.

As at 31 December 2011, the Parent Company held com-

mitted and uncommitted lines of credit totalling 1,061

million euros and 400 million euros respectively. No guar-

antees were issued to obtain said credit lines.

The committed lines of credit are revolving with a three-

year term from subscription. A total of (i) 100 million eu-

ros of said credit lines is available until December 2012

and (ii) the remainder is available until the first quarter of

2013; the contracts entered into provide for the payment

of a fee for non-use (minimum of 0.28% - maximum of

0.35% per annum) plus an upfront fee paid at the time

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 (de-

pending 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 commit-

ted 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 manage-

ment of short-term lines at the start of 2012, given the

date for requested disbursement was also set for Sep-

tember 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.


Interest rate riskThe ACEA Group’s approach to managing interest rate

risk, which takes account of the structure of assets and

the stability of the Group’s cash flows, has essentially

been targeted, up to now, at hedging borrowing costs

and stabilising cash flows, in such a way as to safeguard

margins and ensure the certainty of cash flows deriving

from ordinary activities.

The Group’s approach to managing interest rate risk is,

therefore, prudent and the methods used tend to be

static in nature.

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 peri-

odic analysis and control of positions based on specific

needs. This type of management therefore involves daily

activity in the markets, not for trading purposes but in

order to hedge the identified exposure over the medium/

long term.

ACEA has, up to now, opted to minimise interest rate risk

by choosing a mix of fixed and floating rate debt instru-

ments.

As previously noted, fixed rate debt protects a borrower

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.

In fact, an analysis of the consolidated debt position

The graph below depicts the future development of total cash flows based on the situation at the end of the year.

shows that the risk the ACEA Group is exposed to is

mainly in the form of fair value risk, composed as at 31

December 2011 of fixed rate borrowings (64.7%). With

reference to the current portfolio make-up, the Group is

partly exposed to the risk of fluctuation in future cash

flows and, by contrast, to a greater extent than changes

in fair value.

Given the current mix of fixed and floating rate debt

and also taking account of the trend in market interest

rates in a predominantly recessionary macroeconomic

phase, essentially not due to sudden rises, an increase

in the percentage of medium-term floating rate debt

is not ruled out, which would make it possible to take

advantage of lower short-term rates, thus partially con-

taining the sharp rise in spreads as a result of notable

events linked to the worsening in guaranteed returns

on the debt of certain sovereign European states, in-

cluding Italy.

ACEA is bringing consistency to its decisions regarding

interest rate risk management that essentially aims to

both control and manage this risk and optimise borrow-

ing 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 objec-

tives of these guidelines are as follows:

• toidentify,fromtimetotime,theoptimummixof

fixed and floating rate debt,

2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250

0

–2502011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027


• ACEAhas:

- swapped the 100 million euro loan obtained on

27 December 2007 for a fixed rate. The swap, a

plain vanilla IRS, was stipulated on 24 April 2008,

effective as of 31 March 2008 (date of draw-

down of the underlying loan) and expires on 21

December 2021,

- completed a cross currency transaction to

transform to euro – through a plain vanilla DCS

swap – the currency of the private placement

(yen) and the yen rate applied to a fixed euro

rate through a plain vanilla IRS swap,

• UmbraAcqueswappedamedium/longterm loan

for a fixed rate.

All the derivative instruments taken out by ACEA listed

above are non-speculative and the total fair value of

these was a negative 10.9 million euros and a positive

34.7 million euros respectively.

The fair value of medium/long-term debt is calculated on

the basis of the risk-free and the risk-adjusted interest

rate curves.

• topursueapotentialoptimisationof theGroup’s

borrowing costs within the risk limits established

by governance bodies and in accordance with the

specific nature of the business,

• to manage derivatives transactions solely for

hedging purposes, should the Group decide to use

them, in respect of the decisions of the Board of

Directors and, therefore, the approved strategies

and taking into account (in advance) the impact on

the income statement and balance sheet of said

transactions, giving preference to instruments that

qualify for hedge accounting (typically cash flow

hedges and, under given conditions, fair value

hedges).

The Group currently uses derivative instruments to

hedge interest rate risk exposure for the following com-

panies:

• Acque has swapped the interest rate on 80% of

the loan obtained at the end of 2006 for a fixed

rate. The company executed two different swap

contracts with the same notional value,

Bank Loans: Amortised cost

RISK-FREE FV Increase/ (Decrease)

RISK ADJUSTED FV

increase/ (Decrease)

(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

TOTAL 2,373,271 2,486,710 (113,439) 2,429,481 (56,210)


Sensitivity analysis has been carried out on medium/long-

term financial liabilities using stress testing, thus applying

a constant spread over the term structure of the risk-free

interest rate curve (for the Euro area at 31 December 2011).

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%.

Constant spread applied Movements in Present Value

-1.50% (145.7)

-1.00% (94.9)

-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


or knowledge of the individual reseller through the con-

stant analysis of payment attitudes/habits and is sub-

sequently implemented through a series of targeted

actions ranging from phone collection activities carried

out in-house, remainders sent electronically, sending of

notice letters via registered post, as provided under res-

olution ARG/elt 4/08, to termination of the transportation

contract.

As regards sales of electricity, credit risk was meas-

ured beforehand, especially in relation to the sale of gas

and electricity to industrial and business customers.

The activity was performed in accordance with Credit Risk

Policy Manual rules, through an in-house process involv-

ing the evaluation of credit reliability, assignment of an

internal rating and recognition of the maximum limits of

financial exposure to the counterparty.

Customer evaluation For Acea Energia, credit risk management is differentiated

based on discriminating factors of customer segment (in-

dustrial, business, retail, domestic) and customer category

(prospect, contract stipulated).

In the case of offers from the industrial or business seg-

ment with contractual values higher than a set amount

and/or credit equivalent threshold (maximum potential

credit exposure), for all counterparties, Acea Energia

personnel must ask the Risk Control Unit to perform an

assessment of the customer/counterparty. An in-depth

report drawn up by a company with expertise in risk as-

sessment may be attached to said request.

The assessment is carried out through the following types

of analysis:

- financial (asset, profitability, cash flow)

- commercial (segment, country, company)

- corporate (strategic, management evaluation, trans-

parency)

A judgment on the level of risk is provided for each level

of analysis.

The overall customer rating is also provided; this identi-

fies the unsecured credit limit. In the event said unse-

cured credit limit is exceeded with respect to the credit

equivalent limit, this is provided for in a contract except in

As regards the type of hedges for which the fair value is

calculated and with reference to the hierarchies required

by the IASB, given they are composite instruments, they

are categorised as level 2 in the fair value hierarchy.

Credit riskACEA issued credit policy guidelines which identified

different strategies in line with the customer centric ap-

proach: through flexibility criteria and on the strength of

the activities managed, as well as customer segmenta-

tion, credit risk is managed by taking into account both

the customer type (public or private) and the non-uniform

behaviour of individual customers (behavioural scores).

The key principles on which the risk management strate-

gies are based are as follows:

• definitionofthecustomerclustercategoriesthrough

the abovementioned segmentation criteria;

• standardclustermanagementinACEAGroupcom-

panies, based on the same risks and commercial

characteristics, of defaulting end users;

• collectionmethodsandinstrumentsused;

➢• uniformityofstandardcriteriaregardingtheapplica-

tion of default interest;

• divisionintoinstalmentsofcredit;

➢• definitionof thenecessary responsibilities/authori-

sations for any exceptions.

➢• adequatereportingandtrainingofdedicatedstaff.

With regards to electricity distribution activities the

wholesalers represent credit risk: billing of the latter re-

lates to the transportation of electricity on the distribution

network and services performed for end customers.

The key principles on which the credit risk management

strategies are based are as follows:

• homogeneousmanagementofsellers’receivables,

deemed of equal risk,

• uniformityofstandardcriteriafortheapplicationof

default interest;

• mitigation of credit risk through the signing of a

guarantee by sellers;

• adequatemonitoringthroughcreditageingreporting;

• trainingofdedicatedstaff.

Credit management starts with the “behavioural score”


increase in the expenses incurred by the customer.

As regards credits relating to utility services discontinued

for a total amount lower than 20,000 euros, two months

after the end of services, the job of recovering the credit

by extra-judicial means is entrusted to specialised credit

recovery agencies. Where cases are closed unfavourably

by the recovery agencies, procedures are launched for

recovery by legal means where it is deemed to be eco-

nomically advantageous.

A lodgement of claims is carried out for bankrupt

customers.

With regards to the supply of water, the implementa-

tion of credit risk management strategies started with a

macro-distinction between public sector end users (mu-

nicipalities, public administrations, etc.) and private sec-

tor end users (industrial, commercial, condominium, etc.),

given that said categories present different levels of risk,

in particular:

• lowriskofinsolvencyandhighriskoflatepayment

for public sector end users

• variableriskofinsolvencyandlatepaymentriskfor

private sector end users

As regards credits due from public sector end users, they

are converted to cash through the without-recourse fac-

toring to financial partners and a residual portion is man-

aged directly through the offsetting of receivables/paya-

bles or by means of settlement agreements.

