gemina - atlantia gemina 2009-2011.pdfgemina group 5 contents 1 statutory boards page 7 2 main...

GEMINA ______________________

REPORT ON OPERATIONS

FINANCIAL STATEMENTS 2009

GEMINA GROUP

2

SHAREHOLDERS’ MEETING NOTICE

Pursuant to art. 8 of the Articles of Association and art. 2366, subsection two, of the Italian Civil Code.

Published in the Official Gazette on March 18, 2010. Published in the Corriere della Sera on March 18, 2010.

The Shareholders are called to an Ordinary Shareholders' Meeting to be held on:

- April 27, 2010 at 10.30 a.m. in first call at the registered

office in Via della Posta 8/10, Milan,

- April 28, 2010 at 10.30 a.m. in second call at Palazzo delle

Stelline in Corso Magenta 61, Milan, to resolve on the following Agenda

1) Financial statements as at December 31, 2009; related and

consequent resolutions.

2) Appointment of directors, by determining the number of members of the Board; determination of remuneration of the directors.

3) Authorisation of the purchase and sale of own shares pursuant to arts. 2357 and 2357-ter of the Italian Civil Code, art. 132 of Legislative Decree 58/1998 and art. 144-bis of the Regulations approved by Consob with resolution 11971/1999 and subsequent amendments and supplements, subject to repeal of the shareholders’ meeting resolution of April 28, 2009 concerning the purchase and sale of own shares; related and consequent resolutions.

The subscribed, fully paid-in share capital totals 1,472,960,320 euro, represented by 1,469,197,552 ordinary shares, each of which grants the right to one vote in the shareholders’ meeting, and 3,762,768 non-convertible savings shares, without voting rights, all with a par value of 1 euro. The Company does not hold own shares.

In accordance with the terms of art. 8 of the Articles of Association, in order to attend the shareholders’ meeting, shareholders are required to request the necessary communication from authorised brokers subscribing to the centralised management system of Monte Titoli no later than two working days before the shareholders’ meeting.

Those holding voting rights may be represented by way of written mandate, within the limits of the current regulations; to this end, the mandate reproduced at the bottom of the communication issued by authorised brokers may be used.

Shareholders that alone, or together with other shareholders, represent at least 2.5% of the share capital can request, within

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five days from the publication of this notice, the integration of the list of topics to be covered, indicating in their request the additional topics they propose. These requests for integration will be announced at least ten days prior to the date set for the shareholders’ meeting, using the same methods as used for this notice. Integration of the list of topics to be covered is not permitted for issues on which the shareholders’ meeting resolves pursuant to law, on proposal by the directors or on the basis of a plan or report they have drawn up.

As for the appointment of the Directors (point 2 on the agenda), which may take place on the basis of lists presented by shareholders, see Article 11 of the Articles of Association, published on the company website www.gemina.it.

Specifically, please note the following: Legitimisation to present lists.

Shareholders that alone, or together with other shareholders, hold total shares representing at least 2.5% of the share capital with voting rights in the ordinary shareholders’ meeting, corresponding to 36,729,939 ordinary shares, are entitled to present the lists.

Each shareholder, shareholders who are party to a significant shareholders’ agreement within the meaning of article 122 of Legislative Decree 58/1998, the parent company, the subsidiaries and jointly controlled companies within the meaning of article 93 of Legislative Decree 58/1998, may present or contribute to the presentation of only one list, and are not allowed to vote a different list. Each candidate may be put forward in one list only on pain of non-eligibility. Any support or votes expressed in breach of this prohibition will be assigned to no list.

List presentation procedure.

In order to prove the ownership of the right to vote for the number of shares necessary for presenting lists, the shareholders must at the same time leave the certifications issued by the authorised brokers at the registered office of the company in compliance with the applicable legislation and, together with each list, leave the information and declarations indicated in the rules of law and regulations on the matter and in the above-stated article 11 of the Articles of Association, and specifically: (I) the declarations by which the individual candidates accept their candidacy and certify, on their own responsibility, that there are no causes of non-eligibility and incompatibility, and that the requirements demanded for the respective offices are met; and (II) a curriculum vitae setting forth the personal and professional profile of each candidate and whether the same qualifies as independent. A minimum number of directors elected,

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corresponding to the legal minimum required, in any event, shall meet the requisites of independence referred to in article 148, subsection 3, of Legislative Decree 58/1998.

Shareholders are advised to take into consideration the recommendations contained in Consob notice DEM 9017893 of February 26, 2009 on the “Appointment of members of the administration and control bodies”.

Presentation deadlines.

The lists, together with the required documentation, must be left at the registered office of the company at Via della Posta no. 8/10, Milan, at least 15 days before the date set for the shareholders’ meeting in first call, which is precisely before 5 p.m. Monday, April 12, 2010.

Inadmissibility of the lists.

Lists that to not fulfil the above conditions will not be considered as presented.

If only one list is presented, or if no list is presented, the shareholders’ meeting shall resolve with the majority of votes set forth by law.

The lists, together with the declarations and information required by current legislation, shall be promptly published on the company website www.gemina.it.

Documentation regarding the items on the agenda, and, precisely, the draft financial statements and consolidated financial statements as at December 31, 2009, the Report on Operations, the Report on the Corporate Governance and the ownership structure, the Report of the Board of Statutory Auditors and the Independent Auditors’ Report, as well as the director’s reports on the issues pursuant to points 2) and 3) of the agenda will be made available to the public by filings as the registered office, with Borsa Italiana S.p.A. and on the website www.gemina.it, as provided by law. Shareholders have the right to obtain a copy.

Milan, March 15, 2010

for the Board of Directors The Chairman

(Guido Angiolini)

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CONTENTS

1 STATUTORY BOARDS page 7

2 MAIN ECONOMIC AND FINANCIAL FIGURES

2.1 Gemina Group (“Group”) page 82.2 Gemina Group Structure as at December 31, 2009 page 92.3 Gemina S.p.A. page 102.4 Share performance page 11 FIRST ITEM ON THE AGENDA

3 REPORT ON OPERATIONS

3.1 Overview of the financial year page 123.2 Airport infrastructures (Aeroporti di Roma Group) page 153.2.1 Air transport trend page 153.2.2 Performance page 163.2.3 Legal and regulatory overview page 213.2.4 Significant agreements page 253.2.5 Quality page 263.2.6 Environmental protection page 273.3 Energy (Fiumicino Energia S.r.l.) page 283.4 Performance of companies valued at net equity or at cost page 283.4.1 Air Traffic Control Communication Systems (SITTI S.p.A.) page 283.4.2 Pentar S.p.A. page 293.5 Investments, research and development page 293.6 Human resources page 313.7 Corporate Governance page 323.8 Information about risks and uncertainties page 403.9 Equity, economic and financial highlights for the Gemina Group page 473.9.1 Economic position page 473.9.2 Financial position page 483.9.3 Net financial position page 49

3.9.4

Reconciliation between the reclassified statements and the financial statements page 50

3.10 Gemina S.p.A. page 503.10.1 Economic position page 503.10.2 Financial position page 513.10.3 Net financial position page 523.11 Intercompany relations and transactions with related parties page 533.12 Major Subsequent Events page 543.13 Business outlook page 56

3.14

Equity investments held by Directors, Statutory Auditors and Executives with strategic responsibilities page 58

4 PROPOSALS TO THE SHAREHOLDERS’ MEETING page 60

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CONTENTS

5 CONSOLIDATED FINANCIAL STATEMENTS

5.1 Consolidated Income Statement page 625.2 Consolidated balance sheet page 645.3 Statement of Consolidated Cash Flows page 665.4 Statement of Changes in Consolidated Equity page 675.5 Statement of Reconciliation between Shareholders’ Equity of

Gemina S.p.A. and Consolidated Shareholders’ Equity and between Profit (loss) of Gemina S.p.A. and Consolidated Profit (loss) page 68

5.6 Explanatory Notes page 695.7 Information pursuant to art. 149-duodecies of Consob Issuers’

Regulation page 1375.8 List of equity investments prepared in accordance with art. 126 of

Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions. page 138

5.9 Certification of the Consolidated Financial Statements in accordance with art. 81-ter of Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions page 140

5.10 Independent Auditors' Report page 141 6 FINANCIAL STATEMENTS OF GEMINA S.P.A. 6.1 Income Statement page 1456.2 Balance Sheet page 1476.3 Statement of Cash Flows page 1496.4 Statement of Changes in Shareholders’ Equity page 1506.5 Explanatory Notes page 1516.6 Information on Related Parties page 1866.7 Other Information page 1876.8 Information pursuant to art. 149-duodecies of Consob Issuers’

Regulation page 1896.9 Certification of the Financial Statements in accordance with art. 81-

ter of Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions page 190

6.10 Independent Auditors' Report page 191

7 REPORT OF THE BOARD OF STATUTORY AUDITORS page 195 SECOND ITEM ON THE AGENDA

Report of the Board of Directors

THIRD ITEM ON THE AGENDA

Report of the Board of Directors

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1 STATUTORY BOARDS

BOARD OF DIRECTORS

Chairman Guido Angiolini Directors Giuseppe Angiolini Giuseppe Bencini Stefano Cao Giovanni Fontana Alessandro Grimaldi (*) Aldo Minucci Michele Mogavero Andrea Novarese Eugenio Pinto Clemente Rebecchini EXECUTIVE COMMITTEE

Guido Angiolini Stefano Cao Clemente Rebecchini INTERNAL CONTROL COMMITTEE

Eugenio Pinto Giuseppe Angiolini Giovanni Fontana REMUNERATION AND HUMAN

RESOURCES COMMITTEE

Giovanni Fontana Giuseppe Bencini Andrea Novarese BOARD OF STATUTORY AUDITORS

Chairman Luca Aurelio Guarna Statutory Auditors Giorgio Oldoini Maurizio Dattilo Alternate Auditors Paolo Lenzi Pier Luca Mazza Sergio De Simoi

INDEPENDENT AUDITORS

Deloitte & Touche S.p.A. Appointment extended by the Shareholders' Meeting of May

7, 2007 for the 2007-2012 period.

(*) Resigned on February 26, 2010.

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2.1 GEMINA GROUP

(in millions of euro) 2009 2008 FINANCIAL INFORMATION Revenues 570.9 582.2EBITDA 205.2 193.0Amortisation, depreciation and write-downs (142.1) (138.6)EBIT 63.1 54.4Pre-tax profit (loss) (20.0) (47.2)Net income from discontinued operations - 19.3Net profit (loss) for the year (40.0) (33.9)Net profit (loss) attributable to the Group (39.2) (33.8) 12/31/09 12/31/08EQUITY INFORMATION Net capital invested (NCI) 3,147.5 3,170.6Net financial indebtedness 1,425.1 1,400.2Shareholders’ equity 1,722.4 1,770.4Group shareholders’ equity 1,685.9 1,730.8 2009 2008 INDICES EBITDA/Revenues 35.9% 33.2%R.O.I. (EBIT/Net Capital Invested) 2.0% 1.7%Revenues/Net Capital Invested 18.1% 18.4%R.O.S. (EBIT/Revenues) 11.0% 9.3%Net earnings per share (0.027) (0.023)Net financial indebtedness/ Shareholders’ equity 0.8 0.8Shareholders’ equity per share 1.1 1.2 12/31/09 12/31/08 NUMBER OF GROUP EMPLOYEES (*) 2,552(**) 2,576

(*) Employees of the Gemina S.p.A. (“Gemina, Parent Company, Company, Issuer”) and of the Aeroporti di Roma Group (“ADR Group”). (**) including 88 employees for which the Extraordinary Earnings Supplement Fund (“CIGS”) is being used

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2.2 GEMINA GROUP STRUCTURE AS AT DECEMBER 31, 2009

AEROPORTI DI ROMA S.p.A.

95.76% (1)

Airport Invest BV 100%

ADR Engineering

S.p.A. Unipersonale

100%

ADR TEL S.p.A.

ADR Assistance

S.r.l.Unipersonale

100%

ADR Advertising

S.p.A.51%

ADR Sviluppo S.r.l.

Unipersonale 100%

S.I.T.T.I.S.p.A.40%(2)

PENTAR S.p.A.

20.35%(3)

Leonardo Energia

Soc. Consortile a r.l. 1 % 10%

10 %

99%10 %

(1) Fully consolidated on a line-by-line basis(2) Consolidated using the net equity method(3) Valued at cost

90% 10 %

FIUMICINO ENERGIAS.r.l.

86.12% (1)

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2.3 GEMINA S.P.A.

(in millions of euro) 2009 2008 FINANCIAL INFORMATION Income (charges) on equity investments (3.7) 21.0Financial income (expense) (3.2) (4.1)Net operating costs (6.8) (4.1)Pre-tax profit (loss) (13.7) 12.8Net profit (loss) for the year (14.1) 13.9 12/31/2009 12/31/2008 EQUITY INFORMATION Equity investments 1,851.8 1,853.6Net capital invested (NCI) 1,851.0 1,881.4Net financial indebtedness 31.6 47.2Shareholders’ equity 1,819.4 1,834.2 12/31/2009 12/31/2008 INDICES Net financial indebtedness/ Shareholders’ equity 0.02 0.03Shareholders’ equity per share 1.24 1.25

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2.4 SHARE PERFORMANCE SHARES No. of ordinary shares 1,469,197,552 No. of savings shares 3,762,768

CAPITALIZATION

(in millions of euro) 12/31/2009 12/31/2008

848.9 552.1

SHARE PRICES AND TRADING VOLUMES 2009 2008

0.700 1.197Max. ref. price (euro)Oct-9 Jan-150.214 0.306Min. ref. price (euro)

Mar-9 Dec-9Average ref. price

(euro) 0.479 0.785Av. daily trading

volumes (m) 4.0 3.622.0 20.2Max. daily trading

volumes (m) Oct-13 Jul-150.4 0.5

Min. daily trading volumes (m) Jul-14 Nov-13

SHARE PRICE AND TRADING

VOLUME PERFORMANCE FOR

THE YEAR

_

______price ______ volume

Daily Gemina - andamento del titolo da gennaio a dicembre 2009 02/01/2009 - 30/12/2009 (MIL)

Line, QGEMI.MI, Last Trade(Last)26/01/2010, 0.588Vol, QGEMI.MI, Last Trade26/01/2010, 531,460

Price

EUR

.1234

0.24

0.28

0.32

0.36

0.4

0.44

0.48

0.52

0.56

0.6

0.64

Volume

EUR

.1234

1M2M

3M

4M

5M

6M

7M

8M

9M

10M

11M

12M

13M

14M

15M

16M

17M

18M

19M

20M

05 12 19 26 02 09 16 23 02 09 16 23 30 06 14 20 27 04 11 18 25 01 08 15 22 29 06 13 20 27 03 10 17 24 31 07 14 21 28 05 12 19 26 02 09 16 23 30 07 14 2128Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09

Gemina Daily – share performance from January to December 2009 10/26/2010; 01/02/2009; 12/30/2009

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3.1 OVERVIEW OF THE FINANCIAL

YEAR

(in millions of euro) 2009 2008 Change

%

REVENUES 570.9 582.2 (1.9)

EBITDA 205.2 193.0 +6.3

EBIT 63.1 54.4 +16.0

INVESTMENTS 70.0 111.7 (37.3)

NET FINANCIAL INDEBTEDNESS (*) 1,425.1 1,400.2 +1.8

AIRPORTS – No. Passengers 38,622,838 40,018,165 (3.5)

- Cargo (tonnes) 143,966 157,062 (8.3) (*) At period end Growth in passenger traffic at end 2009 and the beginning of

2010; restructuring of Alitalia and signing with the same of almost all contracts for the provision of services, together with the allocation of Terminal 1 exclusively to the SkyTeam Alliance; approval of the Conversion Law no. 102 of August 3, 2009, which allows ENAC to enter into planning agreements for the main airports in derogation of current regulations; approval of the law authorising ENAC to temporarily increase tariffs in order to finance investments while awaiting the signing of the planning agreements; launch of negotiations with ENAC for entering into the new agreement; launch of the expansion plan for Fiumicino airport, with the concept of the Fiumicino Nord terminal, and presentation of the plan to the authorities, with the aid of Changi Airports International Pte. Ltd.; self-sufficiency in the procurement of electric and thermal power with the coming on stream of the co-generation power plant: these are the salient facts of financial year 2009.

While the economic and financial results show both clear signs of the phase of relaunch of the business of the main Italian carrier and sign generated by the deepest recession since that between the first and second world wars, based on the total of the events outlined above, 2009 can be defined as a transition which provides 2010 with multiple positive elements that are precursors to synergic development for the Group.

According to the ACI (Airports Council International), global

passenger traffic decreased by 2.6% compared to the previous year. This trend did not affect the Middle and Far East, +7% and +3.2%, respectively, and Latin America, +2.5%.

The load factor decreased compared to the previous year. The decrease in cargo transported was 10.1% according to

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IATA (International Air Transport Association).

In Italy, the figures issued by Assaeroporti showed a decrease

of 2.3% in passenger traffic and 15.3% in cargo traffic. The downturn mainly involved the major airports used by

traditional airlines, while minor airports, which have a higher presence of low-cost airlines, managed to contain the downturn and, in several cases, increased their business volumes.

The ADR Group, with 38.6 million passengers transported,

was subject to a downturn of 3.5%, fully resulting from the drop in traffic at Fiumicino airport, while Ciampino airport, whose business is generated by the low-cost segment, confirmed its 2008 volumes.

The last part of the year confirmed the signs of recovery in traffic which had emerged in the third quarter, even though the quarter-on-quarter change was affected by the Alitalia crisis at end 2008.

(no. passengers)2009 2008

% Change

FIRST QUARTER 7,763,440 8,207,061 (5.4)

SECOND QUARTER 10,318,052 11,095,116 (7.0)

THIRD QUARTER 11,330,878 11,961,778 (5.3)

FOURTH QUARTER 9,210,468 8,754,210 5.2

YEAR 38,622,838 40,018,165 (3.5) Though operating in this difficult context, and in the presence

of a significant contraction in the fleet of the main Italian carrier, through targeted marketing actions, Aeroporti di Roma S.p.A. (“ADR”) developed the presence of new carriers, the launch of new connections, and the increase in the frequency of certain flights, in both the domestic and international area.

Year

2008 Dec. 2008

Year 2009

NO. OF DESTINATIONS (*) 176 148 168

NO. OF FLIGHTS (*) 451 354 422

NO. OF AIRLINES 125 100 112 (*) Figures refer to commercial operations with at least 1 flight per week: average values

for the period in question. Group revenues, almost entirely relating to airport activity,

amounted to 570.9 million euro, down compared to the previous year.

Thanks to a more favourable traffic mix, revenues from

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aviation decreased less than the drop in traffic volume before considering the contribution of revenues from assistance to passengers with reduced mobility, which cover the entire year, compared to only five months of 2008.

There were multiple causes of the downturn of 2.6% in

revenues from non-aviation: decrease in the spending power of passengers, with specific reference to those of low-cost carriers, reduction in canteen services as a result of the contraction in staff of airport operators, less use of car parks both due to the use of alternative forms of transportation and to competition from other operators, and a contraction in advertising expenses.

Real estate revenues increased, due to the new areas providing

income such as, primarily, those of the second office building. As regards operating costs, the financial year was burdened by

the charges for the personnel restructuring plan and the delay in bringing on stream the co-generation power plant, while significant contractions in costs were achieved in consulting, in terminating marketing contributions to low-cost airlines at Ciampino airport, and in utilities, specifically electricity.

EBIT stood at 63.1 million euro compared to 54.4 million

euro in the previous year. The significant reduction in cash flows generated from

operations, also due to the difficulties of some carriers and customers, the occurrence of some conflicts which reflect on revenue flows, and the need to comply with covenants entered into with financial institutions resulted in a contraction in investments, which stopped at 70.0 million euro compared to 111.7 million euro in 2008.

Net financial indebtedness was equal to 1,425.1 million euro,

of which 157.2 million euro relating to the fair value of derivatives; as at December 31, 2008 the indebtedness was 1,400.2 million euro, of which 149.3 million euro relating to the fair value of financial instruments.

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3.2 AIRPORT INFRASTRUCTURES

(AEROPORTI DI ROMA GROUP)

3.2.1 AIR TRANSPORT TREND At global level, there was a drop of 2.6% in passenger

numbers, mainly due to the international segment (-4.0%); domestic traffic recorded a smaller decrease (-1.2%).

Change 2009 vs. 2008

WORLD (a) (2.6%)

EUROPE (a) (5.6%)

ITALY (b) (2.3%)

FIUMICINO + CIAMPINO

(*) (3.5%)

Data source: (a) ACI Pax Flash Report (2009) (b) Assaeroporti (2009) (*) Rome Fiumicino and Ciampino airports system (2009)

Compared to 2008, the traffic recorded by the Rome airport system showed the following trend:

(progressive figures as at December 31, 2009)

System Fiumicino Ciampino Domestic International MOVEMENTS 382,082 324,497 57,585 165,867 216,215

% Change (5.9) (6.4) (3.0) (6.7) (5.3)

TONNAGE 28,987,001 26,186,711 2,800,290 10,080,628 18,906,373

% Change (2.9) (3.2) (0.1) (2.0) (3.4)

TOTAL PASSENGERS 38,622,838 33,811,637 4,811,201 13,622,509 25,000,329

% Change (3.5) (4.0) 0.4 (3.8) (3.3)

CARGO (KG) 143,966,346 126,983,426 16,982,920 5,943,899 138,022,447

% Change (8.3) (7.6) (13.5) (32.0) (6.9) The most significant changes in international traffic concerned

the European Union area:

Intern. EU Extra UE MOVEMENTS 216,215 146,478 69,737

% Change (5.3) (8.0) 1.1

TONNAGE 18,906,373 10,077,933 8,828,440

% Change (3.4) (7.1) 1.3

TOTAL

PASSENGERS

25,000,329 16,162,166 8,838,163

% Change (3.3) (5.2) 0.3

CARGO (KG) 138,022,447 29,905,631 108,116,816

% Change (6.9) (19.6) (2.7)

This performance was also the result of the events linked to

the main Italian carrier: the first few days of the year were

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characterised by significantly reduced operations of Alitalia under extraordinary administration, and the new carrier, which also incorporated the operations of AirOne, began operating through its new network from January 13, 2009 with a smaller fleet of aircraft as compared to the previous year.

This led to a reduction in and revision of the total network of the airline, confirming, in any event, Fiumicino airport as the main hub.

Also in 2009, though in a negative economic context, the development of the Fiumicino network continued, with a series of new connections and destinations.

Among the events which characterise 2009, it is important to note the entrance of Switzerland in the Schengen Area.

As regards Ciampino airport, passenger traffic during 2009

remained substantially stable (+0.4%) compared to the previous year, due to the substantial saturation of operating capacity of the airport by virtue of the well-known limitations imposed by the competent authorities. This result was also achieved due to the transfer of several Easyjet flights to Fiumicino airport, substituted by Ryanair flights, which have greater seating capacity.

3.2.2 PERFORMANCE KEY FIGURES


REVENUES 570.2 581.7 (11.5)

EBITDA 209.1 197.1 12.0

% REVENUES 36.7 33.9 2.8

EBIT 105.3 96.0 9.3

% REVENUES 18.5 16.5 2.0

12/31/09 12/31/08 Change

INVESTMENTS 69.8 111.7 (41.9)NET CAPITAL

INVESTED 2,049.5 2,039.1 10.4NET FINANCIAL

INDEBTEDNESS 1,371.8 1,353.0 18.8

STAFF 2,541 (*) 2,568 (27) (*) including 88 employees to which CIGS is applied BREAKDOWN OF REVENUES

(in millions of euro) 2009 2008 Change % Change

AIRPORT FEES 163.2 165.3 (2.1) (1.3)

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CENTRALISED INFRASTRUCTURES 35.5 36.4 (0.9) (2.5)

SECURITY 62.9 63.1 (0.2) (0.3)

OTHER 29.9 24.6 5.3 + 21.5 REVENUES FROM AVIATION

ACTIVITIES 291.5 289.4 2.1 + 0.7

SALES 80.2 87.0 (6.8) (7.8)

SUB-CONCESSIONS AND UTILITIES: 103.2 102.6 0.6 + 0.6

SUB-CONCESSIONS AND OTHER 56.3 54.9 1.4 + 2.5

NON-AVIATION ACTIVITIES 46.9 47.7 (0.8) (1.7)

CAR PARKS 27.5 30.1 (2.6) (8.6)

ADVERTISING 22.8 26.0 (3.2) (12.3)

REFRESHMENTS 6.7 8.6 (1.9) (22.1)

OTHER 30.1 23.5 6.6 + 28.1

REVENUES FROM NON-AVIATION

ACTIVITIES 270.5 277.8 (7.3) (2.6)

OTHER INCOME AND REVENUES 8.2 14.5 (6.3) (43.4)

TOTAL REVENUES 570.2 581.7 (11.5) (2.0)

Revenues from Aviation activities

Revenues from airport fees – These revenues, equal to 163.2 million euro, decreased by 1.3%, compared to the same period of 2008.

- take-off, landing and aircraft parking fees: revenues decreased due to the reduction of 5.9% in movements and 2.9% in tonnage. Slight adjustment in fees in the month of November 2008, different compensation of traffic, which recorded a greater percentage of Extra EU flights, characterised by operations of aircraft with greater average unit tonnage, and increased aircraft parking;

- passenger boarding fees: Revenues decreased by 1.9% due to the smaller number of passengers boarded, down by 3.5%.

The smaller decrease in revenues is due to the slight adjustment of fees occurred in the month of November 2008 and the concentration of the reduction in the number of passengers on domestic and EU routes subject to lower boarding fees.

The changes compared to the previous year were also affected by the transfer of Alitalia flights from Malpensa to Fiumicino, starting from the second quarter of 2008.

Centralized infrastructures – Revenues decreased by 2.5% as a result of:

- a 5.1% decrease in revenues for the loading bridges, due to

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the reduction in movements;

- 0.7% increase in turnover from the baggage handling system as a result of higher volumes handled in the second half of the year, balanced by the reduction in passenger traffic and the opening of Terminal 5 (an infrastructure with a lower unit fee) in the second quarter 2008.

Security - Security services - which take the form of passenger, carry-on baggage and hold baggage screening, checking for the presence of explosives, services on request and monitoring of the airport system - generated revenues of 62.9 million euro, substantially in line with 2008 (-0.3%).

This situation mainly derives from the reduction in passenger traffic and, partly, also from the lower revenues from cargo services on request following the lower volumes of cargo handled at Fiumicino.

Other income and revenues – This item includes revenues from assistance to passengers with reduced mobility, check-in desks and fees for use of goods for common use and other services.

Assistance to passengers with reduced mobility generated revenues of 13.5 million euro, compared to 4.8 million euro in 2008, pointing out that, for the year being compared, the service was provided only starting from the month of July.

From August 1 a new unit fee of 1.05 euro has been applied per passenger departing from Fiumicino, compared to the previous fee of 0.54 euro, thanks to an agreement reached with the Users Committee.

Revenues from non-aviation activities

Non-aviation activities closed 2009 with a downturn of 2.6% in revenues.

In addition to the drop in passenger numbers, the average spend decreased for passengers from the Russia and UK areas and, at the end of the year, also from the US and Japan, due to the trend in exchange rates.

Sales - Revenues from sales recorded turnover of 80.2 million euro, a decrease of 7.8% compared to 2008. Revenues from direct sales recorded a drop of 6.4%, a larger drop than the contraction of 3.5% in outbound traffic volumes, with a resulting decrease of 3.1% in average spend per passenger.

At Fiumicino airport, turnover decreased by 4.9%, which can be attributed to the fall of 3.9% in outbound traffic, accompanied by a contraction in average spend per passenger of 1.0%.

Ciampino airport recorded a decrease of 22.2% in turnover

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19


compared to 2008. This result is attributable, on one hand, to the loss in average spend on UK flights, due to the depreciation of the Pound Sterling against the Euro and, on the other, to the change in the traffic mix, characterised by a higher domestic component which has a lower propensity to purchase.

Sub-concessions and utilities: non-aviation activities - In 2009, revenues from non-aviation activities in sub-concession were equal to 46.9 million euro, a slight decrease compared to 2008 (-1.7%).

Average unit revenue per passenger grew by 1.8%.

Fiumicino airport recorded a decrease in revenues of 1.3% compared to a drop in outbound traffic of 3.9%, recording an increase in unit revenues of 2.8%.

In detail, a decrease was recorded in revenues from royalties for Specialist Retail, with decreases in the Accessories, Electronics, and Fine Food segments, and good performance in the Luxury and Newsagent segments.

During the year, Dixons (Unieuro Group) was introduced as a new operator of Electronics retail outlets. New clothing and accessory brands were also introduced, as well as a new retail outlet for jewellery.

The Food&Beverage segment at Fiumicino airport recorded positive performance deriving from the effect of the new contracts with higher fixed costs in the ex-Cisim Food area, where restructuring work was carried out on the retail outlets.

Activities in sub-concession at Ciampino saw a 15.1% decrease in revenues, for a total of 0.2 million euro, against outbound traffic substantially in line with the previous year (+0.1%).

This result was mainly due to the aforementioned reduction in average spend of passengers with destinations in the UK, and to the change in the traffic mix.

Car parks - Management of the parking system recorded 27.5 million euro in turnover, an 8.6% reduction compared to 2008.

This performance was lower than the trend of the potential originating passenger market, which decreased by 1.7%, and was mainly affected by the contraction in the business segment.

Aggressive competition and increasing use of alternative, less costly means of transport resulted in a loss of 6.5% in average spend, despite the steady growth in On-line Booking (+35%) and the continuous development of distribution channels.

Advertising – Advertising revenues in 2009, equal to 22.8 million euro, highlighted a 12.3% decrease on 2008 deriving from the sharp reduction in revenues from third parties of subsidiary ADR Advertising S.p.A. (“ADR Advertising”), as a

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result of the crisis which has affected the whole sector. There was an increase in revenues from the sale of spaces in directly managed shops, which amounted to 2.8 million euro, growth of 3.5% compared to the previous year.

Refreshments – Revenues amounted to 6.7 million euro, down by 22.1% compared to 2008, in relation to the drop in passengers.

Sub-concessions and utilities: sub-concessions and other (real estate activities) - Revenues amounted to 56.3 million euro, an increase of 2.5% compared to 2008.

This is due to the entry into operation of Office Tower 2, from December 2008, which facilitated some airlines moving their commercial offices from the city centre to the airport.

ECONOMIC PERFORMANCE

The contraction in air traffic reflected on revenues, equal to 570.2 million euro, down by 2% compared to the previous year.

EBIT, which reached 105.3 million euro, improved by 9.3 million euro compared to 2008 despite the costs relating to personnel restructuring, launched at the start of the year as part of cost containment measures, and the provisions regarding the litigation with the Customs Agency.

Consultancy costs, marketing contribution, and utilities and services costs decreased compared to 2008, burdened by 42.4 million euro in losses on receivables due from Alitalia.

Net financial expenses, equal to 77.7 million euro, recorded a reduction of 19.2 million euro compared to 2008, due to the effects of the significant reduction in interest rates, in addition to the partial restructuring of debt in the first half of 2008.

The ADR Group closed 2009 with a profit of 1.5 million euro, compared to a loss of 15.8 million euro in the previous year.

EQUITY AND FINANCIAL POSITION

Invested capital amounted to 2,049.5 million euro as at December 31, 2009, an increase of 10.4 million euro compared to December 31, 2008, as a result of the increase in working capital. This is the result of the failure to collect receivables from Alitalia under extraordinary administration, and a general difficulty among customers in complying with terms of payment.

An effect with the opposite sign derives from the increase in provisions for risks and charges allocated for the personnel

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21


restructuring and the litigation with the Customs Agency.

Net financial indebtedness, equal to 1,371.8 million euro, increased by 18.8 million euro compared to December 31, 2008, mainly due to the increase of 11.0 million euro in the value of outstanding bonds due to the adjustment of the tranche in Pounds Sterling to the year-end exchange rate, as well as to the change of 7.1 million euro in the fair value of derivatives.

(in millions of euro) 12/31/09 12/31/08 Change

CASH AND CASH EQUIVALENTS 135.8 142.4 (6.6)

FINANCIAL INSTRUMENTS - DERIVATIVES 0.5 3.4 (2.9)

OTHER FINANCIAL ASSETS 55.2 49.3 5.9

TOTAL CURRENT FINANCIAL ASSETS 191.5 195.1 (3.6)

CURRENT FINANCIAL LIABILITIES (25.1) (16.8) (8.3)

FINANCIAL INSTRUMENTS - DERIVATIVES (156.8) (152.6) (4.2)

TOTAL CURRENT FINANCIAL LIABILITIES (181.9) (169.4) (12.5)

FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE (284.0) (292.2) 8.2

OUTSTANDING BONDS (1,097.5) (1,086.5) (11.0)

TOTAL NON-CURRENT FINANCIAL LIABILITIES (1,381.5) (1,378.7) (2.8)

NET FINANCIAL INDEBTEDNESS (1,371.8) (1,353.0) (18.8)

3.2.3 LEGAL AND REGULATORY OVERVIEW Updating of airport fees

Ministry of Infrastructure and Transport decree of October 8, 2009 on “Update of airport fees for 2009” was published in the Official Gazette of December 22, 2009, no. 297. The amount of airport fees has been updated to the amount of programmed inflation relating to 2009 which, in the Italian Economic and Financial Planning Document, is forecast as equal to 1.5%.

The new amounts, in force from January 21, 2010, are listed in annex 1 to the decree. For Fiumicino airport, passenger boarding fees are increased to 5.17 euro for EU flights and

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7.57 euro for Extra-EU flights.

For 2010, subsection 6 of article 5 of Law Decree no. 194 of December 30, 2009, known as the “Milleproroghe” Decree, published in the Official Gazette no. 302 of December 30, 2009, extended the powers of intervention of the Ministry of Infrastructure and Transport for updating airport fees to the programmed inflation rate to December 31, 2010. It is also envisaged that the updating of the amount of fees shall not apply if the concession holders do not submit a complete application to stipulate the planning agreement by the same deadline of December 31, 2010.

Concurrently, subsection 7 of Article 5 of said Law Decree no. 194 of December 30, 2009 excluded airport tariffs for services rendered on an exclusive basis from the application of the “tariff block” regulation contained in subsection 1 of Article 3 of Law Decree no. 185 of November 29, 2008, known as the “anticris” decree, converted into Law no. 2/2009, which suspends the effectiveness of government regulations that authorise the State to issue deeds to adjust fees or tariffs to the programmed inflation rate for 2009, a term which was then extended by the same subsection 7 to apply to all of 2010.

Early introduction of airport fees

Subsections 200 and 201 of Article 2 of Law no. 191 of December 23, 2009, (Finance Law 2010), published in the Official Gazette no. 302 of December 30, 2009 authorise the early introduction by airport operators, starting from 2010, and while awaiting the signing of the planning agreements, of passenger boarding fees, within the maximum limit of 3 euro per outbound passenger, on condition that the new infrastructural investments subject to validation by ENAC are executed by way of self-financing.

In order to access this early introduction, airport operators are required to submit a suitable application to ENAC, containing the four-year development and modernisation plan and the list of urgent, non-postponable works, as envisaged by ENAC letter of December 21, 2009. The early introduction of fees is also subject to ENAC’s technical validation of the above development plan.

The early introduction of the fees shall not apply in the event that airport operators:

do not file the documentation necessary for the signing of the planning agreements within the term of six months from the date of ENAC’s technical validation of the four-year development plans;

do not sign the planning agreements within the term of 18 months from said validation;

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and, in any event, if the planned investments are not

launched according to the terms and methods set forth in the four-year plan.

On January 15, 2010 ADR submitted to ENAC its application for admission to the procedure for early introduction of fees pursuant to subsections 200 and 201 of Article 2 of the Finance Law 2010.

Regulatory developments regarding tariff regulation – Planning Agreement

Ministry for Infrastructure and Transport Decree of December 10, 2008, published in the Official Gazette no. 42 of February 20, 2009, repealing the previous Interministerial Decree 41/T, approves the Guidelines drawn up by ENAC for applying the Directive regarding the tariff system for airport services rendered on an exclusive basis.

Anti-Crisis Decree – planning agreement and navigation services

In the Official Gazette of August 4, 2009 the Conversion law no. 102 of August 3, 2009 “Corrective measures of the Anti-Crisis Decree-Law no. 78 of 2009” was published, authorising ENAC to enter into planning agreements in derogation of current regulations for airports with traffic exceeding 10 million passengers per year, introducing long-term tariff systems that, bearing in mind European levels and standards, are oriented towards costs of infrastructures and services, efficiency objectives and the criteria of adequate remuneration of investments and capital, with valid updating methods for the entire duration of the agreements.

Definition of airport management fees

The Decree of the State Property Office of December 23, 2009, published in the Official Gazette no. 302 of December 30, 2009, extended to 2012 the methods for quantifying airport management fees due to operators, previously set forth in the inter-executive decree of June 30, 2003.

EC Directive – airport fees

Directive 2009/12/EC of the European Parliament and of the Council of March 11, 2009 on airport fees (Text with European Economic Area - EEA - relevance) was published in the Official Journal of the European Union of March 14, 2009. This Directive establishes common principles for the collection of fees, and applies to airports in the Community with annual traffic exceeding 5 million passenger movements.

The Directive does not apply for the definition of handling fees and charges for assistance to passengers with reduced mobility.

This Directive provides the possibility of negotiating fees with airport users according to well-defined, periodic procedures,

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24


and establishes the creation of an independent supervisory authority, entrusted with ensuring the correct application of the measures adopted. The adjustment to the provisions of this Directive could result in the amendment of the current legal framework established by Law no. 248/05 (so-called “system requirements”) and by the CIPE Resolution no. 51/08.

Disciplinary measures for the violation of provisions of the Regulation EC no. 1107/2006 regarding the rights of persons with disabilities or persons with reduced mobility in air transport

Legislative Decree no. 24 of February 24, 2009 was published in the Official Gazette of February 24, 2009, providing specifically defined financial penalties (up to 120,000 euro) applied to both air carriers and airport operators for violations such as: refusal to board passengers with reduced mobility (PRM), failure to provide information, failure to designate reception desks in airports, failure to assist passengers with reduced mobility (PRM) and failure to provide training to personnel.

Cargo Tender

On February 17, 2009 ADR notified Flightcare Italia S.p.A. of their provisional award of the tender for the sub-concession of a portion of the Cargo building. The tender procedure was definitively concluded with the signing of the sub-concession agreement between ADR and the company awarded the tender, Flightcare Italia S.p.A., and the delivery to said company of all the assets subject of the tender, on October 22 and December 2, 2009, respectively.

Bilateral agreements

Art. 19, subsection 5 bis of Law no. 2 of January 28, 2009, published in the Official Gazette no. 22 of January 28, 2009, converting the Law Decree no. 185 of 29 November 2008, known as the “Anti-Crisis Package” commits the government to promoting “the definition of new bilateral agreements in the air transport sector, as well as the amendment of agreements in force, in order to expand the number of airline carriers authorised to operate on domestic, international and intercontinental routes, as well as to expand the frequency and number of destinations for which each party is authorised”.

Use of the Extraordinary Earnings Supplement Fund and mobility measures for ADR and companies in the ADR Group

Ministerial Decree no. 46130 of May 27, 2009 was published in the Official Gazette no. 135 of June 13, 2009, authorising the use of the Extraordinary Earnings Supplement Fund for a maximum of 80 workers of ADR, for the period from June 1, 2009 to November 30, 2009.

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Decree no. 46132 of May 28, 2009 was published in the Official Gazette no. 146 of June 26, 2009, authorising the use of mobility measures for 222 workers of ADR.

Decree no. 46128 of May 27, 2009 was published in the Official Gazette no. 136 of June 15, 2009, authorising the use of the extraordinary earnings supplement fund for 2 workers of ADR Engineering S.p.A. (“ADR Engineering”), for the period from June 1, 2009 to November 30, 2009.

Decree no. 46135 of May 28, 2009 was published in the Official Gazette no. 143 of June 23, 2009, authorising the use of mobility measures for 7 workers of ADR Engineering.

Decree no. 46136 of May 29, 2009 was published in the Official Gazette no. 143 of June 23, 2009, authorising the use of mobility measures for 5 workers of ADR Tel S.p.A. (“ADR Tel”).

3.2.4 SIGNIFICANT AGREEMENTS ENAC – Assaeroporti Preliminary Agreement

On September 26, 2009, ENAC and Assaeroporti, in the persons of their respective presidents, signed a Preliminary Agreement which summarised reciprocal commitments aimed at achieving the amicable stipulation of Planning Agreements between ENAC and airport operators, which are required by the current regulations on regulated airport income.

Taking as reference the complex legal framework on the matter of airport tariffs and acknowledging the onerousness of the preliminary investigation which led to the definition of the planning agreements with SAT and Gesac, as a primary step the parties have undertaken to perform the actions under their respective responsibilities in defined and quite contained terms.

In particular, Assaeroporti undertook to request that its members send to ENAC the documentation required to launch the standard inquiry with the Authority, and ENAC undertook, in turn, to close the inquiry within six months from the date of formal opening of the proceeding, according to the priorities it established.

Alitalia CAI S.p.A. – ADR Agreement

In mid-July Alitalia S.p.A. (“Alitalia”) and ADR signed an agreement for a new configuration of the Terminals at Fiumicino airport in Rome, and a series of structural interventions aimed at improving the airport’s operations.

The agreement sets forth a series of organisational steps for improving the quality of services.

One of the most important steps is the dedication of a Terminal (Terminal 1, already existing) “for the sole use of Alitalia and its partners in the SkyTeam Alliance”.

This dedicated Terminal will allow ADR to reconfigure and specialise both its existing Terminals and those under

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construction (new Pier C) and development (new Terminal 1 in the East Area of the airport).

Over the long term, the commitment is to place the first three piers of the East Area and the related boarding infrastructures at Alitalia’s disposal, setting aside the West Area of the airport for the other airlines.

3.2.5 QUALITY

During 2009 the monitoring of airport activities through the daily survey of the level of quality provided and perceived was continued, for a total of over 900,000 objective checks and the completion of about 18,000 questionnaires by passengers.

The study of Fiumicino airport’s quality positioning continued through participation in the international benchmark programme “Airport Service Quality” and through targeted meetings with the leading European airport management companies. The voluntary certifications programme was also developed, as a tool to support improvement.

MONITORING OF LEVELS OF QUALITY PROVIDED FIUMICINO

In 2009 passengers went through carry-on baggage security checks in under 12 minutes in 91.8% of cases. This service provided was about 2 percentage points higher than the standard published in the Service Charter.

The annual average waiting time stood at 5 minutes and 9 seconds, compared to 4 minutes and 5 seconds in 2008.

The percentage of flights with baggage delivery within the envisaged timeframe was 79.9% for the bag and 85.5% for the last bag.

The average times recorded an increase of about one minute for delivery of the first bag and about 2 minutes for the last bag, compared to the service provided in 2008.

The percentage of departing flights with delays greater than 15 minutes was 38.7% compared to 36.6% in the previous year, exceeding the standard published in the Service Charter by 13.7 points. For arriving flights, delays greater than 15 minutes were 22.7% (26.4% in 2008). As a result, the recovery of airport transit times (difference between the % of delays in arrival and departure) was negative (-16%).

The percentage of passengers that complete check-in operations within the times indicated in the Services Charter was 85.9% for domestic flights and 89.4% for international flights.

The service recorded an improvement on the previous year of 5 percentage points in the international area and 1 percentage point in the domestic area.

The times for providing the service show a decrease of an average of 1 minute for international flights, while for domestic flights the times remain substantially unchanged.

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CIAMPINO

Monitoring activities confirm the general trend of the previous year for services provided to passengers, with the exception of passenger check-in operations, which recorded worse results.

3.2.6 ENVIRONMENTAL PROTECTION

In 2009 the maintenance and development of the Environmental Management Systems (“EMS”) of Fiumicino and Ciampino airports continued according to plan.

In the month of December, the certification body Dasa - Rägister performed the periodic audit for maintenance of the ISO 14001 Environmental Management Systems certification for Fiumicino and Ciampino airports, certifying their legal compliance.

As part of training initiatives, the planned sessions were held aimed at company departments involved in the EMS. EMS monitoring, carried out by internal environmental auditors of ADR, was performed according to the plans for the period in question, contributing to identifying areas for improvement in the EMS.

3.3 ENERGY (FIUMICINO ENERGIA S.R.L. –

86.12% GEMINA)

(in millions of euro) 2009 07/01/09 – 12/31/09

REVENUES 16.9 8.2

EBIT (1.0) (1.0)

% - -

12/31/09 07/01/09

NET CAPITAL INVESTED 22.7 19.5

NET FINANCIAL INDEBTEDNESS 21.8 19.1

(amounts including Leonardo Energia) On June 30, 2009 the partial proportional spin-off of Sistemi

di Energia S.p.A. (“SdE”) was carried out, in which Gemina held 45.55%, contributing the co-generation power plant at Fiumicino to Fiumicino Energia.

Subsequently, on July 1, Gemina exchanged its shares in SdE with Edison S.p.A. (“Edison”), without adjustments, for 40.57% of Fiumicino Energia.

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28


Therefore, from July 1, 2009 Gemina holds 86.12% of

Fiumicino Energia, Finlombarda S.p.A. holds 11.25% and minor shareholders hold the remaining part.

Management of the co-generation power plant is assigned to Leonardo Energia Società consortile a r.l. (“Leonardo Energia”), 10% held by ADR and 90% by Fiumicino Energia.

The agreements entered into at that time envisage that in 2023, the co-generation power plant will be transferred free of charge to ADR.

The investment in the co-generation power plant resulted in expenditure of 24.3 million, considerably higher than the initial plan in 2005 which forecast expenditure of 18.6 million euro.

In December 2008 the first parallel connection of the Rolls Royce engines was performed, thus beginning the inspection process of the power plant.

During the inspection phase, malfunctions were detected in the engines, which were remedied through intervention by Rolls Royce within the period for entry into operation established by contract.

This situation, concurrent with the stoppage of the thermal power plant for extraordinary maintenance, resulted in a sharp deviation from the forecasts in the production plans.

As a result, Leonardo Energia had to purchase electricity from the market, also in the F1 period (maximum price), in order to meet the energy requirements of ADR, which, pursuant to the Consortium Regulations, withdrawals from Leonardo Energia the electricity and thermal energy necessary to meet its fully requirements.

As reimbursement for the charges caused by the delay in the

engines coming on stream, and agreement was reached with Rolls Royce that envisaged, among other items, the extension of the warranty from 1 to 3 years and the waiver of 10% of the price of the engines, equal to 864,500 euro.

During the year 181.0 GWh of energy was sold, of which 173.8 to ADR and 7.2 to third parties. Production was equal to 114.0 GWh, to which should be added 67.0 GWh purchased from the market.

3.4 PERFORMANCE OF COMPANIES

VALUED AT NET EQUITY OR AT

COST

3.4.1 S.I.T.T.I. S.p.A (40% GEMINA)


REVENUES 23.1 25.1 (2.0)

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29


EBIT 3.1 3.9 (0.8)

% on revenues 13.4 15.5 (2.1) 12/31/09 12/31/08 Change

NET CAPITAL INVESTED 26.7 24.0 2.7

NET FINANCIAL INDEBTEDNESS 15.7 13.7 2.0

ORDERS PORTFOLIO 20.5 18.2 2.3

NUMBER OF EMPLOYEES 95 91 4

The company operates in the sector of air traffic control communications systems.

In the second half of the year order acquisition improved, making it possible to contain the reduction in revenues recorded in the first part of the year. Orders acquired during the year amounted to 25.2 million euro, of which 12.4 million from the domestic market, and 12.8 million from abroad. In Italy, a significant amount of orders were acquired from the military sector. Orders from abroad mainly originate from Latin America.

Revenues for the year decreased from 25.1 million in 2008 to 23.1 million and, consequently, the profit (loss) for the year.

The size of the orders portfolio at the end of the year and the negotiations in progress let us foresee a better performance in 2010.

3.4.2 PENTAR S.P.A. (20.35% GEMINA)

The company carries on investments in shareholdings and provides strategic and financial consultancy to businesses.

The Extraordinary Shareholders’ Meeting held on June 16, 2008, resolved to increase the share capital, against payment, from 27,871,000 euro up to 50 million euro maximum. The capital increase has not yet been subscribed, and must be executed by December 31, 2011. Gemina will not exercise its pre-emption right.

The last approved financial statements, those for 2008, closed with a loss of 344 thousand euro.

In financial year 2009 the company did not collect dividends from its subsidiaries which, also as a result of the unfavourable economic trend, recorded a decrease in turnover and profitability.

A loss is expected on the income statement for 2009. 3.5 INVESTMENTS, RESEARCH AND

DEVELOPMENT

(in millions of euro) 2009

ADR GROUP INVESTMENTS

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30


BOARDING AREA F (EX NEW

PIER C) 12.8

CIAMPINO - INFRASTRUCTURES 6.0

TERMINAL IMPROVEMENTS 3.2

AIRPORT ROAD NETWORK 2.6

EX ALITALIA CARGO

HBS/BHS 3.4

BAGGAGE SYSTEM AND XRAY

MACHINES 5.2

CIVIL ENGINEERING

WORKS/SYSTEMS 12.6

RUNWAYS AND AIRCRAFT

APRONS 6.2

COMMERCIAL AREAS – CAR

PARKS 1.8

MAINTENANCE OF BUILDINGS

IN SUB-CONCESSION 1.3

OTHER 14.7

OTHER GROUP COMPANIES

CO-GENERATION POWER

PLANT 0.2

TOTAL INVESTMENTS 70.0

In line with the available financial resources, taking into account the constraints posed by the covenants entered into with financial institutions, investments were focused primarily on maintenance works and initiatives already in course, such as Pier C with adjoining baggage handling system (BHS), the new BHS in the ex Alitalia Cargo area and others.

Compared to the previous year, expenses for investments decreased from 111.7 million euro to 70.0 million euro.

Within the scope of the rules governing the early implementation of fees, ADR submitted to ENAC the investment plan for the four-year period 2010-2013, identifying the investments considered urgent in the two-year period 2010-2011 for which the application of early implementation was requested.

RESEARCH AND DEVELOPMENT

The Group did not carry out any specific research and development activities in 2009.

SITTI S.p.A. (“SITTI”), consolidated using the net equity method, carried out development activities in 2009, with capitalised expenses of 0.4 million euro. The company is testing new VoiP (Voice over IP) systems. This technology is based on a transmission system which transfers voice over

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31


a network which originally carried data, and allows for comprehensive management of all messaging for air traffic control.

3.6 HUMAN RESOURCES EMPLOYMENT FIGURES As at December 31, 2009 the number of staff totalled 2,552.

of which:

Executives Managers Employees Workers

Total units

Fixed-term contracts

Open-ended contracts

GEMINA 12/31/09 3 4 4 - 11 - 11 12/31/08 1 3 4 - 8 - 8

Change 2 1 - - 3 - 3

ADR 12/31/09 47 180 1,716 598 2,541 650 1,891 12/31/08 59 214 1,659 636 2,568 669 1,899

Change (12) (34) 57 (38) (27) (19) (8)

TOTAL 12/31/09 50 184 1,720 598 2,552 650 1,902 12/31/08 60 217 1,663 636 2,576 669 1,907

Change (10) (33) 57 (38) (24) (19) (5) % (16.7) (15.2) 3.4 (6.0) (0.9) (2.8) (0.3)

Considering that as at December 31, 2009, the Extraordinary

Earnings Supplement Fund is in use for 88 employees of ADR, operating staff therefore decreased by 115 compared to December 31, 2008.

Fiumicino Energia and Leonardo Energia, included in the

consolidation area from July 1, 2009, had no employees as at December 31, 2009, as the running of the power plant is outsourced to a company specializing in this sector.

SITTI, 40%-owned and not consolidated, has 95 employees, an increase of 4 compared to December 31, 2008.

ORGANISATIONAL STRUCTURES The implementation of the Restructuring Plan 2009-2014 of

the ADR Group, described in the section “INDUSTRIAL RELATIONS” below, was an opportunity to rationalize the operational models of the various organisational units. This was reflected in the decrease in the number of executive positions.

Among these, the most important change is the creation of a single centre dedicated to Operations and Maintenance in the Infrastructure Division of ADR.

The following are important to note, regarding ADR: - the creation of the INSTITUTIONAL COMMUNICATION

unit, reporting to the Chairman, with the objective of developing and consolidating institutional relations activities;

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- the redefinition of the role and responsibilities of the

INTERNAL AUDIT unit. INDUSTRIAL RELATIONS There were two highly significant events as regards Industrial

Relations: - signing of the trade union agreements for the realisation

of the Restructuring Plan 2009-2014 for 292 employees in total, including 280 from ADR and 12 from its subsidiaries.

The procedural process, following the various phases of dialogue with the trade unions on the mobility plans and the activation of the envisaged social shock absorbers in derogation, was concluded on March 23, 2009 at government level – Ministry of Labour, Health and Social Policy;

- negotiations for the renewal of the National Collective Labour Agreement (CCNL) for the entire air transport sector, expired on December 31, 2007.

The negotiations regarding Airport Management Companies, the sector which ADR belongs to, concluded on January 9, 2010 with the signing of a preliminary understanding which was thus formalized on January 26 with the signing of the contract.

The renewal of the CCNL will result in an increase in the cost of labour for the ADR Group estimated on the order of 6.4% at full implementation.

SELECTION, TRAINING AND INSTRUCTION ACTIVITIES Training and instruction activities involved 1,587 participants,

for a total of 14,540 hours provided. A significant portion of these activities were realized using

loans provided by FONDIMPRESA. Training and instruction specifically regarded the following

sectors: - behavioural training and professional development

(customer service, Kaizen method, teamwork, managing uncertainties);

- update on Legislative Decree 231/01, addressed to all executives and managers, with instruction from experts on the matter of regulation of administrative responsibility of legal persons, companies, etc.;

- specialist instruction on equipment used on runways, in aviation business management, etc.

3.7 CORPORATE GOVERNANCE INTRODUCTION

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33


The structure of corporate governance adopted by Gemina draws inspiration from the recommendations and rules contained in the Code of Conduct adopted by the Corporate Governance Committee of Borsa Italiana S.p.A., with the latest revision in 2006 (“Borsa Italiana Code”). It is our conviction that, on the one hand, having a structured system of rules allows the Company to operate according to criteria of maximum efficiency and, on the other, ensuring utmost transparency contributes to increasing the Company’s image of reliability amongst investors. In its meeting of March 27, 2007, the Gemina Board of Directors approved its own Gemina Code of Conduct (“Gemina Code”) in keeping with the main provisions of the Borsa Italiana Code.

Pursuant to article 123 bis of Legislative Decree 58/98, the Gemina Board of Directors approved the Report on the Corporate Governance and the ownership structure for 2009, available on the website www.gemina.it (corporate governance section)

The most important aspects of the annual Report on the Corporate Governance and the ownership structures are summarised below.

COMPLIANCE

As a company registered in Italy that issues shares admitted to trading on the stock exchange, and, as noted, having adopted the Borsa Italiana Code, the Gemina governance structure - based on the traditional organisational model - comprises the following bodies:

- Shareholders’ General Meeting;:

- Board of Directors that operates through (i) the Chairman within the limits of the authority vested as sole executive director and (ii) the Executive Committee assisted by the advisory Committees on internal control and remuneration and human resources;

- Board of Statutory Auditors;

- Independent Auditors.

Completing the governance are the Internal Control System, the Code of Ethics, approved by the Board of Directors in March 2004 and the Organisational, Management and Control Model, in accordance with Article 6 of Legislative Decree 231/2001, available on the web-site www.gemina.it (“Organisational Model”) approved by the Board of Directors in March 2004 and updated most recently by the Board of Directors on March 15, 2010.

Gemina has identified its subsidiary ADR as a company with strategic significance on which its exercises management and coordination activity. This decision forms part of Gemina’s mission to focus its holding business on the airport infrastructure sector, and therefore to divest its portfolio equity investments that operate in other sectors.

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34


BOARD OF DIRECTORS

The Gemina Board of Directors is appointed based on lists presented by shareholders in compliance with the provisions of Article 11 of the Articles of Association.

The table below shows the composition of the Gemina Board of Directors as at December 31, 2009; the table also contains information on the attendance of each Director at Board meetings in percentage terms, the personal and professional details of each Director, and the list the Director belongs to.

The list of other offices held by each Director is reported in attachment A) of the Report on the Corporate Governance and the ownership structures; the curricula vitae of the Directors are available on the web-site www.gemina.it (corporate governance section).

Name Office In office since List Exec. Non

exec. Indep.

Gemina Code

Indep. TUF % BoD Other

offices

GUIDO ANGIOLINI Chairman 05/07/2007 M X NA YES 100 4

GIUSEPPE ANGIOLINI Director 07/18/2007 M X YES YES 100 9

GIUSEPPE BENCINI Director 05/07/2007 M X YES YES 75 -

STEFANO CAO

Director 03/16/2009 M X NO NO 100 6

GIOVANNI FONTANA Director 05/07/2007 M X YES YES 88 -

ALESSANDRO GRIMALDI Director 05/07/2007 M X NO NO 38 19

ALDO MINUCCI

Director 05/07/2007 M X NO NO 88 11

MICHELE MOGAVERO Director 05/07/2007 M X NO NO 75 4

ANDREA NOVARESE Director 05/07/2007 M X NO NO 50 15

EUGENIO PINTO

Director 05/07/2007 m X YES YES 75 5

CLEMENTE REBECCHINI Director 05/07/2007 M X NO NO 88 3

Director Paolo Roverato resigned from his office effective from March 16, 2009. The Shareholders’ Meeting of April 28, 2009 appointed Sefano Cao as his replacement, who shall remain in office until the next shareholders’ meeting.

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The Director Alessandro Grimaldi resigned from office on February 26, 2010. On March 15, 2010, the Board of Directors acknowledged the resignation of the Director, Alessandro Grimaldi and since the Shareholders’ Meeting was set to be held shortly, did not make any decisions on his replacement.

The Board of Directors deemed that the assessment on the maximum number of offices as Director or Auditor in other companies listed in regulated markets (also foreign markets), as well as in finance companies, banks, insurance companies or companies of significant size, which might be deemed as compatible with an efficient performance of the office as Director in the Company, is first of all the task of Shareholders while proposing candidates, and then of each single Director.

The Board of Directors assigned the Chairman, Mr. Guido Angiolini, with managing powers; this choice essentially resulted from the need to ensure that the Company employed efficient operating procedures

In addition to powers entrusted by the law and the Articles of Association, the Chairman is responsible for supervision of the organizational structure of Gemina and Gemina’s external communication activities, including relationships with Institutions, supervisory bodies and Borsa Italiana S.p.A. The Chairman is also responsible for supervision of the performance of equity investments. He is also vested with the Company’s ordinary management powers, with free and several signature powers up to a limit of 1,000,000 euro for each single transaction, for the signature of agreements or the undertaking of commitments of any kind whatsoever (including, but not limited to, loans or issue of guarantees).

In addition to the Chairman of the Board of Directors, no other member of Gemina's Board is to be considered as executive.

The Board of Directors also adopted the procedure that disciplines the approval and execution of transactions with related parties, according to Article 2391-bis of Italian Civil Code and in compliance with Article 9 of the Gemina Code.

EXECUTIVE COMMITTEE

On January 31, 2008, the Board of Directors established the Executive Committee which includes the following Directors as members: Guido Angiolini, Stefano Cao (from March 16, 2009 as a replacement to the outgoing Paolo Roverato) and Clemente Rebecchini; Guido Angiolini is the chairman of the Executive Committee.

The Board, in exercising direction and coordination activities for ADR, delegated to the Executive Committee several duties, and assigned the Executive Committee the duty of assisting the Board of Directors of the Group companies in the process of approving the investment projects.

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ADVISORY COMMITTEES WITHIN THE BOARD

The Board of Directors set up the Internal Control Committee and Remuneration and human resources Committee.

The Remuneration and human resource Committee is made up of non-executive Directors, the majority of whom are independent in compliance with Article 3 of the Gemina Code, currently Giovanni Fontana (Chairman), Giuseppe Bencini and Andrea Novarese. The Remuneration and human resources Committee is responsible for drawing up proposals to the Board of Directors for the division of the remuneration resolved by the shareholders’ meeting for the entire Board of Directors and for the remuneration for Directors holding particular offices; the Committee also coordinates at Group level with the Remuneration Committee set up in ADR.

The Internal Control Committee is made up of three non-executive Directors, all independent as per Art. 3 of the Gemina Code, currently represented by Eugenio Pinto (Chairman), Giovanni Fontana and Giuseppe Angiolini, who has the same accounting and financial experience as the Chairman.

The role of the Internal Control Committee is to provide advice and forward proposals and it is responsible for assisting the Board in the definition of the control system guidelines and assessing the adequacy, efficiency and actual operation of the internal control system on a yearly basis, assessing the work plan of the Internal Control Officer, receiving periodic reports from the latter, evaluating the proposals made by the independent auditors and the work plan prepared, reporting to the Board of Directors at least every six months on the activity performed and receiving the reports of the Supervisory Body as per Legislative Decree 231/2001. The Committee is also responsible for preventatively examining the annual internal audit plans of Gemina and the Group companies and periodically examining the progress of the audits scheduled in the annual plan, the results of these interventions, the corrective actions scheduled and the implementation thereof, providing indications and suggestions if necessary.

INTERNAL CONTROL SYSTEM

In the meeting of March 25, 2004, the Board of Directors passed a motion to provide the Company with an Internal Control System, which is an essential element of the corporate governance system of the Company and its subsidiaries and plays a fundamental role in identifying, preventing and managing significant risks of the Gemina Group and safeguarding corporate assets.

The Internal Control System decreases, but cannot entirely eliminate, the possibility of erroneous decisions, human error, fraudulent violation of the control systems and unanticipated events. Therefore a good Internal Control System should provide reasonable, but not absolute, assurances that the

GEMINA GROUP

37


Company is not hindered from reaching its corporate objectives or the ordered and legitimate running of its own affairs by circumstances that can be reasonably anticipated.

In said meeting, the Board set up the Internal Control Committee assigning the duties of providing the advice and proposals set forth above.

Qualifying elements of the Control System of the Gemina Group: Tools safeguarding operating objectives:

- separation of roles in carrying out of operating activities;

- organizational structure defined in accordance with top management and documented in official organization charts;

- system of delegations and authorisations which attribute to the top management powers that are in line with the responsibilities assigned;

- system of procedures for the correct carrying out of corporate

processes;

- adequate tracking of the activities carried out;

- Code of Ethics, that defines the fundamental principles and values of the corporate ethics, and the rules of behaviour with respect to these principles.

Tools safeguarding compliance objectives:

- Legislative Decree 231/2001: the Company has adopted an Organisational Model, pursuant to Legislative Decree no. 231/2001. The Board of Directors assigned the Supervisory Body with ensuring correct operation of the Organisational Model and updating it;

- Law 262/2005 as amended (“Law on Savings”) with respect to accounting and financial disclosures: the Company adopted an administrative-financial governance model in accordance with the Law on Savings;

- data security: the Company has a system of organisational procedures and structures aimed at managing data security (for the purposes of the legislation on Privacy);

- other rules and regulations: the Managers of the various Departments monitor development and compliance with the laws and regulations of their areas of competence.

Tools safeguarding the reporting objectives:

- accounting and financial statement disclosures: the Company has an accounting manual and administrative-accounting procedures which govern the processes of the collection, processing, representation and issuing of the corporate information;

- privileged information: the Company has adopted a procedure

for the treatment of privileged information which, in line

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with the indications of the Code of Conduct in the matter of Internal Dealing, provides that the management and outgoing communication of documents and information concerning the company and the Group takes place in compliance with the requirements for correctness, clarity and parity of access to the information.

The Board identified the Chairman of the Board of Directors as the executive Director in charge of supervising the operations of the Internal Control System and appointed the Internal Control Officer.

The Internal Control Officer is responsible for ensuring that internal and external regulations are observed and for implementing, through the internal audit department which he manages, activities aimed at identifying specific risk areas, and setting up monitoring and control activities for this purpose. For reasons pertaining to the streamlined nature of Gemina’s organisational structure, the manager of the internal audit department uses the services of an independent risk consulting company for some operating activities.

At the meeting held on March 25, 2004, the Board of Directors approved the Organisational Model which is based on the Confindustria and Assonime guidelines and Italian best practice, aiming to avoid the possibility of committing significant offences according to the decree and, as a consequence, the administrative responsibility of the Company.

The Organisational Model, amended over the years to update it in accordance with new provisions of the law, comprises a general part that includes a description of the contents of Legislative Decree 231/2001 among other things, the objectives and functioning of the Organisational Model, the duties of the Supervisory Body, and the disciplinary rules, and seven separate “Special Parts” that cover the different types of illegal actions envisaged by Legislative Decree 231/2001.

Special Parts Nos. 6 and 7 were introduced by the Board of Directors on March 15, 2010, and the general part of the Organisational Model was also amended to introduce the categories of crimes added by Legislative Decree 231/2001 including computer crimes, organised crime, counterfeiting, false legal tender, stamp duty or instrument identification crimes, crimes against industry and commerce, crimes relating to copyright infringement, crimes regarding the failure to testify or bearing false testimony before court authorities.

The Board of Directors meeting of November 13, 2009 decided to transform the Supervisory Body from a monocratic body to a collegial body, appointing Renato Colavolpe (Chairman), Giuseppe Angiolini and Luigi Manganelli as members. They all have the necessary requirements pursuant to the law. The Supervisory Body is subject to regulations that

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govern its operation and identify the powers, duties and responsibilities assigned in particular, in compliance with the principles set out in the Organisational Model.

BOARD OF STATUTORY AUDITORS

The Board of Statutory Auditors is made of up three statutory auditors and three alternate auditors. The Board of Statutory Auditors is appointed based on lists presented by shareholders in compliance with the provisions of Article 20 of the Articles of Association.

The table below shows the composition of the Gemina Board of Statutory Auditors as at December 31, 2009; the table also contains information on the attendance of each Auditor at the Board meetings in percentage terms, the personal and professional details of each Auditor, and the list the Auditor belongs to. The list of other offices held by each Auditor in listed companies is reported in attachment C) of the Report on the Corporate Governance and the ownership structures; the curricula vitae of the Auditors are available on the web-site www.gemina.it (corporate governance section).

Name Office In office since List

Indep. from Code

% attend meetings

Other offices held in listed companies

LUCA AURELIO GUARNA Chairman 04.28.2009 m YES 100 1

MAURIZIO DATTILO

Statutory Auditor 04.28.2009 M YES 100 -

GIORGIO OLDOINI

Statutory Auditor 04.28.2009 M YES 100 1

The table hereunder shows the Auditors who left their office during 2009. The table also includes information on the period in which the outgoing Auditors remained in office, as well as the percentage of attendance of each Auditor at the meetings of the Board of Statutory Auditors and personal and professional details of each Auditor.

Name Office In office from/to List

Indep. from Code

% attend meetings


GUIDO ZANIN Chairman 09.01.2008-04.28.2009 m YES 100 1

VITTORIO AMADIO Statutory Auditor 05.04.2006-04.28.2009 M YES 100 1


Pursuant to Art. 8, subsection 7 of Legislative Decree 303/2006, the Gemina Shareholders’ Meeting held on May 7, 2007, elected to extend the appointment of Deloitte & Touche S.p.A. to audit the financial statements, including the consolidated financial statements, to audit on a limited basis the half-year report and to carry out the other activities provided by Art. 155 of the TUF, for the period 2007-2012.

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40


CHANGES THAT OCCURRED AFTER THE END OF THE PERIOD

On January 31, 2010, the working relationship with Mr. Mario Sisto was terminated. He had been appointed on May 1, 2009 as Manager in charge of preparing corporate accounting documents.

In its meeting of February 5, 2010, the Board of Directors decided to appoint Ms. Alessandra Bruni, the Administration, Finance and Control Manager of Gemina as the Manager in charge of preparing corporate accounting documents. She has the honourability requirements provided by Art. 147quinquies of the TUF in addition to the professional competence requirements provided under Art. 19 of the Articles of Association.

As noted previously, the Director Alessandro Grimaldi resigned from office on February 26, 2010. On March 15, 2010, the Board of Directors acknowledged the resignation of the Director, Alessandro Grimaldi and since the Shareholders’ Meeting was set to be held shortly, did not make any decisions on his replacement.

3.8 INFORMATION ABOUT RISKS

AND UNCERTAINTIES

SPECIFIC RISKS OF GEMINA ASSOCIATED WITH ITS ACTIVITY In view of the fact it is an investment holding company, the

results of the parent company Gemina are affected by the results of the investee companies and, in particular, by the dividends they distribute.

With reference to the subsidiary ADR, which represents 97% of total assets, the distribution of dividends is conditions not only by the results achieved, but also by observance of the financial covenants provided for by the company’s loan agreements.

Indeed, failure to observe these covenants entails activating measures to safeguard financers, including the impossibility to distribute dividends.

Also the trigger event status determined by the rating level in which ADR finds itself since November 2007 is a condition that hinders distribution of the dividends, and it can be removed only after the company recovers its rating.

SPECIFIC RISKS OF ADR ASSOCIATED WITH ITS ACTIVITY ADR manages the Rome airport system, made up of the

Fiumicino and Ciampino airports, as a concession regulated by Agreement no. 2820 of June 26, 1974 signed with the Ministry of Transport, expiring on June 30, 2044.

The above-mentioned agreement sets a series of obligations the operator must accept and also clearly expresses the causes of cancellation or repeal of the concession, mostly attributable

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41


to cases of unfulfilment.

The ADR Group carries out its activity in a highly regulated sector on the national, European Community and international level.

The extended situation of uncertainty relating to the complexity of the procedure for achieving a satisfactory regulatory and tariff system, is an important risk factor that affects the Group’s future economic and financial balance.

The results of the ADR Group are also strongly conditioned by the air traffic trend at the Fiumicino and Ciampino airports, which is in turn conditioned by:

- the economic trend; - flight operations of the single airline companies on which

also the economic-financial conditions of the single airlines make an impact;

- alliances between carriers; - competition on some routes from of alternative means of

transport (e.g. High Speed railway Rome-Milan); - wars, acts of terrorism and aircraft accidents that

negatively influence the propensity to travel, whether for business or for pleasure.

In any case, it should be pointed out that thanks to the attractiveness of Italy and of Rome in particular, the Fiumicino airport has shown an enormous recovery capability following significant negative events (such as the war in Iraq, the Twin Towers attack, bird flu epidemic, etc.).

CREDIT RISK Credit risk is the risk that a customer or a counterpart of a

financial instrument causes a financial loss by not fulfilling an obligation.

The maximum theoretical exposure to the credit risk for the Group as at December 31, 2009 is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments.

The greatest exposure to credit risk is that of the ADR Group

for trade receivables due from customers. The commercial policies that the ADR Group has

implemented aim at controlling investments according to the following guidelines:

- requests for payments in cash for commercial transactions carried out with end customers (sales in directly-managed shops, multi-storey and long-term car parks, first aid, etc.) with occasional counterparts (for example, for baggage tagging, porterage, managing access to taxi service, etc.);

- requests for payment in cash in advance from occasional

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42


carriers or those without suitable creditworthiness or collateral guarantees;

- granting of extension of payment terms to customers deemed reliable (carriers with medium-term flight schedules and holders of sub-concessions) while, however, monitoring their creditworthiness and requesting collateral guarantees.

For a quantitative analysis of credit risk and of the policies

implemented to manage it, please refer to note 41 of the Consolidated Financial Statements – Explanatory Notes.

LIQUIDITY RISK Liquidity risk may occur when it is impossible to obtain, at

fair conditions, the financial resources necessary to the Groups business.

The main factor determining the Group’s liquidity position consists of the resources generated or absorbed by the operating and investment activities.

The financial structure of the Group is distinguished by a significant incidence of the financial leverage component. As a consequent, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, with a view to the future, by the need to repay debt tranches coming due.

The current medium/long-term loan agreements of both the

parent company Gemina and of ADR foresee not only ADR being subject to rating, but also numerous series of control measures to guarantee priority allocation of the cash generated for the debt service.

These measures become more stringent when, as is the current situation, the level of the rating or several agreed financial indicators fail to reach specific minimum thresholds.

The current rating assigned to ADR prevents it from taking out additional indebtedness without specific authorisation from it financial creditors. Therefore, any contingent additional need for financial resources deriving from the management of working capital or from investments can be covered by a significant amount of cash, in addition to a revolving facility of 100 million euro (currently not used) specifically aimed at supporting this type of need.

The revolving facility is currently useable in observance of the conditions set forth in the “Revolving and Term Loan Facility Agreement”. It is noted that the restrictions applied include that regarding the trigger event, which, however, has been derogated from as a result of the waiver obtained on September 16, 2009.

The priority allocation of the cash generated to the debt service and the aforementioned restrictive control measures for the use of financial resources limit the Group’s operating

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43


and investment flexibility.

Gemina’s treasury is managed in coordination with those of Fiumicino Energia and Leonardo Energia.

In ADR, the centralised treasury in place with several subsidiaries, regulated at market terms, permits the optimisation of the management of financial resources and facilitates the settlement of intercompany commercial relations.

For a quantitative analysis of liquidity risk and of the policies

implemented to manage it, please refer to note 41 of the Consolidated Financial Statements – Explanatory Notes.

INTEREST RATE RISK The Group uses outside financial resources in the form of

debt. Fluctuations in the market interest rates have an impact on

the cost of the various types of loans, affecting the extent of financial expenses.

To hedge these risks, the Group uses derivative instruments, with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuations on the economic result.

Specifically, the Group uses interest rate swaps, interest rate caps, and interest rate collars to hedge its exposure to unfavourable changes in market interest rates.

For a quantitative analysis of interest rate risk and of the

policies implemented to manage it, please refer to note 41 of the Consolidated Financial Statements – Explanatory Notes.

EXCHANGE RISK The Group uses foreign currency hedging derivatives in order

to mitigate any future increases in the outgoing cash flow attributable to unfavourable changes in the exchange rate.

As far as commercial transactions are concerned, the Group bears a negligible exposure to the risk deriving from the fluctuation of exchange rates as the transactions in non-EU currencies are attributable to some supplies of goods and services of an insignificant amount.

The financial indebtedness, expressed in currency other than the Euro (Tranche A4 in Pounds Sterling), was covered by a currency swap in Euro.

For a quantitative analysis of exchange risk, please refer to

note 41 of the Consolidated Financial Statements – Explanatory Notes.

RISKS ASSOCIATED WITH CURRENT LOAN AGREEMENTS GEMINA In December 2008 Gemina contracted a 70 million euro loan

with Mediobanca and Unicredit Mediocredito Centrale S.p.A.

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44


50 million euro of this loan was aimed at the repayment of the residual amount of the Bridge Loan, contracted in 2007, 15 million euro to the payment of interest due and 5 million euro to cover current expenses of the company.

The agreement includes the right of withdrawal for the financers in the event that ADR is given a credit rating lower than BB-/Ba3 by Standard & Poor’s and Moody’s, or at least one of the two agencies. Currently, ADR’s ratings are BB with a stable outlook, but under “credit watch with negative implications” for Standard & Poor’s and Baa3 with negative outlook for Moody’s.

A change in the interest rate is planned in the event of the downgrading of ADR.

Gemina is committed to allocating the income from the disposal of equity investments, the collection of dividends and other payments to the repayment of debt.

The loan is backed by a senior pledge on ordinary shares of ADR representing at least 35% of the share capital, and will be adjusted according to a formula defined in the contractual documents, linked mainly to the performance of the Gemina share.

As at December 31, 2009, just as at February 28, 2010, ADR shares used as guarantee numbered 21,808,430.

Gemina has undertaken the following commitments towards the Unicredit Group, in relation to the financial indebtedness transferred by SdE to Fiumicino Energia as a result of the spin-off:

- waiving the distribution of dividends for the Fiumicino Energia 2009 and 2010 financial statements;

- maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in the Fiumicino Energia financial statements;

- issuing guarantees for 6 million euro and a pledge on the entire quota equal to 86.12% of Fiumicino Energia as guarantee of the loans.

AEROPORTI DI ROMA Covenants The contractual structure of ADR’s bank loans and of the

bonds issued by Romulus Finance S.r.l. (“Romulus”), guaranteed by a monoline insurance policy, includes a series of specific covenants having the aim of:

- safeguarding the preservation of adequate rating levels; - preventing the rights granted to each creditor from being

determined in ways other than according to the pre-established rules.

These contractual clauses are fully described in note 32 of the Explanatory Notes to the Consolidated Financial Statements, regarding “Guarantees and major covenants on payables”.

In particular, it should be stressed that the loan agreements

GEMINA GROUP

45


provide for a series of financial control ratios (calculated on a historic and perspective basis) that measure: (i) the ratio between cash flow available and debt service (DSCR – Debt Service Coverage Ratio), (ii) the ratio between future discounted cash flows and net indebtedness (CLCR – Concession Life Cover Ratio), in addition to (iii) ratio between net indebtedness and EBITDA (Leverage Ratio).

These ratios are checked twice a year, on two of the four dates serviceable for making payments regarding the debt service (application dates) – March 20 and September 20 – by applying the calculation formulas to the figures of reference of the financial statements as at December 31 and of the half-year report as at June 30.

If the aforementioned ratios surpass certain levels, it may

result in the distribution of dividends (if surplus cash is available) and recourse to further indebtedness at higher levels; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default.

With reference to the ratio more sensitive to the short-term

changes of the generated cash flows and amount of debt service to be met in each control period, a table summarising various threshold values of the DSCR and relevant contractual consequences established is provided below.

Level Condition >= 1.7 ADDITIONAL DEBT

>= 1.5 DISTRIBUTION OF DIVIDENDS

<1.25 TRIGGER EVENT

<1.1 DEFAULT

The financial ratios, formalised in September 2009 by ADR

based on the half-year data as at June 30, 2009, certified the values at a level greater than the minimum requirements to maintain ordinary operating conditions of the company, with the exception of the possibility to increase the gross debt (however this was already imposed by the trigger event condition set off following the downgrading by Standard & Poor’s in November 2007).

The loan agreements also provide for events that cancel the

benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics.

Rating The loan agreements are subject to rating by Standard &

Poor's and Moody's. The cost of debt and of the insurance guarantee of the

monoline AMBAC are, effectively, tied to the rating assigned to ADR by the two agencies. Moreover, if the rating goes

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46


below the minimum thresholds, which are contractually defined, this causes the financial creditors to set up tighter cash flow control, implemented by introducing additional obligations affecting the Company’s managerial flexibility (known as “trigger events”).

In relation to the assigned rating, ADR is still subject to the trigger event and cash sweep restrictive regime previously implemented following the downgrading of the rating assigned by Standard & Poor’s on November 30, 2007 (from BBB stable to BBB- stable) as described in more detail in note 32 of the Explanatory Notes to the Consolidated Financial Statements.

On September 22, 2009 Moody’s confirmed ADR’s rating at investment grade level Baa3, but modified the outlook from stable to negative.

According to the Agency, this change in outlook reflects the increase in financial risk deriving from the reduction in traffic volumes and from the risks linked to ADR’s debt structure.

On October 1, 2009, Standard & Poor’s placed the rating of ADR set on April 10, 2009 (BB with stable outlook) under “Credit Watch with negative implications” due to the risks related to the failure to replace AMBAC – which no longer has the minimum rating requirements – as the swap counterpart to Romulus.

As a result of the recent negative evolution of the rating, the Agencies’ ratings of the monoline policy have reached a level even lower than that of the secured debtor (Romulus/ADR).

Due to this new situation, AMBAC, the counterpart to Romulus in the exchange risk and interest rate risk hedging swap on the Pound Sterling bond tranche (A4), must be substituted or counter-guaranteed by a new counterpart with a suitable rating.

This substitution constitutes an obligation for AMBAC while, currently, Romulus only has the right to terminate the swap (Termination) by paying the counterpart the market value of the contract.

Market conditions did not facilitate a quick solution, and only in the last part of the year were initiatives undertaken by the parties involved which provide reasonable certainty of resolving the substitution in the first part of 2010.

The high market value of the swap and the potential negative impact on cash that would derive from the voluntary or automatic exercise of the “Termination” are assessed by the two Agencies - Standard & Poor’s in particular – as an increased element of potential financial risk.

COMPLIANCE RISK As a listed Company in Italy, and in view of the structural

characteristics of the business sector in which it operates, Gemina is exposed to risk factors set out in Italian Legislative Decree 231/2001.

From an analysis made on the Company’s operations, it is

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47


found that the potential risks that it may be subject to and the relevant “Sensitive Processes” are those concerning several crimes against Public Administration and company crimes.

With reference to the regulations mentioned above (Italian Legislative Decree 231/2001 on administrative responsibility of corporate bodies), the company has adopted an Organisation, Management and Control Model that is constantly updated to the most recent new rules introduced, and in order to take into account recent instructions provided by legislation and legal interpretations regarding the liability of corporate bodies.

This Model has been disclosed to all company staff and is periodically checked in order to ensure it is correctly applied.

The subsidiary ADR adopted its own Organisation, Management and Control Model which is updated and disclosed as above.

3.9 EQUITY, ECONOMIC AND

FINANCIAL HIGHLIGHTS

FOR THE GEMINA GROUP

3.9.1 ECONOMIC POSITION


REVENUES 570.9 582.2 (11.3)

CONSUMPTION AND OTHER OPERATING COSTS (222.9) (269.6) 46.7

VALUE ADDED 348.0 312.6 35.4

STAFF COSTS (142.8) (119.6) (23.2)

EBITDA 205.2 193.0 12.2

AMORTISATION AND DEPRECIATION (142.1) (138.6) (3.5)

EBIT 63.1 54.4 8.7

FINANCIAL INCOME (EXPENSES) (81.3) (101.0) 19.7INCOME(CHARGES) FROM EQUITY

INVESTMENTS (1.8) (0.6) (1.2)PROFIT OF CURRENT ASSETS BEFORE

TAXATION (20.0) (47.2) 27.2

INCOME TAX (20.0) (6.0) (14.0)NET INCOME FROM DISCONTINUED

OPERATIONS - 19.3 (19.3)PROFIT (LOSS) ATTRIBUTABLE TO MINORITY

SHAREHOLDERS (0.8) (0.1) (0.7)

PROFIT (LOSS) ATTRIBUTABLE TO THE

GROUP (39.2) (33.8) (5.4)

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48


NET EARNINGS PER SHARE: (0.027) (0.023) (0.004)

Revenues amounted to 570.9 million euro and almost fully

derive from the activities of the ADR Group. In comparison with 2008, consumption and operating costs,

equal to 222.9 million euro, decreased both due to the lower volumes of activity and as a result of the reduction in costs for consulting, marketing contribution, utilities and services.

2008 included 42.4 million euro losses on receivables due from Alitalia under extraordinary administration.

Staff costs rose by 23.2 million euro essentially as an effect of the restructuring costs.

The reduction in interest rates near the end of the previous

year, as well as the effects of ADR’s partial restructuring of debt implemented in March 2008 and finished in the month of June, involving refinancing at more favourable conditions resulted in the containment of net financial expenses for the period at 81.3 million euro, recording a reduction of 19.5% compared to 2008.

The Group closed 2009 with a loss of 39.2 million euro

attributable to the Group, compared to a loss of 33.8 million euro in 2008.

This result reflects the decrease in traffic and is also affected, as already mentioned, by the restructuring plan costs in addition to the allocations to provisions for the risk linked to the litigation with the Customs Agency.

3.9.2 FINANCIAL POSITION

(in millions of euro)12/31/2009 12/31/2008 Change

FIXED ASSETS 3,435.1 3,491.1 (56.0)

NET WORKING CAPITAL 38.2 (5.9) 44.1RISK, CHARGES AND EMPLOYEE SEVERANCE

INDEMNITIES (325.8) (314.6) (11.2)

NET CAPITAL INVESTED 3,147.5 3,170.6 (23.1)

FINANCED BY:

SHAREHOLDERS’ EQUITY 1,722.4 1,770.4 (48.0)

NET FINANCIAL INDEBTEDNESS 1,425.1 1,400.2 24.9

TOTAL 3,147.5 3,170.6 (23.1)

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49


Net working capital increased by 44.1 million euro. The financial tension which characterised the air

transportation sector resulted in an increase of 36.8 million euro in trade receivables.

The increase in working capital was also affected by the “deferred tax assets”, which rose by 8.8 million euro, and to the reduction of 21.9 million euro in trade payables as a result of the drop in investments.

The increase of 11.2 million euro in “Risk, charges and

employee severance indemnities” is due to the effect of the allocations for restructuring costs, litigation and tax liabilities and to the reduction of employee severance indemnities due to the exit of resources linked to redundancy and mobility.

Shareholders’ equity decreased due to the loss for the period

and the change in the derivative fair value hedging reserve. 3.9.3 NET FINANCIAL POSITION


A. CASH AND CASH EQUIVALENTS 149.3 144.2

OTHER RECEIVABLES - FINANCIAL ASSETS 55.5 49.6

FINANCIAL DERIVATIVES 0.5 3.4

B. FINANCIAL ASSETS 56.0 53.0

C. TOTAL CURRENT FINANCIAL ASSETS (A) +(B) 205.3 197.2

D. TOTAL NON-CURRENT FINANCIAL ASSETS 1.4 1.4

E. CURRENT FINANCIAL LIABILITIES (28.8) (20.7)

F. FINANCIAL DERIVATIVES (157.7) (152.7)

G. TOTAL CURRENT FINANCIAL LIABILITIES (E) + (F) (186.5) (173.4)

H. FINANCIAL INDEBTEDNESS (347.8) (338.9)

I. OUTSTANDING BONDS (1,097.5) (1,086.5)

L. TOTAL NON-CURRENT FINANCIAL LIABILITIES (H) + (I) (1,445.3) (1,425.4)

NET FINANCIAL INDEBTEDNESS (C) + (D) + (G) + (L) (1,425.1) (1,400.2)of which:

CURRENT NET FINANCIAL ASSETS (C) +(G) 18.8 23.8

Financial indebtedness, net of SITTI, consolidated using the

Net Equity method as at December 31, 2009, amounted to 15.7 million euro. As at December 31, 2008 the amount was

GEMINA GROUP

50


13.7 million euro.

3.9.4 RECONCILIATION BETWEEN

THE RECLASSIFIED STATEMENTS AND THE FINANCIAL STATEMENTS

The items of the Profit and Loss Account and of the Balance Sheet can be deduced from the financial statements, considering the following:

Fixed assets – Comprises: - “Non-current assets”, with the exclusion of “Invested

receivables”, “Deferred tax assets”, “Other non-current assets” and “Other non-current financial assets”.

Net working capital - Comprises: - “Current assets”, with the exclusion of “Financial

instruments - derivatives”, “Other current financial assets” and “Cash and cash equivalents”;

- the following items under “Non-current assets”: “Invested receivables”, “Deferred tax assets” and “Other non-current assets”;

- the following items under “Current liabilities”: “Trade payables”, “Current tax liabilities” and “Other current liabilities”;

- the following items under “Non-current liabilities”: “Deferred tax liabilities”;

- “Assets held for sale”; - “Liabilities held for sale”. 3.10 GEMINA S.P.A. 3.10.1 ECONOMIC POSITION


INCOME (CHARGES) ON EQUITY INVESTMENTS (3.7)

21.0 (24.7)

NET FINANCIAL INCOME (EXPENSES) (3.2)

(4.1) 0.9

REVENUES 0.9

0.5 0.4

OPERATING COSTS (7.7)

(4.6) (3.1)

PRE-TAX PROFIT (LOSS) (13.7)

12.8 (26.5)

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51


INCOME TAX (0.4)

1.1 (1.5)

NET PROFIT (LOSS) FOR THE YEAR (14.1)

13.9 (28.0) The charges on equity investments derive from Fiumicino

Energia, SITTI and Pentar S.p.A. (“Pentar”). The reductions in interest rates and in financial indebtedness

contribute to reducing financial expenses compared to the previous year.


INTEREST INCOME 0.8 1.3 (0.5)

INTEREST EXPENSE (3.4) (4.4) 1.0

OTHER FINANCIAL EXPENSES (0.6) (1.0) 0.4

NET FINANCIAL INCOME (EXPENSES) (3.2) (4.1) 0.9 Operating costs net of revenues were contained. These include

provisions for the surety granted to ADR for 3.1 million euro. Income taxes include allocations of 1.7 million euro in relation

to a tax audit by the Revenue Office regarding the year 2006. 3.10.2 FINANCIAL POSITION

(in millions of euro) 12/31/2009 12/31/2008 Change

FIXED ASSETS 1,856.5 1,858.0 (1.5)

NET WORKING CAPITAL 5.6 29.7 (24.1)

RISK, CHARGES AND EMPLOYEE SEVERANCE INDEMNITIES (11.1) (6.3) (4.8)

NET INVESTED CAPITAL 1,851.0 1,881.4 (30.4)financed by:


NET FINANCIAL INDEBTEDNESS 31.6 47.2 (15.6) The collection of receivables deriving from tax consolidation

reduced working capital and financial indebtedness.

FIXED ASSETS


ADR 1,835.5 1,835.5 -

SdE - 7.4 (7.4)

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52


FIUMICINO ENERGIA 7.7 - 7.7

SITTI 5.0 6.0 (1.0)

PENTAR 3.6 4.7 (1.1)

TOTAL EQUITY INVESTMENTS 1,851.8 1,853.6 (1.8)

INVESTED RECEIVABLES 4.6 4.3 0.3

OTHER TANGIBLE AND INTANGIBLE FIXED ASSETS 0.1 0.1 -

TOTAL 1,856.5 1,858.0 (1.5)

The equity investment in SdE was transferred to Edison in

exchange for the equity investment in Fiumicino Energia.

NET WORKING CAPITAL


TRADE RECEIVABLES 0.4 4.4 (4.0)

RECEIVABLES FROM TAX CONSOLIDATION 13.4 21.2 (7.8)

PREPAID TAXES 2.0 0.9 1.1

TRADE PAYABLES (0.4) (0.6) 0.2

OTHER CURRENT ASSETS/LIABILITIES (9.8) 3.8 (13.6)

TOTAL 5.6 29.7 (24.1)

Trade receivables deriving from previous years, already factored with recourse together with receivables originating from tax consolidation reduced working capital by 24.1 million euro.

3.10.3 NET FINANCIAL POSITION



B. OTHER FINANCIAL ASSETS 1.6 0.3


D. TOTAL NON-CURRENT FINANCIAL ASSETS 1.4 1.4


GEMINA GROUP

53




H. FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE (47.0) (46.7)

L. TOTAL NON-CURRENT FINANCIAL LIABILITIES (H) (47.0) (46.7)

NET FINANCIAL INDEBTEDNESS (C)+(D)+(G)+(I) (31.6) (47.2)of which:

CURRENT NET FINANCIAL ASSETS (LIABILITIES) (C) +(G) 14.0 (1.9)

Using the cash deriving from the collection of tax receivables

it was possible to cover current expenses also in the absence of income from investee companies.

3.11 INTERCOMPANY RELATIONS

AND TRANSACTIONS WITH

RELATED PARTIES

INTERCOMPANY RELATIONS

Relations with subsidiaries and associated companies are governed at market terms and conditions, taking account of services rendered.

Specifically, please note the following:

- bond issue of the associated company SITTI on June 30,

2006 for 1.4 million euro, expiring on June 30, 2010;

- loan to Fiumicino Energia pursuant to the contract stipulated on December 4, 2009 for a total amount of 2 million euro which, as at December 31, 2009 amounted to 1.5 million euro, disbursed upon request in the form of a giro account;

- agreement for the provision of services to Fiumicino Energia within the company’s business and administration activities.

The agreements with the SdE Group were terminated during the year, due to the transfer of the Group to Edison;

- general service supply agreement rendered by SdE, until

August 31, 2009;

- rent agreement for the equipped area with ADR;

- tax consolidation agreements with ADR, ADR Tel, ADR

Engineering and ADR Sviluppo S.r.l.;

- contract for the provision of e-mail services by ADR Tel;

- staff secondment agreement with ADR. TRANSACTIONS WITH RELATED PARTIES In compliance with the recommendations contained in the

GEMINA GROUP

54


CONSOB notices of February 20, 1997 and February 27, 1998, it is hereby stated that there is no evidence of transactions with “related parties” which are irregular or unusual, alien to customary business management or such as to have a significant impact on the economic and financial position of Gemina.

Transactions which have been established with “related parties” fall under the customary management of business activities and are settled on the basis of market conditions.

More specifically, reference should be made to:

- the cash loan agreement made on December 11, 2008, by and between Gemina, as borrower, Mediobanca as agent, mandated lead arranger, bookrunner and initial lender, Bayerische Hypo – und Vereinsbank AG, Milan Branch as mandated lead arranger and bookrunner and UniCredit MedioCredito Centrale as initial lender for a maximum amount of 70 million euro, with a maximum duration of 3 years;

- hedging contracts with notional value of 35.6 million euro, relating to the above loan, entered into with Mediobanca and UniCredit;

- a fixed-term current account contract in favour of Mediobanca, established for the settlement of cash flows as part of the loan transaction;

- guarantees of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing S.p.A.;

- guarantees for a maximum of 2 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the loan agreement entered into with UniCredit MedioCredito Centrale;

- subscription of a joint deed of pledge on the entire share, equal to 86.12% of the share capital, held in Fiumicino Energia as guarantee of all receivables deriving from the lease agreement entered into with UniCredit Leasing.

3.12 MAJOR SUBSEQUENT EVENTS

ADR submitted to ENAC its application for admission to the procedure for early introduction of fees pursuant to Article 2 of the Finance Law 2010.

Following the formal validation of the urgent, non-postponable works for Fiumicino airport, on March 5, 2010 ENAC sent to the Ministry for Infrastructure and Transport the proposal of early implementation of fees.

GEMINA GROUP

55


In application of the contractual commitments with Financial Institutions, said Institutions were presented with the 2010-2020 ten-year plan, which limits investments in the Fiumicino Sud area and implements the current Interministerial Committee for Economic Planning (CIPE) regulations on tariffs. This was done while waiting for the new planning agreement, which implements the legislative derogations from the CIPE regulations, to permit the launch of the Fiumicino Nord project.

The Lazio Tax Commission, in its meeting on February 17, examined ADR’s appeal against the assessment of the Customs Agency which is currently being collected by way of instalments up to May 3, 2012, for a total amount of 25 million euro.

At the date of approval of the financial statements by the Board of Directors of ADR, the decisions taken by the Rome Regional Tax Commission were not known. While the company firmly maintains its conviction regarding the lack of grounds of the positions expressed by the prosecution, in the event of total or partial negative outcome, it was considered prudent to allocate provisions equal to 50% of the amount assessed as taxes by the Tax Collector’s Office. This allocation takes into account two positive, but uncertain, elements. The first is that the company may not lose at least the part of the assessment carried out on a statistical-deductive basis, and the second regards the existence of sureties issued at the time by Gemina, Falck S.p.A. and Impregilo S.p.A. for a portion totalling 51% of the sanction applicable when the case has reached the court of last instance.

Assaeroporti and the trade unions renewed the National Collective Labour Agreement for Air Transport and Airport Activities ground personnel, which had expired on December 31, 2007, and is now valid until December 31, 2011.

The contract includes the payment of a one-off compensation for the previous period, which, in ADR’s financial statements, was already allocated to an increase in staff costs estimated on the order of 6.4% once fully implemented.

On February 24, 2010 ADR submitted a request for waiver, containing the following, in brief:

- not applying the cash sweep requirement at the application dates of March 2010 and September 2010, inclusive;

- ADR is authorised to refinance the 170 million euro Bank Loan until the application date of September 2011, inclusive;

- until the application date in September 2010, inclusive,

GEMINA GROUP

56


none of the restraints resulting from the occurrence of the trigger event shall be applied, except for the following: distribution of dividends, independent auditing and disclosure obligations;

- if the previous conditions are accepted, at the application date of September 2010, ADR shall make available the greater amount between 45 million euro and 80% of the Surplus Cash available at that date to repay the Bank Loan (25%) and securitize Tranche A1 of Romulus (75%).

It is noted that starting from December 2009, in the presence of an increasing – but not yet current – default risk of AMBAC, ADR – with the support of Mediobanca and The Royal Bank of Scotland – launched a procedure for identifying a Financial Institution which could substitute AMBAC as the counterpart to Romulus in the CrossCurrency Swap relating to Tranche A4 of the bonds denominated in GBP.

At the end of the second phase of the process, which concluded on February 8, 2010, Unicredit MCC submitted the most cost-effective bid. On February 12, 2010 AMBAC formally notified ADR that it accepted Unicredit MCC’s economic bid for substitution.

The substitution of AMBAC with Unicredit MedioCredito Centrale, according to the currently hypothesised contractual structure, will not result in any economic or financial effects for the Group.

On March 3, 2010 Gemina was served, on request of RCS Mediagroup S.p.A. (“RCS”), with a writ of summons for a third party in the proceedings instigated by Mr. Angelo Rizzoli against RCS, Intesa San Paolo S.p.A., Mittel S.p.A., Edison and Giovanni Arvedi. Mr. Rizzoli formulated a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs.

The events date back to 1974-1986.

RCS fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS derives, due to the known spin-off stipulated in 1997.

Provisionally, and on the basis of the elements it is currently aware of, Gemina deems Mr. Rizzoli’s claims to be completely groundless, and shall appear in court within the terms provided.

On March 9, 2010 ADR requested that ENAC issue a formal notice for the purpose of launching the process for signing the planning agreement in derogation pursuant to Article 17, subsection 34 bis of Legislative Decree no. 78 of July 1, 2009,

GEMINA GROUP

57


converted, with amendments, into Law no. 102 of 2009.

3.13 BUSINESS OUTLOOK

The global recovery in air traffic is expected to gain strength during the year, accompanied by the general recovery in economic activity.

Nonetheless, the traffic volumes are expected to remain lower than those of 2008.

In the period January-February, traffic in ADR's airports showed the following trend and the following changes compared to the same period of 2009:

Domestic International Total

PASSENGERS 1,864,588 3,284,608 5,149,196

% Change 4.4 11.7 8.9

MOVEMENTS 24,287 31,739 56,026

% Change (6.6) 3.5 (1.1)

TONNAGE 1,525 2,800 4,325

% Change (3.8) 5.7 2.2

CARGO (KG) 838,501 23,125,181 23,963,682

% Change (0.6) 39.6 37.6

GEMINA GROUP

58


3.14 EQUITY INVESTMENTS HELD

BY DIRECTORS, STATUTORY

AUDITORS AND EXECUTIVES

WITH STRATEGIC

RESPONSIBILITIES

In observance of what is indicated under Art. 79 of the

Regulations approved by Consob with resolution no. 11971 of May 14, 1999 and subsequent amendments, information about the equity investments held by the Directors, the Statutory Auditors and the Executives who have strategic responsibility in the issuer and in its subsidiary companies is provided:

NAME AND SURNAME

INVESTEE COMPANY

NO. OF

SHARES

OWNED AT

YEAR-END

2008

NO. OF

SHARES

PURCHASED

NO. OF

SHARES

SOLD

NO. OF

SHARES

OWNED AT

YEAR-END

2009 OR AT

THE DATE

THE OFFICE

CEASES

GUIDO ANGIOLINI - - - -

GIUSEPPE ANGIOLINI - - - -

GIUSEPPE BENCINI - - - -

STEFANO CAO

GIOVANNI FONTANA - - - -

ALESSANDRO GRIMALDI - - - -

ALDO MINUCCI - - - -

MICHELE MOGAVERO - - - -

ANDREA NOVARESE - - - -

EUGENIO PINTO - - - -

CLEMENTE REBECCHINI - - - -

PAOLO ROVERATO - - - -

LUCA AURELIO GUARNA

MAURIZIO DATTILO - - - -

GIORGIO OLDOINI

GUIDO ZANIN - - - -

VITTORIO AMADIO - - - -EXECUTIVES WITH

STRATEGIC - - - -

GEMINA GROUP

59


RESPONSIBILITY

GEMINA GROUP

60

4 PROPOSALS TO THE SHAREHOLDERS’ MEETING

PROPOSED RESOLUTION Gemina S.p.A. closed the year with a 14,069,524 euro loss. You are therefore invited to adopt the following RESOLUTION The Shareholders' Meeting: - having heard the Report of the Board of Directors on

operations, - taking note of the Report of the Board of Statutory

Auditors, - taking note of the Report of the Independent Auditors, - having read and examined the financial statements as at

December 31, 2009 which report a loss of 14,069,524 euro,

RESOLVES to approve: - the Report of the Board of Directors on operations; - the Income Statement, the Balance Sheet and the related

Explanatory Notes to the financial statements for the year ended December 31, 2009, which report a loss of 14,069,524 euro, as presented by the Board of Directors, both as a whole and with regards to the individual entries, together with the allocations and provisions proposed therein;

to carry forward the loss as at December 31, 2009, equal to

14,069,524 euro. Milan, March 15, 2010 for the Board of Directors The Chairman (Guido Angiolini)

GEMINA GROUP

CONSOLIDATED FINANCIAL

STATEMENTS

GEMINA GROUP

62

5.1 CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT (in thousands of euro)

Note 2009 of which due to related parties

2008 of which due to related parties

REVENUES 1 570,908 1,536 582,157 1,654CONSUMPTION OF RAW MATERIALS AND

CONSUMABLES 2 (68,135) (81,275)

STAFF COSTS 3 (142,733) (119,550)

OTHER OPERATING COSTS 4 (154,798) (3,459) (188,274) (4,209)AMORTIZATION, DEPRECIATION AND WRITE-DOWNS OF FIXED ASSETS 5 (142,165) (138,643)

EBIT 63,077 (1,923) 54,415 (2,555)

FINANCIAL INCOME (EXPENSE)

FINANCIAL INCOME: 6

Interest income 2,220 1,201 8,754 5,827

Income on derivatives 34,070 1,716 23,917 9,366

Exchange gains 49 67,510

Other income 1,864 635

FINANCIAL EXPENSES: 7

Interest expense (72,596) (3,577) (92,757) (2,821)

Expenses on derivatives (26,086) (7,644) (103,197) (2,736)

Exchange losses (16,399) (7)

Other expenses (4,401) (520) (5,859) (808)

TOTAL FINANCIAL INCOME (EXPENSE) (81,279) (8,824) (101,004) 8,828INCOME (CHARGES) ON EQUITY

INVESTMENTS 8 (1,842) (587) PRE-TAX PROFIT (LOSS) ON CONTINUING

OPERATIONS (20,044) (7,830) (47,176) (11,383)

Income taxes 9 (19,925) (6,000) PROFIT (LOSS) ON CONTINUING OPERATIONS

AFTER TAX (39,969) (7,830) (53,176) (11,383)NET INCOME FROM DISCONTINUED

OPERATIONS 10 - 19,321

PROFIT (LOSS) FOR THE YEAR (39,969) (7,830) (33,855) (11,383)Profit (loss) attributable to minority shareholders (817) (71)

PROFIT (LOSS) FOR THE PERIOD

ATTRIBUTABLE TO THE GROUP (39,152) (33,784)

NET EARNINGS PER SHARE (IN EURO)

FROM RECURRING ACTIVITIES (0.027) (0.036) FROM RECURRING AND DISCONTINUED

ACTIVITIES (0.027) (0.023) The basic net earnings per share, which coincides with the diluted net earnings per share, is calculated on the total shares in issue in the respective periods, equal to 1,472,960,320 as at December 31, 2009 and as at December 31, 2008. All Gemina S.p.A. shares are subscribed.

GEMINA GROUP

63


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in thousands of euro)

2009 2008

CONSOLIDATED PROFIT (LOSS) FOR THE YEAR (39,969) (33,855)PROFIT (LOSS) ON DERIVATIVE INSTRUMENTS (CASH

FLOW HEDGES) (13,354) (12,446)

TAX EFFECT 3,673 3,422

TOTAL PROFIT (LOSS) (*) (49,650) (42,878)

TOTAL PROFIT (LOSS) ATTRIBUTABLE TO:

THE GROUP (48,444) (42,429)

MINORITY SHAREHOLDERS (1,206) (450) (*) As a result of the application of IAS 1 Revised from January 1,

2009, the item “Total profit (loss)” includes the change in fair value of hedging derivatives.

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64

5.2 CONSOLIDATED BALANCE SHEET

ASSETS (in thousands of euro)

Note 12/31/2009 of which due to related parties

12/31/2008 of which due to related parties

NON-CURRENT ASSETS

Airport management concession 2,996,374 3,083,181

Goodwill 6,906 -

Other intangible fixed assets 5,167 6,724

TOTAL INTANGIBLE FIXED ASSETS 11 3,008,447 3,089,905

Land and buildings 87,638 92,841

Plant and machinery 74,386 54,010

Fixtures and fittings, tools and other equipment 1,169 1,270

Construction in progress and advances 53,180 35,829

Other tangible fixed assets 198,907 199,023

TOTAL TANGIBLE/TECHNICAL FIXED ASSETS 12 415,280 382,973

EQUITY INVESTMENTS IN ASSOCIATED COMPANIES

VALUED AT NET EQUITY 13 8,649 15,518

INVESTED RECEIVABLES 14 4,591 4,267

OTHER EQUITY INVESTMENTS 15 2,756 2,757

DEFERRED TAX ASSETS 16 51,324 42,469

OTHER NON-CURRENT ASSETS 17 9,486 547

OTHER NON-CURRENT FINANCIAL ASSETS 18 1,400 1,400 1,400 1,400

TOTAL NON-CURRENT ASSETS 3,501,933 1,400 3,539,836 1,400

CURRENT ASSETS

INVENTORIES 19 10,164 11,255

CONTRACT WORK IN PROGRESS 20 17,610 12,473

TRADE RECEIVABLES 21 197,298 68 160,502 361

OTHER RECEIVABLES 22 6,926 33 11,651 33

FINANCIAL INSTRUMENTS - DERIVATIVES 23 534 - 3,436 984

OTHER CURRENT FINANCIAL ASSETS 24 55,497 51,520 49,581 45,969

CASH AND CASH EQUIVALENTS 25 149,272 88,654 144,198 92,797

TOTAL CURRENT ASSETS 437,301 140,275 393,096 140,144

ASSETS HELD FOR SALE 26 - -

TOTAL ASSETS 3,939,234 3,932,932

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65


SHAREHOLDERS’ EQUITY AND LIABILITIES

(in thousands of euro)

Note 12/31/2009 of which due to related parties


SHAREHOLDERS’ EQUITY

Share capital 1,472,960 1,472,960

Capital reserves (share premium reserve) 200,057 200,057

Hedging and translation reserve (50,304) (42,823)

Other reserves 82,756 82,064

Profit (loss) from previous years 19,556 52,352

Profit (loss) for the year (39,152) (33,784)

GROUP SHAREHOLDERS’ EQUITY 1,685,873 1,730,826

Minority shareholders in capital and reserves 36,556 39,573

MINORITY INTEREST IN SHAREHOLDERS’ EQUITY 36,556 39,573

TOTAL SHAREHOLDERS’ EQUITY 27 1,722,429 1,770,399

NON-CURRENT LIABILITIES

EMPLOYEE BENEFITS 28 24,653 33,494 PROVISION FOR RISKS AND CHARGES - BEYOND 12

MONTHS 29 280,843 272,183

DEFERRED TAX LIABILITIES 122 -

FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE 30 347,825 63,843 338,920 46,688

OUTSTANDING BONDS 31 1,097,465 1,086,534

TOTAL NON-CURRENT LIABILITIES 1,750,908 63,843 1,731,131 46,688

CURRENT LIABILITIES

TRADE PAYABLES 33 144,959 10 166,853 18

CURRENT TAX LIABILITIES 34 11,353 1,983

CURRENT FINANCIAL LIABILITIES 35 28,839 2,553 20,657 2,146PROVISIONS FOR RISKS AND CHARGES - WITHIN 12

MONTHS 29 20,324 8,944

FINANCIAL INSTRUMENTS - DERIVATIVES 36 157,685 926 152,694 4,937

OTHER CURRENT LIABILITIES 37 102,737 12 80,271 13

TOTAL CURRENT LIABILITIES 465,897 3,501 431,402 7,114 LIABILITIES HELD FOR SALE 38 - - TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 3,939,234 3,932,932

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66

5.3 STATEMENT OF CONSOLIDATED CASH FLOWS

(in thousands of euro) 2009 2008

PROFIT (LOSS) FOR THE YEAR (39,152) (33,784)

Amortization and depreciation of tangible and intangible fixed assets 142,165 138,643

Increase (decrease) of severance and other provisions (net of risks provision for transfer of Elilario) 11,199 (7,560)

(Increase) decrease in deferred tax liabilities (8,855) (15,960)

(Revaluation) write-down of equity investments valued at net equity 1,374 584

(Gains) losses on disposal of non-current assets - (19,318)OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING

CAPITAL 106,731 62,605

(Increase) decrease in inventories of contract work in progress (4,046) (2,512)

(Increase) decrease in trade receivables (36,796) (8,090)

(Increase) decrease in other current assets (2,110) 2,012

Increase (decrease) in trade payables (21,894) 12,954

Increase (decrease) in other current liabilities 38,669 16,797

TOTAL CHANGES IN WORKING CAPITAL (26,177) 21,161

TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED)

BY OPERATIONS 80,554 83,766

STATEMENT OF CASH FLOWS FROM INVESTMENT ACTIVITIES Increases, purchases, capital increases and loss settlements of equity investments - (259)

Increase in tangible and intangible fixed assets (93,012) (108,407)

Changes in other items in non-current assets and liabilities (9,141) (4,094)Additional charges for disposal of the equity investment which directly reduce the capital gains from disposal of the equity investment in Elilario - (2,350)

Proceeds from disposal of non-current assets 5,496 63,800TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED)

BY INVESTMENT ACTIVITIES (96,657) (51,310)

STATEMENT OF CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid (188) (188)

(Increase) decrease in trade receivables (3,014) 19,441

Increase (decrease) in financial payables 33,009 20,801

Raising of medium/long-term bank payables - 127,500

Repayment of medium/long-term bank payables - (206,750)

Other changes in shareholders’ equity (8,630) (9,904)TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED)

BY FINANCING ACTIVITIES 21,177 (49,100) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,074 (16,644)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 144,198 160,842

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 149,272 144,198

GEMINA GROUP

67

5.4 STATEMENT OF CHANGES IN CONSOLIDATED EQUITY


Share capital

Capital reserves

Hedging and

translation reserve

Other reserves

Profit (loss)

pertaining to

previous years

Profit (loss) for the year

Group Shareholder

s’ equity Minority sharehold

ers in capital

and reserves

BALANCES AS AT 01/01/2008 1,472,960 199,849 (33,799) 81,394 70,326 (17,116) 1,773,614 40,437

ALLOCATION OF RESULTS YEAR 2007 670 (17,786) 17,116 (1,022)

DISTRIBUTION OF DIVIDENDS TO HOLDERS OF SAVINGS SHARES (188) (188)

OTHER CHANGES 208 1,432 1,640 (1,203)TOTAL PROFIT (LOSS) FOR THE

YEAR (8,645) (33,784) (42,429) (450)

BALANCES AS AT 12/31/2008 1,472,960 200,057 (41,012) 82,064 52,352 (33,784) 1,732,637 37,762

ALLOCATION OF RESULTS YEAR 2008 692 (34,476) 33,784

CHANGE IN CONSOLIDATION AREA 1,868 1,868

DISTRIBUTION OF DIVIDENDS TO HOLDERS OF SAVINGS SHARES (188) (188) TOTAL PROFIT (LOSS) FOR THE

YEAR (9,292) (39,152) (48,444) (1,206)

BALANCES AS AT 12/31/2009 1,472,960 200,057 (50,304) 82,756 19,556 (39,152) 1,685,873 36,556

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68

5.5 STATEMENT OF RECONCILIATION BETWEEN SHAREHOLDERS’ EQUITY OF GEMINA

AND CONSOLIDATED SHAREHOLDERS’ EQUITY AND BETWEEN PROFIT (LOSS) OF

GEMINA AND CONSOLIDATED PROFIT (LOSS)


Shareholders’ Equity as at 12/31/2009

Profit (loss) 2009

GEMINA S.P.A. 1,819,404 (14,070)

CANCELLATION OF BOOK VALUE OF

CONSOLIDATED EQUITY INVESTMENTS (136,631) (28,182)

DIFFERENCE BETWEEN BOOK VALUE AND PRO-RATA VALUE OF

SHAREHOLDERS’ EQUITY (137,731) (30,610)

PROFIT (LOSS) OF CONSOLIDATED COMPANIES 1,100 1,100

REVERSAL OF DIVIDENDS - (240)

ELIMINATION OF WRITE-DOWNS ASSOCIATED COMPANIES - 1,568

WRITE-OFF OF IMPACT OF TRANSACTIONS PERFORMED BETWEEN

CONSOLIDATED COMPANIES 3,100 3,100

GUARANTEES PROVIDED TO SUBSIDIARIES 3,100 3,100

GROUP SHAREHOLDERS’ EQUITY AND NET PROFIT (LOSS) FOR THE

YEAR 1,685,873 (39,152)

MINORITY INTERESTS IN SHAREHOLDERS’ EQUITY AND NET PROFIT (LOSS) FOR THE YEAR 36,556 (817)

CONSOLIDATED SHAREHOLDERS’ EQUITY AND

PROFIT (LOSS) FOR THE YEAR 1,722,429 (39,969)

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5.6 EXPLANATORY NOTES

ACCOUNTING STANDARDS

The consolidated financial statements have been prepared according to the international accounting standards (IAS/IFRS) issued by the IASB (International Accounting Standard Board), as approved by the European Union.

The term IAS/IFRS refers to International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), as supplemented by the interpretations issued by IFRIC (International Financial Reporting Interpretations Committee), and previously by the SIC (Standard Interpretation Committee).

Where necessary, the half-year figures of the consolidated investee companies, drawn up by the Boards of Directors or by the Sole Director, have been adjusted to bring the accounting standards used into line with those adopted by the Group.

The financial statements have been drawn up on the basis of the historical cost concept, except for:

- financial derivatives (and the financial liabilities hedged

thereby);

- assets available for sale, the valuation of which has been

effected on the basis of the fair value concept;

- the defined benefit plans for the employees of the ADR Group, for which the actuarial gains and losses have been recognised as prescribed by IAS 19.

The accounting statements have been prepared in thousands of euro.

CONSOLIDATION CRITERIA

The consolidated financial statements as at December 31, 2009 include data of the parent company Gemina and of the subsidiary companies over which Gemina exercises control either directly or indirectly, at the same date and based on the line-by-line method.

Pursuant to IAS 27, control is exercised when the Parent Company has the power to determine the financial and operating policies of an enterprise, in such a way as to obtain benefits from its activity.

The companies over which Gemina exercises joint control pursuant to IAS 31, starting from 2008, are included in the consolidated financial statements using the net equity method.

The equity investments in associated companies, over which Gemina exercises significant control pursuant to IAS 28, are consolidated using the net equity method.

The lists of the subsidiaries and associated companies of the Gemina Group subject to consolidation are included in point

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5.9.

Subsidiaries that are dormant or that generate an insignificant turnover are not included in the consolidated financial statements. Their influence on the total assets, liabilities, financial position and profit or loss of the Group is insignificant.

The main consolidation criteria are set forth below:

- all assets and liabilities, charges and income of companies consolidated using the line-by-line method are fully included in the consolidated financial statements.

The book value of the equity investments is set off against the corresponding share of Shareholders’ Equity in the investee companies, attributing to the single asset and liability items their current value at the date of acquisition of control;

- the profits of subsidiary companies acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition until the effective date of disposal;

- where necessary, adjustments have been made to the financial statements of subsidiaries to bring their accounting criteria in line with those adopted by the group;

- minority interests in the Shareholders’ equity of subsidiaries is separately indicated with regard to Group Shareholders’ equity;

- profits and losses that have not yet been realised by the Group, as they arise on intercompany transactions, have been eliminated, as well as significantly large items that give rise to payables and receivables, income and charges between consolidated companies;

- where applicable, consolidation adjustments take into

account their deferred tax effect;

- dividends received in the year from subsidiaries that are recorded in the income statement of the Parent Company as income from equity investments have been set off against “profits carried forward”.

EQUITY INVESTMENTS IN JOINT VENTURES

From financial year 2008, the Group records its share of the joint ventures using the net equity method.

The consolidated financial statements include the share pertaining to the Group of profit (loss) of joint-controlled companies, recorded using the Net Equity Method, starting from the date when significant influence begins until the date when said significant influence ceases to exist.

EQUITY INVESTMENTS IN ASSOCIATED COMPANIES An associated company is a company in which the Group is

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capable of exercising a significant influence, but not control or joint control, by contributing to the financial and operating decision-making policies of the investee, as it is described by IAS 28 – Investments in Associates.

The economic results of the associated companies have been recorded in the consolidated financial statements using the Net Equity Method, starting from the date when the significant influence begins until the date when said significant influence ceases to exist.

The surplus of the acquisition cost with respect to the Group’s percentage of the current value of the assets, liabilities and potentially identifiable liabilities of the associated company at the date of acquisition is recognised as goodwill. Goodwill is included in the book value of the investment and is subject to impairment test.

VALUATION CRITERIA

The most significant valuation criteria used for the preparation of the consolidated financial statements are set forth below.

REVENUES

Revenues are recorded to the extent to which it proves possible to reliably determine their fair value and that the company is likely to enjoy the related economic benefits.

They are measured on an accrual basis and, in particular, according to the type of transaction. Revenues are recorded only when the following conditions are met:

a) sale of assets:

- significant risks and rewards of ownership are

transferred to the buyer;

- the effective control of the sold assets and the normal continuous level of activities associated with the property have ceased;

- the costs incurred or to be incurred for the transaction

may be reliably determined; b) provision of services:

- the stage of completion of the transaction at the

balance sheet reporting date may be reliably measured;

- the costs incurred for the transaction and the costs to be incurred for its completion may be reliably determined.

COSTS

Costs are valued at the fair value of the amount paid or to be paid, and are recognised in the income statement on an accrual basis.

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USE OF ESTIMATES

Drawing up the financial statements requires estimates and assumptions to be made, which affect the book asset and liability values on the date of reference.

The estimates and assumptions are based on data that reflect the current state of knowledge available, so the final results of the year might differ from these estimates.

The estimates are primarily used to record estimation of the recoverability of the value of assets, the definition of the useful lives of the tangible assets, the valuation of employee benefits, taxes, other allocations, derivative instruments and provisions.

The estimates and underlying assumptions are periodically reviewed, and the effects of each change are reflected in the income statement or in Shareholders’ equity, in connection with the classification of the item of reference.

DIVIDENDS

Dividends are recorded in the financial year when their distribution is resolved by the Shareholders’ Meeting.

FINANCIAL INCOME AND EXPENSE

Financial income and expense are recorded in the income statement on an accrual basis, based on the interest accrued on the net value of the respective financial assets and liabilities using the actual interest rate.

INCOME TAXES

Current taxes are calculated based on taxable income, in compliance with the rates and regulations in force.

Any deferred or prepaid income taxes are calculated on the temporary differences between the equity values entered in the financial statements and the corresponding values recognised for tax purposes, applying the tax rate that is expected to be in effect on the date when the temporary difference will be paid.

The prepaid taxes are recognised to the extent in which it is probable that future income will become available, against which they can be recovered.

The deferred taxes are directly charged to the income statement, except for those concerning items recorded directly at Shareholders’ equity; if this is the case, their deferred taxes will also be charged to Shareholders’ equity.

NET INCOME FROM DISCONTINUED OPERATIONS

Pursuant to IFRS 5, paragraph 33, the economic results of the discontinued operating activities are shown in one amount only, “Net income from discontinued operations”, which indicates:

- total profits or losses of the discontinued operations

without tax effects;

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- the capital gains (or losses) without tax effects, recorded

after disposal of the activities.

In the explanatory notes, the Group also provides an analysis of the above-mentioned amount broken down into the following components:

- revenues, costs and profit and income taxes of

discontinued operations;

- capital gains (or losses) recorded after disposal of the

assets, net of taxes and directly related costs.

Pursuant to IFRS 5, paragraph 34, comparative information for the previous years is presented with the same logic described above so as to make the values presented homogeneous.

EARNINGS PER SHARE

The basic earnings per share are calculated by dividing the Group’s economic result by the weighted average of outstanding shares at year-end, not including own shares.

The profit (loss) attributable to each category of shares (ordinary and savings) is also represented. It is determined based on the respective rights to be given dividends.

The diluted profit corresponds to the basic earnings as diluting instruments have not been issued.

INTANGIBLE FIXED ASSETS

Intangible fixed assets are recorded at the purchase or production cost, including directly attributable accessory charges necessary in order to make the assets ready to be used.

Assets with a defined useful life are systematically amortised from the moment when the asset becomes ready for use in relation to its expected useful life.

Recoverability of value is verified according to criteria provided by IAS 36 (Impairment of Assets) and illustrated in the paragraph “Impairment of assets” below.

Research costs are charged to the income statement for the period in which they are incurred.

Internally generated intangible fixed assets deriving from the development of Group products are recorded under assets, only if all the following conditions are fulfilled:

- the asset can be identified (such as software or new

processes);

- the asset created is likely to generate future economic

benefits;

- the development costs of the asset can be reliably

measured.

Intangible fixed assets are amortised on a straight-line basis over their useful life.

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When internally generated assets cannot be recorded in the financial statements, their development costs are attributed to the income statement for the year when they were incurred.

Concessions

The value of the airport management concession is amortised on the basis of the residual life of said concession, which will expire on June 30, 2044 (see paragraph on “Information on the concession”).

Goodwill

Goodwill arising from acquisition is initially valued at cost insofar as it is indicative of the surplus of purchase cost over the share pertaining to the purchaser of the net fair value referred to the identifiable values of the assets and liabilities acquired.

After initial recording, goodwill is valued at cost, net of any accumulated losses of value.

At the moment of the transfer of part of all of a company acquired, whose acquisition resulted in the accumulation of goodwill, in calculating the capital gain or capital loss from the transfer, the corresponding remaining value of goodwill is considered.

Goodwill is recorded as an asset and the recovery of the book value is verified at least annually, and when events occur that lead to the assumption of impairment, according to that set forth in IAS 36 (Impairment of Assets).

Any impairments are immediately carried to the income statement and may not be restored at a later date.

Impairment of assets

Periodically, the Group reviews the book value of its tangible and intangible fixed assets to determine whether there are indications that these assets could be impaired.

When such indications are present, the recoverable amount of said assets is estimated, in order to calculate any write-downs.

The recoverable amount is the greater of the fair value net of selling costs and the value in use.

The fair value is estimated on the basis of the best information available in order to reflect the amount that the company could obtain from sale of the asset.

The value in use is determined by discounting back the expected cash flows at a rate reflecting the current market values of the interest rate and of the specific risks of the assets.

If the recoverable amount is estimated lower than it book value, it is reduced to that lesser value. The loss in value is recorded in the income statement.

When the loss of value does not occur or is reduced afterwards, except for goodwill, the revaluation that reinstates the book value, within the limits of the cost, is entered in the

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income statement.

TANGIBLE ASSETS

Property, plant, machinery and equipment are entered at historic cost (in some cases increased pursuant to monetary revaluation laws) inclusive of any accessory charges and net of the accumulated depreciation and of any write-downs for impairment.

Fixed assets are depreciated on a straight-line basis in each period in accordance with the depreciation rates established in relation to the estimated useful life and, in the case of disposal, until the end of use.

Depreciation is recorded from the time the fixed asset is available for use, or is potentially capable of providing the economic benefits associated therewith.

A breakdown of the depreciation rates used is provided hereunder:

- Buildings from 3% to 10% - Plant and machinery from 7% to 25% - Equipment from 10% to 25% - Revertible assets from 1% to 10% - Other assets from 10% to 25% - Land is not subject to depreciation.

In the case in which, regardless of the depreciation already recorded, there is evidence of impairment determined according to the criteria described in the concept “Impairment of fixed assets”, the fixed asset is written down accordingly.

If in subsequent years the conditions for the write-down cease to exist, the original value will be reinstated within the limits of accumulated depreciation.

Profits and losses deriving from the transfer or disposal of tangible fixed assets are calculated as the difference between the revenues from the sale of the assets and their book value, and are recorded in the income statement for the year.

The costs incurred after the purchase are capitalised even if they increase the future economic benefits inherent in the asset to which they refer.

Maintenance costs are charged to the income statement.

Costs for improvements and maintenance that result in a significant and tangible increase in production capacity or that extend the useful life of the asset in question, are capitalised and added to the value of the relative asset; they are depreciated on the basis of the useful life of the asset to which they refer.

Costs for improvements to third-party goods which meet the requirements for inclusion under assets are recorded among tangible fixed assets and depreciated over the lesser of the remaining term of the agreement, and the remaining useful life of the asset.

LEASING

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Lease contracts are treated as finance leases when the terms of the contract in question are such that all of the risks and rewards of ownership are substantially transferred to the lessee.

The assets to which the finance lease contracts refer are recorded as Group assets at their current value of minimum payments due for the lease and are subject to depreciation on the basis of their estimated useful life, as for group-owned assets, or, if less, at their fair value at the date of acquisition.

The corresponding liability towards the lessor is included in the balance sheet as financial liability. Payments for lease instalments are divided into principal and interest and the financial expenses are directly ascribed to the income statement for the year.

All the other leases are considered operating leases and the relative costs for the lease instalments are entered on the basis of the conditions set forth in the contract.

INVENTORIES

Inventories are recorded at the lower of acquisition or production cost and net realisable value.

Inventories are valued using the weighted average cost method.

The net realisable value is estimated sale price, less the estimated costs to completion and all costs required to perform the sale.

CONSTRUCTION CONTRACTS

When the profits of a construction contract can be reliably estimated, the revenues and costs regarding such work are recorded, respectively, as revenues and costs of the year in relation to the stage of completion of the work at the balance sheet date, based on the relationship between the costs incurred for the work performed to the balance sheet date, and the total estimated contract costs, except when this calculation is not deemed representative of the state of completion of the contract.

Any change to the contract, price revision or incentives included are those that have been agreed with the contractor.

When the profits of a construction contract cannot be assessed with reasonable certainty, the revenues from said contract are recorded limited to the costs of work carried out to date, which are likely to be recovered.

Contract costs are recorded as expenses for the year in which they are incurred.

If it is likely that total contract costs exceed the revenues from the contract, all of the loss is recognised as soon as it is foreseen.

FINANCIAL ASSETS

Financial assets are initially valued at fair value, which corresponds to cost, including charges directly connected with

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their acquisition.

Financial assets other than those identified as held to maturity are classified as held for trading or held for sale (other equity investments), and are valued at fair value at the end of each period.

In the event of financial assets that are not quoted on an active market and for which a fair value cannot be determined in a reliable way, their book value is maintained at cost.

RECEIVABLES

Receivables are stated at their fair value in the financial statements, which corresponds to their par value, and are adjusted to their estimated realisable value.

In the case of receivables whose collection is expected to be long-term, a value equal to the current value of the estimated discounted cash flows is recorded.

Trade receivables whose expiration falls within the normal commercial terms are not discounted.

Receivables denominated in currencies other than the euro are valued at the exchange rate ruling at year-end.

CASH AND CASH EQUIVALENTS The item includes cash, bank current accounts and deposits

reimbursable upon request and other short-term financial investments with high liquidity, which can be easily converted into cash and are subject to an insignificant risk of change in value.

EMPLOYEE BENEFITS ADR Group companies calculated the employee severance

indemnities by applying an actuarial method - Projected unit credit method - based on a demographic and financial assumption which allows for a reasonable estimate of the amount of benefits that each employee has already accrued based on his years' of service.

Based on this method, the accrued amount payable must be projected in order to estimate the amount to be paid at the moment of terminating the employment relationship and subsequently actualised.

