Annual / Quarterly Financial Statement • Apr 16, 2021
Annual / Quarterly Financial Statement
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2020 Separate Financial Statements
2020
these Financial Statements are available at the website www.a2a.eu
| Overview of performance, financial conditions and net debt | 4 |
|---|---|
| ------------------------------------------------------------ | --- |
| 1 | Financial statements | |
|---|---|---|
| 1.1 | Balance sheet | 12 |
| 1.2 | Income statement | 14 |
| 1.3 | Statement of comprehensive income | 15 |
| 1.4 | Cash-flow statement | 16 |
| 1.5 | Statement of changes in equity | 18 |
| 2 | Financial statements pursuant to Consob Resolution no. 17221 of March 12, 2010 |
|
| 2.1 | Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010 | 22 |
| 2.2 | Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010 | 24 |
| 3 | Notes | |
| 3.1 | General information on A2A S.p.A. | 26 |
| 3.2 | Financial statements | 27 |
| 3.3 | Basis of preparation | 28 |
| 3.4 | Changes in international accounting standards | 29 |
| 3.5 | Accounting standards and policies | 31 |
| 3.6 | Notes to the balance sheet | 43 |
| 3.7 | Net debt | 60 |
| 3.8 | Notes to the income statement | 61 |
| 3.9 | Note on related party transactions | 77 |
| 3.10 | Consob Communication no. DEM/6064293 of July 28, 2006 | 80 |
| 3.11 | Guarantees and commitments with third parties | 81 |
| 3.12 | Other information | 82 |
| 4 | Attachments | |
|---|---|---|
| 4.1 | 1. Statement of changes in tangible assets | 104 |
| 4.2 | 2. Statement of changes in intangible assets | 106 |
| 4.3 | 3/a. Statement of changes in investments in subsidiaries | 108 |
| 4.4 | 3/b. Statement of changes in investments in affiliates | 110 |
| 4.5 | 3/c. Statement of changes in investments in other companies | 113 |
| 4.6 | 4/a. List of investments in subsidiaries | 114 |
| 4.7 | 4/b. List of investments in affiliates | 116 |
| 4.8 | Key data of the financial statements of the main subsidiaries and affiliates | |
| prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code) | 118 | |
| 4.9 | Key data of the financial statements of the main subsidiaries and affiliates | |
| prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code) | 120 | |
| 4.10 | Certification of the financial statements pursuant | |
| to article 154-bis, paragraph 5 of Legislative Decree no. 58/98 | 122 | |
| 5 | Independent Auditors' Report | 123 |
| 6 | Report of the Board of Auditors | 129 |
This is a translation of the Italian original "Bilancio separato 2020" and has been prepared solely for the convenience of international readers. In the event of any ambiguity the Italian text will prevail. The Italian original is available at the website www.a2a.eu.
The Parent Company is responsible for strategic vision, planning, control, financial management and coordination of the A2A Group activities. It also provides services to support the business and operating activities of Group companies (administrative, legal, supply, and personnel management services, information technology and communications) in order to optimize the resources available and use existing expertise in the most efficient manner. These services are governed by intercompany service agreements. Finally, A2A S.p.A. provides its subsidiaries with office space and operating areas, as well as related services.
A2A S.p.A. owns some hydroelectric plants in Valtellina, the hydroelectric unit in Calabria and the unit in Mese, as well as the hydroelectric plants of the unit in Udine.
| millions of euro | 01 01 2020 12 31 2020 |
01 01 2019 12 31 2019 |
Changes |
|---|---|---|---|
| Revenues | |||
| Revenues from the sale of goods and services | 3,943.3 | 4,383.6 | (440.3) |
| Other operating income | 45.4 | 105.5 | (60.1) |
| Total revenues | 3,988.7 | 4,489.1 | (500.4) |
| Operating expenses | (3,736.1) | (4,127.5) | 391.4 |
| Labour costs | (150.9) | (148.1) | (2.8) |
| Gross operating income - EBITDA | 101.7 | 213.5 | (111.8) |
| Depreciation, amortization and write-downs | (100.8) | (94.1) | (6.7) |
| Provisions | (8.3) | (2.3) | (6.0) |
| Net operating income - EBIT | (7.4) | 117.1 | (124.5) |
| Result from non-recurring transactions | - | - | - |
| Financial balance | 499.6 | 353.0 | 146.6 |
| Result before taxes | 492.2 | 470.1 | 22.1 |
| Income taxes | 55.4 | (20.2) | 75.6 |
| Result after taxes from operating activities | 547.6 | 449.9 | 97.7 |
| Net result from discontinued operations | (1,9) | 0.7 | (2.6) |
| Net result of the year | 545,7 | 450.6 | 95.1 |
In the year in question A2A S.p.A. shows revenues for a total of 3,988.7 million euro (4,489.1 million euro in the previous year). Sales revenues (3,741.9 million euro) mainly refer to electricity sales to wholesalers, institutional operators, even on IPEX markets (Italian Power Exchange) and subsidiaries, sales of gas and fuels to third parties and subsidiaries and the sale of environmental certificates. Revenues from services (201.4 million euro) mainly refer to services to subsidiaries of an administrative, fiscal, legal, managerial and technical nature. The decrease in sales revenues is mainly due to the sharp drop in prices on the wholesale markets for both electricity and gas and to the decline in demand, which was affected by the emergency situation that hit the energy sector; this decrease was partly offset by the higher revenues from the sale of environmental certificates recorded in the year under review. Other revenues (45.4 million euro) refer to incentives on net production from renewable sources, rents from subsidiaries, contingent assets recognized as a result of both the difference in allocations from previous years and the release of a provision for risks relating to electricity imbalances following the conclusion of the lawsuit in progress, as well as reimbursements for damages and penalties received from customers, insurance companies and private individuals. In the previous year, other revenues included the release of the provision relating to the excessive costs of the tolling contract with Ergosud.
Operating costs amounted to 3,736.1 million euro (4,127.5 million euro at December 31, 2019) and refer to costs for raw materials (3,025.4 million euro) related primarily to purchases of energy and fuels, both for electricity production and for resale, purchases of materials and environmental certificates, the reduction of which derives mainly from the reduction in unit procurement prices due to the decline in the reference scenario; service costs (287.8 million euro), which refer to the costs for the transport and storage of natural gas, costs for plant maintenance as well as for professional and technical services costs and other operating costs (422.9 million euro), which include the contracting of thermoelectric production plants "tolling agreement" of subsidiaries, as well as water derivation fees, damages and penalties.
Labour costs amounted to 150.9 million euro (148.1 million euro at December 31, 2019); the increase is attributable to the increase in the company's workforce, contract renewals, partially offset by lower mobility charges.
Due to the dynamics mentioned above the EBITDA amounted to 101.7 million euro (213.5 million euro at December 31, 2019).
"Amortization and depreciation, provisions and write-downs" of the year amounted to 109.1 million euro (96.4 million euro at December 31, 2019) and include amortisation, depreciation and write-downs of the tangible and intangible assets for 100.8 million euro (94.1 million euro at December 31, 2019) and provisions for 8.3 million euro (2.3 million euro at December 31, 2019), mainly related to provisions for risks.
The "EBIT" was negative by 7.4 million euro (positive by 117.1 million euro at December 31, 2019).
Financial operations reported a positive balance of 499.6 million euro (positive for 353.0 million euro at December 31, 2019). This item includes dividends from investee companies for 413.7 million euro (333.3 million euro at December 31, 2019), the exchange value of the investment in AEB S.p.A. for 139.6 million euro, deriving from the valuation made by an independent external expert that determined a higher value than the carrying amount, as well as financial expense for 53.7 million euro (76.8 million euro at December 31, 2019).
The "Result before taxes" was positive for 492.2 million euro (positive for 470.1 million euro at December 31, 2019).
"Income taxes" amounted to 55.4 million euro (expenses for taxes for 20.2 million euro at December 31, 2019). Taxation is mainly due to the booking of: i) income deriving from the recognition of the deduction of the loss on the sale of the shareholding in the company EPCG; ii) current tax calculated on taxable income for IRES; iii) reduction in deferred tax assets following reversal of the temporary differences from previous years, partly offset by a reduction in deferred tax liabilities, also due to the reversal of temporary differences from previous years.
The "Net result from discounted operations" was negative and equal to 1.9 million euro (positive for 0.7 million euro at December 31, 2019) and refers to the sale of the shares, accounting for 4.16%, of the company Ascopiave S.p.A. for which A2A S.p.A. exercised the right of withdrawal, net of dividends collected during the year. In 2019, this item included both dividends received and the income from discounting the shareholding in EPCG to fair value.
The "Net result of the year" was positive for 545.7 million euro (450.6 million euro at December 31, 2019).
* * *
Net year capex amounted to 84.2 million euro and in particular involved interventions on the hydroelectric plants, IT equipment of the "New Data Center", fixed assets in progress, capex in the Group's information systems and software and net investments in equity.
Overview of performance, financial conditions and net debt
| millions of euro | 12 31 2020 | 12 31 2019 | Changes |
|---|---|---|---|
| CAPITAL EMPLOYED | |||
| Net fixed capital | 4,883.1 | 4,702.4 | 180.7 |
| - Tangible assets | 1,000.4 | 1,002.6 | (2.2) |
| - Intangible assets | 100.8 | 87.1 | 13.7 |
| - Shareholdings and other non-current financial assets (*) | 3,961.5 | 3,796.5 | 165.0 |
| - Other non-current assets/liabilities (*) | 6.3 | 7.0 | (0.7) |
| - Prepaid/deferred tax assets/liabilities | 41.6 | 59.7 | (18.1) |
| - Provisions for risks, charges and liabilities for landfills | (104.6) | (110.3) | 5.7 |
| - Employee benefits | (122.9) | (140.2) | 17.3 |
| of which with counter-entry to equity | (23.5) | (21.2) | |
| Net Working Capital and Other current assets/liabilities | 133.6 | 9.5 | 124.1 |
| Net Working Capital | 86.3 | (10.0) | 96.3 |
| - Inventories | 64.3 | 106.9 | (42.6) |
| - Trade receivables | 872.1 | 655.9 | 216.2 |
| - Trade payables | (850.1) | (772.8) | (77.3) |
| Other current assets/liabilities | 47.3 | 19.5 | 27.8 |
| - Other current assets/liabilities (*) | (15.3) | (30.6) | 15.3 |
| - Current tax assets/payables | 62.6 | 50.1 | 12.5 |
| of which with counter-entry to equity | 23.9 | (17.5) | |
| Assets/liabilities held for sale (*) | 0.4 | - | 0.4 |
| of which with counter-entry to equity | - | - | - |
| TOTAL CAPITAL EMPLOYED | 5,017.1 | 4.711.9 | 305.2 |
| SOURCES OF FUNDS | |||
| Equity | 3,176.6 | 2,843.7 | 332.9 |
| Total financial position beyond one year | 2,320.7 | 2,024.7 | 296.0 |
| Total financial position within one year | (480.2) | (156.5) | (323.7) |
| Total net financial position | 1,840.5 | 1,868.2 | (27.7) |
| of which with counter-entry to equity | (30.9) | (20.1) | |
| TOTAL SOURCES | 5,017.1 | 4,711.9 | 305.2 |
(*) Excluding balances included in the Net Financial Position.
"Capital employed" totalled 5,017.1 million euro at December 31, 2020, partly covered by "Equity" in the amount of 3,176.6 million euro and net debt of 1,840.5 million euro; provided below are the main items that make up the Capital Employed.
The "Net fixed capital" amounted to 4,883.1 million euro, up 180.7 million euro compared to December 31, 2019.
Changes are detailed below:
decrease of 20.8 million euro for the depreciation charge for the year;
Shareholdings and Other non-current financial assets amounted to 3,961.5 million euro, up 165 million euro compared to December 31, 2019, attributable to:
The "Net Working Capital", defined as the algebraic sum of trade receivables, closing inventories and trade payables, amounted to 86.3 million euro, up 96.3 million euro compared to December 31, 2019. Comments on the main items are given below:
"Assets/liabilities held for sale" were positive and equal to 0.4 million euro at December 31, 2020 and refer to the reclassification of the equity investment in Ge.S.I. S.r.l., equal to 47% of the share capital, the sale of which will be completed in the following year.
