HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2011...Millions of euro 06 30 2011 06 30 2010 Revenues...

HALF-YEARLY FINANCIALREPORT

AT JUNE 30, 2011

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0.1 Performance indicators and corporateinformation

5 The A2A Group at June 30, 2011

6 Financial Highlights

8 A2A S.p.A. on the Stock Exchange

11 Corporate bodies

13 Significant events during the period

17 Summary of results, assets and liabilities and financial position of the A2A

Group

25 Significant events after June 30, 2011

0.2 Condensed half-year consolidated financialstatements

28 Consolidated balance sheet

30 Consolidated income statement

32 Consolidated statement of comprehensive income

33 Consolidated cash flow statement

34 Consolidated statement of changes in equity

36 Consolidated balance sheet pursuant to Consob Resolution no. 17221 of

March 12, 2010

38 Consolidated income statement pursuant to Consob Resolution no. 17221 of

March 12, 2010

Contents

Half-yearly financial report at June 30, 2011

1

0.2.1 Notes to the condensed half-year consolidated

financial statements

41 General information on A2A S.p.A.

42 Half-year financial report

43 Financial statements

44 Basis of preparation

45 Changes in international accounting standards

52 Scope of consolidation

53 Consolidation policies and procedures

59 Seasonal nature of the business

60 A2A Group – Areas of activity

61 Geographical areas of activity

62 Results sector by sector

64 Notes to the balance sheet

83 Net debt

84 Notes to the income statement

92 Earnings per share

93 Note on related party transactions

97 Consob Communication no. DEM/6064293 of July 28, 2006

98 Guarantees and commitments with third parties

100 Other information

0.2.2 Attachments to the condensed half-year

consolidated financial statements

122 1. Statement of changes in tangible assets

124 2. Statement of changes in intangible assets

126 3. List of companies included in the consolidated financial statements

128 4. List of shareholdings in companies carried at equity

130 5. List of companies included in the consolidated financial statements of the

Ecodeco Group

132 6. List of companies included in the consolidated financial statements of the

Coriance Group

134 7. List of financial assets available for sale


Contents

2

0.3 Interim report on operations 137 Results sector by sector

139 Macroeconomic scenario

141 Performance of the energy market

144 Energy Sector

155 Heat and Services Sector

158 Environment Sector

162 Networks Sector

173 Other Services and Corporate Sector

175 Outlook for operations

176 Human resources and industrial relations

177 Corporate Social Responsibility

180 Innovation, development and research

185 Risks and uncertainties

0.4 Certification of the condensed half-yearfinancial statements pursuant to article 154-bisparagraph 5 of Legislative Decree no. 58/98

207 Certification of the condensed half-year financial statements pursuant to

article 154-bis paragraph 5 of Legislative Decree no. 58/98


Contents

3

This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2011” and hasbeen prepared solely for the convenience of international readers. In the event of any ambiguity theItalian text will prevail. The Italian original is available on the website www.a2a.eu

0.1Performanceindicators andcorporateinformation


5

The A2A Group at June 30, 2011

(1) The 61.28% refers to the ordinary shares held in Transalpina di Energia (TdE). Theactual stake in share capital is 60%. Note that Edison holds 50% of shares inEdipower.

(2) 0.38% of these are held through A2A Reti Gas. (3) There are call and put options on a further stake in the company's share capital.(4) There are put options on a futher stake in the company's share capital.

This table shows the A2A Group's most significant shareholdings. You are referred toattachments 3, 4, 5, 6 and 7 for full details of all shareholdings.

Areas of activity

Energy

Heat and services

Environment

Networks

Other companies

A2A Spa

51.00%Delmi (3)

50.00%Transalpina diEnergia

61.28%Edison (1)

20.00%Edipower

100.00%AspemEnergia

100.00%A2A Trading

70.00%A2A Alfa

50.00%Premiumgas

70.00%Plurigas

94.95%Abruzzoenergia

50.00%Ergosud

50.00%Metamer

100.00%A2A Energia

33.33%Lumenergia

100.00%A2AMontenegro

43.70%EPCG

39.49%Rudnik Uglja ad Pljevlja

100.00%A2A Calore &Servizi

98.08%A2A Coriance

100.00%Coriance

90.00%Varese Risorse (4)

60.00%Proaris

50.00%Asm Novara (3)

100.00%Amsa

100.00%Ecodeco

99.97%Aprica

80.00%Montichiariambiente

100.00%PartenopeAmbiente

100.00%A2A Reti Elettriche

100.00%A2A Ciclo Idrico

99.98%BAS-SII

67.00%Seasm

90.00%Aspem (4)

100.00%A2A Reti Gas

100.00%A2A Servizi alladistribuzione

91.60%Retragas

74.50%Camuna Energia

48.86%ASVT (2)

100.00%Selene

100.00%A2A Logistica

100.00%MincioTrasmissione

49.00%e-Utile

21.94%ACSM-AGAM

7.9%Dolomiti Energia

Revenues 3,050 million euro

Gross operating income 477 million euro

Net income 120 million euro

Income statement 01 01 2011 01 01 2010Millions of euro 06 30 2011 06 30 2010

Revenues 3,050 2,858

Operating expenses (2,286) (2,130)

Labour costs (287) (258)

Gross operating income 477 470

Depreciation, amortization, provisions and write-downs (254) (238)

Net operating income 223 232

Financial balance (80) (56)

Other non-operating income 1 –

Other non-operating expenses (5) –

Income before tax 139 176

Income taxes (74) (68)

Net result from non-current assets sold or held for sale 39 282

Minorities interests 16 (19)

Net income for the period pertaining to the Group 120 371

Gross operating income/revenues 15.6% 16.4%

(1) The figures serve as performance indicators required by CESRN/05/178/B

Financial Highlights (1)


6

Balance sheet figures 06 30 2011 12 31 2010Millions of euro

Net capital employed 8,402 8,738

Total equity attributable to the Group and minorities 4,644 4,845

Consolidated net financial position (3,758) (3,893)

Consolidated net financial position/Equity attributable to the Group and minorities 0.81 0.80

Consolidated net financial position/Market cup 1.06 1.03

Financial data 01 01 2011 01 01 2010Millions of euro 06 30 2011 06 30 2010

Net cash from operating activities 398 398

Net cash used in investing activities (63) 218

Free cash flow 335 616

Key figures of A2A S.p.A. 06 30 2011 12 31 2010

Share capital (euro) 1,629,110,744 1,629,110,744

Number of ordinary shares (par value 0.52 euro) 3,132,905,277 3,132,905,277

Number of treasury shares (par value 0.52 euro) 26,917,609 26,917,609

Key indicators 06 30 2011 06 30 2010

Average 6-month Euribor 1.530% o.974%

Average price of Brent crude (USD/bbl) 111.13 78.40

Average exchange rate €/USD (*) 1.40 1.33

Average price of Brent crude (euro/bbl) 79.11 59.15

(*) Source: Italian Foreign Exchange Office


Financial highlights

7

A2A in figures

Capitalization at June 30, 2011 (millions of euro) 3,365

Avarege capitalization in the first half 2011 (millions of euro) 3,552

Average volumes in the first half 2011 10,338,669

Average price in the first half 2011 (*) 1.134

Maximum price in the first half 2011 (*) 1.231

Minimum price in the first half 2011 (*) 1.001

Number of shares 3,132,905,277

(*) euro per shareSource: Bloomberg,

In June 23, 2011 A2A distributed a dividend equal to 0.06 euro per share. In November 24, 2011

will be distributed an additional non-recurring dividend equal to 0.036 euro per share.

A2A forms part of the following indices

FTSE MIB

DJ STOXX

DJ EUROSTOXX

DJ Italy

WisdomTree

S&P Developed Ex-US

Ethical indices

FTSE4GOOD Global e Europe

FTSE ECPI Benchmark

Axia Csr e Ethical

ECPI Ethical Index Global, Euro e EMU

Solactive Climate Change

Source: Bloomberg

A2A ranked as a leading business in the Carbon Disclosure Project 2010.

A2A S.p.A. on the Stock Exchange


8

Shareholders (*)

(*) Quota greater than 2% (updated at June 30, 2011).Sources: CONSOB

Rating

Current

Medium/long-term rating BBB+

Standard & Poor’s Short-time rating A–2

Outlook Negative

Moody’s Medium/long-term rating A3

Outlook Negative

Sources: rating agencies



9

Market37.5%

Municipality ofMilan27.5%

Municipality ofBrescia

27.5%Alpiq HoldingAG5%

Carlo Tassara2.5%

A2A in the first half of 2011

A2A vs FTSE MIB

Source: Bloomberg



10

Vol

umes

€/Sh

are

jan-11feb-11

mar-11apr-11

may-11jun-11

Volumes Price

jan-11 feb-11 mar-11 apr-11 may-11 jun-11

A2A

(€/

Shar

e)

FTSE

MIB

Inde

x

1.3

1.2

1.1

1

0.9

0.8

1.40

1.30

1.20

1.10

1.00

0.90

0.80

SUPERVISORY BOARD

CHAIRMANGraziano Tarantini

DEPUTY CHAIRMANRosario Bifulco

DIRECTORSAdriano BanderaGianbattista BrivioBruno CapariniGianni CastelliAlberto CavalliStefano GrassaniEnrico MattinzoliMarco MiccinesiMassimo PeronaNorberto RosiniGiorgio Maria Filiberto SommarivaFranco TamburiniAntonio Matteo Taormina

MANAGEMENT BOARD

CHAIRMANGiuliano Zuccoli

DEPUTY CHAIRMANVittorio Cinquini

DIRECTORS Franco BaigueraMario CocchiFrancesco RandazzoRenato RavanelliPaolo RossettiGiuseppe Sala

Corporate bodies


11

GENERAL MANAGERS

CORPORATE AND MARKET AREARenato Ravanelli

TECHNICAL-OPERATIONS AREAPaolo Rossetti

INDEPENDENT AUDITORS

PRICEWATERHOUSECOOPERS S.P.A.


Corporate bodies

12


A single sales company for the A2A Group since January

ASMEA S.p.A., Bas-Omniservizi S.r.l. and A2A Servizi al Cliente S.r.l. merged into A2A Energia

S.p.A. on January 1, 2011.

The single sales company arising from this operation concentrates on the sale of electricity

and gas and the related commercial services (call centers, desks and billing).

More specifically, a leading operator on the national energy market has been created which

has around 2 million customers (large-scale industry, apartment blocks and domestic

customers) concentrated mostly in the Milan metropolitan area and the provinces of Brescia

and Bergamo.

This represents a further step in the process of rationalizing the Group and rendering it more

efficient, a step which is designed to make it even more competitive on the liberalized

markets.

Lombardy customers will be able to continue to be able to put their trust in quality services

that are close to them locally, a factor which up until now has been a “winning card” for the

Group as certified by the excellent results obtained in customer satisfaction surveys and in the

special league tables regularly prepared by the Electricity and Gas Authority.

A2A Ciclo Idrico S.p.A. comes to life on January 1, 2011

The contribution of the “water cycle” segment by the parent A2A S.p.A. and the demerger of

the “ownership of the end customers of the water business of the province of Brescia”

segment by A2A Energia S.p.A. (formerly Asm Energia e Ambiente S.r.l.) into A2A Ciclo Idrico

S.p.A. became effective on January 1, 2011.

More specifically, this company carries out the following activities, which are listed by way of

example:

Significant events during the period

13



• research, production, procurement, capitation, transfer and transportation, conversion,

distribution and sale of water for primary, industrial and agricultural use;

• collection and treatment of waste water;

• use and recovery of energy from the integral water cycle;

• management, maintenance and development of the water and sewage networks and of

the plants for the capitation, potabilisation and purification of water.

A2A as one of the leaders in Italy for the Carbon Disclosure Project

A2A was classified as one of the Italian “2010 Carbon Performance Leaders” by the Carbon

Disclosure Project, the body acting on behalf of over 500 institutional investors and which for

more than 10 years has been providing an analysis of the means by which the largest

companies in the world counter greenhouse gas emissions.

A new Managing Director for Ecodeco S.r.l., a company of the A2AGroup

On March 11, 2011, the Board of Directors of Ecodeco S.r.l., one of the companies in the

Environment Sector of the A2A Group, appointed Mr. Enrico Friz as Managing Director of

the company. The intention of renewing the subsidiary’s top management is to consolidate

the company’s development process as part of the Environment Sector of the A2A Group,

with the aim of optimizing organizational and process synergies and strengthening the

offer of environmental services.

Communication of A2A S.p.A., Delmi S.p.A. and EDF S.A. in respect ofthe shareholders’ agreement regarding Edison S.p.A. and Transalpinadi Energia S.r.l. (TdE)On March 15, 2011, as part of the discussions relating to a new industrial project concerning the

Edison Group and the structure of TdE’s shareholdings, A2A S.p.A., Delmi S.p.A. and EDF S.A.

reached agreement as to a change in the shareholders’ pacts regarding Edison S.p.A. and

Transalpina di Energia S.r.l., which provides for an extension to September 15, 2011 of the

deadline for any possible termination of such pacts. If no termination notice is sent by any of

the parties by September 15, the agreements will be renewed for the following three years.

This amendment also provides for the appointment of the boards of directors of Edison S.p.A.

and Transalpina di Energia S.r.l. for a period of one year by the shareholders’ meetings

approving the respective annual financial statements.

14



The Supervisory Board of A2A S.p.A. has approved the 2010 results

On April 27, 2011, with Mr. Graziano Tarantini in the chair, the Supervisory Board met and

approved the separate financial statements and consolidated annual financial report of the

A2A Group for the year ended December 31, 2010. The Supervisory Board agreed with the

proposal of the Management Board to submit to the approval of the shareholders’ meeting

the distribution of a dividend of 0.060 euro per ordinary share, to be put into payment on June

23, 2011.

The Supervisory Board additionally agreed with the proposal of the Management Board to

submit to the approval of the shareholders’ meeting the distribution of an additional dividend

of 0.036 euro per ordinary share, to be put into payment on November 24, 2011.

Ecodeco S.r.l. is awarded a contract in Britain for the design andconstruction of a new waste treatment plant

3SE, a consortium set up by the British companies Shanks Waste Management and Scottish

and Southern Energy, has chosen Ecodeco technology to build a waste treatment plant

located in Yorkshire.

In greater detail, the A2A Group company Ecodeco S.r.l. will be the supplier of the project and

the technology, and will additionally build the plant which will treat the waste of the cities of

Barnsley, Doncaster and Rotherham.

The value of these supplies exceeds 26 million euro and it is also envisaged that Ecodeco will

be paid royalties on the concession for the next 25 years based on each tonne of waste treated.

The plant will be used to treat 250,000 tonnes/year of residual solid urban waste from the

differentiated collection and will serve around 350,000 families. At the end of the treatment

process a secondary fuel will be obtained which will be used in a multifuel plant for producing

electricity.

Glass, plastic and metals will be recovered by building a section for the production of compost.

The agreement provides that the work for the construction of the plant will begin by the

Spring of 2013 and that the first waste will be treated in 2015.

A total of 23.5% of the share capital of Metroweb S.p.A has been sold toFondo Infrastrutturale F2i and IMI InvestimentiOn May 30, 2011 A2A S.p.A. together with Stirling Square Capital Partners, the majority

shareholder of Metroweb S.p.A., signed an agreement for the sale of their shareholdings in

15



Metroweb S.p.A. (respectively 23.5% and 76.5%) to Fondo Infrastrutturale F2i and IMI

Investimenti.

This transaction will lead to proceeds of 53 million euro for A2A S.p.A. and a capital gain of 38

million euro. A2A S.p.A. will continue to hold a convertible bond in its portfolio which if the

option is exercised will enable it to acquire a shareholding in Metroweb S.p.A. of approximately

25%, linked to a put option valid until November 30, 2013 under the same conditions of the

present transaction increased by a financial return.

16


ResultsThe results of the A2A Group for the period ended June 30, 2011 are set out below together

with comparative figures for the first half of the previous year:

Millions of euro 01 01 2011 01 01 2010 Changes 06 30 2011 06 30 2010

Revenues 3,050 2,858 192

of which:

– Revenues from sales of goods and services 2,996 2,815 181

– Other operating income 54 43 11

Operating expenses (2,286) (2,130) (156)

Labour costs (287) (258) (29)

Gross operating income 477 470 7

Depreciation and amortization (213) (196) (17)

Provisions and write-downs (41) (42) 1

Net operating income 223 232 (9)

Net financial expense (67) (106) 39

Share of results of companies at equity (13) 50 (63)

Other non-operating income 1 – 1

Other non-operating expenses (5) – (5)

Income before tax 139 176 (37)

Income taxes (74) (68) (6)

Income from current operations, net of tax 65 108 (43)

Net result from non-current assets sold or held for sale 39 282 (243)

Minority interests 16 (19) 35

Net income for the period pertaining to the Group 120 371 (251)

Note: the Montenegro subsidiary EPCG has been consolidated on a line-by-line basis for the period ended June 30, 2011; in the firsthalf of 2010 it was consolidated on a one-line basis.

The Group earned revenues totaling 3,050 million euro in the first half of 2011, of which 139

million euro relates to the EPCG Group. Revenues from sales and services amounted to 2,996

million euro (of which 138 million euro attributable to the EPCG Group), while other operating

income totaled 54 million euro.

Summary of results, assets and liabilities and financialposition of the A2A Group

17


Summary of results, assets and liabilities and financial position of the A2A Group

The main quantitative data contributing to the formation of these revenues were as follows:

06 30 2011 06 30 2010

Electricity sold to wholesale and retail customers (GWh) 11,204 9,687

Electricity sold on the Power Exchange (GWh) 6,636 7,852

Electricity sold on foreign markets (GWh) 6,289 3,354

Electricity sold (GWh) - EPCG 2,301 –

Gas sold to wholesale and retail customers (Mcm) 2,049 2,362

Heat sold (GWht) 1,676 1,753

Electricity distributed (GWh) 5,756 5,618

Electricity distributed (GWh) - EPCG 1,272 –

Gas distributed (Mcm) 1,155 1,292

Water distributed (Mcm) 33 34

Purified water (Mcm) 19 19

Waste disposed of (Kton) 1,335 1,398

In particular, sales mainly derived from the following quantities produced by the plants

managed by the Group:

06 30 2011 06 30 2010

Thermoelectric production (GWh) 4,040 4,260

Thermoelectric production (GWh) - EPCG 672 –

Hydroelectric production (GWh) 1,640 1,869

Hydroelectric production (GWh) - EPCG 907 –

Heat production (GWht) 1,398 1,474

Electricity produced by cogeneration (GWh) 370 342

Electricity produced by waste to energy and biogas plants (GWh) 631 606

Gross operating income for the period of 477 million euro rose by 7 million euro over the same

period of the previous year.

Excluding the contribution made by the Montenegro EPCG Group, gross operating income

amounted to 462 million euro, representing a slight decrease compared to the first half of

2010.

18



The following table sets out changes in gross operating income by business area.

Millions of euro Gross Gross Operating Operating Income Income 06 30 2011 06 30 2010

Energy Sector 163 191

-electricity 113 162

-gas 50 29

Heat and Services Sector 48 39

Environment Sector 152 141

Networks Sector 128 117

Other Services and Corporate Sector (14) (18)

Total 477 470

The Energy Sector saw a decrease in gross operating income compared to the first half of

2010: the reduction in margins in the electricity area was only partially offset by the rise in

margins in the gas area.

The fall in profitability in the electricity area is essentially due to the decrease in hydroelectric

production, which was affected by the reduced hydraulicity at the Calabria hydroelectric

plants, the decision of the San Filippo del Mela power station in Sicily to leave the boundary

regulated by the tolling agreement with Edipower and the fact that the Monfalcone

thermoelectric power station no longer has the essentiality prerequisites.

In the boundary in question there was also a considerable reduction in the utilization factors

of the combined cycle power stations, compensated in terms of overall profitability by an

improvement in unit margins. The margins for commercial activity also fell in comparison with

the first half of 2010.

Finally, the Montenegro subsidiary EPCG had a positive margin of 13 million euro.

In the gas area, the fall in quantities sold as the result of the mild weather of the first few

months of the year and the economic effect of the reduction in the regulated tariffs of the

protected market were more than offset by the positive effects of the renegotiation of the gas

procurement agreements at the beginning of the fourth quarter of 2010.

The gross operating income of the Heat and Services Sector amounted to 48 million euro, a

rise of 9 million euro over the first six months of 2010. This result is mainly due to new

connections to the district heating service, which more than offset the fall in volumes sold as

the result of the mild temperatures experienced in the first quarter of the year, as well as the

recognition of energy efficiency allowances (White Certificates) relating to initiatives taken in

previous years on the Brescia district heating networks.

19



The gross operating income of the Environment Sector amounted to 152 million euro (141

million euro in the first six months of 2010).

This positive performance is mainly due to the increased contribution provided by the

Brescia, Bergamo and Milan waste to energy plants, which in the second quarter of 2010

underwent a stoppage for planned maintenance, and the increased revenues from the sale of

electricity.

The Networks Sector increased its operating results in the first half of 2011, achieving gross

operating income of 128 million euro (+11 million euro).

The improvement in margins is mainly due to the electricity distribution area as the result of

the adjustment of the revenue component relating to the company specific equalization for

the III regulatory period (2008-2011), not recognized in the first half of 2010, and the reduced

costs deriving from other equalization mechanisms (in particular the measurement service

revenues equalization mechanism).

In addition, electricity distribution in Montenegro provided a positive contribution of 4 million

euro to the sector.

Depreciation, amortization and write-downs amounted in total to 254 million euro (238

million euro for the six months ended June 30, 2010). The increase of 16 million euro includes

an increase of 28 million euro arising from the line-by-line consolidation of the investee EPCG

and a decrease of 8 million euro resulting from a reduction in the accruals made to the

provision for bad and doubtful debts regarding activities in Italy.

As a result of these changes net operating income amounted to 223 million euro, a decrease

of 9 million euro over the six months ended June 30, 2010.

Financial expense, net amounted to 67 million euro (106 million euro for the six months

ended June 30, 2010). This decrease is due to the positive change in the fair value of financial

derivative contracts hedging interest rate risk and the significant fall in average debt (-458

million euro compared to the first half of 2010), effects which were partially offset by the rise

in the average cost of debt as the result of changes in market rates.

The share of results of companies accounted for at equity amounted to a loss of 13 million

euro (a profit of 50 million euro for the six months ended June 30, 2010). The investment in

Transalpina di Energia had a significantly negative effect on the period of 30 million euro,

compared to a positive result of 29 million euro in the six months ended June 30, 2010. It should

also be recalled that the investee EPCG made a positive contribution of 14 million euro in the

first half of 2010 when the investment was consolidated on a one-line basis.

20



Other non-operating expenses totaled 4 million euro in the six months ended June 30, 2011

(nil for the six months ended June 30, 2010) and relate to costs incurred as the result of the

consolidation of the EPCG Group.

Income taxes amounted to 74 million euro (68 million euro for the six months ended June 30,

2010).

Net income from non-current assets sold or held for sale totaled 39 million euro (282

million euro for the six months ended June 30, 2010) and mainly consists of the gain arising on

the sale of the investments in Metroweb S.p.A. and CESI, while in the first half of 2010 this item

mainly consisted of the gain arising on the sale of the investment in Alpiq Holding AG.

After deducting the net income attributable to non-controlling interests (of which 14 million

euro is attributable to the minority sharholders of Delmi), the net income attributable to

the Group for the period amounted to 120 million euro (371 million euro for the six months

ended June 30, 2010).

21

Balance sheet and financial position

Consolidated net “Capital employed” amounted to 8,402 million euro at June 30, 2011 and is

covered by equity for 4,644 million euro (of which 1,319 million euro attributable to non-

controlling interests) and by net debt for 3,758 million euro.

In particular “Working capital” of 527 million euro has decreased by 236 million euro

compared to December 31, 2010.

“Net fixed capital” (which also includes “Assets/liabilities held for sale”) amounted to 7,875

million euro (-100 million euro).

The “Net financial position” at June 30, 2011 of 3,758 million euro improved by 135 million

euro over that at December 31, 2010 thanks to the generation of cash from operations.



22



Millions of euro o6 30 2011 12 31 2010 Changes

CAPITAL EMPLOYED

Net fixed capital 7,856 7,911 (55)

Tangible assets 4,765 4,872 (107)

Intangible assets 1,561 1,552 9

Investments and other non-current financial assets (*) 2,443 2,423 20

Other non-current assets/liabilities (*) (124) (137) 13

Deferred tax assets/liabilities (54) (63) 9

Provisions for risks, charges and liabilities for landfills (459) (460) 1

Employee benefits (276) (276) –

of which with counter-entry to equity (106) (118)

Working capital 527 763 (236)

Inventories 235 239 (4)

Trade receivables and other current assets (*) 2,089 2,416 (327)

Trade payables and other current liabilities (*) (1,811) (1,854) 43

Current tax assets/tax liabilities 14 (38) 52

of which with counter-entry to equity (114) 3

Assets/liabilities held for sale (*) 19 64 (45)

of which with counter-entry to equity

TOTAL CAPITAL EMPLOYED 8,402 8,738 (336)

SOURCES OF FUNDS

Equity 4,644 4,845 (201)

Total financial position beyond one year 3,652 3,635 17

Total financial position within one year 106 258 (152)

Total net financial position 3,758 3,893 (135)

of which with counter-entry to equity (33) (41)

TOTAL SOURCES 8,402 8,738 (336)

(*) Excluding balances included in the net financial position.

23



Millions of euro 01 01 2011 01 01 2010 06 30 2011 06 30 2010

NET FINANCIAL POSITION AT THE BEGINNING OF THE PERIOD (3,893) (4,644)

Net income for the period (including minorities) (**) 66 174

Depreciation and amortization 213 196

Write-downs/disposals of tangible and intangible assets 3 17

Results from companies at equity 13 (50)

Changes in assets and liabilities (*) 103 61

Net cash flows from operating activities 398 398

Net cash flows from investing activities (63) 218

Free cash flow 335 616

Dividends paid by the parent company (186) (217)

Dividends paid by subsidiaries (6) (28)

Cash flows from the distribution of dividends (192) (245)

Changes in financial assets/liabilities with counter-entry to equity (8) 15

NET FINANCIAL POSITION AT THE END OF THE PERIOD (3,758) (4,258)

(*) Excluding balances with counter-entry to equity.(**) The result for the period is stated excluding gains on the disposal of investments.

24


Acerra waste to energy plant: production capacity reaches 100% in thefirst six months of 2011The Acerra waste to energy plant treated 300 thousand tonnes of refuse in the first six months

of 2011, fully in line with the requirements of the Integrated Environmental Authorisation

which envisages a quantity of treatable waste of 600 thousand tonnes/year. At the same time

the plant produced and put 260 GWh of electricity into the grid.

The reported figures, which refer to the first half of the second year in which Partenope

Ambiente S.p.A. has been responsible for the industrial management of the waste to energy

plant, therefore represent an improvement over the already excellent results achieved in

2010, when a total of 516 thousand tonnes of waste were transferred to the plant (being 86%

of its production capacity) and 450 GWh of electricity was put into the grid, equivalent to the

needs of 150 thousand households.

The waste to energy plant worked regularly during the first six months of 2011, succeeding in

maintaining the planned high standards of yield also by means of the maintenance which had

been scheduled by Partenope Ambiente S.p.A. at the beginning of the year and which, in

addition to being absolutely usual in complex set-ups such as waste to energy plants, has the

scope of ensuring safety and efficiency.

Particular emphasis has been placed on environmental aspects: the waste to energy plant is

equipped with leading edge combustion gas purification technologies and a double

“continuous monitoring” system for controlling emissions which provides a constant

guarantee that the plant is working as it should.

Emissions have been well below the limits envisaged by the Authorisation since the start of

plant management, limits which moreover for the Acerra waste to energy plant are fixed at

values which are on the average 50% lower than those envisaged by the community directive

and the Italian legislation transposing it.

In addition to all of the measurements made by Partenope Ambiente S.p.A. on a daily basis,

two outside certified laboratories were engaged in 2010 to carry out five emission monitoring

campaigns, and a further two were performed during the first part of 2011. The data collected

have confirmed the full reliability of the plant and the efficiency of the fume treatment system,

with results well below the emission limits set by the Integrated Environmental Authorisation.

Significant events after June 30,2011

25

A2A and the Confederations of Small and Medium Enterprises sign aprotocol of understanding on the Joint Settlement ProcedureA2A, Casartigiani, CNA, Confagricoltura, Confapi, Confartigianato Imprese, Confcommercio

Imprese per l’Italia and Confesercenti have signed an important joint settlement agreement, putting

into practice the desire expressed in this respect by the AEEG - the Electricity and Gas Authority.

This procedure acts as an out of court tool for resolving certain types of dispute which have not been

resolved by previous complaint procedures, which relate to the supply of electricity and gas on both

the protected and free markets and which arise between business customers belonging to the

Confederations and A2A Energia S.p.A., the single sales company of the A2A Group.

A distinguishing feature of the procedure is its swiftness and informality and the ease by which it may

be accessed and carried out.

The settlement procedure may be activated for disputes relating to assessments, contestations and

the management of problems arising from the supply of electricity or gas, such as: the

reconstruction of usage following the ascertained malfunctioning of a meter pursuant to the

resolutions of the Electricity and Gas Authority; contestations relating to issues connected with the

billing of usage; dealing with a reduction in power or suspension of supply for disputed payment

arrears by the customer; the de-activation of a meter at the customer’s request which has not been

carried out; and the management of problems connected with the issuing of bills.

Working in the Settlement Office are qualified operators from A2A and the Confederations who have

attended specific training courses, a necessary requirement for the qualification to be recognised.

Staff involved in managing the settlements are required to act in an impartial and neutral manner to

encourage a compromise being reached which is acceptable to both parties.

Any measures being taken by A2A Energia S.p.A. to collect the receivable under dispute are

suspended for the whole period of the settlement process.

The introduction of the procedure at a national level will be preceded by a trial period of 12 months,

at the end of which A2A and the Confederations will be entitled to check its effectiveness and agree

any changes which may be needed.

The aim of the agreement, which has already been tested on similar occasions, is to improve the

relationship between Small and Medium Enterprises and energy suppliers under the customer

satisfaction principle.

A2A S.p.A.: the acquisition of 5.05% of the share capital ofAbruzzoenergia S.p.A.

On July 27, 2011 A2A S.p.A. purchased the remaining 5.05% of the share capital of

Abruzzoenergia S.p.A. which was held by minority shareholders.

As a result of this transaction A2A S.p.A. is now the owner of 100% of the company’s share

capital.


Significant events after June 30, 2011

26

0.2Condensed half-yearconsolidated financialstatements

Millions of euro Note 06 30 2011 12 31 2010 06 30 2010

NON-CURRENT ASSETS

Tangible assets 1 4,765 4,872 4,071

Intangible assets 2 1,561 1,552 1,479

Shareholdings carried at equity 3 2,401 2,411 3,124

Other non-current financial assets 3 69 40 47

Deferred tax assets 4 426 430 423

Other non-current assets 5 120 113 145

Total non-current assets 9,342 9,418 9,289

CURRENT ASSETS

Inventories 6 235 239 210

Trade receivables 7 1,717 2,141 1,709

Other current assets 8 372 275 379

Current financial assets 9 80 56 6

Current tax assets 10 25 18 95

Cash and cash equivalents 11 130 132 72

Total current assets 2,559 2,861 2,471

NON-CURRENT ASSETS HELD FOR SALE 12 39 82 36

TOTAL ASSETS 11,940 12,361 11,796

(1) As laid down in Consob Resolution 17221 of March 12, 2010 the effects of related party transactions in the consolidated financial statements are shown

in the tables in section 0.2 with comments in Note 40.

The effects of the significant non-recurring events and transactions are reported in Note 41 of the consolidated financial statements as required by

Consob Communication DEM/6064293 of July 28, 2006.

Consolidatedbalance sheet (1)

Assets


28

Millions of euro Note 06 30 2011 12 31 2010 06 30 2010

EQUITY

Share capital 13 1,629 1,629 1,629

(Treasury shares) 14 (61) (61) (61)

Reserves 15 1,637 1,625 1,575

Net profit for the year 16 – 308 –

Net profit for the period 16 120 – 371

Equity pertaining to the Group 3,325 3,501 3,514

Minority interests 17 1,319 1,344 894

Total Equity 4,644 4,845 4,408

LIABILITIES

Non-current liabilities

Non-current financial liabilities 18 3,767 3,736 3,759

Deferred tax liabilities 19 480 493 471

Employee benefits 20 276 276 269

Provisions for risks, charges and liabilities for landfills 21 459 460 427

Other non-current liabilities 22 156 177 199

Total non-current liabilities 5,138 5,142 5,125

Current liabilities

Trade payables 23 1,221 1,450 1,026

Other current liabilities 23 590 404 550

Current financial liabilities 24 318 448 669

Tax liabilities 25 11 56 9

Total current liabilities 2,140 2,358 2,254

Total liabilities 7,278 7,500 7,379

LIABILITIES DIRECTLY ASSOCIATEDWITH NON-CURRENT ASSETS HELD FOR SALE 26 18 16 9

TOTAL EQUITY AND LIABILITIES 11,940 12,361 11,796

Equity and liabilities


Consolidated balance sheet

29

Millions of euro Note 01 01 2011 01 01 2010 01 01 2010 06 30 2011 06 30 2010 12 31 2010

Revenues

Revenues from the sale of goods and services 2,996 2,815 5,923

Other operating income 54 43 118

Total revenues 28 3,050 2,858 6,041

Operating expenses

Expenses for raw material and services 2,133 1,988 4,129

Other operating expenses 153 142 318

Total operating expenses 29 2,286 2,130 4,447

Labour costs 30 287 258 554

Gross operating income - EBITDA 31 477 470 1,040

Depreciation, amortization, provisions, and write-downs 32 254 238 542

Net operating income - EBITDA 33 223 232 498

Financial balance

Financial income 18 7 58

Financial expenses 85 113 190

Portion of income and charges when shareholdings are carried at equity (13) 50 (231)

Total financial balance 34 (80) (56) (363)

Other non-operating income 35 1 – –

Other non-operating expenses 35 (5) – (1)

Profit before tax 139 176 134

(1) As laid down in Consob Resolution 17221 of March 12, 2010 the effects of related party transactions in the consolidated financial statements are shown

in the tables in section 0.2 with comments in Note 40.

The effects of the significant non-recurring events and transactions are reported in Note 41 of the consolidated financial statements as required by

Consob Communication DEM/6064293 of July 28, 2006.

(2) The comparative figures for January-June 2010 for income statement items relating to revenues and operating expenses, depreciation and

amortization and financial management have been reclassified to reflect the application of IFRS 5.

Consolidated incomestatement (1-2)


30

Millions of euro Note 01 01 2011 01 01 2010 01 01 2010 06 30 2011 06 30 2010 12 31 2010

Income taxes 36 74 68 158

Profit of current operationsnet of tax 65 108 (24)

Net result from non-current assets held for sale 37 39 282 220

Net profit 104 390 196

Minorities 16 (19) 112

Group net profit (loss) for the year/period 38 120 371 308

Earnings per share (in euro):

– basic 0.0386 0.1194 0.0993

– basic, from operating activities 0.0260 0.0296 0.0286

– diluted 0.0386 0.1194 0.0993

– diluted, from operating activities 0.0260 0.0296 0.0286


Consolidated income statement

31

Millions of euro 06 30 2011 06 30 2010 12 31 2010

Net income/(loss) for the period/year (A) 104 390 196

Effective portion of gains/(losses) on cash flow hedges (4) 20 34

Gains/(losses) on the re-measurement of financial assets available for sale – (316) (316)

Tax effect of other gains/(losses) 1 (40) (45)

Total other gains/(losses) net of the tax effect of companies consolidated on a line-by-line basis (B) (3) (336) (327)

Other gains/(losses) of companies valued at equity net of the tax effect ( C ) 10 (1) 21

Total gain/(loss) (A) + (B) + ( C ) 111 53 (110)

Total gain/(loss) attributable to :

Shareholders of the parent company 108 52 (8)

Minority interests 3 1 (102)

Consolidated statement of comprehensive income


32

Millions of euro 06 30 2011 12 31 2010 06 30 2010

CASH AND CASH EQUIVALENTS AT THE BEGINNINGOF THE PERIOD/YEAR 132 25 25

EPCG cash brought in – 95 –

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR 132 120 25

Operating activities

Net income for the period/year (**) 66 (26) 174

Depreciation of tangible assets 172 342 155

Amortization of intangible assets 41 85 41

Tangible and intangible asset write-downs/disposals 3 23 17

Result from investments carried at equity 13 231 (50)

Write-down/disposal of investments – 5 –

Change in assets and liabilities (*) 103 183 61

Cash flows from operating activities 398 843 398

Investing activities

Investments in tangible assets (67) (247) (103)

Investments in intangible assets and goodwill (51) (85) (38)

Investments in shareholdings and securities (*) (5) (14) (6)

Disposal of fixed assets and shareholdings 56 347 307

Dividends received from investments carried at equity and other investments 4 59 58

Cash flows from investment activities (63) 60 218

FREE CASH FLOW 335 903 616

Financing activities

Change in financial assets (*) (38) (94) (65)

Change in financial liabilities (*) (107) (552) (259)

Dividends paid by the parent company (186) (217) (217)

Dividends paid by subsidiaries (6) (28) (28)

Cash flows from financing activities (337) (891) (569)

CHANGE IN CASH AND CASH EQUIVALENTS (2) 12 47

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR 130 132 72

(*) Excluding balances with counter-entry to equity and other balance sheet items.(**) The result for the period/year is stated net of gains from the disposal of investments.