Using the actuarial valuation current service costs and interest

costs are charged to the income statement as follows: current service costs, which represent the total benefits accrued by employees during the year under “Staff costs”, whereas interest costs, which consist of the imputed charges that the business would incur by requesting a loan from the market of the same amount as its employee severance indemnities, are recorded under “Financial income (expense)”.

Profits and losses that show the effects deriving from changes in the actuarial assumptions used are recorded in the income statement to the extent that their unrecorded value at the beginning of the financial year exceeds 10% of the liability

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(the so-called corridor method).

In the case of the other Group companies, post employment benefits have been valued according to Italian accounting standards and to current legislation regarding national collective labour agreements and company pension schemes in force.

An evaluation based on actuarial criteria was not made since the actuarial data expected, both in absolute terms and with respect to the Group Shareholders’ equity, was insignificant.

PROVISIONS FOR RISKS AND CHARGES Provisions for risks and charges include the allocations arising

from current obligations of a legal or implicit nature, deriving from past events, and the fulfilment of which will probably require the employment of resources, of which the amount cannot be reliably estimated.

Provisions are allocated based on the best estimate of the costs expected to fulfil the obligation at the balance sheet date, and are discounted when the amount involved and its effect is material.

Moreover, a “Transferable charges fund” is also recorded, against the higher estimate - carried out by technical bodies - of the charges deriving from the obligation to return the airport complex in a state of efficiency upon termination of the concession (2044).

FINANCIAL PAYABLES Financial payables are initially recorded at fair value,

corresponding to the value received, net of any additional charges for its registration. Subsequently said loans are valued using “amortised cost” criteria.

The amortised cost is the amount of the liability recorded at the time of its initial recognition net of repayments of principal and additional charges amortised applying the effective interest rate method.

If the loans are hedged by derivative instruments of the “fair value hedge” type, in accordance with IAS 39, said loans are valued at fair value as are the related derivative instruments (also see the relevant paragraph “Derivatives and accounting treatment of hedging transactions”).

BONDS Bonds are initially recorded at their fair value, less any costs

incurred to trade and issue the financial instrument (transaction cost). Following the initial recognition, bonds are recorded at amortised cost.

TRADE PAYABLES Trade payables are stated at their fair value, which

corresponds to the par value. Those denominated in currencies other than the Euro are adjusted using the exchange rate ruling at the year end.

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DERIVATIVES AND ACCOUNTING TREATMENT OF

HEDGING TRANSACTIONS The Group uses derivative instruments to hedge the risks

arising from interest rate and exchange rate fluctuations relating to existing bank loans and bond issues.

The structure of the existing contracts complies with the hedging policy approved by the Boards of Directors of the Group companies and is consistent with the restraints imposed by the existing loan agreements.

Derivative instruments are initially recognised at their fair value, corresponding to cost and adjusted to their fair value at year-end.

The recording of hedging derivatives differs depending on the hedging objective: cash flow hedge or fair value hedge.

Cash flow hedge Any changes in the fair value of derivatives, which are so

designated, and considered to be effective in hedging against future cash flows of the Group’s contractual commitments, are directly recorded in shareholders’ equity less the relevant deferred taxes, while their ineffective portion is immediately recognised in the income statement.

Fair value hedge If a derivative instrument is designated as an instrument to

hedge exposure of the fair value changes of a balance sheet asset or liability, the profit or loss deriving from the subsequent fair value valuations of the hedging instrument is recorded in the income statement.

The profit or loss deriving from the fair value change of the hedged item modifies the book value of said item and is recorded in the income statement.

ASSETS AND LIABILITIES HELD FOR SALE Assets and liabilities held for sale include non-current assets

or groups being disposed of, and the associated liabilities which have been selected for disposal.

Assets held for sale are valued at the lower of their book value and their fair value net of disposal costs.

The amounts of previous years, shown for comparison purposes, have not been reclassified under assets and liabilities held for sale, pursuant to IFRS 5 paragraph 40.

SEGMENT INFORMATION The segmentation criteria of business areas, as provided for

by IFRS 8, which substituted IAS 14, require that the Gemina Group profit and loss, shown in Note 40 of this Report, be divided in:

- activities of the Parent Company (corporate activities); - airport infrastructures.

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- energy. ADOPTION OF NEW STANDARDS Accounting standards, amendments and interpretations

applied from January 1, 2009 The following accounting standards, amendments and

interpretations, revised also as a result of the annual 2008 Improvement process conducted by the IASB, were applied for the first time by the Group starting from January 1, 2009.

IAS 1 REVISED - PRESENTATION OF FINANCIAL

STATEMENTS The presentation of income components such as income and

charges (defined as “non-owner changes in equity”) in the Statement of Changes in Shareholders’ Equity is not permitted, and these changes deriving from transactions with non-owners must be indicated separately.

All non-owner changes in equity are highlighted in a single separate statement which shows the trend in comprehensive income for the period or in two separate statements, entitled “Consolidated income statement” and “Consolidated statement of comprehensive income”.

The changes must be shown separately also in the Statement of changes in Shareholders’ equity.

The Group applied the revised version of the standard from January 1, 2009 retrospectively, choosing to indicate all changes due to transactions with non-shareholders in two separate tables which show the trend for the period called respectively “Consolidated income statement” and “Consolidated statement of comprehensive income”.

The Group subsequently amended the presentation of the Statement of changes in Shareholders’ equity.

IFRS 8 — OPERATING SEGMENTS The standard requires companies to base the segment

reporting – previously governed by IAS 14 - on the elements that the management uses in taking its operational decisions. Therefore, this requires the identification of operating segments based on internal reporting, which is regularly reviewed by the management for the purpose of allocating resources to the various segments and for performance analysis.

Adoption of this standard did not produce any effects, as the current internal reporting structure regularly reviewed by the Group’s management matches the structure of the subsidiaries and corresponds to the consolidated financial statements of ADR, drawn up according to the IFRS, and the financial statements of the Fiumicino Energia Group and the Parent Company’s holding company activities.

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IAS 23 REVISED – BORROWING COSTS Starting from January 1, 2009, the standard removed the

option, which had been adopted by the Group up to December 31, 2008, of immediately recognising, within the income statement, financial expenses that relate to investments in assets that normally take a substantial amount of time to prepare for use or sale (qualifying assets).

This version of the standard was also amended during the 2008 Improvement process conducted by the IASB, in order to revise the definition of borrowing costs to be considered for capitalisation.

In accordance with the transition rules provided by the standard, the Group applied the new accounting standard prospectively from January 1, 2009, capitalising borrowing costs directly attributable to the acquisition, construction or production of qualifying assets in which the Group has begun the investment process, has incurred financial expenses for which the activities necessary for preparing the asset for its specific use or for sale began following January 1, 2009.

However, no accounting effects were recorded in 2009 as a result of the adoption of this standard, substantially due to the fact that as per the ADR loan agreements, investments are currently financed through cash flows generated from operations and not through specific or large loans.

IAS 7 – FINANCIAL INSTRUMENTS: DISCLOSURES This requires greater disclosure in the event of valuation at

fair value and strengthens the existing principles regarding disclosure of liquidity risks of financial instruments. Specifically, disclosure is provided regarding the levels of fair value measurement hierarchy for financial instruments. The adoption of this standard, from January 1, 2009, did not entail an effect in terms of the valuation and recognition of the balance sheet items, but only on the type of disclosure provided.

IAS 28 — INVESTMENTS IN ASSOCIATES For equity investments valued using the Net Equity method,

any impairment is not allocated to the single assets (or, specifically, to any goodwill) that make up the book value of the equity investment, but to the value of the equity investments as a whole. Therefore, if the conditions for a subsequent reinstatement of the value exist, said reinstatement of value is recognised in full.

In accordance with the transition rules of the Improvement, the Group applied the standard prospectively from January 1, 2009. Nonetheless, no accounting effects derived from the adoption of this standard, because in 2009 the Group did not record any reinstatements of the value of goodwill included in the book value of the equity investments.

The Standard requires that additional information be provided for equity investments in associated companies and

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joint ventures valued at fair value according to IAS 39.

Its adoption, from January 1, 2009, did not entail the recognition of any effect in these financial statements.

Accounting standards, amendments and interpretations

not yet applicable and not adopted in advance by the Group.

IFRIC 12 - PUBLIC UTILITY CONCESSIONS The interpretation, which contains the methods for

recognising and measuring concession contracts between a public party and a private company was issued in November 2006.

Unlike the practice adopted until now without specific instructions in the IFRS standards, the new interpretation states that the concessionaire must not enter the revertible infrastructure as a tangible asset as it does not have the “control”, but instead, only the right to use it to supply the service in agreement with the terms and procedures with the grantor.

This right can be classified as a financial asset or as an intangible asset, depending on whether or not there is an unconditioned right to receive remuneration regardless of the actual use of the infrastructure or the right to charge the users for use of the public service.

According to the Interpretation, the concessionaire is the supplier of services of twofold nature: (I) construction or expansion of the infrastructure; (II) management, maintenance and use of it to supply a public service.

In connection with this, the accounting repercussions of this interpretation are represented by the recognition of revenues and costs correlated with the construction activity according to the criteria established by the IAS 11 standard for the long-term orders, and of the revenues from tolls.

Analyses and in-depth examinations to quantify the effects of adopting the Interpretation on the Group’s consolidated financial statements are being completed.

Applicable from January 1, 2010. IFRS 3 REVIEWED VERSION, BUSINESS COMBINATIONS

(AMENDMENT TO IAS 27, CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS)

Issued by the IASB on January 10, 2008. Application starts from January 1, 2010. IAS 24 – RELATED PARTY DISCLOSURES Issued on November 4, 2009, it simplifies the type of

disclosure required for transactions with related parties that are government-owned and clarifies the definition of related parties.

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Applicable from January 1, 2011. IFRS 9 – FINANCIAL INSTRUMENTS: CLASSIFICATION AND

MEASUREMENT. Published on November 12, 2009. Applicable from January 1, 2013. It sets forth a single method for determining impairment of

financial assets. INFORMATION ON CONCESSIONS CONCESSIONARY RELATIONSHIP ADR’s corporate purpose is the construction and

management of airports or of a part thereof, and the exercise of any activity related or complementary to air traffic of any type or speciality.

The corporate purpose includes the management and development of the Rome airport system (made up of the “Leonardo da Vinci” Airport of Fiumicino and the “G.B. Pastine” Airport of Ciampino) according to the criteria of economy and coherent organisation, pursuant to Law no. 755 of November 10, 1973 and subsequent amendments.

DURATION OF THE CONCESSION The above-mentioned activity is carried out as a concession

on behalf of the competent State Administration (Ministry for Infrastructure and Transport) with expiration in 2044.

However, the term of the concession, originally set at 35 years and expiring on June 30, 2009 (Art. 3, subsection 2, Law 755/73), was extended by a further 35 years (to June 30, 2044) in compliance with Art. 14 of Law no. 359 of August 8, 1992, and Art. 1-quater of Law no. 351 of August 3, 1995, as set forth in the reports by the Ministry of Transport and Navigation on September 12, 1994 and January 23, 1998.

Pursuant to Agreement 2820/74, the concession (Art. 25) can be terminated with just cause for requirements of public safety. Moreover, other causes for termination of the concession are specified (Art. 24), including: unjustified delays in completing the work, irregularity and negligence in the management of the airport system, any transfer, even partial, of the concession, etc.

SUBJECT OF THE CONCESSION

Law 755/1973 (Art. 1) sets forth the subject of the concession, consisting in the single management of the Capital’s airport system, to be carried out under the supervision of the Ministry of Transport (now ENAC - Italian Civil Aviation Authority - pursuant to Italian Legislative Decree 250/1997) according to the provisions of the Navigation Code and regulations currently in force.

In particular, the concession, governed by specific agreements with the Grantor, includes the management of infrastructures

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and services and the maintenance of existing systems, machinery and buildings. ADR also supplies passengers with carry-on baggage and hold baggage security checks.

INCOME Pursuant to Art. 6, subsection 1, of Law 755/73, “all revenues

of the State, which derive from the management of the two airports, belong to the company holding the concession”.

Art. 6 of Agreement 2820/1974 groups the revenues into those deriving from the use of the airports, those regarding the use of services and the services rendered by the concessionaire, and those regarding the use of airport assets.

The Agreement also provides that the concessionaire has the right to claim fair payment from whoever carries out a profit-making activity in the airports.

With resolution no. 86 of August 4, 2000, the Interministerial

Committee for Economic Planning (“CIPE”) issued a favourable opinion on the “Reordering framework regarding the tariff system for airport services rendered on an exclusive basis” proposed by the Minister of Transport and Navigation in conjunction with the Minister of Finance.

According to said framework, revenues subject to regulation can be classified as follows:

- revenue due as payment (airport fees) for the use of airport infrastructures that are instrumental in services of air transport;

- payments due for the use of airport assets (for common use, for exclusive use, centralised infrastructure) that are instrumental in terminal assistance services (supplied or self-produced);

- payments for security services set forth in another concession deed;

- payments for terminal assistance services, when supplied by the airport operator - in fact or by rights - under exclusive conditions.

Adjustment of the income pertaining to the company holding

the concession is governed by regulations whose application is supervised by CIPE, Nucleus of Implementation and Regulation of Public Utility Services (“NARS”), ENAC, as well as the Ministry of Transport that operates together with other Ministries.

The aforementioned CIPE Resolution no. 86/2000 was cancelled and substituted by CIPE Resolution no. 38/2007 of June 15, 2007 (published in the Official Gazette no. 221 of the Italian Republic of September 22, 2007), which approved the new “Directive” regarding the tariff system for airport services rendered on an exclusive basis (“Directive”).

The purpose of the Directive is to set forth guidelines for the implementation of Law no. 248/2005. It requires ENAC

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(Italian Civil Aviation Authority) to set forth, within 60 days from the publication of the CIPE Directive in the Official Gazette, “guidelines setting forth criteria for the application of the Directive”.

The definitive text of the application Guidelines of CIPE Directive no. 38/07 and the relative attachments, was published by ENAC on its website on January 7, 2008, then rewritten following the observations made by NARS.

On February 14, 2008, the Guidelines were approved by means of Interministerial Decree of the Minister of Transport and the Minister of the Economy and Finance no. 41/T. Said decree (never published in the Official Gazette) was repealed by the subsequent Decree of the Ministry for Infrastructure and Transport of December 10, 2008, which formally approved the Guidelines drawn up by ENAC for applying the Ministerial Directive regarding the tariff system for airport services rendered on an exclusive basis.

On March 27, 2008, CIPE then made a lexical change to its

Resolution no. 38/2007 – publishing the subsequent Resolution no. 51/08 - pursuant to sentence no. 51 of the Constitutional Court dated February 27, 2008, which envisaged the need for the opinion of the Joint Conference. With this change (at point 5.3), the range of duties of the Regions in approving planning agreements was expanded.

All of the other decisions of resolution no. 38/2007 and of the attachment that is an integral part thereof are upheld and unchanged by the March 27, 2008 resolution.

CIPE’s resolution of March 27, 2008 with the above mentioned amendment, was published in the Official Gazette no. 128 of June 3, 2008.

CIPE Resolution no. 51/08, the same as the previous no.

86/00, provides that the new regulated tariffs that the airport operator can apply will be established within a specific “planning agreement” to be entered into by the operator and ENAC.

In consideration of the long time frame required for the approval procedure of planning agreements, and waiting for the planning agreement approval to be completed, national regulations have established the terms of adapting only the airport fees on a provisional basis.

Specifically, Law no. 31 of February 28, 2008

(“Milleproroghe”) provided that until the enactment of the decrees to define airport fees pursuant to Law 248/05, the Minister of Transport issued its own decree, to be adopted by December 31, 2008, to index airport fees to programmed inflation.

Said term was extended once to December 31, 2009 (with Law Decree no. 207 of December 30, 2008, converted into Law 14/2009), then additionally extended to December 31,

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2010 (by subsection 6 of Art. 5 of Law Decree no. 194 of December 30, 2009, known as the “Milleproroghe” Decree).

Ministerial Decree of July 21, 2008 containing the “Airport fee update” to take into account the programmed inflation regarding 2008 that is expected to be 1.7%, according to the Economic and Financial Planning Document was published in the Official Gazette of October 21, 2008, and entered into force on November 20, 2008.

ADR lodged an appeal with Latium Regional Administrative

Court against the aforesaid Decree, requesting its annulment, in consideration of the fact that such Decree would have implemented Law no. 31/08, thus ordering the increase in airport fees, which had not been raised since 2000, by an amount calculated taking into account the programmed inflation rate for the years from 2001 to 2008 (so that the operators would get at least the actual recovery of the loss of purchasing power of money).

ADR also filed an appeal against the Decree owing to the fact

that that amounts of the separate fees for Fiumicino and Ciampino are not even equal to the amount of the airport fees set forth in Ministerial Decree 140/T of November 14, 2000 (latest update) increased by 1.7%, but are considerable less that this percentage.

Similarly, the Ministry for Infrastructure and Transport

Decree of October 8, 2009 on “Update of airport fees for 2009” was then published in the Official Gazette of December 22, 2009, no. 297.

The amount of airport fees has been updated to the amount of programmed inflation relating to 2009 which, in the Italian Economic and Financial Planning Document, is forecast as equal to 1.5%.

ADR will also appeal this Decree before the Latium Regional Administrative Court.

Again on the issue of airport fees, the Finance Law 2010 (Law no. 191 of December 23, 2009, published in the Official Gazette no. 302 of December 30, 2009) permitted airport operators to increase the fees in advance.

In particular, subsections 200 and 201 of Article 2 of the Finance Law 2010, authorise the early introduction by airport operators, starting from 2010, and while awaiting the signing of the planning agreements, of passenger boarding fees, within the maximum limit of 3 euro per outbound passenger, on condition that the new urgent infrastructural investments subject to validation by ENAC are executed by way of self-financing.

In order to access this early introduction, airport operators are required to submit a suitable application to ENAC, containing the four-year development and modernisation plan and the list of urgent, non-postponable works. The early

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introduction of fees is also subject to ENAC’s technical validation of the above development plan.

The early introduction of the fees shall not apply in the event that airport operators:

- do not file the documentation necessary for the signing of the planning agreements within the term of six months from the date of ENAC’s technical validation of the four-year development plans;

- do not sign the planning agreements within the term of 18 months from said validation;

- and, in any event, if the planned investments are not launched according to the terms and methods set forth in the four-year plan.

On January 15, 2010, ADR sent to ENAC its “application for admission to the procedure for early introduction of fees”, according to the methods required by said Authority with letter of December 21, 2009, protocol no. 0090287/DIRGEN/DG, pursuant to Art. 2, subsections 200 and 201 of the Finance Law 2010, attaching:

a. the four-year development plan; b. the list of works, among those set forth in the Plan, which

are deemed urgent and non-postponable; c. traffic forecasts for the four year period of the Plan. CONCESSION FEE

Italian Legislative Decree 251/95, later converted into Law 351/95 introduced the obligation to pay a concession fee. The criteria for the calculation of the concession fee were modified by Art. 2, subsection 188 of Law 662/96. In compliance with said law, the fee was periodically set for each period considered, with reference to the volumes of passenger and cargo traffic.

In the 1997-2002 period, the concession fee was calculated “in an amount corresponding to ten percent of the total amount of revenue deriving from fees on the use of the two airports, as well as the fees for loading and unloading of cargo”.

The Decree of the State Property Agency on June 30, 2003 adopted a new, different reference parameter for calculating the fee, identified as the so-called “WLU (Work Load Unit)” which “corresponds to one passenger or 100 kg of cargo or post” and is “calculated using the data reported in the statistical yearbook of the Ministry for Infrastructure and Transport - ENAC (Italian Civil Aviation Authority)”.

The same decree identified several levels of traffic and, through the use of a differentiated coefficient per layer, allows for the calculation of a fee that values and measures airport traffic.

Lastly it is noted that Article 11.10 of Law 248/2005 -

mentioned earlier - has provided that the state concession fees

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be reduced by 75% up to the date of introduction of the system for determination of airport fees.

Art. 1, subsection 258, of Finance Law 2007 established that with the Minister of Transport decree, in agreement with the Minister of the Economy, the annual fees due from airport management companies would be increased proportionally, to an extent that would bring in new revenue for the tax authority equal to 3 million euro in 2007, 9.5 million euro in 2008 and 10 million euro in 2009.

By the Decree of August 3, 2007 – published on the Official

Gazette no. 226 of the Italian Republic dated September 28, 2007 – the Minister of Transport together with the Minister of the Economy and Finance, pursuant to Law no. 296 of December 27, 2006, (Financial Law 2007), decided the increase in the annual fee for the use of assets of the State Public Property due from the airport managing company for the years 2007-2009.

The Decree of the State Property Office of December 23, 2009, published in the Official Gazette no. 302 of December 30, 2009, extended to 2012 the methods for quantifying airport management fees due by operators, previously set forth in the inter-executive decree of June 30, 2003.

AIRPORT INFRASTRUCTURES. Using funds from autonomous loans or using funds issued by

the State on the basis of specific regulations and agreements, the company has the task of coordinating all assets necessary for the creation of the “Development Plan” of airport infrastructures. The total amount of assets used by the company for the financial year in the exercise of its own activity is composed of four distinct types:

- “Own assets”: assets acquired as property by the company through its own financial means, for which the company does not believe that there is an obligation to assign them at the end of the term of the concession.

They consist of light buildings, systems and machinery, industrial and commercial equipment and other assets. They are shown under balance sheet assets among “Tangible/technical fixed assets”.

- “Revertible assets”: are assets purchased by the company using its own financial means and, based on the concession agreement in force, subject to free reconveyance to the Grantor, in conditions of normal use and regular functioning, upon termination of the concession.

Revertible assets include all works and fixed systems carried out on the airport State-owned soil. They consist of industrial building and fixed systems, and are shown under assets among “Tangible/technical fixed assets”.

- “Assets received in concession”: are assets owned by the

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State and received in concession for use. They essentially consist of previously existing infrastructures on airport soil at the moment of creation of the company in 1974.

As they are not property of the company, their relative value is only indicated in the notes (see the note 12 regarding “Tangible/technical fixed assets”).

- “Assets created on behalf of the State”: are works created by the company, under the construction concession, on behalf of and using funds of the State, for which the company generally does not receive profits or losses deriving from their creation.

As they are not property of the company, the value of the part created by the company and reported to ENAC is indicated only in the notes (see note 12 regarding “Tangible/technical fixed assets”).

The part under construction and not yet disclosed at year end, is included in Assets among “Contract work in progress”. For implementation of said works the company receives from the Grantor an advance, by way of funds provided for the management of the works, which is recorded under payables, at the item “Advances”. Thereafter the costs incurred by the Company for works, supplies and price revision are reported and invoiced to the Grantor on the basis of the state of progress of works, reducing the advances received throughout the period of time required to complete the works.

Only for general construction expenses (for design,

inspectors’ fees, inspection fees, management of works, etc.) shall the Grantor pay the company a lump sum reimbursement, equal to 9% of the loan, corresponding, as a whole, to the total estimated costs that the company shall incur for that item.

In addition, the category Assets, among “Tangible/technical fixed assets”, includes fixed assets for modernisation or renovation carried out using autonomous financial means, on “Assets received in concession” and on “Assets created on behalf of the State”.

VALUATION OF THE CONCESSION As stated in the paragraph regarding the concession

relationship, ADR’s corporate purpose is the construction and management of airports. The concession is the legal instrument that enables ADR to carry out this activity, settling fees and obligations both during and at the end of the concession. As a result, the valuation of the concession effectively corresponds to the valuation of the company, and vice versa.

The airport management concession is recorded in the consolidated financial statements for a value of 2,996 million euro, originating as follows:

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(in millions of euro)

1) Value entered at the time of the first consolidation of Leonardo S.p.A. (now ADR), related to the difference in value between the price paid by Leonardo S.p.A. and ADR’s shareholders’ equity:

a) net value as at December 31, 2006 for the 51.08% share of ADR owned by Gemina 1,151

b) net value as at July 1, 2007 for the 44.68% share of ADR purchased by Macquarie (change in consolidation area) 891

Subtotal 2,042

2) Value measured as at July 1, 2007:

a) difference between ADR’s shareholders’ equity and the price paid to Macquarie 930

b) deferred taxes on the value of 930 257 1,187

3) Depreciation regarding 2007-2008 (146)

4) Value of concession as at December 31, 2009 (1+2+3) 3,083

5) Depreciation regarding 2009 (87)

6) Value of concession as at December 31, 2009 (4+5) 2,996 The value of the concession is amortised on a straight-line

basis in each year along the duration of the concession, i.e. until June 30, 2044.

The fairness of the value has been ascertained by estimating the expected income and cash flows over the period of time of the concession, i.e., until June 2044.

The two chief areas of ADR’s activity, “aviation” and “non aviation”, are considered a single Cash Generating Unit (CGU). ADR manages all of the airport and commercial activities pursuant to Agreement no. 2820.

For the purpose of determining cash flows, for the period

2010 – 2019 the forecasts contained in the 2010 – 2019 Plan approved by ADR’s Board of Directors on January 28, 2010 were used. This Plan was submitted to the approval of the Financial Institutions for the verification of its economic-financial sustainability, with regard to the restraints put in place by the loan agreements.

The Plan was drawn up based on the following assumptions: - investments in infrastructure for 1,575 million euro,

primarily aimed at upgrading and completing the Fiumicino Sud terminal; no investments in the Fiumicino Nord terminal or the new Viterbo airport;

- passenger traffic increasing according to sector experts, to reach 54 million users in 2019, in line with the capacity of the infrastructures;

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- tariff framework in line with the current CIPE

regulations, without, therefore, applying the derogations that Law 102/2009 (“Anti-Crisis Decree”) grants ENAC for airports with traffic exceeding 10 million passengers per year.

For the years following 2019, the following assumptions have

been formulated: - investments for improvement and maintenance of

existing infrastructure; - growth in passenger traffic limited to 0.8% per year, in

line with the improvement in efficiency of the existing infrastructures;

- annual of 2.0% applied to revenues not deriving from tariffs, and to operating costs;

- unchanged tariff framework, thus with unit values significantly decreasing due to the lack of new infrastructures.

Cash flows for the entire period 2010 – 2044 were thus

discounted using ADR’s post-tax cost of capital, equal to 6.5%.

The analyses confirmed the amount of the concession’s value. Nonetheless, it is important to note that according to the

most reliable forecasts, traffic in the Rome airport system will reach 90 – 100 million passengers at the termination of the concession. This is the basis for the plan for upgrading the Fiumicino airport, already launched by ADR with the plan for expanding to the north of the current terminal, and for which the tender for the master plan has already been called.

The significant investments needed for the initiative require the stipulation of a planning agreement which ensures a return on the resources invested, by way of its duration and mechanism for determining tariffs.

The current status of both the valuation of investments and the possible form of the planning agreement do not permit the use of the same for the impairment test of the value of the concession.

On March 9, 2010 ADR requested that ENAC issue a formal

notice for the purpose of launching the process for signing the planning agreement in derogation pursuant to Article 17, subsection 34 bis of Law Decree no. 78 of July 1, 2009, converted, with amendments, into Law no. 102/2009.

CONSOLIDATION AREA Due to the spin-off of SdE, from July 1, 2009 the

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consolidation area includes Fiumicino Energia S.r.l. and Leonardo Energia S.c. a r.l.

These companies, together with Gemina and ADR, have been consolidated on a line-by-line basis

SITTI has been valued at net equity, while Pentar has been valued at cost.

As regards items evaluated, the following tables generally show the amounts of the same, their breakdown, the amount pertaining to the previous year and/or any change with respect to the latter.

Figures shown are in thousands of euro. NOTES TO THE INCOME

STATEMENT

NOTE 1 REVENUES

2009 2008 Change % Change

AIRPORT INFRASTRUCTURES 570,213 581,724 (11,511) (2.0)

AIRPORT FEES 163,182 165,313 (2,131) (1.3)

CENTRALISED INFRASTRUCTURES 35,522 36,450 (928) (2.5)

SECURITY 62,918 63,081 (163) (0.3)

OTHERS 29,851 24,575 5,276 +21.5

AVIATION ACTIVITIES 291,473 289,419 2,054 +0.7

REVENUES FROM SALES 80,154 87,040 (6,886) (7.8)

FACILITY SUB-CONCESSIONS 103,221 102,600 621 +0.6

CAR PARKS 27,493 30,009 (2,516) (8.6)

ADVERTISING 22,787 26,048 (3,261) (12.3)

REFRESHMENTS 6,746 8,572 (1,826) (22.1)

OTHER 30,069 23,512 6,557 +28.1

NON-AVIATION ACTIVITIES 270,470 277,781 (7,311) (2.6)

OTHERS 8,270 14,524 (6,254) (43.4)HOLDING AND OTHER

ACTIVITIES 695 433 262 +60.5

TOTAL 570,908 582,157 (11,249) (1.9)

Revenues almost entirely relate to airport activities, and have decreased compared to the previous year.

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The change compared to the previous year reflects the reduction in traffic and is analysed in detail in paragraph 3.2.2 “Performance” of the Report on Operations.

NOTE 2 CONSUMPTION OF RAW MATERIALS AND CONSUMABLES

2009 2008

COMBUSTIBLES 16,767 26,727

FUEL AND LUBRICANTS 2,566 3,469

ELECTRICITY 2,604 -

SPARE PARTS (PRODUCTION PURCHASES) 5,005 4,709

DIRECT SALES MATERIALS 35,881 39,302

CONSUMABLES 4,221 7,208

CHANGES IN RAW MATERIAL 1,091 (140)

TOTAL 68,135 81,275

The decrease in costs for raw materials and consumables is the result of the decreased activities and several cost containment measures implemented.

NOTE 3 STAFF COSTS

2009 2008

SALARIES AND WAGES 89,799 88,655

SOCIAL SECURITY CHARGES 26,026 23,786

POST-EMPLOYMENT BENEFITS 5,660 5,596

RESTRUCTURING COSTS 20,348 -

PREVIOUS YEARS COST OF LABOUR ADJUSTMENTS (332) 216

OTHER COSTS 1,232 1,297

TOTAL 142,733 119,550

The increase in staff costs is almost fully attributable to the ADR Group, due to the charges allocated for the restructuring plan.

NOTE 4 OTHER OPERATING COSTS

2009 2008

SERVICE CHARGES 108,032 119,552

COSTS FOR USE OF THIRD PARTY ASSETS 13,818 13,536

ALLOCATION TO PROVISION FOR RISKS 6,949 1,523

OTHER PROVISIONS 501 405

WRITE-DOWNS OF RECEIVABLES 5,935 2,580

CONCESSION FEES - 15

OTHER OPERATING EXPENSES 19,563 50,663

TOTAL 154,798 188,274

As regards operating costs, significant contractions in costs

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were achieved in consulting, marketing expenses and utilities.

This item shows a decrease of 33.5 million euro compared to the previous year.

In 2008 “Other operating expenses” included the losses on receivables of the ADR Group due from Alitalia Group companies for 42.4 million euro. In 2009, this item included the estimated charges relating to litigation with the Customs Agency for 12.1 million euro, described in Note 29 “Provisions for risks and charges”.

NOTE 5AMORTIZATION, DEPRECIATION AND WRITE-DOWNS OF FIXED

ASSETS

2009 2008

AMORTISATION OF INTANGIBLE FIXED ASSETS 90,470 90,336

DEPRECIATION OF TANGIBLE FIXED ASSETS 51,695 48,307

TOTAL 142,165 138,643

The difference with respect to the previous year is mainly attributable to:

- increase in amortisation of the ADR Group for 2.7 million

euro.

- depreciation of the co-generation power plant at

Fiumicino airport for 0.8 million euro.

Total amortisation of the airport management concession amounted to 86.8 million euro and it is broken down as follows, both for 2008 and 2009:

AMORTISATION OF CONCESSION

RECORDED IN ADR’S FINANCIAL

STATEMENTS 49,284 AMORTISATION OF CONCESSION

RECORDED IN GEMINA CONSOLIDATED

FINANCIAL STATEMENTS FROM

CONSOLIDATION OF 51.08% OF ADR 5,472 AMORTISATION OF CONCESSION

RECORDED IN GEMINA CONSOLIDATED

FINANCIAL STATEMENTS FROM

CONSOLIDATION OF 44.68% OF ADR 32,051

TOTAL 86,807

NOTE 6 FINANCIAL INCOME

2009 2008

INTEREST INCOME 2,220 8,754

INTEREST ON BANK DEPOSITS AND LOANS 2,220 8,754

INCOME ON DERIVATIVES 34,070 23,917

SWAP DIFFERENTIALS 14,200 8,388

VALUATION OF DERIVATIVES 16,390 15,529

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VALUATION OF DEBT INSTRUMENTS UNDERLYING DERIVATIVES 3,480 -

EXCHANGE GAINS 49 67,510

OTHER INCOME 1,864 635

DEFAULT INTEREST ON CURRENT RECEIVABLES 33 137

INTEREST FROM CUSTOMERS 1 65

INCOME FROM RECEIVABLES HELD AS FIXED ASSETS 3 4


TOTAL 38,203 100,816


- decrease in interest income due to the reduction in interest

rates near the end of the previous year;

- increase in income on derivatives of the ADR Group due to the greater positive swap differentials paid to ADR and Romulus by the counterparts with which the companies subscribed variable rate hedging contracts;

- decrease in exchange gains of the ADR Group as a result of the conversion into Euro of Tranche A4 issued in Pounds Sterling.

NOTE 7 FINANCIAL EXPENSES

2009 2008

INTEREST EXPENSE 72,596 92,757

INTEREST ON OUTSTANDING BONDS 60,835 72,857

INTEREST ON BANK LOANS 11,410 19,900

INTEREST ON FINANCIAL PAYABLES 351 -

EXPENSES ON DERIVATIVES 26,086 103,197



VALUATION OF DEBT INSTRUMENTS UNDERLYING DERIVATIVES - 14,829

EXCHANGE LOSSES 16,399 7

OTHER EXPENSES 4,401 5,859

COMMISSION EXPENSE 327 465

DUE TO EMPLOYEES FOR SEVERANCE INDEMNITIES 722 1,016

EFFECTS OF APPLICATION OF THE AMORTISED COST METHOD 2,966 3,835

OTHER EXPENSES 386 543

TOTAL 119,482 201,820


- decrease in interest expense due to the reduction in

interest rates and to the lower exposure of the ADR

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Group as a result of partial repayments of 99.2 million euro in March 2008, refinanced for 80 million euro at the end of the first half 2008;

- lower expenses on derivatives due to the positive impact of the reduction in rates on variable rate interest rate swaps;

- greater exchange losses following the conversion into Euro of Tranche A4, denominated in Pounds Sterling, which were offset in the item “Income on derivatives – valuation of derivatives”.

NOTE 8 INCOME (CHARGES) ON EQUITY INVESTMENTS

2009 2008 MEASUREMENT OF SDE BY THE NET

EQUITY METHOD - (934)

MEASUREMENT OF SITTI (34) 642

CAPITAL LOSS ON 3 ITALIA - (3)WRITE-DOWN OF LA PIAZZA DI

SPAGNA (44) (1)

WRITE-DOWN OF PENTAR (1,100) (291)OTHER CHARGES ON EQUITY

INVESTMENTS (664) -

TOTAL (1,842) (587) The book value of the equity investment in SITTI is aligned with the likely salvage value. The book value of the equity investment in Pentar was prudently aligned to the quota of the Company’s shareholders’ equity, as is seen in the best information available.

NOTE 9 INCOME TAXES

2009 2008

CURRENT INCOME TAXES 31,580 25,973

IRES 375 338CHARGES FROM CONSOLIDATED

TAXATION 17,442 8,694

IRAP 13,763 13,556

SUBSTITUTE TAX - 3,385INCOME TAXES FOR PREVIOUS

YEARS 1,230 (523)NET (PREPAID) DEFERRED

INCOME TAX (12,885) (19,450)

TOTAL 19,925 6,000 Lacking certainty regarding the availability of tax funds, the

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extraordinary income of 1.6 million euro linked to the IRES reimbursement deriving from the 10% deduction of IRAP for the years 2004-2007 was not allocated.

The application for refund was submitted on February 1, 2010 by the consolidating company ADR for 2004-2006 and on February 24, 2010 by the consolidating company Gemina for 2007.

It is noted that a Group tax consolidation agreement is in force between Gemina, ADR, ADR Tel, ADR Engineering S.p.A., and ADR Sviluppo S.r.l. for the 2007-2009 period.

According to the above agreement, the Parent Company recorded IRES receivables as the company incurred tax losses during the year.

For details on calculation of prepaid taxes, see note 16.

The following table shows the reconciliation of IRES theoretical tax with the actual tax (also including charges from consolidated taxation):

2009 2008

PRE-TAX INCOME (20,044) (13,178)TAX CALCULATED ON THE THEORETICAL IRES

TAX RATE (5,512) 27.5% (3,624) 27.5%EFFECT OF CHANGES INCREASES (DECREASES)

COMPARED TO THE ORDINARY TAX RATE

PERMANENT DIFFERENCES:

REVENUES NOT SUBJECT TO TAXATION - - (14) 0.1%

DIVIDENDS (63) 0.3% (80) 0.6%

UNDEDUCTIBLE COSTS 9,348 (46.6%) 6,282 (47.7%)

CAPITAL GAINS FROM DISPOSALS - - (8,079) 61.3%

OTHER PERMANENT DIFFERENCES (586) 2.9% 2,604 (19.8%)

TEMPORARY DIFFERENCES:

INCREASE 12,171 (60.7%) 9,185 (69.7%)

DECREASE (6,569) 32.8% (4,155) 31.5%

TAX CONSOLIDATION ADJUSTMENTS 9,331 (46.6%) 6,913 (52.5%)

USE OF GROUP LOSSES OF PREVIOUS YEARS - - - -

TOTAL ACTUAL CURRENT IRES 17,817 n/a 9,032 n/a

NOTE 10 NET INCOME FROM DISCONTINUED OPERATIONS

In 2008 this item included the net capital gain resulting from the transfer of the subsidiary Elilario to the Spanish

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company Idomeneo S.L. (INAER Group), occurred in February 2008 at a price of 60.8 million euro.

NOTE 11 INTANGIBLE FIXED ASSETS

12/31/2008 Increases Decreases 12/31/2009

AIRPORT MANAGEMENT CONCESSION 3,083,181 - (86,807) 2,996,374

GOODWILL - 6,906 - 6,906

OTHER INTANGIBLE FIXED ASSETS 6,724 1,466 (3,023) 5,167

TOTAL 3,089,905 8,372 (89,830) 3,008,447

Airport management concession

The change in value with respect to December 31, 2008 can be attributed to the amortisation over the year described in note 5 of these Explanatory Notes.

Goodwill Valuation of the goodwill of the co-generation power plant.

In accordance with agreements made with Edison S.p.A., on July 1, 2009 Gemina exchanged 45.55% of SdE to Edison, for 40.57% of Fiumicino Energia, without any cash adjustments between the parties.

This was backed up by a valuation of the agreement between the parties, performed at the time – in September 2008 – which assigned substantially equal values to the two equity investments.

Gemina thus attributed to the incoming equity investment in Fiumicino Energia the same cost as the outgoing equity investment in Sistemi di Energia, equal to 7.4 million euro. At the date of the spin-off, June 30, 2009, the shareholders’ equity of Fiumicino Energia was 0.4 million euro.

Therefore, an estimation was made of the fair value of the equity investment in Fiumicino Energia, equal to 86.12% of the share capital, based on the following assumptions:

- Fiumicino Energia built a plant for the production of electric and thermal power according to the process of co-generation.

- The co-generation power plant was built on Fiumicino

airport soil received through sub-concession from ADR.

- The agreements with ADR envisage that the power plant will be transferred free of charge to Aeroporti di Roma in June 2023.

- Fiumicino Energia has let the co-generation power plant to consortium company Leonardo Energia, 90% held by Fiumicino Energia and 10% held by ADR.

- The annual lease rental is variable, and equal to the difference between revenues and operating costs of the power plant.

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- The energy produced is destined to meet the requirements of ADR. The selling price is indexed to the trend in prices of a basked of fuel oils.

- The cash flows were discounted at the net tax rate of 4% gathered from the company’s financial structure, composed of about 3% of shareholders’ equity and of about 97% of financial indebtedness in the form of leasing for the main part, mortgages for the construction part, and short-term loans for the remaining part.

The value obtained from the discounting of cash flows is 9.2 million euro, which corresponds to 7.9 million euro for Gemina’s share, equal to 86.12%.

The difference between the purchase cost of the equity investment and the pro-rata Shareholders’ Equity, equal to 6.9 million euro, was provisionally recorded as goodwill.

Fiumicino Energia balance sheet summary

12/31/2009 07/01/2009 Change

FIXED ASSETS 22.7 22.0 0.7

NET WORKING CAPITAL - (2.5) 2.5RISK, CHARGES AND EMPLOYEE SEVERANCE

INDEMNITIES - - -

NET CAPITAL INVESTED 22.7 19.5 3.2

financed by:

SHAREHOLDERS’ EQUITY 0.9 0.4 0.5

NET FINANCIAL INDEBTEDNESS 21.8 19.1 2.7 Other intangible fixed assets

12/31/2008 Changes 12/31/2009

Cost Accr.

Amort. Book value

Increase (decr.)

Amort. rate Cost Accr.

Amort. Book value

INDUSTRIAL PATENTS AND

INTELLECTUAL PROPERTY RIGHTS 7,446 (5,034) 2,412 367 (1,138) 7,813 (6,172) 1,641CONCESSIONS, LICENCES,

TRADEMARKS AND SIMILAR

RIGHTS 20,720 (16,424) 4,296 1,736 (2,511) 22,456 (18,935) 3,521

OTHER 57 (41) 16 2 (13) 59 (54) 5

TOTAL 28,223 (21,499) 6,724 2,105 (3,662) 30,328 (25,161) 5,167

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NOTE 12 TANGIBLE/TECHNICAL FIXED ASSETS

12/31/2008 Changes 12/31/2009

Reclass./Change in consolidation area

Cost Accr. Depr. Book Value

Increase (Decreas

e) Cost Accr. Depr.

Depr. rate

Cost Accr. Depr. Book Value

LAND AND BUILDINGS 194,234 (101,393) 92,841 1,582 241 3 (7,029) 196,057 (108,419) 87,638

PLANT AND MACHINERY 140,472 (86,462) 54,010 30,138 1,321 49 (11,132) 171,931 (97,545) 74,386

FIXTURES AND FITTINGS, TOOLS AND OTHER

EQUIPMENT 8,430 (7,160) 1,270 382 - - (483) 8,812 (7,643) 1,169

CONSTRUCTION IN PROGRESS

AND ADVANCES 35,829 - 35,829 27,644 (10,293) - - 53,180 - 53,180

OTHER ASSETS 565,397 (366,374) 199,023 26,358 7,032 353 (33,589) 598,787 (399,880) 198,907

TOTAL 944,362 (561,389) 382,973 86,104 (1,699) 405 (52,503) 1,028,767 (613,487) 415,280

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Items “Land and buildings” and “Plant and machinery” include assets held by the ADR Group which must be relinquished to the Grantor. The value of these assets is shown in the table below:

12/31/2008 Changes 12/31/2009

Reclass./Change in consolid. area

Cost Accr. Depr.

Book value

Increase

(Decrease) Cost Accr.

Depr.

Depr. rate Cost Accr.

Depr. Book value

LAND AND BUILDINGS 172,722 (82,894) 89,828 1,334 226 - (6,547) 174,282 (89,441) 84,841

PLANT AND MACHINERY 20,564 (13,052) 7,512 1,142 328 23 (1,045) 22,034 (14,074) 7,960

TOTAL 193,286 (95,946) 97,340 2,476 554 23 (7,592) 196,316 (103,515) 92,801

The increase in the item “Plant and Machinery” includes the value, equal to 22.7 million euro, of the co-generation power plant at Fiumicino airport as a result of the inclusion of Fiumicino Energia in the consolidation area.

The capitalisations for the year in the item “Plant and Machinery” include:

- air conditioning and purification systems for 759

thousand euro;

- baggage screening equipment and security equipment,

amounting to 528 thousand euro;

- security systems totalling 963 thousand euro;

- electrical systems for 1,112 thousand euro;

- vehicles used to transport passengers with reduced

mobility for 476 thousand euro.

The increase of “Fixed assets in progress and advances” is mostly made up of:

- 8,653 thousand euro relating to investments in Group property and, in particular, 5,353 thousand euro regarding the new Pier C and 360 thousand euro for the purchase of new printers and readers for boarding cards;

- 18,991 thousand euro are made up by improvement interventions on third party assets that are under way, amongst which:

- renovation of Quadrante 300 aircraft aprons for 2,947

thousand euro;

- former Alitalia Cargo civil engineering works for

3,088 thousand euro;

- runway and aircraft apron sign adjustment works

amounting to 546 thousand euro;

- works on the external road network for 1,074

thousand euro;

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Among the most important improvements on third party assets completed during the year, included in the item “Other assets”, we note:

- Runway 2 and taxiway maintenance for 807 thousand

euro;

- new passenger sign system in the terminals totalling 1,532

thousand euro;

- Ciampino runway maintenance amounting to 685

thousand euro;

- upgrading of technological plans and U.T.A. revision at

Fiumicino and Ciampino for 951 thousand euro.

The guarantees supplied by the ADR Group to some financers regarding fixed assets are described under Note 32 of these Explanatory Notes.

The following table sets forth the value of the systems and infrastructure received in concession in the Fiumicino and Ciampino airports, and the value of the works financed, realised and reported to the National Civil Aviation Board.

12/31/2009 12/31/2008 FIUMICINO ASSETS RECEIVED IN

CONCESSION 119,812 119,812CIAMPINO ASSETS RECEIVED IN

CONCESSION 29,293 29,293ASSETS CREATED ON BEHALF OF

THE STATE 672,999 668,060

TOTAL 822,104 817,165

As these are assets received in concession, and not owned, the related value is not recorded under “Assets” in the Balance Sheet.

NOTE 13EQUITY INVESTMENTS IN ASSOCIATED COMPANIES VALUED AT

NET EQUITY

12/31/2009 12/31/2008 Change SDE - 5,495 (5,495)

SITTI 5,000 5,274 (274) PENTAR 3,609 4,709 (1,100)

LA PIAZZA DI SPAGNA 40 40 -

TOTAL 8,649 15,518 (6,869)

In accordance with the agreements made, Gemina exchanged its shares in SdE with Edison, without adjustments, for the shares held by Edison in Fiumicino Energia, by deed of exchange on July 1, 2009.

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The book value of the shareholding in SITTI is aligned with the likely salvage value.

The book value of the equity investment in Pentar was prudently aligned to the quota of the Company’s shareholders’ equity, as is seen in the best information available.

NOTE 14 INVESTED RECEIVABLES

This item, equal to 4,591 thousand euro, includes the receivable from the INAER Group, due by 2017, following the transfer of the equity investment in Elilario occurred in February 2008.

This is an interest-bearing loan. A 7.5% share is capitalised and will be recognised at the expiry date of the receivable (591 thousand euro in 2009).

A share equal to Euribor rate plus 2% was collected periodically.

NOTE 15 OTHER EQUITY INVESTMENTS

12/31/2009 12/31/2008 Change

NON-CONSOLIDATED SUBSIDIARIES: 10 10 -

DOMINO S.R.L. 10 10 - NON-CONSOLIDATED ASSOCIATED

COMPANIES 10 - 10

CONSORZIO E.T.L. 10 - 10

OTHER COMPANIES: 2,736 2,747 (11)

KIWI 1 VENTURA SERVICOS S.A. 28 28 -

AEROPORTO DI GENOVA S.P.A. 1,395 1,395 -

S.A. CAL. S.P.A. 1,307 1,307 -

ALINSURANCE S.R.L. 6 6 -

CONSORZIO E.T.L. - 10 (10)

LEONARDO ENERGIA S.C.A R.L. - 1 (1)

TOTAL 2,756 2,757 (1)

NOTE 16 DEFERRED TAX ASSETS

The item amounted to 51,324 thousand euro, compared to 42,469 thousand euro as at December 31, 2008.

A breakdown of the item and movements recorded over the year is reported in the table below:

12/31/2008 Increase Decrease 12/31/2009

Taxable income

Tax Taxable income Tax Taxable

incomeTax Taxable

income Tax

(A) (B) (C) (A+B-C)

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PREPAID TAXES 152,036 43,626 57,048 16,131 24,417 6,883 184,667 52,874PROVISIONS FOR RISKS AND

CHARGES 20,395 6,310 15,240 4,450 2,778 811 32,857 9,949

PROVISION FOR OBSOLETE GOODS 446 146 314 101 287 93 473 154

BAD DEBT PROVISION 28,700 7,895 3,924 1,079 879 242 31,745 8,732

PERSONNEL-RELATED ALLOCATIONS 2,579 710 10,640 2,926 2,376 653 10,843 2,983

PREPAID AMORT./DEPRECIATION 1,141 371 - - 145 47 996 324

NET FINANCIAL INCOME/EXPENSE 13,180 3,625 1,114 306 11,454 3,150 2,840 781

CONSOLIDATION ADJUSTMENTS 16,306 5,269 2,854 923 1,600 517 17,560 5,675

OTHER 15,852 4,617 2,526 726 4,898 1,370 13,480 3,973

DERIVATIVES 53,347 14,683 20,436 5,620 - - 73,873 20,303

DEFERRED TAXES (4,192) (1,157) (1,522) (419) (88) (26) (5,626) (1,550)

DIVIDENDS (55) (15) - - (55) (15) - -

CAPITAL GAINS (71) (24) - - (33) (11) (38) (13)

OTHER (4,066) (1,118) (1,522) (419) - - (5,588) (1,537)

TOTAL 147,844 42,469 55,526 15,712 24,329 6,857 179,041 51,324

The increase, compared to December 31, 2008, is attributable to the increase in prepaid taxes following, primarily, the allocations to provisions for risks and charges and, specifically, to provisions for restructuring, in addition to those relating to derivatives.

NOTE 17 OTHER NON-CURRENT ASSETS

This item amounts to 9,486 thousand euro, compared to 547 thousand euro as at December 31, 2008. It includes the amount of 8.9 million euro for the instalments paid, in line with the instalment plan agreed by the Tax Collection Agency, as collection of the amounts provisionally assessed as owed within the litigation with the Customs Agency, described in Note 43. These payments are effectively a financial advance, given the provisional assessment of the amounts as owed in the presence of the appeal presented by ADR against the tax deed.

NOTE 18 OTHER NON-CURRENT FINANCIAL ASSETS

They amount to 1,400 thousand euro (unchanged compared to December 31, 2008) and are solely composed of the share of the bond issue of SITTI, subscribed by Gemina.

NOTE 19 INVENTORIES

12/31/2009 12/31/2008 Change

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RAW, ANCILLARY AND CONSUMABLE

MATERIALS 2,919 2,913 6FINISHED PRODUCTS AND GOODS FOR

RESALE 7,245 8,342 (1,097)

TOTAL 10,164 11,255 (1,091)

The guarantees supplied by the ADR Group to some financers regarding inventories are described in Note 32 of these Explanatory Notes.

NOTE 20 CONTRACT WORK IN PROGRESS

12/31/2009 12/31/2008 Change WORK IN PROGRESS 11,299 10,667 632

RECEIVABLES FOR ACCOUNTS INVOICED 6,929 2,346 4,583 less

ADVANCES FROM CUSTOMERS (618) (540) (78)

TOTAL 17,610 12,473 5,137

NOTE 21 TRADE RECEIVABLES

12/31/2009 12/31/2008 Change

DUE FROM CUSTOMERS 238,777 198,121 40,656

DUE FROM OTHERS 763 533 230

239,540 198,654 40,886

BAD DEBT PROVISION (34,164) (30,058) (4,106)

ALLOWANCE FOR DOUBTFUL ACCOUNTS (8,078) (8,094) 16

(42,242) (38,152) (4,090)

TOTAL 197,298 160,502 36,796

Trade receivables, net of allowances for doubtful accounts, mainly refer to receivables due from customers and amounts due from Public Agencies for work funded by the same and for the supply of utilities and services.

The increase in receivables compared to December 31, 2008 derives from the failure to liquidate the receivables of the ADR Group due from companies of the Alitalia Group under extraordinary administration, amounting to 27.0 million euro as at December 31, 2009, from the extension of the time required for payment by customers, as well as from the increased receivables for council surcharges resulting from the two euro increase in the surcharge in force from November 2008.

The guarantees supplied by the ADR Group to some financers regarding receivables are described in Note 32 of

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these Explanatory Notes.

NOTE 22 OTHER RECEIVABLES

12/31/2009 12/31/2008 Change DUE FROM ASSOCIATED COMPANIES 530 530 -

TAX RECEIVABLES 2,164 6,644 (4,480)

DUE FROM OTHERS 4,232 4,477 (245)

TOTAL 6,926 11,651 (4,725)

NOTE 23 FINANCIAL INSTRUMENTS - DERIVATIVES

12/31/2009 12/31/2008 Change INTEREST RATE HEDGING DERIVATIVES - 2,936 (2,936)

ACCRUED INTEREST 534 500 34

TOTAL 534 3,436 (2,902)

Details of all derivative contracts of the Group are described in Note 36, in the section regarding derivative liabilities.

NOTE 24 OTHER CURRENT FINANCIAL ASSETS

This item as at December 31, 2009 was equal to 55,497 thousand euro, compared to 49,581 thousand euro as at December 31, 2008.

The figure includes the balance, equal to 51 million euro, of the fixed-term deposit held by the “Security Agent” of the ADR loans, called the “Debt Services Reserve Account”.

In this account, ADR deposited an amount as security on the servicing of debt due over the period, according to the methods established by the loan agreement.

NOTE 25 CASH AND CASH EQUIVALENTS

12/31/2009 12/31/2008 Change BANK AND POST OFFICE DEPOSITS 148,695 143,312 5,383

CASH ON HAND 577 886 (309)

TOTAL 149,272 144,198 5,074

It is worth noting that bank deposits include the balance (11.1 million euro) of the “Recoveries Account”, required

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under the terms and conditions of ADR loan agreements, in which cash raised through extraordinary transactions is deposited, net of related costs.

As at December 31, 2009, the amount of 46.2 million euro, coming from the “free” cash (i.e. that can be also destined, under ordinary conditions, to the payment of dividends generated in previous years) was on a current account of ADR, which had not been pledged.

The guarantees supplied by the ADR Group to some financers regarding cash equivalents are described in Note 32 of these Explanatory Notes.

NOTE 26 ASSETS HELD FOR SALE

There are no entries in this item.

NOTE 27 SHAREHOLDERS’ EQUITY

Group shareholders’ net equity for the period as at December 31, 2009 amounts to 1,685,873 thousand euro, while shareholders’ equity pertaining to minority shareholders amounts to 36,556 thousand euro.

Changes occurred over the period are highlighted in the special statement at section 5.4.

The fully paid-in share capital is made up of 1,469,197,552 ordinary shares and 3,762,768 savings shares of the par value of 1 euro.

The reconciliation statement of Gemina shareholders’ equity and the net profit (loss) for the year with consolidated shareholders’ equity and profit (loss) can be found in section 5.5 of these Explanatory Notes.

NOTE 28 EMPLOYEE BENEFITS

VALUE AS AT 12/31/2008 33,494

CURRENT SERVICE COST 5,799 FINANCIAL EXPENSES ON

OBLIGATIONS ASSUMED 722

OTHER CHANGES 39

USE (15,401)

VALUE AS AT 12/31/2009 24,653

Current service cost and net actuarial losses are recorded in the income statement in staff costs as post-employment benefits.

The actuarial profit (loss) not recorded at year-end is insignificant.

The decrease in employee severance indemnities mainly is attributable to the payment of indemnities due to the exit of resources and mobility, in addition to the allocation of shares

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of employee severance indemnity accrued during the year to complementary compensation funds and the INPS Treasury Fund.

Financial expense on obligations assumed is entered in the income statement among “Financial expenses - other expenses”.

NOTE 29 PROVISIONS FOR RISKS AND CHARGES

Change 12/31/2008 Other

changes Allocations Use 12/31/2009

281,127 - 29,923 (9,883) 301,167

OF WHICH:

- AFTER 12 MONTHS 272,183 - 18,543 (9,883) 280,843

- WITHIN 12 MONTHS 8,944 - 11,380 - 20,324

Provisions for risks and charges as at December 31, 2009 amounted to 301,167 thousand euro, compared to 281,127 thousand euro as at December 31, 2008.

The item includes:

- deferred tax on the difference between price paid to Macquarie in July 2007 and ADR’s shareholders’ equity allocated to airport management concession; said value, equal to 245.4 million euro as at December 31, 2008, remains at 238.5 million euro as at December 31, 2009;

- 26.9 million euro in provisions for outstanding litigation, relating to probable liabilities connected with court cases in which the ADR Group is involved;

- estimated charges of 12.1 million euro relating to ongoing litigation with the Customs Agency, with notice of assessment for a total of 25 million euro. In this regard it is noted that the collection procedure is underway for the entire amount assessed as owed, which ADR is paying in 36 instalments, following the petition presented to the Tax Collection Agency after having paid a down payment of 4 million euro. The instalments already paid have been recorded under tax receivables, for a total of 8.9 million euro. As at December 31, 2009 28 instalments remain to be paid, for a total of 17.2 million euro, including interest. The outcome of the appeal presented by ADR to the Regional Tax Commission of Rome is expected shortly. In ADR’s opinion, the appeal will be accepted in favour of

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ADR, fully or at least in part. On this assumption, the representation of the liability in the financial statements respects the prudential valuation performed of the risk of negative outcomes. In this regard it is noted that the Half-Year Report as at June 30, 2009 represented the amounts assessed as owed among payables for the unpaid portion, and recorded among receivables the entire amount of the tax assessed;

- The provision for risks allocated for guarantees granted by the purchaser of the equity investment in Elilario and other provisions for the Group’s current obligations, totalling 6 million euro, payment of which will probably fall due in the years to come;

- the restructuring provisions allocated during the year for the restructuring plan launched by ADR, which envisages the use of mobility and the extraordinary earnings supplement fund for 8.6 million euro;

- provision for internal insurance, equal to 1.4 million euro.

NOTE 30 FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE

The Group’s financial indebtedness is broken down as follows:

FINANCER NAME

DESCRIPTI

ON

GEMINA

GROUP

COMPANY

AMOUNT

OF LOAN

GRANTED AMOUNT

USED BOOK

VALUE INTEREST

RATE REDEMPTI

ON DURATION EXPIRATIO

N

Term Loan Facility ADR 170,000 170,000 169,795 (*) at maturity 6 years Feb. 2012POOL OF BANKS

Revolving Facility ADR 100,000 - - (*) revolving 6 years Feb. 2012

BEI EIB Loan ADR 80,000 80,000 79,637 (*) at maturity 10 years Feb. 2018

BANCA BIIS (EX-BANCA OPI)

BOPI Facility ADR 43,350 43,350 43,037 (*)

6-monthly instalments from 2010

to 2015 12 years Mar. 2015

Tranche A Parent

Company 50,000 47,500 (**) 46,964 (*) at maturity 3 years Dec. 2011

Tranche B Parent

Company 15,000 -(***) - (*) at maturity 3 years Dec. 2011

MEDIOBANCA

UNICREDIT MedioCredito

CENTRALE

IN POOL Tranche C

Parent Company 5,000 - - (*) revolving 3 years Dec. 2011

UNICREDIT

LEASING Leasing Fiumicino Energia 18,844 18,844 17,387 (*)

monthly instalments 8 years Apr. 2017

UNICREDIT MedioCredito

CENTRALE Loan Fiumicino Energia 2,000 2,000 1,694 (*)

6-month instalments 5 years Aug. 2013

OTHER SHORT-TERM LOAN 18,150

TOTAL 376,664

(*)Variable indexed to the Euribor + margin (**) The unused portion of this tranche was contractually written-off. (***) This tranche was contractually written-off on January 22, 2010 This amount is recorded for 347,825 thousand euro under

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non-current liabilities and for 28,839 thousand euro under current financial liabilities (see Note 35).

There was an increase of 17.1 million euro following the recognition of the payables of Fiumicino Energia, consolidated on a line-by-line basis starting from July 1, 2009.

The fair value estimate of medium-term loans granted by banks to the Gemina Group, recorded for a value of 358.5 million euro, was equal to approximately 369.0 million euro (net of interest accrual), as at December 31, 2009.

The description of guarantees supplied and the major covenants on such loans is given in Note 32 of these Explanatory Notes.

NOTE 31 OUTSTANDING BONDS

The value of bonds as at December 31, 2009, equal to 1,097,465 thousand euro, can be attributed to the ADR Group.

VALUE AS AT 12/31/2008 1,086,534

REPAYMENT OF BONDS (4,405) APPLICATION EFFECT OF AMORTISED

COST METHOD 2,430 ADJ. FOR CHANGE IN FAIR VALUE

AND EXCHANGE RATE ADJUSTMENT 12,906

VALUE AS AT 12/31/2009 1,097,465

The item Outstanding bonds, which includes the bond issue made by the company Romulus Finance (“Romulus”), increased by 10.9 million euro, mainly due to the adjustment of Tranche A4, issued in Pounds Sterling, to the exchange rate at December 31, 2009.

The decrease of 4.4 million euro derives from the purchase by ADR of a share of the A4 bonds on the market on February 13, 2009 for a value of 2.8 million euro.

In this regard, it is worth noting that on February 14, 2003 the creditor banks of ADR, in relation to the loan granted on August 2, 2001 for a total of 1,725 million euro, signed an agreement for transfer in lieu of payment of a portion of the debt claimed by ADR from Romulus.

Romulus, Special Purpose Entity (SPE) vehicle, established pursuant to Law no. 130 of April 30, 1999 on securitisations and controlled by two entities governed by Dutch legislation, financed the acquisition of the pre-existing bank loan to ADR through the issue of 1,265 million euro in bonds listed on the Luxembourg Stock Exchange and underwritten by institutional investors.

Following the above-mentioned redemption transaction, the characteristics of the issued securities are summarised below:

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Name Amount Currenc

y Interest rate Coupon Redem. Duratio

n Maturity

term

A1 500,000 Euro 4.94% annual at

maturity 10 years Feb. 2013

A2 200,000 Euro Euribor 3M + 0.90% quarterly at


A3 175,000 Euro Euribor 3M + 0.90% quarterly at


A4 325,019 GBP 5.441% six-monthly at


TOTAL 1,200,019(*)

(*) This is the par value of debt; the book value recorded in the financial statements (1,097 million euro) is adjusted on the amortised cost method, for changes in fair value, and for changes in interest rates for the component issued in Pounds Sterling.

The bonds issued by Romulus relative to Classes A1, A2, A3, and A4 were guaranteed by Ambac Assurance UK Limited (“AMBAC”), a monoline guarantee, which as at December 31, 2009 had a rating lower than ADR (Caa2 from Moody’s and CC from Standard & Poor’s).

For updates and additional information, see also paragraph 3.7 of the Report on Operations, “Information about risks and uncertainties”.

ADR’s rating level makes an impact on the amount of the premium paid to AMBAC for guaranteeing the bonds, but not on the interest margin applied on the single Classes of bonds.

The estimated fair value of the bonds as at December 31, 2009 is approximately 1,196.2 million euro, net of interest accrual.

The description of guarantees supplied and the major covenants on such bonds is given in Note 32 of these Explanatory Notes.

NOTE 32 GUARANTEES AND MAJOR COVENANTS ON PAYABLES Bank loans and outstanding bonds of the ADR Group, specified in Notes 30 and 31, are secured through:

- special privilege (having the characteristics of a property mortgage) of equal degree on:

- moveable property (such as plants, machinery and instruments, etc.), as recorded at any moment under depreciable assets and in the inventories of ADR;

- raw materials, work in progress, stock, finished products, goods or any other assets in ADR’s warehouse;

- receivables deriving from the transfer of plants, machinery and instruments and assets constituting the warehouse of ADR, as well as other assets and rights that are the subject of special privileges;

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- assignment in guarantee of receivables and, more

generally, of any right deriving from the contracts with customers, with ADR Tel and ADR Advertising as well as from insurance policies;

- pledge on ADR’s bank current accounts, regulated by a specific contract (“Account Bank Agreement”);

- pledge on all shares held by ADR in ADR Tel S.p.A., ADR Advertising S.p.A. and ADR Assistance S.r.l..

- “ADR Deed of Charge”, pledge provided for by the British legislation on receivables, hedging agreements and insurance policies subject to British legislation, pursuant to loan agreements.

These guarantees will remain valid until the related bank loans and outstanding bonds are extinguished. The Loan that Mediobanca and Unicredit MedioCredito Centrale granted to the Parent Company on December 11, 2008 is back by the following guarantees:

- a senior pledge on the ordinary shares of ADR representing at least 35% of the share capital of the company and to be supplements if the guarantee margin drops to below 4.5x. Gemina commits to ensure a guarantee margin of at least 4.5x, to be calculated on a monthly basis as the relationship between the simple average of the unit value of ADR shares owned by Gemina in the previous month (calculated by applying the formula included in the contract documents) and the residual loan amount.

As at December 31, 2009, 21,808,430 ADR shares – corresponding to 35% of the company’s share capital - were pledged to Mediobanca and Unicredit MedioCredito Centrale for a value, determined based on the book value of the equity investment, of 670,873 thousand euro. This number was the same as at February 28, 2010;

- pledge of the current account Gemina holds at Mediobanca into which the income derived from the disposal of equity investments, collection of dividends and other compensation will go.

A number of contract provisions govern the management of ADR’s indebtedness, both in reason of the entity of the same, and of AMBAC’s need for hedging ADR’s un-fulfilment and insolvency risk in order to minimize the actual difference between the ensured maximum rating and the issuer/debtor rating. Amongst the main provisions the following can be noted:

- acquisitions of financial assets are possible only with the prior approval of creditors or through a vehicle company without recourse and in any case only through authorised indebtedness or available cash;

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- profits from sale of financial assets can be used for investments or, if not used within 12 months from collection, they shall be destined to the repayment of the payable;

- payment of dividends is possible only if specific financial ratios are over the agreed thresholds and no event of default or a trigger event occurred;

- it is possible to arise a further loan only if the same financial ratios are over specified thresholds (higher with respect to those required for normal debt management) and if the rating granted to ADR is higher than the minimum preset levels;

- if a credit line due to expire is not repaid at least 12 months before the expiration term, during this period the entire exceeding cash generated shall be primarily destined (based on predefined percentage) to the repayment of the debt, the so-called retention regime (nevertheless, if determined financial ratios are not fulfilled 24 months before the expiration term, the retention regime can be of 24 months);

- if financial covenants are lower than certain preset minimum thresholds or the rating is below the thresholds near the sub-investment grade or other critical situations occur, as defined in the agreement, stricter measures will be adopted for the management of cash flows (trigger event) in order to hedge credits against default risk of ADR.

ADR’s loan agreements also include the respect of financial covenants consisting of ratios, defined based on actual and forecasted data, that measure: (i) the ratio between cash flow available and debt service, (ii) the ratio between future discounted cash flows and net indebtedness, in addition to (iii) ratio between net indebtedness and EBITDA.

The aforementioned ratios are verified twice a year, on the application dates of March 20 and September 20, by applying the calculation methods of the respective ratios to the reference dates as at December 31 and June 30.

If the aforementioned ratios surpass certain levels, it may result in the distribution of dividends and recourse to further indebtedness; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default.

The trigger event condition results in a series of management restrictions for ADR, principally:

a) cash sweep with the obligation to use all available cash on the application dates (March 20 and September 20 of each year) for (i) interest payments, (ii) early capital repayment under pari passu regime, (iii) the guarantee of

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Romulus securities which cannot be repaid in advance through the creation of specific cash provisions in special current accounts as pledge in favour of AMBAC (so-called cash collateralization);

b) blocking the payment of dividends and the proscription to use any provisions for dividends payments to make authorised investments (so-called authorised investments);

c) through the Security Agent, creditors can obtain any information, which is deemed suited, and share a solution plan with related implementation schedule, by entrusting an independent expert to evaluate the corporate plan providing measures and solutions for the restatement of a compatible minimum rating. In the event the remedy plan is not implemented, AMBAC will have the faculty to increase the guarantee premium on Romulus bonds;

d) no financial asset acquisitions and new loans will be allowed, even though they are destined to repay the existing indebtedness;

e) transfer under warranty in favour of creditors of all monetary receivables of ADR with consequent notice to debtors transferred.

The financial ratios, formalised in September by ADR based on the half-year data as at June 30, 2009, certified the values at a level greater than the minimum requirements to maintain ordinary operating conditions of the company, with the exception of the possibility to increase the gross debt. However this was prevented by the trigger event condition in which ADR found itself following the downgrading by Standard & Poor’s on November 30, 2007 (from BBB stable to BBB- stable). Moreover, it is noted that on April 10, 2009, Standard & Poor’s downgraded ADR’s rating, bringing it to BB with stable outlook.

The change in rating by Standard & Poor’s had limited effects on the cost of debt. As a result of this event, it was necessary to formalize a new request to the financial creditors for their consent to maintain the pre-existing waiver of the consequences of the trigger event, which are more penalising for management of the company.

Also at the September 2009 “application date” AMBAC and the other financial creditors granted the waiver of application of the trigger event and cash sweep regime until the application date of March 2010. For this reason, the only impact on cash and cash equivalents resulted from AMBAC’S decision not to permit the transfer of part of the unavailable cash on the DSRA (Debt Service Reserve Account) for an amount of 14.7 million euro to available bank accounts. This transfer would have occurred cyclically at the application date in September.

The new downgrading by Standard & Poor’s on April 10,

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2009 (from BB+ to BB with stable outlook) resulted in effects on the cost of debt and caused the non-application of the waiver of the consequences of the trigger event, specifically, the exemption from the cash sweep previously authorised by the financial creditors on request of ADR, thereby making it necessary to launch a new authorisation procedure aimed at maintaining the validity of the waiver previously granted.

Therefore, on April 27, 2009, ADR formalised a new request for waiver of all the consequences of the trigger event and the cash sweep (except for the prohibition of distribution dividends and the need to agree on the measures undertaken to recover the rating) which, with the exception of AMBAC, all the financial creditors authorised at the time.

AMBAC reserved the possibility of deciding whether to force ADR to apply the cash sweep mechanism at the next deadline on which said mechanism would have been applied (the application date in September). On September 15 AMBAC formalised the granting of the waiver of the consequences of the trigger event and cash sweep until the application date of March 2010 (exclusive). The loan agreements also provide for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. The Loan agreement obliges Gemina to allocate 100% of the net income deriving, inter alia, from ADR deeds of transfer or provision or of other assets of Gemina, capital transactions, subordinate and deferred shareholder loans, distribution of dividends or other distributions, issue of financial instruments or debt instruments, financial contracts and all transactions that depict a form of loan, shares of any kind, diversified financial instruments and bonds to the early repayment of the Loan, according to the procedures and within the limits stated in the Loan agreement. The Loan also requires that Gemina provides declarations and guarantees, obligations, proscriptions and commitments, and provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. It is reported that the Financers have the right of withdrawal should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3. In relation to the lease contract stipulated by Fiumicino Energia, in the month of July 2009, Fiumicino Energia stipulated a contract in favour of the financer, to guarantee payment of all amounts due by virtue of said lease contract. The contract requires that Fiumicino Energia factor with

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recourse the entire receivable deriving from the lease rental that Leonardo Energia must pay to Fiumicino Energia pursuant to the company branch leasing contract. Any surplus of the receivable compared to the monthly lease instalment shall be credited to Fiumicino Energia. Gemina’s commitments in relation to the financers of Fiumicino Energia are shown in Note 28 “Guarantees and Commitments” in the Financial Statements as at December 31, 2009.

NOTE 33 TRADE PAYABLES

As at December 31, 2009 trade receivables stand at 144,959 thousand euro (166,853 thousand euro as at December 31, 2008).

The decrease compared to December 31, 2008 is mainly attributable to the contraction in infrastructural investments by the ADR Group.

NOTE 34 CURRENT TAX LIABILITIES

As at December 31, 2009, the item records a total of 11,353 thousand euro (1,983 thousand euro as at December 31, 2008), substantially including the current tax payables of Group companies.

NOTE 35 CURRENT FINANCIAL LIABILITIES

12/31/2009 12/31/2008 Change

INTEREST ON BONDS 13,815 14,029 (214)

INTEREST ON BANK LOANS 850 1,428 (578)

AMOUNTS PAYABLE TO OTHER FINANCERS 1,768 - 1,768

DUE TO BANKS 12,406 5,200 7,206

TOTAL 28,839 20,657 8,182

These increased due to the reclassification from non-current financial liabilities of the instalments of the loan granted by BIIS (formerly Banca OPI) expiring within the following year, for 8.5 million euro.

NOTE 36 FINANCIAL DERIVATIVES

12/31/2009 12/31/2008 Change

FOREIGN CURRENCY HEDGING DERIVATIVES 82,929 99,297 (16,368)

INTEREST RATE HEDGING DERIVATIVES 73,873 52,849 21,024

ACCRUED INTEREST 883 548 335

TOTAL 157,685 152,694 4,991

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The table hereunder summarises the outstanding derivative contracts of the Group.

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SUMMARY TABLE OF DERIVATIVE INSTRUMENTS AND RELATED EFFECTS

Fair value of derivative Change in fair value

Grantor Gemina Group

company Instrument Type

Hedged risk

Subscription date

Maturity term

Hedged notional

value Applied rate

as at 12/31/09

as at 12/31/08

to Income Statement

to Shareholders’ equity

(**)

I. (62,462) (39,392) (1,144) (21,926)

C (82,929) (99,297) 16,368 - AMBAC Financial Services LP ADR

Group Cross Currency Swap CF

02/03 02/23 325,019

Receives a 5.441% fixed rate and pays 3-month Euribor + 90 bps until December 2009, then 6.4% fixed rate. (145,391) (138,689) 15,224 (21,926)

(Note 36) Exchange risk hedging derivatives (82,929) (99,297) -

Re-absorption effect of provision on IRS paid - outstanding value on net equity

- (7,693) 7693

Mediobanca Barclays Royal Bank of Scotland

ADR Group

IRS FV I. 10/04 10/09 495,000 (*) Receives a 3.3% fixed rate and pays a 3-month variable Euribor rate + 0.7% with a 6% cap

- 2,936 (2,936) -

Mediobanca Barclays Royal Bank of Scotland

ADR Group CAP FV Trading 10/04 10/09 495,000 (*)

With a 6% cap on the Pay leg of 3-month Euribor - - - -

Mediobanca Barclays Royal Bank of Scotland, HVB (Unicredit Group), Deutsche Bank

ADR Group

IRS CF I. 04/03 (****)

10/09 864,000 Receives a variable Euribor 3-month rate and pays a 3.891% fixed rate

- (9,430) - 9,430

Barclays Royal Bank of Scotland

ADR Group

Interest Rate Collar Forward Start CF I.

05/06 (***) 02/12 240,000

Receives a variable Euribor 3-month rate and pays a variable 3-month Euribor rate with a 5% cap and a 3.64% floor

(10,517) (3,898) 1,166 (7,785)

Mediobanca GEMINA IRS CF I. 12/08 12/11 17,812.5 Pays a 3.15% fixed rate and receives 6-month Euribor (447) (63) (384)

Unicredit MCC GEMINA IRS CF I. 12/08 12/11 17,812.5 Pays a 3.15% fixed rate and receives 6-month Euribor

(447) (66) (381)

(Note 7) Financial expenses, charges on derivatives, valuation of derivative

- - (10,629)

(Note 36) Interest rate risk hedging derivatives

(73,873) (52,849) -

(Note 23) Interest rate risk hedging derivatives - 2,936 -

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SUMMARY TABLE OF DERIVATIVE INSTRUMENTS AND RELATED EFFECTS

Fair value of derivative Change in fair value

Grantor Gemina Group

company Instrument Type

Hedged risk

Subscription date

Maturity term

Hedged notional

value Applied rate

as at 12/31/09

as at 12/31/08

to Income Statement

to Shareholders’ equity

(**)

Note 6 Financial income, income on derivatives, valuation of derivatives

- 16,390

(13,353)

Change in hedging reserve 3,672

Tax effect 9,681(1)

Total net hedging reserve (5.4)

Key: (*) Until March 2008, the hedged notional was 468 million euro. FV Fair Value Hedge (**) Change in hedging reserve. CF Cash Flow Value Hedge (***) Effects of derivatives will start from October 2, 2009. C Exchange rate (****) Contracts renegotiated on December 18, 2006. I. Interest rate (1) The change in hedging reserve shown in par. 5.4, equal to 9,292 thousand euro, is shown net of third party interests.

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Derivatives hedging foreign currency risk (ADR)

The ADR Group uses hedging derivatives for exchange rate risks to mitigate any future increases in outgoing cash flows attributable to unfavourable changes in exchange rates.

Specifically, one component of the cross currency swap allows the cash flows in euro regarding the payment of interest and the redemption of the A4 bond in Pounds Sterling to be stabilised.

Derivatives hedging interest rate risk (ADR)

The Group uses interest rate swaps and interest rate caps to hedge its exposure to unfavourable changes in market interest rates.

The Group’s hedging policy, which is an integral part of ADR’s loan agreements, require that at least 51% of debt is secured against the risk of interest rate fluctuations.

As at December 31, 2009 55.2% of ADR’s payables were regulated at fixed rates.

Starting from October 2, 2009 two Interest Rate Collar Forward Start contracts became active, subscribed on May 16, 2006 by ADR with Barclays and Royal Bank of Scotland on a notional capital of 120 million euro each. Based on these contracts ADR receives a variable Euribor 3-month rate and pays a variable 3-month Euribor rate with a 5% cap and a 3.64% floor, starting from October 2, 2009 until February 20, 2012.

Thanks to these hedging contracts, an extensive protective barrier has been built against interest rate risk for a further three years on a total notional amount of 240 million euro.

With these contracts, hedging of interest rate risk increases to 71.3% of total payables.

Derivatives hedging interest rate risk (Gemina)

Gemina uses an interest rate swap to manage its exposure to unfavourable changes in the market interest rate.

The hedging policy, which is an integral part of the current loan agreement, requires that at least 75% of Tranche A is protected from the risk of interest rate fluctuations.

On December 22, 2008 Gemina entered into two interest rate swap agreements with Mediobanca and Unicredit MedioCredito Centrale, respectively, for a total amount of 35.6 million euro.

The fair value of the aforesaid instruments has been calculated on the basis of the parameters in force as at December 31, 2009 on the reference market.

The financial derivatives described in Notes 23 and 36 are included in “Level 2” of the “Fair Value Hierarchy” defines by IFRS 7, meaning the fair value is measured based on valuation techniques which take as reference parameters that are

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observable on the market, different from the prices of the financial instrument.

NOTE 37 OTHER CURRENT LIABILITIES

These amount to 102,737 thousand euro as at December 31, 2009 and mainly consist of tax payables, amounts due to social security institutions and sundry trade payables.

The increase of 22.5 million euro compared to December 31, 2008 is mainly due to:

- increase of 11.0 million euro in amounts due to the Tax Authorities for council surcharges on passenger boarding fees;

- higher amounts due recorded in relation to charges for the fire prevention and fire fighting service in 2009, equal to 8.7 million euro. Payables recorded in the financial statements for the years 2007-2009 amount to a total of 25.7 million euro, payables not yet settled while awaiting the outcome of pending cases on appeals lodged by several of the leading airport management companies;

- recording of payables due to personnel for 6.3 million euro linked to the one-off compensation awarded upon renewal of the CCNL;

- increase of 2.1 million euro in payables to former

employees for employee severance indemnity to be settled;

- reduction of 5.1 million euro in payables due to ENAC for

the concession fee. NOTE 38 LIABILITIES HELD FOR SALE There are no entries in this item. NOTE 39 CATEGORIES OF ASSETS/LIABILITIES IAS 39

12/31/2009

Receivables and loans

Fin. instr. available for

sale Payables at

amortised cost Derivatives

BOOK VALUES AS AT 12/31/2009 OTHER EQUITY INVESTMENTS 2,756

INVESTED RECEIVABLES 4,591

OTHER NON-CURRENT FINANCIAL ASSETS 1,400

TRADE RECEIVABLES 197,298

FINANCIAL INSTRUMENTS - DERIVATIVES 534

OTHER CURRENT FINANCIAL ASSETS 55,497

CASH AND CASH EQUIVALENTS 149,272

TOTAL ASSETS IAS 39 408,058 2,756 534

FINANCIAL INDEBTEDNESS NET OF CURRENT

SHARE 347,825

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TRADE PAYABLES 144,959

CURRENT FINANCIAL LIABILITIES 28,839

FINANCIAL INSTRUMENTS - DERIVATIVES 157,685

TOTAL LIABILITIES IAS 39 521,623 157,685

INCOME (CHARGES) RECORDED ON

THE INCOME STATEMENT: INTEREST INCOME 2,220

INCOME ON DERIVATIVES 34,070

OTHER INCOME 1,864

INTEREST EXPENSE (72,596)

EXPENSES ON DERIVATIVES (26,086)

OTHER EXPENSES (4,401)

4,084 (76,997) 7,984

SHAREHOLDERS’ EQUITY (9,292)

12/31/2008



sale Payables at

amortised cost Derivatives

BOOK VALUES AS AT 12/31/2008 OTHER EQUITY INVESTMENTS - 2,757

INVESTED RECEIVABLES 4,267 -

OTHER NON-CURRENT FINANCIAL ASSETS 1,400 -

TRADE RECEIVABLES 160,502 -

FINANCIAL INSTRUMENTS - DERIVATIVES - - 3,436

OTHER CURRENT FINANCIAL ASSETS 49,581 - -

CASH AND CASH EQUIVALENTS 144,198 - -

TOTAL ASSETS IAS 39 359,948 2,757 3,436


SHARE 338,920 -

TRADE PAYABLES 166,853 -

CURRENT FINANCIAL LIABILITIES 20,657 -

FINANCIAL INSTRUMENTS - DERIVATIVES - 152,694


INCOME (CHARGES) RECORDED ON THE INCOME STATEMENT:

INTEREST INCOME 8,754 - - -

INCOME ON DERIVATIVES - - - 23,917

INTEREST EXPENSE - - (92,757) -

EXPENSES ON DERIVATIVES - - - (103,197)

OTHER EXPENSES - - (5,859) -

8,754 - (98,616) (79,280)


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NOTE 40 SEGMENT INFORMATION INCOME STATEMENT

(in millions of euro) Total revenues

Amortisation, depreciation and

write-downs EBIT

Net profit (loss) included the share of

third parties 2009 2008 2009 2008 2009 2008 2009 2008

1. CORPORATE ACTIVITIES 0.9 0.5 - - (6.8) (4.1) (14.1) 13.9 2. AIRPORT INFRASTRUCTURES.

(ADR GROUP) 570.2 581.7 (103.8) (101.1) 105.3 96.0 0.7 (15.2)

3. ENERGY 8.2 - (0.8) - (1.0) - (1.0) (0.3) 4. EFFECT OF CONSOLIDATION

USING NET EQUITY METHOD - - - - - - 0.7 (0.3) 5. AMORTISATION OF AIRPORT

MANAGEMENT CONCESSION - - (37.5) (37.5) (37.5) (37.5) (30.6) (30.6)

6. OTHER CONSOLID. ITEMS (8.4) - - - 3.1 - 4.3 (1.7)

TOT. GEMINA GROUP 570.9 582.2 (142.1) (138.6) 63.1 54.4 (40.0) (33.9) BALANCE SHEET Net capital invested Shareholders’ equity Net financial position

12/31/2009 12/31/2008 12/31/2009 12/31/2008 12/31/2009 12/31/2008

1. CORPORATE ASSETS AND CONSOLIDATION ITEMS

(INCLUDED EQUITY INVESTMENTS AT NET

EQUITY) 1,075.4 1,131.5 1,043.8 1,084.3 31.6 47.2

2. AIRPORT INFRASTRUCTURES (ADR GROUP)

2,049.5 2,039.1 677.7 686.1 1,371.8 1,353.0

ENERGY 22.6 - 0.9 - 21.7 -

TOT. GEMINA GROUP 3,147.5 3,170.6 1,722.4 1,770.4 1,425.1 1,400.2

For detailed information regarding the economic, equity and financial performance of each segment, see the Report on Operations.

NOTE 41 FINANCIAL RISK MANAGEMENT CREDIT RISK

The maximum theoretical exposure to the credit risk for the Gemina Group, as at December 31, 2009, is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments.

The greatest exposure to credit risk is that of the ADR Group

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for trade receivables due from customers.

A special bad debt provision is recorded in the financial statements for the risk of customer default in paying. Its amount is periodically reviewed. The write-down process the Group has adopted envisages that the trade positions are written down individually depending on the age of the receivable, the reliability of the single debtor, the status of the management file and debt recovery.

The commercial policies that the ADR Group has initiated aim at controlling investment in receivables as follows:

- Request of cash payments for commercial transactions made with end consumers (sales in the stores under direct management, long-term multi-level car parks, first aid, etc.), with occasional counterparts (e.g. for registration, baggage porterage, taxi access management activities, etc.);

- Request of cash or advance payments made to air carriers that are occasional or those without suitable creditworthiness or collateral guarantees;

- Granting of deferred payment to retained customers deemed reliable (carriers with medium-term flight scheduling and subcontractors) for which the credit rating and request of collateral is in any case monitored.

The analysis of trade receivables and other receivables broken down by expiration term is shown below.

Receivables expired not written down


Receivables coming

due before 60

days from 61 to 120 days

from 121 to 180 days

more than 181 days

Total receivables

Dec. 31, 09 78.1 47.0 15.0 5.7 51.5 197.3TRADE RECEIVABLES

Dec. 31, 08 47.5 49.4 24.6 12.5 26.5 160.5Dec. 31, 09 5.0 - - - 1.9 6.9

OTHER RECEIVABLESDec. 31, 08 11.2 - - - 0.5 11.7

Receivables not written down that have expired for more than 180 days mainly consist of amounts due from public administrations and the companies of the Alitalia Group under extraordinary administration.

The ADR Group’s credit risk is highly concentrated in so far as about 57% (50% in 2008) of the credit not written down is due from ten customers.

LIQUIDITY RISK

Liquidity risk may occur when it is impossible to obtain, at fair conditions, the financial resources necessary to the Groups business.


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Breakdown of payables by expiry terms is shown hereunder (in millions of euro).

12/31/2009 12/31/2008

within the

following year

between 1 and 5 years

after 5 years Total

within the

following year


after 5 years Total

FINANCIAL

INDEBTEDNESS NET OF

CURRENT SHARE - 262.4 85.4 347.8 - 250.0 88.9 338.9

OUTSTANDING BONDS - 495.5 602.0 1,097.5 - 497.7 588.8 1,086.5

TRADE PAYABLES 137.7 7.3 - 145.0 157.5 9.4 - 166.9CURRENT FINANCIAL

LIABILITIES 28.8 - - 28.8 20.7 - - 20.7OTHER CURRENT

LIABILITIES 102.6 0.1 - 102.7 78.6 1.7 - 80.3

ADR Group

The financial structure of the ADR Group is distinguished by a heavy incidence of the financial leverage component. As a consequence, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, in perspective, by the need to repay debt tranches coming due (the first of which will come due in 2012).

The current medium/long-term loan agreements require not only being rated by Moody’s and Standard & Poor’s, but also a large number of control measures to guarantee priority allocation of the cash generated for the debt service.


This complex contractual structure lowers liquidity risk. Nonetheless, the current rating assigned to ADR prevents it from taking out additional indebtedness without specific authorisation from it financial creditors. Therefore, any contingent additional need for financial resources deriving from the management of working capital or from investments can be covered by a significant amount of cash, in addition to a revolving facility of 100 million euro (currently not used) specifically aimed at supporting this type of need.

It is obvious that the priority allocation of the cash generated for the debt service and the aforementioned restrictive control measures for using financial resources restrict the Group’s operations and investment flexibility in depressing situations characterised by particular financial tension.

The centralised treasury system ADR manages with several of its subsidiary companies, which is adjusted to market

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conditions, allows management of financial resources to be optimised and regulation of infra-group trade relations to be facilitated.

Gemina

To meet its short-term commitments, the Company has liquidity of 13.4 million euro, in addition to bank credit lines of 6 million euro, and a 5 million euro revolving line of credit (Tranche C) for paying interest on current expenses.

The Loan requires Gemina to allocate 100% of the net income deriving from the transfer or provision of shares of ADR and of the other investee companies, and from the distribution of dividends or other distributions of ADR and of the other investee companies to mandatory advance repayment.

The amount of the Loan not repaid with the income listed above will be refinanced upon expiration.

The Loan also provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. It is reported that the Financers have the right of withdrawal should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3.

INTEREST RATE RISK

The Gemina Group uses interest rate derivative instruments (interest rate swaps, interest rate caps and interest rate collars), with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuation on the economic result.

ADR Group


In conformity with this policy, ADR has entered into interest rate swap, interest rate cap and interest rate collar contracts whose characteristics are fully describe in Note 36.

The fixed-rate indebtedness as at December 31, 2009 was 71.3% of the total, due to the aforementioned hedges.

Gemina

The hedging policy, which is an integral part of the Loan Agreement entered into on December 11, 2008, requires that at least 75% of outstanding Tranche A be protected from the risk of interest rate fluctuations.

With regard to this contractual provision, on December 22, 2008 the Company entered into two interest rate swap agreements with Mediobanca and Unicredit MedioCredito Centrale for a notional total amount of 35.6 million euro.

The characteristics of this derivative instrument are described in Note 36.

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Sensitivity analysis

In order to evaluate the potential impact resulting from the fluctuation of interest rates applied, the variable-rate financial debts are analysed, for which the impact in the income statement and to shareholders’ equity due to fluctuations of cash flows are assessed. The potential impacts are shown gross of the tax effect.

Given the expiry and the activation of several hedging contracts on October 2, 2009, the sensitivity analysis was performed based on the conditions of outstanding loans and hedges as at December 31, 2009.

With reference to the variable-rate debts and their hedging derivatives, a hypothetical, immediate increased change of 0.5% of the market interest rate level would generate a positive effect on the cash flow hedge reserve equal to 9.2 million euro and increased financial expenses for the year totalling 2.3 million euro for the portion of unhedged debt. This change would also bring about a decrease of financial expenses totalling 0.2 million euro due to the portion of the fair value change of the collar forward starting directly recorded in the income statement.

To the contrary, a hypothetical, immediate decreased change of 0.5% of the market interest rate level would generate a negative impact on the cash flow hedge reserve equal to 9.6 million euro and a reduction of financial expenses equal to 2.3 million euro.

This change would also bring about a decrease of financial expenses totalling 0.2 million euro due to the portion of the fair value change of the collar forward starting directly recorded in the income statement.

In brief:

- 0.5% increase in interest: higher financial expenses for 2.5 million euro and a positive change in the cash flow hedge reserve totalling 9.2 million euro

- 0.5% decrease in interest: lower financial expenses for 2.5 million euro and a negative change in the cash flow hedge reserve totalling 9.6 million euro.

Lastly, it should be emphasized that the interest rate applied to the Gemina Loan and to some of ADR's credit facilities is the same as Euribor plus a margin proportionate to the rating ADR has been given.

The financial expenses Gemina and ADR pay their financers therefore depend not only on the fluctuation of interest rates, but on ADR’s rating as well.

EXCHANGE RISK As for the financial indebtedness, Tranche 4 of the bond

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issue made by Romulus Finance S.r.l., equal to 215 million Pounds Sterling, was hedged with a currency swap in Euro for the entire duration (year 2023).



A hypothetical immediate increase of 10% in the exchange rates of the Euro compared to the Pound Sterling would have generated a positive impact on the cash flow hedge reserve of 3.2 million euro, whereas a hypothetical immediate decrease of 10% of the exchange rates of the Pound Sterling compared to the Euro would have generated a negative impact on the cash flow hedge reserve equal to 2.6 million euro.

Lastly, appreciable effects on the income statement due to Euro/Pound Sterling exchange rate changes would not be noticed.

NOTE 42 GUARANTEES AND COMMITMENTS

As at December 31, 2009 the Group had the following guarantees:

- guarantees issued for the loan agreements mentioned in

Note 32;

- guarantees stood by the ADR Group to customers and

third parties, for 169 thousand euro.

As regards the Group commitments, it should be noted that ADR holds purchase commitments amounting to 97,872 thousand euro.

As for the Group’s other commitments, please take note of the following.

On February 28, 2003 ADR granted IGPDecaux S.p.A. a put option on shares held by the latter in the ordinary and preferred capital of ADR Advertising S.p.A.

Said option can be exercised up until December 31, 2011, subject to the fulfilment of special conditions that are currently deemed unlikely.

Within the context of purchase commitments, mention is given to ADR’s commitment, as airport infrastructure operator, to draw up and implement plans for containing and abating noise, as provided by the Framework Law on noise pollution (Law no. 447/1995) and by Ministerial Decree 11/29/2000.

To this end, ADR is effecting a survey to establish whether and to what extent limits are actually exceeded and, should they not be respected, it will draw up plans for containing and abating noise.

These commitments prove difficult to quantify and in any

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case must be determined in an interpretative manner as there are no specific indications as to the activities to be considered in the “maintenance” and “upgrading” of the infrastructures, that constitute the basis for calculation pursuant to the mentioned Framework Law.

In consideration of the above, and on the basis of the estimates available at reporting date, ADR deems that its total liability will not exceed the amount of 30 million euro. Hence the amount is conditional on subsequent events and will be defined in relation to the actual programme of the measures to be taken. Future measures will most likely be entered as investment costs subject to capitalisation.

The November 3, 2006 agreements covering sale of the equity investment held in Flightcare Italia S.p.A. (formerly ADR Handling S.p.A.) contemplate a price adjustment condition for a maximum value of 12.5 million euro.

Of this, the portion considered to probably occur was entered in the income statement in the years 2006-2009 with provisions for risks and charges counter-item for a total of about 4 million euro as at December 31, 2009, whereas the remaining portion – presently considered improbable – will undergo updated valuation during future financial years.

It is also important to note the commitments undertaken by Gemina in relation to the financers of Fiumicino Energia, which are shown in Note 28 of the Explanatory Notes to the Financial Statements.

NOTE 43 LITIGATION

As regards litigation in progress, the Group carried out a thorough assessment of existing risks in order to identify the litigation for which the risk of negative outcome is likely, in order to make a reasonable assessment of provisions to be allocated.

Provisions have not been made for litigation for which, given the different legal interpretations, a negative outcome is merely possible, in accordance with the principles and procedures governing the preparation of financial statements.

Furthermore, there are a limited number of civil proceedings underway, for which no provisions were made, as the impact of any negative outcome for the Group, although negligible, could not be measured.

We do not believe that current litigation and potential litigation can give rise to liabilities greater than the amounts already allocated to the relevant provisions.

Customs Agency

On August 16, 2007, the main Customs Office of Rome II served ADR an assessment report which charged irregularities in sales made at the Duty Free Shops over the period January 1, 1993 – January 31, 1998. The objections are mainly related to sales made to passengers with destinations within the EU Community, exceeding the limits of quantities

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and value.

On December 18, 2007, the same main Customs Office served an order of payment for the amounts related to VAT, manufacture tax and duties on tobacco, due according to assessments made in the assessment report. The total amount of taxes and interest required amounted to about 22.3 million euro.

ADR, believing, with the support of the opinions of its tax experts, that the recognition of the legitimacy of its actions to be highly likely, presented appeals to the Tax Commission for the Province of Rome against the afore-mentioned order of payment.

On April 6, 2009 the Tax Commission for the Province of Rome filed judgment no. 149/39/00 which turned down the appeal presented by the Company. Following this ruling, the Customs Agency initiated the procedure for collection of the amounts assessed as owed, which the company is paying in 36 instalments, following the acceptance of the petition presented to the Tax Collection Agency, after having paid a down payment of 4 million euro, which the company set out using an irrevocable payment order on April 27, 2009. Furthermore, on April 24, 2009, the Company presented a petition to the Customs Agency requesting that collection of the assessed debt be suspended until the date the Lazio Regional Tax Commission issues its decision. With deed dated May 19, 2009, the Customs Agency notified its decision to reject the petition for suspension.

The Company is convinced that it has acted correctly in both substance and form, on which its tax advisers agree, confirming the lack of grounds of the tax claim.

Therefore, on July 14, 2009, submitted an appeal against the judgment issued by the Tax Commission for the Province of Rome.

With notification dated November 3, 2009, ADR was informed by the Regional Tax Commission of Rome that the hearing on the appeal submitted by the Company was set for February 17, 2010.

The Rome Tax Commission, in its meeting on February 17, examined ADR’s appeal against the assessment of the Customs Agency.

Specific provisions have been allocated, which are described in the Explanatory Notes to the Consolidated Financial Statements.

Aviation fuel charge risk

Assaero (National Air Transport Operators and Carriers Association) and Blu Panorama filed an appeal with the Lazio Regional Administrative Court (TAR), with concomitant plea for suspension, against the ENAC letter, protocol no. 60600 of September 15, 2006 in which the authority communicated the results of the inspections made at the fully managed airports “in order to analyse the correlation with cost of what

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the management companies are requesting the oil companies to pay as a flat rate”.

The TAR rejected the petition in its judgment no. 11154/2007 and the appeal by the carriers was announced on January 2, 2008. The Council of State admitted the appeal in its judgment no. 1416/2009.

While it confirmed the possibility for airport managers to legitimately charge “fuel royalties” in as much as these are effectively related to the costs incurred by the latter, and while it acknowledged ENAC’s authority to monitor the imposition of surcharges by managers, the Council of State observed that when carrying out this work ENAC must first of all check actual, reliable figures for the costs of said activity.

In compliance with this judgment, following a new preliminary investigation, on April 24, 2009 ENAC issued a ruling which, while repealing all the previously issued rulings for the purpose of self-protection, also repeated that “the oil companies are required to directly pay the airport operator the amount due for the provision of the assets and systems necessary for carrying out the refuelling service within the limit of the ascertained costs”.

IBAR (Italian Board Airlines Representatives) and 6 carriers (Iberia, Tap, American Airlines, Delta Airlines, Ethiopian Airlines and Cyprus Airlines) filed an appeal with the Lazio Regional Administrative Court, with concomitant injunctive relief, against ENAC letter protocol no. 60600 of September 15, 2006 (in addition to other prior provisions), with which the authority communicated the results of the inspections made at the airports with complete management “in order to analyse the correlation with the cost of what the management companies are requesting of the oil companies at a flat rate”. With deed notified on February 27, 2008, Esso Italiana submitted an objection to the sentence. Subsequently, IBAR submitted additional grounds, requesting that the Lazio Regional Administrative Court confirm the illegality of the most recent rulings issued by ENAC on this issue. The date of the hearing has yet to be announced.

Income tax assessment

As part of the annual audit plan set forth by Article 42 of Law 388/2000, on June 4, 2009 the Revenue Office - Lazio Regional Management instigated a general tax audit of ADR regarding income taxes, IRAP (Regional Income Tax) and VAT for the 2007 tax period.

Upon conclusion of the audit, on October 29, 2009 the company was served with an assessment report which presented some findings regarding direct taxes, IRES and IRAP, for a higher taxable income equal to 1,195 thousand euro, and VAT for 2,416 thousand euro. In acknowledging this report, the Company reserved the right to produce replies and to take actions at the competent venues.

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Admittance of liabilities of the Alitalia Group under extraordinary administration

Following the rulings of the Bankruptcy Section of the Court of Rome declaring the state of insolvency of the companies Alitalia – Linee Aeree Italiane S.p.A. under extraordinary administration, Volare S.p.A. under extraordinary administration, Alitalia Express S.p.A. under extraordinary administration, Alitalia Servizi S.p.A. under extraordinary administration, and Alitalia Airport S.p.A. under extraordinary administration, ADR filed appeals for the respective admittance of liabilities.

As to the proceedings regarding Alitalia – Linee Aeree Italiane S.p.A., ADR’s petition was discussed at the December 16, 2009 hearing. At that time, given that ADR is the only operator whose petition and documentation produced was deemed adequate, in relation to the receivables accrued before the start of the proceedings, the discussion of several invoices which are still subject to checks on the correct execution of the performance or the completion of the related payment in the meantime was postponed to the hearing of April 28, 2010. The discussion of the receivable accrued following the start of the proceedings was postponed to the hearing of October 19, 2010.

These are the other issues: AZ Servizi S.p.A. under extraordinary administration: at the hearing of October 29, 2009, the examination of ADR’s appeal for admittance of liabilities was postponed to March 30, 2010; AZ Airport S.p.A. under extraordinary administration: at the hearing of October 15, 2009, the examination of ADR’s appeal for admittance of liabilities was postponed to March 16, 2010; Volare S.p.A. under extraordinary administration: at the hearing of December 9, 2009, the examination of ADR’s appeal for admittance of liabilities was postponed to March 30, 2010 for the receivables prior to the start of the proceedings, and to May 26, 2010 for receivables accrued following; Alitalia Express under extraordinary administration: at the hearing of November 25, 2009, the examination of ADR’s appeal for admittance of liabilities was postponed to March 17, 2010 for the receivables prior to the start of the proceedings, and to May 19, 2010 for receivables accrued following.

Numerous legal undertakings have also been adopted at the Court of Civitavecchia. They are focused on protecting ADR’s evidence of credit for navigation fees Alitalia owes the company, sustained by lien on the aircraft with regard to the relevant owners as well, jointly and severally liable ex lege.

CIPE Resolution 38/07 – ENAC Guidelines - appeal to the Lazio TAR

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On 25 March 2009, ADR filed additional motivations to the main appeal with the Lazio TAR, challenging the Ministerial Decree of December 10, 2008 published in Official Gazette No. 42 of February 20, 2009 which approves ENAC official guidelines and replaces the previous Ministerial Decree challenged by ADR and never published in the Official Gazette.

The date of the hearing has yet to be announced. Volare Group revocatory action

In October 2009 the companies Volare Airlines S.p.A. and Air Europe S.p.A. under extraordinary administration instituted a civil lawsuit before the Court of Busto Arsizio to obtain the revocation of the payments made to ADR over the year prior to the carrier’s admission to insolvency proceedings, which occurred by way of decree of November 30, 2004 – and, as a result, the sentencing of ADR to return the amount of 6.7 million euro relating to Volare Airlines S.p.A. and 1.8 million euro relating to Air Europe S.p.A..

The plaintiff’s request is substantially based on the presumption of ADR’s knowledge of the state of insolvency of the carrier and the entire group it was part of, along with Air Europe and Volare Group, at least up to 2002.

The hearing for the first appearance of the parties was set for March 31, 2010.

Ligabue Gourmet bankruptcy

A group of 16 plaintiffs has served a writ of summons against ADR and Fallimento Ligabue Gourmet (Ligabue Gourmet Bankruptcy), whereby they are contesting the validity of the sale of the company branch of the Ovest catering company by ADR to the company Ligabue, with a consequent request for compensation for damages for a total amount of about 9.8 million euro for damages up to 2006, for future damages and for employee severance indemnities. Though no decisions have yet been made on this litigation, it is deemed highly unlikely that the adverse party’s claims will be accepted. In the hearing of January 28, 2010 set for discussion, the judge set the deadline for submitting reply briefs at April 18, 2010.

Litigation concerning public tenders

On December 30, 2004, ATI NECSO Entrecanales – Lamaro Appalti notified its decision to appeal judgment no. 35859/2003 issued by the Civil Court of Rome, summonsing ADR before the Appeal Court of Rome. In addition to rejecting ATI’s claims, the judge at the initial hearing also ordered the company to pay ADR’s legal expenses. ATI is claiming damages of 9.8 million euro, plus interest, revaluation and costs, from ADR in relation to 7 reserves posted in the accounts relating to the contract for work on the extension and restructuring of the Satellite West at

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Fiumicino airport. Consequent to the positive outcome of the ruling in the first instance, the probability of ADR losing appears to be remote and in any event, much lower than the adverse party’s claims. The proceedings for pronouncement of the sentence were held on November 18, 2008. In the month of April 2009, the Court of Appeals issued an order ruling that it is necessary for the court to appoint an expert witness for the verification of the claims for damages relating to the greater duration of the contract works attributable to the principal ADR. The appointed expert witness was sworn in and assigned the specific issues on November 24, 2009. The start of expert operations was December 21, 2009 and shall continue on March 29, 2010.

Shareholder Serafini litigation

The Court of Milan had dismissed, in first instance, on the grounds that they were inadmissible, the appeals filed by the shareholder Renato Serafini against the resolutions passed by the Shareholders’ Meeting of Gemina on May 10, 2002 (approval of the financial statements as at December 31, 2001 and adjustment of the financial statements as at June 30, 1991 and as at June 30, 1992) and on May 13, 2003 (approval of the financial statements as at December 31, 2002).

Last December, the parties filed their legal briefs and reply briefs in the appeals proceedings instigated by the shareholder, Mr. Serafini, against the first instance judgments of the Court of Milan.

Surety on the Customs Agency litigation

On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina, Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50%, 13.0% and 36.90%, respectively. This commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may incur due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000.

The ongoing dispute between ADR and the Customs Agency regards the period 1993-1998, and is covered by the aforementioned guarantee, which will be enforceable following the final judgment ruling against ADR in relation to the Tax Authorities.

Impregilo S.p.A. and Falck S.p.A. do not recognise the guarantee as valid. ADR has instituted action against these companies for the purpose of sentencing them to pay the amounts owed, on condition that the final judgment ruling against ADR is passed.

Rizzoli litigation Mr. Angelo Rizzoli brought legal proceedings against RCS

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MediaGroup S.p.A., Intesa Sanpaolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi, formulating a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs. The events date back to 1974-1986.

RCS MediaGroup S.p.A., appearing in court, fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS MediaGroup S.p.A. derives, due to the known spin-off stipulated in 1997. The writ of summons for a third party was served to Gemina on March 3, 2010.


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5.7 INFORMATION PURSUANT TO ART. 14-DUODECIES OF CONSOB ISSUERS’

REGULATION

The following statement, drawn up pursuant to Art. 149-duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2009 financial year for audit services and other services rendered by the same Independent Auditors.

(in thousands of euro) Company that rendered

the service Target company

Remunerations pertaining to the

year 2009

AUDIT DELOITTE & TOUCHE S.P.A. GEMINA PARENT

COMPANY 168

DELOITTE & TOUCHE S.P.A. SUBSIDIARY

COMPANIES 246

CERTIFICATION DELOITTE & TOUCHE S.P.A. (1) GEMINA PARENT

COMPANY 3


COMPANIES 79 (1) Subscription of tax acts Income Tax Return and 770 forms.

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5.8 LIST OF EQUITY INVESTMENTS

REGISTERED EQUITY INVESTMENT CONSOLIDATION

CONSOLID. BOOK

NAME TYPE OFFICE ASSETS CURRENCY CAPITAL

% SHARE

THROUGH SHARE METHOD VALUE

* ** ***

PARENT COMPANY

GEMINA L Milan Holding of equity investments euro 1,472,960,320 n/a n/a 100.00 Line-by-line

AIRPORT ACTIVITY

AEROPORTI DI ROMA UL Fiumicino (Rome) Airport management euro 62,309,801 95.76 Direct 100.00 Line-by-line

Airport Invest B.V. Amsterdam (Holland) Equity investments euro 101,040 100.00

Aeroporti di Roma S.p.A. 100.00 Line-by-line

ADR Engineering Unipersonale UL Fiumicino (Rome) Airport engineering euro 774,690 100.00


99.00 Aeroporti di Roma

S.p.A. ADR Tel UL Fiumicino

(Rome) Telecommunications euro 600,000

1.00 ADR Sviluppo

Unipersonale S.r.l.

100.00 Line-by-line

ADR Advertising (1) UL Fiumicino (Rome) Advertising euro 1,000,000 51.00

Aeroporti di Roma S.p.A. (2) 100.00 Line-by-line

ADR Sviluppo Unipersonale S.r.l. Fiumicino (Rome) Real estate euro 100,000 100.00


Romulus Finance S.r.l. Conegliano (Treviso) Credit securitisation euro 10,000 - n/a - Line-by-line

ADR Assistance Unipersonale S.r.l. Fiumicino (Rome)

Assistance to passengers with reduced mobility

euro 6,000,000 100.00 Aeroporti di Roma

S.p.A. 100.00 Line-by-line

La Piazza di Spagna S.r.l. Fiumicino (Rome) Refreshments euro 100,000 49.00

Aeroporti di Roma S.p.A. 49.00 Net equity 40

Ligabue Gate Gourmet Rome in bankruptcy UL Tessera (Venice) Airport catering euro 103,200 20.00

Aeroporti di Roma S.p.A. 20.00 Valued at cost

S.A.CAL. UL Lamezia Terme (Catanzaro) Airport management euro 7,755,000 16.57

Aeroporti di Roma S.p.A. 16.57 Valued at cost 1,307

Aeroporto di Genova UL Genoa Sestri Airport management euro 7,746,900 15.00 Aeroporti di Roma

S.p.A. 15.00 Valued at cost 1,395

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CONSOLID. BOOK

NAME TYPE OFFICE ASSETS CURRENCY CAPITAL SHARE THROUGH SHARE METHOD VALUE

* ** ***

Consorzio E.T.L. Cons. Rome Study of European transport rules euro 82,633 25.00


Alinsurance, in liquidation S.r.l. Rome Insurance Brokerage euro 104,000 6.00 Aeroporti di Roma

S.p.A. 6.00 Valued at cost 6

ELECTRICITY

Fiumicino Energia S.r.l. Milan Electricity Production euro 391,795 86.12 Direct 100 Line-by-line

90.00 Fiumicino Energia

S.r.l. Leonardo Energia S.C.a r.l. Milan Electricity Production euro 10,000

10.00 Aeroporti di Roma

S.p.A.

100 Line-by-line

AIR TRAFFIC CONTROL

SYSTEMS

SITTI UL Vimodrone (Milan)

Air traffic control systems euro 1,560,000 40.00 Direct 40.00 Net Equity 5,000

OTHER

PENTAR UL Milan Holding company euro 24,571,000 20.35 Direct 20.35 Valued at cost 3,609

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CONSOLID. BOOK

NAME TYPE OFFICE ASSETS CURRENCY CAPITAL SHARE THROUGH SHARE METHOD VALUE

* ** ***

DOMINO S.r.l. Milan Internet services euro 10,000 100.00 Direct 100.00 Valued at cost 10

KIWI 1 VENTURA SERVICOS S.A. Channel Islands Investment fund euro 110,610,000 0.92 Direct (3) 0.92 Valued at cost 28

DIRECTIONAL CAPITAL HOLDING N.V. Channel Islands Financial services euro 6,249 5.00 Direct 5.00 Valued at cost

GEMINA FIDUCIARY SERVICES S.A. Luxembourg Fiduciary services euro 150,000 99.99 Direct 99.99 Valued at cost

TELEFIN, in liquidation (formerly Tempo Libero) UL Milan Financial services Lire 20,000,000,000 42.50 Direct 42.50 Valued at cost

NOTES: * The consolidated share refers to consolidation within the specific group belonging to the Gemina Group. ** The consolidation method of indirect equity investments is attributable to sub-consolidation and not directly to Gemina. *** The book value for equity investments valued at cost, in thousands of euro. (1) Equity investment held in ordinary share capital of the company (500,000 euro). The stake held in the overall share capital (1,000,000 euro) is 25.5%. (2) With reference to purchase commitments, it is noted that on February 28, 2003 ADR granted IGP Decaux S.p.A. a put right on shares held in ADR Advertising S.p.A.’s ordinary and privileged share capital.

right can be exercised until December 31, 2011, upon the occurrence of specific conditions. At present, the commitment cannot be quantified as conditions for the exercise of such right have not occurred. (3) The company has been in liquidation since January 2009, as per the Shareholders’ Agreement KEY: L Listed joint stock company. UL Unlisted joint stock company. S.r.l. Limited liability company. Cons. Consortium. S.c. a r.l. Limited liability consortium company.

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5.9 CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS IN

ACCORDANCE WITH ART. 81-TER OF CONSOB REGULATION NO. 11971 OF

MAY 14, 1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS

We, the undersigned, Guido Angiolini, in my position of

Chairman of the Board of Directors, and Alessandra Bruni, in my position of Manager in charge of preparing corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154bis, subsections 3 and 4 of the Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:

- the consistency with regard to the characteristics of the company and

- of the administration and accounting procedures for the drafting of the consolidated financial statements over 2009.

It is also stated that: - the consolidated financial statements as at December 31,

2009: - were drawn up pursuant to the applicable

International Accounting Standards adopted by the European Union pursuant to regulation (EC) no. 1606/2002 of the European Parliament and Council of July 19, 2002;

- correspond to figures disclosed in the accounting books and records;

- supply a true and fair disclosure of the equity, economic and financial situation of the issuer and of the companies included in the consolidation area;

- the Report on Operations includes a reliable analysis of the performance and management result, as well as the situation of the issuer and of the companies included in the consolidation, together with the description of the major risks and uncertainties to which they are exposed.


The Chairman of the Board of

Directors (Guido Angiolini)

The Manager in charge of preparing corporate accounting documents

(Alessandra Bruni)

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5.10

INDEPENDENT AUDITORS’ REPORT

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143

FINANCIAL STATEMENTS

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6.1 GEMINA S.P.A. INCOME STATEMENT AS AT DECEMBER 31, 2009

(in euro) Note 2009

of which due to related

parties 2008


parties

Income (charges) on equity investments:

Dividends from associated companies 240,000 204,000

Other income/(charges) on equity investments (3,952,922) 20,822,616 Total income (charges) on equity investments 1 (3,712,922) 21,026,616

Net financial income (expense):

Financial income:

Interest income 837,299 208,695 1,310,868 216,383

Financial expenses:

Interest expense (3,477,636) (3,236,098) (4,414,098) (2,821,454)

Other expenses (604,840) (520,190) (1,019,794) (795,666)

Total net financial income (expense) 2 (3,245,177) (4,123,024)

Staff costs 3 (1,410,492) (1,236,110)

Other operating costs 4 (3,163,118) (79,573) (3,343,627) (81,671)

Amortisation, depreciation and write-downs 5 (3,100,000) (3,100,000) - Amortisation, depreciation and write-downs of fixed assets (28,707) (33,405)

Revenues 6 300,559 208,175 280,725 273,644

Other operating profit 6 645,844 505,436 225,573 183,307

Total net operating costs (6,755,914) (4,106,844)

Pre-tax profit (loss) (13,714,013) 12,796,748

Income taxes 7 (355,511) 1,058,495

Profit (loss) for the year (14,069,524) 13,855,243

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STATEMENT OF COMPREHENSIVE INCOME


PROFIT (LOSS) FOR THE YEAR (14,070) 13,855PROFIT (LOSS) ON DERIVATIVE INSTRUMENTS

(CASH FLOW HEDGES) (765) (129)

TAX EFFECT 210 35

TOTAL PROFIT (LOSS) FOR THE YEAR (*) (14,625) 13,761

(*) As a result of the application of IAS 1 Revised from January 1, 2009, Total

Profit/(Loss) includes the change in fair value of the hedging derivatives.

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6.2 GEMINA S.P.A. BALANCE SHEET AS AT DECEMBER 31, 2009

ASSETS

(in euro) Note 12/31/2009

of which due to related parties 12/31/2008

of which due to related parties

NON-CURRENT ASSETS

Other intangible fixed assets 3,141 16,368

TOTAL INTANGIBLE FIXED ASSETS 8 3,141 16,368

Fixtures and fittings, tools and other equipment 10,308 15,169


TOTAL TANGIBLE FIXED ASSETS 9 47,624 62,833

EQUITY INVESTMENTS IN SUBSIDIARIES 10 1,843,211,448 1,835,546,345

EQUITY INVESTMENTS IN ASSOCIATES

AND JOINT VENTURES 10 8,609,066 18,072,741


INVESTED RECEIVABLES 11 4,591,111 4,266,667

DEFERRED TAX ASSETS 12 2,109,436 2,710,607

OTHER NON-CURRENT ASSETS 116 581

OTHER NON-CURRENT FINANCIAL ASSETS 13 1,400,000 1,400,000 1,400,000 1,400,000

TOT. NON-CURRENT ASSETS 1,860,000,197 1,862,104,397

CURRENT ASSETS

TRADE RECEIVABLES 14 397,990 335,755 4,419,688 424,399

OTHER RECEIVABLES 15 14,434,597 13,455,843 24,590,992 21,263,073

OTHER CURRENT FINANCIAL ASSETS 16 1,566,043 1,566,043 286,891 49,120

CASH AND CASH EQUIVALENTS 17 13,433,520 411,482 1,744,876 308,348

TOTAL CURRENT ASSETS 29,832,150 31,042,447

ASSETS HELD FOR SALE - -

TOTAL ASSETS 1,889,832,347 1,893,146,844

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(in euro) Note 12/31/2009




Share capital 1,472,960,320 1,472,960,320

Capital reserves 200,056,535 200,056,535

Hedging reserve (648,220) (93,503)

Other reserves 82,756,364 82,063,602

Profit (loss) from previous years 78,348,625 65,374,283

Profit (loss) for the year (14,069,524) 13,855,243

Total Shareholders’ Equity 18 1,819,404,100 1,834,216,480


Employee benefits 19 193,240 162,343

Provisions for risks and charges 20 9,100,000 3,100,000 6,000,000

Financial indebtedness net of current share 21 46,964,031 46,964,031 46,687,953 46,687,953

Total non-current liabilities 56,257,271 52,850,296

CURRENT LIABILITIES

Trade payables 22 478,115 127,792 560,679 65,634

Current financial liabilities 23 89,043 89,043 3,846,094 2,146,094

Provisions for risks and charges 20 1,902,715 175,861

Financial instruments - derivatives 24 926,026 926,026 128,970 128,970

Other current liabilities 25 10,775,077 11,884 1,368,464 12,938

Total current liabilities 14,170,976 6,080,068

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 1,889,832,347 1,893,146,844

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6.3 GEMINA S.P.A. STATEMENT OF CASH FLOWS AS AT DECEMBER 31, 2009

(in thousands of euro) 12/31/2009 12/31/2008

PROFIT (LOSS) FOR THE YEAR (14,070) 13,855

Amortization and depreciation of tangible and intangible fixed assets 29 33Increase (decrease) of employee benefits and other funds (net of risks provision for transfer of Elilario) 4,858 (28)

(Increase) decrease in deferred tax assets 601 854

Capital (gains) losses on transfer of equity investments - (21,506)

(Revaluation) write-down of equity investments 2,100 683

OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING CAPITAL (6,482) (6,109)

(Increase) decrease in trade receivables 4,022 (171)

(Increase) decrease in other current assets 10,157 (1,766)

Increase (decrease) in trade payables (83) (799)

Increase (decrease) in other current liabilities and tax payables 9,407 (397)

CHANGES IN WORKING CAPITAL 23,503 (3,133)

TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

OPERATIONS 17,021 (9,242)

STATEMENT OF CASH FLOWS FROM INVESTMENT ACTIVITIES

Sale of equity investments in Elilario and 3 Italia - 63,800Additional charges for disposal of the equity investment which directly reduce the capital gains from disposal of the equity investment in Elilario - (1,963)

(Increase) decrease in invested receivables (325) (4,267)

Other changes in equity investments (301) -

(Increase) decrease in tangible and intangible fixed assets - (13)TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

INVESTMENT ACTIVITIES (626) 57,557


Dividends paid (188) (188)


Increase (decrease) in financial payables (2,684) (105,132)

Raising of medium/long-term bank payables - 46,688

Other changes in shareholders’ equity (555) 115TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY FINANCING

ACTIVITIES (4,706) (48,153)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 11,689 162



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6.4 GEMINA S.P.A. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY AS AT

DECEMBER 31, 2009

(in thousands of euro) Share capital Capital

reserves Hedging reserve

Other reserves

Profit (loss) pertaining to

previous years Profit (loss) for the year

Shareholders’ equity

Balances as at 01/01/2008 1,472,960 199,849 - 81,394 52,850 13,381 1,820,434

Allocation of proceeds year 2007 13,381 (13,381)

Distribution of dividends to holders of savings

shares 670 (858) (188)

Other changes 208 208Total profit (loss) for the

year (93) 13,855 13,762

Balances as at 12/31/2008 1,472,960 200,057 (93) 82,064 65,373 13,855 1,834,216

Allocation of results year 2008 692 13,163 (13,855)


shares (188) (188)Total profit (loss) for the

year (555) (14,070) (14,625)

Balances as at 12/31/2009 1,472,960 200,057 (648) 82,756 78,349 (14,070) 1,819,404

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6.5 EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS

ACCOUNTING STANDARDS Pursuant to European Regulation no. 1606 of July 19, 2002

and in connection with the provisions of Italian Legislative Decree no. 38/2005, starting with the year ending December 31, 2006 companies issuing financial instruments traded in regulated markets must draw up their financial statements according to the International Accounting Standards (IAS or International Financial Reporting Standards (IFRS)) and according to their “interpretations” as provided in documents issued by the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) approved by the European Commission, with date of transition January 1, 2005.

Therefore, Gemina adopted the above principles from

January 1, 2006. The last financial statements of Gemina drawn up according

to the Italian accounting principles regards the year that ended on December 31, 2005.

The financial statements and information contained herein

were drawn up in conformity with the international standard IAS 1, as provided for by CONSOB communication no. 15519 and CONSOB communication no. 6064293 issued on July 28, 2006.

ADOPTION OF NEW STANDARDS ACCOUNTING STANDARDS, AMENDMENTS AND

INTERPRETATIONS APPLIED FROM JANUARY 1, 2009 The following accounting standards, amendments and

interpretations, revised also as a result of the annual 2008 Improvement process conducted by the IASB, were applied for the first time by the Company starting from January 1, 2009.

IAS 1 REVISED - PRESENTATION OF FINANCIAL

STATEMENTS The presentation of income components such as income and

charges (defined as “non-owner changes in equity”) in the Statement of Changes in Shareholders’ Equity is not permitted, and these changes deriving from transactions with non-owners must be indicated separately.

All non-owner changes in equity are highlighted in a single separate statement which shows the trend in comprehensive

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income for the period or in two separate statements, entitled income statement and statement of comprehensive income.

The changes must be shown separately also in the Statement of changes in Shareholders’ equity.

The Company applied the revised version of the standard from January 1, 2009 retrospectively, choosing to indicate all changes due to transactions with non-shareholders in two separate tables which show the trend for the period called respectively “Income statement” and “Statement of comprehensive income”.

The Company subsequently amended the presentation of the Statement of changes in Shareholders’ equity.

IAS 28 — INVESTMENTS IN ASSOCIATES The Standard requires that additional information be

provided for equity investments in associated companies and joint ventures valued at fair value according to IAS 39.

Its adoption, from January 1, 2009, did not entail the recognition of any effect in these financial statements.

IAS 7 – FINANCIAL INSTRUMENTS: DISCLOSURES This requires greater disclosure in the event of valuation at

fair value and strengthens the existing principles regarding disclosure of liquidity risks of financial instruments. Specifically, disclosure is provided regarding the levels of fair value measurement hierarchy for financial instruments. The adoption of this standard, adopted from January 1, 2009, did not entail an effect in terms of the valuation and recognition of the balance sheet items, but only on the type of disclosure provided.

Finally, it is worth noting that a set of amendments and

interpretations have been released which regulate categories and cases not pertaining to the Company as at the date of these financial statements: IAS 23 – Borrowing Costs; IFRS 2 – Share-Based Payments: Vesting Conditions and Cancellations; IAS 16 – Property, Plant and Machinery; IAS 19 – Employee Benefits; IAS 20 – Government Grants; IAS 38 – Intangible Assets; IAS 32 – Financial Instruments: Presentation; IAS 1 – Presentation of the Financial Statements – Puttable financial instruments and obligations arising on liquidation; IAS 29 – Financial Reporting in Hyperinflationary Economies; IAS 39 – Financial Instruments: Recognition and Measurement; IAS 40 – Investment Property; IFRIC 13 – Customer Loyalty Programmes; IFRIC 15 – Agreements for the Construction of Real Estate; IFRIC 16 – Hedges of a Net Investment in a Foreign Operation.

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ACCOUNTING STANDARDS, AMENDMENTS AND

INTERPRETATIONS NOT YET APPLICABLE AND NOT ADOPTED IN ADVANCE BY THE COMPANY.

A series of amendments and interpretations have been issued which are applicable following December 31, 2009: updated version of IFRS 3 – Business Combinations; IFRS 5 – Non-Current Assets Held for Sales and Discontinued Operations; IAS 39 – Financial Instruments: Recognition and Measurement; IFRIC 17 – Distribution of Non-Cash Assets to Owners; IFRIC 18 – Transfers of Assets from Customers; IFRS 2 – Share-Based Payments; IAS 32 – Financial Instruments: Presentation and Classification of Rights Issues; IAS 24 - Related Party Disclosures; IFRS 9 – Financial Instruments; IFRIC 14 – Advance Payments in Relation to Minimum Funding Requirements; IFRIC 19 – Extinguishing Financial Liabilities With Equity Instruments.

On April 16, 2009 the IASB issued a set of modifications to the IFRS (“Improvements”) that will entail changes in the statement, recognition and valuation of the balance sheet items and modifications that will primarily bring about changes in terminology or publishing, with slight effects from the accounting viewpoint.

These standards have not been adopted in advance by the company, as they regulate cases which were not applicable to the company as at December 31, 2009.

For further information, also see point 5.6 of the Consolidated Financial Statements, “Accounting Standards”.

VALUATION CRITERIA CURRENCY OF REFERENCE The financial statements of Gemina are drawn up in euro. USE OF ESTIMATES Drawing up the financial statements in application of the

IFRS requires estimates and assumptions to be made, which affect the book asset and liability values on the date of reference.



DIVIDENDS

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The dividends are recorded at the time the right of the

shareholders to receive payment arises, which normally corresponds to the date of the annual Shareholders’ Meeting that resolves on the distribution of the dividends.

The dividends payable to minority shareholders are shown as a change of the Shareholders’ Equity as at the date when the Shareholders’ Meeting approves them.

FINANCIAL INCOME AND EXPENSE Financial income and expense are recorded in the income

statement on an accrual basis, based on the interest accrued on the value of the respective financial assets and liabilities using the actual interest rate.

COSTS Costs are valued at the fair value of the amount paid or to be

paid, and are recognised in the income statement on an accrual basis.

Costs connected with share capital increase are charged directly as a decrease in Shareholders’ equity.

REVENUES Revenues from sales and services are respectively posted

when the actual transfer of risks and benefits coming from the sale of the property or the supply of the service has occurred.

INCOME TAXES The income tax on the income of the year is calculated based

on current legislation. Any deferred or prepaid income taxes are calculated on the

temporary differences between the equity values entered in the financial statements and the corresponding values recognised for tax purposes, applying the tax rate that is expected to be in effect on the date when the temporary difference will be paid.


Deferred taxes are recorded in the income statement, with the exception of those relating to items that are directly recorded in shareholders’ equity. In that case, also deferred taxes are charged to shareholders’ equity.

In its capacity of consolidating company, Gemina adopted the national consolidated financial statements, and the following companies participate in it: ADR, ADR Engineering, ADR Tel and ADR Sviluppo S.r.l..

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EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES,

ASSOCIATED COMPANIES AND JOINT VENTURES Equity investments in subsidiary companies, associated

companies and joint ventures are recorded at their purchase cost including additional charges, which is adjusted when there are losses of value pursuant to IAS 36.

The term subsidiary companies means all companies over which Gemina has the power to determine, either directly or indirectly, the financial and operating policies in order to obtain benefits from their activities.

The term joint ventures means all those companies in which Gemina exercises control together with other entities based on agreements that attribute joint powers to govern said Company.

Equity investments in associated companies are those in which Gemina is capable of exercising a significant influence, but not control or joint control, by contributing to the financial and operating decision-making policies of the investees.

The positive difference between acquisition cost and the

share of shareholders’ equity at current values of the Company’s interest arising from the act of purchase is therefore included in the book value of the equity investment.