"Equity" amounted to 3,176.6 million euro and shows a positive change for a total of 332.9 million euro. The net profit for the year generated a positive effect of 545.7 million euro, offset by the distribution of 241 million euro in dividends. There was also a positive valuation of cash flow hedge derivatives and IAS 19 reserves for 28.2 million euro.
The "Net financial position" amounted to 1,840.5 million euro (1,868.2 million euro at December 31, 2019) and improved by 27.7 million euro. During the year, operations, including dividends paid to shareholders for 241 million euro, generated resources for 180.6 million euro, partially offset by resources absorbed by net investment in tangible and intangible assets and equity investments for 84.2 million euro. The effect of the application of IFRS 16 was negative and amounted to 54.7 million euro as a result of new contracts for rights of use stipulated during the year.
Overview of performance, financial conditions and net debt
| millions of euro | 12 31 2020 | 12 31 2019 |
|---|---|---|
| NET FINANCIAL POSITION AT THE BEGINNING OF THE YEAR | (1,868.2) | (2,082.0) |
| EFFECT OF NON-RECURRING TRANSACTIONS | - | (0.5) |
| First-time application of IFRS 16 | - | (11.1) |
| New contracts IFRS 16 | (54.7) | (4.4) |
| Group net result of the year | 545.7 | 450.6 |
| Taxes for the year | (55.4) | 20.3 |
| Net interest of the year | 53.7 | 76.9 |
| Gains/losses for the year | 1.2 | (3.9) |
| Amortization | 100.8 | 90.1 |
| Write-downs/disposals of PPE and intangible assets | - | 4,4 |
| Net allocations for the year | 8.3 | 2.3 |
| Shareholdings write-up/down | - | (96.5) |
| Valuation of share exchange | (139.6) | - |
| Net interest paid | (50.6) | (73.3) |
| Net taxes paid/collected | 52.2 | (33.2) |
| Dividends paid | (241.0) | (217.6) |
| Change in receivables from customers | (216.4) | 61.7 |
| Change in payables to suppliers | 77.4 | (3.2) |
| Change in inventories | 42.6 | (12.2) |
| Other changes in net working capital | 1.7 | 13.6 |
| Cash flow from operating activities | 180.6 | 280.0 |
| Net cash used in investing activities | (84.2) | (40.0) |
| Other changes | (3.2) | (3.6) |
| Change in financial assets/liabilities with counter-entry to equity | (10.8) | (6.6) |
| NET FINANCIAL POSITION AT THE END OF THE YEAR | (1,840.5) | (1,868.2) |
Overview of performance, financial conditions and net debt
Below is a detail of the net debt:
| millions of euro | 12 31 2020 | 12 31 2019 |
|---|---|---|
| Medium/long-term debt | 3,789.5 | 3,174.8 |
| Medium/long-term financial receivables | (1,468.8) | (1,150.0) |
| Total non-current net debt | 2,320.7 | 2,024.8 |
| Short-term debt | 879.9 | 589.8 |
| Short-term financial receivables | (412.8) | (386.3) |
| Cash and cash equivalents | (947.3) | (360.1) |
| Total current net debt | (480.2) | (156.6) |
| Net debt | 1,840.5 | 1,868.2 |
| amounts in euro | Note | 12 31 2020 | 12 31 2019 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Tangible assets | 1 | 1,000,419,014 | 1,002,606,538 |
| Intangible assets | 2 | 100,819,490 | 87,118,089 |
| Shareholdings | 3 | 3,954,036,431 | 3,795,629,441 |
| Other non-current financial assets | 3 | 1,476,271,851 | 1,148,551,632 |
| Deferred tax assets | 4 | 41,585,738 | 59,687,881 |
| Other non-current assets | 5 | 11,917,684 | 15,346,408 |
| Total non-current assets | 6,585,050,208 | 6,108,939,989 | |
| CURRENT ASSETS | |||
| Inventories | 6 | 64,301,009 | 106,912,138 |
| Trade receivables | 7 | 872,115,857 | 655,905,922 |
| Other current assets | 8 | 505,533,864 | 476,999,925 |
| Current financial assets | 9 | 412,777,069 | 386,297,412 |
| Current tax assets | 10 | 62,592,398 | 50,082,993 |
| Cash and cash equivalents | 11 | 947,294,052 | 360,077,895 |
| Total current assets | 2,864,614,249 | 2,036,276,285 | |
| NON-CURRENT ASSETS HELD FOR SALE | 12 | 465,623 | - |
| TOTAL ASSETS | 9,450,130,080 | 8,145,216,274 |
(1) As required by Consob Resolution no. 17221 of March 12, 2010, the effects of relations with related parties in the separate financial statements are highlighted in the accounting statements in section 2 and commented on in Note 35. Significant non-recurring events and transactions in the separate financial statements are provided in Note 36 pursuant to Consob Communication DEM/6064293 of July 28, 2006.
Income statement
Statement of comprehensive income
Cash-flow statement
Statement of changes in equity
| amounts in euro | Note | 12 31 2020 | 12 31 2019 |
|---|---|---|---|
| EQUITY | |||
| Share capital | 13 | 1,629,110,744 | 1,629,110,744 |
| (Treasury shares) | 14 | (53,660,996) | (53,660,996) |
| Reserves | 15 | 1,055,432,573 | 817,577,852 |
| Net result of the year | 16 | 545,729,183 | 450,622,909 |
| Total equity | 3,176,611,504 | 2,843,650,509 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current financial liabilities | 17 | 3,771,288,070 | 3,169,166,330 |
| Employee benefits | 18 | 122,952,128 | 140,247,448 |
| Provisions for risks, charges and liabilities for landfills | 19 | 104,592,610 | 110,362,650 |
| Other non-current liabilities | 20 | 23,815,726 | 11,563,404 |
| Total non-current liabilities | 4,022,648,534 | 3,431,339,832 | |
| Current liabilities | |||
| Trade payables | 21 | 850,137,382 | 772,766,564 |
| Other current liabilities | 21 | 520,846,017 | 507,605,803 |
| Current financial liabilities | 22 | 879,886,643 | 589,827,173 |
| Tax liabilities | 23 | - | 26,393 |
| Total current liabilities | 2,250,870,042 | 1,870,225,933 | |
| Total liabilities | 6,273,518,576 | 5,301,565,765 | |
| LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE |
- | - | |
| TOTAL EQUITY AND LIABILITIES | 9,450,130,080 | 8,145,216,274 |
| amounts in euro | Note | 01 01 2020 | 01 01 2019 |
|---|---|---|---|
| 12 31 2020 | 12 31 2019 | ||
| Revenues | |||
| Revenues from the sale of goods and services | 3,943,350,650 | 4,383,571,770 | |
| Other operating income | 45,421,093 | 105,544,657 | |
| Total revenues | 25 | 3,988,771,743 | 4,489,116,427 |
| Operating expenses | |||
| Expenses for raw materials and services | 3,313,234,320 | 3,852,241,030 | |
| Other operating expenses | 422,866,446 | 275,217,982 | |
| Total operating expenses | 26 | 3,736,100,766 | 4,127,459,012 |
| Labour costs | 27 | 150,968,919 | 148,148,105 |
| Gross operating income - EBITDA | 28 | 101,702,058 | 213,509,310 |
| Depreciation, amortization, provisions and write-downs | 29 | 109,076,423 | 96,355,123 |
| Net operating income - EBIT | 30 | (7,374,365) | 117,154,187 |
| Result from non-recurring transactions | - | - | |
| Financial balance | |||
| Financial income | 581,056,815 | 452,352,639 | |
| Financial expenses | 81,482,396 | 99,365,164 | |
| Result from disposal of other shareholdings | - | - | |
| Total financial balance | 31 | 499,574,419 | 352,987,475 |
| Result before taxes | 492,200,054 | 470,141,662 | |
| Income taxes | 32 | (55,371,601) | 20,264,675 |
| Result after taxes from operating activities | 547,571,655 | 449,876,987 | |
| Net result from discontinued operations | 33 | (1,842,472) | 745,922 |
| NET RESULT OF THE YEAR | 34 | 545,729,183 | 450,622,909 |
(1) As required by Consob Resolution no. 17221 of March 12, 2010, the effects of relations with related parties in the separate financial statements are highlighted in the accounting statements in section 2 and commented on in Note 35. Significant non-recurring events and transactions in the separate financial statements are provided in Note 36 pursuant to Consob Communication DEM/6064293 of July 28, 2006.
| amounts in euro | 12 31 2020 | 12 31 2019 |
|---|---|---|
| Net result of the year (A) | 545,729,183 | 450,622,909 |
| Actuarial gains/(losses) on Employee's Benefits booked in the Net equity | 10,045,828 | (2,092,788) |
| Tax effect of other actuarial gains/(losses) | (2,499,086) | 570,079 |
| Total actuarial gains/(losses) net of the tax effect (B) | 7,546,742 | (1,522,709) |
| Effective part of gains/(losses) on cash flow hedge | 30,498,860 | (34,102,536) |
| Tax effect of other gains/(losses) | (9,852,041) | 9,917,548 |
| Total other gains/(losses) net of the tax effect (C) | 20,646,819 | (24,184,988) |
| Gains/(losses) from recalculation of availiable for sale | - | - |
| Tax effect of other gains/(losses) | - | - |
| Gains/(losses) from the restatement of financial assets available for sale (D) | - | - |
| Total comprehensive result ( A ) + ( B ) + ( C ) + ( D ) | 573,922,744 | 424,915,212 |
With the exception of the actuarial effects on employee benefits recognized in equity, the other effects stated above will be reclassified to the Income Statement in subsequent years.
Balance sheet
Statement of comprehensive income
Income statement
Cash-flow statement
Statement of changes in equity
| amounts in euro | 12 31 2020 | 12 31 2019 (**) |
|---|---|---|
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 360,077,895 | 509,947,205 |
| Operating activities | ||
| Net Result | 545,729,183 | 450,622,909 |
| Net income taxes | (55,371,601) | 20,264,675 |
| Net financial interests | 53,729,668 | 76,855,499 |
| Capital gains/expenses | 1,199,034 | (3,859,910) |
| Tangible assets depreciation | 79,980,239 | 76,047,018 |
| Intangible assets amortization | 20,810,652 | 14,032,393 |
| Fixed assets write-downs/disposals | 5,420 | 4,434,188 |
| Net provisions | 8,285,532 | 2,275,712 |
| Shareholdings write-up/down | - | (96,500,000) |
| Shares exchange ratio | (139,588,612) | - |
| Net financial interests paid | (50,574,561) | (73,255,566) |
| Net taxes paid | 52,152,837 | (33,239,769) |
| Dividends paid | (240,961,749) | (217,642,870) |
| Change in trade receivables | (216,368,867) | 61,690,361 |
| Change in trade payable | 77,370,818 | (3,238,592) |
| Change in inventories | 42,611,129 | (12,175,302) |
| Other changes in net working capital | 1,663,509 | 13,629,117 |
| Cash flow from operating activities | 180,672,631 | 279,939,863 |
| Investment activities | ||
| Investments in tangible assets | (21,120,302) | (23,659,060) |
| Investments in intangible assets | (38,154,919) | (21,935,972) |
| Investments in shareholdings and securities (*) | (67,837,415) | 590,000 |
| Disposal of fixed assets and shareholdings | 42,880,567 | 5,001,100 |
| Cash flow from investment activities | (84,232,069) | (40,003,932) |
| FREE CASH FLOW | 96,440,562 | 239,935,931 |
(*) Cleared of balances in return of shareholders' equity and other balance sheet items.
(**) Values at December 31, 2019 have been reclassified according to the different presentation of the cash-flow statement adopted from December 31, 2020.
