Sustainability Report

2007

serving people.

Planning the future

respecting the environment,

SUSTAINABILITY REPORT

2007

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CHAPTER 1 ATM GROUP IDENTITY

CHAPTER 2 ECONOMIC AND FINANCIALSUSTAINABILITY

CHAPTER 3 THE VALUES OF SERVICE

CHAPTER 4 ENVIRONMENTAL SUSTAINABILITY

CHAPTER 5 SOCIAL SUSTAINABILITY

CHAPTER 6 OUR PEOPLE, OUR VALUES

LETTER FROM THE CHAIRMAN

1.1 The history of ATM p. 101.2 ATM today p. 131.3 Services for sustainable mobility p. 161.4 The ATM Group p. 171.5 Change and the challenge of sustainability p. 201.6 Governance for sustainability p. 231.7 The certification system p. 241.8 Dialogue with the stakeholders p. 25

2.1 Financial results p. 282.2 Investments p. 302.3 Distribution of added value p. 322.4 ATM and public institutions p. 342.5 ATM and its suppliers p. 36

3.1 ATM and its clients p. 423.2 Punctuality and frequency p. 443.3 Safety p. 463.4 Comfort p. 493.5 Information p. 503.6 Sales network p. 513.7 Analysis and market research p. 523.8 Complaints p. 54

4.1 ATM and the environment p. 594.2 Energy efficiency p. 604.3 Emissions reduction p. 614.4 Noise pollution p. 644.5 Other environmental impact p. 654.6 The Ecopass p. 66

5.1 Service accessibility p. 715.2 ATM and public partnerships p. 725.3 ATM for social solidarity p. 735.4 Collaboration with schools and universities p. 745.5 Support for cultural activities p. 765.6 ATM and international institutions p. 77

6.1 ATM and its people p. 826.2 Internal communication p. 846.3 Job safety p. 866.4 Human resources development p. 886.5 Corporate social services p. 906.6 Labour relations p. 93

NOTE ON METHODOLOGY p. 96

ATM is a company with a long history behind it, with deep roots in the territory withinwhich it operates, the Milan area, made up of men and women who work to guarantee,each and every day, the movement of over 2 million persons.

Today the challenge is to consolidate what has been built in over 75 years and, at thesame time, to trace out a new path, to lay the groundwork for a new corporate cultureto support ATM in projects for growth and development.

The 2008-2010 Corporate Plan, the first for ATM, is the instrument we have createdto govern this phase of transformation, a demanding one for all of us.

It was necessary, in fact, to create projects for the medium term, to identify preciseobjectives, to stimulate personnel and operate in a new way, building on technologyand efficient internal processes in order to develop the potential within ATM. We hadto find ways to exploit existing know-how and, at the same time, open ourselvesto the world, to confirm our role as one of Italy’s leading companies, ready to measureourselves against the big European groups.

Growth is the key element of the Corporate Plan. Growth that is sustainable from theeconomic point of view, able to create value over time, and sustainable as well inenvironmental terms, based on energy efficiency and reduced emissions.

Above all, a new way of interpreting the company’s mission: ATM is at the service ofthe citizens, its clients; they set our priorities. Analysis of the results of customersatisfaction surveys and of complaints received has identified the critical factors in thequality of service, factors our clients want us to keep account of: Punctuality, Safetyand Security, Comfort and Information.

We have therefore launched projects to improve the dependability of service, to increasesafety in movement and in the stations, to increase comfort during travel and tostrengthen information systems. Naturally, in order to react adequately to the needsof our citizen/clients, it has been necessary to carefully control and to make moreefficient those processes with a direct impact on quality levels: Maintenance,Logistics, Safety.

But it is not enough for companies in this sector to boost excellence only in theirhome territories. Our survival is linked to our ability to grow, our ability to formalliances, rationalise resources and optimise investments; addressing ourattention to ever vaster client basins, nationally and abroad, through both internaland external expansion. Never losing sight of the commitment the city has undertakenwith regard to EXPO 2015: an important occasion that once again casts ATM in therole of protagonist in creating Milan’s future.

The engine at the heart of ATM is our people, more than eight thousand, who workdaily to “move” Milan: they are the Group’s primary asset. It is to them that theCorporate Plan dedicates particular care, giving attention to the development ofcompetence at all levels of the organisation, to policies favouring professional growth,to the strengthening of instruments to acquire and share information.

With the Sustainability Report we have attempted to tell this story, to capture the newATM, the ideas, the projects, the actions which in 2007 have been set underway, thebeginning of a new path intended to continue and carry forward a long history.

ATM

1ATM GROUP IDENTITY

1931 ATM becomes anindependent company

1964Line 1 of theunderground is inaugurated

1969 Line 2 of theunderground is inaugurated

1971 The “Jumbotram”experiment begins

1990 Line 3 of theunderground is inaugurated

1999 ATM becomes a “special company,”with the name AziendaTrasporti Milanesi

2000 The first Eurotram is presented;

The Radiobustelephone-based callservice is born

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2001ATM becomes a joint-stock company;

The new ATM POINTis inaugurated at theDuomo station;

A service contract is signed with theMunicipality of Milan;

The Quality andEnvironmental Systemcertification processbegins

1.1 THE HISTORY OF ATM

The company has a long history, one of constant renewal. It began back in 1931,when ATM became an independent, city-owned company with the aim of “providingtram services for the Municipality of Milan and hinterland,” as stated in Article 1 of theMunicipal Regulations. The company moved swiftly onwards and towards the future,taking on the demanding and farsighted challenge of sustainability, which hasbecome one of the key themes of EXPO 2015. ATM – Azienda Trasporti Milanesi isowned by the Municipality of Milan and manages public transport in the Lombardcapital as well as in 72 municipalities scattered throughout its Province, serving aterritory with an overall population of 2.6 million citizens. In the years between 1931and 1964, ATM’s – the acronym stood for Azienda Tranviaria Municipale – activitieswere marked by two primary achievements: a progressive rise

2002 Sirio, the latestgeneration in trams, is presented;

The “Buon Samaritano”[Good Samaritan]service is establishedto help and assist thehomeless

2003 The M3 station atMaciachini isinaugurated, as arethe new North andSouth metro-tramroutes

2005 ATM receives anaward fromLegambiente for theintroduction of EURO 2 and EURO 3buses in all of itsurban service area;

The first Cristalistrolleybuses startrunning;

The first companyday-care centre opens

2006The ATM Group is established;

ATM wins the PremioImpresa e Ambiente[Business andEnvironmental Award]founded by the Ministryfor the Environment

2007The Group presents its2008-2010 CorporatePlan

ATM GROUP IDENTITY

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in motorised transport, both within the city and beyond its boundaries, to meet newmobility needs dictated by the economic boom of the post-war period, and theinauguration of the first underground line (the “red line”) in 1964 between Lotto andSesto Marelli. On 1 January 1965, ATM took on the name of Azienda TrasportiMunicipali and five years later – in December of 1969 – it inaugurated its secondunderground line (the “green line”). This was soon followed by the introduction of its “Jumbotrams”, vehicles which cancontain over 250 passengers, on the most popular lines. In 1990, the city’s thirdunderground line (the “yellow line”) was opened. After adopting the name AziendaTrasporti Milanesi in 1999, ATM was transformed into a joint-stock company in 2001.In the same years the quality and environmental system certification process startedas well as with a series of social-environmental initiatives, reflecting the culture ofsustainability that permeates all of ATM’s activities.

ATM’S AMBITION

“To ensure that ATM is admired for the excellence of its customermobility services, for its leading role in environmental and energysustainability initiatives, for the dynamism of its operative model, for thequality of its professional resources and for its culture of innovation.”

THE VALUES OF THE ATM GROUP

QUALITY OF LIFE FOR THE COMMUNITYThe company’s aspiration to improve quality of life for all those who live and travelwithin the territory must be kept at the forefront of all its daily activities.

PROFESSIONAL GROWTHEvery individual who is part of the company must be given the chance to achievefulfilment through continuous professional growth.

ETHICS, TRANSPARENCY AND LOYALTYThe company’s aim is to ensure that its external and internal activities are basedon the principles of legality, transparency, correctness and loyalty.

A CONTINUOUS SEARCH FOR EXCELLENCEEveryone involved must be open to change, ready to question themselves, lookand go one step further in their search for better solutions.

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(*) Including figures relative to the Como-Brunate cable railway and the

Cascina Gobba – San RaffaeleHospital link

ATM GROUP IDENTITY

1.2 ATM TODAY

With almost eighty years of history, ATM is comprised of a group of ten companiesthat manage public transport services in Milan and in 72 municipalities in its Province,providing transport for 2.6 million citizens.As of 1 January 2008, the company also manages the Copenhagen metro, whichis used by approximately 40 million passengers each year.The company provides its services using four primary types of transport:underground trains, buses, trams and trolleybuses.

The Milan underground network is the most extensive in Italy. It is over 74 kilometresin length and features 3 lines with over 120 trains, transporting 328 millionpassengers each year.

The surface network provides transport services in Milan as well as in municipalitiesaround the city and in part of its Province and includes three types of transport(buses, trams and trolleybuses). The company’s surface network is integrated with itsunderground and rail networks, to complete a system allowing citizens to traveleffortlessly using public transport.

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Company size (at 31/12/07) 2007Network length (*) 1,349.7 kmVehicle fleet 2,909Passengers transported (*) 621,489,488Kilometres travelled (*) 144,238,138Staff 8,669

Underground network 2007Number of lines 3Network length 74.1 kmFleet 729 (tractors and carriages)

Surface network 2007BusesNumber of lines 84Network length 944.1 kmFleet (including 81 Radiobuses) 1,498TramsNumber of lines 20Network length 289.3 kmFleet 527TrolleybusesNumber of lines 3Network length 40.4 kmFleet 155

Passengers transported in 2007

621,489,488Over the years, the Radiobus service, the “minimetro” to the San Raffaele Hospitaland the Como-Brunate cable railway line were added to the company’s traditionalunderground and surface transport services.

The Radiobus service is an “on call-bus” within the territory of Milan, which picks upclients and takes them directly to their destination of choice. The service is one-of-a-kind in Europe and is provided using minibuses completelyfitted with air conditioning and access for the disabled.

The “minimetro” links the San Raffaele hospital to the line M2 underground station ofCascina Gobba. It is automatic (that is, without onboard staff) and is similar to a cablerailway. It travels a 682 metre route on a surface track and transports over one millionpassengers each year.

The cable “funicular” railway connects Como and Brunate. This service – operatedby ATM for the Municipality of Como since of 1 July 2005 – is of great historical andtouristic significance. In fifteen minutes, it rises approximately 500 meters along aroute of a little more than one kilometre.

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ATM GROUP IDENTITY

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Other ATMservices:

CommercialActivities

ATM has decided to implement a number of commercial activities alongside its corebusiness in order to further promote its own structures and expand the know-how ofits staff, at times working in partnership with other companies. Specifically, ATM offers:

• A dedicated structure to manage business clients such as companies, banks,universities and institutions which deals with mobility managers and offers sustainablemobility solutions for staff members, such as shuttle services and yearly travel cardsat cost-effective prices;

• The opportunity of relying on large volumes of passenger traffic on the undergroundsystem for all those who want to undertake a commercial activity. The renovationof areas inside stations improves their quality and makes them more than just a pointof passage. They become pleasant, profitable and safe;

• The possibility of delivering advertising messages on public transport, both insideand outside the vehicles themselves;

• ATM structures (depots, garages, parking lots) as locations to host fashion shows,photo shoots, themed evenings, events;

• Hiring historic trams to organise “travelling” parties, children’s birthday parties(with a special vehicle – the Tramito – designed specifically for them) or enjoy a trulyspecial wedding day on the Tram Bianco;

• ATMosfera, the tram restaurant. ATM’s workshops have completely renewed andtransformed two “trolley” vehicles into tasteful, old-style restaurants. The tram restaurants can be used by companies and businesses as well toorganise events and dinner parties.

• Thanks to partnership agreements with leading companies in the sector, MATM – ajoint venture between ATM and other operators – provides both tours of the city andshuttle services between hotels, corporate offices and other locations with poles ofinterest such as airports, railway and underground stations, trade fairs anddedicated transfers to national and international destinations.

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1.3 SERVICES FOR SUSTAINABLE MOBILITY

ATM’s primary objective is sustainable mobility. The International Association of PublicTransport defines sustainable mobility as the “economically approachable, availableand sustainable transport of individuals in terms of its impact on the environment andon society.” To that end, the company has implemented a series of initiatives to reducethe environmental impact of its activities, including the constant renewal of its fleetsof vehicles, experimenting with new technological solutions for emissions, as well aspromoting and endorsing services to support sustainable mobility such as carsharing, bike sharing, long and short stay car parks, and the City Plus service.

Car sharing: This service, provided by Guidami S.r.l., an ATM Group company, allowsindividuals to book a car over the Internet or by phone and pay a fee based on itsactual use. The scheme has a twofold environmental advantage: on one hand, itpromotes collective car use, cutting down on the number of private vehicles incirculation. On the other, the vehicles themselves are fitted with environmentally-friendly or electric motors, which help reduce pollution levels.

Bike sharing: This project was developed by ATM for the Municipality of Milan andis scheduled to be completed by the end of 2008. The bike sharing scheme has beenconceived as a means of transport to be integrated with the city’s public mobilitysystem (ATM transport and urban railway system). The first phase of the projectinvolves installing 1,200 bicycles in 100 stations located in key points of the city.The service will then be expanded to encompass 5,000 bicycles distributed on anetwork of 300 stations by 2009.

Long stay car parks: ATM currently manages 18 structures located near undergroundstations as well as near a number of surface tram lines on the outskirts of the city.Commuters can park their vehicles to benefit from reduced, long stay parking feesand to travel to their final destination using public vehicles (at 31/12/2007, the systemincluded 15,976 parking spots and counted 4,712,424 entries into the city). ATM alsomanages the SostaMilano system (28,437 paid parking spaces) for the Municipalityof Milan.