When there is proof that these equity investments have sustained impairment, the latter is recorded in the income statement as a write-down of the book value.

If no impairment occurs or impairment is reduced afterwards, the revaluation that reinstates the book value up to the new estimation, within the limits of the cost, is entered in the income statement.

In the event the portion of losses of the investee company, which is pertaining to the Company, exceeds the book value of the equity investment, the value of the equity investment is zeroed and the portion of additional losses is disclosed as a provision under liabilities.

FINANCIAL ASSETS HELD FOR SALE (OTHER EQUITY

INVESTMENTS) AND FINANCIAL ASSETS HELD FOR TRADING These are made up of instruments representing the

shareholders’ equity, and are valued at fair value, if it can be determined.

When the fair value cannot be reliably determined, they are entered at cost – written down for impairment losses, if necessary – whose effect is recognised in the income statement.

In the case financial assets are classified as “held for sale” (“other equity investments”), the adjustment to fair value as at the date of reference is recorded under a specific item of

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shareholders’ equity. When they are sold or suffer an impairment loss, the profits or losses previously recorded under shareholders’ equity are charged to the income statement for the year.

If financial assets are classified as “held for trading”, the profits and losses resulting from the changes in fair value are recorded in the income statement for the year.

The financial assets are deleted from the balance sheet assets

if and only if the risks and benefits correlated with their ownership have been substantially transferred.

OTHER FINANCIAL ASSETS The other financial assets are recorded and reversed on the

financial statements based on the trading date, and are initially valued at cost, including charges directly attributable to their acquisition.

TANGIBLE ASSETS The tangible assets are recorded at historical cost. Tangible fixed assets are depreciated on a straight-line basis in

each year in relation to the estimated useful life and, in the case of disposal, until the end of use.


The estimated useful life of tangible assets is such that depreciation rates used are the following:

- Equipment from 15% to 25%; - Other assets from 12% to 20% In the case that there is an impairment loss, aside from the

depreciation already recorded, the asset is written down accordingly.

If in subsequent years the conditions for the write-down cease to exist, the original value will be reinstated within the limits of the write-downs previously made.


Any maintenance costs are charged to the income statement. INTANGIBLE FIXED ASSETS The intangible assets, all having a defined useful life, are

recorded at purchase cost and disclosed net of their related amortisation.

Amortisation is calculated on a straight-line basis depending on the estimated useful life.

Amortisation therefore begins when the intangible asset

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becomes available for use.

RECEIVABLES Receivables are stated at the fair value in the financial

statements corresponding to their par value, and are adjusted to their estimated realisable value.

In the case of receivables whose collection is expected to be long-term, their current value is recorded.




TRADE PAYABLES Trade payables are stated at the fair value corresponding to

their par value. FINANCIAL LIABILITIES The financial liabilities are initially recognised at fair value

corresponding to cost, net of directly attributable transaction costs.

Subsequently they are valued at the amortised cost. The amortised costs is the amount of the liability recorded at the time of its initial recognition net of capital repayments and additional charges amortised applying the effective interest rate method.

FINANCIAL DERIVATIVES The Company uses derivatives for hedging interest rate

fluctuation risks. Interest rate risks derive from variable rate bank loans. To

hedge these risks, the Company converted a portion of its variable rate debts into fixed rate debts and designated them as cash flow hedges.

Derivative instruments are initially recognised at fair value and adjusted to their fair value at year-end.

Any changes in the fair value of derivatives, which are so designated, and considered to be effective in hedging against future cash flows of the Company’s contractual commitments and expected transactions, are directly recorded in shareholders’ equity net of their tax effect, while their ineffective portion is immediately recognised in the income statement.

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EMPLOYEE BENEFITS Post employment benefits – ascribable to employee severance

indemnities – have been valued according to Italian accounting standards and to current legislation regarding collective payroll agreements and company pension schemes.



Provisions are allocated based on a best estimate of the costs required for fulfilling the obligation at the year-end date of the financial statements.

ASSETS/(LIABILITIES) HELD FOR SALE Assets and liabilities held for sale include non-current assets

and the associated liabilities which have been selected for disposal.

Assets held for sale are valued at the lower of their book value and their fair value net of sale costs.

The amounts are expressed in thousands of euro. NOTES TO THE INCOME

STATEMENT

NOTE 1 INCOME (CHARGES) ON EQUITY INVESTMENTS DIVIDENDS

2009 2008 Change

FROM ASSOCIATED COMPANIES 240 204 36

SITTI 240 204 36

TOTAL 240 204 36 OTHER INCOME/(CHARGES) ON EQUITY INVESTMENTS

2009 2008 Change

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CAPITAL GAINS ON DISPOSAL OF

EQUITY INVESTMENTS - 21,509 (21,509)

ELILARIO - 21,509 (21,509)

CAPITAL LOSSES ON DISPOSAL OF

EQUITY INVESTMENTS - (3) 3

3 ITALIA - (3) 3WRITE-DOWNS OF EQUITY

INVESTMENTS (2,100) (683) (1,417)

PENTAR (1,100) (291) (809)

SITTI (1,000) (392) (608)

LOSS SETTLEMENTS (1,193) - (1,193)

FIUMICINO ENERGIA (1,189) - (1,189)

DOMINO (4) (4)

OTHER EXPENSES (660) - (660)

TOTAL (3,953) 20,823 (24,776) The equity investment in Pentar was prudently written down

to line up its book value with the quota of the Company's shareholder’s equity, as is seen in the best information available.

For financial year 2009 a loss is expected on the income statement, also as a result of the investee companies that recorded a decrease in turnover and profitability as a result of the unfavourable economic trend.

The book value of the equity investment in SITTI was

aligned with the likely salvage value. Fiumicino Energia recorded a loss in 2009, mainly due to the

subsidiary Leonardo Energia’s inability to pay the lease rental as set forth in the contract, which reflects the clauses and conditions established in previous consortium agreements.

During the year Gemina made payments of 1,189 thousand

euro to cover said loss, as well as covering the loss of 4 thousand euro accrued by Domino S.r.l. as at December 31, 2009.

The other expenses, equal to 660 thousand euro, regard the

compensation paid to Edison, as per the agreements for the company reorganisation of SdE.

The company reorganisation of SdE, the itemised list of equity investments, the changes in terms of quantity and value that took place during the year, the portion held of each

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one, the name, registered office, share capital, shareholders’ equity and book value are shown in Note 10.

NOTE 2 NET FINANCIAL INCOME (EXPENSES)

INTEREST INCOME

2009 2008 Change FROM RECEIVABLES ENTERED AS NON-

CURRENT ASSETS 546 616 (70)

FROM ASSOCIATED COMPANIES 49 112 (63)

SITTI - interest on bond issue 49 112 (63)

FROM OTHERS 497 504 (7)

IDOMENEO S.A. ( INAER Group) 497 504 (7)FROM RECEIVABLES ENTERED AS CURRENT

ASSETS 3 80 (77)

FROM SUBSIDIARY COMPANIES 3 80 (77)

Fiumicino Energia – Interest income on reciprocal c/a 3 - 3

Elilario - interest income on reciprocal c/a and loan - 80 (80)

INCOME OTHER THAN THE ABOVE 288 615 (327)INTEREST INCOME ON C/A AND BANK

DEPOSITS 95 228 (133)

of which from related parties:

Mediobanca 1 101 (100)

INTEREST INCOME ON TAX CREDITS 157 383 (226)


ADR 106 - 106

ADR Engineering 8 - 8

ADR Tel 6 - 6

IRS DIFFERENTIALS 36 4 32


Mediobanca 18 2 16

Unicredit MedioCredito Centrale 18 2 16

TOTAL 837 1.311 (474) The interest income accrued from the INAER Group

concerns remuneration of the 4 million euro credit coming from the disposal of Elilario Italia S.p.A., described in Note 11.

INTEREST EXPENSE

2009 2008 Change

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INTEREST PAYABLE ON BANK LOANS 2,983 3,768 (785)

of which due to related parties:

Mediobanca 1,451 1,411 40

Unicredit Corporate Banking - 602 (602)

Unicredit MedioCredito Centrale 1,451 808 643

EXPENSES ON DERIVATIVES 335 - 335


Mediobanca 167 - 167

Unicredit MedioCredito Centrale 167 - 167

OTHER INTEREST PAYABLE 160 646 (486)

TOTAL 3,478 4,414 (936)

The interest payable on bank loans refer entirely to the loan stipulated on December 11, 2008, described in Note 21. Expenses on derivatives comprise 302 thousand euro of the negative differential paid in relation to the interest rate swap contract in force, described in Note 24 and 33 thousand euro of accrued liabilities as at December 31, 2009.

OTHER EXPENSES

2009 2008 Change

COMMISSIONS AND CHARGES ON LOANS 323 807 (484)



Unicredit MedioCredito Centrale 140 378 (238)COMMISSION EXPENSE ON THE ASSIGNMENT

OF TAX CREDITS 77 154 (77)

COMMISSIONS ON NON-USE 205 59 146


Mediobanca 102 25 77

Unicredit Corporate Banking - 8 (8)

Unicredit MedioCredito Centrale 102 16 86

TOTAL 605 1.020 (415) COMMISSIONS AND CHARGES ON LOANS

This item regards the share of accessory charges for financial year 2009 for the Loan granted on December 11, 2008.

COMMISSION EXPENSE ON THE ASSIGNMENT OF TAX

CREDITS

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The item refers to the commissions calculated on the amount

of the tax credits transferred to Unicredit Factoring S.p.A. until April 9, 2009, the date when these credits were settled by the Revenue Office, as described also in Note 14 and Note 15.

NOTE 3 STAFF COSTS

2009 2008 Change

SALARIES AND WAGES 1,037 931 106

SOCIAL SECURITY CHARGES 293 237 56

POST-EMPLOYMENT BENEFITS 49 46 3

OTHER COSTS 31 22 9

TOTAL 1,410 1,236 174

The increase is attributable to the hiring of 3 employees during the year.

Below is the average number of employees and the

breakdown by category:

12/31/2008 Recruits Leavers 12/31/2009 Average

EXECUTIVES 1 2 - 3 2

MANAGERS 3 2 (1) 4 3

EMPLOYEES 4 1 (1) 4 4

TOTAL 8 5 (2) 11 9 The increase of three people during the year is due to:

- the hiring of an executive for a subsidiary company, to which the related cost was charged back;

- the direct hiring of 2 employees for positions previously held by personnel seconded from the subsidiary company ADR.


2009 2008 Change

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SERVICE CHARGES 2,282 2,406 (124)


Unicredit MedioCredito Centrale 2 3 (1)

SdE(*) 10 15 (5)

ADR Tel 7 10 (3)

ADR 61 54 7

RENTALS 405 429 (24)ALLOCATION TO PROVISIONS FOR RISKS

AND CHARGES - 15 (15)

OTHER OPERATING EXPENSES 476 494 (18)

TOTAL 3,163 3,344 (181)

(*) until August 30, 2009 SERVICE CHARGES The decrease is mainly attributable to cost savings on

professional services from third parties. OTHER OPERATING EXPENSES These include company costs totalling 202 thousand euro

borne for publishing mandatory company notices and for organising the Shareholders’ Meeting for approval of the financial statements, fiscal charges for non-deductible VAT and other taxes amounting to 166 thousand euro, and 60 thousand euro in costs for contributions paid to trade associations.

NOTE 5 AMORTISATION, DEPRECIATION AND WRITE-DOWNS These refer to the provision, equal to 3.1 million euro, made in order to cover the risk of indemnifying ADR as a result of the guarantee issued to the subsidiary company in December 2002, against any capital losses the company may have had to incur due to tax claims relating to years prior to 2000. The provisions were allocated in the event of a partial negative outcome for ADR in the litigation with the Customs Agency, as described in Note 29 “Litigation”.

NOTE 6 REVENUES AND OTHER OPERATING INCOME Revenues refer to the supply of company and administrative

services, contractually defined, in favour of the Group companies equal to 301 thousand euro, while the other operating income basically comes from the recovery of remuneration for corporate offices filled by executive staff in Group companies (455 thousand euro) and from the re-debiting of costs incurred due to service supply agreements (87 thousand euro).

All revenues were attained in Italy.

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NOTE 7 INCOME TAXES This item includes:

- positive income taxes for fiscal losses generated during the

year totalling 1,822 thousand euro;

- the partial levy of pre-paid taxes on the company share capital increase charges borne in 2007 amounting to 873 thousand euro;

- the allocation of 1.669 thousand euro made in relation to a tax audit by the Milan Revenue Office regarding the year 2006.

The findings issued regard the non-deductibility of interest payable and the failure, in tax filing, to align the statutory values of equity investments sold during the financial year to the tax values.

IRES – RECONCILIATION BETWEEN THEORETICAL AND REAL FISCAL

CHARGES 2009 2008

Taxable income Tax

Taxable income Tax

PRE-TAX PROFIT (LOSS) (13,714) 12,797

THEORETICAL IRES 27.5% 3,771 27.5% (3,519) EFFECT OF INCREASES (DECREASES)

COMPARED TO THE ORDINARY TAX RATE

DIVIDENDS (228) 63 (194) 53

CAPITAL GAINS FROM DISPOSALS (27,998) 7,699 ADDITIONAL CHARGES RELATED TO CAPITAL

INCREASE (3,176) 873 (a) (3,234) 889 (a)

PROVISIONS 3,100 (853) - -

CAPITAL LOSSES ON EQUITY INVESTMENTS 3,953 (1,087) - -

FINANCIAL EXPENSES 2,996 (824) 4,123 (1,134)

FISCAL CHARGES: 59 (16) - -

OTHER PERMANENT DIFFERENCES 385 (105) 8,488 (2,334)

TAXABLE INCOME/(LOSS) (6,625) 1,822 (6,017) 1,655

TOTAL TAX LOSSES (6,625) (6,017)

REVENUES FROM TAX CONSOLIDATION 1,822 1,655 EFFECT ON THE INCOME STATEMENT OF

COSTS/REVENUES DIRECTLY RECORDED IN

SHAREHOLDERS’ EQUITY (a) (873) (889) IRES INCOME ON REDUCTION IN WORKING

HOURS (ROL) TRANSFERRED TO ADR 303 -

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REAL IRES 1,252 766 NOTES TO THE BALANCE SHEET


12/31/2008 Increases Amortisation 12/31/2009

SOFTWARE AND SYSTEMS COSTS 16 - (13) 3

TOTAL 16 - (13) 3

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NOTE 9 TANGIBLE ASSETS

12/31/2008 Changes in the year 12/31/2009

COST REVAL. ACCR. BOOK PURCHA

SES DISPOSALS SHARE

OF COST REVAL. ACCR. BOOK

(W.-D.) DEP. VALUE COST ACCR. DEPR.

DEPR. (W.-D.) DEP. VALUE

FIXTURES AND FITTINGS, TOOLS AND OTHER EQUIPMENT

MISCELLANEOUS FITTINGS 37 - (23) 14 1 - - (5) 38 - (28) 10

OTHER TANGIBLE ASSETS

FURNITURE AND FURNISHINGS 226 - (185) 41 - (1) - (9) 225 - (194) 31

OFFICE MACHINES 59 - (51) 8 - - - (1) 59 - (52) 7

OTHER ASSETS 15 - (15) - - - - - 15 - (15) -

300 - (251) 49 - (1) - (10) 299 - (261) 38

TOTAL 337 - (274) 63 1 (1) - (15) 337 - (289) 48

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NOTE 10 EQUITY INVESTMENTS

EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES, ASSOCIATED COMPANIES, JOINT VENTURES AND OTHER EQUITY INVESTMENTS

The breakdown and change of this item are shown in the following table:

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Stock as at 12/31/2008 Increases Decreases

Value adjustment

s Stock as at 12/31/2008

Name Shares Unit Value %

Equity Shares Value Shares Value Shares Unit Value % Equity or Quotas Value Inv. or Quotas or Quotas or Quotas Value Inv.

EQUITY INVESTMENTS IN

SUBSIDIARY COMPANIES

AEROPORTI DI ROMA S.P.A. 59,668,765 30.76 1,835,536,345 95.76 - - - - - 59,668,765 30.76 1,835,536,345 95.76

FIUMICINO ENERGIA S.R.L.(*) - - - - 1 7,665,103 - - - 1 - 7,665,103 86.12

DOMINO S.R.L. 1 - 10,000 100.00 - - - - - 1 - 10,000 100.00

TOTAL 1,835,546,345 - 7,665,103 - - - - 1,843,211,448

EQUITY INVESTMENTS IN

ASSOCIATES AND JOINT VENTURES

PENTAR S.P.A. 5,000,000 0.94 4,709,065 20.35 - - - - (1,100,000) 5,000,000 0.72 3,609,065 20.35

SISTEMI DI ENERGIA S.P.A.(*) 4,771,243 1.54 7,363,676 45.55 - - 4,771,243 7,363,676 - - - - -

SITTI S.P.A. 1,200,000 5.00 6,000,000 40.00 - - - - (1,000,000) 1,200,00 4.17 5,000,000 40.00

TOTAL 18,072,741 - - - 7,363,676 (2,100,000) 8,609,065

OTHER EQUITY INVESTMENTS

DIRECTIONAL CAPITAL HOLD. NV 1 - - 5.00 - - - - - 1 - - 5.00

KIWI 1 VENTURA SERVICOS S.A. (**) 34 - 28,255 0.92 - - - - - 34 - 28,255 0.92

GEMINA FIDUCIARY SERVICES S.A. 17,646 - - 99.99 - - - - - 17,646 - - 99.99 TELEFIN S.P.A IN LIQUIDATION

(FORMERLY TEMPO LIBERO S.P.A.) 85,000 - - 42.50 - - - - - 85,000 - - 42.50

TOTAL 28,255 28,255

GRAND TOTAL 1,853,647,341 7,665,103 7,363,676 (2,100,000) 1,851,848,768 (*) Changes occurred following the partial proportional spin-off of SdE and the exchange of shares with Edison described below. (**) The company has been in liquidation since January 2009, as per the Shareholders’ Agreement.

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6.5 EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS LIST OF EQUITY INVESTMENTS PURSUANT TO ART. 2427 OF THE ITALIAN CIVIL CODE


NAME

REGISTERED

OFFICE ACTIVITY

SHARE CAPITAL

VALUE IN EURO

SHAREHOLDERS’

EQUITY

INCLUDING

PROFIT (LOSS) AS

AT 12/31/2009

PROFIT

(LOSS) FOR

THE YEAR

2009

PORTION OF

SHAREHOLDER

S’ EQUITY HELD

% OF

DIRECT

OWNERSHI

P

BOOK

VALUE

Aeroporti di Roma S.p.A. Fiumicino Airport services euro 62,309,801 764,438 5,094 732,026 95.76 1,835,536

Fiumicino Energia S.r.l. (1) Milan Production and sale of energy euro 391,795 743 (1,188) 640 86.12 7,665

Domino S.r.l. (2) Milan IT services euro 10,000 6 (4) 6 100.00 10

Gemina Fiduciary Services S.A. Luxembourg Trust company euro 150,000 (21) (13) (21) 99.99 -

Pentar S.p.A.(3) Naples Holding company euro 24,571,000 22,926 (344) 4,665 20.35 3,609

SITTI S.p.A. Milan Air navigation instruments euro 1,560,000 11,003 1,389 4,401 40.00 5,000

Telefin S.p.A in liquidation (formerly Tempo Libero S.p.A.) (4) Milan Financial services Lire 20,000,000,000 - - - 42.50 -

(1) Established on June 30, 2009 as the beneficiary of the partial proportional spin-off of Sistemi Energia S.p.A.. On November 9, 2009 the Shareholders’ Meeting resolved a share capital increase of 350,000 euro to be carried out by March 15, 2010.

(2) On February 18, 2010 the loss was covered through payment by the shareholder Gemina.

(3) Figures refer to the financial statements as at December 31, 2008.

(4) On April 29, 1999 the Court of Milan declared its bankruptcy.

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Due to the partial proportional spin-off of SdE, which took

effect on June 30, 2009, the co-generation power plant at Fiumicino and the holding in Leonardo Energia were transferred to the new company Fiumicino Energia.

In accordance with the agreements made, Gemina exchanged its shares in SdE with Edison, without adjustments, for the shares held by Edison in Fiumicino Energia, by deed of exchange on July 1, 2009.

Therefore, from July 1, 2009 Gemina holds 86.12% of Fiumicino Energia, Finlombarda S.p.A. holds 11.25% and minor shareholders hold the remaining part.

The equity investments in ADR and SITTI were recorded in

the financial statements at a higher book value compared to the corresponding share of shareholders’ equity. These values refer to the price paid for their acquisition, calculated on the basis of both the company’s equity consistency and the expected profitability.

The recorded values of ADR and Fiumicino Energia have been subject to impairment tests in order to verify that the book values state the economic values of the investee companies.

The book value of the equity investment in SITTI is aligned with the likely salvage value.

The book value of the equity investment in Pentar was prudently aligned to the quota of the Company's shareholders’ equity, as is seen in the best information available.


This item, equal to 4,591 thousand euro, includes the receivable of par value of 4.0 million euro from the INAER Group, due by 2017, following the transfer of the equity investment in Elilario Italia S.p.A. occurred in February 2008.

This is an interest-bearing loan: a 7.5% share of the receivable has been capitalised and will be recognised at the expiry date (591 thousand euro), and a share equal to the Euribor + 2% is collected annually.


These substantially regard:

- the amount of 1,838 thousand euro, which is the remaining value of the pre-paid taxes calculated on the additional charges to the share capital increase of 2007 recorded as a direct decrease of the shareholders’ equity, deductible in 5 years. The amount delivered during the year is equal to 873 thousand euro;

- the amount of 210 thousand euro, which is the tax effect

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regarding the fair value of the derivatives recorded under shareholders’ equity.


12/31/2009 12/31/2008 Change

SITTI 1,400 1,400 -

TOTAL 1,400 1,400 -

The amount due from SITTI refers to a bond issue of SITTI itself for a total of 3,500 thousand euro with a four-year term (June 30, 2006 – June 30, 2010), consisting of 3500 bonds having a par value of 1,000 euro each.

Gemina underwrote 1,400 thousand euro, corresponding proportionately to its equity share.

The yield of the bonds is equivalent to the marginal refinancing rate of the European Central Bank plus spread. The average spread in 2009 was 1.4%.


12/31/2009 12/31/2008 Change

DUE FROM CUSTOMERS 5 4,001 (3,996)

DUE FROM CUSTOMERS 270 271 (1)

of which due to related parties (Shareholders’ Agreement): 5 5 -

DUE FROM FACTORING COMPANIES - 3,995 (3,995)

BAD DEBT PROVISION (265) (265) -

RECEIVABLES DUE FROM SUBSIDIARY COMPANIES 209 10 199

ADR 146 10 136

DOMINO S.R.L. 3 - 3

ADR TEL 6 - 6

FIUMICINO ENERGIA 43 - 43

LEONARDO ENERGIA 11 - 11EQUITY INVESTMENTS IN ASSOCIATED

COMPANIES AND JOINT VENTURES 184 409 (225)

C.E.B 1 34 (33)

LEONARDO ENERGIA - 2 (2)

SDE 56 251 (195)

PENTAR 6 9 (3)

SITTI 121 113 8

TOTAL 398 4,420 (4,022) Receivables due from factoring companies decreased to zero

following the settlement of the aforementioned receivables by the Revenue Office on April 9, 2009.

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It is noted that the amount of 3,995 thousand euro as at

December 31, 2008 regarded: - 820 thousand euro of the residual amount to be collected

for 12,819 thousand euro in tax credit for the year 1997 factored without recourse;

- 3,175 thousand euro in interest income accrued as at April 30, 2004, factored with recourse as per the agreement made on May 7, 2004.

Receivables due from subsidiary and associated companies

refer to services rendered and to chargebacks of costs.

NOTE 15 OTHER RECEIVABLES 12/31/2009 12/31/2008 Change

TAX RECEIVABLES 258 1,157 (899)

TAX CREDITS 258 1,157 (899)OTHER RECEIVABLES DUE FROM

SUBSIDIARY COMPANIES 13,423 21,230 (7,807)DUE FROM ADR GROUP FOR CONSOLIDATED

IRES 13,423 21,230 (7,807)


DUE FROM THE TAX AUTHORITY 474 224 250

OTHER RECEIVABLES 68 69 (1)

ACCRUED INCOME 90 1,732 (1,642)

INTEREST INCOME ON TAX CREDITS 90 1,732 (1,642)

PREPAYMENTS 122 179 (57)

SERVICE CHARGES 5 15 (10)

USE OF THIRD PARTY ASSETS 22 24 (2)

OPERATING EXPENSES 62 29 33

FINANCIAL EXPENSES 33 111 (78)



14,435 24,591 (10,156)

Receivables due from subsidiary companies refer to the taxes of ADR Group companies that adhered to the tax consolidation, and for 12,832 thousand euro regard the estimated 2009 tax burden, net of the paid-in advances.

The decrease is due to the collection of receivables relating to the balance of 2007 and 2008 taxes from the ADR Group companies.

The decrease in accrued income concerns the collection of

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the interest accrued on the tax credit arising from the 1997 income tax return, as illustrated in Note 14.

Prepayments refer to ordinary expenses pertaining to the subsequent years.


12/31/2009 12/31/2008 Change RECEIVABLES DUE FROM SUBSIDIARY

COMPANIES: 1,545 6 1,539

- FOR OPERATING C/A 1,545 6 1,539

FIUMICINO ENERGIA 1,545 - 1,545

DOMINO - 6 (6)

DUE FROM ASSOCIATED COMPANIES

SITTI 21 39 (18)ACCRUED INCOME FOR INTEREST ON

RECEIVABLES DUE FROM OTHERS:

IDOMENEO - 238 (238)

ACCRUED INCOME FOR IRS - 4 (4)


Mediobanca - 2 (2)

Unicredit MedioCredito Centrale - 2 (2)

TOTAL 1,566 287 1,279 The amounts due from Fiumicino Energia regard a loan

granted at market conditions in order to optimise treasury management, with a 3-month Euribor rate plus a margin of 200 bps.


12/31/2009 12/31/2008 Change

BANK AND POST OFFICE DEPOSITS 13,432 1,744 11,688

of which due from/to related parties:

Mediobanca 376 217 159

Unicredit Corporate Banking 36 - 36

CASH ON HAND 2 1 1

TOTAL 13,434 1,745 11,689

The increase derives from the collection of receivables due from companies which take part in the tax consolidation agreement and the collection of tax receivables for 1997.

Cash and cash equivalents include the balance of the fixed-term deposit at Mediobanca securing the 376 thousand euro Loan granted on December 11, 2008.

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Shareholders’ equity decreased by 14,813 thousand euro compared to December 31, 2008 due to the joint effect of:

PROFIT (LOSS) FOR THE YEAR 14,070

DISTRIBUTION OF DIVIDENDS TO HOLDERS OF SAVINGS SHARES ON THE 2008 PROFIT 188

NEGATIVE CHANGE IN FAIR VALUE OF DERIVATIVES 555

14,813 The share capital is equal to 1,472,960,320 euro, broken down

into 1,469,197,552 ordinary shares of the par value of 1 euro and 3,762,768 non convertible, savings shares of the par value of 1 euro each.

Changes occurred over 2008 and in the year in question are highlighted in the special statement in point 6.4.

In compliance with Art. 2427 of the Italian Civil Code and the

requirements of IAS 1, subsection 76, the detailed information concerning the possible use of the shareholders’ equity items, together with the uses made in previous years, is summarised below.

TYPE/DESCRIPTION TOTAL AMOUNT POSSIBLE USE SUMMARY OF USES MADE IN THE

PAST THREE YEARS TO HEDGE FOR OTHER LOSSES REASONS

SHARE CAPITAL 1,472,960

CAPITAL RESERVES 200,057

Share premium reserve net of share capital increase costs 149,707 A-B

Reserve for purchase of own shares 50,000

Sale of unexercised rights 350 A-B-C

HEDGING RESERVE (648)

OTHER RESERVES 82,756

Merger surplus reserve and sale of own shares 7,747 A-B-C

Legal reserve 75,009 B PROFIT (LOSS) FROM PREVIOUS

YEARS 78,349 A-B-C

NON-DISTRIBUTABLE PORTION 274,067

RESIDUAL DISTRIBUTABLE PORTION 86,446 Key: A: to increase capital

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B: to cover losses C: for distribution to shareholders

NOTE 19 EMPLOYEE BENEFITS The amount entered relates to the benefits accrued by 11

employees as at December 31, 2009, according to the regulations and collective bargaining agreements.

12/31/2008 Allocations Use 12/31/2009

162 49 (18) 193


12/31/2009 12/31/2008 Change

OTHER PROVISIONS BEYOND 12 MONTHS 9,100 6,000 3,100

OTHER PROVISIONS WITHIN 12 MONTHS 1,903 176 1,727

TOTAL 11,003 6,176 4,827 The increase compared to the previous year refers to the

Assessment Report issued by the Revenue Office for a tax audit on the year 2006, described in Note 7, and the provisions allocated for the guarantee granted to ADR in 2002, in the event of a partial negative outcome for the subsidiary company of the litigation with the Customs Agency, illustrated in Note 5 “Amortisation, depreciation and write-downs” and Note 29 “Litigation”.


12/31/2009 12/31/2008 Change

DUE TO BANKS 47,500 47,500 -


Mediobanca 23,750 23,750 -

Unicredit MedioCredito Centrale 23,750 23,750 -

EFFECT OF “AMORTISED COST METHOD” (536) (812) 276

TOTAL 46,964 46,688 276 This refers to the cash loan for a maximum amount of 70 million euro, with a maximum term of 3 years, which was subscribed on December 11, 2008 (“Loan”).

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Financiers Name/Description

Amount of loan granted

Amount used

Book value

recorded in

financial statement

Interest Repay. Duration Maturity term

Tranche A 50,000 47,500(**) 46,964 (*) at maturity 3 years Dec. 2011

Tranche B 15,000 - (***) - (*) at maturity 3 years Dec. 2011

MEDIOBANCA

AND

UNICREDIT

MEDIOCREDITO

CENTRALE IN

POOL Tranche C 5,000 - - (*) revolving 3 years Dec. 2011

TOTAL 70,000 47,500 46,964

(*) Variable indexed to the Euribor + margin. (**) The unused portion of this tranche was contractually written-off. (***) This tranche was contractually written-off on January 22, 2010 The Loan was taken out with the following aims:

- Tranche A: full redemption of the remaining amount of the Bridge loan taken out in 2007 for the purchase of 44.68% of ADR by Macquarie (“Bridge Loan”), payment of the interest due for the Bridge Loan, coverage of charges related to the Loan and payment of the substitute tax for Tranches A and C;

- Tranche B: payment of the interest due on the Loan, payment of what is due as interest to the hedging counterparts pursuant to the hedging contracts, and payment of the substitute tax for Tranche B;

- Tranche C: financing of the cash needs related to ordinary

activities. The economic terms of the Loan envisage an interest rate

equal to the Euribor plus a margin proportionate to the rating ADR has been given by the rating agencies: from a minimum of 225 bps to a maximum of 350 bps for Tranche A, and from a minimum of 250 bps to a maximum of 375 bps for Tranches B and C. With regard to ADR’s rating, the margin applied as at December 31, 2009 is equal to 350 bps for Tranche A and 375 bps for Tranches B and C.

The unused portion of Tranche A, equal to 2,500 thousand euro, was contractually written-off.

Tranche B was fully written-off following:

- the voluntary advance repayment for 1,654 thousand euro

on December 16, 2009;

- the request, on January 22, 2010 that the remaining

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amount, equal to 13,346 thousand euro, be written off, as a result of the increase in cash and cash equivalents.

Tranche C will be disbursed, upon Gemina’s request, even at various times during the time period elapsing between December 11, 2008 and the last day falling at the end of the six-month period prior to the expiration date of the Loan for amounts no less than 500 thousand euro.

The loan agreement includes the possibility of making voluntary partial advance repayment for a minimum amount of 1 million euro, without added costs, if made coinciding with an interest payment date.

Repayment is envisaged as a sole payment at the expiration date of the loan agreement, without prejudice to those cases of voluntary and mandatory advance repayment and the events that cancel the benefits upon termination, resolution and/or withdrawal.

The Loan agreement envisages that if detrimental changes of the financers or major national banks of reference occur, a reference rate other than Euribor will be applied (arithmetic means of the rates offered by the banks taken as reference to primary banks of the European interbank market for deposits in euro or cost of the financers’ provision, as the circumstances may be).

The estimated fair value of the 47.5 million euro Loan, recorded in the financial statements for 47 million euro, was approximately 50.7 million euro as at December 31, 2009.

Please see Note 28 for the guarantees backing the Loan.


12/31/2009 12/31/2008 Change DUE TO SUPPLIERS 351 495 (144)

DEFERRED TRADE INCOME 36 - 36PAYABLES DUE TO SUBSIDIARY

COMPANIES 91 48 43

ADR 11 46 (35)

ADR TEL 6 2 4

LEONARDO ENERGIA 74 - 74PAYABLES DUE TO ASSOCIATED

COMPANIES - 18 (18)

SDE - 18 (18)

TOTAL 478 561 (83)

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12/31/2009 12/31/2008 Change

DUE TO BANKS - 3,700 (3,700)


Mediobanca - 1,000 (1,000)

Unicredit MedioCredito Centrale - 1,000 (1,000)ACCRUED LIABILITIES FOR INTEREST ON

AMOUNTS DUE TO BANKS 89 146 (57)



Unicredit MedioCredito Centrale 45 73 (28)

TOTAL 89 3,846 (3,757)

The amounts due to banks as at December 31, 2008 included: - use of 2,000 thousand euro of Tranche C; - use of 1,700 thousand euro of bank credit lines. This item dropped to zero due to the repayments made as a

result of the cash availability occurred during the year.


12/31/2009 12/31/2008 Change DERIVATIVES HEDGING INTEREST RATE

RISKS 926 129 797

TOTAL 926 129 797

With regard to the commitment undertaken concerning the Loan agreement (see Note 21), on December 22, 2008 Gemina entered into two interest rate swap agreements with Mediobanca and Unicredit MedioCredito Centrale for a total amount of 35,625 thousand euro, equal to 75% of the Tranche A disbursed.

TABLE SUMMARISING THE OUTSTANDING DERIVATIVE CONTRACTS

MEDIOBANCA UNICREDIT MEDIOCREDITO CENTRALE

INSTRUMENT IRS IRS

TYPE Cash Flow Hedge Cash Flow Hedge

HEDGED RISK Interest rate Interest rate

SUBSCRIPTION DATE Dec. 2008 Dec. 2008

EXPIRATION Dec. 2011 Dec. 2011

HEDGED NOTIONAL VALUE 17,812.5 17,812.5

APPLIED RATEGemina pays a 3.15% fixed rate and receives

Gemina pays a 3.15% fixed rate and receives

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6-month Euribor 6-month Euribor

FAIR VALUE OF DERIVATIVE AS AT:

12/31/2009 (463) (463) (926)

12/31/2008 (63) (66) (129)

CHANGE IN FAIR VALUE: (400) (397) (797)

TO INCOME STATEMENT - - -

TO SHAREHOLDERS’ EQUITY (400) (397) (797)

TAX EFFECT 110 109 219

TOTAL NET CHANGE (290) (288) (578)


12/31/2009 12/31/2008 Change

TAX LIABILITIES 9,254 - 9,254

PAYABLES DUE TO SOCIAL SECURITY 95 65 30PAYABLES DUE TO BOARD OF STATUTORY

AUDITORS 153 151 2

PAYABLES DUE TO DIRECTORS 233 230 3

PAYABLES DUE TO PERSONNEL 292 131 161

WITHHOLDING TAXES 68 41 27

OTHER TAX PAYABLES 103 - 103

ACCRUED LIABILITIES FOR COMMISSIONS 12 13 (1)


Mediobanca 6 6 -

Unicredit MedioCredito Centrale 6 6 -MONTE TITOLI AMOUNTS DEBITED TO BE

RECEIVED 52 153 (101)

OTHER PAYABLES 513 584 (71)

TOTAL 10,775 1,368 9,407 The item tax liabilities refers to the payable for taxes to be settled for 2009, net of the related advances.

NOTE 26 CATEGORIES OF ASSETS/LIABILITIES IAS 39

12/31/2009



sale Payables at

amortised cost Derivatives 12/31/2009

OTHER EQUITY INVESTMENTS 28



TRADE RECEIVABLES 398

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TOTAL ASSETS IAS 39 21,389 28


SHARE 46,964

TRADE PAYABLES 478

CURRENT FINANCIAL LIABILITIES 89

FINANCIAL INSTRUMENTS - DERIVATIVES - 926

TOTAL LIABILITIES IAS 39 47,531 926


THE INCOME STATEMENT:

INTEREST INCOME 801 36

INTEREST EXPENSE (3,143) (335)

OTHER EXPENSES (605) -

801 (3,748) (299)

SHAREHOLDERS’ EQUITY (555)

12/31/2008



sale Payables at

amortised cost Derivatives 12/31/2008





OTHER CURRENT FINANCIAL ASSETS 287


TOTAL ASSETS IAS 39 12,118 28


SHARE 46,688

TRADE PAYABLES 561


FINANCIAL INSTRUMENTS - DERIVATIVES 129

TOTAL LIABILITIES IAS 39 51,095 129



INTEREST INCOME 1,308 3



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1,308 (5,433) 3

SHAREHOLDERS’ EQUITY - - - (93) The financial derivatives described in Note 24 are included in “Level 2” of the “Fair Value Hierarchy” defines by IFRS 7, meaning the fair value is measured based on valuation techniques which take as reference parameters that are observable on the market, different from the prices of the financial instrument.

NOTE 27 FINANCIAL RISK MANAGEMENT Credit risk

The Company’s higher exposure to credit risk concerns the “Other Receivables”, and in particular the amounts due from the ADR Group for consolidated taxation, which amounted to 13,900 thousand euro as at December 31, 2009.


Receivables expired not written down


Receivables coming

due before 60

days from 61 to 120 days


after 181 days

Total receivables

Dec. 31, 09 0.2 - - 0.2 - 0.4TRADE RECEIVABLES Dec. 31, 08 0.3 - 0.1 - 4.0 4.4

Dec. 31, 09 14 - - - 0.4 14.4OTHER RECEIVABLES Dec. 31, 08 24.6 - - - - 24.6

Liquidity risk

The two main factors composing the Company’s liquidity position are, on the one hand, the resources generated or absorbed by the holding activity and, on the other, the characteristics of expiry and renewal of payables and market terms.

Breakdown of payables by expiry terms is shown hereunder.

12/31/2009 12/31/2008


within the

following year


after 3 years Total

within the

following year


after 3 years Total

FINANCIAL

INDEBTEDNESS NET OF

CURRENT SHARE - 47.0 - 47.0 - 46.7 - 46.7

TRADE PAYABLES 0.5 - - 0.5 0.6 - - 0.6

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CURRENT FINANCIAL

LIABILITIES 0.1 - - 0.1 3.8 - - 3.8FINANCIAL INSTRUMENTS

- DERIVATIVES - 0.9 - 0.9 - 0.1 - 0.1OTHER CURRENT

LIABILITIES 10.7 0.1 - 10.8 0.9 0.5 - 1.4

To meet its short-term commitments, the Company has liquidity of 13,434 thousand euro, in addition to bank credit lines of 6 million euro, and a 5 million euro revolving facility (Tranche C) for paying expenses.

The Loan provides for cases of obligatory early repayment by shareholders, described in Note 28 “Guarantees and Commitments”.

The remaining amount must be repaid upon expiry. Interest rate risk The Company uses interest rate swaps to hedge these risks.


With regard to this contractual provision, on December 22, 2008 the Company entered into two interest rate swap agreements with Mediobanca and Unicredit MedioCredito Centrale for a notional total amount of 35.6 million euro.

On the basis of these contracts, Gemina pays a 3.15% fixed rate and receives a variable 6-month Euribor rate.

With the setting up of this hedging relationship, Gemina has set for itself goal of achieving stabilized financial flows associated with the liabilities hedged.

The effectiveness of the hedging is checked retrospectively and with a view to the future every quarter.

The effectiveness of the hedging is calculated estimating the changes of the financial flows of the hedged item (hedged debt) and of the hedging derivative, and by analysing their regression relationship.

With regard to the particular sensitivity of the Company’s results to the interest rate trend, it has been decided to go forward with a sensitivity analysis with a range of +/- 50 bps on the interest rate. The potential effects are shown gross of the tax effect.

A change of +50 bps in the interest rates creates a 0.1 million euro increase in financial expenses a 0.3 million euro positive change of the cash flow hedge reserve.

A change of -50 bps in the interest rates creates a 0.1 million euro decrease in financial expenses a 0.3 million euro negative change of the cash flow hedge reserve.

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It is also pointed out that the interest rate applied to the outstanding Loan is equal to the Euribor rate plus a margin proportionate to the rating given ADR. The financial expenses Gemina pays to its Financers therefore depend on not only the fluctuation of the interest rates, but on ADR’s rating as well.

Exchange Risk

The Company is not exposed to an exchange rate fluctuation risk.


As at December 31, 2009, the Company has the following guarantees and commitments relating to the Loan agreement entered into on December 11, 2008:

- a senior pledge on the ordinary shares of ADR

representing at least 35% of the share capital of the company and to be supplements if the guarantee margin drops to below 4.5x.

Gemina commits to ensure a guarantee margin of at least 4.5x, to be calculated on a monthly basis as the relationship between the simple average of the unit value of ADR shares owned by Gemina in the previous month (calculated by applying the formula included in the contract documents) and the residual loan amount.

As at December 31, 2009, 21,808,430 ADR shares – corresponding to 35% of the company’s share capital - were pledged to Mediobanca and Unicredit MedioCredito Centrale for a value, determined based on the book value of the equity investment, of 670,873 thousand euro. This number was the same as at February 28, 2010;


The Loan agreement obliges Gemina to allocate 100% of the

net income deriving, inter alia, from ADR deeds of transfer or provision or of other assets of Gemina, capital transactions, subordinate and deferred shareholder loans, distribution of dividends or other distributions, issue of financial instruments or debt instruments, financial contracts and all transactions that depict a form of loan, shares of any kind, diversified financial instruments and bonds to the early repayment of the Loan, according to the procedures and within the limits stated in the Loan agreement.

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184


The Loan also requires that Gemina provides declarations

and guarantees, obligations, proscriptions and commitments, and provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics.

It is reported that the financers have the right of withdrawal

should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3.

Gemina has also issued:

- guarantees of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing S.p.A.;

- guarantees for a maximum of 2 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the loan agreement entered into with UniCredit MedioCredito Centrale S.p.A.;

- subscription of a joint deed of pledge on the entire share, equal to 86.12% of the share capital, held in Fiumicino Energia S.r.l. as guarantee of all receivables deriving from the lease agreement entered into with UniCredit Leasing S.p.A..

- commitment with respect to the UniCredit Group of maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in the Fiumicino Energia financial statements;

NOTE 29 LITIGATION

The Court of Milan had dismissed, in first instance, on the grounds that they were inadmissible, the appeals filed by the shareholder Renato Serafini against the resolutions passed by the Shareholders’ Meeting of Gemina on May 10, 2002 (approval of the financial statements as at December 31, 2001 and adjustment of the financial statements as at June 30, 1991 and as at June 30, 1992) and on May 13, 2003 (approval of the financial statements as at December 31, 2002).

Last December, the parties filed their legal briefs and reply briefs in the appeals proceedings instigated by the shareholder, Mr. Serafini, against the first instance judgments of the Court of Milan.

On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina,

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Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50%, 13.0% and 36.90%, respectively. This commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may incur due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000.



In the consolidated financial statements, provisions have been allocated against the risk relating to the litigation with the Customs Agency.

In Gemina’s financial statements, provisions were allocated in the event of a partial negative outcome for ADR and ADR’s activation of the guarantee.

These provisions were reversed in the consolidated financial statements, which reflect the amount allocated by ADR.

Mr. Angelo Rizzoli brought legal proceedings against RCS MediaGroup S.p.A., Intesa Sanpaolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi, formulating a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs.


RCS MediaGroup S.p.A., appearing in court, fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS MediaGroup S.p.A. derives, due to the known spin-off stipulated in 1997. The writ of summons for a third party was served to Gemina on March 3, 2010.


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186

6.6 INFORMATION ON RELATED PARTIES

a) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE

BALANCE SHEET ITEMS

RELATED PARTIES ITEM TOTAL Absolute value %

Other non-current financial assets 1,400 1,400 100Trade receivables 398 336 84Other receivables 14,435 13,456 93Other current financial assets 1,566 1,566 100Cash and cash equivalents 13,434 411 3Financial indebtedness net of current share 46,964 46,964 100Trade payables 478 128 27Current financial liabilities 89 89 100Financial instruments - derivatives 926 926 100Other current liabilities 10,775 12 - b) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE

INCOME STATEMENT ITEMS

RELATED PARTIES ITEM TOTAL Absolute value %

Financial income 837 209 25Financial expenses (4,082) (3,236) 79Other operating costs (3,163) (80) 3Revenues and other operating income 946 714 75

c) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE CASH FLOWS

RELATED PARTIES DESCRIPTION TOTAL Absolute value %

Cash flows from changes in the Net Working Capital 23,503 8,005 34

Cash flows from investing activities (626) (301) 48

Cash flows from financing activities (4,705) (3,056) 65

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6.7 OTHER INFORMATION

REMUNERATION OF DIRECTORS, STATUTORY AUDITORS, GENERAL MANAGERS AND EXECUTIVES WITH STRATEGIC RESPONSIBILITIES

PERSON APPOINTMENT REMUNERATION (in euro)

Name and Surname Position held Duration of office

Remun. for

position

Non-monetary benefits

Bonuses and

other incentiv

es Comp.

Positions held in subsidiary

companies (11)

Chairman (1) 350,000 250,000 Director (1) 15,000 13,000 (9)

Guido Angiolini Chairman of Executive Committee -

Director (1) 15,000 Internal Control

Committee member 9,000 Giuseppe AngioliniSupervisory Body

member (5) 671

Director (1) 15,000 Giuseppe Bencini Remuneration

Committee member 8,000

Stefano Cao Director (1)(8)(9) 11,918 8,110 (9)

Director (1) 15,000

Internal Control Committee member 9,000 Giovanni Fontana

Remuneration Committee member 8,000

Alessandro Grimaldi Director (1) (3) (10) 15,000 10,000 (10)

Aldo Minucci Director (1) 15,000 10,000

Michele Mogavero Director (1)(9) 15,000

Director (1) 15,000 Andrea Novarese Remuneration

Committee member 8,000

Director (1) 15,000 Eugenio Pinto Internal Control

Committee member 9,000 Clemente Rebecchini Director (1)(9) 15,000 10,000 (9) Paolo Roverato Director (1) (9) (4) 3,082 - 10,000 (9)

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PERSON APPOINTMENT REMUNERATION (in euro)

Name and Surname Position held Duration of office

Remun. for

position

Non-monetary benefits

Bonuses and

other incentiv

es Comp.

Positions held in subsidiary

companies (11) Paolo Roverato Director (1) (9) (4) 3,082 - 10,000 (9)

Executives with strategic responsibilities - 2,850 (12) 350,102 4,104 (9)

Luca Aurelio GuarnaChairman of the

Board of Statutory Auditors

(2) (6) 42,693 - -

Maurizio Dattilo Statutory Auditor (2) 41,316 - -

Giorgio Oldoini Statutory Auditor (2) (6) 28,462 - -

Guido Zanin

Chairman of the Board of Statutory

Auditors (7) 20,314

Vittorio Amadio Statutory Auditor (7) 13,542 - 9,500

(1) Until the shareholders’ meeting for approval of the financial statements as at 12/31/2009 (2) Until the shareholders’ meeting for approval of the financial statements as at 12/31/2011 (3) In office until 02/26/ 2010 (4) In office until 03/16/2009 (5) Appointed as a member of the Supervisory Body on 11/13/2009 (6) Appointed on 04/28/2009 (7) In office until 04/28/2009 (8) Appointed on 03/16/2009 (9) Remuneration repaid to the company he belongs to (10) Remuneration repaid to the company he belongs to for 2/3 of amounts paid (11) Remuneration for the offices held in subsidiary companies, for the period actually in office (12) Contributions paid to a Complementary Integrative Pension Plan

No loans and guarantees were granted in their favour.


(Guido Angiolini)

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189


REGULATION

The following statement, drawn up pursuant to Art. 149-

duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2009 financial year for audit services and other services rendered by the same Independent Auditors.

(in thousands of euro) Company that rendered the

service

Remunerations pertaining to the year 2009

AUDIT DELOITTE & TOUCHE S.P.A. 168 CERTIFICATION DELOITTE & TOUCHE S.P.A. (1) 3

(1) Subscription of Income Tax Return and 770 forms.

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190

6.9 CERTIFICATION OF THE FINANCIAL STATEMENTS IN ACCORDANCE WITH

ART. 81-TER OF CONSOB REGULATION NO. 11971 OF MAY 14, 1999 AND

SUBSEQUENT AMENDMENTS AND ADDITIONS


Chairman of the Board of Directors, and Alessandra Bruni, in my position of Manager in charge of preparing corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154 bis, subsections 3 and 4 of Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:


- the actual application of the administration and accounting procedures for the drafting of the financial statements over 2009.

It is also stated that: - the financial statements as at December 31, 2009: - were drawn up pursuant to the applicable



- supply a true and fair disclosure of the economic, financial and equity situation of the issuer;

- the Report on Operations includes a reliable analysis of the performance and management result, as well as the situation of the issuer, together with the description of the major risks and uncertainties to which they are exposed.

March 15, 2010

The Chairman of the Board of Directors (Guido Angiolini)

The Manager in charge of preparing corporate accounting documents

(Alessandra Bruni)

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191

6.10


GEMINA

192

GEMINA

193

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194

7

REPORT OF THE BOARD OF STATUTORY

AUDITORS

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195

Report of the Board of Statutory Auditors to the Shareholders’ Meeting of Gemina S.p.A. (pursuant to Art. 153 of Italian Legislative Decree no. 58/98) Dear Shareholders, During the year ended as at December 31, 2009, we carried out the supervisory activity according to the Law

(Italian Legislative Decree no. 58 of 2/24/1998 – “Testo Unico delle Disposizioni in Materia di Intermediazione

Finanziaria”), aligning our work to the rules of conduct for Boards of Statutory Auditors of corporations with shares

listed in regulated markets recommended by the National Council of Professional Accountants and Qualified

Accountants, and CONSOB notices on the matter of corporate audits and activities of the Board of Statutory

Auditors.

As regards the duties of auditing the accounts, it is noted that, pursuant to Italian Legislative Decree 58/1998, these

are assigned to the independent auditors Deloitte & Touche S.p.A., and reference is made to their report.

The Board of Statutory Auditors currently in office was appointed by the shareholders’ meeting of April 28, 2009,

based on the provisions of the Articles of Association.

Also in compliance with the indications provided by CONSOB in Notice DEM/125564 of April 6, 2001 and

subsequent updates, we note and report on the following:

We have supervised compliance with the Law and the Articles of Association.

We have attended the meetings of the Board of Directors and the specific preparatory meetings on matters

relating to the items on the agenda of the Board of Directors’ meeting, as well as the meetings of the

Internal Control Committee and the Executive Committee. We received periodic information on the general

performance of operations, on the business outlook, as well as on the most significant economic, financial

and equity transactions the Company carried out from the directors, ensuring that the resolutions passed

and executed complied with the Law and the Articles of Association and were not manifestly imprudent,

risky, in potential conflict of interest or in conflict with the resolutions passed by the shareholders’ meeting

or capable of compromising the integrity of company equity.

In the section “Information on Related Parties” included in Explanatory Notes to the Financial Statements,

and in the section “Intercompany relations and transactions with related parties” included in the Report on

Operations, the directors highlight the main transactions carried out with related parties, identified based on

the international accounting standards and the provisions issued on the matter by CONSOB. We make

reference to these sections for the identification of the type of transactions and the related economic, equity

and financial effects.

The Company has drawn up the Financial Statements 2009 according to the international accounting

standards (IAS/IFRS), as done in the previous year 2008.

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The Explanatory Notes set forth the accounting standards and valuation criteria used. The 2008 Financial

Statements of Gemina S.p.A. were submitted to the opinion of the Independent Auditors Deloitte & Touche

S.p.A., which issued their audit report on March 31, 2010 without any comments or remarks on information

provisions. Among the major events occurred during 2009, mainly referring to the subsidiary company

Aeroporti di Roma S.p.A. (hereinafter, for brevity, “ADR”) the following are noted, referring to the Report on

Operations for a more detailed illustration thereof:

Article 2 of Law no. 191 of 12/23/2009 (“Finance Law 2010”), authorised the early introduction

by airport operators, starting from 2010, and while awaiting the signing of the planning

agreements, of passenger boarding fees, within the maximum limit of 3 euro per passenger, on

condition that the new urgent infrastructural investments be executed by way of self-financing.

The subsidiary company ADR submitted to ENAC its application for admission to the procedure

for early introduction of fees on January 15, 2010;

The Conversion Law no. 102 of August 3, 2009 “Corrective measures of the Anti-Crisis Decree-

Law no. 78 of 2009” authorises ENAC to enter into planning agreements in derogation of current

regulations for airports with traffic exceeding ten million passengers per year, introducing long-

term tariff systems that are oriented towards costs of infrastructures and services, efficiency

objectives and the criteria of adequate remuneration of investments and capital, with valid

updating methods for the entire duration of the agreements. On March 9, 2009 ADR requested that

ENAC issue a formal notice for the purpose of launching the process for signing the planning

agreement in derogation.

In the month of July 2009, ADR and Alitalia S.p.A. signed an important agreement for a series of

structural interventions aimed at improving operations at Fiumicino airport in Rome, and the

allocation of a Terminal for the use of Alitalia and its partners.

Though formally referring to subsequent events following the end of the year, during the month of

March 2010 the agreements were finalised for the substitution of AMBAC Financial Services as

the swap counterpart for hedging the exchange rate and interest rate risk of the bond tranche

issued in 2003 by the vehicle company Romulus Finance S.r.l., maturing in 2023. This transaction

removed the risk of the potential financial impacts linked to the possible early extinction of the,

without charges or costs for ADR.

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The Company drew up the 2009 Consolidated Financial Statements of the Gemina Group applying the

international accounting standards (IFRS/IAS), as per the previous year. The Consolidated Financial

Statements of the Gemina Group were submitted to the opinion of the Independent Auditors Deloitte &

Touche S.p.A., which issued their audit report on March 31, 2010 without any comments or remarks on

information provisions. The Independent Auditors also audited the financial statements of the subsidiary

company ADR without any comments or remarks on information provisions.

In the Report on Operations the directors correctly fulfilled the disclosure obligations provided by Art. 154

of Italian Legislative Decree 58/98, introduced by Italian Legislative Decree 195/2007 (“Transparency

Decree”) pointing out the main risks and uncertainties the Company and the Group are exposed to.

We examined and supervised, as far as regards our responsibility, the adequacy of the Company’s

organisational structure, compliance with the principles of proper administration and the adequacy of

instructions given by the Company to the subsidiary companies pursuant to Art. 114, subsection 2 of Italian

Legislative Decree 58/98, by acquiring information from the heads of the competent company functions,

meeting with the independent auditors and meeting with the control bodies of the subsidiary companies, for

the reciprocal exchange of important data and information.

We assessed and supervised the adequacy of the administration-accounting system and its reliability in

properly representing the operational items by obtaining information from the officers in charge of the

function, examining the company documents and analysing the results of the work carried out by the

Independent Auditors Deloitte & Touche S.p.A. The Board of Directors appointed the Manager in charge

of “preparing corporate accounting documents”, verifying that said Manager possesses the suitable

professional competence required. The Managing Director and the Manager in charge of preparing

corporate accounting documents have certified, by issuing a specific Report (attached to the 2009

Financial Statements of the Company): a) the adequacy and the actual application of the administration and

accounting procedures; b) compliance of the contents of the accounting documents with the international

accounting standards IFRS/IAS approved by the European Commission, as well as the provisions issued by

CONSOB to implement Italian Legislative Decree no. 38/2005; c) the correspondence of the documents to

figures disclosed in the accounting books and records, and their suitability in properly representing the

Company’s equity, economic and financial situation. A similar Report of certification is attached to the

Consolidated Financial Statements of the Gemina Group.

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We assessed and supervised the adequacy of the internal control system by: a) examining the report of the

Internal Control Officer on Gemina’s internal control system; b) examining the report of the Internal Audit

department, as well as the information on the outcome of monitoring activities; c) obtaining information

from the officers in charge of the Internal Audit department of the subsidiary company ADR; d) conducting

relationships with the supervisory bodies of the subsidiary companies pursuant to subsections 1 and 2 of

Art. 151 of Italian Legislative Decree 58/98; e) participating in all the meetings of the Internal Control

Committee and acquiring the related documentation. The work carried out resulted in a valuation of

substantial adequacy of the Internal Control System as a whole.

We held periodic meetings with representatives from the Independent Auditors Deloitte & Touche S.p.A.,

pursuant to Art. 150, subsection 3, Italian Legislative Decree 58/98 and no significant data or information

emerged which deserves to be illustrated in this report.

We supervised the methods of concrete implementation of the Code of Conduct of Gemina S.p.A., adopted

by the Board of Directors without any critical issues arising. Moreover, with reference to the

recommendations regarding responsibilities of the Board of Statutory Auditors set forth in the Code of

Conduct, we note that:

- we verified the criteria and procedures adopted by the Board of Directors for assessing

independence were correctly applied, and had no comments in this regard;

- as regards the “self-assessment“ of the requirement of independence of its own members, the

Board of Statutory Auditors verified compliance with this requirement in its meeting of February

5, 2010;

- we complied with the provisions of the regulation for managing and treating reserved and

confidential company information;

- we supervised the independence of the Independent Auditors Deloitte & Touche S.p.A. and the

compatibility of the assignments granted thereto with reference to the provisions of Art. 160 of

Italian Legislative Decree no. 58 of February 24, 1998.

Lastly, it is noted that the Independent Auditors issued their opinion on the consistency of the information

pursuant to subsection 1, letters c), d), f), l) and m) and subsection 2, letter b) of Art. 123-bis of Italian

Legislative Decree 58/98 as provided by the amendments introduced by Art. 5, subsection 4 of Italian

Legislative Decree 173/2008.

with regard to Italian Legislative Decree 231/2001, the Company adopted an organisational and

management model that contains contents in line with international best practice. In this sense, it is noted

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that the Board of Directors meeting of November 13, 2009 resolved to transform the Supervisory Body

from a monocratic body to a collegial body. Moreover, we met with the Supervisory Body for the

reciprocal exchange of information.

We have received evidence of the entry made by the Company of the subsidiary companies of the

following remunerations paid to the Independent Auditors Deloitte & Touche S.p.A. concerning the

appointments specified hereunder:

Description of remuneration in favour of the Company

Total (in thousands of

euro) Audit 168 Certification of Income Tax Return and 770 tax forms 3 Total 171 Description of remuneration in favour of the Subsidiary Companies

Total (in thousands of

euro) Audit 246 Certification services (*) 79 Total 325

(*) 74 thousand euro regarding audits agreed on the separate annual accounts (“unbundling) of ADR During the year, no claims pursuant to Art. 2408 of the Italian Civil Code were received.

We are aware of no other facts or information to be mention to the Shareholders’ Meeting.

We verified compliance with legal regulations regarding the formation of the draft Financial Statements

and the draft Consolidated Financial Statements of the Group, the respective Explanatory Notes and Report

on Operations attached thereto, both directly and with the assistance of the officers in charge of the

functions and by obtaining information from the Independent Auditors, and we have no comments to

express in this regard.

We have issued, according to law, an opinion pursuant to Art. 158 of Italian Legislative Decree no. 58 of

February 24, 1998. The previous Board of Statutory Auditors issued 1 opinion pursuant to Art. 2386,

subsection 1.

In carrying out the supervisory activities described above, during 2009, the Board (also considering the

activity performed by the Board in office until April 28, 2009) met 5 times, participated in the 8 meetings

of the Board of Directors and participated in the 3 meetings of the Internal Control Committee and the 2

meetings of the Executive Committee.

During this activity, as well as on the basis of the information exchanged periodically with the Independent

Auditors Deloitte & Touche S.p.A. there were no omissions and/or objectionable facts and/or irregularities or,

in any event, significant facts that would require reporting to the control bodies or mention in this report.

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Following the supervisory activity performed, the Board of Statutory Auditors invites you to approve the

Financial Statements as at December 31, 2009 in compliance with the proposals of the Board of Directors.

Milan, April 1, 2010

The Board of Statutory Auditors

Signed by

Luca A. Guarna

Signed by

Giorgio Oldoini

Signed by

Maurizio Dattilo

GEMINA

201

Below is a list of offices of administration and control held by members of the Board of Statutory Auditors in other companies (Annex pursuant to Art. 144-quinquiesdecies of the Issuers Regulation) Luca Aurelio GUARNA Number of offices held in issuers: 2 Total number of offices held: 25 Company Name Office held Expiration* A2A Logistica S.r.l. Chairman of the Board of Statutory Auditors 12.31.2011 A2A Produzione S.p.A. Chairman of the Board of Statutory Auditors 12.31.2010 Ambi S.p.A. Statutory Auditor 12.31.2010 Bieffe Medital S.p.A. Statutory Auditor 12.31.2009 Capitoloquattro S.p.A. Sole Director Until revocation Capitoloquattro S.p.A. Chairman of the Board of Directors 12.31.2009 Capitolosette S.r.l. Chairman of the Board of Directors 12.31.2009 Delmi S.p.A. Statutory Auditor 12.31.2010 Duec S.r.l. Statutory Auditor 12.31.2011 Eagle Pictures S.p.A. Statutory Auditor 12.31.2009 Electro Power Systems S.p.A. Chairman of the Board of Directors 12.31.2011 Ge Capital Services S.r.l. Statutory Auditor 12.31.2009 Gemina S.p.A. Chairman of the Board of Directors 12.31.2011 Hamworthy Combustion Engineering S.r.l.

Chairman of the Board of Directors 03.31.2010

Immucor Italia S.p.A. Statutory Auditor 05.31.2009 Michel Rettili S.r.l. Statutory Auditor 12.31.2011 Sirti S.p.A. Statutory Auditor 12.03.2009 Tech Data Italia S.r.l. Statutory Auditor 01.31.2011 Terna S.p.A. Chairman of the Board of Statutory Auditors 12.31.2010 Top Art S.r.l. Statutory Auditor 12.31.2010 Trident Immobiliare S.p.A. Statutory Auditor 12.31.2010 Tridente RE S.p.A. Statutory Auditor 12.31.2010 Venice S.r.l. Statutory Auditor 12.31.2011 Windows on Europe S.p.A. Statutory Auditor 12.31.2010 Zed Italia S.r.l. Chairman of the Board of Statutory Auditors 12.31.2010 Giorgio Oldoini Number of offices held in issuers: 2 Total number of offices held: 7 Company Name Office held Expiration* Sogeli – Società di Gestione di liquidazioni S.p.A.

Chairman of the Board of Directors 12.31.2012

Iride Energia S.p.A. Chairman of the Board of Statutory Auditors

12.31.2009

CAE – Consorzio Amga Energia S.p.A.

Chairman of the Board of Statutory Auditors

12.31.2010

Carige Asset Management SGR S.p.A.


12.31.2011

Gemina S.p.A. Statutory Auditor 12.31.2011 Impregilo S.p.A. Statutory Auditor 12.31.2010 Seastema S.p.A. Chairman of the Board of Statutory

Auditors 12.31.2011

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202

Maurizio Dattilo Number of offices held in issuers: 1 Total number of offices held: 38 Company Name Office held Expiration* Airis S.r.l. Sole Director 12.31.2009 Augusta Assicurazioni S.p.A. Statutory Auditor 04.03.2012 Augusta Vita S.p.A. Statutory Auditor 04.03.2012 BG SGR S.p.A. Statutory Auditor 12.31.2010 Amundi Real Estate Italia SGR S.p.A.


12.31.2009

Cantieri di Pisa S.p.A. Statutory Auditor 12.31.2009 Cantieri Navali Baglietto S.p.A. Statutory Auditor 12.31.2009 Cento 2/5 S.r.l. Sole Director Until revocation Centodieci 2/5 S.r.l. Sole Director Until revocation Centosessanta 6/7 S.r.l. Sole Director Until revocation Centoventi 2/5 S.r.l. Sole Director Until revocation Chateau S.r.l. Sole Director Until revocation Consel S.p.A. Statutory Auditor 12.31.2011 Delfina S.p.A. Chairman of the Board of Statutory

Auditors 12.31.2009

Edilizia Sociale S.r.l. Sole Director Until revocation Editrice Skipper Director 12.31.2011 Gemina S.p.A. Statutory Auditor 12.31.2011 Giglio S.r.l. Sole Director Until revocation Gl & Partners S.r.l. Sole Director Until revocation Global System Milano S.r.l. Sole Director Until revocation Gruppo Baglietto S.p.A. Statutory Auditor 12.31.2009 H7 + S.r.l. Director Until revocation Immobiliare Commerciale XXVI S.r.l.

Statutory Auditor 04.30.2010

Immobiliare La.Co. S.r.l. Chairman of the Board of Directors 12.31.2010 Immobiliare Quest S.r.l. Sole Director Until revocation immobiliare Tibertina S.r.l. Sole Director Until revocation Iniziative Sviluppo Immobiliare - Isim S.p.A.

Statutory Auditor 04.30.2011

Inv.A.G. S.r.l. Statutory Auditor 12.31.2009 Iris S.r.l. Sole Director Until revocation Jetcom S.p.A. Chairman of the Board of Statutory

Auditors 12.31.2011

Landro S.p.A. Statutory Auditor 12.31.2009 Novanta S.r.l. Sole Director Until revocation Nuova Palmontan S.p.A Statutory Auditor 12.31.2010 Rcs Produzioni S.p.A. Statutory Auditor 12.31.2010 S. Alessandro Fiduciaria S.p.A. Statutory Auditor 12.31.2011 S.P.V. Holding S.r.l. Sole Director Until revocation Seven 2000 S.r.l. Statutory Auditor 12.31.2009 Speziayachting S.r.l. Statutory Auditor 31.12.2011 Torino 2012 HDP S.r.l. Sole Director 31.12.2011

GEMINA

203

GEMINA

204

SECOND ITEM ON THE AGENDA

REPORT OF THE BOARD OF DIRECTORS

GEMINA

205

REPORT OF THE BOARD OF DIRECTORS ON THE SECOND ITEM OF THE AGENDA OF THE ORDINARY SHAREHOLDERS’ MEETING OF GEMINA S.p.A.

Appointment of directors, by determining the number of members of the Board; determination of remuneration of the directors.

Shareholders,

With the approval of the financial statements as at December 31, 2009 the mandate granted to the

Board of Directors by the Shareholders’ Meeting of May 7, 2007 comes to an end. Therefore, the

shareholders’ meeting must appoint the directors who will remain in office for the three-year period

2010-2012, and, therefore, until the date of the Shareholders’ Meeting called to approve the

financial statements as at December 31, 2012, after setting the number of members of the Board

of Directors, which may be composed of from three to fourteen members.

The Board of Directors shall be appointed, in compliance with Article 11 of the Articles of

Association, on the basis of lists submitted by shareholders, in which the candidates must be

listed, each with a progressive number.

Shareholders who, alone or together with others, hold voting rights that represent at least 2.5% of

the voting capital for the ordinary shareholders' meeting may submit said list.

Each shareholder, shareholders who are party to a significant shareholders’ agreement within the

meaning of article 122 of Italian Legislative Decree 58/1998, the parent company, the subsidiaries

and jointly controlled companies within the meaning of Article 93 of Italian Legislative Decree

58/1998, may present or contribute to the presentation of only one list, and are not allowed to vote

a different list. Each candidate may be put forward in one list only on pain of non-eligibility. Any

support or votes expressed in breach of this prohibition will be assigned to no list.

The lists must be deposited at the company's registered office at least 15 days prior to the date of

the shareholders' meeting in first call.

Together with each list, the following must be deposited: (I) the specific certification issued by an

authorised broker pursuant to law, proving the ownership of the number of shares necessary for

presenting lists; (ii) the declarations by which the individual candidates accept their candidacy and

certify, on their own responsibility, that there are no causes of non-eligibility and incompatibility,

and that the requirements demanded for the respective offices are met; and (II) a curriculum vitae

setting forth the personal and professional profile of each candidate and whether the same

qualifies as independent.

Lists submitted that do not fulfil the above provisions will not be considered as submitted.

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Attention is also drawn to the contents of Consob Notice DEM 9017893 of February 26, 2009 on

the “Appointment of members of the administration and control bodies”, available on the website

www.consob.it.

The appointment of the Board of Directors will take place according to the following procedure:

a) the Directors to be elected except one shall be taken from the list that obtained the highest

number of votes cast by the shareholders, in the progressive order with which they are listed;

b) the remaining Director will be taken from the minority list that is not in any way – not even

indirectly – associated with the shareholders that presented or voted for the list discussed in letter

a) above, and who obtained the second highest number of votes cast by the shareholders. To this

end, the lists that do not achieve a percentage of votes at least equal to half of that required for

presentation of the lists as per this article shall not be taken into account.

If the appointment of the candidates – appointed under the aforementioned terms – should not

satisfy the requirement consisting in the number of Directors who should possess the requisites of

independence of statutory auditors as set forth in Article 148, subsection 3 of Italian Legislative

Decree 58/1998, equal to the minimum number established by law vis-à-vis the overall number of

Directors (at least one of the members of the Board of Directors, or two if the Board of Directors is

composed of more than seven members). The non-independent candidate appointed as last in

progressive order in the list obtaining the highest number of votes, will be replaced by the first non-

elected independent candidate of the same list, in progressive order, or, failing that, by the first

non-elected independent candidate, in progressive order, of the other lists, on the basis of the

number of votes obtained by each. This replacement procedure will be used until the Board of

Directors is composed of a number of members satisfying the requirements set forth in Article 148,

subsection 3 of Italian Legislative Decree 58\1998 equal to at least the minimum number required

by law.

If only one list is presented, or if no list is presented, the shareholders’ meeting shall resolve with

the majority of votes set forth by law.

The proposals of candidates shall also indicate whether the candidates may be qualified as

independent pursuant to the Gemina Code, drawn up based on the Code of Conduct drawn up by

the Corporate Governance Committee of Borsa Italiana S.p.A., available on the website

www.gemina.it.


for the Board of Directors

The Chairman

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THIRD ITEM ON THE AGENDA

REPORT OF THE BOARD OF DIRECTORS

GEMINA

208

REPORT OF THE BOARD OF DIRECTORS ON THE THIRD ITEM OF THE AGENDA OF THE

ORDINARY SHAREHOLDERS’ MEETING

Authorisation of the purchase and sale of own shares pursuant to Arts. 2357 and 2357-ter of the Italian Civil Code, Art. 132 of Italian Legislative Decree 58/1998 and Art. 144-bis of the Regulations approved by Consob with resolution 11971/1999 and subsequent amendments and supplements, subject to repeal of the shareholders’ meeting resolution of April 28, 2009 concerning the purchase and sale of own shares; related and consequent resolutions.

Shareholders,

We propose that you authorise the purchase and disposal of own shares pursuant to Articles

2357 and 2357-ter of the Italian Civil Code, Art. 132 of Italian Legislative Decree no. 58 of

February 24, 1998 and Art. 144-bis of the Regulation approved by Consob with its resolution

11971/1999 and subsequent amendments and supplements.

This report, drawn up in conformity with Art. 73 and of appendix 3A of the Regulations approved

by Consob by resolution 11971/1999 and subsequent amendments and additions, is to illustrate

the contents, the grounds and the terms of the proposal for said authorisation.

The grounds for the proposal are found in the assessments made by the Board of Directors that

deems it useful to be authorised to intervene, even though brokers, on Gemina stock in the

event of fluctuations that go beyond the normal variations linked to the trends of the stock

market. All this in compliance with regulations in force, prior obtainment of the required financial

resources.

We therefore propose to you to resolve on the authorisation to purchase own non convertible

and fully paid ordinary and savings shares of the par value of 1 euro each, up to a maximum of

80,000,000 shares, after repealing the shareholders’ meeting resolution of April 28, 2009

regarding the purchase and sale of own shares. Said purchase would however be within the

GEMINA

209

limit provided by Art. 2357, subsection 3 of the Italian Civil Code, of 20% of the share capital

regarding own shares held directly and indirectly through subsidiary companies, and

considering the available reserves and the distributable profits – at a price not below 20%

minimum and not exceeding 20% maximum of the reference price established for shares on the

Screen-Traded Stock Market during the last trading session prior to each transaction.

Currently Gemina does not hold any own shares, and as of today Gemina's subsidiary

companies do not hold any shares of Gemina.

Purchases may be made on one or more occasion and for a period of 18 months from the date

of the resolution of the shareholders' meeting.

Purchase transactions will be made on regulated markets in observance of the procedures

established by the regulations for the organisation and management of the markets in question,

which do not allow the direct matching of purchase proposals with pre-arranged selling

proposals, in accordance with Art. 144-bis, subsection 1, letter b) of the Regulations approved

by Consob by resolution 11971/1999 and subsequent amendments and additions.

We also propose that you approve the sale, in accordance with the provisions of Art. 2357-ter of

the Italian Civil Code, of the own shares purchased under this proposal at any time and without

any time limit, in whole or in part, also on one or more occasion, even before completing all

purchases made on the basis of this proposal.

As regards the price for the sale of own shares, the Board of Directors will establish the criteria

to determine such, based on the trend of prices in the period preceding the transaction and in

the best interests of the Company.

If you agree with our proposal, we invite you to adopt the following resolution:

"The ordinary meeting of the Shareholders of Gemina S.p.A.

taking note of the Report of the Board of Directors;

considering the provisions contained in articles 2357, 2357-ter of the Italian Civil Code, 132

of Italian Legislative Decree no. 58 of 24 February 1998 and 144-bis of the Regulations

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210

approved by Consob with resolution 11971/1999 and subsequent amendments and

supplements,

resolves

1. to authorise, according to and consequent to Art. 2357 of the Italian Civil Code, after

repealing the resolution regarding the purchase and sale of own shares passed by the

shareholders’ meeting of April 28, 2009, the purchase, on one or more occasions and for a

period of eighteen months from the date of this resolution, on the basis permitted by the

applicable legislation, of a maximum of 80,000,000 ordinary and savings shares of Gemina

S.p.A., therefore within the limit of 20% of share capital, at a price not exceeding 20% and

not below 20% of the reference price established for shares on the Screen-Traded Stock

Market during the last trading session prior to each transaction. Purchases may be made

using the available reserves, as shown in the last financial statements approved at the time

the transaction is performed.

Purchase transactions will be made on regulated markets in observance of the procedures

established by the regulations for the organisation and management of the markets in

question, which do not allow the direct matching of purchase proposals with pre-arranged

selling proposals, in accordance with Art. 144-bis, subsection 1, letter b) of the Regulations

approved by Consob by resolution 11971/1999 and subsequent amendments and

additions.

2. To authorise the Board of Directors, and on its behalf the Chairman in office, separately,

pursuant to Art. 2357-ter of the Italian Civil Code, to sell, pursuant to regulations in force,

the own shares purchased on the basis of this resolution, at any time, in whole or in part, on

one or more occasion, even before all authorised purchases of own shares have been

made.

The sale price shall be established by the Board of Directors, based on the trend of prices

in the period preceding the transaction and in the best interests of the Company;

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211

3. to award the Board of Directors, and on its behalf the Chairman in office, all the necessary

powers to implement this resolution, even through appointed representatives."



The Chairman

GEMINA ______________________


REPORT ON OPERATIONS

2

CONTENTS

1 STATUTORY BOARDS page 4


2.1 Gemina Group (“Group”) page 5

2.2 Gemina Group Structure as at December 31, 2010 page 6

2.3 Gemina S.p.A. page 7

2.4 Share performance page 8

2.5 Connectivity page 9


3.1 Overview of the financial year page 12

3.2 Traffic page 14

3.3 Operations and related revenues page 19

3.4 Regulatory context page 25

3.5 Quality and the environment page 28

3.6 Investments, research and development page 30

3.7 Human resources and organisation page 31

3.8 Corporate Governance page 34

3.9 Intercompany relations and transactions with related parties page 44

3.10 Information about risks and uncertainties page 47

3.11 Equity, economic and financial highlights for the Group page 54

3.11.1 Economic position page 54

3.11.2 Financial position page 56

3.11.3 Net financial position page 57

3.11.4 Reconciliation between the reclassified statements and the financial statements page 58

3.12 Gemina S.p.A. page 59

3.12.1 Economic position page 59

3.12.2 Financial position page 60

3.12.3 Net financial position page 61

3.13 Major Subsequent Events page 62

3.14 Business outlook page 63

3.15 Equity investments held by Directors, Statutory Auditors and Executives with strategic responsibilities

page 64

4 PROPOSALS TO THE SHAREHOLDERS’ MEETING page 65

3

CONTENTS

5 CONSOLIDATED FINANCIAL STATEMENTS

5.1 Consolidated Income Statement page 67

5.2 Consolidated balance sheet page 69

5.3 Statement of Consolidated Cash Flows page 71

5.4 Statement of Changes in Consolidated Equity page 725.5 Statement of Reconciliation between Shareholders’ Equity of

Gemina S.p.A. and Consolidated Shareholders’ Equity and between Profit (loss) of Gemina S.p.A. and Consolidated Profit (loss) page 73

5.6 Explanatory Notes page 745.7 List of equity investments prepared in accordance with art. 126 of

Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions. page 137

5.8 Effects of the application of IFRIC 12 page 1395.9 Information pursuant to art. 149-duodecies of Consob Issuers’

Regulation page 1485.10 Certification of the Consolidated Financial Statements in accordance

with art. 81-ter of Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions page 149

5.11 Independent Auditors' Report page 150

6 FINANCIAL STATEMENTS OF GEMINA S.P.A.

6.1 Income Statement page 152

6.2 Balance Sheet page 154

6.3 Statement of Cash Flows page 156

6.4 Statement of Changes in Shareholders’ Equity page 157

6.5 Explanatory Notes page 158

6.6 Information on related parties page 197

6.7 Other information page 198

6.8 Information pursuant to art. 149-duodecies of Consob Issuers’ Regulation page 200

6.9 Certification of the Financial Statements in accordance with art. 81-ter of Consob Regulation no. 11971 of May 14, 1999 and subsequent amendments and additions page 201

6.10 Independent Auditors’ Report page 202

7 REPORT OF THE BOARD OF STATUTORY AUDITORS page 203

4

1 STATUTORY BOARDS

BOARD OF DIRECTORS Chairman Fabrizio Palenzona Managing Director Guido Angiolini Directors Giuseppe Angiolini Valerio Bellamoli Giuseppe Bencini Stefano Cao Giovanni Fontana Beng Huat Ho Sergio Iasi Aldo Milanese Aldo Minucci Andrea Novarese Clemente Rebecchini INTERNAL CONTROL COMMITTEE Giuseppe Angiolini (Chairman) Valerio Bellamoli Sergio Iasi REMUNERATION AND HUMAN

RESOURCES COMMITTEE

Giuseppe Bencini (Chairman) Giuseppe Angiolini Stefano Cao Giovanni Fontana Clemente Rebecchini BOARD OF STATUTORY AUDITORS Chairman Luca Aurelio Guarna Statutory Auditors Giorgio Oldoini Maurizio Dattilo Alternate Auditors Paolo Lenzi Pier Luca Mazza Sergio De Simoi INDEPENDENT AUDITORS Deloitte & Touche S.p.A.

Appointment extended by the Shareholders' Meeting

of May 7, 2007 for the 2007-2012 period.

5


2.1 GEMINA GROUP

(in millions of euro) 2010 2009 (*)

FINANCIAL INFORMATION Revenues 597.6 560.1EBITDA 245.9 208.4Amortisation, depreciation and provisions (178.1) (147.4)EBIT 67.8 61.0Pre-tax profit (loss) (21.5) (27.0)Net profit (loss) for the year (37.9) (44.7)Net profit (loss) attributable to the Group (37.2) (43.7)

12/31/2010 12/31/2009 (*)

EQUITY INFORMATION Net capital invested (NCI) 2,943.8 3,066.0Net financial indebtedness 1,338.9 1,425.1Shareholders’ equity 1,604.9 1,640.9Group shareholders’ equity 1,572.0 1,607.4

2010 2009 (*)

RATIOS R.O.S. (EBIT/Revenues) 11.3% 10.9%EBITDA/Revenues 41.1% 37.2%R.O.I. (EBIT/Net Capital Invested) 2.3% 2.0%Revenues/Net Capital Invested 0.20 0.18Net earnings per share (0.025) (0.030)Net financial indebtedness/ Shareholders’ equity 0.8 0.9Shareholders’ equity per share 1.1 1.1Net financial indebtedness/EBITDA 5.4 6.8Net financial expense/EBITDA 0.4 0.4

12/31/2010 12/31/2009

NUMBER OF GROUP EMPLOYEES (**) 2,658 2,552 (*) Values redetermined following the application of IFRIC 12 (**) Employees of the Gemina S.p.A. (“Gemina, Parent Company, Company, Issuer”), of the Aeroporti di Roma Group (“ADR Group”) and

of Fiumicino Energia S.r.l. (“Fiumicino Energia”). As at December 31, 2010, the Extraordinary Earnings Supplement Fund (“CIGS”) is being used for 93 employees, while as at December 31, 2009 it was being used for 88 employees.

6

2 MAIN ECONOMIC AND FINANCIAL FIGURES 2.2 GEMINA GROUP STRUCTURE AS AT DECEMBER 31, 2010

AEROPORTI DI ROMAS.p.A.

95.76%(1)

ADR Engineering

S.p.A. 100%

ADR TEL S.p.A.

ADR Assistance

S.r.l.100%

ADR Advertising

S.p.A.51%

ADR Sviluppo

S.r.l. 100%

PENTARS.p.A.

20.35%(2)

Leonardo Energia

Soc. Consortile a r.l.

1 % 10%

99% 90%


87.14%(1)

(1) Fully consolidated on a line-by-line basis(2) Valued at cost less impairment losses

7


2.3 GEMINA S.P.A.

(in millions of euro) 2010 2009

FINANCIAL INFORMATION

Income (charges) on equity investments (1.3) (3.7)

Financial income (expense) (3.0) (3.2)

Net operating costs (4.4) (3.7)

Provisions (2.2) (3.1)

Pre-tax profit (loss) (10.9) (13.7)

Net profit (loss) for the year (8.7) (14.1)

12/31/2010 12/31/2009

EQUITY INFORMATION

Equity investments 1,845.5 1,851.8

Net capital invested (NCI) 1,839.5 1,851.0

Net financial indebtedness 28.5 31.6

Shareholders’ equity 1,811.0 1,819.4

2010 2009

RATIOS

Net financial indebtedness/ Shareholders’ equity 0.02 0.02

Shareholders’ equity per share 1.23 1.24

8


2.4 SHARE PERFORMANCE

SHARES

NO. OF ORDINARY SHARES 1,469,197,552 NO. OF SAVINGS SHARES 3,762,768 CAPITALISATION


782.0 848.9

SHARE PRICES AND TRADING

VOLUMES

2010 2009

0.670 0.700

MAX. REF. PRICE

(EURO) APR-9 OCT-9

0.450 0.214

MIN. REF. PRICE

(EURO) AUG-25 MAR-9

AVERAGE REF. PRICE

(EURO) 0.556 0.479

AV. DAILY TRADING

VOLUMES (M) 2.0 4.012.0 22.0

MAX. DAILY TRADING

VOLUMES (M) FEB-03 OCT-13

0.3 0.4

MIN. DAILY TRADING

VOLUMES (M) SEP-07 JUL-14

SHARE PRICE AND TRADING VOLUME PERFORMANCE FOR THE YEAR

0

2

4

6

8

10

12

14

Jan10 Jan10 Feb10 Feb10 Mar10 Apr10 Apr10 May10 May10 Jun10 Jul10 Jul10 Aug10 Aug10 Sep10 Oct10 Oct10 Nov10 Nov10 Dec10 Dec10

0.400

0.450

0.500

0.550

0.600

0.650

0.700

(€ per share)

Daily volumes (SX Scale)

Mkt Price ‐ Last (DX Scale)

m traded

shares

9


2.5 CONNECTIVITY

10


2010 TRENDS

2010 Passengers/Movement

90.0

95.0

100.0

105.0

110.0

115.0

120.0

125.0

130.0

Period

Rat

io

Passenger/Movement

Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec-10 10 10 10 10 10 10 10 10 10 10 10

Movements

0250050007500

100001250015000175002000022500250002750030000

Period

Volu

mes

DomesticDomestic + EUTotal (Domestic + EU + Extra EU)

Jan- Feb- Mar- Apr- May-Jun- Jul- Aug-Sep- Oct- Nov- Dec-10 10 10 10 10 10 10 10 10 10 10 10

Passengers

0250000500000750000

1000000125000015000001750000200000022500002500000275000030000003250000350000037500004000000

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct- 10

Nov-10

Dec-10

Period

Volu

mes

Domestic

Domestic + EU

Total (Domestic + EU + Extra EU)

11

FIUMICINO – 2010 NETWORK ITALY WESTERN

EUROPE EASTERN

EUROPE NORTH

AMERICA CENTRAL &

SOUTH AMERICA MIDDLE EAST FAR EAST AFRICA TOTAL

DESTINATIONS 30 61 31 13 7 11 12 19 184 AIRLINES 14 45 24 8 5 14 14 18 (1)

COUNTRIES 1 19 17 2 6 10 12 11 78 AVERAGE FLIGHTS/DAY 178 153 37 15 4 14 7 21 429

Figures refer to commercial operations with at least 1 flight per week: average values for the period in question.

(1) Insignificant figure in that one airline may operate in more than one geographic area.

WE CONNECT THE WORLD WITH THE ETERNAL CITY

12


3.1 OVERVIEW OF THE FINANCIAL

YEAR

(in millions of euro) 2010 2009 (*) CHANGE %

REVENUES 597.6 560.1 6.7INFRASTRUCTURE PURSUANT TO IFRIC

12 55.5 30.1 84.4

EBITDA 245.9 208.4 18.0

EBIT 67.8 61.0 11.1INVESTMENTS

(INCLUDING INVESTMENTS PURSUANT TO IFRIC 12) 110.5 70.0 57.9

NET FINANCIAL INDEBTEDNESS (*) 1,338.9 1,425.1 -6.1

AIRPORT TRAFFIC:

PASSENGERS (NO.) 40,909,255 38,622,838 5.9

CARGO (TONNES) 171,680 143,966 19.3 (*) Adjusted to account for the effects of application of IFRIC 12.

The global economy saw a significant improvement with growth in Gross Domestic Product (GDP) estimated at 4.5% over the previous year, led by developing countries, primarily Brazil, China and India.

The diminished favourable effects from factors such as tax and monetary stimuli and depletion of the inventory cycle weakened the growth rate in the second half of the year.

The economic recovery was evident in air traffic, with 8.2% growth in passengers and 20.6% growth in cargo, but with divergent values in the various regions:

(% change over 2009) PASSENGERS (*) CARGO (*)

AFRICA 12.9% 23.8%

ASIA/PACIFIC 9.0% 24.0%

EUROPE 5.1% 10.8%

LATIN AMERICA 8.2% 29.1%

MIDDLE EAST 17.8% 26.7%

NORTH AMERICA 7.4% 21.8%

WORLDWIDE 8.2% 20.6%

(*) IATA (International Air Transport Association). Change in reference to

passengers/kilometre and tonnes/kilometre.

13


The recovery in passenger and cargo traffic, production capacity changes caused by the grounding of aircraft and effectively stable costs have resulted in a strong and rapid improvement in carriers' profits after the significant losses of recent years.

Asian carriers showed substantial improvements, while European and North American airlines showed some continuing difficulties despite their overall improvements.

The consolidation process continued among airlines with various types of agreements: the merger of British Airways and Iberia and the joint venture with American Airlines, the merger of Continental and United Airlines, Alitalia's inclusion in the joint venture between Air France, KLM and Delta, and, more generally, the strengthening of the three largest alliances, Sky Team (13 members), Star Alliance (27 members) and Oneworld (12 members).

However, there were some problems during the year, sometimes related to substantial government support for airlines in difficulty. Among the more noteworthy examples are Japan Airlines and Mexicana de Aviacion, the bankruptcy of the regional carrier Mesa Airlines in the US and the temporary receivership of the Italian carrier Livingston.

Despite continued delays in the production chain for the two major aircraft manufacturers, 18 additional Airbus 380s were commissioned during the year, bringing to 42 the number of Airbus 380s in the fleets of Singapore Airlines, Quantas, Emirates and the European airlines Air France and Lufthansa. After the first test flight in December 2009, and some further delays, Boeing scheduled the delivery of the first 787 Dreamliner for the third quarter of 2011.

The Rome airport system proved its capabilities by handling more traffic than it had before the crisis.

During the year, passenger traffic reached 40,909,255, an increase of 2.2% over 2008 and 5.9% over 2009.

(no. passengers) FIUMICINO CIAMPINO TOTAL

2010 36,338,179 4,571,076 40,909,255

(% CHANGE OVER 2009) 7.5% (5.0%) 5.9%

(% CHANGE OVER 2008) 3.2% (4.6%) 2.2%

2009 33,811,637 4,811,201 38,622,838

(% CHANGE OVER 2008) (4.0%) 0.4% (3.5%)

2008 35,227,209 4,790,956 40,018,165

14


In August, Fiumicino reached a record number of passengers for the month, with a total of 3,750,249, and August 1 reached a daily record of 137,747 passengers.

Nevertheless, Fiumicino’s saturation and environmental constraints on Ciampino are a hindrance to the physiological development of the Rome airports, whose growth rates during the year were lower than the national average, according to data published in Assaeroporti:

Airport traffic (% change over 2009)

ITALY ROME SYSTEM

PASSENGERS +7.0% +5.9%

CARGO (*) +12.5% +19.3%

Additionally, volumes above the airport saturation level cause a decline in the service level, delays, limitations on traffic and demonstrate that infrastructure support cannot be deferred in a regulatory and rate context that is fixed over the long term.

Negotiations continued with ENAC to enter into a planning agreement in derogation pursuant to Law 102/2009 for the major national airports.

Defining a satisfactory regulatory and tariff system that ensures stability in the concessionary relationship and remuneration of invested capital is an indispensable condition for beginning the serious investment plan necessary for the Rome airport system.

This postponement, which has a negative impact on the construction of airport infrastructures suited to meet air traffic quality and quantity needs, also for extraordinary events, such as the 2020 Rome Olympics project and hampers Fiumicino airport in increasing its quality and efficiency levels to achieve those of the best airports.

Aeroporti di Roma S.p.A. (“ADR”) entered into an agreement with Scott Wilson Ltd. (Great Britain) to develop a master plan through 2044 for Fiumicino airport, whose implementation is dependent on the signing of a new regulatory and tariff contract.

In addition, a strategic and operations consultancy agreement for airport development was entered into with Changi Airport Consultant Group, a subsidiary of Changi Airports Group, Company shareholder and Member of the Shareholders’ Agreement as “Business Partner”, which can commence only after the signing of the planning agreement.

15


Revenues for the year were 597.6 million euro, up 6.7% over 2009, primarily due to growth in non-aviation activities, whose revenues were up 9.3%.

Though penalised by unchanging rates, aviation revenues were up 5.4%, essentially in line with the increase in passenger traffic.

Reductions in staff costs and contained increases in other operating costs had a positive effect on the income statement for the year, which closed with a loss of 37.9 million euro, compared to a loss of 44.7 million euro in 2009.

Delays in signing the planning contract and the upcoming sizeable financial maturities resulted in a change to the investment plans, giving priority to security and maintenance investments while gradually reducing and eventually eliminating investments for infrastructure support. In total, the expenditures for the year were 110.5 million euro compared to 70.0 million euro in 2009.

The positive trend in ordinary management, cutbacks in investments and collection of certain shareholder accounts resulted in the year closing with net financial indebtedness of 1,338.9 million euro, compared to 86.2 million euro as at December 31, 2009.

This is consistent with the plan prepared by ADR to meet financial maturities with internally generated means starting in 2012.

With the sale of S.I.T.T.I. S.p.A. (“SITTI”), Gemina essentially completed its disposal programme for smaller equity investments.

3.2 TRAFFIC

The increase in frequency of flights and the opening of new routes were the result of marketing initiatives by the Company directed at foreign airlines.

TOTAL DOMESTIC EU EXTRA

EU ALITALIA

INCREASE IN FREQUENCY 24 - 12 12 6

NEW ROUTES 55 5 34 16 5

TOTAL 79 5 46 28 11

16


Passenger traffic grew 5.9% over 2009 and reached 40,909,255.

While Fiumicino grew 7.5%, Ciampino decreased by 5.0%.

Domestic traffic declined slightly while flights outside the European Union grew.

Movements grew somewhat, and passengers per aircraft increased markedly.

Cargo movements also improved. SYSTEM

DOMESTIC OTHER EUREST OF

WORLD TOTAL

PASSENGERS 13,540,830 17,266,208 10,102,217 40,909,255

% over PY (0.6%) 6.8% 14.3% 5.9%

MOVEMENTS 155,341 151,858 76,110 383,309

% over PY (6.3%) 3.7% 9.1% 0.3%

TONNAGE 9,648,155 10,658,845 9,625,765 29,932,765

% over PY (4.3%) 5.8% 9.0% 3.3%

CARGO (TONNES) 5,615 31,852 134,213 171,680

% over PY (5.5%) 6.5% 24.1% 19.3% FIUMICINO


WORLD TOTAL

PASSENGERS 12,738,446 13,562,335 10,037,398 36,338,179

% over PY 0.9% 8.4% 15.8% 7.5%

MOVEMENTS 136,473 120,329 72,467 329,269

% over PY (5.3%) 4.6% 10.9% 1.5%

DOMESTIC35%

OTHER EU42%

REST OF WORLD23%

2009 Passenger Traffic

DOMESTIC OTHER EU REST OF WORLD

DOMESTIC33%

OTHER EU42%

REST OF WORLD25%

2010 Passenger Traffic

DOMESTIC OTHER EU REST OF WORLD

17



WORLD TOTAL

TONNAGE 9,083,884 8,667,592 9,524,118 27,275,594

% over PY (3.3%) 6.6% 10.0% 4.2%

CARGO (TONNES) 5,471 13,994 134,213 153,678

% over PY (6.7%) 7.5% 24.1% 21.0% CIAMPINO


WORLD TOTAL

PASSENGERS 802,384 3,703,873 64,819 4,571,076

% over PY (19.2%) 1.5% (61.6%) (5.0%)

MOVEMENTS 18,868 31,529 3,643 54,040

% over PY (13.3%) 0.3% (16.7%) (6.2%)

TONNAGE 564,271 1,991,253 101,647 2,657,171

% over PY (17.6%) 2.3% (40.0%) (5.1%)

CARGO (TONNES) 144 17,858 - 18,002

% over PY 77.3% 5.7% (100%) 6.0%

Towards the end of the year, Alitalia grew at a higher rate than other carriers, resulting in a market share of 47.1%, after having reported a decline in the earlier part of the year.

Alitalia – Market share – Fiumicino Airport

JAN. FEB. MAR. APR. MAY JUN.

48.1 48.1 47.2 45.5 46.3 46.3

JUL. AUG. SEP. OCT. NOV. DEC.

47.2 45.1 47.2 47.3 49.4 49.0

The share of domestic traffic dropped, from 38.4% in 2008 to 35.1% in 2010, while Far East remain unchanged, and other areas increased:

2008 2009 2010

PAX % PAX % PAX %

DOMESTIC 13,540,507 38.4% 12,629,323 37.4% 12,738,446 35.1%

WESTERN EUROPE 12,590,531 35.7% 11,979,967 35.4% 13,247,474 36.4%

18


2008 2009 2010

PAX % PAX % PAX %

EASTERN EUROPE 2,415,259 6.9% 2,463,026 7.3% 2,674,447 7.3%

NORTH AMERICA 2,194,143 6.2% 2,222,591 6.6% 2,463,325 6.8%

CENTRAL AND SOUTH AMERICA 638,112 1.8% 630,179 1.9% 726,456 2.0%

MIDDLE EAST 1,015,030 2.9% 1,056,111 3.1% 1,412,302 3.9%

FAR EAST 1,201,149 3.4% 1,166,156 3.4% 1,234,307 3.4%

AFRICA 1,632,478 4.7% 1,664,284 4.9% 1,841,422 5.1%

TOTAL 35,227,209 100.0% 33,811,637 100.0% 36,338,179 100.0%

The primary destinations for Fiumicino traffic were: Milan, Catania and Palermo for domestic traffic; Paris, London and Madrid in the European Union; New York, Tel Aviv and Istanbul for the rest of the world,

Passengers by major destinations

DOMESTIC EUROPEAN UNION REST OF WORLD

PAX/ 000

% VAR. PY

% SHARE

PAX/ 000

% VAR. PY

% SHARE

PAX/ 000

% VAR. PY

% SHARE

MILAN 2,258,172 (7.6%) 17.7% PARIS 1,445,292 (0.3%) 10.6% NEW YORK 597,305 3.4% 6.0%

CATANIA 1,714,622 5.3% 13.5% LONDON 1,416,757 2.5% 10.4% TEL AVIV 481,485 28.1% 4.8%

PALERMO 1,418,786 2.7% 11.1% MADRID 1,272,629 10.6% 9.4% ISTANBUL 463,076 34.5% 4.6%

TURIN 884,868 1.6% 6.9% AMSTERDAM 808,843 23.6% 6.0% DUBAI 393,094 56.7 3.9%

VENICE 794,148 7.0% 6.2% BARCELONA 687,563 (0.6%) 5.1% MOSCOW 326,557 16.0% 3.3%

CAGLIARI 744,493 (4.8%) 5.8% FRANKFURT 652,733 (0.8%) 4.8% CAIRO 324,888 15.6% 3.2%

LAMEZIA

TERME 619,240 24.1% 4.9% ATHENS 537,592 9.3% 4.0% ZURICH 302,012 (9.0%) 3.0%

BARI 574,349 (15.5%) 4.5% MUNICH 464,720 5.2% 3.4% TOKYO 283,757 2.1% 2.8%

GENOA 538,708 11.9% 4.2% BRUSSELS 459,011 (4.9%) 3.4% GENEVA 282,036 57.7% 2.8%

BRINDISI 433,580 10.9% 3.3% VIENNA 416,038 48.7% 3.1% TUNIS 275,996 8.3% 2.8%

TOP 10 9,980,966 0.8% 78.3% TOP 10 8,161,178 6.2% 60.2% TOP 10 3,730,206 18.2% 37.2%

TOT. FCO 12,738,446 0.9% 100% TOT. FCO 13,562,335 8.4% 100% TOT. FCO 10,037,398 15.8% 100%

The market share held by the major airlines is equivalent to 100% of domestic traffic, 72% of traffic with the European Union and 62% of the traffic with the rest of the world.

19


Alitalia, the airport’s principal airline, covers 75.7% of domestic traffic, 26.7% of traffic with the European Union and 38.1% of the traffic with the rest of the world.

The destinations of flights from Ciampino are primarily cities in the European Union. Ryanair is the principal carrier at the airport, with a market share of 77.9%, followed by EasyJet and WizzAir.

3.3 OPERATIONS AND RELATED

REVENUES

(in millions of euro) 2010 2009 (*) CHANGE % CHG

AVIATION 307.3 291.5 15.8 5.4%

AIRPORT FEES 174.9 163.2 11.7 7.2%

CENTRALISED INFRASTRUCTURES 35.4 35.5 (0.1) (0.3%)

SECURITY 67.7 62.9 4.8 7.6%

OTHER 29.3 29.9 (0.6) (2.0%)

NON-AVIATION 290.3 268.6 21.7 8.1%

REAL ESTATE 59.7 56.3 3.4 6.0%

SUB-CONCESSIONS AND UTILITIES 59.7 56.3 3.4 6.0%

NON-AVIATION 201.3 184.1 17.2 9.3%

SALES 87.3 80.2 7.1 8.9%


CAR PARKS 30.5 27.5 3.0 10.9%

ADVERTISING 22.4 22.8 (0.4) (1.8%)

REFRESHMENTS 7.0 6.7 0.3 4.5%

OTHER 29.3 28.2 1.1 3.9%

TOTAL REVENUES 597.6 560.1 37.5 6.7%INFRASTRUCTURE PURSUANT TO

IFRIC 12 55.5 30.1 25.4 84.4%

TOTAL 653.1 590.2 62.9 10.7% (*) Restated amounts to account for the effects of application of IFRIC 12.

JAN-DEC 2010

Non-aviation revenues

49%

Aviation revenues

51%

Aviation revenues

52%

Non-aviation revenues

48%

JAN-DEC 2009

20


AVIATION SEGMENT

Airport fees – Revenues were 174.9 million euro, up 7.2% compared to the same period of 2009:

- take-off, landing and aircraft parking fees: while movements remained essentially unchanged at +0.3%, the 4.2% revenue increase reflected the operation of aircraft with greater average capacity/tonnage and the increase in unit fees that occurred on January 21, 2010 for adjustments to programmed inflation (+1.5%);

- passenger boarding fees: revenues increased 7.9% due to a greater number of boarded passengers (+6.0%), with growth in Extra EU destinations that have a higher unit fee and the aforementioned fees adjustment (+1.5%);

Cargo traffic increased 19.3%, with increased revenue of 1.0 million euro.

Centralised infrastructure – Revenues, equivalent to 35.4 million euro, were substantially unchanged from the prior year.

Loading bridge revenue declined 1.8%, due to the closing of two aircraft aprons reached by a boarding jetway because of airport expansion works, the reduction in aircraft movements in the first half of the year and the penalising of certain systems due to construction work.

In the second half of 2010, higher aircraft movements and improvement initiatives for infrastructure management offset part of the decline in the first half.

JAN-DEC . 2010

Airport fees57%

Other9%

Security 22%

Centralised infrastructure

12%

JAN-DEC 2009

Centralised infrastructure

12%

Airport fees56%

Other10%

Security22%

21


Despite lower availability of the systems, the decline of the loading bridge commitment for individual flights meant a 3.3% increase in flights assisted with a boarding jetway that served more than 19 million passengers, an increase of 7.1% compared to 2009, with a consequent service improvement.

Baggage system revenue was similar to the previous year, as the higher number of inbound and outbound passengers was offset by the changed distribution of outbound passengers in various airport areas that have different unit fees for baggage handling.

Revenues from centralised information systems increased 6.6%.

Security – Security services, which include checking passenger’s hold and hand baggage, checking for explosives, services requested and surveillance of the airport system, generated revenues of 67.7 million euro, 7.6% more than 2009 as a result of increased passenger traffic and hold baggage and a significant increase in services rendered to other operators.

Other – Assistance for passengers with reduced mobility generated revenue of 13.2 million euro, 2.2% less than the prior year due to the lower fee applied.

22


NON-AVIATION SEGMENT

In 2010, non-aviation activities grew 9.3% compared to the previous year, more than the 5.9% growth in passenger traffic.

In terms of potential market, represented by outbound, transit and inbound passengers, the most significant events that affected the growth in non-aviation activities during the year were:

- changing Terminal 1 from the Domestic Terminal to the Dedicated Terminal for AZ and SkyTeam (November 2009);

- changing SkyTeam flights for France and Holland from

boarding area D to boarding area B (June 2010); - eruption of the Eyjafjallajökull volcano (April 2010).

The first two events resulted in a substantial change in traffic mix and volume in the commercial areas of the Domestic/Schengen zone, with an overall negative effect in that the increase in passenger flow was concentrated in an area with fewer services offered (area B).

Real Estate

Sub-concessions and utilities – Real estate revenues amounted to 59.7 million euro, a 6.0% increase.

Sub-concessions generated 43.8 million euro in revenue, an increase of 6.3% over the prior year.

JAN-DEC 2010

Car parks11%

Sub-concessionsand utilities

19%

Sales29%

Real Estate21%

Other10%

Advertising 8%

Refreshments2%

JAN-DEC 2009

Sub-concessionsand utilities

17%

Car parks 10%

Other10% Real Estate

22%

Sales31%

Advertising8%

Refreshments2%

23


The revenue increase in this areas was due to new contractual terms defined with AZ-CAI for sub-concessions through December 31, 2010 for the entire assets of the so-called “Technical Area”, the effect of sub-concessioned spaces in Office Tower 2 becoming operational and delivered at different points during 2009 and 2010, as well as the portion of Aerostazione Merci assigned to Flightcare Italia becoming operational as cargo handler.

Sub-concession revenues, adjusted for the volumes of activities managed, amounted to 15.9 million euro, a 5.3% increase over 2009.

The increase is substantially due to both the new unit amount for the “aviation allocation”, which increased from 3.82 euro to 3.91 per cubic metre starting on March 1, 2010, as well as better performance in hotel reception (+5.2%).

Sales – Sales revenue, equivalent to 87.3 million euro, showed 8.9% growth compared to the previous year, higher than the growth in outbound traffic of 6.0%.

The average spend per passenger grew 3.3% over 2009 and was equivalent to 4.2 euro.

Growth was seen in all major product categories, with higher than average results for “Wines” (+15.0%), “Fragrances” (+12.6%), “Spirits” (+11.5%) and “Make up” (+10.1%).

Fiumicino experienced growth of 10.9% in turnover and an increase in average spend of 3.1%.

This result was achieved due to marketing initiatives (such as “Il Vino del mese” [Wine of the Month], “Summer Time”, and Christmas displays and promotional initiatives) aimed at increasing footfall, penetration and average sale.

This activity also benefitted from improvements in logistics processes, which will continue in 2011.

The Ciampino airport saw a decline in turnover of 7.2% compared to 2009, more than the decline in boarded passengers (-4.8%), with a resulting decline in average spend of 2.5%.

As regards marketing initiatives to support sales in directly-managed shops, following on the success of the “Il Vino del mese” programme, a communication project called “Promo del mese” [Promo of the Month] was created, which will involve the ad hoc use of panels and exhibits in shops.

24


In December, a promotion began that gave ADR employees a 30% discount on products in the Good Buy Roma shops, excluding tobacco and luxury products, as well as an initiative to develop a Christmas music compilation, as drivers to increase the spending level, supported by related communications in the airport systems and Christmas promotional activity for all customers.

Sub-concessions and utilities – Royalty revenues for sub-concessioned non-aviation activities, equivalent to 54.1 million euro, were up 15.4% with an increase in average revenues per passenger of 9.0%, or 2.66 euro (Specialist Retail +9.7%, Food & Beverage +7.7%, Services +10.0%).

Sub-concession activity in Fiumicino saw revenue growth of 16.1% against an increase in outbound traffic of 7.5%, resulting in an increase in average revenue per passenger of 8.0%.

The results achieved in Specialist Retail (revenue +16.9% or +3.9 million euro) are mostly attributable to performance of businesses in the Extra-Schengen area, who benefitted from the considerable increase in outbound passengers.

In addition, during the year, 11 new stores opened, increasing the commercial surface area by more than 800 square metres, new brands were introduced, including Geox, Burberry and Giunti and refurbishment/expansion work was carried out on more than 1,000 square metres of offer.

The Food & Beverage segment also grew (revenues + 14.5%, or +2.5 million euro) due to continued improvements to quality and expansion of the offer (i.e., the Asian food corner in Autogrill Ciao in T3, landside, and a sushi corner in Chef Express T3 transit) and refurbishment/expansion of 10 shops (4,600 square metres equivalent to more than 40% of the total).

The “Services” category (Other Royalties) saw revenues of 5.6 million euro, up 18.1% compared to the prior year (+0.9 million euro) and the opening of two new currency exchange stations in the landside area of Terminal 3.

Sub-concessions in Ciampino airport saw revenue growth of 7.0% against a decline in outbound traffic of 4.8%.

Due to marketing activities in support of the Rome Airport Shopping Gallery, the project to ease "business navigation” of the Satellite was expanded with specific communication on the brands available at each boarding gate.

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After the Rome-Milan Fast Track was implemented, a new system was put in place on the mezzanine level of T1 with indications about the shopping area and the brands.

Car parks – Management of the car parks system resulted in revenue of 30.5 million euro, up 10.9%, greater than the 4.5% increase in the potential originating passenger market.

Marketing initiatives in support of the Easy Parking brand including a summer radio, text message and on-line campaign was carried out to promote On-line Booking (BOL) (+35%), which saw an increase in average spend of 58%.

A call centre was set up to provide customer support.

Advertising – Advertising revenues for 2010 were 22.4 million euro, a decline of 1.8% compared to the prior year.

Specifically, revenues from the sale of advertising space in directly-managed shops were 2.9 million euro, up 2.4%, while revenues from indirect sale of advertising space were 20.0 million euro, down 2.3%.

Refreshments – Revenues were 7.0 million euro against 6.7 million euro in 2009.

This activity is directed at staff working in the terminals.

Other – These revenues are related to services rendered to third parties for repairs, maintenance and other secondary activities.

They also include revenue for the sale of energy to GSE and of CO2.

3.4 REGULATORY CONTEXT Update of airport fees for inflation

Ministerial Decree no. 4 of October 4, 2010 regarding “Update of airport fees for 2010” was published in the Official Gazette no. 289 of December 11, 2010.

Pursuant to said Decree, airport fees in the preceding Ministerial Decree no. 8 of October 8, 2009 were updated for programmed inflation for 2010, which was established at 1.5% in the 2010/2013 Economic and Financial Planning Document.

The new fees will be applied beginning on January 10, 2011, the effective date of the Decree.

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New commissarial surcharges on passenger boarding fees

Law Decree no. 78 of May 31, 2010 was published on that date including “Urgent measures on financial stabilisation and economic competitiveness”.

Law no. 122 of July 30, 2010 regarding “Conversion into law, with amendments, of Legislative Decree no. 78 of May 31, 2010 including urgent measures on financial stabilisation and economic competitiveness” (Official Gazette no. 176 of July 31, 2010) was definitively introduced, with a request by the Commissioner in charge of the commissarial administration and the Mayor of Rome for an additional commissarial surcharge on outbound passenger boarding fees from the airports of Rome - within the maximum limit of 1 euro per passenger - in order to contribute to the charges deriving from the debt repayment plan of the Municipality of Rome up to a total of 200 million euro.

The establishment of this additional commissarial surcharge was resolved by the Special Commissioner on November 12, 2010 for a maximum amount of 1 euro per passenger beginning January 1, 2011.

The surcharge will be duly applied by ADR beginning on said date.

Planning agreement in derogation

In the second half of the year, the dialogue between ADR and ENAC on the final details of the terms and conditions to be included in the “planning agreement in derogation” moved at a particularly fast pace.

It involves a tool offered by the legislation (Law no. 102 of August 3, 2009) to ENAC and larger national airports with traffic greater than 10 million passengers annually, under which they can outline specific multi-year tariff regulation models.

It would allow that, with a single deed, both the legal/administrative profile of the airport management assignment as well as the typical regulatory/tariff profile can be administered.

This change to the planning agreement would markedly simplify the regulatory context introduced in the Committee for Economic Planning (CIPE) regulations and the ENAC application guidelines and establish a clear and fixed reference framework through the expiration of the ADR management concession (June 30, 2044). It would also allow for a strict correlation between the investment planning activity and the related financial coverage by the combining the preparation of the airport development plan with that of the economic-financial plan.

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Consistent with the above and in order to propose to ENAC a planning agreement that corresponds to international best practices, as well as for the subsequent project financing, ADR has carried out benchmarking with other airport agreements and other sectors in utilities.

A proposal was sent to ENAC on August 4, 2010, subsequently completed in October and December 2010, annexed it with a series of analyses explaining the reasoning behind choices made.

With a note dated November 25, 2010, ENAC sent ADR its changes to the text of the planning convention/agreement that, while considering certain proposals put forward by ADR, did not, however, accept other points that were a priority for the Company.

Discussions with the Grantor and further consultation with the Ministry of Infrastructure and Transport are continuing both in terms of infrastructure (verifying the proposed investments) and judicial/legal (the agreement’s rules as such) as well as economic and financial (the plan over the short/medium term and long term).

It is not currently possible to foresee the terms and timing for signing the agreement or when the new plan will come into effect.

Guideline on the Lazio airport system

On June 7, 2010, the Ministry for Infrastructure and Transport issued a programmatic guideline directed to ENAC, and subsequently forwarded to ADR, with a view to providing, while awaiting the closure and formalisation of the study on the network of national airports, the strategic references concerning the airport structure of Lazio, aiming in this way to a correlated and organised valuation of its future development.

The guideline identifies the priorities with regard to the structural interventions of the airports of Fiumicino and Ciampino, respectively, and related to the carrying out of the Viterbo airport.

Second phase of the “open sky” agreement

The second phase of the US-EU “open sky” agreement was signed in Luxembourg on June 24, 2010, which builds on the benefits resulting from the US-EU “open sky” agreement signed in 2007.

The agreement creates new aviation opportunities and strengthens cooperation in regulatory and environmental context, social responsibility, security and competition.

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3.5 QUALITY AND THE

ENVIRONMENT

During 2010, with the support of a specialised external company, airport activities continued to be monitored through the daily survey of the level of quality provided and perceived, for a total of over 50,000 measurements and the completion of about 28,000 questionnaires by passengers.

The study of Fiumicino airport’s quality positioning continued through participation in the international benchmark programme “Airport Service Quality” and through targeted meetings with the leading European airport management companies.

The voluntary certifications programme was also developed, as a tool to support improvement.

The 2009 Environmental Report was published, and is available on the site www.adr.it.

MONITORING OF QUALITY LEVELS Fiumicino

On a scale from 6 (excellent) to 1 (poor), passengers gave an average satisfaction rating for services provided of 4.35, up from 4.30 in 2009.

In 2010, passengers completed the security check of hand baggage within the 12 minutes indicated in the Service Charter in 92% of cases, essentially unchanged from 2009.

The percentage of flights for which baggage was delivered within the time indicated in the Service Charter was 81.16% for the first baggage compared to 79.94% in 2009, and 86.25% for the last compared to 85.48% in 2009.

The percentage of departing flights with delays greater than 15 minutes was 29.9% compared to 39.2% for the prior year. While performance has improved, the airport does not meet the standard provided for in the Service Charter (25%).

For arriving flights, delays greater than 15 minutes were 22.5%, compared to 22.9% in 2009.

As a result, the recovery of airport transit times (difference between the % of delays in arrival and departure) was negative (-7.4%).

The percentage of passengers that completed check-in operations within the times indicated in the Services Charter was 85.16%.

The service level declined 3 percentage points compared to the previous year.

Ciampino

The average passenger satisfaction rating declined from 4.34 in 2009 to 4.23 in 2010.

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Improvements were seen in the security checks/baggage delivery times and passenger check-in time compared to 2009.

However, the passenger check-in operations and percentages, aircraft departure times and the transit recover times do not meet the standards.

FUNCTIONALITY

Certain initiatives to improve the functionality of the terminal were implemented.

In the second half, the following groups of toilet facilities were renovated:

- Terminal 1: departures area, city side, near the security check area on the west side; arrivals area, passenger exit for those with hand baggage only;

- Terminal 3: boarding area C (gates C8/C16); boarding

area D (gates D5/D7);

for a total of 7 restrooms renovated during the year. In addition to the new group of toilet facilities in the arrivals area of Terminal 1 and renovation is underway for the toilet facilities in boarding area D (gate D6).

The Fast Track was completed in Terminal 3 for first and business class passengers and, in the Terminal 3 transit area, refurbishments on the ceiling voids and the technology equipment contained therein was completed.

At “station E” in T3, expansion work on the security check area for passengers in transit was completed.

A new ADR information booth was added in the Terminal 1 departures area, city-side.

The floors and waiting areas were renovated in some of the Terminals.

SEPARATE WASTE COLLECTION

The programme to develop separate collection of solid urban waste continued at Fiumicino airport, in relation to paper, cardboard, wood, and plastic waste collected from the terminals, the ADR offices and the company cafeteria.

The programme to collect the biological portion of waste produced in preparing company meals at Fiumicino was also initiated.

An ecological area was established that all Fiumicino airport operators can use to deposit certain types of special waste.

Separate collection of packaging waste in paper, cardboard, wood and plastic was launched at Ciampino airport, using blue waste cans.

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Both airports were entered in the S.I.S.T.R.I (Sistema di controllo della tracciabilità dei rifiuti, Waste traceability control system) established with Ministerial Decree by the Ministry of the Environment and Protection of the Territory and of the Sea.

S.I.S.T.R.I. “Delegates” were identified and trained in using the system platform.

POLLUTION MONITORING

The first audit of CO2 (carbon dioxide) emissions was conducted at Fiumicino airport, defining the calculation methodology.

Air quality monitoring activities were carried out and, in order to measure the atmosphere’s capacity to remove pollutants (atmospheric stability), the height of the remixing layer was measured, delineating the area’s climatology.

Additionally, electromagnetic fields were measured at both Fiumicino and Ciampino.

The results of the monitoring campaign both for air pollutants and electromagnetic fields demonstrated full compliance with reference legislation.

The continuous monitoring of the waste water treatment system in the soil at Fiumicino airport verified the correct functioning of the system, in particular, that of biological purification, showing concentrations of the chief pollutants markedly lower than the 50% limit imposed by law.

On July 1, 2010, the Service Conference, established by the Lazio Region to define the sound zoning of the Ciampino airport, concluded its work. As a result, ADR will be expected to carry out analyses in advance to launch certain activities associated with the renovation plan.

ADR has submitted a petition to the Lazio Regional Administrative Court (TAR) to annul the report in which the aforementioned Service Conference approved the acoustic zoning of Ciampino airport, the result of which could impact the construction area.

3.6 INVESTMENTS, RESEARCH

AND DEVELOPMENT


INVESTM. RENEWALS TOTAL


HBS TRANSIT BAGGAGE AZ 20.7 1.3 22.0

31



INVESTM. RENEWALS TOTAL

BOARDING AREA F(FORMERLY PIER C) 19.6 - 19.6

MAINTENANCE AND

OPTIMISATION WORK IN THE

TERMINALS 0.6 9.4 10.0

BAGGAGE SYSTEMS AND

X-RAY MACHINES 5.1 2.6 7.7

FIUMICINO –

ELECTROMECHANICAL SYSTEM

MAINTENANCE 0.9 5.7 6.6

FIUMICINO – ELECTRICAL AND

AIR CONDITIONING SYSTEM

MAINTENANCE - 7.0 7.0

RUNWAYS AND AIRCRAFT

APRONS - 6.4 6.4

CIAMPINO – INFRASTRUCTURE

UPGRADE WORKS 0.3 5.6 5.9

FIUMICINO – CIVIL

ENGINEERING WORKS

MAINTENANCE 0.2 3.6 3.8

EX ALITALIA CARGO HBS/BHS 3.9 - 3.9

OTHER 11.1 6.3 17.4

GROUP COMP. INVEST.

CO-GENERATION POWER PLANT 0.2 - 0.2

TOTAL INVESTMENTS 62.6 47.9 110.5

As a result of the absence of the early introduction of the 3 euro/passenger fee, the protracted negotiations on the new rates and the upcoming financial maturities, there was a tightening in expenditures during the second half year for new infrastructure, for a total of 62.6 million euro, of which 43,0 million euro were carried out in the first half.

The key investments involved boarding area F (formerly Pier C), for expenditures of 19.6 million euro and the new baggage handling system for transit passengers for 20.7 million euro.

The Group has not carried out research and development activities.

3.7 HUMAN RESOURCES AND

ORGANISATION As at December 31, 2010, the number of staff was 2,658, of

which 93 staff from ADR Group were in the Extraordinary Earnings Supplement Fund.

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of which:

EXECUTIVES MANAG

ERS

EMPLOYEES WORKERS TOTAL

STAFF Fixed-

term contracts

Open-ended

contracts

12/31/2010 3 4 4 - 11 - 11

12/31/2009 3 4 4 - 11 - 11GEMINA

CHANGE - - - - - - -

12/31/2010 46 201 1,771 628 2,646 706 1,940

12/31/2009 47 180 1,716 598 2,541 650 1,891

ADR AND

SUBSIDIARY

COMPANIES CHANGE (1) 21 55 30 105 56 49

12/31/2010 - 1 - - 1 - 1

12/31/2009 - - - - - - -FIUMICINO

ENERGIA

CHANGE - 1 - - 1 - 1

12/31/2010 49 206 1,775 628 2,658 706 1,952

12/31/2009 50 184 1,720 598 2,552 650 1,902TOTAL

CHANGE (1) 22 55 30 106 56 50

% (2.0%) 12.0% 3.2% 5.0% 4.2% 8.6% 2.6%

The increase was 4.2% over the previous year, less than the increase in traffic of 5.9%.

During the year, average staff was 2,367.4, excluding those in the Extraordinary Earnings Supplement Fund.

The increase in staff with open-ended contracts is due to various factors. Specifically, for ADR (+46 staff), the combined effect of the hiring of new staff with specialised skills to launch planned initiatives, implementation of the new organisational structure resolved by the Board of Directors during the year, the establishment of temporary work contracts in implementation of the union agreement of August 10, 2010 that actuated the relevant legislation, transformation of apprenticeship contracts in operating areas or integration contracts in the other areas and finally, the termination of working relationships due to resignation or dismissal all influenced the result.

For ADR Engineering S.p.A. (“ADR Engineering”) and ADR Tel S.p.A. (“ADR Tel”), the increase of staff with open-ended contracts (+3 and +2, respectively) is the result of hiring individuals with specialised technical skills for their respective areas.

The increase in temporary staff from the prior year is due to ADR's initiatives for expansion/refurbishment of certain airport infrastructures (NET, HBS Terminal 3).

For ADR Assistance S.r.l. (“ADR Assistance”) (+26 staff), the increase is due to the growing trend in assistance, in addition to compliance with the objectives defined in the Service Charter.

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Unit staff costs declined 1.8%, a positive result of the restructuring plan of 2008/2009.

Staff costs, totalling 122.0 million euro, were 33% of the value added, slightly lower than 2009 for the reasons noted above:

2007 2008 2009 2010

STAFF COSTS

VALUE ADDED % 32 38 41 33

Compensation to executives and managers consists of a fixed portion and a variable portion based on the extent to which their individual assigned objectives were achieved.

In ADR, variable compensation is subordinated to reaching a certain “threshold” at a company level.

In 2010, the threshold was determined to be the ratio of net financial position/cash flow.

In 2010, the new ADR organisational structure resolved by the Board of Directors on 15 April 2010 was implemented to confront the changed reference context.

As such, the following Committees were formed: Investments, Corporate Identity and Communication and Contract Works.

In addition, the project to adapt the Organisation and Control Model pursuant to Law no. 262/05 was completed, involving sixteen business processes.

The Gemina Board of Directors resolved to transfer the Company offices to Fiumicino.

Gemina will perform its holding activities making use of ADR’s operating services (finance, administration, staff, legal, IT, etc.).

It is expected that the employment relationships of the Milan office staff will be terminated assisted by leaving incentives and placement services as well as recourse to applicable legislative institutions.

The CCNL (collective national labour agreement) for airport management companies that expired in 2007 was renewed in February 2010 through negotiations at Assaeroporti.

As part of the agreement, a new contractual framework was established that applies to the entire Air Transport department and includes a general section and more specific sections that govern the three relevant sectors (airport management companies, handling and catering) based on business specifics.

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The renewed text revises the stratification of agreements amending/supplementing the last CCNL that developed over multiple years, offering more clarity between the stipulating parties.

The new CCNL will be valid until December 31, 2011 both for the regulatory and economic portion.

The agreement signed with the business representatives to discontinue transporting staff on company buses was particularly important for ADR.

After review, the company realised that the marginal use of the service had an extremely high cost.

The cancellation of the transport contract equates to a savings of 1.9 million euro annually, with benefits already accruing the last quarter of 2010.

For ADR Assistance, an agreement was signed that introduces partial changes to the previous work organisation.

It enhanced the role of the professional staff members belonging to the operations control grade level in the central coordination area as well as the peripheral oversight areas.

Simultaneously, it introduced tools for greater organisational flexibility in response to fluctuations in assistance requests.

The restructuring plan that began in the previous year continued in 2010.

3.8 CORPORATE GOVERNANCE INTRODUCTION

The structure of corporate governance adopted by Gemina draws inspiration from the recommendations and rules contained in the Code of Conduct adopted by the Corporate Governance Committee of Borsa Italiana S.p.A., with the latest revision in 2006 (“Borsa Italiana Code”). It is our conviction that, on the one hand, having a structured system of rules allows the Company to operate according to criteria of maximum efficiency and, on the other, ensuring utmost transparency contributes to increasing the Company’s image of reliability amongst investors.

In its meeting of March 27, 2007, the Gemina Board of Directors approved its own Gemina Code of Conduct (“Gemina Code”) in keeping with the main provisions of the Borsa Italiana Code.

Pursuant to article 123 bis of Legislative Decree 58/98 (Consolidated Finance Law), the Gemina Board of Directors approved the Report on the Corporate Governance and the ownership structure for 2010, available on the website www.gemina.it (corporate governance section).

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The most important aspects of the annual Report on the Corporate Governance and the ownership structures are summarised below.

GOVERNANCE STRUCTURE

As a company registered in Italy that issues shares admitted to trading on the stock exchange, and, as noted, having adopted the Borsa Italiana Code, the Gemina governance structure - based on the traditional organisational model - comprises the following bodies:

- Shareholders’ General Meeting;:

- Board of Directors that functions through its Chairman and Managing Director as Executive Directors, within the limits of the authority vested in them. The Board of Directors is supported by advisory committees for internal control and human resources and remuneration:

- Board of Statutory Auditors; - Independent Auditors.

Governance tools also include the Code of Ethics, approved by the Board of Directors in March 2004 and updated by the Board of Directors on August 5, 2010, as well as the Organisational, Management and Control Model, in accordance with Article 6 of Legislative Decree 231/2001, approved by the Board of Directors in March 2004 and most recently updated on Board on March 15, 2010. Both documents are available on the website www.gemina.it, along with the Internal Control system.

Gemina has identified its subsidiary ADR as the company with strategic significance.

This decision forms part of Gemina’s mission to focus its holding business on the airport infrastructure sector, and therefore to divest its portfolio equity investments that operate in other sectors.

Gemina exercises management and coordination activity pursuant to Article 2497 bis of the Italian Civil Code on the subsidiaries ADR, Fiumicino Energia and Leonardo Energia S.c. a r.l.

BOARD OF DIRECTORS

The Gemina Board of Directors is appointed based on lists presented by shareholders in compliance with the provisions of Article 11 of the Articles of Association.

The Ordinary Shareholders’ Meeting of April 28, 2010 appointed the Gemina Board of Directors that will remain in office until the shareholders’ meeting for approval of the financial statements as at December 31, 2012.

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The table below shows the composition of the Gemina Board of Directors as at December 31, 2010. The table also contains information on the list the Director belongs to, the personal and professional details of each Director (executive or non-executive, whether or not they meet the independence requirements pursuant to the Gemina Code and the Consolidated Finance Law), and the attendance of each Director at Board meetings, in percentage terms.

The list of other offices held by each Director is reported in the attachment A) of the Report on the Corporate Governance and the ownership structures; the curricula vitae of the Directors are available on the website www.gemina.it (corporate governance section).

NAME OFFICE IN OFFICE

SINCE LIST EXEC.NON-EXEC

INDEP. GEMINA

CODE

INDEP. CONS.