Income statement
Statement of comprehensive income
Cash-flow statement
Statement of changes in equity
| Financing activities Changes in financial assets Change in intercompany currency accounts (30,264,694) Issuance of loans (384,671,970) Proceeds from loans 61,128,595 Other changes 6,135,914 Total changes in financial assets () (347,672,155) Changes in financial liabilities Change in intercompany currency accounts (39,752,331) Borrowings/bonds issued 1,000,000,000 Repayment of borrowings/bond (107,685,761) Other changes (14,114,158) Total changes in financial liabilities () 838,447,750 Cash flow from financing activities 490,775,595 CHANGE IN CASH AND CASH EQUIVALENTS 587,216,157 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 947,294,052 |
amounts in euro | 12 31 2020 | 12 31 2019 (**) |
|---|---|---|---|
| 227,652,435 | |||
| (809,383,740) | |||
| 319,272,575 | |||
| (2,308,782) | |||
| (264,767,512) | |||
| 21,369,164 | |||
| 440,000,000 | |||
| (573,216,034) | |||
| (13,190,859) | |||
| (125,037,729) | |||
| (389,805,241) | |||
| (149,869,310) | |||
| 360,077,895 |
| Description amounts in euro |
Share capital |
Treasury shares |
|
|---|---|---|---|
| Note 13 | Note 14 | ||
| Equity at December 31, 2018 | 1,629,110,744 | (53,660,996) | |
| Allocation of 2018 net result | |||
| Ordinary dividend distribution | |||
| Cash flow hedge reserves (*) | |||
| IAS 19 reserve "Employee Benefits" (*) | |||
| Other changes | |||
| Net result of the year (*) | |||
| Equity at December 31, 2019 | 1,629,110,744 | (53,660,996) | |
| Allocation of 2019 net result | |||
| Ordinary dividend distribution | |||
| Cash flow hedge reserves (*) | |||
| IAS 19 reserve "Employee Benefits" (*) | |||
| Other changes | |||
| Net result of the year (*) | |||
| Equity at December 31, 2020 | 1,629,110,744 | (53,660,996) | |
| Availability of Equity Reserves | |||
| A: For share capital increase | |||
| B: To cover losses | |||
| C: For distribution to Shareholders - available for euro 740,440,409 (**) | |||
| D: Reserves not avaliable | |||
(*) These form part of the statement of comprehensive income.
(**) Of which to fyscal moderate suspension equal to euro 124,783,022.
A2A Separate financial statements 2020
1 Financial statements
Balance sheet
Income statement
Statement of comprehensive income
Cash-flow statement
Statement of changes in equity
| Total equity |
Net result of the year |
Available for sale Reserve |
Cash flow hedge Reserve |
Reserves |
|---|---|---|---|---|
| Note 16 | Note 15 | Note 15 | Note 15 | |
| 2,635,587,456 | 373,091,108 | (462,146) | (2,370,954) | 689,879,700 |
| - | (373,091,108) | 373,091,108 | ||
| (217,642,870) | (217,642,870) | |||
| (24,184,988) | (24,184,988) | |||
| (1,522,709) | (1,522,709) | |||
| 790,711 | 790,711 | |||
| 450,622,909 | 450,622,909 | |||
| 2,843,650,509 | 450,622,909 | (462,146) | (26,555,942) | 844,595,940 |
| (450,622,909) | 450,622,909 | |||
| (240,961,749) | (240,961,749) | |||
| 20,646,819 | 20,646,819 | |||
| 7,546,742 | 7,546,742 | |||
| 545,729,183 | 545,729,183 | |||
| 3,176,611,504 | 545,729,183 | (462,146) | (5,909,123) | 1,061,803,842 |
| D | A-B-C |
Financial statements pursuant to Consob Resolution no. 17221 of March 12, 2010
| amounts in euro | 12 31 2020 | of which Related Parties (note 35) |
12 31 2019 | of which Related Parties (note 35) |
|---|---|---|---|---|
| NON-CURRENT ASSETS | ||||
| Tangible assets | 1,000,419,014 | 45,306,755 | 1,002,606,538 | 1,501,561 |
| Intangible assets | 100,819,490 | 87,118,089 | ||
| Shareholdings | 3,954,036,431 | 3,954,036,431 | 3,795,629,441 | 3,795,629,441 |
| Other non-current financial assets | 1,476,271,851 | 1,468,890,342 | 1,148,551,632 | 1,147,697,845 |
| Deferred tax assets | 41,585,738 | 59,687,881 | ||
| Other non-current assets | 11,917,684 | 15,346,408 | ||
| Total non-current assets | 6,585,050,208 | 6,108,939,989 | ||
| CURRENT ASSETS | ||||
| Inventories | 64,301,009 | 106,912,138 | ||
| Trade receivables | 872,115,857 | 384,878,785 | 655,905,922 | 235,252,459 |
| Other current assets | 505,533,864 | 54,170,554 | 476,999,925 | 55,511,313 |
| Current financial assets | 412,777,069 | 412,777,069 | 386,297,412 | 386,297,412 |
| Current tax assets | 62,592,398 | 50,082,993 | ||
| Cash and cash equivalents | 947,294,052 | 360,077,895 | ||
| Total current assets | 2,864,614,249 | 2,036,276,285 | ||
| NON-CURRENT ASSETS HELD FOR SALE | 465,623 | 465,623 | - | - |
| TOTAL ASSETS | 9,450,130,080 | 8,145,216,274 |
| amounts in euro | 12 31 2020 | of which Related Parties (note 35) |
12 31 2019 | of which Related Parties (note 35) |
|---|---|---|---|---|
| EQUITY | ||||
| Share capital | 1,629,110,744 | 1,629,110,744 | ||
| (Treasury shares) | (53,660,996) | (53,660,996) | ||
| Reserves | 1,055,432,573 | 817,577,852 | ||
| Net result of the year | 545,729,183 | 450,622,909 | ||
| Total equity | 3,176,611,504 | 2,843,650,509 | ||
| LIABILITIES | ||||
| Non-current liabilities | ||||
| Non-current financial liabilities | 3,771,288,070 | 41,190,642 | 3,169,166,330 | 1,121,265 |
| Employee benefits | 122,952,128 | 140,247,448 | ||
| Provisions for risks, charges and liabilities for landfills |
104,592,610 | 1,000,000 | 110,362,650 | 1,000,000 |
| Other non-current liabilities | 23,815,726 | 11,563,404 | ||
| Total non-current liabilities | 4,022,648,534 | 3,431,339,832 | ||
| Current liabilities | ||||
| Trade payables | 850,137,382 | 223,617,370 | 772,766,564 | 101,283,124 |
| Other current liabilities | 520,846,017 | 37,325,581 | 507,605,803 | 33,138,780 |
| Current financial liabilities | 879,886,643 | 398,682,192 | 589,827,173 | 433,133,625 |
| Tax liabilities | - | 26,393 | ||
| Total current liabilities | 2,250,870,042 | 1,870,225,933 | ||
| Total liabilities | 6,273,518,576 | 5,301,565,765 | ||
| LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE |
- | - | ||
| TOTAL EQUITY AND LIABILITIES | 9,450,130,080 | 8,145,216,274 |
Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010
Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010
| amounts in euro | 01 01 2020 12 31 2020 |
of which Related Parties (note 35) |
01 01 2019 12 31 2019 |
of which Related Parties (note 35) |
|---|---|---|---|---|
| Revenues | ||||
| Revenues from the sale of goods and services | 3,943,350,650 | 1,553,187,684 | 4,383,571,770 | 1,550,489,027 |
| Other operating income | 45,421,093 | 5,624,003 | 105,544,657 | 69,566,250 |
| Total revenues | 3,988,771,743 | 4,489,116,427 | ||
| Operating expenses | ||||
| Expenses for raw materials and services | 3,313,234,320 | 173,763,299 | 3,852,241,030 | 197,960,662 |
| Other operating expenses | 422,866,446 | 328,220,557 | 275,217,982 | 188,837,065 |
| Total operating expenses | 3,736,100,766 | 4,127,459,012 | ||
| Labour costs | 150,968,919 | 1,282,005 | 148,148,105 | 1,644,913 |
| Gross operating income - EBITDA | 101,702,058 | 213,509,310 | ||
| Depreciation, amortization, provisions and write-downs |
109,076,423 | 4,373,810 | 96,355,123 | 338,460 |
| Net operating income - EBIT | (7,374,365) | 117,154,187 | ||
| Result from non-recurring transactions | - | - | ||
| Financial balance | ||||
| Financial income | 581,056,815 | 580,304,742 | 452,352,639 | 451,577,963 |
| Financial expenses | 81,482,396 | 414,968 | 99,365,164 | 56,746 |
| Result from disposal of other shareholdings | - | - | ||
| Total financial balance | 499,574,419 | 352,987,475 | ||
| Result before taxes | 492,200,054 | 470,141,662 | ||
| Income taxes | (55,371,601) | 20,264,675 | ||
| Result after taxes from operating activities | 547,571,655 | 449,876,987 | ||
| Net result from discontinued operations | (1,842,472) | 745,922 | ||
| NET RESULT OF THE YEAR | 545,729,183 | 450,622,909 |
A2A S.p.A. is a company with legal personality organized under the laws of the Italian Republic which operates, also through its subsidiaries ("Group"), both in Italy and abroad. In particular, as the "Parent Company", A2A S.p.A. is responsible for the guiding strategy, administration, planning and control, financial management and coordinating the activities of the A2A Group.
Therefore, Group companies benefit from administrative, tax, legal, personnel management, procurement and communication services, so as to optimize the resources that are available within the Group and to use the existing known how in a cost-effective way.
The A2A Group mainly operates in the following sectors:
The separate financial statements for A2A S.p.A. are presented in euro, which is also the functional currency in the economies in which the company operates. In particular, the following notes are prepared in thousands of euro.
The separate financial statements of A2A S.p.A. at December 31, 2020, have been prepared on a goingconcern basis and comprise the balance sheet, income statement, statement of comprehensive income, cash flow statement, statement of changes in equity and these notes.
The separate financial statements of A2A S.p.A. at December 31, 2020 have been prepared:
In preparing the separate financial statements, the same standards used for the financial statements at December 31, 2019 were applied, other than the principles and interpretations described in detail in the paragraph below "Changes in accounting principles" adopted for the first time on January 1, 2020.
These explanatory notes include the supplemental information required by the Italian civil code, by Consob Resolutions no. 15519 and 15520 of July 27, 2006, and Consob communication no. 6064293 of July 28, 2006.
In this file, use has been made of some Alternative Performance Measures (APM) that are different from the financial indicators expressly provided for by the IAS/IFRS international accounting standards adopted by the company; for details of these indicators, please see the specific paragraph Alternative Performance Measures (APM) in the Report on Operations.
These separate financial statements for the year ended December 31, 2020, were approved on March 18, 2021, by the Board of Directors, which authorized its publication, and has been audited by EY S.p.A. in accordance with their appointment by the shareholders of June 11, 2015, for the nine years from 2016 to 2024.
For the balance sheet, the company A2A S.p.A. has adopted a format which separates current and noncurrent assets and liabilities, as required by paras. 60 et seq. of IAS 1.
The income statement is presented by nature, a format which is considered more representative than a presentation by function. The selected format is in agreement with the presentation used by the Group's major competitors and in line with international practice.
The specific line items "Result from non-recurring transactions" and "Result from disposal of other shareholdings" are in the format of the income statement in order to provide clear and immediate identification of the results arising from non-recurring transactions forming part of continuing operations, separating these from the results from discontinued operations/held for sale. In particular, it should be noted that the item "Result from non-recurring transactions" is intended to include the results from the sale of investments in subsidiaries and associates and other non-operating expenses/income. This item is presented between net operating income and the financial balance. In this way net operating income is not affected by non-recurring operations, making it easier to measure the effective performance of the Group's ordinary operating activities.
The cash flow statement has been prepared using the indirect method as permitted by IAS 7.
The statement of changes in equity has been prepared in accordance with IAS 1.
It should be noted that the financial statements presented are unchanged from those used in the preparation of the Separate Financial Statements for the year ended December 31, 2019, with the exception of the Statement of Cash Flows for which the amounts at December 31, 2019 have been reclassified from the published financial statements to conform to a new presentation of items adopted from December 31, 2020.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The separate financial statements as at December 31, 2020, have been prepared on a historical cost basis, with the exception of those items which under IFRS must be or can be measured at fair value, as discussed in further detail in the accounting policies.
The accounting standards, the accounting policies and the methods of measurement used in the preparation of the separate financial statements are consistent with those used to prepare the annual separate financial statements at December 31, 2019, except as specified below regarding newly enacted standards.