Consolidated cash flowstatement


33

Description Share Treasury Cash Flow Millions of euro capital shares Hedge reserve Note 13 Note 14 Note 15

Equity at December 31, 2009 1,629 (61) (3)

Changes in the first half of 2010

Allocation of 2009 net income

Distribution of dividends

IAS 32 and IAS 39 reserves (*) 12

Put option on Delmi S.p.A. shares

Put option on Aspem Group shares

Other changes

Group and minorities net profit for the period

Equity at June 30, 2010 1,629 (61) 9

Changes in the second half of 2010



Put option on Aspem Group shares

Put option on Varese Risorse S.p.A. shares

Put option on Abruzzo Energia S.p.A. shares

Consolidation of EPCG Group

Other changes


Equity at December 31, 2010 1,629 (61) 31

Changes in the first half of 2011

Allocation of 2010 net income

Distribution of dividends



Other changes

Dividends resolved but not yet distributed


Equity at June 30, 2011 1,629 (61) 35

(*) These are included in the statement of comprehensive income

Consolidated statement ofchanges in equity


34

Result from Other resrves Group net Total Minority Total available- and income Group interests net for-sale retained for the net equity equity financial earnings period/year assets Note 15 Note 15 Note 16 Note 17

350 1,695 80 3,690 905 4,595

80 (80)

(217) (217) (28) (245)

(350) (338) 1 (337)

3 3 3

1 1

5 5 (4) 1

371 371 19 390

– 1,566 371 3,514 894 4,408

22 9 31

22 22 22

(1) (1)

1 1

3 3 (1) 2

3 3 572 575

2 2

(63) (63) (132) (195)

– 1,594 308 3,501 1,344 4,845

308 (308)

(186) (186) (6) (192)

4 3 7

6 6 6

(8) (8) (6) (14)

(112) (112) (112)

120 120 (16) 104

– 1,602 120 3,325 1,319 4,644


Consolidated statement of changes in equity

35

Millions of euro 06 30 2011 of wich 12 31 2010 of wich 06 30 2010 of wich Related Related Related Parties Parties Parties (note n. 40) (note n. 40) (note n. 40)

NON-CURRENTS ASSETS

Tangible assets 4,765 4,872 4,071

Intangible assets 1,561 1,552 1,479

Shareholdings carried at equity 2,401 2,401 2,411 2,411 3,124 3,124

Other non-current financial assets 69 5 40 6 47 7

Deferred tax assets 426 430 423

Other non-current assets 120 113 145

Total non-current assets 9,342 9,418 9,289

CURRENT ASSETS

Inventories 235 239 210

Trade receivables 1,717 175 2,141 120 1,709 124

Other current assets 372 275 379

Current financial assets 80 10 56 9 6 5

Current tax assets 25 18 95

Cash and cash equivalents 130 132 72

Total current assets 2,559 2,861 2,471

NON-CURRENT ASSETS HELD FOR SALE 39 82 36

TOTAL ASSETS 11,940 12,361 11,796

Consolidated balance sheetpursuant to Consob resolution 17221 of March 12, 2010

Assets


36

Millions of euro 06 30 2011 of wich 12 31 2010 of wich 06 30 2010 of wich Related Related Related Parties Parties Parties (note n. 40) (note n. 40) (note n. 40)

EQUITY

Share capital 1,629 1,629 1,629

(Treasury shares) (61) (61) (61)

Reserves 1,637 1,625 1,575

Net profit for the year – 308 –

Net profit for the period 120 – 371

Equity pertaining to the Group 3,325 3,501 3,514

Minority interests 1,319 1,344 894

Total equity 4,644 4,845 4,408

LIABILITIES


Non-current financial liabilities 3,767 3,736 3,759

Deferred tax liabilities 480 493 471

Employee benefits 276 276 269

Provisions for risks, charges and liabilitiesfor landfills 459 460 427

Other non-current liabilities 156 177 199

Total non-current liabilities 5,138 5,142 5,125

Current liabilities

Trade payables 1,221 80 1,450 26 1,026 19

Other current liabilities 590 17 404 16 550

Current financial liabilities 318 2 448 3 669 4

Tax liabiliities 11 56 9

Total current liabilities 2,140 2,358 2,254

Total liabilities 7,278 7,500 7,379

LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE 18 16 9

TOTAL EQUITY AND LIABILITIES 11,940 12,361 11,796

Equity and liabilities


Consolidated balance sheet pursuant to Consob Resolution no. 17221 of

March 12, 2010

37

Millions of euro 01 01 2011 of wich 01 01 2010 of wich 01 01 2010 of wich 06 30 2011 Related 06 30 2010 Related 12 31 2010 Related Parties (1) Parties Parties (note n. 40) (nota n. 40) (note n. 40)

Revenues

Revenues from the sales of goods and services 2,996 365 2,815 129 5,923 268

Other operating income 54 1 43 1 118 1

Total revenues 3,050 2,858 6,041

Operating expenses

Expenses for raw materials and services 2,133 173 1,988 12 4,129 27

Other operating expenses 153 70 142 1 318 2

Total operating expenses 2,286 2,130 4,447

Labour costs 287 3 258 554

Gross operating income - EBITDA 477 470 1,040

Depreciation, amortization,provisions and write-downs 254 238 542

Net operating income - EBIT 223 232 498

Financial balance

Financial income 18 3 7 3 58 5

Financial expenses 85 113 190

Portion of income and charges when shareholdings are caried at equity (13) (13) 50 50 (231) (231)

Total financial balance (80) (56) (363)

Other non-operating income 1 – –

Other non-operating expenses (5) – (1)

Profit before tax 139 176 134

(1) The comparative figures for January-June 2010 for income statement items relating to revenues and operating expenses, depreciation and

amortization and financial management have been reclassified to reflect the application of IFRS 5.

Consolidated income statement (1)pursuant to Consob Resolution no. 17221 of March 12, 2010


38

Millions of euro 01 01 2011 of wich 01 01 2010 of wich 01 01 2010 of wich 06 30 2011 Related 06 30 2010 Related 12 31 2010 Related Parties Parties Parties (note n. 40) (note n. 40) (note n. 40)

Income taxes 74 68 158

Income from current operations net of tax 65 108 (24)

Net result from non-current assetsheld for sale 39 282 220

Net profit 104 390 196

Minorities 16 (19) 112

Group net profit(loss) for the year/period 120 371 308


Consolidated income statement pursuant to Consob Resolution no. 17221

of March 12, 2010

39

0.2.1Notes to the condensedhalf-year consolidated

financial statements

A2A S.p.A. is a company incorporated under Italian law.

A2A S.p.A. and its subsidiaries (the “Group”) operate both in Italy and abroad, especially

following the acquisitions in France and Montenegro which took place in recent years.

The A2A Group mainly operates in the following sectors:

• the production, sale and distribution of electricity;

• the sale and distribution of gas;

• the production, sale and distribution of heat through district heating networks;

• waste management (from collection and sweeping to disposal) and the construction and

management of integrated waste disposal plants and systems, including making these

available for other operators;

• integrated water cycle management.

General informationon A2A S.p.A.


41

The half-year financial report (hereafter the “half-year report”) at June 30, 2011 of the A2A

Group is presented in millions of euro; this is also the currency of the economies in which the

Group operates.

The half-year report of the A2A Group at June 30, 2011 has been prepared:

• in compliance with Legislative Decree no. 58/1998 (art. 154-ter) and subsequent

amendments, and with the Issuers’ Regulations published by Consob;

• in accordance with the International Financial Reporting Standards (IFRS) issued by the

International Accounting Standard Board (IASB) and approved by the European Union.

In preparing the half-year report the Group adopted the same principles used in the

preparation of the annual financial report at December 31, 2010, other than the principles and

interpretations described in detail in the paragraph below “Changes in accounting principles”

adopted for the first time on January 1, 2011.

This half-year report at June 30, 2011, which has been subject to a review by the auditors, was

approved by the Management Board on August 3, 2011 which authorized publication.

Half-year financial report


42

The half-year report includes a statement of financial position, an income statement, a cash

flow statement and a statement of changes in equity in order to facilitate an understanding of

the economic performance of the Group for the first six months of 2011 and its financial

position at the end of the period.

The Group has adopted a format for the statement of financial position which presents

current and non-current assets and current and non-current liabilities as separate

classifications, as required by paragraphs 60 and following of IAS 1 (Revised).

The income statement is presented by nature, a format which is considered more

representative than a presentation by function. The selected format is in agreement with the

presentation used by the Group’s major competitors and is line with international practice.

The results of ordinary operations are shown in the income statement separately from

income or expense deriving from transactions that are non-recurring in the business's

ordinary operations, such as gains or losses on the sale of investments and other non-

recurring income or expense; this makes it easier to measure the effective performance of the

Group’s ordinary operating activities.

The cash flow statement has been prepared using the indirect method as permitted by IAS 7.

The statement of changes in equity has been prepared in accordance with IAS 1 (Revised).

The formats adopted for the financial statements are the same as those used to prepare the

annual consolidated financial statements at December 31, 2010.

Financial statements


43

The half-year financial report at June 30, 2011 has been prepared on a historical cost basis, with

the exception of those items which under IFRS must or can be measured at fair value.

The consolidation principles, the accounting principles, the accounting policies and the

methods of measurement used in the preparation of the half-year report are consistent with

those used to prepare the annual consolidated financial statements at December 31, 2010, to

which reference should be made for completeness.

Basis of preparation


44

The accounting standards adopted for the first half of 2011 are the same as those used in the

prior year, with the exception of the changes discussed in the paragraph below “Accounting

standards, amendments and interpretations approved by the European Union and taking

effect from the current period and applied where appropriate”.

In the paragraph below “Accounting standards, amendments and interpretations still to be

approved by the European Union” a summary is provided of the changes which will be

adopted in future periods, indicating to the extent possible the estimated effects on the half-

year report of the A2A Group.

Accounting standards, amendments and interpretations approved bythe European Union and taking effect from the current period with theestimated effects for the Group Certain changes to international accounting standards and their interpretations became

applicable on January 1, 2011, none of which led to any significant effects for the Group. The

main changes were as follows:

• IAS 24 (Revised) “Related Party Disclosures”: approved on July 19, 2010 and applicable

from January 1, 2011, this amends the definition of a related party and adds to the minimum

information to be provided. The current principle requires additional information on

relationships, transactions and balances with related parties, including commitments, to

be provided in the consolidated and separate financial statements of a parent, a joint

venturer or an investor, and that this be disclosed in accordance with IAS 27 “Consolidated

and Separate Financial Statements”. The current principle is also applicable to separate

financial statements.

• IFRS 3 “Business Combinations”: applicable prospectively from July 1, 2010, the

amendment requires that the option to measure non-controlling interests at either fair

value or at the proportionate share of the net assets of the acquired company at the

acquisition date should only include non-controlling interests entitling the owner to a

portion of net assets on liquidation. All other non-controlling interests must be measured

at their fair value at the date of acquisition unless another IFRS requires a different

measurement method to be used. This change additionally clarifies that the requirement

Changes in internationalaccounting standards


45

to measure quotaholdings or shareholdings of the acquirer which replace the share-based

payments of the acquiree in accordance with IFRS 2 at the acquisition date (market based

measure) must also include the share-based payments of the acquiree which are not

replaced.

• IFRS 7 “Financial Instruments: Disclosures”: from January 1, 2011, emphasis is given to the

disclosures of a qualitative and quantitative nature required by the standard regarding the

nature and extent of the risks implicit in financial instruments. This approach should assist

the users of the financial statements to link the information that is presented and obtain a

general description as to the nature and extent of the risks resulting from financial

instruments. Finally, the requirement to provide disclosures concerning financial assets

which have expired but have been renegotiated or written down and that relating to the

fair value of collateral have been eliminated. An amendment was made to this standard in

October 2010 concerning the transfer of financial assets. This amendment will allow users

of financial statements to improve their understanding of transfers of financial assets (for

example securitizations), including an understanding of the possible effects of any risks

that may remain with the entity that transferred the assets. In particular, this amendment

requires a qualitative description to be given of the nature of the link between the assets

transferred and the associated liabilities together with a table setting out the fair value of

the assets transferred and the associated liabilities. Further, additional disclosures

concerning the amount of the cash flows that would be required in the case of a future

repurchase of the transferred assets must be provided. The amendment also requires

additional disclosures to be provided regarding any quantitatively significant transfers

carried out at year end. The amendment is applicable from July 1, 2011.

• IAS 1 “Presentation of Financial Statements”: the amendment is applicable from January 1,

2011 and establishes that an entity may present the analysis relating to other

comprehensive income either in the statement of changes in equity or in the notes to the

financial statements. Early application of the amendment is permitted.

• IAS 34 “Interim Financial Reporting”: from January 1, 2011 the disclosures relating to

significant events reported in interim financial statements must include an update of the

significant events discussed in the annual financial statements, with specific reference to

financial instruments and their fair value.

Accounting standards, amendments and interpretations approved bythe European Union and taking effect from the current period with noeffects for the Group

The following standards and interpretations already approved by the European Union and

published in the European Union will become applicable over the next few years:


Changes in international accounting standards

46

• IFRS 1 “First-time Adoption of International Financial Reporting Standards”: the

amendment is applicable from January 1, 2011 and clarifies that if an entity makes changes

to its accounting manual or the use of the exemptions permitted by IFRS following the

publication of interim financial statements in accordance with IAS 34, but before the first

financial statements prepared in accordance with International Financial Reporting

Standards are published, it must motivate these changes and update the reconciliation

between its previous accounting standards and IFRSs. The requirements of IAS 8

“Accounting Policies, Changes in Accounting Estimates and Errors” are not applicable in

these circumstances. Early application of the amendment is permitted.

• IFRIC 13 “Customer Loyalty Programmes”: the amendment, applicable from January 1,

2011, establishes that an entity may estimate the fair value of award credits by referring to

the fair value of the awards with which these credits can be redeemed.

Accounting standards, amendments and interpretations still to beapproved by the European Union

The following standards and interpretations have not been applied as at the present time the

competent bodies of the European Union have still to complete their approval process.

• IFRS 10 “Consolidated Financial Statements”, published by the IASB on May 12, 2011, is

applicable from January 1, 2013. IFRS 10 establishes the criteria for the presentation and

preparation of consolidated financial statements and emphasizes the concept of control,

regardless of the nature of the investment held by the entity preparing the consolidated

financial statements. Control exists if and only if the investor has all of the following

simultaneously:

1. power to influence and direct the relevant activities of the investee;

2. exposure or rights to variable returns from its involvement with the investee;

3. the ability to use its power over the investee to affect the amount of the investor’s

returns.

The power to influence the activities which significantly affect the investee’s returns

(relevant activities) is most generally exercised through voting rights (including potential

voting rights) but also on the basis of contractual agreements. In the case of control by

virtue of voting rights, the relevant activities are represented by operating activities

(development, purchase and sale of products) and by activities connected with financial

management (obtaining and negotiating loans, the acquisition and disposal of financial

assets).

Variable returns include amongst other things dividends, remuneration linked to the

supply of services by the parent to the activities of the subsidiary and benefits of a fiscal

nature.



47

The third condition in assessing whether there is control considers the interaction

between the first two. In certain circumstances an entity may have an interest in a

particular sets of assets and liabilities of the investee on the basis of a legal or contractual

restriction. IFRS 10 establishes that for the purpose of determining whether control exists,

this set of assets and liabilities may be considered a separate entity only if it is economically

separate from the entity as a whole and hence a subsidiary for the purpose of the

consolidated financial statements. At the same time as this standard was published a

revised version was also published of IAS 27 “Separate Financial Statements”, which

maintains its role as the general reference standard on the subject of separate financial

statements, and IAS 28 “Investments in Associates and Joint Ventures”; in addition, the

interpretation SIC 12 “Consolidation - Special Purpose Entities” has been superseded.

Early application of the standard in question is permitted.

• IFRS 11 “Joint Arrangements”, published by the IASB on May 12, 2011, is applicable from

January 1, 2013. This standard establishes that a joint arrangement is an arrangement of

which two or more parties have joint control and that joint control only exists when the

decisions about the relevant activities require the unanimous consent of the parties

sharing control. IFRS 11 identifies two separate types of joint arrangements:

1. joint operations;

2. joint ventures.

The two types differ on the basis of the rights and obligations which arise for the parties to

a joint arrangement; in a joint operation the parties have rights regarding the assets and

obligations regarding the liabilities of the joint arrangement, while in a joint venture the

parties have rights to the net assets of the arrangement. IFRS 11 establishes that the assets,

liabilities, revenue and expenses of a joint operation should be recognized by the parties on

the basis of their interest, while on the other hand joint ventures should be recognized by

the parties using the equity method, as required by IAS 28 “Investments in Associates and

Joint Ventures”, with the only exclusion being the possibility to select proportionate

consolidation (previously permitted by IAS 31 “Interests in Joint Venture”, superseded by

the introduction of IAS 28 (Revised)).

Joint operations are recognized in the same way in both the separate and consolidated

financial statements by recognizing assets, liabilities, revenue and expenses on the basis of

the percentage interest, while joint ventures, as well as investments in subsidiaries and

associates, may be recognized in the separate financial statements either at cost or on the

basis of IFRS 9 “Financial Instruments” (and IAS 39 “Financial Instruments: Recognition

and Measurement”), as required by IAS 27 “Separate Financial Statements”. For details of

the disclosures to be provided in the notes to the financial statements reference should be

made to the requirements of the new IFRS 12 “Disclosure of Interests in Other Entities”.

Early application of the standard is permitted.



48

• IFRS 12 “Disclosures of Interests in Other Entities”, issued by the IASB on May 12, 2011, is

applicable from January 1, 2013; this standard establishes the minimum disclosures that an

entity must provide, integrating these with those already determined by other standards,

to assist users of the financial statements when assessing the nature and risks associated

with the interests held by the entity in subsidiaries, associates and joint arrangements (as

defined in IFRS 11). In particular, an entity must provide information concerning the

assumptions it has made in determining the existence or otherwise of control, including

joint control, and the significant influence exercised over another entity. Early application

of the standard is permitted.

• IFRS 13 “Fair Value Measurement”, issued by the IASB on May 12, 2011, is applicable from

January 1, 2013. IFRS 13 defines fair value, provides guidance on measuring fair value and

introduces the disclosures to be provided about how it has been measured. The standard

does not establish when measurement at fair value is required but explains the way in

which fair value is calculated when its use is required by other standards. The new

standard is applicable to all transactions, of a financial and non-financial nature, with the

exception of transactions recognized on the basis of IFRS 2 “Share-based Payment”,

leasing transactions within the scope of IAS 17 “Leases” and transactions recognized on

the basis of net realizable value such as in IAS 2 “Inventories” or value in use such as in IAS

36 “Impairment of Assets”. The standard defines fair value as the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants. If transactions are directly observable in a market, the calculation of

fair value may be relatively easy, but if this is not the case then a valuation technique is

used. The standard describes three different valuation techniques to be used to calculate

fair value, represented by the “market approach”, a technique that uses prices and other

relevant information generated by market transactions involving identical or comparable

(i.e. similar) assets and liabilities, the “income approach”, a technique that consists in

discounting cash inflows and cash outflows, and the “cost approach”, a technique that

requires an entity to calculate the amount that would be required currently to replace the

service capacity of an asset. In terms of the disclosures to be provided in the financial

statements, IFRS 13 extends the three-level hierarchy of fair value already required by IFRS

7 “Financial Instruments: Disclosures”, where the levels depend on the inputs used in the

valuation technique, to all of the assets and liabilities forming part of its scope. The

information provided by certain disclosures may vary on the basis of whether the fair value

measurement has been made on a recurring or non-recurring basis; recurring fair value

measurements are those that other IFRSs require or permit at the end of each reporting

period, while non-recurring fair value measurements are those that other IFRSs require or

permit in particular circumstances. Early application of the standard is permitted.

• IAS 27 (Revised) “Separate Financial Statements”, issued by the IASB on May 12, 2011, is



49

applicable from January 1, 2013; at the same time as IFRS 10 “Consolidated Financial

Statements” was published a revised version was also published of this standard which

maintains its role as the general reference standard on the subject of separate financial

statements. This standard applies to the measurement of investments in subsidiaries,

associates and joint ventures in the separate financial statements of the parent. Joint

ventures and investments in subsidiaries and associates may be recognized in the separate

financial statements either at cost or on the basis of IFRS 9 “Financial Instruments” (and

IAS 39 “Financial Instruments: Recognition and Measurement”). If in accordance with IFRS

10 “Consolidated Financial Statements” a parent company decides not to prepare

consolidated financial statements, it must provide disclosures in its separate financial

statements about its investments in subsidiaries, associates and joint ventures, their

principal places of business (and country of incorporation if different), its proportion of

the ownership interest held in each individual investee and a description of the method

used to account for the investments. Early application of the standard is permitted but

only if an entity applies it in conjunction with IFRS 10 “Consolidated Financial Statements”,

IFRS 11 “Joint Arrangements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28

(as amended in 2011).

• IAS 28 (Revised) “Investments in Associates and Joint Ventures”, issued by the IASB on

May 12, 2011, is applicable from January 1, 2013; at the same time as IFRS 10 “Consolidated

Financial Statements” was published a revised version was also published of this standard,

which has the purpose of establishing the criteria for accounting for investments in

associates and joint ventures. An entity with joint control of, or significant influence over,

an investee must account for its investment using the equity method. Early application of

the standard is permitted but only if an entity applies it in conjunction with IFRS 10

“Consolidated Financial Statements”, IFRS 11 “Joint Arrangements”, IFRS 12 “Disclosure of

Interests in Other Entities” and IAS 27 (as amended in 2011).

• IAS 1 “Presentation of Financial Statements”; this amendment applicable from January 1,

2012, relates to the presentation of the figures included in the statement of

comprehensive income. In particular, it keeps the option of presenting the income

statement and the statement of other comprehensive income in either a single statement

or in two separate statements with one following directly after the other. In addition an

entity must group together in the statement of comprehensive income the items which

will be reclassified to profit and loss in subsequent periods: amounts may be presented

either net of the related tax effects or before the related tax effects. Early application of

the amendment is permitted.

• IAS 19 “Employee Benefits”, applicable from January 1, 2013; the changes made in the

amendment may be grouped into three main categories:

(i) recognition and presentation in the financial statements;



50

(ii) disclosures;

(iii) additional changes.

The first category of changes concerns defined benefit plans. In particular the corridor

method used as a means of recognizing actuarial gains and losses has been eliminated,

with the simultaneous requirement being introduced to recognize these items directly in

profit or loss.

The change in the defined benefit obligation is then separated into three components in

the income statement:

1. an operating component (service cost);

2. a financial component (finance cost);

3. a measurement component (remeasurement cost).

As far as disclosures are concerned, in addition to the elimination of the disclosure relating

to the deferral of the recognition of income components (which is no longer required

following the elimination of the option to select the corridor method), information is

required concerning the features of the plans and the related amounts recognized in the

financial statements and the risks involved in the plans including a sensitivity analysis for

the demographic risk together with details about any participation in multiemployer

pension plans.



51

The condensed half-year consolidated financial statements of the A2A Group at June 30, 2011

include the figures of the parent A2A S.p.A. and those of the subsidiaries over which A2A S.p.A.

holds, directly or indirectly, the majority of the voting rights which may be exercised in an

ordinary shareholders’ meeting. In addition, companies in which the parent exercises joint

control with other entities (joint ventures) and those over which it has a significant influence

are consolidated using the equity method.

Changes in the scope of consolidation

The results and assets and liabilities of the Montenegro company EPCG acquired during 2009

have been consolidated on a line-by-line basis in these condensed half-year consolidated

financial statements, with 56.3% of its results and net assets being attributed to non-

controlling interests. This differs from the treatment adopted for the first half of 2010.

This company was included in the consolidation scope of A2A S.p.A. for the six months ended

June 30, 2010, but was consolidated on a “one-line” basis as control was acquired at the

beginning of 2010, as discussed in further detail in the financial statements for the year ended

December 31, 2010.

Scope of consolidation


52

Consolidation policies

Subsidiaries

The consolidation scope of the A2A Group comprises the parent A2A S.p.A. and the companies

over which it exercises direct or indirect control. Subsidiaries are consolidated from the date

on which the Group effectively acquires control and cease to be consolidated on a line-by-line

basis from the date on which control is transferred to a company outside of the Group.

Associates and joint ventures

Investments in associates, namely those in which the A2A Group has a considerable interest

and is able to exercise significant influence, and those over which A2A has joint control

together with other entities (joint ventures) are accounted for using the equity method.

Gains and losses attributable to the Group are recognized in the half-year financial

statements from the date on which the significant influence or joint control commenced.

In the event that the loss attributable to the Group exceeds the carrying amount of the

investment, the carrying amount is reduced to zero and any excess loss is provided for to

the extent that the Group has legal or constructive obligations in respect of the associate to

make good its losses or, in any case, to make payments on its behalf.

Potential voting rights

If the A2A Group holds call options on shares or other equity instruments that are convertible

into ordinary shares or similar instruments having the potential, if exercised or converted, to

give the Group voting rights or reduce the voting rights of third parties (“potential voting

rights”), such potential voting rights are taken into consideration when assessing whether or

not the Group has the power to govern or influence another company's financial and

operating policies.

Consolidation policies and procedures


53

Consolidation procedures

General procedureThe financial statements of the subsidiaries, associates and joint ventures consolidated by the

A2A Group are prepared at the end of each reporting period using the same accounting

policies as the parent. Any items recognized by using different accounting principles are

adjusted during the consolidation process to bring them into line with Group accounting

policies. All intragroup balances and transactions, including any unrealized profits arising

from transactions between Group companies, are fully eliminated.

Unrealized gains and losses deriving from transactions with associates and joint ventures are

eliminated in proportion to the Group’s interest. Unrealized losses are eliminated, unless they

represent a loss in value of the assets that have been sold.

In preparing the half-year financial statements the assets, liabilities, income and expenses of

the companies being consolidated are included in their entirety on a line-by-line basis, stating

the portion of equity and net income for the period attributable to non-controlling interests

separately in the balance sheet and income statement.

The carrying amount of the investment in each subsidiary is eliminated against the

corresponding share of its net equity, including any adjustments to fair value at the acquisition

date; any differences arising are accounted for in accordance with IFRS 3. Transactions with

non-controlling interests which do not lead to the loss of control in consolidated companies

are accounted for using the economic entity view approach.

Consolidation procedure for assets and liabilities held for sale (IFRS 5)

In the case of particularly large amounts and exclusively in connection with non-current assets

and liabilities held for sale, and only in this case, in accordance with the requirements of IFRS 5

the related intragroup financial receivables and payables are not eliminated in order to

provide a clear presentation of the financial impact of their possible disposal.

Effect on consolidation procedures of certain contracts concerning theshares/quotas of Group companies

a) Option contracts between A2A S.p.A. and Società Elettrica Altoatesina SEL S.p.A.

relating to a part of their investment in Delmi S.p.A.

A2A S.p.A. has signed option contracts with Società Elettrica Altoatesina SEL S.p.A. (SEL) in

relation to the portion of the shares it holds in Delmi S.p.A..

Under the option contracts between A2A S.p.A. and SEL S.p.A., the latter has the right to sell to



54



A2A S.p.A. and A2A S.p.A. has the right to purchase from SEL S.p.A. two lots of Delmi S.p.A.

shares, representing 50% and 35% respectively of SEL S.p.A.’s shareholding in Delmi S.p.A.

(currently 10% of Delmi S.p.A.'s share capital).

The strike price of these options will be calculated for each lot based on various formulas that

take into account SEL S.p.A.’s initial investment and/or the value of Edison S.p.A.'s shares at the

time the options are exercised, depending among other things in the case of SEL S.p.A.'s put

options whether SEL S.p.A. - at the time of exercising the option - has or has not become the

owner of certain of Edison' S.p.A.s hydroelectric power plants located in the Province of

Bolzano.

If exercised, the SEL S.p.A. put options and the A2A S.p.A. call options can be implemented in

stages. A2A S.p.A and SEL S.p.A. have renegotiated the expiry dates of these options,

postponing them beyond the initial deadline. In part, this deferral was due to the fact that the

parties could not agree on whether the conditions for the exercising of one of SEL S.p.A.’s put

options had been satisfied or not. As a result, the options are still outstanding and the new

expiry date is not later than 2015.

In accordance with paragraph 23 of IAS 32, the Group has recognized the present value of the

estimated outlay as a liability.

Changes in the present value of this liability caused by the passing of time are considered as

financial expenses and are recognized in profit or loss.

There is still some uncertainty in international accounting standards as to how to treat the

difference between the present value of the strike price of the put options and the carrying

amount of the non-controlling interests. In the absence of an interpretation of this question

by the IFRIC, the Group has decided to present this difference as a deduction from equity

attributable to the Group (if positive) or as an increase in equity attributable to the Group (if

negative) as an alternative to adjusting goodwill.

This is in line with previous decisions taken by the Group. Accordingly, any changes in the

liability that do not depend on time result in adjustments to Group equity.

If the options expire without being exercised, the liability will be reclassified to equity,

reinstating the non-controlling interests.

The condensed half-year consolidated financial statements at June 30, 2011 present a liability

to third parties for the possible exercise of the put options on the shares of Delmi S.p.A. of 90

million euro (93 million euro at December 31, 2010), a reduction in non-controlling interests of

157 million euro (unchanged with respect to December 31, 2010), a positive change in equity

attributable to the Group of 6 million euro (92 million euro at December 31, 2010) and financial

expense of 2 million euro (5 million euro at December 31, 2010).

The share of Delmi S.p.A.’s result remains 51% as the above options do not currently give A2A

access to the economic benefits associated with the shares under option.

55

b) Call option for the purchase of 1% of the share capital of ASM Novara S.p.A.

A2A S.p.A. owns 50% of the shares of ASM Novara S.p.A., a company with a share capital of one

million euro set up with other shareholders in order to build and manage a district heating

network in the town of Novara.

As a result of an agreement between the shareholders of ASM Novara S.p.A., A2A S.p.A. holds

a call option to buy 1% of the share capital of that company. Similarly the other shareholders,

who hold the remaining 50%, have a put option to sell 1% of the share capital to A2A S.p.A..

Exercising one of these options would give A2A S.p.A. control over ASM Novara S.p.A..

Any of the parties can exercise their options within three years of the satisfaction of certain

conditions relating to the construction of the district heating network in Novara: at June 30,

2011 these conditions had not yet been fulfilled.

IAS 27, paragraph 14, establishes that when assessing whether an entity has the power to

govern the financial and operating policies of another entity it has to take account of the

“potential voting rights” that would derive from exercising the options, providing they are

currently exercisable. Such potential voting rights should then be added to the existing voting

rights in order to calculate the total interest held in the share capital, which in turn establishes

the method of consolidation to be applied to the investee.

Potential voting rights that are not currently exercisable are understood as being, for example,

those that cannot be exercised until a future date or until some future event takes place.

Since as explained above the potential voting right held by A2A S.p.A. in ASM Novara S.p.A. is

not currently exercisable, the shareholding in ASM Novara S.p.A. is consolidated using the

equity method.

When the option right is exercised an assessment will be made as to whether ASM Novara

S.p.A. is controlled by A2A S.p.A. in order to decide on the consolidation method to be used.

c) Option granted to the Municipality of Varese for the sale of 10% of Aspem S.p.A.

and 9.8% of Varese Risorse S.p.A.

A2A S.p.A. holds 90% of the shares of Aspem S.p.A., a company that provides local public

services in the city of Varese and in other municipalities in the province of Varese.

Under the shareholders’ agreement between A2A S.p.A. and the Municipality of Varese, the

latter has the right, but not the obligation, to sell (put option) to A2A S.p.A. 9.8% of the share

capital of Aspem S.p.A. and 10% of the share capital of Varese Risorse S.p.A. (held 90% by

Aspem S.p.A.). The two shareholdings must be purchased together within the same context.

The Municipality of Varese can exercise its option after the expiry date of the period of

intratransferability of the shares in Aspem S.p.A. and Varese Risorse S.p.A., which lasts for

three years from the date of signing the shareholders’ agreement: at June 30, 2011, this term



56

was still in course. These transactions have been valued on the basis of purchase value for

Aspem S.p.A. and enterprise value for Varese Risorse S.p.A..

In accordance with paragraph 23 of IAS 32, the Group has recognized the present value of the

estimated outlay as a liability which it will not be able to avoid if the above option is exercised,

with a corresponding entry to equity.

The condensed half-year consolidated financial statements at June 30, 2011 show a liability of

4 million euro to the Municipality of Varese for the possible exercising of the put option on the

shares of Aspem S.p.A. and Varese Risorse S.p.A., with a corresponding reduction in the equity

attributable to non-controlling interests.

d) Option on the sale of approximately 5.0% of the share capital of PRVA BANKA CME

GORE A.D.

At December 31, 2010 the Montenegro company EPCG held an equity interest in the bank

PRVA BANKA CME GORE A.D. equal to 18.24% of its share capital; in April 2011 EPCG

subscribed a capital increase, resolved by the company’s board of directors on April 18, 2011,

increasing its holding to 24.10%. In addition, at the same time a put option contract was signed

with a group of Montenegro investors, which may be exercised between September 1, 2011 and

November 30, 2011, on a number of preferred shares at a price corresponding to their nominal

value. Exercising this option will allow EPCG to take its investment in PRVA BANKA CME GORE

A.D back to the level of December 31, 2010.



57

Key figures at June 30, 2011 and June 30, 2010 for joint ventures(consolidated at equity)

Key figures for the six months ended June 30, 2011 Edipower Transalpina Companies MetamerMillions of euro di Energia of Ecodeco Group 20% 50% 50% (*) 50%

INCOME STATEMENT

Sales revenue 106.4 2,988 5.6 4.1

Gross operating income - EBITDA 40.7 247 0.1 0.2

% of net sales 38.3% 8.2% 1.8% 4.2%

Depreciation, amortization and write-downs 25.0 204 0.4 –

Net operating income - EBIT 15.7 43 (0.3) 0.2

Profit (loss) for the period 7.9 (30) (0.4) 0.1

BALANCE SHEET

Total assets 771.7 8,385 12.2 9.5

Net equity 422.1 3,397 1.0 1.3

Net debt (214.1) (2,651) (3.4) 4.2

(*) Bellisolina S.r.l., Bergamo Pulita S.r.l., Biotecnica S.r.l. and Sed S.r.l..

Key figures for the six months ended June 30, 2010 Edipower Transalpina Companies Metamer GesiMillions of euro di Energia of Ecodeco Group 20% 50% 50% (*) 50% 47.5%

INCOME STATEMENT

Sales revenues 90.1 2,678 6.3 5.9 1.8

Gross operating income - EBITDA 34.2 312 0.9 0.2 0.4

% of net sales 38.0% 11.7% 14.3% 3.4% 22.2%

Depreciation, amortization and write-downs 28.3 196 0.6 - 0.2

Net operating income - EBIT 5.9 116 0.3 0.2 0.2

Profit (loss) for the period 2.5 29 (0.1) 0.1 0.1

BALANCE SHEET

Total assets 815.9 8,594 12.8 8.1 3.0

Net equity 410.8 3,791 1.2 1.2 1.5

Net debt (247.3) (2,712) (4.3) 3.8 0.2

(*) Bellisolina S.r.l., Bergamo Pulita S.r.l., Biotecnica and Sed S.r.l..



58

Given the nature of the Group’s ordinary activities the interim results may be affected by

changes in the weather during the period.

In this respect reference should be made to the comments on performance by sector

presented below.

Seasonal nature of the business


59


60

The A2A Group operates in the production, sale and distribution of gas and electricity, district

heating, environmental services and the integrated water cycle. These activities in turn form

part of the following sectors:

• Energy Sector;

• Heat and Services Sector;

• Environment Sector;

• Networks Sector;

• Other Services and Corporate Sector.

