2013 Annual Accounts. Milano Serravalle - Milano Tangenziali S.p.A. Registered office: Via del Bosco Rinnovato 4/A Assago (MI)

Transcription

1 2013 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 2013 Annual Accounts/Directors Report 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 Operating overview Asset management 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 to year-end Subsequent events to year-end Outlook 69 Shareholders Meeting motions 70 Financial Statements Annual Accounts/Directors Report 2

3 Explanatory Notes 78 Annexes 118 Global Paying Traffic by Vehicle Category 119 Global Paying Traffic by Tariff Category 127 Barrier transits 130 Routine maintenance Annex F 130 Lane types 130 Motorway network investment 131 Board of Statutory Auditors Report 132 Independent Auditors Report 138 Consolidated Financial Statements 141 General information 142 Group Directors Report 144 Consolidated Financial Statements 157 Notes to the Consolidated Financial Statements 164 Board of Statutory Auditors Report 203 Independent Auditors Report Annual Accounts/Directors Report 3

4 General Information 2013 Annual Accounts/Directors Report 4

5 Notice of the Shareholders Meeting Shareholders Meeting Call Shareholders are advised that the Company has called the Shareholders Meeting, as per the Board of Directors resolution of May 30, 2014, for 3 PM on June 29, 2014 in first call and, where necessary, in second call at 3 PM on July 14, 2014, to resolve upon the following Agenda 1. Financial statements for the year ended December 31, 2013, Directors Report, Board of Statutory Auditors Report and the Independent Auditors Report. Approval and resolutions thereon. Examination of the consolidated financial statements The Chairman Mr. Marzio AGNOLONI Assago, June 6, 2014 Postponement of second call supplementation of the Agenda Shareholders are advised that the Company, as per Board of Directors motion of June 17, 2014, has postponed the second call of the Shareholders Meeting, previously called for June 29, 2014 at 3 PM in first call and, where necessary, in second call on July 14, 2014, to July 28 at 3 PM. The Board also supplemented the Agenda of the Shareholders Meeting with the following issues, to be dealt with after point 1: 2. Appointment of the Board of Directors and establishment of remuneration. 3. Appointment of the Chairman The Chairman Mr. Marzio AGNOLONI Assago, June 24, 2014 The Shareholders Meeting, which was held in second call on July 28, 2014, decided to keep the meeting open, updating on Tuesday September 30, 2014 at 2:30 PM for the completion of business Annual Accounts/Directors Report 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 PROVINCE OF MILAN Total 180,000, Annual Accounts/Directors Report 6

7 Corporate Boards Board of Directors Chairman Vice Chairperson Directors Mr. Marzio Agnoloni Ms. Antonella Faggi Mr. Giovanni Angioni Mr. Francesco Bertolini Mr. Claudio De Albertis Ms. Chiara Lazzarini Ms. Daria Pesce Board of Statutory Auditors Chairman Mr. Antonio Musella (*) Standing Auditors Ms. Antonella Fagiani (**) Mr. Antonio De Rosi Alternate Auditors Ms. Carmela Gelmetti(***) Ms. Annamaria Valeria Casasco General Manager Independent Audit Firm Mr. Mario Martino 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 July 16, 2013 and will remain in office until the approval of the 2013 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/Directors Report 7

8 Motorway network The network at December 31, 2013 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: The network integrates with the major Motorway systems of Northern Italy: A4 A4 A8 A1 A7 A21 A26 SATAP S.p.A., Turin-Milan Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Venice Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Lakes Autostrade per l Italia S.p.A. (2 nd segment direction) Milan - Bologna Autostrade per l Italia S.p.A. (1 st segment direction) Serravalle Genoa SATAP S.p.A., Turin-Piacenza Autostrade per l Italia S.p.A. (1 st segment direction), A7-A26 Junction, Predosa Bettole 2013 Annual Accounts/Directors Report 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) 2,963 3,027 3,230 Economic and Equity information Reclassified revenues 198, , ,539 Toll revenues 184, , ,047 Concession revenues 4,825 5,076 7,205 Added value 139, , ,864 EBITDA 94,919 91, ,257 Incidence % of the EBITDA on the revenues EBIT 42,211 43,745 58,452 Incidence % of the EBIT on the revenues Net income 13,446 19,592 17,028 Net invested capital 684, , ,815 Net financial position -298, , ,493 Net equity 386, , ,635 ROE (net income / net equity) 3.48% 5.25% 4.64% ROI (EBIT / net invested capital) 6.17% 7.25% 9.84% Net cash flow -30,717 54,683 22,070 Financial covenant - Adj NFP/Adj EBITDA Financial covenant - Adj NFP/Adj net equity Equity solidity requirement (annex N - Anas) OCF/DS (*) n.d Average personnel (unit no) Where necessary, the data of the previous years, have been reclassified to make them comparable with those of (*) OCF = operating cash flow at debit service, DS = debit service. The requirement, waiting for the certification from the audit company, will be available within 15 days from the approval of the balance sheet by the Ordinary Assembly 2013 Annual Accounts/Directors Report 9