FIN. LAW

%

BOD

OTHER

OFFICE

S

FABRIZIO PALENZONA Chairman 04/28/2010 M X NA NO 67 11

GUIDO ANGIOLINI Managing Director 04/28/2010 M X NA YES 100 3

GIUSEPPE ANGIOLINI Director 04/28/2010 M X YES YES 100 7

VALERIO BELLAMOLI Director 04/28/2010 M X NO NO 83 4

GIUSEPPE BENCINI Director 04/28/2010 M X YES YES 89 1

STEFANO CAO Director 04/28/2010 M X NO NO 100 9

GIOVANNI FONTANA Director 04/28/2010 M X YES YES 89 -

BENG HUAT HO Director 04/28/2010 M X NO NO 100 1

SERGIO IASI Director 04/28/2010 m X YES YES 100 1 ALDO MILANESE Director 04/28/2010 M X YES YES 83 11

ALDO MINUCCI Director 04/28/2010 M X NO NO 78 12

ANDREA NOVARESE Director 04/28/2010 M X NO NO 67 11

CLEMENTE REBECCHINI Director 04/28/2010 M X NO NO 89 2

M = majority list m = minority list

The Director Alessandro Grimaldi resigned from office on February 26, 2010.

On March 15, 2010, the Board of Directors acknowledged the resignation of Director Alessandro Grimaldi and given the upcoming Shareholders’ Meeting on April 28, 2010, did not make any decisions on his replacement.

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With the shareholders’ meeting to approve the financial statements as at December 31, 2009, Directors Michele Mogavero and Eugenio Pinto completed their three-year term in office.

The Board of Directors deemed that the assessment on the maximum number of offices as Director or Auditor in other companies listed in regulated markets (also foreign markets), as well as in finance companies, banks, insurance companies or companies of significant size, which might be deemed as compatible with an efficient performance of the office as Director in the Company, is first of all the task of Shareholders while proposing candidates, and then of each single Director.

The Board of Directors nominated Fabrizio Palenzona as Chairman of the Board and Guido Angiolini as Managing Director of the Company in the Shareholders’ Meeting of April 28, 2010.

Pursuant to Art. 18 of the Articles of Association, the Board of Directors granted to the Chairman, Mr. Palenzona, signing authority and legal representation before third parties and in matters of the court.

In addition to calling the Board of Directors’ meeting, the Chairman sets the agenda, sends the Directors any necessary documentation suitably in advance to allow for effective participation in Board business and directs the meetings, ensuring adequate information flows between any Board committees and the Board itself and making certain that the decisions of the Company’s corporate boards are consistent.

The Chairman ensures that the Board of Directors and the Board of Statutory Auditors are duly informed of any significant events and, at least quarterly, reports on the overall performance of the Company and its subsidiaries.

The Chairman is also granted certain managing powers.

Consistent with programmes approved by corporate bodies, the Chairman supervises general initiatives for promoting the image of the Company and its subsidiaries and oversees the performance of corporate affairs and the proper implementation of corporate bodies’ resolutions.

Additionally, the Chairman is responsible for the Company’s and its subsidiaries’ institutional relationships with Italian and foreign authorities, agencies and bodies, including international bodies, and defines and manages the related institutional communication.

Mr. Palenzona is also Chairman of ADR’s Board of Directors.

The Board of Directors granted managing powers to the Managing Director, Mr. Guido Angiolini.

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In addition to signing authority and legal representation before third parties and in matters of the court, the Managing Director is vested with all ordinary management powers of the Company that are not reserved for the Board of Directors and Chairman, with free and several signature powers up to a limit of 1 million euro for each single transaction, for signing agreements or the undertaking of commitments of any kind whatsoever (including, but not limited to, loans or issue of guarantees).

The Managing Director is responsible for developing and defining proposals to the Board of Directors in relation to budgets, strategic, business and financial plans, including multi-year plans, and intervention and investment plans for Company and its subsidiaries, overseeing their execution.

As the Responsible Director in accordance with Principle no. 8 of the Gemina Code, the Managing Director must oversee the functioning of the internal control system, defining the implementation tools and methodologies based on guidelines provided by the Board of Directors.

The Managing Director must also oversee the Company’s performance, the performance of its equity investments, the Gemina organisational structure, as well as carry out the Company’s business communications, particularly in regards to relationships with supervisory bodies and the stock exchange management company.

Designated bodies report to the Board regarding the activities carried out during the year in exercise of the powers at the first suitable meeting and at least on a quarterly basis.

The Executive Directors for the Gemina Board of Directors are the Chairman of the Board and the Managing Director.

EXECUTIVE COMMITTEE

The Gemina Board of Directors appointed by the Shareholders' Meeting of April 28, 2010 did not establish an Executive Committee in order to simplify and facilitate Company governance.

COMMITTEES WITHIN THE BOARD

The Board of Directors meeting held on April 28, 2010 following the Shareholders' Meeting electing the new Board, appointed the “Human Resource and Remuneration Committee” consisting of five non-executive Directors, the majority of whom are independent pursuant to Article 3 of the Gemina Code: Giuseppe Bencini, named Chairman, Giuseppe Angiolini, Stefano Cao, Giovanni Fontana and Clemente Rebecchini.

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More than one Committee member has adequate knowledge and experience in financial matters.

The Committee has duties to investigate, advise and propose to the Board of Directors, of Gemina as well as its subsidiaries, on allocating the remuneration resolved by the shareholders’ meeting for the entire Board, the remuneration of Directors to cover specific roles and variable compensation of Group management as well as hiring, appointment and dismissal of executives.

In the same April 28, 2010 meeting, the Board of Directors appointed the Internal Control Committee, consisting of three non-executive Directors, the majority of whom are independent pursuant to Article 3 of the Gemina Code: Giuseppe Angiolini named Chairman, Valerio Bellamoli and Sergio Iasi.

More than one Internal Control Committee member has adequate knowledge and experience in accounting and financial matters.

The Committee advises and proposes to the Board of Directors on matters such as assisting the Board to carry out its responsibilities related to the internal control system as identified in Article 8.C.1 of the Borsa Italiana Code and the development and evaluation of the effectiveness and adequacy of subsidiaries’ internal control system.

The Committee also expresses its opinion to the Board on the proposal of the executive Director in charge of supervising the operations of the Internal Control System (the “Responsible Director”) and in relation to the appointment and dismissal of the Internal Control Officer (the “Officer”) and his/her remuneration.

Together with the Manager in charge of preparing corporate accounting documents and the independent auditors, the Committee evaluates the adequacy of the accounting principles used, their proper application and their consistency in preparing the financial statements and consolidated financial statements.

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Upon request of the Responsible Director, the Committee expresses opinions on specific aspects related to identifying the chief business risks as well as planning, implementing and managing the internal control system, reviews the Officer’s work plan as well as receives and evaluates the periodic reports the Officer prepares, reviews in advance Gemina’s annual internal audit plans as well as those of other Group companies, and finally, periodically reviews the status of audits scheduled in the Gemina annual plan and that of its subsidiaries, the results of said audits, any corrective measures taken and the implementation of these measures, and if necessary, provides comments and suggestions. The Committee receives and evaluates the half-year report of the Supervisory Body in accordance with Legislative Decree 231/2001, offers its opinion to the Board on adopting the procedure regulating approval and execution methodologies for transactions with related parties and performs additional functions assigned to the Committee as part of the aforementioned procedures, reports to the Board at least twice a year upon the approval of the financial statements and half-year report, regarding the activities it has undertaken and the adequacy of the internal control system and performs other tasks that the Board of Director of Gemina or the subsidiaries assign to it.

INTERNAL CONTROL SYSTEM

In the meeting of March 25, 2004, the Board of Directors passed a motion to provide the Company with an Internal Control System, which is an essential element of the corporate governance system of the Company and its subsidiaries and plays a fundamental role in identifying, preventing and managing significant risks of the Gemina Group and safeguarding corporate assets.

The Internal Control System decreases, but cannot entirely eliminate, the possibility of erroneous decisions, human error, fraudulent violation of the control systems and unanticipated events.

Therefore a good Internal Control System should provide reasonable, but not absolute, assurances that the Company is not hindered from reaching its corporate objectives or the ordered and legitimate running of its own affairs by circumstances that can be reasonably anticipated.

Qualifying elements of the Control System of the Gemina Group:

Tools safeguarding operating targets: - separation of roles in carrying out of operating activities;

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- organisational structure defined in accordance with top management and documented in official organization charts;

- system of delegations and authorisations which attribute to the top management powers that are in line with the responsibilities assigned;

- system of procedures for the correct carrying out of corporate

processes; - adequate tracking of the activities carried out.

- Code of Ethics, approved by the Board of Directors on August 5, 2010, which defines the fundamental principles and values of the corporate ethics, and the rules of behaviour with respect to these principles.

Tools safeguarding the compliance:

- Legislative Decree 231/2001: the Company has adopted an Organisational Model, and the Board of Directors appointed the Supervisory Body the task of ensuring its correct operation and for updating it.

- Law 262/2005 as amended (“Law on Savings”) with respect to accounting and financial disclosures: the Company adopted an administrative-financial governance model in accordance with the Law on Savings;

- data security: the Company has a system of organisational procedures and structures aimed at managing data security (for the purposes of the legislation on Privacy);

- other rules and regulations: the Managers of the various Departments monitor development and compliance with the laws and regulations of their areas of competence.

Reporting tools:

- accounting and financial statement disclosures: the Company has an accounting manual and administrative-accounting procedures which govern the processes of collecting, processing, representing and issuing corporate information;

- privileged information: the Company has adopted a procedure for the treatment of privileged information which, in line with the indications of the Code of Conduct in the matter of Internal Dealing, provides that the management and outgoing communication of documents and information concerning the Company and the Group takes place in compliance with the requirements for correctness, clarity and parity of access to the information.

The Board identified the Managing Director as the executive Director in charge of supervising the operations of the Internal Control System and appointed the Internal Control Officer.

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The Internal Control Officer is responsible for ensuring that internal and external regulations are observed and for implementing, through the internal audit department which he/she manages, activities aimed at identifying specific risk areas, and setting up monitoring and control activities for this purpose. In consideration of Gemina’s lean organisational structure, the manager of the internal audit department uses the services of an independent risk consulting company for some operating activities.

At the meeting held on March 25, 2004, the Board of Directors approved the Organisational Model which is based on the Confindustria and Assonime guidelines and Italian best practice, aiming to avoid the possibility of committing significant offences according to the decree and, as a consequence, the administrative responsibility of the Company.

The Organisational Model, updated over the years in accordance with new provisions of the law, comprises a general part that includes a description of the contents of Legislative Decree 231/2001 among other things, the objectives and functioning of the Organisational Model, the duties of the Supervisory Body, and the disciplinary rules, and seven separate “Special Parts” that cover the different types of illegal actions envisaged by Legislative Decree 231/2001.

Special Parts Nos. 6 and 7 were introduced by the Board of Directors on March 15, 2010, and the general part of the Organisational Model was also amended to introduce the categories of crimes added by Legislative Decree 231/2001 including computer crimes, organised crime, counterfeiting, false legal tender, stamp duty or instrument identification crimes, crimes against industry and commerce, crimes relating to copyright infringement, crimes regarding the failure to testify or bearing false testimony before court authorities.

The Board of Directors meeting of November 13, 2009 decided to transform the Supervisory Body from a monocratic body to a collegial body.

In the meeting of April 28, 2010, the Board of Directors confirmed the members of the Supervisory Body: Renato Colavolpe (Chairman), Giuseppe Angiolini and Luigi Manganelli, aligning their terms in office to that of the Board’s, expiring at the shareholders' meeting to approve the financial statements as at December 31, 2012.

The Supervisory Body is subject to regulations that govern its operation and identify the powers, duties and responsibilities assigned in particular, in compliance with the principles set out in the Organisational Model.

43


TRANSACTIONS WITH RELATED PARTIES

In order to ensure transparency and accuracy, both substantially and procedurally, for transactions with related parties carried out directly or through subsidiaries and to adopt the new provisions issued by Consob in Resolution no. 17221 of March 12, 2010, later modified with Resolution no. 17389 of June 23, 2010 (Consob Regulation), the Gemina Board of Directors adopted a procedure pursuant to Article 4 of the Consob Regulation (“Procedure”) in its meeting of November 12, 2010, after having received the favourable opinion of a specially established committee made up solely independent Directors.

The Procedure became effective January 1, 2011 and replaced the previous procedure adopted by the Board of Directors in the meeting of June 8, 2007 and updated in March 2009, pursuant to Article 2391 bis of the Italian Civil Code and in accordance with Article 9 of the Gemina Code.

The Procedure also regulates the approval processes for transactions carried out through subsidiaries and the disclosure that should be provided regarding transactions with related parties.

BOARD OF STATUTORY AUDITORS

The Board of Statutory Auditors is made of up three statutory auditors and three alternate auditors.

The Board of Statutory Auditors is appointed based on lists presented by shareholders in compliance with the provisions of Article 20 of the Articles of Association.

The Ordinary Shareholders’ Meeting of April 28, 2009 appointed the Gemina Board of Directors that will remain in office until the shareholders’ meeting for approval of the financial statements as at December 31, 2011.

The table below shows the composition of the Gemina Board of Statutory Auditors as at December 31, 2010. The table also contains information on the list the Auditor belongs to, the personal and professional details of each Auditor (whether or not they meet independence requirements pursuant to the Gemina Code), and the attendance of each Auditor at meetings of the Board of Statutory Auditors, in percentage terms.

The list of other offices held by each Auditor in listed companies is reported in attachment C) of the Report on the Corporate Governance and the ownership structures; the curricula vitae of the Auditors are available on the web-site www.gemina.it (corporate governance section).

44


NAME OFFICE

IN

OFFICE SINCE

LIST

INDEP. ACCORD.

TO

CODE

%

ATTEND

MEETINGS

OTHER

OFFICES

HELD IN

LISTED

COMPANIES

LUCA AURELIO GUARNA Chairman 04/28/2009 M YES 100 1

MAURIZIO DATTILO Statutory Auditor

04/28/2009 M YES 100 -

GIORGIO OLDOINI Statutory Auditor

04/28/2009 M YES 83 1


Pursuant to Article 8, subsection 7 of Legislative Decree 303/2006, the Gemina Shareholders’ Meeting held on May 7, 2007, elected to extend the appointment of Deloitte & Touche S.p.A. to audit the financial statements, including the consolidated financial statements, to audit on a limited basis the half-year report and to carry out the other activities provided by Article 155 of the TUF, for the period 2007-2012.

CHANGES THAT OCCURRED AFTER THE END OF THE PERIOD

The Special Meeting for Savings Shareholders held on January 26, 2011 appointed Mario Rosario Maglione as Common Representative of the savings shareholders for the 2011 to 2013 period, through the approval of the financial statements as at December 31, 2013, with a compensation of 36,000 euro for the entire term in office.

3.9 INTERCOMPANY RELATIONS

AND TRANSACTIONS WITH

RELATED PARTIES INTERCOMPANY RELATIONS

Relations between the Parent Company and its subsidiaries and associated companies are governed at market terms and conditions, taking account of services rendered.

Specifically, please note the following:

- loans to Fiumicino Energia pursuant to the contract stipulated on December 4, 2009 and on June 8, 2010, for a total amount of 4 million euro which, as at December 31, 2010 amounted to 2.9 million euro, disbursed upon request in the form of a giro account;

- agreement for the provision of services to Fiumicino Energia within the company’s business and administration activities;

- rent agreement for the equipped area with ADR;

- tax consolidation agreements with ADR, ADR Tel, ADR Engineering and ADR Sviluppo S.r.l., ADR Assistance, Fiumicino Energia and Leonardo Energia;

45


- contract for the provision of e-mail services by ADR Tel; - staff secondment agreement with ADR.

The bond issue of the associated company SITTI (sold in December 2010) on June 30, 2006 for 1.4 million euro, expired on June 30, 2010 and was repaid.

TRANSACTIONS WITH RELATED PARTIES

It is hereby stated that, pursuant to Art. 154 ter of Legislative Decree 58/2008, no transactions such as to have a significant impact on the economic and financial position of Gemina were carried out during 2010.

Transactions hereunder, which have already been described in the Report on operations as at 31 December 2009, did not undergo any change or development that would result in a significant impact on the economic and financial position of the Company.

As regards the Parent Company, reference should be made to:

- the cash loan agreement made on December 11, 2008, by and between Gemina, as borrower, Mediobanca Banca di Credito Finanziario S.p.A. (“Mediobanca”), as agent, mandated lead arranger, bookrunner and initial lender, Bayerische Hypo – und Vereinsbank AG, Milan Branch as mandated lead arranger and bookrunner and UniCredit MedioCredito Centrale (now UniCredit S.p.A.) (“UniCredit”) as initial lender for a maximum amount of 70 million euro, with a maximum duration of 3 years;

- hedging contracts with notional value of 31.6 million euro, relating to the above loan, entered into with Mediobanca and UniCredit;


- guarantees of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing S.p.A. (“UniCredit Leasing”);

- guarantees for a maximum of 2 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the loan agreement entered into with UniCredit;


46


- signing of insurance policies with Assicurazioni Generali S.p.A. (“Assicurazioni Generali”) and Fondiaria-SAI S.p.A.

With regard to ADR and its subsidiaries, the following is worth noting:

- the main insurance policies signed during the year on

airport activities with Assicurazioni Generali;

- transactions with Mediobanca as advisor, in addition to relations connected with the role played by Mediobanca within the outstanding loan agreements:

• Mandated Lead Arranger of Term Loan Facilities (158,288 thousand euro) and Revolving Facilities (100,000 euro) and taking part in the Lender’s pool;

• Security Agent, representing all creditors of ADR;

• Facility Agent representing banks as parties of the

Bank Facility Agreement;

• Administrative Agent and Account Bank for some ADR's current accounts, regulated by facility agreements, amongst which the following are indicated: Debt Service Account, Interim Proceeds Account, Recoveries Account e Loan Collateral Account.

Mediobanca is also the Account Bank of the fixed-term deposit called “Debt Service Reserve Account”.

- transactions carried out by ADR Group with UniCredit Group for the sub-concession of spaces, in addition to relations connected with the role played by Mediobanca within the outstanding loan agreements:

• Mandated Lead Arranger of Term Loan Facilities (158,288 thousand euro) and Revolving Facilities (100,000 euro) and taking part in the Lender’s pool;

• Account Bank for some ADR’s bank current accounts, regulated by facility agreements, and for the current accounts of some ADR Group companies.

- transactions with Autogrill S.p.A. and Alpha Retail Italia S.r.l. (subsidiary), regarding the sub-concession of stores, royalties, utilities, car parks and services;

- transactions with Pavimental S.p.A. for works on

runways and aircraft aprons;

- transactions with Changi Group (Changi Airport Planners and Engineers Pte. Ltd) regarding the support supplied for the preparation of the Masterplan on the Fiumicino airport.

With regard to Fiumicino Energia and Leonardo Energia, the following is highlighted:

47


- loan granted by UniCredit for the financial coverage necessary for the construction of civil engineering works of the co-generation power plant in Fiumicino, for an original aggregate amount of 2.0 million euro;

- finance lease for the construction of the co-generation power plant, entered with UniCredit Leasing, for a financed amount of 18.0 million euro;

- two insurance agreements regarding the co-generation power plant to cover civil liability risks for damages due to the operation of the Power Plant and the possible pollution risks of such operation, entered with Assicurazioni Generali.

3.10 INFORMATION ABOUT RISKS

AND UNCERTAINTIES SPECIFIC RISKS OF GEMINA ASSOCIATED WITH ITS ACTIVITY In view of the fact it is an investment holding company, the

results of the parent company Gemina are affected by the results of the investee companies and, in particular, by the dividends they distribute.

After the transfer of SITTI, occurred in the second half of December 2010, ADR is actually the only equity investment in Gemina’s portfolio, given the fact that Fiumicino Energia produces electric and thermal power for Fiumicino airport and that the co-generation power plant will be transferred free of charge to ADR in 2023.

The payment of dividends by ADR is conditioned not only by the results achieved, but also by the observance of the financial covenants provided for by the company’s loan agreements and assigned ratings.

Indeed, failure to fulfil covenants entails activating measures to secure financers, including the inability to pay dividends.

The trigger event status determined by the rating level, BB negative according to Standard & Poor’s and Bal stable, according to Moody’s, is a condition that hinders payment of dividends.

SPECIFIC RISKS OF ADR ASSOCIATED WITH ITS ACTIVITY ADR manages the Rome airport system, made up of the

Fiumicino and Ciampino airports, as a concession regulated by Agreement no. 2820 of June 26, 1974 signed with the Ministry of Transport, expiring on June 30, 2044.

The above-mentioned agreement sets a series of obligations the operator must accept and also clearly expresses the causes of cancellation or repeal of the concession, mostly attributable to cases of unfulfilment.

48


The ADR Group carries out its activity in a highly regulated

sector on the national, European Community and international level.

The extended situation of uncertainty relating to the

complexity of the procedure for achieving a satisfactory regulatory and tariff system, is an important risk factor that affects the Group’s future economic and financial balance.

The results of the ADR Group are also strongly influenced

by the air traffic trend at the Fiumicino and Ciampino airports, which is in turn affected by:

- the economic trend; - flight operations of the single airline companies; - economic-financial conditions of each single airline. This

risk is increased by the condition of Fiumicino airport as hub of the reference carrier which is undergoing a delicate reorganization phase;

- alliances between carriers; - competition on some routes of alternative means of

transport (e.g. High Speed railway Rome-Milan); - wars, acts of terrorism and aircraft accidents that

negatively influence the propensity to travel, whether for business or for pleasure.

In any case, it should be pointed out that thanks to the

attractiveness of Italy and of Rome in particular, the Fiumicino airport has shown an enormous recovery capability following significant negative events (such as the war in Iraq, the Twin Towers attack, bird flu epidemic, etc.).

CREDIT RISK Credit risk is the risk that a customer or a counterpart of a

financial instrument causes a financial loss by not fulfilling an obligation.

The maximum theoretical exposure to the credit risk for the Group as at December 31, 2010 is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments.

The greatest exposure to credit risk is that of the ADR Group for trade receivables due from customers.

This risk is also functional to the exposure to credit risk of customers.

The commercial policies that the ADR Group has implemented aim at controlling investments according to the following guidelines:

49


- requests for payments in cash for commercial

transactions carried out with end customers (sales in directly-managed shops, multi-storey and long-term car parks, first aid, etc.) and with occasional counterparts (for example, for baggage tagging, porterage, managing access to taxi service, etc.);

- requests for payment in cash in advance from occasional carriers or those without suitable creditworthiness or collateral guarantees;


For a quantitative analysis of credit risk and of the policies implemented to manage it, please refer to note 40 of the Consolidated Financial Statements – Explanatory Notes.

LIQUIDITY RISK Liquidity risk may occur when it is impossible to obtain, at

fair conditions, the financial resources necessary to the Groups business.


The financial structure of the Group is distinguished by a significant incidence of the financial leverage component.

As a consequence, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, in perspective, by the need to repay debt tranches coming due (the first of which will come due end of 2011 and beginning of 2012).

The current medium/long-term loan agreements of both the parent company Gemina and of ADR foresee not only ADR being subject to rating, but also numerous series of control measures to guarantee priority allocation of the cash generated for the debt service.


The current rating assigned to ADR prevents it from taking out additional indebtedness without specific authorisation from its financial creditors. Therefore, any contingent additional need for financial resources deriving from the management of working capital or from investments can be covered by a significant amount of cash, in addition to a revolving facility of 100 million euro (currently not used) specifically aimed at supporting this type of need.

50


The revolving facility is currently useable in observance of

the conditions set forth in the “Revolving and Term Loan Facility Agreement” and given the fact that the waiver of restraints resulting from the occurrence of the trigger event, obtained on March 16, 2010, is still in force.

The primary allocation of cash generated by debt service, the above-mentioned restriction control measures for the utilisation of finance resources and the extended negotiations for the signature of the planning agreement resulted in a review of investment plans to ensure the required facility availability to cover maturity terms at the beginning of 2012.

ADR also started negotiations to renew the revolving facility due in February 2012.

With special reference to Gemina, this company has the necessary cash available to cover the needs of current operations, and started negotiations to renovate the loan of 42.1 million euro with a maturity term in December 2011.

Gemina’s treasury is managed in coordination with those of Fiumicino Energia and Leonardo Energia.

In ADR, the centralised treasury in place with several subsidiaries, regulated at market terms, permits the optimisation of the management of financial resources and facilitates the settlement of intercompany commercial relations.

See also note 40 of the Consolidated Financial Statements – Explanatory Notes.

INTEREST RATE RISK The Group uses outside financial resources in the form of

debt. Fluctuations in the market interest rates have an impact on

the cost of the various types of loans, affecting the extent of financial expenses.

To hedge these risks, the Group uses derivative instruments, with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuations on the economic result.

In particular, Gemina uses interest rate collars to manage its exposure to unfavourable changes in the market interest rate.

For a quantitative analysis of interest rate risk and of the policies implemented to manage it, please refer to note 40 of the Consolidated Financial Statements – Explanatory Notes.

EXCHANGE RISK The Group uses foreign currency hedging derivatives in order

to mitigate any future increases in the outgoing cash flow attributable to unfavourable changes in the exchange rate.

51


As far as commercial transactions are concerned, the Group

bears a negligible exposure to the risk deriving from the fluctuation of exchange rates as the transactions in non-EU currencies are attributable to some supplies of goods and services of an insignificant amount.

The financial indebtedness, expressed in currency other than the Euro (Tranche A4 in Pounds Sterling), was covered by a currency swap in Euro.

For a quantitative analysis of exchange risk, please refer to

note 40 of the Consolidated Financial Statements – Explanatory Notes.

RISKS ASSOCIATED WITH CURRENT LOAN AGREEMENTS GEMINA In December 2008 Gemina contracted a 70 million euro loan

with Mediobanca and UniCredit. 50 million euro of this loan was aimed at the repayment of the residual amount of the Bridge Loan, contracted in 2007, 15 million euro to the payment of interest due and 5 million euro to cover current expenses of the company (“Loan”).

The agreement includes the right of withdrawal for the financers in the event that ADR is given a credit rating lower than BB-/Ba3 by Standard & Poor’s and Moody’s, or at least one of the two agencies. Currently, ADR’s ratings are BB with negative outlook for Standard & Poor’s and Ba1 with “stable” outlook for Moody’s.

A change in the interest rate is planned in the event of the downgrading of ADR.

Gemina is committed to allocating the income from the disposal of equity investments, the collection of dividends and other payments to the repayment of debt.

The loan is backed by a senior pledge on ordinary shares of ADR representing at least 35% of the share capital, and will be adjusted according to a formula defined in the contractual documents, linked mainly to the performance of the Gemina share.

As at December 31, 2010, just as at February 28, 2011, ADR shares used as guarantee numbered 21,808,430, equal to 3% of share capital.

At year end, the loan amounted to 42.1 million euro and shall be repaid by December 11, 2011.

In order to have the resources necessary to repayment, Gemina entailed negotiations with some credit institutions in order to have the necessary resources available in the event self-generated resources be lacking.

52


Gemina has undertaken the following commitments towards

the UniCredit Group, in relation to the financial indebtedness transferred by Sistemi di Energia S.p.A. to Fiumicino Energia as a result of the spin-off:

- waiving the distribution of dividends for the Fiumicino Energia 2009 and 2010 financial statements;

- maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in the Fiumicino Energia financial statements;

- issuing guarantees for 6 million euro and a pledge on 86.12% share capital of Fiumicino Energia as guarantee of the loans.

AEROPORTI DI ROMA Covenants The contractual structure of ADR’s bank loans and of the

bonds issued by Romulus Finance S.r.l. (“Romulus”), guaranteed by a monoline insurance policy, includes a series of specific covenants with the aim of:

- safeguarding the preservation of adequate rating levels; - preventing the rights granted to each creditor from being

determined in ways other than according to the pre-established rules.

These contractual clauses are fully described in note 32 of the Consolidated Financial Statements - Explanatory Notes regarding “Guarantees and major covenants on payables”.

In particular, it should be stressed that the loan agreements provide for a series of financial control ratios (calculated on a historic and perspective basis) that measure: (i) the ratio between cash flow available and debt service (DSCR – Debt Service Coverage Ratio), (ii) the ratio between future discounted cash flows and net indebtedness (CLCR – Concession Life Cover Ratio), in addition to (iii) ratio between net indebtedness and EBITDA (Leverage Ratio).

These ratios are checked twice a year, on two of the four dates serviceable for making payments regarding the debt service (application dates) – March 20 and September 20 – by applying the calculation formulas to the figures of reference of the financial statements as at December 31 and of the half-year report as at June 30.

If the aforementioned ratios surpass certain levels, it may

result in the distribution of dividends (if surplus cash is available) and recourse to further indebtedness at higher levels; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default.

53


With reference to the ratio more sensitive to the short-term

changes of the generated cash flows and amount of debt service to be met in each control period, a table summarising various threshold values of the DSCR and relevant contractual consequences established is provided below.

LEVEL CONDITION

>= 1.7 ADDITIONAL DEBT


<1.25 TRIGGER EVENT

<1.1 DEFAULT

The financial ratios, calculated based on the financial

statements as at December 31, 2010, show a DSCR higher than 2 and a leverage ratio around 5, certifying values at better levels than the minimum requirements to maintain ordinary operating conditions of the company. However, these conditions are restricted by the trigger event condition occurred following the first Standard & Poor’s downgrading in November 2007.

The loan agreements also provide for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics.

Rating The loan agreements are subject to rating by Standard &

Poor's and Moody's. The cost of debt and of the insurance guarantee of the

monoline AMBAC are, effectively, tied to the rating assigned to ADR by the two agencies.

Moreover, if the rating goes below the minimum thresholds, which are contractually defined, this causes the financial creditors to set up tighter cash flow control, implemented by introducing additional obligations affecting the Company’s managerial flexibility (known as “trigger events”).

In relation to the assigned rating, ADR is still subject to the trigger event and cash sweep restrictive regime previously implemented following the downgrading of the rating assigned by Standard & Poor’s on November 30, 2007 (from BBB stable to BBB- stable) as described in more detail in note 32 of the Consolidated Financial Statements - Explanatory Notes.

54


As regards the substitution of Ambac Financial Services

(“AFS”), as the counterpart to Romulus in the CrossCurrency Swap, the procedure, initiated at end 2009, was successfully completed. This procedure aimed at identifying a Financial Institution which could substitute AFS as the counterpart to Romulus in the Cross Currency Swap related to Tranche A4 of the bonds denominated in GBP.

This substitution was required due to the down grading of the Ambac Group made by rating agencies.

At the end of the second phase of the process, which was concluded on February 8, 2010, UniCredit submitted the most cost-effective bid. On February 12, 2010 AFS formally notified ADR that it accepted UniCredit’s economic bid for substitution.

The agreements on the substitution of AFS with UniCredit, the new counterpart in the swap, sided also by Mediobanca, were signed on March 18, 2010, at the best market terms, with a share of risk linked to the transaction of 75% and 25%, respectively.

For ADR and Romulus the substitution is guaranteed at the same terms and conditions as the previous contractual framework.

On January 12, Moody’s downgraded to Ba1 level, with

“stable” outlook. According to the agency, the review of the level reflects the

greater pressure resulting from the fact that primary repayment terms of the existing indebtedness are getting closer, also in light of the fact that a new tariff agreement, which is essential to define the company's future development, is still missing.

3.11 EQUITY, ECONOMIC AND

FINANCIAL HIGHLIGHTS

FOR THE GROUP

3.11.1 ECONOMIC POSITION

(in millions of euro) 2010 2009 (*) CHANGE

REVENUES 597.6 560.1 37.5INFRASTRUCTURE PURSUANT TO IFRIC

12 55.5 30.1 25.4

TOTAL 653.1 590.2 62.9CONSUMPTION AND OTHER OPERATING

COSTS (234.0) (213.6) (20.4)


COSTS OF INFRASTRUCTURE (51.2) (26.2) (25.0)

ADDED VALUE 367.9 350.4 17.5

55



STAFF COSTS (122.0) (142.0) 20.0

EBITDA 245.9 208.4 37.5AMORTISATION, DEPRECIATION AND

PROVISIONS (178.1) (147.4) (30.7)

EBIT 67.8 61.0 6.8

FINANCIAL INCOME (EXPENSES) (87.5) (86.2) (1.3)INCOME(CHARGES) FROM EQUITY

INVESTMENTS (1.8) (1.8) -PROFIT OF CURRENT ASSETS BEFORE

TAXATION (21.5) (27.0) 5.5

INCOME TAXES (16.4) (17.7) 1.3PROFIT (LOSS) ATTRIBUTABLE TO

MINORITY SHAREHOLDERS (0.7) (1.0) (0.3)PROFIT (LOSS) ATTRIBUTABLE TO THE

GROUP (37.2) (43.7) 6.5

NET EARNINGS (LOSSES) PER SHARE:

FROM RECURRING ACTIVITIES (0.025) (0.030) 0.005FROM RECURRING AND DISCONTINUED

ACTIVITIES (0.025) (0.030) 0.005 (*) Adjusted to take into account the effects of application of IFRIC 12. Revenues, amounting to 597.6 million euro, up by 6.7%

compared to 2009, are almost entirely due to ADR Group’s activities.

Increase in revenues and cost containment increase value added to 367.9 million euro compared to 350.4 of 2009.

Consumption and operating costs– The cost of assets

destined to direct sales amounted to 41.6 million euro, compared to 35.9 million euro in 2009.

The cost of methane for the co-generation power plant amounted to 10.8 million euro, compared to 8.3 million euro in 2009.

The production of electric energy from co-generation, destined to cover power needs of the Fiumicino airport, amounted to GWh 146.3, up by 28.3% compared to the previous year:

(GWh) 12/31/2010

ENERGY PRODUCED 146.3

ENERGY PURCHASED 46.0

ENERGY AVAILABLE 192.3

FOR:

ADR 172.0

MARKET 20.3 The production of thermal energy is also increasing from

46.0 Gcal in 2009 to 65.6 Gcal this year.

56


The documents aimed at acknowledging the right of “green

certificates” until 2016 are being prepared with GSE, RINA and EMAS.

For the year 2010, however, the non-fulfilment of energy and thermal parameters set forth by regulations in force, does not allow for the access to green certificates.

The allocation connected with the dispute with the Customs

Office, amounting to 14.0 million euro and made in the first half of 2010, was supplemented following the unfavourable outcome of ADR's appeal lodged with the Regional Tax Commission of Rome.

Receivables from airport operators, totalling 8.8 million euro,

were written off due to their non recoverability. In 2009, staff costs included charges allocated for the

restructuring plan and amounting to 20.3 million euro. Amortisation, depreciation and provisions, in 2010,

included supplementary allocations to the renovation provisions, pursuant to IFRIC 12:

2010 2009

AMORTISATION/DEPRECIATION 108.2 106.8

ALLOCATION TO RENOVATION PROVISION PURSUANT TO IFRIC 12 69.9 40.6

TOTAL 178.1 147.4 The Group closed 2010 with a loss of 37.2 million euro, after

taxes equal to 16.4 million euro and financial expenses totalling 87.5 million euro.


(in millions of euro) 12/31/2010 12/31/2009 (*) CHANGE

FIXED ASSETS 3,219.2 3,311.8 (92.6)

NET WORKING CAPITAL 54.9 76.2 (21.3)RISK, CHARGES AND EMPLOYEE

SEVERANCE INDEMNITIES (330.3) (322.0) (8.3)

(in millions of euro) 12/31/2010 12/31/2009 (*) CHANGE


FINANCED BY:


NET FINANCIAL INDEBTEDNESS 1,338.9 1,425.1 (86.2)

TOTAL 2,943.8 3,066.0 (122.2) (*) Adjusted to take into account the effects of application of IFRIC 12.

57


Net fixed assets, which include system renovations,

decreases due to amortisation, depreciations and provisions for the period longer than investments.

The 8.3 million euro increase in provisions for risks and

charges is mainly due to a further allocation of 14 million euro, provided for in connection with the dispute with the Customs Office.

The decrease in net working capital of 21.3 million euro

does not included receipts by Alitalia in Extraordinary Administration (“A.S”), totalling 7.8 million euro.

Shareholders’ equity substantially decreased due to the loss

for the year. 3.11.3 NET FINANCIAL POSITION



OTHER RECEIVABLES - FINANCIAL ASSETS 59.4 56.9

FINANCIAL DERIVATIVES - 0.5

B. FINANCIAL ASSETS 59.4 57.4


D. TOTAL NON-CURRENT FINANCIAL ASSETS - -


F. FINANCIAL DERIVATIVES (146.6) (157.7) G. TOTAL CURRENT FINANCIAL LIABILITIES

(E) + (F) (214.3) (186.5)


I. OUTSTANDING BONDS (1,107.6) (1,097.5)L. TOTAL NON-CURRENT FINANCIAL LIABILITIES

(H) + (I) (1,385.7) (1,445.3)

(in millions of euro) 12/31/2010 12/31/2009NET FINANCIAL INDEBTEDNESS (C) + (D) + (G) +

(L) (1,338.9) (1,425.1)

OF WHICH:

CURRENT NET FINANCIAL ASSETS (C) +(G) 46.8 20.2 The following contribute to forming the indebtedness:

58


12/31/2010 12/31/2009

ADR 1,291.5 1,371.8

FIUMICINO ENERGIA 18.9 21.7

GEMINA 28.5 31.6

1,338.9 1,425.1 Cash and cash equivalents of the Group, equal to 201.7

million euro, include the balance of the current account named “loan collateral” on which, at the application date of September 2010, 35.1 million euro were deposited, restricted to the repayment of Romulus’ tranche A, upon maturity.

3.11.4 RECONCILIATION BETWEEN

THE RECLASSIFIED STATEMENTS AND THE FINANCIAL STATEMENTS

The items of the Income Statement and of the Balance Sheet can be deduced from the financial statements, considering the following:

Fixed assets – Comprises: - “Non-current assets”, with the exclusion of “Invested

receivables”, “Deferred tax assets”, “Other non-current assets”, “Other non-current financial assets”, “System renovation provisions”.

Net working capital - Comprises: - “Current assets”, with the exclusion of “Financial

instruments - derivatives”, “Other current financial assets” and “Cash and cash equivalents”;

- the following items under “Non-current assets”: “Invested receivables”, “Deferred tax assets” and “Other non-current assets”;

- the following items under “Current liabilities”: “Trade payables”, “Current tax liabilities” and “Other current liabilities”;

- the following items under “Non-current liabilities”: “Deferred tax liabilities”;

- “Assets held for sale”; - “Liabilities held for sale”.

59


3.12 GEMINA S.P.A. 3.12.1 ECONOMIC POSITION

(in millions of euro) 2010 2009 CHANGE

INCOME (CHARGES) ON EQUITY

INVESTMENTS (1.3) (3.7) 2.4

NET FINANCIAL INCOME (EXPENSE) (3.0) (3.2) 0.2

REVENUES 1.0 0.9 0.1

OPERATING COSTS (5.4) (4.6) (0.8)

PROVISIONS (2.2) (3.1) 0.9

PRE-TAX PROFIT (LOSS) (10.9) (13.7) 2.8

INCOME TAXES 2.2 (0.4) 2.6

PROFIT (LOSS) FOR THE PERIOD (8.7) (14.1) 5.4 Some elements, such as staff selection, certification for

IFRIC 12 and other elements, increased the operating costs. Allocations comprise: - use of the provision for risks, allocated in relation to the

transfer of the equity investment in Elilario Italia S.p.A. (“Elilario”), due to the collection of 4 million euro due from the purchaser INAER;

- further allocation, equal to 3.6 million euro, to the provision by virtue of the ADR/Customs Office dispute, to adjust the amount for the surety granted to ADR by Gemina;

- allocations for other minor risks, equal to 0.4 million euro;

- a 2.2 million euro allocation connected with alleged future losses of the subsidiary Pentar S.p.A. (“Pentar”).

The better net financial position and the decrease in interest rates resulted in decreased financial expenses.


INTEREST INCOME 0.4 0.8 (0.4)

INTEREST EXPENSE (2.2) (3.4) 1.2

OTHER FINANCIAL EXPENSE (0.4) (0.6) 0.2

NET FINANCIAL INCOME (EXPENSES) (2.2) (3.2) 1.0

60



(in millions of euro) 12/31/2010 12/31/2009 CHANGE

FIXED ASSETS 1,845.5 1,856.5 (11.0)

NET WORKING CAPITAL 7.5 5.6 1.9RISK, CHARGES AND EMPLOYEE

SEVERANCE INDEMNITIES (13.5) (11.1) (2.4)


FINANCED BY:


NET FINANCIAL INDEBTEDNESS 28.5 31.6 (3.1)

TOTAL 1,839.5 1,851.0 (11.5) FIXED ASSETS


ADR 1,835.6 1,835.5 0.1

FIUMICINO ENERGIA 7.7 7.7 -

SITTI - 5.0 (5.0)

PENTAR 2.2 3.6 (1.4)

TOTAL EQUITY INVESTMENTS 1,845.5 1,851.8 (6.3)

INVESTED RECEIVABLES - 4.6 (4.6)OTHER TANG. AND INTANG. FIXED

ASSETS - 0.1 (0.1)

TOTAL 1,845.5 1,856.5 (11.0) The amount due from the INAER Group, purchaser of the

company’s equity investment in Elilario in 2008, was collected in advance in July 2010.

The original, interest bearing, receivable of 4 million euro was paid by INAER in advance, in application of a contract clause in which the receivable had to be immediately paid in the event the INAER Group was entirely refinanced.

The amount paid to Gemina was equal to 4.8 million euro, including capitalised interests (4.6 million euro as at December 31, 2009).

During the year, no equity investments were made, except for the purchase of 910 ADR shares sold by small shareholders and the subscription, for the unopted portion, of the share capital of Fiumicino Energia, which increased Gemina’s equity investment from 86.12% to 87.14%.

61


The equity investment in SITTI was transferred to IMI Fondi

Chiusi SGR in December 2010, at a spot price in line with book value and according to the disposal plan of minor equity investments decided by the Company.

NET WORKING CAPITAL


TRADE RECEIVABLES 0.6 0.4 0.2RECEIVABLES FROM TAX

CONSOLIDATION 11.4 13.4 (2)

PREPAID TAXES 1.0 2.0 (1)

TRADE PAYABLES (0.7) (0.4) (0.3)

OTHER CURRENT ASSETS/LIABILITIES (4.8) (9.8) 5

TOTAL 7.5 5.6 1.9 RISK, CHARGES AND EMPLOYEE SEVERANCE INDEMNITIES This item includes the residual of the provision for risks

allocated against the guarantees granted to the purchaser of the equity investment in Elilario, the employee severance indemnities accrued by employees, the provisions allocated for the guarantees granted to ADR in 2002 in the event of a negative outcome for the subsidiary company of the litigation with the Customs Agency that, with the provisions for the period, amounted to 6.7 million euro, the provision for alleged 2.2 million euro losses of the subsidiary Pentar and other minor provisions.

3.12.3 NET FINANCIAL POSITION










62



H. FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE - (47.0)

I. TOTAL NON-CURRENT FINANCIAL LIABILITIES (H) - (47.0)

NET FINANCIAL INDEBTEDNESS (C)+(D)+(G)+(I) (28.5) (31.6)

OF WHICH:

CURRENT NET FINANCIAL ASSETS (LIABILITIES) (C) +(G) (28.5) 15.4 Using the cash deriving from the collection of receivables

from INAER, it was possible to cover current expenses also in the absence of income from investee companies.

The amount collected from the transfer of equity investments in SITTI allowed for the partial advanced repayment of the Loan, with following improvement of the net financial indebtedness.

3.13 MAJOR SUBSEQUENT EVENTS On January 12, 2011, Moody’s agency downgraded ADR

from Baa3, “negative” outlook, to Ba1, “stable” outlook, mainly due to the financial risk connected with the near repayment maturity terms of the indebtedness, given the fact that times and outcome of tariff adjustments are still uncertain.

On January 26, 2011, Mr. Mario Rosario Maglione was

appointed representative of the holders of savings shares, for the 2011-2013 three-year period.

With a letter dated February 16, 2011, the Energy Services

Operator (GSE), informed that no Green Certificates will be granted to Leonardo Energia as this company has not obtained the EMAS enrolment within two years from its entry into operation.

The company deems this decision objectionable and is seeking its cancellation.

In the event this decision be confirmed, the value, confirmed by the impairment test, of the equity investment in Fiumicino Energia, owner of the co-generation power plant rented to Leonardo Energia, will have to be adjusted in Gemina’s financial statements.

The write-down will be approximately of 2.5 million euro.

63


3.14 BUSINESS OUTLOOK Next year management will be mainly focused on generating

finance resources destined to repay loans that will be due. Special attention is given to the evolution of relations with

the reference carrier, representing around 24% of turnover. A better integration amongst Group companies will be

implemented by moving Gemina’s headquarters to Rome. A new tariff regime, or the tariff advance of 3 euro/passenger

are not expected. The airport traffic volumes are expected to increase, although

lower than those of the previous year. In the January-February 2011 period, 5,384,958 passengers

transited by ADR airports, up by 4.5% compared to the previous year.

DOMESTIC INTERNATIONAL TOTAL

PASSENGERS 1,906,168 3,478,790 5,384,958

% CHANGE 2.2% 5.9% 4.5%

MOVEMENTS 22,794 33,089 55,883

% CHANGE (6.2%) 4.3% (0.3%)

TONNAGE 1,448,565 2,894,623 4,343,188

% CHANGE (5.0%) 3.4% 0.4%

Cargo (tonnes) 1,109 22,358 23,467

% CHANGE 32.3% (3.3%) (2.2%)

64


3.15 EQUITY INVESTMENTS HELD

BY DIRECTORS, STATUTORY

AUDITORS AND EXECUTIVES

WITH STRATEGIC

RESPONSIBILITIES

In observance of what is indicated under Art. 79 of the

Regulations approved by Consob with resolution no. 11971 of May 14, 1999 and subsequent amendments, information about the equity investments held by the Directors, the Statutory Auditors and the Executives who have strategic responsibility in the issuer and in its subsidiary companies is provided:

NAME AND SURNAME

INVESTEE COMPANY

NO. OF

SHARES

OWNED AT

YEAR-END

2009

NO. OF

SHARES

PURCHASED

NO. OF

SHARES

SOLD

NO. OF

SHARES

OWNED AT

YEAR-END

2010 OR AT

END OF

OFFICE

GUIDO ANGIOLINI - - - -

GIUSEPPE ANGIOLINI - - - -

GIUSEPPE BENCINI - - - -

STEFANO CAO

GIOVANNI FONTANA - - - -

ALESSANDRO GRIMALDI - - - -

ALDO MINUCCI - - - -

MICHELE MOGAVERO - - - -

ANDREA NOVARESE - - - -

EUGENIO PINTO - - - -

CLEMENTE REBECCHINI - - - -

PAOLO ROVERATO - - - -

LUCA AURELIO GUARNA

MAURIZIO DATTILO - - - -

GIORGIO OLDOINI

GUIDO ZANIN - - - -

VITTORIO AMADIO - - - -EXECUTIVES WITH

STRATEGIC

RESPONSIBILITY - - - -

65

4 PROPOSALS TO THE SHAREHOLDERS’ MEETING

PROPOSED RESOLUTION Gemina S.p.A. closed the year with a 8,686,388 euro loss. You are therefore invited to adopt the following RESOLUTION The Shareholders' Meeting: - having heard the Report of the Board of Directors on

operations, - taking note of the Report of the Board of Statutory

Auditors, - taking note of the Report of the Independent Auditors, - having read and examined the financial statements as at

December 31, 2010 which report a loss of 8,686,388 euro, RESOLVES to approve: - the Report of the Board of Directors on operations; - the Income Statement, the Balance Sheet and the related

Explanatory Notes to the financial statements for the year ended December 31, 2010, which report a loss of 8,686,388 euro, as presented by the Board of Directors, both as a whole and with regards to the individual entries, together with the allocations and provisions proposed therein;

to carry forward the loss as at December 31, 2010, equal to

8,686,388 euro. Milan, March 10, 2011 for the Board of Directors The Chairman (Fabrizio Palenzona)

GEMINA GROUP

66

5. CONSOLIDATED FINANCIAL

STATEMENTS

GEMINA GROUP

67


CONSOLIDATED INCOME STATEMENT


NOTES 2010

OF WHICH

DUE TO

RELATED

PARTIES

2009 (*)

OF WHICH

DUE TO

RELATED

PARTIES

REVENUES 1 597,543 10,839 560,086 10,117INFRASTRUCTURE PURSUANT TO IFRIC 12 55,516 30,110 CONSUMPTION OF RAW MATERIALS AND

CONSUMABLES 2 (72,094) (68,135) STAFF COSTS 3 (121,984) (24) (141,963) COSTS OF INFRASTRUCTURE (51,201) (349) (26,189) (1,056)

OTHER OPERATING COSTS 4 (161,847) (3,659) (145,483) (3,465)AMORTISATION, DEPRECIATION AND WRITE-DOWNS OF FIXED ASSETS 5 (108,179) (106,821) ALLOCATIONS TO RENOVATION PROVISIONS 6 (69,971) (40,571)

EBIT 67,783 61,034

FINANCIAL INCOME (EXPENSE) FINANCIAL INCOME: 7

INTEREST INCOME 1,577 904 2,220 1,201

INCOME ON DERIVATIVES 7,830 7,523 34,070 1,716

EXCHANGE GAINS 51 49

OTHER INCOME 246 1,864 FINANCIAL EXPENSES: 8

INTEREST EXPENSE (66,350) (3,012) (72,596) (3,577)

EXPENSES ON DERIVATIVES (11,229) (3,357) (26,086) (7,644)

EXCHANGE LOSSES (7,560) (16,399)

OTHER EXPENSES (12,084) (376) (9,322) (520)

TOTAL FINANCIAL INCOME (EXPENSES) (87,519) 1,682 (86,200) (8,824)INCOME (CHARGES) ON EQUITY

INVESTMENTS 9 (1,816) (1,842) PRE-TAX PROFIT (LOSS) ON CONTINUING

OPERATIONS (21,552) (27,008)

INCOME TAXES 10 (16,383) (17,675) PROFIT (LOSS) ON CONTINUING

OPERATIONS AFTER TAX (37,935) (44,683) NET INCOME FROM DISCONTINUED

ACTIVITIES - - PROFIT (LOSS) FOR THE YEAR (37,935) (44,683) PROFIT (LOSS) ATTRIBUTABLE TO MINORITY

SHAREHOLDERS (668) (1,016) PROFIT (LOSS) FOR THE PERIOD

ATTRIBUTABLE TO THE GROUP (37,267) (43,667) NET EARNINGS PER SHARE (IN EURO) FROM RECURRING ACTIVITIES (0.025) (0.030) FROM RECURRING AND DISCONTINUED

ACTIVITIES (0.025) (0.030) (*) The amounts are restated to take account of the application of IFRIC 12. The basic net earnings per share, which coincides with the diluted net earnings per share, is calculated on the total shares in issue in the respective periods, equal to 1,472,960,320 as at December 31, 2010 and as at December 31, 2009. All Gemina S.p.A. shares are subscribed.

GEMINA GROUP

68


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in thousands of euro) 2010 2009 (*)

CONSOLIDATED PROFIT (LOSS) FOR THE YEAR (37,935) (44,683)PROFIT (LOSS) ON DERIVATIVE INSTRUMENTS (CASH FLOW

HEDGES) 2,690 (13,353)

TAX EFFECT (741) 3,672

TOTAL PROFIT (LOSS) (*) (35,986) (54,364)

TOTAL PROFIT (LOSS) ATTRIBUTABLE TO:

GROUP (35,390) (52,959)

MINORITY SHAREHOLDERS (596) (1,405)

(*) The amounts are restated to take account of the application of IFRIC 12.

GEMINA GROUP

69


ASSETS


NOTES 12/31/2010 OF WHICH

DUE TO

RELATED

PARTIES

12/31/2009 (*)

OF WHICH

DUE TO

RELATED

PARTIES

NON-CURRENT ASSETS

AIRPORT MANAGEMENT CONCESSION 2,916,273 3,003,280 AIRPORT MANAGEMENT CONCESSION - INVESTMENTS IN

INFRASTRUCTURE IN CONCESSION 473,842 439,143

OTHER INTANGIBLE FIXED ASSETS 6,400 6,976

TOTAL INTANGIBLE FIXED ASSETS 11 3,396,515 3,449,399

PLANT AND MACHINERY 10,488 10,105 FIXTURES AND FITTINGS, TOOLS AND OTHER

EQUIPMENT 1,561 1,169

CONSTRUCTION IN PROGRESS AND ADVANCES - 1,716

OTHER TANGIBLE FIXED ASSETS 3,117 3,920



VALUED AT NET EQUITY 13 2,232 8,649

INVESTED RECEIVABLES 14 - 4,591


DEFERRED TAX ASSETS 16 101,616 89,229

OTHER NON-CURRENT ASSETS 17 16,947 9,486

OTHER NON-CURRENT FINANCIAL ASSETS 18 - 1,400 1,400

TOTAL NON-CURRENT ASSETS 3,534,726 3,582,420 1,400

CURRENT ASSETS

INVENTORIES 19 10,182 10,164

CONTRACT WORK IN PROGRESS 20 296 916

TRADE RECEIVABLES 21 189,610 655 213,992 1,317

OTHER RECEIVABLES 22 9,297 6,926 33

FINANCIAL INSTRUMENTS – DERIVATIVES 23 - 534

OTHER CURRENT FINANCIAL ASSETS 24 59,446 55,662 55,497 51,520

CASH AND CASH EQUIVALENTS 25 201,661 142,420 149,272 88,654



TOTAL ASSETS 4,005,218 4,019,721 (*) The amounts are restated to take account of the application of IFRIC 12; the restatement and information required by IAS 1 as at January 1, 2009 are recorded in the half-year report as at June 30, 2010, to which reference is made.

GEMINA GROUP

70




NOTES 12/31/2010 OF WHICH

DUE TO

RELATED

PARTIES

12/31/2009 (*)

OF WHICH

DUE TO

RELATED

PARTIES


SHARE CAPITAL 1,472,960 1,472,960

CAPITAL RESERVES (SHARE PREMIUM RESERVE) 199,707 200,057

HEDGING AND TRANSLATION RESERVE (48,427) (50,304)

OTHER RESERVES 83,106 82,756

PROFIT (LOSS) FROM PREVIOUS YEARS (98,055) (54,352)


GROUP SHAREHOLDERS’ EQUITY 1,572,024 1,607,450 MINORITY SHAREHOLDERS IN CAPITAL AND

RESERVES 32,846 33,451


TOTAL SHAREHOLDERS’ EQUITY 26 1,604,870 1,640,901


EMPLOYEE BENEFITS 27 24,525 24,653 PROVISION FOR RISKS AND CHARGES – BEYOND 12

MONTHS 28 285,565 277,043 PROVISIONS FOR RESTORATION CHARGES - BEYOND

12 MONTHS 29 142,847 124,591

FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE 30 278,092 14,028 347,825 63,843

OUTSTANDING BONDS 31 1,107,575 1,097,465


CURRENT LIABILITIES

TRADE PAYABLES 33 159,690 565 144,959 10

CURRENT TAX LIABILITIES 34 1,217 11,353

CURRENT FINANCIAL LIABILITIES 35 67,717 44,167 28,839 2,553PROVISIONS FOR RISKS AND CHARGES – WITHIN 12

MONTHS 28 20,219 20,324 PROVISIONS FOR RESTORATION CHARGES - WITHIN

12 MONTHS 29 54,168 41,346

FINANCIAL INSTRUMENTS – DERIVATIVES 36 146,626 139,919 157,685 926

OTHER CURRENT LIABILITIES 37 112,107 3 102,737 12

TOTAL CURRENT LIABILITIES 561,744 184,654 507,243 3,501 LIABILITIES HELD FOR SALE - - TOT. SHAREHOLDERS’ EQUITY AND LIABILITIES 4,005,218 4,019,721

(*) The amounts are restated to take account of the application of IFRIC 12; the restatement and information required by IAS 1 as at January 1, 2009 are recorded in the half-year report as at June 30, 2010, to which reference is made.

GEMINA GROUP

71

5.3 STATEMENT OF CONSOLIDATED CASH FLOWS



Amortisation and depreciation of tangible and intangible fixed assets 108,179 100,442Increase (decrease) of severance and other provisions (net of risks provision for transfer of Elilario) 8,289 11,199

(Increase) decrease in deferred tax liabilities (12,387) (8,855)

Allocations to system renovation provisions 69,971 41,723

(Revaluation) write-down of equity investments valued at net equity 1,903 1,374

(Gains) losses on disposal of non-current assets - -

OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING CAPITAL 138,688 106,731

(Increase) decrease in inventories of contract work in progress 602 (4,046)

(Increase) decrease in trade receivables 24,382 (36,796)

(Increase) decrease in other current assets 2,220 (2,110)

Increase (decrease) in trade payables 14,731 (21,894)

Increase (decrease) in other current liabilities (766) 38,669

TOTAL CHANGES IN WORKING CAPITAL 41,169 (26,177)


OPERATIONS 179,857 80,554

STATEMENT OF CASH FLOWS FROM INVESTMENT ACTIVITIES Increases, purchases, capital increases and loss settlements of equity investments - -

Increase in tangible and intangible fixed assets (93,144) (93,012)

Changes in other items in non-current assets and liabilities (7,461) (9,141)

Proceeds from disposal of non-current assets 5,000 5,496TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

INVESTMENT ACTIVITIES (95,605) (96,657)


Dividends paid - (188)

(Increase) decrease in trade receivables (2,015) (3,014)

Increase (decrease) in financial indebtedness (25,709) 33,009

Raising of medium/long-term bank payables - -

Repayment of medium/long-term bank payables (5,375) -

Other changes in shareholders’ equity 1,236 (8,630)TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

FINANCING ACTIVITIES (31,863) 21,177 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 52,389 5,074



GEMINA GROUP

72

5.4 STATEMENT OF CHANGES IN CONSOLIDATED EQUITY

(in thousands of euro) Share capital

Capital reserves

Hedging and

translation reserve

Other reserves

Profit (loss) pertaining to

previous years

Profit (loss) for the

year Shareholders’

Equity Group

Minority shareholders in capital

and reserves

Balances as at 12/31/2008 1,472,960 200,057 (41,012) 82,064 52,352 (33,784) 1,732,637 37,762

Effect of application of the interpretation IFRIC 12 - - - - (73,908) - (73,908) (2,906)

Balances as at 01/01/2009 (adjusted) 1,472,960 200,057 (41,012) 82,064 (21,556) (33,784) 1,658,729 34,856

Allocation of results as at 12/31/2008 - - - 692 (34,476) 33,784 - -

Distribution of dividends to holders of savings shares - - - - (188) - (188) -

Change in consolidation area - - - - 1,868 - 1,868 -

Total profit (loss) for the year - - (9,292) - - (43,667) (52,959) (1,405)

Balances as at 12/31/2009 1,472,960 200,057 (50,304) 82,756 (54,352) (43,667) 1,607,450 33,451

Allocation of results as at 12/31/2009 - - - - (43,667) 43,667 - -

Other changes - (350) - 350 (36) - (36) (9)

Total profit (loss) for the period - - 1,877 - - (37,267) (35,390) (596)

Balances as at 12/31/2010 1,472,960 199,707 (48,427) 83,106 (98,055) (37,267) 1,572,024 32,846

GEMINA GROUP

73

5.5 STATEMENT OF RECONCILIATION BETWEEN SHAREHOLDERS’ EQUITY OF GEMINA

AND CONSOLIDATED SHAREHOLDERS’ EQUITY AND BETWEEN PROFIT (LOSS) OF

GEMINA AND CONSOLIDATED PROFIT (LOSS)



AS AT 12/31/2010 PROFIT (LOSS) 2010

GEMINA S.P.A. 1,810,963 (8,686)

CANCELLATION OF BOOK VALUE OF CONSOLIDATED

EQUITY INVESTMENTS (245,639) (32,181)

DIFFERENCE BETWEEN BOOK VALUE AND PRO-RATA VALUE OF SHAREHOLDERS’ EQUITY (244,068) (30,610)

PROFIT (LOSS) OF CONSOLIDATED COMPANIES (1,571) (1,571)

WRITE-OFF OF IMPACT OF TRANSACTIONS PERFORMED

BETWEEN CONSOLIDATED COMPANIES 6,700 3,600

GUARANTEES PROVIDED TO SUBSIDIARIES 6,700 3,600

GROUP SHAREHOLDERS’ EQUITY AND NET PROFIT

(LOSS) FOR THE YEAR 1,572,024 (37,267)

MINORITY INTERESTS IN SHAREHOLDERS’ EQUITY AND

NET PROFIT (LOSS) FOR THE YEAR 32,846 (668)

CONSOLIDATED SHAREHOLDERS’ EQUITY AND PROFIT

(LOSS) FOR THE YEAR 1,604,870 (37,935)

GEMINA GROUP

74


ACCOUNTING STANDARDS

The consolidated financial statements have been prepared according to the international accounting standards (IAS/IFRS) issued by the IASB (International Accounting Standard Board), as approved by the European Union.

The term IAS/IFRS refers to International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), as supplemented by the interpretations issued by IFRIC (International Financial Reporting Interpretations Committee), and previously by the SIC (Standard Interpretation Committee).

Where necessary, the half-year figures of the consolidated investee companies, drawn up by the Boards of Directors or by the Sole Director, have been adjusted to bring the accounting standards used into line with those adopted by the Group.

The financial statements have been drawn up on the basis of the historical cost concept, except for:

- financial derivatives (and the financial liabilities hedged

thereby);

- assets available for sale, the valuation of which has been

effected on the basis of the fair value concept;

- the defined benefit plans for the employees of the ADR Group, for which the actuarial gains and losses have been recognised as prescribed by IAS 19.

The accounting statements have been prepared in thousands of euro.

CONSOLIDATION CRITERIA

The consolidated financial statements as at December 31, 2010 include data of the parent company Gemina and of the subsidiary companies over which Gemina exercises control either directly or indirectly, at the same date and based on the line-by-line method.

Pursuant to IAS 27, control is exercised when the Parent Company has the power to determine the financial and operating policies of an enterprise, in such a way as to obtain benefits from its activity.

The companies over which Gemina exercises joint control pursuant to IAS 31, starting from 2008, are included in the consolidated financial statements using the net equity method.

The equity investments in associated companies, over which Gemina exercises significant control pursuant to IAS 28, are consolidated using the net equity method.

GEMINA GROUP

75


The lists of the subsidiaries and associated companies of the Gemina Group subject to consolidation are included in point 5.7.

Subsidiaries that are dormant or that generate an insignificant turnover are not included in the consolidated financial statements. Their influence on the total assets, liabilities, financial position and profit or loss of the Group is insignificant.

The main consolidation criteria are set forth below:

- all assets and liabilities, charges and income of companies consolidated using the line-by-line method are fully included in the consolidated financial statements.

The book value of the equity investments is set off against the corresponding share of Shareholders’ Equity in the investee companies, attributing to the single asset and liability items their current value at the date of acquisition of control;

- the profits of subsidiary companies acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition until the effective date of disposal;




- where applicable, consolidation adjustments take into

account their deferred tax effect;

- dividends received in the year from subsidiaries that are recorded in the income statement of the Parent Company as income from equity investments have been set off against “profits carried forward”.

EQUITY INVESTMENTS IN JOINT VENTURES

The Group records its share of the joint ventures using the net equity method.

The consolidated financial statements include the share pertaining to the Group of profit (loss) of joint-controlled companies, recorded using the Net Equity Method, starting from the date when significant influence begins until the date when said significant influence ceases to exist.


GEMINA GROUP

76


An associated company is a company in which the Group is capable of exercising a significant influence, but not control or joint control, by contributing to the financial and operating decision-making policies of the investee, as it is described by IAS 28 – Investments in Associates.

The economic results of the associated companies have been recorded in the consolidated financial statements using the Net Equity Method, starting from the date when the significant influence begins until the date when said significant influence ceases to exist.

The surplus of the acquisition cost with respect to the Group’s percentage of the current value of the assets, liabilities and potentially identifiable liabilities of the associated company at the date of acquisition is recognised as goodwill. Goodwill is included in the book value of the investment and is subject to impairment test.

VALUATION CRITERIA

The most significant valuation criteria used for the preparation of the consolidated financial statements are set forth below.

REVENUES

Revenues are recorded to the extent to which it proves possible to reliably determine their fair value and that the company is likely to enjoy the related economic benefits.

They are measured on an accrual basis and, in particular, according to the type of transaction. Revenues are recorded only when the following conditions are met:

a) sale of assets:

- significant risks and rewards of ownership are

transferred to the buyer;

- the effective control of the sold assets and the normal continuous level of activities associated with the property have ceased;

- the costs incurred or to be incurred for the transaction

may be reliably determined; b) provision of services:

- the stage of completion of the transaction at the

balance sheet reporting date may be reliably measured;

- the costs incurred for the transaction and the costs to be incurred for its completion may be reliably determined.

COSTS

Costs are valued at the fair value of the amount paid or to be paid, and are recognised in the income statement on an accrual basis.

GEMINA GROUP

77


USE OF ESTIMATES

Drawing up the financial statements requires estimates and assumptions to be made, which affect the book asset and liability values on the date of reference.


The estimates are primarily used to record estimation of the recoverability of the value of assets, the definition of the useful lives of the tangible assets, the valuation of employee benefits, taxes, other allocations, derivative instruments and provisions.


The fairness of the book value of concession has been assessed based on the estimated cash flows in the economic and financial plans; the latter are based on assumptions.

DIVIDENDS

Dividends are recorded in the financial year when their distribution is resolved by the Shareholders’ Meeting.

FINANCIAL INCOME AND EXPENSE

Financial income and expense are recorded in the income statement on an accrual basis, according to the interest accrued on the net value of the respective financial assets and liabilities using the actual interest rate.

INCOME TAXES

Current taxes are calculated based on taxable income, in compliance with the rates and regulations in force.

Any deferred or prepaid income taxes are calculated on the temporary differences between the equity values entered in the financial statements and the corresponding values recognised for tax purposes, applying the tax rate that is expected to be in effect on the date when the temporary difference will be paid.


The deferred taxes are directly charged to the income statement, except for those concerning items recorded directly at Shareholders’ equity; if this is the case, their deferred taxes will also be charged to Shareholders’ Equity.

NET INCOME FROM DISCONTINUED ACTIVITIES

Pursuant to IFRS 5, paragraph 33, the economic results of the discontinued operating activities are shown in one amount only, “Net income from discontinued operations”, which

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indicates:

- total profits or losses of the discontinued operations

without tax effects;

- the capital gains (or losses) without tax effects, recorded

after disposal of the activities.

In the explanatory notes, the Group also provides an analysis of the above-mentioned amount broken down into the following components:

- revenues, costs and profit and income taxes of

discontinued operations;

- capital gains (or losses) recorded after disposal of the

assets, net of taxes and directly related costs.

Pursuant to IFRS 5, paragraph 34, comparative information for the previous years is presented with the same logic described above so as to make the values presented homogeneous.

EARNINGS PER SHARE

The basic earnings per share are calculated by dividing the Group’s economic result by the weighted average of outstanding shares at year-end, not including own shares.

The profit (loss) attributable to each category of shares (ordinary and savings) is also represented. It is determined based on the respective rights to be given dividends.

The diluted profit corresponds to the basic earnings as diluting instruments have not been issued.

INTANGIBLE FIXED ASSETS

Intangible fixed assets are recorded at the purchase or production cost, including directly attributable accessory charges necessary in order to make the assets ready to be used.

Assets with a defined useful life are systematically amortised from the moment when the asset becomes ready for use in relation to its expected useful life.

Recoverability of value is verified according to criteria provided by IAS 36 (Impairment of Assets) and illustrated in the paragraph “Impairment of assets” below.

Research costs are charged to the income statement for the period in which they are incurred.

Internally generated intangible fixed assets deriving from the development of Group products are recorded under assets, only if all the following conditions are fulfilled:

- the asset can be identified;

- the asset created is likely to generate future economic

benefits;

- the development costs of the asset can be reliably

measured.

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Intangible fixed assets are amortised on a straight-line basis over their useful life.

When internally generated assets cannot be recorded in the financial statements, their development costs are attributed to the income statement for the year when they were incurred.

Concessions

The value of the airport management concession is amortised on the basis of the residual life of said concession, which will expire on June 30, 2044 (see paragraph on “Information on the concession”).

Based on the application of IFRIC 12, all fixed assets, which are to be transferred to the grantor on conclusion of the concession, have been classified under item “Intangible Fixed Assets – Investments in infrastructures in concession” and amortised over the term of the concession. Supplementary allocations, which will be recorded in special provisions, were made with respect to the amortisation of the concession for those portions of infrastructures which have a technical-economic duration of less than the residual term of the concession.

Impairment of assets

Periodically, the Group reviews the book value of its tangible and intangible fixed assets to determine whether there are indications that these assets could be impaired.

When such indications are present, the recoverable amount of said assets is estimated, in order to calculate any write-downs.

The recoverable amount is the greater of the fair value net of selling costs and the value in use.

The fair value is estimated on the basis of the best information available in order to reflect the amount that the company could obtain from sale of the asset.

The value in use is determined by discounting back the expected cash flows at a rate reflecting the current market values of the interest rate and of the specific risks of the assets.

If the recoverable amount is estimated lower than it book value, it is reduced to that lesser value. The loss in value is recorded in the income statement.

When the loss of value does not occur or is reduced afterwards, except for goodwill, the revaluation that reinstates the book value, within the limits of the cost, is entered in the income statement.

TANGIBLE ASSETS

This item includes all fixed assets which are to be transferred to the grantor on conclusion of the concession.

Property, plant, machinery and equipment are entered at historical cost (in some cases increased pursuant to monetary revaluation laws) inclusive of any accessory charges and net of the accumulated depreciation and of any write-downs for

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impairment.

Fixed assets are depreciated on a straight-line basis in each period in accordance with the depreciation rates established in relation to the estimated useful life and, in the case of disposal, until the end of use.


A breakdown of the depreciation rates used is provided hereunder:

- Buildings from 3% to 10% - Plant and machinery from 7% to 25% - Equipment from 10% to 25% - Other assets from 10% to 25% - Land is not subject to depreciation.

In the case in which, regardless of the depreciation already recorded, there is evidence of impairment determined according to the criteria described in the concept “Impairment of fixed assets”, the fixed asset is written down accordingly.

If in subsequent years the conditions for the write-down cease to exist, the original value will be reinstated within the limits of accumulated depreciation.


The costs incurred after the purchase are capitalised even if they increase the future economic benefits inherent in the asset to which they refer.

Maintenance costs are charged to the income statement.

Costs for improvements and maintenance that result in a significant and tangible increase in production capacity or that extend the useful life of the asset in question, are capitalised and added to the value of the relative asset; they are depreciated on the basis of the useful life of the asset to which they refer.

Costs for improvements to third-party goods which meet the requirements for inclusion under assets are recorded among tangible fixed assets and depreciated over the lesser of the remaining term of the agreement, and the remaining useful life of the asset.

LEASING

Lease contracts are treated as finance leases when the terms of the contract in question are such that all of the risks and rewards of ownership are substantially transferred to the lessee.

The assets to which the finance lease contracts refer are recorded as Group assets at their current value of minimum payments due for the lease and are subject to depreciation on

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the basis of their estimated useful life, as for group-owned assets, or, if less, at their fair value at the date of acquisition.

The corresponding liability towards the lessor is included in the balance sheet as financial liability. Payments for lease instalments are divided into principal and interest and the financial expenses are directly ascribed to the income statement for the year.

All the other leases are considered operating leases and the relative costs for the lease instalments are entered on the basis of the conditions set forth in the contract.

INVENTORIES

Inventories are recorded at the lower of acquisition or production cost and net realisable value.

Inventories are valued using the weighted average cost method.

The net realisable value is estimated sale price, less the estimated costs to completion and all costs required to perform the sale.

CONSTRUCTION CONTRACTS

When the profits of a construction contract can be reliably estimated, the revenues and costs regarding such work are recorded, respectively, as revenues and costs of the year in relation to the stage of completion of the work at the balance sheet date, based on the relationship between the costs incurred for the work performed to the balance sheet date, and the total estimated contract costs, except when this calculation is not deemed representative of the state of completion of the contract.

Any changes to the contract, price revision or incentives included are those that have been agreed with the contractor.

When the profits of a construction contract cannot be assessed with reasonable certainty, the revenues from said contract are recorded limited to the costs of work carried out to date, which are likely to be recovered.

Contract costs are recorded as expenses for the year in which they are incurred.

If it is likely that total contract costs exceed the revenues from the contract, all of the loss is recognised as soon as it is foreseen.

FINANCIAL ASSETS

Financial assets are initially valued at fair value, which corresponds to cost, including charges directly connected with their acquisition.

Financial assets other than those identified as held to maturity are classified as held for trading or available for sale (other equity investments), and are valued at fair value at the end of each period.

In the event of financial assets that are not quoted on an active market and for which a fair value cannot be determined

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in a reliable way, their book value is maintained at cost.

RECEIVABLES

Receivables are stated at their fair value in the financial statements, which corresponds to their par value, and are adjusted to their estimated realisable value.

In the case of receivables whose collection is expected to be long-term, a value equal to the current value of the estimated discounted cash flows is recorded.


Receivables denominated in currencies other than the euro are valued at the exchange rate ruling at year-end.



EMPLOYEE BENEFITS ADR Group companies calculated the employee severance

indemnities, for the portion remained pertinent to the company after the reformation of the complementary compensation funds as per Law Decree no. 252/2005, by applying an actuarial method - Projected unit credit method - based on a demographic and financial assumption which allows for a reasonable estimate of the amount of benefits that each employee has already accrued based on his years’ of service.

Based on this method, the accrued amount payable must be projected in order to estimate the amount to be paid at the moment of terminating the employment relationship and subsequently actualised.

Using the actuarial valuation current service costs and interest costs are charged to the income statement as follows: current service costs, which represent the total benefits accrued by employees during the year under “Staff costs”, whereas interest costs, which consist of the imputed charges that the business would incur by requesting a loan from the market of the same amount as its employee severance indemnities, are recorded under “Financial income (expense)”.

Profits and losses that show the effects deriving from changes in the actuarial assumptions used are recorded in the income statement to the extent that their unrecorded value at the beginning of the financial year exceeds 10% of the liability (the so-called corridor method).

In the case of the other Group companies, post employment benefits have been valued according to Italian accounting standards and to current legislation regarding national collective labour agreements and company pension schemes

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in force.

An evaluation based on actuarial criteria was not made since the actuarial data expected, both in absolute terms and with respect to the Group Shareholders’ equity, was insignificant.



Provisions are allocated based on the best estimate of the costs expected to fulfil the obligation at the balance sheet date, and are discounted when the amount involved and its effect is material.

FINANCIAL INDEBTEDNESS Financial indebtedness is initially recorded at fair value,

corresponding to the value received, net of any additional charges for its registration. Subsequently said loans are valued using “amortised cost” criteria.

The amortised cost is the amount of the liability recorded at the time of its initial recognition net of repayments of principal and additional charges amortised applying the effective interest rate method.

If the loans are hedged by derivative instruments of the “fair value hedge” type, in accordance with IAS 39, said loans are valued at fair value as are the related derivative instruments (also see the relevant paragraph “Derivatives and accounting treatment of hedging transactions”).

BONDS Bonds are initially recorded at their fair value, less any costs

incurred to trade and issue the financial instrument (transaction cost).

Following the initial recognition, bonds are recorded at amortised cost.

TRADE PAYABLES Trade payables are stated at their fair value, which

corresponds to the par value. Those denominated in currencies other than the Euro are adjusted using the exchange rate ruling at the year end.

DERIVATIVES AND ACCOUNTING TREATMENT OF

HEDGING TRANSACTIONS The Group uses derivative instruments to hedge the risks

arising from interest rate and exchange rate fluctuations relating to existing bank loans and bond issues.

The structure of the existing contracts complies with the hedging policy approved by the Boards of Directors of the Group companies and is consistent with the restraints

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imposed by the existing loan agreements.

Derivative instruments are initially recognised at their fair value, corresponding to cost and adjusted to their fair value at following balance-sheet dates.

The recording of hedging derivatives differs depending on the hedging objective: cash flow hedge or fair value hedge.

Cash flow hedge Any changes in the fair value of derivatives, which are so

designated, and considered to be effective in hedging against future cash flows of the Group’s contractual commitments, are directly recorded in shareholders’ equity less the relevant deferred taxes, while their ineffective portion is immediately recognised in the income statement.

Fair value hedge If a derivative instrument is designated as an instrument to

hedge exposure of the fair value changes of a balance sheet asset or liability, the profit or loss deriving from the subsequent fair value valuations of the hedging instrument is recorded in the income statement.

The profit or loss deriving from the fair value change of the hedged item modifies the book value of said item and is recorded in the income statement.

ASSETS AND LIABILITIES HELD FOR SALE Assets and liabilities held for sale include non-current assets

or groups being disposed of, and the associated liabilities which have been selected for disposal.

Assets held for sale are valued at the lower of their book value and their fair value net of disposal costs.

The amounts of previous years, shown for comparison purposes, have not been reclassified under assets and liabilities held for sale, pursuant to IFRS 5 paragraph 40.

SEGMENT INFORMATION The segmentation criteria of business areas, as provided for

by IFRS 8, which substituted IAS 14, require that the Gemina Group profit and loss, shown in Note 40 of this Report, be divided in:

- activities of the Parent Company (corporate activities); - airport infrastructures. ADOPTION OF NEW STANDARDS Accounting standards, amendments and interpretations

applied from January 1, 2010 The following accounting standards, amendments and

interpretations were applied for the first time by the Group starting from January 1, 2010.

IFRIC 12 - PUBLIC UTILITY CONCESSIONS

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From January 1, 2010, the Group has applied the

interpretation IFRIC 12 “Service Concession Arrangements” (“IFRIC 12 or Interpretation”) that contains the methods for recognising and measuring concession contracts between a public party and a private company. A detailed description of the Interpretation and of the related effects on the economic and equity figures are described in point 5.8 to these Financial Statements.

Specifically: - all fixed assets which are to be transferred to the grantor

on conclusion of the concession have been classified under item “Intangible Fixed Assets” and amortised over the term of the concession;

- supplementary allocations are planned, recorded in specific system renovation provisions, with respect to the amortisation of the concession for those infrastructures whose technical-economical duration is expected to be less than the term of the concession;

- the investments in new infrastructures contribute to forming the value of production, while those for the renovation of existing infrastructures are charged to the use of the system renovation provisions;

- the item “revenues” does not include the value of the infrastructures carried out by the concessionaire and which are to be transferred to the grantor on conclusion of the concession. These are shown separately.

IAS 24 – RELATED PARTY DISCLOSURES On November 4, 2009, IASB issued a revised version of this

standard aimed at clarifying and supplementing the definition of related parties.

This standard must be applied as from January 1, 2011. The Group adopted the standard in advance as from January 1, 2010.

As regards the applicability of the principle to the Company, in particular, the revised Standard extends the meaning of related parties to companies controlled by entities with a significant influence on the Company.

The adoption of this standard has no effect on the evaluation of balance sheet items.

The following amendments, improvements and

interpretations, in effect as from January 1, 2010, will regulate categories and cases not pertaining to the Company as at the date of these financial statements, but might have accounting effects on transactions and future agreements.

- IFRS 3 – Business Combinations; - IAS 27 (2008) – Separate and Consolidated Financial

Statements; - Improvement to IFRS 5 – Non-current Assets Held for

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Sales and Discontinued Operations;

- Amendments to IAS 38 – Equity Investments in Associated Companies and IAS 31 – Equity Investments in joint ventures, following amendments made to IAS 27;

- Improvement to IAS/IFRS (2009); - Amendment to IFRS 2 – Share-Based Payments:

payments based on Group shareholdings governed by cash;

- IFRIC 17 - Distribution of Non-Cash Assets to Owners; - IFRIC 18 – Transfers of Assets from Customers; - Amendment to IAS 39 – Financial Instruments:

Recognition and Measurement – Eligible Hedged Items. ACCOUNTING STANDARDS, AMENDMENTS AND

INTERPRETATIONS NOT YET APPLICABLE AND NOT

ADOPTED IN ADVANCE BY THE COMPANY. A series of amendments and interpretations have been issued

which are applicable following December 31, 2010: IAS 32 – Financial Instruments: Presentation and Classification of Rights Issues; IFRS 9 - Financial Instruments; IFRIC 14 - Advance Payments in Relation to Minimum Funding Requirements; IFRIC 19 – Extinguishing Financial Liabilities With Equity Instruments; IFRS 7 – Financial Instruments: Additional Information.

In May 2010, the IASB issued a set of modifications to the IFRS (“Improvements”) that will entail changes in the statement, recognition and valuation of the balance sheet items and modifications that will primarily bring about changes in terminology or publishing, with slight effects from the accounting viewpoint.

These standards have not been adopted in advance by the Group, as they regulate cases which were not applicable to the Group as at December 31, 2010.

INFORMATION ON CONCESSIONS CONCESSIONARY RELATIONSHIP ADR’s corporate purpose is the construction and

management of airports or of a part thereof, and the exercise of any activity related or complementary to air traffic of any type or speciality.


DURATION OF THE CONCESSION The above-mentioned activity is carried out as a concession

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on behalf of the competent State Administration (Ministry for Infrastructure and Transport) with expiration in 2044.

The term of the concession, originally set at 35 years and expiring on June 30, 2009 (Art. 3, subsection 2, Law 755/73), was extended by a further 35 years (to June 30, 2044) in compliance with Art. 14 of Law no. 359 of August 8, 1992, and Art. 1-quater of Law no. 351 of August 3, 1995, as set forth in the reports by the Ministry of Transport and Navigation on September 12, 1994 and January 23, 1998.

Pursuant to Agreement 2820/74, the concession (Art. 25) can be terminated with just cause for requirements of public safety. Moreover, other causes for termination of the concession are specified (Art. 24), including: unjustified delays in completing the work, irregularity and negligence in the management of the airport system, any transfer, even partial, of the concession, etc.

SUBJECT OF THE CONCESSION Law 755/73 (Art. 1) sets forth the subject of the concession,

consisting in the single management of the Capital’s airport system, to be carried out under the supervision of the Ministry of Transport (now ENAC - Italian Civil Aviation Authority - pursuant to Italian Legislative Decree 250/1997) according to the provisions of the Navigation Code and regulations currently in force.

In particular, the concession, governed by specific agreements with the Grantor, includes the management of infrastructures and services and the maintenance of existing systems, machinery and buildings. ADR also supplies passengers with carry-on baggage and hold baggage security checks.

INCOME Pursuant to Art. 6, subsection 1, of Law 755/73, “all revenues

of the State, which derive from the management of the two airports, belong to the company holding the concession”.

Art. 6 of Agreement 2820/74 groups the revenues into those deriving from the use of the airports, those regarding the use of services and the services rendered by the concessionaire, and those regarding the use of airport assets.

The Agreement also provides that the concessionaire has the right to claim fair payment from whoever carries out a profit-making activity in the airports.

With resolution no. 86 of August 4, 2000, the Interministerial

Committee for Economic Planning (“CIPE”) issued a favourable opinion on the “Reordering framework regarding the tariff system for airport services rendered on an exclusive basis” proposed by the Minister of Transport and Navigation in conjunction with the Minister of Finance.

According to said framework, revenues subject to regulation can be classified as follows:

- revenue due as payment (airport fees) for the use of

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airport infrastructures that are instrumental in services of air transport;

- payments due for the use of airport assets (for common use, for exclusive use, centralised infrastructure) that are instrumental in terminal assistance services (supplied or self-produced);

- payments for security services set forth in another concession deed;

- payments for terminal assistance services, when supplied by the airport operator - in fact or by rights - under exclusive conditions.

The aforementioned CIPE Resolution no. 86/2000 was

cancelled and substituted by CIPE Resolution no. 38/2007 of June 15, 2007 (published in the Official Gazette no. 221 of the Italian Republic of September 22, 2007), which approved the new “Directive” regarding the tariff system for airport services rendered on an exclusive basis (“Directive”).

The purpose of the Directive is to set forth guidelines for the implementation of Law no. 248/2005. It requires ENAC (Italian Civil Aviation Authority) to set forth, within 60 days from the publication of the CIPE Directive in the Official Gazette, “guidelines setting forth criteria for the application of the Directive”.

The definitive text of the application Guidelines of CIPE Directive no. 38/07 and the relative attachments, was published by ENAC on its website on January 7, 2008, then rewritten following the observations made by NARS.

On February 14, 2008, the Guidelines were approved by means of Interministerial Decree of the Minister of Transport and the Minister of the Economy and Finance no. 41/T. Said decree (never published in the Official Gazette) was repealed by the subsequent Decree of the Ministry for Infrastructure and Transport of December 10, 2008, which formally approved the Guidelines drawn up by ENAC for applying the Ministerial Directive regarding the tariff system for airport services rendered on an exclusive basis.

On March 27, 2008, CIPE then made a lexical change to its Resolution no. 38/2007 – publishing the subsequent Resolution no. 51/08 - pursuant to sentence no. 51 of the Constitutional Court dated February 27, 2008, which envisaged the need for the opinion of the Joint Conference. With this change (at point 5.3), the range of duties of the Regions in approving planning agreements was expanded.

All of the other decisions of resolution no. 38/2007 and of the attachment that is an integral part thereof are upheld and unchanged by the March 27, 2008 resolution (published with amendments in the Official Gazette no. 128 of June 3, 2008).

CIPE Resolution no. 51/08, the same as the previous no.

86/00, provides that the new regulated tariffs that the airport

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operator can apply will be established within a specific “planning agreement” to be entered into by the operator and ENAC.

In consideration of the long time frame required for the approval procedure of planning agreements, and waiting for the planning agreement approval to be completed, national regulations have established the terms of adapting only the airport fees on a provisional basis.

Specifically, Law no. 31 of February 28, 2008

(“Milleproroghe”) provided that until the enactment of the decrees to define airport fees pursuant to Law 248/05, the Minister of Transport issued its own decree, to be adopted by December 31, 2008, to index airport fees to programmed inflation.

Said term was extended once to December 31, 2009 (with Law Decree no. 207 of December 30, 2008, converted into Law 14/2009), then additionally extended to December 31, 2010 (by subsection 6 of Art. 5 of Law Decree no. 194 of December 30, 2009) and finally extended to March 31, 2011 (Law Decree no. 225 of December 29, 2010).

Following the above, the first Decree (Ministerial Decree 07/21/2008) was published in the Official Gazette dated October 21, 2008, containing the “Airport fee update”, to take into account the programmed inflation regarding 2008 that is expected to be 1.7% according to the Economic and Financial Planning Document.

Similarly, the Ministry of Infrastructure and Transport Decree of October 8, 2009 on “2009 Airport fee update” was then published in the Official Gazette of December 22, 2009. The amount of airport fees was updated to the amount of programmed inflation relating to 2009, which, in the Italian Economic and Financial Planning Document, was as equal to 1.5%.

Lastly, the Ministerial Decree of October 4, 2010 was published in the Official Gazette of December 11, 2010, including the “2010 Airport fee update”: according to this decree, the amount of airport fees as per the previous Ministerial Decree 10/8/2009, was updated to the programmed inflation rate relating to 2010 which, in the Italian Economic and Financial Planning Document, was equal to 1.5%.

The new amount of rights will be applicable starting to January 10, 2011, the date in which the above-mentioned Decree entered into force.

Again on the issue of airport fees, the Finance Law 2010 (Law

no. 191 of December 23, 2009) permitted airport operators to increase the fees in advance.

On January 15, 2010, ADR submitted to ENAC its application for admission to the procedure for early introduction of fees. On March 5, 2010, ENAC informed

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ADR that checks on documents filed in by the company were concluded and the application transmitted to the competent Ministry of Infrastructure and Transportation.

No reply from the above-mentioned Ministry had been received by ADR as at December 2010.

In the Official Gazette of August 4, 2009 the Conversion law

no. 102 of August 3, 2009 “Corrective measures of the Anti-Crisis Decree-Law no. 78 of 2009” was published, authorising ENAC to enter into planning agreements in derogation of current regulations for airports with traffic exceeding 10 million passengers per year (now eight million, following the amendments based on Law 122/010), introducing long-term tariff systems that, bearing in mind European levels and standards, are oriented towards costs of infrastructures and services, efficiency objectives and the criteria of adequate remuneration of investments and capital, with valid updating methods for the entire duration of the agreements.

Always regarding fees, the Law Decree no. 78 of May 31, 2010 (converted in Law no. 122 of July 30, 2010), bearing “Urgent measures on financial stabilisation and economic competitiveness”, Art. 14, subsection 14, set out a commissarial surcharge on outbound passenger boarding fees from the airports of Rome - within the maximum limit of 1 euro per passenger - in order to contribute to the charges deriving from the carrying out of the debt repayment plan of the Municipality of Rome up to a total of 200 million euro.

Pursuant to the above-mentioned standard, the Commissioner in charge of the commissarial administration – prior resolution no. 36 of the Municipality of Rome dated October 27, 2010 – decided this commissarial surcharge, equal to 1 euro per passenger, as from January 1, 2011.

CONCESSION FEE Italian Legislative Decree 251/95, later converted into Law

351/95 introduced the obligation to pay a concession fee. The criteria for the calculation of the concession fee were modified by Art. 2, subsection 188 of Law 662/96. In compliance with said law, the fee was periodically set for each period considered, with reference to the volumes of passenger and cargo traffic.

In the 1997-2002 period, the concession fee was calculated “in an amount corresponding to ten percent of the total amount of revenue deriving from fees on the use of the two airports, as well as the fees for loading and unloading of cargo”.

The Decree of the State Property Agency on June 30, 2003 adopted a new, different reference parameter for calculating the fee, identified as the so-called “WLU (Work Load Unit)” which “corresponds to one passenger or 100 kg of cargo or post” and is “calculated using the data reported in the statistical yearbook of the Ministry for Infrastructure and Transport - ENAC (Italian Civil Aviation Authority)”.

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The same decree identified several levels of traffic and,

through the use of a differentiated coefficient per layer, allows for the calculation of a fee that values and measures airport traffic.

Lastly it is noted that Article 11.10 of Law 248/2005 - mentioned earlier - has provided that the state concession fees be reduced by 75% up to the date of introduction of the system for determination of airport fees.

The Decree of the State Property Office of December 23, 2009, published in the Official Gazette no. 302 of December 30, 2009, extended to 2012 the methods for quantifying airport management fees due to operators, previously set forth in the inter-executive decree of June 30, 2003.

AIRPORT INFRASTRUCTURES Using funds from autonomous loans or using funds issued by

the State on the basis of specific regulations and agreements, the company has the task of coordinating all assets necessary for the creation of the “Development Plan” of airport infrastructures. The total amount of assets used by the company for the financial year in the exercise of its own activity is composed of four distinct types:

- “Own assets”: assets acquired as property by the company through its own financial means, for which the company does not believe that there is an obligation to assign them at the end of the term of the concession.

They consist of light buildings, systems and machinery, industrial and commercial equipment and other assets. They are shown under balance sheet assets among “Tangible/technical fixed assets”.

- “Revertible assets”: are assets purchased by the company using its own financial means and, based on the concession agreement in force, subject to free reconveyance to the Grantor, in conditions of normal use and regular functioning, upon termination of the concession.

Revertible assets include all works and fixed systems carried out on the airport State-owned soil. They consist of industrial building and fixed systems, and are shown under assets among “Intangible fixed assets – Airport concession – Investments on infrastructures under concession”.

- “Assets received in concession”: are assets owned by the State and received in concession for use. They essentially consist of previously existing infrastructures on airport soil at the moment of creation of the company in 1974.

As they are not property of the company, their relative value is only indicated in the notes (see the note 12 regarding “Intangible fixed assets”).

- “Assets created on behalf of the State”: are works created by the company, under the construction concession, on behalf of and using funds of the State, for which the

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company generally does not receive profits or losses deriving from their creation.

As they are not property of the company, the value of the part created by the company and reported to ENAC is indicated only in the notes (see note 12 regarding “Intangible fixed assets”).

The part under construction and not yet disclosed at year end, is included in Assets among “Receivables”.

For implementation of said works the company receives from the Grantor an advance, by way of funds provided for the management of the works, which is recorded under payables, at the item “Advances”. Thereafter the costs incurred by the Company for works, supplies and price revision are reported and invoiced to the Grantor on the basis of the state of progress of works, reducing the advances received throughout the period of time required to complete the works.

Only for general construction expenses (for design,

inspectors’ fees, inspection fees, management of works, etc.) shall the Grantor pay the company a lump sum reimbursement, equal to 9% of the loan, corresponding, as a whole, to the total estimated costs that the company shall incur for that item.

In addition, the category Assets, among “Intangible fixed assets – Airport concession – Investments on infrastructures in concession”, includes fixed assets for modernisation or renovation carried out using autonomous financial means, on “Assets received in concession” and on “Assets created on behalf of the State”.

VALUATION OF THE CONCESSION As stated in the paragraph regarding the concession

relationship, ADR’s corporate purpose is the construction and management of airports.

The concession is the legal instrument that enables ADR to carry out this activity, settling fees and obligations both during and at the end of the concession.

As a result, the valuation of the concession effectively corresponds to the valuation of the company, and vice versa.

The airport management concession is recorded in the consolidated financial statements for a value of 2,916 million euro, originating as follows:



a) net value as at December 31, 2006 for the 51.08% share of ADR owned by Gemina 1,151

b) net value as at July 1, 2007 for the 44.68% share of ADR purchased by Macquarie (change in consolidation area) 891

Subtotal 2,042

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a) difference between ADR’s shareholders’ equity and the price paid to Macquarie 930


3) Depreciation regarding 2007-2008-2009 (233)


5) Value recognised while consolidating Fiumicino Energia 7

6) Amortisation regarding 2010 (87)


The value of the concession is amortised on a straight-line

basis in each year along the duration of the concession, i.e. until June 30, 2044.

The fairness of the value has been assessed by discounting the cash flows estimated in the economic and financial projections drawn up by ADR management over the 2011-2044 period, divided in two parts: 2011 – 2020 and 2021 – 2044.

Forecasts for the 2011-2020 period made up the 2011-2020 Economic-financial Plan approved by ADR’s Board of Directors held on January 28, 2011 and Gemina’s Board of Directors held on February 4, 2011, to fulfil commitments arising from loan agreements.

Forecasts are based on the following assumptions: - airport tariffs estimated at best by the current status of

negotiations with ENAC; - passenger traffic reaching 46 million in 2020 and 99

million in 2044; - investments in infrastructure, amounting to 2.5 billion

euro over the 2011-2020 period and 9.5 billion euro over the following period;

- discounting at 6.5% annual nominal rate after taxation. Discounted financial flows, also using alternatives, confirm

the value of concession as at December 31, 2010. The two main ADR’s business areas, aviation and non

aviation, were considered as one single Cash Generating Unit for both their strict interconnection and the fact that one single value was assigned to the concession.

Investments over the 2011-2020 period are the first part of

the development plan of the airport system in Rome until

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2044. This plan is aimed at meeting, at the end of the period, the passenger traffic needs of around 100 million per year, in addition to a significant improvement to the quality of services.

The new infrastructures, (“Fiumicino Nord”), for which a budget of around 7.2 billion euro investments is estimated, will be located in an area north of the existing airport, to which they will be linked.

The implementation of this demanding investment program is however subjected to the signature of a planning agreement which would ensure continuity and stability of contract clauses over the entire concession term.

CONSOLIDATION AREA Due to the spin-off of Sistemi di Energia S.p.A., from July 1,

2009, the consolidation area includes Fiumicino Energia and Leonardo Energia.

These companies, together with Gemina and ADR, have been consolidated on a line-by-line basis. Pentar has been valued at written down cost for impairment losses.

NOTES TO THE INCOME

STATEMENT

As regards items evaluated, the following tables generally show the amounts of the same, their breakdown, the amount pertaining to the previous year and/or any change with respect to the latter.

Figures shown are in thousands of euro, unless otherwise indicated, and amounts for 2009 are re-determined following the application of IFRIC 12.

NOTE 1 REVENUES

(in millions of euro) 2010 2009 CHANGE %

CHANGE

AVIATION 307.3 291.5 15.8 5.4%

AIRPORT FEES 174.9 163.2 11.7 7.2%

CENTRALISED INFRASTRUCTURES 35.4 35.5 (0.1) (0.3%)

SECURITY 67.7 62.9 4.8 7.6%

OTHER 29.3 29.9 (0.6) (2.0%)

NON AVIATION 290.3 268.6 21.7 8.1%

PROPERTIES 59.7 56.3 3.4 6.0%

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TRADE 201.3 184.1 17.2 9.3%

SALES 87.3 80.2 7.1 8.9%


CAR PARKS 30.5 27.5 3.0 10.9%

ADVERTISING 22.4 22.8 (0.4) (1.8%)


OTHER 29.3 28.2 1.1 3.9%

TOTAL REVENUES 597.6 560.1 37.5 6.7%INFRASTRUCTURE PURSUANT TO

IFRIC 12 55.5 30.1 25.4 84.4%

TOTAL 653.1 590.2 62.9 10.7%

Revenues almost entirely relate to airport activities, and have increased compared to the previous period.

The change compared to the previous year reflects the increase in traffic and is analysed in detail in paragraph 3.3 “Operations and related revenues” of the Report on Operations.

NOTE 2 CONSUMPTION OF RAW MATERIALS AND CONSUMABLES

2010 2009



ELECTRICITY 4,154 2,604




CHANGES IN RAW MATERIAL (790) 1,091

TOTAL 72,094 68,135

NOTE 3 STAFF COSTS

2010 2009




RESTRUCTURING COSTS 3,183 20,348

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PREVIOUS YEARS COST OF LABOUR ADJUSTMENTS (2,230) (332)


TOTAL 121,984 141,963

Staff costs decreased by 20.0 million euro compared to 2009, burdened by restructuring costs of about 20.3 million.


2010 2009






TOTAL 161,847 145,483

“Other operating expenses” include the estimate of the charge regarding the Customs Office, for 14.0 million euro (12.0 million euro in 2009), of which Note 28 “Provisions for risks and charges” and the write-downs of receivables from handlers, as per Note 21 “Trade receivables”.

NOTE 5 AMORTISATION, DEPRECIATION AND WRITE-DOWNS OF FIXED ASSETS

2010 2009



TOTAL 108,179 106,821

The amortisation of intangible fixed assets is broken down as follows:

2010 2009AMORTISATION OF AIRPORT

MANAGEMENT CONCESSION “ACQUIRED

RIGHTS”: 87,007 86,807AMORTISATION OF AIRPORT

MANAGEMENT CONCESSION

“INVESTMENTS IN INFRASTRUCTURE” 11,742 10,862

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AMORTISATION OF INTANGIBLE FIXED

ASSETS 3,972 3,845

TOTAL 102,721 101,514

Total amortisation of the airport management concession –“acquired rights” - amounted to 87.0 million euro and it is broken down for 2010 as follows:

AMORTISATION OF CONCESSION

RECORDED IN ADR’S FINANCIAL

STATEMENTS 49,284AMORTISATION OF CONCESSION

RECORDED IN GEMINA


STATEMENTS FROM CONSOLIDATION

OF 51.08% OF ADR 5,472AMORTISATION OF CONCESSION

RECORDED IN GEMINA


STATEMENTS FROM CONSOLIDATION

OF 44.68% OF ADR 32,051AMORTISATION OF CONCESSION

RECORDED IN FIUMICINO ENERGIA’S


TOTAL 87,007

NOTE 6 ALLOCATIONS TO RENOVATION PROVISIONS They amounted to 69,971 thousand euro compared to 40,571 thousand euro in 2009. They include supplementary allocations, with respect to the amortisation of the concession for those infrastructures whose technical-economical duration is expected to be less than the term of the concession.

NOTE 7 FINANCIAL INCOME

2010 2009


INTEREST ON BANK DEPOSITS AND LOANS 1, 577 2,220


SWAP DIFFERENTIALS - 14,200


VALUATION OF DEBT INSTRUMENTS UNDERLYING DERIVATIVES - 3,480


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98


OTHER INCOME 246 1,864


INTEREST FROM CUSTOMERS 27 1

INCOME FROM RECEIVABLES HELD AS FIXED ASSETS - 3

OTHER INCOME 6 1,827

TOTAL 9,704 38,203


- absence of swap differentials paid to ADR and Romulus by the counterparts with which the companies subscribed variable rate hedging contracts;

- lower income from evaluation of derivatives which were

offset in item “Financial charges – exchange losses”.

NOTE 8 FINANCIAL EXPENSES

2010 2009




INTEREST ON FINANCIAL PAYABLES 519 351

2010 2009



VALUATION OF DERIVATIVES - 10,629

EXCHANGE LOSSES 7,560 16,399


COMMISSION EXPENSE 101 327

DUE TO EMPLOYEES FOR SEVERANCE INDEMNITIES 703 722


EFFECTS OF APPLICATION OF IFRIC 12 7,741 4,921


TOTAL 97,223 124,403

The difference with respect to the previous year is attributable to:

- the decrease in interest expense due to the reduction in interest rates and to the lower average exposure as a result of repayments of 11.7 million euro in September 2010 regarding the term loan facility, as well as of the payment of instalments coming due of the debt with Banca OPI amounting to 8.5 million euro;

- lower evaluation charges on derivatives for the expiring in

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2009 of some contracts.


2010 2009

MEASUREMENT OF SITTI - (34)

WRITE-DOWN OF LA PIAZZA DI SPAGNA (15) (44)

WRITE-DOWN OF AEROPORTO DI GENOVA (500) -

WRITE-DOWN OF PENTAR (1,377) (1,100)

OTHER INCOME/(CHARGES) ON EQUITY INVESTMENTS 76 (664)

TOTAL (1,816) (1,842)

The equity investment in Pentar was prudently written down to line up its book value with the quota of the Company’s shareholder’s equity, as is seen in the best information available.

The equity investment in SITTI was sold at a spot price in line with the book value of the equity investment.

ADR’s equity investment in Genoa Airport was written-down by 0.5 million euro due to an updating of the impairment of the investment.

NOTE 10 INCOME TAXES

2010 2009

CURRENT INCOME TAXES 37,759 31,580

IRES 65 375

CHARGES FROM CONSOLIDATED TAXATION 22,680 17,442

IRAP 15,014 13,763

INCOME TAXES FROM PRIOR PERIODS (259) 1,230

NET (PREPAID) DEFERRED INCOME TAX (21,117) (15,135)

TOTAL 16,383 17,675

It is noted that a Group tax consolidation agreement is in force between Gemina, ADR, ADR Tel, ADR Engineering, ADR Sviluppo S.r.l., ADR Assistance., Leonardo Energia and Fiumicino Energia for the 2010-2012 period.

According to the above agreement, the Parent Company recorded IRES receivables as the company incurred tax losses during the year.

For details on calculation of prepaid taxes, please see note 16.

The following table shows the reconciliation of IRES theoretical tax with the actual tax (also including charges from consolidated taxation):

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2010 2009

PRE-TAX INCOME (21,552) (27,008)TAX CALCULATED ON THE THEORETICAL

IRES TAX RATE (5,927) 27.5% (7,427) 27.5%EFFECT OF CHANGES INCREASES

(DECREASES) COMPARED TO THE ORDINARY

TAX RATE:

PERMANENT DIFFERENCES:

DIVIDENDS - - (63) -

UNDEDUCTIBLE COSTS 9,766 9,348

OTHER PERMANENT DIFFERENCES (896) (586)


INCREASE 21,010 13,783

DECREASE (8,337) (6,569)

TAX CONSOLIDATION ADJUSTMENTS 7,129 9,331 USE OF GROUP LOSSES OF PREVIOUS

YEARS - -

TOTAL ACTUAL CURRENT IRES 22,745 n/a 17,817 n/a NOTES TO THE BALANCE SHEET

The compared 2009 figures are restated following the application of IFRIC 12.


01/01/2009 INCREASES DECREASES 12/31/2009AIRPORT MANAGEMENT CONCESSION

“ACQUIRED RIGHTS” 3,083,181 6,906 (86,807) 3,003,280AIRPORT MANAGEMENT CONCESSION

“INVESTMENTS IN INFRASTRUCTURE” 401,681 47,951 (10,489) 439,143


TOTAL 3,491,131 58,792 (100,524) 3,449,399

01/01/2010 INCREASES DECREASES 12/31/2010AIRPORT MANAGEMENT CONCESSION

“ACQUIRED RIGHTS” 3,003,280 - (87,007) 2,916,273AIRPORT MANAGEMENT CONCESSION



TOTAL 3,449,399 50,682 (103,566) 3,396,515 Airport management concession “acquired rights” The change in value with respect to December 31, 2009 can

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be attributed to the amortisation over the period already described in Note 5.

Airport management concession “investments in infrastructure”

The item, pursuant to IFRIC 12, includes all fixed assets which are to be transferred to the grantor on conclusion of the concession. Moreover, reference is made to appendix 5.8.

The following table sets forth the value of the systems and infrastructure received in concession in the Fiumicino and Ciampino airports, and the value of the works financed, realised and reported to the National Civil Aviation Board.

12/31/2010 12/31/2009

FIUMICINO ASSETS RECEIVED IN CONCESSION 119,812 119,812

CIAMPINO ASSETS RECEIVED IN CONCESSION 29,293 29,293

ASSETS CREATED ON BEHALF OF THE STATE 668,309 672,999

TOTAL 817,414 822,104

As these are assets received in concession, and not owned, the related value is not recorded under “Assets” in the Balance Sheet.

The other intangible fixed assets are broken down as follows:

12/31/2009 CHANGES 12/31/2010

Cost Accr.

Amort. Book Value

Incr. (decr.)

Amort. rate Cost

Accr. Amort.

Book Value


INTELLECTUAL PROPERTY

RIGHTS 7,813 (6,172) 1,641 1,259 (1,187) 9,072 (7,359) 1,713CONCESSIONS, LICENCES,


RIGHTS 21,907 (18,386) 3,521 3,122 (2,560) 25,029 (20,946) 4,083

OTHER 2,264 (450) 1,814 (981) (229) 1,283 (679) 604

TOTAL 31,984 (25,008) 6,976 3,400 (3,976) 35,384 (28,984) 6,400

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102


NOTE 12 TANGIBLE/TECHNICAL FIXED ASSETS

12/31/2009 CHANGES TO 12/31/2010

RECLASS./CHANGE

IN CONSOLIDATION

AREA

COST ACCR. DEPR.

BOOK VALUE

INCREAS

E

(DECRE

ASE) COST ACCR. DEPR.

DEPR. RATE COST

ACCR. AMORT.

BOOK VALUE

PLANT AND MACHINERY 38,880 (28,775) 10,105 3,661 62 - (3,340) 42,603 (32,115) 10,488

FIXTURES AND FITTINGS TOOLS AND OTHER

EQUIPMENT 8,769 (7,600) 1,169 888 (6) 6 (496) 9,651 (8,090) 1,561

FIXED ASSETS CONSTRUCTION IN PROGRESS

AND ADVANCES 1,716 - 1,716 - (1,716) - - - - -

OTHER ASSETS 40,805 (36,885) 3,920 509 243 67 (1,622) 41,557 (38,440) 3,117

TOTAL 90,170 (73,260) 16,910 5,058 (1,417) 73 (5,458) 93,811 (78,645) 15,166

GEMINA GROUP

103


NOTE 13EQUITY INVESTMENTS IN ASSOCIATED COMPANIES VALUED AT

NET EQUITY

12/31/2010 12/31/2009 CHANGE

SITTI - 5,000 (5,000)

PENTAR 2,232 3,609 (1,377)

LA PIAZZA DI SPAGNA - 40 (40)

TOTAL 2,232 8,649 (6,417)

In December 2010, the equity investment in SITTI was transferred to IMI Fondi Chiusi SGR at a price of 5 million euro, paid at closing, in addition to 0.5 million euro, which will be paid upon the occurrence of specific conditions related to the subsequent divestment by the Fund.

The book value of the equity investment in Pentar was written-down as a prudential measure for the protraction of losses recorded by the investee.

The liquidation procedure of the associated company “La Piazza di Spagna S.r.l. in liquidation” was concluded on December 16, 2010.


The item, which included exclusively the receivables from the INAER Group resulting from the transfer of its shareholding in Elilario Italia, occurred in February 2008, are cancelled due to the advanced collection of the amount due.

This by applying a contract clause that envisages the immediate collectability of the receivable in the case of total refinancing of the debt of the INAER Group.

The amount collected by Gemina is equal to 4.8 million euro, including interests capitalised.

NOTE 15 OTHER EQUITY INVESTMENTS

12/31/2010 12/31/2009 CHANGE

NON-CONSOLIDATED SUBSIDIARIES 10 10 -

DOMINO S.R.L. 10 10 -NON-CONSOLIDATED ASSOCIATED

COMPANIES 10 10 -

CONSORZIO E.T.L. 10 10 -

OTHER COMPANIES 2,230 2,736 (506)

KIWI 1 VENTURA SERVICOS S.A. 28 28 -

AEROPORTO DI GENOVA S.P.A. 895 1,395 (500)

S.A. CAL. S.P.A. 1,307 1,307 -

ALINSURANCE S.R.L. - 6 (6)

GEMINA GROUP

104


TOTAL 2,250 2,756 (506)



A breakdown of the item and movements recorded over the period is reported in the table below:

12/31/2009 INCREASE DECREASE 12/31/2010

Taxable

incomeTax

Taxable

incomeTax

Taxable

incomeTax

Taxable

income Tax

(A) (B) (C) (A+B-C)

PREPAID TAXES 302,956 90,908 76,091 23,028 37,211 10,476 341,836 103,460PROVISIONS FOR RISKS AND

CHARGES 32,857 9,949 8,728 2,603 6,759 1,955 34,826 10,597SYSTEM RENOVATION PROVISIONS

AND OTHER IFRIC 12 ADJUSTMENTS 117,677 38,035 36,449 11,780 - - 154,126 49,815

PROVISION FOR OBSOLETE GOODS 473 131 277 76 399 110 351 97

BAD DEBT PROVISION 31,745 8,732 10,541 2,899 6,351 1,747 35,935 9,884

STAFF-RELATED ALLOCATIONS 10,618 2,921 7,632 2,099 10,681 2,938 7,569 2,082

PREPAID AMORT./DEPRECIATION 996 276 - - 139 38 857 238NET FINANCIAL INCOME

(EXPENSES) 2,840 781 - - 2,840 781 - -

CONSOLIDATION ADJUSTMENTS 17,560 5,675 2,901 938 2,620 847 17,841 5,766

OTHER 14,316 4,105 9,563 2,633 4,594 1,282 19,285 5,456

DERIVATIVES 73,874 20,303 - - 2,828 778 71,046 19,525

DEFERRED TAXES (6,096) (1,679) (597) (167) 2 (2) (6,695) (1,844)

CAPITAL GAINS (38) (13) - - (21) (8) (17) (5)

OTHER (6,058) (1,666) (597) (167) 23 6 (6,678) (1,839)

TOTAL 296,860 89,229 75,494 22,861 37,213 10,474 335,141 101,616

NOTE 17 OTHER NON-CURRENT ASSETS


The value includes for 16.3 million euro the entry of the instalments paid (8.9 million euro as at December 31, 2009), in line with the instalment plan agreed by the Tax Collection Agency, as collection of the amounts provisionally assessed as owed within the litigation with the Customs Agency, described in Note 28.

These payments are effectively a financial advance, failing final judgement.

The increase is attributable to the instalments paid in 2010.

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105



They are zeroed compared to 1,400 thousand euro as at December 31, 2009, that included the portion of bond issue of SITTI, subscribed by Gemina, expired on June 30, 2010 and paid off.

NOTE 19 INVENTORIES

12/31/2010 12/31/2009 CHANGE

RAW, ANCILLARY AND CONSUMABLE

MATERIALS 2,661 2,919 (258)

FINISHED GOODS AND MERCHANDISE 7,521 7,245 276

TOTAL 10,182 10,164 18

The guarantees supplied by the ADR Group to some financers regarding inventories are described in Note 32 of these Explanatory Notes.

NOTE 20 CONTRACT WORK IN PROGRESS

12/31/2010 12/31/2009 CHANGE

WORK IN PROGRESS 93 441 (348)

RECEIVABLES FOR ACCOUNTS INVOICED 203 475 (272)

TOTAL 296 916 (620)


12/31/2010 12/31/2009 CHANGE

DUE FROM CUSTOMERS 211,980 238,777 (26,797)RECEIVABLES FOR CONSTRUCTION

SERVICES 24,127 16,694 7,433


236,880 256,234 (19,354)

BAD DEBT PROVISION (39,206) (34,164) (5,042)ALLOWANCE FOR DOUBTFUL

ACCOUNTS (8,064) (8,078) 14

(47,270) (42,242) (5,028)

TOTAL 189,610 213,992 (24,382)

The 24.4 million euro is attributable to the improvement of the time required for collection and the 5.0 million euro increase in the Bad debt provision, also resulting from the write- down of receivables from handlers totalling around

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106


8.8 million euro.

The figures includes the balance of 20.2 million euro of amounts due from companies of the Alitalia Group in extraordinary administration.

The guarantees supplied by the ADR Group to some financers regarding receivables are described in Note 32 of these Explanatory Notes.


12/31/2010 12/31/2009 CHANGE

DUE FROM ASSOCIATED COMPANIES 482 530 (48)

TAX RECEIVABLES 5,256 2,164 3,092

DUE FROM OTHERS 3,559 4,232 (673)

TOTAL 9,297 6,926 2,371


12/31/2010 12/31/2009 CHANGE

INTEREST RATE HEDGING DERIVATIVES - - -

ACCRUED INTEREST - 534 (534)

TOTAL - 534 (534)

Details of all derivative contracts of the Group are described in Note 36, in the section regarding derivative liabilities.


This item as at December 31, 2010 was equal to 59,446 thousand euro, compared to 55,497 thousand euro as at December 31, 2009.

The figure includes the balance, equal to 55.7 million euro, of the fixed-term deposit held by the “Security Agent” of the ADR loans, called the “Debt Services Reserve Account” (DSRA).

In accordance with loan agreements, the DSRA is a fixed-term deposit held by the “Security Agent” on which the company is obliged to deposit an amount as security on the servicing of debt to be adjusted on a six-month basis (periods from March 20 to September 19 and from September 20 to March 19).

Currently, the debt service has a different weight in the two mentioned six-month periods: hence, the due dates on which the reserve increases (March) is constantly alternated with the due dates on which the reserve must be decreased

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(September).


12/31/2010 12/31/2009 CHANGE

BANK AND POST OFFICE DEPOSITS 201,032 148,695 52,337

CASH ON HAND 629 577 52

TOTAL 201,661 149,272 52,389

Cash and cash equivalents of the Group increased by 52.4 million euro compared to December 31, 2009 due to greater cash flows generated by operations, in spite of higher volumes of investments and the repayment of financial indebtedness.

It is worth noting that bank deposits include the balance (11.1 million euro) of the “Recoveries Account”, required under the terms and conditions of ADR loan agreements, in which cash raised through extraordinary transactions is deposited, net of related costs.

Due to the protraction of the cash sweep-trigger event occurrence and according to the waiver granted in the first quarter of 2010, on the application date of September 2010, ADR deposited on the current account held at Mediobanca and denominated “Loan collateral”, 35.1 million euro for the securitisation of tranche A1 of Romulus.

As at December 31, 2010, the amount of 46.2 million euro, coming from the “free” cash (i.e. that can be also destined, under ordinary conditions, to the payment of dividends generated in previous years) was on a current account of ADR, which had not been pledged.

The guarantees supplied by the ADR Group to some financers regarding cash equivalents are described in Note 32 of these Explanatory Notes.


Group shareholders’ net equity for the period as at December 31, 2010 amounts to 1,572,024 thousand euro, while shareholders’ equity pertaining to minority shareholders amounts to 32,846 thousand euro.

Changes occurred over the period are highlighted in the special statement at section 5.4.

The fully paid-in share capital is made up of 1,469,197,552 ordinary shares and 3,762,768 non-convertible savings shares of the par value of 1 euro.

The reconciliation statement of Gemina shareholders’ equity with consolidated shareholders’ equity and the company’s profit (loss) for the year with the consolidated profit (loss)

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can be found in section 5.5 of these Explanatory Notes.

NOTE 27 EMPLOYEE BENEFITS

VALUE AS AT 12/31/2009 24,653

CURRENT SERVICE COST 5,883

FINANCIAL EXPENSES ON OBLIGATIONS ASSUMED 703

OTHER CHANGES 12

USE (6,726)

VALUE AS AT 12/31/2010 24,525


CHANGE 12/31/2009 OTHER

CHANGES ALLOCATIO

NS USE 12/31/2010

297,367 - 29,537 (21,120) 305,784

OF WHICH:

- BEYOND 12 MONTHS 277,043 (406) 26,040 (17,112) 285,565

- WITHIN 12 MONTHS 20,324 406 3,497 (4,008) 20,219

Provisions for risks and charges (within 12 months and after 12 months) as at December 31, 2010 amounted to 305,784 thousand euro, compared to 297,367 thousand euro as at December 31, 2009.

The item includes:

- deferred tax on the difference between price paid to Macquarie in July 2007 and ADR’s shareholders’ equity allocated to airport management concession; said value, equal to 238.5 million euro as at December 31, 2009, remains at 231.6 million euro as at December 31, 2010;

- 30.6 million euro in provisions for outstanding litigation, relating to probable liabilities connected with court cases in which the ADR Group is involved;

- the overall expense (taxes, interests and additional charges) relating to the dispute with the Customs Office (26.0 million euro); the additional provision of 14.0 million euro was carried out during the year owing to the negative result of the appeal lodged by ADR with the Regional Tax Commission of Rome.

In this regard it is noted that the procedure is underway to collect the sum due, which ADR is paying in 36

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instalments, following the application submitted to the Collection Agent after paying an advance of 4 million euro.

The instalments already paid, totalling 16.3 million euro, have been recognised as tax credits. At December 31, 2010, 16 instalments amounting to 9.8 million euro, including interest, were outstanding. Reference is made to Note 42 “Litigation”.

- the residual amount of the provision for risks allocated in relation to the guarantees granted to the purchaser of the 2.0 million euro equity investment in Elilario;

- the restructuring provisions allocated for the restructuring plan launched by ADR, which envisages the use of mobility and the extraordinary earnings supplement fund, amounted to 8.6 million euro as at December 31, 2009, during 2010 4.2 million euro were used and a further 3.1 million euro were allocated;

- provision for internal insurance, equal to 1.6 million

euro;

- the provision for alleged 2.2 million euro losses of the

subsidiary Pentar;

- the allocation related to the Assessment Report issued by the Revenue Office for a tax audit on the year 2006, for 1.7 million euro;

- other minor provisions.

NOTE 29 SYSTEM RENOVATION PROVISIONS

CHANGE

01/01/09

provision (+) (+) financial

expense (+) (+) reabsorpt. (-) use (-) 12/31/09

153,737 41,723 4,923 (1,152) (33,294) 165,937

CHANGE

01/01/10

provision (+) (+) financial

expense (+) (+) reabsorpt, (-) use (-) 12/31/10

165,937 71,168 7,741 (1,168) (46,663) 197,015 It includes supplementary allocations, with respect to the amortisation of the concession for those infrastructures whose technical-economical duration is expected to be less than the term of the concession.


The Group’s financial indebtedness is broken down as follows:

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110


FINANCER NAME

DESCRIP. GEMINA

GROUP

COMPANIES

AMOUNT

OF LOAN

GRANTED AMOUNT

USED

RESIDUAL

BOOK

VALUE

RECORDED

IN

FINANCIAL

STATEMEN

TS

INTEREST

RATE REDEMPTI

ON DURATION MATURITY

TERM

Term Loan Facility ADR 170,000 170,000 158,288 (*) at maturity 6 years Feb. 2012POOL OF BANKS

Revolving Facility ADR 100,000 - - (*) revolving 6 years Feb. 2012

BEI EIB Loan ADR 80,000 80,000 79,637 (*) at maturity 10 years Feb. 2018

BANCA BIIS (FORM. BANCA

OPI) BOPI Facility ADR 43,350 43,350 34,850 (*)

6-monthly instalments from 2010

to 2015 12 years Mar. 2015

UNICREDIT

LEASING Leasing Fiumicino Energia 18,022 18,022 14,939 (*)

monthly instalments 8 years Apr. 2017

UNICREDIT MEDIOCREDITO

CENTRALE (1) Facility Fiumicino Energia 2,000 2,000 1,302 (*)

monthly instalments 5 years Aug. 2013

Tranche A Parent

Company 50,000 42,125 (**) 41,865 (*)

at maturity

3 years Dec. 2011

Tranche B Parent

Company 15,000 -(***) - (*)

at maturity

3 years Dec. 2011

MEDIOBANCA

UNICREDIT MEDIOCREDITO

CENTRALE (1)

IN POOL Tranche C

Parent Company 5,000 - - (*) revolving 3 years Dec. 2011

OTHER SHORT-TERM LOAN 14,928

TOTAL 345,809

(*) Variable indexed to the Euribor + margin (**) The unused portion of this tranche was contractually written-off. (***) This tranche was contractually written-off on January 22, 2010 (*) Now UniCredit S.p.A.

This amount is recorded for 278,092 thousand euro under non-current liabilities and for 67,717 thousand euro under current financial liabilities (see Note 35).

Tranche A of the Parent Group Loan was repaid in advance on December 16, 2010, for the amount of 5.4 million euro, of which 5.0 million euro arising from the amount of spot price for the sale of the equity investment in SITTI and the residual amount from the cash.

The Term Loan Facility was partially repaid on September 20, 2010 for 11.7 million euro, decreasing to 158.3 million euro.

The Parent Group Loan, previously stated under item Medium/long-term financial indebtedness, is now stated in current financial liabilities as its maturity term is in December 2011.

New contracts with banks have been negotiated for the granting of a new loan. A new arm’s length loan is expected to be concluded thanks to these negotiations.

The fair value estimate of medium-term loans granted by banks to the Gemina Group, recorded for a value of 330.9

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111


million euro, was equal to approximately 336.0 million euro (net of interest accrual), as at December 31, 2010.

The description of guarantees supplied and the major covenants on such loans is given in Note 32 of these Explanatory Notes.

NOTE 31 OUTSTANDING BONDS

The value of bonds as at December 31, 2010, equal to 1,107,575 thousand euro, can be attributed to the ADR Group.

VALUE AS AT 12/31/2009 1,097,465

APPLICATION EFFECT OF AMORTISED COST METHOD 2,561 ADJ. FOR CHANGE IN FAIR VALUE AND EXCHANGE RATE

ADJUSTMENT 7,549

VALUE AS AT 12/31/2010 1,107,575

The item Outstanding bonds, which includes the bond issue made by Romulus, increased by 10.1 million euro, mainly due to the adjustment of Tranche A4, issued in Pounds Sterling, to the exchange rate at December 31, 2010.

In this regard, it is worth noting that on February 14, 2003 the creditor banks of ADR, in relation to the loan granted on August 2, 2001 for a total of 1,725 million euro, signed an agreement for transfer in lieu of payment of a portion of the debt claimed by ADR in favour of Romulus.

Romulus, Special Purpose Entity (SPE) vehicle, established pursuant to Law no. 130 of April 30, 1999 on securitisations and controlled by two entities governed by Dutch legislation, financed the acquisition of the pre-existing bank loan to ADR through the issue of 1,265 million euro in bonds listed on the Luxembourg Stock Exchange and underwritten by institutional investors.

Following the redemption of 2.8 million euro of February 2009, the characteristics of the issued securities are summarised below:

NAME AMOUNT CURREN

CY INTEREST RATE COUPON REDEMP

TION DURATI

ON EXPIRAT

ION

A1 500,000 euro 4.94% annual at


A2 200,000 euro Euribor 3M + 0.90% quarterly at


A3 175,000 euro Euribor 3M + 0.90% quarterly at


A4 325,019 GBP 5.441% six-monthly at


TOTAL 1,200,019 (*)

(*) This is the par value of debt; the book value recorded in the financial statements

(1,107.6 million euro) is adjusted on the amortised cost method, for changes in fair

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value, and for changes in interest rates for the component issued in Pounds Sterling.

The bonds were guaranteed by Ambac Assurance UK Limited, a monoline guarantee, which as at December 31, 2010 had a rating lower than ADR (Caa2 stable from Moody’s).

ADR’s rating level makes an impact on the amount of the premium paid to AMBAC for guaranteeing the bonds, but not on the interest margin applied on the single Classes of bonds.

The estimated fair value of the bonds as at December 31, 2010 is approximately 1,211.1 million euro, net of interest accrual.

The description of guarantees supplied and the major covenants on such bonds is given in Note 32 of these Explanatory Notes.

NOTE 32 GUARANTEES AND MAJOR COVENANTS ON PAYABLES Bank loans and outstanding bonds of the ADR Group, specified in Notes 30 and 31, are secured through:

- special privilege (having the characteristics of a property mortgage) of equal degree on plants, machinery and instruments, as well as ADR’s stocks and any receivables deriving from the sale of these assets;

- assignment in guarantee of receivables and, more generally, of any right deriving from contracts with customers and insurance policies;

- pledge on ADR’s bank current accounts;

- pledge on all shares held by ADR in the capital of its subsidiaries ADR Tel, ADR Advertising and ADR Assistance.

- “ADR Deed of Charge”, pledge provided for by the British legislation on receivables, hedging agreements and insurance policies subject to British legislation, pursuant to loan agreements.

These guarantees will remain valid until the related bank loans and outstanding bonds are extinguished. The Loan that Mediobanca and Unicredit granted to the Parent Company on December 11, 2008 is backed by the following guarantees:

- a senior pledge on the ordinary shares of ADR representing at least 35% of the share capital of the company and to be supplements if the guarantee margin drops to below 4.5x. Gemina commits to ensure a guarantee margin of at least 4.5x, to be calculated on a monthly basis as the relationship between the simple average of the unit value of ADR shares owned by Gemina in the previous month

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(calculated by applying the formula included in the contract documents) and the residual loan amount. As at December 31, 2010, 21,808,430 ADR shares – corresponding to 35% of the company’s share capital - were pledged to Mediobanca and Unicredit for a value, determined based on the book value of the equity investment, of 670,873 thousand euro. This number was the same as at February 28, 2011;


A number of contract provisions govern the management of ADR’s indebtedness, both in reason of the entity of the same, and of AMBAC’s need for hedging ADR’s un-fulfilment and insolvency risk in order to minimize the actual difference between the ensured maximum rating and the issuer/debtor rating. Amongst the main provisions the following can be noted:







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ADR’s loan agreements also include the respect of financial covenants consisting of ratios, defined based on actual and forecasted data, that measure: (i) the ratio between cash flow available and debt service, (ii) the ratio between future discounted cash flows and net indebtedness, in addition to (iii) ratio between net indebtedness and EBITDA. The aforementioned ratios are verified twice a year, on the application dates of March 20 and September 20, by applying the calculation methods of the respective ratios to the reference dates as at December 31 and June 30. If the aforementioned ratios surpass certain levels, it may result in the distribution of dividends and recourse to further indebtedness; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default. The trigger event condition results in a series of management restrictions for ADR, principally:

a) cash sweep with the obligation to use all available cash on the application dates (March 20 and September 20 of each year) for (i) interest payments, (ii) early capital repayment under pari passu regime, (iii) the guarantee of Romulus securities which cannot be repaid in advance through the creation of specific cash provisions in special current accounts as pledge in favour of AMBAC (so-called cash collateralization);



d) no financial asset acquisitions and new loans will be allowed, even though they are destined to repay the existing indebtedness;

e) transfer under warranty in favour of creditors of all monetary receivables of ADR with consequent notice to debtors transferred.

The financial ratios, calculated based on the financial statements as at December 31, 2010, show a DSCR higher than 2 and a leverage ratio around 5, certifying values at a greater level than the minimum requirements to maintain ordinary operating conditions of the company. These conditions are however restricted by the trigger event condition occurred following the first Standard & Poor’s downgrading in November 2007.