General information on A2A S.p.A.
Financial statements
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Other information
3.4 Changes in international accounting standards Pursuant to IAS 8, the subsequent paragraph "Accounting standards, amendments and interpretations applicable by the company as of the current year" indicates and briefly illustrates the amendments in force
as of January 1, 2020. The following paragraph, "Accounting standards, amendments and interpretations approved by the European Union" instead detail the accounting standards and interpretations already issued, not yet approved by the European Union and therefore not applicable for the preparation of the financial statements at December 31, 2020, any impacts of which will then be transposed as of the financial statements of the following years.
As from January 1, 2020, applicable to the Group are the following additions to specific paragraphs of the international accounting standards already adopted by the Group companies in previous years:
an acquisition as a business, it must be possible to provide goods or services to customers, unlike as indicated by the original standard that has a focus on the ability to produce dividends or economic benefits to stakeholders. No impacts are expected on the Group's economic and financial situation. On May 14, 2020, the IASB issued amendments to IAS 16 "Property, Plant and Equipment" and IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" both applicable to financial statements ending January 1, 2022. The amendment to IAS 16 clarifies the prohibition on deducting from the cost of the tangible asset any revenues deriving from the sale of materials used during the period of production and start-up of the asset. These revenues are recognized in the Income Statement when realised. The amendment to IAS 37 specifies the costs to be included when considering the obligation arising from the conclusion of an onerous contract. The amendment provides for the application of the directly related cost approach. Costs that relate directly to a contract for the provision of goods or services include both incremental costs and costs directly attributed to contractual activities. General and administrative expenses are not directly related to a contract and are excluded unless they are explicitly chargeable to the other party under the contract. No impacts are expected on the Group's economic and financial situation;
The consolidated financial statements of the A2A Group are presented in euro; this is also the functional currency of the economies in which the Group operates.
Transactions in other currencies are initially recognized at the exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into euro at the exchange rates at the balance sheet date.
Non-monetary items measured at historical cost in foreign currency are translated at the exchange rates at the date of the transaction. Non-monetary items measured at fair value are translated at the exchange rates at the date when the fair value was determined.
Assets for business use are classified as tangible assets, while non-business assets are classified as investment property.
Tangible assets are measured at cost, including any additional charges directly attributable to bringing the asset into an operating condition (e.g. transport, customs duty, installation and testing costs, notary and land registry fees and any non-deductible VAT), increased when material and where there are obligations by the present value of the estimated cost of restoring the location from an environmental point of view or dismantling the asset. Borrowing costs, where directly attributable to the purchase or construction of an asset, are capitalized as part of the cost of the asset if the type of asset so warrants.
If important components of tangible assets have different useful lives, they are accounted for separately using the "component approach", assigning to each component its own useful life for the purpose of calculating depreciation (the component approach).
Land, whether occupied by residential or industrial buildings or devoid of construction, is not depreciated as it has an unlimited useful life, except for land used in production activities that is subject to deterioration over time (e.g. landfills, quarries).
Ordinary maintenance costs are fully expensed to the income statement in the year they are incurred. Costs for maintenance carried out at regular intervals are attributed to the assets to which they refer and are depreciated over the specific residual possibility of use of such.
Tangible assets are stated net of accumulated depreciation and any write-downs. Depreciation is charged from the year in which the individual asset enters service on a straight-line basis over the estimated useful life of the asset for the business. The estimated realizable value which is deemed to be recoverable at the end of an asset's useful life is not depreciated. The useful life of each asset is reviewed annually and any changes, if needed, are made with a view to showing the correct value of the asset.
Landfills are depreciated on the basis of the percentage filled, which is calculated as the ratio between the volume occupied at the end of the period and the total volume authorized.
The main depreciation rates used, which are based on technical and economic considerations, are as follows:
| • | buildings _________0.1 % - 11.0 % | |
|---|---|---|
| • | production plants_____________ 0.2 % - 12.8 % | |
| • | distribution networks _________ 1.4 % - 10.0 % | |
| • | miscellaneous equipment____________ 10.0 % - 12.0 % | |
| • | mobile phones ______________ 100.0 % | |
| • | furniture and fittings __________ 6.0 % - 16.7 % | |
| • | electric and electronic office machines _______ 10.0 % - 25.0 % | |
| • | means of transport ____________10.0 % | |
| • | improvements to third-party assets - buildings________ 6.0 % - 20.0 % | |
Tangible assets are subjected to impairment testing if there is any indication that an asset may be impaired in accordance with the paragraph below "Impairment of assets"; write-downs may be reversed in subsequent periods if the reasons for which they were recognized no longer apply.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
When an asset is disposed of or if future economic benefits are no longer expected from using an asset, it is removed from the balance sheet and any gain or loss (being the difference between the disposal proceeds and the carrying amount) is recognized in the income statement in the year of the derecognition.
Assets for rights of use are recognized on the start date of the lease, i.e. the date on which the underlying asset is available for use.
Rights to use assets are measured at cost, net of accumulated depreciation and impairment losses, and adjusted for any restatement of lease liabilities. The cost of assets for rights of use includes the amount of lease liabilities recognized and lease payments made on or before the commencement of the lease. Assets for right of use are depreciated on a straight-line basis from the effective date to the end of the useful life of the asset consisting of the right of use or at the end of the lease term, whichever is earlier.
If the lease transfers ownership of the underlying asset to the lessee at the end of the term of the contract or if the cost of the asset consisting of the right of use reflects the fact that the lessee will exercise the purchase option, the asset consisting of the right of use is depreciated from the effective date until the end of the useful life of the underlying asset.
Lease liabilities are recognized at the present value of lease payments not yet paid at the reporting date. Lease payments also include the exercise price of a purchase option if it is reasonably certain that the option will be exercised.
Intangible assets are identifiable non-monetary assets without physical substance which are controlled by the enterprise and able to produce future economic benefits, and include goodwill when acquired for consideration.
The fact of being identifiable distinguishes an intangible asset that has been acquired from goodwill; this requirement is normally met when: (i) the intangible asset is attributable to a legal or contractual right, or (ii) the asset is separable, in other words it can be sold, transferred, rented or exchanged individually or as an integral part of other assets.
Control by the enterprise consists of the right to enjoy the future economic benefits flowing from the asset and to restrict the access of others to those benefits.
Intangible assets are stated at purchase or production cost, including ancillary charges, determined in the same way as for tangible assets. Intangible fixed assets produced internally are not capitalized but recognized in the income statement in the year in which the costs are incurred.
Intangible assets with a definite useful life are reported in the financial statements net of the related accumulated amortization and impairments in the same way as for tangible assets. Changes in the expected useful life or in the ways in which the future economic benefits of an intangible asset are achieved by the Company are accounted for by suitably adjusting the period or method of amortization, treating them as changes in accounting estimates. The amortization of intangible fixed assets with a definite useful life is charged to income statement in the cost category that reflects the function of the intangible asset concerned.
Intangible assets are subjected to impairment testing if there are specific indications that they may be impaired, in accordance with the paragraph below "Impairment of assets"; impairment losses may be reversed in subsequent periods if the reasons for which they were recognized no longer apply.
Intangible assets with an indefinite useful life and those that are not yet available for use are subjected to impairment testing on an annual basis, whether or not there are any specific indications that they may be impaired, in accordance with the paragraph below "Impairment of assets". Impairment losses recognized for goodwill are not reversed.
Gains or losses on the disposal of an intangible asset are calculated as the difference between the disposal proceeds and the carrying amount of the asset and recognized in the Income Statement at the time of the disposal.
The following amortization rates are applied to intangible assets with a definite useful life:
| • | industrial patents and intellectual property rights ____ 33.0 % - 50.0 % | ||
|---|---|---|---|
| • | concessions, licenses, trademarks and similar rights____ 7.0 % - 33.3 % | ||
| • | other tangible assets __________ 2.0 % - 20.0 % |
IFRIC 12 states that, based on the characteristics of the concession arrangement, the infrastructures used in the provision of public services under concession are to be recognized as intangible assets if the operator has the right to receive a payment from the customer for the service provided, and/or as a financial asset if the operator has the right to receive payment from the public sector entity.
Tangible assets, intangible assets and investments are subjected to impairment testing if there is any specific indication that there may be an impairment loss.
Goodwill, other intangible assets with an indefinite useful life and assets not available for use are tested for impairment at least annually or more frequently if there is any specific indication that they may be impaired.
Impairment testing consists of comparing the carrying amount of an asset or impairment with an estimate of the related recoverable amount.
The recoverable amount of an asset or investment is the higher of its fair value less costs to sell and its value in use. To determine the value in use of an asset or investment, the entity calculates the present value of the estimated future cash flows on the basis of business plans prepared by management, before tax, applying a pre-tax discount rate which reflects current market assessments of the time value of money and the risks specific to the asset or investment. If the recoverable amount of an asset or investment is lower than its carrying amount, a loss is recognized in the Income Statement. If a loss recognized for an asset other than goodwill no longer exists or is reduced, the carrying amount of the asset or cash-generating unit is increased to the new estimate of recoverable value, which may not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset. Reversals of impairment losses are immediately recognized in the income statement.
When the recoverable amount of the individual asset cannot be estimated, it is based on the cash generating unit (CGU) or group of CGUs that the asset belongs to and/or to which it may be reasonably allocated.
CGUs are identified on the basis of the company's organizational and business structure as homogeneous aggregations that generate independent cash inflows deriving from the continuous use of the assets allocated to them.
Different accounting policies are applied to quotas or certificates held for own use in the "Industrial Portfolio" and those held for trading purposes in the "Trading Portfolio".
Surplus quotas or certificates held for own use in the "Industrial Portfolio" which are in excess of the Group's requirements in relation to the obligations accruing at year end are recognized as other intangible assets at the actual cost incurred. Quotas or certificates assigned free of charge are recognized at a zero carrying amount. Given that they are assets for instant use, they are not amortized but subjected to impairment testing. The recoverable amount is the higher of value in use and market value. If, on the other hand, there is a deficit because the requirement exceeds the quotas or certificates in portfolio at the balance sheet date, a provision is recognized for the amount needed to meet the residual obligation, estimated on the basis of any purchase contracts, spot or forward, already signed at the balance sheet date; otherwise on the basis of market prices.
Quotas or certificates held for trading in the "Trading Portfolio" are recognized in inventories and measured at the lower of purchase cost and estimated realizable value based on market trends. Quotas or certificates assigned free of charge are recognized at a zero carrying amount. Market value is established on the basis of any sales contracts, spot or forward, already signed at the balance sheet date; otherwise on the basis of market prices.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Subsidiaries are companies in which the parent company "is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee", as defined by IFRS 10. Control is generally assumed to exist when a company holds either directly or indirectly more than half of the exercisable voting rights at an ordinary shareholders' meeting, also considering potential voting rights, meaning voting rights deriving from convertible financial instruments.
Subsidiaries are consolidated on a line-by-line basis.
Associates are companies in which the parent has a significant influence over strategic decisions, despite not having control, also considering potential voting rights, meaning voting rights deriving from convertible financial instruments; significant influence is assumed to exist when A2A S.p.A. holds, either directly or indirectly, more than 20% of voting rights exercisable at an ordinary shareholders' meeting.
A joint venture is a contractual agreement whereby two or more parties undertake an income generating activity subject to joint control.
Shareholdings in associates and joint ventures are accounted for in the consolidated financial statements using the equity method.
Construction contracts with durations exceeding one year in progress are valued in accordance with IFRS 15. In particular, over-the-time revenues are recognized if it can be demonstrated that: a) the customer simultaneously receives and consumes the benefits of the contract in force at the same time as the service is provided b) the service provided improves.
Construction contracts currently in progress are measured on the basis of the contractual fees that have accrued with reasonable certainty on the basis of the stage of completion, using the "cost to cost" method, so as to allocate the revenues and net result of the contract to the individual periods to which they belong in proportion to the progress being made on the project. Any difference, positive or negative, between the value of the contracts and advances received is recognized as an asset or a liability respectively.
In addition to the contractual fees, contract revenues include variants, price revisions and incentive awards to the extent that it is probable that they represent actual revenues that can be reliably determined. Ascertained losses are recognized independently of the stage of completion of contracts.