Credit management for private sector end users starts

with behavioural scores or “knowledge in terms of the

probability of default of each individual customer through

the constant analysis of payment attitudes/habits”, and is

subsequently implemented through a series of targeted

actions ranging from reminder letters, assignment to spe-

cialised companies for credit recovery via phone collec-

tion, to detachment of the defaulting end users.

The water area is also characterised by a significant

amount of invoices to be issued which are determined by

the characteristics of the business.

the case of obtainment of specific credit hedges (gener-

ally bank or corporate guarantees), indicated by the Risk

Control Unit at the time of transmission of the evaluation

outcome, or authorisation by the Risk Committee.

In the case of offers from the industrial or business seg-

ment with contractual values lower than a set amount

and/or credit equivalent threshold, a risk evaluation is re-

quested from specialised companies.

For each request, the rating agency indicates the rating,

which corresponds to a judgment of reliability which can

be very high, high, average or high risk. Based on the rat-

ing, a decision is taken on whether or not to request the

issue of a guarantee. In extreme cases no contract is stip-

ulated with the customer.

Credit Recovery For customers in the industrial area, in the event of non-

payment a few days after expiry of the invoice, a reminder

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

5 days after delivery of said letter, a request is made to

the distributor for suspension through default. Six months

after expiry of the first invoice, the case is passed to an ex-

ternal legal office that proposes a repayment plan to the

customer; if an agreement is not reached or in the event

of non-compliance with the plan, the legal office proceeds

with the coercive recovery of the credit with a subsequent

increase in costs and fees for the customer.

In the case of Business and Retail segment customers:

- A reminder letter is sent twenty days after the in-

voice expiry;

- A registered letter of default and a notice of suspen-

sion of supply are sent forty days after the invoice

expiry;

- Distributors are asked to suspend supply;

- The Supply Contract is resolved.

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 de-

linquency persists, procedures are launched for the re-

covery of the credit by legal means with, if necessary, an


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

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) 775,595 5,043 3,758 2,391 1,145 118 105

Networks 8,801 5,043 3,758 2,391 1,145 118 105

Energy 472,634 0

Energy Generation 1,398 701 697 151 140 384 23

Sales 471,235 190,443 280,792 22,185 70,653 33,335 154,620

Engineering and services 0 0

Water 294,160 0

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 0

Corporate 0 0

End users for bills to be issued: (B) 392,621 392,621

Networks 23,042 23,042

Energy 164,443 164,443

Energy Generation 0 0

Sales 164,443 164,443


Water 205,136 205,136

Lazio-Campania 173,163 173,163

Tuscany-Umbria 31,973 31,973

Environment and Energy 0 0

Corporate 0 0

Provisions for impairment of receivables: (C)

(149,391)

Networks (3,916)

Energy (85,416)

Energy Generation 0

Sales (85,416)

Engineering and services 0

Water (60,059)

Lazio-Campania (47,813)

Tuscany-Umbria (12,246)

Environment and Energy 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 0

Energy Generation 438 438 0

Sales 19,458 318 19,140 13,089 932 3,236 1,883

Engineering and services 1,786 0 1,786 28 247 49 1,462

Water 47,567 0

Lazio-Campania 37,078 594 36,484 157 3,491 32,836

Tuscany-Umbria 8,262 2,075 6,186 1,582 484 323 3,798

Overseas Water Services 2,228 460 1,768 920 487 361

Environment and Energy 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

End users for bills to be issued: (B) 91,256 91,256

Networks 18,802 18,802

Energy 42,325 42,325

Energy Generation 7,863 7,863

Sales 34,463 34,463


Water 20,463 20,463

Lazio-Campania 12,430 12,430

Tuscany-Umbria 3,898 3,898

Overseas Water Services 4,134 4,134

Environment and Energy 5,513 5,513

Corporate 3,731 3,731

Provisions for impairment of receivables: (C)

(44,493)

Networks (1,137)

Energy (982)

Energy Generation 0

Sales (982)

Engineering and services (566)

Water (17,520)

Lazio-Campania (8,898)

Tuscany-Umbria (8,420)

Overseas Water Services (202)

Environment and Energy (935)

Corporate (23,354)


(37,027 thousand euros);

• 50,000thousandeurosinfavourofAceaEnergia

and in the interests of Enel Distribuzione S.p.A.

as a back-to-back guarantee for the transport of

electricity;

• 68,277thousandeurostoAcquirenteUnico(Sole

Buyer) and in the interest of Acea Energia S.p.A. as

a back-to-back guarantee relating to the electric-

ity sale contract signed by the parties;

• 5,936 thousand euros issued by insurance insti-

tutions on behalf of Aria SpA to the Umbria Re-

gion (1,320 thousand euros) as guarantee for the

authorisation of the management of the Paliano

plant and the Lazio Region (3,829 thousand euros)

for exercising authorisations on the I and II lines of

the San Vittore del Lazio plant;

• 17,158thousandeurosissuedbyinsuranceinsti-

tutions on behalf of SAO in favour of the Province

of Terni for the management of landfill operations

and post-closure operations (12,166 thousand eu-

ros) and waste disposal (3,157 thousand euros).

It should be noted that the guarantee of 2,884 thou-

sand euros issued in the interest of Acea Ato5 re-

quired by art. 31 of the Technical Regulations, issued

by Banca di Roma, in favour of the Authority for Ato5

–SouthernLazio,waseliminated.On1 June2011,on

the basis of the assumption that the Operator commit-

ted breach with respect to the payment of concession

fees, the Area Authority requested that UniCredit Cor-

porate & Investment Banking enforce the cautionary

deposit provided by ACEA Ato5 through the “immedi-

ate 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 re-

covery of said cautionary deposit. As a result of the re-

jection 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 Authority the enforced sum,


said surety be returned. Given the illegitimate grounds,

Commitments and contingencies

Corporate liens, sureties and guaranteesThese amounted to 377,039 thousand euros. Worthy of

mention are:

• 425thousandeurosfortheback-to-backguaran-

tee issued for Acea Energia Holding for the new

office lease contract;

• 38,387 thousand euros for the bank guarantees

issued by Acea Energia, mostly in favour of Terna

relative to the electricity dispatch service con-

tract;

• 53,666thousandeurosintheformofabankguar-

antee issued by ACEA to Cassa Depositi e Pres-

titi in relation to refinancing of the loan issued to

ACEA Distribuzione. This is a sole guarantee giving

the lender first claim and covering all obligations

linked to the original loan (493 million euros). The

sum of 53,666 thousand euros refers to the guar-

anteed portion exceeding the loan originally dis-

bursed (439 million euros);

• asuretyof7,747thousandeurosissuedbyACEA

Ato2 to the Area Authority, guaranteeing the cor-

rect fulfilment of the obligations undertaken as

part of the concession agreement. This surety

runs out on 6 August 2007 and is renewable;

• asuretyof3,425thousandeurosissuedbyACEA

with regard to the selection of a partner for Publi-

acqua in the municipality of Florence;

• 1,471thousandeurosissuedbyACEAtoAquaser

to guarantee the credit line granted to Solemme;

• 3,783 thousand euros issued in favour of ARIA

SPA, which replaced EALL following the merger

by incorporation on 1 August 2011, to Terna as a

guarantee for the hedging of direct and indirect

risks and charges deriving from works that the lat-

ter will have to carry out for the connection to the

national grid of the San Vittore del Lazio waste-to-

energy plant;

• 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.


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 sure-

ties 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 in-

terest in G.O.R.I. S.p.A.

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

ANNExES


at 31 December 2011


A. List of consolidated companies

Name Registered office Share capital % interest Group’s consolidated

interest


ACEA Distribuzione S.p.A. P.le Ostiense, 2 - Rome 345,000,000 100.00% 100.00% Line-by-line

ACEA Ato2 S.p.A. P.le Ostiense, 2 - Rome 362,834,320 96.46% 100.00% Line-by-line

Acea Reti e Servizi Energetici S.p.A.

P.le Ostiense, 2 - Rome 300,120,000 100.00% 100.00% Line-by-line

Acque Blu Arno Basso S.p.A. P.le Ostiense, 2 - Rome 8,000,000 69.00% 100.00% Line-by-line

Acque Blu Fiorentine S.p.A. P.le Ostiense, 2 - Rome 15,153,400 69.00% 100.00% Line-by-line

Ombrone S.p.A. P.le Ostiense, 2 - Rome 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. P.le Ostiense, 2 - Rome 6,735,053 95.79% 100.00% Line-by-line

CREA S.p.A. P.le Ostiense, 2 - Rome 2,678,958 100.00% 100.00% Line-by-line

Crea Gestioni S.r.l. P.le Ostiense, 2 - Rome 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. P.le Ostiense, 2 - Rome 120,000 100.00% 100.00% Line-by-line

Consorzio Acea Ricerca e Perdite

P.le Ostiense, 2 - Rome 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.