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Due to the protraction of the cash sweep-trigger event occurrence, in the first quarter of 2010, ADR obtained a new waiver, containing the following, in brief: a) non-application of the cash sweep requirement at the

application dates of March 2010 and September 2010, inclusive;

b) authorisation to refinance the 170 million euro Bank Loan until the application date of September 2011, inclusive;

c) waiver, until the application date in September 2010, inclusive, of all the restraints resulting from the occurrence of the trigger event, except for: distribution of dividends, independent auditing of rating recovery plan and disclosure obligations upon request of financial creditors.

According to the above-mentioned agreements, at the application date of September 2010, ADR allocated a total amount of 46.8 million euro to the two facilities. In particular, 11.7 million euro were destined to the redemption of the Bank Loan and 35.1 million euro to the securitisation of Tranche A1. The loan agreements also provide for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. The Loan agreement obliges Gemina to allocate 100% of the net income deriving, inter alia, from ADR deeds of transfer or provision or of other assets of Gemina, capital transactions, subordinate and deferred shareholder loans, distribution of dividends or other distributions, issue of financial instruments or debt instruments, financial contracts and all transactions that depict a form of loan, shares of any kind, diversified financial instruments and bonds to the early repayment of the Loan, according to the procedures and within the limits stated in the Loan agreement. The Loan also requires that Gemina provides declarations and guarantees, obligations, proscriptions and commitments, and provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. It is reported that the Financers have the right of withdrawal should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3. In relation to the lease contract stipulated by Fiumicino Energia, in the month of July 2009, Fiumicino Energia stipulated a credit assignment contract in favour of the

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financer, to guarantee payment of all amounts due by virtue of said lease contract. The contract requires that Fiumicino Energia factor with recourse the entire receivable deriving from the lease rental that Leonardo Energia must pay to Fiumicino Energia pursuant to the company branch leasing contract. Any surplus of the receivable compared to the monthly lease instalment shall be credited to Fiumicino Energia. Gemina’s commitments in relation to the financers of Fiumicino Energia are shown in Note 28 “Guarantees and Commitments” in the Financial Statements as at December 31, 2010.


As at December 31, 2010 trade payables stand at 159,690 thousand euro (144,959 thousand euro as at December 31, 2009).

The increase is due to the higher volumes in investments made over the year.

NOTE 34 CURRENT TAX LIABILITIES

As at December 31, 2010, the item records a total of 1,217 thousand euro (11,353 thousand euro as at December 31, 2009), substantially including the IRAP tax payables of Group companies.


12/31/2010 12/31/2009 CHANGE

INTEREST ON BONDS 13,980 13,815 165

INTEREST ON BANK LOANS 651 850 (199)AMOUNTS PAYABLE TO OTHER

FINANCERS 1,800 1,768 32

DUE TO BANKS 51,286 12,406 38,880

TOTAL 67,717 28,839 38,878

The amounts due to banks include the Parent Company Loan, with maturity term in December 2011, previously stated under item Medium-long term financial indebtedness and described in the table shown in Note 30 “Financial indebtedness net of current share”.

New contracts with banks have been negotiated for the granting of a new loan.

The estimated fair value of the 42.1 million euro Loan, recorded in the financial statements for 41.9 million euro,

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was approximately 43.5 million euro as at December 31, 2010.

NOTE 36 FINANCIAL DERIVATIVES

12/31/2010 12/31/2009 CHANGE

FOREIGN CURRENCY HEDGING DERIVATIVES 75,237 82,929 (7,692)

INTEREST RATE HEDGING DERIVATIVES 71,045 73,873 (2,828)

ACCRUED INTEREST 344 883 (539)

TOTAL 146,626 157,685 (11,059)

The table hereunder summarises the outstanding derivative contracts of the Group.

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SUMMARY TABLE OF DERIVATIVE INSTRUMENTS AND RELATED EFFECTS FAIR VALUE OF

DERIVATIVE CHANGE IN FAIR VALUE GRANTOR GEMINA

GROUP

COMPANIES INSTRUMENT TYPE

HEDGE

D RISK

SUBSCR. DATE

MAT. TERM

HEDGED

NOTIONAL

VALUE APPLIED

RATE AS AT

12/31/10 AS AT

12/31/09 TO INCOME STATEMENT

TO SH. EQUITY(*)

I (63,992) (62,462) (169) (1,361)

C (75,237) (82,929) 7,692 - MEDIOBANCA/UNICREDIT ADR

Group

Cross Currency Swap CF

02/03 02/23 325,019

Receives a 5.441% fixed rate and pays 3-month Euribor + 90 bps until December 2009, then 6.4% fixed rate. (139,229) (145,391) 7,523 (1,361)

(Note 36) Exchange risk hedging derivatives (75,237) (82,929) - -

BARCLAYS ROYAL BANK OF

SCOTLAND ADR

Group Interest Rate Collar

Forward Start CF I 05/06 02/12 240,000


(6,498) (10,517) 307 3,712

MEDIOBANCA GEMINA IRS CF I 12/08 12/11 15,797 Pays a 3.15% fixed rate and receives 6-month Euribor (278) (447) - 169

UNICREDIT GEMINA IRS CF I 12/08 12/11 15,797 Pays a 3.15% fixed rate and receives 6-month Euribor (277) (447) - 170

(Note 36) Interest rate risk hedging derivatives (71,045) (73,873)

(Note 6) Financial income, income on derivatives, valuation of derivatives

7,830

CHANGE IN HEDGING RESERVE 2,690

TAX EFFECT (741)

TOTAL NET HEDGING RESERVE (5.4) (**) 1,949

Key: (*) Change in hedging reserve. FV Fair Value Hedge (**) The change in hedging reserve shown in par. 5.4, equal to 1,877 thousand euro, is shown net of third party interests CF Cash Flow Value Hedge C Exchange rate I Interest rate

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119


Derivatives hedging foreign currency risk (ADR)

The ADR Group uses hedging derivatives for exchange rate risks to mitigate any future increases in outgoing cash flows attributable to unfavourable changes in exchange rates.

Specifically, one component of the cross currency swap allows the cash flows in euro regarding the payment of interest and the redemption of the A4 bond in Pounds Sterling to be stabilised.

Derivatives hedging interest rate risk (ADR)

The Group uses interest rate swaps and interest rate collars to hedge its exposure to unfavourable changes in market interest rates.


As at December 31, 2010, 56.0 % of ADR’s facilities is at fixed rate (55.2% as at December 31, 2009).

Starting from October 2, 2009 two Interest Rate Collar Forward Start contracts became active, subscribed on May 16, 2006 by ADR with Barclays and Royal Bank of Scotland on a notional capital of 120 million euro each. Based on these contracts ADR receives a variable 3-month Euribor rate and pays a variable 3-month Euribor rate with a 5% cap and a 3.64% floor, starting from October 2, 2009 until February 20, 2012.

Thanks to these hedging contracts, an extensive protective barrier has been built against interest rate risk for a further three years on a total notional amount of 240 million euro.

With these contracts, hedging of interest rate risk increases to 72.3% of total payables (71.3 as at December 31, 2009).

Derivatives hedging interest rate risk (Gemina)

Gemina uses an interest rate swap to manage its exposure to unfavourable changes in the market interest rate.

The hedging policy, which is an integral part of the current loan agreement, requires that at least 75% of Tranche A is protected from the risk of interest rate fluctuations.

On December 22, 2008 Gemina entered into two interest rate swap agreements with Mediobanca and UniCredit respectively, for a total amount of 35.6 million euro.

The amount of derivatives decreased from 31.6 million euro as from December 16, 2010, following the partial advanced repayment of the loan, for 5.4 million euro, in order to adjust it to 75% of the new par value of the debt.

The fair value of the aforesaid instruments has been calculated on the basis of the parameters in force as at December 31, 2010 on the reference market.

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The financial derivatives described in Notes 23 and 36 are included in “Level 2” of the “Fair Value Hierarchy” defined by IFRS 7, meaning that the fair value is measured based on valuation techniques taking parameters observable on the market, different from the prices of the financial instrument, as reference.


They amount to 112,107 thousand euro as at December 31, 2010 and mainly consist of tax payables, amounts due to social security institutions and sundry trade payables.

Specifically, they include:

- amounts due to the Tax Authorities for council surcharges on passenger boarding fees, totalling 38.8 million euro. This amount is paid in the following month for the portion collected by carriers and is offset in trade receivables for the amount still to be collected;

- payables of 34.5 million euro, of which the portion for 2010 is equal to 8.8 million euro; payables not yet settled while awaiting the outcome of pending cases on appeals lodged by several of the leading airport management companies;

- IRES payables for 5.5 million euro.

- payables due to personnel and former employees for employee severance indemnity to be settled, in addition to minor payables.


12/31/2010

RECEIVABLES

AND LOANS

FIN. INSTR. AVAILABLE FOR

SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES

BOOK VALUES AS AT 12/31/2010

OTHER EQUITY INVESTMENTS 2,250

INVESTED RECEIVABLES -

OTHER NON-CURRENT FINANCIAL ASSETS -


FINANCIAL INSTRUMENTS – DERIVATIVES -

12/31/2010

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES



TOTAL ASSETS IAS 39 450,717 2,250 -

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121



SHARE 278,092



FINANCIAL INSTRUMENTS – DERIVATIVES 146,626




INTEREST INCOME 1,577


OTHER INCOME 246




1,823 (78,434) (3,399)

SHAREHOLDERS’ EQUITY 1,877

12/31/2009

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES


OTHER EQUITY INVESTMENTS - 2,756

INVESTED RECEIVABLES 4,591 -

OTHER NON-CURRENT FINANCIAL ASSETS 1,400 -

TRADE RECEIVABLES 213,992 -

FINANCIAL INSTRUMENTS – DERIVATIVES - - 534

OTHER CURRENT FINANCIAL ASSETS 55,497 - -

CASH AND CASH EQUIVALENTS 149,272 - -

TOTAL ASSETS IAS 39 424,752 2,756 534


SHARE 347,825 -

12/31/2009

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES

TRADE PAYABLES 144,959 -

CURRENT FINANCIAL LIABILITIES 28,839 -

FINANCIAL INSTRUMENTS – DERIVATIVES - 157,685



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INTEREST INCOME 2,220 - - -

INCOME ON DERIVATIVES - - - 34,070

OTHER INCOME 1,864 - - -

INTEREST EXPENSE - - (72,596) -

EXPENSES ON DERIVATIVES - - - (26,086)

OTHER EXPENSES - - (9,322) -

4,084 - (81,918) 7,984


NOTE 39 SEGMENT INFORMATION INCOME STATEMENT (*)

(in millions of euro) REVENUES (**)

AMORTISATION, DEPRECIATION AND

WRITE-DOWNS EBIT

NET PROFIT (LOSS)

INCLUD. THE SHARE

OF THIRD PARTIES

2010 2009 2010 2009 2010 2009 2010 2009

1. CORPORATE ASSETS 1.0 0.9 - - (6.6) (6.8) (8.7) (14.1)

2. AIRPORT

INFRASTRUCTURES 652.8 589.9 (70.5) (69.3) 108.5 102.2 (2.1) (5.0)3. AMORTISATION OF

AIRPORT MANAGEMENT

CONCESSION - - (37.7) (37.5) (37.7) (37.5) (30.7) (30.6)

4. OTHER CONSOLID. ITEMS (0.7) (0.6) - - 3.6 3.1 3.6 5.0

TOTAL GEMINA GROUP 653.1 590.2 (108.2) (106.8) 67.8 61.0 (37.9) (44.7)

(*) As at December 31, 2009, the "ENERGY" segment is included in the “Airport infrastructures” segment. It should be noted that 89.4% of electricity production is destined to the Airport needs.

(**) Including infrastructures “pursuant to IFRIC 12”. BALANCE SHEET

NET CAPITAL INVESTED SHAREHOLDERS’ EQUITY NET FINANCIAL POSITION

12/31/2010 12/31/2009 12/31/2010 12/31/2009 12/31/2010 12/31/2009 1. CORPORATE ASSETS AND

CONSOLIDATION ITEMS (INCLUDING EQUITY

INVESTMENTS AT NET EQUITY) 1,034.5 1,073.2 1,006.0 1,041.6 28.5 31.6

2. AIRPORT INFRASTRUCTURES (ADR GROUP) 1,909.3 1,992.8 598.9 599.3 1,310.4 1,393.5

TOT. GEMINA GROUP 2,943.8 3,066.0 1,604.9 1,640.9 1,338.9 1,425.1

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NOTE 40 FINANCIAL RISK MANAGEMENT

CREDIT RISK

The maximum theoretical exposure to the credit risk for the Gemina Group, as at December 31, 2010, is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments.

The greatest exposure to credit risk is that of the ADR Group for trade receivables due from customers.

A special bad debt provision is recorded in the financial statements for the risk of customer default in paying. Its amount is periodically reviewed. The write-down process the Group has adopted envisages that the trade positions are written down individually depending on the age of the receivable, the reliability of the single debtor, the status of the management file and debt recovery.

The commercial policies that the ADR Group has initiated aim at controlling investment in receivables as follows:

- Request of cash payments for commercial transactions made with end consumers (sales in the stores under direct management, long-term multi-level car parks, first aid, etc.), with occasional counterparts (e.g. for registration, baggage porterage, taxi access management activities, etc.);

- Request of cash or advance payments made to air carriers that are occasional or those without suitable creditworthiness or collateral guarantees;

- Granting of deferred payment to retained customers deemed reliable (carriers with medium-term flight scheduling and subcontractors) for which the credit rating and request of collateral is in any case monitored.


RECEIVABLES EXPIRED NOT WRITTEN DOWN


RECEIVABL

ES COMING

DUE before 60 days

from 61 to 120 days


after 181 days

TOTAL

RECEIVABLES

Dec. 31, 10 107.0 18.6 8.3 3.9 51.8 189.6

TRADE RECEIVABLESDec. 31,

09 95.5 47.0 14.3 5.7 51.5 214.0Dec. 31,

10 7.9 - - - 1.4 9.3OTHER RECEIVABLES

Dec. 31, 09 5.0 - - - 1.9 6.9

Receivables not written down that have expired for more than 181 days mainly consist of amounts due from public

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124


administrations and the companies of the Alitalia Group under extraordinary administration.

The ADR Group’s credit risk is highly concentrated in so far as about 58% (57% in 2009) of the credit not written down is due from ten customers.

LIQUIDITY RISK

Liquidity risk may occur when it is impossible to obtain, at fair conditions, the financial resources necessary to the Groups business.


Breakdown of payables by expiry terms is shown hereunder (in millions of euro).

12/31/2010 12/31/2009

WITHIN

THE

FOLLOWI

NG YEAR

BETWEE

N 1 AND 5

YEARS

AFTER 5

YEARS TOTAL

WITHIN

THE

FOLLOWI

NG YEAR

BETWEE

N 1 AND

5 YEARS

AFTER 5

YEARS TOTAL

FINANCIAL

INDEBTEDNESS NET OF

CURRENT SHARE 185.3 90.6 2.2 278.1 - 262.4 85.4 347.8

OUTSTANDING BONDS - 868.0 239.6 1,107.6 - 495.5 602.0 1,097.5

TRADE PAYABLES 152.5 7.2 - 159.7 137.7 7.3 - 145.0CURRENT FINANCIAL

LIABILITIES 67.7 - - 67.7 28.8 - - 28.8OTHER CURRENT

LIABILITIES 112.1 - - 112.1 102.6 0.1 - 102.7 ADR Group

The financial structure of the ADR Group is distinguished by a heavy incidence of the financial leverage component. As a consequence, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, in perspective, by the need to repay debt tranches coming due (the first of which will come due in 2012).

The current medium/long-term loan agreements require not only being rated by Moody’s and Standard & Poor’s, but also a large number of control measures to guarantee priority allocation of the cash generated for the debt service.


This complex contractual structure lowers liquidity risk. The current rating assigned to ADR, however, prevents it

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from taking out additional indebtedness without specific authorisation from its financial creditors. Any contingent additional need for financial resources deriving from the management of working capital or from investments can be covered by a significant amount of cash, in addition to a revolving facility of 100 million euro (currently not used) specifically aimed at supporting this type of need

The revolving facility is currently useable in observance of the conditions set forth in the “Revolving and Term Loan Facility Agreement” and given the fact that the waiver of restraints resulting from the occurrence of the trigger event, obtained on March 16, 2010, is still in force.

It is obvious that the priority allocation of the cash generated for the debt service and the aforementioned restrictive control measures for using financial resources restrict the Group’s operations and investment flexibility in depressing situations characterised by particular financial tension.

The centralised treasury system ADR manages with several of its subsidiary companies, which is adjusted to market conditions, allows management of financial resources to be optimised and regulation of infra-group trade relations to be facilitated.

Gemina

To meet its short-term commitments, the Company has liquidity of 11.1 million euro, in addition to bank credit lines of 6 million euro, and a 5 million euro revolving line of credit (Tranche C) for paying interest on current expenses.

The Company started negotiations to renew the facility of 42.1 million euro with maturity at end of 2011.

The Loan requires Gemina to allocate 100% of the net income deriving from the transfer or provision of shares of ADR and of the other investee companies, and from the distribution of dividends or other distributions of ADR and of the other investee companies to mandatory advance repayment.

The amount of the Loan not repaid with the income listed above will be refinanced upon maturity.

The Loan also provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. It is reported that the Financers have the right of withdrawal should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3.

INTEREST RATE RISK

The Gemina Group uses derivative instruments, with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuations on the economic

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result.

ADR Group


In conformity with this policy; ADR has entered into interest rate collar contracts whose characteristics are thoroughly described in Note 36.

The fixed-rate indebtedness as at December 31, 2010 was 72.3% of the total (71.3% as at December 31, 2009), due to the aforementioned hedges.

Gemina

The hedging policy, which is an integral part of the Loan entered into on December 11, 2008, requires that at least 75% of outstanding Tranche A be protected from the risk of interest rate fluctuations.

With regard to this contractual provision, on December 22, 2008 the Company entered into two interest rate swap agreements with Mediobanca and UniCredit, for a notional total amount of 35.6 million euro.

The amount of the derivative decreased from 31.6 million euro as from December 16, 2010, following the partial advanced repayment of the Loan, for 5.4 million euro, in order to adjust it to 75% of the new par value of the debt.



In order to evaluate the potential impact resulting from the fluctuation of interest rates applied, the variable-rate financial debts are analysed, for which the impact in the income statement and to shareholders’ equity due to fluctuations of cash flows are assessed.

The potential impacts are shown gross of the tax effect.

Given the expiry and the activation of several hedging contracts on October 2, 2009, the sensitivity analysis was performed based on the conditions of outstanding loans and hedges as at December 31, 2009.

With reference to the variable-rate debts and their hedging derivatives, a hypothetical, immediate increased change of 0.5% of the market interest rate level would generate a positive effect on the cash flow hedge reserve equal to 6.7 million euro and increased financial expenses for the year totalling 2.2 million euro for the portion of unhedged debt.

To the contrary, a hypothetical, immediate decreased change of 0.5% of the market interest rate level would generate a negative impact on the cash flow hedge reserve equal to 7.0 million euro and a reduction of financial expenses equal to 2.2 million euro.

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Lastly, it should be emphasized that the interest rate applied to the Gemina Loan and to some of ADR’s credit facilities is the same as Euribor plus a margin proportionate to the rating ADR has been given.

The financial expenses Gemina and ADR pay their financers therefore depend not only on the fluctuation of interest rates, but on ADR’s rating as well.

EXCHANGE RISK

As for the financial indebtedness, Tranche 4 of the bond issue made by Romulus, equal to 215 million Pound Sterling, was hedged with a currency swap in Euro for the entire duration (year 2023).



A hypothetical immediate increase of 10% in the exchange rates of the Euro compared to the Pound Sterling would have generated a positive impact on the cash flow hedge reserve of 4.4 million euro, whereas a hypothetical immediate decrease of 10% of the exchange rates of the Pound Sterling compared to the Euro would have generated a negative impact on the cash flow hedge reserve equal to 3.6 million euro.

Lastly, appreciable effects on the income statement due to Euro/Pound Sterling exchange rate changes would not be noticed.



- guarantees issued for the loan agreements mentioned in

Note 32;

- guarantees stood by the ADR Group to customers and

third parties, for 439 thousand euro.

As regards the Group commitments, it should be noted that ADR holds purchase commitments amounting to 87,113 thousand euro.

It should be also noted that, on February 28, 2003 ADR granted IGPDecaux S.p.A. a put option on shares held by the latter in the ordinary and preferred capital of ADR Advertising.

Said option can be exercised up until December 31, 2011, subject to the fulfilment of special conditions, also in light of

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128


agreements entered between ADR and ADR Advertising to review the guaranteed minimum. The shareholder IGPDecaux S.p.A. has expressed its intention not to exercise its put right for 2011.

Within the context of purchase commitments, mention is given to ADR’s commitment, as airport infrastructure operator, to draw up and implement plans for containing and abating noise, as provided by the Framework Law on noise pollution (Law no. 447/1995) and by Ministerial Decree dated November 29, 2000.

To this end, ADR is effecting a survey to establish whether and to what extent limits are actually exceeded and, should they not be respected, it will draw up plans for containing and abating noise.

These commitments prove difficult to quantify and in any case must be determined in an interpretative manner as there are no specific indications as to the activities to be considered in the “maintenance” and “upgrading” of the infrastructures that constitute the basis for calculation pursuant to Law no. 447/1995 (framework law on noise pollution).

In consideration of the above, and on the basis of the estimates available at reporting date, ADR deems that its total liability will not exceed the amount of 35 million euro.

Hence the amount is conditional on subsequent events and will be defined in relation to the actual programme of the measures to be taken. Future measures will most likely be entered as investment costs subject to capitalisation.

The November 3, 2006 agreements covering sale of the equity investment held in Flightcare Italia S.p.A. (formerly ADR Handling S.p.A.) contemplate a price adjustment condition for a maximum value of 12.5 million euro.

Of this, the portion considered to probably occur was entered in the income statement in the years 2006-2009 with provisions for risks and charges counter-item for a total of about 4.4 million euro as at December 31, 2010, whereas the remaining portion – presently considered improbable – will undergo updated valuation during future financial years.

It is also important to note the commitments undertaken by Gemina in relation to the financers of Fiumicino Energia, which are shown in Note 28 of the Explanatory Notes to the Financial Statements.

NOTE 42 LITIGATION

As regards litigation in progress, the Group carried out a thorough assessment of existing risks in order to identify the litigation for which the risk of negative outcome is likely, in order to make a reasonable assessment of provisions to be allocated.

Provisions have not been made for litigation for which, given the different legal interpretations, a negative outcome is

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merely possible, in accordance with the principles and procedures governing the preparation of financial statements.

Furthermore, there are a limited number of civil proceedings underway, for which no provisions were made, as the impact of any negative outcome for the Group, although negligible, could not be measured.

We do not believe that current litigation and potential litigation can give rise to liabilities greater than the amounts already allocated to the relevant provisions.

Customs Agency

In August 16, 2007, the main Customs Office of Rome II served ADR an assessment report which charged irregularities in sales made at the Duty Free Shops over the period January 1, 1993 – January 31, 1998.

The objections are mainly related to sales made to passengers with destinations within the EU Community, exceeding the limits of quantities and value.

On December 18, 2007, the same main Customs Office served an order of payment for the amounts related to VAT, manufacture tax and duties on tobacco, due according to assessments made in the assessment report.

The total amount of taxes and interest required amounted to about 22.3 million euro.

ADR, believing, with the support of the opinions of its tax experts, that the recognition of the legitimacy of its actions to be highly likely, presented appeals to the Tax Commission for the Province of Rome against the afore-mentioned order of payment.

On April 6, 2009 the Tax Commission for the Province of Rome filed judgment no. 149/39/00 which turned down the appeal presented by the Company.

Following this ruling, the Customs Agency initiated the procedure for collection of the amounts assessed as owed, which the company is paying in 36 instalments, following the acceptance of the petition presented to the Tax Collection Agency, after having paid a down payment of 4 million euro, which the company set out using an irrevocable payment order on April 27, 2009.

The total amount, including interest and additional charges, was 26.1 million euro.

Moreover, on April 24, 2009, the Company filed in a petition to the Customs Agency requesting that collection of the assessed debt be suspended until the date the Lazio Regional Tax Commission issues its decision. With deed dated May 19, 2009, the Customs Agency notified its decision to reject the petition for suspension.

Therefore, on July 14, 2009, ADR submitted an appeal against the judgment issued by the Tax Commission for the Province of Rome.

On May 26, 2010, the judgement no. 105/35/10 of the Regional Tax Commission of Rome was awarded. In this

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judgement, ADR’s appeal was rejected, with order of payment of its own legal expenses.

This further unfavourable evolution increased the risk of a negative outcome, independently from the unchanged position, in Court, of the Company and its tax experts on the lack of grounds of the tax claim and the substantial and formal correctness of the company’s actions.

Therefore, in preparing the financial statements as at December 31, 2010, the provisions already made in the 2009 financial statements were supplemented with the entire amount of the alleged tax payment, including interest and additional charges.

While deeming the Company’s position, in Court, unchanged as regards the groundless of the tax claim and the substantial and formal correctness of its actions, the Company proposed an appeal in the Court of Cassation against the Regional Tax Commission’s judgment no. 105/35/10.

Aviation fuel charge risk

Assaero (National Air Transport Operators and Carriers Association) and Blu Panorama filed an appeal with the Lazio Regional Administrative Court (TAR), with concomitant plea for suspension, against the ENAC letter, protocol no. 60600 of September 15, 2006 in which the authority communicated the results of the inspections made at the fully managed airports “in order to analyse the correlation with cost of what the management companies are requesting the oil companies to pay as a flat rate”.

The TAR rejected the petition in its judgment no. 11154/2007 and the appeal by the carriers was submitted on January 2, 2008. The Council of State admitted the appeal in its judgment no. 1416/2009.

While it confirmed the possibility for airport managers to legitimately charge “fuel royalties” in as much as these are effectively related to the costs incurred by the latter, and while it acknowledged ENAC’s authority to monitor the imposition of surcharges by managers, the Council of State observed that when carrying out this work ENAC must first of all check actual, reliable figures for the costs of said activity.

In compliance with this judgment, following a new preliminary investigation, on April 24, 2009 ENAC issued a ruling which, while repealing all the previously issued rulings for the purpose of self-protection, also repeated that “the oil companies are required to directly pay the airport operator the amount due for the provision of the assets and systems necessary for carrying out the refuelling service within the limit of the ascertained costs”.

IBAR (Italian Board Airlines Representatives) and 6 carriers (Iberia, Tap, American Airlines, Delta Airlines, Ethiopian Airlines and Cyprus Airlines) filed an appeal with the Lazio Regional Administrative Court, with concomitant injunctive

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relief, against ENAC letter protocol no. 60600 of September 15, 2006 (in addition to other prior provisions), with which the authority communicated the results of the inspections made at the airports with complete management “in order to analyse the correlation with the cost of what the management companies are requesting of the oil companies at a flat rate”.

With deed notified on February 27, 2008, Esso Italiana submitted an objection to the sentence.

Subsequently, IBAR submitted additional grounds, requesting that the Lazio Regional Administrative Court confirm the illegality of the most recent rulings issued by ENAC on this issue.

The date of the hearing has yet to be announced.

Airone summoned in the Civil Court of Rome, both Tamoil, its supplier of avio fuels, and some airport operators (SAB - Bologna Airport, ADR, SEA and SAVE) with the request to assess any illegal payments for the use airport infrastructures required by the operators to the oil companies which, in their turn, charged these amounts to the carriers. The claim also includes the request that Tamoil – jointly with summoned airport operators – each for its pertaining share - be bound to refund the amount paid by Airone since 2003 and amounting to 2.9 million euro.

The hearing for specification of conclusions is scheduled on December 21, 2011.

Income tax assessment

As part of the annual audit plan set forth by Article 42 of Law 388/2000, on June 4, 2009 the Revenue Office - Lazio Regional Management instigated a general tax audit of ADR regarding income taxes, IRAP (Regional Income Tax) and VAT for the 2007 tax period.

Upon conclusion of the audit, on October 29, 2009 the company was served with an assessment report which presented some findings regarding direct taxes, IRES and IRAP, for a higher taxable income equal to 1,195 thousand euro, and VAT for 2,416 thousand euro.

In acknowledging this report, the Company reserved the right to produce replies and to take actions at the competent venues.

Application of rights to Swiss segments

ADR contested the Italian Civil Aviation Authority’s April 13, 2010 letter and the Ministry of Transport’s May 13, 2010 note (and all other related notes) before the Lazio TAR. These notes indicate that ADR must apply EU fee charges to Swiss carriers, or better, to flights to and from Swiss Confederation territory (vice versa, ADR applies extra-EU fees for these flights, and until now no other carrier or authority had expressed doubts on this matter).

The Italian Civil Aviation Authority’s affirmation is based on

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the fact that the January 21, 1999 EU-Swiss Confederation agreement (which entered into force on June 1, 2002) gave equal rights to Swiss and EU carriers and, therefore, ADR is discriminating Swiss carriers.

However, the company retains that it has not discriminated, given that the application of airport fees, and their amounts, are regulated in Italy by Ministerial Decree dated November 14, 2000 which is based on the territory (within or outside of the European Union) of the flight and not on the subjectivity of the carrier that provides it; furthermore, no EC regulation on airport fees is indicated in the cited agreement, nor is it referred to in the annex, which was also recently amended.

In the hearing before the TAR for the suspension of contested deeds set for July 12, 2010, for procedural opportunities, ADR requested a deferral directly to hearing of the grounds shortly.

In the event of a negative outcome for ADR, the carriers operating the flights in question will in all likelihood request for the return of the higher amounts deposited as airport fees since June 2002, the date that the above-mentioned Agreement entered into force.

The total maximum amount has been estimated at about 8 million euro.

The right obtained by these carriers shall be assessed in Court.

Admittance of liabilities of the Alitalia Group under extraordinary administration

Following the rulings of the Bankruptcy Section of the Court of Rome declaring the state of insolvency of the companies Alitalia – Linee Aeree Italiane S.p.A. under extraordinary administration, Volare S.p.A. under extraordinary administration, Alitalia Express S.p.A. under extraordinary administration, Alitalia Servizi S.p.A. under extraordinary administration, and Alitalia Airport S.p.A. under extraordinary administration, ADR filed appeals for the respective admittance of liabilities.

As to the proceedings regarding Alitalia – Linee Aeree Italiane S.p.A., ADR’s petition was discussed at the December 16, 2009 hearing.

At that time, given that ADR is the only operator whose petition and documentation produced was deemed adequate, the liabilities were admitted. The hearing fixed for the discussion on the receivables accrued after the start of the proceedings was postponed to a date to be defined in order to complete the checks, to be performed by the commissarial office, also with reference to the allocation of payments.

These are the other issues: AZ Servizi S.p.A. under extraordinary administration and AZ Airport S.p.A. under extraordinary administration: the next hearing for the discussion on the receivables required for pre-deduction was postponed on a date to be defined: Volare S.p.A. under

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extraordinary administration: in the hearing held on March 30, 2010, regarding creditors before the opening of the proceeding, a period of time to file in any remarks by creditors was granted. However, the Company deemed useless to file in any further memorandums or documents, in light of the fact that the Commissioner asked that all the company’s receivables be considered as guaranteed receivables. The hearing for the discussion of receivables requested in pre-deduction was instead postponed to a date to be defined; Alitalia Express under extraordinary administration: in the hearing held on March 17, 2010, ADR’s request for admittance of liabilities was discussed. The request was accepted almost entirely. In the hearing held on May 19, 2010, as regards receivables accrued after the opening of the proceeding, ADR’s request was postponed on July 8, 2010.

On this occasion, the conclusions expressed by the Commissioner were made available and the entire amount requested by ADR was acknowledged as eligible for pre-deduction.

Numerous legal undertakings have also been adopted at the Court of Civitavecchia. They are focused on protecting ADR’s evidence of credit for navigation fees Alitalia owes the company, sustained by lien on the aircraft with regard to the relevant owners as well, jointly and severally liable ex lege.

Antitrust

On March 23, 2010, the Italian Competition Authority (“AGCM”) served ADR with a measure to commence an inquiry as regards the company to verify any abuse of a dominant position within the market of access to centralised infrastructures.

The commencement of this inquiry follows the partial acceptance by the Lazio Regional Administrative Court (TAR) of the Air One appeal against the measure with which the Antitrust had ordered ADR to pay administrative penalties, however excluding the violation.

ADR challenged the cited TAR judgment at the Council of State and on March 31, 2010, filed a petition to hasten the hearing on this matter.

On June 8, 2010, this court issued a judgment accepting ADR’s appeal, definitively affirming the legitimacy of the Antitrust’s decision that ADR had not committed any violation in that market.

In the summons of this ruling, however, the Authority proceeded with its new proceeding by sending an inquiry notice to ADR as regards costs and revenues of the airport infrastructures under evaluation.

Following the publication of the judgement of the Council of State on July 9, 2010, ADR sent its request to shelve the Proceeding based on the above-mentioned ruling. The Authority accepted the demand and therefore the enquiry

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notice sent by the Authority was shelved as well.

As regards the case in progress against the AGCM proceedings regarding ADR’s alleged abuse of airport tariffs, the Council of State accepted ADR’s appeal in the part regarding centralised infrastructure tariffs in its June 8, 2010 judgment.

Moreover, the TAR also partially accepted Air One’s appeal in the part in which the claimant contested AGCM’s exclusion of ADR’s dominant position regarding access to centralised infrastructures.

Volare Group revocatory action

In October 2009, the companies Volare Airlines S.p.A. and Air Europe S.p.A. under extraordinary administration instituted a civil lawsuit before the Court of Busto Arsizio to obtain the revocation of the payments made to ADR over the year prior to the carrier’s admission to insolvency proceedings, which occurred by way of decree of November 30, 2004 – and, as a result, the sentencing of ADR to return the amount of 6.7 million euro relating to Volare Airlines S.p.A. and 1.8 million euro relating to Air Europe S.p.A..

The plaintiff’s request is substantially based on the presumption of ADR’s knowledge of the state of insolvency of the carrier and the entire group it was part of, along with Air Europe and Volare Group, at least since 2002.

At the hearing for pronouncement of the judgement held on February 2, 2011, the ruling for the proceedings was postponed.

Ligabue Gate Gourmet S.p.A. bankruptcy

A group of 16 plaintiffs has served a writ of summons against ADR and Fallimento Ligabue Gate Gourmet S.p.A., whereby they are contesting the validity of the sale of the company branch of the Ovest catering company by ADR to the company Ligabue Gate Gourmet S.p.A., with a consequent request for compensation for damages for a total amount of about 9.8 million euro for damages up to 2006, for future damages and for employee severance indemnities. Though no decisions have yet been made on this litigation, it is deemed highly unlikely that the adverse party’s claims will be accepted.

ADR won this dispute with a judgment on June 29, 2010, since all of the counterparty’s petitions were rejected. They were moreover required to refund ADR all legal costs.

Litigation concerning public tenders

On December 30, 2004, ATI NECSO Entrecanales – Lamaro Appalti (“ATI”) notified its decision to appeal judgment no. 35859/2003 issued by the Civil Court of Rome, summonsing ADR before the Appeal Court of Rome.

In addition to rejecting ATI’s claims, the judge at the initial hearing also ordered the company to pay ADR’s legal

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expenses.

ATI is claiming damages of 9.8 million euro, plus interest, revaluation and costs, from ADR in relation to 7 reserves posted in the accounts relating to the contract for work on the extension and restructuring of the Satellite West at Fiumicino airport.

Consequent to the positive outcome of the ruling in the first instance, the probability of ADR losing appears to be remote and in any event, much lower than the adverse party’s claims.

The proceedings for pronouncement of the sentence were held on November 18, 2008.

In April 2009, the Court of Appeals issued an order ruling that it is necessary for the court to appoint an expert witness for the verification of the claims for damages relating to the greater duration of the contract works attributable to the principal ADR.

The appointed expert witness was sworn in and assigned the specific issues on November 24, 2009.

Expert operations began on December 21, 2009.

On June 18, 2010, the expert witness report was filed in which the reserves set forth by the contractor company totalling 3.3 million euro were retained sustainable.

ADR’s defendant’s expert prepared his own observations which were discussed, together with the expert, in the September 28, 2010 hearing.

The remarks on the expert witness report were filed in on the occasion of the September 28, 2010 hearing.

At the hearing for pronouncement of the judgement held on February 8, 2011, the ruling for the proceedings was postponed.

Shareholder Serafini litigation

On March 31, 2010, the January 13, 2010 judgment was filed in the clerk’s office of the 1st civil division of the Milan Court of Appeals in which the Milan Court of Appeals rejected shareholder Renato Serafini’s appeal of the Court of Milan’s first instance judgment which stated the inadmissibility of the applications made by the shareholder against the resolutions passed by Gemina’s shareholders’ meeting of May 10, 2002 (approval of the financial statements as at December 31, 2001 and adjustment of the financial statements as at June 30, 1991 and as at June 30, 1992) and by the shareholders’ meeting of May 13, 2003 (approval of the financial statements as at December 31, 2002).

Surety on the Customs Agency litigation

On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina, Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50%, 13.0% and 36.90%, respectively. This

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commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may incur due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000.




In Gemina’s financial statements, provisions were allocated in the event of a total negative outcome for ADR and ADR’s activation of the guarantee.

This allocation was included in the year 2010 following the negative outcome of the appeal lodged with the Regional Tax Commission of Rome and reversed in the consolidated financial statements, which reflect the amount allocated by ADR.

Rizzoli litigation

On March 3, 2010 Gemina was served, on request of RCS Mediagroup S.p.A. (“RCS”), with a writ of summons for a third party in the proceedings instigated by Mr. Angelo Rizzoli against RCS, Intesa San Paolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi.

Mr. Rizzoli formulated a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs.


RCS fully rejected the plaintiff’s claims, stating they were completely groundless and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS derives, due to the known spin-off stipulated in 1997.

Gemina still deems Mr. Rizzoli’s claims, as well as RCS’s request to summon Gemina to court, to be groundless.

The judge, after rejecting the preliminary claims of the plaintiff, fixed the hearing for pronouncement of the sentence for next June 28.

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REGISTERED EQUITY INVESTMENT CONSOLIDATION CONSOLID. BOOK

NAME TYPE OFFICE ASSETS CURRENCY CAPITAL % SHARE

THROUGH SHARE METHOD VALUE

* ** ***

PARENT COMPANY

GEMINA L Milan Holding of equity investments euro 1,472,960,320 n/a n/a 100.00 Line-by-line

AIRPORT ACTIVITY

AEROPORTI DI ROMA UL Fiumicino

(Rome) Airport management euro 62,309,801 95.76 Direct 100.00 Line-by-line

ADR Engineering UL Fiumicino

(Rome) Airport engineering euro 774,690 100.00

Aeroporti di Roma S.p.A.

100.00 Line-by-line

99.00Aeroporti di Roma

S.p.A. ADR Tel UL

Fiumicino (Rome)

Telecommunications euro 600,000

1.00 ADR Sviluppo

100.00 Line-by-line

ADR Advertising (1) UL Fiumicino

(Rome) Advertising euro 1,000,000 51.00


100.00 Line-by-line

ADR Sviluppo S.r.l. Fiumicino

(Rome) Real estate euro 100,000 100.00


100.00 Line-by-line

Romulus Finance S.r.l. Conegliano (Treviso)

Credit securitisation euro 10,000 - n/a - Line-by-line

ADR Assistance S.r.l. Fiumicino

(Rome) Assistance to passengers

with reduced mobility euro 6,000,000 100.00Aeroporti di Roma

S.p.A. 100.00 Line-by-line

Ligabue Gate Gourmet Rome in bankruptcy

UL Tessera (Venice) Airport catering euro 103,200 20.00Aeroporti di Roma

S.p.A. 20.00 Valued at cost

S.A.CAL. UL Lamezia Terme

(Catanzaro) Airport management euro 7,755,000 16.57


16.57 Valued at cost 1,307

Aeroporto di Genova UL Genova Sestri Airport management euro 7,746,900 15.00Aeroporti di Roma

S.p.A. 15.00 Valued at cost 894

Consorzio E.T.L. in liquidation Cons. Rome Study of European

transport rules euro 82,633 25.00Aeroporti di Roma

S.p.A. 25.00 Valued at cost

Fiumicino Energia S.r.l. Milan Electricity Production euro 741,795 87.14 Direct 100 Line-by-line

90.00Fiumicino Energia

S.r.l.

Leonardo Energia S.C.a r.l. Milan Electricity Production euro 10,000

10.00Aeroporti di Roma

S.p.A.

100 Line-by-line

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5. 5.7 LIST OF EQUITY INVESTMENTS


NAME TYPE OFFICE ASSETS CURRENCY CAPITAL % SHARE THROUGH SHARE METHOD VALUE

* ** ***

OTHER

PENTAR UL Milan Holding company euro 11,548,370 20.35 Direct 20.35 Valued at cost 2,232

DOMINO S.r.l. Milan Internet services euro 10,000 100.00 Direct 100.00 Valued at cost 10

KIWI 1 VENTURA SERVICOS S.A. Channel Islands Investment fund euro 110,610,000 0.92 Direct (2) 0.92 Valued at cost 28

DIRECTIONAL CAPITAL HOLDINGS IN LIQUID.

N.V. Channel Islands Financial services euro 6,249 5.00 Direct (4) 5.00 Valued at cost 1 euro cent

GEMINA FIDUCIARY SERVICES

S.A. Luxembourg Trust company euro 150,000 99.99 Direct 99.99 Valued at cost 1 euro cent

TELEFIN in liquidation (form. Tempo Libero) (3)

UL Milan Financial services Lire 20,000,000,000 42.50 Direct 42.50 Valued at cost 1 euro cent

NOTES:

* The consolidated share refers to consolidation within the specific group belonging to the Gemina Group. ** The consolidation method of indirect equity investments is attributable to sub-consolidation and not directly to Gemina. *** Book value for equity investments posted at cost, with the shareholders’ equity method, in thousands of euro. (1) Equity investment held in the ordinary share capital of the company (500,000 euro). The stake held in the overall share capital (1,000,000 euro) is 25.5%. (2) The company has been in liquidation since January 2009, as per the Shareholders’ Agreement. (3) On April 29, 1999, the Court of Milan declared its bankruptcy. (4) As from March 31 2008, the company is in liquidation.

KEY:

L Listed joint stock company. UL Unlisted joint stock company.

S.r.l. Limited liability company. Cons. Consortium.

S.c. a r.l. Limited liability consortium company.

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5.8 EFFECTS OF APPLICATION OF IFRIC 12

This appendix illustrates the changes introduced by the interpretation IFRIC 12 “Service Concession Agreements” (“Interpretation or IFRIC 12”), issued by the International Accounting Standards Board (“IASB”), which governs the methods of recognition and valuation of concession contracts between a public sector body and a private operator, in which the price for and nature of the services provided are regulated by the Grantor.

IFRIC 12, published by the IASB in November 2006, was approved by the European Commission with EC Regulation no. 254/2009 on March 25, 2009 and its application is mandatory for financial statements drawn up in compliance with the IAS/IFRS for financial years which began following the year of approval.

Therefore, starting from January 1, 2010, the Gemina Group publishes its accounting disclosures applying IFRIC 12.

Unlike the practice adopted until now without a specific criterion set forth by the IASB, moving beyond the concept of the transfer of “risks and benefits” which has prevailed until now in the body of the IFRS standards, according to IFRIC 12, the concessionaire must not enter the infrastructure in concession as a tangible asset as it does not have the “control”, but instead, only the right to use the asset to supply the service in agreement with the terms and procedures with the grantor. This right is classified as a financial asset or as an intangible asset, depending on whether or not there is an unconditioned right to receive remuneration regardless of the actual use of the infrastructure, rather than the right to charge the users for use of the service. In the event that the arrangement contains a combination of the two cases, the mixed model is applied.

Set forth below are the criteria used to apply the Interpretation to the concession assigned to ADR by the Ministry for Infrastructure and Transport regarding the Rome airport system (“Airport Management Concession”) and the effects deriving from the first-time application of the Interpretation.

It is also noted that these financial statements have also been prepared in compliance with the indications set forth in the draft document drawn up by the Organismo Italiano di Contabilità (the Italian Standard Setter) – Application no. 3 “Service Concession Arrangements”. If, in the future, also as a result of additional consultation on the method of application of the Interpretation to the specific case of the Group, new guidance or operating indications should arise, these shall be considered in the subsequent income statements and balance sheets drawn up by the Group.

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Information on the airport management concession

IFRIC 12 is applicable to the Group in relation to the airport management concession of the subsidiary company ADR.

ADR’s corporate purpose is the construction and management of airports or of a part thereof, and the exercise of any activity related or complementary to air traffic of any type or speciality.


The above-mentioned activity is carried out as a concession on behalf of the competent State Administration (Ministry for Infrastructure and Transport) with expiration in 2044.

The purpose of the concession is the single management of the airport system and the concession includes the management of infrastructures and services and the maintenance of existing systems, machinery and buildings.

Using funds from autonomous loans or using funds issued by the State on the basis of specific regulations and agreements, ADR has the task of coordinating all assets necessary for the creation of the “Development Plan” of airport infrastructures.

Scope of application and first-time application of the interpretation

IFRIC 12 applies to service concession arrangements in which the grantor is a public sector body and the concessionaire is a private operator, if the following conditions are met:

a) the grantor controls or regulates what services the concessionaire must provide using the infrastructure, to whom and at what price; and

b) the grantor controls - through its ownership or in another way - any residual interest in the infrastructure at the end of the term of the arrangement.

Following the analysis performed, the new Interpretation was deemed to be applicable to the Group’s Airport Management Concession.

On first-time application, the provisions contained in IFRIC 12 must be applied retroactively, recalculating the effects that would have occurred as at January 1, 2009 (start date of the financial year presented in the financial statements for comparative purposes), attributing these effects to Shareholders’ Equity reserves.

Nonetheless, it is noted that in relation to the subsidiary

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company ADR, the retroactive application regarded the period following January 1, 2001, the year of the merger between Leonardo S.p.A (now ADR) and ADR. In relation to this business combination, at the time of the transition to IFRS, the Group adopted the option provided by IFRS 1 of not recalculating the operation in compliance with IFRS 3.

Presentation of impacts deriving from the adoption of the Interpretation

In order to illustrate the effects deriving from the application of IFRIC 12, the following sections provide several accounting statements reconciling statement of financial position, income statement and cash flow values before and after the application of IFRIC 12. In particular:

a) the comparative statements of the consolidated statement of financial position as at December 31, 2009, providing evidence of the effect of application of IFRIC 12 as at January 1, 2009;

b) the comparative statements of the reclassified consolidated

income statement for the entire year 2009;

c) the statements of reconciliation between the consolidated shareholders’ equity as at January 1 and December 31, 2009 and the consolidated profit (loss) for the entire year 2009.

It is noted that as a result of applying the interpretation, it was necessary to revise and adapt several items contained in the consolidated statements (official and restated) and, therefore, also the income statement, balance sheet and cash flow information disclosed.

Key points of the accounting representation of IFRIC 12

Based on the contractual agreements which fall within the scope of application of IFRIC 12, the concessionaire acts as a provider of services regarding (i) the realisation and/or improvement of infrastructures used to provide public services, and (ii) the management and maintenance of said assets, for a specific period of time. As a result, the construction and improvement of the infrastructure is treated as the activity of a construction company, and during the period in which the service is provided, the costs and revenues from construction are recorded in the income statement in compliance with IAS 11.

As indicated by IFRIC 12, in exchange for the construction and/or improvement services provided by the concessionaire, the grantor pays the concessionaire a consideration, to be recognised at its fair value, which may consist in rights over:

a financial asset; an intangible fixed asset. The financial asset model applies when the concessionaire has

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an unconditional contractual right to receive cash for the construction services, irrespective of the actual use of the infrastructure.

According to the intangible fixed asset model, on the other hand, in exchange for the services of construction and improvement of the infrastructure, the concessionaire acquires the right to charge users of the infrastructure. Therefore, the concessionaire’s cash flows are not guaranteed by the grantor, but are contingent on the users’ effective use of the infrastructure, in which case demand risk is incurred by the concessionaire.

In the event that the arrangement contains a combination of the two cases, it falls within the scope of the mixed model.

The mixed model is applicable to the Airport Management Concession held by the Gemina Group. Principally, the construction and improvement works are remunerated through the tariffs for the use of the service using the intangible asset model, and the financial asset model is only marginally applicable.

Summary of the main financial statement items affected by IFRIC 12 or presented for the first time

In relation to the above, the main effects of application of IFRIC 12 to the balance sheet items of the consolidated financial statements of the Gemina Group regard:

a) tangible assets: all fixed assets which are to be returned to the grantor on conclusion of the concession have been classified under the item “Intangible Fixed Assets”;

b) intangible fixed assets: the above fixed assets have been recorded in the item “Airport management concession – investments in infrastructure in concession” as concession rights deriving from the construction services, values which shall be recovered through the considerations for the use of the infrastructures (airport tariffs). These intangible assets are amortised over the term of the concession (up to 2044), using criteria that reflect the methods in which the economic benefits of the activity flow to the company. The amortisation starts from the moment the rights in question begin to produce the related economic benefits;

c) contract work in progress/receivables: the values of works

created using the financial means of the grantor have been restated from contract work in progress to receivables;

d) receivables: the receivables relating to the amount due from the grantor for the realization of the works previously recorded under contract work in progress were recorded in this category;

e) system renovation provisions: supplementary allocations are planned with respect to the amortisation of the concession for those portions of infrastructures which have a technical-

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economic duration of less than the residual term of the concession, which shall be recorded in specific provisions.

Investments realised for the maintenance and renovation of infrastructures are charged to use of the provisions in question;

f) deferred tax assets: pursuant to IAS 12, all the effects recorded upon first-time application of IFRIC 12, described in the above points, have generated deferred tax assets or liabilities;

g) shareholders’ equity, profit (loss) related o the new IFRS standards: the balance of the effects on equity recognised due to the application of the Interpretation was attributed to shareholders’ equity reserves.

The most significant effects on the items of the Gemina Group consolidated income statement, in addition to those previously described and relating to the elimination of amortisation and depreciation for the fixed assets which are to be returned to the grantor on conclusion of the concession, to the recording of amortisation of the “airport management concession –investments in infrastructure in concession” and to the allocations and uses of the system renovation provisions, are as follows:

h) revenues from construction services (“infrastructure pursuant to IFRIC 12): revenues from construction services are recognised in the income statement, referring to the state of completion of the construction works They represent the consideration due to the concessionaire for the activity carried out, and are valued based on the total construction costs incurred. The item in question also includes revenues from construction of assets created using State funds.

i) costs of infrastructure: costs for construction services are recognised in the income statement, referring to the state of completion of the construction works, and are mainly comprised of costs for external materials and services;

j) financial income and expenses: compared to the accounting scheme prior to IFRIC 12, financial income and expenses have been changed as a result of the expenses incurred in the period in relation to the discounting of the system renovation provisions.

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ASSETS (in thousands of euro)

12/31/2009 PRE-IFRIC 12

(*)

IFRIC 12 ADJUST./RECL

ASSIFICATIONS

AS AT

01/01/2009

IFRIC 12 ADJUSTMENTS

/RECLASSIFICA

TIONS 2009

12/31/2009 POST-IFRIC

12

NON-CURRENT ASSETS

Airport management concession 2,996,374 - 6,906 3,003,280Airport management concession - investments in infrastructure in concession - 401,681 37,462 439,143

Goodwill 6,906 - (6,906) -

Other intangible fixed assets 5,167 (455) 2,264 6,976

TOTAL INTANGIBLE FIXED ASSETS 3,008,447 401,226 39,726 3,449,399

Land and buildings 87,638 (92,841) 5,203 -

Plant and machinery 74,386 (42,264) (22,017) 10,105

Fixtures and fittings, tools and other equipment 1,169 - - 1,169

Construction in progress and advances 53,180 (34,143) (17,321) 1,716

Other tangible fixed assets 198,907 (194,129) (858) 3,920

TOTAL TANGIBLE/TECHNICAL FIXED ASSETS 415,280 (363,377) (34,993) 16,910

EQUITY INVESTMENTS IN ASSOCIATED

COMPANIES VALUED AT NET EQUITY 8,649 - - 8,649

INVESTED RECEIVABLES 4,591 - - 4,591

OTHER EQUITY INVESTMENTS 2,756 - - 2,756

DEFERRED TAX ASSETS 51,202 35,775 2,252 89,229

OTHER NON-CURRENT ASSETS 9,486 - - 9,486

OTHER NON-CURRENT FINANCIAL ASSETS 1,400 - - 1,400

TOTAL NON-CURRENT ASSETS 3,501,811 73,624 6,985 3,582,420

CURRENT ASSETS

INVENTORIES 10,164 - - 10,164

CONTRACT WORK IN PROGRESS 17,610 (11,892) (4,802) 916

TRADE RECEIVABLES 197,298 11,892 4,802 213,992

OTHER RECEIVABLES 6,926 - - 6,926

FINANCIAL INSTRUMENTS – DERIVATIVES 534 - - 534

OTHER CURRENT FINANCIAL ASSETS 55,497 - - 55,497

CASH AND CASH EQUIVALENTS 149,272 - - 149,272

TOTAL CURRENT ASSETS 437,301 - - 437,301

ASSETS HELD FOR SALE - - - -

TOTAL ASSETS 3,939,112 73,624 6,985 4,019,721

(*) Pursuant to the consolidated financial statements as at December 31, 2009 approved by the Board of Directors on March 15, 2010.

GEMINA GROUP

145



SHAREHOLDERS’ EQUITY AND LIABILITIES (in thousands of euro)

12/31/2009 PRE-IFRIC

12 (*)

IFRIC 12 ADJUST./RECLA

SSIFICATIONS AS

AT 01/01/2009

IFRIC 12 ADJUSTMENTS/RECLASSIFICATI

ONS 2009

12/31/2009 POST-

IFRIC 12


Share capital 1,472,960 - - 1,472,960

Capital reserves (share premium reserve) 200,057 - - 200,057

Hedging and translation reserve (50,304) - - (50,304)

Other reserves 82,756 - - 82,756

Profit (loss) from previous years 19,556 (73,908) - (54,352)

Profit (loss) for the year (39,152) - (4,515) (43,667)

GROUP SHAREHOLDERS’ EQUITY 1,685,873 (73,908) (4,515) 1,607,450Minority shareholders in capital and reserves 36,556 (2,906) (199) 33,451MINORITY INTEREST IN SHAREHOLDERS’ EQUITY 36,556 (2,906) (199) 33,451

TOTAL SHAREHOLDERS’ EQUITY 1,722,429 (76,814) (4,714) 1,640,901


EMPLOYEE BENEFITS 24,653 - - 24,653PROVISION FOR RISKS AND CHARGES –

BEYOND 12 MONTHS 280,843 (3,300) (500) 277,043PROVISIONS FOR RESTORATION CHARGES -

BEYOND 12 MONTHS - 119,292 5,299 124,591FINANCIAL INDEBTEDNESS NET OF

CURRENT SHARE 347,825 - - 347,825

OUTSTANDING BONDS 1,097,465 - - 1,097,465

TOTAL NON-CURRENT LIABILITIES 1,750,786 115,992 4,799 1,871,577

CURRENT LIABILITIES

TRADE PAYABLES 144,959 - - 144,959

CURRENT TAX LIABILITIES 11,353 - - 11,353

CURRENT FINANCIAL LIABILITIES 28,839 - - 28,839PROVISIONS FOR RISKS AND CHARGES –

WITHIN 12 MONTHS 20,324 - - 20,324PROVISIONS FOR RESTORATION CHARGES -

WITHIN 12 MONTHS - 34,446 6,900 41,346

FINANCIAL INSTRUMENTS – DERIVATIVES 157,685 - - 157,685

OTHER CURRENT LIABILITIES 102,737 - - 102,737

TOTAL CURRENT LIABILITIES 465,897 34,446 6,900 507,243

GEMINA GROUP

146


LIABILITIES HELD FOR SALE - - - -TOTAL SHAREHOLDERS’ EQUITY AND

LIABILITIES 3,939,112 73,624 6,985 4,019,721

(*) Pursuant to the consolidated financial statements as at December 31,

2009 approved by the Board of Directors on March 15, 2010.

(in millions of euro) 2009 (*)

PRE-IFRIC 12

IFRIC 12 ADJUSTMENTS/

RECLASSIFICATIONS 2009

POST-IFRIC 12

REVENUES 570.9 (10.8) 560.1

INFRASTRUCTURE PURSUANT TO IFRIC 12 - 30.1 30.1

CONSUMPTIONS AND OPERATING COSTS (222.9) 9.3 (213.6)

COSTS OF INFRASTRUCTURE - (26.2) (26.2)

VALUE ADDED 348.0 2.4 350.4

STAFF COSTS (142.8) 0.8 (142.0)


PROVISIONS (142.1) 35.3 (106.8)ALLOCATIONS TO SYSTEM RENOVATION

PROVISIONS - (40.6) (40.6)

EBIT 63.1 (2.1) 61.0

FINANCIAL INCOME/(EXPENSES) (81.3) (4.9) (86.2)INCOME/(CHARGES) ON EQUITY

INVESTMENTS (1.8) - (1.8)PROFIT OF CURRENT ASSETS BEFORE

TAXATION (20.0) (7.0) (27.0)

INCOME TAXES (20.0) 2.3 (17.7)PROFIT (LOSS) OF THIRD-PARTY

SHAREHOLDERS (0.8) (0.2) (1.0)PROFIT (LOSS) ATTRIBUTABLE TO THE

GROUP (39.2) (4.5) (43.7)

NET EARNINGS PER SHARE:

FROM RECURRING ACTIVITIES (0.027) (0.003) (0.030)FROM RECURRING AND DISCONTINUED

ACTIVITIES (0.027) (0.003) (0.030)

(*) Pursuant to the consolidated financial statements as at December 31,

2009 approved by the Board of Directors on March 15, 2010.

GEMINA GROUP

147


RECONCILIATION OF SHAREHOLDERS’ EQUITY FOLLOWING THE INTRODUCTION OF IFRIC 12


SHAREHOLDE

RS’ EQUITY 01/01/2009

CHANGES TO SHAREHOLDER

S’ EQUITY 2009 PROFIT (LOSS)

2009

SHAREHOLD

ERS’ EQUITY 12/31/2009

CONSOLIDATED SHAREHOLDERS’ EQUITY

PRE-IFRIC 12 1,770,399 (8,001) (39,969) 1,722,429

IFRIC 12 ADJUSTMENTS Adjustments to tangible and intangible fixed

assets 35,950 - 4,296 40,246

System renovation provisions (148,538) - (11,268) (159,806)

(112,588) - (6,972) (119,560)

Tax effect on IFRIC 12 adjustments 35,774 - 2,258 38,032

TOTAL IFRIC 12 ADJUSTMENTS (76,814) - (4,714) (81,528)

CONSOLIDATED SHAREHOLDERS’ EQUITY

- IAS/IFRS - IFRIC 12 VALUES 1,693,585 (8,001) (44,683) 1,640,901

ABSOLUTE CHANGE (76,814) - (4,714) (81,528)

PERCENTAGE CHANGE (4.3%) - (11.8%) (4.7%)

GEMINA GROUP

148


REGULATION

The following statement, drawn up pursuant to Art. 149-duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2010 financial year for audit services and other services rendered by the same Independent Auditors.

(in thousands of euro) COMPANY THAT RENDERED

THE SERVICE TARGET COMPANY

REMUNERATIO

NS PERTAINING

TO THE YEAR

2010


COMPANY 139


COMPANIES 318


COMPANY 3


COMPANIES 75

OTHER SERVICES DELOITTE & TOUCHE S.P.A. (2) GEMINA PARENT

COMPANY 23 (1) Subscription of Income Tax Return and 770 forms.

(2) Technical and methodological support for the adoption of IFRIC 12 standard.

GEMINA GROUP

149

5.10 CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS IN

ACCORDANCE WITH ART. 81-TER OF CONSOB REGULATION NO. 11971 OF

MAY 14, 1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS


Managing Director, and Alessandra Bruni, in my position of Manager in charge of preparing corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154 bis, subsections 3 and 4 of Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:


- of the correct application of administration and accounting procedures for the drafting of the consolidated financial statements over 2010.

It is also stated that: - the consolidated financial statements as at December 31,

2010: - were drawn up pursuant to the applicable


- are consistent with figures disclosed in the accounting books and records;

- supply a true and fair disclosure of the equity, economic and financial situation of the issuer and of the companies included in the consolidation area;

- the Report on Operations includes a reliable analysis of the performance and management result, as well as the situation of the issuer and of the companies included in the consolidation, together with the description of the major risks and uncertainties to which they are exposed.


The Managing Director

(Guido Angiolini)

Manager in charge of preparing

corporate accounting documents (Alessandra Bruni)

GEMINA GROUP

150

5.11


GEMINA GROUP

151

GEMINA GROUP

152

6.


OF GEMINA S.P.A.

GEMINA

154


(in euro) Notes

2010 Financial

Year


parties

2009 Financial

Year


parties INCOME (CHARGES) ON EQUITY

INVESTMENTS

DIVIDENDS FROM ASSOCIATED COMPANIES - 240,000 OTHER INCOME/(CHARGES) ON EQUITY

INVESTMENTS (1,348,180) (3,952,922) TOTAL INCOME (CHARGES) ON EQUITY

INVESTMENTS 1 (1,348,180) (3,712,922)

NET FINANCIAL INCOME (EXPENSE)

FINANCIAL INCOME:

INTEREST INCOME 389,201 90,290 837,299 208,695

FINANCIAL EXPENSES:

INTEREST EXPENSE (3,010,887) (3,010,887) (3,477,636) (3,236,098)

OTHER EXPENSES (376,458) (376,458) (604,840) (520,190)

TOTAL NET FINANCIAL INCOME (EXPENSE) 2 (2,998,144) (3,245,177)

STAFF COSTS 3 (1,525,942) (24,436) (1,410,492)

OTHER OPERATING COSTS 4 (3,846,358) (87,747) (3,163,118) (79.573)

NET PROVISIONS 5 (2,239,601) (3,600,000) (3,100,000) (3,100,000)

AMORTISATION/DEPRECIATION (19,855) (28,707)

REVENUES 6 1,043,965 880,651 946,403 713,611

TOTAL NET OPERATING COSTS (6,587,791) (6,755,914)

PRE-TAX PROFIT (LOSS) (10,934,115) (13,714,013)

INCOME TAXES 7 2,247,727 (355,511)

PROFIT (LOSS) FOR THE YEAR (8,686,388) (14,069,524)

GEMINA

155




PROFIT (LOSS) FOR THE YEAR (8,686) (14,070)PROFIT (LOSS) ON DERIVATIVE

INSTRUMENTS (CASH FLOW HEDGES) 338 (765)

TAX EFFECT (93) 210

TOTAL PROFIT (LOSS) FOR THE YEAR (8,441) (14,625)

GEMINA

156


ASSETS

(in euro) Notes 12/31/2010



NON-CURRENT ASSETS

Other intangible fixed assets 785 3,141

TOTAL INTANGIBLE FIXED ASSETS 8 785 3,141 Fixtures and fittings, tools and other equipment 6,467 10,308



EQUITY INVESTMENTS IN SUBSIDIARIES 10 1,843,246,286 1,843,211,448

EQUITY INVESTMENTS IN ASSOCIATES AND

JOINT VENTURES 10 2,231,743 8,609,066


INVESTED RECEIVABLES 11 - 4,591,111

DEFERRED TAX ASSETS 12 1,028,997 2,109,436

OTHER NON-CURRENT ASSETS 116 116

OTHER NON-CURRENT FINANCIAL ASSETS 13 - 1,400,000 1,400,000

TOTAL NON-CURRENT ASSETS 1,846,571,447 1,860,000,197

CURRENT ASSETS

TRADE RECEIVABLES 14 578,327 578,077 397,990 335,755

OTHER RECEIVABLES 15 13,012,292 11,876,426 14,434,597 13,455,843

OTHER CURRENT FINANCIAL ASSETS 16 2,934,423 2,927,493 1,566,043 1,566,043

CASH AND CASH EQUIVALENTS 17 11,136,773 47,533 13,433,520 411,482

TOTAL CURRENT ASSETS 27,661,815 29,832,150

TOTAL ASSETS 1,874,233,262 1,889,832,347

GEMINA

157



(in euro) Notes 12/31/2010




Share capital 1,472,960,320 1,472,960,320

Capital reserves 199,706,821 200,056,535

Hedging reserve (403,283) (648,220)

Other reserves 83,106,078 82,756,364

Profit (loss) from previous years 64,279,101 78,348,625

Profit (loss) for the year (8,686,388) (14,069,524)

Total Shareholders’ Equity 18 1,810,962,649 1,819,404,100


Employee benefits 19 244,339 193,240

Provisions for risks and charges 20 11,300,000 6,700,000 9,100,000 3,100,000

Financial indebtedness net of current share 21 - 46,964,031 46,964,031

Total non-current liabilities 11,544,339 56,257,271

CURRENT LIABILITIES

Trade payables 22 711,378 119,144 478,115 127,792

Current financial liabilities 23 41,953,635 41,953,635 89,043 89,043

Provisions for risks and charges 20 1,922,139 1,902,715

Financial instruments - derivatives 24 581,212 581,212 926,026 926,026

Other current liabilities 25 6,557,910 438,115 10,775,077 11,884

Total current liabilities 51,726,274 14,170,976

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 1,874,233,262 1,889,832,347

GEMINA

158

6.3 GEMINA S.P.A. STATEMENT OF CASH FLOWS AS AT DECEMBER 31, 2010

(in thousands of euro) 12/31/2010 12/31/2009


Amortisation and depreciation of tangible and intangible fixed assets 20 29

Increase (decrease) of employee benefits and other funds 2,271 4,858

(Increase) decrease in deferred tax assets 1,080 601

(Revaluation) write-down of equity investments 1,378 2,100

1) OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING CAPITAL

(3,937) (6,482)

(Increase) decrease in trade receivables (180) 4,022

(Increase) decrease in other current assets 1,422 10,157

Increase (decrease) in trade payables 234 (83)

Increase (decrease) in other current liabilities and tax payables (4,220) 9,407

2) CHANGES IN WORKING CAPITAL (2,744) 23,5033) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

OPERATIONS (1+2) (6,681) 17,021


Disposal of equity investments in SITTI 5,000 -

(Increase) decrease in invested receivables 4,591 (325)

Other changes in equity investments (35) (301)

(Increase) decrease in tangible and intangible fixed assets (5) -4) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

INVESTMENT ACTIVITIES 9,551 (626)


Dividends paid - (188)

(Increase) decrease in trade receivables 32 (1,279)

Increase (decrease) in financial payables (5,444) (2,684)

Other changes in shareholders’ equity 245 (555)5) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

FINANCING ACTIVITIES (5,167) (4,706)

6) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3+4+5) (2,297) 11,689

7) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 13,434 1,745

8) CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (6+7) 11,137 13,434

GEMINA

159

6.4 GEMINA S.P.A. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY AS AT

DECEMBER 31, 2010


Share capital Capital reserves

Hedging reserve

Other reserves

Profit (loss)

pertaining to previous years

Profit (loss) for the

year Shareholders’

Equity

Balances as at 01/01/2009 1,472,960 200,057 (93) 82,064 65,373 13,855 1,834,216

Allocation of results year 2008 692 13,163 (13,855)


shares (188) (188)

Total profit (loss) for the year (555) (14,070) (14,625)

Balances as at 12/31/2009 1,472,960 200,057 (648) 82,756 78,349 (14,070) 1,819,404

Allocation of results year 2009 (14,070) 14,070

Other changes (350) 350

Total profit (loss) for the year 245 (8,686) (8,441)

Balances as at 12/31/2010 1,472,960 199,707 (403) 83,106 64,279 (8,686) 1,810,963

GEMINA

160


ACCOUNTING STANDARDS These financial statements have been prepared according to

the International Accounting Standards (IAS or International Financial Reporting Standards (IFRS)) and according to their “interpretations” as provided in documents issued by the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) approved by the European Commission.

The financial statements and information contained herein

were drawn up in conformity with the international standard IAS 1, as provided for by CONSOB communication no. 15519 and CONSOB communication no. 6064293 issued on July 28, 2006.

ADOPTION OF NEW STANDARDS ACCOUNTING STANDARDS, AMENDMENTS AND

INTERPRETATIONS APPLIED FROM JANUARY 1, 2010 IAS 24 – RELATED PARTY DISCLOSURES On November 4, 2009 IASB issued a revised version of this

standard aimed at clarifying and supplementing the definition of related parties.

This standard must be applied as from January 1, 2011. The company adopted the standard in advance as from

January 1, 2010. As regards the applicability of the principle to the Company,

in particular, the revised Standard extends the meaning of related parties to companies controlled by entities with a significant influence on the Company.

The adoption of this standard has no effect on the evaluation of balance sheet items.

The following amendments, improvements and

interpretations, in effect as from January 1, 2010, will regulate categories and cases not pertaining to the Company as at the date of these financial statements, but might have accounting effects on transactions and future agreements.

- IFRS 3 – Business Combinations; - IAS 27 (2008) – Separate and Consolidated Financial

Statements; - Improvement to IFRS 5 – Non-current Assets Held for

Sales and Discontinued Operations; - Amendments to IAS 28 – Equity Investments in

Associated Companies and IAS 31 – Equity Investments in Joint Ventures, following amendments made to IAS 27;

GEMINA

161


- Improvements to IAS/IFRS (2009); - Amendment to IFRS 2 – Share-Based Payments:

payments based on Group shareholdings governed by cash;

- IFRIC 17 – Distribution of Non-Cash Assets to Owners; - IFRIC 18 – Transfers of Assets from Customers; - Amendment to IAS 39 – Financial Instruments:

Recognition and Measurement – Eligible Hedged Items. ACCOUNTING STANDARDS, AMENDMENTS AND

INTERPRETATIONS NOT YET APPLICABLE AND NOT ADOPTED IN ADVANCE BY THE COMPANY.

A series of amendments and interpretations have been issued which are applicable following December 31, 2010: IAS 32 – Financial Instruments: Presentation and Classification of Rights Issues; IFRS 9 - Financial Instruments; IFRIC 14 - Advance Payments in Relation to Minimum Funding Requirements; IFRIC 19 – Extinguishing Financial Liabilities With Equity Instruments; IFRS 7 – Financial Instruments: Additional Information.

In May 2010, the IASB issued a set of modifications to the IFRS (“Improvements”) that will entail changes in the statement, recognition and valuation of the balance sheet items and modifications that will primarily bring about changes in terminology or publishing, with slight effects from the evaluation viewpoint.

These standards have not been adopted in advance by the company, as they regulate cases which were not applicable to the company as at December 31, 2010.

VALUATION CRITERIA These financial statements are prepared on an on-going

concern. CURRENCY OF REFERENCE The financial statements of Gemina are drawn up in euro. USE OF ESTIMATES Drawing up the financial statements in application of the

IFRS requires estimates and assumptions to be made, which affect the book asset and liability values on the date of reference.



GEMINA

162


DIVIDENDS The dividends are recorded at the time the right of the

shareholders to receive payment arises, which normally corresponds to the date of the annual Shareholders’ Meeting that resolves on the distribution of the dividends.

The dividends payable to minority shareholders are shown as a change of the Shareholders’ Equity as at the date when the Shareholders’ Meeting approves them.

FINANCIAL INCOME AND EXPENSE Financial income and expense are recorded in the income

statement on an accrual basis, based on the interest accrued on the value of the respective financial assets and liabilities using the actual interest rate.

COSTS Costs are valued at the fair value of the amount paid or to be

paid, and are recognised in the income statement on an accrual basis.

Costs connected with share capital increase are charged directly as a decrease in Shareholders’ equity.

REVENUES Revenues from sales and services are respectively posted

when the actual transfer of risks and benefits coming from the sale of the property or the supply of the service has occurred.

INCOME TAXES The income tax on the income of the year is calculated based

on current legislation. Any deferred or prepaid income taxes are calculated on the

temporary differences between the equity values entered in the financial statements and the corresponding values recognised for tax purposes, applying the tax rate that is expected to be in effect on the date when the temporary difference will be cancelled.


Deferred taxes are recorded in the income statement, with the exception of those relating to items that are directly recorded in shareholders’ equity. In that case, also deferred taxes are charged to shareholders’ equity.

In its capacity of consolidating company, Gemina adopted the national consolidated financial statements, and the following companies participate in it: ADR, ADR Engineering, ADR Tel, ADR Sviluppo S.r.l., ADR Assistance, Fiumicino Energia and Leonardo Energia.

GEMINA

163


EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES,

ASSOCIATED COMPANIES AND JOINT VENTURES Equity investments in subsidiary companies, associated

companies and joint ventures are recorded at their purchase cost including additional charges, which is adjusted when there are losses of value pursuant to IAS 36.

The term subsidiary companies means all companies over which Gemina has the power to determine, either directly or indirectly, the financial and operating policies in order to obtain benefits from their activities.

The term joint ventures means all those companies in which Gemina exercises control together with other entities based on agreements that attribute joint powers to govern said Company.

Equity investments in associated companies are those in which Gemina is capable of exercising a significant influence, but not control or joint control, by contributing to the financial and operating decision-making policies of the investees.

The positive difference between acquisition cost and the share of shareholders’ equity at current values of the Company’s interest arising from the act of purchase is therefore included in the book value of the equity investment.

When there is proof that these equity investments have sustained impairment, the latter is recorded in the income statement as a write-down of the book value.

If no impairment occurs or impairment is reduced afterwards, the revaluation that reinstates the book value up to the new estimation, within the limits of the cost, is entered in the income statement.

In the event the portion of losses of the investee company, which is pertaining to the Company, exceeds the book value of the equity investment, the value of the equity investment is zeroed and the portion of additional losses is disclosed as a provision under liabilities.

FINANCIAL ASSETS HELD FOR SALE (OTHER EQUITY

INVESTMENTS) AND FINANCIAL ASSETS HELD FOR TRADING These are made up of instruments representing the

shareholders’ equity, and are valued at fair value, if it can be determined.

When the fair value cannot be reliably determined, they are entered at cost – written down for impairment losses, if necessary – whose effect is recognised in the income statement.

GEMINA

164


In the case financial assets are classified as “held for sale”

(“other equity investments”), the adjustment to fair value as at the date of reference is recorded under a specific item of shareholders’ equity. When they are sold or suffer an impairment loss, the profits or losses previously recorded under shareholders’ equity are charged to the income statement for the year.

If financial assets are classified as “held for trading”, the profits and losses resulting from the changes in fair value are recorded in the income statement for the year.

The financial assets are deleted from the balance sheet assets if and only if the risks and benefits correlated with their ownership have been substantially transferred.

OTHER FINANCIAL ASSETS The other financial assets are recorded and reversed on the

financial statements based on the trading date, and are initially valued at cost, including charges directly attributable to their acquisition.

TANGIBLE ASSETS The tangible assets are recorded at historical cost. Tangible fixed assets are depreciated on a straight-line basis in

each year in relation to the estimated useful life and, in the case of disposal, until the end of use.


The estimated useful life of tangible assets is such that depreciation rates used are the following:

- Fixtures and fittings, 15%. - Other assets 12% to 20%. In the case that there is an impairment loss, aside from the

depreciation already recorded, the asset is written down accordingly.

If in subsequent years the conditions for the write-down cease to exist, the original value will be reinstated within the limits of the write-downs previously made.


Any maintenance costs are charged to the income statement.

GEMINA

165


INTANGIBLE FIXED ASSETS The intangible assets, all having a defined useful life, are

recorded at purchase cost and disclosed net of their related amortisation.

Amortisation is calculated on a straight-line basis depending on the estimated useful life.

Amortisation therefore begins when the intangible asset becomes available for use.

RECEIVABLES Receivables are stated at the fair value in the financial

statements corresponding to their par value, and are adjusted to their estimated realisable value.

In the case of receivables whose collection is expected to be long-term, their current value is recorded.




TRADE PAYABLES Trade payables are stated at the fair value corresponding to

their par value. FINANCIAL LIABILITIES The financial liabilities are initially recognised at fair value

corresponding to cost, net of directly attributable transaction costs.

Subsequently they are valued at the amortised cost. The amortised costs is the amount of the liability recorded at the time of its initial recognition net of capital repayments and additional charges amortised applying the effective interest rate method.

FINANCIAL DERIVATIVES The Company uses derivatives for hedging interest rate

fluctuation risks. Interest rate risks derive from variable rate bank loans. To

hedge these risks, the Company converted a portion of its variable rate debts into fixed rate debts and designated them as cash flow hedges.

Derivative instruments are initially recognised at fair value and adjusted to their fair value at year-end.

GEMINA

166


Any changes in the fair value of derivatives, which are so

designated, and considered to be effective in hedging against future cash flows of the Company’s contractual commitments and expected transactions, are directly recorded in shareholders’ equity net of their tax effect, while their ineffective portion is immediately recognised in the income statement.

EMPLOYEE BENEFITS Post employment benefits – ascribable to employee severance

indemnities – have been valued according to Italian accounting standards and to current legislation regarding collective payroll agreements and company pension schemes.

PROVISIONS FOR RISKS AND CHARGES

Provisions for risks and charges include the allocations arising from current obligations of a legal or implicit nature, deriving from past events, and the fulfilment of which will probably require the employment of resources, of which the amount cannot be reliably estimated.

Provisions are allocated based on a best estimate of the costs required for fulfilling the obligation at the year-end date of the financial statements.

NOTES TO THE INCOME

STATEMENT (in thousands of euro)


They amount to (1,348) thousand euro compared to (3,713) thousand euro in 2009.

DIVIDENDS

2010 2009 CHANGE

FROM ASSOCIATED COMPANIES - 240 (240)

SITTI - 240 (240)

TOTAL - 240 (240) OTHER INCOME/(CHARGES) ON EQUITY INVESTMENTS

2010 2009 CHANGE

WRITE-DOWNS OF EQUITY

INVESTMENTS (1,378) (2,100) 722

PENTAR (1,378) (1,100) (278)

SITTI - (1,000) 1,000

LOSS SETTLEMENT (1) (1,193) 1,192

GEMINA

167


FIUMICINO ENERGIA - (1,189) 1,189

2010 2009 CHANGE

DOMINO (1) (4) 3

OTHER INCOME (CHARGES) 31 (660) 691

TOTAL (1,348) (3,953) 2,605 The equity investment in Pentar was written down to line up

its book value with the quota of the Company’s shareholder’s equity, as is seen in the best information available.

The equity investment in SITTI, as per Note 10, was sold at a spot price in line with the book value of the equity investment.

The itemised list of equity investments, the changes in terms of quantity and value that took place during the year, the portion held of each one, the name, registered office, share capital, shareholders’ equity and book value are shown in Note 10.

NOTE 2 NET FINANCIAL INCOME (EXPENSE) They amount to (2,998) thousand euro compared to (3,245)

thousand euro in 2009. INTEREST INCOME

2010 2009 CHANGE

FROM RECEIVABLES ENTERED AS NON-CURRENT ASSETS 284 546 (262)

FROM ASSOCIATED COMPANIES 20 49 (29)

SITTI - INTEREST ON BOND ISSUE 20 49 (29)

FROM OTHERS: 264 497 (233)

IDOMENEO S.A. ( INAER GROUP) 264 497 (233)FROM RECEIVABLES ENTERED AS CURRENT

ASSETS 68 3 65

FROM SUBSIDIARY COMPANIES 68 3 65FIUMICINO ENERGIA – INTEREST INCOME ON

RECIPROCAL C/A 68 3 65

INCOME OTHER THAN THE ABOVE 37 288 (251)INTEREST INCOME ON C/A AND BANK

DEPOSITS 35 95 (60)

OF WHICH FROM RELATED PARTIES:

MEDIOBANCA 2 1 1

INTEREST INCOME ON TAX CREDITS 2 157 (155)

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ADR - 106 (106)

2010 2009 CHANGE

ADR ENGINEERING 2 8 (6)

ADR TEL - 6 (6)

IRS DIFFERENTIALS - 36 (36)


MEDIOBANCA - 18 (18)

UNICREDIT - 18 (18)

TOTAL 389 837 (448) The interest income accrued from the INAER Group

concerns remuneration of the 4 million euro credit coming from the disposal of Elilario Italia, described in Note 11, until collection date.

INTEREST EXPENSE

2010 2009 CHANGE



MEDIOBANCA 1,084 1,451 (367)

UNICREDIT 1,084 1,451 (367)

EXPENSES ON DERIVATIVES 842 335 507


MEDIOBANCA 421 167 254

UNICREDIT 421 167 254

OTHER INTEREST PAYABLE - 160 (160)

TOTAL 3,010 3,478 (468)

The interest payable on bank loans refer entirely to the loan stipulated on December 11, 2008, described in Note 23. Expenses on derivatives comprise 744 thousand euro of the negative differential paid in relation to the interest rate swap contract in force, described in Note 24 and 25 thousand euro of accrued liabilities as at December 31, 2010 and 73 thousand euro of charges connected with the reduction in the notional value, from 35.6 million euro to 31.6 million euro, on the occasion of the partial repayment of the Loan.

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OTHER EXPENSES

2010 2009 CHANGE

COMMISSIONS AND CHARGES ON LOANS 310 323 (13)


MEDIOBANCA 172 176 (4)

UNICREDIT 138 140 (2)COMMISSION EXPENSE ON THE ASSIGNMENT

OF TAX CREDITS - 77 (77)

COMMISSIONS ON NON-USE 66 205 (139)



UNICREDIT 33 102 (69)

TOTAL 376 605 (229) COMMISSIONS AND CHARGES ON LOANS

They refer to the portion pertaining to 2010 of the Loan granted on December 11, 2008.

NOTE 3 STAFF COSTS

2010 2009 CHANGE

SALARIES AND WAGES 1,079 1,037 42

SOCIAL SECURITY CHARGES 348 293 55

POST-EMPLOYMENT BENEFITS 59 49 10

OTHER COSTS 40 31 9

TOTAL 1,526 1,410 116 Below is the average number of employees and the

breakdown by category:

12/31/2009 RECRUITS LEAVERS 12/31/2010 AVERAGE

EXECUTIVES 3 1 (1) 3 3

MANAGERS 4 - - 4 4

EMPLOYEES 4 - - 4 4

TOTAL 11 1 (1) 11 11

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2010 2009 CHANGE

SERVICE CHARGES 2,670 2,282 388


UNICREDIT 1 2 (1)

SDE (*) - 10 (10)

ADR TEL 3 7 (4)

ADR 5 61 (56)

RENTALS 372 405 (33)

OTHER OPERATING EXPENSES 804 476 328

TOTAL 3,846 3,163 683 (*) Now UniCredit S.p.A. SERVICE CHARGES (2,670 thousand euro) Greater operating costs of the Board of Directors, and some

elements, such as research costs for the Managing Director of ADR, legal aid in contractual relations with Changi, chargesfor the adoption of new IAS principles (IFRIC 12), are the main causes for the increase in operating costs.

OTHER OPERATING EXPENSES (804 thousand euro) These include company costs, totalling 408 thousand euro,

borne for publishing mandatory company notices and for organising the Shareholders’ Meeting for approval of the financial statements, fiscal charges for non-deductible VAT and other taxes amounting to 216 thousand euro.

NOTE 5 NET PROVISIONS (2,240 thousand euro) These refer to the provision, equal to 3.6 million euro, made

in order to cover the risk of indemnifying ADR as a result of the guarantee issued to the subsidiary company in December 2002, against any capital losses the company may have had to incur due to tax claims relating to years prior to 2000.

Following the negative result of the appeal to the Tax Commission in the ADR/Customs Agency litigation, the provisions of the 2009 financial year was adjusted, by 3.1 million euro, to the amount for the surety granted to Gemina and described in Note 29 “Litigation”.

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The litigation with the Customs Office is described in Note

29 “Litigation”. The item also includes:

- a 2.2 million euro allocation, equal to the book value at year end, due to future alleged losses of the subsidiary Pentar.

Gemina has already stated that it will not take part in the capital increase.

- the partial use of the provision for risks, connected with the transfer of the equity investment in Elilario for the collection of the 4 million euro amount due from the purchaser;

- allocations for other minor risks, equal to 0.5 million euro.

NOTE 6 REVENUES Revenues are due to the supply of company and

administrative services, contractually defined, in favour of the Group companies (68 thousand euro), the recovery of remuneration for corporate offices filled by executive staff in Group companies (146 thousand euro), as well as to the re-debiting of costs incurred due to service supply agreements rendered to subsidiaries (668 thousand euro) and sundry recoveries for differences.

All revenues were attained in Italy.

NOTE 7 INCOME TAXES The item, equal to 2,248 thousand euro, includes:

- the use of tax losses generated over the year, amounting to 3,187 thousand euro, recovered by Gemina within the agreements of the tax consolidation;

- the partial levy of pre-paid taxes on the company share capital increase charges borne in 2007 amounting to 939 thousand euro;

IRES – RECONCILIATION BETWEEN THEORETICAL AND REAL FISCAL CHARGES

2010 2009

TAXABLE

INCOME TAX TAXABLE

INCOME TAX

PRE-TAX PROFIT (LOSS) (10,886) (*) (13,714) (*)

THEORETICAL IRES 27.5% 2,994 27.5% 3,771

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EFFECT OF INCREASES (DECREASES)

COMPARED TO THE ORDINARY TAX

RATE

2010 2009

TAXABLE

INCOME TAX TAXABLE

INCOME TAX

DIVIDENDS - - (228) 63 ADDITIONAL CHARGES RELATED TO

CAPITAL INCREASE (3,118) 857 (a) (3,176) 873 (a)

PROVISIONS 2,293 (631) 3,100 (853) CAPITAL LOSSES ON EQUITY

INVESTMENTS 1,379 (379) 3,953 (1,087)

FINANCIAL EXPENSES 2,998 (824) 2,996 (824)

FISCAL CHARGES - - 59 (16)

OTHER PERMANENT DIFFERENCES (154) 42 385 (105)

TAXABLE INCOME/(LOSS) (7,488) 2,059 (6,625) 1,822 EFFECT ON THE INCOME STATEMENT OF

COSTS/REVENUES DIRECTLY RECORDED

IN SHAREHOLDERS’ EQUITY (a) (857) (873)

ADJUSTMENTS OF PREVIOUS YEARS (82) - IRES INCOME ON REDUCTION IN

WORKING HOURS (ROL) TRANSFERRED

TO ADR 1,128 303

REAL IRES 2,248 1,252 (*) () charge. NOTES TO THE BALANCE SHEET


12/31/2009 INCREASES AMORTISATION 12/31/2010

SOFTWARE AND SYSTEMS COSTS 3 - (2) 1

TOTAL 3 - (2) 1

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NOTE 9 TANGIBLE ASSETS

12/31/2009 CHANGES IN THE YEAR 12/31/2010

COST REVAL. ACCR. BOOK PURCHASE

S DISPOSALS SHARE


(WRITE-DOWN)

DEPR. VALUE COST PROVISION DEPR. (WRITE-DOWN)

DEPR. VALUE


EQUIPMENT

MISCELLANEOUS FITTINGS 38 - (28) 10 2 (7) 7 (7) 33 - (28) 5

38 - (28) 10 2 (7) 7 (7) 33 - (28) 5

OTHER TANGIBLE ASSETS

FURNITURE AND FURNISHINGS 225 - (194) 31 2 (10) 10 (8) 217 - (192) 25

OFFICE MACHINES 59 - (52) 7 - (50) 50 (2) 9 - (4) 5

OTHER ASSETS 15 - (15) - 1 (7) 7 (1) 9 - (9) -

299 - (261) 38 3 (67) 67 (11) 235 - (205) 30

TOTAL 337 - (289) 48 5 (74) 74 (18) 268 - (233) 35

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NOTE 10 EQUITY INVESTMENTS

EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES, ASSOCIATED COMPANIES, JOINT VENTURES AND OTHER EQUITY INVESTMENTS

The breakdown and change of this item are shown in the following table:

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Stock as at 12/31/2009 Increases Decreases Value

Adjustments Stock as at 12/31/2010

Name Shares Unit. Value % Shares Value Shares Value Shares Unit Value %

or Quotas Value Equity

Inv. or Quotas or Quotas or Quotas Value Equity

Inv.

EQUITY INVEST. IN SUBSIDIARIES

AEROPORTI DI ROMA S.P.A. 59,668,765 30.76 1,835,536,345 95.76 910 27,300 - - - 59,669,675 30.76 1,835,563,645 95.76

FIUMICINO ENERGIA S.R.L. 1 - 7,665,103 86.12 - 7,538 - - - 1 - 7,672,641 87.14

DOMINO S.R.L. 1 - 10,000 100.00 - - - - - 1 - 10,000 100.00

TOTAL 1,843,211,448 34,838 - - - - 1,843,246,286 EQUITY INVESTMENTS IN

ASSOCIATES AND JOINT VENTURES

PENTAR S.P.A. 5,000,000 0.72 3,609,065 20.35 - - - - (1,377,322) 5,000,000 0.45 2,231,743 20.35

SITTI S.P.A. 1,200,000 4.17 5,000,000 40.00 - - 1,200,000 5,000,000 - - - - -

TOTAL 8,609,065 - - - 5,000,000 (1,377,322) 2,231,743

OTHER EQUITY INVESTMENTS DIRECTIONAL CAPITAL HOLD. NV IN

LIQUID.(*) 1 - - 5.00 - - - - - 1 - - 5.00

KIWI 1 VENTURA SERVICOS S.A. (**) 34 - 28,255 0.92 - - - - - 34 - 28,255 0.92

GEMINA FIDUCIARY SERVICES S.A. 17,646 - - 99.99 - - - - - 17,646 - - 99.99 TELEFIN S.P.A IN LIQUIDATION

(FORMERLY TEMPO LIBERO S.P.A.) (***) 85,000 - - 42.50 - - - - - 85,000 - - 42.50

TOTAL 28,255 - - 28,255

GRAND TOTAL 1,851,848,768 34,838 5,000,000 (1,377,322) 1,845,506,284

(*) The company has been in liquidation since March 31, 2008. (**) The company has been in liquidation since January 2009, as per the Shareholders’ Agreement. (***) On April 29, 1999 the Court of Milan declared its bankruptcy.


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NAME

REGISTERED

OFFICE ACTIVITY

SHARE CAPITAL

VALUE IN EURO

SHAREHOLDERS’

EQUITY

INCLUDING

PROFIT (LOSS)

AS AT 12/31/2010

PROFIT

(LOSS) FOR

THE YEAR

2010

PORTION OF

SHAREHOLDE

RS’ EQUITY

HELD

% OF

DIRECT

OWNERSHIP

BOOK

VALUE

AEROPORTI DI ROMA S.P.A. Fiumicino Airport services euro 62,309,801 785,705 21,267 752,391 95.76 1,835,564

FIUMICINO ENERGIA S.R.L. Milan Production and sale of energy euro 741,795 811 68 707 87.14 7,673

DOMINO S.R.L. Milan IT services euro 10,000 9 (1) 9 100.00 10

GEMINA FIDUCIARY SERVICES S.A. Luxembourg Trust company euro 150,000 20 41 20 99.99 -

PENTAR S.P.A.(1) Naples Holding company euro 24,571,000 11,484 (11,442) 2,337 20.35 2,232 TELEFIN S.P.A. IN LIQUIDATION (FORMERLY TEMPO LIBERO S.P.A.)

(2) Milan Financial services Lire 20,000,000,000 - - - 42.50 -




LIST OF EQUITY INVESTMENTS PURSUANT TO ART. 2427 OF THE ITALIAN CIVIL CODE (in thousands of euro)

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The equity investment in ADR was recorded in the financial statements at a higher book value compared to the corresponding share of shareholders’ equity. This value refers to the price paid for its acquisition, calculated on the basis of both the company’s equity consistency and the expected profitability.

ADR book value underwent an impairment test, which confirmed the book values of the investee.

The fairness of the value was assessed by discounting the cash flows estimated in the economic and financial projections drawn up by ADR management over the 2011-2044 period, divided in two parts: 2011 – 2020 and 2021 – 2044.

Forecasts for the 2011-2020 period made up the 2011-2020 Economic-financial Plan approved by ADR’s Board of Directors held on January 28, 2010 and Gemina’s Board of Directors held on February 4, 2011, to fulfil commitments arising from loan agreements.

Forecasts are based on the following assumptions:

- airport tariffs estimated at best by the current status of

negotiations with ENAC;

- passenger traffic reaching 46 million in 2020 and 99

million in 2044;

- investments in infrastructures, amounting to 2.5 billion euro over the 2011-2020 period and 9.5 billion euro over the following period;

- discounting at 6.5% annual nominal rate after taxation.

Discounted financial flows, also using alternatives, confirm the value of concession as at December 31, 2010.

The two main ADR’s business areas, aviation and non aviation, were considered as one single Cash Generating Unit for both their strict interconnection and the fact that one single value was assigned to the concession.

Investments over the 2011-2020 period are the first part of the development plan of the airport system in Rome until 2044. This plan is aimed at meeting, at the end of the period, the passenger traffic needs of around 100 million per year, in addition to a significant improvement to the quality of services.

The new infrastructures, (“Fiumicino Nord”), for which a budget of around 7.2 billion euro investments is estimated, will be located in an area north of the existing airport, to which they will be linked.

The implementation of this demanding investment program is however subjected to the signature of a planning agreement, which would ensure continuity and stability of contract clauses over the entire concession term.

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The implementation of this demanding investment program is however subjected to the signature of a planning agreement, which would ensure continuity and stability of contract clauses over the entire concession term.

910 shares, with a nominal value of 30 euro per share, equal to the book value of other shares in portfolio were purchased from minority shareholders over the year.

On March 17, 2010, following the outcome of the share capital increase from 391,795 euro to 741,795 euro, subscribed by Gemina for 308 thousand euro, Gemina’s equity investment in Fiumicino Energia rose from 86.12% to 87.14%.

Fiumicino Energia is the owner of the co-generation power plant built in the area of Fiumicino Airport. It supplies electric and thermal power to the Leonardo da Vinci Airport, through the company Leonardo Energia.

Based on the 2005 industrial co-operation agreement signed by Fiumicino Energia and ADR, in 2023 the co-generation power plant, built by Fiumicino Energia and in good state of repair, as well as in full operation, will be purchased free of charge by ADR.

To date, as confirmed by the impairment test performed over a period of time till 2023, no losses for Gemina are expected from this free transfer.

This year, the company obtained revenues amounting to 21.7 million euro, of which 19.1 million euro, equal to 88.0% of the total for the supply of ADR’s electric and thermal energy.

Domino is dormant.

Gemina Fiduciary Services S.A. (“GFS”) is attending to the credit collection at Banca Centrale Argentina through a lawsuit.

The recovered amount will be repaid to bond subscribers, net of operating costs, which will be kept by GFS. Operating costs are currently paid by Gemina for around 20/30 thousand euro per year.

Pentar holds equity investments in various sectors. A loss is expected to be recorded in 2010. Gemina has already stated that it will not take part in the capital increase decided by the company.

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179


In December 2010, the equity investment in SITTI was transferred to IMI Fondi Chiusi SGR, at a price of 5 million euro, paid at closing, in addition to 0.5 million euro, which will be paid upon the occurrence of specific conditions related to the subsequent divestment by the Fund.

The proceeds were used to partially repay the medium-term loan agreement granted by Mediobanca and UniCredit.


The item, which included exclusively the receivables from the INAER Group resulting from the transfer of its equity investment in Elilario Italia, occurred in February 2008, are cancelled due to the advanced collection of the amount due.

This by applying a contract clause that envisages the immediate collectability of the receivable in the case of total refinancing of the debt of the INAER Group.

The amount collected by Gemina is equal to 4.8 million euro, including interests capitalised.


These substantially regard:

- the amount of 866 thousand euro, which is the remaining value of the pre-paid taxes calculated on the additional charges to the share capital increase of 2007 recorded as a direct decrease of the shareholders’ equity, deductible in 5 years. The amount delivered during the year is equal to 936 thousand euro;

- the amount of 153 thousand euro, which is the tax effect regarding the fair value of the derivatives recorded under shareholders’ equity.


12/31/2010 12/31/2009 CHANGE

SITTI - 1,400 (1,400)

TOTAL - 1,400 (1,400)

The bond issue of SITTI, made on June 30, 2006 for 1.4 million euro, expired on June 30, 2010 and was repaid.

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180



12/31/2010 12/31/2009 CHANGE

DUE FROM CUSTOMERS 29 5 24

DUE FROM CUSTOMERS 294 270 24

OF WHICH DUE TO RELATED PARTIES: SHAREHOLDERS BEING A PARTY OF THE

SHAREHOLDERS’ AGREEMENT 29 5 24

BAD DEBT PROVISION (265) (265) -RECEIVABLES DUE FROM SUBSIDIARY

COMPANIES 425 209 216

ADR 246 146 100

DOMINO 1 3 (2)

ADR TEL - 6 (6)

FIUMICINO ENERGIA 149 43 106

LEONARDO ENERGIA 29 11 18EQUITY INVESTMENTS IN ASSOCIATED

COMPANIES AND JOINT VENTURES 124 184 (60)

CEB (*) - 1 (1)

SDE (*) - 56 (56)

PENTAR 7 6 1

SITTI 117 121 (4)

TOTAL 578 398 180 (*) Up to June 30, 2009. Receivables due from subsidiary and associated companies

refer to services rendered and to chargebacks of costs.


12/31/2010 12/31/2009 CHANGE

TAX RECEIVABLES - 258 (258)

TAX CREDITS - 258 (258)OTHER RECEIVABLES DUE FROM

SUBSIDIARY COMPANIES 11,408 13,423 (2,015)DUE FROM ADR GROUP FOR

CONSOLIDATED IRES 11,408 13,423 (2,015)

DUE FROM OTHERS 1,415 542 873


OTHER TAX RECEIVABLES 843 107 736

OTHER RECEIVABLES 54 68 (14)

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181


12/31/2010 12/31/2009 CHANGE

ACCRUED INCOME - 90 (90)

INTEREST INCOME ON TAX CREDITS - 90 (90)

PREPAYMENTS 189 122 67

SERVICE CHARGES 10 5 5

USE OF THIRD PARTY ASSETS 24 22 2

OPERATING EXPENSES 122 62 60

FINANCIAL EXPENSES 33 33 -


MEDIOBANCA 33 33 -

13,012 14,435 (1,423)

Tax credits, equal to 258 thousand, was collected in November 2010.

Receivables due from subsidiary companies refer to the taxes of ADR Group companies and Fiumicino Energia that adhered to the tax consolidation, and for 8.3 million euro regard the estimated 2010 tax burden, net of the paid-in advances.

Prepayments refer to ordinary expenses pertaining to the subsequent years.


12/31/2010 12/31/2009 CHANGE

RECEIVABLES DUE FROM SUBSIDIARY

COMPANIES: 2,927 1,545 1,382FIUMICINO ENERGIA FOR CURRENT

ACCOUNT 2,927 1,545 1,382

DUE FROM ASSOCIATED COMPANIES: - 21 (21)

SITTI (*) - 21 (21)

DUE FROM OTHERS: 7 - 7

ACCRUALS ON INTERESTS 7 - 7

TOTAL 2,934 1,566 1,368

(*) Up to December 10, 2010. The amounts due from Fiumicino Energia regard two loans

granted in the form of a giro account, granted at market terms in view of optimizing the Group’s treasury management. These loans have a 3-month Euribor rate plus a margin of 200 bps.

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182



12/31/2010 12/31/2009 CHANGE

BANK AND POST OFFICE DEPOSITS 11,136 13,432 (2,296)

OF WHICH DUE TO RELATED PARTIES:


UNICREDIT CORPORATE BANKING (*) 46 36 10

CASH ON HAND 1 2 (1)

TOTAL 11,137 13,434 (2,297) The change in cash and cash equivalents is mainly due to:

- the payment of the company’s operating expenses and

interest expense for the year;

- advanced collection of the amount due from the INAER

Group, for 4.8 million euro, as per Note 11. Cash and cash equivalents include the balance of the fixed-

term deposit at Mediobanca securing the 2 thousand euro Loan granted on December 11, 2008.

NOTE 18 SHAREHOLDERS’ EQUITY Shareholders’ equity decreased by 8,441 thousand euro

compared to December 31, 2009 due to the effect of:

PROFIT (LOSS) FOR THE YEAR (8,686)POSITIVE CHANGE IN FAIR VALUE OF

DERIVATIVES 245

(8,441) Changes occurred over 2009 and in the year in question are

highlighted in the special statement in point 6.4. The share capital is equal to 1,472,960,320 euro, broken down

into 1,469,197,552 ordinary shares of the par value of 1 euro and 3,762,768 non convertible, savings shares of the par value of 1 euro each.

In compliance with Art. 2427 of the Italian Civil Code and the requirements of IAS 1, subsection 76, the detailed information concerning the possible use of the shareholders’ equity items, together with the uses made in previous years, is summarised below.

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183


TYPE/DESCRIPTION TOTAL AMOUNT POSSIBLE USESUMMARY OF USES MADE IN

THE PAST THREE YEARS

TO HEDGE

LOSSES FOR OTHER

REASONS


CAPITAL RESERVES 199,707 SHARE PREMIUM RESERVE NET OF SHARE

CAPITAL INCREASE COSTS 119,707 A-B RESERVE FOR PURCHASE OF OWN

SHARES 80,000


OTHER RESERVES 83,106 MERGER SURPLUS RESERVE AND SALE OF

OWN SHARES 7,747 A-B-C

SALE OF UNEXERCISED RIGHTS 350 A-B-C

LEGAL RESERVE 75,009 B

PROFIT (LOSS) FROM PREVIOUS YEARS 64,279 A-B-C


RESIDUAL DISTRIBUTABLE PORTION 72,376 Key: A: to increase capital B: to cover losses C: for distribution to shareholders

NOTE 19 EMPLOYEE BENEFITS The amount entered relates to the benefits accrued by 11

employees as at December 31, 2010, according to the regulations and collective bargaining agreements.

12/31/2009 ALLOCATIONS USE 12/31/2010

193 58 (7) 244


12/31/2010 12/31/2009 CHANGE

BEYOND 12 MONTHS 11,300 9,100 2,200

WITHIN 12 MONTHS 1,922 1,903 19

TOTAL 13,222 11,003 2,219

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184


The change, compared to the previous year, refers to comments in Note 5.

Provision for risks and charges as at December 31, 2010, include:

- the residual amount of the provision for risks allocated in relation to the guarantees granted to the purchaser of the equity investment in Elilario;

- the allocations made for the guarantee granted to ADR in 2002, in the event of a negative outcome for the subsidiary company of the litigation with the Customs Agency that, with the provisions for the period, amounted to 6.7 million euro;

- the provision for alleged 2.2 million euro losses of the

subsidiary Pentar;

- the allocation related to the Assessment Report issued by the Revenue Office for a tax audit on the year 2006, for 1,725 thousand euro;

- other minor provisions.


12/31/2010 12/31/2009 CHANGE

DUE TO BANKS - 47,500 (47,500)


MEDIOBANCA - 23,750 (23,750)

UNICREDIT - 23,750 (23,750)

EFFECT OF “AMORTISED COST METHOD” - (536) 536

TOTAL - 46,964 (46,964)

The cash loan for a maximum amount of 70 million euro, with a maximum term of 3 years, which was subscribed on December 11, 2008 (“Loan”) was restated in current financial liabilities as it will be due on December 11, 2011 and it is described in Note 23.

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185



12/31/2010 12/31/2009 CHANGE

DUE TO SUPPLIERS 593 351 242

DEFERRED TRADE INCOME 95 36 59PAYABLES DUE TO SUBSIDIARY

COMPANIES 23 91 (68)

ADR 22 11 11

ADR TEL 1 6 (5)

LEONARDO ENERGIA - 74 (74)

TOTAL 711 478 233


12/31/2010 12/31/2009 CHANGE

DUE TO BANKS 42,126 - 42,126


MEDIOBANCA 21,063 - 21,063

UNICREDIT 21,063 - 21,063

EFFECT OF “AMORTISED COST METHOD” (261) - (261)ACCRUED LIABILITIES FOR INTEREST ON

AMOUNTS DUE TO BANKS 89 89 -


MEDIOBANCA 44 44 -

UNICREDIT 45 45 -

TOTAL 41,954 89 41,865

The amounts due to banks refer to the Loan previously stated under item medium/long term financial indebtedness.

The Loan is broken down as follows:

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186


FINANCER NAME

DESCRIP. AMOUNT

OF LOAN

GRANTED AMOUNT

USED

RESIDUAL BOOK

VALUE RECORDED

INTEREST

RATE REDEMP

TION DURAT

ION EXPIRATI

ON

Tranche A 50,000 42,126 (**) 41,865 (*) at

maturity 3 years Dec. 2011

Tranche B 15,000 - (***) - (*) at

maturity 3 years Dec. 2011

MEDIOBANCA AND UNICREDIT

S.P.A. IN POOL

Tranche C 5,000 - - (*) revolving 3 years Dec. 2011

TOTAL 70,000 42,126 41,865

(*) Variable indexed to the Euribor + margin. (**) The unused portion of this tranche was contractually written-off. (***) This tranche was contractually written-off on January 22, 2010 The Loan was taken out with the following aims:

- Tranche A full redemption of the remaining amount of the Bridge loan taken out in 2007 for the purchase of 44.68% of ADR by Macquarie, payment of the interest due for the Bridge Loan, coverage of charges related to the Loan and payment of the substitute tax for Tranches A and C;

- Tranche B: payment of the interest due on the Loan, payment of what is due as interest to the hedging counterparts pursuant to the hedging contracts, and payment of the substitute tax for Tranche B;

- Tranche C: financing of the cash needs related to

ordinary activities.

The economic terms of the Loan envisage an interest rate equal to the Euribor plus a margin proportionate to the rating ADR has been given by the rating agencies: from a minimum of 225 bps to a maximum of 350 bps for Tranche A, and from a minimum of 250 bps to a maximum of 375 bps for Tranches B and C.

With regard to ADR’s rating, the margin applied as at December 31, 2010 is equal to 350 bps for Tranche A.

The unused portion of Tranche A, equal to 2,500 thousand euro, was contractually written-off.

Tranche A was repaid in advance on December 16, 2010, for the amount of 5.4 million euro, of which 5.0 million euro arising from the amount of spot price for the sale of the equity investment in SITTI and the residual amount from the cash, securing the loan, previously transferred to the fixed-term deposit at Mediobanca.

Tranche B was fully written-off following:

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187


- the voluntary advance repayment for 1,654 thousand euro

on December 16, 2009;

- the request, on January 22, 2010 that the remaining amount, equal to 13,346 thousand euro, be written off, as a result of the increase in cash and cash equivalents.

Tranche C will be disbursed, upon Gemina’s request, even at various times during the time period elapsing between December 11, 2008 and the last day falling at the end of the six-month period prior to the expiration date of the Loan for amounts no less than 0.5 million euro.

The Loan agreement includes the possibility of making voluntary partial advance repayment for a minimum amount of 1 million euro, without added costs, if made coinciding with an interest payment date.

Repayment is envisaged as a sole payment at the expiration date of the Loan agreement, without prejudice to those cases of voluntary and mandatory advance repayment and the events that cancel the benefits upon termination, resolution and/or withdrawal.

The Loan agreement envisages that, if detrimental changes of the financers or major national banks of reference occur, a reference rate other than Euribor will be applied (arithmetic means of the rates offered by the banks taken as reference to primary banks of the European interbank market for deposits in euro or cost of the financers’ provision, as the circumstances may be).

New contracts with banks have been negotiated for the granting of a new loan.

A new arm's length loan is expected to be concluded thanks to these negotiations.

The estimated fair value of the 42.1 million euro Loan, recorded in the financial statements for 41.9 million euro, was approximately 43.5 million euro as at December 31, 2010.

Please see Note 28 for the guarantees backing the Loan.

NOTE 24 FINANCIAL INSTRUMENTS – DERIVATIVES

12/31/2010 12/31/2009 CHANGE

DERIVATIVES HEDGING INTEREST RATE

RISKS 581 926 (345)

TOTAL 581 926 (345)

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188


With regard to the commitment undertaken concerning the Loan agreement on December 22, 2008 Gemina entered into two interest rate swap agreements with Mediobanca and Unicredit for a total amount of 35.6 million euro, equal to 75% of the Tranche A disbursed.


TABLE SUMMARISING THE OUTSTANDING DERIVATIVE CONTRACTS

MEDIOBANCA UNICREDIT

INSTRUMENT IRS IRS

TYPE Cash Flow Hedge Cash Flow Hedge

HEDGED RISK Interest rate Interest rate SUBSCRIPTION DATE Dec. 2008 Dec. 2008

EXPIRATION Dec. 2011 Dec. 2011 HEDGED NOTIONAL VALUE 15,796.9 15,796.9

APPLIED RATEGemina pays a 3.15%

fixed rate and receives 6-month Euribor

Gemina pays a 3.15% fixed rate and receives 6-

month Euribor


12/31/2010 (290) (291) (581)

12/31/2009 (463) (463) (926)

CHANGE IN FAIR VALUE: 173 172 345

TO INCOME STATEMENT 12 13 25

TO SHAREHOLDERS’ EQUITY (157) 156 313

TAX EFFECT (46) (47) (93)

TOTAL NET CHANGE 123 122 245


12/31/2010 12/31/2009 CHANGE

TAX LIABILITIES 5,500 9,254 (3,754)

PAYABLES DUE TO SOCIAL SECURITY 133 95 38PAYABLES DUE TO BOARD OF STATUTORY

AUDITORS 151 153 (2)


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12/31/2010 12/31/2009 CHANGE

PAYABLES DUE TO PERSONNEL 254 292 (38)

WITHHOLDING TAXES 65 68 (3)

OTHER TAX PAYABLES 103 103 -

ACCRUED LIABILITIES FOR COMMISSIONS 3 12 (9)


MEDIOBANCA 1 6 (5)

UNICREDIT 2 6 (4)MONTE TITOLI AMOUNTS DEBITED TO BE

RECEIVED 51 52 (1)

OTHER PAYABLES 39 513 (474)

TOTAL 6,558 10,775 (4,217)

The item tax liabilities refers to the payable for taxes to be settled for 2010, net of the related advances.


12/31/2010

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES





TOTAL ASSETS IAS 39 14,649 28 - -

TRADE PAYABLES 711


FINANCIAL INSTRUMENTS – DERIVATIVES 581

TOTAL LIABILITIES IAS 39 - - 42,665 581



INTEREST INCOME 389


OTHER EXPENSES (376)

389 - (2,545) (842)

SHAREHOLDERS’ EQUITY 245

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190


12/31/2009

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES







TOTAL ASSETS IAS 39 21,389 28 FINANCIAL INDEBTEDNESS NET OF

CURRENT SHARE 46,964

TRADE PAYABLES 478


FINANCIAL INSTRUMENTS – DERIVATIVES - 926

TOTAL LIABILITIES IAS 39 47,531 926INCOME (CHARGES) RECORDED ON




OTHER EXPENSES (605) -

801 (3,748) (299)

SHAREHOLDERS’ EQUITY (555)

The financial derivatives described in Note 24 are included in “Level 2” of the “Fair Value Hierarchy” defined by IFRS 7, meaning the fair value is measured based on valuation techniques which take as reference parameters that are observable on the market, different from the prices of the financial instrument.

NOTE 27 FINANCIAL RISK MANAGEMENT

CREDIT RISK

The Company’s higher exposure to credit risk concerns the “Other Receivables”, and in particular the amounts due from the ADR Group for consolidated taxation, which amounted to 11,408 thousand euro as at December 31, 2010.


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191




RECEIV

ABLES

COMING

DUE BEFORE 60

DAYS FROM 61

TO 120

DAYS

FROM 121

TO 180

DAYS AFTER

181 DAYS

TOTAL

RECEIVAB

LES

Dec. 31, 10 0.6 - - - - 0.6TRADE RECEIVABLES Dec. 31, 09 0.2 - - 0.2 - 0.4

Dec. 31, 10 13.0 - - - - 13.0OTHER RECEIVABLES Dec. 31, 09 14.0 - - - 0.4 14.4

LIQUIDITY RISK

The two main factors composing the Company’s liquidity position are, on the one hand, the resources generated or absorbed by the holding activity and, on the other, the characteristics of expiry and renewal of payables and market terms.

Breakdown of payables by expiry terms is shown hereunder.

12/31/2010 12/31/2009


WITHIN

THE

FOLLOWI

NG YEAR

BETWE

EN 1

AND 3

YEARS

AFTER 3

YEARS TOTAL

WITHIN

THE

FOLLOWI

NG YEAR

BETWEE

N 1 AND

3 YEARS AFTER 3

YEARS TOTAL

FINANCIAL INDEBTEDNESS

NET OF CURRENT SHARE - - - - - 47.0 - 47.0

TRADE PAYABLES 0.7 - - 0.7 0.5 - - 0.5CURRENT FINANCIAL

LIABILITIES 42.0 - - 42.0 0.1 - - 0.1FINANCIAL INSTRUMENTS -

DERIVATIVES 0.6 - - 0.6 - 0.9 - 0.9OTHER CURRENT

LIABILITIES 6.6 - - 6.6 10.7 0.1 - 10.8

To meet its short-term commitments, the Company has liquidity of 11.1 million euro, in addition to bank credit lines of 6 million euro, and a 5 million euro revolving line of credit (Tranche C) for paying interest on operating expenses. The Company started negotiations to renew the loan of 42.1 million euro with maturity at end of 2011.

The Loan provides for cases of obligatory early repayment by shareholders, described in Note 28 “Guarantees and Commitments”.

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192


INTEREST RATE RISK The Company uses interest rate swaps to hedge these risks.


With regard to this contractual provision, on December 22, 2008 the Company entered into two interest rate swap agreements with Mediobanca and UniCredit, for a notional total amount of 35.7 million euro.


On the basis of these contracts, Gemina pays a 3.15% fixed rate and receives a variable 6-month Euribor rate.

With the setting up of this hedging relationship, Gemina has set for itself goal of achieving stabilized financial flows associated with the liabilities hedged.

The effectiveness of the hedging is checked retrospectively and with a view to the future every quarter.

The effectiveness of the hedging is calculated estimating the changes of the financial flows of the hedged item (hedged debt) and of the hedging derivative, and by analysing their regression relationship.

With regard to the particular sensitivity of the Company’s results to the interest rate trend, it has been decided to go forward with a sensitivity analysis with a range of +/- 50 bps on the interest rate. The potential effects are shown gross of the tax effect.

A change of +50 bps in the interest rates creates a 0.1 million euro increase in financial expenses a 0.1 million euro positive change of the cash flow hedge reserve.

A change of -50 bps in the interest rates creates a 0.1 million euro decrease in financial expenses a 0.1 million euro negative change of the cash flow hedge reserve.

It is also pointed out that the interest rate applied to the outstanding Loan is equal to the Euribor rate plus a margin proportionate to the rating given ADR. The financial expenses Gemina pays to its Financers therefore depend on not only the fluctuation of the interest rates, but on ADR’s rating as well.

EXCHANGE RISK

The Company is not exposed to an exchange rate fluctuation risk.

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193



As at December 31, 2010, the Company has the following guarantees and commitments relating to the Loan agreement entered into on December 11, 2008:

- a senior pledge on the ordinary shares of ADR representing at least 35% of the share capital of the company and to be supplements if the guarantee margin drops to below 4.5x.

Gemina commits to ensure a guarantee margin of at least 4.5x, to be calculated on a monthly basis as the relationship between the simple average of the unit value of ADR shares owned by Gemina in the previous month (calculated by applying the formula included in the contract documents) and the residual loan amount.

As at December 31, 2010, 21,808,430 ADR shares – corresponding to 35% of the company’s share capital - were pledged to Mediobanca and UniCredit for a value, determined based on the book value of the equity investment, of 670,873 thousand euro. This number was the same as at February 28, 2011;


The Loan agreement obliges Gemina to allocate 100% of the net income deriving, inter alia, from ADR deeds of transfer or provision or of other assets of Gemina, capital transactions, subordinate and deferred shareholder loans, distribution of dividends or other distributions, issue of financial instruments or debt instruments, financial contracts and all transactions that depict a form of loan, shares of any kind, diversified financial instruments and bonds to the early repayment of the Loan, according to the procedures and within the limits stated in the Loan agreement.

The Loan also requires that Gemina provides declarations and guarantees, obligations, proscriptions and commitments, and provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics.

The Financers have the right of withdrawal should Standard & Poor’s Rating Group and Moody’s Investors Service Inc., or at least one of the two, assign ADR a rating lower than BB-/Ba3.

Gemina has also issued:

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194


- guarantees of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing;


- subscription of a joint deed of pledge on 86.12% of the share capital, held in Fiumicino Energia as guarantee of all receivables deriving from the lease agreement entered into with UniCredit Leasing;

- commitment with respect to the UniCredit Group of maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in the Fiumicino Energia financial statements.

NOTE 29 LITIGATION

Shareholder Serafini litigation - On March 31, 2010, the January 13, 2010 judgment was filed in the clerk's office of the 1st civil division of the Milan Court of Appeals in which the Milan Court of Appeals rejected shareholder Renato Serafini’s appeal of the Court of Milan's first instance judgment which stated the inadmissibility of the applications made by the shareholder against the resolutions passed by Gemina’s shareholders' meeting of May 10, 2002 (approval of the financial statements as at December 31, 2001 and adjustment of the financial statements as at June 30, 1991 and as at June 30, 1992) and by the shareholders’ meeting of May 13, 2003 (approval of the financial statements as at December 31, 2002).

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195


Surety on the Customs Agency litigation - On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina, Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50.0%, 13.10% and 36.90%, respectively. This commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may have incurred due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000.




In Gemina’s financial statements, provisions were allocated in the event of a total negative outcome for ADR and ADR’s activation of the guarantee.

This allocation was included in the year 2010 following the negative outcome of the appeal lodged with the Regional Tax Commission of Rome and reversed in the consolidated financial statements, which reflect the amount allocated by ADR.

Rizzoli litigation - On March 3, 2010 Gemina was served, on request of RCS MediaGroup S.p.A. (“RCS”), with a writ of summons for a third party in the proceedings instigated by Mr. Angelo Rizzoli against RCS, Intesa San Paolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi.

Mr. Rizzoli formulated a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs.


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196


RCS fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS derives, due to the known spin-off stipulated in 1997.

Gemina still deems Mr. Rizzoli’s claims, as well as RCS’s request to summon Gemina to court, to be groundless.

The judge, after rejecting the preliminary claims of the plaintiff, fixed the hearing for pronouncement of the sentence for next June 28.

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197

6.6 INFORMATION ON RELATED PARTIES

a) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE

BALANCE SHEET ITEMS

RELATED PARTIES ITEM TOTAL ABSOLUTE

VALUE %

Other non-current financial assets - - -

Trade receivables 578 578 100%

Other receivables 13,012 11,876 91%

Other current financial assets 2,934 2,927 100%

Cash and cash equivalents 11,137 48 0%

Provisions for risks and charges 11,300 6,700 59%

Trade payables 711 119 17%

Current financial liabilities 41,954 41,954 100%

Financial instruments - derivatives 581 581 100%

Other current liabilities 6,558 438 7%

b) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE



VALUE %

Financial income 389 90 23%

Financial expenses (3,387) (3,387) 100%

Staff costs (1,526) (24) 2%

Other operating costs (3,846) (88) 2%

Net provisions (2,240) (3,600) > 100%

Revenues and other operating income 1,044 881 84%


RELATED PARTIES DESCRIPTION TOTAL ABSOLUTE

VALUE %

Cash flows from changes in the Net Working Capital (2,744) 1,755 n/a

Cash flows from investing activities 9,551 - -

Cash flows from financing activities (5,167) (5,405) > 100%

GEMINA

198



PERSON APPOINTMENT REMUNERATION (IN EURO)

NAME SURNAME

POSITION HELD

DURATIO

N OF

OFFICE

REMUNER.FOR

POSITION

NON-MONETAR

Y BENEFITS

BONUSE

S AND

OTHER

INCENT

IVES COMP.

POSITIONS HELD

IN SUBSIDIARY COMPANIES

Chairman (4) (1) (8) 33,333 3,367 339,686 Fabrizio Palenzona Director (4) (1) 10,000 10,000

Chairman (5) 116,664 Managing Director (4) (1) 166,667 71,918

Director (1)(4) 15,000 13,000 (6) Guido Angiolini Chairman of

Executive Committee (5) -

Director (4) (1) 15,000 Internal Control

Committee member (4) 9,667 Remuneration and Human Resources

Committee member (4) 6,000

Giuseppe Angiolini

Supervisory Body member (4) 5,000

Director (4) (1) (6) 10,000 5,589 (6) Valerio Bellamoli Internal Control

Committee member (4) (6) 6,667

Director (1)(4) 15,000

Giuseppe Bencini Remuneration and Human Resources


Director (1) (4) (6) 15,000 10,000 (6) Remuneration and Human Resources

Committee member (4) (6) 6,000 Stefano Cao

Executive Committee member (5) -

Director (1)(4) 15,000

Internal Control Committee member (5) 3,000 Giovanni Fontana Remuneration and Human Resources

Committee member (4) 8,667 Alessandro Grimaldi Director (3) (7) 2,342 1,562 (7)

GEMINA

199


PERSON APPOINTMENT REMUNERATION (IN EURO)

NAME SURNAME

POSITION HELD

DURATIO

N OF

OFFICE

REMUNER.FOR

POSITION

NON-MONETAR

Y BENEFITS

BONUSE

S AND

OTHER

INCENT

IVES COMP.

POSITIONS HELD

IN SUBSIDIARY COMPANIES

Beng Huat Ho Director (4) (1) (6) 10,000 7,123 (6)

Director (4) (1) 10,000 Sergio Iasi Internal Control


Aldo Milanese Director (1) (4) 10,000

Aldo Minucci Director (1) (4) 15,000 10,000

Michele Mogavero Director (5) (6) 4,849

Director (1) (6) (4) 15,000

Andrea Novarese Remuneration and Human Resources

Committee member (5) (6) 2,667

Director (5) 4,849 Eugenio Pinto Internal Control


Director (1) (6) (4) 15,000 10,000 (6) Remuneration and Human Resources

Committee member (1) (6) (4) 6,000

Clemente Rebecchini

Executive Committee member (5) -

Executives with strategic responsibilities 4,954 261,413 8,200 (6)

Luca Aurelio Guarna

Chairman of the Board of Statutory

Auditors (2) 61,974 - 29,490

Maurizio Dattilo Statutory Auditor (2) 41,316 - -

Giorgio Oldoini Statutory Auditor (2) 41,316 - -

(1) Until the shareholders’ meeting for approval of the financial statements as at 12/31/2012. (2) Until the shareholders’ meeting for approval of the financial statements as at 12/31/2011. (3) In office until 02/26/ 2010. (4) Appointed on 04/28/2010. (5) In office until 04/28/ 2010. (6) Remuneration repaid to the company he belongs to. (7) Remuneration repaid to the company he belongs to for 2/3 of amounts paid. (8) As a more favourable condition with respect to provisions set forth by CCNL (collective national labour agreement) for Managers of service

companies, the Company undertook to grant the beneficiary person, in the event of death, within 7 years starting from 06/15/2010, a decreasing capital ranging between 3.6 and 3.3 million euro. Gemina hedged this risk by entering an insurance policy with Assicurazioni Generali.

No loans and guarantees were granted in their favour.


The Chairman (Fabrizio Palenzona)

GEMINA

200

6.8 INFORMATION PURSUANT TO ART. 149-DUODECIES OF CONSOB ISSUERS’ REGULATION

The following statement, drawn up pursuant to Art. 149-

duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2010 financial year for audit services and other services rendered by the same Independent Auditors.

(in thousands of euro)COMPANY THAT RENDERED THE

SERVICE

REMUNERATIONS

PERTAINING TO

THE YEAR 2010

AUDIT DELOITTE & TOUCHE S.P.A. 138,931

OTHER SERVICES DELOITTE & TOUCHE S.P.A. (1) 23,000

CERTIFICATION DELOITTE & TOUCHE S.P.A. (2) 3,266

(1) Technical and methodological support for the adoption of IFRIC 12 standard. (2) Subscription of Income Tax Return and 770 forms.

GEMINA

201

6.9 CERTIFICATION OF THE FINANCIAL STATEMENTS IN ACCORDANCE WITH

ART. 81-TER OF CONSOB REGULATION NO. 11971 OF MAY 14, 1999 AND

SUBSEQUENT AMENDMENTS AND ADDITIONS


Managing Director, and Alessandra Bruni, in my position of Manager in charge of preparing corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154 bis, subsections 3 and 4 of Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:


- the actual application of the administration and accounting procedures for the drafting of the financial statements over 2010.

It is also stated that: - the financial statements as at December 31, 2010: - were drawn up pursuant to the applicable



- supply a true and fair disclosure of the economic, financial and equity situation of the issuer;

- the Report on Operations includes a reliable analysis of the performance and management result, as well as the situation of the issuer, together with the description of the major risks and uncertainties to which they are exposed.

March 10, 2011

Managing Director (Guido Angiolini)

Manager in charge of preparing

corporate accounting documents (Alessandra Bruni)

GEMINA

202

6.10


GEMINA

203

GEMINA

204

GEMINA

205

7

REPORT OF THE BOARD OF STATUTORY

AUDITORS

GEMINA

206

Statutory Auditors' Report to Gemina S.p.A. Shareholders' Meeting

(pursuant to art. 153 of Italian Legislative Decree no. 58/98)

Dear Shareholders,

during the financial year closed at 31 December 2010, we have performed the supervisory activity in accordance to the

Law (Legislative Decree no. 58 of 24/2/1998 – “Consolidated Act on Financial Intermediation”), in line with the code

of conduct of the Board of Statutory Auditors in joint-stock companies with stock listed in the regulated markets as

recommended by the National Associations of Chartered Accountants and Bookkeepers, and with CONSOB notices on

corporate governance and on the activities of the Board of Statutory Auditors.

As regards the legal audit of accounts it is hereby recalled that, pursuant to Legislative Decree 58/1998, the Company

appointed Deloitte & Touche S.p.A. as external auditors and we make reference to their report.

The Board of Auditors currently holding office was appointed by the shareholders' meeting of 28 April 2009 pursuant

to the Company By-Laws.

Also in compliance with CONSOB guidelines by Notice DEM/125564 dated 6 April 2001 and subsequent updates, we

hereby inform you about the following:

We have overseen the Company's compliance with the Law and the By-Laws.

We have attended the Board of Directors' meetings and relevant preliminary meetings on the issues relating to

the items on the agenda, as well as the meetings of the Audit Committee, of the Executive Committee, until it

operated, and of the Human Resources and Compensation Committee; and we have obtained information on a

regular basis from the Board members on the general operating performance, on the foreseeable outlook and

on the high-value economic, financial and cash flow transactions made by the Company, and we have made

sure that the resolutions adopted and enforced complied with the Law and the By-Laws and were not

manifestly imprudent, risky, in potential conflict of interest or in conflict with the resolutions adopted by the

shareholders' meeting or such to have an adverse impact on the company assets.

At the meeting of 12 November 2010 the Board of Directors adopted the compulsory amendments to the

Company By-Laws provided for by Legislative Decree 27/2010, resolving to amend articles 8, 11, 20 and 21

of the By-Laws in compliance with the legislative provisions, pursuant to art. 17 of the By-Laws and art. 2365

of the Italian Civil Code.

In section “Related party disclosures” in the Notes to the Report and in section “Intercompany relations and

related party relationships” in the Directors' Report the Directors report about the major transactions occurred

with related parties, identified according to the international accounting principles and to the provisions issued

on this matter by CONSOB. We refer to these sections in relation to the identification of the types of

transactions and of the relevant economic, financial and cash flow effects, also pointing out that the Company

decided to early adopt the IAS 24 in its version revised by IASB on 4 November 2009. We also observe that

on 12 November 2010, after hearing the opinion in favour of a Committee set up ad hoc, the Board of

Directors adopted the “Procedure regulating transactions with related parties” pursuant to art. 4 of the

Regulation adopted by Consob by resolution no. 17221 of 12 March 2010, as subsequently amended and

supplemented. The procedure, compliant with Consob Regulation no. 17221 of 12 March 2010 and with

Consob Notice dated 24 September 2010, shall apply as of 1 January 2011 and is advertised on the Company

website.