City Plus: ATM’s logistical section was established with the aim of providing a transportservice for goods within the city using environmentally-friendly vehicles. In fact, allvehicles used for deliveries are equipped with EURO 4 motors complete with particlefilters and are used to transport foodstuffs, hanging garments and valuables. ATMCity Plus has started to experiment with the use of electrical vehicles for smalldeliveries in Milan’s city centre.

1.4 THE ATM GROUP

The ATM Group is comprised of 10 companies headed by the holding company,ATM SpA, wholly owned by the Municipality of Milan.

During 2007, both the company’s institutional and organisational framework weresubject to radical changes to ensure maximum efficiency, transparency and optimummanagement controls as well as to provide greater focus on the client and onoperative processes within the scope of a framework of integration and teamwork.

ATM GROUP IDENTITY

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GROUP STRUCTURE AT 30 JUNE 2008

InstitutionalFramework and

GovernanceModel

Corporate RolesChairman and Managing Director Elio CataniaBoard of Directors Francesco Tofoni

Piero RamponiGiuseppe Frattini

Luciano ValaguzzaBoard of Statutory Auditors Angelo Minoia

Alessandro DanoviStefano Sarubbi

The members of the Board of Directors are appointed by the Municipality of Milan. This isthe company’s main governance body. Its activities are supported by four committees:

The Compensation committeeValidates the Group’s pay policies

The Audit CommitteeResponsible for internal control of corporateprocesses

The Personnel consulting teamPerforms a first assessment of organisationalpolicies

Operations and Investments consulting teamAssesses – in preparation for the decisions made by the Board of Directors – choicesin terms of whether to carry out certain operations based on the related investments.

The decision-making structure is further based on a system of working groups,a mechanism promoting greater interaction and communication within the Group:

Executive TeamSupports the Managing Director in strategic and operative decision-making whilemonitoring Group trends as a whole.

Operations TeamIts aim is to align department managers on the principal corporate projects, monitoroperations and verify the progress of the introduction of innovation.

Management Team: Involves not just executives, but the personnel reporting directly to them as well – middlemanagement, staff and intermediate levels. This team meets twice a year and providesinformation on Group trends as well as on leading strategic and operative issues.

Overall, Group Management is supported by a structured reporting system onbusiness trends and on the progress of essential projects.

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ATM GROUP IDENTITY

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OrganisationalStructure

The ATM Group has adopted an organisational structure based on the followingkey points:• A focus on clients and on business;• Organization by processes, with clear responsibilities;• Simplification, speed of execution and continuous monitoring;• Unitary governance.

1.5 CHANGE AND THE CHALLENGE OF SUSTAINABILITY

ATM today faces a series of challenges which, on one hand require a decisivecommitment to a “change of pace” in terms of strategy, while on the other areseen within the Group as a great opportunity to stand out and consolidateleadership in the sector.The local public transport sector is in fact becoming increasingly competitive.A number of growth processes are currently underway, driven by mergers andacquisitions among European competitors. The market is facing significant change.The ATM Group is therefore opening to new markets and alliances at a national andinternational level thanks to the extraordinary opportunity due to the discontinuitycreated by two circumstances that took place early in 2008: the Ecopass and EXPO 2015.The Ecopass scheme was developed to discourage the use of highly polluting privatevehicles, which must pay a ticket to enter the centre of the city. Profits will be usedto fund sustainable mobility projects. The City of Milan was also entrusted withorganising EXPO 2015, an event that will attract millions of visitors from around theworld. This it will be an important test for the ATM Group, which will be entrusted withmaking the EXPO “keep on the move”. Both events offer ATM the possibility ofincreasing public mobility, introducing new vehicles and technologies, andexperimenting with a new approach to parking and car parks, as well as to boost itsvisibility on the international stage.However, in order to do so, a deep change in ATM’s business culture must take placeand must in turn be translated into a concrete strategic plan for sustainability. It is onthis basis that the Group has developed its 2008-2010 Corporate Plan.With this Plan, ATM’s objective is to renew its corporate identity as a sociallyresponsible company while ensuring respect for the commitments it has undertakenin terms of its clients, the city and its citizens - as well as institutions, the territory andthe environment - through the implementation of systematic actions.

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GOVERNANCE EFFICIENCY ENVIRONMENT SERVICES SOCIETY STAFF

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SUSTAINABLE DEVELOPMENT

TECHNOLOGY ENERGY INNOVATION

2008-2010 CORPORATE PLAN: STRATEGIC ORIENTATION

ATM GROUP IDENTITY

GovernanceThe company’s new organisational model has been designed to ensure a focus onthe client and on operative processes through teamwork; guaranteeing maximumefficiency, transparency and management controls.

EfficiencyOperative process efficiency means:

- Vehicle and infrastructure engineering;- Integrated logistics- Operational security

EnvironmentThe Corporate Plan aims to pursue sustainable development in terms of energyefficiency and to reduce environmental impact (emissions and noise).

ServicesThe company will strive to achieve these improvements while focusing on four qualityof service factors which have been highlighted by clients as “critical” based on theanalysis of results from customer surveys and complaints received. The majority ofprojects included in the Corporate Plan are aimed at improving performance in terms of:

- punctuality and frequency- safety- comfort- information

SocietyThe Group is aware of the important role played by LPT services in the developmentof the urban area, as well as the challenges facing Milan. The Group has further undertakento help contribute to cultural growth and social cohesion in the city.

StaffThe ATM Group invests in staff development in order to:

- improve professional and technical competencies;- promote a corporate culture based on values and professional ethics.

The company’s Strategic Plan provides for the definition of a detailed humanresources policy by 2008 as well as the start-up of a general process of simplificationin its organisational levels, with greater attention on teamwork as a key featureof every process.

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The aim of the Group is to target increasingly larger user pools, both in Italy and abroad.The following expansion projects are currently underway:• a merger with Gruppo Torinese Trasporti (GTT);• the acquisition – together with transport companies in Bergamo and Brescia - of a

portion of the Azienda Pubblici Autoservizi di Mantova (APAM) • participation in tenders to design and/or manage public transport in a number of

Italian cities.

At an international level – through the company INMETRO, a subsidiary held togetherwith Ansaldo STS – the Group has since 1 January 2008 been managing a key partof the public transport system in Copenhagen.INMETRO is responsible for operating a completely automated, 21 kilometre-longunderground system with 22 stations, 13 of which are surface stations, used by 40million passengers in 2007. It further plans to take part in other primary tenders at theinternational level.

1.6 GOVERNANCE FOR SUSTAINABILITY

Sustainability implies a cultural orientation which transversally involves all of thecompany’s organisational behaviours. For this reason the ATM Group has defined a seriesof broadly distributed areas of responsibility in order to make use of supportsconsistent with management systems as well as with the organisational departmentsin question.A constructive contribution in this direction – aimed at identifying the most suitabletools for governing corporate responsibility – is the development of the organisationalmodel provided for by Legislative Decree 231/2001. This is a useful support not justto fight unlawful actions and corporate crime, but to define behaviour and monitoractivities as well.

On 19 July 2007 the Board of Directors approved the first Code of Conduct for theATM Group. The Code is broken down into 5 sections: general principles, dealingswith third parties, staff, privacy and information processing, and internal controls.The Code aims at spreading a new corporate culture and was distributed to all of theGroup’s employees.A Monitoring Body will be established within 2008 to monitor the Decree 231Organisational Model. An Ethics Committee will also be established to overseecompliance with all the ethical principles the company has defined and set for itself.

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The Code of Conduct

Legislative Decree 231/2001 introduced for the first time the concept of corporateresponsibility with respect to certain crimes committed by individuals when carrying out their taskswithin the company. As a result, companies have had to equip themselves with the necessarystructures to prevent these crimes by preparing an organisational model defining precise internalrules and regulations.The process to create model 231 for the ATM Group began in October of 2007, with the identificationof critical areas for crimes covered by the Decree and continued with the definition of models for thecompanies ATM SpA, ATM Servizi, Gesam, Mipark and Perotti. Within this scope, the ATM Group has provided for the introduction of a code aimed at integratingthe behavioural values and regulations contained in the Code of Conduct to avoid and prevent thecrimes covered by the Decree from being committed.

ATM GROUP IDENTITY

(*) Cascina Gobba and San Raffaele Hospital link.

1.7 THE CERTIFICATION SYSTEM

To meet the best quality standards, ATM has undertaken to comply with quality andenvironmental norms as defined by UNI EN ISO 9001 and UNI EN ISO 14001certification, subjecting itself to periodic controls by an external body with respect toits compliance with these standards.

ATM began the process to achieve Quality and Environmental Management SystemCertification in 2000, in accordance with guidelines focusing on:• the importance of the client, whose needs, requirements and expectations become

binding in terms of system choices;• the regular monitoring of corporate processes with potentially negative effects on

the quality of service and the environment;• staff support and involvement, so that the achievement of objectives becomes

a shared goal and the primary aim of each individual.

This process has led to the certification of all the sectors involved in the productionof LPT services, day-care centres and the Campus, and was carried out as follows:

At the moment the Parking Lots, Parking Areas and Corporate Security sectors as wellas School Bus and Radiobus service are not included in the quality managementsystem.

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1998 2000 2002 2003 2004 2006 2007

Publication of the first Social Report

Top Managementformalisesenvironmental andquality policiesand targets

Quality andEnvironmentalCertificationobtained forsurface servicesboth inside andoutside the city

ATM “Campus”obtains ISO 9001Certification.Activities to designand provide localpublic transportand depotmaintenanceservices obtainCertification

Planning andmaintenanceactivities for rollingstock, plantinfrastructure and buildings as well as theMetropolitanaLeggeraAutomatica (*) arecertified

The company’sday care centresobtain ISO 9001certification

Certification isextended to theconstruction ofinfrastructure onthe trolleybus-rail-tram lines as wellas to trafficmanagementsystems

1.8 DIALOGUE WITH THE STAKEHOLDERS

In 2007, the ATM Group updated its stakeholder map in accordance with the first phasesof the AA1000 standard. These activities led to the identification of some of the keymethods used by the company to interact with various categories of stakeholders.

Stakeholders Primary channels of informationand dialogue currently in place

Stakeholders Primary channels of informationand dialogue currently in place

Clients - Freephone number 800-808181- Website- Online Newsletter:

ATM Information and Traffic Info- Messages on video screens in the

underground- Visual and spoken announcements- ATM POINT- “lineaDiretta” page in the City

free-press paper- Mobility Card- Customer Satisfaction surveys- Complaint handling systems- Meetings for discussions with the

ombudsman- Media relations

Staff - Management meetings- Focus Groups- Trade union meetings- Seniority awards- House organ- Intranet- Organisational dispositions,

communications and letters- Identity manual- Welcome book- ATM x ATM publication- Employee discount agreements- Fondazione ATM and Fondazione

ATM magazine- Employee Counter

Municipality of Milan and otherInstitutions

- Stakeholders’ meetings- Specific meetings- Regulation Agreements- Service contracts- Consolidated

Financial Statements- Sustainability Report

Suppliers - Dedicated area on the website- Systems for qualification based

on products- Application through on-line survey- Traditional tenders- E-procurement system

(on-line tenders)- Supplier assessment procedures

through performance monitoring

TradeAssociations

- Periodic meetings- Participation in working groups,

conferences and research

Environment - ISO declarations- Mobility Charter

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ATM GROUP IDENTITY

2ECONOMIC AND FINANCIAL

SUSTAINABILITY

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ATM improved its service offer during 2007, as reflected by the 13% rise of theEffectiveness Index (ratio of seats-kilometres produced and number of inhabitants).

(*) The figures refer to thenetwork as a whole, excludingthe Cascina Gobba – SanRaffaele link and the Comocable railway

2.1 FINANCIAL RESULTS

2007 was a particularly favourable year for the ATM Group in terms of both itsbusiness and its accounts. Due to the positive trend in revenues and its extraordinaryplan to reduce costs, the company achieved net profits of approximately euro 3 million.In 2007 production increased by approximately 1.4 million vehicles/km, in spite ofa significant reduction in travel outside the city due to the reorganisation of over-the-road transport in the province. This increase in production in terms of kilometresderives from both an increase in offered capacity during the summer and the start ofa trial Ecopass period before its final implementation.

This result was particularly important given the rise in oil prices, which inevitablyaffected ATM’s costs without, however, impacting on the end customer, since ticketprices have remained unchanged regardless of current trends in oil prices.

Investments for over

euro147million

Seats-Km Inhabitants Effectiveness Percentageproduced Index increase

2005 22,340,148,929 2,930,565 7,623 -2006 22,674,209,460 2,942,149 7,707 + 1.10%2007 22,898,869,734 2,627,284 8,716 + 13.09%

ECONOMIC AND FINANCIAL SUSTAINABILITY

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2007 was also the year of the company’s first Consolidated Financial Statement,an indication that the ATM Group restructuring process can already rely on acorporate architecture ready to take on the new challenges presented by the nationaland international transport market.

Profit and Loss Account 2007 (euro/000)

A) VALUE OF PRODUCTION1) Revenues from sales and services: 313,428

- Public Transport 284,545- Parking Lots and Parking Areas 23,732- Other 5,151

4) Increases due to improvements to fixed assets 15,9105) Other revenues: 426,661

- Other 85,723- EU and other grants 144- National Collective Labour Agreement grants 46,350- LPT grants 294,444

Total Value of Production 755,999

B) COST OF PRODUCTION 6) Raw materials, consumables, supplies 79,9067) Services 161,2918) Third party assets 37,2599) Staff 393,71710) Amortisation 70,22611) Decreases in raw materials, consumables, supplies12) Provisions for risks 14,57613) Other provisions14) Other operating costs 5,785

Total Cost of Production 756,781

Difference between Value and Cost of Production (A-B) -782Total Financial Income and Charges 15,515Total impairment of financial assets -5,012Total Extraordinary Income and Charges 8,923Profit or Loss Before Income Taxes 18,644

22) Income taxes for the year - Current taxes -15,782- Prepaid/deferred -45

Profits before the share pertaining to third parties 2,817Profits pertaining to third parties 39123) Profits for the year 2,426

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Investments carried out for rolling stock consist in the purchase of 27 trains in viewof extensions of the M2 and M3 underground lines, as well as strengthening servicewith 85 Sirio trams, 72 urban buses and coaches, 15 18-metre trolleybuses and thecontinuation of general revamping and revision operations for underground vehicles.