P.le Ostiense, 2 - Rome 120,000 100.00% 100.00% Line-by-line

Acea Produzione S.p.A. P.le Ostiense, 2 - Rome 5,000,000 100.00% 100.00% Line-by-line

Acea Energia Holding S.p.A. Via dell’Aeronautica, 7 – Rome 153,500,000 100.00% 100.00% Line-by-line

Acea Energia S.p.A. P.le Ostiense, 2 - Rome 45,000,000 100.00% 100.00% Line-by-line

Acea Servizi Acqua S.r.l. P.le Ostiense, 2 - Rome 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

Acque Industriali S.r.l. Via Bellatalla, 1- Pisa 100,000 100.00% 45.00%[2] Proportionate

Acque Servizi S.r.l. Via Bellatalla, 1- Pisa 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

Ecogena S.p.A. P.le Ostiense, 2 - Rome 1,000,000 51.00% 51.00%[4] Proportionate

Ecomed S.r.l. P.le Ostiense, 2 - Rome 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. P.le Ostiense, 2 - Rome 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) 217,500 49.00%

Geal S.p.A. Viale Leporini, 1348 - LUCCA 1,450,000 28.80%

Sogea S.p.A. Via Mercatanti, 8 - RIETI 260,000 49.00%

Aguas de San Pedro SA Las Palmas, 3 - San Pedro (Honduras) 6,162,657 31.00%

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 P.le Ostiense, 2 - Rome 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%

Illuminazione scarl Via Monteverdi, 11 - Milan 90,000 32.18%

Eur power S.r.l. P.le Ostiense, 2 - Rome 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%


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

Net profit Shareholders’ equity

31.12.2011 31.12.2010 31.12.2011 31.12.2010

Balances in ACEA’s statutory financial statements 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

Elimination of dividends 1,878 3,088 46,241 44,363

Acea ATO2 Acea Distribuzione Acea Energia goodwill (119,355) (115,758) 0 0

Elimination of extraordinary items 34,090 32,565 (278,797) (312,887)

Balances in consolidated financial statements (1,464) (5,189) (1,464) (5,189)

BALANCES IN CONSOLIDATED FINANCIAL STATEMENTS 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 Expiry of office

Giancarlo Cremonesi Chairman 29/04/2010 (1)

Marco Staderini CEO 29/04/2010 (1)

Paolo Giorgio Bassi Director 29/04/2010 (1)

Francesco Caltagirone Director 29/04/2010 (1)

Jean Louis Chaussade 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

The non-monetary benefits granted to the CEO include supplementary pension provision and health insurance.

Remuneration (€000)

Name and Surname Office Remuneration of position held

Non-monetary

benefits

Bonuses and other incentives

(2)

Other remuneration

(3)

Total

Giancarlo Cremonesi Chairman 36 264 300

Marco Staderini CEO 36 1 287 324

Paolo Giorgio Bassi Director 36 58 94

Francesco Caltagirone Director 36 45 81

Jean Louis Chaussade 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 direc-tors, said item includes the fees for participating in Committees (fee for the fulfilment of office and/or attendance fees).



Said executives with strategic responsibilities also enjoy

non-monetary benefits including supplementary pen-

sion, health insurance and unlimited use of company

cars.

The information set forth above includes data relative

to the General Manager, Paolo Gallo, appointed by the

Board of Directors in October 2010 and in office as of 1

February 2011.

Key ManagersFees paid to executives with strategic responsibilities dur-

ing the year amount to:

• salaries and bonuses (including contributions),

2,217 thousand euros,

• non-monetarybenefits,84thousandeuros.

Remuneration paid to key managers is established by

the Remuneration Committee based on average levels of

pay in the labour market.

Board of Statutory Auditors (elected 29 April 2010)

NAME POSITION REMUNERATION (€000)

NAME AND SURNAME

OFFICE HELD TERM OF OFFICE

REMUNERATION OF POSITION

HELD

BENEFICI NON MONETARI

BONUS E ALTRI INCENTIVI

ALTRI COMPENSI

Enrico Laghi Chairman (1) 211 0 0 41

Corrado Gatti Statutory auditor (1) 140 0 0 0

Alberto Romano Statutory auditor (1) 147 0 0 0

TOTAL BOARD OF STATUTORY AUDITORS 498 0 0 41

(1) Until approval of the financial statements for the year ended 31 December 2012

(2) Represents remuneration accrued in 2011



D. Information provided pursuant to CONSOB Ruling no. 6064293

31.12.2011 Of which related

party transactions

Impact 31.12.2010 Of which related

party transactions

Impact

Consolidated net revenues 3,288,954 258,219 7.85% 2,540,535 371,199 14.61%

Consolidated net revenue 3,288,954 258,219 7.85% 2,540,535 371,199 14.61%

Total cost of materials and overheads 2,544,576 773,189 30.39% 1,439,092 174,248 12.11%

Total cost of materials and overheads 2,544,576 773,189 30.39% 1,439,092 174,248 12.11%

Gross Operating Profit 744,377 (514,971) -69.18% 1,101,442 196,951 17.88%

Amortisation, depreciation, provisions and impairment charges

425,984 0.00% 320,593 0 0.00%

Operating profit/(loss) 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%

Total profit/(loss) on investments 9,295 0.00% 2,572 0.00%

Profit/(loss) before tax 209,266 (514,938) -245.81% 694,490 200,998 28.94%

Taxation 60,737 0.00% 69,844 0.00%


148,529 (514,938) -346.69% 624,646 200,998 32.18%


(55,009) (21,636) 39.33% (524,626) (163,228) 31.11%

NET PROFIT/(LOSS) FOR THE PERIOD 93,521 (536,574) -573.75% 100,020 37,770 37.76%



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

ASSETS 31 December

2011

Of which related party transactions

Impact 31 December

2010


Impact

Property, plant and equipment 2,021,364 1,904,563

Investment property 2,993 3,148

Goodwill and consolidation differences 151,244 19,718

Concessions 1,553,946 1,418,071

Other intangible assets 115,067 67,350

Investments in subsidiaries and associates 14,795 32,066

Other investments 4,686 3,650

Deferred tax assets 353,648 267,520

Financial assets 19,939 18,033 90.44% 7,553 5,028 66.57%

Other assets 63,189 26,212

NON-CURRENT ASSETS 4,300,870 18,033 0.42% 3,749,850 5,028 0.13%

Non-current assets held for sale 0 0 704,013 43,262

Inventories 66,106 58,039

Trade receivables 1,510,012 269,944 17.88% 1,144,811 195,819 17.10%

Other current assets 189,518 60 77,337 10,964 14.18%

Current financial assets 57,089 123,732 216.73% 321,384 274,392 85.38%

Current tax assets 172,768 42,437 6,033 14.22%

Cash and cash equivalents 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



LIABILITIES €000 31 December

2011


Impact 31 December

2010


Impact


share capital 1,098,899 1,098,899

legal reserve 113,731 111,785

other reserves (375,802) (272,132)

profit (loss) pertaining to previous years 314,009 276,004

profit (loss) for the period 85,958 92,148

Total Group shareholders’ equity 1,236,795 1,306,704

Shareholders’ equity attributable to minority interests

74,661 74,623

Total shareholders’ equity 1,311,457 1,381,326

Staff termination benefits and other defined benefit plans

104,776 106,934

Provisions for liabilities and charges 250,892 191,683

Borrowings and financial liabilities 2,298,916 2,299,463

Other liabilities 278,415 227,478

Provisions for deferred tax liabilities 98,826 77,410

NON-CURRENT LIABILITIES 3,031,825 0 2,902,969 0

Non-current liabilities held for sale 0 581,371 153,612

Trade payables 1,344,785 331,215 24.63% 883,498 148,292 16.78%

Other current liabilities 286,441 259,620 36 0.01%

Borrowings 540,645 16,005 2.96% 250,045 8,926 3.57%

Tax payables 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%




31.12.2011 Related parties 31.12.2010 Related parties

Non-current financial assets/(liabilities) 1,907 2,525

Intercompany non-current financial assets/(liabilities) 18,033 18,033 5,028 5,028

Non-current borrowings and financial liabilities (2,298,916) (2,299,463)

Net medium/long-term debt (2,278,976) 18,033 (2,291,910) 5,028

Net long-term debt (Discontinued operations) (183,576)

Cash and cash equivalents and securities 321,093 283,009

Short-term bank borrowing (448,889) (199,199)

Current financial assets/(liabilities) (26,787) (1,341) (5,145)

