2014 Annual Accounts. Milano Serravalle - Milano Tangenziali S.p.A. Registered office: Via del Bosco Rinnovato 4/A Assago (MI)

Transcription

1 2014 Annual Accounts Milano Serravalle - Milano Tangenziali S.p.A. Registered office: Via del Bosco Rinnovato 4/A Assago (MI) Tax, VAT and Company Registration Office No.: Chamber of Commerce No.: No secondary offices exist 2014 Annual Accounts 1

2 General Information 4 Notice of the Shareholders Meeting 5 Shareholders 6 Corporate Boards 7 Motorway network 8 Key Financial Highlights 9 Directors Report 10 Letter to the Shareholders operations Toll Collection and Service Area Management Network management Investments Disputes and other legal issues Corporate Boards Relations with the Granting Authority: regulatory compliance and developments Funding Human resources and organisation Workforce and organisation Prevention and protection Industrial relations Training and development operating results Economic management Balance sheet Financial management Investee companies Investee companies at December 31, Performance of the subsidiary companies Performance of the other investee companies Related parties Related parties Risk management Company risk management Subsequent events and outlook Subsequent events to year-end Outlook 69 Shareholders Meeting motions 70 Financial Statements Annual Accounts 2

3 Explanatory Notes 78 Cash Flow Statement 119 Annexes 122 Global Paying Traffic by Vehicle Category 123 Global Paying Traffic by Tariff Category 131 Barrier transits 134 Routine maintenance Annex F 134 Lane types 135 Motorway network investment 136 Board of Statutory Auditors Report 137 Independent Auditors Report 142 Consolidated Financial Statements 145 General information 146 Group Directors Report 148 Consolidated Financial Statements 160 Notes to the Consolidated Financial Statements 167 Consolidated Cash Flow Statement 209 Board of Statutory Auditors Report 213 Independent Auditors Report Annual Accounts 3

4 General Information 2014 Annual Accounts 4

5 Notice of the Shareholders Meeting Shareholders Meeting Call Shareholders are called, as per Board of Directors motion of June 9, 2015, to the Shareholders Meeting at 10 AM on June 29, 2015 in first call and, where necessary, in second call at 3 PM on July 14, 2015, to resolve upon the following Agenda 1. Financial statements for the year ended December 31, Directors Report, Board of Statutory Auditors Report and the Independent Auditors Report. Approval and resolutions thereon. Examination of the consolidated financial statements 2. Appointment of the Board of Statutory Auditors following establishment of the number of members. Establishment of remuneration 3. Allocation of amount for donations in FY Other matters The Shareholders, in accordance with Article 8 of the By-Laws, may attend through presentation of their shareholder certificates or such demonstrating ownership of a series of undertakings, through their deposit at least three days before the date fixed for the Shareholders Meeting, at the registered office or at the banks Intesa Sanpaolo S.p.A., Carige S.p.A. and Monte dei Paschi di Siena S.p.A.. Kind regards. Milano Serravalle Milano Tangenziali The Chairperson Ms. Maura Tina Carta Assago, June 15, Annual Accounts 5

6 Shareholders Share Capital of Euro 93,600,000, fully subscribed and paid-in, with a par value of Euro The Company does not hold treasury shares. Shareholder Number of shares % A.S.A.M. S.p.A. 95,223, MUNICIPALITY OF MILAN 33,480, S.I.A.S. S.p.A. 19,179, PROVINCE OF PAVIA 7,540, PARCAM S.r.l. 7,199, PROVINCE OF COMO 6,541, AUTOSTRADA DEI FIORI S.p.A. 5,191, Chamber of Commerce of PAVIA 2,808, MUNICIPALITY OF PAVIA 1,632, GENOA PORT AUTHORITY 510, MUNICIPALITY OF COMO 360, Chamber of Commerce of COMO 229, ASTM S.p.A. 86, SATAP S.p.A. 13, PROVINCE OF LECCO 4, Chamber of Commerce of MILAN METROPOLITAN CITY Total 180,000, Annual Accounts 6

7 Corporate Boards Board of Directors Chairperson Chief Executive Officer Directors Ms. Maura Tina Carta Mr. Massimo Sarmi Mr. Giovanni Angioni Mr. Francesco Bertolini Mr. Claudio De Albertis Ms. Antonella Faggi Ms. Daria Pesce Board of Statutory Auditors Chairman Mr. Antonio Musella (*) Statutory Auditors Ms. Antonella Fagiani (**) Mr. Antonio De Rosi Alternate Auditors Ms. Carmela Gelmetti (***) Ms. Annamaria Valeria Casasco Independent Audit Firm Ria Grant Thornton S.p.A. (*) Appointed by the Ministry for the Economy and Finance (**) Appointed by Anas (***) Appointed by the Shareholders Meeting of April 4, 2014 and remaining in office until the approval of the 2014 Annual Accounts Duration The Board of Directors was appointed by the Shareholders Meeting of September 30, 2014 and will remain in office until the approval of the 2015 Annual Accounts. The Board of Statutory Auditors was appointed by the Shareholders Meeting of May 11, 2012 and will remain in office for three years, therefore until the approval of the 2014 Annual Accounts. The Independent Audit firm was appointed by the Shareholders Meeting of June 18, 2013 on the proposal of the Board of Statutory Auditors, following the awarding of the public tender and their mandate will conclude on the approval of the 2015 Annual Accounts Annual Accounts 7