As to investments related to systems, special mention must be made of theimplementation of a magnetic-electronic ticketing system and the start of renovationwork on the signalling system for Line 1 of the underground.

2.2 INVESTMENTS

In 2007, the ATM Group implemented investments amounting to � 147.6 million,of which € 143.4 million on tangible fixed assets and € 4.2 million on intangible fixedassets, which are accounted for in the balance sheet with an increase in fixed assetsof € 81.4 million.Pursuant to Law Decree 159/2007, the Municipality of Milan was granted € 150million to “carry out investments on the underground railway system in Milan by2007”. More than 60% of this amount (equal to € 93.5 million) was set aside for ATMand over € 16 million have already been paid.

Investments for the year were primarily carried out by the parent company, ATM SpA.Other companies have instead carried out much smaller investments, in line withGroup policies which provide for common investments being concentrated in ATM.

INVESTMENTS 2006-2007

(in �/000) 2007 2006 Δ* Δ %Total € 147,634 € 91,861 € 55,773 60.7%Buildings and other infrastructure € 3,490 € 3,843 - € 353 -9.2%Plants and systems € 17,510 € 17,770 - € 260 -1.5%Rolling stock € 122,501 € 65,233 € 57,268 87.8%Other investments € 4,133 € 5,015 - € 882 -17.6%

*compared to the previous year

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Plannedinvestments forthe 2008-2010

three-year period

The ATM Group has planned investments for the next three years for an overall amountof over � 900 million, which can be broken down as follows:

• € 581 million for 693 new vehicles, including 450 buses, 57 trams, 90 radiobuses,60 trolleybuses, 36 trains and more than 18 revamped trains;

• € 235 million for infrastructure to improve service quality;• € 149 million to update technology in operations centres and for investment indepot infrastructure, stations renovation and safety in the underground.

INVESTMENTS FOR THE INVESTORS*THREE-YEAR PERIOD*

* millions ofEuro

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2.3 DISTRIBUTION OF ADDED VALUE

Added value is the wealth produced by the ATM Group in 2007, calculated as thedifference between value of production and intermediate production costs for publictransport services. “Intermediate” costs are defined as costs relating to the purchaseof goods and services, rents, maintenance and repairs, and other operating charges.

Description 2007 Net turnover from sales and services:

- Traffic 284,544,515- Managing parking areas and parking lots 23,732,413- Other 5,150,786

Total 313,427,714Capitalisation 15,910,496Other revenues 85,722,791Grants received in the year 340,937,122Total revenues 755,998,123Purchases -79,906,142Changes in stocks 8,978,688Consumption of materials -70,927,454Maintenance and repairs -47,759,961Provided services and utilities -113,531,019Use of third-party assets -37,259,078Other operating costs -5,784,624Characteristic gross value added 480,735,987Balance of extraordinary items 21,524,189Overall gross value added 502,260,176Amortisation -70,226,013Contingencies -14,576,255Net overall value added 415,360,603

a) Remunerations -283,549,325b) Social costs -78,764,767c) Severance indemnity -26,611,324d) Provisions for pensions and similar rights -1,833,670e) Other costs -5,957,591

Income before taxes 18,643,926Income tax:

- Current -15,782,000- Prepaid/deferred -44,568

Profits pertaining to third parties 391,464Operating result 2,425,895

PROFIT AND LOSS ACCOUNT FOR THE PRODUCTION OF ADDED VALUE

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In 2007, 82.52% of added value produced at the consolidated level was distributedto employees, confirming how a significant part of the wealth produced by the ATMGroup returns to those who actively contribute to the pursuit of its corporate mission.The share of added value destined to the corporate structure was equal to 13.75%and includes provisions for reserves, reflecting a significant use of self-financing tofund Group development.Of the remaining part, 3.29% was distributed to the public administration system,while 0.44% represented the total amount of interest paid to investors.

SUMMARY ADDED VALUE ACCOUNTS AND DISTRIBUTION

2007 Total gross added value 502,260,176Divided between:A) EMPLOYEES 396,716,677

Labour costsB) INVESTORS FOR OWN CAPITAL OR LOANS 2,097,305

Balance of other interestsC) EU/STATE SYSTEM 15,826,568

IRAP/GENERAL TAXESD) CORPORATE STRUCTURE 87,619,627

Amortisation 70,226,013Provisions 14,576,255Operating result 2,425,895Operating result pertaining to third parties 391,464

ECONOMIC AND FINANCIAL SUSTAINABILITY

MOBILITY SYSTEM IN MILAN: ACTORS AND COMPETENCIES

2.4 ATM AND PUBLIC INSTITUTIONS

The Group’s relationships with Local Authorities involved in the public transportsystem are governed by agreements, regulations and service contracts which definethe terms and conditions of service as well as its roles and responsibilities.

In 2007, the ATM Group managed local public transport services for three Local Authorities:

Municipality of Milan. ATM SpA operates a system of extended licenses for automobile,trolleybus, and tram services as well as services both within and outside the city.

Province of Milan. The provincial service was subject to a tender procedure and theProvince assigned the lots as of 2007. ATM was awarded two of the 6 lots into whichthe territory had been divided. Activities in the Northeast lot were begun on 1 January2008, while activities in the Western lot became operative as of July. Management forboth these areas has been entrusted to companies established specifically for thispurpose, respectively under the name of Net (company wholly owned by ATM) andMovibus (company 25.5% owned by ATM).

Municipality of Como. ATM SpA has been managing the Como-Brunate cablerailway since 1 July 2005.

Although the Municipality of Milan is the reference subject that manages and governsthe ATM Group, not only local authorities are involved in mobility and LPT issues.Multiple actors make contributions and participate - especially with respect to tariffs,financing for infrastructure (systems, traffic, networks) and medium-long term planning.

ATM Group Manages public transport services in the city of Milan and in part of its surroundingterritory. The Group is the primary interlocutor for Authorities, Bodies and Companies withrespect to the services provided.

Agenzia della Mobilità Programs and studies public and private transport.Municipality of Milan Reference shareholder participating in governing the public transport service in Milan as well as

in decision-making and funding for infrastructure, plans and programs to develop the network.Province of Milan Participates by way of the territorial coordination plan in governing and funding local public

transport network development programs in addition to determining the modalities ofresponse to inter-municipal links.

Lombardy Region Takes on an increasingly important role as a governing institution in terms of transportpolicies, delegating the execution of programs to local authorities and taking on greaterresponsibilities for defining policies as well as for programming the related resources.Within this scope, it decides and funds both plans and programs to develop the networkand public transport.

State In order to promote the development of sustainable mobility, the national governmentselects investments and programs to develop the public transport network which directlyimpact the local level as well.

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These different public actors interact with ATM within the scope of their multiple rolesas investors, institutions responsible for setting fees and subjects interested inensuring the quality of the service, issuing to and receiving resources from thecompany. The tables below provide a summary of this two-way flow.

PAYMENTS BY ATM TO PUBLIC AUTHORITIES (€)

Description 2007 StateGrants for sick leave in previous years 5,475,337National Collective Labour Agreement grants 46,349,688Investment grants transferred to the capital account 896,400Total State 52,721,425Lombardy RegionInvestment grants transferred to the profit and loss account 294,443,546Investment grants transferred to the profit and loss account relating to previous years 489,451Investment grants transferred to capital accounts 15,554,466Total Lombardy Region 310,487,463Province of MilanNational Collective Labour Agreement grants in previous years 356,282Municipality of Milan Investment grants transferred to capital accounts 16,962,696Total 380,527,866

FINANCIAL RESOURCES RECEIVED BY ATM FROM PUBLIC AUTHORITIES (€)

Description 2007 StateIncome tax 15,676,000Stamp duty and registration tax 103,198Vehicle ownership tax, registration and revisions 163,555Total State 15,942,753Region and MunicipalitiesMunicipal taxes 2,890,507Total 18,833,260

ECONOMIC AND FINANCIAL SUSTAINABILITY

36

2.5 ATM AND ITS SUPPLIERS

“Those who, through their business dealings with third parties (in the tendering of bids,provisioning, the supply of goods and/or services, etc.), must deal with them incompliance with all laws and regulations and in accordance with the principles of ethicalbehaviour, fairness, transparency and correctness established in the Code of Conduct”.“Each company in the Group must ensure genuine and correct competition betweensuppliers”.“In contracts with suppliers, the obligation to comply with the principles of the Codeof Conduct must be included.”

These are the first three paragraphs contained in the section of the corporate Codeof Conduct focussing on “Dealings with Third Parties,” approved in 2007.ATM’s relationship with its suppliers is strategic and must be based on the utmostin transparency, correctness and quality.Many procedures have been put in place to achieve this aim, both during the initialpurchasing phase and later, when assessing the services or goods provided undercontract. The process begins with the broad application of a system for openqualification by products and the possibility for suppliers to present themselvesthrough an online questionnaire, for the purpose of verifying possession of thefundamental requisites (assets, economic and financial, organisational and in termsof quality and environmental certification) necessary for qualification.Furthermore, award mechanisms have been introduced into the tender process(through accumulated scoring) for suppliers who can show they meet with ISO 14001Environmental Certification and SA 8000 Social Certification Standards.As regards the “post-purchase” phase, ATM verifies the performance of suppliers ofgoods and services through the careful monitoring of service levels and/or quality of thegoods provided as well as their compliance with contractual agreements. Negativeevaluations - based on parameters defined on a case-by-case basis - can lead to formalcomplaints, to the definition of punitive actions and to the termination of the contract.

VERIFICATION RESULTS (AT 31/12/2007)

Verification of Goods/Service Suppliers in 2007Total %

Total suppliers verified 1,362Total suppliers verified with positive results: 1,085 79.66Excellent 471 43.41Good 370 34.1Satisfactory 244 22.49Total suppliers verified with negative results: 277 20.34For delivery delays 273 98.56Product/delivery quality 4 1.44Totale 415.205

Supplier Audits in awarding

tenders

For larger purchases, the award of a tender to a supplier is subordinated to thesupplier’s ability to pass a technical/organisational audit at its own premises with theaim of verifying the availability of machinery, its specialisations and supply contractsrequired as well as the capacity to track the processes necessary to provide thesupplies or goods subject to the tender.Each phase of the audit is carried out based on the adoption of an assessment chartthat is provided to participants when the tender is called.Further, all procedures to acquire materials and services which may have anenvironmental impact call for the signing of a declaration by suppliers in which theyaccept ATM’s environmental policies and confirm that they have implemented withintheir own organisations the measures necessary to respect these. ATM reserves theright to carry out specific auditing activities in this connection.

ECONOMIC AND FINANCIAL SUSTAINABILITY

38

Over the past few years, particular attention has been paid to the digitalisation of alltender documents in order to improve the system of online bidding. In particular, amethod has been adopted for the computerised transmission of building designs forrail/tram materials. Computerised design management allows for the latest version ofthese to be stored online, resulting in noticeable savings in the use of paper and inthe rationalisation of the time necessary to physically forward the document.In 2007, a procedure for the signing and forwarding of purchase orders wasintroduced using a fax server, completely digitalising the service. This brought abouta rationalisation process for purchasing activities measurable in terms of:

• greater process speed;• a reduction in paper output;• the certainty of delivery: an error message is given if the reception fails;• reduction of postage costs.

ATM has achieved savings of approximately ��50,000 in one year with the introductionof these systems. ATM is currently testing a specific website to host supplier file sharing.

E-PROCUREMENT:ONLINE TENDERS USING SAP-SRM

The implementation of online tenders using a SAP-SRM (Supplier RelationshipManagement) platform has provided significant advantages for ATM’s purchasingprocesses in terms of:

• the speed of purchasing procedures;• a reduction in the use of hardcopy documents (drawings, technical

specifications, correspondence in general)• monitoring and analysis of the entire supply cycle in complete transparency

while protecting privacy;• the creation of an automatic tender archive: all tender documentation is

in fact automatically stored in the system;• improved quotes: an - albeit modest - benefit has been seen which may

be attributed to an improvement in quotes received when compared totraditional tenders, particularly in terms of online auctions as well as for anumber of tenders involving significant amounts.

During 2007, approximately 1,400 tenders were carried out online, approximately50% of the tenders called by the company. The overall total for orders/contractsassigned is equal to around ��9,600,000.

Digitalisation and technologicalinnovation

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• Adherence to the 2008-2010 Corporate Plan and related investments• Improvements in efficiency and efficacy parameters• A reduction in supply costs• Planning purchases based on needs and not stocks• The development of partnerships with strategic suppliers • The promotion of an Ethical-Environmental Code for purchases• Purchases based on life cycle costs, that is, on the overall working life of an item,

including maintenance and assistance• Increase introduction of IT-based procedures (file sharing, design transmission,

online tenders, etc...).

for 2008-2010targets

Improvement

3THE VALUES OF SERVICE

42

Punctuality and frequency, safety, comfort and information: this is what Milan’sinhabitants require from their public service, and this is what ATM has placed at thecentre of its service objectives. This is a radical change of direction permeating theentire company giving rise to a new corporate culture.In order to achieve constant improvements in quality of service, the company carriesout periodic customer satisfaction surveys in addition to listening directly to clients.In fact, they have the right to obtain, in a complete and correct manner, all theinformation required about service and are guaranteed the possibility of presentingtheir observations, complaints and suggestions on how to improve its quality.ATM is committed to listening carefully to the needs of its clients and potential users,implementing all the possible systematic measures to satisfy them. This concept isfurther underlined in the “Principles” section of its Mobility Charter, a documentpublished and distributed on a yearly basis at the ATM POINT as well as online andthrough the postal system. It explains the company’s corporate mission, its qualitystandards for the services it provides and its commitment to improving service qualitylevels in accordance with citizens’ requirements.

3.1 ATM and its

Clients

Punctuality and Frequency

Information / Info-mobilityComfort Safety and Security

ATM’S PRINCIPLES FOR PROVIDING SERVICES

EQUALITY AND IMPARTIALITY: ATM’s services are equally accessible to all, without any form ofdiscrimination against any category of person or social class.