Inventories of materials and fuel are measured at the lower of weighted average cost and market value at the balance sheet date. Weighted average cost is determined for the period of reference for each inventory code. Weighted average cost includes any additional costs (such as sea freight, customers charges, insurance and lay or demurrage days in the purchase of fuel). Inventories are constantly monitored and, where necessary, obsolete stocks are written down with a charge to the Income Statement.
Financial instruments include shareholdings (excluding shareholdings in subsidiaries, joint ventures and associates) held for trading (so-called trading shareholdings) or available for sale, non-current receivables and loans and other non-current financial assets, trade and other receivables deriving from company operations and other current financial assets such as cash and cash equivalents. The latter consist of bank and postal deposits, readily negotiable securities used as temporary investments of surplus cash and financial receivables due within three months. Financial instruments also include financial payables (bank loans and bonds), trade payables, other payables and other financial liabilities and derivatives.
Financial assets and liabilities are recognized at the time that the contractual rights and obligations forming part of the instrument arise.
Financial assets and liabilities are accounted for in accordance with IFRS 9 "Financial Instruments".
Financial assets are classified into two categories alone - "at fair value" or "at amortized cost". Classification within the two categories is carried out on the basis of an entity's business model and the contractual cash flow characteristics of the financial asset. A financial asset is measured at amortized cost if both of the following requirements are met: the objective of the entity's business model is to hold assets to collect contractual cash flows (and therefore in substance not to earn trading profits) and the characteristics of the cash flows of the asset are solely payments of principal and interest. A financial asset is measured at fair value if it is not measured at amortized cost.
All equity instruments both listed and unlisted – must be measured at fair value.
An entity has the option of presenting changes in the fair value of equity instruments that are not held for trading in equity; that option is not permitted for equity instruments that are held for trading. This designation is permitted on initial recognition, may be adopted for each individual instrument and is irrevocable. If an election is made for this option, changes in the fair value of these instruments may never be reclassified from equity to the income statement. Dividends on the other hand continue to be recognized in the income statement.
In addition, the method of expected credit losses is modified, moving to an impairment model that leads to the early recognition of forward-looking losses.
Measurement subsequent to initial recognition depends on which of the following categories the financial instrument falls into:
Financial assets at amortized cost are valued using the effective interest method and are subject to impairment.
Gains and losses are recognized in the income statement when the asset is derecognized, modified or revalued.
On initial recognition, the Group may irrevocably choose to classify its equity investments as equity instruments recognized at fair value through profit and loss when they meet the definition of equity instruments pursuant to IAS 32 "Financial instruments: Presentation" and are not held for trading. The classification is determined for each individual instrument.
Gains and losses on these financial assets are never reclassified to the income statement. Dividends are recognized as other income in the income statement when the right to payment has been approved, except when the Group benefits from such income as a recovery of part of the cost of the financial asset, in which case such profits are recognized in OCI. Equity instruments recognized at fair value through OCI are not subject to impairment testing.
This category includes assets held for trading, assets designated at the time of initial recognition as financial assets at fair value with changes recognized in the Income Statement, or financial assets that must be measured at fair value. Assets held for trading are all those assets acquired for sale or repurchase in the short term. Derivatives, including those separated, are classified as financial instruments held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not represented solely by principal and interest payments are classified and measured at fair value in the Income Statement, regardless of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through OCI, as described above, debt instruments may be recognized at fair value in the Income Statement upon initial recognition if this results in the elimination or significant reduction of an accounting mismatch.
3 Notes
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Financial instruments at fair value with changes recognized in the Income Statement are recognized in the statement of financial position at fair value and net changes in fair value are recognized in profit/(loss) for the year.
This category includes derivative instruments and listed equity investments that the Group has not irrevocably chosen to classify at fair value through OCI. Dividends on listed equity investments are also recognized as other income in the statement of profit/(loss) for the year when the right to payment is established.
The embedded derivative contained in a non-derivative hybrid contract, in a financial liability or in a principal non-financial contract, is separated from the principal contract and accounted for as a separate derivative, if: its economic characteristics and the risks associated with it are not closely correlated with those of the principal contract; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value in the Income Statement. Embedded derivatives are measured at fair value, with changes in fair value recognized in the Income Statement. A restatement occurs only when there is a change in the terms of the contract that significantly changes the cash flows otherwise expected or a reclassification of a financial asset to a category other than fair value in the Income Statement.
An embedded derivative included in a hybrid contract that contains a financial asset is not separated from the host contract. The financial asset together with the embedded derivative is classified entirely as a financial asset at fair value in the Income Statement.
A financial asset is derecognized when:
In cases where the company has transferred the rights to receive cash flows from an asset or signed an agreement under which it retains the contractual rights to receive the cash flows from the financial asset but assumes a contractual obligation to pay the cash flows to one or more beneficiaries (pass-through), it assesses whether and to what extent it has retained the risks and rewards of ownership. In the cases in which it has neither transferred nor retained substantially all of the risks and rewards or has not lost control of the asset, it continues to be recognized in the financial statements of the Group to the extent of its continuing involvement in the asset. In this case, the Group also recognizes an associated liability. The transferred asset and the associated liability are valued to reflect the rights and obligations that remain with the Group.
When the entity's continuing involvement is a guarantee of the transferred asset, involvement is measured on the basis of the lower of the amount of the asset and the maximum amount of consideration received that the entity might have to repay.
Financial liabilities are classified, at the time of initial recognition, at fair value in the Income Statement, as mortgages and loans or as derivatives designated as hedges. Directly attributable transaction costs are added to the valuation.
The Group's financial liabilities include trade payables and other payables, mortgages and loans, including current account overdrafts and derivative financial instruments.
The subsequent evaluation depends on the classification of the main instrument:
A financial liability is derecognized when the obligation underlying the liability is settled or cancelled.
These are initially recognized at fair value on the date the contract is signed and the subsequent measurement is also at fair value.
To classify a derivative as a hedge, the company formally designates and documents the hedging relationship, its risk management objectives and the strategy pursued.
From January 1, 2018, the following must be identified: a) the hedging instrument b) the nature of the risk being hedged c) the way in which the company will assess the effectiveness of the hedge. The hedging relationship is effective if:
If a derivative financial instrument is designated as a hedge against exposure to changes in the fair value of an asset or liability attributable to a specific risk, the gain or loss resulting from subsequent changes in fair value of the hedging instrument is recognized in the Income Statement. The profit or loss deriving from the adjustment to fair value of the item hedged, for the part attributable to the hedged risk, changes the book value of this item and is recognized in the Income Statement. Cash flow hedge - If a derivative financial instrument is designated to hedge the exposure to the variability of the cash flows of an asset or a liability recognized in the Financial Statements or of a highly probable transaction, the effective portion of the resulting profits or losses deriving from the fair value adjustment of the derivative instrument is recognized in a specific equity reserve. The cumulative profit or loss is reversed from the equity reserve and recorded in the Income Statement in the same years in which the effects of the hedged transaction are recognized in the Income Statement. The gain or loss associated with that part of the ineffective hedge is recognised in the Income Statement immediately. If the hedged transaction is no longer considered probable, the unrealized gains or losses recognized in the equity reserve are immediately recognized in the Income Statement.
The portion of gain or loss on the hedged instrument relating to the effective portion of the hedge is recognized in other comprehensive income in the cash flow hedge reserve, while the ineffective portion is recognized directly in the Income Statement. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in the fair value of the hedged item.
Amounts accumulated under other components of the comprehensive income statement are recorded, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial component, the accumulated amount in equity is removed from the separate component of equity and included in the cost or other carrying amount of the asset or liability hedged. This is not considered a reclassification of the items recognized in OCI for the period. This also applies in the case of a hedged forecast transaction of a non-financial asset or a non-financial liability that subsequently becomes an irrevocable commitment to which fair value hedge accounting is applied.
For any other cash flow hedge, the amount accumulated in OCI is reclassified in the Income Statement as a reclassification adjustment in the same period or periods during which the hedged cash flows impact profit or loss.
If the cash flow hedge accounting is discontinued, the accumulated amount in OCI must remain so if the hedged future cash flows are expected to occur. Otherwise, the amount shall be immediately reclassified to profit or loss for the period as a reclassification adjustment. After suspension, once the hedged cash flow occurs, any accumulated amount remaining in OCI must be accounted for depending on the nature of the underlying transaction as described above.
Non-current assets held for sale, disposal groups and discontinued operations whose carrying amount will be recovered principally through sale rather than continuous use are measured at the lower of their carrying amount and fair value less costs to sell. A disposal group is a group of assets to be disposed of together as a group in a single transaction together with the liabilities directly associated with those 3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
assets that will be transferred in that transaction. Discontinued operations on the other hand consist of a significant component of the Group such as a separate major line of business or a geographical area of operations or a subsidiary acquired exclusively with a view to resale.
In accordance with IFRSs, the figures for non-current assets held for sale, disposal groups and discontinued operations are shown on two specific lines in the balance sheet: non-current assets held for sale and liabilities directly associated with non-current assets held for sale.
Non-current assets held for sale are not depreciated or amortized and are measured at the lower of carrying amount and fair value less costs to sell; any difference between carrying amount and fair value less costs to sell is recognized in the income statement as a write-down.
The net economic results arising from discontinued operations, and only discontinued operations, pending the disposal process, any gains or losses on disposal and the corresponding comparative figures for the previous year or period are recognized in a specific line of the Income Statement: "Net result from discontinued operations". On the other hand any gains or losses recognized as the result of measuring non-current assets (or disposal groups), classified as held for sale within the meaning of IFRS 5, at fair value less costs to sell are presented in a specific line item of the income statement "Result from nonrecurring transactions", as discussed further in the previous section "Format of financial statements".
The employees' leaving entitlement (TFR) and pension provisions are determined using actuarial methods; the rights accrued by employees during the year are recognized in the Income Statement as "labour costs", whereas the figurative financial cost that the company would have to bear if it were to ask the market for an loan of the same amount as the TFR is recognized as part of the "financial balance". Actuarial gains and losses arising from changes in actuarial assumptions are recognized in income statement taking into account the residual average working life of the employees.
Following the introduction of Finance Law no. 296 of December 27, 2006, only the portion of accrued employees' leaving entitlement that remained in the company has been measured in accordance with IAS 19, as amounts are now paid over to a separate entity as they accrue (either to a supplementary pension scheme or to funds held by INPS). As a result of these payments the company no longer has any obligations in connection with the services employees may render in the future.
Guaranteed employee benefits paid on or after the termination of employment through defined benefit plans (energy discount, health care or other benefits) or long-term benefits (loyalty bonuses) are recognized in the period when the right vests.
The liability for defined benefit plans, net of any plan assets, is determined by independent actuaries on the basis of actuarial assumptions and recognized on an accrual basis in line with the work performed to obtain the benefits.
Gains and losses arising from actuarial calculations are recognized in a specific equity reserve.
The Group entered into factoring agreements, typically in the technical form of reverse factoring. On the basis of the contractual structures in place, the supplier has the possibility to sell at its discretion, the receivables from the company to a lending institution. In some cases, the payment terms indicated in the invoice are the subject of further deferments agreed between the supplier and the Group; these deferments can be both burdensome and not burdensome.
In the event of extensions, a quantitative analysis is carried out to verify whether or not the contractual terms have been amended. In this context, the relations, for which the primary obligation is maintained with the supplier and the possible deferment, if granted, does not involve a substantial change in payment terms, retain their nature and are therefore classified as trading liabilities.
Provisions for risks and charges regard costs of a determinate nature and of certain or probable existence which at year-end are uncertain in terms of timing or amount. Provisions are recognized when there is a legal or constructive present obligation arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits, and it is possible to make a reasonable estimate of the obligation.
Provisions are recognized at the best estimate of the amount that the company would have to pay to settle the liability or to transfer it to third parties at the balance sheet date. If the effect of discounting is significant, provisions are calculated by discounting expected future cash flows at a pre-tax discount rate that reflects the current market assessment of the time value of money. If discounting is used the increase in the provision due to the passage of time is recognized as financial expense.