10 Directors Report 2013 Annual Accounts/Directors Report 10

11 Letter to the Shareholders Dear Shareholders, We firstly highlight that the Board of Directors in its meeting of March 28, 2014, 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 2013 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 a number of funding related issues. The financial statements at December 31, 2013, which we submit for your approval, report a net profit of Euro 13.4 million and a net equity of Euro million. Despite the reduced net profit compared to the previous year, substantially due to an increased writedown on the investment held in the subsidiary Autostrada Pedemontana Lombarda and in line with its net equity value, the Company in 2013 improved EBITDA 4.3%, from Euro 91 million in 2012 to Euro 95 million, with an approx. 48% revenue margin. This result is principally due to the containment of operating costs. In 2013 the Company advanced the infrastructural developments necessary to support the upgrading and development of the motorway network. Investment expenditure amounted to approx. Euro 59 million. The investment programmes have experienced delays in comparison to the existing finance plans; however, with the beginning of works on the motorway upgrade on the SP46 Rho-Monza section of the Northern Ring Road to Baranzate, the Company expects to significantly recover the investments made in the section and therefore to recover the delays seen in recent years. In terms of relations with the Granting Authority, the Company, considering that the conclusion of the regulatory period was December 31, 2012, on June 28, 2013 communicated to the Authority all the necessary elements of the finance plan update proposal. The proposal concerns motorway network investment of over Euro 700 million, which will be financed through new funding and motorway management cash flow, covering almost the entirety of the investment required and remunerated according to CIPE decision 39/2007. Last May the Granting Authority requested an update to the finance plan 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 and the further upgrading requested in July 2014 following the additional assessments undertaken together with the Ministry for the Economy and Finance. On August 1, 2014, CIPE expressed its approval of the supplement to the Regulatory Agreement between Anas S.p.A. and the Company and of the update to the relative finance plan, following the conclusion of the regulatory period. This development is considered a fundamental step for a successful approval process outcome. In order to source the funding necessary for the motorway investment envisaged by the finance plan, in view of the rating and of the debt of the Company, in addition to the current financial markets, the Company, through an appropriate motion, began the process for the issue of a bond of Euro 300 million Annual Accounts/Directors Report 11

12 The preparatory work for the bond loan issue required the verification of the Company rating. This was concluded in February 2014, with a downgrading to BBB- with negative outlook. The credit rating awarded by the agency was principally impacted by indirect risks stemming from the increasing exposure of the Company to major greenfield infrastructural projects. As outlined in the 2012 Directors Report, in order for the Company to source the funding necessary for its investees to execute the largest infrastructural projects in the Lombardy area without affecting its capital and financial base, the Shareholders Meeting of December 27, 2012 and of July 18, 2013 were submitted the proposal to recapitalise Milano Serravalle - Milano Tangenziali up to a maximum Euro 300 million. On both occasions, Shareholders decided to postpone the decision, impacting therefore the ability to inject equity into the investee companies. Following the postponement of the recapitalisation, the Company, after covering the non-subscription by the banking partners to the share capital increase of Autostrada Pedemontana Lombarda for approx. Euro 32 million through a Shareholder loan, was forced to cancel the share capital increase in the investee company Tangenziali Esterne di Milano, a company which holds a significant share of the project company Tangenziale Esterna therefore diluting the Company stake in the investee. Simultaneously, also in the absence of income from the disposal of investments, with disposal finalised only last April 4, the Company as controlling Shareholder of Autostrada Pedemontana Lombarda - with over 76% of the share capital, was required to consider financial support for the subsidiary. In particular, in 2013 the subsidiary began the review process of the financial plan in order to reestablish the initial balanced position, principally through the use of the tax break regulation and the proposal to construct the Piedmont infrastructure in stages. The option to complete the infrastructure in stages was identified for the so-called Expo By-pass - comprising section A (A8-A9 connection) and for the first lot of the Como and Varese Ring Road and section B1 (A section connection with the SS 35 Milan Meda) - the priority lot to be completed for the world trade fair to be held in Milan between April-October The loan, necessary for the completion of works and the opening to traffic of the By-pass, was initially identified - in addition to the public grant issued to cover 80% of the costs incurred for section A and the Como and Varese Ring Roads and 35.74% of section B1 - as an extension to the bridge loan of Euro 200 million in place and a fresh equity injection of Euro 100 million. In March 2014 however the subsidiary informed the Company that the credit institutions declared that the conditions for the extension of the bridge loan were not in place, nor for the issue of further funding to be agreed upon with Autostrada Pedemontana Lombarda. Following the above-stated communication, the subsidiary, after meeting with the CAL Granting Authority, put in place a business plan which reviewed the funding means for the completion of the Expo By-pass. In particular, CAL declared the possibility to increase the grant from 35.74% to 80% also on the B1 section, on condition of verified financing for the residual portion, valued at Euro 150 million, by the controlling Shareholder through equity injection or through Shareholder loans Annual Accounts/Directors Report 12