CORRECTNESS: ATM carries out periodic surveys to check quality levels and compares these withthe values it has promised in order to implement the necessary measures to maintain the commitmentundertaken with its clients.

PARTICIPATION AND TRANSPARENCY: ATM develops a constant and continuous relationship with clients,informing them of the services it offers and its planning criteria, and committing itself to publishing annualresults. Clients have the right to enjoy access to all information related to the service in a complete andcorrect manner, and are guaranteed the possibility of presenting observations, complaints and suggestionsto improve service quality. ATM is always interested in the needs of its customers and potential users, andemploys this information to implement systematic measures in order to satisfy these needs.

EFFICIENCY AND EFFICACY: ATM is committed to offering a service which increasingly meets theneeds of its customers, while at the same time striving for an ever more cost-effective managementof its resources.

RESPECT FOR THE ENVIRONMENT: ATM, aware of the role it plays with regard to mobility, iscommitted to continuously improving its environmental standards through policies aimed at achievingsustainable development.

SOSTENIBILITÀ DI SERVIZIO

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Actions

3.2 PUNCTUALITY AND FREQUENCY

The punctuality and frequency of public transport are closely connected to the typeof equipment used. The variables impacting the surface network (buses, trams andtrolleybuses) are different from those regarding the underground network. In fact, whilesurface transport can be influenced by traffic conditions, street demonstrations, prolongedtraffic gridlocks, disturbances to the service and breakdowns of individual vehicles,underground services are instead only interrupted in extraordinary circumstances.The company monitors all these events and analyses figures regarding breakdownson the line and gridlocks in order to implement the measures required to navigatetraffic, “dissuasive” measures for private vehicle traffic and preventive measures interms of maintenance.

To ensure punctuality while at the same time increase surface line frequency, duringthe last few months of 2007 and in early 2008 the company implemented a numberof targeted actions to ensure that the services provided were in line with demand.In particular, the following were implemented:• an expansion in services on 13 lines connecting municipalities in the nearer suburbs

to the City of Milan: 585 new runs, for an average increase of 27% during peakhours and 51% at off hours;

• a lengthening of services during the afternoon-evening rush hour until 8.00 pm, witha 20% increase in runs for both surface and underground vehicles;

• new schedules for main surface lines between 8.00 am and 1.00 pm on Sundaysand holidays. Passage frequencies have been set at 15 minute intervals andsynchronised with the three underground lines in operation in order to guaranteetravel without prolonged waiting periods;

• the strengthening of the rapid intervention task force for traffic in case of irregularlyparked cars blocking the lines;

• the progressive elimination of 70% of 35 metre trams from the city centre and theirsubstitution with new 26 metre trams. The so called “long” trams have beendedicated to lines with a greater demand for transport.

In order to measure the punctuality and frequency of its services, ATM has defineda new indicator: adherence to the waiting times advertised at the stops. Today, 65%of surface vehicles respect these. The company’s objective is to reach 85% by 2010.Finally, in 2007 ATM also began renewing its traffic light signalling system on the M1line of the underground network in order to automate the calculation of distancesbetween trains and the speeds at which they are to travel. The objective is to increasethe number of trains operating on the line to increase their frequency.

THE VALUES OF SERVICE

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Controls to monitor whether surface services are provided in a regular manner arecarried out from the Operations Centre, which is equipped with the latesttechnologies to simultaneously monitor all the vehicles in circulation (the number ofsurface vehicles in circulation varies between 802 during off hours to 1,516 at peak).If privately-owned vehicles are irregularly parked and hinder tram passage, theOperations Centre can immediately activate the rapid intervention task force toensure that service is restored as soon as possible - and fine the driverresponsible for the delay.Train circulation on underground lines is also monitored on a constant basis fromthree different Operations Centres - one per line.

Coordination between ATM Operations Centres and those of the operators of theconventional Railway network have also been intensified to optimise and ensurecirculation, even in case of partial interruptions in multiple rail or underground lines.

Technology and the rapid

intervention task force

THE NEW SURFACE OPERATIONS CENTRE

Information is transmitted between the active fleet and the Operations Centreusing a system that locates the vehicles on each line and provides onboardannouncements together with information on waiting times at stops equipped forthis service. Vehicle drivers communicate by sending pre-coded messages or – ifnecessary – by phone using on-board equipment.

In 2008, a new Operations Centre was inaugurated with a more efficient and moreadvanced technology to locate vehicles and prevent delays using a GPS systeminstalled on all the vehicles. Notices on waiting times have as a result becomemore reliable, with a positive effect on service quality.

In figures, the new Operations Centre can be summed up as follows:• ��13 million in investments;• 25 AVM (Automatic Vehicle Monitoring) stations;• 45 staff members and 9 coordinators;• 95 traffic controllers;• 116 surface lines managed (ATM and NET)• 1,500 vehicles monitored during peak hours;• 3,000 calls a day;• 24,000 trips monitored every day.

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Personal security

3.3 SAFETY

ATM is committed to guaranteeing personal security and safe transport for itscustomers. Particular attention has been dedicated to the areas of network andfunctional monitoring, as well as careful maintenance of vehicles and infrastructure.

ATM has intensified monitoring on the surface lines most at risk, using specialist staffworking in partnership with the Police as necessary.Some years ago the company reached an agreement with the Municipality of Milanto create a dedicated Municipal police service, the Public Transport Security Team,whose offices have been established in ATM Operations Centres. The team workstogether with the Customer Support Unit and its mission is to ensure the safety ofcustomers and drivers. A police station was set up within the Duomo stop and workstogether with ATM ticket controllers.

Communications between Operations Centres and the Police Force have also beenimproved, giving the latter access to CCTV circuits, corporate telephone networksand dedicated radio channels.

The use of video surveillance systems on buses, trams and trolleybuses has becomea consolidated practice on the surface network (576 systems at 31/12/2007). ATM isalso experimenting with the use of cameras at bus stops (as of 31/12/2007, activesystems were in use at approximately one hundred stops).

In the underground, video surveillance has been activated in stations and is directlyconnected to the Operations Centres (1,391 cameras installed as of 31/12/2007). During 2007, the video surveillance and video-recording systems on the M1 and M2lines of the underground were also updated to:• increase the number of cameras installed in order to raise the number of areas

under surveillance;• improve control functions to handle more images from the same station at the

same time;• provide video-recording using all of the cameras inside the stations;• convert the system from black and white to colour.

Travellers are also provided with more than 700 emergency intercom systems on allof the carriages on the underground as well as in the elevators and on the platformsof Line M3. All the doors in the stations and all emergency exits have been fitted withalarms, and volumetric systems have been installed in station mezzanines in order tosignal any type of intrusion during the hours when the service is suspended.

All surface vehicles and underground stations are connected with their respectiveOperations Centres so they can request timely intervention in case of need.

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Raising transport safety standards is one of ATM’s primary objectives. With this inmind, the company has continued to experiment with the latest technologies offeringhigh levels of reliability, both in terms of vehicle and systems maintenance, and inoverall network performance.Maintaining and renovating vehicles, analysing and identifying new management andaction strategies: these are ATM’s maintenance objectives. They aim to ensure thatcitizens are provided with safe, fast, comfortable and reliable service.

In addition to all those activities carried out to ensure that vehicles are available, thatthey are reliable in terms of safety and efficiency, and that they meet emission andpollution standards established in corporate policies as well as in applicable regulations,maintenance is carried out both upstream and downstream of the system. That is:• ex ante, when purchasing the vehicles, through set regulations used to encourage

suppliers to produce vehicles with low Lifecycle Costs and a low environmentalimpact (both for fuel consumption and emissions). This promotes and supportsforecasting diagnostics both on and offline, encouraging the development of newtechnologies and products with the aim of improving travel safety and comfort;

• ex post, using fault analysis to increase productivity in terms of greater availabilityand lower management costs.

The use of new technologies – such as onboard diagnostics and line monitoring tools– contributes towards optimising maintenance in all fields of intervention (preventive,forecast, programmed and accidental) in order to reduce maintenance interventionfor breakdowns and to improve cyclical, programmed maintenance.

In terms of management, the company uses an integrated SAP informationsystem to monitor all maintenance activities and ensure that spares are handledcorrectly. The system registers interventions requested and effected so thatstatistical analyses can be performed to measure the efficiency of maintenanceactivities.

Transport safety

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This mosaic, an “UrbanLandscape with the Strehler Theatre”, was created by thearchitect Giovanna FrancoRepellini and wasinaugurated in October2007 in the Lanza station of the M2 underground line.

The company’s decades-long operating experience, together with its advancedmonitoring systems, ensures complete safety while travelling.In the underground, the Operations Centres constantly monitor traffic throughout thenetwork with systems that supply information in real-time on the location, separation andload carried by the cars, automatically adjusting train flows and intervening in case ofanomalies or if maximum consented speeds are exceeded.

The surface network (tracks and trolley aerial wiring) is also subjected to periodiccontrols and, as necessary, is upgraded with the installation of systems improvingsafety standards.The latest generation of tram switches are activated using pulses of current and radiosignalling, both reducing noise pollution and improving system safety, in part becausethey permit remote operation. The new switches are classified in accordance with thestrictest European standards.

THE VALUES OF SERVICE

3.4 COMFORT

Over the past 10 years, ATM has renewed 89% of its urban bus fleet, whose averagelife now stands at 6.3 years. Vehicles are more comfortable in use and moreaccessible, thanks to low easy-access decks, present on 92.7% of the urban fleet,and to air-conditioning systems. A revamping program is underway regarding the tram and trolleybus fleets as well.At the end of 2007, 89 Eurotram and Sirio trams were operative, while the introductionof new Cristalis trolleybuses marked the start of a new era for the trolleybus fleet. All newtrams and trolleybuses are fitted with air-conditioning, easy-access decks and video-surveillance systems.As for the underground, new Meneghino trains - inter-communicating and air-conditioned- will be introduced in late 2008 and will run on all three lines. The 36 Meneghino trainsare a step ahead in comfort, safety and reliability, and will offer important advantagesin terms of consumption - significantly reduced as a result of their energy efficiency.Work has also been underway to modernise trains operating on the M1 line.

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REVAMPING TRAINS ON THE M1 LINE

The renovation of existing carriages affects 56 traction units with light alloy bodiesbuilt between 1973 and 1989. In particular, it calls for:1. equipping the carriages with “chopper” electronic traction/brakes to reduce energy

consumption as well as preventive maintenance costs and to improve reliability;2. installing electric doors to boost reliability and reduce maintenance costs;3. installing electronic tachographs to substitute electro-mechanical equipment;4. installing air-conditioning systems in passenger compartments;5. providing a passage between carriages to increase passenger comfort and safety;6. new internal furnishings7. installing a video-surveillance system to improve safety.This intervention will result in energy savings of approximately 11 million kWh/year,worth over �1 million.

Finally, the installation of misted-water air-cooling systems has continued on platformsin underground stations.

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Station restyling is one of the key projects contained in the Corporate Plan and hasbeen given increased in priority due to the assignment of EXPO 2015 to the City of Milan. 15 stations will be renovated by 2010 because a better, more liveable and morefunctional travel environment will improve the urban experience. New lighting, newflooring and a new look will bring the stations closer to passenger needs.

In June 2007, ATM launched a project to provide GSM and UMTS network coveragein the underground. The project is to be completed by 2010. The M1 line was the firstto offer coverage in certain stations, allowing passengers to use their mobile phoneson the platforms and in trains, increasing their sense of safety while travelling.

3.5 INFORMATION

ATM provides customers with a wide and diversified range of instruments forobtaining both static and real-time service information.Information tools available to citizens include:• maps, schedules, route indicators (so-called “static information”) which can be

found in stations on all three underground lines as well as at stops on the surfacenetwork. These tools are currently undergoing an in-depth review in order to offercustomer information that is both more accessible and more useful;

• ATM network maps are distributed, free of charge, at the five ATM Points;• the website, www.atm-mi.it;• the “InfoMobilità” electronic newsletter, which sends information directly to email

inboxes, with the possibility of choosing specific areas of interest;• the “lineaDiretta” page published in City, a free-press newspaper distributed in all

underground stations as well as at certain stops on the surface network (250 thousandcopies daily, Monday through Friday);

• video communications in the main underground stations;• onboard announcements in surface vehicles and inside stations;• waiting-time indicators: 950 stops (at 31/12/2007) have been equipped with

a panel providing updated arrival messages.

In 2007 an experimental video communication system was successfully tested on line84. As a result, 500 buses will be fitted with the system by the end of 2008.

ATM is further working to improve the information it provides by taking advantageof the potential of Internet and mobile telephony, with the objective of creatingan integrated real-time communications system.

In-touch travel

Station restyling

To the same end, the company’s Internet site has also been revamped to make ita more dynamic source of information.

Customer care also requires more direct channels of dialogue. The company’sFreephone number 800 80 81 81 is active every day from 7.30 am to 7.30 pm andtakes 500,000 calls a year. Customers can also receive service information from anyof the company’s five ATM POINTS, as well as purchase season passes and tickets.Lastly, the company also has a dedicated customer care organisation - available toaccept suggestions and complaints - whose aim is to enrich communication betweenclients and the company.

3.6 SALES NETWORK

Tickets, season passes, “pay and display” parking tickets and devices, as well asEcopasses, can be purchased in 1,886 different shops and sales points. ATM constantly assesses the state of the sales network, also with respect to thechanging needs of its customers. A dedicated structure has been entrusted withmonitoring their requirements, verifying the need to create new sales points orimprove existing ones by upgrading them with new equipment to top up electroniccards or with semi-automatic ticket distributors, so that the company can providecapillary coverage throughout the territory in which it operates.

In the last few years, ATM set up and installed a Magnetic and Electronic Ticketing System(SBME) which has allowed it to progressively eliminate passes and paper tickets, with anoticeable improvement in ease of use for the customer. For ATM, the system has meanta more practical and efficient method of checking and validating tickets. In 2007, theSBME system was extended to include cumulative tickets and tickets for travel outsidethe city, with the upgrading of equipment on vehicles operating beyond the city limits.