8 Motorway network The network at December 31, 2014 had a total length of KM, as follows: SECTION KM A7 Milan Serravalle Motorway from Milan Piazza Maggi to Serravalle Scrivia 86.3 A53 Bereguardo - Pavia junction 9.1 A54 Pavia Ring Road 8.4 A50 Milan Motorway Western Ring Road with Fiera Rho-Pero junction 33.0 A51 Milan Motorway Eastern Ring Road 29.4 A52 Milan Motorway Northern Ring Road 12.9 Lentate sul Seveso by-pass 5.5 TOTAL Specifically, there are 3 lanes in each direction for km of the network: - The A7 Motorway from Milan to the A26 Predosa Motorway branch road (73.1 Km) - A50 Ring Road for the complete section excluding the Fiera Rho-Pero junction (31.5 KM) - A51 Ring Road from the A1 connection to the Agrate barrier (19.5 Km) In order to assess the 2013 motorway quality and the related tariff adjustments, the Regulatory Agreement in force with Anas allocates to the Company, in relation to the development of the Motorway network, the A7 Milan-Serravalle section and the three Milan Ring Roads for a total of Km, while not considering in this regard the downgraded routes or to be downgraded by the relevant public Authority under an appropriate provision. The breakdown of the licensed network is as follows: 21% 18% 53% 8% A7 A50 A51 A52 The network integrates with the major Motorway systems of Northern Italy: A4 SATAP S.p.A., Turin-Milan A4 Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Venice A8 Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Lakes A1 Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Bologna A7 Autostrade per l Italia S.p.A. (1 st segment direction) Serravalle Genoa A21 SATAP S.p.A., Turin-Piacenza A26 Autostrade per l Italia S.p.A. (1 st segment direction), A7-A26 Junction, Predosa Bettole 2014 Annual Accounts 8

9 Key Financial Highlights The key financial highlights of the Company for the last three years are reported below. The figures are based on the reclassified financial statements at section 3. in thousand euros Paying traffic (in million vehicles/km) 2,985 2,963 3,027 Economic and Equity information Reclassified revenues 207, , ,996 Toll revenues 193, , ,089 Concession revenues 4,569 4,825 5,076 Added value 140, , ,453 EBITDA 94,939 94,919 91,043 Incidence % of the EBITDA on the revenues Adjusted EBITDA (*) 101, ,906 96,805 EBIT 43,668 42,211 43,745 Incidence % of the EBIT on the revenues Net income 19,618 13,446 19,592 Net invested capital 784, , ,385 Net financial position (NFP) -378, , ,520 Adjusted net financial position (**) 410, , ,174 Net equity 405, , ,865 Adjusted net equity (***) 390, , ,680 ROE (net income / net equity) 4.83% 3.48% 5.25% ROI (EBIT / net invested capital) 5.57% 6.17% 7.25% Net cash flow -19,438-30,717 54,683 Financial covenant - Adj NFP/Adj EBITDA Financial covenant - Adj NFP/Adj net equity Equity solidity requirement (Annex N - Anas) OCF/DS n.d. 4,88 5,93 Average personnel (unit no) Where necessary, the data of the previous years, have been reclassified to make them comparable with those of (*) The difference between the value of production letter A) accounts and the costs of production letter B) accounts excluding finance lease charges on assets held under leases and including utilisations from the Renewal Fund. (**) The difference between the Financial debt and the sum of the accounts under Assets, letter C No. IV and under cash and cash equivalents including also Government securities and other temporary liquidity instruments. Financial debt includes: any monetary obligation relating to the sum of the liability accounts, letter D, (including leasing payables), and 11, these latter three accounts limited to the financial items, increased by the value of sureties granted in favour of financial institutions in guarantee of liquidity provided to third parties. Financial payables concerning project financing operations are excluded. (***) The sum of the liability letter A) accounts, net of the restricted delayed investments provision Annual Accounts 9