13 In this regard, a number of simulations were drawn up to verify the equity and financial sustainability in the absence of a simultaneous capitalisation through the above stated financial support to the subsidiary, taking account also of the effects of the new bond loan issue. The simulations highlighted that the support of the subsidiary Autostrada Pedemontana Lombarda of Euro 150 million may compromise the equity and financial structure of our Company. In particular, the results indicate the need to renegotiate the existing financial covenants on loans, the meeting of the debt/equity ratio under the agreement with the Granting Authority, with the consequent risk of requirements imposed by the Authority, the reasonable risk of a downgrading of the credit rating allocated to the Company by the ratings agency and therefore the placing of the bond loan at a higher price. Given that stated above, the Board of Directors on May 12, aware of the importance of the decision and undertaking a responsible position, decided to cover the immediate needs of the subsidiary through approving such financial support, having sourced the necessary funding through a Shareholder loan of Euro 100 million in order to guarantee coverage of works for the entire year of 2014, on the condition that the Granting Authority CAL guarantees the increase of the grant to 80% of the requirements for the B1 section and that the bank syndicate extend the bridge loan until 31/12/2014. Of the above Shareholder loan, Euro 38 million was paid by the Company on May 15, as in the absence of such support the bridge loan would have concluded, thus resulting in the stoppage of works, impacting therefore the ability to complete the works by the 2015 Expo and thus prompting numerous corporate and social repercussions. Having secured the possibility to speed up the grant also to the B1 section and the communication of the credit institutions concerning the extension of the bridge loan, to March 31, 2015, the Company formalised through a commitment letter on September 12, 2014 its financial support for a further Euro 62 million. This commitment was undertaken on the receipt of a binding offer from the banks of a credit line totalling Euro 90 million, of which Euro 72 million is not subject to the satisfaction of conditions upon pre-existing loans. The support given to the subsidiary does not permit however, considering the CAL requirements, the full resolution of the funding requirements for the completion of the Expo By-pass and therefore the Company as controlling Shareholder undertook also a commitment to source by February 2015 further funding up to a maximum Euro 50 million necessary for the completion of works on section A, the Como and Varese Ring Roads and on section B1. On September 12, the Board of Directors, taking account of the commitments undertaken with the subsidiary Autostrada Pedemontana Lombarda, requested shareholders to increase the bond loan, already approved, from Euro 300 million to Euro 400 million in consideration of the fact that the abovestated commitments must be satisfied with the undertaking of new debt. The Board has emphasised that this fresh debt will create equity and financial structural tension with the undertaking by the Company of particularly significant levels of debt and compromising, in the absence of instruments to reduce the debt exposure or to increase the net equity of the company, compliance with the financial structure objective identified as a debt/equity ratio of Annual Accounts/Directors Report 13