THE VALUES OF SERVICE

Shops on the underground 89Shops on the surface network

Inside the city 1,059Outside the city 738

Total 1,886

POINTS OF SALE (31/12/07)

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3.7 ANALYSIS AND MARKET RESEARCH

ATM constantly monitors the quality of the service it offers as well as customersatisfaction levels by means of surveys which - using a set of integrated instruments- allow it to analyse the relationship between the company and its customers in acomplete and dynamic manner.The results of these surveys are then analysed and shared within the corporatestructure, where they are used to identify priorities for intervention, focusing resourceson improving elements that customers perceive as critical.This process has led to the identification of four service quality factors which wereused as the basis of the 2008-2010 Corporate Plan: punctuality, safety, comfort andinformation. Through the Plan, ATM intends to increase service standards in order tomeet growing customer expectations.

SURVEYS PERFORMED IN 2007

Survey title Objective Methodology

Customersatisfactionsurvey

1st survey period: May 2007.- Sample: 1,021 residents in the Municipality of

Milan, aged 14 and above, who travelled on anATM vehicle on the day preceding the interview.

- Methodology: telephone interviews.

2nd survey period: October 2007.- Sample: 2,100 cases. The sample was expanded

with respect to the survey carried out in May 2007to include customers travelling the networkoutside the city as well as those within it. The survey monitored 10 urban surface lines(buses, trolleybuses and trams) as well as 3 underground lines, for a total of approximately64% of all journeys provided.

- Methodology: Face-to-face interviews onboardvehicles, near stops on the surface network and on platforms while waiting for the underground.

To measure perceivedsatisfaction levelsamong customersregarding the serviceoffered by ATM.

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THE VALUES OF SERVICE

Corporate image survey

- Survey period: May 2007.

- Sample: 820 residents of the City of Milan, aboveage 14 who travelled on an ATM vehicle on the day preceding the interview.

- Methodology: telephone interviews.

To measure awarenessand perception of ATM as a company,identifying and monitoring bothstrengths and weaknessin the company’s imagewith citizens

Survey ondiscounts/benefitsprovided forATM season ticketholders

- Survey period: December 2007

- Sample: 500 cases.

- Methodology: telephone surveys.

To analyse awarenessand satisfaction levelswith offers for discountsand benefits providedfor annual ATM seasonticket holders and studytheir expectations.

Mystery Client surveys

- Survey period: July 2007.

- Methodology: The twelve mystery clientsoperated following a specific research protocol and filled in an “assessment sheet” following each simulation.

A team of professionalmystery clients wereused to monitorefficiency levels for a series of services (staff courtesy, whetherticket stampingmachines and ticketingmachines functioned, if the air-conditioningsystem worked, etc...).

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Survey title Objective Methodology

54

3.8 COMPLAINTS

A 12.20% drop in complaints was registered in 2007 over the previous year. A peakin the number of complaints received was seen in November, when two strikes anda breakdown on the M1 line took place.The vast majority of complaints focussed on the punctuality of service, staffbehaviour, assistance to passengers and accessibility.

To guarantee transparency, ATM has introduced a complaint response process within itsQuality Management System, in accordance with UNI EN ISO 9001 standards.This process is subject to periodic verification in order to achieve constant improvement.

2006/2007COMPARISON OF COMPLAINTS

55

• Improve punctuality at stops both on the underground and on surface lines• Lengthen service on the 3 underground lines until 1.30 am on Saturday night• Increase controls on lines with the greatest customer safety problems, creating

security teams and increasing the number of ticket controllers (240 staff members)• 2,500 CCTV cameras in stations and upgrade video-surveillance system• Extend GSM/UMTS coverage to all stations• Increase the number of vehicles with air-conditioning: 95% of buses, 60% of trams

and 100% of vehicles on the M1 line• Renew the fleet: purchasing 450 Ecobuses, 90 Radiobuses, 57 trams, 60 trolleybuses

and 36 trains• Renovate 15 stations• Renovate signage in underground stations• 7 new ATM POINTS and restyle existing points• 1,800 bus stops with dynamic message displays• Renew communications at surface stops (maps and schedules)• Install a video communication system on 500 buses• New website• Increase the mobility information provided online and via text messaging

for 2008-2010targets

Improvement

4ENVIRONMENTAL SUSTAINABILITY

450ECOBUSES BY 2010

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The progressive reduction of the environmental impact of local public transport,together with the promotion of sustainable mobility with the intention of changingindividual behaviour of citizens, are the primary objectives of ATM’s polices fordevelopment. On the national level, the company already holds a record for servingurban routes using clean energy - 65.4% of the total kilometres travelled (at31/12/2007).

In Milan, 50% of all car trips are of less than 4 kilometres and 30% are equal to lessthan 3 kilometres, with an average number of passengers per car of 1.21. This is whythe company is committed to providing an efficient, environmentally-friendly service,supporting the Municipality in initiatives aimed at preventing pollution. This requiresgetting to know and understand customer expectations, meeting customerrequirements with suitable services, studying environmental impact and makingconstant improvements.

For this purpose, ATM has adopted UNI EN ISO 9001 standards (QualityManagement Systems) and UNI EN ISO 14001 (Environmental Management Systems)environmental certification and has implemented an Environmental and QualityManagement System that provides for:• a Quality policy, with objectives affecting customer satisfaction levels;• an Environmental policy, with a system of controls for activities with a high environmental

impact;• the processes necessary to ensure that objectives are met• criteria and methods to ensure efficacy and control of processes, with periodic

verification for the principal company activities (including those outsourced);• resources and information to implement and monitor processes;• performance indicators defined for each activity and for individual procedures in

order to assess the improvements achieved in relation to initial objectives;• the definition and implementation of “improvement plans”.In order to coordinate all of its Environmental policy initiatives in the energy field,ATM some years ago created the role of Energy Manager within its organisation todevelop and apply sustainable energy plans.

environment4.1 ATM and the

Clean Energy

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4.2 ENERGY EFFICIENCY

ATM’s activities involve an elevated consumption of energy. Electricity is the primarysource of energy employed by the company (approximately 68% of the total) and isused to power its 3 underground lines, its tram and trolleybus lines and, as well, itssystems and infrastructure. The company’s second source of energy is diesel fuel,which is used for traction vehicles and accounts for around 26% of totalconsumption; the remaining 6% is methane gas for heating. The company’s overall energy consumption stands at approximately 112,780 TPE(Ton Petroleum Equivalent) per year.

Reducing consumption means making an essential contribution to environmentalsustainability.For this reason, one of the company’s objectives in its 2008-2010 Corporate Planis to reduce annual energy consumption by 7.5% using targeted actions both on itsfleet and on its infrastructure in order to achieve overall savings of ��4.6 million. Therevamping of trains on the M1 line alone will result in energy savings of approximately11 million kWh/year, equal to over € 1 million.

2005 2006 2007Ton Petroleum Equivalent 111,949 112,774 114,077

ANNUAL ENERGY CONSUMPTION

UPGRADING IT SYSTEMS

Periodic system updates at the Data Centre offer further opportunities for energysavings. The latest generation in servers consumes less energy and produces lessheat, so requiring less energy to cool the room in which they are housed.Two of the most significant operations undertaken in 2007 have been:• the completion of the removal from service of ATM’s old IT system. In addition

to the unquestionable technological benefits, closing the system and its peripheraldevices had a noticeable effect on energy costs as well, given its advanced ageand high energy consumption levels.

• the introduction of a virtualisation system for servers: approximately 40 systemsrun on the 3 new servers of the latest generation, with evident savings in terms ofenergy, space and air conditioning.

PERCENTAGE CHANGES IN POLLUTION EMISSIONS 2006-2007

ENVIRONMENTAL SUSTAINABILITY

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The use of renewable

energy sources

Today, 8.7% of the energy used by ATM comes from renewable sources such ashydro-electric energy and wind power. ATM’s commitment to environmentally-friendlymobility is further supported by its use of solar energy with the installation of solarpanels on the roof of its Precotto tram depot (more than 23,000 sq m). The energyproduced will be used to power part of Line 1 on the underground. This is the first ofthree projects which are part of an ambitious plan to place panels on three maintenancegarages, thirteen urban and nine extra-urban depots and two office buildings.

4.3 EMISSIONS REDUCTION

ATM’s commitment to the environment is above all reflected in its control overatmospheric emissions, particularly those connected to transport services.

Pollution emissions in tons 2006 2007 % changeCO 55.00 53.35 -3.0%NOx/10 48.00 46.51 -3.1%HC 16.00 15.52 -3.0%PT 5.50 5.31 -3.5%

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EURO 2

EURO 2 + CRT(emissions equal to EURO 4 performance, less Nitrogen Oxides (NOx)

EURO 3

EURO 3 + CRT(emissions equal to EURO 5 performance, less Nitrogen Oxides (NOx)

These data show that a reduction of approximately 3% in carbon monoxide, nitrogenoxides, hydrocarbons and particulates was achieved in the 2006-2007 two-yearperiod. This result is connected to the renewal of the company’s fleet, which hasbrought its urban bus fleet to an average age of 6.3 years. All vehicles currently in useare equipped with EURO 2 and EURO 3 motors, use environmentally-friendly dieselfuel and – in 66% of cases – have particle filters.

ENGINES USED BY THE ENTIRE BUS FLEET (AT 31/12 OF EACH YEAR)

URBAN BUSES BY ENGINE TYPE (AT 31/12/2007)

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Investments to renew the fleet in the 2008-2010 period count the purchase of 450EEV (Environmentally Enhanced Vehicle) vehicles equipped with low environmentalimpact technology, recognisable by green stickers applied on their livery and whichidentify them as “Ecobus. The environmentally-friendly bus.” The company is also setto enhance its Radiobus fleet with the addition of 90 new low environmental impactvehicles by 2010.

All air-conditioning systems installed on ATM vehicles employ environmentally-friendlygasses. Only the air-conditioning systems used in the company’s buildings still useHydrochlorofluorocarbon (HCFC) gas as a coolant. These, however, will be replacedover the next few years, as plants are upgraded or substituted.

Emissions relating to heating systems, maintenance and industrial activities arelimited and monitored in terms of quantity and quality in accordance with applicableregulations and specific regional rules.

Lastly, with respect to emissions from heating plants, all of these are today poweredwith methane gas. In fact, the conversion process from diesel fuel to methane hasbeen completed in every Group heating plant, with a resulting reduction in particulateemissions.

VARIATION IN EMISSONS FOR THE COMPLETE BUS FLEET

CARBON MONOXIDE NITROGEN OXIDES(multiply by ten)

HYDROCARBONS PARTICULATES

ENVIRONMENTAL SUSTAINABILITY

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4.4 NOISE POLLUTION

Noise pollution - especially on the underground - is a particular concern of passengers,who complain that sound levels are too high on some routes. Although the phenomenondepends primarily on the track substructure (that is, rails, junctions and roadbeds), ATMis constantly committed to reducing the acoustic impact of its vehicles.ATM has implemented a system to take vibration and noise readings (Vibration andNoise Laboratory) covering all of the company’s transport sectors: tram, underground,bus and trolleybus. Its principal areas of investigation to cut down noise levels are focused on:• monitoring vibrations created by carriages in the underground;• developing a noise map and action plans for ATM’s surface vehicles and the

surface extensions of the M2 underground line;• handling complaints on vibration noise levels generated by vehicles or other ATM

systems. The laboratory uses dedicated software applications to process and analyse vibro-metricdata generated by underground carriages, using readings taken from fixed measurementstations in tunnels. This data is used to assess wear on the wheels of the carriagesand program targeted maintenance operations.

A friction reduction system is already active at 11 points along the lines and falls withinthe scope of the 2008/2010 Industrial Plan. Its objective is to reduce screechingsounds created by trams when passing over sharp curves. Friction is reduced usingautomatic systems which release lubricants as they approach.

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4.5 OTHER ENVIRONMENTAL IMPACT

SoilThe ATM Group employs buried tanks to store diesel oil for self-traction. Their integrityis checked once a year. Ground water is monitored periodically in areas belongingto the company that have been subjected to decontamination in the past.

WaterATM produces industrial wastewater only when washing its vehicles. These operationsare carried out in dedicated automatic tunnels. Wastewater is removed through thepublic sewage system - in accordance with specific Municipal authorisation - withinthe capacity limits of the system. These limits are met through the use of 20 purifiers,monitored periodically by specialist companies operating in the sector. Only industrial waste from the Famagosta depot is released into surface waters(under provincial authorisation). In this case, the respect of the applicable limits isachieved with the use of a complex purification system comprised of a chemical-physicalunit and a biological unit downstream of the purification process.Over the past few years, the company’s average consumption of water has stood atabove 2 million cubic meters. However, it significantly reduced its consumption in 2007.

Radon gasATM carries out periodic environmental inspections to monitor radon gas levels in theunderground as well as in underground work areas. The investigation monitors thegeneral situation in Milan up to a depth of 24 meters. Only very modest concentrationshave been recorded, indicating that the levels of this pollutant are not significant.

AsbestosATM has implemented a multi-year decontaminationprogram that has allowed it to eliminate 68% ofcement-asbestos roofs. In the 2006-2007 periodalone, 7,345 sq m of asbestos roofing wasremoved from Company premises.

WATER CONSUMPTION(CUBIC METRES/YEAR)

ENVIRONMENTAL SUSTAINABILITY

REDUCTION IN CEMENT-ASBESTOS

SURFACES

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WasteATM waste production is extremely complex, both in terms of quantity and nature.The Group promotes waste reduction and recycling, respecting applicableregulations. Recycling activities currently recover approximately 65% of the wasteproduced, with respect to an average value of 56% over the past 3 years.ATM is also committed to collecting paper in underground stations. (265 dedicatedbins at 31/12/2007).

ATM is gradually eliminating the organic compounds (PCB - Polychlorinated biphenyls)contained in a limited number of transformers, which are subjected to constantinspection. 70% of PCBs have been removed, beginning in 1999.