10 Directors Report 2014 Annual Accounts 10

11 Letter to the Shareholders Dear Shareholders, We firstly highlight that the Board of Directors in its meeting of March 18, 2015, in accordance with Article 2364 of the Civil Code, as enacted also by Article 21 of the Company By-laws, postponed the approval of the 2014 Annual Accounts to the extended deadline of 180 days from year-end. This decision was taken due to the non-availability of the financial statements of the subsidiary Autostrada Pedemontana Lombarda S.p.A., whose year-end closure was subject to the resolution of funding related issues. The financial statements at December 31, 2014, which we submit for your approval, report a net profit of Euro 19.6 million and a net equity of Euro million. Although toll revenues increased approx. 4.9%, EBITDA was principally in line with the previous year, due to the significant increase in operating costs, mainly following higher road maintenance costs due to the non-completion of works last year. However, the net profit improved significantly on 2013, mainly due to the reduced write-down on the investment in the subsidiary Autostrada Pedemontana Lombarda. In 2014, investment in the upgrading and development of the network continued; during the year works on the upgrading of the S.P. 46 Rho-Monza began resulted in, at the beginning of the Expo trade fair, the opening to traffic of the direct connection between the Northern A52 Ring Road and the historic route of the above-stated provincial roadway, with this new route comprising the first motorway level upgrade of the S.P. 46 Rho-Monza. In terms of relations with the Granting Authority, the company, in order to complete the approval of the financial plan following the conclusion of the regulatory period, ensured the completion of the document update requests communicated by the Authority. An initial request was received in May 2014 following the publication of the CIPE decision, with which the Company was awarded, as licensee for the upgrading of the SP46 Rho-Monza motorway, a grant of Euro 55 million for the project amendment concerning the underpass of the Milan Saronno rail line; a second update request was received in July following the additional assessments undertaken together with the Ministry for the Economy and Finance. This latter proposal of the financial plan was approved by the CIPE at the meeting of August 1, 2014 and on December 22, 2014, following filing at the Court of Audit, the Committee motion was published in the Official Gazette. This endorsement was an important step for the completion of the approval process, which however could not be completed following Interministerial Decree of December 31 preceded by the signing between the company and the Granting Authority of a memorandum of understanding which fixed for 2015 a tariff increase lower than that established under the plan approved by the CIPE. Following this, last March the Granting Authority invited the company to communicate a version of the financial plan which takes into account the natural conclusion of the concession, according to the existing agreement, which sets out an investment programme on the basis of the conclusion date and which presents a contained tariff increase of 1.5%. On April 15 of the current year the company sent an updated version of the financial plan which, in order to maintain the earnings parameters under the plan against the tariff adjustment fixed by the ministerial indications, sets out a re-scheduling of the investments previously approved by 2014 Annual Accounts 11

12 the CIPE motion of August At the approval date of the financial statements, the approval process had not yet been completed. In terms of funding, as noted, in 2014 the company began the process for the placement of a bond. These activities however slowed following the establishment of the financial support conditions to the subsidiary Autostrada Pedemontana Lombarda S.p.A.. The decisions undertaken, justified by the fact that the significant investment in the above-stated subsidiary could not be compromised, led to a review of the credit rating of the company which was based on the indirect risks stemming from the increasing exposure of the company to major greenfield infrastructural projects. These developments undermined the conditions required for the placement of the bond and prompted the company to put in place all initiatives necessary to ensure a stable credit rating. In this regard, the initial step taken by the company was the drawing up of an industrial plan to put in place a series of initiatives to ensure greater profitability, efficiency and cost savings, in order to allow the company access to the credit market, presenting itself to potential investors with improved visibility. In terms of group activities, we highlight the recent undertaking by the company of the toll collection service, on behalf of the investee Tangenziale Esterna (also incurring the costs). This undertaking will enable the company to optimise labour costs, consequently improving profitability. Also in terms of the group, in 2014 the company, as the majority shareholder, in order to ensure the going concern of Autostrada Pedemontana Lombarda S.p.A. and following the non-subscription to the share capital increase of the subsidiary by the other shareholders, undertook all possible options to ensure the financial support for the completion of the first part of the works and for the construction of the B1 section, providing a shareholder loan of Euro 100 million and committing to issue a further Euro 50 million, also in the form of a shareholder loan. In this regard, we indicate that: in 2014 the company further consolidated its investment in Autostrada Pedemontana Lombarda, proportionally increasing its commitments; the commitments undertaken with regard to the subsidiary taking account of the current and future debt level, on the basis of the investment programme represents that currently sustainable for the company, to ensure that the credit rating does not deteriorate, in addition to the completion of the entire Autostrada Pedemontana project, with the consequent enhancement of the company s assets, which requires new investors with whom your company can complete the initiative, or alternatively the recapitalisation of the company, as previously considered. In the absence of that outlined above, the completion of the section, which the region has needed for many years, would be compromised. We highlight that, also in accordance with Law 147/ Stability Law Article 1, paragraph 569, a number of Public Body Shareholders in accordance with law and corresponding to approx. 10.9% of the share capital, communicated their intention to sell their shareholdings. The company initiated the preparatory activities to assessing the value of shares subject to liquidation. The liquidation of these shares will consequently result in the reduction of the share capital or, alternatively, the purchase of treasury shares - issues which would require your consideration during the year Annual Accounts 12

13 Although the choices and initiatives taken by the company were fundamental for the completion of the Autostrada Pedemontana Lombarda project, at the same time they significantly increased the debt position, which at year-end totalled Euro 413 million. In this regard, taking account also of the regulatory provisions as per Law 147/2013, such will guarantee the company full sustainability and we therefore restate our request to recapitalise the company or source alternative forms of funding which may be converted into risk capital. In closing, and on behalf of the entire Board of Directors, we warmly thank all Company personnel who on a daily basis work with diligence and dedication and also the Highway Police who are a constant presence on the motorway network. We thank the members of the Board of Statutory Auditors who, for the three-year period just completed, professionally supported the undertakings of the Board of Directors with continual vigilance and support. I wish to express my gratitude to the entire Supervisory Board and its Chairman for the activities undertaken in the year. Finally, we thank the Ministry for Infrastructure and Transport General Management for the Supervision of the Motorway network, AISCAT and the FISE Association for the significant and specific contribution provided throughout the year. for the Board of Directors The Chairperson Ms. Maura Tina Carta Assago, July 8, Annual Accounts 13