Intercompany current financial assets/(liabilities) 107,727 107,727 270,612 270,612

Net short-term debt (46,855) 107,727 353,081 265,467

Net short-term debt (Discontinued operations) (81,316) (100,364)

TOTAL NET DEBT (2,325,831) 125,760 (2,203,722) 170,130




€ 31.12.2011 Related parties

Impact 31.12.2010 Related parties

Impact


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)

Amortisation/depreciation 250,453 230,818

Revaluations/impairment charges (2,044) 61,319

Movement in provisions for liabilities 50,179 (42,057)

Net movement in staff termination benefits (12,554) (12,540)

Realised gains 0 9,466

Net financial interest expense 120,574 98,895

Income taxes paid (139,540) (40,866)

Cash generated by operations before movements in working capital

426,160 490,454

Increase in current receivables (289,129) 13,866 (4.8%) (196,781) 63,333 (32.2%)

Increase/decrease in current liabilities 314,398 129,155 41.1% 74,476 (36,254) (48.7%)

Increase/(decrease) in inventories 6,322 (19,572)

Movement in working capital 31,591 (141,877)

Changes in other assets/liabilities during the period

(124,780) 97,606

TOTAL CASH FLOW FROM OPERATING ACTIVITIES 332,972 446,183


Purchase/Sale of property, plant and equipment (86,311) (192,414)

Purchase/sale of intangible assets (380,155) (227,343)

Investments (13,210) 1,168

Proceeds/payments deriving from other investments 230,233 (137,655) (59.8%) 64,652 104,537 161.7%

Dividends received 2,048 0

Interest income received 22,609 20,214

TOTAL (224,787) (333,723)


Minority interests in capital increases by subsidiaries 0 0

Repayment of mortgages and long-term borrowings (41,552) (69,238)

Provision of mortgages/other medium/long-term borrowings

0 680,337

Decrease/increase in other short-term borrowings 237,019 (98,430) (41.53%) (429,636) 9,230 (2.1%)

Interest expenses paid (119,622) 580 (0.48%) (96,808) 741 (0.8%)

Dividends paid (159,530) (2,851)

TOTAL CASH FLOW (83,685) 81,803

Cash and cash equivalents at beginning of period 296,522 102,258

Cash flows for the year 24,500 194,263

Cash and cash equivalents at end of period 321,022 296,522



E. Segment information: balance sheet and income statement

2010 Balance Sheet

GENERATION E.E.

DISTRIBUTION SALES TRADING PUBLIC LIGHTING

ITALIAN WATER

SERVICES

OVERSEAS WATER SERVICES

ANALYSIS AND RESEARCH

CORPORATE ENVIRONMENT PV POWER TOTAL CONSOLIDATION ADJUSTMENTS

GROUP TOTAL

Investments 3,693 99,000 5,400 8,800 201,100 800 900 12,100 48,500 53,300 0 0 0

Segment assets

Property, plant and equipment 48,937 1,356,829 929 198 64,416 2,517 3,535 56,155 209,891 123,783 1,867,189 40,522 1,907,710

Intangible assets 542 110,591 23,194 56,799 1,552,857 8,141 891 12,423 7,264 0 1,773,002 (267,863) 1,505,139,198

Non-current financial assets accounted for at Equity

0 0 0 0 0 0 0 32,066

Non-current financial assets 3,650

Other non-current trading assets 293,732

Other non-current financial assets 7,553

Inventories 696 20,885 0 5,075 15,787 1,040 0 (0) 2,914 15,705 62,102 (4,063) 58,039

Trade receivables due from third parties 100,106 323,888 2,353 531,244 4,287 24,683 26,128 44,788 19,657 1,077,133 (85,868) 991,265

Trade receivables due from Parent Company

20,081 0 55,336 55,821 0 3,636 8,864 86 0 143,823 (30,250) 113,572


25,240 0 0 5,367 0 395 32,686 461 0 64,150 (24,177) 39,973


Other current financial assets 321,384


Non-current assets held for sale 507,772 248,172 755,944 (51,931) 704,013

TOTAL ASSETS 557,946 1,633,732 348,010 248,172 119,761 2,225,493 16,285 33,139 136,257 265,403 159,145 5,743,343 (423,630) 6,379,614



GENERATION E.E.

DISTRIBUTION SALES TRADING PUBLIC LIGHTING

ITALIAN WATER

SERVICES




GROUP TOTAL

Investments 3,693 99,000 5,400 8,800 201,100 800 900 12,100 48,500 53,300 0 0 0

Segment assets

Property, plant and equipment 48,937 1,356,829 929 198 64,416 2,517 3,535 56,155 209,891 123,783 1,867,189 40,522 1,907,710

Intangible assets 542 110,591 23,194 56,799 1,552,857 8,141 891 12,423 7,264 0 1,773,002 (267,863) 1,505,139,198

Non-current financial assets accounted for at Equity

0 0 0 0 0 0 0 32,066




Inventories 696 20,885 0 5,075 15,787 1,040 0 (0) 2,914 15,705 62,102 (4,063) 58,039

Trade receivables due from third parties 100,106 323,888 2,353 531,244 4,287 24,683 26,128 44,788 19,657 1,077,133 (85,868) 991,265


20,081 0 55,336 55,821 0 3,636 8,864 86 0 143,823 (30,250) 113,572


25,240 0 0 5,367 0 395 32,686 461 0 64,150 (24,177) 39,973




Non-current assets held for sale 507,772 248,172 755,944 (51,931) 704,013

TOTAL ASSETS 557,946 1,633,732 348,010 248,172 119,761 2,225,493 16,285 33,139 136,257 265,403 159,145 5,743,343 (423,630) 6,379,614



2010 Balance Sheet

GENERATION DISTRIBUTION SALES TRADING PUBLIC LIGHTING

ITALIAN WATER

SERVICES




GROUP TOTAL

Segment liabilities

Trade payables due to third parties 149,741 183,905 36,314 369,372 2,078 3,383 56,596 39,356 55,668 896,412 (129,557) 766,854

Trade payables due to Parent Company 4,646 28,937 0 51,569 548 201 31,395 931 0 118,227 (22,023) 96,204


2,984 2 4,061 10,352 93 654 13,131 340 24 31,642 (11,202) 20,439



Staff termination benefits and other defined-benefit plans

505 31,295 2,538 3,837 39,411 177 2,862 24,384 1,634 276 106,919 15 106,934

Other provisions 291 20,473 8,232 2,167 119,582 0 2,610 25,477 17,722 67 196,621 (4,938) 191,683

Provisions for deferred tax liabilities 77,410


Other non-current financial liabilities 2.299,463

Liabilities directly associated with assets for sale

82,181 207,932 290,112 291,258 581,371

Shareholders’ equity 1.381,326


82,977 209,138 223,614 207,932 46,379 590,286 2,896 9,710 150,983 59,983 56,035 1.639,933 123,553 6,379,614



GENERATION DISTRIBUTION SALES TRADING PUBLIC LIGHTING

ITALIAN WATER

SERVICES




GROUP TOTAL

Segment liabilities

Trade payables due to third parties 149,741 183,905 36,314 369,372 2,078 3,383 56,596 39,356 55,668 896,412 (129,557) 766,854

Trade payables due to Parent Company 4,646 28,937 0 51,569 548 201 31,395 931 0 118,227 (22,023) 96,204


2,984 2 4,061 10,352 93 654 13,131 340 24 31,642 (11,202) 20,439




505 31,295 2,538 3,837 39,411 177 2,862 24,384 1,634 276 106,919 15 106,934

Other provisions 291 20,473 8,232 2,167 119,582 0 2,610 25,477 17,722 67 196,621 (4,938) 191,683



Other non-current financial liabilities 2.299,463

Liabilities directly associated with assets for sale

82,181 207,932 290,112 291,258 581,371

Shareholders’ equity 1.381,326


82,977 209,138 223,614 207,932 46,379 590,286 2,896 9,710 150,983 59,983 56,035 1.639,933 123,553 6,379,614



2010 Income Statement

GENERATION DISTRIBUTION SALES TRADING PUBLIC LIGHTING ITALIAN WATER SERVICES



ENVIRONMENT PV POWER CORPORATE TOTAL ASSETS

CONSOLIDATION ADJUSTMENTS

CONSOLIDATED TOTAL

Third party revenues 7,088 159,146 168,920 71,371 722,143 23,704 565 76,075 49,446 22,800 1,301,257 (55,842) 1,245,415

Inter-segment sales 10,145 257,536 1,200,938 16 2,437 0 26,124 76 0 74,532 1,571,803 (276,683) 1,295,120

Staff costs 1,275 62,503 9,485 9,094 123,783 7,099 11,328 8,281 603 46,417 279,868 (14,900) 264,968

Energy purchase 5,386 61,458 1,326,035 0 27 0 0 2,429 0 142 1,395,476 (718,245) 677,231