4.6 THE ECOPASS

On 2 January 2008, the Municipal Administration of Milan introduced the Ecopassscheme with the aim of discouraging the use of private autos in the city centre.Between July and September 2007, the ATM Group and the Municipality completedthe civil engineering works necessary to prepare roadbeds for the installation of 43computerized monitoring stations on streets entering the designated zone. Themonitoring stations automatically recognise vehicles on entry by reading their licenseplates. Further, the necessary infrastructure was put in place to connect the devicesto the control room. Between September and December 2007, the Group wasentrusted with testing the system and executing the pre-operational verification necessaryto ensure that the system would be ready to run.Since 2008, the ATM Group has been responsible for distributing tickets issued bythe Ecopass system, managing revenues on behalf of the Municipality and handlinginformation on vehicles to be fined.

DESTINATION OF WASTE PRODUCED (KG) TYPE OF WASTE PRODUCED (KG)

KG KG

• reduce energy consumption: -7.5% a year• install solar panels at the Precotto tram depot to power the M1 underground line• 450 EEV buses (Environmentally Enhanced Vehicles)• 90 7.5 m long vehicles with hybrid environmentally-friendly motors• cut carbon monoxide emissions by 50% and PM10 and incombustible hydrocarbon

emissions by 90%• launch the bike sharing service• participate in international sustainable mobility projects

Within 2008

(*) EEV - Ecobuses beganoperating in 2008.

Balance 2007 Commitment 2008 % seats-km provided on electric vehicles 72.4% 74.6%(trams, trolleybuses, metro) with respect to the total

Balance 2007 Commitment 2008 URBAN SERVICEBus fleet enginesEuro 2 16.1% 10.0%Euro 2 with catalytic particulate filter 32.5% 26.0%Euro 3 17.9% 2.5%Euro 3 with catalytic particulate filter 33.5% 53.3%EEV - Ecobus n.a.* 8.2%

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for 2008-2010targets

Improvement

5SOCIAL SUSTAINABILITY

ATM’s commitment regarding the community is expressed through a social role whichgoes beyond its corporate mission strictly speaking. It is summarised as follows in theCode of Conduct: “Companies belonging to the ATM Group are committed tocontributing to the wellbeing, quality of life and development of the communityin which they operate by providing efficient and technologically advanced serviceswhich are both socially relevant and respect the environment and public health.”

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ATM’scommitment to the

community

SOCIAL SUSTAINABILITY

5.1 SERVICE ACCESSIBILITY

ATM provides accessibility by studying and offering solutions which allow individualswith motor, visual or hearing disabilities - as well as the elderly, mothers with youngchildren and, more generally, anyone who has difficulty walking - to freely use its services.To that end, ATM has established systematic partnerships with Universities andPrivate Associations in order to research and implement new systems.

The company has made the removal of obstacles for the physically disabled a priorityand has implemented targeted actions on all its systems, vehicles and infrastructure.Special signs have been provided in the underground to point out access to lifts andstairways. All of the stations in the M3 underground line, in addition to some stationson the M1 and M2 lines (29 in total), are fitted with lifts - to connect different floors toeach other and to the outside - as well as staircases and escalators. As stations arerevamped, spaces will be provided to install lifts connecting ground floor areas withmezzanines and platforms. A plan has been launched to adjust and renovate stopsfor surface vehicles (expand platforms to optimise the use of disabled access slides).

To make travelling a more enjoyable experience for visually impaired or partiallysighted users, all surface lines within the city have been equipped with audioannouncements at stops. Devices to announce station names are currently beinginstalled at all stops on the underground network.The company has further completed both its project to install guards between traincarriages on the underground and a plan to install “sensitive” flooring on platforms ofthe M1 line to inform the visually impaired of the dangers in the area next to the centreof the train.

The company is currently developing a visual sign system for the hearing impaired toannounce the name of each stop on the surface line. A trial version of this system hasbeen installed on two urban lines. Displays showing the destination of each train havebeen installed on underground platforms.

ATM offers a dedicated service for disabled customers using special urbantransports. The stops are located near passengers’ homes, vehicle size permitting.The service is provided using 7 metre buses, equipped with radio-telephones, lifts toload and unload wheelchairs, safety devices and visual displays to announce stopsfor the hearing impaired.

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5.2 ATM AND PUBLIC PARTNERSHIPS

ATM works closely with public institutions and plays a leading role in supportinginitiatives in favour of the community and the weaker members of society, both in theMunicipality of Milan and in the surrounding area.

ATM vehicles have been used to support initiatives of the Municipality of Milan:• to accompany the elderly to markets where - for a few days - discounts were

applied on foodstuffs in order to counter the rise in living expenses;• to distribute meals to the elderly in August, as part of the Piano Anticaldo (Plan to

fight the Heat) scheme devised by the Municipality of Milan.

ATM has also sponsored a series of events and campaigns in Milan. Of these, specialmention must be made of Milano Aperta d’Agosto (Milan Open in August - a guideto services and activities available during the month of August), la Notte Bianca delloSport (“White Night” for Sports) and the City Marathon.

Upon the request of the Municipality of Bollate and based on an agreement with AMSA- which has developed a scheme where prison inmates can carry out socially useful workin their structures - ATM has provided a number of vehicles to transport inmates.

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BUS BY NIGHT

In November 2007, in partnership with the Municipality of Milan, ATM launchedBus By Night, an initiative targeting young people enjoying nightlife in clubs.This consists in a minibus service to take young people home on Friday andSaturday nights: for just one euro (the service is free for all ATM season cardholders) young people can take the minibus and tell the driver where they want togo. Tickets can also be purchased onboard at no extra charge.The service leaves from several different areas around the city, where Milanesenightlife is concentrated, at scheduled times between 2.00 am and 5.10 am.

Considering that each minibus has a capacity of 16 passengers and that 32journeys were made on average on each of the 18 nights service was offeredbetween 9/11/2007 and 31/12/2007, average vehicle occupation was 34.09 %.

5.3 ATM FOR SOCIAL SOLIDARITY

As in past years, ATM renewed its commitment to the Buon Samaritano (GoodSamaritan) project - an aid and support service provided in partnership with theFondazione Fratelli di San Francesco - in 2007.The project involves the use of a bus specifically fitted to house the homeless whichtravels around the city between 8.00 pm and 1.00 am during the coldest months ofthe year (December to February), providing medical care and basic supplies to thehomeless. During the year, 2,039 people were picked up and transported to variousdormitories around the city.

In 2007, ATM sponsored the Fondazione Tehodora campaign to sustain children inhospitals by involving them in games and artistic activities; the Parent Project, anassociation of parents formed to fight the Duchenne and Becker varieties of musculardystrophy; Avon Running, a sports and solidarity event involving a number of citiesin Italy with the aim of raising awareness on prevention and the fight against canceramong women as well as on domestic violence; and “Acqua: uso e consumointelligente” (Water: intelligent use and consumption), promoted by the FondazioneSorella Natura, active both in Italy and around the world and which works tosafeguard, promote and provide education on environmental issues.

The sixth edition of Caccia al Tesoro (Treasure Hunt) - a team-based competitionwhich involved around 5,000 citizens - was also held. Profits were devolved to theAmico Charly association, a non-profit organisation working with underprivilegedchildren.

ATM also sponsored two important events in Milan focusing on sustainability issues:Fa la cosa giusta (Do the right thing) - a fair to promote sustainable lifestyles - andthe Salone della Responsabilità Sociale (Social Responsibility Forum).

Many associations also promote their activities on the ATM “lineaDiretta” pagepublished in City (a free-press paper) - which is distributed on the underground andin a number of stops on the surface network - as well as in the company’s houseorgan (approximately 10,000 copies per month).

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OPERATION: FAMILY

This initiative was established to support families with small children. As part ofthe scheme, children up to five years of age, as well as those between the agesof six and ten (in this case with a maximum of two per adult) can travel on ATMvehicles free of charge. The transport of prams and pushchairs is also free.

SOCIAL SUSTAINABILITY

5.4 COLLABORATION WITH SCHOOLS AND UNIVERSITIES

ATM is committed to raising awareness on environmental issues as well as on theproper and efficient use of public transport among young people by working togetherwith schools and universities in Milan.The In viaggio con ATM (Travelling with ATM) initiative continued to be held in 2007.The project was developed to familiarise young people with the company’s corporateoffices and depots and allow them to get to know its history and technologies as wellas future prospects for travel in Milan.During these visits, ATM provides to students informative materials about thecompany and its history which they can use in class later to study the public transportsystem and its social and environmental impact in greater depth.

Visits are carried with the support of ANLA ATM (Associazione Nazionale LavoratoriAnziani di ATM - National Association of Retired ATM workers), a group of retiredemployees whose volunteers accompany children from primary and middle schoolsduring their visits. High school students are instead accompanied by the company’stechnical staff.

Another initiative targeting schools is entitled Scuolaintram, and is based on a tramwhich transports annually approximately 3,000 children on different itineraries todiscover the city. During the journey, a municipal policeman stimulates children’sinterest and curiosity with information on traffic laws, civic education and the city.

ATM has developed deep bonds with five universities in Milan (Politecnico, Bocconi,Statale, Cattolica and Bicocca) as well as with the Universities of Parma and Pavia,developing a number of partnerships and projects which focus on - among otherthings - university courses concerning transport planning and railway engineering.The company also participates in graduate courses and has developed an internshipand graduate recruitment program as well. To further support young people in thephase between university and working life, ATM organises graduate internships andtraining courses and provides undergraduate students studying the public transportsector with assistance and support.The company organised 17 paid internships in 2007 (in 2005 and 2006 they were 23and 19, respectively).

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Academic year 2004/2005 1,064Academic year 2005/2006 1,250Academic year 2006/2007 1,450

NUMBER OF STUDENTS WHO TOOK PART IN THE INITIATIVE

HANDLING DISCARDED COMPUTERS

Over the past few years, ATM has been working with SIAM (Scuola IncoraggiamentoArti e Mestieri) on a project to recover and reuse PCs made obsolete by the company.After all corporate information stored on the computers has been removed, the PCsare sent to SIAM which - with the aid of its students - adapts them so that they canbe employed again, installing a new open source operating system on each beforedistributing them on request to schools in Milan and its province.This operation has numerous benefits, both from an environmental and social pointof view, since it supplies schools with educational tools and extends the lifespan ofobjects which would have otherwise been discarded.

SOCIAL SUSTAINABILITY

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5.5 SUPPORT FOR CULTURAL ACTIVITIES

ATM is committed to supporting the leading events of Milan cultural season - particularlythe latest talents in contemporary art, independent cinema and theatre.

The company has supported the following partners in promoting their exhibitions:Palazzo Reale (The Beauty of Ancient Egypt), Fondazione Mazzotta (Dario Ballantini),Triennale (Hans Hartung), Museo Diocesano (The Annunciation by Antonello daMessina), and Palazzo delle Stelline (Arturo Martini).

ATM also sponsored a number of events which have become part of Milan culturalscene, such as MITO (an international music festival), MilanoFilmFestival (Independentfilm festival), La fabbrica dell’Uomo (theatre), Quante storie (third edition of theChildren’s and Young Adult’s Book Festival), Subway (a competition for talented youngwriters; winning works are printed and distributed at no cost in the underground).

In addition, ATM took part in Cowparade - the themed contemporary art exhibitionwhich has been “invading” the streets of cities around the world since 1998 and bringingthe creativity of its artists to the people. In 2007, Milan hosted 100 life-size, fibreglass“art” cows, which were transformed into works of art and scattered throughout the city.ATM supported the initiative by “adopting” its own cow (the “Tramucca” - Tramcow),which was placed on show at the Cairoli M1 underground station.The exhibition was brought to a close with an auction and its profits were donated tothe non-profit foundation, Champions For Children, which supports, helps andprotects the education and training of needy children and young persons.

5.6 ATM AND INTERNATIONAL INSTITUTIONS

ATM’s international activities are focused on safeguarding the company’s interestsand familiarising itself with international laws which could have an effect on its internalmanagement. ATM monitors legislation regarding local public transport and supportscommon positions on pressing issues to be presented to Institutions.ATM also participates in the UITP (International Public Transport Union) “EuropeanUnion Committee”, which discusses issues relevant to the public transport sector.The committee represents a link between the competent authorities, operators,manufacturers and European institutions.

Some of the key dossiers it examined during 2007 included:• Regulations governing award of public transport services;• The Third Rail Packet (2 Directives and 1 Regulation);• The Green Paper on urban mobility;• The proposed Directive on the promotion of environmentally-friendly vehicles• The proposed Directive on urban transport URD - urban rail platform (formerly DURD).

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SOCIAL SUSTAINABILITY

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ATM’S INTERNATIONAL COMMITMENT TO SUSTAINABILITY

The “Sustainable Development Charter”: in 2003, the ATM Group adhered tothe UITP initiative to raise awareness among government bodies, institutions andbusinesses, promote the commitments it had undertaken and outline the directionit would take to support sustainability in a concrete manner.

Its participation in the UITP Sustainable Development Commission involved anumber of specific responsibilities in 2007 as well:• research on shared sustainability indicators;• further studies on social inclusion and the fight against discrimination;• creating a specific working group on climate change;• drafting the Making Tomorrow Today sector report;• promoting and organising the Second Conference on Sustainable Development,

hosted by ATM in Milan in October of 2008.

Taking Stock of Climate Change: activity carried out within the framework ofthe MMG (Major Metropolies Group) to examines contributions made by leadingEuropean LPT companies to the fight against climate change.A summary of its findings were presented to Jacques Barrot in September of2007. At the time, Mr. Barrot was the Deputy President of the European Commissionfor Transport.

Participation in internationalresearch projects

Energy efficiency and intermodality are two of the key themes that ATM focused onduring 2007. Its commitment to these issues was reflected in the company’sparticipation in two international consortia which included companies operating in thelocal public transport sector, manufacturers, research centres and universities as wellas the presentation of two projects: HORUS (Holistic Optimisation for the Reductionof energy consumption in Urban Rail Systems, which looked at energy efficiency) andSWITCH (Straight for Ward InTerCHange, which examined the multiple opportunitiesoffered by intermodal interchange).