14 OPERATIONS 2014 Annual Accounts 14

15 1.1 Toll Collection and Service Area Management Traffic In 2014 paying traffic on the entire network completed 2,985,465,746 kilometres, increasing 0.75% on the previous year. PAYING TRAFFIC (VEHICLES-KM) 2014 % 2013 % variation A7 Milano - Serravalle 1,479,937, ,449,416, % West Milan 198,975, ,999, % Terrazzano 285,369, ,303, % Milan Ghisolfa 49,128, ,775, % Melegnano toll booth 47,563, ,622, % South Milan 225,237, ,444, % A50 West Ring Road 806,274, ,145, % Venezia 199,029, ,765, % Vimercate 129,644, ,503, % A51 East Ring Road 328,673, ,268, % Sesto S. Giovanni 275,475, ,787, % Monza 95,104, ,583, % A52 North Ring Road 370,580, ,371, % TOTAL 2,985,465, ,963,203, % The most significant traffic increase on the previous year was seen in the first six months (+1.75%), while in the second half traffic reduced 0.18% Variation Light 531,187, ,195, % Heavy 133,331, ,938, % 1^ quarter 664,518, ,133, % Light 647,220, ,491, % Light 146,161, ,266, % 2^ quarter 793,381, ,758, % Light 670,138, ,899, % Heavy 138,325, ,644, % 3^ quarter 808,464, ,543, % Light 580,350, ,115, % Heavy 138,750, ,651, % 4^ quarter 719,101, ,766, % Light 2,428,896,965 2,407,702, % Heavy 556,568, ,500, % TOTAL 2,985,465,746 2,963,203, % In relation to the breakdown between light and heavy vehicles, whose composition remains substantially unchanged on 2013, light vehicles reported increased traffic of 0.88% and heavy vehicles of 0.19% Annual Accounts 15

16 2014 % 2013 % Variation Light 2,428,896, ,407,702, % Heavy 556,568, ,500, % TOTAL 2,985,465,746 2,963,203, % Compared to the previous year, the change by individual section, broken down between the two categories, was as follows: COMPARISON LIGHT/HEAVY VEICHLES PAYING TRAFFIC Variation paying vehicles/km Light Heavy Light Heavy Light Heavy A7 Milano - Serravalle 1,205,155, ,781,666 1,179,714, ,702, % 1.88% A50 West Ring Road 650,048, ,225, ,276, ,869, % -1.66% A51 East Ring Road 275,398,825 53,275, ,537,880 54,730, % -2.66% A52 North Ring Road 298,293,870 72,286, ,174,035 72,197, % 0.12% TOTALE 2,428,896, ,568,781 2,407,702, ,500, % 0.19% The most significant reduction was seen on the Eastern Ring Road due to the opening to traffic of the new Brebemi motorway, which certainly played a part in reducing traffic exiting at the Milan Eastern Ring Road direction Venice Motorway A4 barrier. The reduction in traffic on the Western Ring Road was however due to a decrease in journeys to the Milan Ghisolfa barrier following the actions on the Western Ring Road in relation to the interconnection with the A4 Motorway in the Ghisolfa locality, carried out by the company and the construction of the fourth lane on the A4 motorway undertaken by the licensee S.A.T.A.P. S.p.A., which diverted traffic for a number of months in the year. Tariffs Through Decree of the Ministry for Infrastructure and Transport, together with the Ministry for the Economy and Finance, a tariff increase of 4.47% was recognised with effect from January 1, This increase includes the K variable adjustment concerning the remuneration of investments permitted under the 2007 Regulatory Agreement of 3.5%. At the end of December 2014, the Ministry for Infrastructure and Transport issued a Directive indicating, as a priority public interest objective, the adoption of all measures needed to overcome the current recession. This directive led to the signing of a memorandum of understanding between the Ministry and the licensee to control tariff increases. Specifically, the company and the Granting Authority, on December 30, 2014, signed a memorandum of understanding under which the parties agreed for 2015 that the licensee will apply, provisionally, a tariff increase of 1.5% and will update the Financial Plan, to be approved by June 30, 2015, which will be recovered with the financial effects remaining unchanged the altered tariff increase from that established under the existing agreement. Through Decree No. 591 of December 31, 2014, the Ministry for Infrastructure and Transport, together with the Ministry for the Economy and Finance, recognised the tariff adjustment to the Company for 2015 in the amount of 1.5% Annual Accounts 16

17 Tolls In 2014, Company toll revenues, net of discounts applied and the additional fees recognised to the granting authority, increased 4.92% to Euro 193,415,686. On the initiative of the Ministry for Infrastructure and Transport, on an experimental basis, between February 2014 and December 2015, a promotion will be introduced which will allow users with Telepasses to avail of a discount of up to 20% on motorway tolls for a section of maximum length of 50 KM. The discount, not cumulative with other initiatives in progress, is subject to the number of journeys made in the same month and is reserved to physical persons driving class A vehicles. In 2014 the discounts under the Ministerial provision applied to users amounted to Euro 229,054. Net toll revenues variation Toll revenues 214,992, ,750, % Additional fees as under law 10/2009 article 19-21,576,378-21,398, % Net tolls of the period 193,415, ,352, % of which variation A7 Milano - Serravalle 69,234,405 64,898, % A50 West Ring Road 50,080,893 48,216, % A51 East Ring Road 35,118,274 34,141, % A52 North Ring Road 38,982,114 37,095, % Net tolls of the period 193,415, ,352, % The toll payment breakdown below reports a continued shift towards telepasses, away from prepaid toll cards and cash. TOLL PAYMENT BREAKDOWN Service areas 2014 was again a difficult year for the service areas, which reported reduced sales of fuels and non-oil products, respectively of 9.2% and 1.6% Annual Accounts 17