Sundry materials and overheads

2,544 71,483 38,586 42,504 316,078 12,183 8,090 42,357 39,542 71,814 645,181 (148,286) 496,895

Gross operating profit/(loss)

8,028 221,237 (4,249) 0 19,790 284,691 4,423 7,270 23,084 9,301 (21,041) 552,535 548,907 1,101,441

Amortisation/depreciation 5,804 104,713 28,749 1,937 131,290 887 1,189 18,954 3,009 22,130 318,661 1,931 320,592

Operating profit/(loss) 2,225 116,525 (32,998) 0 17,853 153,401 3,536 6,081 4,130 6,292 (43,171) 233,874 546,976 780,849

Finance (costs)/income (88,932)

Investments accounted for using equity method

Profit/(loss) on investments (17) 545 2,727 1,088 (179) (1,591) 2,572 2,572

Profit/(loss) before tax 2,225 116,507 (32,453) 0 17,853 156,128 4,624 6,081 3,951 6,292 (44,762) 236,446 458,046 694,490

Taxation 69,844

Profit/(loss) from continuing operations

624,646


(23,455) 27,734 17,358 (3,541) 18,095 (542,721) (524,626)


100,020



GENERATION DISTRIBUTION SALES TRADING PUBLIC LIGHTING ITALIAN WATER SERVICES



ENVIRONMENT PV POWER CORPORATE TOTAL ASSETS


CONSOLIDATED TOTAL

Third party revenues 7,088 159,146 168,920 71,371 722,143 23,704 565 76,075 49,446 22,800 1,301,257 (55,842) 1,245,415

Inter-segment sales 10,145 257,536 1,200,938 16 2,437 0 26,124 76 0 74,532 1,571,803 (276,683) 1,295,120

Staff costs 1,275 62,503 9,485 9,094 123,783 7,099 11,328 8,281 603 46,417 279,868 (14,900) 264,968

Energy purchase 5,386 61,458 1,326,035 0 27 0 0 2,429 0 142 1,395,476 (718,245) 677,231

Sundry materials and overheads

2,544 71,483 38,586 42,504 316,078 12,183 8,090 42,357 39,542 71,814 645,181 (148,286) 496,895

Gross operating profit/(loss)

8,028 221,237 (4,249) 0 19,790 284,691 4,423 7,270 23,084 9,301 (21,041) 552,535 548,907 1,101,441

Amortisation/depreciation 5,804 104,713 28,749 1,937 131,290 887 1,189 18,954 3,009 22,130 318,661 1,931 320,592

Operating profit/(loss) 2,225 116,525 (32,998) 0 17,853 153,401 3,536 6,081 4,130 6,292 (43,171) 233,874 546,976 780,849


Investments accounted for using equity method

Profit/(loss) on investments (17) 545 2,727 1,088 (179) (1,591) 2,572 2,572

Profit/(loss) before tax 2,225 116,507 (32,453) 0 17,853 156,128 4,624 6,081 3,951 6,292 (44,762) 236,446 458,046 694,490

Taxation 69,844

Profit/(loss) from continuing operations

624,646


(23,455) 27,734 17,358 (3,541) 18,095 (542,721) (524,626)


100,020



2011 Balance Sheet

GENERATION E.E. DISTRIBUTION SALES PUBLIC LIGHTING ITALIAN WATER SERVICES

OVERSEAS WATER SERVICES ANALYSIS AND

RESEARCH


GROUP TOTAL

Investments 11,240 103,600 11,250 0 229,700 200 400 10,500 20,600 25,400 412,956 0 412,956

Segment assets

Property, plant and equipment 160,775 1,356,688 2,234 0 62,563 2,061 1,814 55,419 204,580 143,488 1,989,623 34,723 2,024,346

Intangible assets 1,304 116,938 33,500 0 1,739,304 7,906 290 10,393 9,576 0 1,919,211 (98,945) 1,820,267

Non-current financial assets accounted for using the equity method

0 0 0 0 0 0 0 14,795




Inventories 2,926 16,601 0 7,068 13,656 1,831 0 (0) 2,806 23,706 68,594 (2,489) 66,106

Trade receivables due from third parties 10,864 142,288 642,359 10,666 489,451 6,160 22,636 27,977 77,189 63,662 1,493,252 (188,561) 1,304,691


0 4,596 38,903 37,349 76,674 0 72 8,865 105 0 166,564 (6,504) 160,060


0 13,517 32,988 224 7,520 92 60 53,659 140 0 108,200 (62,939) 45,261




TOTAL ASSETS 175,869 1,650,629 749,983 55,307 2,389,168 18,050 24,873 156,313 294,395 230,857 5,745,444 (324,714) 6,617,384



GENERATION E.E. DISTRIBUTION SALES PUBLIC LIGHTING ITALIAN WATER SERVICES


RESEARCH


GROUP TOTAL

Investments 11,240 103,600 11,250 0 229,700 200 400 10,500 20,600 25,400 412,956 0 412,956

Segment assets

Property, plant and equipment 160,775 1,356,688 2,234 0 62,563 2,061 1,814 55,419 204,580 143,488 1,989,623 34,723 2,024,346

Intangible assets 1,304 116,938 33,500 0 1,739,304 7,906 290 10,393 9,576 0 1,919,211 (98,945) 1,820,267

Non-current financial assets accounted for using the equity method

0 0 0 0 0 0 0 14,795




Inventories 2,926 16,601 0 7,068 13,656 1,831 0 (0) 2,806 23,706 68,594 (2,489) 66,106

Trade receivables due from third parties 10,864 142,288 642,359 10,666 489,451 6,160 22,636 27,977 77,189 63,662 1,493,252 (188,561) 1,304,691


0 4,596 38,903 37,349 76,674 0 72 8,865 105 0 166,564 (6,504) 160,060


0 13,517 32,988 224 7,520 92 60 53,659 140 0 108,200 (62,939) 45,261




TOTAL ASSETS 175,869 1,650,629 749,983 55,307 2,389,168 18,050 24,873 156,313 294,395 230,857 5,745,444 (324,714) 6,617,384



2011 Balance Sheet

GENERATION E.E.

DISTRIBUTION SALES PUBLIC LIGHTING

ITALIAN WATER

SERVICES


RESEARCH


GROUP TOTAL

Segment liabilities

Trade payables due to third parties 11,434 169,461 516,132 73,416 430,766 1,682 2,092 61,720 39,369 58,637 1,364,708 (179,733) 1,184,975

Trade payables due to Parent Company 725 15,796 56,547 0 66,958 567 497 31,395 877 0 173,361 (40,565) 132,796


0 3,468 824 8,537 10,277 15 323 16,785 534 0 40,763 (13,750) 27,014




1,857 28,471 4,576 3,754 37,892 221 2,552 23,551 1,901 0 104,776 0 104,776

Other provisions 1,428 15,842 3,257 1,799 145,308 690 2,355 70,680 19,293 0 260,650 (9,758) 250,892






15,444 233,039 581,335 87,506 691,202 3,174 7,818 204,131 61,974 58,637 1,944,259 (243,806) 6,617,384



GENERATION E.E.

DISTRIBUTION SALES PUBLIC LIGHTING

ITALIAN WATER

SERVICES


RESEARCH


GROUP TOTAL

Segment liabilities

Trade payables due to third parties 11,434 169,461 516,132 73,416 430,766 1,682 2,092 61,720 39,369 58,637 1,364,708 (179,733) 1,184,975

Trade payables due to Parent Company 725 15,796 56,547 0 66,958 567 497 31,395 877 0 173,361 (40,565) 132,796


0 3,468 824 8,537 10,277 15 323 16,785 534 0 40,763 (13,750) 27,014




1,857 28,471 4,576 3,754 37,892 221 2,552 23,551 1,901 0 104,776 0 104,776

Other provisions 1,428 15,842 3,257 1,799 145,308 690 2,355 70,680 19,293 0 260,650 (9,758) 250,892






15,444 233,039 581,335 87,506 691,202 3,174 7,818 204,131 61,974 58,637 1,944,259 (243,806) 6,617,384



2011 Income Statement

GENERATION E.E. (SEGM.)

DISTRIBUTION (SEGM.)

SALES (SEGM.)

TRADING (SEGM.)

PUBLIC LIGHTING

(SEGM.)

ITALIAN WATER

SERVICES (SEGM.)


RESEARCH (SEGM.)