A2A Group – Areas of activity

Sectors of the A2A Group

Energy

Heat & Services

Environment

Networks

Other services and corporate

Sectors of theA2A Group

Thermoelectricand hydroelectric

plants

EnergyManagement

Sale of electricityand gas

Cogenerationplants

District heatingnetworks

Saleof heat and other

services

Collection andstreet sweeping

Treatment

Disposal ofwaste with

energy recovery

ElectricityNetworks

Gas Networks

Integrated WaterCycle

Other services

Corporate sector

Hydroelectric plants

Thermoelectric plants

Cogeneration plants

Waste disposal plants

Technological partnerships

Geographical areas of activity


61

Millions of euro Energy Heat and Services

01 01 11 01 01 10 01 01 11 01 01 10 06 30 11 06 30 10 06 30 11 06 30 10

Revenues 2,397 2,245 216 198

- of which inter-sectors 102 92 21 16

Gross operating income - EBITDA 163 191 48 39

% of revenues 6.8% 8.5% 22.2% 19.7%

Depreciation, amortization, provisions and write-downs (114) (97) (24) (27)

Net operating income - EBIT 49 94 24 12

% of revenues 2.0% 4.2% 11.1% 6.1%

Net financial income/expense

Non-operating income/expense

Income before tax

Income taxes

Net income

Net income from non-current assets held for sale

Income pertaining to minorities

Group net income for the period

Gross investments (1) 10 16 31 25

(1) See "Investments" in the tables reported in notes 1 and 2 on the tangible and intangible assets in the consolidated financialstatements.

Millions of euro Energy Heat and Services

06 30 11 12 31 10 06 30 11 12 31 10

Tangible assets 2,226 2,290 470 465

Intangible assets 58 60 123 118

Trade receivables and current financial assets 1,333 2,478 139 190

Trade payables and current financial liabilities 1,007 2,075 115 163

Results sector by sector


62


Results sector by sector

Networks Environment Other Services Eliminations Total Group and Corporate

01 01 11 01 01 10 01 01 11 01 01 10 01 01 11 01 01 10 01 01 11 01 01 10 01 01 11 01 01 10 06 30 11 06 30 10 06 30 11 06 30 10 06 30 11 06 30 10 06 30 11 06 30 10 06 30 11 06 30 10

347 301 418 395 113 109 (441) (390) 3.050 2.858

196 165 16 16 106 101 (441) (390)

128 117 152 141 (14) (16) – (2) 477 470

36.9% 38.9% 36.4% 35.7% (12.4%) (14.7%) 15.6% 16.4%

(59) (58) (48) (45) (13) (16) 4 5 (254) (238)

69 59 104 96 (27) (32) 4 3 223 232

19.9% 19.6% 24.9% 24.3% (23.9%) (29.4%) 7.3% 8.1%

(80) (56)

(4)

139 176

(74) (68)

65 108

39 282

16 (19)

120 371

55 60 11 30 11 10 – – 118 141

Networks Environment Other Services Eliminations Total Group and Corporate

06 30 11 12 31 10 06 30 11 12 31 10 06 30 11 12 31 10 06 30 11 12 31 10 06 30 11 12 31 10

1,458 1,481 498 525 224 222 (111) (111) 4,765 4,872

1,361 1,357 38 39 74 72 (93) (94) 1,561 1,552

302 339 268 255 144 128 (389) (1.193) 1,797 2,197

327 298 168 184 303 363 (381) (1.185) 1,539 1,898

63

Changes in the consolidation scope compared to December 31, 2010

There has been a change in the consolidation scope during the six months ended June 30, 2011

compared to the previous year as a result of the sale of the investments in the following

companies:

• Metroweb S.p.A.;

• Coges S.p.A..

Notes to the balance sheet


64

ASSETS

Non-current assets

1) Tangible assets

Millions of euro Balance Changes in the period Balance

at

Invest- Other Disposals Write- Depre- Total at

12 31 2010

ments/ changes and sales downs ciation changes 06 30 201

additions

1

Land 247 247

Buildings 825 2 2 (10) (6) 819

Plant and machinery 3,223 38 20 (2) (118) (62) 3,161

Industrial and commercial equipment 39 1 (2) (1) 38

Other tangible asssets 64 3 (10) (7) 57

Landfills 14 1 2 (1) (2) 14

Assets held under concession (freely transferable) 355 1 (26) (25) 330

Construction in progress and advances 83 20 (23) (3) 80

Leasehold improvements 10 1 1 11

Leased assets 12 (4) (4) 8

Total 4,872 67 1 (2) (1) (172) (107) 4,765

of which:

Historical cost 7,540 67 1 (5) (1) 62 7,602

Accumulated depreciation (2,668) 3 (172) (169) (2,837)

“Tangible assets” amounted to 4,765 million euro (4,872 million euro at December 31, 2010)

representing a net decrease of 107 million euro.

The following changes took place during the period:

• an increase of 67 million euro due to investments, as described in further detail below;

• a decrease of 2 million euro for disposals, net of accumulated depreciation;

• a reduction of 172 million euro relating to the depreciation charge for the period

• an increase of 1 million euro due to other changes

• a decrease of 1 million euro arising from write-downs for the period.

Investments may be analyzed as follows:

• there was an increase of 10 million euro in the energy sector which related mainly to the

following: 6 million euro for work carried out at the Monfalcone and Calabria power

stations; 2 million euro for work carried out at the Cassano d’Adda, Ponti sul Mincio,

Braulio, Stazzona, Lovero, Grosio and Premadio power stations; 1 million euro for work

carried out at the Gissi power station;



65

• investments of 20 million euro in the heat sector regarded the development of the district

heating network in the Milan, Brescia, Bergamo and Varese areas for 16 million euro;

extraordinary maintenance work and the development of plants in the area totaled 4

million euro;

• the increase of 10 million euro in the environment sector relates to development and

maintenance work on the waste treatment and disposal plants and the purchase of

equipment and vehicles for refuse collection

• investments in the networks sector amounted to 24 million euro and mainly related to

development and maintenance work carried out on electricity distribution equipment, the

extension and reconstruction of the low and medium voltage network, the installation of

new electronic meters and the upgrading of primary plants;

• investments in the services sector amounted to 3 million euro.

Included in tangible assets are “Leased assets” for a total of 8 million euro, recognized in

accordance with the accounting treatment required by IAS 17 and for which the outstanding

payable to the lessor at June 30, 2011 amounted to 29 million euro.



66

2) Intangible assets

Millions of euro Balance Changes in the period Balance

at

Invest- Other Disposals/ Write- Amort- Total at

12 31 2010

ments/ changes sales downs ization changes 06 30 2011

additions

Industrial patents and intellectual property rights 22 4 3 (7) 22

Concessions, licenses, trademarks and similarrights 802 41 5 (30) 16 818

Assets in progress 21 6 (9) (3) 18

Other intangible assets 32 (4) (4) 28

Goodwill 675 675

Total 1,552 51 (1) (41) 9 1,561

“Intangible assets” at June 30, 2011 amounting to 1,561 million euro (1,552 million euro at

December 31, 2010) have increased by 9 million euro compared to the balance at December 31,

2010.

Through the application of IFRIC 12, from financial year 2010 intangible assets also include

assets in concession, which mainly relate to gas distribution and the integrated water cycle.

The following changes took place during the period:

• an increase of 51 million euro due to investments;

• a reduction of 41 million euro relating to the amortization charge for the period;

• a decrease of 1 million euro for other changes.

Investments relate mainly to the following:

• “Industrial patents and intellectual property rights”, for 4 million euro, mainly relating to

the CRM software, the new receivables management system and the integration of the

information systems of the A2A Group;

• “Concessions, licenses, trademarks and similar rights ”, for 41 million euro, regarding:

- development and maintenance of the plant in the gas distribution area relating to the

connection of new users and the replacement of low and medium pressure underground

tubing for 22 million euro;

- intervention on the water transportation and distribution network, on the sewage

networks and on the purification plants for 6 million euro;

- investments made in the Coriance Group for 11 million euro;

- other investments of 2 million euro;

• “Assets in progress”, for 6 million euro, relating mainly to the development of new

computer projects and the development and maintenance of plants for the distribution of

gas and water, sewage networks and purification plants.



67

“Other intangible assets” include the “customer list” which refers to the acquisition of

customer portfolios by Group companies. These balances are amortized on the basis of the

estimated benefits expected to be obtained in future years.

More specifically, the outstanding balance of 26 million euro at June 30, 2011 relates mainly to

the amount paid in previous years by subsidiaries for the acquisition of customers of the

business acquired from ENEL in 2003 relating to a portion of the networks and customers of

the city and province of Bergamo, the value of the customers belonging to the gas sector and

the valuation of the customer portfolio of the subsidiary Aspem Energia S.r.l., a company

belonging to the Aspem Group.

Goodwill

Millions of euro Balance at Changes in the period Balance at

12 31 2010

Invest- Other Write- Total 06 30 2011

ments/ changes downs changes additions

Goodwill 675 – – – – 675

Total 675 – – – – 675

There has been no change in goodwill compared with the previous year-end.



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Goodwill at June 30, 2011 may be analyzed as follows:

Cash Generating Unit - Millions of euro

Electricity networks 271

Ecodeco 228

Aprica 5

Gas networks 38

Gas 7

Heat - Italy 21

Heat - France 11

EPCG 94

Total goodwill at June 30, 2011 675

There were no impairment indicators arising during the period which led to write-downs.

Impairment testing is in any case carried out on goodwill at least annually.

3) Investments and other non-current financial assets

Millions of euro Balance at Changes Balance at of which included in the NFP 12 31 2010 in the period 06 30 2011

12 31 2010 06 30 2011

Shareholdings carried according to equity method 2,411 (10) 2,401 – –

Other non-current financial assets 40 29 69 28 27

Total shareholdings and other non-current financial assets 2,451 19 2,470 28 27

"Shareholdings carried according to equity method" decreased by 10 million euro over

December 31, 2010.



69

The following table sets out details of the changes:

Shareholdings carried according to equity method - Millions of euro Total

Balance at December 31, 2010 2,411

Changes during the period

– acquisitions and capital increases –

– measurement at equity (4)

– Dividends received from shareholdings carried at equity (4)

– sales –

– other changes –

– reclassifications (2)

Total changes during the period (10)

Balance at June 30, 2011 2,401

The changes which took place during the first half year, a decrease of a total of 10 million euro,

refer to the measurement of investees accounted for using the equity method for 4 million

euro, in particular Transalpina di Energia S.r.l., Edipower S.p.A., PremiumGas S.p.A., Ergosud

S.p.A. and Dolomiti Energia S.p.A., the rececipt of dividends for 4 million euro, the

reclassification of the investment in Servizi Valdisotto S.p.A. to “Available-for-sale financial

assets” for 1 million euro and to the reclassification of the investment in Coges S.p.A. to “Non-

current assets held for sale” for 1 million euro.

“Other non-current financial assets” had a balance of 69 million euro at June 30, 2011, a rise

of 29 million euro over the previous year end. Of this 24 million euro regards the

reclassification from “Non-current assets held for sale” of the convertible bond issued by

Metroweb S.p.A. and subscribed by A2A S.p.A., maturing on November 30, 2013, 5 million

euro relates to the increase in the investment in Prva banka Crne Gore A.D. Podgorica held by

EPCG, 1 million euro is due to the reclassification of Servizi Valdisotto S.p.A. and ASM Sondrio

S.p.A., merged into the new company named Azienda Energetica Valtellina e Valchiavenna

S.p.A., and 1 million euro results from a decrease in other financial receivables from third

parties. This balance sheet item has been accounted for in accordance with IAS 32 and in this

respect reference should be made to the financial statements for the year ended December

31, 2010 in the section discussing accounting standards.

For more details on the investment in Prva banka Crne Gore A.D. Podgorica held by EPCG

reference should be made to the paragraph “consolidation procedures”.



70

4) Deferred tax assets

Millions of euro Balance at Changes Balance at 12 31 2010 in the period 06 30 2011

Deferred tax assets 430 (4) 426

“Deferred tax assets” amount to 426 million euro, representing a decrease of 4 million euro

over December 31, 2010.

The assets arise from charges for provisions, write-downs, depreciation and amortization

recorded by the Group which become deductible for fiscal purposes in future years.

The Group’s forecasts confirm that these assets will be recovered by achieving adequate

future taxable profit..

5) Other non-current assets


12 31 2010 06 30 2011

Non-current derivatives 98 4 102 98 102

Other non-current assets 15 3 18 – –

Total other non-current assets 113 7 120 98 102

“Other non-current assets” amount to 120 million euro (113 million euro at December 31,

2010) and consist of the following:

• 102 million euro relating to “Derivatives” hedging non-current financial items, regarding

mainly Interest Rate Swap (IRS) contracts hedging the risk of an adverse change in interest

rates on long-term bonds. This item has increased by 4 million euro compared to

December 31, 2010 mainly as the result of the measurement at fair value of the financial

instruments;

• 18 million euro per “Other non-current assets”, principally relating to guarantee deposits

and expenditure incurred but relating to future years.



71

Current assets

6) Inventories


Inventories 239 (4) 235

“Inventories” amount to 235 million euro (239 million euro at December 31, 2010),

representing a decrease of 4 million euro which may be analyzed as follows:

• 1 million euro relating to the decrease in fuel stocks, which at the balance sheet date

totaled 158 million euro compared to 159 million euro at December 31, 2010;

• 6 million euro relating to the decrease in other stocks, which at June 30, 2011 amounted to

15 million euro while the corresponding figure at the end of the previous year was 21 million

euro;

• 3 million euro relating to the increase in materials, which totaled 55 million euro at June 30,

2011 and amounted to 52 million euro at December 31, 2010.

7) Trade receivables


Trade receivables 2,416 (400) 2,016

Provision for receivables write-downs (275) (24) (299)

Total trade receivables 2,141 (424) 1,717

“Trade receivables” amount to 1,717 million euro at June 30, 2011 (2,141 million euro at

December 31, 2010), representing a decrease of 424 million euro due to the following:

• for 429 million euro to a decrease in trade receivables from customers; this item had a

balance of 1,576 million euro at the balance sheet date compared to that of 2,005 million

euro at December 31, 2010;

• for 18 million euro to an increase in receivables from the Municipalities of Milan and

Brescia. This item had a balance of 124 million euro at June 30, 2011 (106 million at the end

of the previous year);

• for 6 million euro to the decrease in receivables from associates; this item had a balance of

8 million euro at the balance sheet date compared to that of 14 million euro at December

31, 2010;



72

• for 7 million euro to the decrease of contracts in progress, which had a total balance of 9

million euro (16 million euro at December 31, 2010).

The Group made sales of receivables without recourse to a factoring company during the

period which amounted to 78 million euro. This enabled the Group to derecognize these

receivables.

The provision for receivables write-downs was increased to 24 million euro as the result of

accruals of 26 million euro made during the year, net of utilizations of 2 million euro, made to

provide against the collection risk arising mainly from the current economic situation.

8) Other current assets


Current derivatives 18 30 48

Other current assets 257 67 324

Total other current assets 275 97 372

“Other current assets”, had a balance of 372 million euro compared to 275 million euro at

December 31, 2010, representing an increase of 97 million euro, and may be analyzed as

follows:

• an increase of 30 million euro in current derivative instruments which at June 30, 2011

amounted to 48 million euro (18 million euro at December 31, 2010);

• a decrease of 3 million euro in assets relating to future years amounting to 27 million euro

at June 30, 2011 (30 million euro at December 31, 2010);

• an increase of 22 million euro in receivables from the Electricity Sector Equalization Fund

which at June 30, 2011 amounted to 73 million euro and at the end of the previous year

totaled 51 million euro;

• an increase of 2 million euro in advances to suppliers, which at the end of the period

amounted to 6 million euro (4 million euro at December 31, 2010);

• an increase of 46 million euro in VAT receivables which at June 30, 2011 amount to 112

million euro (66 million euro at the end of the previous year);

• an increase of 1 million euro in receivables from the personnel (nil at the end of the

previous year);

• a decrease in other receivables of 1 million euro which total 105 million euro (106 million

euro at December 31, 2010).



73

9) Current financial assets

Millions of euro Balance at Changes Balance at of wich included in the NFP 12 31 2010 in the period 06 30 2011

12 31 2010 06 30 2011

Other financial assets 47 23 70 47 70

Financial assets due fromrelated parties 9 1 10 9 10

Total current financial assets 56 24 80 56 80

This item had a balance of 80 million euro at the balance sheet date (56 million euro at

December 31, 2010) and relates to receivables of a financial nature due from associates of 10

million euro.

10) Current tax assets


Current tax assets 18 7 25

“Current tax assets” amount to 25 million euro (18 million euro at December 31, 2010)

representing an increase of 7 million euro over the previous year-end.

11) Cash and cash equivalents


12 31 2010 06 30 2011

Cash and cash equivalents 132 (2) 130 132 130

“Cash and cash equivalents” amounted to 130 million euro at June 30, 2011 compared to 132

million euro at the beginning of the year, representing a decrease of 2 million euro.

Bank deposits include accrued interest even though this had not yet \been credited at the end

of the period.



74

12) Non-current assets held for sale


12 31 2010 06 30 2011

Non-current assets heldfor sale 82 (43) 39 2 2

“Non-current assets held for sale” had a balance of 39 million euro at June 30, 2011 and refer

to the following:

• for 6 million euro to the goodwill relating to BAS-SII S.p.A.;

• for 31 million euro to the assets of BAS-SII. S.p.A.;

• for 2 million euro to the assets relating to certain businesses of the Ecodeco Group.

The change over the period, a decrease of 43 million euro, is due to the following:

• for 24 million euro to the reclassification to “Investments and other non-current financial

assets” of the convertible bond issued by Metroweb S.p.A. and wholly underwritten by

A2A S.p.A.;

• for 17 million euro to the sale of the investment in the associate Metroweb S.p.A., of which

14 million euro relates to the carrying amount of the investment and 3 million euro to the

receipt of the interest previously capitalized on the convertible bond;

• for 4 million euro to the decrease arising from the sale of the investments in Autostrade

Lombarde S.p.A., Autostrade Centropadane S.p.A. and Stradivaria S.p.A.;

• for 2 million euro to an increase in the assets of BAS-SII S.p.A..



75

EQUITY AND LIABILITIES

Equity

Equity, which at June 30, 2011 amounted to 4,644 million euro (4,845 million euro at December

31, 2010), is set out in the following table:


Equity pertaining to the Group:

Share capital 1,629 – 1,629

(Treasury shares) (61) – (61)

Reserves 1,625 12 1,637

Group net income for the year 308 (308) –

Group net income for the period – 120 120

Total Group equity 3,501 (176) 3,325

Minority interests 1,344 (25) 1,319

Total equity 4,845 (201) 4,644

The overall change in equity, a reduction of 201 million euro, is due to net income for the

period of 120 million euro, to the measurement under IAS 32 and 39 of the cash flow hedge

derivatives, to the valuation of the put option on the shares of Delmi S.p.A. and to the change

in non-controlling interests.

13) Share capital

“Share capital” amounts to 1,629 million euro and consists of 3,132,905,277 ordinary shares

each of nominal value 0.52 euro.

14) Treasury shares

“Treasury shares” amount to 61 million euro, unchanged compared to December 31, 2010, and

relate to 26,917,609 own shares held by the parent company A2A S.p.A..



76

15)Reserves


Other reserves 1,625 12 1,637

“Reserves”, which amount to 1,637 million euro (1,625 million euro at December 31, 2010),

consist of the legal reserve, the extraordinary reserve arising on consolidation and the

retained earnings of subsidiaries. This item also includes the cash flow hedge reserve, which

relates to the measurement at the end of the period of the derivatives responding to the

requirements for hedge accounting.

The other reserves also include the effect of applying paragraph 23 of IAS 32 to the put options

on the shares of Delmi S.p.A. agreed by A2A S.p.A. with Società Elettrica Altoatesina S.p.A.

(SEL). As discussed in the section “Consolidation policies and procedures”, the difference

between the present value of the strike price of these put options and the carrying amount of

the non-controlling interests is deducted from Group equity (if positive) or added to Group

equity (if negative). The effect of the put options on the shares of Delmi S.p.A. led to a positive

change of 6 million euro in Group equity at June 30, 2011.

16) Net profit for the period

This amounts to 120 million euro and represents the result for the reporting period.

17) Minority interests


Minority interests 1,344 (25) 1,319

“Minority interests” amount to 1,319 million euro (1,344 million euro at December 31, 2010)

and represent the portion of capital, reserves and net income attributable to minority

shareholders.

The decrease for the period of 25 million euro relates to the following:

• the allocation of the portion attributable to minority shareholders amounting to 16 million

euro, of which minus 14 million euro relating to the share of the result attributable to the

minority shareholders of Delmi S.p.A., minus 6 million euro attributable to the minority

shareholders of the EPCG Group and plus 4 million euro attributable to the minority

shareholders of Plurigas S.p.A. and A2A Alfa S.r.l.;



77

• negative adjustments of 9 million euro relating to the changes during the period of the

components of equity attributable to the minority shareholders of the EPCG Group and

Delmi S.p.A. and Plurigas S.p.A..

A dividend of 298 million euro was approved in 2011, being 0.096 euro per share, of which 186

million euro has already been distributed and 112 million euro has yet to be distributed.

LIABILTIES


18) Non-current financial liabilities


12 31 2010 06 30 2011

Non-convertible bonds 2,170 21 2,191 2,170 2,191

Due to banks 1,477 36 1,513 1,477 1,513

Due to other providers of finance 66 (21) 45 66 45

Finance lease payables 23 (5) 18 23 18

Total non-current financialliabilities 3,736 31 3,767 3,736 3,767

“Non-current financial liabilities”, which amount to 3,767 million euro (3,736 million euro at

December 31, 2010), rose by 31 million euro.

More specifically, “Non-convertible bonds” are four bonds issued by the Group which relate

to:

• a ten-year bond with a nominal value of 500 million euro issued on May 28, 2004 at a

nominal fixed rate of 4.875%. Its carrying amount of 498 million euro is calculated at

amortized cost;

• a thirty-year bond issued in yen on August 10, 2006 at a fixed rate of 5.405%. Its carrying

amount of 98 million euro is calculated at amortized cost;

• a ten-year bond with a nominal value of 500 million euro issued on October 30, 2003 at a

nominal fixed rate of 4.875%. As a result of electing for the fair value option on transition to

IAS/IFRS the fair value of this bond at June 30, 2011 was 521 million euro;

• a seven year bond with a nominal value of 1,000 million euro issued on October 27, 2009 at

a nominal fixed rate of 4.50% which qualifies for fair value hedge accounting. As a result,

this financial instrument (bond) is measured at amortized cost adjusted by the change in

the fair value of the underlying risk. Its value at June 30, 2011 was 1,024 million euro.



78

The end-of-period measurement of the fair value and amortized cost of the non-convertible

bonds led to a decrease of 21 million euro in “Non-current financial liabilities”.

Interest of 50 million euro had accrued on bonds at June 30, 2011.

The different accounting treatment used for the four bonds is the result of the different

options selected during the stage of transition to IAS/IFRS by the companies merged on

January 1, 2008.

“Due to banks” increased by 36 million euro over the period. This was mainly due to the use of

new long-term loan facilities. The consolidation of the EPCG Group contributed by 44 million

euro.

The total of 45 million euro “Due to other providers of finance” decreased by 21 million euro

over December 31, 2010 as the result of the reclassification of the portion falling due within

twelve months to current.

“Finance lease payables” amount to 18 million euro, while at December 31, 2010 they

amounted to 23 million euro.

19) Deferred tax liabilities


Deferred tax liabilities 493 (13) 480

Deferred tax liabilities arise from capital gains that have been realized but are deferred on an

installment basis for fiscal purposes and from differences between the bases of tangible and

intangible assets for accounting and fiscal purposes, including those resulting from the

consolidation process and from accounting for finance leases and financial instruments under

international accounting standards.



79

20) Employee benefits

The balance on this item amounted to 276 million euro at June 30, 2011 (unchanged compared

to December 31, 2010) and moved as follows during the period:

Millions of euro Balance at Provisions Utilizations Other Balance at 12 31 2010 changes 06 30 2011

Severance indemnities 147 11 (7) (7) 144

Employee benefits 129 – (4) 7 132

Total employee benefits 276 11 (11) – 276

21) Provisions for risks, charges and liabilities for landfills

Millions of euro Balance at Provisions Utilizations Other Balance at 12 31 2010 changes 06 30 2011

Provisions for risk, charges and liabilities for landfills 460 14 (19) 4 459

These provisions totaled 459 million euro at June 30, 2011 (460 million euro at the previous

year end). Accruals were made amounting to 14 million euro which mainly related to

provisions made for disputes in course with certain social security bodies and local authorities

and for litigation with personnel and third parties. The utilizations of 19 million euro refer

mainly to the amount used for payments made during the period, while other changes totaled

4 million euro.

22) Other non-current liabilities


12 31 2010 06 30 2011

Other non-current liabilities 152 (10) 142 – –

Non-current derivatives 25 (11) 14 25 14

Total other non-current liabilities 177 (21) 156 25 14

The decrease of 21 million euro in “Other non-current liabilities” is mainly due to the change in

payables to third parties arising from the valuation of the put option on Delmi S.p.A. shares

and the valuation of the non-current derivatives regarding the adjustment of fair value

recognized in the period.



80

Current liabilities

23) Trade payables and other current liabilities


Advances 23 (9) 14

Payables to suppliers 1,427 (220) 1,207

Total trade payables 1,450 (229) 1,221

Payables to social security institutions 36 (3) 33

Other current liabilities 351 169 520

Current derivatives 17 20 37

Total other current liabilities 404 186 590

Total trade playable and other current liabilities 1,854 (43) 1,811

“Trade payables and other current liabilities” amount to 1,811 million euro (1,854 million euro

at December 31, 2010), representing an overall decrease of 43 million euro which arises mainly

from a reduction in “Trade payables” which was partially offset by an increase in “Other

current liabilities” and “Current derivatives”. The consolidation of the EPCG Group had an

effect of 47 million euro.

“Other current liabilities” include 112 million euro as the amount due to shareholders for the

non-recurring dividend approved in general meeting on June 15, 2011 which will be disbursed in

November 2011.

“Other current liabilities” include an amount of 16 million euro as the effect arising from the

application of a tax transparency agreement entered into by the parent A2A S.p.A. with an

associate, as per “Tax liabilities”.

24) Current financial liabilities

Millions of euro Balance at Changes Balance at included in the NFP 12 31 2010 in the period 06 30 2011

12 31 2010 06 30 2011

Due to banks 390 (130) 260 390 260

Due to other providers of finance 43 – 43 43 43

Finance lease payables 12 (1) 11 12 11

Financial payables torelated parties 1 1 2 1 2

Financial payables todisposal subsidiaries 2 – 2 2 2

Total current financialliabilities 448 (130) 318 448 318



81

“Current financial liabilities” amount to 318 million euro, compared to 448 million euro at

December 31, 2010. The decrease of 130 million euro is mainly due to a decrease in “Due to

banks” arising from repayments made during the period and a decrease in the use of revolving

credit lines expiring within twelve months. The consolidation of the EPCG Group had an effect

of 6 million euro.

25) Tax liabilities


Tax liabilities 56 (45) 11

“Tax liabilities” amount to 11 million euro (56 million euro at December 31, 2010), representing

a decrease of 45 million euro.

This item includes the effect arising from the application of a tax transparency agreement

entered into by the parent company A2A S.p.A. with an associate.

26) Liabilities directly associated with non-current assets held for sale


Liabilities directly associeted with non-current assetsheld for sale 16 2 18

The balance on this item amounted to 18 million euro at June 30, 2011 of which 16 million euro

regards the liabilities connected with BAS-SII S.p.A. and 2 million euro relates to the Ecodeco

Group in respect of the liabilities connected with certain businesses held for sale.



82

27) Net Debt(pursuant to CONSOB Communication no. DEM/6064293 of July 28, 2006)

The following table provides details of net debt.

Millions of euro Note 06 30 2011 12 31 2010

Bonds - non-current portion 18 2,191 2,170

Bank loans - non-current portion 18 1,513 1,477

Amounts due to other providers of finance - non-current portion 18 45 66

Finance leases - non-current portion 18 18 23

Other non-current liabilities 22 14 25

Total medium/long-term debt 3,781 3,761

Non-current financial assets with related parties 3 (5) (6)

Non-current financial assets 3 (22) (22)

Other non-current assets 5 (102) (98)

Total medium/long-term financial receivables (129) (126)

TOTAL NON-CURRENT NET DEBT 3,652 3,635

Bank loans - current portion 24 260 390

Amounts due to other providers of finance - current portion 24 43 43

Finance leases - current portion 24 11 12

Current financial liabilities with related parties 24 2 1

Financial payables to companies held for sale 24 2 2

Total short-term debt 318 448

Other current financial assets 9 (70) (47)

Current financial assets with related parties 9 (10) (9)

Financial receivables in assets held for sale 12 (2) (2)

Total short-term financial receivables (82) (58)

Cash and cash equivalents 11 (130) (132)

TOTAL CURRENT NET DEBT 106 258

NET DEBT 3,758 3,893

Net Debt


83

Changes in the consolidation scope compared to June 30, 2010

There has been a change in the consolidation scope during the six months ended June 30, 2011

compared to the previous year as a result of the sale of the investments in the following:

• Metroweb S.p.A.;

• Coges S.p.A..

EPCG has been consolidated on a line-by-line basis for the six months ended June 30, 2011,

while for the six months ended June 30, 2010 it was consolidated on a “one-line” basis.

The comparative figures for the items of the income statement relating to revenues and

operating expenses and financial management for the corresponding period of the previous

year have been reclassified to reflect:

• the application of IFRS 5 regarding the reclassification of the results of the investment in

BAS-SII S.p.A., which was previously consolidated on a line-by-line basis, to the item “net

result from non-current assets held for sale” following management’s decision to finalize

the sale;

• the application of IFRS 5, with the reclassification of the results of the investment in

Metroweb S.p.A., which was previously accounted for using the equity method, to the item

“net result from non-current assets held for sale” following management’s decision to

finalize the sale; applying IFRS 5 also led to the reclassification of the financial income

relating to the bond due from Metroweb S.p.A..

Notes to the income statement


84

28) Revenues

Revenues for the period totaled 3,050 million euro (2,858 million euro for the six months

ended June 30, 2010), representing an increase therefore of 192 million euro.

The more significant items of this balance were as follows:

Revenues - Millions of euro 06 30 2011 06 30 2010

Revenues from the sales of goods 2,594 2,450

Revenues from services 400 351

Revenus from long-term contracts 2 14

Total revenues from the sales of goods and services 2,996 2,815

Other operating income 54 43

Total revenues 3,050 2,858

“Revenues from sales and services” amounted in total to 2,996 million euro (2,815 million euro

in the corresponding period of the previous year), of which 139 million euro relates to the

consolidation of the EPCG Group, representing an increase of 181 million euro. This increase is

due to increased sales revenues of 144 million euro, a rise in services income of 49 million euro

and a decrease of 12 million euro in revenues from long-term contracts.

“Other operating income” amounted to 54 million euro, of which 1 million euro relating to the

consolidation of the EPCG Group, representing an increase of 11 million euro compared to the

first half of 2010.

Further details of the main items are as follows:

Revenues from sales of goods and services - Millions of euro 06 30 2011 06 30 2010

Sale and distribution of electricity 1,620 1,461

Sale and distribution of gas 780 799

Sale of heat 110 107

Water and utilities sold to civil customers 20 22

Hedging gains on operating derivatives 1 -

Hedging losses on operating derivatives – (1)

Sale of emission certificates and allowances 48 48

Connection contributions 15 14

Total revenues from sales 2,594 2,450

Services to customers 400 351

Total revenue from services 400 351

Revenues from long-term contracts 2 14

Total revenues from sales of goods and services 2,996 2,815

Other operating revenues 54 43

Total revenues 3,050 2,858



85

Trading margin

The following table sets out the results arising from the trading portfolio; these figures relate to

trading in electricity, gas and environmental certificates.

Millions of euro Note 06 30 2011 06 30 2010

Trading margin

Revenues 28 431 267

Operating expenses 29 (424) (265)

Total trading margin 7 2

29) Operating expenses

“Operating expenses” amounted to 2,286 million euro (2,130 million euro in the

corresponding period of the previous year), of which 98 million euro relating to the

consolidation of the EPCG Group, therefore representing an increase of 156 million euro.

Details of the main components are as follows:

Operating expenses - Millions of euro 06 30 2011 06 30 2010

Costs for raw materials and consumables 1,720 1,613

Service costs 413 375

Total expenses for raw materials and services 2,133 1,988

Other operating expenses 153 142

Total operating expenses 2,286 2,130

“Costs for raw materials and services” amounted to 2,133 million euro (1,988 million euro for

the six months ended June 30, 2010), of which 88 million euro relating to the consolidation of

the EPCG Group, representing an increase of 145 million euro.

This increase is due to the following:

• an increase of 92 million euro in the purchase of raw materials and consumables, due to

increased costs for the purchase of power and fuel of 88 million euro, a decrease in the

charges relating to the purchase of emission certificates and allowances of 2 million euro,

a decrease in the cost of purchases of materials of 3 million euro and the net gains of 9

million euro arising from hedging gains and losses on operating derivatives; the

consolidation of the EPCG Group contributed for 73 million euro;

• an increase of 38 million euro in costs for delivery, subcontracted work and services, of

which 15 million euro relates to the consolidation of the EPCG Group;

• a positive change of 15 million euro in stocks of fuels and materials.



86

The following table sets out details of the more significant components:

Expenses of raw materials and consumables - Millions of euro 06 30 2011 06 30 2010

Purchases of power and fuel 1,674 1,586

Purchases of materials 34 37

Purchases of water 2 2

Hedging charges on operating derivatives 5 7

Hedging income on operating derivatives (5) (16)

Purchases of emission certificates and allowances 12 14

Total expenses of raw materials and consumables 1,722 1,630

Costs for delivery, subcontracted work and services 413 375

Total service costs 413 375

Change in inventories of fuels and materials (2) (17)

Total expenses of raw materials and services 2,133 1,988

Other operating expenses 153 142

Total operating expenses 2,286 2,130

30) Labour costs

Excluding capitalized costs, personnel costs for the six months ended June 30, 2011 amounted

to 287 million euro (258 million euro for the six months ended June 30, 2010), of which 26

million euro relates to the consolidation of the EPCG Group, representing an increase of 29

million euro.

“Labour costs” may be analyzed as follows:

Labour costs - Millions of euro 06 30 2011 06 30 2010

Wages and salaries 187 167

Social security charges 71 63

Severance indemnities 11 11

Other costs 16 17

Total labour costs 287 258

The A2A Group had an average workforce of 11,878 during the six months ended June 30, 2011,

of whom 2,750 belong to the EPCG Group. The increase in labour costs is attributable to the

increase in the average workforce as a result in the change in consolidation scope and the

increase in costs resulting from the rises in wages and salaries provided by employment

agreements.



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31) Gross operating income - EBITDA

As a result of the above movements, consolidated “Gross operating income” for the six

months ended June 30, 2011 amounted to 477 million euro (470 million euro for the six months

ended June 30, 2010), of which 15 million euro relates to amounts brought in by the EPCG

Group.

Further details may be found in the section “Results by sector”.

32) Depreciation, amortization, provisions and write-downs

“Depreciation, amortization provisions and write-downs” totaled 254 million euro for the six

months ended June 30, 2011 (238 million euro for the first half of 2010), of which 28 million

euro relates to the consolidation of the EPCG Group, representing an increase of 16 million

euro.

The following table provides details of the individual items:

Depreciation, amortization, provisions and write-downsMillions of euro 06 30 2011 06 30 2010

Amortization of intangible assets 41 41

Depreciation of tangible assets of which: 172 155

– 1. ordinary depreciation 146 125

– 2. depreciation of assets held under concession (freely trasferable) 26 30

Total depreciation and amortization 213 196

Provisions for risks and charges 14 18

Write-down of receivables included in current assets 26 24

Other write-downs of fixed assets 1 –

Total depreciation, amortization, provisions and write-downs 254 238

More specifically, “Depreciation and amortization” totaled 213 million euro (196 million euro

in the corresponding six months of the previous year), of which 18 million euro related to the

consolidation of the EPCG Group, representing an increase of 17 million euro. Excluding the

consolidation of the EPCG Group depreciation and amortization would have amounted to 195

million euro, essentially unchanged compared to the first half of 2010.

“Provisions for risks and charges” amounted to 14 million euro (18 million euro for the six

months ended June 30, 2010) and relate to the provisions made in the period for disputes in

course with certain social security bodies and accruals for outstanding litigation.

“Write-down of receivables included in current assets” amount to 26 million euro (24 million

euro for the six months ended June 30, 2010), of which 10 million euro relates to the



88

consolidation of the EPCG Group. The prudent accrual made for the period is affected by the

persistence of a generally economic situation making it difficult for businesses and individuals

to respect their obligations within the agreed terms. For conservative reasons, therefore, the

sales companies, being those which are most exposed to insolvency risk, have adjusted their

estimates of the expected recoverable amount of outstanding receivables from end

customers.

“Other write-downs of fixed assets” amounting to 1 million euro regard certain write-downs

made by the Ecodeco group.

33) Net operating income - EBIT

“Net operating income” amounted to 223 million euro (232 million euro for the six months

ended June 30, 2010), of which 13 million euro of expenses relate to the EPCG Group.

34) Financial balance

“Financial balance” closed with net financial expense of 80 million euro (56 million euro for

the six months ended June 30, 2010), including the positive contribution of 7 million euro

arising from the consolidation of the EPCG Group.