14 In relation to the further funding of Euro 50 million required for the completion of the so-called Expo By-pass the Directors of the Subsidiary consider that this currently represents for APL an element of significant uncertainty which may give rise to significant doubts on the going concern of the Company. The Company however has not considered further impairments on the investment necessary given that the going concern of the subsidiary is guaranteed beyond December 31, 2014; only if further financing was not sourced the going concern may lapse in Therefore, the Board considers it absolutely necessary to resubmit the recapitalisation request of the Company. In the absence of approved support to the investee Autostrada Pedemontana Lombarda, the significant investment committed to the subsidiary (to date - considering the Shareholder loan of last May - approx. Euro 300 million has been issued) may be significantly compromised, putting also our Company, as parent company, into serious difficulty. In view of the outcome of the Inter-ministerial Committee on Economic planning, which in the same meeting in which it expressed approval of the supplement to the Regulatory Agreement with the Company, also approved the tax break measures for the Piedmont-Lombardy Motorway sections required to rebalance the financial plan, considered that the CIPE decision taken to guarantee the completion of the strategic works for the 2015 trade fair, in addition to the advancement of the entire infrastructure plan of the appointed companies within the defined regulatory system, stated that the Company - also through your direct intervention has fully informed all the relevant public institutions affected by the Piedmont initiative, thus assisting the completion of an infrastructure which is essential for the interests of the Region and its citizens, in addition to that of our Company. In closing, and on behalf of the entire Board of Directors, we 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 furthermore thank the Board of the Statutory Auditors for the support to the Board of Directors and to the Supervisory Board. Finally, we thank the Ministry for Infrastructure and Transport Supervisory Section to the Motorway network, AISCAT and the FISE Association for the significant and specific contribution provided throughout the year. for the Board of Directors The Chairman Mr. Marzio Agnoloni 2013 Annual Accounts/Directors Report 14

15 OPERATIONS 2013 Annual Accounts/Directors Report 15

16 1.1 Toll Collection and Service Area Management Traffic In 2013 motorway network traffic, with 2,963,203,120 kilometres driven (paying vehicles) reduced 2.10% on the previous year. PAYING TRAFFIC (VEHICLES-KM) 2013 % 2012 % variation A7 Milano - Serravalle 1,449,416, ,475,337, % West Milan 195,999, ,863, % Terrazzano 284,303, ,546, % Milan Ghisolfa 56,775, ,380, % Melegnano toll booth 47,622, ,395, % South Milan 222,444, ,572, % A50 West Ring Road 807,145, ,758, % Venezia 203,765, ,349, % Vimercate 132,503, ,478, % A51 East Ring Road 336,268, ,827, % Sesto S. Giovanni 271,787, ,106, % Monza 98,583, ,866, % A52 North Ring Road 370,371, ,973, % TOTAL 2,963,203, ,026,897, % Traffic volumes once again decreased as a result of the continued economic crisis, with the further increase to fuel prices increasingly affecting travel options. In the second part of the year, signs of a slight recovery which consolidated in the fourth quarter into a traffic increase were reported - as highlighted by the following table: Variation Light 517,195, ,797, % Heavy 131,938, ,555, % 1 quarter 649,133, ,352, % Light 637,491, ,469, % Heavy 146,266, ,153, % 2 quarter 783,758, ,622, % Light 671,899, ,489, % Heavy 137,644, ,187, % 3 quarter 809,543, ,677, % Light 581,115, ,973, % Heavy 139,651, ,270, % 4 quarter 720,766, ,244, % Light 2,407,702,837 2,456,730, % Heavy 555,500, ,166, % TOTAL 2,963,203,120 3,026,897, % Compared to the previous year, the change by individual section, broken down between light and heavy vehicles, was as follows: 2013 Annual Accounts/Directors Report 16

17 - A7 Motorway -1.76%, -1.81% for light vehicles and -1.52% for heavy vehicles; - Western ring road 1.90%, -1.64% for light vehicles and -2.93% for heavy vehicles; - Eastern ring road -2.20%, -2.05% for light vehicles and -2.96% for heavy vehicles; - Northern ring road -3.79%, -3.43% for light vehicles and -5.28% for heavy vehicles. COMPARISON LIGHT/HEAVY VEICHLES PAYING TRAFFIC Variation paying vehicles/km Light Heavy Light Heavy Light Heavy A7 Milano - Serravalle 1,179,714, ,702,247 1,201,459, ,878, % -1.52% A50 West Ring Road 648,276, ,869, ,092, ,665, % -2.93% A51 East Ring Road 281,537,880 54,730, ,424,644 56,403, % -2.96% A52 North Ring Road 298,174,035 72,197, ,754,120 76,219, % -5.28% 2,407,702, ,500,283 2,456,730, ,166, % -2.57% The most significant decreases were seen on the Milan ring roads, with a reduction in commuting traffic in view of the average A7 motorway increase. The breakdown of traffic between light and heavy vehicles, as a percentage, remained substantially unchanged on % 2012 % Variation Light 2,407,702, ,456,730, % Heavy 555,500, ,166, % TOTAL 2,963,203,120 3,026,897, % Tariffs During the year, 7,064 exceptional transit authorisations were issued: this figure, decreasing 3.71% on 2012, was impacted by the continued overall motor sector crisis. As per point 3 of the CIPE decision of December 21, 1995, published in the Official Gazette on February 26, 1996 No. 47, the tables outlining the monthly paying traffic in kilometres driven are provided as annexes, broken down into categories of heavy vehicles and light vehicles and by tariff class for the years On January 1, 2013 the Ministry for Infrastructure and Transport, together with the Ministry for the Economy and Finance, implemented a tariff increase of 1.16% - a reduction on that requested. The provision recognised the adjustment to the price cap component. However, the K variable concerning the remuneration of investments awarded under the 2007 Regulatory Agreement was suspended, based on the non-updating of the five-year Finance plan. The Company contested the relative decree, allocating the case to a legal representative, with filing on March 1, Subsequently, through Legislative Decree No. 140/2013, the Ministry approved the adjustments to the suspended K variable, in the amount of 1.07%, with effect from April 12, Following this latter provision, the unitary KM charge at December 31, 2012 had increased 2.23%. Through Decree No. 494 of December 31, 2013, the Ministry for Infrastructure and Transport, together with the Ministry for the Economy and Finance, recognised the tariff adjustments to the Company, with effect from January 1, 2014, in the amount of 4.47%. In the approval of the 2013 Annual Accounts/Directors Report 17