ENVIRONMENT AND ENERGY

PV POWER CORPORATE TOTAL ASSETS


CONSOLIDATED TOTAL

Third party revenues 9,999 196,841 290,986 0 4,176 768,023 36,093 751 84,037 83,593 89,387 1,563,885 (64,837) 1,499,048

Inter-segment sales 18,552 246,245 1,792,482 0 77,890 5,408 178 22,964 75 0 5,355 2,169,149 (379,243) 1,789,906

Staff costs 4,597 61,420 18,712 0 11,163 123,591 10,678 8,669 8,739 182 47,648 295,401 (17,468) 277,933

Energy purchase 5,814 63,757 1,971,418 0 0 263 0 0 1,165 0 442 2,042,859 (335,604) 1,707,255

Sundry materials and overheads 7,071 80,622 64,077 0 64,938 342,481 16,896 7,095 42,530 57,008 77,291 760,008 (200,620) 559,388

Gross operating profit/(loss) 11,068 237,286 29,260 0 5,966 307,096 8,697 7,951 31,677 26,403 (30,639) 634,765 109,612 744,377

Amortisation, depreciation and impairment charges

15,682 118,570 28,030 0 2 156,361 1,773 980 31,195 6,716 66,700 426,010 (26) 425,984

Operating profit/(loss) (4,614) 118,716 1,230 0 5,964 150,734 6,924 6,970 482 19,687 (97,339) 208,755 109,638 318,393


Profit/(loss) on investments 144 7,458 39 1,653 9,295 9,295

Profit/(loss) before tax (4,614) 118,861 8,688 0 5,964 150,773 8,577 6,970 482 19,687 (97,339) 218,050 209,266

Taxation 60,737


148,529


(6,616) 22 3,525 (3,069) (51,940) (55,009)


93,521



GENERATION E.E. (SEGM.)

DISTRIBUTION (SEGM.)

SALES (SEGM.)

TRADING (SEGM.)

PUBLIC LIGHTING

(SEGM.)

ITALIAN WATER

SERVICES (SEGM.)


RESEARCH (SEGM.)

ENVIRONMENT AND ENERGY

PV POWER CORPORATE TOTAL ASSETS


CONSOLIDATED TOTAL

Third party revenues 9,999 196,841 290,986 0 4,176 768,023 36,093 751 84,037 83,593 89,387 1,563,885 (64,837) 1,499,048

Inter-segment sales 18,552 246,245 1,792,482 0 77,890 5,408 178 22,964 75 0 5,355 2,169,149 (379,243) 1,789,906

Staff costs 4,597 61,420 18,712 0 11,163 123,591 10,678 8,669 8,739 182 47,648 295,401 (17,468) 277,933

Energy purchase 5,814 63,757 1,971,418 0 0 263 0 0 1,165 0 442 2,042,859 (335,604) 1,707,255

Sundry materials and overheads 7,071 80,622 64,077 0 64,938 342,481 16,896 7,095 42,530 57,008 77,291 760,008 (200,620) 559,388

Gross operating profit/(loss) 11,068 237,286 29,260 0 5,966 307,096 8,697 7,951 31,677 26,403 (30,639) 634,765 109,612 744,377


15,682 118,570 28,030 0 2 156,361 1,773 980 31,195 6,716 66,700 426,010 (26) 425,984

Operating profit/(loss) (4,614) 118,716 1,230 0 5,964 150,734 6,924 6,970 482 19,687 (97,339) 208,755 109,638 318,393


Profit/(loss) on investments 144 7,458 39 1,653 9,295 9,295

Profit/(loss) before tax (4,614) 118,861 8,688 0 5,964 150,773 8,577 6,970 482 19,687 (97,339) 218,050 209,266

Taxation 60,737


148,529


(6,616) 22 3,525 (3,069) (51,940) (55,009)


93,521



F. Financial Highlights of Companies accounted for under Proportionate Consolidation

€ Acque Acque Industriali

Acque Servizi

Publiutenti Publiacqua Gori Voghera Vendite

Umbria Energy

Elga Sud Ecogena Overseas Umbra Acque

Apice Ecomed Nuove Acque

Ingegnerie Toscane

srl

Acquedotto del Fiora

Income statement

Total net revenues 56,843 2,688 11,217 51 76,688 52,418 39,721 57,428 28,172 1,754 2,463 24,791 0 7,344 7,671 30,857

Total operating costs 29,852 2,256 9,914 90 46,775 36,243 39,296 56,667 27,818 1,517 715 18,006 59 159 4,679 5,878 19,224

Gross Operating Profit 26,991 431 1,303 (39) 29,914 16,175 425 762 354 236 1,748 6,786 (59) (159) 2,665 1,793 11,633

% of Revenues 0 0 0 (0) 0 0 0 0 0 0 0 0 0 (1) 0 0 0


(16,342) (192) (506) (18,934) (11,244) (345) (940) (352) (160) (480) (4,871) (1,373) (257) (6,147)

Operating profit/(loss) 10,649 240 797 (39) 10,979 4,931 80 (179) 3 77 1,268 1,915 (59) (159) 1,292 1,536 5,487

Net profit/(loss) for the period 5,155 116 437 (28) 6,976 2,561 6 (245) (27) 7 783 357 (61) (163) 436 1,036 2,211

Balance sheet

Net invested capital 116,586 1,789 3,625 (252) 103,236 43,185 6,438 5,204 2,569 4,440 8,960 23,507 (34) (194) 15,683 5,030 48,827

Current assets 33,448 1,316 8,539 72 47,060 118,174 15,380 18,767 8,663 2,680 290 16,396 15 47 2,263 10,774 16,230

Current liabilities (36,744) (1,015) (5,262) (318) (48,936) (104,293) (9,113) (14,190) (6,086) (2,618) (214) (17,310) (49) (245) (2,558) (6,140) (16,350)

Net current assets/(liabilities) (3,296) 301 3,278 (246) (1,877) 13,881 6,267 4,577 2,577 62 76 (914) (34) (198) (295) 4,633 (120)

Non-current assets 158,143 1,660 895 159,293 83,863 299 1,232 11 6,701 8,884 36,467 0 3 20,079 735 66,136

Non-current liabilities (38,261) (171) (548) (6) (54,181) (54,559) (129) (605) (19) (2,323) (12,046) (4,100) (339) (17,189)

Net non-current assets/(liabilities) 119,883 1,488 347 (6) 105,113 29,304 170 627 (8) 4,378 8,884 24,421 0 3 15,979 396 48,947

Shareholders’ equity (23,838) (552) (1,904) 10 (71,066) (28,828) (195) (1,013) (113) (353) (6,536) (7,924) 22 (3) (5,861) (3,060) (11,353)

Net funds/(debt) (92,748) (1,238) (1,721) 242 (32,170) (14,357) (6,243) (4,190) (2,456) (4,086) (2,323) (15,583) 12 198 (9,823) (1,970) (37,474)

Current financial assets 2,760 67 377 242 9,885 4,499 4 152 0 325 1,011 515 12 236 1,846 (91) 3,987

Current financial liabilities (1,561) (379) (1,971) (29,466) (18,856) (6,247) (4,343) (2,456) (523) (498) (5,555) (0) (38) (1,880) (35,626)

Total net current financial assets/(liabilities)

1,200 (312) (1,594) 242 (19,581) (14,357) (6,243) (4,190) (2,456) (198) 513 (5,040) 12 198 1,846 (1,970) (31,639)

Non-current financial assets 23 427 57 0

Non-current financial liabilities (93,947) (926) (127) (12,612) (4,315) (2,836) (10,599) (11,669) (5,834)

Total net non-current financial assets/(liabilities)

(93,947) (926) (127) 0 (12,589) 0 0 0 0 (3,889) (2,836) (10,543) 0 0 (11,668) 0 (5,834)



€ Acque Acque Industriali

Acque Servizi

Publiutenti Publiacqua Gori Voghera Vendite

Umbria Energy

Elga Sud Ecogena Overseas Umbra Acque

Apice Ecomed Nuove Acque

Ingegnerie Toscane

srl

Acquedotto del Fiora

Income statement

Total net revenues 56,843 2,688 11,217 51 76,688 52,418 39,721 57,428 28,172 1,754 2,463 24,791 0 7,344 7,671 30,857

Total operating costs 29,852 2,256 9,914 90 46,775 36,243 39,296 56,667 27,818 1,517 715 18,006 59 159 4,679 5,878 19,224

Gross Operating Profit 26,991 431 1,303 (39) 29,914 16,175 425 762 354 236 1,748 6,786 (59) (159) 2,665 1,793 11,633

% of Revenues 0 0 0 (0) 0 0 0 0 0 0 0 0 0 (1) 0 0 0


(16,342) (192) (506) (18,934) (11,244) (345) (940) (352) (160) (480) (4,871) (1,373) (257) (6,147)

Operating profit/(loss) 10,649 240 797 (39) 10,979 4,931 80 (179) 3 77 1,268 1,915 (59) (159) 1,292 1,536 5,487

Net profit/(loss) for the period 5,155 116 437 (28) 6,976 2,561 6 (245) (27) 7 783 357 (61) (163) 436 1,036 2,211

Balance sheet

Net invested capital 116,586 1,789 3,625 (252) 103,236 43,185 6,438 5,204 2,569 4,440 8,960 23,507 (34) (194) 15,683 5,030 48,827