Details of the more significant items are as follows:

Financial balance - Millions of euro 06 30 2011 06 30 2010

Financial income 18 7

Financial expense (85) (113)

Portion of income and charges when shareholdings are carried at equity (13) 50

Total financial balance (80) (56)

“Financial income” amounted to 18 million euro, of which 8 million euro relates to the

consolidation of the EPCG Group, representing an increase of 11 million euro over the first half

of 2010 mainly due to the positive effect of the change in the fair value of the financial

derivative contracts relating to the bond of 500 million euro, the revolving credit lines and the

loan granted by Cassa Depositi e Prestiti.



89

“Financial expense”, which amounted to 85 million euro, decreased by 28 million euro over the

six months ended June 30, 2010 and may be analyzed as follows:

• charges of 82 million euro from financial liabilities (77 million euro for the six months

ended June 30, 2010) detailed as follows:

Expenses on financial liabilities - Millions of euro 06 30 2011 06 30 2010

Interest on bond loans 51 51

Interest charged by bank 18 15

Interest on loans by Cassa Depositi e Prestiti 1 1

Interest on finance leases 1 1

Other financial expenses 11 9

Total charges from financial liabilities 82 77

• charges on financial derivatives of 3 million euro (36 million euro for the six months ended

June 30, 2010). The decrease is mainly due to the fair value of the bond of 500 million euro,

accounted for using the fair value option method, and the derivatives on the revolving

credit lines, the loan granted by Cassa Depositi e Prestiti and the bond of 1,000 million

euro, which had a positive effect for the six months ended June 30, 2011.

The “Portion of income and charges when shareholdings are carried at equity” was negative

for 13 million euro (positive for 50 million euro for the six months ended June 30, 2010). This

item mainly consists of the effects of the results of the valuations of the investments in

Transalpina di Energia S.r.l., Dolomiti Energia S.p.A., Edipower S.p.A., PremiumGas S.p.A. and

Ergosud S.p.A..

35) Other non-operating income and expenses

“Other non-operating income and expenses” had a balance of 4 million euro (nil for the six

months ended June 30, 2010) and relates to the expenses incurred by the EPCG Group.



90

36) Income taxes

Income taxes - Millions of euro 06 30 2011 06 30 2010

Current taxes 83 91

Deferred tax assets 2 (7)

Deferred tax liabilities (11) (16)

Total income taxes 74 68

Taxes for the period, calculated on the basis of current accounting standards and proper

consolidation criteria, have been calculated as follows:

• current taxes for the period relating to IRES corporate income tax, the “Robin Hood” tax

and IRAP regional production tax, for 83 million euro;

• expense of 2 million euro relating to deferred tax assets;

• income of 11 million euro relating to deferred tax liabilities.

Paragraphs 5 and 6 of article 23 of Decree Law no. 98/2011 converted with amendments into Law

no. 111 of July 15, 2011, published in Official Journal no. 164 of July 16, 2011, introduce an increase

in the IRAP tax rate from 3.90% to 4.20% for companies acting as concessionaires other than

those in the construction industry or involved in the management of motorways and tunnels.

37) Net result from non-current assets held for sale

There was a positive balance of 39 million euro on this item for the six months ended June 30,

2011, which relates mainly to the sale of the investments in Metroweb S.p.A. and CESI.

38) Group net profit for the period

The Group’s consolidated profit, net of minority interests of 16 million euro (-19 million euro

for the six months ended June 30, 2010), amounted to 120 million euro (371 million euro for

the six months ended June 30, 2010).



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39) Earnings per share

01 01 2011 01 01 2010 06 30 2011 06 30 2010

Earnings (loss) per share (euro)

– basic 0.0386 0.1194

– basic, from operating activities 0.0260 0.0296

– diluted 0.0386 0.1194

– diluted, from operating activities 0.0260 0.0296

Weighted average number of shares in circulation for the calculation of earnings (loss) per share

– basic 3,105,987,497 3,105,987,497

– diluted 3,105,987,497 3.,105,987,497

Earnings per share


92

40) Note on related party transactions

“Related parties” are the persons and entities defined in IAS 24 (Revised) “Related Party

Disclosures”.

Relations with Parent Entities and their subsidiaries

On October 5, 2007, the Municipalities of Milan and Brescia entered a shareholders’ agreement to

regulate the ownership structure and corporate governance of A2A, giving rise to joint control by

the Municipalities over the company by means of a dualistic system of administration and control.

More specifically, regardless of the legal structure adopted the merger which took place on

January 1, 2008 resulted in the creation of a joint venture under the joint control of the

Municipality of Brescia and the Municipality of Milan, which each hold an interest of 27.5%.

Dealings between companies of the A2A Group and the Municipalities of Milan and Brescia are of a

commercial nature, involving the supply of electricity, gas, heat and drinking water, services

involving the public lighting and traffic light systems, services involving the water purification and

sewerage plants, collection and sweeping services and video surveillance systems.

Similarly, the companies of the A2A Group have commercial dealings with the companies

controlled by the Municipalities of Milan and Brescia, such as by way of example SEA S.p.A.,

Metropolitana Milanese S.p.A., Brescia Mobilità S.p.A., Brescia Trasporti S.p.A. and Centrale del

Latte di Brescia S.p.A., providing them with electricity, gas, heat, sewage management and water

purification services at market rates adapted to the specific supply conditions and performing the

services requested by these companies. It is stressed that these companies are not considered

related parties in the summary schedules prepared in accordance with Consob Resolution no.

17221 of March 12, 2010.

Dealings between the Municipalities of Milan and Brescia and the A2A Group relating to public

lighting and traffic light services, the management and distribution of electricity, gas, heat and

Note on related partytransactions


93

sewerage and water purification services are governed by suitable agreements and specific

contracts.

All transactions with entities controlled by the Municipalities of Milan and Brescia which involve

supplying electricity are carried out at normal market conditions.

Dealings with subsidiaries and associates

The parent A2A S.p.A. provides centralized treasury services for the majority of its

subsidiaries. Intragroup transactions are regulated through current accounts between the

parent and the subsidiaries; balances on these accounts bear interest at a 3-month Euribor

rate increased for the creditor positions (of A2A S.p.A.) or reduced for the debtor positions by

a margin in line with that applied by the financial market.

A2A S.p.A. and its subsidiaries continued filing their VAT return on a group basis in 2011.

For IRES purposes, A2A S.p.A. files for tax on a consolidated basis together with its main

subsidiaries in accordance with articles 117-129 of Presidential Decree no. 917/86. To this end a

contract has been stipulated with each of the subsidiaries involved in the Group tax return to

regulate the tax benefits and charges transferred, with specific reference to current items.

These contracts also govern the transfer of any unused tax losses, as provided by current

legislation.

A2A S.p.A has signed a tax transparency agreement with an associate having effect from 2010.

The parent provides its subsidiaries and associates with administrative, tax, legal, managerial

and technical services so as to optimize the resources available within the company and make

the best use of its know-how in the most economical way. These services are governed by

specific supply contracts that are stipulated annually. A2A S.p.A. also makes available office

space and operating areas at its own premises to subsidiaries and associates, as well as

providing services relating to their use. These are provided at market conditions.

The parent provides a power generation service to A2A Trading S.r.l. for a monthly fee that

depends on the actual availability of the thermoelectric and hydroelectric plants.

A2A S.p.A. purchases an insignificant quantity of rights needed for hydroelectric production

from the associate Società Servizi Valdisotto S.p.A. under a contractual agreement. IT services

are provided by the subsidiariy Selene S.p.A. and by the associate e-Utile S.p.A.

Telecommunications services are provided by the subsidiary Selene S.p.A. and computer

services by the associate e-Utile S.p.A..


Note on related party transactions

94

As regards the consolidation using the equity method of the Transalpina di Energia Group,

which is jointly controlled through the subsidiary Delmi S.p.A., the parent sells electricity to

companies of the Transalpina di Energia Group and some subsidiaries have dealings of a

commercial nature with certain companies of the Transalpina di Energia Group.

As a result of the requirements of the Consob Communication issued on September 24, 2010

containing provisions regarding related party transactions pursuant to Consob Resolution no.

17221 of March 12, 2010 and subsequent amendments, on receiving the favorable opinion of

the Internal Control Committee, the Management Board of A2A S.p.A. approved the

Procedure for Governing Related Party Transactions on November 11, 2010 and this became

effective on January 1, 2011. The aim of this procedure is to assure the transparency and the

propriety in substance and procedure of transactions entered into by A2A S.p.A. directly or

through its subsidiaries with related parties identified in accordance with international

accounting standard IAS 24 Revised.

Summary schedules of balances and transaction with related parties pursuant to Consob

Resolution no. 17221 of March 12, 2010 are set out below:

Balance sheet Total Of which regarding related parties

06 30 2011

Asso- Related Muni- Subsids. Muni- Subsids. Indivi- Total % of Millions of euro ciates compa- cipality of Muni- cipality of Muni- duals as related balance nies of Milan cipality of Brescia cipality related parties sheet of Milan of Brescia parties item

TOTAL ASSETS OF WHICH: 11,940 2,419 34 108 9 21 2,591 21.7%

Non-current assets 9,342 2.401 5 2,406 25.8%

Investments 2,401 2,401 2,401 100.0%

Other non-current financial assets 69 5 5 7.2%

Current assets 2,559 18 34 108 9 16 185 7.2%

Trade receivables 1,717 8 34 108 9 16 175 10.2%

Current financial assets 80 10 10 12.5%

TOTAL LIABILITIES OF WHICH: 7,278 38 41 11 1 7 1 99 1.4%

Current liabilities 2,140 38 41 11 1 7 1 99 4.6%

Trade payables 1,221 20 41 11 1 7 80 6.6%

Other current liabilities 590 16 1 17 2.9%

Current financial liabilities 318 2 2 0.6%



95

Statement of comprehensive Total Of which regarding related partiesincome

06 30 2011

Asso- Related Muni- Subsids. Muni- Subsids. Indivi- Total % of Millions of euro ciates compa- cipality of Muni- cipality of Muni- duals as related balance nies of Milan cipality of Brescia cipality related parties sheet of Milan of Brescia parties item

REVENUES FROM SALES OF GOODS AND SERVICES 3,050 2 171 166 3 23 1 366 12.0%

Revenues from sales of goods and services 2,996 1 171 166 3 23 1 365 12.2%

Other operating income 54 1 1 1.9%

OPERATING EXPENSES 2,286 13 226 1 3 243 10.6%

Cost of raw materials and services 2.133 13 160 173 8.1%

Other operating expenses 153 66 1 3 70 45.8%

LABOUR COSTS 287 3 3 1.0%

FINANCIAL BALANCE (80) (13) 3 (10) 12.5%

Financial income 18 3 3 16.7%

Financial expense (85)

Portion of income and charges when shareholdings are carried at equity (13) (13) (13) 100.0%

Section 0.2 of this report contains the complete schedules required by Consob Resolution no.

17221 of March 12, 2010.



96

41) Consob communication no. DEM/6064293 of July 28, 2006

There were no non-recurring transactions during the period.

Consob communication no.DEM/6064293 of July 28, 2006


97

Millions of euro 06 30 2011 12 31 2010

Guarantee deposits received 407 402

Guarantees given 1,226 1,214

Guarantee deposits received

Guarantee deposits received from subcontractors and performance bonds received amount

in total to 407 million euro (402 million euro at December 31, 2010).

Guarantees given and commitments with third parties

These amount to 1,226 million euro (1,214 million euro at December 31, 2010) and relate to

performance bonds and deposits pledged as guarantees of obligations assumed with third

parties.

Collateral pledged

The convertible bond issued by Metroweb S.p.A. and subscribed by A2A S.p.A., having a

nominal value of 24 million euro, has been pledged to the banks financing Metroweb S.p.A..

The shares of Edipower S.p.A. owned by A2A S.p.A., having a carrying amount of 398 million

euro, have been pledged to a syndicate of banks for the loans they have granted.

Guarantees and commitmentswith third parties


98

Other commitments and risks

As is normal for transactions of such size and duration, take or pay clauses are included in the

natural gas import agreements of Plurigas S.p.A.. These are clauses that require the purchaser

to pay for quantities not withdrawn in comparison with a pre-determined threshold if this is

for reasons not foreseen in the agreement, except for the possibility over the contract term to

recover the volume already partially paid for but not withdrawn under certain conditions.

Group companies hold third party assets under concession having a value of 147 million euro.


Guarantees and commitments with third parties

99

1) Subsequent events

Reference should be made to the specific paragraph of this half-year financial report for a

discussion of subsequent events.

2) Information relating to treasury shares

At June 30, 2011 A2A S.p.A. held 26,917,609 treasury shares, equal to 0.859% of its share capital

consisting of 3,132,905,277 shares, unchanged compared to the end of the previous year. At

June 30, 2011 no treasury shares were held through subsidiaries, finance companies or

nominees.

3) Information relating to non-current assets held for sale anddiscontinued operations (IFRS 5)

The items “Non-current assets held for sale” and “Liabilities directly associated with non-

current assets held for sale” consist of balances arising from the Ecodeco Group, and in

particular assets belonging to certain businesses held for sale, together with the assets and

the liabilities of BAS-SII S.p.A..

For further details reference should be made to note 12 to the statement of financial position.

Other information


100

The main information regarding the assets and liabilities of the above investments and

businesses is set out in the following table.

Figures at june 30, 2011

Assets and liabilities of the companies BAS-SII Ecodeco Totalheld for sale S.p.A. GroupMillions of euro

Non-current assets 23 – 23

Current assets 14 2 16

Total assets 37 2 39

Non-current liabilities 3 – 3

Current liabilities 13 2 15

Total liabilities 16 2 18

BAS-SII S.p.A. had an effect of 0.8 million euro on profit or loss.

4) Update of the main pending legal and tax disputes

EC infringement procedure

On June 5, 2002, the European Commission published Decision no. 2003/193/EC declaring

that the three-year exemption from income tax (under article 3.70 of Law no. 549/95 and

article 66.14 of Decree Law no. 331/1993, converted into Law no. 427/93) and the advantages

deriving from loans granted pursuant to article 9-bis of Decree no. 318/1986, converted into

Law no.488/96, to public majority-owned companies formed under Law no. 142/90 were

incompatible with EC law, since they were deemed to represent State aid which is prohibited

under article 87.1 of the EC Treaty. The Commission did not however consider the tax

exemption on business contributions under article 3.69 of Law no. 549/95 to be State aid.

This decision was notified on June 7, 2002 to the Italian State, which appealed against it to the

Court of Justice. Subsequently, by order of the Court of Justice dated June 8, 2004, the case

was transferred to the Court of First Instance with reference number T-222/04, following the

expansion of that court's functions by the Treaty of Nice.

In July 2002, the Commission communicated the decision to the companies concerned, which

appealed against this to the Court of First Instance of the European Community on September

30, 2002, pursuant to article 230.4 of the EC Treaty. Further appeals against this decision have

also been filed by other public sector commercial companies and by Confservizi.


Other information

101

The Italian State did not ask the Court of Justice to suspend execution of the Commission's June

2002 decision so as not to prejudice the resolution of merit in the event of a refusal. In fact, it is

rare for the Court to concede a stay of execution, above all in matters regarding State aid.

The decision is therefore fully effective and binding on the Italian State, which is obliged to

recover the aid granted.

On the invitation of the Commission and while continuing to pursue action to overturn the

decision, the Italian State has therefore activated a recovery procedure. This process has

involved the preparation of a survey questionnaire to identify the public sector commercial

companies that have benefited from the above tax exemption and from loans granted by

Cassa Depositi e Prestiti in the years under consideration.

The Italian State's recovery initiatives continued with the predisposition of an amendment to

the EC law, which was approved by the Senate on April 13, 2005 (article 27, Law no. 62 of April

18, 2005). The measure envisages detailed recovery procedures based on ordinary tax rules to

adjust any recovery to the effective existence of recoverable aid (considering the specific

circumstances of each position and bearing in mind any outstanding disputes with the tax

authorities). In particular, this measure envisaged certain declarations on the part of the

taxpayer and presumed certain official acts specifying the application methods and guidelines

for a correct evaluation of cases of non-application. The guidelines were then amended to

make them more precise by article 1.133 of Law no. 266 of March 23, 2006 (Finance Law 2006).

Subsequently, following Italy's condemnation by the Court of Justice for the delay in

recovering the "aid" (Sentence June 1, 2006, case C – 207/05), Decree Law no. 10 of February

15, 2007 (converted into Law no. 46 of April 6, 2007) made further amendments to the existing

recovery procedures.

In this connection, new instructions were issued for the implementation of European

Commission Decision no. 2003/193/EC with a view to the recovery of aid equivalent to the

unpaid taxes and related interest resulting from application of the tax exemption regime

envisaged in article 3.70 of Law no. 549 of December 28, 1995 and article 66.14 of Decree Law

no. 331 of August 30, 1993, converted with amendments into Law no. 427 of October 29, 1993.

In the first half of 2007 the Tax Revenue Office sent notices to AEM S.p.A. and ASM S.p.A. -

pursuant to Decree no. 10/2007 - in the form of a "communication-injunction" concerning the

alleged State aid enjoyed during the moratorium period.

On April 30, 2009, the Tax Revenue Office notified five further assessments in connection with

the position of the former AEM S.p.A. and the former ASM S.p.A. pursuant to article 27, Decree

Law no. 185 of November 29, 2008, as converted with amendments into Law no. 2 of January

28, 2009, for approximately 64 million euro including interest.


Other information

102

Decree no. 135 of September 25, 2009 (article 19) introduced new instructions regarding the

recovery of the aid mentioned, essentially involving (i) the possible notification of further

repayment assessments, (ii) the irrelevance for recovery purposes of any realized capital

gains. As a result, on October 2, 2009, the company received six further assessments from the

competent offices for the recovery of amounts additional to those already claimed totaling

approximately 220 million euro.

On this basis, the Tax Revenue Office activated the recovery procedure by means of a fiscal

type assessment without offering any possibility to defer or suspend payment.

On the merits, the guidelines for recovery can be found in Day Order no. 901972/071 of the

Chamber of Deputies, which was approved at the session held on January 14, 2009. In the

guidelines, it is explained that the recovery "cannot take the form of a simple tax assessment,

without any specific criteria; instead, it has to determine if and how much aid has to be

recovered, clarifying in particular that it is recoverable only if actually enjoyed and verifying

case by case whether the companies have actually made use of illegitimate State aid that has

altered the principles of free competition and a company’s freedom of establishment". In line

with this concept, "those resources that have already been involved in forms of

reimbursement" have to be considered "excluded from the recovery measure".

In exercising the powers granted, the Tax Revenue Office should therefore have identified, in

the specific circumstances, the actual enjoyment of illegitimate State aid that has not already

been reimbursed.

Given that the lawsuits involving the merging company AEM S.p.A. (now A2A S.p.A.) and the

merged company ASM S.p.A. are the subject of separate proceedings at the Court of First

Instance of the European Community and have different positioning in relation to the

“communication-injunction" and the assessments, the two situations are explained separately

below for the sake of clarity.

Former AEM S.p.A. (now A2A S.p.A.)

In the action promoted by AEM S.p.A., on January 6, 2003 the Commission filed an objection

claiming that it could not accept the appeal. AEM promptly replied before the legal deadline.

The Court arranged the meeting concerning the objection claiming that it could not accept

the appeal on its merit by order dated August 5, 2005. On March 15, 2006, AEM filed a brief in

relation to the judgment pending before the Court of First Instance. On February 28, 2008, the

Court of First Instance communicated to AEM its intention to combine (only for the oral

phase) the various lawsuits being brought by AEM S.p.A, Confservizi, other public sector

commercial companies and the Italian State, asking for the opinions of the parties concerned.


Other information

103

On March 6, 2008, AEM S.p.A. communicated to the Court that it would welcome a move to

combine the various lawsuits and, apparently, the other appellants also responded in the same

way. The final hearing was held on April 16, 2008, and by a ruling dated June 11, 2009 the Court

of First Instance declared that the appeal presented by AEM S.p.A. was admissible but rejected

it on merit - as for those presented by the other appellants - taking the view that the measure

in question constituted State aid that was prohibited under article 87.1 of the EC Treaty,

therefore confirming the decision of the Commission. AEM S.p.A. impugned this sentence on

a timely basis before the European Court of Justice. On July 14, 2011 an oral hearing was held

before the Court of Justice on the appeal lodged by A2A S.p.A. and the other former municipal

utilities; the Court has reserved the right to decide.

With reference to article 27 of Law no. 62 of April 18, 2005, AEM S.p.A. has carefully complied

with the obligations placed on the former municipal utilities that are contained in the above-

mentioned recovery regulations and related enabling instructions.

For completeness, it should be noted that on October 27, 2005 the Tax Revenue Office visited

the head office of AEM S.p.A. to acquire the accounting documentation necessary to check the

correctness of the figures declared in the tax returns filed in accordance with art. 27 of Law no.

62. The visit was merely to ascertain and finalize the amount of any taxes that were to be

reimbursed. AEM S.p.A. provided the inspectors with an ample statement as to how the tax

returns had been compiled. Even if all possible forms of legal protection failed, it was deemed

reasonable to assume that the Italian Government's recovery actions would have involved

revoking the benefits granted in different ways, depending on the public service sectors

concerned. In particular, it was assumed that such action would have taken account of the

actual degree of competition during the effective period of the measures being contested

and, therefore, of the extent to which it may have been distorted.

In this regard, the appeal made by AEM S.p.A. explained that, during the 1996-1999 period

examined by the Commission, the company operated in sectors such as electricity and gas

that were not opened up to competition and in which AEM S.p.A. did not take part in any

tenders for the provision of the related services (an observation that was subsequently

repeated to the Court of Justice).

In the light of the uncertainty regarding the outcome of the appeals and the ways in which the

Commission's Decisions would be applied, the company believed it possible, but not probable,

that it risks having to return all of the aid received if the result of the entire appeal procedure

turns out to be negative: consequently, no provisions were made for this matter in any of its

financial statements up to December 31, 2006. This decision took account of objective

uncertainties as to the possibility of making a sufficiently reasonable estimate of the charges

that would be borne by AEM S.p.A. as a consequence of the above decision.


Other information

104

Lastly, the majority of the profits distributed by AEM S.p.A. during the tax moratorium period

were paid to the Municipality of Milan, which is part of the Public Administration. AEM S.p.A.

did not receive any assisted loans from Cassa Depositi e Prestiti under the laws mentioned

during the period considered by the Commission.

On March 30, 2007, the Milan Tax Revenue Office notified four assessments, or

"communication-injunctions" under Decree Law no. 10/2007 – relating to the alleged aid used

during the periods 1996, 1997, 1998 and 1999.

The amounts requested in these assessments, totaling 4.8 million euro inclusive of interest,

were based on the company's declaration made in July 2005, except for the disallowance of

the effect of applying the so-called "tombstone" tax amnesty under Law no. 289/2002.

Pursuant to Decree Law no. 10/2007 the amounts established but not paid over are subject to

forcible collection via inclusion on the tax roll; the rules do not permit any extended payment

terms or suspensions, not even in the event of appeal.

Having taken note of these communications, considered Decree Law no. 10/2007 and related

conversion law and checked that the amounts requested agree with those originally declared,

the company decided on April 27, 2007 to pay the amounts requested.

As a result of the above, the amounts paid were included in the 2007 accounts under

“Financial expenses” and “Other non-operating expenses”.

In any case the arguments presented by the company before the European Union jurisdiction

against the Decision of the EU Commission of June 5, 2002 remain valid; the same arguments

have been represented before the Court of Justice. If the actions taken before the European

Union jurisdiction are successful, all the amounts paid by the company ought to be reimbursed

since the concept of aid recovery would not be valid. The company prudently decided to appeal

against these communication-injunctions to the competent tax jurisdiction. The Provincial Tax

Commission of Milan - Section 21 rejected these appeals in ruling no. 8 of January 25, 2008 and

the sentence that establishes the amount of the recoverable aid is now definitive.

On April 30, 2009, the Tax Authorities notified three assessments, issued under article 24 of

Decree no. 185/2008, for the recovery of alleged State aid that conflicts with EC legislation and

the earlier decision of the European Commission. Appeals against these assessments have

been filed with the Milan Provincial Tax Commissioners where the case is still pending. An oral

hearing will be held on September 19, 2011.

Based on current law, the amount requested, namely a total of 23 million euro, had to be paid

within thirty days of notification of the provision and accordingly made the payment on May 8,

2009.


Other information

105

On June 11, 2009, the European Court of First Instance issued its sentence on the lawsuit no.

T-301/02 brought by the former AEM, rejecting its appeal. An appeal against this ruling has

been filed with the European Court of Justice.

As mentioned, on October 2, 2009 the Tax Revenue Office notified four assessments issued

under article 19 of Decree no. 135/2009 for the further recovery of alleged State aid to the

former AEM S.p.A. that has been stated to conflict with EC legislation.

Having paid a total of 184 million euro on October 22, 2009 - to avoid the charges involved in

being entered on the tax rolls and the accrual of further interest - the company appealed

against these notices before the Milan Provincial Tax Commission which - after meeting in

connection with those relating to ASM S.p.A. - discussed the merit of the case on January 19,

2010 and upheld the appeal with sentence no. 137/01/10.

Following this sentence, A2A S.p.A. requested the Tax Revenue Office to return the sums paid

as a refund of the alleged "State Aid" but has yet to receive a reply.

On April 9, 2010 an appeal was lodged against this sentence by the Regional Department of the

Tax Revenue Office of Lombardy and by the Tax Revenue Office - Milan 1 Office.


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Former ASM S.p.A. (merged into A2A S.p.A. from January 2008)

As regards ASM's S.p.A.’s position, the company has also impugned the decision before the

Court of First Instance in Luxembourg with an appeal filed on its own account on January 2,

2003 and "ad adiuvandum" in support of AEM S.p.A. and AMGA S.p.A..

ASM moreover considered that the European Commission's decision no. 2003/293/EC of July

5, 2002 was not applicable because of the particular nature of its situation: during the period

under consideration the services provided by ASM S.p.A. in its areas of operations were not

open to the market or free competition.

On January 6, 2003 the Commission filed an objection claiming that it could not accept the

appeal. ASM S.p.A. promptly replied before the legal deadline. The Court set the meeting

concerning the objection claiming that it could not accept the appeal on the merit by order

dated August 5, 2005.

On February 28, 2008 the Court of First Instance communicated to ASM S.p.A its intention to

combine (only for the oral phase) the various lawsuits being brought by ASM S.p.A.,

Confservizi, other majority-held public sector commercial companies and the Italian State,

asking for the opinions of the parties concerned. ASM S.p.A. communicated to the Court that

it would welcome such a move to combine the various lawsuits.

The final hearing was held on April 16, 2008, and by a ruling dated June 11, 2009 the Court of

First Instance declared that the appeal presented by AEM S.p.A. was admissible, but rejected it

on merit - as for those presented by the other appellants - taking the view that the measure in

question constituted State aid that was prohibited under art. 87.1 of the EC Treaty, therefore

confirming the decision made by the Commission. This sentence was impugned before the

European Court of Justice and on July 14, 2011 an oral discussion was held before that court;

the court has reserved the right to decide.

The companies of the ASM Group involved in the recovery procedure (ASM S.p.A., also on

behalf of the merged BAS S.p.A. and Azienda Servizi Valtrompia S.p.A), in accordance with the

request contained in article 27 of Law no. 62 of April 18, 2005, sent the declaration required by

article 27 of said law for each of the periods affected by the tax moratorium.

BAS Bergamo, which was merged with effect from May 18, 2005, and Azienda Servizi

Valtrompia S.p.A had negative taxable income during the years in which the moratorium

applied and so it is probable that no tax will be due.

In April 2007 ASM S.p.A. received notification of the communication-injunction under article

1 of Legislative Decree no. 10/2007 from the Brescia Tax Revenue Office for the periods 1998

and 1999.


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Based on the opinion of its tax advisors and experts in EC law, ASM S.p.A. pointed out to the

Brescia Tax Revenue Office that the communication-injunction that it had received was

contrary to the provisions of this decree both in content and in amount.

At the same time ASM S.p.A. appealed to the Brescia Court for this injunction to be declared

null and void; it also asked for a court order suspending payment.

On May 23 the Tax Revenue Office acknowledged that ASM S.p.A.'s arguments were correct

and cancelled the communication-injunction to pay. In any case the arguments presented by

the company before European jurisdiction against the Decision of the Commission of June 5,

2002 remain valid; the same arguments are being re-proposed before the Court of Justice.

In the light of the uncertainty regarding the outcome of the appeals and the ways in which the

Commission's Decisions would be applied, the company believes it possible, but not probable,

that it risks having to return all of the aid received if the result of the entire appeal procedure

turns out to be negative: consequently no provision has been made for this matter in the

financial statements.

While waiting for the question to be decided, the shareholders' meeting of ASM S.p.A. has

resolved not to consider distributable an amount of 13 million euro representing a portion of

the available reserves formed during the period of the "tax moratorium".

On April 30, 2009 the Tax Revenue Office notified two assessments, issued under article 24 of

Decree Law no.185/2008, for the recovery of alleged State aid to the former ASM S.p.A. stated

to be in conflict with EC regulations. Appeals against these assessments have been filed with

the Milan Provincial Tax Commissioners. An oral hearing will be held on September 19, 2011.

Under current regulations the amount requested, 41.6 million euro, had to be paid within

thirty days of the provision being notified and so A2A S.p.A. paid on May 8, 2009.

As mentioned on October 2, 2009 the Tax Authorities notified two assessments, issued under

art. 19 of Decree Law no. 135/2009, for the further recovery of alleged State aid to the former

ASM S.p.A. that is stated to be in conflict with EC regulations.

Having paid a total of 35.8 million euro on October 22, 2009 - to avoid the charges involved

in being entered on the tax rolls and the accrual of further interest - the company appealed

against these notices before the Milan Provincial Tax Commission, which - after meeting

with ASM S.p.A. - discussed the merit of the case on January 19, 2010 and upheld the appeals

with sentence no. 137/01/10. Following this sentence A2A S.p.A. requested the Tax Revenue

Office to return the sums paid as a refund of the alleged "State Aid" but has yet to receive a

reply.


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On April 9, 2010 an appeal was lodged against this sentence by the Regional Department of the

Tax Revenue Office of Lombardy and by the Tax Revenue Office - Milan 1 Office.

* * *

Ruling on the appeal proposed by the Tax Authority by way of sentence 137/01/10 concerning

the positions of the former AEM S.p.A. and the former ASM S.p.A.

Following the proposal received, A2A S.p.A. appealed and filed counter-arguments and

subsequent pleading.

The Tax Revenue Office’s appeal was discussed on July 5, 2010 before the Regional Tax

Tribunal, which upheld it.

The company filed an appeal to the supreme court on a timely basis, specifying the

inconsistencies in the appeal court’s ruling; the date of this hearing has not been set yet.

Consul Latina S.r.l./BAS S.p.A. (now A2A S.p.A.)

The purchase of the investment in HISA by BAS S.p.A. was made through a local consultant,

Consul Latina S.r.l..

Given that the wording of the contract was not totally clear and the fact that BAS S.p.A. on its

own did not buy 100% of HISA, BAS S.p.A. did not pay the fee due to Consul Latina S.r.l. which

in 1998 initiated legal action for payment.

The lawsuit is still in underway with various procedural objections, some recent, such as the

fact that all court proceedings after May 18, 2005 were declared null and void for lack of right

of attorney, a problem that has subsequently been resolved.

In the appeal ref. EXP 82218, Sentence no. 3697/3000 dated May 9, 2008, Consul Latina S.r.l.

requested that the proceedings be declared null and void given that the lawyers had no

powers and claimed damages due to a delay in the filing of documents by BAS S.p.A. in 2008;

the court rejected all these claims, recognizing that ASM took over from BAS.

The judge also rejected the appeal ref. EXP 90779, Sentence 5317534 dated May 20, 2005, in

which Consul Latina S.r.l. claimed that the lawyer Mr. De Florio had no powers of representation

at the hearing held in August 2005 due to the merger of BAS S.p.A. into ASM S.p.A..

On November 10, 2008, Consul Latina S.r.l. attempted to file a new claim against BAS S.p.A.,

EXP 095148, requesting information about Enerfin S.r.l. in liquidation, designed to find out if

ASM S.p.A. was still a shareholder and, if it had sold the investment, the sales price. It appears

that the way in which Consul Latina S.r.l. notified this request was considered inadequate by the Court.


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On the basis of information received from the lawyer, Mr De Florio, according to Consul Latina

S.r.l. the amount payable on May 10, 2007 was $1,872,000, calculated as capital of $720,000

plus interest of 1% from April 1999.

As of that date a possible offer by ASM S.p.A. to settle the dispute for $400,000 was not

considered acceptable.

In a more recent communication (November 18, 2008), the lawyer recalled that the

coefficient to be applied to the value of the principal to understand the sum due by BAS S.p.A.

in the event of losing the lawsuit was 27.22%. He also confirmed that, over the last two years,

the interest rate applicable to commercial settlements had remained unaltered at 1.55%.

In May 2009 the lawyers filed new documents but without outcome.

On November 16, 2009 the judge condemned A2A to pay a fine of 300 pesos per day from May

6, 2009 for not having provided the information requested about the sale on that date; the

lawyers appealed immediately against this sentence and for this reason no fine has yet been

paid.

In the lawyers' opinion the sentence will be quashed; if this does not happen, the fine accruing

up to February 2010, the date of the last deed deposited as part of the appeal, amounts to

$22,265.

In February 2010, A2A S.p.A. renewed its mandate with the Garrido law firm to identify a

solution for settling the original lawsuit brought by Consult Latina and to take the necessary

steps to revoke the pledge filed by Consul Latina S.r.l. on HISA's subsidiaries.

The international rogatory notification was sent on July 30, 2010 with the request that A2A

S.p.A. be formally questioned about the irreogatories formulated by the Buenos Aires Court;

the hearing was held on September 17, 2010. The evidence will be sent the Buenos Aires appeal

court for its judgment.

The lawyers representing A2A S.p.A. believe that the testimony provided by A2A S.p.A. is

positive but are unable to estimate a date for the issuing of a sentence nor are they able to

forecast the outcome of the litigation.

The company is represented by the legal firm Garrido of Buenos Aires.


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ENEL/AEM Elettricità S.p.A. (now A2A Reti Elettriche S.p.A., a subsidiary of A2A

S.p.A.)

By means of a writ served in 2001, ENEL requested annulment of the decision made by the

Board of Arbitrators appointed in accordance with Decree no. 79 of March 16, 1999 (the so-

called "Bersani Decree"), which set at 820 billion lire the price to be paid to ENEL for the sale

to AEM Elettricità S.p.A. (now A2A Reti Elettriche S.p.A.) of the power distribution business in

the municipalities of Milan and Rozzano. AEM Elettricità S.p.A. asked for ENEL’s request to be

rejected, as the arbitrators' decision could not be considered manifestly unfair or erroneous

in accordance with article 1349 of the Italian Civil Code. AEM Elettricità S.p.A. in turn filed a

counter-claim asking for ENEL to be sentenced to pay compensation for the damages caused

by the delay with which ENEL implemented the sale of the business, as imposed by the law.

In AEM Elettricità S.p.A’s opinion, the judge would only be able to change the arbitrators'

decision if it appeared to be "manifestly unfair or erroneous", as also confirmed by an expert

witness's report which the judge has ordered.

The Court-appointed expert witness carried out a detailed review of the situation, making

numerous adjustments, and in the end established a figure of 66 million euro as the upper

value of the business, net of the damages which the expert recommended should be awarded

to AEM Elettricità S.p.A..

In a sentence filed on June 9, 2008, the Milan Court set a new price for the business based on

the indications of the expert witness (990.8 billion lire) and rejected the claim for damages

made by AEM Elettricità S.p.A. According to the Court, the difference between the expert

witness's valuation and that carried out by the Board of Experts was such as to make the latter

manifestly unfair. In other words, the Judge believed that he could fully trust the conclusions

reached by the expert witness appointed by him, even though some of the choices made

appeared to be the result of exercising in a different way the technical discretion that is

inherent in valuations, leading to a very different result from that reached by the Board of

Experts. The Judge also based his decision on certain affirmations made by the expert witness

regarding the "inappropriate nature" of certain parameters used by the Board of Experts.

Considering therefore that the price established by the Board of Experts was unfair, the Judge

also rejected the claim made by AEM Elettricità S.p.A. for damages caused by the delay in

transferring the business. In fact, according to the Judge, ENEL was justified in not

transferring the business as the price was unfair.

There are various objections that can be made to this sentence.


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To start with, the assumption is not accepted that the price established by the Board of

Experts was affected by errors, or that it was unfair. The Board consisted of illustrious

professors with years of acknowledged experience in company valuations, so the fact that the

Judge simply “replaced” their calculation with the one performed by the expert witness is

totally unsatisfactory. From another standpoint, there appears to be no justification for

rejecting the request for damages because of the delayed transfer of the business, given that

ENEL could quite easily have handed it over - as indeed it did - while at the same time asking for

a fairness review of the price set by the Board of Experts. A2A S.p.A. has appealed against the

Court sentence with a writ served on October 23, 2008; the hearing for the statement of the

conclusions is expected on April 5, 2011. Subsequently, with a writ served on May 28, 2009,

Enel has sued A2A S.p.A, based on this sentence by the Milan Court (which was not a sentence

of condemnation), asking that A2A should be condemned to pay Euro 88,244,342, as well as

interest at the legal rate and monetary revaluation from October 31, 2002. At the first hearing

of this case on November 24, 2009, the plaintiff waived the injunction and the parties are now

waiting for the above appeal to go ahead.