18 finance plan concerning the regulatory period, the adjustment was set undertaking the content of the finance plan for the regulatory period as the benchmark. The above stated provision in this regard states at Article 2 that by February 28, 2014, the Ministry for Infrastructure and Transport will forward to CIPE the supplement to the Finance Plan. The plan will establish also the recovery of the difference between the tariff increase agreed for 2014 and that under the finance plan. According to the simulations, the above-stated differential will be very contained. Tolls In 2013, Company toll revenues, net of discounts applied and the additional fees recognised to the granting authority, reduced 0.93% to Euro 184,352,083. The tariff increases partly contained the traffic reduction. Net toll revenues variation Toll revenues 205,750, ,930, % Additional fees as under law 10/2009 article 19-21,398,725-21,841, % Net tolls of the period 184,352, ,089, % of which variation A7 Milano - Serravalle 64,898,447 64,843, % A50 West Ring Road 48,216,115 48,347, % A51 East Ring Road 34,141,846 34,570, % A52 North Ring Road 37,095,674 38,328, % Net tolls of the period 184,352, ,089, % The table below highlights the increased usage of the Telepass and prepaid toll cards in place of cash. TOLL PAYMENT BREAKDOWN Service areas Consumption levels at service areas continued to decline in Fuel sales reduced 9%, while non-oil products and services contracted by slightly more than 5% Annual Accounts/Directors Report 18

19 However, a significant recovery was seen in the second half of the year, with losses halving on the preceding months. Considering the various areas of the network, the ring roads (reduction of 13% for fuels and approx 7% for non-oil) have been impacted greatest by the economic crisis in comparison with the A7 motorway (stable for fuels, reducing less than 4% for non-oil). 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 838,310 1,070,686 1,908, ,663 1,078,231 1,896, % A50 West Ring Road 176,124 1,575,529 1,751, ,994 1,700,729 1,871, % A51 East Ring Road 150, ,778 1,008, , ,768 1,139, % A52 North Ring Road 31, , ,195 30, , , % Total network 1,197,088 3,627,499 4,824,587 1,167,171 3,908,127 5,075, % The monitoring and control of the service areas was stepped up further: 545 controls were carried out and 107 statements of non-compliance subsequently resolved were sent to the subcontracting companies. In relation to the restructuring programme of the service areas in view of Expo 2015, tests on the upgrading of the Totalerg service areas of Razzano Est were carried out, development works were carried out on the Totalerg area of Cologno Est and the activities for the granting of the necessary permission to begin the restructuring works at the Eni managed areas continued. In relation to advertising space, the old obsolete plant was removed and disposed of and the project for the installation of new plant was examined and approved, with opinions and the clearance of the sub-contracting companies obtained for the various service areas; in February 2014, the installation of the new advertising panels began. 1.2 Network management Motorway maintenance and interventions During the year, the Company carried out all actions necessary to maintain the efficiency and safety of the motorway network through maintenance activity. In terms of restoration, the construction supports were restored in many areas, with extensive maintenance through the refurbishment of foundations and of the supports on the Po river bridge and to the supports to the Binasco viaduct. A control system on metallic objects and structures was implemented, which has enabled actions taken to resolve highlighted critical issues. The horizontal and vertical signage was maintained, with replacement of the vertical signage on the SS.11/SS.31 junction of Molino Dorino, the refurbishment of the safety barrier and the maintenance and renewal of the enclosure networks. An extensive number of maintenance 2013 Annual Accounts/Directors Report 19