Current assets 33,448 1,316 8,539 72 47,060 118,174 15,380 18,767 8,663 2,680 290 16,396 15 47 2,263 10,774 16,230

Current liabilities (36,744) (1,015) (5,262) (318) (48,936) (104,293) (9,113) (14,190) (6,086) (2,618) (214) (17,310) (49) (245) (2,558) (6,140) (16,350)

Net current assets/(liabilities) (3,296) 301 3,278 (246) (1,877) 13,881 6,267 4,577 2,577 62 76 (914) (34) (198) (295) 4,633 (120)

Non-current assets 158,143 1,660 895 159,293 83,863 299 1,232 11 6,701 8,884 36,467 0 3 20,079 735 66,136

Non-current liabilities (38,261) (171) (548) (6) (54,181) (54,559) (129) (605) (19) (2,323) (12,046) (4,100) (339) (17,189)

Net non-current assets/(liabilities) 119,883 1,488 347 (6) 105,113 29,304 170 627 (8) 4,378 8,884 24,421 0 3 15,979 396 48,947

Shareholders’ equity (23,838) (552) (1,904) 10 (71,066) (28,828) (195) (1,013) (113) (353) (6,536) (7,924) 22 (3) (5,861) (3,060) (11,353)

Net funds/(debt) (92,748) (1,238) (1,721) 242 (32,170) (14,357) (6,243) (4,190) (2,456) (4,086) (2,323) (15,583) 12 198 (9,823) (1,970) (37,474)

Current financial assets 2,760 67 377 242 9,885 4,499 4 152 0 325 1,011 515 12 236 1,846 (91) 3,987

Current financial liabilities (1,561) (379) (1,971) (29,466) (18,856) (6,247) (4,343) (2,456) (523) (498) (5,555) (0) (38) (1,880) (35,626)

Total net current financial assets/(liabilities)

1,200 (312) (1,594) 242 (19,581) (14,357) (6,243) (4,190) (2,456) (198) 513 (5,040) 12 198 1,846 (1,970) (31,639)

Non-current financial assets 23 427 57 0

Non-current financial liabilities (93,947) (926) (127) (12,612) (4,315) (2,836) (10,599) (11,669) (5,834)

Total net non-current financial assets/(liabilities)

(93,947) (926) (127) 0 (12,589) 0 0 0 0 (3,889) (2,836) (10,543) 0 0 (11,668) 0 (5,834)



G. List of significant investments at 31.12.11 – art.120, paragraph 4, legislative decree no. 58/98 – ACEA S.p.A.

Acea Ato 2 S.p.A.

p.le Ostiense, 2

00154 Rome

TAX CODE AND VAT no. 05848061007

362,834,320.00 euros

35,000,000.00

par value of 10.00 euros

96.46% 96.46% Ownership Direct

Acea ATO 5 S.p.A.

via Roma, snc

03100 Frosinone

Tax Code and VAT no. 02267050603

120,000.00 euros 11,338.00 94.48% 94.48% Ownership Direct

Acea Dominicana SA

avenida Las Americas

Esquina Mazoneria, Ensanche Ozama

11501 Santo Domingo

Dominican Republic

30,000,000.00

Pesos

239.904,00

par value of 125.00 Pesos


AceaGori Servizi Scarl

via ex Aeroporto, s.n.c.

località Area “Consorzio Sole”

Pomigliano d’Arco


1,000,000.00 euros

Holding equal to 550,000.00 euros


55%

40%

Ownership Direct Direct

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%)

Acea Servizi Acqua S.r.l. in liq.

p.le Ostiense, 2

00154 Rome


10,0000.00 euros € Holding equal to 7,000.00 euros€

70% 70% Ownership Direct

Acque Blu Arno Basso S.p.A. (“ABAB”)

p.le Ostiense, 2

00154 Rome


8,000,000.00 euros€

5,520,000.00

par value of 1.00 euro

€


Acque Blu Fiorentine S.p.A.

p.le Ostiense, 2

00154 Rome


15,153,400.00 euros€

10,445,746.00


€


Nome and registered office

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)




or holdings






Acque Blu S.r.l.

via Ugo Bassi, 34

51016 Montecatini Terme (PT)

Tel . 06/57996837


10,000.00 euros € Holding equal to 5,500.00 euros


Acque S.p.A.

via Garigliano, 1

50053 Empoli


9,953,116.00 euros€

4,478,902.00


45% 45% Ownership Indirect through ABAB S.p.A., in which ACEA has an equity interest of 69%

Acquedotto del Fiora S.p.A.

via G. Mameli, 10

58100 Grosseto


1,730,520.00 euros

76,912.00


40% 40% Ownership Indirect through Ombrone S.p.A., a company in which ACEA has an equity interest of 84.57%

Aguas de San Pedro SA de CV

Las Palmas, 3 Avenida, 20y 27 calle,

S.E. Apto Postal no 261

21104 San Pedro Sula

Honduras

159,900,000.00

Lempiras

49,569.00

par value of 1,000.00 Lem-

piras


Aguazul Bogotà S.A. calle 82 n. 19°-34 110221 Bogotà - Colombia

4,000,000,000.00

Pesos

2,040.00

par value of 1,000,000.00

Pesos


AZGA NORD S.p.A. in liquidation

piazza Repubblica, Palazzo Comunale

54027 Pontremoli (MS)

Tel. 0187/833378


217,500.00 euros 106,575.00


49% 49% Ownership Indirect through

CREA SpA in liquidation, of which Acea is the sole shareholder

Consorcio Agua Azul SA

calle Amador Merino Reina, 307

Lima 27

Peru

PEN 69,001,000.00

*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..

17,595,255.00 25.5% 25.5% Ownership Direct




or holdings






Crea Gestioni S.r.l.

p.le Ostiense, 2

00154 Rome

Tel. 06/57991


1100,000.00 euros



Crea - Costruzione Riordino Esercizio Acquedotti S.p.A. in liquidation

p.le Ostiense, 2

00154 Rome

Tel. 06/57996837


2,678,958.00 euros

2,678,958.00



Gori S.p.A.

via Trentola, 211 80056 Ercolano - NA


44,999,970.75 euros

108,018.00


37.05%

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%)

GE.SE.SA. S.p.A.

zona Industriale Pezzapiana lotto 11/12 82100 Benevento

Tel. 0824/320311


519,340.75 euros 6,000.00


59.67% 59.67% Ownership Indirect through CREA Gestioni S.r.l., of which Acea is the sole shareholder

G.E.A.L. S.p.A.

v.le Luporini, 1348

55100 Lucca

Tel. 0583/540218


1,450,000.00 euros€€

417,600.00


€

28.80% 28.80% Ownership Indirect through CREA SpA in liquidation, of which Acea is the sole shareholder




or holdings






Ingegnerie Toscane S.r.l.

via di Villamagna, 90/c

50126, Florence


100,000.00 euros€€ Holding equal to 1,000.00 euros

Holding equal to 2,564 euros

Quota pari a 48.218 €

Holding equal to 48,218 euros €

1%

2.564%

48.218%

48.218%

1%

2.564%

48.218%

48.218%

1%

Ownership

Ownership

Ownership

Direct

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%

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%

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%

Intesa Aretina Scarl

via F. Petrarca, 22/A

20123 Milan

Tel : 02-43982187


18,112,000.00 euros

Holding equal to

6,339,200.00 euros


LUNIGIANA ACQUE S.p.A.

in liquidation

via Nazionale, 173/175

54011 Massa Carrara

Tel. 0187/421650


750,000.00 euros 718,400.00

par value of 1.00 euros €

95.79% 95.79% Ownership Indirect through

CREA SpA in liquidation, of which Acea is the sole shareholder

Nuove Acque S.p.A.