An agreement was negotiated with the counterpart during 2009 allowing any costs to be paid

in installments to eliminate the risk that the Company may have to pay out a sizeable amount

all at the same time.

When preparing the 2009 annual report, it was decided in the interests of prudence to

maintain the book value of 88 million euro recognized for goodwill already disclosed as a

balance sheet asset for the business transferred, booking a contra-entry to a provision for

risks and charges (under liabilities) of the same amount and recognizing ancillary charges of

24 million euro in the same way.

As the result of the need to reorganize the rolls, the case has been rescheduled and the hearing

for the statement of the conclusions, originally planned for April 5, 2011, has been deferred to

September 18, 2012.

Investigation into gas meters

There is a nationwide investigation pending at the Public Prosecutor's Office in Brescia

concerning the way that gas consumption is measured. This investigation involves a number

of A2A Group companies and certain of their directors and managers. The alleged offence is

fraud as well as other matters. The investigation was initiated by the Milan Judicial Authority

but then transferred to Brescia for a question of territorial jurisdiction.

With a ruling issued on January 12, 2011 by the Public Prosecutor's Office, on February 7, 2011

notification was issued on the conclusion of the preliminary investigation at A2A Energia S.p.A.

and A2A Reti Gas S.p.A., whilst A2A S.p.A. is still awaiting notification.


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All physical persons involved in the investigation received a copy of the aforementioned

notification.

A2A S.p.A./ Mr. Buzzi

Mr. Buzzi sued AEM S.p.A. (now A2A S.p.A.) before the Milan Court by a writ served on May 24,

2001.

Mr. Buzzi challenged before the Milan Court the resolutions by which the shareholders'

meeting approved the financial statements and authorized the sale by AEM S.p.A. to e.Biscom

S.p.A. of the 30.8% stake then held by AEM S.p.A. in Fastweb S.p.A. with the simultaneous

purchase by AEM S.p.A. of the interest of 33% held by e.Biscom S.p.A. in Metroweb S.p.A. and

the subscription of a bond.

AEM S.p.A. appeared at the hearing on November 19, 2003, filing a defense statement.

The parties appeared at the hearing on April 20, 2004, whereas the hearing at which the case

was discussed was held on November 9, 2004. The parties' legal counsel exchanged

statements in accordance with articles 183.5 and 184 of the Code of Civil Procedure. Mr. Buzzi's

counsel asked the Judge to admit evidence from witnesses, to request an expert witness's

report and to order the acquisition "of the appraisal carried out at the time by Morgan Stanley

on the valuation of Fastweb S.p.A. and Metroweb for the purposes of the share exchange

between e.Biscom S.p.A. and AEM S.p.A. and collateral transactions and Metroweb S.p.A.'s

financial statements at December 31, 2002 and December 31, 2003”. AEM S.p.A.'s defense

counsel opposed this and at the hearing of February 28, 2005 the Investigating Judge

dismissed Mr. Buzzi's requests. Then, considering that the case was ready for a final decision,

he set April 4, 2006 as the date for the hearing at which the conclusions would be heard.

With a sentence filed on June 7, 2007, the Judge of the Milan Court rejected the plaintiff's

requests, sentencing him to pay the legal expenses.

Mr. Buzzi appealed against this decision by the Court with a writ served on July 10, 2008. The

first hearing of the appeal was scheduled for December 9, 2008; the hearing for the statement

of the conclusions has been postponed to April 5, 2011.

Despite being unable to predict the outcome of the appeal, there does not appear to be a

considerable risk that the judgment of the Court of First Instance will be reformulated.

The decision of the Court will most likely be issued in late 2011 or early 2012.


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Arbitration initiated by Ecovolt for violation of the Quotaholders’ Agreement for the

Investment in Ostros Energia S.r.l. (now in liquidation)

On May 25, 2009 the minority quotaholders of Ostros Energia S.r.l. (now in liquidation)

initiated arbitration proceedings under a settlement clause contained in the Investment

Agreement signed with ASM S.p.A. on January 30, 2007, with a view to establishing a breach of

the agreement by A2A S.p.A. for having failed to finance the development of Ostros Energia

S.r.l. (now in liquidation) and not complying with the provisions of article 2.5 of the

Agreement.

These matters were first examined by the parties towards the end of 2008 and legal opinions

were obtained.

The Board of Arbitration is made up of Prof. N. Irti, Prof. G. Sbisà and Prof. M. Cera. During the

first meeting on March 4, 2010, convened to make the obligatory attempt at reconciliation, the

board took note of the absence of the parties as the conditions did not exist for a settlement

and scheduled the hearing to cross-examine the parties for April 26, 2010, to this end inviting

their legal representatives or informed persons with right of attorney to attend. The board

also established November 20, 2010 as the deadline to conclude the arbitration proceedings.

Following the aforementioned cross-examination hearing the board issued order no. 6309/20

on June 3, 2010 requesting the Chamber of Arbitration to appoint an expert assessor to qualify

the difference between the projects mentioned in the January 31, 2007 Investment

Agreement, in particular the San Biagio project and those included in the Baltic agreement.

In an order of the Board of Arbitrators of July 1, 2010, Deutsches Windenergie GmbH Institute

Branch DeEI Italia was appointed as expert assessor; subsequently, the Board scheduled a

hearing for September 23 to confirm the arbitration question and determine the dates when

the appraisal would commence (October 15, 2010) and when the final report would be due

(January 10, 2011), and also to allow the parties involved to appoint their own expert advisors.

At this hearing, A2A S.p.A. appointed the firm D’Apollonia as its expert advisor and Ecovolt

appointed Prof. Zaninelli.

On September 28, the Chamber of Arbitration notified that the expert which it had appointed

with the above order had withdrawn from the case.

In a letter dated October 13, 2010, the Chamber of Arbitration gave notice of order 1611/21

issued on October 12, 2010 in which Prof. Villacci of the University of Sannio was appointed as

the new expert. On December 23, 2010, the expert made an application to the Arbitrators to

obtain an extension of the deadline established for the for the filing of the expert’s report until

February 25, 2011. The deadline has been further extended to April 6, 2011.

The company is represented by the legal firm Chiomenti.


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Arbitration initiated by S.F.C. S.A. and Eurosviluppo Industriale S.p.A. against A2A

S.p.A. and E.ON Europa S.L. for alleged non-fulfillment of the private deed for the

purchase of the shares of Eurosviluppo Industriale S.p.A., now ERGOSUD S.p.A. (no.

4011)

On May 2 and May 3, 2011 respectively the Milan Arbitration Chamber sent A2A S.p.A. (the

holder of an interest of 50% in the share capital of Ergosud S.p.A.) and E.ON Europa S.L. (a

former shareholder of Ergosud – the investment is currently held by E.ON Italia S.p.A.) a

request for arbitration in which Société Financiere Cremonese S.A. in conjunction with

Eurosviluppo Industriale S.p.A. initiate an arbitration procedure against such companies,

requesting (i) ascertainment as to non-fulfillment by E.ON Europa S.L. and A2A S.p.A. of the

obligations assumed in the agreements of December 16, 2004, October 15, 2004 and July 25,

2007 inter partes and (ii) by virtue of the effect, that they be condemned to the payment of

the remaining part of the price for the sale of the shares making up the whole share capital of

Ergosud S.p.A., amounting to 10,000,000 euro, as well as compensation for the damages

suffered by Société Financiarie Cremonese S.A. and Eurosviluppo Industriale S.r.l. from the

double standpoint of the consequential loss or damage and loss of profits in the amount of

126,496,496 euro, save better specification, plus damages for the stoppage at the worksite,

interest and revaluation.

E.ON Europa and A2A S.p.A. have duly appeared before the court calling for the request to be

rejected in full and by cross-claim calling for the counterparts to be condemned to pay

compensation for the damages suffered by the defendants as the result of the numerous

examples of contractual non-fulfillment, quantified initially in the amount of 30,500,000 euro

or alternatively the greater or lesser sum considered equitable, quantified also pursuant to

article 1226 of the Italian Civil Code, plus interest, ex article 1283 of the Italian Civil Code and

monetary revaluation, ex article 1284 of the Italian Civil Code

The company is represented by the legal firms Chiomenti and Simmons & Simmons.

Consorzio Eurosviluppo Scarl / Ergosud S.p.A. and A2A S.p.A. – Civil Court of Rome

On May 27, 2011 Consorzio Eurosviluppo Industriale S.p.A. served a writ on Ergosud S.p.A. and

A2A S.p.A. with the following claims: (i) compensation for damages, of both a contractual and

extra-contractual nature, jointly, or alternatively exclusively and separately, in the amount of

35,411,997 euro (of which 1,065,529 euro as the residual portion of their share of the

expenses); (ii) compensation for damages for the stoppage at the worksite and the failure to

return the areas of pertinence to the Consortium.

In the filing of appearance Ergosud S.p.A. and A2A S.p.A. will call for the request to be rejected

in full because it is unfounded in its merit and in its substance, and will point out: (i) the lack of


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the right of the Consortium to institute proceedings as it is currently in a state of bankruptcy,

(ii) the lack of the right of the Consortium to institute proceedings for the damages allegedly

suffered by Fin Podella at the item “anticipation of program contract” for 6,153,437 euro and

the damages allegedly suffered by Conservificio Laratta S.r.l. for 359,000 euro.

The first hearing has been fixed for October 30, 2011.

At that hearing Ergosud S.p.A. and A2A S.p.A. will not be able to make any cross-claims as that

is the competence of the Bankruptcy Judge.

The company is represented by the legal firm Simmons & Simmons.

* * *

The following information is provided in connection with the main fiscal litigation involving

Group companies.

A2A S.p.A. – Assessments for IRES, IRAP and VAT purposes for tax year 2005

The Regional Department of the Lombardy tax office in Milan notified A2A S.p.A (formerly

ASM Brescia S.p.A.) on December 23, 2010 of IRES, IRAP and VAT tax assessments for tax year

2005 as a result of a general tax audit carried out in 2008 by the Brescia 2 tax office into that

tax year.

These assessments are based on the Regional Department's claim that the company has not

fulfilled its direct tax and VAT obligations; on this basis, additional IRES, IRAP and VAT

payments are claimed as well as penalties and interest amounting to a total of 3.3 million euro.

Appeals against each of these assessments have been filed with the relevant Tax

Commissioners.

On the same date, the Regional Department served notice of IRES assessments (level 2 notice)

for tax year 2005 on A2A S.p.A. as the consolidating company of Aprica S.p.A. and A2A Reti Gas

S.p.A..

The sum demanded was paid concerning the notice served as the consolidating company of

A2A Reti Gas S.p.A., thereby definitively closing the case.

The notice served as the consolidating company of Aprica S.p.A. was, however, the subject of

an appeal as part of the dispute currently in course for the level I notice, received in 2010 for

the same reasons regarding Aprica S.p.A..


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A2A Trading S.r.l. - Assessments for VAT Green Certificates regarding 2004 and 2005

On December 23, 2009 the Milan Tax Revenue Office served A2A Trading S.r.l. with a VAT tax

assessment concerning tax year 2004. This notice cited the company's failure to invoice

taxable transactions and required the company to pay additional VAT as well as penalties and

interest amounting to a total of 3.3 million euro.

In particular, under this assessment the Tax Revenue Office served a penalty on A2A Trading

S.r.l. for not having invoiced the tollee (Edipower) for the Green Certificates allegedly

transferred between the two.

After appropriate examination, which also included the other tollers, it was considered that

the Tax Revenue Office's conclusions could not be accepted. In fact under tolling

arrangements tollers are on the one hand the owners of the raw materials, including fuel, that

they supply to the tollees to produce electricity, and on the other are the "ab origine" owners

of the electricity produced. The delivery of Green Certificates to tollees by tollers can in no

way be considered as the transfer of title of such.

A2A Trading S.r.l. has therefore not committed any breach of regulations and accordingly no

provision has been made in the financial statements for this matter.

On December 16, 2010, the Milan Tax Revenue Office served notice of a VAT tax assessment

concerning tax year 2005 for the same reasons, requiring the company to pay additional VAT

as well as penalties and interest amounting to a total of 4.8 million euro. As for 2004, A2A

Trading S.r.l. did not breach any regulations in 2005 either and accordingly no provision has

been made in the financial statements for this matter.

A2A Trading S.r.l. has lodged an appeal with the relevant bodies against both notices,

requesting that the claim for additional taxes be fully annulled.

A2A Reti Elettriche S.p.A. - registration tax assessment for adjustments to the value

of the sale of the “protected categories” business to A2A Energia S.p.A.

On February 16, 2010, the Milan 3 Office of the Tax Revenue Office served notice of the

correction and settlement of registration tax due on the sale of the "protected categories"

business from Aem Elettricità S.p.A. (now A2A Reti Elettriche S.p.A.) to Aem Energia S.p.A.

(now A2A Energia S.p.A.) on February 1, 2008. In an assessment notice, the tax office

contested the figure disclosed for “goodwill” and as a result the corresponding registration

tax payable. The company attempted to reach a tax settlement but since no agreement was

reached the assessing office has challenged the notice served by lodging an appeal.


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A2A Reti Gas S.p.A. - General IRES/IRAP/VAT audit for tax year 2007

On February 24, 2010 the Tax Revenue Office (Brescia 2 Office) commenced a general tax

audit of A2A Reti Gas S.p.A. (previously Asm Reti S.p.A.) for IRES, IRAP and VAT purposes for

tax year 2007. This audit was completed on April 29, 2010.

Significant violations were found, mainly regarding direct taxation.

To date assessment notices have been served for 2005, 2006, 2007 and 2008.

The company communicated its acceptance on February 21, 2011 for 2005, on May 25, 2011 for

2006 and on June 6, 2011 for 2008.

On June 30, 2011 the company made an application for settlement concerning the assessment

notice for 2007.

Aprica S.p.A. - General IRES/IRAP/VAT audit for tax year 2007

On January 10, 2011 the Tax Revenue Office (Brescia 2 Office) commenced a general tax audit

of Aprica S.p.A. for IRES, IRAP and VAT purpose for tax year 2007. The audit was completed on

February 8, 2011.

Significant violations were found, mainly regarding direct taxation.

No assessment notice has been received to date.

A2A S.p.A. (merging company of AMSA Holding S.p.A.) – Assessments for VAT

purposes for tax years 2001 to 2005

In early 2006, the Italian Finance Police - Lombardy Regional Unit, Milan - carried out an audit

of AMSA Holding S.p.A. (now A2A S.p.A.) for VAT purposes for tax years 2001 to 2005.

The audit ended with the issue of a final report contesting the legitimacy of the ordinary VAT

rate applied by suppliers in place of the special rate for waste disposal and plant maintenance,

as well as the subsequent deduction made after the invoices issued for these services were

duly paid.

The report was followed by formal notices of assessment from the Tax Revenue Office (Milan

3 Office) for each year audited; appeals were then lodged with the Provincial Tax Commission

within the term provided by law.

The appeals for 2001 and for 2004 and 2005 were discussed on January 25, 2010 and on

February 17, 2010 respectively, with a favorable outcome for the company in all cases.


Other information

118

The outcomes of the 2002 and 2003 disputes were also favorable for the company but the Tax

Revenue Office lodged an appeal against both sentences. The appeal for 2002 was discussed

on November 30, 2010, and on February 23, 2011 the Milan Regional Tax Commission issued its

ruling, revising the initial sentence and upholding the Tax Revenue Office’s appeal on almost all

counts with the exception of the hazardous waste category. The company will file an appeal

with the Supreme Court for 2002, while for 2003 it has submitted its counter-arguments to

the Tax Revenue Office’s appeal and a discussion has been arranged on this matter for

November 7, 2011.

Plurigas S.p.A. - Duty audit for tax years 2009, 2010 and 2011

On May 25, 2011 the Finance Police - Milan Tax Unit - began a tax audit into Plurigas S.p.A. in

connections with duty for the tax years 2009, 2010 and 2011 limited to the date of access.

This audit has yet to be completed and is at present suspended for reasons concerning the

service of the auditors.

Ecodeco S.r.l. – Assessment for VAT purposes for tax years 2006 and 2007

On July 5 and 6, 2010 the Milan Tax Revenue Office served VAT tax assessment notices for the

years 2006 and 2007 contesting the reduced VAT rates applied to the disposal of fuel

produced from waste. This claim was accompanied by a demand for additional VAT of 472

thousand euro (plus penalties and interest) for 2006 and 496 thousand euro (plus penalties

and interest) for 2007.

Ecodeco S.r.l. has lodged an appeal with the appropriate authorities for both tax assessment

notices.

Asrab S.r.l. - Assessments for IRES and IRAP purposes for tax year 2004

On December 21, 2009 the Milan 2 Tax Revenue Office served notices of IRES and IRAP tax

assessments for tax year 2004 contesting several items of amortization and depreciation

charged against taxable income along with costs relating to "assignment rights" which the

company pays each year to Co.s.r.a.b.. The claim was accompanied by a demand for additional

IRES of 233 thousand euro (plus penalties and interest) and an additional 40 thousand euro for

IRAP (plus penalties and interest).

The company lodged an appeal with the Provincial Tax Commission (CTP) of Milan on May 20,

2010. The Commission upheld the request made by the company to suspend proceedings and

in May 2011 the Milan Tax Commission upheld the appeal, cancelling the assessment notice

relating to the costs for "assignment rights".


Other information

119


On March 9, 2011 the Biella Tax Revenue Office served notices of IRES and IRAP tax

assessments contesting several items of amortization and depreciation charged against

taxable income along with costs related to “assignment rights” that the company pays each

year to Co.s.r.a.b.. The claim was accompanied by a demand for additional IRES of 456

thousand euro (plus penalties and interest) and 58 thousand euro for IRAP (plus penalties and

interest).

The company lodged an appeal with the Provincial Tax Commission (CTP) of Biella on May 20,

2011.


The company was served notices of IRES and IRAP tax assessments in the period between

June 10 and 17, 2011 contesting several items of amortization and depreciation charged against

taxable income along with costs related to “assignment rights” that the company pays each

year to Co.s.r.a.b.. The claim was accompanied by a demand for additional IRES of 646

thousand euro (plus penalties and interest) and 83 thousand euro for IRAP (plus penalties and

interest).

The company will appeal against these assessments to the appropriate authorities.

5) Environmental certificates as contingent assets

At June 30, 2011 the Group has an excess of environmental certificates (Emission Allowances,

Green Certificates, and White Certificates).


Other information

120

0.2.2Attachments to thecondensed half-yearconsolidated financialstatements


Tangible fixed assets Net book Changes in the periodMillions of euro value at

Investments Category12 31 2010changes

Land 247 – –

Buildings 825 2 2

Plant and machinery 3,223 38 20

Industrial and commercial equipments 39 1 –

Other assets 64 3 1

Landfills 14 1 2

Assets held under concession (freely transferable) 355 1 –

Assets under construction and advances 83 20 (25)

Leasehold improvements 10 1 –

Leased assets 12 – –

Total 4,872 67 –

1 - Statement of changes intangible assets

122


1 Statement of changes in tangible assets

Changes in the period Net book

Other changes Write-downs Disposals/Sales Amortization Totalvalue at

Value of asset Accumulatedchanges

06 30 2011

Gross Accumulatedamortization

in the periodValue amortization

– – – – – – – 247

– – – – – (10) (6) 819

– – – (3) 1 (118) (62) 3,161

– – – – – (2) (1) 38

(1) – – (2) 2 (10) (7) 57

– – (1) – – (2) – 14

– – – – – (26) (25) 330

2 – – – – – (3) 80

– – – – – – 1 11

– – – – – (4) (4) 8

1 – (1) (5) 3 (172) (107) 4,765

123

Intangible assets Net book Changes in the periodMillions of euro value at

Purchases Category12 31 2010changes

Industrial patents and intellectual property rights 22 4 3

Concessions, trademarks, licenses and similar rights 802 41 6

Assets under formation 21 6 (9)

Other intangible assets 32 – –

Goodwill 675 – –

Total intangible assets 1,552 51 –

2 - Statement of changes inintangible assets


124


2 Statement of changes in intangible assets

Changes in the period Net book

Reclassifications Disposals Write-downs Amortization Totalvalue at

charge changes in06 30 2011

Gross Accumulated Gross Accumulated the periodvalue amortization value amortization

– – – – – (7) – 22

(3) 2 (1) 1 – (30) 16 818

– – – – – – (3) 18

– – – – – (4) (4) 28

– – – – – – – 675

(3) 2 (1) 1 – (41) 9 1,561

125

Name Registered office Currency Share capital

(thousands)

Consolidation areaA2A Reti Gas S.p.A. Brescia Euro 442,000A2A Reti Elettriche S.p.A. Brescia Euro 520,000AMSA S.p.A. Milan Euro 52,179A2A Calore & Servizi S.r.l. Brescia Euro 150,000Selene S.p.A. Brescia Euro 3,000A2A Servizi alla Distribuzione S.p.A. Brescia Euro 300A2A Energia S.p.A. Milan Euro 520A2A Trading S.r.l. Milan Euro 1,000Partenope Ambiente S.p.A. Brescia Euro 120A2A Logistica S.p.A. Brescia Euro 250A2A Ciclo Idrico S.p.A. Brescia Euro 70,000Ecodeco S.r.l. Milan Euro 7,469Aspem Energia S.r.l. Varese Euro 2,000A2A Montenegro d.o.o. Podgorica (Montenegro) Euro 300Mincio Trasmissione S.r.l. Brescia Euro 10Aprica S.p.A. Brescia Euro 204,698A2A Coriance S.a.s. Noisy Le Grand (Francia) Euro 32,562Assoenergia S.p.A. in liquidazione Brescia Euro 126Abruzzoenergia S.p.A. Gissi (Ch) Euro 130,000Retragas S.r.l. Brescia Euro 34,495

Aspem S.p.A. Varese Euro 174Varese Risorse S.p.A. Varese Euro 3,624Montichiariambiente S.p.A. Brescia Euro 1,500Ostros Energia S.r.l. in liquidazione Brescia Euro 350Camuna Energia S.r.l. Cedegolo (Bs) Euro 900A2A Alfa S.r.l. Milan Euro 100Plurigas S.p.A. Milan Euro 800SEASM S.r.l. Brescia Euro 700Proaris S.r.l. Milan Euro 1,875Delmi S.p.A. Milan Euro 1,466,868Ecofert S.r.l. S, Gervasio Bresciano (Bs) Euro 1,787Elektroprivreda Cnre Gore AD Niksic (EPCG) Niksic (Montenegro) Euro 958,666EPCG d.o.o. Beograd Belgrade (Serbia) Dinar RSD 35Zeta Energy d.o.o. Danilovgrad (Montenegro) Euro 10,240Shareholdings held for saleBAS-SII S.p.A. Bergamo Euro 17,166

For investments in the subsidiaries of the Ecodeco Group refer to schedule 5.For investments in the subsidiaries of the Coraince Group refer to schedule 6.

3 - List of companies included in theconsolidated financial statements


126


3 List of companies included in the consolidated financial statements

% Stake Shareholder Valuation methodconsolidated held

Group %shareholding at 06 30 2011

100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% Aspem S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation100.00% 100.00% A2A S.p.A. Line-by-line consolidation

99.99% 99.97% A2A S.p.A. Line-by-line consolidation98.08% 98.08% A2A S.p.A. Line-by-line consolidation97.76% 97.76% A2A S.p.A. Line-by-line consolidation94.95% 94.95% A2A S.p.A. Line-by-line consolidation91.60% 91.60% A2A S.p.A. (87.27%)

A2A Reti Gas Sp.A. (4.33%) Line-by-line consolidation90.00% 90.00% A2A S.p.A. Line-by-line consolidation90.00% 90.00% Aspem S.p.A. Line-by-line consolidation80.00% 80.00% Aprica S.p.A. Line-by-line consolidation80.00% 80.00% A2A S.p.A. Line-by-line consolidation74.50% 74.50% A2A S.p.A. Line-by-line consolidation

70.00% 70.00% A2A Trading S.r.l. Line-by-line consolidation70.00% 70.00% A2A S.p.A. Line-by-line consolidation67.00% 67.00% A2A S.p.A. Line-by-line consolidation60.00% 60.00% A2A S.p.A. Line-by-line consolidation

51.00% 51.00% A2A S.p.A. Line-by-line consolidation47.00% 47.00% A2A S.p.A. Line-by-line consolidation43.70% 43.70% A2A S.p.A. Line-by-line consolidation

100.00% 100.00% EPCG Line-by-line consolidation80.47% 80.47% EPCG Line-by-line consolidation

99.98% 99.98% A2A S.p.A. IFRS5

127


(thousands)

Shareholdings in companies carried at equity

Transalpina di Energia S.r.l. Milan Euro 3,146,000

PremiumGas S.p.A. Bergamo Euro 120

Ergosud S.p.A. Roma Euro 81,448

Ergon Energia S.r.l. in liquidazione Milan Euro 600

Metamer S.r.l. San Salvo (Ch) Euro 650

Asm Novara S.p.A. Brescia Euro 1,000

Bergamo Servizi S.r.l. Sarnico (Bg) Euro 10

SET S.p.A. Toscolano Maderno (Bs) Euro 104

e-Utile S.p.A. Milan Euro 1,000

Azienda Servizi Valtrompia S.p.A. Gardone Valtrompia (Bs) Euro 6,000

Ge.S.I. S.r.l. Brescia Euro 1,000

Centrale Termoelettrica del Mincio S.r.l. Ponti s/Mincio (Mn) Euro 11

Serio Energia S.r.l. Concordia s/Secchia (Mo) Euro 1,000

Visano Soc. Trattamento Reflui Scarl Brescia Euro 25

LumEnergia S.p.A. Lumezzane (Bs) Euro 300

Sviluppo Turistico Lago d'Iseo S.p.A. Iseo (Bs) Euro 1,194

ACSM-AGAM S.p.A. Monza Euro 76,619

Edipower S.p.A. Milan Euro 1,441,300

Utilia S.p.A. Rimini Euro 900

Futura S.r.l. Brescia Euro 2,500

Prealpi Servizi S.r.l. Varese Euro 2,250

COSMO Società Consortile a Responsabilità Limitata Brescia Euro 100

Dolomiti Energia S.p.A. Rovereto (Tn) Euro 219,000

Rudnik Uglja Ad Plejvlja Plejvlja (Montenegro) Euro 21,493

Consolidamento Gruppo Ecodeco (1)

Consolidamento Gruppo Coriance (2)

Total shareholdings

(1) For investments in the subsidiaries of the Ecodeco Group refer to schedule 5.(2) For investments in the subsidiaries of the Coraince Group refer to schedule 6.

4 - List of shareholdings incompanies carried at equity


128

Stake Shareholder Book Valuation methodheld value at

% 06 30 2011(thousands)

50.00% Delmi S.p.A. 1,738,483 Equity method

50.00% A2A Alfa S.r.l. 5,683 Equity method

50.00% A2A S.p.A. 86,780 Equity method



50.00% A2A S.p.A. 346 Equity method

50.00% Aprica S.p.A. 209 Equity method



48.86% A2A S.p.A. (48.48%) A2A Reti Gas S.p.A. (0.38%) 4,022 Equity method





33.33% A2A Energia S.p.A. 823 Equity method




20.00% A2A Energia S.p.A. 192 Equity method

20.00% A2A Calore & Servizi S.r.l. 500 Equity method

12.47% Aspem S.p.A. 806 Equity method

52.00% A2A Calore & Servizi S.r.l. 52 Equity method



1,641 See attachment 5

1,766 See attachment 6

2,399,001


4 List of shareholdings in companies carried at equity

129

Name Registered office Currency Sharecapital

(thousands)

Consolidation area

Ecodeco S.r.l. Milan Euro 7,469

Ecodeco Hellas S.A. Atene Euro 60

Ecolombardia 18 S.r.l. Milan Euro 658

Ecolombardia 4 S.p.A. Milan Euro 17,727

Sicura S.r.l. Milan Euro 1,040

Sistema Ecodeco UK Ltd Canvey Island Essex (UK) Lst 250

Vespia S.r.l. Torino Euro 10

A.S.R.A.B. S.p.A. Biella Euro 2,582

Nicosiambiente S.r.l. Milan Euro 50

Ecoair S.r.l. Milan Euro 10


SED S.r.l. Robassomero (To) Euro 1,250

Bergamo Pulita S.r.l. Bergamo Euro 10

Tecnoacque Cusio S.p.A. Omegna (Vb) Euro 206

Bellisolina S.r.l. Montanaso (Lo) Euro 52

Total shareholdings

5 -List of companies included inthe consolidated financialstatements of the Ecodeco Group


130


5 List of companies included in the consolidated financial statements of the

Ecodeco Group

% Stake Shareholder Book Valuation methodconsolidated held value at

Group % 06 30 2011shareholdings (thousands)

at 06 30 2011

Line-by-line consolidation

100.00% 100.00% Ecodeco S.r.l. Line-by-line consolidation









50.00% Ecodeco S.r.l. 1,213 Equity method

50.00% Ecodeco S.r.l. 184 Equity method

25.00% Ecodeco S.r.l. 244 Equity method

50.00% Ecodeco S.r.l. - Equity method

1,641

131


(thousands)

Consolidation area

Coriance Sas Noisy Le Grand - France Euro 5,407

Aulnay Energie Services Sas Aulnay-sous-Bois - France Euro 610

Calo Rem Sas Manosque - France Euro 40

Castres Energie Services Sas Castres - France Euro 38

Mebois-Montrond Bois Energie Sas Montrond-Les-Bains - France Euro 40

Andrezieux Boutheon Energie Services Sas Andrezieuz-Boutheon - France Euro 40

Energie Meaux Sas Meaux - France Euro 3,050

Les Mureaux Energie Services Sas Le Mureaux - France Euro 40

Societé Thermique De Villiers Le Bel Gonesse Sas Villiers-Le-Bel - France Euro 150

Blanc Mesnil Energie Services Sas Le Blanc Mesnil - France Euro 40

Chelles Chaleur Sas Chelles - France Euro 369

Drome Energie Services Sas Pierelatte - France Euro 200

Eneriance Sas Toulouse - France Euro 150

Ris Energie Services Sas Ris Orangis - France Euro 38

Societé Thermique De La Doua Sas Villeurbanne - France Euro 40

VLBG Energie Sa Viliers-le-Bel - France Euro 781

Inter Industrie Thermique Sas Nemours - France Euro 60

Sogatherm Sas Chalett sur Loing - France Euro 8

SOFREDITH Société Fresnoise de la Distribution Thermique Sa Fresnes - France Euro 229

Societé Thermique De Salon De Provence Sa Salon De Provence - France Euro 39

SOFREGE Société fresnoise de Géothermique Sas Fresnes - France Euro 1,000


Gennedith Sas Nanterre - France Euro 85

Stade Energie Sas Noisy-le-Grand - France Euro 153

Eriva Sas Montereau - France Euro 100

Societé Thermique de Laval Saint Nicolas Sa Laval - France Euro 472

Via Confort Sas Villars - France Euro 1,100

Coge Sante Lille Gie Sant-André-es-Lille - France Euro n.a.

Total shareholdings

6 - List of companies included inthe consolidated financialstatements of the CorianceGroup


132


6 List of companies included in the consolidated financial statements of the

Coriance Group

133

% Stake Shareholder Book Valuation methodconsolidated held value at

Group % 06 30 2011shareholding (thousands)at 06 30 2011

100.00% 100.00% A2A Coriance Sas Line-by-line consolidation

100.00% 100.00% Coriance Sas Line-by-line consolidation




















26.00% Coriance Sas 291 Equity method

50.00% Coriance Sas 1,080 Equity method




34.00% Coriance Sas - Equity method

1,766

Name Stale Shareholder Book held value at

% 06 30 2011(thousands)

Financial assets available for sale

Infracom S.p.A. 1.57% A2A S.p.A. 2,011

Immobiliare-Fiera di Brescia S.p.A. 9.44% A2A S.p.A. 1,101

E.M.I.T. S.p.A. 10.00% A2A S.p.A. 1,247

Azienda Energetica Valtellina e Valchiavenna S.p.A. (AEVV) 9.39% A2A S.p.A. 1,846

Others:

A.C.B. Servizi S.r.l.

Alesa S.r.l.

ANCCP S.r.l.

AQM S.r.l.

AvioValtellina S.p.A.

Banca di Credito Cooperativo di Calcio e Covo Società Cooperativa

Bergamo Energia S.p.A.

Brescia Mobilità S.p.A.

Brixia Expo-Fiera di Brescia S.p.A.

Cavaglià Sud S.r.l. in liquidazione

Consorzio DIX.IT in liquidazione

Consorzio Intellimech

Consorzio Italiano Compostatori

Consorzio L.E.A.P.

Consorzio Milano Sistema in liquidazione

Consorzio Polieco

Cramer Scrl

Curdem

7 - List of financial assets availablefor sale


134

Name Interest Shareholder Carrying held amount at

% 06 30 2011(thousands)

Emittenti Titoli S.p.A.

Guglionesi Ambiente S.c.a.r.l.

INN.TEC. S.r.l.

Isfor 2000 S.c.p.a.

S.I.T. S.p.A.

Stradivaria S.p.A.

Tirreno Ambiente S.p.A.

Prva banka Crne Gore A.D. Podgorica (*)

Total other financial assets 11,729

Total financial assets available for sale 17,934

(*) Although representing 24.10% of share capital the investment in Prva banka Crne Gore A.D. Podgorica is classified as AFS for thereasons discussed in the section "Consolidation procedures"


7 List of financial assets available for sale

135

0.3Interim report onoperations

The A2A Group operates in the following sectors:

Energy Sector

This sector’s activity is the sale of electricity and natural gas on wholesale and retail electricity

and methane gas markets. The support of the marketing areas is assured by fuel procurement,

electricity generation plant planning and dispatching, portfolio optimization and trading on

domestic and foreign markets.

Heat and Services Sector

This sector’s activity is mainly the sale of heat and electricity produced by cogeneration plants

(mostly owned by the Group). Cogenerated heat is sold through district heating networks.

The sector also provides services, such as managing district heating plants owned by third

parties (heat management services).

Environment Sector

This sector’s activity relates to the whole waste management cycle, which ranges from

collection and street sweeping to the treatment, disposal and recovery of materials and

energy. This sector’s activity includes the recovery of the energy content in waste by means of

waste to energy or biogas plants.

Networks Sector

This sector’s activity consists of the technical and operational management of networks for

the transmission and distribution of electricity, the transport and distribution of natural gas

and the management of the entire Integrated Water Cycle (water captation, aqueduct

Results by sector


137

management, water distribution, sewerage network management, water purification). Also

included are activities relating to public lighting, traffic regulation systems, the management

of votive lights in cemeteries and systems design services.

Corporate and Other Services

Corporate services include various activities such as guidance, strategic direction,

coordination and control of industrial operations, as well as services to support business and

operating activities (e.g. administrative and accounting services, legal services, procurement,

personnel management, information technology, telecommunications etc.). Other services

also include video-surveillance, data transmission, telephony and internet access services.


Results by sector

138

World economic activity continued to display a robust expansion increasingly capable of self-

sustainment in a situation where global financial conditions are improving. The latest

indicators however point to a slight slowing down of activities compared to the high rates of

increase seen at the beginning of the year. At the same time there are considerable differences

between the various regions.

In the advanced economies the effect of natural disasters, the need for more rigor in reviving

the public finances and the continuing process of adjustment to accounts in the private sector

have contributed to slowing down growth. More specifically, the recovery in the United States

has remained at a rather moderate level, given the seriousness of the recession arising from

the world financial crisis, but is increasingly supported by domestic demand. In Japan the

earthquake which hit the eastern area of the country has caused a sharp contraction in short-

term activity, although its global repercussions ought to be somewhat limited. In the United

Kingdom growth was slowed down by the adverse weather conditions and then continued to

demonstrate a rather stagnant trend in the presence of fiscal restriction measures. In the

emerging economies on the other hand activity has remained vigorous. Price overheating

pressure continues, especially in Asia, despite the steps taken to limit growth by means of

more restrictive monetary and fiscal policies. In South America the economy has obtained

additional support from the high level of raw materials prices.

In Italy the recovery has been slowed down by the process involving the consolidation of the

financial statements of banks, as well as the rigorous approach taken to revive the public

finances.

The ECB’s forecasts state that the increase in global GDP in real terms will rise from 4.5% in

2011 to 4.7% in 2012.

Macroeconomic projections for the eurozone drawn up in June by the Eurosystem experts

point to GDP growth rates in real terms of between 1.5% and 2.3% in 2011 and between 0.6%

and 2.8% in 2012. Among the European countries moving ahead quickly there is always

Macroeconomic scenario


139

Germany. As far as Italy is concerned, latest estimates indicate a rise of 0.8% in GDP in 2011 and

1.3% in 2012, remaining at the same level as 2010 (source: IMF-WEO).