18 The poor sales concern the Ring Roads, as the upgrading works of the service areas saw the closure of three areas and reduced service capacity for an additional two areas. The sales of LPG and methane gas increased significantly (respectively +7.4% and +8.3%), thanks to the development of the network: plant replacement in Rozzano, a new LPG sales point in Cologno and the consolidation of the methane sale point in Dorno Ovest opened in The only service area on the Northern Ring Road in addition reported a significant increase in nonoil revenues. The contraction in service area sales reduced overall company revenue, as highlighted in the table below. INCOME FROM SERVICE AREAS variation Fees Royalties Total Fees Royalties Total Total A7 Milano - Serravalle 843,340 1,089,380 1,932, ,310 1,070,686 1,908, % A50 West Ring Road 178,062 1,414,457 1,592, ,124 1,575,529 1,751, % A51 East Ring Road 152, , , , ,778 1,008, % A52 North Ring Road 31, , ,514 31, , , % Total network 1,205,906 3,363,034 4,568,940 1,197,088 3,627,498 4,824, % In relation to the implementation of the improvement and development plans for the service areas in view of Expo 2015, between May and September 2014 works for the reclamation and restructuring of five service areas began: Muggiano Ovest and the two areas of San Giuliano on the Western Ring Road, Cascina Gobba East and West on the Eastern Ring Road; this latter and the two areas of San Giuliano were closed to the public to ensure improved works management. In relation to advertising spaces, the sub-contracting company began the commercial use of the installed plant. The installations will be completed with the conclusion of the rebuilding works. 1.2 Network management Motorway maintenance and interventions During the year, the Company as usual carried out all actions necessary to maintain the efficiency and safety of the motorway network through scheduled maintenance activity. With regards to surfacing, the improvement of the safety and performance works continued, with the delivery of good results in view of the IPAV index on surfacing quality. The actions undertaken, noted for their extent, ensure high safety levels on the most used sections. Ahead of the 2015 Milan World EXPO and as per the Granting Ministry s request, a number of actions on the Milan Western Ring Road, one of the main routes serving the event, were brought forward. In addition, restoration was carried out on the S.P. 46 Rho-Monza, with the use of a draining surface mixture to ensure improved performance and a reduced utilisation of solvents in the winter period. The construction supports were restored in many areas and expansion joints installed: the most significant works concerned the interconnection between the Western Ring Road and the A4 Motorway (Ghisolfa intersection) and the Eastern Ring Road Parks viaduct Annual Accounts 18

19 The construction of a defensive bank on the Scrivia stream in protection of the A7 Motorway at the interconnection with the A21 Motorway was a significant achievement. Following the major flooding in November of the Grue stream of the Calvenza river and of the Lambro river, recovery and extraordinary maintenance actions were undertaken on the A7 and on the Milan Ring Roads. The horizontal and vertical signage was maintained, ensuring good visibility, with the refurbishment of the safety barrier and the maintenance and renewal of the enclosure networks. Numerous maintenance actions were taken on motorway network technological and electrical plant. In particular, we highlight: - the replacement, with LED bulbs, of the lighting at a number of toll collection stations; - the refurbishment of lighting control and operating plant and that for the disposal of platform water at the Forlanini junction; - the completion of the works at the Milan West barrier on the telepass lanes, with the creation of two quick telepass lanes in the Milan central direction opened on May 20, the conversion of two telepass lanes (1 in each direction) to a bi-modal type at the Terrazzano barrier, in order to extend the service to users paying by credit card, in view of 2015 EXPO. - the development of the motorway network video surveillance plant, in service of the highway police, ahead of the 2015 EXPO; In relation to the maintenance of buildings, we highlight the electrical, sanitary, air-conditioning efficiency maintenance, in addition to minor internal and external restructurings. The fire protection plant and the lifts were also reviewed and maintained. As always, particular attention was placed on the maintenance of the motorway platform accessories through the normal actions of the maintenance and viability teams, green works operations, the disposal of waste and the cleaning of the collection systems and the channeling of rainwaters from the station plazas and the checking and cleaning of the rainwater basin filters. The scheduled actions were taken to keep the motorways clear through the use of clearance vehicles and salt trucks. Safety and Accidents Accidents in 2014 on the entire network increased 2.6% compared to the previous year and the average number of accidents daily increased from 3.8 in 2013 to 3.9 in Fatal accidents reduced from 8 in 2013 to 4 in 2014, with 3 on the Eastern Ring Road and 1 on the Milan-Serravalle motorway Annual Accounts 19