Sede Legale Patrignone, loc. Cuculo

52100 Arezzo

Tel : 0575-3391


34,450,389.12 euros

3,081,997.00


46.16 % 46.16 % Ownership Indirect through Intesa Aretina Scarl, a company in which ACEA S.p.A. has an equity interest of 35%




or holdings






Ombrone S.p.A.

p.le Ostiense, 2

00154 Rome


6,500,000.00 euros

5,497,350.00



Publiacqua S.p.A.

via Villamagna

50100 Florence


150,280,056.72 euros

11,649,617.00


40% 40% Ownership Indirect through Acque Blu Fiorentine S.p.A., a company in which ACEA has an equity interest of 69%

Sarnese Vesuviano S.r.l.

p.le Ostiense, 2

00154 Rome

Tel. 06/57991


6,735,053.48 euros

Holding equal to

6,451,345.00 euros


S.O.G.E.A. S.p.A.

via Mercatanti, 8

02100 Rieti

Tel. 0746/204256


260,000.00 euros€€

245,000.00


49% 49% Ownership Indirect through CREA Gestioni S.r.l., of which Acea is the sole shareholder

Tirana Acque Scarl in liquidation

via SS. Giacomo e Filippo, 7

16122 Genoa


95,000.00 euros Holding equal to

38,000.00 euros


Umbra Acque S.p.A.

via Benucci, 162

06087 Ponte San Giovanni (PG)

Tel. 075/50593969


15,549,889.00 euros

6,219,956.00



Umbriadue Servizi Idrici Scarl

strada Sabbione zona ind. A72

05100 Terni


100,000.00 euros Holding equal to 34,000.00 euros

34% 34% Ownership Indirect through Crea Gestioni S.r.l., a wholly owned subsidiary of ACEA S.p.A. (100%)

Acea Distribuzione S.p.A.

p.le Ostiense, 2

00154 Rome

TAX Code and VAT no. 05816611007

345,000,000.00 euros

172,500,001.00 euros

50%

50%

50%

50%

Ownership Direct

Indirect through Acea Reti e Servizi Energetici S.p.A., of which ACEA is the sole shareholder




or holdings






Acea Illuminazione Pubblica S.p.A.

p.le Ostiense, 2

00154 Rome

Tel. 06 57993562


120,000.00 euros 120,000.00



Acea Reti e Servizi Energetici S.p.A.

p.le Ostiense , 2

00154 Rome


300,120,000.00 euros

300,120,000.00 100% 100% Ownership Direct

CESAP Vendita Gas S.r.l.

via del Teatro, s.n.c.

06083 Bastia Umbra (PG)

Tel. 075/ 8010703



100% 100% Ownership Indirect through SI(E)NERGIA S.p.A., in which ACEA has an interest of 42.08%

Citelum Acea Napoli P.I. S.c.a.r.l.

via Monteverdi Claudio, 11

20131 Milan

Tel. 02 29414900


90,000.00 euros€€ Holding equal to 28,962.00 euros


Ecogena S.p.A.

p.le Ostiense, 2

00154 Rome


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

Eur Power S.r.l.

largo Virgilio Testa, 23,

Rome

Tel. 06 54252176


1,000,0000.00 euros€

Holding equal to

490,000.00 euros

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

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





or holdings






SI(E)NERGIA S.p.A. (formerly CESAP S.p.A.)

via Fratelli Cairoli, 24 06125 Perugia

Tel. 075/ 5006050


132,000.00 euros 55,551.00 42.08% 42.08% Ownership Direct

Umbria Distribuzione Gas S.p.A.

via Capponi, 100

05100 Terni


2,120,000.00 euros

318,000.00 15% 15% Ownership Direct

AceaEnergia Holding S.p.A.

viale dell’Aeronautica, 7

00144 Rome


1153,500,000.00 euros€€

153,500,000.00 euros


Acea Energia S.p.A.

p.le Ostiense, 2

00154 Rome


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)

Acea Produzione S.p.A.

p.le Ostiense, 2

00154 Rome


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)

Acea8cento S.p.A.

p.le Ostiense, 2

00154 Rome


120,000.00 euros 120,000.00 100% 100% Ownership Direct

Dyna Green S.r.l. in liquidation

v.le Bianca Maria 24

20129 Milan



10,000.00 euros


Elga Sud S.p.A.

via Montegrappa, 6

70059 Trani


250,000.00 euros 122,500.00 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)




or holdings






Energy Molise Scarl in liquidation

via Flaminia, 133/137

00100 Rome



5,000.00 euros

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)

Umbria Energy S.p.A.

via Bruno Capponi, 100

05100 Terni


1,000,000.00 euros

500,000.00 50% 50% Ownership Indirect through


Voghera Energia Vendita S.p.A.

largo Toscanini, 5

27058 Voghera (PV)


250,000.00 euros 125,000.00 50% 50% Ownership Indirect through


A.PI.C.E. S.r.l.

p.le Ostiense, 2

00154 Rome

Tel. 06/57996685


86,112.00 euros 43,056.00 50% 50% Ownership Direct

Acea Risorse e Impianti per l’Ambiente S.p.A., in sigla anche ARIA S.p.A.

via G. Bruno, 7

05100 Terni


2,224,992.00 euros

4,312.00



Ame@tad S.r.l. in liquidation

v.le San Francesco d’Assisi, 15/C

03018 Paliano (FR)



55% 55% Ownership Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder

AMEA S.p.A. (Azienda Multiservizi Energia Ambiente)

v.le San Francesco d’Assisi, 15C

03018 Paliano (FR)


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.




or holdings






Aquaser S.r.l.

via dei Sarti, 15

56048 Volterra (PI)

Tel. 0588/81499


3,050,000.00 euros

Holding equal to 2,568,000.00

euros


ARKESIA S.p.A. (Arkesia Energia e Gas)

via Garibaldi, 7/E

03018 Paliano (FR)


170,827.00 euros 56,373.00 33% 33% Ownership Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder.

Ecoenergie S.r.l.

v.le San Francesco d’Assisi, 15/C

03018 Paliano (FR)


10,000.00 euros Holding equal to 9,000.00 euros €

Holding equal to

500.00 euros€

Holding equal to

500.00 euros

90,0%

5%

5%

90,0%

5%

5%

Ownership

Ownership

Ownership

Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder. 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.

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.

Ecomed S.r.l.

p.le Ostiense, 2

00154 Rome


50,094.00 euros

Holding equal to

25,047.00 euros


I.S.A. Innovazione Sostenibilità Ambientale S.r.l.

via Ravano Km. 2+400

Pontecorvo (FR)



40% 40% Ownership Indirect through Aquaser S.r.l., in which ACEA has an equity interest of 84.21%

Kyklos S.r.l.

via Ferriere Nettuno, Km15

04011 (LT)



51% 51% Ownership Indirect through Aquaser S.r.l., in which ACEA has an equity interest of 84.21%

R.E.C.L.A.S. (Recupero Ecologico Lazio Sud) - S.p.A. in liquidation

via Ortella, Km.3

03043 Frosinone



14% 14% Ownership Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder




or holdings






SAO Servizi Ambientali Orvieto S.p.A.

piazza del Commercio, 21

05019 Orvieto


7,524,400.00 euros

144,700.00


100% 100% Ownership Indirect through A.R.I.A. S.p.A., of which ACEA is the sole shareholder.

Solemme S.p.A.

località Carboli

Monterotondo Marittimo 58025 (GR)


761,400.00 euros 761,400.00 euros 100% 100% Ownership Indirect through Aquaser S.r.l., in which ACEA has an equity interest of 84.21%

LaboratoRI S.p.A.

via Vitorchiano, 165

00189 Rome


2,444,000.00 euros

4,700,000.00



WRc Plc

Frankland Road Blagrove

Swindon, Wiltshire SN5 8YF

England (UK)

GBP 500,000.00, fully paid-up

80,000.00 16% 16% Ownership Direct

Hydreco S.c.a.r.l. in liquidation

via M. L. King, 4 c/o Studio Barone

87036 CS

Tel. 0984/464222


10,200.00 euros 12,000.00



S.C.I.M.E.R. S.r.l. in liquidation

via M. O. Garana, 8

96100 Siracusa



59.9%

59.9%

Ownership Indirect through CREA Gestioni S.r.l., of which Acea is the sole shareholder

Te.Si.Ma S.p.A. in liquidation

piazza Della Libertà, 10


103,200.00 euros 3,840.00


19,20% 19,20% Ownership Direct

Marco Polo S.p.A.

via Marco Polo, 31

00154 Rome


894,000.00 euros 294,000.00





or holdings






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..




or holdings






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..


Certification of consolidated financial statements in

accordance with art. 154-bis of Legislative Decree 58/98

1. The undersigned, Marco Staderini, as Chief Executive Officer, and Giovanni

Barberis, as Executive Responsible for Financial Reporting of the company Acea

S.p.A., taking also account of provisions envisaged by Art. 154-bis, paragraphs

3 and 4, of the Legislative Decree no. 58 of 24 February 1998, hereby certify:

• the consistency to the business characteristics and

• the effective application

of the administrative and accounting procedures for preparing the consolidated

financial statements at 31 December 2011. 2. To this purpose, no significant issues were recorded. 3. It is also certified that:

the consolidated financial statements: a) were drawn up in compliance with the applicable international accounting

standards recognised in the European Community in accordance with EC

regulation 1606/2002 of the European Parliament and the Council, of 19 July

2002, b) are consistent with the underlying accounting books and records, c) give a true and correct view of the operating results and financial position

of the issuer and the overall of companies included in the consolidation, the report on operations includes a reliable analysis of the operational

performance and result, as well as the situation of the issuer and the

companies included in the scope of consolidation, together with a description

of the main risks and uncertainties to which they are exposed.

Rome, 12 April 2012

The CEO Marco Staderini

The Executive Responsible for Financial Reporting

Giovanni Barberis

390