In terms of prices, Eurostat’s estimates show that there was inflation of 2.7% over the twelve

months to June. The relatively high inflation rates over the past few months are to a large

extent due to rises in the prices of energy and raw materials. For the future, it is likely that they

will remain above 2% over the next few months. The upwards pressure on inflation can also be

seen at the initial stages of the production process. The macroeconomic projections

formulated for the eurozone by the Eurosystem experts indicate that there will be an annual

inflation rate of between 2.5% and 2.7% in 2011 and between 1.1% and 2.3% in 2012. In Italy the

retail price index has to a large extent reflected the changes in prices in the eurozone and

reached 2.7% in June.

As far as interest rates are concerned at its meeting of July 7 the ECB decided to raise its

reference interest rate by 25 basis points to 1.50% on the basis of its usual economic and

monetary analysis. Liquidity is still abundant and might encourage the pressure on prices to

settle in the eurozone. In addition, recent data confirm that underlying changes in economic

activity in the eurozone are positive. Taken overall, the orientation of monetary policy remains

accommodating, providing support for the economy. On the other hand after taking the cost

of money to its lowest ever level of 0.925% in the second half of 2008, the Fed has continued

to keep it at that level.

In the first five months of 2011, the euro/dollar exchange rate appreciated considerably,

absorbing the fall at the end of 2010, only then to suddenly depreciate. After a further period

of volatility in May and the beginning of June the rate settled at 1.44 in the latter month. The

average rate for the six months was 1.40 dollars (source: ECB). The appreciation in the single

currency between January and the start of May appears linked to the mitigation of fears about

the sustainability of the public finances in certain economies in the eurozone and the gradual

widening of interest rate spreads in favor of the euro. The subsequent depreciation is

probably connected with a renewal of risk aversion, in the wake of increased concerns about

the budget prospects of certain countries in the eurozone.


Macroeconomic scenario

140

The energy scenario for the first half of 2011 has been characterized by a rising trend in the

price of Brent - the reference commodity for the fuel market - and in general of all the oil-

based commodities. Quotations in dollars of these products which reached their maximum in

April remained at high levels for the remainder of the half year. These quotations were only

partially mitigated by the rise in the single currency against the dollar from 1.34 dollars in

January to 1.44 dollars in June.

The average price of Brent for the period from January to June 2011 was 111.1 $/bbl (79.1 €/bbl).

The rise in oil-based commodity prices in the first four months of 2011 was only partially due

to an increase in global demand and expansionary monetary policies. Contributing in addition

were the high level of geopolitical instability in North Africa and the Middle East and the

tremendous earthquake which struck Japan.

As far as the domestic electricity market scenario is concerned, following the reversal of the

trend which took place during the previous year, electricity volumes traded (purchases/sales)

in Italy in the first half of 2011 continued to pick up.

During the first half of 2011 there was a demand for electricity of 162.9 TWh, representing an

increase of 1.0% over the same period in the previous year. Load coverage was guaranteed by

national production for 86.1% and by net imports for the remaining 13.9% (Terna data).

(Net) domestic electricity production was guaranteed as to 76.0% by thermoelectric sources,

17.1% by hydroelectric sources and 5.0% by geo-thermoelectric and wind sources, and for the

remaining 1.9% by photovoltaic sources.

Compared to the same period of the previous year there was a contraction in generation from

hydroelectric sources by 11.3%; on the other hand there was an increase in production from

geo-thermoelectric (+5.8%) and wind (+2.8%) sources, from thermoelectric sources (+2.0%)

and from photovoltaic sources (+284.6%).

Net domestic production rose by 1.0% while the foreign balance fell by 0.7%.

Energy market trends


141

The average quotation of the PUN (Base Loan Single Nationwide Price) for the period

between January and June 2011 reached a level of 67.4 €/MWh, representing an increase of

9.4% over the equivalent figure in the same period of the previous year (61.6 €/MWh).

During the first six months the PUN displayed an upwards trend. This increase, partially offset

by the increase in the quotations of commodities, caused a considerable increase in the

margins of market operators.

Methane gas

On the basis of the figures published by the Ministry for Economic Development for the

natural gas market for Italy the volume of gas consumed in the first half of 2011 amounted to

42,160 cm, representing a fall of 4.4% over the same period in 2010 (when it increased by

14.4%); this is a larger decrease than that of 2.6% recorded in April.

Imports also fell during the first half year (by 2.4% amounting to 39,041 million cm), as did

withdrawals from stocks, with a fall in levels of 88%, and domestic production (-3.2% equal to

4,154 million cm).

Among the entry points there was a significant increase in Russian gas arriving at Tarvisio

(+54.7%, equal to 8,863 million cm) and the GNL at Gorizia (+45.6%, equal to 90 million cm).

Gas arriving from Northern Europe through Passo Gries fell however (-29.3%, equal to 4,819

million cm). The entry point at Gela, regarding gas arriving from Libya, remained at a standstill

(-72.9%, equal to 1,343 million cm imported in the first months of the year).

The procurement market for gas in Italy was affected in the first half of 2011 by significant

events occurring at two of the seven gas import points.

The Transitgas methane pipeline which brings methane into Italy from Northern Europe and

which was closed as the result of a landslip in July 2010 reopened on a provisional basis on

December 24, 2010, and with subsequent extensions continued to be available throughout the

winter without interruption. The somewhat favorable weather allowed the new course of the

methane pipeline to be built where the landslip occurred. In April 2011 a connection was made

between the new course of the methane pipeline that had been built and the rest of the

course; the infrastructure has therefore become available again on a non-provisional basis.

The recent events in Libya led ENI to suspend gas production and close the Greenstream

methane pipeline which brings methane of Libyan origin into Italy (representing around 10%

of total Italian supplies). The effect of the lack of this infrastructure in respect of the safety of

supplies was mitigated by the imminent end of the winter season, with stocks being

replenished at a level still sufficient to ensure that civil usage was guaranteed and a



142

structurally long market which characterized the whole of the thermal year in progress. The

lack of availability of the Greenstream infrastructure did not even have any repercussions on

the replenishment of stocks during the summer period, which is proceeding in line with that

of previous years.

The events in Libya and in the Middle East in general on the other hand had a significant

indirect effect on the price of gas, connected with the repercussions of oil-based products on

the market. The price of Brent DTD rose from 105 $/bbl to over 120 $/bbl, fluctuating between

125 $/bbl and 105 $/bbl in a highly volatile manner. Long-term contract gas prices which are

linked to the international quotations of oil-based products therefore had a very significant

increase due to contractual lag, and will continue to do so in the second half of the year.



143


The Energy Sector comprises the following activities:

• Electricity generation: power plant management through a generation pool of

hydroelectric and thermoelectric plants with installed power of 6.5 GW .

• Energy management: the purchase and sale of electricity and gaseous and non-gaseous

fuels on national and international wholesale markets; the procurement of the fuels

needed to cover the requirements of the thermoelectric plants and customers; the

planning, programming and dispatching of electricity generation plants.

• Sale of electricity and gas: marketing of electricity and gas to the eligible customer

market. Also included is the sale of electricity to customers eligible for “higher

protection”.

In addition to the activities carried on directly by A2A S.p.A. the Energy Sector also includes the

following companies:

(1) Includes 20% of the Edipower plants and the EPCG plants

Energy Sector

144

Energy

Thermoelectric and hydroelectric plants

Energy Management

Sale of Electricty and Gas

Consolidated companies of the A2A Group

• Abruzzoenergia

• A2A Energia

• A2A Trading

• Plurigas

• Aspem Energia

• EPCG

Recent changes in legislation in the electricity sector

Large hydroelectric concessions

With Law no. 122/2010 the deadline for outstanding concessions was extended for a period of

5 years in order to allow the term for the calling of tenders for the new allocation of these

concessions to be respected.

With the law of December 20, 2010 the Region of Lombardy adopted additional provisions on

the subject, in view of the expiry of certain of the outstanding concessions in the relative local

area.

With Resolution no. 1205 of December 29, 2010 the Regional Council initiated implementation

of the above mentioned provisions, activating the “temporary continuation” by A2A S.p.A. of

the use of the shunting and hydroelectric plants of Stazzona, Lovero and Grosotto, which

notwithstanding the above-mentioned provisions of State legislation were considered

expired at December 31, 2010.

A2A S.p.A. and other operators have appealed against the provision at the High Court of Public

Waters.

On February 23, 2011 the Cabinet also adopted a resolution to challenge before the

Constitutional Court certain of the provisions adopted, as being prejudicial to State

jurisdiction.

It is however not possible to ascertain what effect this proceeding may have in this respect

given that the regime relating to the extension of the outstanding concessions has not been

challenged by the Government.

In a communication of March 15, 2011 the European Union notified our country that a default

letter had been issued against the Republic of Italy calling for clarifications in respect of the

provisions of Law no. 122/2010.

Further details may be found in the discussion on this matter to be found in the section

relating to Legislative and Regulatory Risk.

Remuneration of production capacity

The provisional mechanism established by Resolution no. 48/04 of the Authority provides for

the recognition of a set fee to entities which make production capacity available for the needs

of balancing the system, against the fulfillment of the commitment to make production

capacity available on high and medium critical days, together with an additional fee to be paid


Energy Sector

145

when the actual revenues earned by the individual producer on the electricity markets are, on

an annual basis, lower than a reference level equal to the revenues which the same producer

would have earned under the previous administered regime.

With Resolution ARG/elt no. 166/10, the formula for calculating the additional fee to cover the

remuneration of the production capacity, as per article 48 of Attachment A of Resolution no.

111/06, has been revised. Since the envisaged method of calculation is of a discriminatory and

distorting nature with respect to the mechanism by which the reference markets work, A2A

Trading S.r.l. has lodged an appeal against the Authority with the Regional Administrative

Court (TAR) in order to have the provision repealed. With an order issued on February 18

concerning the appeal lodged by ENEL against Resolution ARG/elt no. 166/10, the Lombardy

TAR suspended the effects of the provision, freezing the use of the amount of the fee set aside

following billing to end customers, in the fourth quarter of 2010, to cover the costs for the

remuneration of the availability of production capacity (as per article 48 of Attachment A of

Resolution no. 111/06) increased for that period to 0.130 eurocents per kWh.

The hearing for the discussion of the merit has been arranged for October 13, 2011.

Resources essential for the safety of the electricity system

With Resolution ARG/elt no. 8/11 the Authority amended Resolution no. 161/10 on the

calculation of the fees to be paid for the plants considered essential for the safety of the

electricity system (whose owners may decide to avail themselves of the ordinary

remuneration method), with specific reference to the offer conditions for the energy

produced by units admitted to the reintegration of costs.

Incentives for production from renewable sources

On March 29 Legislative Decree no. 28/2011 became effective, implementing European

Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

The main measures envisaged, though, may only be implemented following the issue of

further ministerial decrees (the majority of which by the Ministry for Economic Development

and the Ministry for the Environment).

Reference should be made to the section discussing Legislative Risk for a summary of the

contents of the regulations adopted.


Energy Sector

146

Bid price of Green Certificates held by the Energy Services Manager(GSE) - 2011

With Resolution ARG/elt no. 5/11, applying the criteria established by Resolution ARG/elt no.

24/08, the Authority determined the bid price of the Green Certificates held by the Energy

Services Manager (GSE) for 2011 to be 66.90 euro/MWh (the price for 2010 was 67.18

euro/MWh in accordance with Resolution ARG/elt no. 3/10).

Emissions Trading

In accordance with EU Directive 2003/87/EC, from January 1, 2005 the operators of plants

which emit CO2 into the atmosphere must hold an authorization issued by the competent

national authority and cover their emissions with equivalent rights, part of which are issued

free of charge on the basis of the Emissions Allocation Plan adopted by each country.

With Decree Law no. 72 of May 20, 2010 urgent measures were adopted for assigning CO2

emission quotas for plants (“new entrants”) which entered use after the adoption of the

National Allocation Plan (PNA) referring to the second period of application of the European

Emissions Trading System (2008-2012).

With Resolution no. 117/10 the Authority established that the credits due to each entitled party

would be calculated annually on the basis of the allowances sent to the Electricity and Gas

Authority (AEEG) by the National Committee responsible for managing Directive 2003/87/EC

by recognizing a valuation for each emission allowance that takes into account the arithmetic

average of the daily price of the EUAs and the volumes traded on the main organized European

markets.

As far as 2010 and the following two years are concerned, Resolution no. 16/2010 of the

National Committee responsible for managing Directive 2003/87/EC established that the

allowances to be considered as the basis for the credit due for the Canavese (A2A Calore &

Servizi S.r.l.) plant and the integrated cogeneration heating-cooling plant (Varese Risorse

S.p.A.) were to be 56,285 tonnes and 10,518 tonnes respectively for each year.

With Resolution ARG/elt no. 38/11, the Authority quantified the credits due for 2010 to

operators of plants or parts of plants recognized as new entrants in the Emissions Trading

System pursuant to article 3, paragraph 1m) of Legislative Decree no. 216 of April 4, 2006.

More specifically the following were recognized:

• credits of 807,126.90 euro to A2A Calore & Servizi S.r.l. for its Canavese plant, to cover the

failure to recognize emission allowances for 56,285 tonnes of CO2 valued at 14.34 euro per tonne;


Energy Sector

147

• credits of 150,828.12 euro to Varese Risorse S.p.A. for the integrated cogeneration heating-

cooling plant, to cover the failure to recognize allowances for 10,518 tonnes of CO2 valued

at 14.34 euro per tonne.

The amounts relating to 2010 for the Scandale plant, which will be entitled to the credits due

to new entrants up to 2012, will be established by a later provision.

With the Determination of April 5, 2011, applying the methodology established in Resolution

ARG/elt no. 77/08, the Authority additionally determined the criteria for the recognition for

2010, pursuant to CIP Provision no. 6/92, of the charges deriving from the application of

Directive 2003/87/EC limited to the electricity sold to the Electricity Services Manager (GSE)

as part of destined sale conventions stipulated pursuant to the mentioned provision.

In particular, for the purposes of applying article 5 of resolution ARG/elt no. 77/08 for 2010, the

Authority determined the value of the PFLEX term in 12.30 €/t and the value of the PEUA term

in 14.13 €/t.

Electricity sales price for owners of plants under the CIP 6/92convention

Law no. 99/09 provided that starting from 2009 the value of the component relating to the

Avoided Fuel Cost (CEC) of the sales price of CIP 6 electricity due to owners of plants forming

part of the convention, to be recognized on account until the annual settlement price is fixed,

should be determined by a decree of the Ministry for Economic Development, on the proposal

of the AEEG. In addition, the law clarified that these updates must be carried out on the basis

of the quarterly periods for the recording of the quotations of the products of the basket of

reference of the conventional component relating to the value of natural gas as per Resolution

no. 154/08 of the AEEG.

In February 2011 the Electricity Services Manager (GSE) published the tables for the sales

prices of electricity produced under the CIP 6/92 regime which must be used by producers

who are owners of plants with that convention for valuing electricity sold to the GSE in the first

quarter of 2011.

With the Ministerial Decree of 8 June, on the proposal of the Energy Authority, for the

purpose of determining the 2010 settlement value for the Avoided Fuel cost for plants under

the CIP 6/92 regime, the Ministry for Economic Development quantified the average price of

the fuel for 2010 as per the convention to be 29.05 €/cm (with the Ministerial Decree of July 12,

2010 the price was quantified as 29.59 €/cm for the 2009 settlement).


Energy Sector

148

Regulation of the electricity sector in Montenegro

The electricity sector in Montenegro is regulated by the Energy Law (a first Energy Law was

issued in 2003 and new legislation in this respect was issued in 2010 which is currently in

force).

On the basis of this law, in establishing the country’s economic policy the Government must

also indicate a strategy for the energy sector. The Energy Regulatory Agency (RAE), an

autonomous and independent body established by the 2003 Energy Law, has the task of

regulating the sector along all the stages of the chain (generation, transmission, distribution

and sale to the end customer) in accordance with the Government’s indications and on the

basis of the provisions contained in the Energy Law.

The new law dictates provisions in terms of the functional unbundling (separation of

accounting, separation of management and separation of sensitive commercial information)

of all the activities of the electricity sector; in addition, distribution must be separated from a

corporate standpoint from the other activities managed by the vertically integrated company

by the end of 2011.

At present regulatory periods have a term of one year, despite the fact that the 2010 law

allowed for the possibility of establishing multi-year regulatory periods.

Until 2010 tariffs were determined on the basis of the “Electricity tariff rules” adopted by the

RAE pursuant to the 2003 law. The methodology applied by the RAE is based on a cost-plus

type cost remuneration principle, under which tariffs are established in such a way as to

ensure that the operator’s actual costs are covered, thus guaranteeing remuneration of the

capital invested without however encouraging efficiency in any specific way.

With a decision of December 14, 2010 the RAE established the tariffs to be applied in the first

quarter of 2011, essentially confirming the values approved for 2010 (a provision already

challenged by EPCG).

Recent legislative changes in the natural gas sector

Upstream gas market

Reorganization of the market and regulations governing the equalization of the

economic merit of natural gas

With Resolution ARG/gas no. 45/11 the Electricity and Gas Authority introduced changes to the

regulatory framework regarding the transportation, equalization and storage of natural gas in

order to introduce a discipline for the equalization of natural gas based on market criteria.


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Energy Sector

This discipline provides for the start-up, during the first stage, of a simplified system

consisting of a daily equalization market session in which the quantities of natural gas bought

or sold by the person responsible for the equalization and by users for each gas day are

determined, together with the related fees, as part of a platform managed by the Electricity

Market Operator (GME).

To deal with the delay in the implementation of the information systems of Snam Rete Gas, the

opportunity to complete the disciplining of the settlement and the definition of the system of

guarantees covering the system, together with the failure to adjust the platform of the GME,

with Resolution ARG/gas no. 81/11 the Authority subsequently intervened by deferring the

timing of the start up of the discipline to the first available gas day in December 2011.

The discipline introduced by the Storage Decree

In April 2011 the procedure to allocate new storage capacity as per article 6.5 of Legislative

Decree no. 130/2010 (the “Storage Decree”) went live with the start of the first stage of the

tender procedures for the new storage capacity made available by Stogit amounting in total to

3 billion cm: 2.033 billion mc was assigned to industrial customers (compared to a demand of

over 9 billion cm) and 967 cm was assigned to SMEs (compared to a demand of over 1 billion

cm), at a price of 1.250155 euro/GJ. There is accordingly no capacity available for

thermoelectric customers for thermal year 2011/2012.

Gas supply

Protected economic conditions

The dispute regarding Resolution ARG/gas no. 89/10, approved in June 2010, by which the

AEEG amended the method of updating the price of the supply of gas for the protected service

by applying a reducing coefficient k to the indexed component (a variable fee covering the

costs of provisioning), is currently in progress.

Provisions common to both sectors (electricity and gas)

A commercial code of conduct has been in force since January 1, 2011 which was introduced by

resolution ARG/com no. 104/10 and which is applicable in the case when a supply contract on

the free market is proposed by any seller to an end customer supplied at low voltage and/or

having a consumption of natural gas not exceeding 200,000 scm/year.

150


Energy Sector

Quantitative data-electricity sector

Key quantitative data relating to the energy sector are summarized below.

GWh 06 30 2011 06 30 2010 Change % 2011/2010

SOURCES

Net production 5,680 6,129 (449) (7.3%)

– thermoelectric production 4,040 4,260 (220) (5.2%)

– hydroelectric production 1,640 1,869 (229) (12.3%)

Purchases 18,449 14,764 3,685 25.0%

– single buyer 1,502 1,657 (155) (9.3%)

– exchange 5,522 6,520 (998) (15.3%)

– foreign markets 7,681 4,821 2,860 59.3%

– other purchases 3,744 1,766 1,978 112.0%

TOTAL SOURCES 24,129 20,893 3,236 15.5%

USES

Protected market sales 1,502 1,657 (155) (9.4%)

Sales to eligible customers and wholesalers 9,702 8,030 1,672 20.8%

Sales on the exchange 6,636 7,852 (1,216) (15.5%)

Sales on foreign markets 6,289 3,354 2,935 87.5%

TOTAL USES 24,129 20,893 3,236 15.5%

Note: the sales figures are stated gross of any losses. The quantitative data relating to the EPCG Group are not included.

The Group's electricity output in the first half of 2011 amounted to 5,680 GWh, to which should

be added purchases of 18,449 GWh for a total availability of 24,129 GWh.

Production fell compared with the same period of the previous year.

The drop in thermoelectric production (-220 GWh) was caused by a lower load factor in the

Group’s power stations and the departure of the San Filippo del Mela oil-fired power station

from the tolling agreement with Edipower.

The decrease in hydroelectric production was on the other hand mainly due to the reduced

contribution of the Calabria hydroelectric plants, which in the first six months of 2010

benefited from greater hydraulicity.

Purchases of electricity rose by 25.0% over the first half of 2010 from 14,764 GWh to 18,449

GWh.

In addition there was an increase in sales on the retail and wholesale markets and a rise in the

quantity of electricity brokered on foreign markets, which more than offset the decrease in

electricity brokered on the Ipex platform.

The subsidiary Elektroprivreda Crne Gore AD Niksic (EPCG) was consolidated on a line-by-line

151

basis for the period ended June 30, 2011, while for that ended June 30, 2010 it was

consolidated using the “one line” method.

EPCG has an efficient production mix with total installed capacity of 0.9 GW, of which 0.2 GW

is thermoelectric and 0.7 GW is hydroelectric.

The following is a summary of the quantitative data relating to the first half of 2011 for the

electricity sector of the EPCG Group:

GWh 06 30 2011

SOURCES

Production 1,579

– thermoelectric production 672

– hydroelectric production 907

Imports and other sources 722

– imports 526

– other sources 20

– EPS (Serbian Electricity Company) 176

TOTAL SOURCES 2,301

USES

Domestic market consumption 1,729

Network losses 345

Other uses 17

Exports 210

TOTAL USES 2,301

Quantitative data-gas sector

Milioni di mc 06 30 2011 06 30 2010 Change % 2011/2010

SOURCES

Procurement 2,940 3,209 (269) (8,4%)

Withdrawals from stock (40) (5) (35) n.d.

Internal consumption/GNC (20) (16) (4) 25,0%

TOTAL SOURCES 2,880 3,188 (308) (9,7%)

USES

End uses 954 1.137 (183) (16,1%)

Thermoelectric uses 660 642 18 2,8%

Heat uses 125 131 (6) (4,6%)

Wholesalers 1.141 1.278 (137) (10,7%)

TOTAL USES 2,880 3,188 (308) (9,7%)


Energy Sector

152

During 2011 volumes provisioned amounted to 2,940 Mcm, a decrease of 269 Mcm over the

same period of the previous year, mainly due to the mild temperatures experienced during the

first few months of the year.

Economic data

Millions of euro 01 01 2011 01 01 2010 Change 06 30 2011 06 30 2010

Revenues 2,397 2,245 152

Gross operating income 163 191 (28)

% of revenues 6.8% 8.5%

Depreciation, amortization and provisions (114) (97) (17)

Net operating income 49 94 (45)


Investments 10 16 (6)

The revenues of the Energy Sector amounted to 2,397 million euro in the first half of the year

(2,245 million euro in the six months ended June 30, 2010), of which 146 million euro relates to

the production and sale of electricity by the EPCG Group.

Gross operating income of 163 million euro fell by 28 million euro compared to the first half of

2010: the decrease of 49 million euro in the margin in the electricity subsector was only

partially offset by the increase of 21 million euro in the margin in the gas subsector.

The fall in profitability in the electricity subsector is mainly due to a decrease in hydroelectric

production, which was affected by the lower hydraulicity at the Calabria hydroelectric plants,

the departure from the regulated boundary of the tolling agreement stipulated by the San

Filippo del Mela power station in Sicily with Edipower and the loss by the Monfalcone power

station of its essentiality requisites.

There were considerable falls in the utilization factors of the combined cycle power stations in

the boundary in question, offset in terms of overall profitability by an improvement in unit

margins. The margins of marketing activity also contracted compared to the first half of 2010.

The Montenegro consolidated company EPCG made a positive contribution of 13 million euro.

In the gas subsector the decrease in quantities sold as the result of the mild weather

experienced during the first few months of the year and the economic impact of the reduction

in tariffs regulated by the protected market were more than offset by the positive effects of

renegotiating gas procurement agreements at the start of the fourth quarter of 2010.


Energy Sector

153

Depreciation, amortization and provisions totaled 114 million euro (97 million euro for the six

months ended June 30, 2010). Compared with the first half of 2010, this item includes

depreciation, amortization and provisions of 19 million euro relating to the electricity sector

of the EPCG Group.

As a result of the above changes, net operating income amounted to 49 million euro (of which

-6 million euro relates to the electricity sector of the EPCG Group), a decrease of 45 million

euro compared to the first half of 2010.

Capital expenditure totaled 10 million euro and mainly regarded extraordinary maintenance at

the Timpagrande hydroelectric plant (modernization and replacement of turbine

components for 2.5 million euro) and the Satriano hydroelectric plant (0.6 million euro), the

other hydroelectric plants in Calabria (0.6 million euro), the hydroelectric plants in the

Valtellina (0.8 million euro) and the thermoelectric plant at Gissi (1.2 million euro).

In addition extraordinary maintenance was carried out on the thermoelectric plants at

Cassano D’Adda (0.6 million euro), Monfalcone (2.4 million euro mainly relating to work to

adjust groups 1 and 2) and Ponti sul Mincio (0.2 million euro).


Energy Sector

154

The Heat and Services Sector comprises the activities of cogeneration, district heating and

the sale of heat, as well as other activities relating to heat management and facility

management services. The following is a short description of these activities:

• Cogeneration and district heating: production, distribution and sale of heat,

production and sale of electricity, as well as operation and maintenance activities on the

cogeneration plants and district heating networks.

• Heat and other services: management of heating plants owned by third parties.

The companies listed below form part of the Heat and Services Sector:

Heat and services sector


155

Heat and services

Cogeneration plants

District heating networks

Sale of heat and other services


• A2A Calore & Servizi

• Proaris

• Coriance Group

• Varese Risorse

Key quantitative and economic data of the sector are reported below.

Quantitative data

GWht 06 30 2011 06 30 2010 Change % 2011/2010

SOURCES

Plants at: 968 1,007 (39) (3.9%)

- Lamarmora 304 327 (23) (7.0%)

- Famagosta 81 86 (5) (5.8%)

- Tecnocity 39 41 (2) (4.9%)

- Impianti Coriance 341 356 (15) (4.2%)

- Other plants 203 197 6 3.0%

Purchases from: 708 746 (38) (5.1%)

- Third parties 288 301 (13) (4.3%)

- Other sectors 420 445 (25) (5.6%)

TOTAL SOURCES (*) 1,676 1,753 (77) (4.4%)

USES

Sales to end customers 1,676 1,753 (77) (4.4%)

TOTAL USES 1,676 1,753 (77) (4.4%)

(*) net of losses.Note:- The figures refer to district heating alone. sales relating to heat management are not included.- The quantities of heat purchased from the Environment Sector are included among purchases.

There was a fall of 4.4% in the sale of heat to end customers in the first half of 2011, mainly the

result of the mild temperatures experienced during the winter months.

For the above reasons a total of 968 GWht of heat was produced, a decrease of 3.9%

compared to the first half of 2010. A similar fall took place in the quantity of heat purchased

from Group companies (Amsa S.p.A. and Aprica S.p.A.) and from third parties.



156

Economic data


Revenues 216 198 18



Depreciation, amortization and provisions (24) (27) 3

Net operating income 24 12 12


Investments 31 25 6

Revenues amounted to 216 million euro in the period (198 million euro for the six months

ended June 30, 2010). The increase of 18 million euro is mainly due to rises over the first half of

2010 in unit revenues for the sale of heat and electricity.

Gross operating income amounted 48 million euro, an increase of 9 million euro over the first

half of 2010: the increase in margins arising from new connections to the district heating

service was partially offset by the decrease in volumes sold as the result of the mild

temperatures experienced during the first quarter of the year. Also contributing to the rise in

margins was the recognition of energy efficiency credits relating to prior year initiatives on the

Brescia district heating networks and the good performance of the French subsidiary

Coriance.

Depreciation, amortization and provisions amounted to 24 million euro, a decrease of 3

million euro compared to the same period of the previous year.

As a result of these changes, net operating income closed at 24 million euro (12 million for the

first half of 2010).

Capital expenditure of 31 million euro during the six months involved the development of the

district heating networks in the Milan and Bergamo areas (14 million euro), development and

extraordinary maintenance at the cogeneration plants in the Milan, Brescia, Bergamo and

Varese areas (6 million euro) and development investments made by the Coriance Group (11

million euro). This latter expenditure included an amount of 6 million euro spent on the start-

up of work to construct the biomass cogeneration plant at Drome.



157

The Environment Sector comprises the activities relating to the entire waste management

cycle. These activities are briefly described below:

• Collection and street sweeping: cleaning streets and collecting refuse for

transportation to its destination.

• Treatment: carried out in dedicated centers specializing in the recovery or

transformation of waste to make it suitable for recycling, waste-to-energy system or

disposed of in landfill sites.

• Disposal: this involves the final disposal of urban and special waste in combustion plants

or landfills, where possible recovering energy through incineration or the use of biogas.

The Environment Sector also includes the following companies:

Environment Sector


158

Environment

Collection and street sweeping

Treatment

Disposal and energy recovery


• Ecodeco Group

• Amsa

• Aprica

• Montichiariambiente

• Ecofert

• Partenope Ambiente

• Aspem S.p.A.

Recent changes in legislation in the environment sector

At the end of July 2010 the Government issued the implementing regulation for the provisions

contained in article 23-bis (concerning local public services of economic importance) of Law

no. 133/08 , as amended by Decree Law no. 135/09 (“community obligations”) converted by

Law no. 166/09.

In addition, the community obligations Decree Law introduced an amendment to the

transitional period during which mandates which are outstanding and do not derive from

public procedures for water and waste management services remain in force.

As the result of the referendum held in Italy on June 12 and 13, 2011, article 23-bis of Law no.

133/08 is in the process of being repealed.

Further details in this respect may be found in the section Risks and uncertainties.

Consolidated Environment Law

Decree no. 152 of April 3, 2006 "Regulations on environmental matters" (as subsequently

amended and supplemented, most recently by Legislative Decree no. 205/10 which dictated

measures implementing Directive 2008/98/EC on waste) acts as the reference legislation for

the waste sector and was revised during 2008 by the "Unified Amendment". This provision

(the Consolidated Law) ratifies the repeal of Legislative Decree no. 22 of February 5, 1997, the

“Ronchi Decree”, which until then had been the national framework legislation on this subject.

Certain regulatory technical rules required to carry out collection and transfer services

currently remain in force from the preceding legislative framework on a transitional basis until

the rules implementing the Consolidated Law are issued.

Of particular interest in the changes made to the framework law by Decree no. 205/10 is the

regulation regarding the new ways of classifying waste, which call for ecotox tests to be

carried out to determine whether the waste is hazardous or non-hazardous.

(1) Converting into law, with amendments, Decree Law no. 112 of June 25, 2008 on urgent provisions for economic development,simplification, competitiveness, the stabilization of the public finances and tax equalization.


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Waste tracking control systemWith the Ministerial Decree of December 17, 2009, subsequently amended and supplemented

by the Ministerial Decrees of February 15, July 9, September 28 and December 22, 2010, a

Waste tracking control system has been set up, run by the Carabinieri Unit for the Protection

of the Environment, to enable the special waste chain to be computerized at a national level

(and that of urban waste for the Campania region).

The system simplifies the procedures and formalities which are the responsibility of sector

operators, reducing the costs incurred by businesses, and manages a complex and variegated

process in an innovative and efficient way, with guarantees for increased transparency,

knowledge and the prevention of illegal acts.

Province of Brescia Provincial Waste Management Plan

The Province of Brescia Provincial Waste Management Plan was approved with Decree no.

9/661 of October 20, 2010 of the Council of the Lombardy Region; this proposes measures

having the objective of reducing the per capita production of waste and improving

differentiated collection (which is planned to reach 65% of the waste produced by 2016,

consistent with European provisions in this respect).

Key quantitative and economic data of the sector are reported below.

Quantitative data

06 30 2011 06 30 2010 Change % 2011/2010

Waste collected (Kton)* 492 502 (10) (2.0%)

Waste disposed of (Kton) 1,335 1,398 (63) (4.5%)

Electricity sold (GWh) 631 606 25 4.1%

heat sold (GWht)** 472 502 (30) (6.0%)

(*) Waste collected in the Municipalities of Milan, Brescia, Bergamo and Varese.(**) Quantities at the plant entrance.

In the first six months of the year the quantity of waste collected amounted to 492 thousand

tonnes, substantially in line with the first half of 2010.

The decrease in the amount of waste disposed of compared to the same period of 2010 (-

4.5%) was on caused by the reduction in transfers to industrial waste landfills, also as the

result of the new acceptance criteria established by the legislation which came into effect at

the end of 2010, and a fall in the transfer of urban waste (in particular biological sludge not

transferred for agricultural purposes due to unfavorable weather conditions).


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The increase in quantity of electricity sold (+4.1%) over the same period of the previous year

was due to the rise in the production of the Brescia and Milan waste to energy plants.

The reduced production of heat (-6.0%) was essentially the result of lower requests made by

end customers.

Economic data


Revenues 418 395 23







The Environment Sector recorded revenues of 418 million euro in the first half of 2011 (395

million euro for the six months ended June 30, 2010).

Gross operating income closed at 152 million euro, an increase over the first half of 2010 (141

million euro). This positive performance is basically due to an increase in the contribution

made by the Brescia, Bergamo and Milan waste to energy plants which during the first second

quarter of 2010 underwent a stoppage for scheduled maintenance and an increase in

revenues from the sale of electricity.

Depreciation, amortization and provisions amounted to 48 million euro, representing an

increase of 3 million euro over the same period of the previous year.

As a result of these changes net operating income amounted to 104 million euro, an increase

of 8 million euro over the first half of 2010.

Capital expenditure during the period amounted to 11 million euro and related mainly to

collection vehicles and containers (5 million euro) and maintenance and development work

on waste to energy plants (2 million euro), treatment plants (2 million euro) and landfills

(2 million euro).


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161

The Networks Sector comprises the activities regulated by sector Authorities, namely the

management of the electricity and gas networks and the integrated water cycle. These

activities are briefly described below:

• Electricity networks: the transmission and distribution of electricity.

• Gas networks: the transport and distribution of natural gas.

• Integrated water cycle: water captation, aqueduct management, water distribution,

sewerage and water purification.

• Other services: activities relating to public lighting, traffic regulation systems, the

management of votive lights and systems design services.

The Networks Sector also includes the following companies:

Networks sector


162

Networks

Electricity networks

Gas networks

Integrated water cycle


• A2A Reti Elettriche

• A2A Reti Gas

• A2A Ciclo Idrico

• EPCG

• Mincio Trasmissione

• Camuna Energia

• Retragas

• Seasm

• Aspem S.p.A.

• A2A Servizi alladistribuzione

Recent regulatory changes in the distribution sector

Legislative Decree no. 28/11 became effective on March 29, 2011, implementing European

Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

The main measures envisaged, though, may only be implemented following the issue of

further ministerial decrees (the majority of which by the Ministry for Economic Development

and the Ministry for the Environment), for which half-monthly deadlines are planned starting

from the effective date of the legislation.

Natural gas distribution

Allocation and performance of the distribution service

With respect to the natural gas distribution service, in safeguarding the provisions of

Legislative Decree no. 164/2000 and article 46-bis of Decree Law no. 159 of October 1, 2007,

converted with amendments into Law no. 222 of November 29, 2007 regarding the

distribution of natural gas, Law no. 99/2009, the “Development Law”, defines the new

“Minimum Territorial Ambits” for which tenders will be called to allocate the service to the

Ministry for Economic Development, in conjunction with the Ministry for Regional Affairs,

after consulting with the Combined Conference and the Electricity and Gas Authority.

On March 31, 2011 the Decree of the Ministry for Economic Development dated January 19,

2011 was published in the Official Journal; this identifies 177 Minimum Territorial Ambits and

provides details by region in attachment 1.

Nevertheless, the precise identification of the individual municipalities making up each

Minimum Territorial Ambit has been deferred to a subsequent decree of the Ministry for

Economic Development, “attachment 2”, which will be adopted in conjunction with the

Ministry for Regional Affairs and is to be communicated to the Combined Conference.

The criteria followed for identifying the municipalities included in each individual Ambit

envisage a maximum of 50 municipalities for Ambits with more than 50,000 effective

customers; in addition, municipalities fed by the same distribution plant will be included in the

same Ambit. Account will also be taken of population density and the specifics of the area.