20 ACCIDENTS IN STRECHES PASSENGERS/GOODS Var.% Total with injuries fatal Total with injuries fatal Total with injuries fatal A7 Milano - Serravalle = A50 West Ring Road A51 East Ring Road A52 North Ring Road = Total network 1, , The accident rate, calculated as the number of accidents per 100 million vehicle KM, in 2014 was in line with 2013 at Traffic, traffic assistance and informational radio centre The fundamental user assistance operations were continued 24 hours a day by the Traffic Officers, supporting the Highway Police at a number of events, as outlined in the following table. The assistance at roadway accidents without injuries by the Traffic Officers and Managers, began in July 2010, continued successfully. Interventions in homogenous areas - auxiliary A7-A53-A54 A50 A51 A52 Total Accidents ,619 Notification code Request for help and user assistance 1,870 2,501 1, ,119 Other interventions 1,490 1, ,602 Total interventions 4,024 4,668 3,743 1,529 13,964 Informational radio centre During 2014, 62,248 events were monitored and actively managed by the radio centre. With the beginning of the winter season, the weather service was reintroduced, which ensures dedicated weather forecasts 24 hours a day, allowing therefore the timely undertaking of operating decisions and the consequent optimisation of resources in the field also for the Snow Plan, based on that drawn up by Viabilità Italia the National Traffic Co-ordination Center. The snow plan is drawn up annually to prevent motorway traffic build ups caused by snow and provides also for the temporary closure of roadways to heavy vehicles to prevent blockages caused by vehicles without winter chains or tyres on motorway sections and previously identified areas. On the request of the Granting Authority, in June, the Summer Exodus Management Plan was also prepared and communicated to the National Traffic Co-ordination Centre. This document identifies, particularly with regard to the departure and re-entry periods, the technical, organisational and operational measures drawn up to cope with any unfavourable conditions and to ensure entirely safe traffic flow, with sufficient user information. 1.3 Investments 2014 Annual Accounts 20

21 In 2014, the activity related to the upgrading and development of the network continued and works began on the upgrading of the S.P. 46 Rho-Monza. Total investment amounted to Euro 60,329,787, net of financial charges capitalised. The state of works at December 31, 2014 is outlined in the following table. The investments are shown on the basis of value: Motorway Investment Contractor Status A52 North Ring Road A51 East Ring Road A51 East Ring Road A50 West Ring Road A7 Milano Serravalle Motorway Upgrading on the SP46 Rho-Manza: from the Northern Ring Road to the Baranzate locality Lambrate junction restructuring, Cassanese connection and completion of the viability for the Segrate Intermodal Centre Completion viability i.c. Segrate Adjustment of the safety barriers and lightling of West Ring Road Adjustment of the safety barriers of Serravalle Motorway A53 Construction of Pavia Bereguardo motorway Bereguardo Pavia connection and extension of the Bereguardo toll connection booth A50 West Ring Road A50 West Ring Road A54 Pavia Ring Road Extraordinary actions on the Western Ring Road in relation to the interconnection with the A4 motorway in the Ghisolfa locality Upgrading and development of the Gropello Cairoli toll booth on the A7 Motorway Anti-noise barrier Municipality of Pavia along the Pavia West Ring Road R.T.I. Grandi Lavori Fincosit S.p.A. / Collini Lavori S.p.A. / Costruzioni Edili Stradali e Fognature S.r.l. R.T.I. CCC Soc. Coop. / Pessina Costruzioni / Co.Ve.Co. Consorzio Veneto Cooperativo R.T.I. Collini Lavori S.p.A. / S.G.F. - I.N.C. S.p.A. 7 Costruzioni Edili Stradali e Fognature S.r.l. CAR Segnaltica Stradale S.r.l. R.T.I. Itinera S.p.A. / Tubosider S.p.A. R.T.I. Itinera S.p.A. /Caffù S.r.l. / Strago S.p.A. R.T.I. SVAM S.r.l. / Coima S.r.l. Gi.Ma.Co. S.r.l. R.T.I. Impresa Cav. Antonio Santalucia / Ritonnaro Costruzioni S.r.l. Amount of investment Amount Economic Framework [mln ] of which works [mln ] Work progress as at 31/12/2014 in progress % at completion % temporary adjudication in progress % completed in % in progress % completed in % intervened rescission of contract % completed in % A7 Milano Serravalle Construction of service road on the S.P. 184 L'Orobica S.r.l. completed in % Motorway Upgrading on the S.P. 46 Rho-Monza: from the Northern Ring Road to the Baranzate locality In January 2014, the Ministry for the Environment, Regional Protection and the Marine, together with the Ministry for Heritage and Culture and Tourism signed the Environmental Compatibility Decree for the works and the Public Works Department decreed the completion of the State Region Agreement for the works, declaring them of Public Utility. On February 4, 2014, accepting the request of the Licensee, the Universal Expo 2015 Commissioner signed the provision for the reduction of the timeframe in accordance with law for the expropriation activities. On March 13, 2014, the decision undertaken by CIPE in the meeting of August 8, 2013 was published in the Official Gazette of the Italian Republic, under which, in accordance with Article 18, Paragraph 3 of Legislative Decree No. 69/2013, a loan was provisioned for the upgrading of the S.P. 46 Rho-Monza - lot 2: underpass alteration of the Milan Saronno line grant for Euro 55 million, required for the underground pass of the Milan Saronno rail line. The Ministry for Infrastructure and Transport approved with Decree No of March 19, 2014 the executive project Annual Accounts 21