If the liability relates to tangible assets (such as the dismantling and reclamation of industrial sites), the initial provision is recognized as a counter-entry to the assets to which it refers; expense is then charged to income statement as the asset in question is depreciated.
Treasury shares are accounted for as a deduction from equity. In particular, treasury shares are recognized as a negative equity reserve.
Grants, both from public entities and from third party private entities, are measured at fair value when there is the reasonable certainty that they will be received and that the Group will be able to comply with the terms and conditions for obtaining them.
Grants received to provide support for the cost of specific assets are recognized as a direct deduction from the assets concerned and credited to the income statement over the life of the depreciable asset to which they refer.
Revenue grants (given to provide the company with immediate financial support or as compensation for expenses or losses incurred in a previous accounting period) are recognized in their entirety in the income statement as soon as the conditions for recognizing the grants are met.
The recognition of revenues is based on the following five steps: (i) identification of the contract with the customer; (ii) identification of the performance obligations, represented by the contractual promises to transfer goods and/or services to a customer; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations identified on the basis of the stand-alone sale price of each good or service; (v) recognition of the revenue when the relative performance obligation is satisfied, i.e. when the promised good or service is transferred to the customer; the transfer is considered completed when the customer obtains control of the good or service, which can occur continuously over time diluted and extended or at a point in time. Depending on the type of transaction, revenues are recognized on the basis of the following specific criteria:
Revenues are stated net of returns, discounts, allowances and rebates, as well as directly related taxes. Expenses relate to goods or services sold or consumed during the year or as a result of systematic allocation; if no future use is envisaged they are recognized directly in the income statement.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The item "Non-recurring transactions" consists of the gains and losses arising from the measurement at fair value less costs to sell or from the sale or disposal of non- current assets (or disposal groups) classified as held for sale within the meaning of IFRS 5, the gains or losses arising on the disposal of shareholdings in unconsolidated subsidiaries and associates and other non-operating income and expense.
Financial income is recognized when interest income arises using the effective interest method, i.e. at the rate that exactly discounts expected future cash flows over the expected life of the financial instrument. Financial expense is recognized in the Income Statement on an accrual basis on the basis of the effective interest.
Dividend income is recognized when it is established that the shareholders have a right to receive payment, and is recognized as financial income in the Income Statement.
Current income taxes are based on an estimate of taxable income in compliance with tax regulations in force or substantially approved at the balance sheet date, bearing in mind any exemptions or tax credits due. Account is also taken of the fact that the Group now files for tax on a consolidated basis.
Deferred tax assets and liabilities are calculated on the temporary differences between the carrying amount of assets and liabilities in the balance sheet and their tax bases, with the exception of goodwill which is not deductible for tax purposes and any differences resulting from investments in subsidiaries which are not expected to reverse in the foreseeable future. The tax rates used are those expected to apply to the period when the temporary differences reverse. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the tax benefit will be realized. The measurement of deferred tax assets takes account of the period for which business plans are available.
When transactions are recognized directly in equity, any related current or deferred tax effects are also recognized directly in equity. Deferred taxes on the undistributed profits of Group companies are only provided for if there is the real intention to distribute such profits and, in any case, if the taxation is not offset as the result of filing a Group tax return.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Taxes are only offset when they are levied by the same tax authority, when there is the legal right of setoff and when settlement of the net balance is expected.
Preparing the financial statements and notes requires the use of estimates and assumptions in determining certain assets and liabilities and measuring contingent assets and liabilities. The actual results after the event could differ from such estimates.
Estimates have been used in assessing the recoverability of assets, to determine certain sales revenues, in provisions for risks and charges, in provisions for receivables and other write-downs, amortization and depreciation, the valuation of derivatives, employee benefits and taxes. The underlying estimates and assumptions are regularly reviewed and the effect of any change is immediately recognized in the income statement.
The following are the key assumptions made by management as part of the process of making these accounting estimates. The inherently critical element of such estimates comes from using assumptions or professional opinions on matters that are by their very nature uncertain. Changes in the conditions underlying the assumptions and opinions used could have a material impact on subsequent results.
The carrying amount of non-current assets (including goodwill and other intangible assets) and of assets held for sale is reviewed periodically and whenever circumstances or events require a more frequent assessment. If it is considered that the book value of a group of fixed assets has had an impairment loss, it is subject to the application of professional judgement by management and is based on assumptions that include: the identification of the Cash Generating Units, the estimate of the future operating cash flows associated with these CGUs during the reference period of the 2021-2030 business plan, the estimate of the cash flows subsequent to this time horizon, the cash flow deriving from the disposal at the end of useful life of the assets, discount rates used ("Wacc"). These assumptions are complex due to their nature and imply recourse to the opinion of the directors, who are also sensitive to future trends in energy markets, macroeconomic scenarios, and the resolutions of ARERA (Regulatory Authority for Energy Networks and Environment).
For the purpose of preparing the impairment test, the company avails itself of the support of an independent expert, external to the A2A Group.
In the hypothesis in which the recoverable value is lower than the carrying amount, the latter is written down to the extent applicable. Management is of the opinion that the estimates of such recoverable amounts are reasonable, albeit subject to changes in the factors underlying the estimates on which these recoverable amounts have been calculated could produce different measurements. For further details on the way in which impairment testing was carried out and the results of such testing, reference is made to the specific paragraph.
Revenues for the year include income from the sale of electricity and gas, including through sales on the IPEX markets, from the sale of environmental certificates and from the provision of administrative, fiscal, legal, management and technical services, as well as incentives on net production from renewable sources and rental income. It should be noted that the processes and methods for evaluating and determining these types of revenue do not require the use of complex assumptions.
In certain circumstances it is not easy to identify whether a legal or constructive present obligation exists. The directors assess these situations case by case, together with an estimate of the economic resources required to settle the obligation. Estimating such provisions is the result of a complex process that involves subjective judgements on the part of company management. When the directors are of the opinion that it is only possible that a liability could arise, the risks are disclosed in the section on commitments and contingent liabilities without making any provision.
The liabilities for landfills provision represents the amount set aside to meet the costs which will be incurred for the management of the period of closure and post-closure of landfills currently in use. The future outlays, calculated for each landfill by a specific appraisal updated annually, were discounted in accordance with the provisions of IAS 37.
The entry into force of IFRS 9 on January 1, 2018 has led to a change in the recognition of credit losses for the Group. The approach adopted is a forward-looking one, focusing on the probability of future losses on receivables, even in the absence of events that would suggest the need to write-down a credit position (Expected Losses).
Although the provision is considered adequate, the use of different assumptions or changes in prevailing economic conditions, even more so in this period of recession, could give rise to adjustments to the bad debts provision.
Depreciation and amortization charges are a significant cost for the company. Non-current assets are depreciated or amortized on a straight-line basis over the useful lives of the assets. The useful lives of the company's non-current assets are established by the directors, with the assistance of expert appraisers, when they are purchased. The company periodically reviews technological and sector changes, dismantling/closure charges and the recovery amount of assets to update their residual useful lives. This periodic update could lead to a change in the period of depreciation or amortization and hence also in the depreciation or amortization charge in future years.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The derivatives used are measured at fair value based on the forward market curve at the balance sheet date, if the underlying of the derivative is traded on markets that provide official, liquid forward prices. If the market does not provide forward prices, forecast price curves are used based on simulation models developed by Group companies internally. However, the actual results of derivatives could differ from the measurements made.
The serious turbulence on markets for the energy commodities traded by the company, as well the fluctuations in exchange and interest rates, could lead to greater volatility in cash flows and in expected results.
The calculations of expenses and the related liabilities, estimated by independent experts, are based on actuarial assumptions. The full effects of any changes in these actuarial assumptions are recognized in a specific equity reserve.
Accounting for business combinations entails allocating the difference between purchase cost and net carrying amount to the assets and liabilities of the acquired business. For the majority of assets and liabilities this difference is allocated by recognizing the assets and liabilities at fair value. If positive, the unallocated portion is recognized as goodwill. If negative, it is recognized in the income statement. A2A S.p.A. bases its allocations on available information and, for the more significant business combinations, on external appraisals.
The uncertainties that exist regarding the way of applying certain tax regulations have led the company to taking an interpretative stance when providing for current taxes in the financial statements; such interpretations could be overturned by official clarifications on the part of the tax authorities.
Deferred tax assets are accounted for on the basis of the taxable profit expected to be available in future years. Assessing the expected taxable profit for the purpose of accounting for deferred taxation depends on factors that can vary over time, and may lead to significant effects on the measurement of deferred tax assets.
| thousands of euro Balance at Changes during the year |
Balance at | ||||||
|---|---|---|---|---|---|---|---|
| 12 31 2019 | Invest. | Other changes |
Disposals net of the provision |
Amort. | Total changes |
12 31 2020 | |
| Land | 32,335 | 214 | (52) | 162 | 32,497 | ||
| Buildings | 214,984 | 538 | 254 | (1,708) | (9,646) | (10,562) | 204,422 |
| Plant and machinery | 716,172 | 1,661 | 9,943 | (5) | (55,526) | (43,927) | 672,245 |
| Industrial and commercial equipment | 2,096 | 722 | (366) | 356 | 2,452 | ||
| Other assets | 11,776 | 2,787 | (31) | (5,211) | (2,455) | 9,321 | |
| Construction in progress and advances | 15,560 | 15,409 | (7,115) | 8,294 | 23,854 | ||
| Leasehold improvements | 62 | 3 | (15) | (12) | 50 | ||
| Assets for rights of use | 9,621 | 55,173 | (9,216) | 45,957 | 55,578 | ||
| Total tangible assets | 1,002,606 | 21,120 | 58,438 | (1,765) | (79,980) | (2,187) | 1,000,419 |
| of which: | |||||||
| Historical cost | 2,819,712 | 21,120 | 57,426 | (4,355) | 74,191 | 2,893,903 | |
| Accumulated amortization | (1,464,617) | 1,012 | 2,590 | (79,980) | (76,378) | (1,540,995) | |
| Write-downs | (352,489) | (352,489) |
At December 31, 2020, "Tangible assets" amounted to 1,000,419 thousand euro (1,002,606 thousand euro in the previous year) and show a decrease of 2,187 thousand euro resulting from the following transactions:
For a detailed analysis of changes in the year, reference shall be made to annex "1 Statement of changes in tangible assets".
Capex during the year refer to:
3 Notes
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
"Tangible assets" include "Construction in progress and advances" for 23,854 thousand euro (15,560 thousand euro at December 31, 2019), presenting an increase of 8,294 thousand euro resulting from the counter effects of the following items:
With regard to large-scale diversion hydroelectric concessions, it is noted that when they are converted into law (Law no. 12/2019) with amendments to Law Decree December 14, 2018, no. 135 Simplifications Law Decree), the Legislator intervened in article 11-quater with overall review of the regulations governing large-scale diversion hydroelectric concessions (> 3 MW), as explained in greater detail in the section "Regulatory Changes and Impacts on the Business Units of the A2A Group - Generating and Trading Business Unit" in the Report on Operations. The Company is continuing to analyze the impact of regulatory amendments, also in light of the new regulations issued in 2020, and confirms, to date, that the amounts recognized in the financial statements for dry and wet works related to hydroelectric concessions are prudent and recoverable also in accordance with the new regulations.
Tangible assets include "Assets for rights of use" totalling 55,578 thousand euro (9,621 thousand euro at December 31, 2019), recognized in accordance with IFRS 16 and for which the outstanding payable to lessors at December 31, 2020 amounted to 57,120 thousand euro (9,565 million thousand at December 31, 2019). Below is a breakdown of Assets for rights of use deriving from operating and financial leases at December 31, 2020:
| Assets consisting of rights of use thousands of euro |
Balance at Changes during the year |
||||
|---|---|---|---|---|---|
| 12 31 2019 | Other changes |
Amort. | Total changes |
12 31 2020 | |
| Land | 97 | 23 | (43) | (20) | 77 |
| Buildings | 4,433 | 6,172 | (2,731) | 3,441 | 7,874 |
| Other assets | - | 48,027 | (4,002) | 44,025 | 44,025 |
| Vehicles | 5,091 | 951 | (2,440) | (1,489) | 3,602 |
| Total | 9,621 | 55,173 | (9,216) | 45,957 | 55,578 |
It is specified that the Company has made use of the option provided for in paragraph 6 of the standard not to apply the provisions of paragraphs 22 to 49 of the standard to the following categories:
a) short-term leases;
b) leases whose underlying assets are of low value.