In respect of the possibility of calling new tenders before this discipline is completed, by means of Legislative

Decree no. 23 of June 1, 2011 (Third Energy Package) the legislator has specified that all tenders for which by

the effective date of this law a tender notice has been published in the case of an open procedure or

invitation letters have been sent in the case of a restricted procedure may be carried out on the basis of the

procedures applicable at the date on which they were called, provided that such documents include the

criteria for evaluating the offer and the repayment amount for the outgoing operator.


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163

On the other hand from June 29, 2011, the date on which the decree became effective, tenders

not included in these cases must be carried out exclusively for Territorial Ambits as per article

46-bis of Law no. 222 of 2007 and on the basis of the criteria referred to therein, to be issued

shortly.

In respect of the criteria for the tenders for the allocation of the distribution service, said

article 46-bis establishes that the Ministry for Economic Development, in conjunction with

the Ministry for Regional Affairs, after consulting with the Combined Conference and on the

basis of the opinion of the Electricity and Gas Authority, shall identify the “criteria for the

tender and the valuation of the offer for allocating the gas distribution service”. The criteria to

be used for this purpose are, in addition to the economic conditions, the benefits for

consumers, the quality and safety standards and the soundness of the investment and

development plan. At the present time the opinion of the State Council is awaited together

with the signatures of the competent ministers.

Finally, the Ministerial Decree dated April 21, 2011 has been published which concerns

provisions for regulating the social effects connected with the new means of allocating gas

distribution concessions, the “Social Clause” measure.

This decree, drawn up by the Ministry for Economic Development and the Ministry for

Employment and Social Policies, contains regulations to safeguard the jobs of the personnel

of the outgoing distribution company following the awarding of the service to another

company, together with a series of obligations for the latter company.

The protection envisaged for the company’s employees consist in the fact that they will be

immediately directly transferred to the company taking over, with the employment

conditions they previously enjoyed of an economic nature and relating to length of service

schemes of which they are members being guaranteed.

Suitable lay-off schemes will be applied for those members of staff who on the basis of the

above-mentioned conditions turn out to be in excess to needs, without prejudice to the

possibility of being rehired should the new company seek additional personnel within two

years of the date of the tender.

Distribution tariffs

With Resolution ARG/gas no. 159/08 (Consolidated Text on the regulation of the quality and tariffs

of services for the Distribution and measurement of Gas for the regulatory period 2009-2012

(TUDG): approval of part II “Tariff Regulation for services for the Distribution and measurement

of Gas for the regulatory period 2009-2012” (RTDG)), the Authority established a compulsory

tariff, separated into six tariff areas and applicable for the calendar year, as coverage of the costs

relating to the distribution, measurement and marketing service.


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164

The tariff regime envisages remuneration of the net invested capital at a rate of 7.6% for

distribution and 8% for measurement.

Operating costs are updated by applying a price cap. The price cap applied to distribution

operating costs is differentiated by company size.

Since analyses showed that the level of net invested capital at a national level, determined on the

basis of the definitive data acquired for the first year of the regulatory period in course, exceeded

the value recognized to the same companies with reference to thermal year 2007-2008 by more

than 5%, a graduality mechanism has been introduced. As a result, the restrictions of the

companies have been reduced by the percentages provided by article 17 of the RTDG.

With Resolution ARG/gas no. 235/110 the Authority has updated the compulsory tariffs for the

natural gas distribution and measurement services for 2011 and the tariff options for the

distribution and measurement of gas other than natural gas by means of channeled networks,

and has initiated a proceeding for re-exercising tariff regulation powers in accordance with

sentences nos. 6912, 6914, 6915 and 6916 of the Lombardy Regional Administrative Court (TAR),

Section III, dated October 11, 2010, by which the following have been cancelled:

• the reduction of 10% in the tariff restriction for the previous regulatory period for

operators who do not supply the data requested, either wholly or in part;

• the missing estimate of the “volume effect”, namely the exclusion of the possibility to

recover in the tariff the negative meteorological effect occurring during the last two years

of the second regulatory period;

• the estimate of a productivity recovery coefficient, the “X-factor”, constant for the whole

term of the third regulatory period.

The lack of alignment between tariff receipts and the restriction on revenues, as possibly

recalculated, will be compensated by equalization mechanisms.

Electricity distribution

Distribution service tariff regime

With Resolution no. 348/07 the Authority adopted the Integrated Text of the provisions for the

regulation of the transmission, distribution and measurement of electricity for the third

regulatory period (2008-2011).

The provision provides for a general equalization regime and a specific company-based

equalization regime, ensuring that changes in the costs incurred by companies due to external

factors are covered.

For the purposes of calculating tariff levels:

• the recognized return on capital invested is established as 7.0% for the distribution

service, including the related marketing activities, and 7.2% for measurement services;


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165

• in respect of the portion of the tariff components covering operating costs, the provision

establishes an annual productivity increase target (the “X-factor”) in order that the

increased recoveries in efficiency already achieved by companies in the second regulatory

period, as identified at an average national level, equal to 1.9% for distribution and 5.0% for

the measurement service, may be transferred to end customers within eight years for

transmission and distribution and within six years for the measurement service;

• with regard to annual updates, the depreciation charge is excluded from the sphere of

application of the price cap.

Measurement equalization

With Resolution ARG/elt no. 74/11, the Authority approved the results of the equalization of

measurement service revenues for 2009 and the settlements for the equalization of

measurement service revenues for 2008 (amounts already recognized with Resolution

ARG/elt no. 40/10), recalculated following the communication of various adjustments. A2A

Reti Elettriche S.p.A. therefore paid an equalization amount of 6.18 million euro into the

Electricity Sector Settlement Fund.

Investments in Smart Grids

With Resolution ARG/elt no. 12/11, the Authority published the classification list of the projects

admitted to incentive treatment as per paragraph 11.4 d) of the TIT.

In particular, the investments relating to the pilot projects presented by A2A Reti Elettriche

S.p.A. consisting of automation, protection and control systems for medium voltage active

networks (smart grids) relating to the Lambrate Primary cabin (Milan) and the Gavardo

Primary cabin (Brescia ambit) were classified in first and third places.

For new investments relating to pilot projects consisting of automation, protection and

control systems for medium voltage active networks (smart grids), paragraph 11.4 of the TIT

provides for the recognition of an increase of 2% in the remuneration rate for invested capital

for 12 years.

Penalty for breaching Authority provisions on withdrawal point data

Closing the proceeding initiated with Resolution VIS no. 171/09, with resolution VIS no. 15/11 the

Authority inflicted a penalty of 302,000 euro on A2A Reti Elettriche S.p.A. for breaching

provisions on managing the data regarding the points of withdrawal and aggregation of

withdrawal measurements for the dispatch of electricity, as per Resolutions no.168/03 and no.

111/06.


Networks sector

166

Regulation of the electricity sector in Montenegro

Reference should be made to the specific paragraph of the Energy Sector for details of the

regulation of the electricity sector in Montenegro.

Provisions common to the two sectors (gas and electricitydistribution)

Energy efficiency

The decree of the Ministry for Economic Development of December 21, 2007 revised and

updated the decrees of the Minister of Productive Activities and the Minister of the Environment

of July 20, 2004, which required distributors of electricity and natural gas who on December 31,

2001 served at least 100,000 end-customers to comply with specific energy saving objectives

based on the energy distributed. In order to achieve these objectives, distributors must develop

energy saving projects in compliance with the provisions of Law no. 239/04 (Marzano Law) and

the related implementation instructions, especially in matters concerning post-meter activity.

The 2007 decree establishes new reference objectives for the three-year period 2010 – 2012.

On March 29, the new legislative decree implementing European Directive 2009/28/EC on the

promotion of the use of energy from renewable sources became effective.

The main measures envisaged, though, may only be implemented following the issue of further

ministerial decrees (the majority of which by the Ministry for Economic Development and the

Ministry for the Environment).

Tariff grant

The unit tariff grant recognized for each year (t+1) obligatory after 2008 is defined by the

Authority by November 30 of the previous year (t).

The tariff grant recognized for achieving the energy savings objectives for 2011, laid down in

Resolution EEN no. 16/10 (as amended by Resolution EEN no. 17/10), is worth 93.68 euro/tonne

of oil equivalent (toe) saved.

Energy saving objectives for 2011

With Resolution EEN no. 18/10, the Authority established the specific objectives for primary

energy savings in 2011 for the distributors of gas and electricity. The objectives set for the

obligated distributors of the A2A Group are set out in the following table:

Distributor Objective 2011 (toe)

A2A Reti Elettriche S.p.A. 144,103

A2A Reti Gas S.p.A. 144,162


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167

Achievement of energy saving objectives for 2010

Pursuant to Resolution no. 98/06 as subsequently amended and supplemented, the two

obligated distributors of the A2A Group requested the cancellation of the following energy

efficiency credits for 2010:

Distributor Obligation Obligation 2010 2009

A2A Reti Elettriche S.p.A. 89,371 1,946

A2A Reti Gas S.p.A. 101,694 1,636

Both distributors fulfilled the specific energy saving objective for 2010, as established by

Resolution EEN no. 25/09 as amended and supplemented by Resolution EEN no. 1/10, as to 84%

of the total obligation. Pursuant to the Ministerial Decree of December 21, 2007, the extent to

which fulfillment was not achieved in 2010 must be compensated in the year following that to

which the obligation relates.

In addition, the distributors arranged for the cancellation of the credits corresponding to the

part of the energy saving obligation for 2009, not compensated on the cancelation of the

objective for that year.

Provisions concerning accounting and functional separation(unbundling)

With Resolution no. 11/07, partially amended by Resolutions no. 253/07 and ARG/com no. 57/10,

the Authority issued an Integrated Text on administrative and accounting unbundling for

companies operating in the electricity and gas sectors, modifying the current rules

(established by Resolutions no. 310/01 and no. 311/01).

This resolution introduces the requirement for vertically integrated groups to unbundle from

a functional standpoint the distribution of electricity and gas, the transmission of electricity

and the transport of gas from the activities it carries on in the free market. The purpose is to

ensure neutrality in the management of these infrastructures and to prevent discrimination in

the access to commercially sensitive information and cross-transfers of resources between

segments of the various sectors (this latter objective is more directly pursued through the

provisions regarding accounting unbundling).

On the basis of the legislation, the activities subject to functional unbundling have been given

decision-making and organizational autonomy by assigning the administration to an

"Independent Manager".

In implementing the provisions adopted by the AEEG with Determination no. 6/10 of the

Director of the Tariff Department, A2A Reti Elettriche S.p.A., A2A Reti Gas S.p.A. and Azienda


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168

Servizi Valtrompia S.p.A. have carried out the requirements of the TIU for 2010, while the

Independent Managers of Retragas S.r.l., Mincio Trasmissione S.r.l. and Seasm S.r.l. were

appointed during the first half of 2011.

Integrated water serviceWith Decree Law no. 225 of December 29, 2010 (the “Thousand extensions decree”) provision

was made for the general extension to March 31, 2011 (a date extendible to December 31, 2011

through decrees of the Prime Minister in conjunction with the Minister for the Economy and

Finance) of certain legal regimes - with expiry prior to March 15, 2011.

The conversion into law of Decree Law no. 2 of January 25, 2010 in fact provided for the

abolition of the Optimum Territorial Ambit Authorities and gave the regions the task of

assigning (possibly to new entities) the functions exercised by the Optimal Territorial Ambit

Authorities in accordance with the principles of subsidiarity, differentiation and suitability.

With Regional Law no. 21 of December 27, 2010, the Region of Lombardy required the

functions exercised by the Ambit Authorities to be assigned to the provinces. The Decree of

the Prime Minister of March 25, 2011 entitled “Additional extension of terms relating to the

Ministry for the Environment and the Protection of Land and Sea” established December 31,

2011 as the end of the term for the suppression of the Ambit Authorities and completion of the

subsequent formalities.

With the community obligation Decree Law the legislator introduced a change to the

discipline of the transitional period for the concessions in course not deriving from public

procedures and relating to the water and waste management services.

However as the result of the referendum held in Italy on June 12 and 13, 2011, the formal repeal

is currently awaited of article 23-bis of Law no. 133/08 as amended by the above decree and the

requirement of article 154, paragraph 1 of Legislative Decree no. 152 of 2006, limited to the

section which envisages that “The tariff represents the fee for the integrated water service

and is calculated amongst other things by taking into account (…) the adequacy of the

remuneration of the capital invested (…)”.

As a consequence, therefore, the legislation on integrated water services is liable to change

during the year.

Further details in this respect may be found in the section relating to risks.

Optimal Territorial Ambit Province of Brescia

During the Consortium general meeting on December 21, 2010 details of tariffs for 2011 were

approved; these are applicable, for the various uses, in the municipalities belonging to the Ambit.

The municipalities of the Brescia Ambit have been subdivided into three tariff areas.


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169

In addition, the amount of the restricted portion of the water purification tariff applicable to

users lacking a purification service was approved.

A summary of the key quantitative and economic data of the sector are reported below.

Quantitative data

06 30 2011 06 30 2010 Change % 2011/2010

Electricity distributed (GWh) 5,756 5,618 138 2,5%

Gas distributed (Mcm) 1,155 1,292 (137) (10.6%)

Gas supply points (Number)* 1,255,821 1,255,821 – –

Gas transported (Mcm) 226 249 (23) (9.2%)

Water distributed (Mcm) 32 34 (2) (5.9%)

(*) Number of supply points used by the AEEG to determine admitted revenues for 2009 and 2010.

Electricity distributed in the first half of 2011 amounted to 5,756 GWh, representing an

increase over the same period of 2010 which arose mainly from a pick-up in consumption by

industrial customers.

The quantities of gas distributed totaled 1,155 Mcm, 10.6% down on the first half of the

previous year. This trend was essentially due to the mild temperatures experienced during the

first few months of 2011 which had an adverse effect on the demand for gas for heating

purposes.

For the same reasons the amount of gas transported amounted to 226 Mcm (249 Mcm for the

six months ended June 30, 2010).

The water distributed of 32 Mcm fell slightly over the same period of the previous year (-5.9%).

The electricity distribution network management activities of the EPCG Group, acquired in

September 2009 and consolidated on a line-by-line basis from the year ended December 31,

2010, are also included in A2A’s Network Sector. Overall EPCG owns 18,500 km. of electricity

network at low and medium voltage.

The electricity distributed in Montenegro in the first half of 2011 was as follows:

EPCG 06 30 2011

Electricity distributed (GWh) 1,272


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170

Economic data


Revenues 347 301 46







The Networks Sector had revenues of 347 million euro in the first half of 2011 (301 million euro

for the six months ended June 30, 2010). The increase of 46 million euro is mainly due to the

contribution of the networks sector of the EPCG Group (34 million euro).

Gross operating income closed at 128 million euro (117 million euro for the six months ended

June 30, 2010), of which 4 million euro relating to the networks sector of the EPCG Group.

Activities for managing the networks for the distribution and transportation of gas closed

with a gross operating income of 53 million euro in the first half of 2011, a rise over the same

period of the previous year (50 million euro for the six months ended June 30, 2010). This

increase is mainly due to the increase in the revenues admitted by the Electricity and Gas

Authority, arising mostly from the application of graduality mechanisms.

Electricity distribution activities closed with a net operating income of 71 million euro for the

period, an increase of 12 million euro over the first half of 2010. This change is due for 4 million

euro to the inclusion of the EPCG Group’s networks sector in the boundary of the sector and

for 8 million euro to electricity distribution in the Milan and Brescia areas. This latter increase

is mainly due to the income relating to the “specific company equalization”, arising from the

determination of the specific company correction factor for the III regulatory period (2008-

2011) at the end of September 2010 and therefore not recognized in the first half of 2010, as

well as minor costs arising from other equalization mechanisms (in particular the mechanism

equalizing measurement revenues).

Gross operating income for the water sector, amounting to 2 million euro, fell slightly over the

same period of the previous year (5 million euro for the six months ended June 30, 2010). This

fall was mainly the result of the lower volumes of water distributed during the period and

settlements relating to previous years.

Depreciation, amortization and provisions amounted to 59 million euro (58 million euro for the six months

ended June 30, 2010); of this 10 million euro relates to the networks sector of the EPCG Group.


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171


Networks sector

172

As a result of these changes, net operating income amounted to 69 million euro (59 million

euro in the first half of 2010).

Capital expenditure in the Milan and Brescia areas amounted to 54 million euro and regarded:

• as far as electricity distribution is concerned, development and maintenance work on

plant, and in particular the connection of new users, maintenance on secondary cabins,

the extension and refurbishment of the medium and low voltage network and the

maintenance and upgrading of primary plants (22 million euro);

• in the gas distribution area, development and maintenance work on gas plant relating to

the connection of new users and the replacement of medium and low pressure piping and

meters (24 million euro);

• in the integrated water cycle, work carried out on the water transportation and

distribution network and the sewerage networks (8 million euro).

The following is a brief description of the activities carried out by this sector:

• Corporate (1): direction, coordination and control activities, such as business

development, strategic direction, planning and control, financial management and the

coordination of the Group's activities; central services to support the business and

operating activities (e.g. administrative and accounting services, legal services,

procurement, personnel management, information technology, communication services,

etc.) provided by the parent company under specific intercompany service agreements.

• Other services: activities relating to video-surveillance, data transmission, telephony and

internet access services.

In addition to the activities carried out directly by A2A S.p.A., this area also includes the

following companies:

(1) This includes the General Manager's Office (Corporate and Market Area), the General Manager's staff (Technical and OperationsArea) and the staff of the Office of the Chairman of the Management Board and the Chairman of the Supervisory Board.



173

Other services andcorporate

Other services

Corporate


• Selene

• Aspem S.p.A.

• A2A Logistica

• EPCG

Economic data


Revenues 113 109 4

Gross operating income (14) (16) 2

% of revenues (12.4%) (14.7%)

Depreciation, amortization and provisions (13) (16) 3

Net operating income (27) (32) 5

% of revenues (23.9%) (29.4%)

Investments 11 10 1

The Other Services and Corporate Sector earned revenues of 113 million euro in the half year,

of which 6 million euro relating to the services sector of the EPCG Group.

The gross operating loss amounted to 14 million euro of which 2 million euro related to the

EPCG Group.

After depreciation, amortization and provisions, there was a net operating loss of 27 million

euro.

Capital expenditure for the period amounted to 11 million euro and mainly related to

investments in information systems (9 million euro).



174

The difficult situation in the energy and gas industries which by now has become structural,

which sees a significant lack of balance between production (or import) capacity and the level

of domestic demand, will be confirmed in the second half of 2011.

In terms of industrial performance, the good results of the Environment Sector and Heat and

Service Sector will partially offset a contraction in results in the Energy Sector.

Outlook for operations


175

At June 30, 2011 the Group had 11,888 employees, of whom 2,758 work for the EPCG Group.

Excluding other personnel costs, labor cost has risen by 11.4% compared with the

corresponding six months in 2010, mainly as the result of the extension of the consolidation of

EPCG from December 31, 2010, which led to an increase in costs of 25.1 million euro compared

to the first half of 2010.

Excluding EPCG unit cost rose per employee in the boundary rose by 1.8 % in the first half of

2011, mainly as the result of automatic contractual increases.

Agreement on the local company contract for the areas of Milan and the Valtellina was

reached during the first half of 2011.

On completion of the trades union procedure for transferring the “Water Cycle” business

from A2A S.p.A to A2A Ciclo Idrico S.p.A., the Gas-Water national collective bargaining

agreement (CCNL) became applicable for the transferred employees on January 1, 2011,

consistent with the new company’s corporate object; as a consequence negotiations have

begun with the Brescia trades union organizations with the aim of governing certain aspects

resulting from the application of the new CCNL by means of a local company contract.

Discussions continued with the national sector organizations of the trades unions on subjects

relating to the harmonization processes in the Group.

Technical training has also been stepped up by means of courses relating in particular to

compliance with legal requirements for safety in the workplace (Legislative Decree no.

231/2001) amounting to approximately 12,000 hours, support for IT technologies (office and

operating systems) and specialist technical matters. In total, training in the half year

amounted to a total of some 30,000 hours.

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176

A2A has Sustainability as one of its founding values, taking shape in the ability to generate and

distribute value in a long-lasting and harmonic way by reconciling the needs of the various

subjects with whom it interacts: investors, workers, local communities, suppliers, customers

and institutions.

An approach which is the result of over a hundred years of history which grows and renews

itself in the face of new challenges: the liberalization of the markets, the economic crisis,

internationalization, climate change and the rise in society’s sensitivity to environmental

matters.

Underlying this commitment is the awareness that the main sectors in which the Group works

have a fundamental impact on the economic wellbeing of companies, the quality of life of

citizens, social development and the safeguarding of the environment.

This commitment is put into practice by the Group amongst other things by deploying

certified management systems in the spheres of quality, environment and safety. More

specifically as far as the environment is concerned the ISO14001 certification covers:

Plants

• 100% of installed hydroelectric power

• 100% of installed thermoelectric power

• 80% of the thermal power and 85% of the electric power of the cogeneration pool from

fossil/renewable sources

• 100% of the waste treatment capacity in the waste to energy plants

• 87% of the treatment capacity of the other plants of the integrated waste cycle.

Networks

• Milan area gas distribution network

• Milan area electricity distribution network

• integrated water cycle of the Brescia Municipality (including the Verziano purifier)

• Milan area and Brescia area district heating network.

Corporate Social Responsibility


177

In addition 11 assets are EMAS registered.

In 2010 the A2A Group published its third Sustainability Report, the means it has used since

2008 to account for its performance to its main interlocutors in terms of sustainable growth

from an environmental, economic and social standpoint. This document is prepared in

accordance with the rigorous principles of the GRI (Global Reporting Initiative) as integrated

by the guidelines of the Energy Sector Utility supplement, obtaining a B+ level of compliance

(verified by an external firm).

Thanks to its performance in the sustainability field and its commitment to reporting this, A2A

was listed in ten ethical financial indices in 2010.

A selection of the main results reached by the Group in the Corporate Social Responsibility

field since the beginning of 2011 are as follows:

• in the March 2011 audit, A2A’s position as a member of the London Stock Exchange

FTSE4Good ethical index was confirmed. This index is designed to measure the

performance of companies which meet globally recognized corporate responsibility

standards, in order to facilitate investment in those companies. The assessment carried

out by the research provider EIRIS into the three Socially Responsible Investment (SRI)

areas, the environment, social justice and corporate governance, required for being

assigned a rating was positive.

• On June 14, 2011, in the Assolombarda Auditorium, A2A reached the final of the “Initiative

in favor of the environment” category of the Sodalitas Social Award with its Contagio

environmental awareness project. This award is given each year to companies, business

associations, industrial clusters and organizations who have been actively involved in

Corporate Social Responsibility and Sustainability projects, consistent with their declared

values. The Ninth Edition of the Award saw 206 companies taking part with a total of 251

projects.

• The Canavese district heating plant was awarded the Certificate of Merit in the “New

district heating systems” category on the occasion of the 2011 edition of the International

District Heating Energy Climate Awards, organized by the International Energy Agency

(IEA) and by Euro Heat & Power (the European association of district heating operators).

• In the sphere of its relations with trade associations, the general manager of the Technical

and Operations Area, Paolo Rossetti, has been appointed for the next three years to lead

the CIG, the Italian Gas Committee, the UNI-federated body delegated with the

responsibility for technical standards for fuel gases in Italy.

• In terms of human resource appraisal, the performance management system initiated in 2009

has been extended to all of the Group’s employees, reaching the 4,300 people appraised in

June. In addition, in the first part of 2011 an induction training program for over 200 newly

hired employees began with the aim of presenting the Group’s main activities and businesses.



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• The Group companies A2A S.p.A. and Partenope Ambiente S.p.A. supported the exhibition

dedicated to Margherita di Savoia, the first queen of Italy, in the rooms of the Royal Palace

in Naples. By doing this it was the aim of the Group, which has recently developed its

industrial presence in Campania, to show its proximity to the local area and its support for

obtaining the most out of the region’s historical and cultural heritage.

• Together with the Region of Lombardy A2A S.p.A. and Aprica S.p.A. began the sixth step in

the Waste Reduction Action Plan (P.A.A.R), which concern farm delivery. In practical terms

this service consists in providing a crate of biological, in-season fruit and mixed vegetables

each week to every family in the system; on delivery, the crate used the previous week is

collected for re-use.

• In 2011 A2A Energia S.p.A. entered an agreement with the Municipality of Milan for the

supply of 100% renewable energy: 236 million clean kilowatt-hours supplied leading to a

reduction of 90 thousand tonnes of CO2 a year. In addition, a plate is fixed onto buildings

fed by green energy certifying that only energy from renewable sources is used there,

thanks also to the use of the “Energia A2A Rinnovabile 100%. Certificata Recs” certificate.

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Research and constant innovation are essential factors for pursuing the objectives which the

A2A Group has set itself and which are stated in its Charter of Values.

These are activities which thanks also to the collaboration of external organizations such as

research institutions and bodies provide considerable value added to the Group’s

development and growth.

District heating development plan for milan

The realization of the “District heating development plan for the city of Milan” continued in

2011; this plan, an integral part of the agreement stipulated in 2007 between the Municipality

of Milan and A2A, has as its objective the upgrading of district heating throughout the city in

order to achieve a significant reduction in the polluting emissions deriving from energy

requirements for city heating.

The plan aims to serve around 380,000 inhabitant equivalents by the end of 2012 and to

achieve a total increase of 600,000 inhabitant equivalents over 2007 by the end of 2015.

Amongst the more significant activities started up by A2A to reach these objectives and

worthy of note are the development of the Figino network towards the San Siro quarter which

is fed by the Silla 2 waste to energy plant and the development of the network fed by the

Canavese plant towards the city center for the link with the Court as user. Included among the

activities carried out at the production plants, emphasis should be given to the installation and

start-up of the large-scale heat pump (15 MW) at the Famagosta power station.

The following table sets out the energy and environmental benefits which may be achieved by

putting the plan into practice.

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District heating development plan for the city of Milan – Estimate ofthe energy and environmental benefits to be achieved by 2015

District Heating Plan

Inhabitant equivalents served [no.] + 600,000

Target 2015

Reduction in fuel consumption [GWh/year] (413)

Reduction in emissions [tonnes/year]

NOx (268)

SO2 (408)

PM10 (23)

CO2 (163,384)

New heating-cooling plant with cogeneration at Varese hosptal

Varese Risorse is implementing a project for the construction of a heating-cooling plant with

cogeneration at the new Varese Hospital. On September 24, 2009 the thermal section of this

new plant, which produces steam and hot water to support/supplement the district heating by

means of three dual fuel boilers (natural gas and diesel) and has a heating core power of ~27

MWt, entered service. The cooling section (total installed power of 10 MWf through 4

absorption groups, 2 fuelled by hot water and 2 by steam) and cogeneration section (1 MWe

motor) of the new plant will enter service in September 2011.

Completion of this project will enable the so-called trigeneration (the combined generation of

electricity heat and cooling), which is seen by everybody as the new frontier of cogeneration, to be

achieved through this project. In addition, there will be a significant saving of energy and reduction

of greenhouse gas (GHG) emissions arising from the increase in the number of hours worked in

cogeneration mode by the turbogas having nominal power of MWe existing in the Via Rossi district

heating plant.

The total savings achieved in this way will be entitled to white certificates (Energy Efficiency

Credits).

A2A electric mobility

E-moving is the electric mobility project being promoted by A2A in partnership with Renault and in

conjunction with the municipal administrations of Brescia and Milan. A2A is in charge of realizing the

infrastructure for the recharging of electric cars while Renault provides vehicles from its zero emission

range (saloon cars and small vans), equipped with the latest generation lithium-ion batteries.


Innovation, development and research research

181

The pilot stage took off in June 2010 and will continue for the whole of 2011. The two

Lombardy municipalities see themselves becoming the cities of reference for electric mobility

in Italy, being the first to begin developing a complete cutting edge structured electric

recharging network, with a total of 270 recharging points, of which around 150 will be available

for the use of motorists in public places (roads, parking lots etc.), while the remainder will be

for private use (garages, condominium parking lots, business parking lots).

As of today 18 columns have been installed in Brescia, making a total of 36 recharging points;

as regards private points, 3 have been set up at Renault dealers and 31 are aimed for company

fleets and private users.

In Milan 32 columns have been installed for a total of 64 recharging points on public land. For

the private areas there are 10 recharging points at Cadorna station, where a short while ago

the new electric car-sharing service E-VAI, created from the collaboration between the Region

of Lombardy, A2A, Trenitalia – Ferrovie Nord and Sems, a company of the Fnm group, was

inaugurated. Eight recharging points have been set up at Renault dealers (the partner in the

project), 4 in A2A areas and 4 in areas belonging to the Municipality. To these a further 40

recharging points at ATM interchange points are about to be added.

The objective of E-moving is to test every component of the electric mobility operating model:

the technology and the locating of the recharging infrastructure, the processes and

commercial solutions, the interaction between the recharging network and the vehicles, the

supply of energy, the billing systems, battery management and car maintenance.

Consistent with the initiative’s environmental aims, the electricity to fuel the vehicles will

mostly be produced from renewable sources, a factor useful in pursuing the objective of

having a complete zero emission cycle.

Acerra waste to energy plant

The Acerra waste to energy plant treated 300 thousand tonnes of refuse in the first six months

of 2011, fully in line with the requirements of the Integrated Environmental Authorization

which envisages a quantity of treatable waste of 600 thousand tonnes/year. At the same time

the plant produced and put 260 GWh of electricity into the grid.

Particular emphasis has been placed on environmental aspects: the waste to energy plant is

equipped with leading edge combustion gas purification technologies and as part of the

structural improvement measures envisaged by the Integrated Environmental Authorization

the following have been installed at the plant under specific instructions from the Prime

Minister’s Office: a portal measuring the radioactivity of the vehicles transporting the waste,

a second continuous monitoring system for controlling furnace emissions (SME), a

continuous system for monitoring the mercury in the fumes and a system for sampling micro-


Innovation, development and research

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pollutants (PAHs, dioxins and furans and PCBs).

These instruments entered service fully in February 2011.

Project for the soundproofing of double chamber compressors for thecollection of glass and paper

The objective of this project is to identify measures to soundproof the rear part of the double

chamber compressors used in the city of Milan to collect glass and paper and evaluate these

by testing.

Between 2011 and 2012, 36 vehicles will be equipped with a rear cap soundproofing system

developed by Amsa which consists in the installation of sound absorption panels inside and

outside the equipment and a hydraulic system aimed at slowing down the speed at which the

glass falls into the collecting bin. The sound absorption material has a composite and stratified

nature, while the intervention on the equipment envisages the presence of a flap positioned

on the mouth from which the glass falls, activated by a hydraulic cylinder which remains in a

closed position when the bin is emptied and subsequently assumes an open position.

This interruption to the fall and the panel soundproofing have enabled a reduction of up to 12

decibels to be achieved at the rear part of the vehicle and at a distance of six meters when the

glass is being collected, which in terms of noise peaks, measured in pascals, means a

decrease from 40 to 10 Pa.

District heating from the Cassano d’Adda thermoelectric plant -auxiliary boiler

The Cassano d’Adda (MI) thermoelectric plant produces electricity by means of two

combined cycles for a total installed electric power of 995 MW. The heat for the district

heating users of the Cassano d’Adda municipality is extracted from the combined cycles. As of

today the power installed with users amounts to approximately 33 thermal MW; the

development plan for the district heating network envisages a further increase in users during

2011 and 2012, which also includes the district of Albignano in the municipality of Truccazzano

(MI).

Brescia waste to energy plant: air nozzle testing in the NOx reductionsystem

Following the start of industrial use of the new high-dust catalyzers on all three combustion

lines at the end of 2010 (an initiative included in a European research project called

NextGenBioWaste – Innovative Demonstration for the Next Generation of Biomass and Waste



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combustion plants for energy recovery and renewable electricity production), since June 2011

testing has been taking place on optimizing the non-catalytic reduction system (SNCR) with

which the plant has been equipped since it entered use. An air nozzle will be installed on line 3

to inject ammonia solution into the combustion chamber to check the possibility of replacing

the present water injection system in order to obtain better nebulization and hence a more

effective reaction of the ammonia to reduce NOx.

Brescia waste to energy plant: new fire detection system in the wastebunker

Since the end of 2010 a system of infra-red television cameras connected to monitors situated

in the control room and the overhead travelling crane command cabin has been in service at

the plant, with the aim of detecting sources of heat in the waste in the bunker in order to

prevent potential fires breaking out in the bunker and in any case enabling the equipment to

be maneuvered in the event of low visibility, for example in the case of intervention with

remote-controlled hydrants on the source of a fire.

Brescia waste to energy plant: inertization of fly ash (COSMOS project)

A project has been initiated for the inertization of fly ash through the use of pilot equipment to

check the effectiveness of the process, which has already been demonstrated in laboratory

tests, also on a pre-industrial scale.

The process for rendering end filtration dust inert has been developed by the University of

Brescia and is funded by the European Commission as part of the LIFE+08 Program- Project

ENV/IT/434 title COSMOS "COlloidal Silica Medium to Obtain Safe inert".

The equipment, which resides in an area of approximately 100 m2 inside the Brescia waste to

energy plant, is made up of four separate units:

1) storage and moving of dusts and liquids;

2) blending of dusts with suitable additives;

3) dosage of dusts and additives/control panel;

4) sludge washing.

The A2A Group has a risk assessment and reporting process based on the Enterprise Risk

Management method of the Committee of Sponsoring Organizations of the Treadway

Commission (COSO report), whose purpose is to make business risk management an integral

and systematic part of management processes.

In particular, A2A has defined a risk model that takes account of the Group's characteristics, its

multi-business vocation and the sector to which it belongs; it has also commenced a process

of self-assessment of risks which directly involves management.

This process accompanies the monitoring of commodity price risk which is already

consolidated practice for the Group. This risk is looked after centrally by the parent company,

which has the task of managing it and monitoring the way it evolves.

Set out below is a description of the main risks and uncertainties to which the Group is

exposed, considering the sectors in which it operates and the specific aspects of its business

model.

Risks connected with the external environment

Commodity price risk (energy risk management)

Commodity price risk, namely the market risk linked to changes in the price of energy raw

materials such as electricity, natural gas, coal and fuel oil as well as the by-products of these

materials, is handled as part of the Risk Management Organizational Unit.

Risk Management has the objective of stabilizing the cash flows generated by the asset

portfolio and outstanding contracts through the use of derivative financial instruments, to

ensure there is economic and financial equilibrium in the Group.

More specifically, the market risk linked to fluctuations in energy commodity prices and the

exchange rates associated with these are managed centrally by means of a netting process

applied to the entire exposure of the Group's portfolio, which is constantly monitored.

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Each year the Management Board of A2A S.p.A. defines the commodity risk limits for the

Group.

Consistent with the Group’s Energy Risk Policy, the Risk Committee ensures compliance with

these limits and where necessary defines the hedging strategies designed to bring risk within

the set limits.

Interest rate risk

Interest rate risk is connected with medium-long term loans and has a different effect

depending on whether the loan bears interest at a fixed or floating interest rate. If interest is

payable at a floating rate then the interest rate risk is on the cash flows, while if interest is

payable at a fixed rate then the interest rate risk is on the fair value.

The interest rate risk management policy that has been adopted is designed to reduce any

losses arising from a fluctuation in interest rates in the floating rate case to a minimum by

converting these to fixed rates or arranging collar contracts, and to reduce the increased cost

of the fixed rate over the floating rate (“negative carry”) to a minimum.

A structured model has been developed internally to analyze and manage interest rate risk. The

method used to calculate the exposure to this risk is based on the Montecarlo method, which

enables the effect that fluctuations in interest rates have on future cash flows to be calculated.

Under this methodology at least ten thousand scenarios are simulated for each key variable, on

the basis of the volatilities and correlations associated with them, using market rate forward

curves for future levels. In this way a probability distribution of the results is obtained from which

the worst case scenario and best case scenario are extrapolated using a 99% confidence level.

Liquidity risk

The Group is currently not exposed to short-term liquidity risk, having 2,080 million euro of

committed lines of credit available at the balance sheet date of June 30, 2011. In the fourth

quarter of 2010, A2A S.p.A. agreed new committed lines having terms ranging from 5 to 7 years.

These new lines replaced the committed lines expiring mainly in 2011, increasing availability in the

medium to long term. These lines will be used to satisfy temporary liquidity requirements.

In addition, the Group has medium-long term facilities, forming part of agreements but not

yet used, totaling 253 million euro.



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Default risk and covenants

In October 2003 and in May 2004, A2A S.p.A. issued two bond loans each having a nominal

value 500 million euro and a 10-year maturity. In 2009, the Company issued a bond loan of 1

billion euro maturing in November 2016.

There is a credit rating clause in the agreement with the EIB for the loan originally of 100

million euro repayable in 2012 (a rating lower than BBB), for the loan originally of 100 million

euro repayable in 2014-2016 (a rating lower than BBB), for the loan originally of 200 million

euro repayable in 2023 (a rating lower than BBB) and for the loan originally of 200 million euro,

of which 150 million euro is repayable in 2025 (a rating lower than BBB) and 50 million euro

repayable in 2026 (a rating lower than BBB), and in the agreement with CSA for a bond loan in

yen repayable in 2036 and the related cross-currency swap contract ("put right" with a rating

lower than BBB-).