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207

Finally, in relation to related party transactions, we deem it appropriate to note that by resolution of 12

November 2010 the Board of Directors unanimously approved the stipulation of a contract for the supply of

strategic and operational consulting services for the airport development with Changi Airport Consultant

Group, a company controlled by Changi Airports Group, shareholder of the Company and Party to the

Shareholders' Agreement as “Industrial Partner”; the enforcement of the contract, and the consequent relevant

economic and financial impact, is conditional to the stipulation of the planning agreement by the subsidiary

Aeroporti di Roma S.p.A. (ADR) with ENAC.

The Company prepared the 2010 Financial Statements according to the IAS/IFRS principles as in the previous

year 2009. The accounting principles and the valuation criteria adopted are reported in the Notes to the Report.

The 2010 Financial Statements of Gemina S.p.A. (Gemina) have been audited by the external auditors Deloitte

& Touche S.p.A. which issued their audit report on 25 March 2011 without identifying any irregularities or

making requests for disclosures. The major events occurred in the financial year 2010 are exhaustively

described by the Directors in Paragraph 3.1 “Financial Year Highlights” in the Directors' Report, for a more

detailed review.

The Company prepared the 2010 consolidated financial statements of Gemina Group according to the

IFRS/IAS principles as in the past year. Gemina Group consolidated financial statements have been audited by

the external auditors Deloitte & Touche S.p.A., that issued their audit report on 25 March 2011 without

observing any irregularities or making any requests for disclosures. The same auditing company also audited

the financial statements of the subsidiary company ADR without identifying any irregularities or making any

requests for disclosures.

In the Directors' Report the Directors properly fulfilled their disclosure obligations as provided for by art. 154

ter of Legislative Decree 58/98, introduced by Legislative Decree 195/2007 (so-called “Transparency

Decree”) highlighting the main risks and uncertainties to which the Company and the Group are exposed.

We have gained knowledge and overseen - as for what falls under our competence - the adequacy of the

Company organisation structure, the compliance with the principles of proper management and the adequacy

of instructions given by the Company to its subsidiaries pursuant to art. 114, paragraph 2, of Legislative

Decree 58/98, through the acquisition of information from the heads of the competent business functions, by

meeting with the external auditors and by meetings with the management bodies of the major subsidiaries, for

the purpose of a mutual exchange of relevant data and information.

We have assessed and overseen the adequacy of the administrative-accounting system and the reliability

thereof to correctly reflect the operating performance, by obtaining information from the head of the relevant

function, by reviewing the company documents and by analysing the results of the work performed by the

external auditors Deloitte & Touche S.p.A. The Board of Directors appointed the Executive Responsible for

the “drafting of the corporate accounting documents”, while also verifying the fulfilment of the adequate

professional requirements. The CEO and the Executive Responsible for the drafting of the corporate

accounting documents have confirmed by a specific Report (attached to the Company Financial Statements for

2010) a) the adequacy and actual application of the administrative and accounting procedures; b) the

compliance of the accounting documents with the international accounting principles IFRS/IAS validated by

the EC as well as with the orders issued by Consob to enforce the Legislative Decree no. 38/2005; c) the

conformity of said documents with accounting books and records and their suitability to correctly reflect the

GEMINA

208

Company financial, economic and operating position. A similar Report is attached to Gemina Group

Consolidated Financial Statements.

We have assessed and overseen the adequacy of the internal control system a) by reviewing the Control

Officer's report on the internal control system of Gemina; b) by reviewing the Internal Audit's reports and the

report on the outcome of the monitoring activities; c) by obtaining information from the Internal Audit

function of the subsidiary ADR, d) through the relations with the management bodies of the subsidiary

companies pursuant to paragraphs 1 and 2 of art. 151 of Legislative Decree 58/98, e) by attending all the

meetings of the Audit Committee and by acquiring the relevant documents. Taking part in the Audit

Committee allowed the Statutory Auditors to coordinate their functions of "Internal audit and account audit

Committee" undertaken by virtue of art. 19 of Legislative Decree 39/2010 with the Audit Committee's

activities and also to oversee in particular i) the financial disclosure process, ii) the effectiveness of internal

control systems, internal audit and risk management, iii) legal audit of annual and consolidated accounts, iv)

the aspects relating to the independence of the Auditing Company. From the activity it carried out, the Board

of Auditors expresses its positive opinion on Gemina Internal Audit System in general and acknowledges, in

its capacity as Internal Control and Account Auditing Committee that there are no irregularities to report to the

Shareholders' Meeting. In relation to the provisions of paragraph 1 of art. 19 of Legislative Decree 39/2010

the external auditors notified the time they worked and the total fees invoiced for the auditing of Gemina

S.p.A. financial statements and consolidated financial statements as at 31 December 2010, as well as for the

limited auditing of the half-year report and for the performance of activities to audit the corporate accounting

regularity. Moreover, the auditing company has notified that, based on the best available information, taking

into account the regulatory and professional requirements regulating the auditing activity, it maintained in the

period of reference its position of independence and impartiality vis-à-vis Gemina S.p.A. and that no change

occurred in relation to the non-existence of causes of incompatibility between the situations and the persons

indicated in art. 17 of Legislative Decree 39/2010 and of the articles under Chapter I-bis (Incompatibility) of

Title VI of the Issuers Regulation.

We held regular meetings with the representatives of the auditing company Deloitte & Touche S.p.A., pursuant

to art. 150, paragraph 3, Legislative Decree 58/98, and no significant data and information arose that deserve to

be reported herein. It is also hereby acknowledged that the auditing company filed on 25 March 2011 the

report provided for in paragraph 3 of art. 19 of Legislative Decree 39/2010, reporting that no critical issues

were identified upon auditing or substantial gaps in the internal control system with reference to financial

disclosures.

We have overseen the implementation of the Corporate Governance Code of Gemina S.p.A. as adopted by the

Board of Directors without identifying any criticality. Moreover, with reference to the recommendations of the

Corporate Governance Code regarding the Board of Statutory Auditors, we hereby inform you that:

- we have checked for the proper application of the criteria and procedure for the assessment of

independence, adopted by the Board of Directors, without identifying any irregularity;

- as for the so-called “self-assessment” of the independence requirements, the Statutory Auditors

verified their fulfilment, at the meeting of 4 February 2011;

- we have complied with the provisions of the regulation governing the management and process of

confidential and privileged company information;

GEMINA

209

Finally, it shall be noted that the auditing company expressed its positive opinion on information consistency

as per paragraph 1, letters c), d), f), l), m) and paragraph 2, letter b), of art. 123-bis of Legislative Decree 58/98,

as provided for by amendments to art. 5, paragraph 4, of Legislative Decree 173/2008.

With reference to Legislative Decree no. 231/2001, the Company adopted an organisation and control model

the contents of which are consistent with the international best practices. During the year we met the

Supervisory Body for a mutual exchange of information.

During the year we have not received any report pursuant to art. 2408 of the Italian Civil Code.

We are not aware of other facts or events to be reported to the Shareholders' Meeting.

We have verified the compliance with the law provisions regarding the preparation of the Draft Financial

Statements and of the Group Consolidated Draft Financial Statements, of the respective Notes to the Report

and Directors' Report, directly and through the heads of function as well as through the information obtained

from the external auditors. In this respect we have no observations.

We have issued an opinion pursuant to art. 154-bis of Legislative Decree 58/1998 for the appointment of the

Executive Responsible for the drafting of the Company accounting documents, an opinion pursuant to art.

2386 of the Italian Civil Code in relation to the non-replacement of a resigning Board Member, in view of the

Shareholders' Meeting; we also issued two opinions pursuant to art. 2389, paragraph three, of the Italian Civil

Code.

In performing the afore-mentioned supervisory activity, during 2010 the Board of Statutory Auditors met 6

times, attended 9 meetings of the Board of Directors and 4 meetings of the Audit Committee, 1 meeting of the

Executive Committee and 2 meetings of the Human Resources and Compensation Committee.

During such activity and also based on the information regularly exchanged with the external auditors Deloitte &

Touche S.p.A. no omission and/or censurable facts and/or irregularities were identified, nor significant facts to be

reported to the Company management bodies or herein.

Following to the supervisory activity performed, the Board of Statutory Auditors hereby recommends the approval

of the financial statements as at 31 December 2010 in accordance with the Board of Directors' proposal.

Milan, 25 March 2011

The Board of Statutory Auditors

Signed by

Luca A. Guarna

Signed by

Giorgio Oldoini

Signed by

Maurizio Dattilo

GEMINA

210

The list of the offices held by the Statutory Auditors in other companies are listed below (Annex pursuant to art. 144 quinquiesdecies of the Issuers

Regulation).

Dott. Luca Aurelio GUARNA

Number of offices held in issuers: 2

Total number of offices held : 28

Company name Office held Expiry date*

A2A Logistica S.r.l. Chief Statutory Auditor 31.12.2011

Aeroporti di Roma S.p.A. Actual Auditor 31.12.2012

Ambi S.p.A. Actual Auditor 31.12.2010

Bieffe Medital S.p.A. Actual Auditor 31.12.2012

Biolase S.p.A. Actual Auditor 31.12.2012

Capitoloquattro S.p.A. Chief Statutory Auditor 31.12.2010

Capitolosette S.r.l. Chief Statutory Auditor 31.12.2010

Delmi S.p.A. Actual Auditor 31.12.2010

Duec S.r.l. Actual Auditor 31.12.2011

Eagle Pictures S.p.A. Actual Auditor 31.12.2012

Electro Power Systems S.p.A. Chief Statutory Auditor 31.12.2011

Ge Capital Services S.r.l. Actual Auditor 31.12.2012

Gemina S.p.A. Chief Statutory Auditor 31.12.2011

Hamworthy Combustion Engineering S.r.l. Chief Statutory Auditor 31.03.2013

Immucor Italia S.p.A. Actual Auditor 31.05.2013

IFIB Immobiliare Finanziaria S.r.l. Chief Statutory Auditor 31.12.2012

Michel Rettili S.r.l. Actual Auditor 31.12.2011

Partecipazioni Editoriali S.r.l. Chief Statutory Auditor 31.12.2011

Silvano Toti Holding S.p.A. Chief Statutory Auditor 31.12.2011

Tech Data Italia S.r.l. Actual Auditor 31.01.2011

Terna S.p.A. Chief Statutory Auditor 31.12.2010

Trident Immobiliare S.p.A. Actual Auditor 31.12.2010

Tridente RE S.p.A. Actual Auditor 31.12.2010

Venice S.r.l. Actual Auditor 31.12.2011

Windows on Europe S.p.A. Actual Auditor 31.12.2010

Zed Italia S.r.l. Chief Statutory Auditor 31.12.2010

* approval of financial statements

Dott. Giorgio Oldoini


Total number of offices held: 5

Company name Office held Expiry date

Iren Acqua Gas S.p.A. Chief Statutory Auditor 31.12.2012

Carige Asset Management SGR S.p.A. Director 31.12.2011

Gemina S.p.A. Actual Auditor 31.12.2011

Impregilo S.p.A. Actual Auditor 31.12.2010

Seastema S.p.A. Chief Statutory Auditor 31.12.2011

GEMINA

211

Dott. Maurizio Dattilo


Total number of offices held: 32

Company name Office held Expiry date

Airis S.r.l. Sole Administrator 31.12.2009

Augusta Assicurazioni S.p.A. Actual Auditor 30.04.2012

Augusta Vita S.p.A. Actual Auditor 30.04.2012

BG SGR S.p.A. Actual Auditor 31.12.2010

Amundi Real Estate Italia SGR S.p.A. Chief Statutory Auditor 31.12.2009

Centodieci 2/5 S.r.l. Sole Administrator Until revocation

Centosessanta 6/7 S.r.l. Sole Administrator Until revocation

Chateau S.r.l. Sole Administrator Until revocation

Consel S.p.A. Actual Auditor 31.12.2011

Concerto S.r.l. A Socio Unico Sole Administrator Until revocation

Delfina S.p.A. Chief Statutory Auditor 31.12.2009

Gemina S.p.A. Actual Auditor 31.12.2011

Genco Holding S.r.l. Sole Administrator Until revocation

Giglio S.r.l. Sole Administrator Until revocation

Gl & Partners S.r.l. Sole Administrator Until revocation

Global System Milano S.r.l. Sole Administrator Until revocation

Immobiliare La.Co. S.r.l. Chairman of the Board of Directors 31.12.2010

Immobiliare Tibertina S.r.l. Sole Administrator Until revocation

Iniziative Sviluppo Immobiliare - Isim S.p.A. Actual Auditor 30.04.2011

Inv.A.G. S.r.l. Actual Auditor 31.12.2009

Iris S.r.l. Sole Administrator Until revocation

Interalia S.r.l. Sole Administrator Until revocation

Nuova Palmontan S.p.A. Actual Auditor 31.12.2010

Rcs Produzioni S.p.A. Actual Auditor 31.12.2010

Generfid S.p.A. (ex S. Alessandro) Actual Auditor 31.12.2011

S.P.V. Holding S.r.l. Sole Administrator Until revocation

Seven 2000 S.r.l. Actual Auditor 31.12.2009

Sviluppo Immobiliare Santa Teresa S.r.l. Sole Administrator Until revocation

GEMINA ______________________

ANNUAL REPORT 2011

1

CONTENTS

1. STATUTORY BOARDS .......................................................................................................................................... 2

2. MAIN ECONOMIC AND FINANCIAL FIGURES ................................................................................................... 3 2.1 Gemina Group ................................................................................................................................................................................3

2.2 Gemina Group structure as at December 31, 2011....................................................................................................................4

2.3 Gemina S.p.A...................................................................................................................................................................................5

2.4 Shareholders and Share performance..........................................................................................................................................6

3. REPORT ON OPERATIONS .................................................................................................................................. 8 3.1 Overview of the financial year.......................................................................................................................................................8

3.2 Air traffic ........................................................................................................................................................................................10

3.3 Operations and related revenues.................................................................................................................................................16

3.4 Quality and the environment ......................................................................................................................................................22

3.5 Investments, research and development ...................................................................................................................................25

3.6 Human resources and organisation ............................................................................................................................................29

3.7 Corporate transactions.................................................................................................................................................................30

3.8 Equity, economic and financial highlights for the group .......................................................................................................31

3.8.1 Economic position ............................................................................................................................................................31

3.8.2 Financial position ..............................................................................................................................................................34

3.8.3 Net financial position........................................................................................................................................................35

3.8.4 Reconciliation between the reclassified statements and the financial statements.....................................................36

3.9 Legal and regulatory framework..................................................................................................................................................36

3.10 Corporate Governance...............................................................................................................................................................38

3.11 Intercompany relations and transactions with related parties...............................................................................................47

3.12 Information about risks and uncertainties...............................................................................................................................49

3.13 Gemina S.p.A. .............................................................................................................................................................................56

3.13.1 Economic position ............................................................................................................................................................56

3.13.2 Financial position ..............................................................................................................................................................56

3.13.3 Net financial position........................................................................................................................................................57

3.13.4 Statement of reconciliation between the shareholders’ equity of Gemina and the consolidated shareholders’ equity and the consolidated profit (loss)......................................................................................................................................58

3.14 Subsequent Events......................................................................................................................................................................59

3.15 Business outlook .........................................................................................................................................................................61

4. PROPOSALS TO THE MEETING......................................................................................................................... 62

5. CONSOLIDATED FINANCIAL STATEMENTS………………………………………………………………………………….……63

6. FINANCIAL STATEMENTS……………………………………………………………………………………………………………...134

2

1. STATUTORY BOARDS BOARD OF DIRECTORS In office until the shareholders’ meeting for the approval of the financial statements as at December 31, 2012 Chairman

Fabrizio Palenzona Vice Chairman Massimo Pini (*) Managing Director Carlo Bertazzo (*) Directors Giuseppe Angiolini Valerio Bellamoli Giuseppe Bencini Stefano Cao Giovanni Fontana Beng Huat Ho Sergio Iasi Aldo Minucci (**) Piergiorgio Peluso (*) Clemente Rebecchini Secretary Antonio Sanna INTERNAL CONTROL COMMITTEE In office until the shareholders’ meeting for the approval of the financial statements as at December 31, 2012 Giuseppe Angiolini Valerio Bellamoli Sergio Iasi REMUNERATION AND HUMAN

RESOURCES COMMITTEE

In office until the shareholders’ meeting for the approval of the financial statements as at December 31, 2012 Giuseppe Bencini Giuseppe Angiolini Stefano Cao Giovanni Fontana Clemente Rebecchini BOARD OF STATUTORY AUDITORS In office until the shareholders’ meeting for the approval of the financial statements as at December 31, 2011 Chairman Luca Aurelio Guarna Statutory Auditors Giorgio Oldoini Maurizio Dattilo Alternate Auditors Paolo Lenzi Pier Luca Mazza Sergio De Simoi INDEPENDENT AUDITORS Deloitte & Touche S.p.A.

Appointment extended by the Shareholders’ Meeting

of May 7, 2007 for the 2007-2012 period.

(*) co-opted by the Board of Directors’ meeting of April 19, 2011 and appointed by the Meeting of March 1, 2012 (**) outgoing since January 30, 2012

2. MAIN ECONOMIC AND FINANCIAL FIGURES

3


2.1 GEMINA GROUP AIRPORT TRAFFIC 2011 2010 Var. %

Passengers (no.) 42,480,476 40,909,255 3.8

Cargo (tonnes) 161,678 171,680 (5.8) (in millions of euro) FINANCIAL INFORMATION 2011 2010 Revenues from airport management 613.5 594.0 Construction services 27.6 55.5 EBITDA 271.5 245.9 Amortisation, depreciation and provisions (170.9) (178.1) EBIT 100.6 67.8 Pre-tax profit (loss) 12.5 (21.5) Net profit (loss) for the year (13.4) (37.9) Net profit (loss) attributable to the Group (14.8) (37.2) Funds From Operations (FFO) (*) 152.1 138.7 EBITDA “normalised” (**) 292.4 282.2

EQUITY INFORMATION 12/31/11 12/31/10 Net capital invested (NCI) 2,847.2 2,943.8 Net financial indebtedness 1,248.4 1,338.9 Shareholders’ equity 1,598.8 1,604.9 Group shareholders’ equity 1,565.4 1,572.0

RATIOS 2011 2010 EBTDA/Revenues from airport management 44.2% 41.4% R.O.S. (EBIT/Revenues from airport management) 16.4% 11.4% Revenues from airport management/Net capital invested 21.5% 20.2% R.O.I. (EBIT/Net Capital Invested) 3.5% 2.3%

Net financial indebtedness/EBITDA 4.6 5.4 Net financial expense/EBITDA 0.3 0.4 Net financial indebtedness / Shareholders’ equity 0.8 0.8

Net earnings per share (0.010) (0.025) Shareholders’ equity per share (euro) 1.1 1.1

2011 2010 Investments (including renovation actions) 69.6 110.5 Number of Group employees (***) 2,405 2,369

(*) detailed breakdown in the “Statement of Consolidated Cash Flows” (**) calculated with the exclusion of provisions, extraordinary items and, for 2011, the positive effect of the litigation “100% hold

baggage” under Note 12 of the Consolidated Financial Statements. (***) Full time equivalent: employees of Gemina S.p.A. (“Gemina, Parent Company, Company, Issuer”), of the Aeroporti di Roma group

(“ADR Group”) and of Fiumicino Energia S.r.l. (“Fiumicino Energia”).


4

2.2 GEMINA GROUP STRUCTURE AS AT DECEMBER 31, 2011

AEROPORTI DI ROMAS.p.A.95.90%

(1)

ADR Engineering

S.p.A. 100%

ADR TEL S.p.A.

ADR Assistance

S.r.l.100%

ADR Advertising

S.p.A.51%

ADR Sviluppo

S.r.l. 100%

PENTARS.p.A.

18.54%(2)

Leonardo Energia

Soc. Consortile a r.l.1 % 10%

99% 90%


87.14%(1)

(1) Fully consolidated on a line-by-line basis (2) Valued at cost less impairment losses

(1)(1) (1)(1)(1) (1)


5

2.3 GEMINA S.P.A.

(in millions of euro) 2011 2010

FINANCIAL INFORMATION

Income (charges) on equity investments 0.0 (1.3)

Financial income (expense) (2.8) (3.0)

Net operating costs (5.6) (4.4)

Provisions (0.1) (2.2)

Pre-tax profit (loss) (8.5) (10.9)

Net profit (loss) for the year (6.6) (8.7)

12/31/2011 12/31/2010

EQUITY INFORMATION

Equity investments 1,843.3 1,843.3

Net capital invested (NCI) 1,837.8 1,839.5

Net financial indebtedness 33.2 28.5

Shareholders’ equity 1,804.6 1,811.0

12/31/2011 12/31/2010

RATIOS

Net financial indebtedness / Shareholders’ equity 0.02 0.02

Shareholders’ equity per share 1.23 1.23


6

2.4 SHAREHOLDERS AND SHARE PERFORMANCE SHAREHOLDERS AT DECEMBER 31, 2011 (*)

Sintonia S.A. (1) (2) 510,900,000 34.77%

Silvano Toti Holding S.p.A. 188,587,116 12.84%

Mediobanca S.p.A. (2) 184,531,124 12.56%Worldwide United (Singapore) Pte Ltd (Changi

Airport Group) (2) 122,814,053 8.36%

Fondiaria Sai S.p.A. (2) 61,478,844 4.19% 15.58% FloatUniCredit S.p.A. (2) 50,173,454 3.41%

UBS AG 46,978,907 3.20%

Assicurazioni Generali S.p.A. (2) 44,882,492 3.05%

Norges Bank (The Central Bank of Norvay) 30,090,794 2.05%

(1) Direct and indirect share(2) Companies adhering to Gemina's Shareholders' Agreement

Source: shareholders' ledger, Consob site, other available information (*) on ordinary capital SHARE PERFORMANCE

SHARES

NO. OF ORDINARY

SHARES 1,469,197,552 NO. OF SAVINGS SHARES 3,762,768 CAPITALISATION


867.3 782.0

SHARE PRICES AND TRADING

VOLUMES

2011 2010

0.766 0.670 MAX. REF. PRICE (EURO) JUNE-2 APR-9

0.540 0.450 MIN. REF. PRICE (EURO) JAN-3 AUG-25

AVERAGE REF. PRICE

(EURO) 0.640 0.556

AV. DAILY TRADING

VOLUMES (M) 2.1 2.012.6 12.0

MAX. DAILY TRADING

VOLUMES (M) APR-14 FEB-03

0.3 0.3

MIN. DAILY TRADING

VOLUMES (M) OCT-26 SEP-07


7

0

2

4

6

8

10

12

14

03 Jan 11 30 Jan 11 26 Feb 11 25 Mar 11 21 Apr 11 18 May 11 14 Jun 11 11 Jul 11 07 Aug 11 03 Sep 11 30 Sep 11 27 Oct 11 23 Nov 11 20 Dec 11

0,525

0,550

0,575

0,600

0,625

0,650

0,675

0,700

0,725

0,750

0,775

0,800

Volumi giornalieri (Scala Sx)

Mkt Price ‐ Last (Scala Dx)

SHARE PRICE AND TRADING VOLUME PERFORMANCE FOR THE YEAR 2011

Daily volumes (SX Scale)

Mkt Price ‐ Last (DX Scale)

(€ per share)

(M traded

shares)

3. REPORT ON OPERATIONS

8


3.1 OVERVIEW OF THE FINANCIAL YEAR

Dear Shareholders, In the financial year just ended, key objectives were achieved in a difficult and conflicting general context. Management actions are now almost exclusively determined by the ADR Group, and so are the format and contents of these Notes to the account. The economic and financial improvement expressed by these financial statements proposed for approval was carried out with a focus on the protection of revenues and on the control of costs and investments that is now, regardless of the persistent block of tariffs, a constant factor of the virtuous behaviour of the Group; however, the general context of the air travel sector and of Fiumicino, in particular, makes the achieved objective unstable and uncertain. However, we believe that the most important objective achieved in prospect was to have shared with the Grantor an important project for the development of the Roman airport system and the contents of a Planning Agreement that will ensure the financeability of the project without public contribution and an adequate return on invested capital; in this sense, we hope that the process for its approval is quick and as much as possible shared with the territory. In particular, with reference to the economic and financial results, the improvement compared to the previous financial year was achieved thanks to an increased traffic for the two airports of Fiumicino and Ciampino by 3.8% with a total number of passengers exceeding 42 million, including 37.7 million for Fiumicino (+3.7%) and 4.8 million (+4.7%) for Ciampino. A considerable attention is still placed on the performance of the main national carrier that reported for Fiumicino encouraging results on domestic and EU routes in terms of passenger traffic (+2.4% and +6.9%, respectively), which was however offset by a decrease in the capacity offered for the domestic route (-3.0%), in addition to a general negative result on the routes outside EU (-1.5% passengers and -3.5% fluctuations). Consolidated revenues from the airport management, amounting to 613.5 million euro, are up 3.3% on 2010, whereas operating costs were basically aligned with 2010. Pre-tax income – after operating costs, amortisation and depreciation and financial income and expenses – totals 12.5 million euro, compared with the negative result of 21.5 million euro of 2010. The Group’s net income is 14.8 million euro, compared with 37.2 million euro in 2010. Consolidated investments of 69.6 million euro (including renewal interventions) decreased compared to 2010 (110.5 million euro). They were significantly influenced by the carrying-out of the new baggage handling system (the so-called BHS) for a financial commitment of more than 21 million euro. With reference to this important system carried out, which made it possible to drastically reduce the inefficiencies in this business segment, Alitalia and the carriers of the Sky Team alliance challenged the charge of the consideration - albeit determined in close correlation to the costs incurred – increasing the credit concentration risk as illustrated in more detail in the chapter dedicated to the specific notice.


9

Together with a careful management of working capital and of the investment volume, the performance has resulted also in 2011 in a cash inflow of 80.4 million euro, which has allowed to cut consolidated net debt from 1,338.9 million euro at the end of 2010 to 1,248.4 million euro at the end of 2011. Going back to ADR’s development plan of the Roman airport system, we would like to note the bases that justify the proposed measures:

Fiumicino is now saturated and its infrastructures and flights are inadequate to serve the expected traffic with a European quality standard;

this situation is the consequence of a decade of stagnation in tariffs and crisis of the main customer, factors that have considerably affected the infrastructural planning with economic and financial effects important for the Group.

Therefore, the improvement and upgrading of the Roman airport system are urgent and the proposal shared with the Grantor requires:

1) investments, amounting approximately to 12.1 billion euro over the 2012-2044 period, of which 2.5 billion euro in the first 10 years;

2) a tariff level and mechanism, which (i) allows to recover, albeit partially, the existing initial

gap with respect to the average of other European airports, by connecting the trend in tariffs to the investments actually made and to the costs incurred (ii) a reduction in the use of facilities in peak hours through different charging systems;

3) a system of rules and commitments that define every aspect of mutual relations, effective for all the period of validity of the concession, in order to be a reliable reference for the financeability of the project.

In addition, the positive impact that the completion of the works will have on the economic system of the Country in terms of GDP growth, as well as the direct and induced employment effects of approximately 30 thousand units in the first regulatory period (2012-2021) and approximately 230,000 units in the long term, must not be underestimated.

Investimenti previsti (in €/mln)

0

50

100

150

200

250

300

350

400

450

500

550

204

42

043

204

22

041

204

020

3920

3820

3720

3620

3520

3420

332

032

203

12

030

202

92

028

202

72

026

202

52

024

202

32

022

2021

2020

2019

2018

2017

2016

201

52

014

201

32

012

201

1

Sviluppo

Manutenzione

€ mln

Irrobustimento delle infrastrutture nell’area Sud di Fiumicino, per complessivi € 4,4 miliardi di investimenti;

Sviluppo di Fiumicino Nord orientato ai piùelevati standard di servizio per complessivi €7,2 miliardi di investimenti;

Riqualifica di Ciampino a City Airport

Sviluppo del nuovo scalo di Viterbo una volta perfezionato un apposito atto convenzionale previsto nella proposta di Contratto di Programma/Convenzione

Investimenti previsti (in €/mln)Investimenti previsti (in €/mln)

0

50

100

150

200

250

300

350

400

450

500

550

204

42

043

204

22

041

204

020

3920

3820

3720

3620

3520

3420

332

032

203

12

030

202

92

028

202

72

026

202

52

024

202

32

022

2021

2020

2019

2018

2017

2016

201

52

014

201

32

012

201

1

Sviluppo

Manutenzione

€ mln

Irrobustimento delle infrastrutture nell’area Sud di Fiumicino, per complessivi € 4,4 miliardi di investimenti;

Sviluppo di Fiumicino Nord orientato ai piùelevati standard di servizio per complessivi €7,2 miliardi di investimenti;

Riqualifica di Ciampino a City Airport

Sviluppo del nuovo scalo di Viterbo una volta perfezionato un apposito atto convenzionale previsto nella proposta di Contratto di Programma/Convenzione

Strengthening of infrastructures in the southern area of Fiumicino, for a total of 4.4 billion euros of investments;

Development of the northern area of Fiumicino oriented to the highest standards of service for a total of 7.2 billion euros of investments;

Upgrading of Ciampino to City Airport

Development of the new airport of Viterbo after executing a special agreement deed provided in the proposed Planning Agreement

Investment plans

Maintenance

Development


10

The sharing objective of the plan was achieved through a complex process that required a comparison and investigation with the grantor for each step of the proposed Planning Agreement. ENAC, at the end of its Board of Directors’ meeting of July 18, 2011, issued a statement in which it informed to have approved the principles; therefore, the checking phase of the financial and operational figures indicated by Aeroporti di Roma S.p.A. (“ADR”) in the sent documents started, in order to share the Economic and Financial Plan until the expiry of the concession and the measure of the tariff trend. On July 29, 2011, ENAC approved the Agreement proposal. On November 2, 2011, ENAC sent the explanatory report on the Planning Agreement, together with the resolution of its Board of Directors, to the Minister of Infrastructure and Transport, the Ministry of Economy and Finance, the Prime Minister’s Office and the Company. Subsequently, ENAC formally opened the consultations with the users of the airports of Fiumicino and Ciampino on the programming aspects of the airport development and specifically on: a) Investment Plan indicating the works that ADR will carry out on the airports of the Roman airport system over the 2012-2016 period, with development until 2044, b) the ten-year Quality and environmental protection Plan and c) the development of air traffic in 2016 with 2021 forecasts. The documents were shown by the subsidiary ADR on December 13, 2011, in the public consultation, held at the Fiumicino airport, which was attended by the associations and representatives of the air carriers and handlers, as well as consumers and couriers. ENAC fixed the date of January 10, 2012 as the deadline for sending, by the users, the final considerations on the issues subject-matter of the consultation, which can therefore be considered closed due to the subsequent clarifications given. The definition of the tariff model before the assessment by the competent Ministries and the start of the second and last consultation with users is currently underway with Civil Aviation Authority. We wish to point out the absolute and urgent need to successfully close the proposed planning agreement.

3.2 AIR TRAFFIC

In 2011 wwoorrlldd air traffic recorded a 4.9% increase in passengers compared to 2010, showing a decreasing trend in the second half of the year. The growth in passenger traffic is highlighted both internationally, with an increase of 6.2%, and at a domestic level (up 3.7%), despite the risks found in the currency markets and, more generally, the overall macro-economic situation. Europe and Italy segments show a substantially similar trend. In 2011 EEuurrooppee, though affected by the impact in various countries of the sovereign debt crisis and the slowdown of the global economy, recorded a 7.3% increase in passengers compared to 2010, which however was penalised in April by the highly publicized effects of the volcanic ash, with serious repercussions on European traffic. The growth rate remained positive both in the Domestic (up 5.1%) and International segment (up 8.1%). In IIttaallyy, in 2011, passenger traffic recorded an overall increase of 6.4%, up 7.1% deriving from the Domestic segment and up 6.3% from the International segment.


11

2011 vs. 2010 SOURCE:

WORLD (a) 4.9% (a) ACI Pax Flash Report (2011)

Europe (a) 7.3% (b) ASSAEROPORTI (2011)

Italy (b) 6.4% (*) = Roman Fiumicino and Ciampino Airport System

FCO + CIA (*) 3.8%

% change for the year 2011 in passenger traffic compared with 2010

0%

5%

10%

15%

20%

25%

30%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

World Europe Italy

In 2011 the main European airports recorded the following passenger traffic trends: Madrid (down 0.4%), Milan (Linate and Malpensa) (up 4.1%), London (up 4.4%), Paris (up 5.7%), Frankfurt (up 6.5%), Munich (up 8.8%) and Amsterdam (up 10.1%). In the same time period the Roman airport system recorded a growth of 3.8%, which remains lower than that recorded in the other Italian airports, showing the initial effects deriving from capacity saturation. The Fiumicino airport passenger traffic monthly trend is shown in the graph below, highlighting the slowdown in the growth trend recorded in the last quarter.

0

1

2

3

4

5

Pax

(Mill

ion)

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2011 PAX 2,435,782 2,255,888 2,840,897 3,155,634 3,387,716 3,484,274 3,881,984 3,862,803 3,639,420 3,415,852 2,675,625 2,657,590

Change % vs. AP 6.0% 3.0% 1.8% 8.3% 4.6% 6.5% 6.2% 3.0% 4.6% 0.3% -0.6% 0.3%

January Febraury March April May June July August September October November December


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It is worth remembering that 2010 was nevertheless penalised in April by the effects of the volcanic cloud with a loss at Rome’s airports estimated at about 290,000 passengers. This result was reached despite the air traffic over the year being negatively affected by various external events:

- the social-political instability which, starting from the end of January, involved numerous countries in North Africa;

- the earthquake that hit Japan in March and the consequent impact on Japanese economy, influencing the volumes to the area concerned;

- the crisis and the economic-financial uncertainties which, particularly in the last quarter, affected the desire to travel in Italy.

Regarding the International events (North Africa and Japan) the estimated loss in traffic amounts to about 700,000 passengers and more than 5,000 flights cancelled. The Roman airport system in 2011, analyzed in the division between Domestic and International segment (the latter broken down between the European Union and non-European Union), recorded the following trend compared to 2010:

The breakdown in terms of traffic market share (between the Domestic, EU and non-EU segments) and its distribution in the various geographic areas is summarised as so:

The Roman Airport System: Market Share 2010-2011

2010

2011 33.0%

33.1%

43.6%

42.2%

23.4%

24.7%

DOMESTIC EU NON-EU


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The Roman Airport System: passenger traffic distribution by Geographic Area

Fiumicino airport closed 2011 with a 3.7% increase in passengers compared to the previous year; in terms of capacity the results were as follows: offered seats (up 0.7%), movements (down 0.2%) and aircraft tonnage (down 0.2%).

With the sequent concentration on the national flag carrier Alitalia:

The load factor stands at 70.2%, with a growth of 2.1% compared to 2010. The overall performance in 2011 was the final result of a trend which, in the last quarter, progressively worsened, especially due to the ever more negative economic scenario both at national and international level. This scenario is actually progressively forcing carriers to adopt a strategy featuring growing “prudence” with special attention placed on containing costs, leading to reductions in the capacity offered to adjust to the slowdown in demand.


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Breakdowns for the different areas are as follows. Domestic Traffic: the overall growth reached 2.2% in terms of passengers, while the capacity offered recorded a drop of 3.5% for the movements and 2.6% for the tonnage. The segment, accounting for 34.6% of total passenger traffic, recorded, in the Alitalia/Other carriers subdivision, the following trend: Alitalia (76.0% of passenger market share): the carrier recorded an increase in passengers

transported (up 2.4%), instead the capacity offered decreased both in terms of movements (down 3.0%) and aircraft tonnage (down 2.4%);

Other carriers (24.0% of passenger market share): the Other carriers achieved an overall growth in passengers equal to +1.8%, despite a decrease in movements (down 4.7%) and tonnage (down 3.3%).

International European Union traffic: this segment represents the airport’s main growth driver, recording an overall increase in terms of both passengers (up 9.5%) and capacity offered (movements up 2.1% and tonnage +1.0%). The segment, accounting for 39.4% of total passenger traffic, recorded, in the Alitalia/Other carriers subdivision, the following trend: Alitalia (26.1% of passenger market share): the carrier achieved growth in passenger volumes

equal to 6.9%, as well as an increase in the capacity offered in terms of movements (up 1.9%) and aircraft tonnage (up 4.0%);

Other carriers (73.9% of passenger market share): also the other carriers achieved a 10.5% increase in the number of passengers transported, just like the capacity offered (movements up 6.2%, tonnage up 4.7%).

International traffic outside the European Union: this segment was affected by the “losses” linked to the social-political affairs in the International scenario (North Africa and Japan with an estimated loss of about 700 thousand passengers), which are the main cause for the 2.2% reduction in terms of passengers and capacity offered, recording a 2.8% drop for movements and a 2.2% drop for the tonnage. The segment, representing 26.0% of the total passenger traffic, recorded the following trend: Alitalia (38.4% of passenger market share): the carrier recorded a drop in passenger volumes

(down 1.5%) and movements (down 3.5%), followed by a contained growth in tonnage (up 0.4%);

other carriers (61.6% of passenger market share): recorded a loss for passengers (down 2.7%) and movements (down 2.5%) and tonnage (down 3.8%).

In 2011 Fiumicino airport in any case continued to develop its network through a series of new destinations previously not provided and/or frequency increases operating on the already existing domestic, EU and non-EU flights; among the most significant, broken down by segment, are the following:


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SEGMENT CARRIER DESTINATION

DDoommeessttiicc new flights Blu-Espress Reggio Calabria Alitalia Toulouse

Wizz Air Vilnius, Brno, Tirgu Mures Norwegian Helsinki, Goteborg Carpatair Iasi

new flights

easyJet Bristol, Lyon, Paris Orly Iberia Madrid SAS Stockholm

Malev Budapest easyJet Amsterdam LuxAir Luxemburg

Lufthansa Frankfurt Aer Lingus Cork, Belfast

EEUU

Frequency increases on already existing routes

Jet2.com Leeds, Manchester Alitalia Rio De Janeiro, Peking

China Eastern Airlines Shanghai Gulf Air Bahrain

Ukraine Int. Airline Ivano-Frankivsk SkyWork Bern

Swiss Basel

new flights

Eritrean Airlines Asmara Alitalia Osaka, San Paolo, Teheran

Saudi Arabian Airlines Jeddah Rossiya Airlines Saint Petersburg

Air Transat Toronto, Montreal Turkish Airlines Istanbul

Biman Bangladesh Dacca SriLankan Airlines Colombo

Qatar Airways Doha

NNoonn--EEUU

Frequency increases on already existing routes

Air Algerie Algiers

Nevertheless traffic performance at Rome airport was affected by reductions in the offer for some specific routes: the well-known social-political events which involved the main countries in North Africa (Tunisia, Egypt and Libya), and the nuclear problems which concerned Japan following the catastrophic earthquake in March, affected the carriers working in these countries. E.g. with reference to the Libyan airlines, the services completely interrupted at the end of February were not reactivated. In addition, a reduction was recorded in the offer on the routes to and from North America, especially to the USA: United Airlines did not operate the summer flight Rome – Chicago, and it also cut some weekly

frequencies, for the winter period, on the Rome – Washington route, Continental did not propose the usual capacity increase (doubling of the daily flights in the peak

summer period) on the route Rome – Newark, Delta Airlines cancelled the flights Rome – New York for the winter season, therefore starting

from November, from the same month, and until April 2012, Alitalia cancelled the flights to Los Angeles and

Chicago. Ciampino airport, though maintaining the maximum limit of a hundred commercial movements a day as capacity that can be allocated, in 2011 recorded an increase in the passenger traffic of 4.7% and a slight growth in the capacity offered (movements up 1.2%, offered seats up 5.9% and aircraft tonnage up 5.4%). This performance is mainly due to the recovery of the volumes lost in 2010 due to the eruption of the Icelandic volcano and the gradual complete use of the maximum capacity that can be allocated (not completely used in 2010).


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Worth highlighting is that during 2011 the transfer process was completed at Fiumicino of the easyJet flights previously operating at Ciampino. These flights were progressively replaced with destinations serviced by Ryanair, which was able to launch new routes and increase the offer on the already active flights. Among the main operations, worth remembering in the domestic segment is the increase of the frequency of the flights to numerous destinations already serviced and the start-up of new flights for Genoa and Brindisi, and in the International segment the opening of a host of new routes (Porto, Vilnius, Salonika, Riga, Marseilles, Bordeaux, Manchester, Leipzig).

3.3 OPERATIONS AND RELATED REVENUES In 2011 the Group’s activities generated total revenues of 652.9 million euro, which break down as follows:

(in millions of euro) 2011 2010 CHANGE % CHANGE

AVIATION 323.4 307.2 16.2 5.3%

AIRPORT FEES 181.6 174.8 6.8 3.9%

CENTRALISED INFRASTRUCTURES 40.5 35.4 5.1 14.4%

SECURITY 70.3 67.7 2.6 3.8%

OTHERS 31.0 29.3 1.7 5.8%

NON AVIATION 290.1 286.8 3.3 1.2%

REAL ESTATE 61.9 59.7 2.2 3.7%

TRADE 205.9 198.9 6.9 3.5%

SALES1 89.4 84.9 4.5 5.3%


CAR PARKS 31.6 30.5 1.1 3.7%

ADVERTISING 20.0 22.4 (2.4) (10.5%)


OTHERS 22.4 28.2 (5.8) (20.6%)

REVENUES FROM AIRPORT

MANAGEMENT 613.5 594.0 19.5 3.3%

CONSTRUCTION SERVICES 27.6 55.5 (27.9) (50.3%)

OTHER REVENUES 11.8 3.6 8.2 227.7%

TOTAL 652.9 653.1 (0.2) (0.0%)

1 in retail outlets directly managed


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A review of operations during 2011 in the various areas of business in which the Group is involved is provided below. AVIATION ACTIVITIES

Airport fees In 2011 revenues from airport fees amounted to 181.6 million euro growing by 3.9% compared to the previous year. In particular, the two main components of this revenue led to the following trend being recorded: landing, take-off and parking fees (58.4 million euro): against a number of overall movements

equalling those recorded in 2010, the 1.1% increase recorded in comparison to the previous year was mainly due to the increase in fees from January 10, 2011 to bring them into line with the target inflation (up 1.5%)2 and, secondly, a slight increase of the average/overall tonnage (up 0.3%);

passenger boarding fees (120.2 million euro): increased 5.5% due to the higher number of boarding passengers (up 4.1%) and the mentioned fee adjustment (up 1.5%).

During the year a 5.8% reduction in cargo traffic compared with 2010 was also registered, resulting in a drop in cargo revenues of around 0.2 million euro (down 5.5%); revenues in 2011 totalled 3.0 million euro.

Management of centralised infrastructures The management of the centralised airport infrastructures, carried out directly by ADR, in 2011 registered a turnover of 40.5 million euro (of which 19.0 million euro relating to the baggage handling systems, 17.3 million euro to the loading bridges and 4.2 million euro to other centralised infrastructures) corresponding to an increase of 14.4% compared to the previous year. This increase is due to the combined effect of: 40.9% increase in the revenues deriving from the baggage handling systems mainly correlated to

the charge – for about 90% to Alitalia – from January 1, 2011 of the consideration, validated by the Civil Aviation Authority (ENAC) with provision of May 11, 2011 (unit fee per baggage handled equal to 1.87 euro), related to the use of the new handling system of transit baggage “NET6000”, created and put into operation in 2010. The trend of revenues for the baggage handling systems was also affected by the rise in passengers, partly balanced by a different distribution of outbound passengers in the various airport areas that have differential baggage treatment unit fees;

3.0% decrease compared to last year of the revenues relating to the loading bridges mainly due to the unavailability and penalisation of some systems of Satellite West, a higher unit revenue for upgrade works, in addition to the reduction in aircraft movements at Fiumicino on the national traffic (down 3.5%) and non-EU (down 2.8%) components.

2 pursuant to Ministerial Decree of October 4, 2010 regarding "Revised airport fees for 2010" published in Official Gazette no. 289 of December 11, 2010.


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Despite the lower traffic recorded in the national and non-EU segments, there were 160,562 flights served with loading bridges in 2011, an increase of 2.8% compared to 2010, for a total number of 20,429,377 passengers served (up 5.5% compared to the previous year). The improvements in bridge management, and in particular the lower average use per single flight allocated to loading bridges, allowed a greater number of customers to be guaranteed the use of these infrastructures and improve the service level, despite the lower availability of the systems.

Security Security activities carried out by ADR (security checks on passengers, carry-on baggage, checked baggage, explosive detection checks and services requested) generated revenues of 70.3 million euro, an increase of 3.8% on 2010. This performance derives from an increase in passenger traffic, partly offset by a decrease in revenues for on-demand services provided at Fiumicino (special entry points, goods in simulation room, etc.).

Assistance to passengers with reduced mobility (PRM) and other aviation revenues As part of the revenues related to the other aviation activities, equal in total to 31.0 million euro (up 5.8%), the trend of the following items is shown: - assistance to passengers with reduced mobility (“PRM”): for this activity revenues were recorded

for 14.6 million euro, with a 10.6% increase compared to the previous year due to the rise in boarded passengers and the increase in the fee applied at Fiumicino starting from December 2010;

- passenger check-in desks: revenues, equalling 11.2 million euro, decreased by 3.0% compared to last year for the optimisation actions implemented by the user companies (ground assistance service providers), in particular at Ciampino. On this point it is worth mentioning that in the fourth quarter of the year, at Fiumicino, new management and assignment methods were defined for the check-in desks aiming to avoid the abovementioned actions from ground assistance service providers being able to reach such levels that may jeopardize the quality of the services offered to the passenger; the effect of these new methods will be fully operational during 2012;

- other aviation revenues: equal to 5.2 million euro and consisting of revenues for the use of common assets, luggage porters and left luggage, etc..

NON-AVIATION ACTIVITIES

Real estate management Revenues from retail and other sub-concessions, deriving from fees and utilities at Fiumicino and Ciampino airports, amount to 46.2 million euro, registering a 5.4% increase compared with 2010. This increase is due to the positive effect of the sub-concession agreements at Office Tower 2 which were delivered at various times during 2010 and also to the entry into service of the portion of the cargo building allocated to Flightcare Italia S.p.A. in its capacity as a cargo handler in the third quarter 2010; also greater fees for license, user and service fees to the “rent a car” following the transfer to Office Tower 2 with a substantial doubling of the spaces used.


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Revenues from sub-concessions (service stations, catering companies, hotels, etc.) calculated on the volume of activity carried out amount to 15.7 million, registering a decrease of about 1.3% compared to 2010. The result for 2011 is mainly attributable to a: 4.1% reduction in revenues to “avio” service stations reaching 6.9 million euro, due to the new

unit cost applied to “avio deliveries” which – in compliance with the Civil Aviation Authority criteria that ensure annual cost-related increases for the operator – moved from 3.91 euro to 3.62 (down 7.4%) euro per cubic meter starting from March 1, 2011;

5.9% drop in revenues to catering companies, equalling to 1.5 million euro. The amicable settlement of the relationships with the two catering companies operating at the Roman airport system (LSG on November 26, 2010 and Servair Chef on June 6, 2011) allowed on the one side a recovery of past receivables, and on the other the obtaining of the data related to the “flights actually serviced”. Based on the volumes communicated and by applying the unit amount for the surcharge in force, the total income was lower than the “connection at cost” acknowledged by the Civil Aviation Authority;

5.3% decrease in the total turnover for the hotel business (1.2 million euro) consequently to the lower average occupancy and the reduction in the average sales price per room;

instead royalties (equal to 5.1 million euros) from car hire companies increased (up 3.4%). Commercial activities

The retail outlets directly managed by sub-concessionaires recorded a growth in revenues (turnover from retail outlets managed directly plus royalties from sub-concession agreements) of 5.6% in absolute terms and an increase of 1.4% in revenues per passenger. Though positive, the performance was affected, in the first months of the year, by the negative effect of the earthquake in Japan and the North African crisis and, in the last quarter, the effect of the global economic crisis especially in the retail segment. The traffic mix was also not very rewarding: 2011 closed with a trend for the high spending component (passengers with Non-EU destinations) down by 0.9% compared to 2010, against a growth of 5.7% for the low-medium spending components (passengers with Domestic and EU destinations). Despite these penalising phenomena, thanks to programs to develop retail outlets managed directly and by sub-concessionaires, the growth in revenues for the ADR Group was higher than for traffic.

Direct sales Given a 4.1% increase in outbound passengers in the total system, the eight retail outlets directly managed closed 2011 with an increase in revenues of 5.3% and a total turnover of 89.4 million euro, with an increase in the average spend per passenger of 1.1% (4.22 euro per outbound passenger). The projects created produced an increase in margins and productivity of the business; the most important are listed below: - pricing policy review;


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- logistical process review, which led to a notable increase in productivity in 2011, with benefits

going to system in 2012; - the conversion from duty paid to duty free of shops 3 and 5 (Schengen area), with a positive

economic impact and benefits for the logistical processes; - sales personnel management improvements (training and organisation); - the shop Rocco Giocattoli being transferred by sub-concession to T1; - opening of the shop-in-shop Chanel at shop 1 at T3. The product segments that mostly contributed to the growth of the turnover were Confectionery (up 15.6%), Fine Food (up 16%) and Wines (up 11.3%). Tobacco (down 1.3%) was affected by the abovementioned drop in the reference market, consisting of passengers with Non-EU/North African destinations.

Outlets managed by sub-concessionaires Revenues from retail outlets managed by sub-concessionaires in 2011 equalled 57.4 million euro, with an increase compared to 2010 of 6.1%; the average revenue per passenger grew by 1.9%.

“Specialist retail” activities recorded revenues equal to 29.6 million euro, up compared to 2010 by 5.9% (up 1.7% in terms of average revenue per passenger). Concerning the product segments, it is worth mentioning the particularly positive trend of the luxury segment, up 7% in terms of average revenue per passenger, and the souvenir and eyewear segments, on average up by 9% in terms of average revenue per passenger. Instead the performance of the sportswear segment is negative (down 4.6%) and so is the shoes segment (down 17.9%) mainly due to the closure of the shop Valleverde in the mezzanine floor in Terminal 1. The “other royalties” segment (currency exchange, tax refund, etc.) generated revenues equal to 6.4 million euro, with an 11.0% increase compared to 2010, therefore above the traffic trend. Regarding “Food & Beverage”, in 2011 revenues were 21.4 million euro, with growth up 4.8% compared to 2010; the revenue per passenger grew by 0.7%.

Management of car parks Management of parking systems generated revenues of 31.6 million euro, up 3.7% on the previous year. This increase is lower than the rise in the potential market represented by outgoing passengers (up 5.4%). In detail the following trends were registered: passenger car parking: revenues of 27.1 million euro (up 3.1%) with a 2.2% drop in the average

spend for the outbound passengers; airport operator car parking: revenues of 4.5 million euro (up 7.4%).


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During the first half of the year the works to adjust and modify the Terminal arrival road at Fiumicino and Ciampino airports were completed. Thanks to the changes made, the vehicle traffic has been streamlined and regulated, dedicating various access routes to the terminals to each type of user and based on the specific needs. Remote waiting areas were established for the rentals with driver and the buses, in this way allowing a decongestion of the closest traffic to the terminal. The creation of short-term car parks (free for the first 30 minutes) led to benefits in terms of service and increase in turnover: in the June/December period accesses to the Short-Term Car Parks were about 800,000 and 70% of the users used it for free. During the second half the improvements to the multilevel car park infrastructure were concluded aiming to enhance the overall quality (car park enlargement, painting of walls, directing signs, space counters at the floors); car park areas regulated with parking meters were also widened. To support the new “short-term” car parks of T1 and T3, new commercial signals were put in place along the route. The Telepass project was implemented in the multilevel car parks A, B, C, and D, with adjustment of the related horizontal and vertical signals.

Advertising Revenues from the sale of advertising spaces in 2011 amounted to 20.0 million euro, down by 10.5% compared with the previous year. In detail, revenues from the sale of advertising in directly managed outlets (totalling 2.8 million euro) were substantially in line with 2010 (down 1.3%), while revenues from indirect sales of advertising spaces at airports, carried out by the subsidiary ADR Advertising S.p.A., amounted to 17.2 million euro, down 11.8% on 2010. The negative trend continues in this segment as already experienced in previous years, deriving from the reference market trend, with competitive pressure from alternative forms of advertising, and the specific conditions of the Fiumicino airport grounds, which recorded a change in the traffic mix that makes advertising spaces less attractive.

Due to the abovementioned aspects, some contracts were cancelled and fee reductions had to be agreed to; furthermore, in relation to the difficulties of a sub-concessionaire, falling into arrears last year with a consequent anticipated termination of the related contracts, some systems were subject to conservative seizure and therefore did not produce any income. Refreshments

In 2011 refreshment outlets (management of canteens for airport operators) registered revenues of 7.4 million euro, with an increase of 5.1%. This increase was generated by the annual review of the prices and the completion of the AZ/CAI personnel transfer operation from Magliana to Fiumicino.


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Other In the “other income” segment, equalling 22.4 million euro in 2011, the following trend is shown compared to last year: - revenues for maintenance operations provided to third parties, equalling 9.4 million euro down

18.7%; - revenues for cleaning fees and biological wastewater treatment for 3.7 million euro, down 9.0%; - revenues for other sales (fuel, consumable materials, etc), equal to 2.9 million euro, up 18.9%.

CONSTRUCTION SERVICES These revenues total 27.6 million euro, with a 27.9 million euro decrease on 2010 resulting from a reduction in construction services provided in connection with the airport concession.

3.4 QUALITY AND THE ENVIRONMENT QUALITY ADR continued monitoring of airport activities in 2011 via daily checks on the level of quality provided and perceived. The monitoring of the service levels provided at Fiumicino and Ciampino airports was carried out by a specialised external company; during the year about 57,000 surveys were conducted, with around 28,000 questionnaires completed by passengers. Analysis of Fiumicino’s positioning in terms of quality continued, through participation in the Airport Service Quality international benchmarking program and via specific meetings with major European airport operators. A voluntary certification program was also developed as a tool to aid improvement. Monitoring of quality levels Fiumicino

Regarding customer satisfaction with the services provided at the airport, in 2011 Fiumicino received an average score of 4.37 from passengers (valuation scale 6 = excellent 1 = poor), registering a slight increase with respect to 2010 (4.35), assessment essentially linked to the high level of saturation of infrastructures. Objective checks carried out at Fiumicino airport in 2011 show the following. 87.5% of passengers waited less than 12 minutes for carry-on baggage security checks, compared with the standard published in the Service Charter (90% of passengers). The services provided worsened compared to 2010 by about 5 points. The percentage of flights with baggage reclaim times within the set fn standards was 88.2% for the first piece of luggage (81.1% in 2010) and 90.8% for the last (86.2% in 2010), compared with the standard of 90%. The percentage of passengers who completed check-in operations within the times set in the Service Charter was 89.4%, compared with the standard of 90%. Despite the non-compliance of the set standard (90%), the service recorded an improvement of about 4 percentage points compared to last year.


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The percentage of outgoing flights with delays of more than 15 minutes was 21.4%, compared with 29.9% in 2010. The airport’s performance improved compared to last year and meets the standard laid down in the Service Charter (25%). The percentage of incoming flights with delays of more than 15 minutes was 16.7% (22.5% in 2010). The indicator “recovery of airport transit times” (the difference between delays to incoming and outgoing flights with respect to scheduled time) was negative (down 4.7%). Ciampino

Regarding customer satisfaction with the services provided at the airport, in 2011 Ciampino received an average score of 4.26 from passengers (valuation scale 6 = excellent 1 = poor), registering an increase with respect to 2010 (4.23). Objective checks carried out at Ciampino airport in 2011 report the following. Carry-on baggage security checks are completed within the set standard time of 14 minutes in 98.3% of all cases, improving by around 2 percentage points on 2010 (the standard is 90%). The percentage of flights with baggage reclaim times within the set Service Charter standards was 97.2% for the first piece of luggage and 98.3% for the last (the standard is 90%); performance improved by 4 points compared with 2010. Passenger check-in operations were completed within 20 minutes in 94.3% of cases; a 21-point improvement was registered with respect to 2010 and the compliance with the set standard (90%). The percentage of outgoing flights with delays of more than 15 minutes was 15.7%, whilst the percentage of incoming flights with delays of more than 15 minutes was 13.3%. The airport failed to meet the standard regarding delays to outgoing flights (17%), with an improvement (10.5%) compared to 2010. Benchmarking In 2011 systematic comparison in ADR continued of the performance of the main quality standards within the European Airports Benchmarking Group on Service Quality, coordinated by ADR, and including all of Europe’s major airports (Amsterdam, Copenhagen, Frankfurt, London-Heathrow, Madrid, Milan, Munich, Paris, Vienna and Zurich). In 2011, in particular, the issues concerning outbound baggage left behind and the new technologies to measure the lines of passengers at the security check points and check-in desks were analyzed (Bluetooth, video cameras, lasers, wi-fi, etc.), with the aim of sharing information and identifying best practices. In 2011, the levels of satisfaction regarding Fiumicino expressed by passengers via the Airport Service Quality program, a survey conducted in collaboration with ACI (Airports Council International) at 180 airports around the world, confirmed Fiumicino’s ranking as slightly below the average among leading European airports. In addition, in 2011 cooperation with Aéroports de Paris and Munich Airport was started on the organisational structures, the business models and the demographic and social-professional profile of the personnel. Finally, in 2011 ADR launched a survey on the subject of energy and energy policies and the strategies implemented in the framework of climate change and the development of renewable energy in particular; in this survey the airports of Dublin, Madrid and Paris participated. ENVIRONMENT Regarding focus on environmental issues in 2011 the ADR Environmental Report was drawn up, containing the data relating to 2010 and the activities aimed at the sorting of recyclable waste and the monitoring of pollution.


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Sorting of recyclable waste The program for the sorting of recyclable waste at Fiumicino and Ciampino airports continued for the portion comprising paper, cardboard, wood and plastic, with collection areas set up near terminals, company canteens and administrative offices. The design of five new waste disposal areas to serve Fiumicino terminals was completed. The aim is to increase the sorting of recyclable waste and guarantee a correct method of disposal for users. The first recycling point is being created, located at the T3 area of the Control Tower. The start of operations, at Fiumicino and Ciampino airports, for the S.I.S.T.R.I. (a waste tracking monitoring system), which was established under a Ministerial Decree issued by the Ministry of the Environment and Protection of Land and Marine Resources, set for September 2011, was delayed until April 2012. Pollution monitoring The “Project for the quantification of CO2 emissions deriving from the activities at the Leonardo da Vinci Fiumicino airport” has finished. In June it was subject to inspection by the control body and the certificate was obtained, which certifies the methodology for the quantification of the CO2 emissions at Fiumicino airport, relating to 2008 – 2009 – 2010 (Airport Carbon Accreditation). In February 2011, the monitoring of air quality was completed at the airports of Fiumicino and Ciampino and, in order to measure the atmosphere’s capacity to remove pollutants (atmospheric stability), the height of the mixing layer was measured, thereby defining the climatology of the area. The CNR (National Research Council) produced the final report on the monitoring activities carried out, which confirmed in the airport complex a general compliance with reference standards. Starting from June a new monitoring campaign was started, ending in December 2011, and the final report is being prepared by the CNR. The continuous monitoring of the performance of wastewater treatment systems was continued at Fiumicino airport, which showed the optimal operation of the same systems and the biological wastewater treatment in particular, revealing concentrations of the main pollutants on average below 50% of legal limits. The drinking water monitoring network was enhanced, with the aim of submitting for inspection all the infrastructures at the airport. ADR requested and obtained the authorisation from the Province of Rome to use, pursuant to art. 110 of Legislative Decree 152/2006, the wastewater treatment system to treat the waste coming from airport septic tanks and the maintenance of the water networks, previously disposed of at external systems. Regarding the issue of noise abatement, on July 1, 2010 the Service Conference set up by Lazio Regional Authority to define acoustic zoning for Ciampino airport completed its work. ADR lodged before the Lazio Regional Administrative Court the report of the above Conference which approves the acoustic zoning; in any case the preliminary activities were started to identify the properties falling within the critical area and which may be subject to acoustic redevelopment, in order to detect the extent and type of interventions required to carry out the acoustic redevelopment plans. An initial report of the buildings involved was prepared in November 2011; the analysis will be completed in 2012. The Civil Aviation Authority was regularly advised on the activities being performed.


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3.5 INVESTMENTS, RESEARCH AND DEVELOPMENT

(in millions of euro) 2011 (*) INVESTM. RENEWALS (**) TOTAL


E/ F BOARDING AREAS 12.2 0 12.2

BAGGAGE SYSTEM AND XRAY MACHINES 6.1 3.6 9.7

EX ALITALIA CARGO HBS/BHS 1.7 0 1.7

FIUMICINO NORD: LONG-TERM DEVELOPMENT PLAN 1.7 0 1.7

IMPROVEMENT/ OPTIMISATION OF TERMINALS

0.8 4.2 5.0

FIUMICINO – ELECTROMECHANICAL SYSTEM MAINTENANCE 0.1 2.3 2.4

IMPROVEMENTS TO COMMERCIAL AND PARKING AREAS 0.9 0.6 1.5

AIRPORT ACCESS ROUTE IMPROVEMENTS 0 2.0 2.0

FIUMICINO – ELECTRICAL SYSTEM MAINTENANCE 0 5.4 5.4

FIUMICINO – ELEC. NETWORK AND AIR-CON. MAINT. OP. 0 5.4 5.4

IMPROVEMENTS TO RUNWAYS AND AIRCRAFT APRONS 0 5.3 5.3

CIAMPINO – INFRASTRUCTURAL UPGRADES 0 4.9 4.9

FIUMICINO – CIVIL WORK MAINTENANCE 0 2.2 2.2

FIUMICINO DISCHARGE AND WATER NET. MAINT. OP. 0 1.7 1.7

OTHER 7.0 1.1 8.1

OTHER GROUP COMPANIES

CO-GENERATION PLANT 0.4 0 0.4

TOTAL INVESTMENTS 30.9 38.7 69.6 (*) including the works charged to the Civil Aviation Authority (**) these amounts are to be used by the renovation provision

As known, the failure to adjust the price-regulated tariff and the delay in signing the Planning Agreement caused the progressive downgrading of ADR (currently at “sub-investment grade” level) by activating “Trigger Event” mechanisms which make it actually impossible for important development investments to be made. Consequently ADR just made those maintenance investments considered necessary to suitably manage safety and security levels while guaranteeing the current quality levels. Therefore, in 2011 investments for 69.6 million euro were made (110.5 million euro in 2010), falling compared to the previous year when the new transit baggage handling system was created. Terminals The construction works at boarding area F (formerly Pier C) continued, albeit at a slower pace than in the previous year. Slowing the works with respect to the schedule became necessary to assure expenditure commitments – for the self-financed portion of the works – that are compatible with the Group’s upcoming financial commitments, due to the persisting uncertainties concerning the terms for the approval of the Planning Agreement. As at December 31, 2011 an expense supplement was requested to the Civil Aviation Authority, for the portion charged to the State of the boarding area F, for 18.2 million euro, of which 16.3 million euro were collected.


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To date, the following activities are underway: - placement of the metal framework comprising the structure of the new pier; - creation of stairways; - laying roof tiles. The works concerning the new service tunnel are complete, linking the pier to the existing technical centre and the section of the service tunnel crossing the air-side route in front of Station E. In boarding area D (formerly Pier B) the works to create the new flight control and coordination room were completed in May, while in March the restoration and adaptation works were completed relating to boarding area C (formerly B11/B21) and the area that connects boarding area B (formerly Pier A) to boarding area C. As part of the works to improve the image and function of the terminals, the group of restrooms located in boarding area D, next to gate D6 was restructured and so was the group located in the passenger waiting hall, arrival hall, eastern side of Terminal 1 next to the offices of the airlines, and the group located in the baggage reclaim hall of Terminal 1. Still as part of the works to improve the image and function of the terminals, in November, at Terminal 3 (formerly TC), the prototype was installed of the new check-in desks (in correspondence to desks 289-290) and, at boarding area D, the prototype of the new departure gates (in correspondence to departure gate D1). In the third quarter, the works to extend and upgrade the eastern side security controls at Terminal 3 were completed for the departures and so were the renovation works regarding the offices for the handlers/carriers and ADR/Security located next to the new security checking area. The replacement was finished of the panoramic elevators at Terminals 1 and 3 for a total of six systems and the installation works were started for the installation of a new service elevator for the transportation of goods to the direct retail warehouses of Terminal 3. The restoration works were completed regarding the new store managed by ADR (shop 30) located in boarding area B, inaugurated and open to the public on March 28, 2011. Regarding the integration of the internal/external signalling system at terminals, aimed at improving direction information given to passengers, the installations correlated to the new Polo Bus were completed. Furthermore the works for the integration of the internal signalling system were terminated at the terminals (Airport Identity – Boarding area B). Infrastructural works were carried out, which are necessary to modify the route in front of the Terminals (Arrivals) in order to enhance circulation, rationalise the parking time and avoid congestion. Within the first months of 2012 also the route to Departures will be modified. Baggage handling In the second quarter of 2011 the important baggage handling system for Terminal 5 was finally acquired, previously used on a loan basis. With reference to the two HBSs (Handling Baggage System) which service Terminal 3 (formerly Terminal B and C), it is worth mentioning that:


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- the adaptation of the HBS of former Terminal C was completed; - the activities for the creation of a fourth security check line for the HBS system of the former

Terminal B were completed. Regarding the automated baggage handling system (BHS/HBS) at Terminal 1, for which the executive design has been completed, restructuring works were resumed - previously suspended - in the area that will house the equipment (the former Alitalia cargo warehouse). Infrastructure and buildings Restructuring works of the former CED premises were completed at ADR’s Headquarters, located on the ground floor of building E for use as offices and meeting rooms, including the works for furnishing the interior of the scale model area. At the beginning of February the adaptation works were completed of the 3rd and 4th floor of the Epua 2 building, where the front desks and back offices of the rent a car sub-concessionaries were transferred to in April, thus freeing the areas that were unsuitable for the growth in business volumes. In November, on the departures flyover works were started to remake the road connections, which will be completed within April 2012. To facilitate the usability by the users, some accesses have been fitted with Telepass both at the short-term car parks in front of the terminal and the multilevel and long-term car parks, open to the public at the end of November. Runways and aircraft aprons The preliminary works were completed to make the apron “703” of boarding area G suitable to accommodate the A380 aircraft: on June 6, 2011 the maiden flight of the A380 was made by Emirates. The third phase of the apron upgrading works was completed. The residual works were completed for the apron upgrade contract (2nd phase) and the extraordinary works at the northern section of runway 16L-34R. The executive project was completed of the taxiways of sector 700-800 and the one for the upgrade of taxiway Charlie. The feasibility study was completed, which will identify the best project for the radical upgrade works at runway 16L-34R. The program to study and monitor airport surfaces (Pavement Management System) was completed for 2011 according to the provisions in the Airport Manual. At Ciampino in the middle of March (ahead of schedule) the radical upgrade works at SB taxiway were completed. In December also the works concerning aprons 400, 500 and 600 were finished as was the preliminary project for extraordinary maintenance of the Ciampino runway.


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The route in front of the airport was reconfigured in terms of passenger loading and unloading, while extraordinary maintenance was carried out on the road surface of the internal road for vehicles. The investment activity described previously was accompanied by a host of technological and functional improvements in the Information Technology area (ICT). In particular: makeover of Company websites; creation of the system to access the new operator parking area (called “PR12”); furthermore the

activities concerning ICT infrastructures were carried out as part of the project to change the airport access route for arrivals and so were the activities for the automatic management of the “rent a car” integrated with the current parking access system and those to provide access to the car parks using Telepass equipment;

completion of the project to manage and monitor passengers with reduced mobility (PRM). Infrastructure planning and development Last July the Civil Aviation Authority approved the project to complete infrastructures at “Fiumicino Sud 2012-2021”, presented by ADR in May 2011 to be created in a subordinate manner upon signing the Planning Agreement. This project defines all the airside and landside infrastructural improvements, for a total of about 2.5 billion euro, which will guarantee the usability of the airport areas in relation to the increase in traffic in the short/medium term. To obtain the environmental and urban permits for the works included in the approved project, ADR provided an environmental impact study. This study was sent to the Civil Aviation Authority on August 8, 2011 and filed with the Ministry for the Environment, Cultural Assets and Lazio Regional Board, on December 20, 2011 in order to allow the start of the Environmental Impact Assessment (EIA). The procedure includes a period of publication and consultation by the public and the offices of each Institutional Body entitled to an opinion. The outcome of the environmental assessment procedure will lead to the call by the Civil Aviation Authority of the services conference convened by the Ministry of Infrastructure and Transportation for the final Urban and Environmental approval of the complete project. Despite the new Convention still not being approved, ADR continued to prepare the Master Plan relating to the development of Fiumicino in 2044 entrusted to the company Scott & Wilson with the support of experts from Changi Airport, incurring fees for a total of 2.8 million euro to system. This important activity will be completed by the first half of 2012.


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3.6 HUMAN RESOURCES AND ORGANISATION

As at December 31, 2011 the number of staff totalled 2,593. of which

EXECUTIVES MANAGERS EMPLOYEES WORKERS TOTAL

STAFF

Fixed-term

contracts

Open-ended

contracts

12/31/11 1 1 - - 2 - 2

12/31/10 3 4 4 - 11 - 11GEMINA

CHANGE (2) (3) (4) - (9) - (9)

12/31/11 45 184 1,791 569 2,589 572 2,017

12/31/10 (*) 46 201 1,771 628 2,646 706 1,940

ADR AND

SUBSIDIARIES CHANGE (1) (17) 20 (59) (57) (134) 77

12/31/11 - 1 1 - 2 - 2

12/31/10 - 1 - - 1 - 1FIUMICINO

ENERGIA

CHANGE - - 1 0 1 - 1

12/31/11 46 186 1,792 569 2,593 572 2,021

12/31/10 49 206 1,775 628 2,658 706 1,952TOTAL

CHANGE (3) (20) 17 (59) (65) (134) 69

% (6.1%) (9.7%) 1.0% (9.4%) (2.4%) (19.0%) 3.5% (*) 93 in extraordinary earnings supplement

On April 19, 2011, Gemina’s Board of Directors resolved to move Gemina’s registered office and headquarters to Fiumicino airport (Rome), effective on August 1, 2011. The employment contracts of the Milan office staff have been terminated, assisted by leaving incentives and placement services as well as recourse to applicable legislative institutions. At the end of 2011 the number of staff of the parent company equalled 2. After the end of the year, the work relation with the Manager was terminated. Simultaneously with the move of the registered office, the full service agreement between ADR and Gemina entered into force; through it, the subsidiary provides the holding parent company with all services necessary to carry out its corporate functions. The total reduction of the headcount of the ADR group by 57 units derives from the decrease in the fixed-term contracts of 134 units, partly compensated by the increase in the workforce on open-ended contracts of 77 resources. In particular in ADR, which records a total reduction in the workforce of 56 resources, the increase on open-ended contracts (up 84 units) is due to varying reasons: staff redundancies (down 93 units), termination of employment due to resignation, decease or dismissal (down 21 units), application of contractual regulations on conversion of temporary into open-ended contracts (up 171 units), conversion of staff hired on temporary and placement contracts (up 11 units), entry of new professionals (up 14 units), other (up 2 units).


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The application of the contractual regulations on conversion of temporary into open-ended contracts (up 171 units) had a direct effect in lower hiring of seasonal personnel; the fixed-term headcount of ADR reduced by 140 units.

During the year, average staff was 2,405 (2,369 units in 2010) excluding those in the Extraordinary Earnings Supplement Fund. Staff costs, totalling 123.1 million euro, were 31% of the value added, slightly lower than 2010:

2011 2010

STAFF COSTS VALUE ADDED

% 31 33

The productivity of the ADR Group grew by 2.0% (indicator: passengers/full-time equivalents), thanks to a more contained increase in the headcount (up 1.8%) compared to the passenger traffic trend (up 3.8%). For the Group’s remuneration policy, reference is made to the Report on “Remuneration 2011” available at www.gemina.it. ADR adopted a new organisational structure according to a framework that between suits its multi-business nature. Two new departments were set up: Relations with the Board of Directors and strategic planning and Real Estate. Also worth mentioning is the variation of the organisational perimeter of the Human Resource department, which absorbed the responsibilities of the Quality and Environment department, and the change in the organizational structure of the Tenders, Purchases and ICT unit, with the objective of directing the purchase process towards a procurement model. To support the corporate strategic processes, some committees were reconfigured and established: the Investment committee, whose inquiry and consulting functions were confirmed towards the Board of Directors, and the Concessions committee, aimed at ensuring the effectiveness of the process to assign the commercial spaces managed by sub-concessionaires inside the airport, guaranteeing consistency with the corporate plans and strategies. During the year the Steering Committee 231 was set up, with the aim of promoting the distribution and effectiveness of the Organizational Model Leg. Decree 231/01.

3.7 CORPORATE TRANSACTIONS In the second half of 2011 the subsidiary ADR started a study aiming to amend the corporate structure of the ADR group by setting up new special-purpose entities dedicated to the management of the following activities: direct retail, car parks, security and vehicle maintenance. The initiatives being studied are in line with the corporate model already existing, which envisages the presence within the Group of the companies ADR Tel S.p.A. (telecommunication services), ADR Engineering S.p.A. (design and project management), ADR Assistance S.r.l. (PRM assistance) and ADR Advertising S.p.A. (advertising); this model is also used by other national and international market operators.


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In particular: ddiirreecctt rreettaaiill aanndd ccaarr ppaarrkkss: the companies will operate via a sub-concession agreement with ADR;

the involvement of specialised operators will allow for value creation by leveraging synergies and assets of leading players in the industry, with the consequent improvement of the offer and the quality in line with the best international practices;

sseeccuurriittyy: ADR will entrust the company with the execution of security-related activities to allow a greater focus on security activities, an increase in managerial effectiveness and more competitive staff costs;

tthhiirrdd ppaarrttyy vveehhiiccllee mmaaiinntteennaannccee: this non-core business for the operator has a non-competitive cost structure and limited recovery potential; therefore, the intention is to divest the business while mitigating the impact on employment by involving specialised third party operators.

3.8 EQUITY, ECONOMIC AND FINANCIAL HIGHLIGHTS FOR THE GROUP

The reclassified statements of the equity, economic and financial situation of the Gemina Group are shown hereunder together with the analysis of the main changes occurred over 2011.

3.8.1 Economic position


REVENUES FROM AIRPORT MANAGEMENT 613.5 594.0 19.5

CONSTRUCTION SERVICES 27.6 55.5 (27.9)

OTHER REVENUES 11.8 3.6 8.2

TOTAL REVENUES 652.9 653.1 (0.2)

CONSUMPTION AND OTHER OPERATING COSTS (232.5) (234.0) 1.5

COSTS OF CONSTRUCTION SERVICES (25.8) (51.2) 25.4

VALUE ADDED 394.6 367.9 26.7

STAFF COSTS (123.1) (122.0) (1.1)


PROVISIONS (170.9) (178.1) 7.2

EBIT 100.6 67.8 32.8

FINANCIAL INCOME (EXPENSES) (88.1) (87.5) (0.6)

INCOME(CHARGES) ON EQUITY INVESTMENTS - (1.8) 1.8PROFIT (LOSS) OF CURRENT ASSETS BEFORE

TAXATION 12.5 (21.5) 34

TAX REVENUES (CHARGES) (25.9) (16.4) (9.5)

PROFIT (LOSS) FOR THE YEAR (13.4) (37.9) 24.5PROFIT (LOSS) ATTRIBUTABLE TO MINORITY

SHAREHOLDERS (1.4) 0.7 (2.1)

PROFIT (LOSS) ATTRIBUTABLE TO THE GROUP (14.8) (37.2) 22.4

NET EARNINGS (LOSSES) PER SHARE:

FROM CURRENT ASSETS (0.01) (0.025)

FROM DISCONTINUED ACTIVITIES - -


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In 2011, the volume of activities managed by the Group was positively affected by the trend in traffic on the Roman airport system that increased compared to 2010 (passengers +3.8%), albeit showing a progressive decrease in the development trend in the last part of the financial year. On the other hand, cost pushes deriving from the initiatives - undertaken during the previous financial year and continued in 2011 - to improve the level of airport services, such as baggage handling, safety, etc., occurred, and in any case offset by cost-saving actions. Earnings were also affected by an increasingly high load of provisions primarily against risks associated with relationships with customers and contractors. Revenues from airport management increased by 19.5 million euro (+3.3%), mainly due to the higher volume of aviation activities, up by 5.3%, and, to a lesser extent, of non aviation activities (+1.2%). Basically, all the components of aviation activities, influenced directly by the traffic trend, reported an increase in revenues.

- airport fees, up by 3.9%, also due to the adjustment to inflation on their measurement set out by law;

- revenues from security services, up by 3.8%; - revenues deriving from centralised infrastructures (+14.4%), affected by the income

generated from the new automatic handling system of transit baggage. Revenues from non aviation activities increased by 1.2%, mainly due to higher direct sales (+5.3%) and the increase in revenues for sub-concessions and utilities. The management performance of car parking (+3.7%) and canteens (+5.1%) was also positive; revenues from advertising are still down (-10.5%). As to construction services, they total 27.6 million euro, with a 27.9 million euro decrease on 2010 resulting from less services rendered. It is noted that these construction services are measured at fair value, calculated based on the total costs incurred. In 2011, other income and revenues included the amount of 6.7 million euro, finally paid to ADR as an indemnity for the favourable sentence of the State Council on the dispute with the Ministry for Infrastructure and Transport and ENAC on the payment date of the price for the service of performing security checks on 100% of hold baggage. Consumption and other operating costs are in line with 2010, due to the combined effect of a reduction in costs for external services and allocations to provisions for risks and charges and bad debt provisions, almost entirely offset by the growth in costs for raw materials and goods, also relating to the oil price increase. The production of electric energy from co-generation, destined to cover power needs of the Fiumicino airport, amounted to GWh 143.0, slightly down (-2.3%) compared with the previous year:


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(GWh) 2011 2010

ENERGY PRODUCED 143.0 146.3 ENERGY PURCHASED 43.0 46.0 ENERGY AVAILABLE 186.0 192.3

FOR: ADR 167.1 167.1

MARKET 18.9 18.9

The dispute with GSE, RINA and EMAS, aimed at acknowledging the right of "green certificates", currently not acknowledged, is still underway. An appeal has been submitted to the competent administrative Courts. As to costs for construction services, a 25.4 million euro decrease is highlighted, compared to 2010, due to less services rendered in favour of the grantor ENAC, as previously described. In 2011, staff costs slightly increased (+1%) due to the increase in average resources employed on activities affected by higher traffic volumes, as well as to plans aimed at improving service. With respect to the above, EBITDA is equal to 271.5 million euro, up by 10.4% compared to 2010. In 2011, amortisation, depreciation and provisions included depreciation of tangible and intangible fixes assets, mainly referred to the amortisation of the airport concession owned by the subsidiary ADR, as well as to allocations for the year (lower by 7.3 million euro with respect to 2010) made to the system renovation provision for revertible assets in view of future restoration and replacement charges, pursuant to maintenance commitments of these assets.

2011 2010 AMORTISATION/DEPRECIATION 108.3 108.2

ALLOCATIONS TO RENOVATION PROVISION 62.6 69.9 TOTAL 170.9 178.1

On the whole, net financial expenses (88.1 million euro) are substantially in line with 2010. Profit (loss) of current assets before taxation is positive by 12.5 million euro (negative by 21.5 million euro in 2010), mainly resulting from the above-mentioned operating improvements, as well as from lower allocations to the system renovation provision. The year 2011 closed with a loss for the year amounting to 13.4 million euro (37.9 million euro in 2010), net of fiscal charges (25.9 million euro). This loss increases to 14.8 million euro at Group level (37.2 million euro in 2010).


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3.8.2 Financial position


NET NON-CURRENT , NON FINANCIAL ASSETS 3,332.0 3,414.0 (82.0)

NET WORKING CAPITAL 76.5 54.9 21.6

SYSTEM RENOVATION PROVISION (231.6) (197.0) (34.6)RISK, CHARGES AND EMPLOYEE SEVERANCE

INDEMNITIES (329.7) (328.1) (1.6)


FINANCED BY:SHAREHOLDERS’ EQUITY 1,598.8 1,604.9 (6.1)

NET FINANCIAL INDEBTEDNESS 1,248.4 1,338.9 (90.5)

TOTAL 2,847.2 2,943.8 (96.6)

Net non-current, non financial assets decreased by 82.0 million euro due to the combined effect of amortisation, depreciation and provisions for the year, partially offset by investments for the year. Net working capital increased by 21.6 million euro, mainly due to the increase in trade receivables, resulting from an increase in revenues, as well as to deferred tax assets relating to net allocations made during the year for litigation and disputes and for the system renovation provision of revertible assets, which will be fiscally deductible in future years. The system renovation provision, which includes the current estimated amount of charges to be incurred by reason of the restoration and replacement contract commitments for assets under concession, increased by 34.6 million euro, resulting from allocations made over the period, net of uses. Net capital invested totalled 2,847.2 million euro, down by 96.6 million euro due to the above-mentioned reasons. Shareholders’ Equity decreased by 6.1 million euro, corresponding to the total economic result of 2011. Net financial indebtedness for the year decreased by 90.5 million euro, with respect to the dynamics of the financial position described in the following section.


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3.8.3 Net financial position



OTHER RECEIVABLES – FINANCIAL ASSETS 60.4 59.4

B. CURRENT FINANCIAL ASSETS 60.4 59.4

C. TOTAL CURRENT FINANCIAL ASSETS (A)+(B) 240.6 261.1




G. TOTAL CURRENT FINANCIAL LIABILITIES

(E)+(F)(221.2) (214.3)


I. OUTSTANDING BONDS (1,117.7) (1,107.6)

L. TOTAL NON-CURRENT FINANCIAL LIABILITIES

(H) + (I) (1,267.8) (1,385.7)

NET FINANCIAL INDEBTEDNESS (C) + (D) + (G) +

(L)(1,248.4) (1,338.9)

OF WHICH:

CURRENT NET FINANCIAL ASSETS (C) +(G) 19.4 46.8

The following contribute to forming the indebtedness:

12/31/2011 12/31/2010

ADR 1,198.4 1,291.5

FIUMICINO ENERGIA 16.8 18.9

GEMINA 33.2 28.5

1,248.40 1,338.9

The total amount of current financial assets, down by 20.5 million euro, includes cash and cash equivalents, equal to 180.2 million euro, mainly referred to cash and cash equivalents of the ADR Group, of which 52.1 million euro are relating to the balance of the “Loan Collateral” account for collaterals and commitments connected with the outstanding financial indebtedness, restricted to the repayment of Romulus’ tranche A1, upon maturity. Total current financial liabilities amounted to 221.2 million euro, with a net increase of 6.9 million euro, mainly resulting from the combined effect of: - reclassification under ADR’s current liabilities of the “Term Loan Facility” residual amount,

equal to 65.5 million euro, with maturity in February 2012; - redemption, in 2011, by Gemina, of the Tranche A of the loan received in December 2008,

equal to 42 million euro; - reduction of the negative fair value of Interest Rate Swap derivative contracts, in force at

balance-sheet date, equal to 17.5 million euro.


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Total non-current financial liabilities totalled 1,267.8 million euro, with a net decrease of 117.9 million euro, mainly resulting from the combined effect of: - the above-mentioned reclassification under ADR’s current liabilities of the residual amount of

the "Term Loan Facility" (65.5 million euro) and of the shortly expiring amounts of the Banca BIIS Loan (8.5 million euro), totalling 74 million euro;

- reimbursements incurred in 2011, totalling 92.8 million euro, of ADR’s “Term Loan Facility”; - Gemina's entering in a new loan agreement with a pool of banks, with maturity in December

2014, for a total amount of 42 million euro; - the increase in liabilities related to outstanding bonds (recognised in the financial statements with

the amortised cost method), equal to 10.1 million euro, mainly due to the conversion in euro of Tranche A4 denominated in pound sterling.

3.8.4 Reconciliation between the reclassified statements and the financial statements

The items of the Income Statement and of the Balance Sheet can be deduced from the financial statements, considering the following: Non-current, non financial assets – They include “Non-current assets”, excluding “Deferred tax assets”, “Other non-current assets”, “Other non-current financial assets”, net of the “System renovation provision” related to revertible assets. Net working capital - Comprises: - “Current assets”, with the exclusion of “Financial instruments - derivatives”, “Other current

financial assets” and “Cash and cash equivalents”; - the following items under “Non-current assets”: “Deferred tax assets” and “Other non-current

assets”; the following items under “Current liabilities”: “Trade payables”, “Current tax liabilities” and “Other current liabilities”;

3.9 LEGAL AND REGULATORY FRAMEWORK

In 2011 and in the first part of 2012, a host of actions took place of general interest for the industry and of specific interest for ADR. In particular:

Extension of airport terms and fees (inflation updating) Law no. 10/2011 of conversion with amendments of Law Decree no. 225/2010 relating to the “Extension of the terms set by legislative provisions, urgent tax-related measures and measures supporting companies and households”, so-called “Milleproroghe Decree”, confirmed the extension to March 31, 2011 of the terms set by Law Decree no. 225/2010 related to the updating of airport fees in line with the target rate of inflation. Subsequently the Decree of the President of the Council of Ministers of March 25, 2011 relating to “Additional extension of the terms relating to the Ministry for Infrastructure and Transport” extended until December 31, 2011 the abovementioned deferment expiring on March 31, 2011. In the Official Gazette no. 302 of December 29, 2011, Law Decree no. 216 of December 29, 2011 was published (so-called “Milleproroghe Decree”), converted into Law no.14 of February 24, 2012. Art. 11, paragraph 3, further extended the abovementioned term until December 31, 2012.


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At the date of drafting this document the obligatory inter-ministerial decree has not been issued, which identifies the percentage to bring the airport fees in line with the target rate of inflation related to 2011, with the application from the time of validity of this provision.

Implementation of Directive 2009/12/EC on airport fees

On Ordinary Supplement 18/L to OG no. 19 of January 24, 2012, Law Decree no. 1/2012 was published relating to “Urgent provisions for competition, development of infrastructures and competitiveness” (so-called Liberalisation Law Decree, in force since January 24, 2012). The decree introduces in articles from 71 to 82 the provisions for the implementation of Directive 2009/12/EC concerning airport fees. On Ordinary Supplement 27/L to OG no. 33 of February 9, 2012 Law Decree no. 5/2002 was published relating to “Urgent provisions for simplification and development” (in force since February 10, 2012). Paragraphs 2 and 3 of art. 22 introduce the provisions to protect the procedures underway for the stipulation of the Planning agreements with the airport management companies. In particular art. 22 subsection 2 stipulates that the implementation of Directive 2009/12/EC concerning airport fees under Law Decree no. 1 /2012 in any case safeguards the completion of the procedures in progress to stipulate the planning agreements (both “ordinary” and “special”) with the airport management companies. According to this same provision, these procedures must be completed by and no later than December 31, 2012 and in any case, the duration of the program contracts stipulated according to the provisions in force at the time of the previous period is set in compliance with national and community regulations on the subject and related tariff models. Finally art. 22 paragraph 3 lays out that the measure of the airport fees set in the planning agreements, stipulated prior to January 24, 2012 (coming into force of Law Decree no. 1/2012), may be determined according to the new methods defined by the provision implementing EU regulations on airport fees (under account II of the Decree no. 1/2012) upon the expiration of the same agreements.

Provisions for the liberalisation of the transport sector Law of December 22, 2011 of conversion with amendments of Law Decree no. 201/2011 relating to “Urgent provisions for growth, fairness and the consolidation of public accounts”, so-called “Save Italy Decree” (Ordinary Supplement to OG no. 300 of December 27, 2011), includes some provisions for the liberalisation and regulation of the transport sector and the access to the related infrastructures (rail, airports and ports including those for urban connections to rail stations, airports and ports). In particular art. 37 authorises the Government to adopt, by June 28, 2012, some regulations that must identify, among the existing independent Authorities, the new transport regulation authority while governing the different regulatory and fee activities and competences listed by the same art. 37. Paragraph 4 of art. 37 expressly safeguards all the other competences of other supervisory, control and sanctioning administrations in the relationship with the companies and managers of the infrastructures concerning security and technical standards. Also in light of this last provision, the Civil Aviation Authority in its current state may not be included among the independent Authorities that may be designated pursuant to the regulation in question. On Ordinary Supplement 18/L to OG no. 19 of January 24, 2012, Law Decree no. 1/2012 was published relating to “Urgent provisions for competition, development of infrastructures and competitiveness” (so-called Liberalisation Law Decree, in force since January 24, 2012).


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The decree introduces measures aimed at modernising and developing national infrastructures and implementing competition in the markets. Concerning transport and airports in particular, art. 36 of the Law Decree (Independent regulation regarding transport) amends the provisions of Law Decree no. 201/2011, converted with amendments into Law no. 214/2011 (so-called Save Italy decree) providing for the establishment of an authority to regulate transport and the functions to be attributed to it. Art. 36 paragraph 1 specifies first of all that the establishment of the aforementioned Authority takes place through the presentation of a draft law by the Government, within three months from the conversion of this Decree into law. In the second place, while waiting for a specific Authority to be established, which shall also be in charge of the economic regulation of airport fees and duties, the envisaged functions must be exercised by the Authority for electricity and gas. Changes to municipal surtaxes for 2011

Law no. 130/2011 of conversion with amendments of Law Decree no. 107 of July 12, 2011 regarding the international missions of the armed forces and the implementation of UN Resolutions no. 1970 and no. 1973 (in the official gazette of August 5, 2011) applies to the breakdown of the income from the application of municipal surcharges on boarding fees for passengers boarding from Italian airports. Art. 4 bis of the law provides for the municipal surtaxes under art. 2, paragraph 11, letter a) under Law no. 350/2003 (amounts destined for the Ministry of the Interior for reallocation to airport municipalities), only for 2011 and within the limit of 10 million euro, to be allocated to the adoption of measures to support and re-launch the sectors of the economy in the provinces concerned by significant damage following the limitations imposed by military operating activities pursuant to UN Resolution no. 1973 that affected the operation of civil airports. The provisions implementing this regulation must be defined with subsequent Decree of the President of the Council of Ministers to be adopted within 60 days from the law coming into force (October 5, 2011).

3.10 CORPORATE GOVERNANCE

INTRODUCTION The structure of corporate governance adopted by Gemina draws inspiration from the recommendations and rules contained in the Code of Conduct adopted by the Corporate Governance Committee of Borsa Italiana S.p.A., amended many times, in 2006 first and with the latest revision in 2011 (“Borsa Italiana Code”). It is our conviction that, on the one hand, having a structured system of rules allows the Company to operate according to criteria of maximum efficiency and, on the other, ensuring utmost transparency contributes to increasing the Company’s image of reliability amongst investors. In its meeting of March 27, 2007, the Gemina Board of Directors approved its own Gemina Code of Conduct (“Gemina Code”) in keeping with the main provisions of the Borsa Italiana Code. On November 11, 2011, the Board of Directors adopted a new Code of Conduct (“Gemina Code”) in which, among other things, it took into account the changes in the regulations taking place after the approval, in 2007, of this Code. The main changes concern: 1. the update of the regulations concerning remuneration, which envisage the approval by the Board

of Directors, on the proposal of the Remuneration and Human Resources Committee, of a General Remuneration Policy;

2. the integration of the tasks of the Remuneration and Human Resources Committee; 3. the change of the responsibilities of the Internal Control Committee, which took the name of

Committee for Internal Control and Corporate Governance, also in order to bring them into line with the provisions of Legislative Decree 39/2010 (Consolidated Law on Legal Review).


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The Gemina Code does not consider the amendments made by the Committee for Corporate Governance of the Italian Stock Exchange to the Code in December 2011; the Company will apply the recent amendments by the end of 2012 and provide information to the market with the report on corporate governance which will be published in 2013. The Board of Directors of Gemina approved, pursuant to art. 123 bis of Legislative Decree 58/98 (TUF), the Annual report on corporate governance and the ownership structures referring to 2011, available on the website www.gemina.it (corporate governance section). Below is a summary of the most important aspects of the Annual Report on corporate governance and the ownership structures. GOVERNANCE STRUCTURE As a company registered in Italy that issues shares admitted to trading on the stock exchange, and, as noted, having adopted the Borsa Italiana Code, the Gemina governance structure - based on the traditional organisational model - comprises the following bodies: - Shareholders’ General Meeting; - Board of Directors that functions through its Chairman and Managing Director as Executive

Directors, within the limits of the authority vested in them. The Board of Directors is supported by advisory committees for internal control and corporate governance and remuneration and human resources;

- Board of Statutory Auditors; - Independent Auditors. Governance tools also include the Code of Ethics, approved by the Board of Directors in March 2004 and updated by the Board of Directors on August 5, 2010, as well as the Organisational, Management and Control Model, in accordance with Article 6 of Legislative Decree 231/2001, approved by the Board of Directors in March 2004 and most recently updated by the Board of Directors on December 14, 2010. Both documents are available on the website www.gemina.it, along with the Internal Control system. Gemina exercises management and coordination activity pursuant to Article 2497 bis of the Italian Civil Code on the subsidiaries ADR, Fiumicino Energia S.r.l. and Leonardo Energia S.c. a r.l. BOARD OF DIRECTORS The Gemina Board of Directors is appointed based on lists presented by shareholders in compliance with the provisions of Article 11 of the Articles of Association. The Ordinary Shareholders’ Meeting of April 28, 2010 appointed the Gemina Board of Directors that will remain in office until the shareholders’ meeting for the approval of the financial statements as at December 31, 2012. On April 19, 2011, following the resignation of the Managing Director Guido Angiolini and the Directors Aldo Milanese and Andrea Novarese, the Board of Directors of Gemina resolved on the appointment of directors Carlo Bertazzo (with the position of Managing Director), Piergiorgio Peluso and Massimo Pini (Vice Chairman) as their replacements.

Reference is made to the paragraph “Changes that occurred after the end of the period” for the resolutions made by the ordinary shareholders’ meeting on March 1, 2012. The table below shows the composition of the Gemina Board of Directors as at December 31, 2011. The table also contains information on the list the Director belongs to, the personal and professional details of each Director (executive or non-executive, whether or not they meet the independence requirements pursuant to the Gemina Code and the Consolidated Finance Law), and the attendance of each Director at Board meetings, in percentage terms.


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The list of other offices held by each Director is reported in the attachment sub A) of the Report on the Corporate Governance and the ownership structures; the CVs of the Directors are available on the website www.gemina.it (corporate governance section).

Name Office In office since List Exec.

Non Exec.

Indep. Gemina

Code

Indep. Cons.

Fin. Law

% BoD

Other offices

PALENZONA FABRIZIO

Chairman

04/28/2010

M X NA NO 90 12

PINI MASSIMO Vice Chairman 04/19/2011 _ X NO NO 75 5

BERTAZZO CARLO

Managing director 04/19/2011 - X NA NO 100 2

ANGIOLINI GIUSEPPE Director

04/28/2010 M X YES YES 90 4

BELLAMOLI VALERIO Director

04/28/2010 M X NO NO 83 3

BENCINI GIUSEPPE Director

04/28/2010 M X YES SI 90 1

CAO STEFANO

Director 04/28/2010

M X NO NO 100 9

FONTANA GIOVANNI Director

04/28/2010 M X YES YES 89 -

HO BENG HUAT Director

04/28/2010 M X NO NO 100 -

IASI SERGIO Director

04/28/2010 m X YES YES 90 1

MINUCCI ALDO Director

04/28/2010 M X NO NO 60 12

PELUSO PIERGIORGIO Director 04/19/2011 - X NO NO 43 1

REBECCHINI CLEMENTE

Director 04/28/2010 M X NO NO 100 3 M = majority list m = minority list The Board of Directors, pursuant to art. 1.5 of the Gemina Code, has the right to express its guidance concerning the maximum number of offices as Director or Auditor which the Directors may hold in the listed companies, also foreign, in finance companies, banks, insurance companies or companies of significant size, which might be deemed as compatible with an efficient performance of the office as Director in the Company. At present the Board of Directors has not expressed any guidance in this sense. At the meeting of April 28, 2010, the Board of Directors appointed Mr. Fabrizio Palenzona as the Chairman of the Board of Directors and at the meeting of April 19, 2011, appointed Mr. Carlo Bertazzo as the Managing Director of the Company, after having co-opted him as a replacement for the resigning Mr. Guido Angiolini. The Board of Directors granted the Chairman, Mr. Palenzona, pursuant to Art. 18 of the Articles of Association, signing authority and legal representation before third parties and in matters of the court. In addition to calling the Board of Directors’ meeting, the Chairman sets the agenda, sends the Directors any necessary documentation suitably in advance to allow for effective participation in Board business and directs the meetings, ensuring adequate information flows between any Board committees and the Board itself and making certain that the decisions of the Company’s corporate boards are consistent. The Chairman ensures that the Board of Directors and the Board of Statutory Auditors are duly informed of any significant events and, at least quarterly, reports on the overall performance of the Company and its subsidiaries.


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The Chairman is also granted certain managing powers. Consistent with programmes approved by corporate bodies, the Chairman supervises general initiatives for promoting the image of the Company and its subsidiaries and oversees the performance of corporate affairs and the proper implementation of corporate bodies’ resolutions. Additionally, the Chairman is responsible for the Company’s and its subsidiaries’ institutional relationships with Italian and foreign authorities, agencies and bodies, including international bodies, and defines and manages the related institutional communication. Mr. Palenzona is also Chairman of ADR’s Board of Directors. The Board of Directors granted the Managing Director, Mr. Carlo Bertazzo managing powers. In addition to signing authority and legal representation before third parties and in matters of the court, the Managing Director is vested with all ordinary management powers of the Company that are not reserved for the Board of Directors and Chairman, with free and several signature powers up to a limit of 1 million euro for each single transaction, for signing agreements or the undertaking of commitments of any kind whatsoever (including, but not limited to, loans or issue of guarantees). The Managing Director is responsible for developing and defining proposals to the Board of Directors in relation to budgets, strategic, business and financial plans, including multi-year plans, and intervention and investment plans for Company and its subsidiaries, overseeing their execution. The Managing Director must also oversee the Company’s performance, the performance of its equity investments, the Gemina organisational structure, as well as carry out the Company’s business communications, particularly in regards to relationships with supervisory bodies and the stock exchange management company. Designated bodies report to the Board regarding the activities carried out during the year in exercise of the powers at the first suitable meeting and at least on a quarterly basis. The Executive Directors for the Gemina Board of Directors are the Chairman of the Board and the Managing Director. EXECUTIVE COMMITTEE An Executive Committee has not been established. COMMITTEES WITHIN THE BOARD REMUNERATION AND HUMAN RESOURCES COMMITTEE The Remuneration Committee was established with resolution of the Board of Directors on May 10, 2002. The Board of Directors in the meeting held on April 28, 2010 following the Shareholders’ Meeting electing the new Board, appointed the “Remuneration and Human Resources Committee” consisting of five non-executive Directors, the majority of whom are independent pursuant to Article 3 of the Gemina Code: Giuseppe Bencini, Giuseppe Angiolini, Stefano Cao, Giovanni Fontana and Clemente Rebecchini. More than one member of the Remuneration and Human Resources Committee has adequate knowledge and experience in financial matters. On May 7, 2010, the Remuneration and Human Resources Committee appointed Giuseppe Bencini as Chairman and approved a Regulation which, in addition to governing the terms and methods for calling and holding the meetings by consequently defining the responsibilities of the Chairman, provides the Committee with investigation, advisory and designative duties, towards the Board of Directors, for Gemina and its subsidiaries. On November 25, 2011, the Remuneration and Human Resources Committee adopted a new Regulation pursuant to which, in compliance with the resolution of the Board of Directors of Gemina, the Remuneration and Human Resources Committee performs the following functions:


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(i) puts forward proposal to the Board of Directors to define the general policies for the

remuneration of Executive Directors, the other Directors in special positions and the managers with strategic responsibilities;

(ii) periodically assesses the adequacy, the overall consistency and the solid application of the Remuneration Policy, in this latter case using the information provided by the Managing Directors; makes related proposals to the Board of Directors;

(iii) makes proposals to the Board of Directors for the allocation of the remuneration attributed by the meeting to the entire Board of Directors, also considering the participation of each Director in one or more committees;

(iv) presents to the Board of Directors proposals on the remuneration of the Executive Directors and the other Directors in special positions as well as on the setting of the performance targets correlated to the variable component of this remuneration;

(v) monitors the application of the decisions adopted by the Board by checking, in particular, the effective achievement of the performance targets;

(vi) examines any stock or monetary incentive plans for the Company or Group employees; (vii) examines the strategic development policies of human resources; (viii) expresses opinions concerning the recruitment, appointment, dismissal of managers and in

relation to the stipulation of contractual clauses of indemnity and protection in the favour of the manager in case of termination of the employment contract;

(ix) submits for the approval of the Board of Directors of Gemina the Report on the remuneration pursuant to art. 123 ter of the TUF.

Should it intend to use the services of a consultant in order to obtain information on market practices concerning remuneration policies, the Remuneration and Human Resources Committee shall check beforehand that there are no situations that may compromise the consultant’s independent judgement. In carrying out its tasks the Committee refers to the Code of Conduct. The Chairman of the Boards of Statutory Auditors or another Auditor designated by the same participates in Committee meetings. The Chairman and the Managing Director of the company are invited to the meetings and, from time to time, the Chairman and the Managing Director of the subsidiaries may be invited in connection with the issues to be dealt with. Concerning the information on the remuneration of directors reference is made to the Report on Remuneration, which will be published by the Company pursuant to art. 123 ter of the TUF. INTERNAL CONTROL COMMITTEE AND CORPORATE GOVERNANCE The Internal Control Committee was established with resolution of the Board of March 25, 2004. The Board of Directors’ meeting held on April 28, 2010 following the Shareholders’ Meeting electing the new Board, appointed the “Internal Control Committee” comprising three non-executive Directors, the majority of whom are independent pursuant to Article 3 of the Gemina Code: Giuseppe Angiolini, Valerio Bellamoli and Sergio Iasi. More than one Internal Control Committee member has adequate knowledge and experience in accounting and financial matters. On May 6, 2010 the Internal Control Committee appointed Giuseppe Angiolini as Chairman. On November 11, 2011 the Board of Directors of Gemina changed the responsibilities of the Internal Control Committee, which also took the name of Committee for Internal Control and Corporate Governance. Subsequently, on December 6, 2011, the Committee for Internal Control and Corporate Governance adopted a new Regulation which, in addition to governing the terms and methods for calling and holding the meetings by consequently defining the responsibilities of the Chairman, entrusts the Committee for Internal Control and Corporate Governance with providing the advice and proposals set forth below:


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(i) assists the Board of Directors in carrying out the tasks under art. 11.3 of the Gemina Code; (ii) on the request of the Managing Director, expresses opinions on specific aspects concerning

the identification of the main corporate risks as well as the design, creation and management of the internal control system;

(iii) assesses the work plan prepared by the Internal control manager and examines the periodic reports prepared by the same;

(iv) together with the Manager in charge of preparing corporate accounting documents and the independent auditors, evaluates the adequacy of the accounting standards applied, their proper application and their consistency in preparing the financial statements and consolidated financial statements.

(v) reports to the Board at least bi-annually, at the time of approving the financial statements and the half-year report, on the activity carried out and the suitability of the internal control system;

(vi) carries out tasks attributed to it by the Transactions with Related Parties Procedure; (vii) carries out additional tasks attributed to it by the Board of Directors; (viii) oversees compliance and the periodical updating of the corporate governance rules; (ix) expresses an opinion on the Report on Corporate Governance and ownership structures

pursuant to art. 123-bis of the TUF; (x) receives the Reports of the Supervisory Body pursuant to Legislative Decree 231/2001. The Chairman of the Boards of Statutory Auditors or another Auditor designated by the same participates in Committee meetings. From time to time, when deemed suitable for the issues to be dealt with, the Manager, the Chairman of the Board of Directors, the Managing Director, the Manager in charge of preparing the company accounting documents may be invited to participate. INTERNAL CONTROL SYSTEM In the meeting of March 25, 2004, the Board of Directors passed a motion to provide the Company with an Internal Control System, which is an essential element of the corporate governance system of the Company and its subsidiaries and plays a fundamental role in identifying, preventing and managing significant risks of the Gemina Group and safeguarding corporate assets. The internal control system of the Gemina group consists of a set of organisational rules, procedures and structures aimed to prevent or minimise the consequences of unexpected results and, therefore, allow the achievement of the operating targets (i.e. activity effectiveness and efficiency and protecting corporate assets), in compliance with the laws and regulations applicable (compliance) and correct and transparent information (reporting), through a suitable identification, measurement, management and monitoring process of the main risks. The Internal Control System decreases, but cannot entirely eliminate, the possibility of erroneous decisions, human error, fraudulent violation of the control systems and unanticipated events. Therefore a good Internal Control System should provide reasonable, but not absolute, assurances that the Group is not hindered from reaching its corporate objectives or the ordered and legitimate running of its own affairs by circumstances that can be reasonably anticipated. In the meeting of March 25, 2004, the Board of Directors established the Internal Control Committee with advisory and designative functions; the Board of Directors, with the assistance of the Internal Control Committee, defines the guidelines of the internal control system, periodically examines the main company risks and assesses, at least annually, the adequacy, effectiveness and actual operation of the internal control system. Pivotal principles of the risk management and internal control system: - separation of roles in carrying out of operating activities;


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- organisational structure defined in accordance with top management and documented in official

organisation charts; - system of delegations and authorisations which attribute to the top management powers that are

in line with the responsibilities assigned; - system of procedures for the correct carrying out of corporate processes; - adequate tracking of the activities carried out; - Code of Ethics, that defines the fundamental principles and values of the corporate ethics, and

the rules of behaviour with respect to these principles. MAIN FEATURES OF THE RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM IN RELATION TO THE

FINANCIAL INFORMATION PROCESS With reference to the financial information process, the Group implemented and keeps up to date an internal control system on financial reporting, whose reliability, accuracy and promptness are ensured by the set of administrative and accounting procedures implemented, in accordance with the related legislation in force. The adequacy of the processes related to accounting and financial disclosures is assessed according to the reference standards for the internal control system on financial reporting, generally accepted at international level [“Internal Control - Integrated Framework (CoSo), published by the Committee of Sponsoring Organizations of the Treadway Commission]”, according to five components (control environment, risk assessment, control activities, information systems and communication flows, monitoring activities). The internal control system on financial disclosure ensures the exchange of data and information between Gemina S.p.A. and its subsidiaries, guaranteeing its coordination also through the application by the subsidiaries of accounting standards of the Group for the preparation of the reporting packages drawn up for consolidation purposes, in line with IFRS. The controls are established downstream of an assessment process carried out according to a top-down approach aimed at identifying organisational entities, processes, specific activities able to generate risks of unintentional error or fraud that may significantly affect financial information. The accounting control system of the Group comprises: - a set of reference guidelines set by the Parent Company with the objective of promoting the

development and application of uniform accounting criteria to record, classify and measure operations;

- accounting procedures that define the responsibilities and rules of control and - operating instructions outlining the detailed methods to manage the activities of predisposition of

the statements by shared and defined terms.

The process of analysis and monitoring of the internal control system on financial reporting includes an assessment of the adequacy of the controls at entity level and process level in terms of effectiveness of the model of the key controls identified. In order to identify and classify any potential errors in financial reporting, reference is made to the standard “contents” of financial statements: the existence and occurrence of events, completeness, assessment and registration, rights and obligations, presentation and disclosure. The risks are assessed in terms of potential impact on the basis of quantitative and qualitative parameters, assuming the absence of controls (at an inherent level). Monitoring activities on the internal control system are to be conducted initially by the management of the line responsible for the implementation of the controls and, in order to ensure the effective assessment and homogeneous design of the control system, by the structure available to the Manager in charge.


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The monitoring of the effective application of administrative accounting procedures is conducted with regard to effective operation of the key controls in line with international best practices. The Board identified the Managing Director as the executive Director in charge of supervising the operations of the Internal Control System and appointed the Internal Control Officer. The Officer has the task of making sure that internal and external regulations are complied with, carrying out monitoring and auditing activities on specific risk areas, through the internal audit function directing him/her. At the meeting held on March 25, 2004, the Board of Directors approved the Organisational Model which is based on the Confindustria and Assonime guidelines and Italian best practice, aiming to avoid the possibility of committing significant offences according to the decree and, as a consequence, the administrative responsibility of the Company. The adoption of the Organisational Model, of which the Code of Ethics is one of the main elements, results in the rigor, transparency and sense of responsibility in internal and external relations and offers shareholders suitable guarantees of efficient and correct management, making all of those who operate in the name and on the behalf of Gemina aware of the importance, in performing their functions, of assuming a correct and straightforward conduct to prevent the risk of committing the offences under Legislative Decree 231/2001. The Organisational Model, updated and approved by the Board of Directors last time during the meeting of December 14, 2011 in accordance with new provisions of the law and to adjust it to the needs deriving from the full service contract entered into with ADR as mentioned above, comprises a general part that includes a description of the contents of Legislative Decree 231/2001 among other things, the objectives and functioning of the Organisational Model, the duties of the Supervisory Body, and the disciplinary rules, and two separate “Special Parts” that cover the different types of illegal actions envisaged by Legislative Decree 231/2001. “Special Part no. 1 – Insider trading and market manipulation” “Special Part no. 2 – Crimes of receiving, laundering and using money, goods or advantages of illicit origin”. In consideration of the full service contract, the risk areas now covered by activities/services performed by ADR no longer generate Special Parts of the Gemina Organisational Model, but are governed by that of ADR and the procedures adopted by it, which are consequently to be considered an integral and substantial part of the Gemina Organisational Model. The Board of Directors’ meeting of November 13, 2009 transformed the Supervisory Body from monocratic to a collegial body, currently comprising Renato Colavolpe (Chairman), Giuseppe Angiolini and Cinzia Versace, with expiry on the meeting to approve the financial statements as at December 31, 2012. The Supervisory Body is subject to regulations that govern its operation and identify the powers, duties and responsibilities assigned in particular, in compliance with the principles set out in the Organisational Model. The Board of Directors’ meeting of ADR of December 14, 2011 in turn updated the Organisational Model of the Company to adjust it to the new legal provisions and best practices in the sector. TRANSACTIONS WITH RELATED PARTIES In order to ensure transparency and accuracy, both substantially and procedurally, for transactions with related parties carried out directly or through subsidiaries and to adopt the new provisions issued by Consob in Resolution no. 17221 of March 12, 2010, later modified with Resolution no. 17389 of June 23, 2010 (Consob Regulation), the Gemina Board of Directors adopted a procedure pursuant to Article 4 of the Consob Regulation (“Procedure”) in its meeting of November 12, 2010, after having received the favourable opinion of a specially established committee made up solely Independent Directors.


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The Procedure became effective January 1, 2011 and replaced the previous procedure adopted by the Board of Directors in the meeting of June 8, 2007 and updated in March 2009, pursuant to Article 2391 bis of the Italian Civil Code and in accordance with Article 9 of the Gemina Code (currently art. 13). The Procedure also regulates the approval processes for transactions carried out through subsidiaries and the disclosure that should be provided regarding transactions with related parties. BOARD OF STATUTORY AUDITORS The Board of Statutory Auditors is made of up three statutory auditors and three alternate auditors. The Board of Statutory Auditors is appointed based on lists presented by shareholders in compliance with the provisions of Article 20 of the Articles of Association. The Ordinary Shareholders’ Meeting of April 28, 2009 appointed the Gemina Board of Statutory Auditors that will remain in office until the shareholders’ meeting for approval of the financial statements as at December 31, 2011. During this meeting, two lists were presented for the appointment of the Board of Statutory Auditors: one was presented by the shareholder Investimenti Infrastrutture S.p.A. and was voted by 58.59% of the ordinary share capital; the other was presented by the shareholder Silvano Toti S.p.A. (now Silvano Toti Holding S.p.A.) and was voted by 12.90% of the ordinary share capital. The table below shows the composition of the Gemina Board of Statutory Auditors as at December 31, 2011. The table also contains information on the list the Auditor belongs to, the personal and professional details of each Auditor (whether or not they meet independence requirements pursuant to the Gemina Code), and the attendance of each Auditor at meetings of the Board of Statutory Auditors, in percentage terms. The list of other offices held by each Auditor in listed companies is reported in attachment C) of the Report on the Corporate Governance and the ownership structures; the curricula vitae of the Auditors are available on the web-site www.gemina.it (corporate governance section).

Name

Office In office since

List

Indep. accord. to Code

% attend meetings


GUARNA LUCA AURELIO

Chairman 04.28.2009 m YES 100 2

DATTILO MAURIZIO

Statutory Auditor

04.28.2009 M YES 100 2

OLDOINI GIORGIO

Statutory Auditor

04.28.2009 M YES 100 1

M = majority list m = minority list INDEPENDENT AUDITORS Pursuant to Article 8, subsection 7 of Legislative Decree 303/2006, the Gemina Shareholders’ Meeting held on May 7, 2007, elected to extend the appointment of Deloitte & Touche S.p.A. to audit the financial statements, including the consolidated financial statements, to audit on a limited basis the half-year report and to carry out the other activities provided by Article 155 of the TUF, for the period 2007-2012. CHANGES THAT OCCURRED AFTER THE END OF THE PERIOD On January 30, 2012 the Director Mr. Aldo Minucci resigned with immediate effect as Director; the Board of Directors, since the meeting to approve the financial statements as at December 31, 2011 was set to be held shortly, resolved not to replace him, postponing any decision on this subject to the next meeting.


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On March 1, 2012 the Shareholders’ meeting of the company was called to resolve on the following points: (i) in ordinary session

- the confirmation of the directors Carlo Bertazzo, Piergiorgio Peluso and Massimo Pini, co-opted on April 19, 2011 pursuant to art. 2386, subsection 1 of the Italian Civil Code and art. 12, subsection 1, letter b) of the Articles of Association;

- the approval, on the proposal of the Board of Directors and the Remuneration and Human Resources Committee, of a stock incentive plan pursuant to art. 114 bis of the Consolidated Finance Law called “Stock option plan 2012”. The main characteristics of the incentive plan are illustrated in the reporting document that, pursuant to the combined provisions of art. 114 bis of the Consolidated Finance Law and art. 84 bis of IR, was drawn up and made available to the public on January 21, 2012 at the Gemina registered office and the company website www.gemina.it, as well as forwarded to CONSOB and Borsa Italiana;

- subject to repeal of the resolution of April 19, 2011, the authorisation of the Board of Directors to purchase and sale own shares pursuant to articles 2357 and 2357-ter of the Italian Civil Code, art. 132 of the TUF and art. 144-bis of IR up to a maximum of 120,000,000 shares and in any case within the legal limits;

(ii) extraordinary session - elimination of the par value of the outstanding ordinary and savings shares, with consequent

amendment of articles 5 (capital), 23 (financial statements, profits and prepaid dividends) and 24 (dissolution and liquidation) of the Articles of Association;

- the assignment to the Board of Directors, for a five-year period from the resolution date, of the right to increase the share capital by payment, in tranches, pursuant to art. 2439, sub-section 2 of the Italian Civil Code, once or more times, up to a maximum nominal value of Euro 40,000,000 through the issue of a maximum of 40,000,000 ordinary shares with regular dividend, to service exclusively and irrevocably incentive plans based on financial instruments in favour of employees and/or collaborators and/or directors in special position in the company and subsidiaries pursuant the combined provisions of art. 2441, subsections 5 and 8 of the Italian Civil Code and art. 134, sub-section 2 of the TUF and/or pursuant to art. 2441, sub-sections 5 and 6 of the Italian Civil Code.

The Board of Directors held at the end of the meeting resolved: - to confirm Mr. Carlo Bertazzo as Managing Director of the Company, assigning him all the

power previously conferred, and Mr. Massimo Pini as Vice Chairman; - to implement the Stock option plan 2012, based on the compliant proposal of the Remuneration

and Human Resources Committee and with the favourable opinion of the Board of Statutory Auditors, pursuant to art. 2389 of the Italian Civil Code (attributing the options and identifying the recipients of the Plan) and to approve the “SOP-2012 Regulations” that set the terms and conditions of the Plan.

3.11 INTERCOMPANY RELATIONS AND TRANSACTIONS WITH RELATED PARTIES

INTERCOMPANY RELATIONS Relations between the Parent Company and its subsidiaries and associates are governed at market terms and conditions, taking account of services rendered. Specifically, please note the following: - loans to Fiumicino Energia pursuant to the agreements stipulated on December 4, 2009 and on

June 8, 2010, for a total amount of 4 million euro which, as at December 31, 2011, amounted to 3.2 million euro, disbursed upon request in the form of a giro account;


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- agreement for the provisions of services by ADR to Gemina within the company’s business,

legal, administrative and control activities, purchasing, IT, general services and domiciliation; - tax consolidation agreements with ADR, ADR Tel, ADR Engineering and ADR Sviluppo S.r.l.,

ADR Assistance, Fiumicino Energia and Leonardo Energia; - agreement for the provision of e-mail services by ADR Tel; - staff secondment agreement with ADR. TRANSACTIONS WITH RELATED PARTIES It is hereby stated that, pursuant to Art. 154 ter of Legislative Decree 58/2008, no transactions such as to have a significant impact on the economic and financial position of the Group were carried out during 2011. Transactions hereunder, which have already been partly described in the Report on operations as at December 31, 2010, did not undergo any change or development that would result in a significant impact on the economic and financial position of the Group. As regards the Parent Company, reference should be made to: - the new loan stipulated on August 30, 2011 (see details in the chapter “Risks associated with

current loan agreements”) for a total of 60.1 million euro of which 18.0 million euro as revolving line, includes the equity investment of Mediobanca - Banca di Credito Finanziario S.p.A. (“Mediobanca”) and UniCredit S.p.A. (“UniCredit”) as financing banks together with a pool of another five banks with equal shares. Mediobanca also covers the role of Facility Agent;


- surety of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing S.p.A. (“UniCredit Leasing”);



- signing of insurance policies with Assicurazioni Generali S.p.A. (“Assicurazioni Generali”) and Fondiaria-SAI S.p.A.

With regard to ADR and its subsidiaries, the following is worth noting: Financial relations Many transactions were carried out by ADR with Mediobanca in connection with the role covered as part of the existing loan agreements: - “Mandated Lead Arranger” of “Term Loan Facility” (equal to a residual 65.5 million euro) and

taking part in the Lenders’ pool for the “Revolving Facility” (100 million euro); - “Security Agent”, representing all creditors of ADR; - “Facility Agent” representing banks as parties of the “Bank Facility Agreements”; - “Administrative Agent” in addition to Account Bank of the fixed-term deposit called “Debt

Service Reserve Account” for which ADR posted a financial receivable in the accounts.


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Many transactions were carried out by ADR Group with UniCredit in connection with the role covered as part of the existing loan agreements: - “Mandated Lead Arranger” of “Term Loan Facility” (equal to a residual 65.5 million euro) and

taking part in the Lenders’ pool for the “Revolving Facility” (100 million euro); - Account bank of ADR’s current accounts (“Debt Service Account”, “Interim Proceeds Account”,

“Recoveries Account” and “Loan Collateral Account”), regulated by the facility agreements, and some companies of the ADR Group.

Trade relations - Assicurazioni Generali: is the insurance group with which the ADR Group has stipulated the

main existing insurance policies; - Mediobanca: ADR incurred costs related to bank commissions, reimbursements of costs and

commission regarding the Revolving Facility (up-front fee) paid to Mediobanca as agent bank but to be attributed pro-rata to all the banks in the pool;

- UniCredit Group: the ADR Group recorded revenues for the sub-concession of spaces and incurred costs, mainly account charges;

- Autogrill S.p.A. (directly owned by Edizione S.r.l., which indirectly holds an equity investment in Gemina and is è bound to its shareholders’ agreement): revenues were obtained for the sub-concession of spaces, royalties, utilities, car parks and various services;

- Alpha Retail Italia S.r.l. (a subsidiary of Autogrill S.p.A.): revenues were obtained for the sub-concession of spaces, royalties, utilities, car parks and various services;

- Atahotels S.p.A. (a subsidiary of Fondiaria – SAI): revenues were obtained for the sub-concession of spaces, royalties, utilities, car parks and various services;

- Telepass (indirect subsidiary of Sintonia SA, which indirectly holds an equity investment in Gemina): costs were incurred in connection with the Telepass system introduced in ADR car parks;

- Pavimental S.p.A. (indirect subsidiary of Sintonia SA): the ADR Group has the following payables regarding investment activities performed in the previous year and concerning works on runways and aircraft aprons;

- Changi Airport Planners and Engineers Pte. Ltd (a subsidiary of Changi Airports International Pte Ltd, which indirectly holds an equity investment in Gemina): a contract is in place for the support to prepare the master plan for Fiumicino airport.

With regard to Fiumicino Energia and Leonardo Energia, the following is highlighted: - loan granted by UniCredit for the financial coverage necessary for the construction of civil

engineering works of the co-generation power plant in Fiumicino, for an original aggregate amount of 2.0 million euro;

- finance lease for the construction of the co-generation power plant, entered with UniCredit Leasing, for a financed amount of 18.0 million euro;

- two insurance agreements regarding the co-generation power plant to cover civil liability risks for damages due to the operation of the Power Plant and the possible pollution risks of such operation, entered with Assicurazioni Generali.

3.12 INFORMATION ABOUT RISKS AND UNCERTAINTIES

SPECIFIC RISKS OF GEMINA ASSOCIATED WITH ITS ACTIVITY In view of the fact it is an investment holding company, the results of the parent company Gemina are affected by the results of the investee companies and, in particular, by the dividends they distribute. ADR is actually the only equity investment in Gemina’s portfolio, given the fact that Fiumicino Energia produces electric and thermal power for Fiumicino airport and that the co-generation power plant will be transferred free of charge to ADR in 2023.


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The payment of dividends by ADR is conditioned not only by the results achieved, but also by the observance of the financial covenants provided for by the company’s loan agreements and assigned ratings. Indeed, failure to fulfil covenants entails activating measures to secure financers, including the inability to pay dividends. Also the trigger event status confirmed by the BB rating, recently put under “CreditWatch with developing implications”, according to Standard & Poor’s and Ba2 (under observation for possible additional downgrading) according to Moody’s, is a condition that hinders payment of dividends. SPECIFIC RISKS OF ADR ASSOCIATED WITH ITS ACTIVITY ADR manages the Roman airport system, made up of the Fiumicino and Ciampino airports, as a concession regulated by Agreement no. 2820 of June 26, 1974 signed with the Ministry of Transport, expiring on June 30, 2044. The above-mentioned agreement sets a series of obligations the operator must accept and also clearly expresses the causes of cancellation or repeal of the concession, mostly attributable to cases of unfulfilment. The ADR Group carries out its activity in a highly regulated sector on the national, European Community and international level. The extended situation of uncertainty relating to the complexity of the procedure for achieving a satisfactory regulatory and tariff system, is an important risk factor that affects the ADR Group’s future economic and financial balance. The results of the ADR Group are also strongly conditioned by the air traffic trend at the Fiumicino and Ciampino airports, which is in turn conditioned by: - the economic trend; - flight operations of the single airline companies on which also the economic-financial conditions

of the single airlines make an impact; this risk is increased by the condition of Fiumicino airport as hub of the reference carrier which is undergoing a delicate reorganisation phase;

- alliances between carriers; - competition on some routes of alternative means of transport (e.g. High Speed railway Rome-

Milan); - wars, acts of terrorism, natural catastrophes and aircraft accidents that negatively influence the

propensity to travel, whether for business or for pleasure. The ADR Group is involved in various active and passive civil, administrative, labour-law and fiscal court cases. To face the risks connected with these proceedings, specific provisions have been allocated, with detailed disclosure provided in a specific section of the Explanatory Notes. CREDIT RISK Credit risk is the risk that a customer or a counterpart of a financial instrument causes a financial loss by not fulfilling an obligation. The maximum theoretical exposure to the credit risk for the Group as at December 31, 2011 is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments. The greatest exposure to credit risk is that of the ADR Group for trade receivables due from customers. This risk is also functional to the exposure to credit risk of customers. The commercial policies that the ADR Group has implemented aim at controlling investments according to the following guidelines:


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- requests for payments in cash for commercial transactions carried out with end customers (sales

in directly-managed shops, multi-storey and long-term car parks, first aid, etc.) and with occasional counterparts (for example, for baggage tagging, porterage, managing access to taxi service, etc.);

- requests for payment in cash in advance from occasional carriers or those without suitable creditworthiness or collateral guarantees;


For a quantitative analysis of credit risk and of the policies implemented to manage it as well as for the special situation of concentration deriving from the relationship with the main carrier Alitalia, reference is made to note 10 of the Consolidated Financial Statements – Explanatory Notes. LIQUIDITY RISK Liquidity risk may occur when it is impossible to obtain, at fair conditions, the financial resources necessary to the Groups business. The main factor determining the Group’s liquidity position consists of the resources generated or absorbed by the operating and investment activities. The financial structure of the ADR Group is distinguished by a heavy incidence of the financial leverage component, since financial indebtedness is 4 times the EBITDA. As a consequence, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, in perspective, by the need to repay debt tranches coming due (the first of which will come due in February 2012). In addition to the requirement to have Moody’s and Standard & Poor’s issue a rating for ADR, the medium/long-term loan agreements in place provide for a number of measures to ensure that the cash generated is used first of all to service debt. These measures become more stringent when, as is the current situation, the level of the rating or several agreed financial indicators fail to reach specific minimum thresholds. The liquidity risk is considerably mitigated through this complex contractual check. The current rating assigned to ADR prevents it from taking out additional indebtedness without specific authorisation from its financial creditors. It is obvious that the priority allocation of the cash generated for the debt service and the aforementioned restrictive control measures for using financial resources restrict the ADR Group’s operations and investment flexibility in depressing situations characterised by particular financial tension. However, in case of temporary additional financial requirements for operations or investments, in addition to cash and cash equivalents, a revolving line of credit is available for 100 million euro (currently not used) destined for this purposes by contract. On August 22, 2011, ADR stipulated with a pool of seven banks comprising Banca Nazionale del Lavoro S.p.A., Barclays Bank Plc, Crédit Agricole Corporate & Investment Bank, Mediobanca, Natixis S.A., The Royal Bank of Scotland N.V. and UniCredit, a revolving line agreement for a total of 100 million euro maturing on February 20, 2013. Mediobanca also acts as Agent Bank.