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• Approve the Group’s Code of Conduct• Improve structures to ensure greater accessibility:

- equip vehicles with easy-access decks and reserved space for the disabled- “sensitive” floors and lifts in the underground- equip surface vehicles with displays to announce upcoming stops- improve signage in stations

• Increase the Group’s participation in national and international research projectsfocusing on sustainable mobility issues

• Maintain and foster partnerships in the community with cultural and social organisations and associations.

for 2008-2010targets

Improvement

6OUR PEOPLE, OUR VALUES

Customers and their needs take centre stage, as do people and their professionalism.These are both the basis of and a key condition for the growth of the company.ATM’s top management is highly aware of this and has repeatedly and publiclystressed its importance. In 2007, the company’s Human Resources managementdrew its inspiration from this concept, with the aim of promoting cultural andprofessional growth for the entire ATM Group (8,669 employees at 31/12/2007).

The company’s new management model has been organised by processes anddefines training and development programs to support internal mobility as well astargeted interventions to improve the quality of working conditions.Management by processes encourages simplified organisational levels and widerranging and more functional task management, leading to greater involvement andparticipation by individuals with shared objectives.

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and its people

6.1 ATM

OUR PEOPLE, OUR VALUES

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STAFF BY GENDER AND QUALIFICATION (AT 31/12 OF EACH YEAR)

Gender distribution 2007Area/Qualification 2005 2006 2007 F % M %

Women MenExecutives 25 26 29 2 6.9% 27 93.1%Middle management 223 217 240 51 21.3% 189 78.7%Employees (administration and services as well 720 713 687 236 34.4% 451 65.6%as staff working the company’s day care centres)Travel staff (operations) 5,223 5,260 5,235 117 2.2% 5,118 97.8%Workers 1,971 1,969 1,901 4 0.2% 1,897 99.8%(plant maintenance and garages)Auxiliary mobility service staff 522 575 577 180 31.2% 397 68.8%TOTAL 8,684 8,760 8,669 590 6.8% 8,079 93.2%

STAFF BY TYPE OF CONTRACT (AT 31/12/2007)

Type of Contract 2007 %Executive contract 29 0.33%FISM Day care centre contracts 10 0.12%Public transport worker contracts 8,630 99.55%

Open-ended contracts 8,246Fixed-term contracts 384

TOTAL 8,669 100%

EMPLOYEES BY AGE GROUP (AS AT 31/12/07)

Age 2007 %20 - 30 1,001 11.55%31 - 40 2,783 32.10%41 - 50 3,292 37.97%51 - 60 1,550 17.88%over 60 43 0.50%TOTAL 8,669 100%

NUMBER OF INDIVIDUALS HIRED AND TERMINATED IN THE LAST THREE-YEAR PERIOD

2005 2006 2007Hired 454 601 280Terminated* 281 524 370

(*) Including 175 individuals whohave retired (equal to 47% oftotal discharges), 110 individualswho have resigned (30%) and 55 individuals transferred to other companies following a tender (15%).

As for the protected category of workers, at 31/12/2007 ATM employed 30 personsdisabled following industrial accidents and 118 individuals with civil disabilities.

6.2 INTERNAL COMMUNICATIONS

In 2007, the ATM Group launched an in-depth overhaul of its communication andstaff involvement initiatives in order to improve dialogue between the parties andboost reciprocal satisfaction between the company and its workers.

The company’s new intranet portal went online in the autumn of 2007. Its objectivesare to:• promote internal communication with a corporate dimension (involving every articulation

of the Group);• establish a two-way dialogue between the company and its workers,• stimulate growth and promote spread of competencies;• improve efficiency, making the portal a single reference point for staff;• improve the quantity and quality of information available.

The Attilio project was launched to ensure that staff without a fixed workplace couldhave access to the intranet portal. Multimedia stations have been installed at twodepots on a trial basis before the service is extended to other company locations.

In November 2007, a focus group study was carried out with a representative sampleof workers from the company to collect opinions and tips as well as to identifystrengths and weaknesses in communication processes between the company andits employees.

STAFF BY EDUCATION LEVELS (AT 31/12/07)

Education level 2007 %University Degree 269 3.10%University Diploma 6 0.07%High School Leaving Certificate 2,622 30.25%Professional Diploma 584 6.74%Middle School licence 4,718 54.42%Primary School licence 470 5.42%TOTAL 8,669 100%

Total number of participants 168 persons

Number of people in each group 12 persons

Number of focus groups created 14 groupsBus drivers (3 groups), tram drivers (2 groups), station agents (2 groups),garage staff (3 groups), auxiliary staff (1 group), white-collar employees (3 groups)

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OUR PEOPLE, OUR VALUES

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Issues discussed in the focus groups included:• organisational communication: analysis of accessibility and the timely nature of

work-related information;• company-employee communication: analysis of transmitted information and level

of understanding in terms of corporate strategies and objectives;• inter-functional communication: evaluation of information sharing and knowledge

levels between different Departments in the Group.• boss/staff communication: survey on the availability of bosses, their listening skills

and their openness to dialogue and to providing information.

The work carried out by each of the groups was highly constructive and led to theidentification of a number of critical issues as well as, in particular, the measures tobe adopted to overcome them.Among these, special mention must be made of the following projects developedin 2007 for implementation during 2008:- revamping the company’s internal magazine to provide information useful to all

staff members and retired individuals and to act as a vehicle to:• provide updates on the company;• share corporate strategies;• open to the outside world, focusing particularly on the transport sector;• identify corporate values and foster a sense of belonging;• give employees a space to think and express themselves;

- produce pocket publications for travelling staff - brief, issue-specific manuals - withthe aim of improving knowledge related to their own professional sphere;

- produce signage for depots to raise staff awareness of professional and social issues;- carry out analysis of the image and climate within the company with a sample group

of 600 individuals;- provide guidance for the children of employees on the labour market and on onward

professions;- collect “company stories” to be printed in a book for all staff members.

RELAXATION ROOMS

ATM is planning to renovate rooms set aside for travelling staff at depots. The projecthas been entitled “Sale Relax” - “Relaxation rooms” - and has already beenundertaken at the via Messina depot, a testbed for the initiative. Its objective is tomake these spaces both more comfortable and welcoming, so that all individualsusing them can rest and chat with colleagues between one duty period and the next.

6.3 JOB SAFETY

ATM sees safeguarding the health and safety of its workers as one of its top priorities.In 2007, the company carried out an intensive, widespread awareness-raising activityon the issue. The entire company was involved in defining a project entitled Safetyand Prevention at the Workplace which was included in the 2008-2010 Industrial Planand was based on an analysis of past accidents and injuries. This investigationhighlighted the fact that the vast majority of these events - which have beenprogressively reduced - were related to the behaviour of individual workers and thatgreater awareness must be raised among employees so that they adopt lifestylechoices appropriate to the work they carry out.The Safety and Prevention at the Workplace project includes meetings in eachdepartment to raise awareness among staff in garages and depots and encouragethem to adopt “safe” behaviour. Meetings with drivers will instead focus on heath anddiet choices as well as on the effects of the use of drugs and psychoactive substances.

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General information 2005 2006 2007 Δ 05-07 Δ %Accidental injuries (falls, manually handling 362 284 232 -130 -35.91loads, portable tools, impacts, etc.)Service-related injuries (car accidents, 435 419 429 -6 -1.38assault, events taking place during travel)Total injuries 797 703 661 -136 -17.06

Healthcaremonitoring and

prevention

OUR PEOPLE, OUR VALUES

87

TRAINING FOR HEALTH AND WELLBEING

ATM’s concern with the health and wellbeing of its staff is reflected in the twocourses it offers entitled “Health and Wellbeing” and “Diet and Health”.The first course - which saw the participation of almost 200 people - was designedfor entry-level personnel (travel staff and workers), who were provided withinformation on healthy choices and diets and included mapping the lifestylesadopted by participants.The second course was broken down into 50 days of training, and included theparticipation of approximately 900 employees.The lecturer appointed to give both courses was a dietician from the Company’sSocial Services department, supported by a psychologist for the “Health andWellbeing” course.

Year Fit Partially fit with Unfitsome limits and

restrictions2007 90.56% 8.90% 0.52%

2006 90.55% 8.75% 0.70%

Healthcare monitoring is carried out according to the level of risk of each job, thehealthcare situation of the worker and the provision of applicable regulations. In 2007,3,614 visits were carried out, of which 1,424 involved operational staff, 1,771 involvedmanual workers and 419 involved administrative staff. The illnesses found are thosemost diffused in developed societies, including type II diabetes, obesity, high bloodpressure, back pain and high cholesterol levels.As can be seen in the table below, the vast majority of staff was found to be fit for thework they were carrying out. This is primarily due to the company’s corporatehealthcare monitoring system, which keeps a constant eye on the situation in orderto achieve rapid recovery and full working fitness in the shortest possible time.

6.4 HUMAN RESOURCES DEVELOPMENT

The Technical and Managerial Competencies Model was finalised in 2007 for theentire managerial area - comprised of 240 individuals - and will be used as a startingpoint to prepare individual and group-based training programs. This managementtool offers the Group valid support for organisational analyses while contributing todefining management roles and identifying both the competencies andresponsibilities of each manager.An experiment was also carried out where the model was used to draft professionalprofiles that could be employed when recruiting staff and during performanceassessment and self-assessments. This process focuses strongly on the individual inorder to identify development plans for management staff. Within this framework, aseries of measures have already been implemented to support and promote therecognition and development of merit incentives (Management By Objectives) havealso been provided for executives. During 2008, these will be extended to includemid-level and intermediate managers.Lastly, a remuneration system was defined in the last two months of 2007 whichgrants each department head the possibility of awarding bonuses, wage increasesand promotions to their most deserving staff members.

88

hours of trainingfor ATM staff

14,698

OUR PEOPLE, OUR VALUES

Campus ATM - a training and work guidance centre - was established in 1999 withthe support of the corporate organisation, university research centres and theentrepreneurial sector. It has the following objectives:• to attract, to motivate and to retain the human capital necessary to achieve ATM’s

business objectives;• to support contacts with universities and specialist research centres with the aim of

recruiting employees and networking;• to promote and to spread a culture of focusing on human resources and continuously

improving customer service quality within the company;• to support quality policies, environmentally-friendly measures and safety at the

workplace through training and the development of professional competencies;• to analyse trends and dynamics among staff (climate surveys, staff growth trends,

turnover analyses, etc.)Campus ATM has received accreditation from the Lombardy Region and has beenauthorised to plan and provide training and work guidance activities. As a reflectionof its excellent standards, the structure was awarded ISO 9001:2000 qualitycertification in 2003.Campus ATM is equipped to both provide technical/practical (tram drivers, train staffmembers to use forklifts and fire-fighting devices) and theoretical training (all classroomsare equipped with PCs, TVs, DVD players and overhead projectors).A three stage training course was also designed to develop professionalcompetencies, provide motivation and encourage a focus on the customer. This canbe described as follows:• Job Training: before hiring, it prepares professional figures which are hard to come

by on the labour market - such as tram drivers or skilled workers;• Introductory Training: held during the first few months after an individual is hired

to support them during insertion;• Continuous Training: offered to all staff members to develop and update their

technical/professional competencies and people-skills.

89

Training andWork Guidance

Type of training Nr. of courses Duration Participants Participant hours Internal 176 12,478 3,410 114,409 External 114 2,156 503 10,582 Internal + External 2 64 73 2,336 TOTAL 292 14,698 3,986 127,327

TRAINING PROVIDED IN 2007

6.5 CORPORATE SOCIAL SERVICES

ATM implements social policies for its employees with the aid of its Internal SocialServices, which focus in particular on four social service areas: social assistance, thefamily, housing and healthcare.

Social Guidance ServicesFree consultancy services looking at family, home and work issues to provideguidance, information and access to social resources and services offered bygovernment bodies, institutions and the private sector as well as by the company itself.

SupportThrough a brief support phase, workers are encouraged to develop their ownpotential in order to face and solve private and family-related problems as well associal-health problems and problems at work.

Multidisciplinary management of complex social-healthcare problemsCare planning is provided with respect to the appropriate territory/company framework.

Work/Life BalanceServices to provide a work/life balance for workers in their roles as parents and withinthe family as well as to meet related needs.

Promoting healthcare and psycho-physical wellbeingTraining, awareness-raising and the promotion of healthy lifestyle and a correct dietto prevent illnesses - especially if chronic - and the inability to work.

Social Housing InterventionsMeasuring social-housing needs directly when recruiting staff and researchingtemporary housing opportunities for newly-hired workers from Central and SouthernItaly as well as for individuals who have already been hired by the company and whorun the risk of social emargination.

90

Problem CasesHousing 12Addiction 6Mental wellbeing 14Economic 4Family-related 120Psychological 24Healthcare 72TOTAL 252

REQUESTS FOR SUPPORT AND NEEDS HANDLED IN 2007

OUR PEOPLE, OUR VALUES

In 2007, 39% of requests for support from ATM Social Services came from theemployees, 23% came from their bosses and 15% came from Fondazione ATM.When working to resolve problems, Social Services adopt a network-based outlook,working both with the services provided in the territory in terms of healthcare, socialsecurity and insurance and with the various corporate structures.

Corporate DayCare Centres

The project to create day care centres within ATM was born with the aim of supportingand assisting parents and reconciling work and family times.The company’s first day care centre was inaugurated at the Baggio depot in Septemberof 2005 (15 places), and was quickly followed by the one at the Leoncavallo depot in2006 (17 places). A third day care centre is currently being created and is set to welcomeanother 36 children, for an overall total of 68. The following specific features distinguishall ATM day care centres:• designed and created with the contribution of internal competencies, coordinated

by a multidisciplinary team;• small, delocalised day care centres located in different company locations with a

capacity of no more than 30 places;• direct ATM management, employing qualified staff with proven experience;• support from specialist consultants with teaching and paediatric skills;• the development of a Teaching Plan specifically for ATM;• a service which aims for excellence, with quality ISO 9001-2000 certification.

The two day care centres at Baggio and Leoncavallo have a potential capacity of 32places. On average, they host 20 children a day, for a total of almost 5,000 presencesa year. Almost all the children who attended the centres remained there more thanhalf a day. In fact, 99% of them were served lunch - fully meeting their individualpaediatric needs - at the centres.