20 actions were carried out on the motorway network technological plant; we particularly highlight the construction of a new heating cable plant and the buffles sound mitigation system in the artificial gallery section in Vimercate municipality. In relation to the maintenance of buildings, we highlight both the waterproofing, internal painting and coverage organisation and the sanitary, air-conditioning and electric plant efficiency maintenance, in addition to the review and maintenance of the fire protection plant and the maintenance of the lifts. The maintenance of the toll collection equipment was carried out with the replacement of electronic equipment and components, the maintenance of station booths and platforms and station laneways and islands. At the Milan West Barrier, a pedestrian overpass was constructed to allow service personnel to cross the station safely and in September works to amend the configuration of the barrier through the introduction of tri-modal lanes (Telepass/Via Card/Manual) began and for an automatic barrier for Milan Central. This configuration is the most functional from an operating viewpoint, as guaranteeing a better service to users without sacrificing their safety. Maximum focus was placed on the maintenance of the motorway platform accessories through various operations from the maintenance and viability team actions, to the green works, 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. Actions were taken particularly in the initial months of the year to keep the motorways clear through the use of clearance vehicles and salt trucks. Safety and Accidents On the entire network in 2013, accidents reduced by 6.6%. The only section to report an increase was the Eastern Ring Road, where accidents overall rose 4.1%. Total fatal accidents increased from 6 in 2012 to 8 in 2013, of which 6 on the Eastern Ring Road. ACCIDENTS IN STRECHES PASSENGERS/GOODS Var.% 2013/2012 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 2013 decreased on 2012 to (49.15 in 2012), while the mortality rate (number of fatal accidents for every 100 million vehicle KM) was Annual Accounts/Directors Report 20

21 Toll collection The shift restructuring exercises in 2013 resulted in a total of 42,421 shifts, reducing by 1,887 compared to 2012 (4.26%) and by 5,200 shifts compared to 2011 (10.92%). PERCENTAGE OF TRAFFIC MANAGED BY AUTOMATIC LANES (Telepass, Viacard, Cash) The use of automatic lanes overall in 2013 was 82.90%, compared to 82.25% in 2012 and 80.28% in The commercial activities carried out at the courtesy points produced the following results: - distribution of 8,350 Telepass devices, of which 1,170 discounted family passes; - 5,640 plates enabled for access to the Milan C area; - 41,866 prepaid toll cards sold, of which 11,861 discounted. User information The company continued to provide information and assistance to users in an increasingly punctual manner, through the use of changeable message panels, which allow increasing flexibility and speed in the communication of information in the case of accidents and/or roadworks and through various additional initiatives. Again this year the Company reached its users through the traditional channels (website, the radio agencies, INFO FLASH, the CISS TRAVEL INFORMED service), in addition to - under the agreements with Infoblu - the communication of traffic in real time on navigators, smartphones and the communication of information in real time in relation to traffic and viability Annual Accounts/Directors Report 21

22 Traffic, traffic assistance and informational radio centre Compared to 2012, interventions reduced from 11,152 to 10,951, with a significant drop in code notifications, thanks to the use of changeable message panels on the network and against an increase in user assistance actions and first aid provision. In particular, the user assistance activities by traffic officers resulted in, among other issues, the recording of 107 road accidents without injuries. Interventions in homogenous areas A7-A53-A54 A50 A51 A52 Total Accidents ,194 Notification code Request for help and user assistance 1,421 1,888 1, ,313 Other interventions 1, ,815 Total interventions 3,251 3,743 2,833 1,124 10,951 During the year, 56,523 events were monitored and actively managed by the radio centre. English language courses were introduced for all radio centre operators in order to improve communication with foreign users, which, particularly in the summer exodus period, increases significantly in terms of daily traffic on the network. At the beginning of the winter season, the weather service was reintroduced, allowing the timely undertaking of operating decisions in relation to the Snow Plan. In June, the Summer Exodus Management Plan was prepared and communicated to the Italian National Traffic Coordination Centre in order to cope with any unfavourable conditions and to ensure entirely safe traffic mobility, with sufficient user information. 1.3 Investments The activity related to the upgrading and development of the network continued. Capital expenditure in 2013 totalled Euro 59.5 million, net of financial charges. Lambrate junction restructuring, Cassanese connection and completion of the viability for the Segrate Intermodal Centre (works approved under agreements of December 7, 1999) In 2013, the works continued in compliance with the interim deadline established under the supplement signed by the parties on March 21, 2012: at December 31, 2013, 5 of the 8 Lambrate junction ramps had been opened to traffic, as established under contract, in addition to the via Rombon pedestrian cycle lane, whose opening in advance to the original project deadline was ordered for reasons of public interest. On September 2, the Granting Authority approved the second technical and supplementary alteration appraisal, with reduction of the action, based on the unexpected increase in the ground water level which required the cancellation of the Segrate lot from the original tender Annual Accounts/Directors Report 22