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This new facility, secured by the same collaterals issued for the other loans of ADR, guarantees, until the stated maturity date, the availability of the seamless Revolving facility compared to the expiry of the validity of the pre-existing one negotiated in 2005 and valid until August 22, 2011. The cost conditions obtained can be considered as in line with the best ones that can be obtained currently in the market for companies with the same rating. The margin applied to the euribor can be further reduced if the Company manages to improve the rating assigned to it by both agencies, in the near future. ADR, in the last part of the year, completed the analysis of the various refinancing options to repay Tranche A1 (with a par value of 500 million euro) of the payable to the vehicle Romulus Finance S.r.l. maturing on February 20, 2013. Based on the outcome of the legal and market studies conducted, the various refinancing options available were selected, including the bank loan, which appears to be the main option for Tranche A1. In the first quarter of 2012 the refinancing project moved to the implementation phase. With special reference to Gemina, this company has the necessary cash available to cover the needs of current operations, in addition to bank credit lines, a revolving credit line (revolving Line B) of 18.0 million euro to pay for running costs. In ADR, the centralised treasury in place with several subsidiaries, regulated at market terms, permits the optimisation of the management of financial resources and facilitates the settlement of intercompany commercial relations. See also note 10 of the Consolidated Financial Statements – Explanatory Notes. INTEREST RATE RISK The Group uses outside financial resources. Fluctuations in the market interest rates have an impact on the cost of the various types of loans, affecting the extent of financial expenses. To hedge these risks, the Group uses derivative instruments, with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuations on the economic result. In particular, Gemina uses “interest rate swap” “interest rate collar” to manage its exposure to unfavourable changes in the market interest rate. For a quantitative analysis of interest rate risk and of the policies implemented to manage it, please refer to note 10 of the Consolidated Financial Statements – Explanatory Notes. EXCHANGE RISK The Group uses foreign currency hedging derivatives in order to mitigate any future increases in the outgoing cash flow attributable to unfavourable changes in the exchange rate. As far as commercial transactions are concerned, the Group bears a negligible exposure to the risk deriving from the fluctuation of exchange rates as the transactions in non-EU currencies are attributable to some supplies of goods and services of an insignificant amount. The financial indebtedness, expressed in currency other than the Euro (Tranche A4 in Pounds Sterling), was covered by a currency swap in Euro. For a quantitative analysis of exchange risk, please refer to note 10 of the Consolidated Financial Statements – Explanatory Notes. RISKS ASSOCIATED WITH CURRENT LOAN AGREEMENTS GEMINA On August 30, 2011 the company signed a loan agreement for a maximum amount of 60.1 million euro with expiry in December 2014 (“Loan 2011”).


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The loan 2011 was destined for 42.1 million euro (“Line A”) to the full redemption of the remaining amount of the loan taken out in December 2008 (“Loan 2008”), occurred in September 16, 2011, and for 18.0 million euro (“Revolving Line B”) to hedge the future cash requirement regarding Gemina’s operations. The loan 2011 was subscribed mutually by the same pool of banks that at the same time refinanced the revolving line of ADR, comprising Banca Nazionale del Lavoro S.p.A., Barclays Bank Plc, Crédit Agricole Corporate & Investment Bank, Mediobanca, Natixis S.A., The Royal Bank of Scotland N.V. and UniCredit, and organised by Mediobanca as Agent Bank. The loan 2011 is backed by a senior pledge on a number of ADR shares representing at least 35% of the share capital. The number of shares to be subjected is in any case calculated, and possibly adjusted, each quarter depending on the trend of the Gemina share. As at December 31, 2011, ADR shares used as guarantee numbered 21,778,660, equal to 35% of share capital. Pursuant to paragraph 12.2.8 of the loan agreement, Gemina is obliged to hedge against the interest rate risk to the tune of at least 50% of the amount, disbursed and not repaid, due to Line A (therefore currently at least 21.1 million euro). With regard to the commitment undertaken on September 16, 2011 Gemina entered into an interest rate swap agreement with Crédit Agricole for a total amount of 25.3 million euro, equal to 60% of Line A of Loan 2011. Gemina has undertaken the following commitments towards the UniCredit Group, in relation to the financial indebtedness transferred by Sistemi di Energia S.p.A. to Fiumicino Energia as a result of the spin-off: - maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in

the Fiumicino Energia financial statements; - issuing guarantees for 6 million euro and a pledge on 86.12% of the share capital of Fiumicino

Energia to guarantee the loans. AEROPORTI DI ROMA Covenants The contractual structure of ADR’s bank loans and of the bonds issued by Romulus Finance S.r.l. (“Romulus”), guaranteed by a monoline insurance policy includes a series of specific covenants with the aim of: - safeguarding the preservation of adequate rating levels; - preventing the rights granted to each creditor from being determined in ways other than

according to the pre-established rules. These contractual clauses are fully described in note 8 of the Consolidated Financial Statements - Explanatory Notes regarding “Guarantees and major covenants on payables”. In particular, it should be stressed that the loan agreements provide for a series of financial control ratios (calculated on a historic and perspective basis) that measure: (i) the ratio between cash flow available and debt service (DSCR – Debt Service Coverage Ratio), (ii) the ratio between future discounted cash flows and net indebtedness (CLCR – Concession Life Cover Ratio), in addition to (iii) ratio between net indebtedness and EBITDA (Leverage Ratio). These ratios are checked twice a year, on two of the four dates available for making debt service payments (application dates) – March 20 and September 20 – by applying the calculation formulas to the reference figures of the financial statements as at December 31 and of the half-year report as at June 30. If the aforementioned ratios surpass certain levels, it may result in the distribution of dividends (if surplus cash is available) and recourse to further indebtedness at higher levels; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default.


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With reference to the ratio more sensitive to the short-term changes of the generated cash flows and amount of debt service to be met in each control period, a table summarising various threshold values of the DSCR and relevant contractual consequences established is provided below.

The financial ratios, formalised in September 2011 by ADR based on the half-year data as at June 30, 2011 confirmed values at a level greater than the minimum requirements to maintain ordinary management conditions of the company. These conditions are however restricted by the mentioned trigger event condition. Regarding the financial ratios calculated based on the financial statements as at December 31, 2011 (being formalised), the DSCR assumes the value of 2.03, the Leverage Ratio of 4.34 and the CLCR of 5.05. The loan agreements also provide for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics.

Rating ADR is subject to rating by Standard & Poor’s and Moody’s. The cost of debt and of the insurance guarantee of the monoline AMBAC are, effectively, tied to the rating assigned to ADR by the two agencies. Moreover, if the rating goes below the minimum thresholds, which are contractually defined, this causes the financial creditors to set up tighter cash flow control, implemented by introducing additional obligations affecting the Company’s managerial flexibility (known as “trigger events”).

In 2011 ADR rating evolved as follows:

Moody’s On January 12, 2011 Moody’s downgraded to Ba1 level, with “stable” outlook. According to the agency, the review of the level reflected the greater pressure resulting from the fact that primary repayment terms of the existing indebtedness are getting closer, also in light of the fact that a new tariff agreement, which is essential to define the company’s future development, is still missing. Moody’s rating change involved a slight increase in the margin applied to bank loans, with an annual impact on ADR’s financial charges amounting to around 0.3 million euro. On December 16, 2011 the agency further downgraded ADR’s debt from Ba1 to BBaa22 also pointing out that this rating remains “under observation for possible additional downgrading”. The downgrade was motivated by the increased risk of ADR’s financial profile following continuous delays in finalising the new regulatory framework and consequent fee increases. The agency was also seriously concerned by the deadline (February 2013) for the Romulus bond of 500 million euro issued in 2003 drawing closer.

LEVEL CONDITION

>= 1.7 ADDITIONAL DEBT


<1.25 TRIGGER EVENT

<1.1 DEFAULT


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Standard & Poor’s

The agency Standard & Poor’s kept the BB rating unchanged for the entire year with a “negative” outlook attributed on May 11, 2010 (for more updates reference is made to section “Subsequent Events”).

The Trigger Event condition persists and so does the application of the Cash Sweep regime, both active since November 30, 2007 due to the rating going below the contractually agreed thresholds (BBB+/Baa3 – BBB-/Baa2stable). The two Cash Sweep and Trigger Event conditions impose increasingly stricter requirements for the management of cash flows on the company. Among these: a) the obligation, as debt service dates approach, to allocate the residual cash available to the repayment/collateralisation of repayable/non-repayable debt, b) prohibition to distribute dividends and c) obligation to identify, with the support of an external consultant entrusted by lenders, the remedy measure to restore the minimum required rating in the ordinary regime. ADR has in any case operated in derogation regime due to the subsequent waivers granted over time by the lenders, the last of which was approved on September 28, 2011 and valid until March 20, 2012 to reiterate the derogation regime with exclusion of points a), b) and c) above. However, with the approaching deadlines for the repayment of the individual debt tranches, an additional constraint has now been imposed on the allocation of available cash on the accounts of the Account Bank. Contractual provisions in particular impose for the available cash to be used to repay/collateralize the upcoming debt repayment. In application of this condition, ADR allocated all available liquidity to the accounts of the Account Bank on the application dates of 2011 as specified below: - application date of March 2011: 90.3 million euro for the advance repayment of the “Term Loan

Facility”; - application date of September 2011: 19.5 million euro of which 17.0 million euro to collateralise

Tranche A1 (expiring on February 20, 2013) and 2.5 million euro for the early repayment of the “Term Loan Facility” expiring on February 20, 2012.

Consequently to the application of the collateralisation mechanism already in force in the previous application dates, cash was collateralised as of December 31, 2011 on an account dedicated to the repayment of Tranche A1 with a par value of 500 million euro, for 52.2 million euro, while the residual Term Loan Facility to be repaid in February 2012 equals 65.5 million euro in consideration of the compulsory repayments already finalized.


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3.13 GEMINA S.P.A.

The reclassified statements of the equity, economic and financial situation of the Gemina company are shown hereunder.

3.13.1 Economic position


INCOME (CHARGES) ON EQUITY

INVESTMENTS 0.0 (1.3) 1.3

NET FINANCIAL INCOME (EXPENSE) (2.8) (3.0) 0.2

REVENUES 1.0 1.0 0.0

OPERATING COSTS (6.6) (5.4) (1.2)

PROVISIONS (0.1) (2.2) 2.1

PRE-TAX PROFIT (LOSS) (8.5) (10.9) 2.4

INCOME TAXES 1.9 2.2 (0.3)

PROFIT (LOSS) FOR THE YEAR (6.6) (8.7) 2.1

No charges on equity investments were reported in 2011. In 2010 they amounted to 1.3 million euro with respect to write-downs for impairment of the equity investment in Pentar. As to operating costs, they increased by 1.2 million euro, mainly due to non-recurring charges related to the moving of the headquarters from Milan to Rome. This also involved the disbursement of charges for incentives to leave, due to voluntary labour termination agreements signed during the year. Provisions are substantially cancelled, with respect to charges in 2010 amounting to 2.2 million euro. The profit (loss) for the year shows a 6.6 million euro loss, down by 2.1 million euro compared to 2010, due to the above-mentioned changes.

3.13.2 Financial position


EQUITY INVESTMENTS 1,843.3 1,843.3 -

NET WORKING CAPITAL 5.7 7.5 (1.8)RISK, CHARGES AND EMPLOYEE

SEVERANCE INDEMNITIES (11.2) (11.3) 0.1


FINANCED BY:


NET FINANCIAL INDEBTEDNESS 33.2 28.5 4.7

TOTAL 1,837.8 1,839.5 (1.7)


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The Company’s financial structure as at December 31, 2011, highlights no relevant deviations compared to the position at balance-sheet date. Item equity investments substantially refers to equity investments owned in ADR and in Fiumicino Energia, which underwent changes during the year. Net working capital decreased by 1.8 million euro, mainly due to the credit dynamics for the tax consolidation regime, as well as to trade payables and other current assets/liabilities, as it can be inferred from the table hereunder.


TRADE RECEIVABLES 0.5 0.6 (0.1)RECEIVABLES FROM TAX

CONSOLIDATION 16.9 11.4 5.5

PREPAID TAXES 0.1 1.0 (0.9)

TRADE PAYABLES (1.8) (0.7) (1.1)

OTHER CURRENT ASSETS/LIABILITIES (9.9) (4.8) (5.1)

TOTAL 5.7 7.5 (1.8)

Shareholders’ Equity decreased by 6.4 million euro, corresponding to the total economic result for the year. Net financial indebtedness increased by 4.7 million euro, corresponding to the loss for the year, net of the above-mentioned change in net working capital.

3.13.3 Net financial position




C. TOTAL CURRENT FINANCIAL ASSETS (A)+(B) 8.6 14.0

D. TOTAL NON-CURRENT FINANCIAL ASSETS 0.2 -



G. TOTAL CURRENT FINANCIAL LIABILITIES (E)+(F) (0.8) (42.5)

H. NON-CURRENT FINANCIAL LIABILITIES (41.2) -

NET FINANCIAL INDEBTEDNESS (C)+(D)+(G)+(H) (33.2) (28.5)

OF WHICH:

CURRENT NET FINANCIAL ASSETS (LIABILITIES) (C) +(G) 7.8 (28.5)


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Total current financial liabilities are substantially cancelled due to the redemption, in 2011, of Tranche A of the loan entered in December 2008 and amounting to 42 million euro, as well as to the reduction of the negative fair value of interest rate swap contracts in force. Total non-current financial liabilities amount to 41.2 million euro and refer to liabilities resulting from the entering of a new loan contract by Gemina with a pool of banks, expiring in December 2014, for a total amount of 42 million euro, calculated with the amortised cost method.

3.13.4 Statement of reconciliation between the shareholders’ equity of Gemina and the consolidated shareholders’ equity and the consolidated profit (loss).


GEMINA S.p.A. 1,804,620 (6,616)

CANCELLATION OF BOOK VALUE OF CONSOLIDATED EQUITY INVESTMENTS (245,955) (8,171)

DIFFERENCE BETWEEN BOOK VALUE ANDPRO-RATA VALUE OF SHAREHOLDERS’ EQUITY

(245,955)

PROFIT (LOSS) OF CONSOLIDATED COMPANIES (8,171)

WRITE-OFF OF IMPACT OF TRANSACTIONS PERFORMEDBETWEEN CONSOLIDATED COMPANIES 6,700 0

GUARANTEES PROVIDED TO SUBSIDIARIES 6,700

GROUP SHAREHOLDERS’ EQUITY AND NET PROFIT(LOSS) FOR THE YEAR

1,565,365 (14,787)

MINORITY INTERESTS IN SHAREHOLDERS’ EQUITY ANDNET PROFIT (LOSS) FOR THE YEAR 32,062 1,416

CONSOLIDATED SHAREHOLDERS’ EQUITY AND PROFIT(LOSS) FOR THE YEAR 1,597,428 (13,371)

SHAREHOLDERS’EQUITY

AS AT 12/31/2011 PROFIT (LOSS) 2011


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3.14 SUBSEQUENT EVENTS

Compared with the same period of 2011, ttrraaffffiicc using the Roman airport system during the period January-February 2012 registered the following performance, broken down into segments for Fiumicino and Ciampino, and domestic and international traffic:

Progressive figures as at February 29, 2012 and changes with respect to the same period of 2011

International traffic breaks down into EU and non-EU traffic as follows.

The Airport System ends the first two months of the year with a reduction in traffic common to both the passenger component (down 1.3%) and the “capacity offered” (movements down 6.7%, aircraft tonnage down 5.8% and offered seats down 4.5%); by virtue of this trend, the load factor grew by 2.1%, increasing from 62.2% to the current 64.3%. In terms of passengers the 1.3% reduction is the result of a negative performance common to all the segments being analyzed: domestic traffic ended the two-month period with a 1.8% reduction and international traffic down 1.1% (with EU down 0.4% and Non-EU down 2.3%). Concerning individual airports, passenger volumes dropped by 1.0% at Fiumicino and 3.7% at Ciampino. Airlines in general continue to face the economic crisis and the confidence issue through a process of review and rationalisation of their network with the aim of maximum cost cutting.


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At Fiumicino airport, in the first two months of the year worth mentioning is also the negative effect of the snow emergency that concerned most of Italy in February with repercussion also on air transport: the meteorological conditions led to over 400 movements being cancelled overall and an estimated loss of 80,000 passengers due to cancellations and the consequent lower propensity to fly. To be added is the effect of the three strikes in the air transport sector that overall further reduced traffic by an estimated 8,000 passengers. At Ciampino airport traffic recorded a 3.7% loss in passenger traffic, offset by a 2.8% increase in movements, 1.1% increase in tonnage and 4.7% in offered seats. Regarding the subdivision by segment, consequently to changes in the network made by the carrier Ryanair, passengers in the domestic sector grew by 30.1%, while in the international sector these dropped by 12.0% (EU down 10.9% and Non-EU down 43.3% respectively); strikes and snow emergency led to a traffic reduction of about 110 movements and 20,000 passengers. In the period in question the effects of the negative meteorological conditions in February were partially offset by the extra day (February 29, 2012) in the leap year.

Preliminary activities continue for the establishment of special purpose entities (direct retail,

parking, safety) through the assignment of specific divisions to be completed by the first half of 2012.

A formal trial was started with a pool of banks to refinance Tranche A1 of the Romulus loan.

Based on the accounts from the pool of banks it is believed that this refinancing, though complicated by the uncertain financial markets, may be completed by the first half of 2012.

On March 2, 2012 ADR obtained from the lenders the extension of some consequences of the Trigger Event from March 20, 2012 until the application date of September 2012.

On March 2, 2012, the agency Standard & Poor’s confirmed the rating assigned to ADR as BB

and placed the company in “CreditWatch with developing implications”. This “CreditWatch” will evolve within 90 days depending on the outcome of the refinancing process.

On March 1, 2012 the meeting approved the general lines and the rules of a stock incentive plan

pursuant to art. 114-bis of Legislative Decree no. 58 of February 24, 1998 called “stock option plan 2012”. The prompt definition of the related terms and conditions was referred to a specific regulation approved by the board of directors’ meeting of Gemina of march 1, 2012 (on the proposal of the remuneration and human resources committee and with the favourable opinion of the board of statutory auditors pursuant to art. 2389 of the Italian Civil Code), in compliance with the guidelines approved by the meeting. the plan is aimed at encouraging the beneficiaries in valorising the Gemina group while creating a loyalty instrument that promotes a value generating culture. the plan is reserved for employees and/or collaborators and/or directors in special positions in Gemina and/or its subsidiaries pursuant to art. 93 of the Consolidated Finance Law, identified by the board of directors at its unquestionable discretion on the proposal of the remuneration and human resources committee, among the subjects holding strategically important positions within the company and the subsidiaries, having regard for the respective position covered.


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3.15 BUSINESS OUTLOOK

The negative economic Italian and European situation as well as, though in a differentiated manner one from the other, that of other geographical areas, has a significant impact on the flows of traffic movements that in 2012 will not be able to grow at the same level as in the last few years, thus further worsening the risk for trade receivables. In this context, the focus on better managing the existing facility, accelerating the spin-off initiatives and refinancing the debts of ADR expiring in February 2013 is the main short-term management tool while awaiting the conclusion of the new Agreement-Planning Contract, which has become increasingly urgent and fundamental, consequently starting to re-launch ADR.

4. PROPOSALS TO THE MEETING

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4. PROPOSALS TO THE MEETING RESOLUTION PROPOSAL Gemina S.p.A. closed the year with a 6,616,194.52 euro loss. You are therefore invited to adopt the following

RESOLUTION The Shareholders’ Meeting:

- having heard the Report of the Board of Directors on operations, - taking note of the Report of the Board of Statutory Auditors, - taking note of the Report of the Independent Auditors, - having read and examined the financial statements as at December 31, 2011 which

report a loss of 6,616,194.52 euro,

RESOLVES to approve: - the Report of the Board of Directors on operations; - the Income Statement, the Balance Sheet and the related Explanatory Notes to the

financial statements for the year ended December 31, 2011, which report a loss of 6,616,194.52 euro, as presented by the Board of Directors, both as a whole and with regards to the individual entries, together with the allocations and provisions proposed therein;

to carry forward the loss as at December 31, 2011, equal to 6,616,194.52 euro. Fiumicino, March 8, 2012


(Fabrizio Palenzona)

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5. CONSOLIDATED FINANCIAL

STATEMENTS

5. CONSOLIDATED FINANCIAL STATEMENTS

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CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT


Notes 2011 of which due to related parties

2010 of which due to related parties

REVENUES FROM AIRPORT MANAGEMENT 613,490 10,836 594,000 10,839

CONSTRUCTION SERVICES 27,566 55,516

OTHER INCOME AND REVENUES 11,801 21 3,543

REVENUES 6.1 652,857 10,857 653,059 10,839CONSUMPTION OF RAW MATERIALS AND

CONSUMABLES 6.2 (74,934) (72,094)

STAFF COSTS 6.3 (123,127) (25) (121,984) (24)

COSTS OF CONSTRUCTION SERVICES (25,769) (690) (51,201) (349)

OTHER OPERATING COSTS 6.4 (157,596) (3,281) (161,847) (3,659)AMORTISATION, DEPRECIATION AND WRITE-DOWNS OF FIXED ASSETS 6.5 (108,296) (108,179) ALLOCATIONS TO SYSTEM RENOVATION

PROVISIONS 6.6 (62,550) (69,971)

EBIT 100,585 7,552 67,783 6,807

FINANCIAL INCOME (EXPENSES)

FINANCIAL INCOME: 6.7

INTEREST INCOME 2,880 2,086 1,577 904

INCOME ON DERIVATIVES 7,555 7,545 7,830 7,523



FINANCIAL EXPENSES: 6.8


EXPENSES ON DERIVATIVES (9,590) (3,929) (11,229) (3,357)

EXCHANGE LOSSES (7,618) (7,560)

OTHER EXPENSES (12,088) (54) (8,948) (376)

TOTAL FINANCIAL INCOME (EXPENSES) (88,142) 3,659 (87,519) 1,682INCOME (CHARGES) ON EQUITY

INVESTMENTS 6.9 30 (1,816) PRE-TAX PROFIT (LOSS) ON CONTINUING

OPERATIONS 12,473 (21,552)

TAX REVENUES (CHARGES) 6.10 (25,844) (16,383) PROFIT (LOSS) ON CONTINUING OPERATIONS

AFTER TAX (13,371) (37,935)

NET INCOME FROM DISCONTINUED ACTIVITIES - -

PROFIT (LOSS) FOR THE YEAR (13,371) (37,935) PROFIT (LOSS) ATTRIBUTABLE TO MINORITY

SHAREHOLDERS 1,416 (668) PROFIT (LOSS) FOR THE YEAR ATTRIBUTABLE

TO THE GROUP (14,787) (37,267)

NET EARNINGS PER SHARE (EURO): FROM CURRENT ASSETS (0.010) (0.025) FROM DISCONTINUED ACTIVITIES - -

The basic net earnings per share, which coincides with the diluted net earnings per share, is calculated on the total shares in issue in the respective periods, equal to 1,472,960,320 both as at December 31, 2011 and as at December 31, 2010. All Gemina S.p.A. shares are subscribed.


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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


CONSOLIDATED PROFIT (LOSS) FOR THE YEAR (13,371) (37,935)

PROFIT (LOSS) FROM FAIR VALUE VALUATION OF

DERIVATIVE INSTRUMENTS (CASH FLOW HEDGE) 9,381 2,690 TAX EFFECT (2,580) (741)

RECLASSIFICATIONS OF THE COMPONENTS IN THE COMPREHENSIVE INCOME STATEMENT IN THE INCOME STATEMENT

PROFIT (LOSS) FROM FAIR VALUE VALUATION OF

DERIVATIVE INSTRUMENTS (CASH FLOW HEDGE) 556 TAX EFFECT (154)

TOTAL ECONOMIC RESULT FOR THE YEAR (6,168) (35,986)

OF WHICH: GROUP (7,867) (35,390) MINORITY SHAREHOLDERS 1,699 (596)


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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS


Notes 12/31/2011 of which due to related parties


NON-CURRENT ASSETS

AIRPORT MANAGEMENT CONCESSION 2,829,266 2,916,273 AIRPORT MANAGEMENT CONCESSION – INVESTMENTS

IN INFRASTRUCTURE IN CONCESSION 483,756 473,842

OTHER INTANGIBLE FIXED ASSETS 4,210 6,400

TOTAL INTANGIBLE FIXED ASSETS 7.1 3,317,232 3,396,515

PLANT AND MACHINERY 8,097 10,488

FIXTURES AND FITTINGS TOOLS AND OTHER EQUIPMENT 1,408 1,561

CONSTRUCTION IN PROGRESS AND ADVANCES 894 -

OTHER TANGIBLE FIXED ASSETS 2,141 3,117

TOTAL TANGIBLE FIXED ASSETS 7.2 12,540 15,166 EQUITY INVESTMENTS IN COMPANIES VALUED AT NET

EQUITY 7.3 - 32

OTHER EQUITY INVESTMENTS 7.4 2,254 2,250

DEFERRED TAX ASSETS 7.5 116,110 101,616

OTHER NON-CURRENT ASSETS 7.6 24,166 16,947

OTHER NON-CURRENT FINANCIAL ASSETS 7.7 304 63 -

TOTAL NON-CURRENT ASSETS 3,472,606 63 3,532,526

CURRENT ASSETS

INVENTORIES 7.8 11,346 10,182

CONTRACT WORK IN PROGRESS 7.9 497 296

TRADE RECEIVABLES 7.10 191,176 898 189,610 655

OTHER RECEIVABLES 7.11 9,634 9,297

OTHER CURRENT FINANCIAL ASSETS 7.12 60,427 56,397 59,446 55,662

CASH AND CASH EQUIVALENTS 7.13 180,196 129,788 201,661 142,420



TOTAL ASSETS 3,925,882 4,003,018


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CONSOLIDATED STATEMENT OF FINANCIAL POSITION






SHARE CAPITAL 1,472,960 1,472,960

CAPITAL RESERVES (SHARE PREMIUM RESERVE) 199,707 199,707

HEDGING AND TRANSLATION RESERVE (41,577) (48,427)


PROFIT (LOSS) FROM PREVIOUS YEARS (134,044) (98,055)


GROUP SHAREHOLDERS’ EQUITY 1,565,365 1,572,024

MINORITY SHAREHOLDERS IN CAPITAL AND RESERVES 32,062 33,514

MINORITY INTEREST IN PROFIT (LOSS) FOR THE YEAR 1,416 (668)


TOTAL SHAREHOLDERS’ EQUITY 7.14 1,598,843 1,604,870


EMPLOYEE BENEFITS 7.15 20,596 24,525 PROVISION FOR RISKS AND CHARGES – BEYOND 12

MONTHS 7.16 285,460 283,365 PROVISIONS FOR RESTORATION CHARGES – BEYOND

12 MONTHS 7.17 133,779 142,847

FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE 7.18 150,445 12,254 278,092 14,028

OUTSTANDING BONDS 7.19 1,117,698 1,107,575


CURRENT LIABILITIES

TRADE PAYABLES 7.20 136,923 332 159,690 565

CURRENT TAX LIABILITIES 7.21 12,874 6,279

CURRENT FINANCIAL LIABILITIES 7.22 92,096 1,175 67,717 44,167PROVISIONS FOR RISKS AND CHARGES – WITHIN 12

MONTHS 7.16 23,607 20,219 PROVISIONS FOR RESTORATION CHARGES – WITHIN 12

MONTHS 7.17 97,814 54,168

FINANCIAL INSTRUMENTS – DERIVATIVES 7.23 129,096 127,745 146,626 139,919

OTHER CURRENT LIABILITIES 7.24 126,651 107,045 3

TOTAL CURRENT LIABILITIES 619,061 141,506 561,744 184,654LIABILITIES HELD FOR SALE - -

TOT. SHAREHOLDERS’ EQUITY AND LIABILITIES

3,925,882 4,003,018


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STATEMENT OF CONSOLIDATED CASH FLOWS



Amortisation and depreciation of tangible and intangible fixed assets 108,296 108,179Increase (decrease) of severance and other provisions (net of risks provision for transfer of Elilario) 8,522 8,289

(Increase) decrease in deferred/prepaid tax liabilities (24,196) (12,387)

Allocations to system renovation provisions, including financial expenses 72,916 69,971

(Revaluation) write-down of equity investments valued at net equity - 1,903

(Gains) losses on disposal of non-current assets (34) -OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING CAPITAL

(OPERATING CASH FLOW FFO) 152,133 138,688

(Increase) decrease in inventories of contract work in progress (201) 602


(Increase) decrease in other current non financial assets (1,501) 2,220

Increase (decrease) in trade payables (22,767) 14,731

Increase (decrease) in other current non financial liabilities 26,201 (766)

TOTAL CHANGES IN WORKING CAPITAL 166 41,169


OPERATIONS 152,299 179,857


Airport investments and changes in tangible and intangible fixed assets (64,725) (93,144)

Changes in other items in non-current non financial assets and liabilities (7,219) (7,461)

Proceeds from disposal of non-current assets 62 5,000TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

INVESTMENT ACTIVITIES (71,882) (95,605)


(Increase) decrease in financial receivables (1,285) (2,015)

Increase (decrease) in financial payables 4,620 (25,709)

Raising of medium/long-term bank payables 41,236 -

Repayment of medium/long-term bank payables (146,594) (5,375)

Other changes in shareholders’ equity 141 1,236TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

FINANCING ACTIVITIES (101,882) (31,863)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (21,465) 52,389



ADDITIONAL INFORMATION TO THE STATEMENT OF CASH FLOWS INCOME TAXES PAID 42,551 40,627INTEREST PAYABLE AND OTHER FINANCIAL EXPENSE PAID, NET OF INTEREST INCOME

AND OTHER FINANCIAL INCOME COLLECTED 73,423 75,374


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STATEMENT OF CHANGES IN CONSOLIDATED EQUITY

SHARE CAPITAL HEDGING OTHER PROFITS

AND LOSSES PROFIT SHAREHOLD

ERS’

MINORITY SHAREHOL

DERS TOTAL

CAPITAL RESERVE RESERVE RESERVES PERTAINING

TO (LOSS) EQUITY

IN CAPITAL

AND SHAREHOLD

ERS’

(in thousands of euro) PREVIOUS

YEARS FOR THE YEAR GROUP RESERVES EQUITY

Balances as at 12/31/2009 1,472,960 200,057 (50,304) 82,756 (54,352) (43,667) 1,607,450 33,451 1,640,901

Transactions with shareholders

Allocation of results as at December 31, 2009 (43,667) 43,667

-

-

Other changes (350) 350 (36) (36) (9) (45) Total economic result for the year 1,877 (37,267) (35,390) (596) (35,986)

Balances as at 12/31/2010 1,472,960 199,707 (48,427) 83,106 (98,055) (37,267) 1,572,024 32,846 1,604,870


Allocation of results as at December 31, 2010 (37,267) 37,267

-

-

Other changes (70) 1,278 1,208 (1,067) 141

Total economic result for the year 6,920 (14,787) (7,867) 1,699 (6,168)

Balances as at 12/31/2011 1,472,960 199,707 (41,577) 83,106 (134,044) (14,787) 1,565,365 33,478 1,598,843


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EXPLANATORY NOTES NOTE 1 – GENERAL INFORMATION

The Gemina Group is mainly engaged in the management of the concession for the creation and management of the “Leonardo da Vinci” Airport of Fiumicino (Rome), and “G. Pastine” Airport of Ciampino (Rome). For additional information on the concession agreement in question, held by the subsidiary company Aeroporti di Roma S.p.A. (hereafter “ADR”), reference is made to note 5. The Parent Company Generale Mobiliare Interessenze Azionarie S.p.A. (hereafter also “Gemina” or “Company”), whose shares are listed on the Screen Traded Stock Market managed by Borsa Italiana S.p.A., only operates as an investment holding company listed on the Milan Stock Exchange with the mission of developing financial and growth strategies in the airport infrastructure sector, and does not play a direct operating role. The registered office is in Fiumicino, Via dell’Aeroporto di Fiumicino, 320 and has no secondary offices. Until July 31, 2011 the registered office was located in Milan, via della Posta 8/10. On the date of preparing these financial statements Sintonia S.A. is the shareholder that, directly and/or indirectly, holds the majority regarding Gemina shares, and adheres to a shareholders’ agreement together with other shareholders; Sintonia S.A., which is in turn a subsidiary company of Edizione S.r.l., does not exercise management and coordination activities with respect to Gemina. The list of equity investments in these notes also fulfils the obligation of communication of the equity investments owned in unlisted companies higher than 10% of the share capital, pursuant to art. 126 of Consob (Commissione Nazionale per le Società e la Borsa) Regulation no. 11971/1999. These financial statements were approved by the Board of Directors of the company in the meeting of March 8, 2012. These financial statements were prepared on an on-going concern. Indeed, the Group deemed that, despite the persisting difficult economic and financial situation, there is no significant uncertainty as to the on-going concern. NOTE 2 – FORM AND CONTENT OF THE FINANCIAL STATEMENTS

The consolidated financial statements for the year ended December 31, 2011, drawn up on an on-going concern, were prepared pursuant to articles 2 and 4 of Italian Legislative Decree 38/2005, in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and approved by the European Commission, in effect on the date of the financial statements, which include the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as well as the previous International Accounting Standards (IAS) and the interpretations of the Standard Interpretations Committee (SIC) still in force on the same date. For simplicity reasons, the set of all the standards and interpretations listed above is defined below as “IFRS”. Furthermore, reference was made to the provisions issued by Consob (Commissione Nazionale per le Società e la Borsa) implementing subsection 3 of article 9 of Italian Legislative Decree 38/2005.


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The consolidated financial statements comprise the consolidated accounting statements (income statement, statement of comprehensive income, statement of financial position, statement of cash flows, statement of changes in Shareholders’ equity) and these explanatory notes, applying the provisions of IAS 1 “Presentation of Financial Statements” and the general criterion of the historical cost, with the exception of the financial statement items that according to IFRS are recognised at their fair value, as stated in the valuation criteria of the individual items. The statement of financial position is presented on the basis of the framework that envisages a distinction of assets and liabilities into current and non-current, while in the income statement the costs are classified based on their nature; the statement of cash flows is presented by using the indirect method. IFRS were applied consistently with the indications of the “Framework for the Preparation and Presentation of Financial Statements” and no issues emerged that required derogations pursuant to IAS 1, paragraph 19. With Resolution no. 15519 of July 27, 2006, Consob requested the inclusion in the accounting statements of sub-items, when of a considerable amount, in addition to those already specifically required by IAS 1 and the other international accounting standards in order to highlight them separately from the reference items: (i) the amounts of the positions and transactions with related parties as well as, with regard to the income statement, (ii) the income positive and/or negative components deriving from events and transactions whose occurrence is not recurring or from transactions or facts that do not take place frequently during normal business operations. To this end, it is highlighted that during 2011 no significant non-recurring, atypical or unusual transactions were carried out with third parties or with related parties. All the values are expressed in thousands of euro, unless otherwise stated. Euro is both the Group’s functional currency and the currency of presentation of the financial statements. For each item in the consolidated financial statements, the corresponding value of the previous year is reported for comparison purposes. However, for the purposes of better representing the statement of financial position of the Group, some economic and financial values were reclassified for negligible amounts; of these worth mentioning is the reclassification, in direct reduction of the book value of the investment, of the provisions related to the subsidiary company Pentar S.p.A., allocated in 2010 due to presumable losses of this company. NOTE 3 – ACCOUNTING STANDARDS APPLIED

Described below are the most important accounting standards and valuation criteria applied in preparing the consolidated financial statements for the year ended December 31, 2011, which comply with those used to prepare the financial statements of the previous year, since no new accounting standards, interpretations and amendments to the accounting standards and the interpretations already enforced came into force during 2011, which have a significant effect on the consolidated financial statements of the Gemina Group. REVENUES Revenues are measured on an accrual basis to the extent to which it is possible to reliably determine their fair value and that the related economic benefits are likely to be enjoyed. Depending on the type of transaction, revenues are recorded on the basis of the specific criteria reported below: a) the revenues from the sale of assets when the significant risks and benefits of the ownership of

the same are transferred to the purchaser;


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b) the revenues from service provisions based on the stage of completion of the activities. If the value of revenues cannot be reliably determined, the revenues are recorded until reaching the costs incurred that are deemed as recoverable;

c) the rental income and the royalties in the accrual period, based on the contractual agreements signed.

Interest income is measured on an accrual basis, calculated on the amount of the relevant financial assets, using the effective interest rate. Dividends are measured when the right of the Company to receive their payment arises. COSTS Costs are valued at the fair value of the amount paid or to be paid, and are recognised in the income statement on an accrual basis and in correlation with any related revenues. Any expense related to transactions of share capital increase is recorded as reduction in the shareholders’ equity. FINANCIAL INCOME AND EXPENSE Financial income and expense are recorded in the income statement on an accrual basis, and calculated on the value of the respective financial assets and liabilities using the actual interest rate. INCOME TAXES The tax on the income of the year is calculated based on the tax expenses to be paid, in compliance with current legislation. Prepaid and deferred taxes resulting from temporary differences between the financial statements value of assets and liabilities, calculated by applying the criteria described in this section, and their tax value, deriving from the application of current legislation, are recorded: a) the former, only if sufficient taxable income is likely to allow the recovery; b) the latter, if any, in any case. Prepaid taxes are recorded in the income statement, with the exception of those relating to items that are directly recorded in shareholders’ equity. In that case, also prepaid and/or deferred taxes are charged to shareholders’ equity. Gemina has decided to adopt the national consolidated financial statements based on Italian Legislative Decree 344/2003, with the adherence of its subsidiary companies Aeroporti di Roma S.p.A. (“ADR”), ADR Engineering S.p.A., ADR Tel S.p.A., ADR Sviluppo S.r.l., ADR Assistance S.r.l., Fiumicino Energia S.r.l. and Leonardo Energia S.c.ar.l. TANGIBLE ASSETS The tangible assets are recorded at historical cost, inclusive of any directly attributable accessory charges. The cost of tangible fixed assets whose use is limited over time is systematically amortised on a straight-line basis in each year based on the estimated economic-technical life. If significant parts of these tangible fixed assets have different useful lives, these components are recorded separately. Depreciation is recorded from the time the fixed asset is available for use, or is potentially capable of providing the economic benefits associated therewith. In short, the annual depreciation rates applied are:

- Buildings: from 3% to 10%; - Plant and machinery: from 7% to 25%; - Fixtures and fittings: from 10% to 25%; - Other assets: from 10% to 25%.


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The tangible assets purchased with finance lease are initially recorded as tangible fixed assets with the related debt as balancing entry, at a value equal to the related fair value or, if lower, the current value of the minimum payments due contractually. The lease fee consists of the two components of financial expenses recorded in the income statement and of the capital repayment recorded as a reduction of the financial debt. In the presence of specific indicators regarding the risk of failed recovery of the book value of tangible assets, these undergo an impairment test, as described in the specific paragraph. Tangible assets are no longer shown in the financial statements after their transfer or if no future economic benefit exists expected from the use; any deriving profit or loss (calculated as the difference between the transfer value, net of sale costs, and the book value) is recorded in the income statement of the year of sale. Any ordinary maintenance costs are charged to the income statement. For the transition to IFRS and the preparation of the opening financial statements (as of January 1, 2004) according to the international accounting standards selected by the Parent Company, IFRS 3 – Business Combinations, was not applied retroactively to the acquisitions made before January 1, 2004; consequently, the book value of tangible assets on that date, determined on the basis of the previous accounting standards, was maintained for these acquisitions. INTANGIBLE FIXED ASSETS Intangible fixed assets are assets without physical substance, controlled by the company and able to produce future economic benefits and goodwill acquired in business combinations. An asset is classified as intangible when there is the possibility of it from the goodwill. This condition is normally met when: (i) the intangible fixed asset arises from contractual or legal rights, or (ii) the asset is separable, i.e. can be sold, transferred, rented or exchanged autonomously or as an integral part of other assets. The company controls an asset if it has the power to obtain future economic benefits generated by the underlying assets and to restrict the access of others. Except for the “airport management concession”, intangible assets are stated at cost as determined by the methods indicated for tangible assets, only when the latter can be reliably valued and when these assets can be identified, are controlled by the company and can generate future economic benefits. For the intangible assets represented by the “airport management concession”, the recording value includes: a) the fair value of the construction and/or improvement services provided to the concessionaire

(measured as illustrated in the standard regarding “construction contracts and services being executed”), net of the parts represented as financial assets, corresponding to the portions in the form of contribution;

b) the rights acquired from third parties in relation to the acquisition of the subsidiary ADR. For the transition to IFRS and the preparation of the opening financial statements (as of January 1, 2004) according to the international accounting standards selected by the Parent Company, IFRS 3 – Business Combinations, was not applied retroactively to the acquisitions made before January 1, 2004; consequently, the book value of tangible assets on that date, determined on the basis of the previous accounting standards, were maintained for these acquisitions. Intangible assets with a definite useful life are amortised, starting from the time when they are available for use, based on their residual possibility of use with respect to the residual useful life. On the other hand, concession rights are amortised throughout the entire concession, with a criteria that reflects the methods with which the economic benefits will be received by the company, with the use of constant rates determined with reference to the expiry of the concession in 2044. The amortisation starts from the time when the rights in question start to generate the relevant economic benefits.


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The profit or loss deriving from the sale of an intangible asset is the difference between the sale value, net of sale costs, and the book value, and is recorded in the income statement of the year of sale. EQUITY INVESTMENTS Equity investments in unconsolidated subsidiary companies and other companies, which can be classified in the category of financial assets held for sale as defined in IAS 39, are initially recorded at cost, as determined on the settlement date, as it represents the fair value, inclusive of the directly attributable transaction costs. After the initial recording, these equity investments are valued at fair value, if this can be determined, with the effects being attributed to the comprehensive income statement and this in a specific shareholders’ equity reserve. At the time of a loss of value from impairment, or when this is recognised, the profits and losses in this reserve are posted in the income statement. Any losses in value identified as described in the section regarding “Impairment of assets”, are restored in the other components of the comprehensive income statement if the reasons for the write-downs made cease to apply. If the fair value cannot be determined in a reliable manner, the equity investments classified under financial assets held for resale are valued at cost, adjusted by the impairment losses; in this case the losses in value are not subject to reinstatement. Equity investments in associated companies and joint ventures are valued according to the net equity method, with the portion of profits or losses of the year accrued for the Group being recorded in the income statement, except for the effects related to other changes in the shareholders’ equity of the investment, reflected directly in the comprehensive income statement of the Group. The risk deriving from possible losses that exceed the book value of the equity investment is recorded in a specific liability fund proportionally to the investor’s commitment to fulfilling the legal or implicit obligations towards the investee or in any case covering its losses. The equity investments held for sale or in liquidation in the short term are recorded under current assets at the lower between the book value and the fair value, net of possible sale costs. CONSTRUCTION CONTRACTS AND SERVICES BEING EXECUTED The construction contracts being executed are assessed on the basis of the contractual payments accrued with reasonable certainty in connection with the work progress using the percentage of completion criterion determined with the methodology of physical measurement of the works executed in order to attribute the revenues and the economic result of the contract to the years of accrual proportionally to the work progress report. The positive or negative difference between the value of the contracts performed and the value of the advances received is posted as an asset or liability in the statement of financial position, respectively, in consideration also of possible write-downs made for risks related to the failed recognition of the works executed for the principals. The revenues from the contract, in addition to the contractual consideration, include the variations, the price reviews and any claims to the extent these are likely to represent actual revenues that can be determined reliably. In case a loss is expected from the execution of the contract activities, this is immediately recorded in full in the accounts, regardless of the progress made in the contract. The construction services in favour of the grantor pertaining to the concession agreement held by ADR are specifically recorded in the income statement based on the progress of the works. Revenues for construction and/or improvement services in particular, which represent the consideration due for the activity performed, are valued at their fair value, calculated on the basis of the total costs incurred, which mainly comprise the costs of materials and external services, the costs of benefits for the employees devoted to these activities and the attributable financial expense.


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These revenues for construction services are set off against a financial assets or the “airport concession” entered as intangible assets as shown in this paragraph. INVENTORIES Inventories are valued at the lower of acquisition or production cost and the net realisable value that can be obtained from their sale during normal operations. The acquisition cost is determined by applying the weighted average cost method. PAYABLES AND RECEIVABLES Receivables are initially recognised at fair value and then valued at the amortised cost by using the effective interest rate method, net of any impairment related to the sum considered non-performing and recorded in the specific bad debt provisions. The amounts considered non-performing are estimated on the basis of the value of the expected cash flows. These flows consider the expected recovery terms, the likely salvage value, any guarantees as well as the costs that are estimated to be incurred to recover the receivables. The original value of the receivables is reinstated in the next years as the reasons for its adjustment cease to apply. In this case the value reinstatement is recorded in the income statement cannot exceed the amortised costs that the credit would have had in the absence of previous adjustments. Payables are initially recorded at cost, corresponding to the fair value of the liability, net of any directly attributable transaction costs. After initial recording, payables are valued with the amortised cost criterion by using the effective interest rate method. Trade receivables and payables whose expiration falls within the normal commercial terms are not discounted. CASH AND CASH EQUIVALENTS Cash and cash equivalents are recorded at par value and include the values that meet the requirements of high liquidity, availability on demand or in a very short term, good outcome and negligible risks of change in their value. FINANCIAL DERIVATIVES All derivative financial instruments are recorded in the statements of financial position based on their fair value, determined on the date when the period ends. According to IAS 39, derivatives are classified as hedging instruments when the relationship between the derivative and the subject of the hedge is formally documented and the hedge has a high hedge ranging between 80% and 125%, as initially and periodically checked. For the instruments hedging against the risk of change in the cash flows of the assets and/or liabilities being hedged (cash flow hedge), the changes in fair value are recorded in the income statement in consideration of the relevant deferred tax effect; the ineffective part of the hedge is recorded in the income statement. For any instrument hedging against the risk of change in the fair value of assets and/or liabilities (fair value hedge), the changes in fair value are recorded in the income statement. Consistently, also any related asset and/or liability being hedged, in so far as the hedged risk, is adjusted to the fair value with effect on the income statement. The changes in the fair value of derivatives that do not meet the conditions for qualification pursuant to IAS 39, as hedging financial instruments are recorded in the income statement.


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OTHER FINANCIAL ASSETS AND LIABILITIES Any financial assets which the Company intends and has the ability to maintain until maturity, based on the provisions of IAS 39, and the financial liabilities are recorded at cost, as measured on the settlement date, represented by the fair value of the initial remuneration, increased in the case of assets and decreased in the case of liabilities, by any transaction costs that are directly attributable to the acquisition of the assets and the issue of the financial liabilities. After initial recording, these financial assets and liabilities are valued with the amortised cost criterion by using the effective interest rate method. Any financial assets held with the intention of obtaining a profit in the short term are recorded and valued at fair value, with recognition of the effects in the income statement; any financial assets other than those above are classified as financial instruments available for sale, recorded and valued at fair value with recognition of the effects in the comprehensive income statement. Financial instruments included in these categories have never been reclassified. Financial assets and liabilities are no longer shown in the financial statements when, consequently to their sale or redemption, the Company is no longer involved in their management nor is liable for the risks and benefits related to these sold/redeemed instruments. HIERARCHICAL LEVELS TO ASSESS THE FAIR VALUE OF FINANCIAL INSTRUMENTS As regards the financial instruments valued at fair value and recorded in the statement of financial position, IFRS 7 “Financial Instruments: Disclosures” provides for these to be classified hierarchically on the basis of the relevance of the inputs of values used to determine the fair value. The standard makes a distinction between the following levels for the financial instruments valued at fair value: a) level 1 – quoted prices in active markets; b) level 2 – when the values, other than the quoted prices above, can be observed directly (prices) or

indirectly (deriving from prices) in the market; c) level 3 – inputs not based on observable market data. In 2011 there were no transfers between the various hierarchical levels for fair value. Furthermore, no financial instruments can be classified as level 3 in terms of fair value. EMPLOYEE BENEFITS The liabilities relating to short term benefits granted to employees, disbursed during the employment relationship, are recorded for the amount accrued at year end. The liabilities related to benefits granted to employees and paid during or after the termination of the employment relationship through defined contribution plans, are recorded for the amount accrued at year end. The liabilities related to benefits granted to employees and paid during or after the termination of the employment relationship through defined contribution plans, mainly consisting of the Severance Indemnities of the Group companies accrued until December 31, 2006 (or, where applicable, until the next date of adhesion to the complementary compensation fund), are recorded in the year when the right arises, net of any assets assisting the plan and the advances paid; these are calculated on the basis of actuarial assumptions and measured on an accrual basis in line with the services needed to obtain the benefits; the liabilities are valued by independent actuaries. Profits or losses deriving from the actuarial calculation and changes in the actuarial assumptions used are recorded in the income statement to the extent that their unrecorded value at the beginning of the financial year exceeds 10% of the liability (the so-called corridor method), in consideration of the related deferred tax effect.


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PROVISIONS FOR RISKS AND CHARGES Provisions for risks and charges include the allocations arising from current obligations of a legal or implicit nature, deriving from past events, and the fulfilment of which will probably require the employment of resources, of which the amount cannot be reliably estimated. Provisions are allocated based on a best estimate of the costs required for fulfilling the obligation at the year-end date or to transfer it to third parties. If discounting produces a significant effect, allocations are determined by discounting the financial flows expected in the future at a discount rate that reflects the current market change of the current value of cost of money, and the specific risks related to the liability. When discounting, the increase in the allocation due to time passing is recorded as financial expense. The “Provisions for renovation charges” for the assets under concession, consistently with the conventional obligations in place, includes, at year end, the allocations regarding maintenance actions to be carried out in the future and aimed at ensuring the necessary functionality and safety of the airport infrastructure. The allocations to these provisions are determined according to the use and wear of the infrastructure, in consideration of the financial component related to time passing, when significant. NON-CURRENT ASSETS HELD FOR SALE AND ASSETS/LIABILITIES BEING DISPOSED OF AND/OR

CONNECTED TO DISCONTINUED OPERATIONS Non-current assets held for sale and the assets/liabilities being disposed of and/or connected to discontinued operations, for which the book value will be recovered primarily through the sale and continuous use, are presented separately from the other assets and liabilities in the statement of financial position. Immediately before being classified as held for sale, these are stated on the basis of the specific reference IFRS applicable to each asset and liability, and subsequently recorded at the lower of the book value and the estimated fair value, net of the related sale costs. Any loss is immediately recorded in the income statement. Regarding exposure in the income statement, disposed operations or operations being disposed are classifiable as “discontinued operations” when they meet the requirements below: a) they represent an important independent operational branch or geographical area of operation; b) they are part of a single coordinated plan to discontinue an important branch or geographical

area; c) they are subsidiaries acquired exclusively in order to be sold at a later stage. The economic effects of these transactions, net of the related tax effects, are recorded under a single item in the income statement, with reference to the date in the year of comparison. IMPAIRMENT OF ASSETS (IMPAIRMENT TEST) At year-end, the book value of tangible, intangible and financial assets and of equity investments is tested to find any indication of impairment of these assets. If these indications exist, the recoverable amount of these assets is estimated to determine the amount of any write-down to be recorded. For any intangible assets with an indefinite useful life and any assets under construction, the impairment test described above is performed at least once a year, regardless of the occurrence of events that suggest impairment, or more frequently in case events or changes in the circumstances take place, which may lead to possible impairment. If the recoverable value of an asset cannot be estimated individually, the estimate of the recoverable value is included within the framework of the unit generating financial flows the assets belong to.


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This test estimates the recoverable value of the asset (represented by the greater of the likely market value, net of sale costs, and the value in use) and compares it with the relevant net book value. If the latter is higher, the asset is written down until reaching the recoverable value. In determining the value in use, the financial flows expected in the future after taxation are discounted by using a discount rate, after taxation, which reflects the current market estimate referred to the cost of capital in connection with the time and specific risks of the asset. Losses of value are recorded in the income statement and classified differently depending on the nature of written down asset. These losses in value are reinstated, within the limits of the write-down made, if the reasons that generated them ceased to apply, except for goodwill. ESTIMATES AND VALUATIONS According to IFRS, the preparation of the financial statements requires estimates and valuations to be made, which affect the determination of the book value of assets and liabilities as well as the information provided in the explanatory notes, also with reference to the assets and liabilities potentially existing at the end of the year. These estimates and hypotheses are used, in particular, to determine the cash flows used as basis for the impairment of the assets (including the valuation of receivables), provisions for risks and charges, benefits for the employees, the fair value of financial assets and liabilities, deferred and prepaid taxes. Therefore, the actual results recorded may differ from these estimates; furthermore, the estimates and valuations are reviewed and updated periodically and the effects deriving from any variation are immediately reflected in the financial statements. CONVERSION OF THE ITEMS IN CURRENCIES Any transaction in a currency other than the euro is recorded at the exchange rate of the date of the transaction. The related monetary assets and liabilities denominated in currencies other than the euro are subsequently adjusted at the exchange rate in force on the date of closing the year of reference. Any resulting exchange rate differences are reflected in the income statement. Non-monetary assets and liabilities denominated in currency and recorded at historical cost are converted by using the exchange rate in force on the date the transaction is first recorded. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the result for the year by the weighted average number of shares outstanding during the year. Diluted earnings per share are calculated in consideration, for both the portion of the result for the year and the mentioned weighted average, of the effects related to the subscription and/or total conversion of all the potential shares that may be issued consequently to certain outstanding options being exercised. INFORMATION BY INDUSTRY SEGMENT Following the administrative and financial integration of Gemina and ADR, the Group is engaged in one sector only, i.e. the development and management of airport infrastructures. Thus the Group’s operations are subject to reporting and analysis by management as an individual unit. Consequently, with reference to the provisions of IFRS 8, no (financial and/or economic) segment information is provided for the business sectors, as this is not applicable.


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ACCOUNTING STANDARDS AND NEWLY ISSUED INTERPRETATIONS, REVISIONS AND AMENDMENTS TO

EXISTING STANDARDS NOT YET IN FORCE OR NOT YET VALIDATED BY THE EUROPEAN UNION No new accounting standards or interpretations came into force in 2011, or amendments to the accounting standards and interpretations already in force, which significantly affected the financial statements of Gemina. As requested by IAS 8 “Accounting policies, changes in accounting estimates and errors”, stated below are the new accounting standards and interpretations, in addition to the amendments to the already applicable standards and interpretations not yet in force or not yet validated by the European Union (EU), which may be applied in the future to the financial statements of the Company. IAS 9 – Financial Instruments On November 12, 2009, IASB issued the first part of IFRS 9, which changes recognition and measurement criteria of financial assets, currently governed by IAS 39; once completed, IFRS 9 will entirely supersede IAS 39. On October 28, 2010, IASB published a reviewed version of IFRS 9 which contains the provisions regarding the recognition and measurement of financial liabilities. Other changes are reported in the version published on December 16, 2011. IFRS 9 provides for two categories of classification for financial assets. Two possible valuation criteria are also set: the amortised cost and the fair value. The classification is carried out on the basis of both the management model adopted for the financial assets and the contractual characteristics of the cash flows of the asset. The initial recognition and valuation at amortised cost require that both conditions below be complied with: a) the management model for the financial asset implies the holding of the same with the aim of

collecting the related financial flows; and b) that the financial asset contractually generates, on pre-set dates, the financial flows only

representing the return of the same financial asset. If one of the two conditions above is not met, the financial assets is initially recorded and subsequently valued at fair value. All financial assets represented by shares are valued at fair value. The new standard, unlike IAS 39, does not provide for exceptions to this general rule; consequently, there is no possibility for valuation at cost for all unlisted shares, for which the fair value cannot be determined reliably. A financial asset that meets the requirements for classification and valuation at amortised cost may, at the time of the initial recognition, be designated as financial asset at fair value with attribution of the existing variations in the income statement, if this measurement allows the asymmetrical valuation or recording (“accounting mismatch”) to be eliminated or reduced significantly, which would otherwise result in the valuation of assets or liabilities or the recognition of the related profits or losses according to a different base. In case of investments in equity instruments for which the recording and valuation at amortised cost is not possible, when these are investments in shares not held for trading but rather of strategic nature, according to the new standard, the entity may irrevocably choose, at the time of the initial recognition, to value them at fair value with attribution of the next changes in the comprehensive income statement. Regarding financial assets, the provisions of the current IAS 39 are confirmed by the new IFRS 9. Financial liabilities continue to be valued at amortised cost or at fair value with recording in the income statement in specific circumstances.


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The changes compared to the current provisions of IAS 39 mainly concern: a) the representation of the changes in fair value attributable to the credit risk associated to the

liability, for which IFRS 9 provides recognition in the comprehensive income statement for some type of financial liabilities;

b) elimination of the option to value at amortised cost the financial liabilities consisting of derivatives with delivery of unlisted equities. Due to this change, all derivative instruments must be valued at fair value.

IFRS 9 is currently being examined by the EU as part of the overall valuation by the same on the entire project to review and replace IAS 39. IFRS 10 – Consolidated Financial Statements, IAS 27 – Separate Financial Statements and IFRS 12 – Disclosure of Interests in Other Entities On May 12, 2011 IASB issued the new accounting standard IFRS 10, completing the project associated with redefining the concept of control and overcoming the discrepancies found in applying this concept; while IAS 27 – Consolidated and Separate Financial Statements, defines the control on an entity as the power to make certain financial and managerial choices of an entity while obtaining the relevant benefits, SIC 12 – Consolidation - Special Purpose Entities, interprets the requirements of IAS 27 by placing more emphasis on the risks and benefits. The new standard, which was issued at the same time as IAS 27 – Separate Financial Statements, replaces the old IAS 27 and SIC 12 and contains a new definition of control as well as the methodologies to be used to prepare the financial statements according to IFRS, already contained in the old IAS 27 and which were not amended. According to IFRS 10 an investor controls an entity when it is exposed, or holds rights, to variable returns on its investment in the entity and has the ability to change these returns through its power on the entity. Therefore, control is based on the following three elements: (i) power on the entity, (ii) exposure or right to variable returns on the investment of the entity, and (iii) ability to use the power over the entity to influence the returns on the investment. According to IFRS 10 the concept of control must be applied to all the circumstances below: a) in case of voting rights or similar rights that give power to the investor, including situations in

which the investor holds less than the majority of the voting rights and in case of potential voting rights;

b) when the entity is organised in such a way that all the voting rights are not the dominating factor in defining the control of the entity, as in the case of the voting rights having an impact on administrative aspects only, and the important assets of the entity are affected essentially by contractual relationships;

c) agency relationships; d) when the investor has control over specific assets of the entity. Finally, IFRS 10 refers to the new IFRS 12 – Disclosure of Interests in Other Entities (issued at the time of the other new standards stated) regarding information to be provided in the statements as regards equity investments owned in other companies. This last standard essentially contains a series of obligations as to the information the entity drawing up the financial statements must provide as regards equity investments in subsidiaries and associates as well as the joint agreements (under the new IFRS 11 illustrated below). The new IAS 27 – Separate Financial Statements – essentially is an extract from part of the old standard, since it only governs the methods of reporting and information for investments in subsidiaries as well as the requirements for the preparation by the entity of the financial statements for the year; the new standard did not introduce any changes with regard to these aspects. The date for the new standards IFRS 10, IFRS 12 and IAS 27 to enter into force mandatorily is January 1, 2013, with the right of early application. These standards are still being reviewed by the EU.


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IFRS 13 – Fair Value Measurement IFRS 13, issued on May 12, 2011, clarifies the determination of the fair value for the purpose of valuation and information in the financial statements, and applies to all IFRS requiring or allowing the measurement of fair value or presentation of information based on the fair value. The new standard emphasises the use of market sources and, where possible, must be adopted starting from January 1, 2013, and has not been validated by the EU yet. IAS 1 – Presentation of Items of Other Comprehensive Income On June 16, 2011 IASB published the amendment to IAS 1, deemed necessary to clarify the methods of presentation of the items contained in the comprehensive income statement. The change did not affect the elements that must be included in the comprehensive income statement but rather the fact that the elements presented must be highlighted by nature and grouped into two categories: (i) those that will not be subsequently reclassified in the income statement, and (ii) those that will be subsequently reclassified in the income statement when some specific conditions are met, as requested by IFRS. The amendments made are effective from the year starting after July 1, 2012, and have not been validated by the EU yet. IAS 12 – Income Taxes On December 20, 2010 IASB approved some amendments to IAS 12 in connection with the recovery of deferred taxes regarding some types of assets, which also replaces SIC 21. By superseding the current general provision of IAS 12 to assess the methods of transferring deferred taxes through the use of the assets or liabilities rather than its sale, the changes introduce the assumption that, regarding property investments and other tangible and intangible assets valued at fair value, the related deferred taxes will be entirely transferred through the sale of the asset unless there is clear evidence that the recovery may occur with use. The amendments must be applied in the financial statements from January 1, 2012. Early application is allowed. The amendments have not been validated by the EU yet. IAS 19 – Employee Benefits In June 2011 IASB approved the new IAS 19 regarding the treatment of benefits to employees. The new standard makes several changes to the previous edition. The main changes of the new IAS 19 are: a) all actuarial profits and losses accrued on the balance sheet date must be immediately recorded in

the comprehensive income statement. Therefore, there is no longer the possibility of deferring them through the corridor method, which is no longer applicable, or recording them in the income statement;

b) any cost related to changes in the plans that imply variations in the services already provided must be recorded in the period when the plan is changed, and can no longer be deferred in the future service periods;

c) any benefit implying a service obligation after the termination of the employment relationship is not included in the termination benefit category, with consequent reduction in the number of agreements that can be included in this category. Furthermore, a liability for termination benefit can be recorded in the accounts only when the entity measures the related restructuring cost or when it cannot avoid offering the termination benefit. This may lead to the recording of these benefits at a later stage than the time established by the old standard.

The new standard will enter into force mandatorily on January 1, 2013, with the possibility of early application; however, it has not been validated by the EU yet.


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IAS 28 - Investments in Associates and Joint Ventures On May 12, 2011, IASB, at the same time as issuing the new standards IFRS 10, IFRS 11, IFRS 12 and IAS 27 mentioned above, issued the new IAS 28 – Investments in Associates and Joint Ventures, to account for some amendments to these standards. The new standard replaces the old IAS 28 – Investments in Associates, without making substantial changes; the new standard does not amend the concept of significant influence already contained in the old IAS 28 but introduces the obligation to apply the net equity method to the valuation of equity investments in joint ventures, as established by the new IFRS 11. The methods of application of the net equity method already established by the old IAS 28 have been confirmed. The new IAS 28 will enter into force mandatorily on January 1, 2013, with the possibility of early application. This standard, as well as the other standards IFRS 10, IFRS 11, IFRS 12 and IAS 27, is currently being reviewed by the EU. IAS 32 and IFRS 7 – Offsetting Financial Assets and Liabilities On December 16, 2011, IASB published an amendment to IAS 32 and IFRS 7 regarding the methods of presentation of the offsetting of financial assets and liabilities, and the related information to be provided in the financial statements. The amendments to IAS 32 clarify that the entity drawing up the financial statements has a legal right to offset the amounts of financial assets and liabilities already recorded in the accounts only when this right: a) is not conditioned to the occurrence of future events; b) can be exercised in case of continuous operation of the entity drawing up the financial statements

and all the parties involved, in case of default, insolvency or bankruptcy. The amendments to IAS 32 must be adopted compulsorily from January 1, 2014 (early application is allowed), with retroactive effect, while those to IFRS 7 must be compulsorily adopted from January 1, 2013. The amendments have not been validated by the EU yet. The Group is in the process of assessing any impact deriving from the future application of all of these newly issued standards and interpretations, as well as the revisions or amendments to the existing standards. NOTE 4 – CONSOLIDATION AREA, CRITERIA AND METHODS

In addition to the Parent Company Gemina, the companies directly or indirectly controlled by it are also included in the consolidation area. Consolidated in particular are the entities in which the Parent Company exercises the control both by virtue of the shares directly or indirectly held to obtain the majority of votes in the meeting and due to exercise of a prevailing influence expressed by the power to make financial and managerial choices for the entity while obtaining the related benefits, also setting aside shares. Excluded from the consolidation with the integral method are some minor entities whose exclusion, with reference to operations (e.g. companies that are not yet or no longer operational, companies for which a liquidation process has almost been completed), would be negligible in terms of quantity and quality for the purposes of correctly representing the income statement, statement of financial position and cash flow information of the Group.


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All the controlled entities are included in the consolidation area as of the date when control is acquired by the Group. The entities are excluded from the consolidation area from the date the Group loses control over them. In 2011 there have been no changes in the consolidation area compared to the previous year. The list of companies included in the consolidation area is reported in attachment “List of equity investments”. For consolidation purposes, the financial statements of the subsidiary companies approved by the respective Board of Directors were used, adjusted according to the IFRS adopted by the Group. The main consolidation criteria are set forth below:

- all assets and liabilities, charges and income of companies consolidated using the line-by-line method are fully included in the consolidated financial statements;

- the book value of the equity investments is set off against the corresponding share of Shareholders’ Equity in the investee companies, attributing to the single asset and liability items their current value at the date of acquisition of control;




- where applicable, consolidation adjustments take into account their deferred tax effect; - dividends received in the year from subsidiaries that are recorded in the income statement of the

Parent Company as income from equity investments have been set off against “profits carried forward”.

NOTE 5 – CONCESSION AGREEMENT

CONCESSIONARY RELATIONSHIP ADR’s corporate purpose is the construction and management of airports or of a part thereof, and the exercise of any activity related or complementary to air traffic of any type or speciality. The corporate purpose includes the management and development of the Roman airport system (made up of the “Leonardo da Vinci” Airport of Fiumicino and the “G.B. Pastine” Airport of Ciampino) according to the criteria of economy and coherent organisation, pursuant to Law no. 755 of November 10, 1973 and subsequent amendments. DURATION OF THE CONCESSION The above-mentioned activity is carried out as a concession on behalf of the competent State Administration (Ministry for Infrastructure and Transport) with expiration in 2044. The term of the concession, originally set at 35 years and expiring on June 30, 2009 (Art. 3, subsection 2, Law 755/73), was extended by a further 35 years (to June 30, 2044) in compliance with Art. 14 of Law no. 359 of August 8, 1992, and Art. 1-quater of Law no. 351 of August 3, 1995, as set forth in the reports by the Ministry of Transport and Navigation on September 12, 1994 and January 23, 1998. Pursuant to Agreement 2820/74, the concession (Art. 25) can be terminated with just cause for requirements of public safety. Moreover, other causes for termination of the concession are specified (Art. 24), including: unjustified delays in completing the work, irregularity and negligence in the management of the airport system, any transfer, even partial, of the concession, etc.


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SUBJECT OF THE CONCESSION Law 755/73 (Art. 1) sets forth the subject of the concession, consisting in the single management of the Capital’s airport system, to be carried out under the supervision of the Ministry of Transport (now ENAC - Italian Civil Aviation Authority - pursuant to Italian Legislative Decree 250/1997) according to the provisions of the Navigation Code and regulations currently in force. In particular, the concession, governed by specific agreements with the Grantor, includes the management of infrastructures and services and the maintenance of existing systems, machinery and buildings. ADR also supplies passengers with carry-on baggage and hold baggage security checks. INCOME Pursuant to Art. 6, subsection 1, of Law 755/73, “all revenues of the State, which derive from the management of the two airports, belong to the company holding the concession”. Art. 6 of Agreement 2820/74 groups the revenues into those deriving from the use of the airports, those regarding the use of services and the services rendered by the concessionaire, and those regarding the use of airport assets. The Agreement also provides that the concessionaire has the right to claim fair payment from whoever carries out a profit-making activity in the airports. With resolution no. 86 of August 4, 2000, the Interministerial Committee for Economic Planning (“CIPE”) issued a favourable opinion on the “Reordering framework regarding the tariff system for airport services rendered on an exclusive basis” proposed by the Minister of Transport and Navigation in conjunction with the Minister of Finance. According to said framework, revenues subject to regulation can be classified as follows: - revenue due as payment (airport fees) for the use of airport infrastructures that are instrumental

in services of air transport; - payments due for the use of airport assets (for common use, for exclusive use, centralised

infrastructure) that are instrumental in terminal assistance services (supplied or self-produced); - payments for security services set forth in another concession deed; - payments for terminal assistance services, when supplied by the airport operator - in fact or by

rights - under exclusive conditions. The aforementioned CIPE Resolution no. 86/2000 was cancelled and substituted by CIPE Resolution no. 38/2007 of June 15, 2007 (published in the Official Gazette no. 221 of the Italian Republic of September 22, 2007), which approved the new “Directive” regarding the tariff system for airport services rendered on an exclusive basis (“Directive”). The purpose of the Directive is to set forth guidelines for the implementation of Law no. 248/2005. It requires ENAC (Italian Civil Aviation Authority) to set forth, within 60 days from the publication of the CIPE Directive in the Official Gazette, “guidelines setting forth criteria for the application of the Directive”. The definitive text of the application Guidelines of CIPE Directive no. 38/07 and the relative attachments, was published by ENAC on its website on January 7, 2008, then rewritten following the observations made by NARS. On February 14, 2008, the Guidelines were approved by means of Interministerial Decree of the Minister of Transport and the Minister of the Economy and Finance no. 41/T. Said decree (never published in the Official Gazette) was repealed by the subsequent Decree of the Ministry for Infrastructure and Transport of December 10, 2008, which formally approved the Guidelines drawn up by ENAC for applying the Ministerial Directive regarding the tariff system for airport services rendered on an exclusive basis.


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On March 27, 2008, CIPE then made a lexical change to its Resolution no. 38/2007 – publishing the subsequent Resolution no. 51/08 - pursuant to sentence no. 51 of the Constitutional Court dated February 27, 2008, which envisaged the need for the opinion of the State-Regions Conference. With this change (at point 5.3), the range of duties of the Regions in approving planning agreements was expanded. All of the other decisions of Resolution no. 38/2007 and of the attachment that is an integral part thereof are upheld and unchanged by the March 27, 2008 resolution (published with amendments in the Official Gazette no. 128 of June 3, 2008). CIPE Resolution no. 51/08, the same as the previous no. 86/00, provides that the new regulated tariffs that the airport operator can apply will be established within a specific “planning agreement” to be entered into by the operator and ENAC. In consideration of the long time frame required for the approval procedure of planning agreements, and waiting for the planning agreement approval to be completed, national regulations have established the terms of adapting only the airport fees on a provisional basis. Specifically, Law no. 31 of February 28, 2008 converting Law Decree 248/2007 (“Milleproroghe” Decree) provided that until the enactment of the decrees to define airport fees pursuant to Law 248/05, the Minister of Transport issued its own decree, to be adopted by December 31, 2008, to index airport fees to programmed inflation. Said term was extended once to December 31, 2009 (with Law Decree no. 207 of December 30, 2008, converted into Law 14/2009), then additionally to December 31, 2010 (by subsection 6 of Art. 5 of Law Decree no. 194 of December 30, 2009 converted into law 25 2010) and December 31, 2011 with two subsequent legislative measures (Law Decree no. 225 of December 29, 2010, converted into law 10/2011 and Decree by the President of the Council of Ministers of March 25, 2011). Finally, Law Decree no. 216 of December 29, 2011 (converted into Law no. 14 of February 24, 2012) extended to December 31, 2012 the already mentioned terms for updating airport fees to the target inflation rate. Following the above, the first Decree (Ministerial Decree 07/21/2008) was published in the Official Gazette dated October 21, 2008, containing the “Airport fee update”, to take into account the programmed inflation regarding 2008 that is expected to be 1.7% according to the Economic and Financial Planning Document. Similarly, the Ministry of Infrastructure and Transport Decree of October 8, 2009 on “2009 Airport fee update” was then published in the Official Gazette of December 22, 2009. The amount of airport fees was updated to the amount of programmed inflation relating to 2009, which, in the Italian Economic and Financial Planning Document, was as equal to 1.5%. Lastly, the Ministerial Decree of October 4, 2010 was published in the Official Gazette of December 11, 2010, including the “2010 Airport fee update”: according to this decree, the amount of airport fees as per the previous Ministerial Decree 10/8/2009, was updated to the programmed inflation rate relating to 2010 which, in the Italian Economic and Financial Planning Document 2010/2013, was equal to 1.5%. The new amount of rights will be applicable starting to January 10, 2011, the date in which the above-mentioned Decree entered into force. At the end of 2011 the compulsory ministerial decree for the adjustment of airport fees to the target inflation rate relating to 2011 and provided for by the abovementioned extension regulation for 2011 has not been issued yet (art. 1, Law Decree no. 225 of December 29, 2010, and art. 1, Decree by the President of the Council of Ministers of March 25, 2011). Again on the issue of airport fees, the Finance Law 2010 (Law no. 191 of December 23, 2009) permitted airport operators to increase the fees in advance.


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On January 15, 2010, ADR submitted to ENAC its application for admission to the procedure for early introduction of fees. On March 5, 2010, ENAC informed ADR that checks on documents filed in by the company were concluded and the application transmitted to the competent Ministry of Infrastructure and Transportation. No reply from the above-mentioned Ministry had been received by ADR as at December 31, 2011. In the Official Gazette of August 4, 2009 Law no. 102 of August 3, 2009 was published, authorising ENAC to enter into planning agreements in derogation of current regulations for airports with traffic exceeding 10 million passengers per year (now eight million, following the amendments based on Law 122/010), introducing long-term tariff systems that, bearing in mind European levels and standards, are oriented towards costs of infrastructures and services, efficiency objectives and the criteria of adequate remuneration of investments and capital, with valid updating methods for the entire duration of the agreements. The contract is approved with decree by the President of the Council of Ministers to be adopted within sixty days from the stipulation on the proposal of the Ministry of infrastructure and transport in agreement with the Ministry of the Economy. Always regarding fees, the Law Decree no. 78 of May 31, 2010 (converted in Law no. 122 of July 30, 2010), bearing “Urgent measures on financial stabilisation and economic competitiveness”, Art. 14, subsection 14, set out a commissarial surcharge on outbound passenger boarding fees from the airports of Rome - within the maximum limit of 1 euro per passenger - in order to contribute to the charges deriving from the carrying out of the debt repayment plan of the Municipality of Rome up to a total of 200 million euro. Pursuant to the above-mentioned standard, the Commissioner in charge of the commissarial administration – prior resolution no. 36 of the Municipality of Rome dated October 27, 2010 – decided this commissarial surcharge, equal to 1 euro per passenger, as from January 1, 2011. On October 6, 2011 the Council of Ministers approved the Legislative Decree (prepared on the basis of the delegation of authority contained in the “2009 Community Law”, law no. 96 of June 4, 2010) implementing the directive 2009/12/EC, concerning airport rights. This Directive establishes common principles for the collection of fees, and applies to airports in the Community with annual traffic exceeding 5 million passenger movements. This Directive provides the possibility of negotiating fees with airport users according to well-defined, periodic procedures, and establishes the creation of an independent supervisory authority, entrusted with ensuring the correct application of the measures adopted. On October 13, 2011 the decision of the Head of State not to issue the legislative decree in the form adopted by the Council of Ministers of October 6, 2011 for anti-competitive aspects, excess of delegation and inconsistency with the European directive, was learnt from the press and the statements made by the Chairman of ENAC. Regarding the failure to transpose the directive within the community terms, on May 18, 2011 the European Commission started the procedure of infringement towards Italy. On November 24, 2011, as part of this procedure, the Commission sent Italy a “motivated opinion” demanding it to adopt and communicate within January 24, 2012 the national legislative provisions to implement the EU regulation in a way to ensure transparency of airport fees, their lack of discrimination and their periodical review. The Italian Government has established the provisions to implement Directive 2009/12/EC on airport fees under articles 71 to 82 of Law Decree no. 1/2012 regarding “Urgent provisions for competition, development of infrastructure and competitiveness” (so-called Liberalisations decree), in force since January 24, 2012. These provisions, inter alia, establish: - common principles to determine and collect airport fees in the international airport open to

commercial traffic; - the establishment of the National Supervisory Authority fulfilling tasks of economic regulation

and supervision, and functions exercised temporarily by ENAC until the establishment of the Independent authority for transport regulation under art. 36 sect. 1 of the same Decree;


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- for the purposes of the determination by the Supervisory Authority of the airport fees, the

preparation of specific tariff models calibrated on the basis of the annual traffic of passengers, in compliance with the standards and criteria under art. 11/9 of Law Decree 203/2005 converted with amendment of Law 248/2005 (so-called Law Decree on system requirements);

- the identification by the operator of a tariff model among those prepared by the Authority, subject to consultation with airport users, to be subject to the Supervisory Authority for approval, having regard to the opinion of MEF and MIT;

- the establishment of compulsory procedures for consultation between the operator and the airport users that guarantee periodical consultations (at least once a year).

With subsequent Law Decree no. 5/2002 regarding “Urgent provisions regarding simplification and development” (in force since February 10, 2012), the Government intervened to govern the protection of the procedures in progress to stipulate the Program Contracts with the airport management companies. Art. 22, subsection 2 in particular provides for the absorption of Directive 2009/12/EC regarding airport fees under legislative decree no. 1 /2012 in any case to require the completion of the procedures in progress to stipulated the program contracts with the airport management companies with reference to “ordinary” ones (former Law no. 248/2005) and “derogating” ones (former Law Decree no. 78/2009, converted into Law no. 102/2009). According to this same provision, these procedures must be completed by and no later than December 31, 2012 and in any case, the duration of the program contracts stipulated according to the provisions in force at the time of the previous period is set in compliance with national and community regulations on the subject and related tariff models. Finally, Art. 22, subsection 3 provides for the amount of the airport fees established in the program contracts stipulated before January 24, 2012 (date when Law Decree no. 1/2012 comes into force) to be possibly determined according to the new methods defined by the provisions absorbing the EU legislation on airport fees (under point II of Decree no. 1/2012), on the expiry of the same contracts. The Law Decree is currently being reviewed by Parliament for conversion into law and can therefore be subject to amendment. CONCESSION FEE Italian Legislative Decree 251/95, later converted into Law 351/95 introduced the obligation to pay a concession fee. The criteria for the calculation of the concession fee were modified by Art. 2, subsection 188 of Law 662/96. In compliance with said law, the fee was periodically set for each period considered, with reference to the volumes of passenger and cargo traffic. In the 1997-2002 period, the concession fee was calculated “in an amount corresponding to ten percent of the total amount of revenue deriving from fees on the use of the two airports, as well as the fees for loading and unloading of cargo”. The Decree of the State Property Agency on June 30, 2003 adopted a new, different reference parameter for calculating the fee, identified as the so-called “WLU (Work Load Unit)” which “corresponds to one passenger or 100 kg of cargo or post” and is “calculated using the data reported in the statistical yearbook of the Ministry for Infrastructure and Transport - ENAC (Italian Civil Aviation Authority)”. The same decree identified several levels of traffic and, through the use of a differentiated coefficient per layer, allows for the calculation of a fee that values and measures airport traffic. Lastly it is noted that Article 11.10 of Law 248/2005 - mentioned earlier - has provided that the state concession fees be reduced by 75% up to the date of introduction of the system for determination of airport fees. The Decree of the State Property Office of December 23, 2009, published in the Official Gazette no. 302 of December 30, 2009, extended to 2012 the methods for quantifying airport management fees due to operators, previously set forth in the inter-executive decree of June 30, 2003.


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AIRPORT INFRASTRUCTURES Using funds from autonomous loans or using funds issued by the State on the basis of specific regulations and agreements, the company has the task of coordinating all assets necessary for the creation of the “Development Plan” of airport infrastructures. The total amount of assets used by the company for the financial year in the exercise of its own activity is composed of four distinct types: - “Revertible assets”: are assets purchased and/or created by the company using its own financial

means and, based on the concession agreement in force, subject to free reconveyance to the Grantor, in conditions of normal use and regular functioning, upon termination of the concession. Revertible assets include all works and fixed systems carried out on the airport State-owned soil. They consist of industrial building and fixed systems, and are shown under assets among “Intangible fixed assets – Airport concession – Investments on infrastructures under concession”.

- “Assets received in concession”: are assets owned by the State and received in concession for use. They essentially consist of previously existing infrastructures on airport soil at the moment of creation of the company in 1974. As they are not property of the company, their relative value is only indicated in the notes (see the note 7.1 regarding “Intangible fixed assets”).

- “Assets created on behalf of the State”: are works created by the company, under the construction concession, on behalf of and using funds of the State, for which the company generally does not receive profits or losses deriving from their creation, and representing construction services.

- In consideration of the nature of the assets developed and since these assets are not the property of the company, the value of the construction services rendered by the company and reported to ENAC is indicated only in the notes (see note 7.1 regarding “Intangible fixed assets”).The part under construction and not yet disclosed at year end, is included in Assets among “Receivables”. For implementation of said works the company receives from the Grantor an advance, by way of funds provided for the management of the works, which is recorded under payables, at the item “Advances”. Thereafter the costs incurred by the Company for works, supplies and price revision are reported and invoiced to the Grantor on the basis of the state of progress of works, reducing the advances received throughout the period of time required to complete the works. Only for general construction expenses (for design, inspectors’ fees, inspection fees, management of works, etc.) shall the Grantor pay the company a lump sum reimbursement, equal to 9% of the loan, corresponding, as a whole, to the total estimated costs that the company shall incur for that item;

- Finally it is highlighted that the management activity is developed also through some “Owned assets”, represented by moveable property acquired by the Company as property through its own financial means, and for which the Companies does not believe that there is an obligation to assign them at the end of the term of the concession. They consist of light buildings, systems and machinery, industrial and commercial equipment and other assets. They are shown under balance sheet assets among “Tangible/technical fixed assets”.

VALUATION OF THE CONCESSION As stated in the paragraph regarding the concession relationship, ADR’s corporate purpose is the construction and management of airports. The concession is the legal instrument that enables ADR to carry out this activity, settling fees and obligations both during and at the end of the concession.


89

As a result, the valuation of the concession effectively corresponds to the valuation of the company, and vice versa. The part of the airport management concession related to the acquired rights is recorded in the consolidated financial statements for a value of 2,829 million euro, originating as follows:



a) net value as at December 31, 2006 for the 51.08% share of ADR owned by Gemina

1,151

b) net value as at July 1, 2007 for the 44.68% share of ADR purchased by Macquarie (change in consolidation area)

891

Subtotal 2,042


a) difference between ADR’s shareholders’ equity and the price paid to Macquarie

930


3) Value recognised while consolidating Fiumicino Energia 7

4) Depreciation regarding 2007-2010 (320)

5) Value of concession as at December 31, 2010 (1+2+3+4) 2,916

6) Amortisation regarding 2011 (87)

7) Value of concession as at December 31, 2011 (5+6) 2,829

The value of the concession is amortised on a straight-line basis in each year along the duration of the concession, i.e. until June 30, 2044. The fairness of the value was assessed by discounting the cash flows estimated in the economic and financial projections drawn up by ADR management in the Economic- Financial Plan delivered to ENAC on October 27, 2011 and approved by the Board of Directors of Gemina in December 2011.

- Forecasts are based on the following assumptions: airport fees defined on the basis of the criteria and standards contained in the draft convention – Program Contract approved by the Board of Directors of ENAC in July 2011;

- passenger traffic reaching 50 million in 2021 (term for the first regulatory period) and 98 million in 2044;

- investments in infrastructures, amounting to 2.5 billion euro over the 2012-2021 period and 9.5 billion euro over the following period;

- discounting at 6.9% annual nominal rate after taxation. Discounted financial flows, also using alternatives and a rate simulation range, confirm the recoverability of the value of concession as at December 31, 2011. The two main ADR’s business areas, aviation and non aviation, were considered as one single Cash Generating Unit for both their strict interconnection and the fact that one single value was assigned to the concession.


90

The investments expected related to the expansion of the capacity at “Fiumicino Sud” for 4.4 billion euro and the creation of a new accommodation capacity (“Fiumicino Nord”) for 7.2 billion euro. For the remaining part, these concern the construction of the new low cost airport of Viterbo and the simultaneous requalification of Ciampino city – airport. The implementation of this demanding investment program is however subjected to the signature of a planning agreement, which would ensure continuity and stability of contract clauses over the entire concession term. NOTE 6 – INFORMATION ON THE ITEMS IN THE INCOME STATEMENT

As regards items evaluated, the following tables generally show the amounts of the same, their breakdown, the amount pertaining to the previous year and/or any change with respect to the latter. Unless otherwise indicated, amounts are expressed in thousands of euro.

6.1 – Revenues

Change %

Aviation 323.4 307.2 16.2 5.3%Airport Charges 181.6 174.8 6.8 3.9%

Centralized Infrastructures 40.5 35.4 5.1 14.4%Security 70.3 67.7 2.6 3.8%

Other 31.0 29.3 1.7 5.8%No aviation 290.1 286.8 3.3 1.2%Real estate 61.9 59.7 2.2 3.7%

Sub-concessions and utilities 61.9 59.7 2.2 3.7%Commercial 205.9 198.9 6.9 3.5%

"Duty free" and "duty paid" 89.4 84.9 4.5 5.3%Commercial activities in sub-concession 57.4 54.1 3.3 6.1%

Parking 31.6 30.5 1.1 3.7%Advertising 20.0 22.4 (2.4) -10.5%

Canteen 7.4 7.1 0.4 5.1%Other 22.4 28.2 (5.8) -20.6%

Aeronautical revenues 613.5 594.0 19.5 3.3%

Construction services 27.6 55.5 (27.9) -50.3%

Others revenues 11.8 3.6 8.2 227.7%

TOTAL 652.9 653.1 (0.2) 0.0%

2010(in millions of euros)

Description 2011

As a whole revenues do not record considerable changes compared to 2010. Revenues from airport management increased by 19.5 million euro (+3.3%), mainly due to the greater traffic recorded in 2011 compared to 2010. Revenues from construction services equal 27.6 million euro, down by 27.9 million euro due to the drop in the volume of investments made in the year; the costs charged by third party suppliers for these construction activities equal 25.8 million euro (51.2 million euro in 2010).


91

Other income and revenues in 2011 included the amount of 6.7 million euro, finally paid to ADR as an indemnity for the favourable sentence of the State Council on the dispute with the Ministry for Infrastructure and Transport and ENAC on the payment date of the price for the service of performing security checks on 100% of hold baggage. For a detailed analysis of revenues, reference is made to section 3.3 “Operations and related revenues” of the annual report. 6.2 – Consumption of raw materials and consumables

2011 2010



ELECTRICITY 4,653 4,154




CHANGES IN RAW MATERIAL (1,164) (790)

TOTAL 74,934 72,094

The costs of raw materials and consumables are slightly up compared to 2010, essentially due to the increase in the cost of materials being sold and fuel, the latter in connection with the oil price increase. 6.3 - Staff costs

2011 2010




RESTRUCTURING COSTS 1,108 3,183

PREVIOUS YEARS COST OF LABOUR ADJUSTMENTS (2,189) (2,230)


TOTAL 123,127 121,984

The increase in staff cost compared to 2010 derives from the increase in the average number of staff employed (+36 fte), partly offset by lower restructuring costs. Restructuring costs in 2011, equal to 1,108 thousand euro, essentially comprise the one-off costs for the termination of the work contracts of the Parent Company in connection with the transfer of the headquarters from Milan to Rome in August 2011.


92

6.4 - Other operating costs

2011 2010






TOTAL 157,596 161,847

The “Allocation to provision for risks” refers to the allocations made by the subsidiary ADR for 20.3 million euro for the charges estimated to be incurred for new disputes/risks in the relationships with customers and contractors. For more information reference is made to note 12 regarding disputes in place. The “Other operating expenses” included in 2010 the estimate of the cost for the dispute pending with the Customs Agency for 14 million euro, following the favourable outcome of the appeal filed by ADR with the Regional Tax Commission of Rome.

6.5 - Amortisation, depreciation and write-downs of fixed assets

2011 2010



TOTAL 108,296 108,179

The amortisation of intangible fixed assets is broken down as follows:

2011 2010 AMORTISATION OF AIRPORT

MANAGEMENT CONCESSION “ACQUIRED

RIGHTS”: 87,007 87,007 AMORTISATION OF AIRPORT

MANAGEMENT CONCESSION

“INVESTMENTS IN INFRASTRUCTURE” 12,568 11,742

AMORTISATION OF OTHER INTANGIBLE

FIXED ASSETS 3,527 3,972

TOTAL 103,102 102,721

Total amortisation of the airport management concession –“acquired rights” - amounted to 87.0 million euro, similarly to the previous year, and it is broken down as follows:


93

AMORTISATION OF CONCESSION RECORDED IN ADR’S FINANCIAL

STATEMENTS 49,284 AMORTISATION OF CONCESSION RECORDED IN GEMINA’S

CONSOLIDATED FINANCIAL STATEMENTS FROM CONSOLIDATION OF

51.08% OF ADR 5,472 AMORTISATION OF CONCESSION RECORDED IN GEMINA’S

CONSOLIDATED FINANCIAL STATEMENTS FROM CONSOLIDATION OF

44.68% OF ADR 32,051 AMORTISATION OF CONCESSION RECORDED IN GEMINA’S

CONSOLIDATED FINANCIAL STATEMENTS OF FIUMICINO ENERGIA 200

TOTAL 87,007 6.6 - Allocations to system renovation provisions These amount to 62,550 thousand euro compared to 69,971 thousand euro in 2010; for more information please refer to note 7.17 “system renovation provisions”. Financial expenses accrued in the year in relation to time passing (thus representing the transfer of the discounting of the same provision), are highlighted in note 6.8. 6.7 – Financial income

2011 2010


INTEREST ON BANK DEPOSITS AND LOANS 2,880 1,577



IRS DIFFERENTIALS 6 -




INTEREST FROM CUSTOMERS 1,424 27

OTHER INCOME 64 6

TOTAL 12,201 9,704

“Interest income”, equal to 2,880 thousand euro, increased by 1,303 thousand euro compared to 2010 due to the rise in interest rates. The income from “evaluation of derivatives” refers to the change occurred in the year in the fair value of cross currency swap contracts aimed at hedging the bonds issued in a currency other than the euro, illustrated in note 7.19. This income balances off the corresponding exchange losses deriving from the change in the value of these liabilities and included in the “financial expenses” as shown in note 6.8.


94

6.8 – Financial expenses

2011 2010





INTEREST ON FINANCIAL PAYABLES - 519


IRS DIFFERENTIALS 9,590 11,229

EXCHANGE LOSSES 7,618 7,560


COMMISSION EXPENSE - 101

FINANCIAL EXPENSES FROM DISCOUNTING BENEFITS FOR EMPLOYEES 822 703FINANCIAL EXPENSES FROM DISCOUNTING SYSTEM RENOVATION

PROVISIONS 10,366 7,741


TOTAL 100,343 97,223

The increase in financial expenses compared to the previous year, equal to 3.1 million euro, is attributable to the combined effect of: - an increase of 1.5 million euro in the expenses for interest attributable to outstanding bonds (+2

million euro) due to the increase in rates on classes A2 and A3, with a variable interest rate and lower interest on financial payables (-0.5 million euro);

- lower expenses for differentials paid on IRS derivatives (-1.5 million euro); - an increase of 3.1 million euro in the other expenses, mainly referred to greater expenses for the

discounting of the system renovation provisions due to unfavourable interest rates. Exchange losses, substantially deriving from the change in the rate of the bonds issued in a currency other than the euro, are indirectly offset by the income for “valuation of derivatives” as shown in note 6.7, regarding the change in fair value occurred in the year for the cross currency swap contracts aimed at hedging the same bonds as shown in note 7.19.

6.9 - Income (charges) on equity investments

2011 2010

WRITE-DOWN OF LA PIAZZA DI SPAGNA - (15)

WRITE-DOWN OF AEROPORTO DI GENOVA - (500)

WRITE-DOWN OF PENTAR - (1,377)

OTHER INCOME/(CHARGES) ON EQUITY INVESTMENTS 30 76

TOTAL 30 (1,816)

The item “other income (charges) on equity investments”, equal to 30 thousand euro, includes for 34 thousand euro the income from the liquidation of the investee company Kiwi 1 Ventura Servicos S.A. occurred during 2011.


95

6.10 - Tax revenues (charges)

2011 2010

CURRENT INCOME TAXES (50,055) (37,759)

IRES (33,479) (22,745)

IRAP (16,576) (15,014)

CHANGES IN ESTIMATES FROM PREVIOUS YEARS 17 259

NET (PREPAID) DEFERRED INCOME TAX 24,194 21,117

TOTAL (25,844) (16,383) The increase in current IRES taxes is essentially affected by the improvement in the pre-tax result of the Group. It is noted that the Group tax consolidation agreement is in force between Gemina, ADR, ADR Tel, ADR Engineering, ADR Sviluppo S.r.l., ADR Assistance, Leonardo Energia and Fiumicino Energia for the 2010-2012 period. For details on prepaid net taxes reference is made to note 7.5. The following table shows the reconciliation of IRES theoretical tax with the actual tax:

TAXABLE TAX TAXABLE TAX

INCOME INCOME

PRE-TAX PROFIT (LOSS) 12,473 (21,552)

TAX RATE 27.50% 27.50%TAX CALCULATED ON THE THEORETICAL

IRES TAX RATE 3,430 (5,927)

PERMANENT DIFFERENCES 58,281 16,027 57,828 15,997


INCREASE 84,494 23,236 76,400 21,010

DECREASE (33,506) (9,214) (30,313) (8,335)

TAXABLE PROFIT (LOSS) 121,742 82,363

TOTAL ACTUAL CURRENT IRES (*) 33,479 22,745

(*) TAX CONSOLIDATION ADJUSTMENTS INCLUDED

2011 2010


96

NOTE 7 – INFORMATION ON THE ITEMS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 7.1 – Intangible fixed assets

12/31/2010 INCREASES DECREASES 12/31/2011 AIRPORT MANAGEMENT CONCESSION

“ACQUIRED RIGHTS” 2,916,273 0 (87,007) 2,829,266AIRPORT MANAGEMENT CONCESSION



TOTAL 3,396,515 23,983 (103,266) 3,317,232

The change in item “Airport management concession acquired rights” with respect to December 31, 2010 can be attributed to the amortisation over the period already described in Note 5. The item “Airport management concession investments infrastructure”, pursuant to IFRIC 12, includes the value of the construction and improvement services rendered by the Group which are to be transferred to the grantor free of charge on conclusion of the concession. The following table sets forth the value of the systems and infrastructure under lease by the grantor in the Fiumicino and Ciampino airports, and the value of the construction services for works financed, realised and reported to the Italian Civil Aviation Authority.

12/31/2011 12/31/2010

FIUMICINO ASSETS RECEIVED IN CONCESSION 119,812 119,812

CIAMPINO ASSETS RECEIVED IN CONCESSION 29,293 29,293

ASSETS CREATED ON BEHALF OF THE STATE 689,369 680,309

TOTAL 838,474 817,414

These assets received in concession are not recorded as “Assets” in the statement of financial position. Furthermore, note 5 illustrates the impairment assets developed as of December 31, 2011 to test the recoverability of the concession’s value. The other intangible fixed assets are broken down as follows:

12/31/2010 CHANGES 12/31/2011

Cost Accr.

Amort. Book value

Incr. (Decr.)

Amort. rate Cost

Accr. Amort.

Book value


INTELLECTUAL PROPERTY

RIGHTS 9,072 (7,359) 1,713 366 (1,053) 9,438 (8,412) 1,026CONCESSIONS, LICENCES,


RIGHTS 25,029 (20,946) 4,083 1,179 (2,293) 26,208 (23,239) 2,969

OTHER 1,283 (679) 604 (124) (265) 1,159 (944) 215

TOTAL 35,384 (28,984) 6,400 1,421 (3,611) 36,805 (32,595) 4,210 7.2 – Tangible fixed assets

These comprise assets owned by the Group and used to develop the business. The table below shows the changes occurred in the year.


97

TANGIBLE ASSETS

12/31/2010 CHANGES TO 12/31/2011

RECLASS./CHANGE IN

CONSOLIDATION AREA

COST ACCR. DEPR.

BOOK VALUE

INCR. (DECR.) COST

ACCR. DEPR.

DEPR. RATE COST ACCR. DEPR.

BOOK VALUE

PLANT AND MACHINERY 42,603 (32,115) 10,488 881 12 - (3,284) 43,496 (35,399) 8,097

FIXTURES AND FITTINGS TOOLS AND OTHER EQUIPMENT 9,651 (8,090) 1,561 345 (7) - (491) 9,989 (8,581) 1,408

FIXED ASSETS CONSTRUCTION IN PROGRESS

AND ADVANCES - - - 894 - - - 894 - 894

OTHER ASSETS 41,557 (38,440) 3,117 411 33 - (1,419) 42,001 (39,859) 2,141

TOTAL 93,811 (78,645) 15,166 2,531 38 - (5,194) 96,380 (83,839) 12,540


98

7.3 – Equity investments valued at equity

12/31/2011 12/31/2010 CHANGE

PENTAR - 32 (32)

TOTAL - 32 (32) The change compared to the previous year is entirely referred to the reclassification of the equity investment in Pentar, which dropped from 20.35% to 18.54% of the share capital, under item “Other equity investments”; this related to the share capital increase occurred in 2011, not subscribed by Gemina.

7.4 – Other equity investments

12/31/2011 12/31/2010 CHANGE

NON-CONSOLIDATED SUBSIDIARIES 10 10 0

DOMINO S.R.L. 10 10 0

NON-CONSOLIDATED ASSOCIATED COMPANIES 10 10 0

CONSORZIO E.T.L. IN LIQUIDATION 10 10 0

OTHER COMPANIES 2,234 2,230 4

PENTAR 32 - 32

KIWI 1 VENTURA SERVICOS S.A. - 28 (28)

AEROPORTO DI GENOVA S.P.A. 895 895 0

S.A. CAL. S.P.A. 1,307 1,307 0

TOTAL 2,254 2,250 4

As specified in the previous note, the equity investment in Pentar was reclassified from item “Equity investments in companies valued at equity”. The equity investment in Kiwi Ventura Servicos SA was zeroed after the liquidation of the company in 2011.

7.5 - Deferred Tax Assets

The item amounted to 116,110 thousand euro, compared to 101,616 thousand euro as at December 31, 2010. A breakdown of the item and movements recorded over the period is reported in the table below:


99

12/31/2010 INCREASE DECREASE RATE

ADJ. 12/31/2011

Taxable income Tax Taxable

incomeTax Taxable

incomeTax Tax Taxable

incomeTax

(A) (B) (C) (D) (A+B-C+D)

PREPAID TAXES 341,846 103,460 75,889 23,342 33,232 9,276 640 384,503 118,166PROVISIONS FOR RISKS AND

CHARGES 34,826 10,597 20,129 6,420 8,450 2,344 116 46,505 14,789SYSTEM RENOVATION PROVISIONS

AND OTHER IFRIC 12 ADJUSTMENTS 154,126 49,815 28,356 9,250 0 0 462 182,482 59,527

PROVISION FOR OBSOLETE GOODS 351 97 246 68 305 84 0 292 81

BAD DEBT PROVISION 35,935 9,884 6,750 1,856 238 65 0 42,447 11,675

STAFF-RELATED ALLOCATIONS 7,569 2,082 7,451 2,049 7,529 2,070 0 7,491 2,061

PREPAID AMORT./DEPRECIATION 857 238 0 0 137 37 0 720 201

CONSOLIDATION ADJUSTMENTS 17,841 5,766 2,657 867 1,846 602 54 18,652 6,085

OTHER 19,295 5,456 10,121 2,783 4,672 1,310 8 24,744 6,937

DERIVATIVES 71,046 19,525 179 49 10,055 2,764 0 61,170 16,810DEFERRED TAXES THAT CAN BE

OFFSET (6,695) (1,844) (766) (211) 5 1 0 (7,466) (2,056)

CAPITAL GAINS (17) (5) 0 0 (17) (5) 0 0 0

OTHER (6,678) (1,839) (766) (211) 22 6 0 (7,466) (2,056)

TOTAL NET PREPAID TAXES 335,151 101,616 75,123 23,131 33,237 9,277 640 377,037 116,110

7.6 – Other non-current assets The item amounted to 24,166 thousand euro, compared to 16,947 thousand euro as at December 31, 2010. The value includes for 23.7 million euro the entry of the instalments paid (16.3 million euro as at December 31, 2010), in line with the instalment plan granted, to the Tax Collection Agency, as collection of the amounts provisionally assessed as owed within the litigation with the Customs Agency, described in Note 12 “Litigation”. These payments are a financial advance failing final judgement. On this point also see the indications in note 7.16.

7.7 – Other non-current financial assets

These equal 304 thousand euro and refer to medium/long term financial prepayments.

7.8 – Inventories

12/31/2011 12/31/2010 CHANGE RAW, ANCILLARY AND CONSUMABLE

MATERIALS 2,691 2,661 30

FINISHED GOODS AND MERCHANDISE 8,655 7,521 1,134

TOTAL 11,346 10,182 1,164


100

Inventories refer entirely to the stocks of the subsidiary company ADR, and increase by a total of 1.2 million euro compared to the end of the previous year mainly due to greater stocks of “goods” for sale (directly managed duty-free and duty-paid shops) due to the rise in sales volumes as well as the launch and introduction of new high-end products and the creation of the new Chanel “shop in shop” (exhibition area). The guarantees supplied by the ADR Group to some financers regarding inventories are described in Note 7.22 of these Explanatory Notes.

7.9 - Contract work in progress

12/31/2011 12/31/2010 CHANGE

WORK IN PROGRESS 170 93 77

RECEIVABLES FOR ACCOUNTS INVOICED 327 203 124

TOTAL 497 296 201

7.10 – Trade receivables

12/31/2011 12/31/2010 CHANGE

DUE FROM CUSTOMERS 230,778 211,980 18,798RECEIVABLES FOR CONSTRUCTION

SERVICES 11,669 24,127 (12,458)

DUE FROM OTHERS 1,791 773 1,018

244,238 236,880 7,358

BAD DEBT PROVISION (44,951) (39,206) (5,745)

ALLOWANCE FOR DOUBTFUL ACCOUNTS (8,111) (8,064) (47)

(53,062) (47,270) (5,792)

TOTAL 191,176 189,610 1,566 Trade receivables, net of allowances for doubtful accounts, increased by 18.8 million due to the rising turnover, given the same days of extension compared to last year. The balance of trade receivables includes 20.2 million euro of receivables of the ADR Group from the Alitalia group under extraordinary administration. The guarantees supplied by the ADR Group to some financers regarding receivables are described in Note 8 of these Explanatory Notes.

7.11 – Other receivables

12/31/2011 12/31/2010 CHANGE

DUE FROM ASSOCIATED COMPANIES 482 482 0

TAX RECEIVABLES 2,978 5,256 (2,278)

DUE FROM OTHERS 6,174 3,559 2,615

TOTAL 9,634 9,297 337


101

7.12 - Other current financial assets The item as of December 31, 2011 amounted to 60,427 thousand euro, compared to 59,446 thousand euro as at December 31, 2010. The figure includes the balance, equal to 55.7 million euro, of the fixed-term deposit held by the “Security Agent” of the ADR loans, called the “Debt Services Reserve Account” (DSRA). In accordance with loan agreements, the DSRA is a fixed–term deposit held by the “Security Agent” on which the company is obliged to deposit an amount as security on the servicing of debt to be adjusted on a six-month basis (periods from March 20 to September 19 and from September 20 to March 19). Currently, the debt service has a different weight in the two mentioned six-month periods: hence, the due dates on which the reserve increases (March) is constantly alternated with the due dates on which the reserve must be decreased (September).

7.13 - Cash and cash equivalents

12/31/2011 12/31/2010 CHANGE


CASH ON HAND 864 629 235

TOTAL 180,196 201,661 (21,465) Cash and cash equivalents of the Group decreased by 21.5 million euro compared to December 31, 2010 substantially due to the effect of repaying financial payables as shown in notes 7.18 and 7.22 to which reference is made. It is worth noting that bank deposits include the balance (11.1 million euro) of the “Recoveries Account”, required under the terms and conditions of ADR loan agreements, in which cash raised through extraordinary transactions is deposited, net of related costs. Cash and cash equivalents of the Group include 52.1 million euro for the balance of the account called “loan collateral” on which, on the application date of September 2011, in compliance with the provisions of the loan agreements, 17.0 million euro were deposited to “collateralise” Tranche A1 of the bonds. As at December 31, 2011, the amount of 43.4 million euro, coming from the “free” cash (i.e. that can be also destined, under ordinary conditions, to the payment of dividends) generated in previous years) was on a current account of ADR, which had not been pledged (even in case of cash sweep). The guarantees provided by the ADR Group to some lenders, regarding cash and cash equivalents, are described under note 8 of these Explanatory Notes.


102

7.14 – Shareholders’ equity

Group shareholders’ equity for the period as at December 31, 2011 amounts to 1,565,365 thousand euro, while shareholders’ equity pertaining to minority shareholders amounts to 33,478 thousand euro. The changes occurred in the year are highlighted in the special statement inserted in the financial statements. Also after the reduction in the share capital of the subsidiary company ADR in 2011 (due to a capital increase resolved in previous years and never finalised), a reclassification of 1.1 million euro took place to increase the consolidated shareholders’ equity of the Group and corresponding decrease in the minority shareholders’ one. The fully paid-in share capital is made up of 1,469,197,552 ordinary shares and 3,762,768 non-convertible savings shares of the par value of 1 euro and did not change during the year.

7.15 - Employee benefits

VALUE AS AT 12/31/2010 24,525

CURRENT SERVICE COST 6,028

ACTUARIAL LOSSES 111

FINANCIAL EXPENSES FOR DISCOUNTING THE PROVISIONS 822

OTHER CHANGES 0

LIQUIDATION / USE (10,890)

VALUE AS AT 12/31/2011 20,596 Reported below are the main assumptions made for the process of actuarial estimation of the employee severance indemnity provision as of December 31, 2011: financial hypotheses – discounting rate 4.58% – inflation rate 2.00% – annual rate of increase in employee severance indemnities 2.67% – annual rate of pay increase 3.93%

– annual turnover rate 4.68% – annual rate of disbursement of advances 1.69% demographic hypotheses – mortality ISTAT indexes reduced to 85% – inability INPS tables reduced to 70% – retirement requirements General Compulsory Insurance (after the 2011 reform)


103

7.16 - Provisions for risks and charges

CHANGE

12/31/2010 OTHER

CHANGES ALLOCATIO

NS USE 12/31/2011

303,584 (4) 20,936 (15,449) 309,067

OF WHICH:

- BEYOND 12 MONTHS 283,365 285,460- WITHIN 12 MONTHS 20,219 23,607

Provisions for risks and charges (within 12 months and after 12 months) as at December 31, 2011 amounted to 309,067 thousand euro, compared to 303,584 thousand at December 31, 2010. In particular the item essentially includes: - deferred tax on the difference between price paid to Macquarie in July 2007 and ADR’s

shareholders’ equity allocated to airport management concession; said value, equal to 231.6 million euro as at December 31, 2010, remains at 224.7 million euro as at December 31, 2011; and

- the estimate of the expenses that are expected to be incurred in connection with the guarantees and disputes in place, for 79.7 million euro.

With regard to the relationships with the Financial Administration in particular, the Group companies are involved in some disputes, the most important of which is the one with the Customs Agency for which the entire charge of a total of 26.1 million euro was allocated (taxes, interest and accessory charges). For additional details, please see note 12 “Litigation”.

7.17 – System renovation provisions

CHANGE

01/01/10

provision (+) financial

expense (+) re-absorption (-) use (-) 12/31/10

165,937 71,168 7,741 (1,168) (46,663) 197,015

CHANGE

01/01/11

provision (+) financial

expense (+) re-absorption (-) use (-) 12/31/11

197,015 64,884 10,366 (2,334) (38,338) 231,593

The provision includes the current estimated amount of charges to be incurred by reason of the restoration and replacement of the contract commitments for assets under concession according to the airport concession signed by the Grantor. As of December 31, 2011, the value of 231.6 million euro refers to 97.8 million euro for expenses expected to be incurred during 2012, and 133.8 million euro for expenses to be incurred from 2013.


104

7.18 - Financial indebtedness net of current share

Financial indebtedness net of current share amounts to 150,445 thousand euro. The characteristics of the loans as of December 31, 2011, the amount used and the book value are summarised in the table below, which also reports the estimate of the fair value of the same liabilities. The values in the table include both non-current shares and the shares posted under current financial liabilities, excluding interest rates.

FINANCER NAME GEMINA AMOUNT AMOUNT RESIDUAL BOOK INTEREST REDEMPTION DURATION MATURITY FAIR VALUEDESCRIP. GROUP OF LOAN USED VALUE RECORDED IN RATE TERM

COMPANIES GRANTED FINANCIAL STATEMEN TS

POOL OF BANKSTerm Loan

Facility ADR 65,522 65,522 65,519 (*) at maturity 6 years Feb. 2012 65,664

POOL OF BANKSRevolving

Facility ADR 100,000 - - (*) revolving 1.5 years Feb. 2013 -

BEI EIB Loan ADR 80,000 80,000 79,724 (*) at maturity 10 years Feb. 2018 80,100

BANCA BIIS (FORM. BANCA OPI) BOPI Facility ADR 26,350 26,350 26,234 (*)

6-monthly instalments from

2010 to 2015 12 years Mar. 2015 26,958

Tranche AParent

Company 42,100 42,100 41,295 (*) at maturity 3.3 years Dec. 2014 45,900

Tranche BParent

Company 18,000 - - (*) at maturity 3.3 years Dec. 2014 -

UNICREDIT LEASING LeasingFiumicino Energia 18,022 18,022 13,139 (*)

monthlyinstalments 8 years Apr. 2017 13,139

UNICREDITMEDIOCREDITO

CENTRALE (1) FinancingFiumicino Energia 2,000 2,000 899 (*)

6-monthly instalments 5 years Aug. 2013 899

OTHER SHORTTERM LOAN 497 497

TOTAL 227,307

POOL OF BANKS

(*) Variable indexed to the Euribor + margin

(1) Now UniCredit S.p.A. The overall value stated above, equal to 227.3 million euro is recorded for 150,445 thousand euro in non-current liabilities and 76,927 thousand euro in current financial liabilities. The lines of credit taken out during 2011 include: - the Revolving Facility that on August 22, 2011, ADR stipulated with a syndicate of seven banks

comprising Banca Nazionale del Lavoro S.p.A., Barclays Bank Plc, Crédit Agricole Corporate & Investment Bank, Mediobanca – Banca di Credito Finanziario S.p.A. (Mediobanca), Natixis S.A., The Royal Bank of Scotland N.V. and UniCredit S.p.A. (“UniCredit”), for a revolving line of a total of 100 million euro maturing on February 20, 2013. Mediobanca also acts as Agent Bank. This new facility, secured by the same collaterals issued for the other loans of ADR, guarantees, until the stated maturity date, the availability of the seamless Revolving facility compared to the expiry of the validity of the pre-existing one negotiated in 2005 and valid until August 22, 2011. The cost conditions obtained can be considered as in line with the best ones that can be obtained in the market for companies with the same rating. The margin applied to the Euribor can be further deducted if the Company, in the near future, manages to improve the rating assigned by both agencies; and


105

- the loan agreement signed by Gemina on August 30, 2011 with a syndicate of banks for a total

amount of 60.1 million euro maturing in December 2014. In particular the loan was subscribed equally by a syndicate of seven banks comprising Banca Nazionale del Lavoro S.p.A., Barclays Bank Plc, Crédit Agricole Corporate & Investment Bank, Mediobanca, Natixis S.A., The Royal Bank of Scotland N.V. and UniCredit, and organised by Mediobanca as Agent Bank. This loan was destined for 42.1 million euro (“Line A”) to the full redemption of the remaining amount of the loan taken out in December 2008, occurred in September 16, 2011, and for 18.0 million euro (“Revolving Line B”) to hedge the future cash requirement regarding Gemina’s operations. Furthermore, the loan is backed by a senior pledge on the shares of ADR representing at least 35% of the share capital, and will be adjusted according to a formula defined in the contractual documents, linked mainly to the performance of the Gemina share. The interest rate is the Euribor plus a margin tied to the rating assigned to ADR; the maximum margin established contractually, equal to 300 basis points, corresponds to the one applied currently, which can therefore be subject to increase.

The description of guarantees provided and the major covenants on such loans is given in Note 8 of these Explanatory Notes.

7.19 Outstanding bonds

VALUE AS AT 12/31/2010 1,107,575

APPLICATION EFFECT OF AMORTISED COST METHOD 2,655

EXCHANGE ADJUSTMENT 7,468

VALUE AS AT 12/31/2011 1,117,698

The value of bonds as at December 31, 2011, equal to 1,117,698 thousand euro, can be entirely attributed to the ADR Group. The item Outstanding bonds in particular refers to the bond issue made by Romulus Finance S.r.l., increased by 10.1 million euro, mainly due to the adjustment of Tranche A4, issued in Pounds Sterling, to the exchange rate at December 31, 2011. Romulus Finance is the Special Purpose Entity (SPE) vehicle established pursuant to law no. 130 of April 30, 1999 on securitisation, through which, on February 14, 2003 the creditor banks of ADR securitised part of the previous loan granted to ADR on August 2, 2001 for a total of 1,725 million euro. The issue of bonds is arranged into four residual classes of which three are in euro (A1, A2 and A3) and one (A4) in GBP as stated below:

NAME AMOUNT

(*) CURREN

CY INTEREST COUPON REDEMP

TION DURATI

ON MATURI

TY

A1 500,000,000 euro 4.94% annual at


A2 200,000,000 euro Euribor 3M + 0.90% quarterly at


A3 175,000,000 euro Euribor 3M + 0.90% quarterly at


A4 215,000,000 GBP 5.441% six-monthly at


(*) This is the par value of debt; the book value recorded in the financial statements (1,117.7 million euro) is adjusted on the amortised cost method, the exchange rate at year end of Class A4 in Pound Sterling, net of bonds A4 currently held by ADR, equal to 4 million Pound Sterling.


106

The bonds are guaranteed by Ambac Assurance UK Limited, monoline insurance; since April 2011 the insurance company is no longer subject to rating assessment. ADR’s rating level makes an impact on the amount of the premium paid to AMBAC for guaranteeing the bonds, but not on the interest margin applied on the single Classes of bonds. To guarantee the repayment of Class A1, on the application date of September 2011 ADR collateralised, on the account held with Mediobanca called “loan collateral”, the amount of 17.0 million euro which was added to 35.1 million euro collateralised during the year for a total of 52.1 million euro as of December 31, 2011. The estimated fair value of the bonds as at December 31, 2011 is approximately 1,241.3 million euro, net of interest accrual. The description of guarantees supplied and the major covenants on such bonds is given in Note 8 of these Explanatory Notes.

7.20 – Trade payables

As at December 31, 2011 trade receivables stand at 136,923 thousand euro (159,690 thousand euro as at December 31, 2010). The reduction can be attributed to the lesser payables in relation to the drop in the volume of airport investments of the year.

7.21 - Current tax liabilities

As of December 31, 2011 this item stood at 12,874 thousand euro compared to 6,279 thousand euro of December 31, 2010 and includes the amounts payable to the Tax Authorities for IRES for 10,929 thousand euro and the amounts due for IRAP of the group companies for 1,945 thousand euro.

7.22 - Current financial liabilities

12/31/2011 12/31/2010 CHANGE

INTEREST ON BONDS 14,020 13,980 40

INTEREST ON BANK LOANS 1,214 651 563AMOUNTS PAYABLE TO OTHER

FINANCERS 1,915 1,800 115

DUE TO BANKS 74,947 51,286 23,661

TOTAL 92,096 67,717 24,402 For detailed information regarding the payables existing at year end to banks and other financers, reference is made to note 7.18 “Financial indebtedness net of current share”. The change in the balance of payables to banks as of December 31, 2010 essentially derives from the combined effect: - of the reclassification under ADR’s current liabilities of the residual amount of the “Term Loan

Facility”, equal to 65.5 million euro, with maturity in February 2012, and the amount of Banca BIIS expiring in March and September 2012 totalling 8.5 million euro;

- redemption, in 2011, by Gemina, of the Tranche A of the loan received in December 2008, equal to 42 million euro.


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7.23 - Financial derivatives

12/31/2011 12/31/2010 CHANGE FOREIGN CURRENCY HEDGING

DERIVATIVES 67,627 75,237 (7,610)INTEREST RATE HEDGING

DERIVATIVES 61,169 71,045 (9,876)

ACCRUED INTEREST 300 344 (44)

TOTAL 129,096 146,626 (17,530)

The table in the next page summarises the outstanding derivative contracts of the Group. DERIVATIVES HEDGING FOREIGN CURRENCY RISK (ADR) The ADR Group uses hedging derivatives for exchange rate risks to mitigate any future increases in outgoing cash flows attributable to unfavourable changes in exchange rates. Specifically, one component of the cross currency swap allows the cash flows in euro regarding the payment of interest and the redemption of the A4 bond in Pounds Sterling to be stabilised. DERIVATIVES HEDGING INTEREST RATE RISK (ADR) The Group uses interest rate collars to hedge its exposure to unfavourable changes in market interest rates. The Group’s hedging policy, which is an integral part of ADR’s loan agreements, require that at least 51% of debt is secured against the risk of interest rate fluctuations. As at December 31, 2011, 60.1% of ADR’s facilities is at fixed rate (as at December 31, 2010): 56.0%). Starting from October 2, 2009 two Interest Rate Collar Forward Start contracts became active, subscribed on May 16, 2006 by ADR with Barclays and Royal Bank of Scotland on a notional capital of 120 million euro each. Based on these contracts ADR receives a variable 3-month Euribor rate and pays a variable 3-month Euribor rate with a 5% cap and a 3.64% floor, starting from October 2, 2009 until February 20, 2012. With the activation of these contracts, an extension was obtained of the protection from the rate risk of another three years on a notional total amount of 240 million euro, thus increasing to 77.6% of total payables (72.3% as at December 31, 2010) the hedging of interest rate risks. DERIVATIVES HEDGING INTEREST RATE RISK (GEMINA) Gemina uses an interest rate swap to manage its exposure to unfavourable changes in the market interest rate. The hedging policy, which is an integral part of the current loan agreement, requires that at least 50% of Line A is protected from the risk of interest rate fluctuations. With regard to this contractual provision, on September 16, 2011 the Company entered into an interest rate swap agreement with Crédit Agricole for a notional total amount of 25.3 million euro, equal to 60% of Line A. Simultaneously, upon reaching the maturity of the loans at December 31, 2010, the company closed the related interest rate swap agreements signed in 2008 and pertaining to the abovementioned loans. The fair value of the aforesaid instruments has been calculated on the basis of the parameters in force as at December 31, 2011 on the reference market. The financial derivatives described are included in “Level 2” of the “Fair Value Hierarchy” defined by IFRS 7, meaning the fair value is measured based on valuation techniques which take as reference parameters that are observable on the market, different from the prices of the financial instrument.


108

IS AT 12/31/2011 IS AT 12/31/2010TO INCOME STATEMENT

TO SH. EQUITY (*)

(60,004) (63,992) (65) 4,053

(67,627) (75,237) 7,610

C (127,631) (139,229) 7,545 4,053

BARCLAYS, ROYAL BANK OF SCOTLAND

ADR GroupInterest Rate Collar

Forward StartCF I 05/06 02/12 240,000


(986) (6,498) 4 5,508

MEDIOBANCA / UNICREDIT GEMINA IRS CF I 12/08 12/11 15,797 Pays a 3.15% fixed rate and receives 6-month Euribor

(278) 278

UNICREDIT GEMINA IRS CF I 12/08 12/11 15,797 Pays a 3.15% fixed rate and receives 6-month Euribor

(277) 277

CREDIT AGRICOLE GEMINA IRS CF I 09/11 12/14 25,260

Pays a 1.65% fixed rate and receives: - a 1.729% fixed rate from 9/16/11 to 3/16/12- 6-months Euribor from 3/16/11 to 9/16/14- 3/4-months interpolated Euribor from 9/16/14 to 12/30/14

(179) (179)

CHANGE IN HEDGING RESERVE (128,796) (146,282) 7,549 9,937

TAX EFFECT (2,733)

TOTAL NET HEDGING RESERVE (**) 7,204of which:DERIVATIVES HEDGING EXCHANGE RATE RISK (Note 7.23) (67,627) (75,237)DERIVATIVES HEDGING INTEREST RATE RISK (Note 7.23) (61,169) (71,045)

(128,796) (146,282)

(*) Change in hedging reserve.

(**) The change in hedging reserve shown in "Statement of changes in Consolidated Equity", equal to 6,920 thousand euro, is shown net of third party interests

LegendCF Cash Flow Value HedgeC Exchange rateI Interest rate

CHANGE IN FAIR VALUE

MEDIOBANCA / UNICREDIT ADR Group Cross Currency Swap CF 02/03 02/23 325,019 Receives a 5.441% fixed rate and pays 3-month Euribor + 90 bps until December 2009, then 6.4% fixed rate.

I

GRANTORGEMINA GROUP

COMPANIESINSTRUMENT TYPE APPLIED RATE

FAIR VALUE OF DERIVATIVEHEDGED

RISKSUBSCR.

DATEMAT. TERM

HEDGED NOTIONAL

VALUE


109

7.24 - Other current liabilities These amount to 126,651 thousand euro as at December 31, 2011 and mainly consist of tax payables, amounts due to the staff, social security institutions and sundry trade payables. Specifically, they include: - amounts due to the Tax Authorities for council surcharges on passenger boarding fees, totalling

42.1 million euro. This amount is paid in the following month for the portion collected by carriers and is offset in trade receivables for the amount still to be collected;

- payables of 42.9 million euro, of which the portion for 2011 is equal to 8.6 million euro; payables not yet settled while awaiting the outcome of pending cases on appeals lodged by several of the leading airport management companies;

- payables due to personnel and former employees for employee severance indemnity to be settled, in addition to minor payables.

NOTE 8 - GUARANTEES AND MAJOR COVENANTS ON PAYABLES

Bank loans taken out by ADR, as detailed in note 7.18, and the bond loan – overturned to ADR by the vehicle Romulus Finance- under note 7.19, are guaranteed by: - special privilege (having the characteristics of a property mortgage) of equal degree on plants,

machinery and instruments, as well as ADR’s stocks and any receivables deriving from the sale of these assets;

- assignment in guarantee of receivables and, more generally, of any right deriving from contracts with customers and insurance policies;

- pledge on ADR’s bank current accounts; - pledge on all shares held by ADR in the capital of its subsidiaries ADR Tel, ADR Advertising and

ADR Assistance. - “ADR Deed of Charge”, pledge provided for by the British legislation on receivables, hedging

agreements and insurance policies subject to British legislation, pursuant to loan agreements. These guarantees will remain valid until the related bank loans and the Romulus loan (and thus the outstanding bonds) are extinguished. The loan granted to the Parent Company by a syndicate of seven banks subscribed on August 30, 2011 (for the refinancing of the previous loan taken out in 2008) is backed also by the following guarantees: - a senior pledge on the ordinary shares of ADR representing at least 35% of the share capital

comprising ordinary shares of the company with voting right and destined to supplemented if the guarantee margin drops to below 4.0x. Gemina commits to ensure a guarantee margin of at least 4.0x, to be calculated every quarter as the relationship between the simple average of the unit value of ADR shares owned by Gemina in the last month of each quarter (calculated by applying the formula included in the contract documents) and the residual loan amount. As at December 31, 2011, 21,778,660 ADR shares – corresponding to 35% of the company’s share capital - were pledged to Mediobanca and UniCredit for a value, determined based on the book value of the equity investment, of 669.9 million euro;

- pledge of the current account Gemina holds at Mediobanca into which the flows derived from the disposal of equity investments, collection of dividends and other compensation will go mandatorily.


110

The management of ADR’s indebtedness implies several rules that govern both the cash flows and the free cash flow (the cash remaining after the debt service) generated by management. Amongst the main provisions the following can be noted:







ADR’s loan agreements also include the respect of financial covenants consisting of ratios, defined based on actual and forecasted data, that measure: (i) the ratio between cash flow available and debt service, (ii) the ratio between future discounted cash flows and net indebtedness, in addition to (iii) ratio between net indebtedness and EBITDA. The aforementioned ratios are verified twice a year, on the application dates of March 20 and September 20, by applying the calculation methods of the respective ratios to the reference dates as at December 31 and June 30. If the aforementioned ratios surpass certain levels, it may result in the distribution of dividends and recourse to further indebtedness; on the contrary, in the event in which these ratios fall below certain levels, it may result in a trigger event or event of default. The trigger event condition results in a series of management restrictions for ADR, principally:

a) cash sweep with the obligation to use all available cash on the application dates (March 20 and September 20 of each year) for (i) interest payments, (ii) early capital repayment under pari passu regime, (iii) the guarantee of Romulus securities which cannot be repaid in advance through the creation of specific cash provisions in special current accounts as pledge in favour of AMBAC (so-called cash collateralisation);




111

d) no financial asset acquisitions and new loans will be allowed, even though they are destined

to repay the existing indebtedness; e) transfer under warranty in favour of creditors of all monetary receivables of ADR with

consequent notice to debtors transferred. For more information on the covenants, reference is made to the Report on operations under paragraph 3.12 “Information about risks and uncertainties”. Due to the protraction of the Trigger Event, in the third quarter of 2011, ADR extended, thanks to a new waiver, the derogation regime with the following summarised contents:

a) authorisation to refinance possible due payables; b) waiver, until the application date in March 2012 (excluded) of all the restraints resulting from

the occurrence of the trigger event, except for: cash sweep, distribution of dividends, independent auditing of rating recovery plan and disclosure obligations upon request of financial creditors.

No additional waiver to the cash sweep regime was requested because in 2011 both the bank loan (since March) and the Romulus A1 line (since September) entered the Retention regime. Available cash was therefore used in 2011 to repay a bank loan for 92.8 million euro and to collateralise the line A1 (not repayable) for 17.0 million euro. Following this additional contribution, the collateral account dedicated to the repayment of line A1 at the end of 2011 was 52.1 million euro. The loan agreements also provide for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. Also the new loan agreement of Gemina provides for some rules and constraints to be complied with. The main one is the obligation to allocate 100% of the net income deriving, inter alia, from the transfer or provision of shares of ADR and other assets with Gemina, capital increases; the percentages is reduced to 50% for dividends received and profits deriving from other forms of distribution. Obtaining more financial debt is also prohibited until ADR’s rating maintains a sub-investment grade; this is allowed (though in compliance with the contractually defined financial parameter) if ADR’s rating returns to the investment grade for both Agencies. The Loan also requires that Gemina provides declarations and guarantees, obligations, proscriptions and commitments, and provides for events that cancel the benefits upon termination, resolution or withdrawal which are typical for loans with similar characteristics. In relation to the lease contract stipulated by Fiumicino Energia, the same stipulated a credit assignment contract in favour of the financer in 2009, to guarantee payment of all amounts due by virtue of said lease contract. The contract requires that Fiumicino Energia factors with recourse the entire receivable deriving from the lease rental that Leonardo Energia must pay to Fiumicino Energia pursuant to the company branch leasing contract. Any surplus of the receivable compared to the monthly lease instalment shall be credited to Fiumicino Energia. Gemina’s commitments in relation to the financers of Fiumicino Energia are shown in Note 10 “Financial risk management”.


112

NOTE 9 - CATEGORIES OF ASSETS/LIABILITIES IAS 39

12/31/2011

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES




OTHER NON-CURRENT FINANCIAL ASSETS 304





TOTAL ASSETS IAS 39 432,103 2,254 -FINANCIAL INDEBTEDNESS NET OF CURRENT

SHARE 150,445









OTHER INCOME 1,583




4,463 (83,135) (2,035)


113

12/31/2010

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVES




OTHER NON-CURRENT FINANCIAL ASSETS -





TOTAL ASSETS IAS 39 450,717 2,250 -FINANCIAL INDEBTEDNESS NET OF CURRENT

SHARE 278,092









OTHER INCOME 246




1,823 (78,434) (3,399)


114

NOTE 10 – FINANCIAL RISK MANAGEMENT

CREDIT RISK The maximum theoretical exposure to the credit risk for the Gemina Group, as at December 31, 2011, is represented by the book value of financial assets disclosed, in addition to the par value of guarantees granted on payables or third-party commitments. The greatest exposure to credit risk is that of the ADR Group for trade receivables due from customers. A special bad debt provision is recorded in the financial statements for the risk of customer default in paying. Its amount is periodically reviewed. The write-down process the Group has adopted envisages that the trade positions are written down individually depending on the age of the receivable, the reliability of the single debtor, the status of the management file and debt recovery. The commercial policies that the Group has initiated aim at controlling investment in receivables as follows: - request of cash payments for commercial transactions made with end consumers (sales in the

stores under direct management, long-term multi-level car parks, first aid, etc.), with occasional counterparts (e.g. for registration, baggage porterage, taxi access management activities, etc.);

- request of cash or advance payments made to air carriers that are occasional or those without suitable creditworthiness or collateral guarantees;

- granting of deferred payment to retained customers deemed reliable (carriers with medium-term flight scheduling and subcontractors) for which the credit rating and request of collateral is in any case monitored.