There is a credit rating clause in the agreement for the A2A S.p.A. loan of 85 million euro,

brokered by EIB, bearing floating rate interest and repayable in June 2018; more specifically,

the company has undertaken to maintain an investment grade rating throughout the whole

term of the loan.

If that commitment is not met, there are balance sheet, income statement and financial

covenants linked to the debt/equity ratio, the debt/gross operating income ratio and the gross

operating income/financial expenses ratio. The company calculates these ratios every twelve

months on the basis of its consolidated financial statements in order to review the covenants.

The A2A Group has stipulated a number of committed lines of credit with various financial

institutions for a total of 2,950 million euro (of which 2,835 million euro stipulated by A2A

S.p.A.) which are not subject to any covenants.

As regards the bond loans, the above-mentioned loans and the committed lines of credit

contain (i) negative pledge clauses under which A2A S.p.A. undertakes not to set up real

guarantees on the assets of A2A S.p.A. and those of its directly held subsidiaries over and

above a specific threshold; (ii) cross default/acceleration clauses which entail immediate

reimbursement of the loans in the event of serious non-performance; and (iii) clauses that

provide for immediate repayment in the event of declared insolvency on the part of certain

directly held subsidiaries..

A2A S.p.A. has undertaken not to give up control over Delmi S.p.A. for certain committed lines

of credit and for all lines to reserve the same treatment for the lending banks as that due to

creditors under other unsecured loan agreements (pari passu).

In addition, the loan of the subsidiary Abruzzoenergia S.p.A. is secured by a mortgage of up to

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As matters currently stand there is no default on the part of companies of the A2A Group nor

a breach of any of the covenants mentioned above.

Legislative and regulatory risk

The Group operates in a highly regulated sector. As a consequence, one of the risk factors of

the business is the constant and not always predictable evolution of the legislative and

regulatory situation for the electricity and natural gas sectors, as well as for the sectors

relating to the management of the water cycle and environmental services.

In order to deal with these risk factors the Group has adopted a policy of monitoring and

managing legislative risk by having various levels of control, in order to mitigate the impact of

this to the extent this is possible. This involves collaborative dialogue with the institutions and

with the bodies which govern and regulate the sector, active participation in trade

associations and the work groups set up at these entities and a detailed review of changes in

legislation and the provisions issued by the sector Authority.

It also involves constant dialogue with the business units affected by legislative changes in

order to assess the potential effects in full.

The main topics involved in current changes in legislation are as follows:

• the rules governing the terms and conditions of large hydroelectric concessions;

• the evolution in the rules of CIP 6/92 conventions;

• the rules on the regulation of local public services, particularly in light of the amendments

and additions made to article 23-bis of Law no. 133/08 on the duration of the transitional

period for current mandates, as per article 15 of Law no. 166/2009 referred to above;

• the evolution of the rules for the Green Certificates market.

Large hydroelectric concessions

The 2006 Finance Law provided for a 10-year extension of large concessions regarding water

for hydroelectric use in exchange for adequate investment in the modernization of the

installations. (This 10-year extension was based on paragraphs 6, 7 and 8 of article 12 of

Legislative Decree no. 79/99, the "Bersani Decree"). Sentence no. 1/2008 of the Constitutional

Court declared that part of the law was illegitimate as it violated constitutional provisions

regarding the jurisdiction of regions over energy matters with respect to the State. This sentence

by the Court led to a situation where it was no longer possible to extend the concessions,

although it did not entirely reinstate the rules contained in article 12 of the Bersani Decree

(paragraphs 3 and 5 remain repealed, paragraph 2 has been repealed and paragraph 1 has been

replaced by the first part of paragraph 483 of article 1 of the 2006 Finance Law). According to the



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sentence of the Constitutional Court, the determination of the tender parameters (minimum

organizational and financial requisites for operators, parameters for the increase in power and

energy generated) by the Ministry for Economic Development will also have to provide for the

suitable involvement of the regions which can be achieved through the Joint Conference.

Article 15, paragraph 6 of Decree Law no. 78/2010 (the Budget Decree Law), published in the

Official Journal of May 31, intervened on this matter by raising the bases for the calculation of

the extra fees payable on large hydroelectric concessions (article 15, paragraph 6).

With an amendment to the text, in view of the conversion of the decree into law which was

carried out at the end of July by means of Law no. 122/2010, the above legislation was

supplemented by additional provisions concerning the duration of outstanding concessions,

in turn declared illegitimate by sentence no. 205/2011 of the Constitutional Court published on

July 13, 2011.

In addition, with a note of March 15, 2011, the European Union provided communication to the

Italian Government as to the issue of a notification of default letter against the Republic of Italy

for the request for clarifications regarding the provisions as per Law no. 122/2010. The

Commission believes in this respect that the means by which an extension to the concessions

provided therein is given may represent a breach of freedom of establishment regulations as

per article 49 of the TFEU. The infringement procedure is expected however to be dismissed

following sentence no. 205/2011 of the Constitutional Court.

The following matters are highlighted in particular with respect to the provisions introduced

by Law no. 122/2010:

• from January 1, 2010 the municipalities and consortia of mountain catch basins receive

from the holders of large hydroelectric concessions the extra fees as per articles 1 and 2 of

Law no. 925 of 1980, updated respectively in the amounts of 28 and 7 euro for each kW of

nominal power, without prejudice to the methods of additional updating in force;

• the Ministry for Economic Development, in conjunction with the Ministry for the

Environment and subject to agreement with the Joint Conference, must determine by

means of a measure of its own the minimum organizational and financial requisites, the

parameters and the timing regarding the tender procedure;

• if at expiry date of the outstanding concessions as extended the procedure to identify the

concessionaire has not yet been completed, the outgoing concessionaire shall continue in

management, with unchanged conditions, until the party to whom the tender is awarded

takes over;

• the amounts received by the Municipalities and the State pursuant to the provisions of the

2006 Finance Law prior to sentence no. 1 of the Constitutional Court of January 2008 shall

be kept on a definitive basis by the bodies which received them;



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• the concessions and related plant which are governed by international conventions shall

remain exclusively subject to the legislation of the State, including for the purpose of the

ratification of any agreement modifying the respective regime; with respect to A2A S.p.A.,

this provision is applicable to the concession held by the Spoel, the governance of which

derives from an international convention between the Republic of Italy and the Swiss

Confederation.

By means of the Regional Law of December 20, 2010, published in the Official Bulletin of

the Lombardy Region of December 27, 2010, the Region of Lombardy has adopted

additional provisions on the subject, in view of the expiry of certain of the outstanding

concessions.

Temporary continuation of use

More specifically, the Regional Council may, solely for concessions expiring up to December

31, 2015, permit the granting of the concession to the outgoing concessionaire to continue on

a temporary basis for the time required to complete the assignment procedures and for

periods which in any case do not exceed five years.

For the period of the temporary continuation of the concession, the outgoing concessionaire

is required to carry out the following:

• to pay the region an additional fee (of an amount not currently quantified) with respect to

the fee and extra fee and free of charge sale of energy already established;

• to observe the additional technical and economic usage conditions required by the

regional council through its resolution;

• to carry out at its own expense any ordinary and extraordinary maintenance required to

ensure the full efficiency of the assets and works and to notify the regional council of the

program of interventions to be realized.

Expiry of the mandate

On the expiry of the mandate, the region acquires title to the works and plant subject to the

concession, in order to contribute them, within 6 months of that date, in ownership to special-

purpose companies with non-transferable wholly-owned public capital which are controlled

by the region, and in which local authorities and/or their forms of aggregation participate,

without charge, in an amount of not less than 30%. The industrial usage of the works and plant

will then be entrusted to third parties by means of publicly open competitive procedures or

alternatively to mixed public and private companies held by the mountain province having

territorial jurisdiction (provided the selection of the private shareholder is made by means of

a competitive procedure whose object is the quality of the shareholder and the assignment of

specific operational tasks connected with the industrial management and the investment of



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the private shareholder is between 40% and 60% of share capital, and on condition that if the

provinces of reference do not fall within the parameters established by the 2007 Finance Law

and referred to by Law no. 122/2010 then they have 50% of their territory at least 500 meters

above sea level).

Use of infrastructure and plant

In order to use the infrastructure and the plant, the mandated party will obtain access to the assets

owned by the special-purpose company against payment of a fee in part fixed (determined on the

basis of the average annual nominal power of the plant) and in part variable (in proportion to the

production achieved, valued on the basis of the results of the power markets).

The Council of Ministers has appealed to the Constitutional Court against certain clauses of article

53-bis of Regional Law no. 26/2003 introduced by the Regional Law of December 20, 2010 on the

basis that these are prejudicial to State jurisdiction. It is not, however, possible to determine what

effect this proceeding may have on the regime relating to the extension of outstanding

concessions, which has not been challenged by the Government. The hearing of the Constitutional

Court is expected to take place in October.

With Resolution no. 1205 of December 29, 2010 the Regional Council initiated the “temporary

continuation” by A2A S.p.A. of the use of the shunting and hydroelectric plants of Stazzona, Lovero

and Grosotto. A2A S.p.A. and other operators, for the concessions which regard them and who find

themselves in the same condition, have appealed against the resolution at the High Court of Public

Waters. In its appeal to the High Court, A2A has also requested the judge to raise a question of

constitutional illegitimacy incidentally concerning the regional legislation regarding the

“temporary continuation of use” which has not been challenged by the Government.

Evolution of the rules of the CIP 6/92 conventions

Law no. 99/2009 (the "Development Law") establishes that the Ministry for Economic

Development has responsibility for defining the criteria for the updating of the Avoided Fuel

Cost and that mechanisms be proposed to producers for the early termination of the CIP 6/92

conventions in order to reduce the costs of maintaining these arrangements.

This regulation was introduced by a decree of December 2, 2009, which applies solely to plants fed by

process or residual fuels or by energy recoveries, or similar types fed by fossil fuels, and by a decree of

August 2, 2010 on the early termination of the CIP 6/92 conventions for approximately 2,000 MW of similar

plant fed by fossil fuels.

Both decrees describe the method of calculating the fees due in the case of the continuation of the

conventions through to their expiry date and the fees to be paid in the case of early termination, entrusting

the Energy Services Manager (GSE) with the task of checking - as an essential condition for termination -

that the difference between the two is positive and thus leads to a saving for consumers in absolute terms.



191

The categories of plant for which as of today provisions have been issued implementing the rules

contained in the Development Law therefore do not include plants fed by renewable sources and by

waste, for which the implementation of the provision will be carried out by means yet to be established

following further assessments by the Energy Services Manager, the Ministry for Economic Development

and the Electricity and Gas Authority.

Regulation of local public services

At the end of July 2010 the Government issued the regulation implementing the provisions of

article 23-bis of Law no. 133/08 regarding local public services of economic importance.

The provisions relating to the distribution of natural gas and electricity were excluded from

the application of the provisions of article 23-bis, firstly by article 30, paragraph 1 of Law no.

99/09 and then by article 15, paragraph 1 a) of Decree Law no. 135/09.

This legislation therefore regards the water and waste sectors.

Integrated Water Service and Waste Management

By community obligations Decree Law no. 135/09, for assigning the management of local

public services governed by the rules in article 23-bis, the legislator provides for an ordinary

and special process.

• Under the ordinary process the appointment is made by public procedure with the

beneficiary being either a private economic subject or a mixed public-private subject,

providing however for strict conditions on the features of the private partner.

• The special process, which envisages an in-house mandate, may only be used in

exceptional circumstances which are identified by the legislation (economic, social, geo-

morphological conditions), subordinate moreover to the requirement to suitable

publicity and the motivation and opinion of the antitrust regulator.

The community obligations Decree Law has additionally introduced a change in the discipline

of the transitional period during which mandates which are outstanding and do not derive

from public procedures remain in force.

Certain scenarios may be outlined on the basis of the provisions which have been introduced.

In particular, as far as it may be of interest, the provision exists by which the direct

appointments assigned at October 1, 2003 to companies having a public investment which are

already listed on the stock market at that date and to subsidiaries of these pursuant to article

2359 of the Italian civil code cease at the expiry date envisaged in the service contract, on

condition that the public investment reduces, also gradually, by means of a public procedure

or forms of private placement with qualified investors and industrial operators, to a holding

not exceeding 40% at June 30, 2013 and 30% at December 31, 2015; if that is not the case, the



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appointments will cease, without deferral and without the need for a suitable resolution by

the appointing body, on June 30, 2013 and December 31, 2015 respectively.

The regulatory framework summarized above was repealed as a consequence of the repealing

referendum of June 12 and 13, 2011, as enunciated finally by Presidential Decree no. 113 of July

18, 2011.

As a result of this referendum the following no longer hold (i) the dates of the anticipated

cessation of outstanding concessions arising from other than public procedures, (ii) the

reasons for not being able to take part in new public procedures and (iii) the standardization

of the means by which local public services are allocated.

In the absence of further laws or regulations on this matter, the outstanding concessions may

continue until their original deadline. For the main urban hygiene contracts held by the Group

(collection, street sweeping - excluding management-ownership of disposal plants) the

original deadlines are as follows:

• Amsa - Municipality of Milano natural termination in 2021;

• Aprica - Municipality of Brescia natural termination in 2050 (under the original bylaws of

ASM Brescia, which becomes 2100 if the post-merger bylaws are considered);

• Aprica - Municipality of Bergamo natural termination in 2023;

• Aspem - Municipality of Varese natural termination in 2030.

For the main Brescia province water service contracts:

• A2A Ciclo Idrico - Municipality of Brescia natural termination in 2050.

Future concessions will also not be subject to the regime as per article 23-bis, which has been

removed from legislation.

As a means of carrying out the requirements on admission of the question, until new

legislation or regulations are issued on the matter, at the present time municipalities must

apply community principles.

The outcome of the consultation concerning referendum question no. 2, as stated in

Presidential Decree no. 166 of July 18, 2011, has on the other hand led to the repealing of article

154, paragraph 1 of Legislative Decree no. 152 of 2006 (reported below), restricted to the

following section:

• “The tariff represents the fee for the integrated water service and this shall be calculated

by taking into account the quality of the water service and the service provided, the

necessary works and adjustments, the extent of the costs for managing the works, the

adequacy of the remuneration of the capital employed and the costs for managing the

protected areas, and a share of the running costs of the Ambit Authority, in order that full

coverage of the investment and running costs is assured in accordance with the cost



193

recovery principle and in accordance with the principle of “who pollutes pays”. All the

portions of the tariff for the integrated water service have the nature of a fee”.

For the purpose of determining the tariff for the integrated water service, therefore, the

normalized method will continue to apply. This method is dictated by the Ministerial Decree of

August 1, 1996, legislation delegated by article 13 of Law no. 34/96, and provides for the

remuneration of employed capital, until the legislator issues the decree envisaged by article

154.

In this respect, it should also be noted that also in the event of a generalized application of the

principles contained in the Water Framework Directive (2000/60/EC), at article 9 this latter

establishes the principle of the “recovery of costs for water services”, which must be pursued

starting from an economic analysis (Annex III) which considers an estimate of the investments

connected with meeting long-term supply and demand..

Finally, it should be noted that the inter-ministerial decrees that must be issued to implement

article 154 of Legislative Decree no. 152/06 must take into account the repeal required by the

referendum and hence regulate the tariff in consideration of all the additional factors also

present in paragraph 1:

– quality of the water resource

– quality of the service provided

– necessary works and adjustments

– running costs for the works

– costs for managing the protected areas

– share of the functioning costs of the AATOs (which are shortly expected to be replaced by

other bodies).

Natural Gas and Electricity Distribution

As far as the distribution of electricity is concerned, article 1, paragraph 2 c) of Law no. 239/04

states that concessions are granted for electricity distribution on the basis of the

requirements of law, while at article 9 the Bersani Legislative Decree (no. 79/99) identifies the

Ministry for Economic Development as the body granting the local concession, comprising

one or more municipalities.

With respect to the natural gas distribution service, in safeguarding the provisions of

Legislative Decree no. 164/2000 and article 46-bis of Decree Law no. 159 of October 1, 2007,

converted with amendments into Law no. 222 of November 29, 2007 regarding the

distribution of natural gas, Law no. 99/2009, the “Development Law”, defines the new

“Minimum Territorial Ambits” for which tenders will be called to allocate the service to the



194

Ministry for Economic Development, in conjunction with the Ministry for Regional Affairs,

after consulting with the Combined Conference and the Electricity and Gas Authority.

On March 31, 2011 the Decree of the Ministry for Economic Development dated January 19,

2011 was published in the Official Journal; this identifies 177 Minimum Territorial Ambits and

provides details by region in Attachment 1.

Nevertheless, the precise identification of the individual municipalities making up each

Minimum Territorial Ambit has been deferred to a subsequent decree of the Ministry for

Economic Development, “Attachment 2”, which will be adopted in conjunction with the

Ministry for Regional Affairs and is to be communicated to the Combined Conference. This

communication is currently expected to be made in September 2011.

The criteria followed for identifying the municipalities included in each individual Ambit

envisage a maximum of 50 municipalities for Ambits with more than 50,000 effective

customers; in addition, municipalities fed by the same distribution plant will be included in the

same Ambit. Account will also be taken of population density and the specifics of the area.

In respect of the blocking of tenders it should be noted that at article 24, paragraph 4 of

Legislative Decree no. 93 of June 1, 2011 (Third Energy Package), published in the Official

Journal on June 28, 2011, the legislator has specified in more detail than earlier which of the

tenders for assigning the gas distribution service which have already started up and have yet

to be completed may be awarded on the basis of the procedures applicable at the date when

they were called.

More specifically, all the tenders for which by the effective date of the above-mentioned

legislative decree a tender notice has been published in the case of an open procedure or

invitation letters have been sent in the case of a restricted procedure may be carried out on

the basis of the procedures applicable at the date on which they were called, provided that

such documents include the criteria for evaluating the offer and the repayment amount for

the outgoing operator.

On the other hand tenders not included in these cases must, from June 29, 2011, the date on

which the above-mentioned decree became effective, be carried out exclusively for Territorial

Ambits as per article 46-bis of Law no. 222 of 2007 and on the basis of the criteria referred to

therein, to be issued shortly.

In respect of the criteria for the tenders for the allocation of the distribution service, said article 46-

bis establishes that the Ministry for Economic Development, in conjunction with the Ministry for

Regional Affairs, after consulting with the Combined Conference and on the basis of the opinion of

the Electricity and Gas Authority, shall identify the “criteria for the tender and the valuation of the



195

offer for allocating the gas distribution service”. The criteria to be used for this purpose are, in

addition to the economic conditions, the benefits for consumers, the quality and safety standards

and the soundness of the investment and development plan. At the present time the opinion of the

State Council is awaited together with the signatures of the competent ministers.

Finally, the Ministerial Decree dated April 21, 2011 has been published in the Official Journal no.

102 of the ordinary series of May 4, 2011, becoming effective the following day; this concerns

provisions for regulating the social effects connected with the new means of allocating gas

distribution concessions, the “Social Clause” measure.

This decree, drawn up by the Ministry for Economic Development and the Ministry for

Employment and Social Policies, contains regulations to safeguard the jobs of the personnel

of the outgoing distribution company following the awarding of the service to another

company, together with a series of obligations for this latter company. The incoming operator

is required to hire at least a number of employees not exceeding the sum of the staff at the

plants forming part of the tender and a portion of the personnel with central functions

supporting distribution and measurement.

The protection envisaged for employees with the above hiring requirement consists in the

fact that they will be immediately directly transferred to the company taking over, with

guarantees being made of their previous employment conditions of an economic nature and

long-term service schemes of which they are members. Suitable lay-off schemes will be

applied for those members of staff who on the basis of the above-mentioned conditions turn

out to be in excess to needs, without prejudice to the possibility of being rehired should the

new company seek additional personnel within two years of the date of the tender.

Evolution of the market rules regarding Green Certificates and legislation regarding

the encouragement of production from renewable sources

On March 29, 2011 the Legislative Decree implementing Directive 2009/28/EC on the promotion of

the use of energy from renewable sources became effective; this had already been available in draft

form since December 2010 and was subsequently submitted for review by the parliamentary

committees.

Certain aspects of the draft proposed in December were amended during the subsequent review.

The main measures adopted by the decree, though, may only be implemented following the issue

of further ministerial decrees (the majority of which by the Ministry for Economic Development

and the Ministry for the Environment) with six-monthly deadlines, starting from the effective

date of the legislation.



196

Reform of mechanisms to encourage renewable sources - Reference provisions when

fully operational

The decree requires that production from renewable sources for plants entering use after

December 31, 2012 should be given incentives by:

• recognizing a feed-in tariff for plants of up to 5 MW of installed power (this threshold will

vary on the basis of the characteristics of the various renewable sources used);

• Dutch auction mechanisms run by the GSE for plants having installed power exceeding the

above limits.

The feed-in tariff will be attributed exclusively to the production of new plants, including

those built following complete reconstruction, upgraded plants, limited to the additional

production available, and hybrid power plants, limited to the portion of energy produced from

renewable sources.

The incentive will additionally be allocated, “for power quotas”, to the production of plants

which have been fully or partially refurbished, up to a maximum of 25% for partial

refurbishment and 50% for total refurbishment. The two portions can increase to 80% and

90% (respectively in the cases of partial and total refurbishment) for plants fuelled by

biomasses, including those fuelled by the biodegradable fraction of waste.

Reform of mechanisms to encourage renewable sources - Transition to the regime

Production from renewable sources for plants entering use by December 31, 2012 will be

encouraged with the existing mechanisms. For the Green Certificate mechanism a gradual

reduction of the required portion is however envisaged, which will fall to zero by 2015, as well

as the repeal of the reference legislation (as per article 11 of the Bersani Decree) starting from

2016, after which therefore producers from renewable sources will no longer receive the

Certificates.

From 2012 to 2015 the GSE will withdraw the certificates issued for production from

renewable sources and left unsold at a price of 78% of that established by paragraph 148 of

article 2 of the 2008 Finance Law. Over the same period of time the GSE will additionally

withdraw the unsold certificates issued for production from cogeneration sources connected

with district heating at the average price of the certificates on the market during 2010.

Electricity imported from January 1, 2012 will not be liable to the requirement to purchase Green

Certificates only if it forms part of national energy saving objectives.

The implementation decrees for the incentive mechanisms planned when everything is fully

operational (feed-in tariffs and Dutch auctions) will govern the transition from the old to the

new incentive mechanism, in particular as far as the right to use the Green Certificates for

years after 2015 is concerned.



197

Guarantee of origin

The decree requires that by the means envisaged by article 1, paragraph 5 of Decree Law no. 73

of June 18, 2007 (completing the liberalization of the sale of electricity), converted with

amendments into Law no. 125 of August 3, 2007, the method for the issue, recognition and use

of the guarantee that the electricity has been produced from renewable sources should be

updated in compliance with the provisions of article 15 of Directive 2009/28/EC.

From January 1, 2012, electricity suppliers will only be able to use that guarantee to attest to

the portion/quantity of energy from renewable sources included in their energy mix.

Support regimes for the production of thermal energy from renewable sources for

energy efficiency

The decree provides for incentives for measures increasing energy efficiency and producing

thermal energy from renewable sources by means of the following support regimes:

a) contributions valid for natural gas tariffs for small-sized measures;

b) the issue of White Certificates for all measures which do not fall amongst those

included at the previous point.

a) Incentive is given to small-sized measures for the production of thermal energy from

renewable sources and increasing energy efficiency carried out after December 31, 2011.

With the aim of ensuring a fair remuneration of the investment, the incentive is

proportional to the energy savings produced by the measures and its term may not exceed

ten years staring from the date of completion of the measure.

b) Consistent with the provisions of article 7 of Legislative Decree no. 115 of May 30, 2008, the

means are established by which the obligations of the distribution companies as per article

9.1 of Legislative Decree no. 79 of 1999 and article 16.4 of Legislative Decree no. 164 of

2000 tie in with the national energy efficiency objectives.

The decree links the period of entitlement to Green Certificates to the useful life of the

measure and envisages that the energy savings realized by efficiency measures for the

electricity and gas networks may form part of reaching the obligations of the distribution

companies without the issue of White Certificates.

Third Energy Package

On June 29, 2011, following publication in the Official Journal, Legislative Decree no. 93/2011

came into force implementing the Third Energy Package Directives 2009/72/EC, 2009/73/EC

and 2008/92/EC regarding community legislation on the internal electricity and natural gas

markets and a community procedure on the transparency of the price of gas and electricity

for the end industrial user and the repealing of Directives 2003/54/EC and 2003/55/EC.



198

The following is a summary of the main provisions of interest which have to be implemented

by the Regulator.

Provisions concerning accounting and functional unbundling

The provisions dictated by the decree for the two sectors concerning functional unbundling

for distribution activities in substance follow those already in force, as contained in AEEG

Resolution no. 11/04.

The decree dictates measures concerning accounting unbundling only for the gas sector, but

in this case too these relate to provisions already implemented pursuant to Resolution no.

11/07.

Further provisions relating to the natural gas sector – protection of end customers

The suitability of all customers is confirmed and categories of “vulnerable” end customers are

identified (domestic customers, hospitals, nursing homes, retirement homes and similar

institutions, as well as civil and non-civil customers with a usage not exceeding 50,000 cm a

year), for whom there is the requirement to assure supply with the highest safety level, also at

critical times.

For these customers, additionally, the AEEG will continue on a transitional basis to determine the

reference points.

In addition to the last resort service, if these customers find themselves without any supply

and lacking the requirements for activating such service (FUI), the distributor will guarantee

the balancing of its network in relation to withdrawal at that point for the period when

physical disconnection is not possible, in accordance with the terms and conditions

established by the AEEG, which has to ensure that the distribution company receives

adequate remuneration for the service provided (in addition to the costs it incurs).

A period of up to three weeks is envisaged for satisfying the requests for a change of supplier,

with the additional clarification that the switch-over must begin from the first day of the

month.

Further provisions relating to the natural gas sector - unbundling of transportation activities

The AEEG is required to start up a certification procedure for each company owning a

transportation network which at the same date also acts as an operator.

The procedure should be concluded within four months of notification and provide

authorization for companies which are the owners of infrastructure to perform

199



transportation activities, as operators of transport systems.

It is additionally planned for the operators of transport systems to be certified by the

Authority by March 3, 2012.

In addition, by March 3, 2012 vertically integrated groups other than the major transport

company which are owners of gas transportation companies may decide whether to separate

the company from an ownership standpoint or whether to propose an independent system

operator to the Ministry for Economic Development.

In addition, the smaller regional transportation companies who are owners of gas pipelines as

per the decree of the Industry Ministry of September 29, 2005, used mainly for the

transportation of natural gas, may not apply the above provisions.

Further provisions relating to the electricity sector – protection of end customers

The regulation confirms the suitability of all end customers and takes up the measures already

adopted by means of Law no. 125/07 to confirm their framework of reference (the setting up

of markets for greater protection and safeguarding).

In addition, the three week term for the activation of a new supply as the result of the switch-

over is also introduced for the sale of electricity (the regulation is consistent with the

provisions introduced for natural gas).

Further provisions relating to the electricity sector – retail markets

The provisions as per article 41 require the communication and branding policies relating to

sales to customers on the free market or to customers on the markets for greater protection

not to create confusion between the businesses or between the companies performing such

activities.

In particular, commercially sensitive information concerning each activity must be disclosed

in a non-discriminatory way.

Finally, it is stated that in the case where a single company performs both activities, the AEEG

should adopt the provisions required to prevent that company from obtaining a competitive

advantage from the availability of the data relating to the same user, both as far as end

customers are concerned and “from the standpoint of the assessments which the Authority

makes as to the quality of the service”, with respect to a corporate structure in which the two

activities are entrusted to different companies within the same group.

200



Powers of the Electricity and Gas Authority

Note is made in particular in this respect of the provision by which a company receiving

sanction measures from the AEEG may propose commitments which serve to pursue the

interests protected by the regulations for which the violation is raised in the most effective

manner.

Process risks

Business interruption risk

All of the Group's sectors of activity involve managing production sites which are

technologically and operationally complex (electric power stations, waste disposal plants,

cogeneration plants, distribution networks, etc.), where a breakdown or accidental damage

could lead to a lack of availability and in turn to financial losses and possibly harm to the

Group's reputation due to the interruption of the services provided.

These risks are linked to a variety of factors which, in the case of certain plants, could

moreover be accentuated by changes in the competitive context and in the markets of

reference. While the risk of unavailability of the plants may be considered an inherent part of

the business and one that is impossible to eliminate entirely, the A2A S.p.A. sets up preventive

risk mitigation strategies in all of its sectors to reduce the probability of such risks occurring

and action strategies aimed at limiting any impact.

Safeguarding the Group's assets involves adopting procedures of scheduled maintenance and

periodic revision of the plants and networks and keeping these constantly updated with respect

to best practice; it also involves providing specific training courses for technical personnel,

including on the operating procedures currently in force. The Group also makes widespread

use of instruments for the control and remote control of technical parameters capable of

permitting adequate monitoring and timely detection of any anomalies as well as having a back-

up of the components needed to guarantee operational continuity, where possible.

Improvements designed to further mitigate the risk of business interruption continued

during 2011. These measures regarded the Group’s assets, by means of steps geared towards

plants and networks of a critical nature, the development of interconnections between

transmission networks to avoid congestion risks and the start-up of the pooling of critical

spare parts for the plants, and a continuous updating of the procedural documentation

supporting operations in order to manage the main operational processes safely.

201



When new production sites are acquired specific steps are taken to encourage these to be

brought into line with Group standards in terms of maintenance, control and personnel

training methods.

Finally, the Group takes out insurance to cover any direct and indirect damages which may

arise from other types of risk.

ICT infrastructure

The activities of the A2A Group are managed through complex ICT systems which support the

main business processes: operational, administrative and commercial. Possible risk factors

include the inadequacy of such systems compared to business needs, possible "downtime",

making them unavailable, or inadequate handling of the aspects linked to the integrity and

confidentiality of information. These risk factors are mitigated by controls governed by the

Information & Communication Technology Department.

In 2010, the Group continued to integrate and consolidate its ICT systems, also in the light of

changes in corporate structures.

The Group has continued to rationalize its outsourced ICT services, periodically revising the

tasks assigned to the service companies with respect to the key skills maintained internally, in

order to have increasingly efficient operational support at its disposal.

In order to mitigate the potential risk of business interruption for processes that are

considered strategic, the Group is equipped with hardware/software back-up facilities to

ensure continuity of service in the event of a breakdown.

Given the importance of the activities that are carried out every day on the Italian Power

Exchange, particular attention is given to protecting the systems interfacing with the market;

these systems have in fact been duplicated and are subject to specific management and

maintenance procedures to ensure their stability.

The Group also has a disaster recovery system that ensures service and data continuity at an

alternative ICT centre. The efficiency of this system is tested periodically. The Group has now

completed the system for mutual recovery between the ICT centers in Milan and Brescia,

providing better protection against the risk of potential interruptions.

Data confidentiality and security are subject to specific controls by the Group, both through

internal policies and by means of tools to segregate access to information, as well as by

specific contractual agreements with any third parties who may have to access the

information handled.

202



In particular, work has initiated that is aimed at checking the alignment between the

organizational role model and the segregation of duties technical role model implemented in

the systems. Consistent with this work, it is planned to gradually adopt identity management

and access control tools designed to ensure an increasingly effect control over the processing

of data critical for the business.

Environmental risk

The risks associated with events that impact the environment or the health of the population

living in the areas of influence of the Group's activities (for example for the disposal of

production waste, emissions from production processes, waste collection and disposal

management) are the object of increasingly close attention by public regulators and more and

more stringent legislation.

The Group pays constant attention to the prevention of such risks, and in particular has

adopted a policy document entitled "Policy for the Quality, Environment and Safety of the A2A

Group", which is now the instrument that lays down the Group's approach to such questions.

This document, which is widely distributed both internally and externally, explains the values

which underlie the Group's operations and which the Quality, Environment and Safety

Department is committed to spreading and sharing as guidance for the day-to-day work of all

concerned.

The purpose of the Quality, Environment and Safety Department is also to provide top

management with support in establishing company policy in these areas, and it checks that

this is implemented properly in compliance with the rules applicable in all areas and internal

processes.

Operational implementation of the policy takes place through the use of an Environmental

Management System (EMAS) in the Group entities that are more exposed to both direct and

indirect potential environmental impact. This system provides for a program of progressive

extension and upgrading to the standards of ISO14001 certification for those of the Group's

main activities having a greater impact on the environment, as well as the management of

EMAS certification for the Group's main plants.

For the purpose of arriving at a single model measures which are at the completion stage are

currently being taken which will allow all the operating companies of the Group to make

reference to a single, integrated Quality, Environment and Safety system by the end of 2011.

The Quality, Environment and Safety Department has also set up organizational control units,

203





which among other things carry out periodic environmental analyses and audits to detect and

prevent conduct that does not comply with the environmental procedures established for all

of the Group’s operating companies.

In the perspective of having a constant evolution of the systems controlling environmental

risk, the Group joined the ARPA (Regional Agency for the Protection of the Environment)

Lombardy Project in 2010, whose purpose is to improve the efficiency of the system for

controlling the more significant emissions, including in the light of technical developments in

the sector, by connecting all the Emission Monitoring Systems (SMEs) to a single control

centre.

The A2A Group has taken out insurance against damage from both accidental and gradual

pollution, in order to cover any residual environmental risk.

Each year the Group also publishes a Sustainability Report which reports key data and

information on environmental aspects in order to encourage the circulation of these among

the public. Starting in 2010, the Sustainability Report is certified by the auditors, who attest

that it is in compliance with the Sustainability Reporting Guidelines issued by the Global

Reporting Initiative.

Health and safety risk

The Group operates in a heterogeneous business context characterized by a strong

technology element and the presence of personnel at its plants and throughout its territory.

Certain Group activities are, by their nature, more exposed to the risk of “typically work-

related” accidents linked to the operational services in the territory and the performance of

technical services and activities at the plants.

Through the Quality, Environment and Safety Policy (which provides for a program to

upgrade the personnel safety management system to comply with ISO 14001 and OHSAS

18001 standards), the prevention measures adopted aim for a "zero risk" objective,

encouraging a constant rise in the level of safety in the workplace.

A central Prevention and Protection Service has been set up as part of the Quality,

Environment and Safety Department in order to harmonize the objectives of safety and

protection in Group companies and to monitor that these standards are also being followed

by contractors at both the prequalification stage and execution stage at worksites.

Control sections have then been set up at the various Group companies, coordinated by A2A

S.p.A.'s Safety Unit, which among other things carry out specific inspections to monitor

204

compliance with the procedures for implementing legislation on prevention and protection

and workers' health and safety as well as personnel update training.

There is also a program of employee health surveillance, conducted with the aid of a team of

doctors located in the various areas who carry out periodic assessments on the state of health

of personnel.

A system of monitoring, recording and reporting accidents has been set up to assist in the

process of constantly improving safety, together with an after-the-event analysis to identify

any causes and undertake corrective and mitigating action. A process is currently taking place

to manage this accident monitoring system by computer with the aim of making the analysis

and resolution of the causes of accidents in the Group even more efficient and of creating a

tool that can provide employees and collaborators with information about matters regarding

health and safety in the workplace and make them more aware of these.



205

0.4Certification of thecondensed half-yearfinancial statementspursuant to art. 154-bis para. 5 of Legislative Decreeno. 58/98

206

1. The undersigned Giuliano Zuccoli, in the name and on behalf of the entire Management

Board of A2A S.p.A., and Stefano Micheli, as the Manager in charge of preparing the

corporate accounting documents of A2A S.p.A., certify the following, taking into account

the provisions of art. 154-bis, paras. 3 and 4, of Legislative Decree no. 58 of February 24, 1998:

• the adequacy in relation to the characteristics of the business and

• the effective application

of the administrative and accounting procedures for the preparation of the condensed half-

year financial statements during the first half of 2011.

2. We also certify that:

2.1 the condensed half-year financial statements:

a) have been prepared in accordance with the international accounting standards approved

by the European Community pursuant to Regulation (EC) no. 1606/2002 of the European

Parliament and of the Council of July 19, 2002;

b) agree with the balances on the books of account and accounting entries;

c) are able to give a true and fair view of the assets and liabilities, results and financial position

of the issuer and of the set of companies included in the consolidation;

2.2 the interim report on operations includes a reliable analysis of key events that took place

during the first six months of the year and of their impact on the condensed half-year

financial statements, together with a description of the main risks and uncertainties to

which the business is exposed for the remaining six months of the year. The interim report

on operations also includes a reliable analysis of the information on significant related

party transactions.

Milan, August 3, 2011

Giuliano Zuccoli Stefano Micheli

(on behalf of the Management Board) (Manager in charge of

preparing the corporate

accounting documents)

Certification of the condensedhalf-year financial statementspursuant to art. 154-bis para. 5 ofLegislative Decree no. 58/98


Sintesi economica, patrimoniale e finanziaria

207

0.5Independed Auditor'sreport


209

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