23 The Company presented precise observations in relation to the provisions established by the approval Decree; subsequently, with note No. 1778, the Ministry for Infrastructure and Transport accepted and shared these supplements communicated by the company and issued a new approval provision of the alteration second appraisal which redefined the financial framework of the intervention. In terms of the executive project of the completion lot, the Ministry for Infrastructure approved the executive project on September 2 and on December 11 the tender procedure was initiated. 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. Autostrada Telematica: Integrated system of traffic video surveillance and user information (works approved under Agreement of December 7, 1999) In March 2013, the Memorandum of Substantial Completion of Works was prepared and in June the static tester issued the testing report of the structures. The final accounting procedures are being drawn up, following which the technical administrative approval will be requested. Construction of Pavia Bereguardo motorway connection and extension of the Bereguardo toll booth (works approved under Agreement of December 7, 1999) The investments, which provide for the upgrading of the motorway connection between the A7 motorway to the Pavia Ring Road (Motorway A53) and the simultaneous extension of the Bereguardo toll booth, are currently being executed. The contract was signed on June 28 and after the sub-contractor suitability verifications by the Prefecture work began on July 9. Completion is expected in the first half of Extension of the third lane of the A7 motorway from the Po River Bridge to the interconnection with the A21 Motorway (works approved under Agreement of December 7, 1999) In 2013, the sub-contractor carried out the actions requested by the approval board for the resolution of a number of critical issues. In September, the technical-administrative approval of the works took place. Upgrading and changes to the Forlanini Junction (works approved under Agreement of December 7, 1999) The commission, as per Article 240, Paragraph 1 of Legislative Decree 163/2006, incorporated on February 7, 2013, proposed the resolution of the dispute concerning the value of reserves recognised by the sub-contractor s final accounts, with a proposal of an agreement which was signed in October. Access viability to the new Rho-Pero Trade Fair hub (works approved under Supplementary Agreement of June 24, 2004) In relation to the legal dispute taken by ATI, appointed as Works Manager, in September a transitory agreement was signed which concludes the dispute, as described in greater detail at paragraph Annual Accounts/Directors Report 23

24 Noise mitigation action in the Municipality of Vimercate, Oreno section (works approved under Agreement of December 7, 1999) In December, an agreement was signed with the sub-contractor as per Article 240 of Legislative Decree 163/2006, with the appointment of the technical-administrative approval officer for the closure of the investment still awaited. Noise mitigation action in the municipality of Osmate (works approved under Agreement of December 7, 1999) The work for the construction of the noise barriers in the municipality of Osmate was completed. In autumn 2013, the technical-administrative approval of the works took place. Hydraulic construction system of the right bank and the protection of the Po River Bridge supports on the A7 motorway (New investments under the regulatory agreement of November 7, 2007) The works, carried out at the end of November 2011 and largely concluded by December 31, 2013, concerned the securitisation of the bridge supports as a result of the impact of the currents and the consequent risk of structural de-stabilisation of the infrastructure. The first technical and supplementary appraisal is awaiting approval which, considered necessary in view of the unpredictable nature of the riverbed due to floods in recent years, was forwarded to the Granting Authority in March ENVIRONMENTAL ACTIONS: (New investments under the Regulatory Agreement of November 7, 2007) Noise protection barrier Municipality of Rozzano The works were completed on April 6, 2013, 182 days in advance of the contractual deadline, due to modification to the type of sub-foundations which allowed the time completion reduction, in addition to cost savings on the work. The technical improvement alteration appraisal is awaiting approval by the Granting Ministry, as is the conclusion of the technicaladministrative approval. Anti-noise barrier (sound tunnel) Municipality of Cologno Monzese Begun at the end of August 2012, the efficacy of the public utility declaration of works through the approval by the Granting Authority of the definitive projects began. The procedures began for the expropriations and the activities for the movements of the interfering subservices. The Granting Authority was requested a number of clarifications concerning the application of the regulatory provisions of Legislative Decree 31/2011. The procedure for the awarding of the executive design, construction and relative maintenance is in the initial phases. Anti-noise barrier Municipality of Pavia along the Pavia West Ring Road The works, awarded on October 18, 2012, by December 31, 2013 had been substantially completed. The initial delays due to the organisational difficulties of the sub-contractor were recovered, with the works continuing in line with the approved programme, in advance to the contractual terms which provided for completion in April Annual Accounts/Directors Report 24