It should also be noted, in accordance with paragraph 48 of the principle, that the Company does not have assets for rights of use that meet the definition of property investment.
It should be noted that the amendment to IFRS 16, issued in June 2020, with the objective of neutralizing the effect of the restatement of the value of the right of use and the related financial liability as a result of suspension/reduction of lease/rental fees as a result of the COVID-19 pandemic, did not have an impact on the company as it was not necessary to reach agreements to this effect.
| thousands of euro | Balance at 12 31 2019 |
Changes during the year | Balance at | ||||
|---|---|---|---|---|---|---|---|
| Invest. | Other changes |
Disposals net of the provision |
Amort. | Total changes |
12 31 2020 | ||
| Industrial patents and intellectual property rights |
16,226 | 5,581 | 2,942 | (8,254) | 269 | 16,495 | |
| Concessions, licences, trademarks and similar rights |
21,290 | 18,202 | 849 | (12,531) | 6,520 | 27,810 | |
| Goodwill | 35,641 | 35,641 | |||||
| Assets in progress | 9,080 | 14,276 | (4,414) | (294) | 9,568 | 18,648 | |
| Other intangible assets | 4,881 | 96 | (2,726) | (26) | (2,656) | 2,225 | |
| Total intangible assets | 87,118 | 38,155 | (3,349) | (294) | (20,811) | 13,701 | 100,819 |
At the reporting date, "Intangible assets" amounted to 100,819 thousand euro (87,118 thousand euro at December 31, 2019).
"Intangible assets" in 2020 increased by 13,701 thousand euro resulting from the following:
More specifically, capex during the year refer to the following:
Included in the total balance of "Intangible assets" are "Assets in progress" for 18,648 thousand euro (9,080 thousand euro as at December 31, 2019), resulting in an increase of 9,568 thousand euro due to the combined effect of the following items:
For more in-depth information, refer to annex "2. Statement of changes in intangible assets".
| thousands of euro | Balance at | Changes during the year | Balance at | ||||
|---|---|---|---|---|---|---|---|
| 12 31 2019 | Invest. | Reclass./ Other changes |
Disp./ Write downs |
Amort. | Totale changes |
12 31 2020 | |
| Goodwill | 35,641 | 35,641 | |||||
| Total goodwill | 35,641 | - | - | - | - | - | 35,641 |
Goodwill equal to 35,641 thousand euro at December 31, 2020, unchanged compared to the end of the previous year, was formed as a result of non-recurring transactions with third parties.
This goodwill was allocated to the following CGUs: "A2A Reti Gas" for 3,700 thousand euro, "A2A Gas" for 6,800 thousand euro, "A2A Calore" for 18,000 thousand euro and "A2A Ambiente" for 7,141 thousand euro.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Under IAS 36 goodwill, an intangible asset with an indefinite useful life, is not amortized systematically but tested at least once a year ("Impairment Test"). As goodwill neither generates independent cash flow nor can it be sold separately, IAS 36 calls for a secondary audit of its recoverable amount, determining cash flows generated by a set of assets that constitute the business to which it belongs, i.e. the Cash Generating Unit (CGU).
The verification of the recoverable value has been carried out within the broader Impairment Test activities of the various CGU carried out for the Consolidated Financial Statements, which include the goodwill in question. For the year 2020, it did not produce any value adjustments.
The parameters used for the purposes of the Impairment Test are set out in note 2 of the Consolidated Annual Financial Report, to which reference is made for further details.
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Shareholdings in subsidiaries | 3,793,552 | 158,873 | 3,952,425 | ||
| Shareholdings in affiliates | 2,077 | (466) | 1,611 | ||
| Other non-current financial assets | 1,148,552 | 327,720 | 1,476,272 | 1,147,655 | 1,468,848 |
| Total shareholdings and other non-current financial assets |
4,944,181 | 486,127 | 5,430,308 | 1,147,655 | 1,468,848 |
"Shareholdings in subsidiaries" amounted to 3,952,425 thousand euro (3,793,552 thousand euro as at December 31, 2019).
The following table illustrates the changes during the year:
| Shareholdings in subsidiaries thousands of euro |
TOTAL |
|---|---|
| Balance at December 31, 2019 | 3,793,552 |
| Changes during the year: | |
| - acquisitions and capital increases | 57,335 |
| - sales and decreases | (38,050) |
| - reversals | |
| - write-downs | |
| - exchange assessments | 139,588 |
| - reclassifications | |
| - other changes | |
| Total changes during the year | 158,873 |
| Balance at December 31, 2020 | 3,952,425 |
The value of shareholdings in subsidiaries presented an increase of 158,873 thousand euro with respect to the close of the previous fiscal year and is attributed to the following changes:
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Other information
demerger of the gas distribution business relating to certain municipalities in the provinces of Bergamo and Milan, belonging to the subsidiary Unareti S.p.A., and of the shareholding in A2A Illuminazione Pubblica S.r.l. to AEB S.p.A., with effect from November 1, 2020;
• recognition in A2A S.p.A. of the shareholding of 33.52% of the share capital of AEB S.p.A., for 158,638 thousand euro, equal to the fair value of the net assets transferred and described above, based on the value determined by an independent external appraiser for the purposes of determining the exchange at the time of the issue of AEB S.p.A. shares to be assigned to A2A S.p.A..
Further information regarding movements involving shareholdings in subsidiary companies may be found within annexes 3/a and 4/a to compare their book value and corresponding portions of net assets.
"Shareholdings in affiliates and joint ventures" amounted to 1,611 thousand euro (2,077 thousand euro at December 31, 2019); the decrease of 466 thousand euro refers to the reclassification, in compliance with IFRS 5, to the item "Assets held for sale" of the shareholding in Ge.S.I. S.r.l., equal to 47% of the share capital, following the exercise of the put option subscribed on November 23, 2020 of the entire shareholding.
Further details regarding shareholdings in affiliates may be found in annexes 3/b and 4/b.
The recoverable value of shareholdings has been measured based on the present value of the corresponding expected net cash flows attributable to the shareholdings of A2A S.p.A. The cash flows used are in line with those used for the Impairment Test of the CGU for the consolidated financial statements. The same applies to the methodological approach and discount rates adopted further detailed in the Consolidated Annual Financial Report (note 2).
It shall be recalled that the Impairment Test is carried out for all shareholdings which have a carrying value higher than the corresponding fraction of shareholders' equity of competence and/or in the presence of specific impairment indicators.
During the reporting year, shareholdings did not require any write-downs/write-backs.
"Other non-current financial assets" amounted to 1,476,272 thousand euro (1,148,552 thousand euro as at December 31, 2019), of which:
| thousands of euro | Balance at | Net changes | Balance at |
|---|---|---|---|
| 12 31 2019 | during the year | 12 31 2020 | |
| Deferred tax assets | 59,688 | (18,102) | 41,586 |
The item, equal to 41,586 thousand euro, includes the net effect, as detailed in the table below to which reference is made, of deferred tax liabilities and deferred tax assets as per corporate income tax (IRES) and regional tax (IRAP) as well as provisions made solely for tax purposes. The recoverability of "Deferred tax assets" recorded in the financial statements for IRES purposes is considered likely, as the future plans envisage IRES taxable income sufficient for the absorption of the temporary differences that will be reversed at tax consolidation level.
For the years of the plan between 2021 and 2025 in which IRAP taxable income is not expected to be sufficient to absorb the IRAP temporary differences, the relative IRAP deferred tax assets and liabilities have been reversed, with reference to the items in the financial statements for which the actual change can be estimated over the relevant time period.
Deferred tax assets are calculated using the tax rate applicable at the time of repayment.
At December 31, 2020, the amounts relative to deferred tax assets/deferred tax liabilities have been expressed as net ("offsetting") as per IAS 12.
This item is detailed within the table below:
| thousands of euro | Balance at 12 31 2020 |
Balance at 12 31 2019 |
|---|---|---|
| Value differences of tangible assets | 110,515 | 131,810 |
| Adoption of the finance lease standard (IFRS 16) | 3,897 | 348 |
| Measurement differences of intangible assets | 2,557 | 2,522 |
| Deferred capital gains | 8 | 15 |
| Other deferred tax liabilities | 4,294 | 4,404 |
| Deferred tax liabilities (A) | 121,271 | 139,099 |
| Taxed risk provisions | 43,622 | 47,260 |
| Amortization, depreciation and write-downs | 54,810 | 71,528 |
| Bad debts provision | 2,550 | 2,565 |
| Provisions and employee benefits | 12,152 | 14,669 |
| Goodwill | 47,338 | 50,466 |
| Other deferred tax assets | 2,385 | 12,299 |
| Deferred tax assets (B) | 162,857 | 198,787 |
| Net effect deferred tax assets (B-A) | 41,586 | 59,688 |
For further details and information, please refer to the item "Income/expenses for income tax" on the income statement.
| thousands of euro | Balance at Changes 12 31 2019 during the year |
Balance at 12 31 2020 |
of which included in the NFP |
||
|---|---|---|---|---|---|
| 12 31 2020 | |||||
| Non-current derivatives | 2,381 | (2,381) | - | 2,381 | - |
| Other non-current assets | 12,966 | (1,048) | 11,918 | - | - |
| Total other non-current assets | 15,347 | (3,429) | 11,918 | 2,381 | - |
"Other non-current assets" amounted to 11,918 thousand euro (15,347 thousand euro at December 31, 2019) with a decrease compared to the previous year of 3,429 thousand euro and consisted of other non-current receivables referring to security deposits (12,966 thousand euro at December 31, 2019), the decrease of which is attributable to the partial repayment of security deposits paid to Terna during the previous year by way of participation in auctions on the capacity market. At December 31, 2019, this item included 2,381 thousand euro related to the fair value measurement of non-current derivative instruments that had a debit balance at the end of the reporting year.
| thousands of euro | Balance at 12 31 2019 |
Changes during the year |
Balance at 12 31 2020 |
|---|---|---|---|
| - Materials | 1,222 | 110 | 1,332 |
| - Material obsolescence provision | (634) | (36) | (670) |
| Total material | 588 | 74 | 662 |
| - Fuel | 95,555 | (31,916) | 63,639 |
| Raw and ancillary materials and consumables | 96,143 | (31,842) | 64,301 |
| Third-party fuel | 10,769 | (10,769) | - |
| Total inventories | 106,912 | (42,611) | 64,301 |
Inventories at December 31, 2020 amounted to 64,301 thousand euro (106,912 thousand euro at December 31, 2019); changes during the year were negative for 42,611 thousand euro and mainly refer to the decrease in natural gas inventories and the zeroing of fuel inventories held by third parties. This item includes:
| thousands of euro | Balance at 12 31 2019 |
Changes during the year |
Balance at 12 31 2020 |
|---|---|---|---|
| Trade receivables - invoices issued | 29,667 | 6,637 | 36,304 |
| Trade receivables - invoices to be issued | 632,433 | 209,501 | 841,934 |
| Bad debt provision | (6,194) | 72 | (6,122) |
| Total trade receivables | 655,906 | 216,210 | 872,116 |
At December 31, 2020, trade receivables amounted to 872,116 thousand euro (655,906 thousand euro at December 31, 2019) and increased by 216,210 thousand euro.
These receivables include:
As of the reporting date, the bad debt provision calculated in accordance with IFRS 9 amounted to 6,122 thousand euro, a decrease of 72 thousand euro. This provision is considered adequate to cover the risks to which it relates.