22 Following this approval and the simultaneous declaration of public utility, the expropriation procedures for the obtaining of the areas began. In May 2014, the preliminary works began (munitions clearance, interference resolution, expropriation applications), with the works awarded to the contractor in September During the works, due both to the extension of the timeframe necessary to complete the approval process (Environmental Impact Assessment, Conference of Services, ANAC requirements) and the numerous Regional Administrative Court appeals introduced by local bodies or citizen committees, it was not possible to complete the first functional lot as established under the tender. As a significant public interest is served by the completion of the A52 and S.P.46 connection by May 1, 2015, the opening date of the 2015 EXPO, it was necessary to establish a more contained design solution for the functional section. This section was effectively completed and opened to traffic on May 1, 2015, in compliance with the timeframe dictated by the event. Currently non-interfering works are in progress on the major part of the infrastructure, with the partial suspension lifted at the end of the EXPO, therefore October 30, Lambrate junction restructuring, Cassanese connection and completion of the viability for the Segrate Intermodal Centre On February 20, 2014, the Ministry for Infrastructure and Transport issued the approval of the second appraisal which redefined the financial framework. The Supplement to the 2004 Regulatory Agreement is being finalised for the breakdown of the construction loan between the Company, the Lombardy region and the Municipality of Milan. In 2014, works continued in line with that programmed, in particular in April 2014 all of the ramps on the Lambrate junction in the new configuration were opened to traffic. The works thereafter focused on the completion of the external viability and works related to the deviation of the interfered associated sub-services and on May 22, 2015 the certificate of completion was issued. In terms of the executive project of the completion lot of the Segrate viability, approval was received from the Ministry for Infrastructure in September 2013 and in December the tender procedure was initiated. On September 10, the ministerial commission concluded the process, identifying the provisional awardee. The environmental reclamation tender procedure is also still in progress which is complementary and contemporaneous to the principal tender works, with the provisional awardee also identified. The definitive awarding of works and the environmental reclamation operations are subject to the issue of the higher provision (MIT-MIF Interministerial Decree), which will give effect to the update of the Financial Plan. Adjustment of the safety barriers and lightling of West Ring Road The works were awarded in July 2013 and completion, after the granting of a number of extensions, is contractually established for September The works are therefore currently suspended on the basis of the limitations imposed by the 2015 EXPO. During the works, technical and supplementary alteration appraisal No. 1 was approved - for a total of Euro 1.9 million - which provides for the replacement of the established traditional lighting with LED lighting. This appraisal was approved by the Board of Directors of the company on December 3, 2014 and presented to the Ministry for higher approval Annual Accounts 22

23 Due to the surpassing of the statutory limits for not unfounded or manifestly admissible reserves, a procedure for the setting up of the Commission as per Article 240 of the Public Contracts Code has begun for the drawing up of a reasoned agreement. Adjustment of the safety barriers of Serravalle Motorway The works, completed on June 9, 2014, were subject to a technical and supplementary alteration appraisal, approved by the company in March 2014 for an increased amount of Euro 1.7 million for works alone and sent to the Ministry for higher approval. In December 2014, the final invoice was issued, with the technical-administrative testing activities currently underway. In relation to the reserves recognised by the Contractor, the setting up of the commission for the drawing up of an agreement proposal according to the manner established by the Public Contracts Code will be put forward. Construction of Pavia Bereguardo motorway connection and extension of the Bereguardo toll booth The works were awarded in July 2013 and completion is scheduled for the first half of Extraordinary actions on the Western Ring Road in relation to the interconnection with the A4 motorway in the Ghisolfa locality The work concerns the extraordinary maintenance of six areas of the interconnection between the A4 motorway and the Western Ring Road and will be completed in December During the completion of works, a technical and supplementary alteration appraisal was necessary for the works and safety charges, approved by the Board of Directors of the company on November 6, The technical administrative approval is currently in progress. Upgrading and development of the Gropello Cairoli toll booth on the A7 Motorway The works for the upgrading and extension of the Gropello Cairoli toll booth were completed in October In 2014, the new toll equipment was supplied. In February 2015, following the issue by the Milan Prefecture of the anti-mafia provision the contract was rescinded. The state of advancement of the works carried out is currently being prepared and the completion works will be awarded to a new contractor. Anti-noise barrier Municipality of Pavia along the Pavia West Ring Road The works were completed in April The appointment of the technical-administrative tester by the Ministry is awaited. Construction of service road on the S.P. 184 During the execution of works, it was necessary to prepare a technical and supplementary alteration appraisal, communicated to the Granting Authority for higher approval in March The works were completed and in December 2014 the execution certificate issued Annual Accounts 23