RECEIVABLES EXPIRED (NET OF THE BAD DEBT PROVISION)


RECEIVABL

ES COMING

DUE before 60 days

from 61 to 120 days


after 181 days

TOTAL

RECEIVABLES

Dec. 31, 2011 92.2 49.8 5.9 3.9 39.4

191.2

TRADE RECEIVABLES Dec. 31,

2010 107.0 18.6 8.3 3.9 51.8 189.6

Dec. 31, 2011 8.2 - - - 1.4

9.6 OTHER RECEIVABLES

Dec. 31, 2010 7.9 - - - 1.4 9.3

Receivables not written down that have expired for more than 181 days mainly consist of amounts due from companies of the Alitalia Group under extraordinary administration. The ADR Group’s credit risk is highly concentrated in so far as about 69% (58% in 2010) of the credit not written down is due from ten customers. The economic and financial situation with the reference carrier in particular is critical in relation to the credit risk and, more generally, consequently to the disavowal of the value of a series of services provided that are not being paid for or recognised. On this point, the credit position for invoices issued by ADR as of December 31, 2011 is specified below:


115

12/31/2011 12/31/2010 ∆% 12/31/2011 12/31/2010 ∆% 12/31/2011 12/31/2010 ∆%Alitalia CAI 64,058 47,222 36% 38,123 35,440 8% 25,936 11,781 120%

AirOne 1,581 1,832 (14%) 947 911 4% 634 922 (31%)

Alitalia/Airone 65,639 49,054 34% 39,069 36,351 7% 26,570 12,703 109%

EAS 308 308 0% - - 0% 308 308 0%

AZ-EAS Group 65,947 49,363 34% 39,069 36,351 7% 26,878 13,012 107%

Receivables Receivables not yet due Past due receivables

This exposure includes the receivables for the handling system of transit baggage equal to 5.2 million euro; Alitalia is the main user of the plant, generating approximately 90% of the activity. In July 2011 IBAR and ten carriers appealed before the Regional Administrative Court for the cancellation of the Civil Aviation Authority directive determining the fee, and at the same time stopped all related payments. On October 18, 2011 the company lodged its defence briefs. Thus the Company informed Alitalia and all the other carries using the plant that, in the absence of the payment as ruled by the Civil Aviation Authority it would suspend the service from January 1, 2012. The Civil Aviation Authority convened the parties, underlying the obligation for the carriers to pay the amounts set and highlighting the importance of not discontinuing the service. Having found that an agreement had not been reached, with ruling 20/2011 of December 27, 2011, the Civil Aviation Authority ordered ADR to keep the system operational. At the same time the Civil Aviation Authority deemed art. 802 of the Navigation Code applicable to the specific case and, upon request of ADR dated December 28, 2011 provided for, starting from January 10, 2012, the prohibition for the flights of defaulting carriers to depart for which the price to use the system in question had not been paid in advance. Following this measure, some carriers settled their debt or made the required payment in advance, though as a precautionary measure, while others, including Alitalia, made partial payments. On January 10, 2012 Alitalia informed the Civil Aviation Authority of its reasons, challenged by ADR with letter of January 12, 2012, as to the existence in the case of the pre-requirements to apply art. 802 of the Navigation Code, with the Civil Aviation Authority demanding the opinion of the Attorney’s Office. Taking its responsibilities very seriously, ADR declared itself willing to continue to provide the service until this opinion is received. On February 9, 2012 the Civil Aviation Authority informed ADR and Alitalia that the Attorney’s Office had stated that art. 802 may be applied only upon determination of the same remuneration according to the provisions of Law Decree no. 1/2012 (currently being converted by Parliament), which absorbs Directive 2009/12/EC on airport fees. The Civil Aviation Authority, though confirming the validity and enforcement of the remuneration determined by the same Body in May 2011 to use the NET6000, communicated that it will not accept the requests of application of art. 802 of the Navigation Code put forward by ADR, finally specifying that the Company may seek legal remedy to recover the credits. In this sense ADR used the injunction filed on December 22, 2011 with the Court of Civitavecchia. Furthermore, as of December 31, 2011, the following are ascertained: receivables for the sub-concession of the Technical Area equal to 1.8 million euro, - plus local

property taxes for 0.7 million euro. Regarding this service, ADR deems a legitimate review of the economic terms of the sub-concession agreement applicable, which based on preliminary understandings, subsequently disregarded by Alitalia, would lead to a credit equal to 10.7 million euro;


116

receivables for the use of common use assets for the years from 2009 to 2011 equal to 4.9

million euro, also being challenged by Alitalia. ADR started lawsuits with the other handlers that had challenged this charge (mainly towards EAS – now Alitalia – and Aviapartner). When a ruling is obtained (expected in the short term), actions will be taken also against Alitalia-CAI.

LIQUIDITY RISK Liquidity risk may occur when it is impossible to obtain, at fair conditions, the financial resources necessary to the Group’s business. The main factor determining the Group’s liquidity position consists of the resources generated or absorbed by the operating and investment activities. Breakdown of payables by expiry terms is shown hereunder (in millions of euro).

12/31/2011 12/31/2010

WITHIN

THE

FOLLOWI

NG YEAR

BETWEE

N 1 AND 5

YEARS

AFTER 5

YEARS TOTAL

WITHIN

THE

FOLLOWI

NG YEAR

BETWEE

N 1 AND

5 YEARS

AFTER 5

YEARS TOTAL

FINANCIAL

INDEBTEDNESS NET OF

CURRENT SHARE 70.7 79.8 150.5 - 193.7 84.4 278.1

OUTSTANDING BONDS 870.3 247.4 1,117.7 - 868.0 239.6 1,107.6

TRADE PAYABLES 130.9 6 136.9 152.5 7.2 - 159.7CURRENT FINANCIAL

LIABILITIES 92.1 92.1 67.7 - - 67.7OTHER CURRENT

LIABILITIES 126.6 126.6 107.0 - - 107.0

ADR Group The financial structure of the ADR Group is distinguished by a heavy incidence of the financial leverage component, since financial indebtedness is 4 times the EBITDA. As a consequence, a considerable amount of the financial resources generated by operations is absorbed by the debt service and, in perspective, by the need to repay debt tranches coming due (the first of which will come due in February 2012). In addition to the requirement to have Moody’s and Standard & Poor’s issue a rating for ADR, the medium/long-term loan agreements in place provide for a number of measures to ensure that the cash generated is used first of all to service debt. These measures become more stringent when, as is the current situation, the level of the rating or several agreed financial indicators fail to reach specific minimum thresholds. The liquidity risk is considerably mitigated through this complex contractual check. The current rating assigned to ADR prevents it from taking out additional indebtedness without specific authorisation from its financial creditors. It is obvious that the priority allocation of the cash generated for the debt service and the aforementioned restrictive control measures for using financial resources restrict ADR’s operations and investment flexibility in depressing situations characterised by particular financial tension.


117

However, in case of temporary additional financial requirements for operations or investments, in addition to cash and cash equivalents, a revolving line of credit is available for 100 million euro (currently not used) destined for this purposes by contract. On August 22, 2011, ADR stipulated with a syndicate of seven banks comprising Banca Nazionale del Lavoro S.p.A., Barclays Bank Plc, Crédit Agricole Corporate & Invest Bank, Mediobanca – Banca di Credito Finanziario S.p.A. (Mediobanca), Natixis S.A., The Royal Bank of Scotland N.V. and UniCredit S.p.A. (“UniCredit”), a revolving line agreement for a total of 100 million euro maturing on February 20, 2013. Mediobanca also acts as Agent Bank. This new facility, secured by the same collaterals issued for the other loans of ADR, guarantees, until the stated maturity date, the availability of the seamless Revolving facility compared to the expiry of the validity of the pre-existing one negotiated in 2005 and valid until August 22, 2011. The cost conditions obtained can be considered as in line with the best ones that can be obtained currently in the market for companies with the same rating. The margin applied to the Euribor can be further reduced if the Company manages to improve the rating assigned to it by both agencies, in the near future. ADR, in the last part of 2011, completed the analysis of the various refinancing options to repay Tranche A1 (with a par value of 500 million euro) of the payable to the vehicle Romulus Finance S.r.l. maturing on February 20, 2013. Based on the outcome of the legal and market studies conducted, the various refinancing options available were selected, including the bank loan, which appears to be the main option for Tranche A1. In the first quarter of 2012 the refinancing project moved to the implementation phase. The centralised treasury system managed by ADR with the subsidiary companies ADR Engineering S.p.A., ADR Tel S.p.A. and ADR Assistance S.r.l., adjusted to market conditions, allows management of financial resources to be optimised and regulation of infra-group trade relations to be facilitated. Gemina For its short term requirements, the Company has liquid funds available for 5.3 million euro, in addition to the revolving lines of credit (revolving Line B) of 18.0 million euro to pay for running costs. The existing Loan 2011 requires Gemina to allocate 100% of the net income deriving from the transfer or provision of shares of ADR and of the other investee companies and 50% of the income from the distribution of dividends or other distributions of ADR and of the other investee companies to mandatory advance repayment. INTEREST RATE RISK The Gemina Group uses derivative instruments, with the purpose of mitigating, at economically acceptable terms, the potential impact of interest rate fluctuations on the economic result. The Groups’ hedging policy is illustrated in note 7.23 above, to which reference is made. Sensitivity analysis In order to evaluate the potential impact resulting from the fluctuation of interest rates applied, the variable-rate financial debts are analysed, for which the impact in the income statement and to shareholders’ equity due to fluctuations of cash flows are assessed. The potential impacts are shown gross of the tax effect.


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The sensitivity analysis was carried out on the basis of the conditions of the loans and hedges in place as of December 31, 2011. With reference to the variable-rate debts and their hedging derivatives, a hypothetical, immediate increased change of +0.5 bps of the market interest rate level would generate a positive effect on the cash flow hedge reserve equal to 5.1 million euro and increased financial expenses for the year totalling 1.8 million euro for the portion of unhedged debt. To the contrary, a hypothetical, immediate decreased change of 50 bps of the market interest rate level would generate a negative impact on the cash flow hedge reserve equal to 5.4 million euro and a reduction of financial expenses equal to 2.2 million euro. Lastly, it should be emphasised that the interest rate applied to the Gemina Loan and to some of ADR’s credit facilities is the same as Euribor plus a margin proportionate to the rating ADR has been given. The financial expenses Gemina and ADR pay their financers therefore depend not only on the fluctuation of interest rates, but on ADR’s rating as well. EXCHANGE RISK As for the financial indebtedness, Tranche 4 of the bond issue made by Romulus, equal to 215 million Pound Sterling, was hedged with a currency swap in Euro for the entire duration (year 2023). The characteristics of this derivative instrument are described in Note 7.23. Sensitivity analysis A hypothetical immediate increase of 10% in the exchange rates of the Euro compared to the Pound Sterling would have generated a positive impact on the cash flow hedge reserve of 8.1 million euro, whereas a hypothetical immediate decrease of 10% of the exchange rates of the Pound Sterling compared to the Euro would have generated a negative impact on the cash flow hedge reserve equal to 6.6 million euro. Lastly, appreciable effects on the income statement due to Euro/Pound Sterling exchange rate changes would not be noticed. NOTE 11 – GUARANTEES AND COMMITMENTS


- guarantees issued for the loan agreements mentioned in Note 7.22; - guarantees issued by the ADR Group to customers and third parties, for 439 thousand

euro. As regards the Group commitments, it should be noted that ADR holds purchase commitments amounting to 75,605 thousand euro. It should be also noted that, on February 28, 2003 ADR granted IGPDecaux S.p.A. a put option on shares held by the latter in the ordinary and preferred capital of ADR Advertising. This right expired on December 31, 2011. Within the context of purchase commitments, mention is given to ADR’s commitment, as airport infrastructure operator, to draw up and implement plans for containing and abating noise, as provided by the Framework Law on noise pollution (Law no. 447/1995) and by Ministerial Decree dated November 29, 2000.


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To this end, ADR is effecting a survey to establish whether and to what extent limits are actually exceeded and, should they not be respected, it will draw up plans for containing and abating noise. These commitments prove difficult to quantify and in any case must be determined in an interpretative manner as there are no specific indications as to the activities to be considered in the “maintenance” and “upgrading” of the infrastructures that constitute the basis for calculation pursuant to Law no. 447/1995 (framework law on noise pollution). In consideration of the above, and on the basis of estimates available based on the investments made on the date of this report, ADR deems that its total liability in relation to the progress of the investment plan does not exceed about 37 million euro. Hence the amount is conditional on subsequent events and will be defined in relation to the actual programme of the measures to be taken. Future measures will most likely be entered as investment costs subject to capitalisation. The November 3, 2006 agreements covering sale of the equity investment held in Flightcare Italia S.p.A. (formerly ADR Handling S.p.A.) contemplate a price adjustment condition for a maximum value of 12.5 million euro. Of this, the portion considered to probably occur was entered in the income statement under extraordinary items in the years 2006-2011 with provisions for risks and charges counter-item for a total of about 4.6 million euro as at December 31, 2011, whereas the remaining portion – presently considered improbable – will undergo updated valuation during future financial years. It is also important to note the commitments undertaken by Gemina in relation to the financers of Fiumicino Energia, which are shown in Note 7.22 of the Explanatory Notes to the Financial Statements.

NOTE 12 – LITIGATION

As regards litigation in progress, the Group carried out a thorough assessment of existing risks in order to identify the litigation for which the risk of negative outcome is likely, in order to make a reasonable assessment of provisions to be allocated. Provisions have not been made for litigation for which, given the different legal interpretations, a negative outcome is merely possible, in accordance with the principles and procedures governing the preparation of financial statements. Furthermore, there are a limited number of civil proceedings underway, for which no provisions were made, as the impact of any negative outcome for the Group, although negligible, could not be measured. We do not believe that current litigation and potential litigation can give rise to liabilities greater than the amounts already allocated to the relevant provisions. CUSTOMS AGENCY On August 16, 2007, the main Customs Office of Rome II served ADR an assessment report which charged irregularities in sales made at the Duty Free Shops over the period 1/1/1993 – 1/31/1998. The objections are mainly related to sales made to passengers with destinations within the EU Community, exceeding the limits of quantities and value. On December 18, 2007, the same main Customs Office served an order of payment for the amounts related to VAT, manufacture tax and duties on tobacco, due according to assessments made in the assessment report. The amount of taxes and interest required amounted to about 22.3 million euro. ADR appealed to the Provincial Tax Commission against the afore-mentioned order of payment. On April 6, 2009 the Tax Commission for the Province of Rome filed judgment no. 149/39/00 which turned down the appeal presented by the Company. The Customs Agency subsequently initiated the


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procedure for collection of the amounts assessed as owed, which ADR is paying by instalment. The total amount, including interest and additional charges, was 26.1 million euro. On July 14, 2009, submitted an appeal against the judgment issued by the Tax Commission for the Province of Rome. On May 26, 2010, the judgement no. 105/35/10 of the Regional Tax Commission of Rome was awarded. In this judgement, ADR’s appeal was rejected, with order of payment of its own legal expenses. This further unfavourable evolution increased the risk of a negative outcome, independently from the unchanged position, in Court, of the Company and its tax experts on the lack of grounds of the tax claim and the substantial and formal correctness of the company’s actions. Therefore, in preparing the financial statements as at December 31, 2010, also the amounts of the taxes assessed on a statistical-deductive basis were allocated, thus matching the provisions with the entire amount of the tax payment, including interest and additional charges. While deeming the Company’s position, in Court, unchanged as regards the groundless of the tax claim and the substantial and formal correctness of its actions, the Company proposed an appeal in the Court of Cassation against the Regional Tax Commission’s judgment no. 105/35/10. CONSUMPTION TAX, EXCISE DUTY AND ADDITIONAL FEE ON ELECTRICITY On March 1, 2011, the Customs Agency – Rome 2 Office, started an inspection with respect to ADR to assess the correct application of the current regulations on consumption tax, excise duty and additional fee on electricity for the 2007-2010 period. The assessment is connected with the inspection carried out, for the 2002-2006 period, by the former UTF of Rome, for which a litigation is still pending at the Court of Cassation due to the appeals filed in against the judgments issued by the Regional Tax Commission in favour of the Company. On February 9, 2012 the company was served with an assessment report with which the Agency set the omitted payment of the consumption tax, the related surcharge and the VAT due for said period, at 2.5 million euro. In acknowledging this report, the Company reserved the right to produce replies and to take actions at the competent venues. INCOME TAX ASSESSMENT As part of the annual audit plan set forth by Article 42 of Law 388/2000, on June 4, 2009 the Revenue Office - Lazio Regional Management instigated a general tax audit of ADR regarding income taxes, IRAP (Regional Income Tax) and VAT for the 2007 tax period. Upon conclusion of the audit, on October 29, 2009 the company was served with an assessment report which presented some findings regarding direct taxes, IRES and IRAP, for a higher taxable income equal to 1.2 million euro, and VAT for 2.4 million euro. In acknowledging this report, the Company reserved the right to produce replies and to take actions at the competent venues. APPLICATION OF RIGHTS TO SWISS SEGMENTS ADR contested the Italian Civil Aviation Authority’s April 13, 2010 letter and the Ministry of Transport’s May 13, 2010 note (and all other related notes) before the Lazio TAR. These notes indicate that ADR must apply EU fee charges to Swiss carriers, or better, to flights to and from Swiss Confederation territory (vice versa, ADR applies extra-EU fees for these flights).


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The Italian Civil Aviation Authority’s affirmation is based on the fact that the January 21, 1999 EU-Swiss Confederation agreement (which entered into force on June 1, 2002) gave equal rights to Swiss and EU carriers and, therefore, ADR is discriminating Swiss carriers. However, the company retains that it has not discriminated, given that the application of airport fees, and their amounts, are regulated in Italy by Ministerial Decree dated November 14, 2000 which is based on the territory (within or outside of the European Union) of the flight and not on the subjectivity of the carrier that provides it; furthermore, no EC regulation on airport fees is indicated in the cited agreement, nor is it referred to in the annex, which was also recently amended. In the hearing before the TAR set for July 12, 2010 for the suspension of contested deeds, ADR for procedural opportunities, ADR requested a deferral directly to hearing of the grounds. The overall maximum amount for the potential request to return is estimated at about 8 million euro plus interest; the right that would be obtained from these carriers shall in turn be assessed in Court. On this issue, on July 21, 2011 ADR was served the complaint, before the Court of Civitavecchia, of Swiss International Airlines Ltd for the repayment of 5.2 million euro, including interest, equal to the alleged difference paid in excess by Swiss from 2002 to 2009 for take-off and landing fees. On August 18, 2011 ADR was notified a similar appeal once again by Swiss with a claim for 3.1 million euro plus interest, for a total of 3.5 million euro as passenger boarding fees (take-off and landing fees are no longer mentioned). In the hearing for the first appearance of the parties set for December 23, 2011, Swiss, in the case regarding take-off and landing fees, re-quantified the value of its claims form 5.2 million euro to 1.6 million euro, admitting its material error. 100% HOLD BAGGAGE In 2003 ADR challenged Ministerial Decree 14/T of March 14, 2003 before the Lazio Regional Administrative Court (TAR). The decree contains provisions on the remuneration for the service of performing security checks on 100% of hold baggage in relation to the payment date. The dispute was aimed at recovering the turnover for the period passed between the date of validity of the decree (June 3, 2003) and the term set by ENAC with separated letter (June 26, 2003). With judgement no. 13847/2010 the Lazio Regional Administrative Court (TAR) accepted the appeal, condemning ENAC and the Ministry of Infrastructure and Transport (jointly and severally) to the payment in favour of ADR of 6.7 million euro, plus legal interest from the date of the amount becoming payable until the date of its settlement. With deed notified in October 2010 the Administrations failed appeal against the abovementioned ruling by the TAR. With the sentence filed with the Chancery n October 27, 2011 the appeal was fully repealed, thus definitively recognising in ADR’s favour of the amount of 6.7 million euro, plus legal interest, in the meantime settled by ENAC and the Italian Ministry of Transport and Infrastructure between June and September 2011. COMPENSATION FOR THE BAGGAGE HANDLING SYSTEM On July 11, 2011 ADR S.p.A. was notified, in its capacity as party involved, the appeal lodged before the Lazio Regional Administrative Court by IBAR and ten carriers (Brussels Airlines, Qatar Airways, Kuwait Airways, Egypt Air, Cyprus Airways, Bulgaria Air, Malaysia Airlines, Iberia, Tunisair) for the repeal of ENAC instruction pursuant to letter of May 11, 2011. With the mentioned directive the Civil Aviation Authority declared that, with reference to the fee to use the automatic handling system of transit baggage “NET6000”, the cost connection limit just for 2011 is “equal to 1.87 euro per piece of baggage”. The appellants did not made a request for suspensive relief and a date for the relevant hearing has yet to be set.


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Therefore, in relation to the failed payment from January 2011 for the use of the NET6000 system by the ten carriers, on December 22, 2011 ADR filed the relevant appeals for injunctions to recover its credit expired on November 30, 2011, equal to 3.8 million euro towards: Alitalia (3.6 million euro), Air France, Delta, Korean, Air One, United, Darwin, Emirates, Continental and Qatar. On January 17, 2012 the company filed the supplementary notes to the appeals for injunctions towards Alitalia, Air One, Emirates, Delta and Air France to demand their provisional enforceability, while it withdrew those towards Darwin and Continental, given that these airlines paid the due debt. Also United paid the entire due debt and, given that the action can no longer be withdrawn from, the Injunction will not be notified. “AVIO” SERVICE STATION RISK In March 2006 ADR appealed to the Lazio Administrative Court against the Civil Aviation Authority’s memorandum of February 3, 2006 and subsequent memoranda in which the Authority deemed it appropriate to suspend payment of royalties on the sub-concession of airport fuel supply to third parties. The suspension is to remain in force until the submission by airport operators of data regarding the costs incurred in relation to the service provided by oil companies and until the completion of checks to be carried out on these companies by the Civil Aviation Authority. An announcement of the date of a hearing to discuss the matter is awaited. IBAR (Italian Board Airlines Representatives) and 6 carriers (Iberia, Tap, American Airlines, Delta Airlines, Ethiopian Airlines and Cyprus Airlines) lodged an appeal with the Lazio Administrative Court, against the Civil Aviation Authority’s memorandum of September 15, 2006 (protocol no. 60600) (in addition to other previous measures), with which the Civil Aviation Authority communicated the results of the controls carried out at airports managed by full-service operators “in order to analyze the correlation between costs and the flat rates charged by airport operators to oil companies”. Subsequently, IBAR put forward additional grounds and requested the Regional Administrative Court to acknowledge the illegitimacy of the most recent rulings issued by the Civil Aviation Authority regarding the matter. An announcement of the date of a hearing to discuss the matter is awaited. AirOne has taken out legal proceedings at the Civil Court of Rome against Tamoil, its jet fuel supplier, as well as certain airport operators (SAB – Aeroporto di Bologna, ADR, SEA and SAVE), claiming the illegality of the fees charged to oil companies by operators in return for the use of airport infrastructure, which these companies subsequently “pass on” to carriers. Consequently, AirOne also requests that Tamoil – together with the above airport operators, each according to their portion of responsibility – be ordered to repay the sum paid by AirOne since 2003, amounting to 2.9 million euro. The issue of the sentence is awaited. ADMITTANCE OF LIABILITIES OF THE ALITALIA GROUP UNDER EXTRAORDINARY ADMINISTRATION Following the rulings of the Bankruptcy Section of the Court of Rome, declaring the state of insolvency of the following companies: Alitalia – Linee Aeree Italiane S.p.A. under extraordinary administration, Volare S.p.A. under extraordinary administration, Alitalia Express S.p.A. under extraordinary administration, Alitalia Servizi S.p.A. under extraordinary administration, and Alitalia Airport S.p.A. under extraordinary administration, ADR filed appeals for the respective admittance of liabilities. Regarding the proceedings related to Alitalia S.p.A., ADR’s claim was dealt with at a hearing on December 16, 2009. On this occasion, ADR was the only operator deemed to have adequately proved its claims, and a first statement of affairs was duly filed. Subsequently the amounts due after the opening of the procedure were excluded from the statement of affairs due to the guideline adopted by the Commissioners, by virtue of which, dealing with “non insolvent” amounts due, the related assessment is referred to the Delegated Judge only in case of formal dispute by the Commissioners due to allocation and/or amount.


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In the meantime, an expert was arranged by the Delegated Judge, also for the amounts due alleged by ADR S.p.A., similarly to the process relating to the other operators. In December 2011 the statement of affairs was made executive. Pursuant to art. 97 of the bankruptcy law, communications shall be sent to the creditors to inform them of the filing with the chancery of the statement of affairs, as well as the outcome of the application. From the time of receiving this communication, the terms shall apply for any opposition (30 days). As for the other companies of the Alitalia group under extraordinary administration, between June and December 2011, the statements of affairs were made executive although the related communications have still not been received by ADR. Moreover, several legal initiatives have been undertaken at the Court of Civitavecchia, in support of ADR’s claims for amounts due from Alitalia for navigation fees, secured by a lien on the aircraft, also in respect of their related owners, who are jointly liable under the law. REVOCATORY ACTIONS: VOLARE GROUP In October 2009, the companies Volare Airlines S.p.A. under extraordinary administration and Air Europe S.p.A. under extraordinary administration instituted a civil lawsuit before the Court of Busto Arsizio to obtain the revocation of the payments made to ADR over the year prior to the carrier’s admission to insolvency proceedings, which occurred by way of decree of November 30, 2004 - and, as a result, the sentencing of ADR to return the amount of 6.7 million euro relating to Volare Airlines S.p.A. and 1.8 million euro relating to Air Europe S.p.A. under extraordinary administration. The plaintiff’s request is substantially based on the presumption of ADR’s knowledge of the state of insolvency of the carrier and the entire group it was part of, along with Air Europe and Volare Group, at least up to 2002. At the hearing for pronouncement of the judgement held on February 2, 2011, the ruling for the proceedings was postponed. With its decisions of June 2011, the Court, totally rejecting the objections raised by ADR – for having omitted any grounds with regard to the specific nature of the function performed by the airport operator, which could not suspend the performance of its services relying on the solvency tests carried out by ENAC – accepting the plaintiffs’ claims, declared ineffective, pursuant to Article 67 Paragraph 2 of the Bankruptcy Law, the payments made by the carrier to ADR and, as a result, it ordered the company to pay 6.7 million euro, plus interest, in favour of the Extraordinary Administration of Volare Airlines and 1.8 million euro plus interest, in favour of the Extraordinary Administration of Air Europe. ADR proposed an appeal. The hearing is adjourned until February 6, 2014 to pronounce the final judgment. With reference to the Air Europe ruling, with ruling filed on February 7, 2012, the Court accepted ADR’s appeal and suspended the enforcement of the 1st instance sentence. LIGABUE GATE GOURMET S.P.A. BANKRUPTCY A group of 16 plaintiffs has served a writ of summons against ADR and Fallimento Ligabue Gourmet, whereby they are contesting the validity of the sale of the company branch of the Ovest catering company by ADR to the company Ligabue, with a consequent request for compensation for damages for a total amount of about 9.8 million euro for damages up to 2006, for future damages and for employee severance indemnities. ADR won this dispute with a judgment on June 29, 2010, since all of the counterparty’s petitions were rejected. They were moreover required to refund ADR all legal costs. Of the 16 plaintiffs of the first-degree phase, 14 filed to appeal the decision, with respect to which ADR has made its entry of appearance. The next hearing is scheduled for December 2, 2014.


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LITIGATION CONCERNING PUBLIC TENDERS On December 2004, ATI NECSO Entrecanales – Lamaro Appalti notified its decision to appeal judgment no. 35859/2003 issued by the Civil Court of Rome, summonsing ADR before the Appeal Court of Rome. In addition to rejecting ATI’s claims, the judge at the initial hearing also ordered the company to pay ADR’s legal expenses. ATI claimed damages of 9.8 million euro, plus interest, revaluation and costs, from ADR in relation to 7 reserves posted in the accounts relating to the contract for work on the extension and restructuring of the Satellite West at Fiumicino airport. With decisions disclosed in September 2011, the Appeal Court fully rejected the claims of ATI Necso ordering it to pay ADR’s legal costs. The terms to lodge an appeal with the court of cassation are expiring. CONTRACT WORKS Although it is not a litigation case, the construction works for the Boarding Area F (formerly Pier C) contracted out to the Cimolai Temporary Association of Companies (ATI) are late with respect to the schedule set out in the construction contract. At the end of 2011 an agreement was reached with the company to remodel the works, among other things, and define the reserves recorded in the works journal. DAMAGE CLAIMS On June 22, 2011, ADR received formal ddaammaaggee claims from the insurance company AXA Assicurazioni, insurer of the airline Ryanair, for the damage suffered by the aircraft B737-800, registration E-IDYG as a consequence of the emergency landing caused by a bird strike occurred on November 10, 2008 at the Ciampino airport. ADR rejects any and all liability on this matter although the investigation by the cognisant authority is currently still ongoing. The damage claims amount to about 27 million dollars for direct damages (indirect damages are still being defined) and any indemnification would be covered by the Airport Operator’s RCT insurance policy if, as a result of the investigation, ADR were found liable of the occurrence of the event.

SURETY ON THE CUSTOMS AGENCY LITIGATION On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina, Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50.0%, 13.10% and 36.90%, respectively. This commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may incur due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000. The ongoing dispute between ADR and the Customs Agency regards the period 1993-1998, and is covered by the aforementioned guarantee, which will be enforceable following the final judgment ruling against ADR in relation to the Tax Authorities. Impregilo S.p.A. and Falck S.p.A. do not recognise the guarantee as valid. ADR has instituted action against these companies for the purpose of sentencing them to pay the amounts owed, on condition that the final judgment ruling against ADR is passed. As part of this action, at the hearing of January 30, 2012 the ruling for the proceedings was postponed. A ruling is being awaited. In the consolidated financial statements, provisions have been allocated against the risk relating to the litigation with the Customs Agency. In Gemina’s financial statements, provisions were allocated in the event of a total negative outcome for ADR and ADR’s activation of the guarantee.


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RIZZOLI LITIGATION On March 3, 2010 Gemina was served, on request of RCS Mediagroup S.p.A. (“RCS”), with a writ of summons for a third party in the proceedings instigated by Mr. Angelo Rizzoli against RCS, Intesa San Paolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi. Mr. Rizzoli formulated a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs. The events date back to 1974-1986. RCS fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS derives, due to the known spin-off stipulated in 1997. Gemina still deems Mr. Rizzoli’s claims, as well as RCS’s request to summon Gemina to court, to be groundless. The judge rejected the preliminary claims of the plaintiff and on June 28, 2011 he held the hearing for pronouncement of the sentence. With ruling no. 248/2012 of January 11, 2012, the Court of Milan rejected all the plaintiff’s claims, condemning the losing party to fully pay the legal expenses towards the defendant and third parties (including, in favour of Gemina, 1,020 thousand euro for fees, 3 thousand euro for expenses and 17 thousand euro for duties). With deed notified on February 17, 2012 Mr. Angelo Rizzoli proposed an appeal (hearing for the appearance of the parties in the deeds: June 14, 2012), asking at the same time the preventive suspension of the executive effectiveness of the appealed ruling. Gemina’s right to pay legal expenses as shown above was recorded under the receivables while the residual amount to be paid for the professional services supplied by Gemina lawyers is recorded under trade receivables. GREEN CERTIFICATES Pursuant to art. 4, subsection 2 of Ministerial Decree of October 24, 2005 and consequently to resolution of GSE S.p.A. of October 22, 2008, the co-generation power plant for the district heating of the subsidiary company Fiumicino Energia was qualified as thermo-electrical plant in co-generation and the right to the issue of green certificates only for the portion of energy actually used for the district heating of the airport network. In compliance with art. 14 of Legislative Decree no. 20 of February 8, 2007, which subordinates the right to the issue of green certificates to obtaining the EMAS registration within two years from the plant being commissioned, Fiumicino Energia presented the EMAS registration petition on August 4, 2010. The registration process was suspended by the committee for Ecolabel and Ecoaudit “ …for the special organisational configuration existing between Fiumicino Energia and Leonardo Energia”. Consequently, the Energy Services Operator (GSE) arranged for the issue of green certificates to be blocked. During 2011 Fiumicino Energia and Leonardo Energia filed two appeals to the TAR against these provisions by proposing different ground for illegality; the Lazio TAR rejected the appeals. Against the rulings of the TAR the company proposed an appeal before the State Council, which accepted them and with ruling of September 28, 2011 ascertained the erroneous interpretation given by the EMAS Committee to the requirements for registration; the TAR Lazio set the hearing for April 3, 2012.


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NOTE 13 TRANSACTIONS WITH RELATED PARTIES

In implementing the provisions of article 2391-bis of the Italian Civil Code and the Consob regulation adopted with resolution no. 17221 of March 12, 2010, later modified with Resolution no. 17389 of June 23, 2010 (Consob Regulation), the Gemina Board of Directors adopted a procedure pursuant to Article 4 of the Consob Regulation in its meeting of November 12, 2010, after having received the favourable opinion of a specially established committee made up solely independent Directors to ensure the transparency and substantially and procedural correctness of the transactions with related parties carried out directly or via subsidiaries. The Procedure entered into force on January 1, 2011 and regulates the approval processes for transactions carried out through subsidiaries and the disclosure that should be provided regarding transactions with related parties. Paragraph 3.11 of the Report on operations, to which reference is made, analyses the main transactions with related parties which had a significant effect on the financial situation or result of the Group. Furthermore, the accounts in this statement show for each item the amount referred to the transactions with related parties. Transactions with related parties do not include atypical or unusual transactions carried out in 2011. According to IAS 24, with reference to the Directors and Executives with strategic responsibilities of the Gemina Group, in 2011 the remuneration, employment compensation, non-monetary benefits, bonuses, incentives and other payments, also for possible assignments in subsidiary companies, amount to a total of 5,445 thousand euro. Pursuant to art. 123-ter of Legislative Decree 58/98, the Report on remuneration was prepared, which shows the consideration due to the members of the administration and control bodies, the General Manager and other executives with strategic responsibilities of Gemina and the Group. This Report is available at Borsa Italiana S.p.A. and on the website www.gemina.it within the limits of the law.


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LIST OF EQUITY INVESTMENTS REGISTERED EQUITY INVESTMENT CONSOLIDATION CONSOLID. BOOK


* ** ***

PARENT COMPANY

GEMINA L Fiumicino (Rome)

Holding of equity investments euro 1,472,960,320 n/a n/a 100.00 Line-by-line

AIRPORT ACTIVITY

ADR UL Fiumicino (Rome) Airport management euro 62,224,743 95.90 Direct 100.00 Line-by-line

ADR Engineering UL Fiumicino (Rome) Airport engineering euro 774,690 100.00


99.00 Aeroporti di Roma S.p.A.

ADR Tel UL Fiumicino (Rome) Telecommunications euro 600,000

1.00 ADR Sviluppo

100.00 Line-by-line

ADR Advertising (1) UL Fiumicino (Rome) Advertising euro 1,000,000 51.00


ADR Sviluppo S.r.l. Fiumicino (Rome) Real estate euro 100,000 100.00

Aeroporti di Roma S.p.A. 100.00

Line-by-line

Romulus Finance S.r.l. Conegliano (Treviso)

Credit securitisation euro 10,000 - n/a - Line-by-line

ADR Assistance S.r.l. Fiumicino (Rome)

Assistance to passengers with reduced mobility

euro 6,000,000 100.00 Aeroporti di Roma S.p.A. 100.00 Line-by-line

Ligabue Gate Gourmet Rome in bankruptcy UL Tessera (Venice) Airport catering euro 103,200 20.00


Fiumicino Energia S.r.l. Fiumicino (Rome) Electricity Production euro 741,795 87.14 Direct 100 Line-by-line

90.00 Fiumicino

Energia S.r.l. Leonardo Energia S.C.a r.l. Fiumicino

(Rome) Electricity Production euro 10,000

10.00 Aeroporti di Roma S.p.A.

100 Line-by-line

S.A.CAL. UL Lamezia Terme (Catanzaro) Airport management euro 7,755,000 16.57

Aeroporti di Roma S.p.A. 16.57 Valued at cost 1,307

Aeroporto di Genova UL Genova Sestri Airport management

euro 7,746,900 15.00 Aeroporti di Roma S.p.A. 15.00 Valued at cost 895

Consorzio E.T.L. in liquidation Cons. Rome Study of European transport rules euro 82,633 25.00

Aeroporti di Roma S.p.A. 25.00 Valued at cost 10


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* ** ***

OTHER

PENTAR UL Milan Holding company euro 12,672,627 18.54 Direct 18.54 Valued at cost 32

DOMINO S.r.l. Fiumicino (Rome) Internet services euro 10,000 100.00 Direct 100.00 Valued at cost 10

DIRECTIONAL CAPITAL HOLDINGS IN LIQUID. N.V. Channel Islands Financial services euro 6,249 5.00 Direct (3) 5.00 Valued at cost 1 euro cent

GEMINA FIDUCIARY SERVICES S.A. Luxembourg Trust company euro 150,000 99.99 Direct 99.99 Valued at cost 1 euro cent

TELEFIN in liquidation (former Tempo Libero) (2) UL Milan Financial services Lire 20,000,000,000 42.50 Direct 42.50 Valued at cost 1 euro cent

* The consolidated share refers to consolidation within the specific group belonging to the Gemina Group. ** The consolidation method of indirect equity investments is attributable to sub-consolidation and not directly to Gemina. *** Book value for equity investments posted at cost, with the shareholders’ equity method, in thousands of euro. (1) Equity investment held in the ordinary share capital of the company (500,000 euro). The stake held in the overall share capital (1,000,000 euro) is 25.5%. (2) On April 29, 1999, the Court of Milan declared its bankruptcy. (3) As from March 31, 2008, the company is in liquidation.

L Listed joint stock company. UL Unlisted joint stock company.

S.r.l. Limited liability company. Cons. Consortium. S.c. a

r.l. Limited liability consortium company.


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INFORMATION PURSUANT TO ART. 149-DUODECIES OF CONSOB ISSUERS’ REGULATION The following statement, drawn up pursuant to Art. 149-duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2011 financial year for audit services and other services rendered by the same Independent Auditors.


THE SERVICE TARGET COMPANY

REMUNERATIO

NS PERTAINING

TO THE YEAR

2011 (*)


COMPANY 155


COMPANIES 298


COMPANY 3


COMPANIES 79

OTHER SERVICES DELOITTE & TOUCHE S.P.A. (2) GEMINA PARENT

COMPANY 11 (1) Subscription of Income Tax Return and 770 forms.

(2) Review of request from shareholder Changi Ltd. (*) including expenses


130

CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE WITH ART. 81-TER

OF CONSOB REGULATION NO. 11971 OF MAY 14, 1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS We, the undersigned, Carlo Bertazzo, in my position of Managing Director, and Sandro Capparucci in my position of Manager in charge of preparing the corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154-bis, subsections 3 and 4 of Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:

- the consistency with regard to the characteristics of the company - of the correct application of administration and accounting procedures for the drafting of the

consolidated financial statements over 2011.

It is also stated that:: - the consolidated financial statements as at December 31, 2011:

- were drawn up pursuant to the applicable International Accounting Standards adopted by the European Union pursuant to regulation (EC) no. 1606/2002 of the European Parliament and Council of July 19, 2002;

- correspond to figures disclosed in the accounting books and records; - supply a true and fair disclosure of the equity, economic and financial situation of the issuer and

of the companies included in the consolidation area; - the Report on Operations includes a reliable analysis of the performance and management result, as

well as the situation of the issuer and of the companies included in the consolidation, together with the description of the major risks and uncertainties to which they are exposed.

Fiumicino, March 8, 2012

The Managing The Manager Director in charge of preparing (Carlo Bertazzo) corporate accounting documents (Sandro Capparucci)


131



132


133

134

6.


OF GEMINA S.P.A.

AS AT DECEMBER 31, 2011

6. FINANCIAL STATEMENTS

135

FINANCIAL STATEMENTS OF GEMINA S.P.A.

INCOME STATEMENT


Notes 2011 of which due to related

parties

2010 of which due to related

parties INCOME (CHARGES) ON EQUITY

INVESTMENTS

DIVIDENDS FROM ASSOCIATES - - OTHER INCOME/(CHARGES) ON EQUITY

INVESTMENTS 30 (1,348) TOTAL INCOME (CHARGES) ON EQUITY

INVESTMENTS 4.1 30 (1,348)

NET FINANCIAL INCOME (EXPENSE)

FINANCIAL INCOME:

INTEREST INCOME 249 100 389 90

FINANCIAL EXPENSES:


OTHER EXPENSES (123) (54) (66) (66)

TOTAL NET FINANCIAL INCOME (EXPENSE) 4.2 (2,843) (2,998)

STAFF COSTS 4.3 (2,159) (25) (1,526) (24)

OTHER OPERATING COSTS 4.4 (4,413) (623) (3,846) (88)

NET PROVISIONS 4.5 (112) (2,240) (3,600)

AMORTISATION/DEPRECIATION (12) (20)

REVENUES 4.6 1,004 797 1,044 881

TOTAL NET OPERATING COSTS (5,692) (6,588)

PRE-TAX PROFIT (LOSS) (8,505) (10,934)

TAX REVENUES (CHARGES) 4.7 1,889 2,248



136




PROFIT (LOSS) FROM FAIR VALUE VALUATION OF DERIVATIVE INSTRUMENTS (CASH FLOW HEDGE) (179) 338

TAX EFFECT 49 (93)

RECLASSIFICATIONS OF THE COMPONENTS IN THE COMPREHENSIVE INCOME STATEMENT IN THE INCOME STATEMENT PROFIT (LOSS) FROM FAIR VALUE VALUATION OF DERIVATIVE INSTRUMENTS (CASH FLOW HEDGE) 556

TAX EFFECT (153)

TOTAL PROFIT (LOSS) FOR THE YEAR (6,343) (8,441)


137

STATEMENT OF FINANCIAL POSITION ASSETS




NON-CURRENT ASSETS

Other intangible fixed assets - 1

TOTAL INTANGIBLE FIXED ASSETS 5.1 - 1 Fixtures and fittings tools and other equipment - 6

Other tangible fixed assets 2 29

TOTAL TANGIBLE FIXED ASSETS 5.2 2 35

EQUITY INVESTMENTS IN SUBSIDIARIES 5.3 1,843,283 1,843,246

INVESTMENTS IN ASSOCIATES AND JOINT

VENTURES 5.3 - 32

OTHER EQUITY INVESTMENTS 5.3 32 28

DEFERRED TAX ASSETS 5.4 125 1,029

OTHER NON-CURRENT FINANCIAL ASSETS 5.5 221 63 -

TOTAL NON-CURRENT ASSETS 1,843,663 1,844,371

CURRENT ASSETS

TRADE RECEIVABLES 5.6 432 432 578 578

OTHER RECEIVABLES 5.7 19,645 16,864 13,013 11,876

OTHER CURRENT FINANCIAL ASSETS 5.8 3,346 3,266 2,934 2,927

CASH AND CASH EQUIVALENTS 5.9 5,340 14 11,137 48

TOTAL CURRENT ASSETS 28,763 27,662

TOTAL ASSETS 1,872,426 1,872,033


138

STATEMENT OF FINANCIAL POSITION SHAREHOLDERS’ EQUITY AND LIABILITIES





SHARE CAPITAL 1,472,960 1,472,960

CAPITAL RESERVES 199,707 199,707

HEDGING RESERVE (130) (403)


PROFIT (LOSS) FROM PREVIOUS YEARS 55,593 64,279


TOTAL SHAREHOLDERS’ EQUITY 5.10 1,804,620 1,810,963


EMPLOYEE BENEFITS 5.11 107 244

PROVISIONS FOR RISKS AND CHARGES 5.12 9,100 6,700 9,100 6,700

FINANCIAL INDEBTEDNESS NET OF

CURRENT SHARE 5.13 41,295 11,799 -

TOTAL NON-CURRENT LIABILITIES 50,502 9,344

CURRENT LIABILITIES

TRADE PAYABLES 5.14 1,799 320 711 119

CURRENT FINANCIAL LIABILITIES 5.15 605 173 41,954 41,954

PROVISIONS FOR RISKS AND CHARGES 5.12 2,037 1,922

FINANCIAL INSTRUMENTS – DERIVATIVES 5.16 174 - 581 581

CURRENT TAX LIABILITIES 5.17 10,929 5,065

OTHER CURRENT LIABILITIES 5.17 1,760 531 1,493 438

TOTAL CURRENT LIABILITIES 17,304 51,726

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 1,872,426 1,872,033


139

STATEMENT OF CASH FLOWS


PROFIT (LOSS) FOR THE YEAR (6,616) (8,686)AMORTISATION AND DEPRECIATION OF TANGIBLE AND INTANGIBLE FIXED

ASSETS 12 20

INCREASE (DECREASE) OF EMPLOYEE BENEFITS AND OTHER FUNDS (22) 2,271

(INCREASE) DECREASE IN DEFERRED TAX ASSETS 904 1,080

(REVALUATION) WRITE-DOWN OF EQUITY INVESTMENTS - 1,378

1) OPERATING PROFIT (LOSS) BEFORE CHANGES IN WORKING CAPITAL

(5,722) (3,937)

(INCREASE) DECREASE IN TRADE RECEIVABLES 146 (180)

(INCREASE) DECREASE IN OTHER CURRENT ASSETS (6,633) 1,422

INCREASE (DECREASE) IN TRADE PAYABLES 1,088 234INCREASE (DECREASE) IN OTHER CURRENT LIABILITIES AND TAX PAYABLES

FOR CURRENT TAXES 6,131 (4,220)

2) CHANGES IN WORKING CAPITAL 732 (2,744)3) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

OPERATIONS (1+2) (4,990) (6,681)


DISPOSAL OF EQUITY INVESTMENTS IN SITTI - 5,000

(INCREASE) DECREASE IN INVESTED RECEIVABLES - 4,591

OTHER CHANGES IN EQUITY INVESTMENTS (9) (35)

(INCREASE) DECREASE IN TANGIBLE AND INTANGIBLE FIXED ASSETS 22 (5)4) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

INVESTMENT ACTIVITIES 13 9,551


(INCREASE) DECREASE IN TRADE RECEIVABLES (633) 32

RAISING OF NEW LOANS 41,200 -

REPAYMENTS OF FINANCIAL INDEBTEDNESS (41,660) (5,444)

OTHER CHANGES IN SHAREHOLDERS’ EQUITY 273 2455) TOTAL CASH AND CASH EQUIVALENTS GENERATED (ABSORBED) BY

FINANCING ACTIVITIES (820) (5,167)

6) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3+4+5) (5,797) (2,297)

7) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 11,137 13,434

8) CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (6+7) 5,340 11,137

ADDITIONAL INFORMATION TO THE STATEMENT OF CASH FLOWS

INCOME TAXES PAID - -

TAX RECOVERY FROM TAX CONSOLIDATION 3,100 1,010

INTEREST INCOME AND OTHER FINANCIAL INCOME COLLECTED 243 105

INTEREST PAYABLE AND OTHER FINANCIAL EXPENSE PAID 1,529 2,168


140

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (in thousands of euro)

Share Capital Hedging Other Profit (loss) Profit (loss) Shareholder'scapital reserves reserve reserve pertaining to for the year Equity

previous years

Balances as at 12/31/2009 1,472,960 200,057 (648) 82,756 78,348 (14,069) 1,819,404



Other changes (350) 350


Balances as at 12/31/2010 1,472,960 199,707 (403) 83,106 64,279 (8,686) 1,810,963




Balances as at 12/31/2011 1,472,960 199,707 (130) 83,106 55,593 (6,616) 1,804,620


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EXPLANATORY NOTES NOTE 1 – GENERAL INFORMATION

Generale Mobiliare Interessenze Azionarie S.p.A. (hereafter also “Gemina” or “Company”) has its registered office in Fiumicino, Via dell’Aeroporto di Fiumicino, 320 and no secondary offices. Until July 31, 2011 the registered office was located in Milan, via della Posta 8/10. The Company only operates as an investment holding company listed on the Milan Stock Exchange with the mission of developing financial and growth strategies in the airport infrastructure sector, and does not play a direct operating role. On the date of preparing these financial statements Sintonia S.A. is the shareholder that, directly and indirectly, holds the majority regarding Gemina shares, and adheres to a shareholders’ agreement together with other shareholders; Sintonia S.A., which is in turn a subsidiary of Edizione S.r.l., does not exercise management and coordination activities with respect to Gemina. These financial statements were approved by the Board of Directors of the Company in the meeting of March 8, 2012. It is worth mentioning that, by holding significant majority equity investments in other companies, the company also prepares the consolidated financial statements of the Group, published together with these financial statements. NOTE 2 – FORM AND CONTENT OF THE FINANCIAL STATEMENTS

The financial statements for the year ended December 31, 2011, drawn up on an on-going concern, were prepared pursuant to articles 2 and 4 of Italian Legislative Decree 38/2005, in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and approved by the European Commission, in effect on the date of the financial statements, which include the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as well as the previous International Accounting Standards (IAS) and the interpretations of the Standard Interpretations Committee (SIC) still in force on the same date. For simplicity reasons, the set of all the standards and interpretations listed above is defined below as “IFRS”. Furthermore, reference was made to the provisions issued by Consob (Commissione Nazionale per le Società e la Borsa) implementing subsection 3 of article 9 of Italian Legislative Decree 38/2005. The financial statements comprise the consolidated accounting statements (income statement, statement of comprehensive income, statement of financial position, statement of cash flows, statement of changes in Shareholders’ equity) and these explanatory notes, applying the provisions of IAS 1 “Presentation of Financial Statements” and the general criterion of the historical cost, with the exception of the financial statement items that according to IFRS are recognised at their fair value, as stated in the valuation criteria of the individual items. The statement of financial position is presented on the basis of the framework that envisages a distinction of assets and liabilities into current and non-current, while in the income statement the costs are classified based on their nature; the statement of cash flows is presented by using the indirect method. IFRS were applied consistently with the indications of the “Framework for the Preparation and Presentation of Financial Statements” and no issues emerged that required derogations pursuant to IAS 1, paragraph 19.


142

With Resolution no. 15519 of July 27, 2006, Consob requested the inclusion in the accounting statements of sub-items, when of a considerable amount, in addition to those already specifically required by IAS 1 and the other international accounting standards in order to highlight them separately from the reference items: (i) the amounts of the positions and transactions with related parties as well as, with regard to the income statement, (ii) the income positive and/or negative components deriving from events and transactions whose occurrence is not recurring or from transactions or facts that do not take place frequently during normal business operations. To this end, it is highlighted that during 2011 no significant non-recurring, atypical or unusual transactions were carried out with third parties or with related parties. The accounting statements of Gemina and these explanatory notes are expressed in thousands of euro, unless otherwise stated. Euro is both the Company’s functional currency and the currency of presentation of the financial statements. For each item in the financial statements, the corresponding value of the previous year is reported for comparison purposes. These comparative values were not subject to significant recalculation and/or reclassification compared to those already in the financial statements for the year ended December 31, 2010, since no notable events or amendments to the accounting principles applied took place, which require these rectifications to be made. However, for the purposes of better representing the economic and financial position of the Company, some economic and financial values were reclassified for negligible amounts; of these worth mentioning is the reclassification, in direct reduction of the book value of the investment, of the provisions related to the subsidiary Pentar S.p.A., allocated in 2010 due to presumable losses of this company. These financial statements were prepared on an on-going concern. Indeed, the Company deemed that, despite the persisting difficult economic and financial situation, there are no significant uncertainties as to the on-going concern. NOTE 3 – ACCOUNTING STANDARDS APPLIED

Described below are the most important accounting standards and valuation criteria applied in preparing the financial statements for the year ended December 31, 2011, which comply with those used to prepare the financial statements of the previous year, since no new accounting standards, interpretations and amendments to the accounting standards and the interpretations already in force came into force during 2011, which have a significant effect on the financial statements of Gemina. REVENUES Revenues are measured to the extent to which it is possible to reliably determine their fair value and that the related economic benefits are likely to be enjoyed. Depending on the type of transaction, revenues are recorded on the basis of the specific criteria reported below: a) the revenues from the sale of assets when the significant risks and benefits of the ownership of

the same are transferred to the purchaser; b) the revenues from service provisions based on the stage of completion of the activities. If the

value of revenues cannot be reliably determined, the revenues are recorded until reaching the costs incurred that are deemed as recoverable.


143

Dividends are measured when the right of the Company to receive their payment arises. COSTS Costs are valued at the fair value of the amount paid or to be paid, and are recognised in the income statement on an accrual basis and in correlation with any related revenues. Any expense related to transactions of share capital increase is recorded as reduction in the shareholders’ equity. FINANCIAL INCOME AND EXPENSE Financial income and expense are recorded in the income statement on an accrual basis, and calculated on the value of the respective financial assets and liabilities using the actual interest rate. INCOME TAXES The tax on the income of the year is calculated based on the tax expenses to be paid, in compliance with current legislation. Prepaid and deferred taxes resulting from temporary differences between the financial statements value of assets and liabilities, calculated by applying the criteria described in this section, and their tax value, deriving from the application of current legislation, are recorded: a) the former, only if sufficient taxable income is likely to allow the recovery; b) the latter, if any, in any case. Prepaid taxes are recorded in the income statement, with the exception of those relating to items that are directly recorded in shareholders’ equity. In that case, also prepaid and/or deferred taxes are charged to shareholders’ equity. Gemina has decided to adopt the national consolidated financial statements based on Italian Legislative Decree 344/2003, with the adherence of its subsidiaries Aeroporti di Roma S.p.A. (“ADR”), ADR Engineering S.p.A., ADR Tel S.p.A., ADR Sviluppo S.r.l., ADR Assistance S.r.l., Fiumicino Energia S.r.l. and Leonardo Energia S.c.ar.l. Therefore, the payables and receivables for current IRES taxes of these companies, subject to consolidation, are shown as payables and receivables for current taxes, with corresponding recording of a payable to or receivable from the subsidiary related to the transfers of funds to be performed for this tax consolidation. TANGIBLE FIXED ASSETS The tangible assets are recorded at historical cost, inclusive of any directly attributable accessory charges. The cost of tangible assets whose use is limited over time is systematically amortised on a straight-line basis in each year based on the estimated economic-technical life. If significant parts of these tangible assets have different useful lives, these components are recorded separately. Depreciation is recorded from the time the fixed asset is available for use, or is potentially capable of providing the economic benefits associated therewith. In short, the annual depreciation rates applied are: - Fixtures and fittings: 15%. - Other assets: from 12% to 20%. In the presence of specific indicators regarding the risk of failed recovery of the book value of tangible assets, these undergo an impairment test, as described in the specific paragraph.


144

Tangible assets are no longer shown in the financial statements after their transfer or if no future economic benefit exists expected from the use; any deriving profit or loss (calculated as the difference between the transfer value, net of sale costs, and the book value) is recorded in the income statement of the year of sale. Any ordinary maintenance costs are charged to the income statement. INTANGIBLE FIXED ASSETS Intangible assets are assets without physical substance, controlled by the company and able to produce future economic benefits and goodwill acquired in business combinations. An asset is classified as intangible when there is the possibility of it from the goodwill. This condition is normally met when: (i) the intangible asset arises from contractual or legal rights, or (ii) the asset is separable, i.e. can be sold, transferred, rented or exchanged autonomously or as an integral part of other assets. The company controls an asset if it has the power to obtain future economic benefits generated by the underlying assets and to restrict the access of others. The intangible assets are recorded at cost, as determined according to the methods stated for tangible assets, only when this can be reliably valued. Intangible assets with a definite useful life are amortised, starting from the time when they are available for use, based on their residual possibility of use with respect to the useful life of the assets. The profit or loss deriving from the sale of an intangible asset is the difference between the sale value, net of sale costs, and the book value, and is recorded in the income statement of the year of sale. EQUITY INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES Equity investments in subsidiaries, associates and joint ventures are recorded and valued at purchase cost, inclusive of directly attributable accessory charges, rectified in the presence of any losses in value identified as described in the section regarding “Impairment of assets”, which are recorded in the income statement. The same are restored if the reason for the write-downs made cease to apply. The term subsidiaries means all companies over which Gemina has the power to determine, either directly or indirectly, the financial and operating policies in order to obtain benefits from their activities. Investments in Associates are those in which Gemina is capable of exercising a significant influence, but not control or joint control, by contributing to the financial and operating decision-making policies of the investee. Any equity investments in other companies, which can be classified in the category of financial assets held for sale as defined in IAS 39, are initially recorded at cost, as determined on the settlement date, as it represents the fair value, inclusive of the directly attributable transaction costs. After the initial recording, these equity investments are valued at fair value with recognition of the effects being attributed to the comprehensive income statement and thus in a specific shareholders’ equity reserve. At the time of a loss of value from impairment occurring or being recognised, the profits and losses in this reserve are posted in the income statement. If the fair value cannot be determined in a reliable manner, the equity investments classifiable under financial assets held for resale are valued at cost, adjusted by the impairment losses; in this case the losses in value are not subject to reinstatement. The risk deriving from possible losses that exceed the book value of the equity investment is recorded in a specific liability fund proportionally to the Company’s commitment to fulfilling the legal or implicit obligations towards the investee or in any case covering its losses.


145

The equity investments held for sale or in liquidation are recorded under current assets at the lower between the book value and the fair value, net of possible sale costs. PAYABLES AND RECEIVABLES Receivables are initially recognised at fair value and then valued at the amortised cost by using the effective interest rate method, net of any impairment related to the sum considered non-performing and recorded in the specific bad debt provisions. The amounts considered non-performing are estimated on the basis of the value of the expected cash flows. These flows consider the expected recovery terms, the likely salvage value, any guarantees as well as the costs that are estimated to be incurred to recover the receivables. The original value of the receivables is reinstated in the next years as the reasons for its adjustment cease to apply. In this case the value reinstatement is recorded in the income statement cannot exceed the amortised costs that the credit would have had in the absence of previous adjustments. Payables are initially recorded at cost, corresponding to the fair value of the liability, net of the directly attributable transaction costs. After initial recording, payables are valued with the amortised cost criterion by using the effective interest rate method. Trade receivables and payables whose expiration falls within the normal commercial terms are not discounted. CASH AND CASH EQUIVALENTS Cash and cash equivalents are recorded at par value and include the values that meet the requirements of high liquidity, availability on demand or in a very short term, good outcome and negligible risks of change in their value. FINANCIAL DERIVATIVES All derivative financial instruments are recorded in the statements of financial position at their fair value, determined on the date when the period ends. According to IAS 39, derivatives are classified as hedging instruments when the relationship between the derivative and the subject of the hedge is formally documented and the hedge has a high hedge ranging between 80% and 125%, as initially and periodically checked. For the instruments hedging against the risk of change in the cash flows of the assets and/or liabilities being hedged (cash flow hedge), the changes in fair value are recorded in the income statement in consideration of the relevant deferred tax effect; the ineffective part of the hedge is recorded in the income statement. For any instrument hedging against the risk of change in the fair value of assets and/or liabilities (fair value hedge), the changes in fair value are recorded in the income statement. Consistently, also any related asset and/or liability being hedged, in so far as the hedged risk, is adjusted to the fair value with effect on the income statement. The changes in the fair value of derivatives that do not meet the conditions for qualification pursuant to IAS 39, as hedging financial instruments are recorded in the income statement. HIERARCHICAL LEVELS TO ASSESS THE FAIR VALUE OF FINANCIAL INSTRUMENTS As regards the financial instruments valued at fair value and recorded in the statement of financial position, IFRS 7 “Financial Instruments: Disclosures” provides for these to be classified hierarchically on the basis of the relevance of the inputs of values used to determine the fair value. The standard makes a distinction between the following levels for the financial instruments valued at fair value: a) level 1 – quoted prices in active markets; b) level 2 – when the values, other than the quoted prices above, can be observed directly (prices)

or indirectly (deriving from prices) in the market;


146

c) level 3 – inputs not based on observable market data. In 2011 there were no transfers between the various hierarchical levels for fair value. Furthermore, no financial instruments can be classified as level 3 in terms of fair value. EMPLOYEE BENEFITS The liabilities relating to short term benefits granted to employees, disbursed during the employment relationship, are recorded for the amount accrued at year end. The liabilities related to benefits granted to employees and paid during or after the termination of the employment relationship through defined contribution plans and/or defined benefits (consisting of the Severance Indemnities), are recorded for the amount accrued at year end, net of any advances paid, in compliance with the current legislation and the collective payroll agreements and company pension schemes. PROVISIONS FOR RISKS AND CHARGES Provisions for risks and charges include the allocations arising from current obligations of a legal or implicit nature, deriving from past events, and the fulfilment of which will probably require the employment of resources, of which the amount cannot be reliably estimated. Provisions are allocated based on a best estimate of the costs required for fulfilling the obligation at the year-end date or to transfer it to third parties. If discounting produces a significant effect, allocations are determined by discounting the financial flows expected in the future at a discount rate that reflects the current market change of the current value of cost of money, and the specific risks related to the liability. When discounting, the increase in the allocation due to time passing is recorded as financial expense. IMPAIRMENT OF ASSETS (IMPAIRMENT TEST) At year-end, the book value of tangible, intangible and financial assets and the equity investment is tested to find any indication of impairment of these assets. If these indications exist, the recoverable amount of these assets is estimated to determine the amount of any write-down to be recorded. For any intangible assets with an indefinite useful life and any assets under construction, the impairment test described above is performed at least once a year, regardless of the occurrence of events that suggest impairment, or more frequently in case events or changes in the circumstances take place, which may lead to possible impairment. If the recoverable value of an asset cannot be estimated individually, the estimate of the recoverable value is included within the framework of the unit generating financial flows the assets belong to. This test estimates the recoverable value of the asset (represented by the greater of the likely market value, net of sale costs, and the value in use) and compares it with the relevant net book value. If the latter is higher, the asset is written down until reaching the recoverable value. In determining the value in use, the financial flows expected in the future after taxation are discounted by using a discount rate, after taxation, which reflects the current market estimate referred to the cost of capital in connection with the time and specific risks of the asset. Losses of value are recorded in the income statement and classified differently depending on the nature of written down asset. These losses in value are reinstated, within the limits of the write-down made, if the reasons that generated them ceased to apply, except for goodwill.


147

ESTIMATES AND VALUATIONS According to IFRS, the preparation of the financial statements requires estimates and valuations to be made, which affect the determination of the book value of assets and liabilities as well as the information provided in the explanatory notes, also with reference to the assets and liabilities potentially existing at the end of the year. These estimates and hypotheses are used, in particular, to determine the cash flows used as basis for the impairment tests of the assets (including the valuation of receivables), provisions for risks and charges, benefits for the employees, the fair value of financial assets and liabilities, deferred and prepaid taxes. Therefore, the actual results recorded may differ from these estimates; furthermore, the estimates and valuations are reviewed and updated periodically and the effects deriving from any variation are immediately reflected in the financial statements. CONVERSION OF THE ITEMS IN CURRENCIES Any transaction in a currency other than the euro is recorded at the exchange rate of the date of the transaction. The related monetary assets and liabilities denominated in currencies other than the euro are subsequently adjusted at the exchange rate in force on the date of closing the year of reference. Any resulting exchange rate differences are reflected in the income statement. Non-monetary assets and liabilities denominated in currency and recorded at historical cost are converted by using the exchange rate in force on the date the transaction is first recorded. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the result for the year by the weighted average number of shares outstanding during the year. Diluted earnings per share are calculated in consideration, for both the portion of the result for the year and the mentioned weighted average, of the effects related to the subscription and/or total conversion of all the potential shares that may be issued consequently to certain outstanding options being exercised. ACCOUNTING STANDARDS AND NEWLY ISSUED INTERPRETATIONS, REVISIONS AND AMENDMENTS TO

EXISTING STANDARDS NOT YET IN FORCE OR NOT YET VALIDATED BY THE EUROPEAN UNION No new accounting standards or interpretations came into force in 2011, or amendments to the accounting standards and interpretations already in force, which significantly affected the financial statements of Gemina. As requested by IAS 8 “Accounting policies, changes in accounting estimates and errors”, stated below are the new accounting standards and interpretations, in addition to the amendments to the already applicable standards and interpretations not yet in force or not yet validated by the European Union (EU), which may be applied in the future to the financial statements of the Company. IAS 9 – Financial Instruments On November 12, 2009, IASB issued the first part of IFRS 9, which changes recognition and measurement criteria of financial assets, currently governed by IAS 39; once completed, IFRS 9 will entirely supersede IAS 39. On October 28, 2010, IASB published a reviewed version of IFRS 9 which contains the provisions regarding the recognition and measurement of financial liabilities; other changes are reported in the version published on December 16, 2011. IFRS 9 provides for two categories of classification for financial assets. Two possible valuation criteria are also set: the amortised cost and the fair value.


148

The classification is carried out on the basis of both the management model adopted for the financial assets and the contractual characteristics of the cash flows of the asset. The initial recognition and valuation at amortised cost require that both conditions below be complied with: a) the management model for the financial asset implies the holding of the same with the aim of

collecting the related financial flows, and b) that the financial asset contractually generates, on pre-set dates, the financial flows only

representing the return of the same financial asset. If one of the two conditions above is not met, the financial assets is initially recorded and subsequently valued at fair value. All financial assets represented by shares are valued at fair value. The new standard, unlike IAS 39, does not provide for exceptions to this general rule; consequently, there is no possibility for valuation at cost for all unlisted shares, for which the fair value cannot be determined reliably. A financial asset that meets the requirements for classification and valuation at amortised cost may, at the time of the initial recognition, be designated as financial asset at fair value with attribution of the existing variations in the income statement, if this measurement allows the asymmetrical valuation or recording (“accounting mismatch”) to be eliminated or reduced significantly, which would otherwise result in the valuation of assets or liabilities or the recognition of the related profits or losses according to a different base. In case of investments in equity instruments for which the recording and valuation at amortised cost is not possible, when these are investments in shares not held for trading but rather of strategic nature, according to the new standard, the entity may irrevocably choose, at the time of the initial recognition, to value them at fair value with attribution of the next changes in the comprehensive income statement. Regarding financial assets, the provisions of the current IAS 39 are confirmed by the new IFRS 9. Financial liabilities continue to be valued at amortised cost or at fair value with recording in the income statement in specific circumstances. The changes compared to the current provisions of IAS 39 mainly concern: a) the representation of the changes in fair value attributable to the credit risk associated to the

liability, for which IFRS 9 provides recognition in the comprehensive income statement for some type of financial liabilities;

b) elimination of the option to value at amortised cost the financial liabilities consisting of derivatives with delivery of unlisted equities. Due to this change, all derivative instruments must be valued at fair value.

IFRS 9 is currently being examined by the EU as part of the overall valuation by the same on the entire project to review and replace IAS 39. IFRS 10 – Consolidated Financial Statements, IAS 27 – Separate Financial Statements and IFRS 12 – Disclosure of Interests in Other Entities On May 12, 2011 IASB issued the new accounting standard IFRS 10, completing the project associated with redefining the concept of control and overcoming the discrepancies found in applying this concept; while IAS 27 – Consolidated and Separate Financial Statements, defines the control on an entity as the power to make certain financial and managerial choices of an entity while obtaining the relevant benefits, SIC 12 – Consolidation - Special Purpose Entities, interprets the requirements of IAS 27 by placing more emphasis on the risks and benefits. The new standard, which was issued at the same time as IAS 27 – Separate Financial Statements, replaces the old IAS 27 and SIC 12 and contains a new definition of control as well as the methodologies to be used to prepare the financial statements according to IFRS, already contained in the old IAS 27 and which were not amended.


149

According to IFRS 10 an investor controls an entity when it is exposed, or holds rights, to variable returns on its investment in the entity and has the ability to change these returns through its power on the entity. Therefore, control is based on the following three elements: (i) power on the entity, (ii) exposure or right to variable returns on the investment of the entity, and (iii) ability to use the power over the entity to influence the returns on the investment. Finally, IFRS 10 refers to the new IFRS 12 – Disclosure of Interests in Other Entities (issued at the time of the other new standards stated) regarding information to be provided in the statements as regards equity investments owned in other companies. This last standard essentially contains a series of obligations as to the information the entity drawing up the financial statements must provide as regards equity investments in subsidiaries and associates as well as the joint agreements (under the new IFRS 11 illustrated below). The new IAS 27 – Separate Financial Statements – essentially is an extract from part of the old standard, since it only governs the methods of reporting and information for investments in subsidiaries as well as the requirements for the preparation by the entity of the financial statements for the year; the new standard did not introduce any changes with regard to these aspects. The date for the new standards IFRS 10, IFRS 12 and IAS 27 to enter into force mandatorily is January 1, 2013, with the right of early application. These standards are still being reviewed by the EU. IFRS 13 – Fair Value Measurement IFRS 13, issued on May 12, 2011, clarifies the determination of the fair value for the purpose of valuation and information in the financial statements, and applies to all IFRS requiring or allowing the measurement of fair value or presentation of information based on the fair value. The new standard emphasises the use of market sources and, where possible, must be adopted starting from January 1, 2013, and has not been validated by the EU yet. IAS 1 – Presentation of Items of Other Comprehensive Income On June 16, 2011 IASB published the amendment to IAS 1, deemed necessary to clarify the methods of presentation of the items contained in the comprehensive income statement. The change did not affect the elements that must be included in the comprehensive income statement but rather the fact that the elements presented must be highlighted by nature and grouped into two categories: (i) those that will not be subsequently reclassified in the income statement, and (ii) those that will be subsequently reclassified in the income statement when some specific conditions are met, as requested by IFRS. The amendments made are effective from the year starting after July 1, 2012, and have not been validated by the EU yet. IAS 12 – Income Taxes On December 20, 2010 IASB approved some amendments to IAS 12 in connection with the recovery of deferred taxes regarding some types of assets, which also replaces SIC 21. By superseding the current general provision of IAS 12 to assess the methods of transferring deferred taxes through the use of the assets or liabilities rather than its sale, the changes introduce the assumption that, regarding property investments and other tangible and intangible assets valued at fair value, the related deferred taxes will be entirely transferred through the sale of the asset unless there is clear evidence that the recovery may occur with use. The amendments must be applied in the financial statements from January 1, 2012. Early application is allowed. The amendments have not been validated by the EU yet.


150

The Company is in the process of assessing any impact deriving from the future application of all of these newly issued standards and interpretations, as well as the revisions or amendments to the existing standards. NOTE 4 – INFORMATION ON THE ITEMS IN THE INCOME STATEMENT

4.1 – Income (charges) on equity investments Positive for 30 thousand euro, against a negative value of 1,348 thousand euro in 2010. The breakdown of the item is shown in the following table.

2011 2010 CHANGE

WRITE-DOWNS OF EQUITY

INVESTMENTS - (1,378) 1,378

PENTAR - (1,378) 1,378

LOSS SETTLEMENT (4) (1) (3)

DOMINO (4) (1) (3)

OTHER INCOME (CHARGES) 34 31 3

TOTAL 30 (1,348) 1,378 During 2011 no events and/or circumstances occurred that required the writing down of the equity investments held. Instead in 2010, a write-down for 1,378 thousand euro for the equity investment in Pentar was highlighted. For more information concerning the impairment tests performed with reference to December 31, 2011 on the value of the portfolio equity investments, reference is made to note 5.3. The item “other income”, equal to 34 thousand euro, refers to the income from the liquidation of the investee company Kiwi 1 Ventura Servicos S.A. occurred during 2011. A detailed list of the equity investments held at year end, as well as the changes in quantity and values taking place over the year, is reported in note 5.3, to which reference is made. 4.2 – Net financial income (expenses) In 2011 net financial expenses equal to 2,843 thousand euro were incurred, compared to 2,998 thousand euro in 2010. Financial income amounts to 249 thousand euro (389 thousand euro in 2010), as detailed in the table below.


151

Financial income

2011 2010 CHANGE

FROM NON-CURRENT FINANCIAL ASSETS - 284 (284)

ASSOCIATES: - 20 (20)

OTHERS: - 264 (264)

CURRENT FINANCIAL ASSETS 100 68 32

SUBSIDIARIES: FIUMICINO ENERGIA – INTEREST INCOME ON

RECIPROCAL C/A 100 68 32

INCOME OTHER THAN THE ABOVE 149 37 112INTEREST INCOME ON C/A AND BANK

DEPOSITS 143 35 108

OF WHICH FROM RELATED PARTIES - 2 (2)

INTEREST INCOME ON TAX CREDITS - 2 (2)OF WHICH FROM RELATED PARTIES - 2 (2)

IRS DIFFERENTIALS 6 - 6

TOTAL 249 389 (140) Financial income totals 3,092 thousand euro (3,387 thousand euro in 2010), as detailed in the table below. Financial expenses

2011 2010 CHANGE

INTEREST EXPENSE 2,969 3,321 (352)


OF WHICH FROM RELATED PARTIES: MEDIOBANCA 1,003 1,256 (253)

UNICREDIT 957 1,222 (265)

EXPENSES ON DERIVATIVES 520 842 (322)OF WHICH FROM RELATED PARTIES: MEDIOBANCA 270 421 (151)

UNICREDIT 250 421 (171)

OTHER EXPENSES 123 66 57

COMMISSIONS FOR UNUSED LOANS 123 66 57

OF WHICH FROM RELATED PARTIES: MEDIOBANCA 27 33 (6)

UNICREDIT 27 33 (6)

TOTAL 3,092 3,387 (295)

The interest payable on bank loans refers for 1,460 thousand euro to the interest paid on the loan stipulated on December 11, 2008, repaid during 2011, as well as for 586 thousand euro to the new loan stipulated on August 30, 2011; these loan agreements are shown in notes 5.13 and 5.15, to which reference is made. It also includes the pro-rata of the year value of the commissions incurred for the raising the loans, equal to 403 thousand euro.


152

Expenses on derivatives, equalling 520 thousand euro, refer to the costs incurred by the company as part of the renegotiation of its financial liabilities, and relate to the closure of the derivative financial instruments existing on loans expiring in 2011. The commissions on non-use, equal to 123 thousand euro, relate for 49 thousand euro to the loan repaid during 2011 and for 74 thousand euro to the loan stipulated on August 30, 2011. 4.3 - Staff costs The breakdown of the balance for the staff costs and the corresponding changes in the years of comparison are shown in the following statement.

2011 2010 CHANGE

SALARIES AND WAGES 1,854 1,079 775

SOCIAL SECURITY CHARGES 233 348 (115)

POST-EMPLOYMENT BENEFITS 47 59 (12)

OTHER COSTS 25 40 (15)

TOTAL 2,159 1,526 633

Salaries and wages include 746 thousand euro relating to compensation and payments to employees and executives, as well as 1,108 thousand euro of costs for incentives to leave, deriving from the voluntary labour termination agreements following the transfer of the company offices from Milan to Rome. The employment contracts of the Milan office staff have been terminated assisted by leaving incentives and placement services as well as recourse to applicable legislative institutions. Below is the average number of employees and the breakdown by category:

12/31/2010 RECRUITS LEAVERS 12/31/2011 AVERAGE

EXECUTIVES 3 - (2) 1 2

MANAGERS 4 - (3) 1 3

EMPLOYEES 4 - (4) - 2

TOTAL 11 - (9) 2 7

Worth mentioning is that, after the end of the year, the work relation with the Manager existing as at December 31, 2011 was terminated. 4.4 - Other operating costs They are represented by the costs shown in the table below.


153

2011 2010 CHANGE

SERVICE CHARGES 3,405 2,670 735


UNICREDIT 1 1 -

ADR TEL S.P.A. 2 3 (1)

ADR 490 5 485

ASSICURAZIONI GENERALI 130 - 130

RENTALS 270 372 (102)

OTHER OPERATING EXPENSES 738 804 (66)

TOTAL 4,413 3,846 567 The most important item are analysed below. Service charges They amount to 3,405 thousand euro, with an increase of 765 thousand euro, mainly due to the higher operating costs of the Board of Directors as well as a series of charges incurred in relation to the transfer of the office from Milan to Rome. At the time of the transfer in particular, the full service agreement between ADR and Gemina came into force; through it, the subsidiary provides the Company with all services necessary to carry out its corporate functions. Other operating expenses These basically include company costs, totalling 357 thousand euro, borne for publishing mandatory company notices and organising the Shareholders’ Meeting for the approval of the financial statements, fiscal charges for non-deductible VAT and other taxes amounting to 208 thousand euro. 4.5 – Amortisation, depreciation and write-downs These amount to 112 thousand euro (2,240 thousand euro in 2010) and entirely refer to an integration of the provision allocated against the risk relating to the Assessment report issued by the Revenue Office for a tax audit relating to 2006. This integration was made in order to consider the probable risk of being charged the interest accrued on the penalties as well as a change in the same penalties. 4.6 – Revenues The revenues of 1,004 thousand euro (1,044 thousand euro in 2010) derive from the corporate and administrative services provided, as contractually defined, to Group companies for 30 thousand euro, the recovery of remuneration for corporate offices filled by executive staff in Group companies for 21 thousand euro, and the re-debiting of costs to subsidiaries for 747 thousand euro, as well as various recoveries for the residual amount. All revenues were attained in Italy.


154

4.7 – Income taxes The item is positive for 1,889 thousand euro (2,248 thousand euro in 2010), and includes: - the income from IRES tax losses generated over the year, amounting to 2,298 thousand euro,

recovered by Gemina within the agreements of the tax consolidation; - the income, equal to 391 thousand euro, deriving from the transfer, as part of the tax

consolidation, of deductible ROL; - the partial levy of pre-paid net taxes for 800 thousand euro, essentially due to the effect of the

deduction, for tax purposes, of the last portion of the share capital charges incurred in 2007.

The table below shows the reconciliation between the theoretical fiscal and real charges incurred for the IRES tax for the year.

IRES – reconciliation between theoretical and real fiscal charges

TAXABLE TAX TAXABLE TAXINCOME INCOME

PRE-TAX PROFIT (LOSS) (8,505) (10,934)

THEORETICAL IRES 27.50% 2,339 27.50% 3,007

PERMANENT DIFFERENCES 3,059 (841) 6,564 (1,805)

TEMPORARY DIFFERENCES DEDUCTIBLE IN FUTURE YEARS 390 (107) - -

REVERSAL OF TEMPORARY DIFFERENCES FROM PREVIOUS YEARS (3,299) 907 (3,118) 857

TAXABLE PROFIT (LOSS) (8,355) 2,298 (7,488) 2,059

2011 2010

NOTE 5 – INFORMATION ON THE ITEMS OF THE STATEMENT OF FINANCIAL POSITION

5.1 – Intangible fixed assets They consist of expenses for software and IT systems, entirely amortised at year-end, as shown in the table below.

12/31/2010 INCREASES

AMORTISATION/ DEPRECIATION 12/31/2011

SOFTWARE AND IT SYSTEMS 1 - (1) -

TOTAL 1 - (1) - 5.2 – Tangible fixed assets These consist of assets owned by the Company. At December 31, 2011, net of the accumulated depreciation, these have a book value equal to 2 thousand euro (35 thousand euro at December 31, 2010). The changes taking place in the year are represented essentially by the amortisation over the period, equal to 11 thousand euro, and the transfers and disposals for a net book value of 23 thousand euro. The detail of the items and the changes taking place is represented in the following table.


155

12/31/2010 CHANGES IN THE YEAR 12/31/2011

COST REVAL. ACCR. BOOK PURCHASES DISPOSALS SHARE


(WRITE-DOWN)

DEPR. VALUE COST PROVISION DEPR. (WRITE-DOWN)

DEPR. VALUE


EQUIPMENT

MISCELLANEOUS FITTINGS 33 - (28) 5 - (33) 28 - - - - -

33 - (28) 5 - (33) 28 - - - - -

OTHER TANGIBLE FIXED

ASSETS

FURNITURE AND FURNISHINGS 217 - (192) 25 - (215) 197 (6) 2 - (1) 1

OFFICE MACHINES 9 - (4) 5 1 (8) 8 (5) 2 - (1) 1

OTHER ASSETS 9 - (9) - - (9) 9 - - - - -

235 - (205) 30 1 (232) 214 (11) 4 - (2) 2

TOTAL 268 - (233) 35 1 (265) 242 (11) 4 - (2) 2


156

5.3 – Equity investments These are equity investments in other companies. Below is the breakdown of the individual items as well as the changes taking place in 2011; this information is also summarised in the table at the end of this note. Equity investments in subsidiaries The value at year end is represented by the value of the equity investments held in: - ADR, owner of the concession for the creation, management and maintenance in the original

condition of the “Leonardo da Vinci” Airport of Fiumicino (Rome), and “G.B. Pastine” Airport of Ciampino (Rome);

- Fiumicino Energia S.r.l., the owner of the co-generation power plant built in the area of Fiumicino Airport. It supplies electric and thermal power to the Leonardo da Vinci Airport, through the company Leonardo Energia S.c.ar.l.;

- Domino S.r.l., company not operational. The value of the equity investment held in ADR consists of the historical cost incurred for its acquisition, which incorporated both the company’s equity consistency and the expected profitability. During the year 2,210 shares were purchased from minority shareholders interested in the disposal, for a total of 37 thousand euro. Of the shares held, 21,778,660 (corresponding to 35% of ADR’s share capital) were pledged by the pool of banks that during 2011 disbursed the “Loan” shown in note no. 5.13. As in previous years, the book value of the equity investment was subject to a specific impairment test, which confirmed the recoverability with reference to the value in use. The fairness of the value was assessed by discounting the cash flows estimated in the economic and financial projections drawn up by ADR management in the Economic- Financial Plan delivered to ENAC on October 27, 2011 and approved by the Board of Directors of Gemina in December 2011. Forecasts are based on the following assumptions: - airport fees defined on the basis of the criteria and standards contained in the draft convention –

Program Contract approved by the Board of Directors of ENAC in July 2011; - passenger traffic reaching 50 million in 2021 (term for the first regulatory period) and 98 million in

2044; - investments in infrastructures, amounting to 2.5 billion euro over the 2012-2021 period and 9.5

billion euro over the following period; - discounting at 6.9% annual nominal rate after taxation. The financial flows discounted also using alternative hypotheses and a rate simulation range confirm the recoverability of the value of the equity investment as at December 31, 2011. The two main ADR’s business areas, aviation and non aviation, were considered as one single Cash Generating Unit for both their strict interconnection and the fact that one single value was assigned to the concession. The investments expected related to the expansion of the capacity at “Fiumicino Sud” for 4.4 billion euro and the creation of a new accommodation capacity (“Fiumicino Nord”) for 7.2 billion euro. For the remaining part, these concern the construction of the new low cost airport of Viterbo and the simultaneous requalification of Ciampino city – airport. The implementation of this demanding investment program is however subjected to the signature of a planning agreement, which would ensure continuity and stability of contract clauses over the entire concession term.


157

With reference to Fiumicino Energia, the owner of the co-generation power plant built in the area of Fiumicino Airport, worth noting is that, based on the 2005 industrial co-operation agreement signed by Fiumicino Energia and ADR, in December 2023 (that is upon the expiry of the sub-concession agreement stipulated between these companies) the co-generation power plant will be purchased free of charge by ADR, in good state of repair and in full operation. Also with reference to this equity investment, an impairment test was carried out, with the aim of checking the recoverability of the book value at year end. The test in question, performed through the estimate of the value in use, confirmed the recoverability of the values recorded, and was prepared based on the industrial plan 2012-2023 drafted by the management of the company; since this period encompasses the entire residual duration of the sub concession Fiumicino Energia is the owner of, no terminal value was considered in the estimate of the value in use. The costs or revenues relating to “green certificates” and “carbon emissions” were not hypothesised in the plan in consideration of the uncertainty as to the dispute concerning these issues in place with the subsidiary and the competent authorities and also of the possibility of transferring these possible costs to the customer ADR (as expressly provided for by the supply agreement). The cash flows from operations calculated as so were discounted at a rate (nominal after taxation) of 4.9%, representative of the weighted average cost of the capital of this company. The subsidiary Domino is dormant. Investments in Associates and Joint Ventures The value at the end of the previous year was represented by the net book value of the equity investment held in Pentar S.p.A., a company which holds equity investments in various sectors. The historical cost of the equity investment held for 2,232 thousand euro, was subject to write-down in 2010 for 2,200 thousand euro in relation to the estimate of the recoverable value of this company. During 2011 a share capital increase was finalised, which Gemina did not participate in. Thus, the equity investment held in this company was reduced from 20.25% to 18.54%. Other equity investments Gemina Fiduciary Services S.A. (“GFS”) is a company that attends to the collection of credit from Banca Centrale Argentina through a lawsuit. Any recovered amount will be repaid to the bond subscribers, net of operating costs, which will be held by GFS. Operating costs are currently paid by Gemina for around 20/30 thousand euro per year. In 2011 the activities linked to the liquidation of the subsidiary Kiwi 1 Ventura Servicos S.A. were completed, which led to the recognition of proceeds for 34 thousand euro, as shown in note 4.1, to which reference is made.


158

Name Shares Unit. % Value Shares Value Shares Value Value Shares Unit. Value %or Quotas Value Equity or Quotas or Quotas Adjustments or Quotas Value Equity

Inv. Inv.

EQUITY INVEST. IN SUBSIDIARIES

AEROPORTI DI ROMA S.P.A. 59,669,675 30.76 95.76 1,835,564 2,210 37 - - - 59,671,885 30.76 1,835,600 95.90

FIUMICINO ENERGIA S.R.L. 1 - 87.14 7,673 - - - - - 1 - 7,673 87.14

DOMINO S.R.L. 1 - 100.00 10 - - - - - 1 - 10 100.00

TOTAL 1,843,246 - 37 - - - 1,843,283

EQUITY INVESTMENTS INASSOCIATES AND JOINT VENTURES

PENTAR S.P.A. 5,000,000 0.45 20.35 32 - - - - (32) 5,000,000 0.00 -

TOTAL 32 - - (32) -

OTHER EQUITY INVESTMENTS

PENTAR S.P.A. 32 0.01 32 18.54

DIRECTIONAL CAPITAL HOLD. NV 1 - 5.00 - - - - - - 1 - - 5.00

KIWI 1 VENTURA SERVICOS S.A. 34 - 0.92 28 - - - - (28) - - - 0.00

GEMINA FIDUCIARY SERVICES S.A. 17,646 - 99.99 - - - - - - 17,646 - - 99.99

TELEFIN S.P.A IN LIQUIDATION 85,000 - 42.50 - - - - - - 85,000 - - 42.50

TOTAL 28 - - (28) -

GRAND TOTAL 1,843,306 37 (28) 1,843,315

IncreasesStock as at 12/31/2010 Stock as at 12/31/2011Decreases


159

INFORMATION CONCERNING THE EQUITY INVESTMENTS (IN THOUSANDS OF EURO)

NAME

REGISTERED OFFICE ACTIVITY SHARE CAPITAL

VALUE IN EURO

SHAREHOLDERS’ EQUITY INCLUDING

PROFIT (LOSS) AS AT 12/31/2011

PROFIT (LOSS) FOR THE YEAR

2011

PORTION OF SHAREHOLDERS’ EQUITY

HELD

% OF DIRECT OWNERSHIP

BOOK VALUE

AEROPORTI DI ROMA S.P.A. Fiumicino Airport services euro 62,224,743 825,571 39,686 791,723 95.90 1,835,600

FIUMICINO ENERGIA S.R.L. Fiumicino Production and sale of energy euro 741,795 791 (20) 690 87.14 7,673

DOMINO S.R.L. Fiumicino IT services euro 10,000 6 (5) 6 100.00 10

GEMINA FIDUCIARY SERVICES S.A. (1) Luxembourg Trust company euro 150,000 20 41 20 99.99 -

PENTAR S.P.A. (1) Naples Holding company euro 11,548,370 9,822 (2,786) 1,821 18.54 32

TELEFIN S.P.A. IN LIQUIDATION (FORMERLY TEMPO LIBERO S.P.A.) (2) Milan Financial services Lire 20,000,000,000 - - - 42.50 -




160

5.4 - Deferred Tax Assets These substantially regard:

- 76 thousand euro for the tax effect of the staff cost not settled, deductible in future years, and the remuneration relating directors;

- 49 thousand euro for the tax effect related to the fair value of the derivative financial instruments subscribed to hedge against the financial flows of the bank payables.

During 2011 deferred tax assets incurred a net decrease of 904 thousand euro, essentially due to the deduction in 2011, for tax purposes, of the last portion of the share capital charges incurred in 2007. 5.5 – Other non-current financial assets Equal to 221 thousand euro (of which 31.5 thousand euro towards Mediobanca and 31.5 thousand euro towards UniCredit), these entirely relate to prepayments pertaining to the non-current portion of the costs incurred by the company to activate the revolving credit line of an amount equal to 18.0 million euro, better described in note 5.13, to which reference is made. 5.6 – Trade receivables

12/31/ 2011 12/31/2010 Change



OF WHICH DUE TO RELATED PARTIES 14 29 (15)

BAD DEBT PROVISION 0 (265) 265 RECEIVABLES DUE FROM

SUBSIDIARIES 418 426 (8)

ADR 412 246 166

DOMINO S.R.L. - 1 (1)

ADR TEL S.P.A. - - -

FIUMICINO ENERGIA S.R.L. - 149 (149)

LEONARDO ENERGIA S.C. A R.L. 6 30 (24)

INVESTMENTS IN ASSOCIATES AND

JOINT VENTURES - 123 (123)

PENTAR S.P.A. - 6 (6)

S.I.T.T.I. S.P.A. - 117 (117)

TOTAL 432 578 (146)

Receivables due from subsidiaries refer to services rendered and to charge backs of costs.


161

5.7 – Other receivables

12/31/2011 12/31/2010 Change

RECEIVABLES DUE FROM SUBSIDIARIES 16,864 11,408 5,456

DUE FROM COMPANIES OF THE GROUP FOR CONSOLIDATED IRES 16,864 11,408 5,456

DUE FROM OTHERS 2,656 1,416 1,240


OTHER TAX RECEIVABLES 833 843 (10)

OTHER RECEIVABLES 1,128 55 1,073

PREPAYMENTS 125 189 (64)


MEDIOBANCA - 33 (33)

TOTAL 19,645 13,013 6,632 The receivables due from subsidiaries refer to the taxes of the companies of the ADR group and Fiumicino Energia that adhered to the tax consolidation. Concerning the “Due from others”, it is highlighted that the change of 1,073 thousand euro derives essentially from the receivable deriving from the ruling issued during 2011 in relation to the Rizzoli dispute, as illustrated in note 7.1 below, to which reference is made, to recover expenses for the lawyers that assisted Gemina in the same litigation, whose services are allocated under the amounts due to suppliers. 5.8 – Other current financial assets

12/31/2011 12/31/2010 Change

RECEIVABLES DUE FROM SUBSIDIARIES 3,203 2,927 276

FOR THE GIRO ACCOUNT

FIUMICINO ENERGIA S.R.L 3,203 2,927 276 RECEIVABLES DUE FROM OTHERS 143 7 136

ACCRUALS ON INTEREST ON BANK DEPOSITS - 7 (7) PREPAYMENTS FOR COMMISSIONS ON LOANS 143 - 143

OF WHICH DUE TO RELATED PARTIES

MEDIOBANCA 47 - 47

UNICREDIT 16 - 16

TOTAL 3,346 2,934 412

The amounts due from Fiumicino Energia regard two loans granted in the form of a giro account, granted at market terms in view of optimising the Group’s treasury management. These loans have a 3-month Euribor rate plus a margin of 200 bps.


162

The prepayments for commissions on loans refer to the current share, concerning 2012, of the costs incurred for the subscription of Line B of the revolving loan of an amount equal to 18 million euro, shown in note 5.13. 5.9 – Cash and cash equivalents

12/31/2011 12/31/2010 Change


OF WHICH DUE TO RELATED PARTIES MEDIOBANCA 2 2 - UNICREDIT 12 46 (46)

CASH ON HAND - 1 (1)

TOTAL 5,340 11,137 (5,797)

The values at year end represent liquidity at the bank accounts. 5.10 – Shareholders’ equity The shareholder’s equity amounts to 1,804,620 thousand euro (1,810,963 thousand euro at December 31, 2010) and is a decrease of 6,343 thousand euro compared to December 31, 2010, in relation to the following effects: - losses of the year amounting to 6,616 thousand euro; - recording of net profits, for 273 thousand euro for other components of the comprehensive

income statement generated by the change in fair value, net of the related tax effect, of the derivative financial instruments of cash flow hedge.

The changes occurred over 2010 and in the year in question are highlighted in the special statement presented among the financial statements. The share capital, fully paid-in, consists of 1,469,197,552 ordinary shares with a par value of 1 euro each and 3,762,768 non-convertible savings shares with a par value of 1 euro each, for a total 1,472,960 thousand euro. Below is the statement analyzing the capital and the net Shareholders’ equity reserves with indication of the related possibility of use, in compliance with the provisions of art. 2427 of the Italian Civil Code and IAS 1 paragraph 76.


163

TYPE/DESCRIPTION TOTAL AMOUNT POSSIBLE

USE SUMMARY OF USES MADE IN

THE PAST THREE YEARS

TO HEDGE

LOSSES FOR OTHER

REASONS


CAPITAL RESERVES: 199,707 SHARE PREMIUM RESERVE NET OF SHARE

CAPITAL INCREASE COSTS 119,707 A-B RESERVE FOR PURCHASE OF OWN

SHARES 80,000


OTHER RESERVES: 83,106 MERGER SURPLUS RESERVE AND SALE OF

OWN SHARES 7,747 A-B-C

SALE OF UNEXERCISED RIGHTS 350 A-B-C

LEGAL RESERVE 75,009 B PROFIT (LOSS) FROM PREVIOUS

YEARS 55,593 A-B-C


RESIDUAL DISTRIBUTABLE PORTION 63,690

Key:

A: to increase capital

B: to cover losses

C: for distribution to shareholders 5.11 – Employee benefits The amount entered relates to the benefits accrued by employees as at December 31, 2011, according to the regulations and collective bargaining agreements.

12/31/2010 Provisions Liquidated 12/31/2011 amounts

244 47 (184) 107 The reduction taking place during the year is correlated to the reduction in company staff.


164

5.12 – Provisions for risks and charges

12/31/2011 12/31/2010 Change

NON-CURRENT SHARE 9,100 9,100 -

CURRENT SHARE 2,037 1,922 115 TOTAL 11,137 11,022 115

The change taking place during the year arises from the higher allocation made for the risk deriving from an audit by the Revenue Office, as already mentioned in note 4.5. At December 31, 2011 the provisions for risks and charges mainly include: - the residual amount of the provision for risks allocated in relation to the guarantees granted to the

purchaser for the equity investment in Elilario, equal to 2 million euro ; - the allocations made for the guarantee granted to ADR in 2002, in the event of a negative outcome

for the subsidiary of the litigation with the Customs Agency amounting to 6.7 million euro; - the allocation related to the Assessment Report issued by the Revenue Office for a tax audit on the

year 2006, for 1.7 million euro. At December 31, 2011 no additional significant potential liabilities and obligations are recorded for which it is necessary to allocate provisions for risks and charges. 5.13 – Financial indebtedness net of current share

12/31/2011 12/31/2010 Change

DUE TO BANKS 42,100 - 42,100


MEDIOBANCA 6,014 - 6,014UNICREDIT 6,014 - 6,014EFFECT OF “AMORTISED COST METHOD” (805) - (805)

Total 41,295 - 41,295

On August 30, 2011 the company signed a loan agreement for a maximum amount of 60.1 million euro with expiry in December 2014 (“Loan 2011”). The “Loan 2011” was destined for 42.1 million euro (“Line A”) to the full redemption of the remaining amount of the loan taken out in December 2008 (“2008 loan”), occurred in September 16, 2011, and for 18.0 million euro (“Revolving Line B”) to hedge the future cash requirement regarding the company’s operations. The Loan 2011 was signed in quote equally by a pool of seven banks consisting of Banca Nazionale del Lavoro S.p.A. (BNL), Barclays Bank Plc (Barclays), Crédit Agricole Corporate & Investment Bank (Crédit Agricole), Mediobanca – Banca di Credito Finanziario S.p.A. (Mediobanca), Natixis S.A. (Natixis), The Royal Bank of Scotland N.V. (RBS) and UniCredit S.p.A. (UniCredit), and organised by Mediobanca in its capacity as Agent Bank. The Loan 2011 is backed by a senior pledge on the shares of ADR representing at least 35% of the share capital, and will be adjusted according to a formula defined in the contractual documents, linked mainly to the performance of the Gemina share. As at December 31, 2011, ADR shares used as guarantee numbered 21,778,660, equal to 35% of share capital.


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The interest rate is the euribor plus a margin tied to the rating assigned to ADR; the maximum margin established contractually, equal to 300 basis points, corresponds to the one applied currently, which therefore cannot be subject to increase. The fair value of the Loan is estimated at 45.9 million euro.

FINANCER NAME

DESCRIP. AMOUNT OF

LOAN GRANTED AMOUNT

USED BOOK VALUE

RECORDED

INTEREST REDEMPTION DURATION MATURITY

Line A 42,100 42,100 41,881 (*) (**) at maturity 3.3 years Dec. 2014 MEDIOBANCA

AND UNICREDIT, IN POOL WITH 5

OTHER BANKS Line B 18,000 - - (*) (**) at maturity 3.3 years Dec. 2014

TOTAL 60,100 42,100 41,881 (*) Total value recorded at the amortised cost, including the current share and the accrual matured at year end (**) Variable, indexed to the Euribor plus a spread based on the rating attributed to ADR 5.14 – Trade payables

12/31/2011 12/31/2010 Change

DUE TO SUPPLIERS 1,587 593 994

TRADE LIABILITY ACCRUALS - 95 (95)

PAYABLES DUE TO SUBSIDIARIES 212 23 189

- ADR 211 22 189

- ADR TEL S.P.A. 1 1 -

TOTAL 1,799 711 1,088

The item, equal to 1,799 thousand euro, consists of the amounts due to suppliers (1,587 thousand euro), mainly originating from professional services, and the amounts due to group companies (212 thousand euro). The book value of the trade amounts due approximates its fair value, since the discounting effect is not significant. Regarding the change of the amounts due to suppliers, equal to 994 thousand euro, it is worth noting that this derives essentially from the amounts due for professional services in activities related to the Rizzoli dispute, illustrated in note 7.1 below, to which reference is made; the related sentence was issued during 2011 and established the right of Gemina to fully recover the fees relating to the services from the counterpart.


166

5.15 – Current financial liabilities

12/31/2011 12/31/2010 CHANGE

DUE TO BANKS - 42,126 (42,126)


MEDIOBANCA - 21,063 (21,063)

UNICREDIT - 21,063 (21,063)

EFFECT OF “AMORTISED COST METHOD” - (261) 261 ACCRUED LIABILITIES FOR INTEREST ON

AMOUNTS DUE TO BANKS 605 89 516


MEDIOBANCA 84 44 40

UNICREDIT 84 45 39

TOTAL 605 41,954 (41,349) During the year loans existing at December 31, 2010, were repaid through the signing of a new loan already illustrated in the previous note. 5.16 – Financial derivatives

12/31/2011 12/31/2010 Change

DERIVATIVES HEDGING INTEREST RATE RISKS 174 581 (407)

TOTAL 174 581 (407) With regard to the commitment undertaken in relation to the 2011 Loan agreement, on September 16, 2011 Gemina entered into an interest rate swap agreement with Crédit Agricole for a total amount of 25.3 million euro, equal to 60% of Line A of Loan 2011. Simultaneously, upon reaching the maturity of the loans at December 31, 2010, the company closed the related interest rate swap agreements signed in 2008 and pertaining to the abovementioned loans. TABLE SUMMARISING THE OUTSTANDING DERIVATIVE CONTRACTS Pursuant to paragraph 12.2.8 of the loan agreement under note 5.13, Gemina is obliged to hedge against the interest rate risk to the tune of at least 50% of the amount, disbursed and not repaid, due to Line A (therefore currently at least 21.1 million euro). To face this obligation the Company signed an interest rate swap agreement on September 16, 2011, whose main characteristics are summarised in the table below:


167

COUNTERPART CRÉDIT AGRICOLE

INSTRUMENT IRS

TYPE Cash Flow Hedge

HEDGED RISK Interest

SUBSCRIPTION DATE Sept. 2011

EXPIRATION December 30, 2014

HEDGED NOTIONAL VALUE 25.260

APPLIED RATE

Gemina pays a fixed rate of 1.65% and receives: - From 09/16/2011 to 03/16/2012 a fixed rate of 1.729%; - From 03/16/2012 to 09/16/2014 the Euribor 6 months; - From 09/16/2014 to 12/30/2014 the Euribor interpolated at 3-4 months


12/31/2011 (179)

CHANGE IN FAIR VALUE: (179)

TO INCOME STATEMENT -

TO SHAREHOLDERS’ EQUITY (179)

TAX EFFECT (49)

TOTAL NET CHANGE (130) 5.17 – Current tax liabilities and other current liabilities

12/31/2011 12/31/2010 ChangeAMOUNTS PAYABLE TO THE TAX AUTHORITIES FOR CURRENT TAXES 10,929 5,065 5,864

TOTAL 10,929 5,065 5,864

PAYABLES DUE TO BOARD OF STATUTORY AUDITORS 151 151 -


PAYABLES DUE TO PERSONNEL 275 254 21PAYABLES TO SUBSIDIARIES FOR TAX REFUND APPLICATIONS 435 435 -

ADR 426 426 -

ADR TEL S.P.A. 4 4 -

ADR ENGINEERING S.P.A. 5 5 -

OTHER PAYABLES 412 394 18

TOTAL 1,760 1,493 267 The item tax liabilities refers to the payable for taxes to be settled for 2011, net of the related advances; it takes into account the balances deriving from the tax consolidation arranged by the company. The


168

change in the year is offset by a corresponding increase in the amount due from companies of the group for these balances to be paid to the Tax Authority. The item other payables mainly includes payables to social security for 64 thousand euro and other tax payables for 103 thousand euro. NOTE 6 – OTHER FINANCIAL INFORMATION

6.1 - Categories of assets/liabilities IAS 39

12/31/2011

RECEIVABLES

AND LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVE

INSTRUMENTS


OTHER NON-CURRENT FINANCIAL ASSETS 221




TOTAL ASSETS IAS 39 9,339 32 - -

NON-CURRENT FINANCIAL LIABILITIES 41,295




TOTAL LIABILITIES IAS 39 - - 43,699 174 INCOME (CHARGES) RECORDED ON THE INCOME STATEMENT:



OTHER EXPENSES (123) 243 - (2,572) (514)

12/31/2010

RECEIVABLES

AND

LOANS


SALE

PAYABLES AT

AMORTISED

COST DERIVATIVE

INSTRUMENTS




CASH AND CASH EQUIVALENTS 11,137 TOTAL ASSETS IAS 39 14,649 28 - -

TRADE PAYABLES 711



TOTAL LIABILITIES IAS 39 - - 42,665 581


169

INCOME (CHARGES) RECORDED ON THE INCOME STATEMENT:

INTEREST INCOME 389


OTHER EXPENSES (66)

389 - (2,545) (842) 6.2 – Financial risk management The financial derivatives described in Note 5.16 are included in “Level 2” of the “Fair Value Hierarchy” defined by IFRS 7, meaning the fair value is measured based on valuation techniques which take as reference parameters that are observable on the market, different from the prices of the financial instrument. In order to carry out its business, the company is exposed to: a. the market risk, mainly of changes in interest rates connected to the financial assets disbursed and

financial liabilities assumed; b. the credit risk, connected to the normal commercial relationships, and the possibility of default of a

financial counterpart; c. the liquidity risk, with reference to the availability of financial resources required to run its business

and repay the assumed liabilities. MARKET RISK The strategy followed for this type of risk aims to mitigate the rate risk and optimise the cost of borrowing, considering the interests of the stakeholders. These risks are managed in compliance with the principles of prudence and in line with the “best practices” of the market. The company’s derivative portfolio transactions at December 31, 2011 are recorded as cash flow hedge in compliance with IAS 39. The fair value of the derivative financial instruments is determined by discounting the expected cash flows and using the market interest rate curve at the reference date. The residual average duration of the overall financial indebtedness equals about 3 years. The monitoring activities also aim to assess, on a continuous basis, the credit worthiness of the counterparts and the risk concentration level. The Company is not exposed to an exchange rate fluctuation risk. In consideration of Gemina’s specific economic and financial position, the rate risk is connected to the uncertainty induced by interest rate performance, and may be presented in the form of cash flow risk, connected to the financial assets or liabilities with indexed flows at a market interest rate. With the aim of reducing the amount of financial indebtedness at a variable rate, an interest rate swap (IRS) derivative agreement was signed, classified as “cash flow hedge”. The expiry of the hedge derivative and the underlying liability loan is the same. The effectiveness of the hedging is checked retrospectively and with a view to the future every quarter. The effectiveness of the hedge is confirmed by the effectiveness test calculated at the time of stipulating the agreement. For this purpose the “hypothetical derivative method” was used: in particular the test was carried out by applying the dollar offset method, referring the fair value delta of the hedge instrument to the one of the hypothetical derivative; since this ratio is between 80 and 125%, the hedge is deemed effective.


170

The dollar offset method was used both for the retrospective test (referring the change in the fair value of the hedge instrument with the one of the hypothetical derivative) and for the prospective test (obtaining the hedge ratio by simulating a parallel instantaneous shock of +/- 100 bps on the rate curve). The tests performed showed an effectiveness of the hedge in the year of 100%. The changes in fair value of the derivative contracts are recorded in the comprehensive income statement, while no ineffective share is recorded in the income statement. The income statement is credited (debited) simultaneously upon the occurrence of the interest flows of the hedged instruments. With reference to the type of interest rate, the financial indebtedness at December 31, 2011 is expressed at 60% at fixed rate. CREDIT RISK The Company’s higher exposure to credit risk concerns the “Other Receivables”, and in particular the amounts due from the ADR Group for consolidated taxation. The analysis of trade receivables and other receivables broken down by expiration term is shown below.



RECEIVABLES

COMING DUE BEFORE 60

DAYS FROM 61 TO

120 DAYS FROM 121 TO

180 DAYS AFTER

181 DAYS

TOTAL

RECEIVABLES

Dec. 31, 2011 0.5 - - - - 0.5TRADE RECEIVABLES

Dec. 31, 2010 0.6 - - - - 0.6

Dec. 31, 2011 19.6 - - - - 19.6OTHER RECEIVABLES

Dec. 31, 2010 13.0 - - - - 13.0

LIQUIDITY RISK The liquidity risk is the risk that the financial resources available may be insufficient to cover the expiring obligations. In consideration of the company’s ability to generate cash flows and the availability of uncommitted lines of credit, the Company believes to have access to sufficient sources of finance to meet the planned financial requirements. The table below illustrates a breakdown of the expiries for the financial liabilities at December 31, 2011 and the comparative figures at December 31, 2010.

12/31/2011 12/31/2010


WITHIN THE

FOLLOWING

YEAR

BETWEEN

1 AND 3

YEARS

AFTER

3

YEARS TOTAL

WITHIN THE

FOLLOWING

YEAR

BETWEEN

1 AND 3

YEARS

AFTER

3

YEARS TOTAL

FINANCIAL INDEBTEDNESS NET

OF CURRENT SHARE - 41.3 - 41.3 - - - -

TRADE PAYABLES 1.8 - - 1.8 0.6 - - 0.6

CURRENT FINANCIAL LIABILITIES 0.6 - - 0.6 42.0 - - 42.0FINANCIAL INSTRUMENTS –

DERIVATIVES - 0.2 - 0.2 0.6 - - 0.6

OTHER CURRENT LIABILITIES 12.7 - - 12.7 6.6 - - 6.6


171

It is highlighted that during the year the Company restructured its debt exposure to the credit institutes, also in order to face the short-term commitments existing at the end of the previous year. In particular, as already described previously in note 5.13, on August 30, 2011 the company signed a loan agreement for a maximum amount of 60.1 million euro with expiry December 30, 2014. At December 31, 2011, based on the loan agreements signed, the company has a revolving line for amount equal to 18.0 million euro allocated to cover future cash needs. SENSITIVITY ANALYSIS The sensitivity analysis highlights the impacts that would occur on the income statement and the shareholders’ equity during the year in case of changes in interest rates and exchange rates the company is exposed to. With regard to the particular sensitivity of the Company’s results to the interest rate trend, it has been decided to go forward with a sensitivity analysis with a range of +/- 50 bps on the interest rate. The potential effects, shown gross of the tax effect, are summarised as follows. - A change of +50 bps in the interest rates creates a 0.1 million euro increase in financial expenses a

0.35 million euro positive change of the cash flow hedge reserve. - a change of -50 bps in the interest rates determines a reduction of equal amount and opposite sign

for the two components. Finally, it is also pointed out that the interest rate applied to the outstanding Loan is equal to the Euribor rate plus a margin that is proportional to the rating given to ADR. The financial expenses paid by Gemina to its Financers therefore depend also on, in addition to the fluctuation in interest rates, ADR’s rating; on this point the maximum margin contractually established, equal to 300 basis points, corresponds to the one currently applied, which therefore will not be subject to increases. 6.3 – Guarantees and major covenants on payables The loan agreement signed by the Company on August 30, 2011, is backed by a senior pledge on a number of ADR shares representing at least 35% of the share capital. The number of shares to be subjected is in any case calculated, and possibly adjusted, each quarter depending on the trend of the Gemina share. As at December 31, 2011, ADR shares used as guarantee numbered 21,778,660, equal to 35% of share capital. Pursuant to paragraph 12.2.8 of the loan agreement, Gemina is obliged to hedge against the interest rate risk to the tune of at least 50% of the amount, disbursed and not repaid, due to Line A (therefore currently at least 21.05 million euro). By virtue of this obligation the Company signed with the counterpart Crédit Agricole an interest rate swap agreement whose main characteristics are reported in note 5.16 to which reference is made. Gemina has also issued:

- guarantees of 4.0 million euro in the interest of subsidiary Fiumicino Energia to guarantee the fulfilment of obligations deriving from the lease contract entered into with UniCredit Leasing;


- subscription of a joint deed of pledge on 86.12% of the share capital, held in Fiumicino Energia as guarantee of all receivables deriving from the lease agreement entered into with UniCredit Leasing;

- commitment with respect to the UniCredit Group of maintaining the ratio of Net financial indebtedness/Shareholders’ equity at fair value at 3 or less in the Fiumicino Energia financial statements. This covenant was complied with.


172

NOTE 7 – OTHER INFORMATION

7.1 – Litigation SURETY ON THE CUSTOMS AGENCY LITIGATION On December 12, 2002, having received the consent of IRI to sell 44.74% of ADR to the Macquarie Group, Gemina, Impregilo S.p.A. and Falck S.p.A. took the place of IRI, directly assuming the commitment to indemnify ADR, with a share of 50.0%, 13.1% and 36.9%, respectively. This commitment was issued by IRI upon the privatisation of ADR for the purpose of covering 51.166% of capital losses the company may incur due to tax claims for deeds and declarations relating to periods prior to the privatisation, which took place in July 2000. The ongoing dispute between ADR and the Customs Agency regards the period 1993-1998, and is covered by the aforementioned guarantee, which will be enforceable following the final judgment ruling against ADR in relation to the Tax Authorities Impregilo S.p.A. and Falck S.p.A. do not recognise the guarantee as valid. ADR has instituted action against these companies for the purpose of sentencing them to pay the amounts owed, on condition that the final judgment ruling against ADR is passed. As part of this action, at the hearing of January 30, 2012 the ruling for the proceedings was postponed. A ruling is being awaited. In the consolidated financial statements, provisions have been allocated against the risk relating to the litigation with the Customs Agency. In Gemina’s financial statements, provisions were allocated in the event of a total negative outcome for ADR and ADR’s activation of the guarantee. RIZZOLI LITIGATION On March 3, 2010 Gemina was served, on request of RCS Mediagroup S.p.A. (“RCS”), with a writ of summons for a third party in the proceedings instigated by Mr. Angelo Rizzoli against RCS, Intesa San Paolo S.p.A., Mittel S.p.A., Edison S.p.A. and Giovanni Arvedi. Mr. Rizzoli formulated a series of claims aimed at compensating for the economic damages he incurred as a result of the sale of Rizzoli Editore S.p.A., which owns Corriere della Sera, to group of entrepreneurs. The events date back to 1974/1986. RCS fully rejected the plaintiff’s claims, stating they were completely without grounds and considerably subject to the statute of limitations and, as a final alternative, requested that Gemina be summoned to court, as the party from which the current RCS derives, due to the known spin-off stipulated in 1997. Gemina still deems Mr. Rizzoli’s claims, as well as RCS’s request to summon Gemina to court, to be groundless. The judge rejected the preliminary claims of the plaintiff and on June 28, 2011 he held the hearing for pronouncement of the sentence. With ruling no. 248/2012 of January 11, 2012, the Court of Milan rejected all the plaintiff’s claims, condemning the losing party to fully pay the legal expenses towards the defendant and third parties (including, in favour of Gemina, 1,020 thousand euro for fees, 3 thousand euro for expenses and 17 thousand euro for duties). With deed notified on February 17, 2012 Mr. Angelo Rizzoli proposed an appeal (hearing for the appearance of the parties in the deeds: June 14, 2012), asking at the same time the preventive suspension of the executive effectiveness of the appealed ruling.


173

7.2 – Information on Related Parties a) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE

BALANCE SHEET ITEMS


VALUE %

OTHER NON-CURRENT FINANCIAL ASSETS 221 63 29%

TRADE RECEIVABLES

432

432 100%

OTHER RECEIVABLES

19,645

16,864 86%

OTHER CURRENT FINANCIAL ASSETS

3,346

3,266 98%

CASH AND CASH EQUIVALENTS

5,340

14 0%

PROVISIONS FOR RISKS AND CHARGES 11,137 6,700 60%

FINANCIAL INDEBTEDNESS NET OF CURRENT SHARE

41,295

11,799 29%

TRADE PAYABLES

1,799

320 18%

CURRENT FINANCIAL LIABILITIES

605

173 29%

OTHER CURRENT LIABILITIES

1,760

531 30%

b) EFFECTS OF THE TRANSACTIONS OR POSITIONS WITH RELATED PARTIES ON THE



VALUE %

FINANCIAL INCOME 249 100 40%

FINANCIAL EXPENSES (3,092) (2,534) 82%

STAFF COSTS (2,159) (25) 1%

OTHER OPERATING COSTS (4,413) (623) 14%

REVENUES 1,004 797 79%


RELATED PARTIES DESCRIPTION TOTAL ABSOLUTE

VALUE % CASH FLOWS FROM CHANGES IN THE NET WORKING CAPITAL 732 (4,983) n/a

CASH FLOWS FROM INVESTING ACTIVITIES 13 - -

CASH FLOWS FROM FINANCING ACTIVITIES (820) (30,391) > 100%


174

As required by IAS 24 it is highlighted that for 2011, for assignments in Gemina and in other Group companies, the remunerations, non-monetary benefits, bonuses, incentives and other payments due to the Chairman (Mr. Fabrizio Palenzona) amount to a total of 428 thousand euro. In addition, the similar remuneration due to the current Managing Director (Mr. Carlo Bertazzo, in office since April 19, 2011) amounts to a total of 217 thousand euro, as well as the previous Managing Director (Mr. Guido Angiolini) for a total of 680 thousand euro. Worth noting is that pursuant to art. 123-ter of Legislative Decree 58/98, the Report on remuneration was prepared, which shows the consideration due to the members of the administration and control bodies, the General Manager and other executives with strategic responsibilities of Gemina and the Group. This Report is available at Borsa Italiana S.p.A. and on the website www.gemina.it within the limits of the law.


The Chairman (Fabrizio Palenzona)


175

INFORMATION PURSUANT TO ART. 149-DUODECIES OF CONSOB ISSUERS’ REGULATION The following statement, drawn up pursuant to Art. 149-duodecies of the Consob Issuers’ Regulation, highlights the remunerations pertaining to the 2011 financial year for audit services and other services rendered by the same Independent Auditors.


THE SERVICE

REMUNERATION

S PERTAINING TO

THE YEAR 2011 (*)

AUDIT DELOITTE & TOUCHE S.P.A. 155

OTHER SERVICES DELOITTE & TOUCHE S.P.A. (1) 11

CERTIFICATION DELOITTE & TOUCHE S.P.A. (2) 3

(1) Review of request from shareholder Changi Ltd. (2) Subscription of Income Tax Return and 770 forms. (*) including expenses


176

CERTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE WITH ART. 81-TER OF CONSOB REGULATION NO. 11971 OF MAY 14, 1999 AND SUBSEQUENT AMENDMENTS

AND ADDITIONS We, the undersigned, Carlo Bertazzo, in my position of Managing Director, and Sandro Capparucci in my position of Manager in charge of preparing the corporate accounting documents of Gemina S.p.A., taking also account of provisions set forth by Art. 154 bis, subsections 3 and 4 of Italian Legislative Decree no. 58 of February 24, 1998, hereby declare:

- the consistency with regard to the characteristics of the company - of the correct application of administration and accounting procedures for the drafting of the

consolidated financial statements over 2011.

It is also stated that: - the consolidated financial statements as at December 31, 2011:

- were drawn up pursuant to the applicable International Accounting Standards adopted by the European Union pursuant to regulation (EC) no. 1606/2002 of the European Parliament and Council of July 19, 2002;

- correspond to figures disclosed in the accounting books and records; - supply a true and fair disclosure of the equity, statement of financial position of the issuer and

of the companies included in the consolidation area; - the Report on Operations includes a reliable analysis of the performance and management result, as

well as the situation of the issuer and of the companies included in the consolidation, together with the description of the major risks and uncertainties to which they are exposed.

Fiumicino, March 8, 2012

The Managing The Manager Director in charge of preparing (Carlo Bertazzo) corporate accounting documents (Sandro Capparucci)


177



178


179


180

STATUTORY AUDITORS’ REPORT


181

Statutory Auditors' Report to Gemina S.p.A. Shareholders' Meeting (pursuant to art. 153 of Italian Legislative Decree no. 58/98) Dear Shareholders, during the financial year closed at 31 December 2011, we have performed the supervisory activity in accordance to the Law (Legislative Decree no. 58 of 24/2/1998 – “Consolidated Act on Financial Intermediation”), in line with the code of conduct of the Board of Statutory Auditors in joint-stock companies with stock listed in the regulated markets as recommended by the National Associations of Chartered Accountants and Bookkeepers, and with CONSOB notices on corporate governance and on the activities of the Board of Statutory Auditors. As regards the legal audit of accounts it is hereby recalled that, pursuant to Legislative Decree 58/1998, the Company appointed Deloitte & Touche S.p.A. as external auditors and we make reference to their report. The Board of Auditors currently holding office was appointed by the shareholders' meeting of 28 April 2009 pursuant to the Company By-Laws. With the approval of this financial statements, the mandate will expire and the shareholders' meeting will be called the appointment of a new controlling body. Also in compliance with CONSOB guidelines by Notice DEM/125564 dated 6 April 2001 and subsequent updates, wehereby inform you about the following: We have overseen the Company's compliance with the Law and the By-Laws. We have attended the Board of Directors' meetings and relevant preliminary meetings on the issues

relating to the items on the agenda, as well as the meetings of the Audit Committee, and the Corporate Governace, and of the Human Resources and Compensation Committee; and we have obtained information on a regular basis from the Board members on the general operating performance, on the foreseeable outlook and on the high-value economic, financial and cash flow transactions made by the Company, and we have made sure that the resolutions adopted and enforced complied with the Law and the By-Laws and were not manifestly imprudent, risky, in potential conflict of interest or in conflict with the resolutions adopted by the shareholders' meeting or such to have an adverse impact on the company assets.

At the meeting of 8 March 2012 the Board of Directors, with favourable opinion of Human Resources and Compensation Committee, adopted “Report on the remuneration policy for directors and key managers” provided for by article 123 ter of Legislative Decree 58/1998 and in compliance with the legislative provisions, pursuant to art. 6 of Code of Conduct of the Italian Stock Exchange.

In section “Related party disclosures” in the Notes to the Report and in section “Intercompany relations and related party relationships” in the Directors' Report the Directors report about the major transactions occurred with related parties, identified according to the international accounting principles and to the provisions issued on this matter by CONSOB. We refer to these sections in relation to the identification of the types of transactions and of the relevant economic, financial. We have supervised on the application of the “Procedure regulating transactions with related parties” pursuant to art. 4 of the Regulation adopted by Consob by resolution no. 17221 of 12 March 2010, as subsequently amended and supplemented, and adopted by the Board of Directors on 12 November 2010.

The Company prepared the 2011 Financial Statements according to the IAS/IFRS principles as in the previous year 2010. The accounting principles and the valuation criteria adopted are reported in the Notes to the Report. The 2011 Financial Statements of Gemina S.p.A. (Gemina) have been audited by the external auditors Deloitte & Touche S.p.A. which issued their audit report on 22 March 2012 without identifying any irregularities or making requests for disclosures. The major events occurred in the financial year 2011 are exhaustively described by the Directors in Paragraph 3.1 “Financial Year Highlights” in the Directors' Report, for a more detailed review.

The Company prepared the 2011 consolidated financial statements of Gemina Group according to the IFRS/IAS principles as in the past year. Gemina Group consolidated financial statements have been audited by the external auditors Deloitte & Touche S.p.A., that issued their audit report on 22


182

March 2012 without observing any irregularities or making any requests for disclosures. The same auditing company also audited the financial statements of the subsidiary company ADR without identifying any irregularities or making any requests for disclosures.

In the Directors' Report the Directors properly fulfilled their disclosure obligations as provided for by art. 154 ter of Legislative Decree 58/98, introduced by Legislative Decree 195/2007 (so-called “Transparency Decree”) highlighting the main risks and uncertainties to which the Company and the Group are exposed.

We have gained knowledge and overseen - as for what falls under our competence - the adequacy of the Company organisation structure, the compliance with the principles of proper management and the adequacy of instructions given by the Company to its subsidiaries pursuant to art. 114, paragraph 2, of Legislative Decree 58/98, through the acquisition of information from the heads of the competent business functions, by meeting with the external auditors and by meetings with the management bodies of the major subsidiaries, for the purpose of a mutual exchange of relevant data and information.

We have assessed and overseen the adequacy of the administrative-accounting system and the reliability thereof to correctly reflect the operating performance, by obtaining information from the head of the relevant function, by reviewing the company documents and by analysing the results of the work performed by the external auditors Deloitte & Touche S.p.A. The Board of Directors appointed the Executive Responsible for the “drafting of the corporate accounting documents”, while also verifying the fulfilment of the adequate professional requirements. The CEO and the Executive Responsible for the drafting of the corporate accounting documents have confirmed by a specific Report (attached to the Company Financial Statements for 2011) a) the adequacy and actual application of the administrative and accounting procedures; b) the compliance of the accounting documents with the international accounting principles IFRS/IAS validated by the EC as well as with the orders issued by Consob to enforce the Legislative Decree no. 38/2005; c) the conformity of said documents with accounting books and records and their suitability to correctly reflect the Company financial, economic and operating position. A similar Report is attached to Gemina Group Consolidated Financial Statements.

We have assessed and overseen the adequacy of the internal control system a) by reviewing the Control Officer's report on the internal control system of Gemina; b) by reviewing the Internal Audit's reports and the report on the outcome of the monitoring activities; c) by obtaining information from the Internal Audit function of the subsidiary ADR, d) through the relations with the management bodies of the subsidiary companies pursuant to paragraphs 1 and 2 of art. 151 of Legislative Decree 58/98, e) by attending all the meetings of the Audit Committee and Corporate Governace and by acquiring the relevant documents. Taking part in the Audit Committee and Corporate Governace allowed the Statutory Auditors to coordinate their functions of "Internal audit and account audit Committee" undertaken by virtue of art. 19 of Legislative Decree 39/2010 with the Audit Committee's activities and also to oversee in particular i) the financial disclosure process, ii) the effectiveness of internal control systems, internal audit and risk management, iii) legal audit of annual and consolidated accounts, iv) the aspects relating to the independence of the Auditing Company. From the activity it carried out, the Board of Auditors expresses its positive opinion on Gemina Internal Audit System in general and acknowledges, in its capacity as Internal Control and Account Auditing Committee that there are no irregularities to report to the Shareholders' Meeting. In relation to the provisions of paragraph 1 of art. 19 of Legislative Decree 39/2010 the external auditors notified the time they worked and the total fees invoiced for the auditing of Gemina S.p.A. financial statements and consolidated financial statements as at 31 December 2011, as well as for the limited auditing of the half-year report and for the performance of activities to audit the corporate accounting regularity. Moreover, the auditing company has notified that, based on the best available information, taking into account the regulatory and professional requirements regulating the auditing activity, it maintained in the period of reference its position of independence and impartiality vis-à-vis Gemina S.p.A. and that no change occurred in relation to the non-existence of causes of incompatibility between the situations and the persons


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indicated in art. 17 of Legislative Decree 39/2010 and of the articles under Chapter I-bis (Incompatibility) of Title VI of the Issuers Regulation.

We held regular meetings with the representatives of the auditing company Deloitte & Touche S.p.A., pursuant to art. 150, paragraph 3, Legislative Decree 58/98, and no significant data and information arose that deserve to be reported herein. It is also hereby acknowledged that the auditing company filed on 2 the report provided for in paragraph 3 of art. 19 of Legislative Decree 39/2010, reporting that no critical issues were identified upon auditing or substantial gaps in the internal control system with reference to financial disclosures.

We have overseen the implementation of the Corporate Governance Code of Gemina S.p.A. as adopted by the Board of Directors without identifying any criticality. Moreover, with reference to the recommendations of the Corporate Governance Code regarding the Board of Statutory Auditors, we hereby inform you that: - we have checked for the proper application of the criteria and procedure for the assessment of

independence, adopted by the Board of Directors, without identifying any irregularity; - as for the so-called “self-assessment” of the independence requirements, the Statutory Auditors

verified their fulfilment, at the meeting of 1 March 2012; - we have complied with the provisions of the regulation governing the management and process of

confidential and privileged company information; Finally, it shall be noted that the auditing company expressed its positive opinion on information consistency as per paragraph 1, letters c), d), f), l), m) and paragraph 2, letter b), of art. 123-bis of Legislative Decree 58/98, as provided for by amendments to art. 5, paragraph 4, of Legislative Decree 173/2008.

With reference to Legislative Decree no. 231/2001, the Company adopted an organisation and control model the contents of which are consistent with the international best practices. During the year we met the Supervisory Body for a mutual exchange of information.

During the year we have not received any report pursuant to art. 2408 of the Italian Civil Code. We are not aware of other facts or events to be reported to the Shareholders' Meeting. We have verified the compliance with the law provisions regarding the preparation of the Draft

Financial Statements and of the Group Consolidated Draft Financial Statements, of the respective Notes to the Report and Directors' Report, directly and through the heads of function as well as through the information obtained from the external auditors. In this respect we have no observations.

We have issued an opinion pursuant to art. 2386 of Italian Civil Code for the cooptation of three Board Member and an opinion pursuant to art. 2389 paragraph 3 of the Italian Civil Code.

In performing the afore-mentioned supervisory activity, during 2011 the Board of Statutory Auditors met 6 times, attended 10 meetings of the Board of Directors and 4 meetings of the Audit Committee and Corporate Governance and 8 meetings of the Human Resources and Compensation Committee.

During such activity and also based on the information regularly exchanged with the external auditors Deloitte & Touche S.p.A. no omission and/or censurable facts and/or irregularities were identified, nor significant facts to be reported to the Company management bodies or herein. Following to the supervisory activity performed, the Board of Statutory Auditors hereby recommends the approval of the financial statements as at 31 December 2011 in accordance with the Board of Directors' proposal. Roma, 22 March 2012 The Board of Statutory Auditors Signed by Luca A. Guarna Signed by Giorgio Oldoini Signed by Maurizio Dattilo

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