92

FONDAZIONE ATM (www.fondazioneatm.it)

Fondazione ATM is a non-profit foundation established in 1999 and supported by thecompany and its members to help the human, social, cultural and sports-baseddevelopment of employees, retirees and family members belonging to the ATM Group.In particular it:• promotes initiatives carried out during the summer months;• enters into special discount agreements with tour operators;• provides economic support in case of need;• funds cultural, amateur sports, extramural, recreational and group-based tourism

activities;• promotes group activities for its beneficiaries;• enters into special agreements with public and private social-healthcare institutions

(i.e. for surgery, hospital admissions, treatment and healthcare).

Fondazione ATM provides services for more than 14,000 families and calculates thatmore than 35,000 people with different needs benefit from its activities. In 2007, over4,200 families used one or more of the recreational services it offers. Ten years fromits establishment, the number of individuals it assists has grown by 11%.

• Wage integration for workers on maternity leave both during the mandatory anddiscretionary period;

• Discount season passes for the entire family;• “Priamo” Complementary Social Security Fund for workers employed in the public

transport sector as well as other, similar sectors. The aim of the Fund - which is notmandatory - is to provide complementary pension services in addition to the basicpension system, in part thanks to contributions made by their company;

• Professional and extra-professional accident insurance policies for staff members;• Employee counter (services to provide loans, mortgages and scholarships for

employees and their children);• Company cafeteria;• Free tax consultancy services to help employees complete and submit their tax

declarations (online as well). In 2007, 5,053 employees took advantage of the service;• Free flu vaccine (1,312 vaccinations provided in 2007);• Special discount agreements for theatrical performances, museum tickets, etc...

Employeebenefits

OUR PEOPLE, OUR VALUES

6.6 LABOUR RELATIONS

Labour relations were developed to define a system of relationships based on theconcentration of interests in order to involve, include and have workers participate inGroup objectives through their labour unions.

To that end, an ATM Group Framework Agreement was signed on 4 October 2007,establishing the underlying principles of unitary Group and staff polices. A Protocol forIndustrial Relations was also signed on the same date and identifies key points forharmonisation, contractual levels and basic labour union relations.

93

ATM AND LABOUR UNION REPRESENTATION

ATM has a labour union membership level of above 75% and as such enjoys an - albeitdiversified (contracts/informative) - relationship with a range of different labour unions.In 2007, contract agreements were established with FILT CGIL, FIT CISL, UILT UIL andORSA labour organisations, with which the Framework Agreement and IndustrialRelations Protocol were signed. The company also had dealings with OO.SS UGL andFAISA CISAL which, together with FILT-FIT-UILT are the organizations drafting theCollective Labour Contract Agreements for rail, tram and shipping workers (LPT-mobility) which is applied within local public transport companies.The RSU (Rappresentanze Sindacali Unitarie - Unitary Labour Union Representation) isan entity entrusted with operational issues handled together with the CoordinamentoRSU (coordination unit of the RSU, elected in each of the corporate divisions).The RSU is comprised of 120 workers’ representatives elected in 2006 from the lists ofthe following organisation: FILT CGIL, FIT CISL, UILT UIL, ORSA, SLAI COBAS, ALCOBAS and Federquadri.OO.SS. FILDIAI CILDI, SAL SINPA and SAMA FAISA CONFAIL are also represented atATM. The company exchanges information with them, since they hold a recognisedRSA (corporate labour union representation) pursuant to Art. 19 of Law 300/70, inaddition to OO.SS. CUB and RDB, which do not instead have a recognised RSA.

The vast majority of strikes affected only a handful of sectors amongst the staff(engine-drivers/parking wardens).

All employees are employed within the framework of collective labour agreements bothat national and corporate level, which govern all the economic and legal aspects of theiremployment. For the vast majority of employees (99.55%), employment contracts areregulated by the National Collective Labour Contract Agreement for train, tram and shipworkers (LPT-mobility), while staff employed in the day care centres (10) are employedunder the terms of the national collective FIMS contract (primary school staff notemployed by the state) and those remaining fall within the scope of the NationalCollective Labour Contract Agreement for Industrial managers (0.33%).

Some aspects of the work carried out by train and tram workers are still governed byRoyal Decree 148/31 which prohibits the possibility of hiring workers from outside theEU. As a result, the company does not currently employ any workers from outside the EU.

A “work scholarship” scheme has also been devised to hire entry-level workers with3-months starting contracts, which may be extended.

94

Workscholarships

The reason for which thenumber of scholarships andrecipients are not identical isthat in a few cases thescholarships were extended for a further 3 months.

Year Work scholarship Recipients2005 4 32006 14 102007 15 11

95

• Design new tools and implement existing ones to promote participation and thecirculation of information

• Organise a systematic process to assess performances and evaluate career paths• Develop strategic business competencies using targeted training programs• Provide systematic management support to line staff by establishing a continuous

presence in depots• Work on creating and spreading a culture of diversity and equal opportunity, as

well as on reconciling work/family time• Widen the scope of social policies in terms of services and projects provided to

support families and parenting within the company• Promote the wellbeing and health of workers, with particular attention for the

theme of addiction• Develop and consolidate processes to further reinforce safety in the workplace

for 2008-2010targets

Improvement

Guidelines and reportingperimeters

NOTE ON METHODOLOGY

Over the last decade, ATM has adopted a social accounting scheme, publishing itsfirst Social Report in 1998, and continued to do so using the same framework until2005. After a brief pause in 2006 - when it carried out an in-depth overhaul of themethods used to prepare the document as well as its aims - it has once continuedon its chosen path with this report, which presents two important new features.The first concerns the central role played by sustainability in ATM’s corporate culture,taken in the broadest sense.The second new feature is instead concerned with the significance of the reportwithin the Group, no longer a simple vehicle for communications used to underlinethe company’s commitment to sustainability, but a management tool intended tocontinuously improve corporate, environmental social and service performance.The accounting process employed is based on the AA1000 guidelines, which definekey stages used to prepare Social and Sustainability reports. The contents of thereport have been drafted in compliance with the GRI - Global Reporting Initiative andGBS - Group Social Report guidelines while taking into account all the informationconsidered to be relevant to the company’s stakeholders.The data used to prepare the report was collected while working together with theGroup’s entire corporate structure and through the definition of a process whichidentified specific techniques to indicate corporate solutions collectively as well as toestablish indicators.The reporting perimeters focused on the activities carried out by the ATM Group,while looking specifically at its core business.

96

97

Referencestandards

AA1000 (AccountAbility 1000) is an Anglo-Saxon standard developed by ISEA(Institute of Social and Ethical Accountability) to improve overall performance throughenhanced quality in social-environmental accounting, auditing and reporting.

GRI (Global Reporting Initiative) standards are the most popular reference modelaround the world and use a triple bottom line accounting framework constructed ona three-level approach: economic, social and environmental.

The GBS (Gruppo di studio per la statuizione dei principi di redazione del BilancioSociale - “Study Group to Define the Principles used to Prepare Social Reports”)publishes the principles used to prepare social reports in Italy, which are recognisedand shared by the operators in the sector and are employed as a scientific referenceby businesses, professionals and auditing companies.

G3 CONTENT CORRELATION TABLEATM developed an accounting process as well as a series of indicators during theyear which have allowed it to achieve level B in the application of the standard.Auditing by external companies is not foreseen for the current year.

PROFILE

OU

TP

UT

MANAGEMENTMETHOD

OU

TP

UT

PERFORMANCEINDICATOR

OU

TP

UT

LEVEL OFAPPLICATION

ACCOUNTS ON:1.12.1 - 2.103.1 - 3.8 - 3.10 - 3.124.1 - 4.4- 4.14 - 4.15

NOT REQUIRED

A MINIMUM OF 10PERFORMANCEINDICATORS MUST BETAKEN INTO ACCOUNT,INCLUDING AT LEAST ONESOCIAL, ENVIRONMENTALAND ECONOMICINDICATOR

INF

OR

MAT

ION

STA

ND

AR

D

CACCOUNTS ON ALLCATEGORY PROVED FORLEVEL C AND ABOVE: 1.23.9 - 3.134.5 - 4.13- 6.16 - 4.17

NOTICE ON MANAGEMENTMETHOD FOR EACHCATEGORY OFINDICATORS

A MINIMUM OF 20PERFORMANCEINDICATORS MUST BETAKEN INTO ACCOUNT, OFWHICH AT LEAST ONEECONOMIC,ENVIRONMENTAL, HUMANRIGHTS, LABOUR,SOCIETY, PRODUCTRESPONSIBILITYINDICATOR

BSAME REQUIREMENTS AS LEVEL B

NOTICE ON MANAGEMENTMETHODS FOR EACHCATEGORY OFINDICATORS

ALL PERFORMANCEINDICATORS ANDSUPPLEMENTARY SECTORINDICATORS APPLICABLEWITH RESPECT TOPRINCIPLE OFMATERIALITY MUST BETAKEN INTO ACCOUNTAND ALL OMISSIONSMUST BE EXPLAINED

A

RE

PO

RT

AU

DIT

ED

EX

TE

RN

ALL

Y

RE

PO

RT

AU

DIT

ED

EX

TE

RN

ALL

Y

RE

PO

RT

AU

DIT

ED

EX

TE

RN

ALL

YC+ B+ A+

GRI Table of ContentsThe following table identifies the position of the information required by GRI-G3standards with a code which identifies the indicator, accounting level and relativepage number.

GENERAL PART P.

1.1 � 7 1.2 � 24

PROFILE P.

2.1 � I cover 2.2 � 13-17 2.3 � 17-22 2.4 � 100 2.5 � 22 2.6 � 17 2.7 � Chapter 3 2.8 � 13 2.9 � 17 2.10 - n.av.

PARAMETERS OF THE REPORT P.

3.1 � 96 3.2 � 96 3.3 � 96 3.4 � 100 3.5 � 963.6 � 963.7 � 963.8 � 17 3.9 � 96 3.10 � 29 3.11 � 96 3.12 � 98 3.13 � 97

GOVERNANCE, COMMITMENTS AND STAKEHOLDERINVESTMENTS P.

4.1 � 17-184.2 � 194.3 - n.a.4.4 - n.av. 4.5 � 88 4.6 - n.av. 4.7 � 18 e 234.8 � 12 4.9 � 23-24 4.10 - n.av. 4.11 � 23 4.12 � 78 4.13 � 77-78 4.14 � 25 4.15 � 25 4.16 � 25 4.17 - n.av.

ECONOMIC PERFORMANCEINDICATORS

ECONOMIC PERFORMANCE P.

EC1 � 32-33EC2 � 31; 62-63EC3 � 92EC4 � 35

MARKET PRESENCE P.

EC5 - n.av. EC6 - n.av. EC7 - n.r.

INDIRECT ECONOMIC IMPACT P.

EC8 � Chapter 5 EC9 � Chapter 5

ENVIRONMENTAL PERFORMANCEINDICATORS

RAW MATERIALS P.

EN1 - n.r.EN2 - n.av.

ENERGY P.

EN3 � 60 EN4 - n.r.EN5 � 60EN6 � 60-61 EN7 - n.r.

WATER P.

EN8 � 65EN9 - n.r.EN10 - n.r.

BIODIVERSITY P.

EN11-EN15 - n.r.

EMISSIONS-DISCHARGES-WASTES P.

EN16 � 63EN17 � 63EN18 � 62-63EN19 � 63EN20 � 63EN21 � 65EN22 � 66EN23 - n.r.EN24 � 66EN25 - n.r.

PRODUCTS AND SERVICES P.

EN26 � Chapter 4EN27 - n.r.

CONFORMITY P.

EN28 - n.r.

TRANSPORT P.

EN29 - n.a.

GENERAL P.

EN30 � 31; Chapter 4

Key:

� Fully taken into account

� Partly taken into account

- Not taken into account

n.av. Not available

n.r. Not relevant

n.a. Not applicable

SOCIAL PERFORMANCEINDICATORS

EMPLOYMENT P.

LA1 � 83LA2 � 83LA3 � 92

INDUSTRIAL RELATIONS P.

LA4 � 94LA5 - n.av.

HEALTH AND SAFETYAT THE WORKPLACE P.

LA6 - n.av.LA7 � 86LA8 � 86-87; 90LA9 - n.av.

EDUCATION AND TRAINING P.

LA10 � 89LA11 � 88-89LA12 � 88-89

EQUAL OPPORTUNITIES AND DIVERSITY P.

LA13 � 83-84LA14 - n.r.

HUMAN RIGHTS P.

HR1-HR9 - n.av.HR3 - n.a.HR4 - n.av.HR5-HR9 - n.a.

COLLECTIVITY P.

SO1 � Chapter 3

CORRUPTION P.

SO2 � 23SO3 - n.av.SO4 - n.av.

POLITICAL GRANTS P.

SO5 - n.r.SO6 - n.av.

COLLUSIVE BEHAVIOURS P.

SO7 - n.av.

CONFORMITY P.

SO8 - n.av.

PRODUCT RESPONSIBILITY P.

PR1 - PR9 - n.r.

INDICATORS SPECIFIC TO THE TRANSPORT SECTOR P.

LT1 - n.a.LT2 � 13 e 62 LT3 � 16; Chapter 4 LT4 � Chapter 4 LT5 � 61-63 LT6 � 16 e 66LT7 � 64 LT8 � Chapter 4 LT9 � 93-94 LT10 - n.a. LT11 � 87-90 LT12 - n.av. LT13 - LT17 - n.a.

ATM - Sustainability Report 2007

Planning and coordinationATM SpA - Marketing and Communication department

Editorial ProjectCohn & Wolfe

Technical and Scientific SupportREvalue srl

Graphics Project Dondina Associati

International Edition Hansen Worldwide

Gruppo ATMForo Buonaparte, 6120121 MilanPhone +39 02 48 03 11Fax +39 02 48 03 92 10

www.atm-mi.it

We would like to thank the ATM internal Working Group which supported and helped us prepare the 2007 Sustainability Report.

Printed in December 2008Fiordo s.r.l. Galliate (NO)