25 Municipality of Milan Anti-Noise Barrier: Eastern Ring Road (Mi East 1 and Mi East 2) and the A7 Motorway and the Cantalupa district In 2013, following the approvals by the Municipality of Milan, the projects concerning the Milan East 1 actions were forwarded to the Granting Authority for higher approval (May 2013) and A7 Famagosta (June 2013) for which unification of the A7 Cantalupa action, previously forwarded in September 2012, was requested. The project concerning the Milan East 2 action is still in the approval phase by the Municipality of Milan. Anti-noise barrier in Municipality of Buccinasco (Western Ring Road) and Municipality of Trivolzio (A7 Motorway) In relation to the executive project for noise mitigation in the Municipality of Buccinasco sent to the Granting Authority for approval in December 2012, the approval decree to initiate the awarding procedures is still awaited. Concerning the intervention in the municipality of Trivalzio in January 2014, the executive project was sent to the Ministry. 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 ministry for approval in October MODERNISATION TO IMPROVE SECTOR QUALITY STANDARDS: (New investments under the Regulatory Agreement of November 7, 2007) Alteration to the central, lateral and overpass guardrails on the A7 Motorway The works, which concern the upgrading of the guardrails on the motorway access roads and relative junctions, in 2013 saw a series of partial suspensions, both due to weather conditions and operating requirements, resulting in a deferment of the deadline which, together with the delay in the release of authorisations by the proposing bodies for the execution of works in relation to the overpass and the increased time for additional works as per alteration appraisal No. 1, the completion deadline was fixed at May The works are progressing in line with the new contractual conditions. Alteration to the central, lateral and overpass guardrails and Western Ring Road lighting The works, which involve the adjustment of the safety barrier on the Western Ring Road and the introduction of lighting, began in July 2013, on conclusion of the awarding process which extended beyond two years due to a number of contestations by tender participants. The works are currently in course and due to the reduction in execution time by the subcontractor, delivery is expected in the first quarter of Annual Accounts/Directors Report 25

26 Extraordinary actions on the A7 Motorway: Ticino River Bridge, Terdopio Creek Bridge, overpass at KM On April 2, the extraordinary maintenance works were completed, in full compliance with the contractual deadline. The technical administrative approval is currently in progress. 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 is currently being executed. In November 2013, alteration appraisal No. 1 for works and security charges, postponed the completion date to November The works are proceding in line with the appraisal provisions. Upgrading and development of the Gropello Cairoli toll booth on the A7 Motorway The work for the upgrading and extension of the Gropello Cairoli toll booth was definitively awarded in January; subsequently, due to the sale of the business unit by the awarding entity and the execution of the necessary verifications concerning the new sub-contractor, the delivery of work was postponed until October The works are currently in progress and completion is scheduled by the end of Field photovoltaic station of 4.59 MWp In July 2013, following the completion of the definitive design, the project was sent to the Granting Authority for approval. The decree to proceed with the tender procedures for the executive design and carrying out of works is awaited. Construction of service road on the S.P. 184 The works concern the construction, close to the Milan west barrier, of a service road with access to the S.P Work was awarded in April 2013 with completion in March Improved traffic flow of the Cascina Gobba junction of the Eastern Ring Road first phase (New investments under the Regulatory Agreement of November 7, 2007) The introduction of these investments was postponed in comparison to the finance plan due to the continuation of the Environmental Impact Assessment procedure. In March 2013, the beginning of the Conference of Services began and subsequently in February 2014, the relative State Region Agreement was signed. Following the conclusion of the conference of services and the approval of the definitive project by the Granting Authority, the procedures for the awarding of the executive design and completion of works will begin. Upgrading on the SP46 Rho-Manza: from the Northern Ring Road to the Baranzate locality (New investments under the Regulatory Agreement of November 7, 2007) In 2013, the expression of environmental compatibility of the region and the V.I.A. Commission was given, in addition to the test of the Conference of Services. In addition, in the meeting of August 8, 2013, CIPE made available the loan for the alteration to the underpass of the Milan- Saronno rail line for Euro 55 million. Having incorporated the provisions of the Conference of Services on November 29, 2013, the executive project was sent to the S.V.C.A. for approval Annual Accounts/Directors Report 26