24 The other investments, principally concerning the design activities, are summarised in the following table. Motorway A51 East Ring Road Investment Improved traffic flow of the Cascina Gobba junction of the Eastern Ring Road first phase Engineering companies Milano Serravalle Engineering S.r.l. Status Final project review in progress Amount of investment Amount Economic Framework [mln ] 61.1 A51 East Ring Road Realisation lighting installation and adjustment security devices Milano Serravalle Engineering S.r.l. Final project in progress 56.8 A52 North Ring Road Realisation lighting installation and adjustment security devices Milano Serravalle Engineering S.r.l. Final project in progress 44.5 A51 East Ring Road Anti-noise barrier (sound tunnel) Municipality of Cologno Monzese SINA S.p.A. Custody proceedings in progress 37.7 A7 Milano Serravalle Motorway A7 Milano Serravalle Motorway Upgrading the Milano West barrier New Binasco toll booth in A7 and access viability Milano Serravalle Engineering S.r.l. Milano Serravalle Engineering S.r.l. Conference services Final project unapproved returned from MIT by 2/ A50 West Ring Road Field photovoltaic station of 4.59 MWp Milano Serravalle Engineering S.r.l. Executive project approval at MIT by 7/ A51 East Ring Road Municipality of Milan Anti-Noise Barrier: Eastern Ring Road Mi East 2 Milano Serravalle Engineering S.r.l. Final project approval at MIT by 5/ Executive project A51 East Ring Road Municipality of Milan Anti-Noise Barrier: Eastern Ring Road Mi East 1 Milano Serravalle Engineering S.r.l. delivered at MIT in 5/2013 for 4.5 approval Executive project A50 West Ring Road Anti-noise barrier in Municipality of Buccinasco Milano Serravalle Engineering S.r.l. delivered at MIT in 12/2012 for 4.5 approval A7 Milano Serravalle Motorway Municipality of Milan Anti-Noise Barrier: A7 Motorway Cantalupa and Famagosta Milano Serravalle Engineering S.r.l. Executive project approval at MIT by 2/ Executive project Total network Green areas Milano Serravalle Engineering S.r.l. unapproved returned from MIT 1.8 by 4/2015 A7 Milano Serravalle Motorway Anti-noise barrier in Municipality of Trivolzio Milano Serravalle Engineering S.r.l. Executive project delivered at MIT in 2/2014 for approval 0.4 Following the issue of the Inter-ministerial Decree of December 31, 2014, concerning the approval of motorway tariffs, it was necessary to update the Financial Plan for the regulatory period, previously approved by CIPE motion. This redrawn Financial Plan, presented for higher approval to the Ministry in April 2015, concerns investments which do not consider the completion of the actions indicated in the above table, within the regulatory period. Therefore, although considering the beginning of the awarding procedures, the related administrative 2014 Annual Accounts 24

25 activities were not carried out, while awaiting the outcome of the approval process of the updated financial plan. Improved traffic flow of the Cascina Gobba junction of the Eastern Ring Road first phase In February 2014, the State-Region Agreement was signed for the first stage (southern area) and, with provision of March 23, 2014, the conference of services - began in March positively concluded. The definitive project is currently under review, with regard to the requirements drawn up by the bodies at the Conference of services, for subsequent sending to the Ministry for approval. Realisation lighting installation and adjustment security devices, A51 Motorway During the year, the final plan of the action was completed. Realisation lighting installation and adjustment security devices, A52 Motorway During the year, the final plan of the action was completed. Anti-noise barrier (sound tunnel) Municipality of Cologno Monzese The efficacy of the public utility declaration of works through the approval by the Granting Authority began. The activities for the movements of the interfering subservices began. The procedure for the awarding of the executive design, completion of works and maintenance are in progress. Specifically, the tender was published in June following its approval. The decision was taken to revoke the provisional award as, following the provision for the containment of tariff increases under the 1.5% annual threshold, the programme of investments was redrawn. Upgrading of the Milan West barrier The project concerns the upgrading of the Milan West barrier of the A7 Motorway. On July 2, 2014, the Granting Authority communicated its technical approval of the final plan, necessary for the approval process. The Ministry for Infrastructure and Transport called the first meeting of the Conference of services on the final plan for March 4, 2015, which is currently in progress. New Binasco toll booth in A7 and access viability The project involves the building of a new toll collection area. During the year, the final plan of the action was completed and sent to the Granting Authority. On February 11, 2015, the Granting Authority re-established the project, communicating that the preliminary activities could not conclude following the non-conclusion of the finance plan approval process. Field photovoltaic station of 4.59 MWp A reply by the Granting Authority containing the approval provision of the final plan sent in July 2013 is still awaited. Municipality of Milan Anti-Noise Barrier: Eastern Ring Road (Mi East 1 and Mi East 2) The actions concern the building of a noise reduction barrier throughout the managed network, in particular on the A51 Milan Eastern Ring Road Annual Accounts 25

26 In 2013, following the approvals by the Municipality of Milan, the final plan for the approval of the executive project of the Milan East 1 action was forwarded to the Granting Authority. In October 2014, the noise reduction process on the Milan East 2 motorway was submitted for the attention of the Granting Authority. The Authority approved the executive project of this latter action on May 14, 2015; for the Milan East 1 action, the approval provision is currently awaited. Anti-noise barrier in Municipality of Buccinasco The executive project for noise mitigation in the Municipality of Buccinasco was sent to the Granting Authority for approval in December 2012, while the approval decree is still awaited. Municipality of Milan Anti-Noise Barrier: A7 Motorway (Famagosta and Cantalupa) The actions concern the building of a noise reduction barrier throughout the managed network, in particular on the urban section of the A7 Motorway. In 2013, following the approvals by the Municipality of Milan, the executive projects were sent to the Granting Authority for approval. Approval was granted on February 20, Green areas The three projects, concerning works along the Milan Ring Road for the mitigation of environmental impacts through the transformation of the residual and verged areas, received the necessary approvals from the relevant bodies and in October 2013 were sent to the granting authority. On April 16, 2015, the Granting Authority re-established the project, communicating that the preliminary activities could not conclude following the non-conclusion of the finance plan approval process. Anti-noise barrier in Municipality of Trivolzio In relation to the intervention in the Municipality of Trivolzio in February 2014, in agreement with the Granting Authority, the executive project was sent and the approval decree is awaited Annual Accounts 26