The detailed changes in the provisions to adjust the values of receivables are outlined in the following table:
| thousands of euro | Balance at 12 31 2019 |
Provisions | Utilizations | Other changes |
Balance at 12 31 2020 |
|---|---|---|---|---|---|
| Bad debt provision | 6,194 | 159 | (231) | - | 6,122 |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The following is the aging of trade receivables:
| thousands of euro | Balance at 12 31 2019 |
Balance at 12 31 2020 |
|---|---|---|
| Trade receivables of which: | 655,906 | 872,116 |
| Current | 21,816 | 27,101 |
| Past due of which: | 7,851 | 9,203 |
| - Past due up to 30 days | 1,079 | 2,646 |
| - Past due from 31 to 180 days | 724 | 559 |
| - Past due from 181 to 365 days | (124) | 56 |
| - Past due over 365 days | 6,172 | 5,942 |
| Invoices to be issued | 632,433 | 841,934 |
| Bad debts provision | (6,194) | (6,122) |
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Current derivatives | 371,479 | 54,473 | 425,952 | - | - |
| Other current assets of which: | 105,521 | (25,939) | 79,582 | - | - |
| - advances to suppliers | 10,907 | (10,291) | 616 | ||
| - receivables from employees | 193 | 1 | 194 | ||
| - tax receivables | 2,058 | 5,222 | 7,280 | ||
| - receivables related to future years | 8,658 | (1,691) | 6,967 | ||
| - receivables from subsidiaries for tax consolidation | 55,459 | (1,288) | 54,171 | ||
| - receivables from social security entities | 882 | (53) | 829 | ||
| - receivables for water derivation fees | 52 | - | 52 | ||
| - Stamp office | 124 | (1) | 123 | ||
| - receivables for security deposits | 1,174 | 167 | 1,341 | ||
| - receivables from Ergosud | 2,175 | - | 2,175 | ||
| - other sundry receivables | 23,839 | (18,005) | 5,834 | ||
| Total other current assets | 477,000 | 28,534 | 505,534 | - | - |
"Other current assets" presented a balance of 505,534 thousand euro (477,000 thousand euro at December 31, 2019), an increase of 28,534 thousand euro with respect to the previous year.
"Current derivative instruments" amounting to 425,952 thousand euro (371,479 thousand euro at December 31, 2019) refer to the fair value valuation of commodity derivatives at the end of the year under review. The increase is due both to the increase in the fair value valuation of the year and to the change in the amounts covered. It should be noted that "Other current liabilities" include 403,141 thousand euro in "Current derivatives".
Tax receivables, amounting to 7,280 thousand euro, refer to receivables from the tax authorities for excise duties for 6,192 thousand euro, a tax credit from the tax authorities for research and development activities recognized for the purposes provided for by art. 3 of Law Decree No. 145 of December 23, 2013 and the Decree of May 27, 2015 issued by the Minister of Economy and Finance in agreement with the Minister of Economic Development for 861 thousand euro, to a tax credit from the tax authorities for sanitization and the purchase of protection devices pursuant to art. 125 of Law Decree 34/2020 (Decreto Rilancio - Relaunch Decree) for 28 thousand euro, as well as other receivables for 199 thousand euro. Receivables from subsidiaries for the Group tax consolidation and VAT regime amounted to 54,171 thousand euro.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of
preparation Changes in
international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Other information
provided by ARERA Resolutions no. ARG/elt 194/10 and no. 117/10. Other receivables include a receivable of 3,295 thousand euro from SNAM for the recalculation of gas imbalances for previous years. The decrease of 18,005 thousand euro compared with the previous year is mainly due to lower prepayments on electricity futures contracts, which will become effective in the
Receivables from Ergosud, amounting to 2,175 thousand euro, unchanged over the previous year, refer to the receivable due for new entry plants (Scandale Plant), regarding portions of emission allowances as
following year.
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Financial assets measured at amortized cost (HTC) of which: |
|||||
| - third parties | - | - | - | - | - |
| - related parties | 386,297 | 26,480 | 412,777 | 386,297 | 412,777 |
| Total financial assets measured at amortized cost (HTC) |
386,297 | 26,480 | 412,777 | 386,297 | 412,777 |
| Total current financial assets | 386,297 | 26,480 | 412,777 | 386,297 | 412,777 |
"Current financial assets" refer to "Financial assets measured at amortized cost (HTC)" totalling 412,777 thousand euro (386,297 thousand euro at December 31, 2019) and refer:
This item increased by 26,480 thousand euro due to the combined effect of higher receivables for loans granted to subsidiaries and higher receivables accrued on correspondence current accounts.
| thousands of euro | Balance at | Changes | Balance at |
|---|---|---|---|
| 12 31 2019 | during the year | 12 31 2020 | |
| Current tax assets | 50,083 | 12,509 | 62,592 |
At December 31, 2020, this item amounted to 62,592 thousand euro (50,083 thousand euro at December 31, 2019) and refers to IRAP receivables (12,047 thousand euro), IRES receivables (49,920 thousand euro), relating to current IRES for amounts requested for reimbursement on payments of previous years, and the remaining credit for Robin Tax (625 thousand euro) paid in previous years and that will be recovered in subsequent years.
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Cash and cash equivalents | 360,078 | 587,216 | 947,294 | 360,078 | 947,294 |
"Cash and cash equivalents" at December 31, 2020 amounted to 947,294 thousand euro (360,078 thousand euro at December 31, 2019), with an increase of 587,216 thousand euro compared with the end of the previous year. Bank deposits include accrued interest not yet credited by the end of the year.
Cash and cash equivalents at December 31, 2020 are free from any kind of restriction, block, even temporary, and pledge.
| thousands of euro | Balance at | Changes | Balance at |
|---|---|---|---|
| 12 31 2019 | during the year | 12 31 2020 | |
| Non-current assets held for sale | - | 466 | 466 |
The item "Non-current assets held for sale" at December 31, 2020 amounted to 466 thousand euro (zero balance at December 31, 2019) and refers to the reclassification of the shareholding in Ge.S.I. S.r.l., equal to 47% of the share capital, following the exercise of the put option subscribed on November 23, 2020 of the entire shareholding.
Equity, which at December 31, 2020 amounted to 3,176,611 thousand euro (2,843,650 thousand euro at December 31, 2019), is set forth within the following table:
| thousands of euro | Balance at 12 31 2019 |
Changes during the year |
Balance at 12 31 2020 |
|---|---|---|---|
| Equity | |||
| Share capital | 1,629,111 | - | 1,629,111 |
| (Treasury shares) | (53,661) | - | (53,661) |
| Reserves | 817,577 | 237,855 | 1,055,432 |
| Net result of the year | 450,623 | 95,106 | 545,729 |
| Total equity | 2,843,650 | 332,961 | 3,176,611 |
At December 31, 2020, the "Share capital" amounted to 1,629,111 thousand euro and is comprised of 3,132,905,277 ordinary shares with a unitary value of 0.52 euro each.
The "Treasury shares" amounted to 53,661 thousand euro, unchanged with respect to December 31, 2019 and consist of 23,721,421 own shares held by the company.
| thousands of euro | Balance at 12 31 2019 |
Changes during the year |
Balance at 12 31 2020 |
|---|---|---|---|
| Reserves | 817,577 | 237,855 | 1,055,432 |
| of which: | |||
| - Change in fair value of derivatives Cash flow hedges and fair value bonds |
(37,448) | 30,499 | (6,949) |
| - Tax effect | 10,892 | (9,852) | 1,040 |
| Cash flow hedge reserves and fair value bonds | (26,556) | 20,647 | (5,909) |
| Change in the IAS 19 Revised reserve - Employee Benefits | (52,203) | 10,046 | (42,157) |
| Tax effect | 14,656 | (2,499) | 12,157 |
| IAS 19 Revised reserves - Employee benefits | (37,547) | 7,547 | (30,000) |
| Change in the Available for sale reserves | (608) | - | (608) |
| Tax effect | 146 | - | 146 |
| Change in Available for sale | (462) | - | (462) |
"Reserves", which at December 31, 2020 amounted to 1,055,432 thousand euro (817,577 thousand euro at December 31, 2019), increased by 237,855 thousand euro mainly due to the allocation of the 2019 profit.
This item includes the following unavailable reserves:
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Reserves and the profits that in case of distribution must be considered as IRES tax suspension amounted to 68,954 thousand euro.
It should be noted that during 2020, dividends amounting to 240,962 thousand euro corresponding to 0.0775 euro per share were distributed, as approved by the shareholders' meeting on May 13, 2020.
Positive result for 545,729 thousand euro.
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
of which included Balance at 12 31 2020 in the NFP |
||
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Non-convertible bonds | 2,549,811 | 140,224 | 2,690,035 | 2,549,811 | 2,690,035 |
| Payables to banks | 613,489 | 220,950 | 834,439 | 613,489 | 834,439 |
| Payables to other lenders | - | 199,807 | 199,807 | - | 199,807 |
| Non-current financial payables for rights of use to third parties |
4,745 | 1,071 | 5,816 | 4,745 | 5,816 |
| Non-current financial payables for rights of use to related parties |
1,121 | 40,070 | 41,191 | 1,121 | 41,191 |
| Total non-current financial liabilities | 3,169,166 | 602,122 | 3,771,288 | 3,169,166 | 3,771,288 |
"Non-current financial liabilities" amounted to 3,771,288 thousand euro (3,169,166 thousand euro at December 31, 2019), with an increase of 602,122 thousand euro.
"Non-convertible bonds" regard the following bonds, accounted for at amortized cost:
The net increase in the non-current component of "Non-convertible bonds" of 140,224 thousand euro compared to December 31, 2019 was mainly due to the subscription of the new bond maturing in 2032 (nominal value 500,000 thousand euro recorded net of amortized cost), partly offset by the reclassification to "Current financial liabilities" of the bond maturing in 2021 (351,438 thousand euro) and the decrease in the ECB exchange rate applied to the yen bond.
Non-current "Payables to banks" amounted to 834,439 thousand euro, a net increase of 220,950 thousand euro compared to the previous year-end, due to the 300,000 thousand euro disbursement of new loans and the reclassification under current liabilities of the portions of capital maturing within the following year.
"Payables to other lenders" amounted to 199,807 thousand euro (at December 31, 2019 they were zero) and refer to the disbursement of a new loan from Cassa Depositi e Prestiti.
"Financial payables for non-current rights of use", in application of IFRS 16 for leases previously classified as operating leases, both to third parties and to related parties amounted to 47,007 euro thousand, an increase of 41,141 thousand euro compared with the end of the previous year due to new contracts entered into in 2020.
The following table shows the comparison, for each long-term debt category, between the book value and the fair value, including the portion falling due in the next 12 months. For listed debt instruments, the fair value is determined using stock prices, while for unlisted securities the fair value is determined using valuation models for each category of financial instrument and using market data relating to the closing date of the financial year, including the credit spreads of A2A S.p.A..
| thousands of euro | Nominal value |
Book value |
Current portion |
Non-current portion |
Fair Value |
|---|---|---|---|---|---|
| Bonds | 3,049,457 | 3,087,638 | 397,603 | 2,690,035 | 3,237,268 |
| Amounts due to banks and other lenders | 1,113,868 | 1,113,370 | 79,124 | 1,034,246 | 1,145,811 |
| Total | 4,163,325 | 4,201,008 | 476,727 | 3,724,281 | 4,383,079 |
At the end of the fiscal year, "Employee Benefits" amounted to 122,952 thousand euro (140,247 thousand euro as of December 31, 2019) with changes as follows during the period:
| thousands of euro | Balance at 12 31 2019 |
Provisions | Utilizations | Other changes |
Balance at 12 31 2020 |
|---|---|---|---|---|---|
| Employee leaving entitlement (TFR) | 27,815 | 5,976 | (4,344) | (5,370) | 24,077 |
| Employee benefits | 112,432 | (4,480) | (9,077) | 98,875 | |
| Total employee benefits | 140,247 | 5,976 | (8,824) | (14,447) | 122,952 |
Changes during the year include 5,976 thousand euro in provisions for the year, 8,824 thousand euro in the decrease due to disbursements during the year, and 14,447 thousand euro in the net decrease due to actuarial valuations for the year, resulting from the combined effect of the increase for interest cost of 953 thousand euro, the decrease for actuarial gains/losses of 10,046 thousand euro and other negative changes for 5,354 thousand euro.
Technical valuations were carried out on the basis of the following assumptions:
| 2020 | 2019 | |
|---|---|---|
| Discount rate | from -0.3% to 0.3% | from -0.1% to 0.8% |
| Annual inflation rate | 0.80% | 1.2% |
| Annual seniority bonus increase rate | 2.0% | 2.0% |
| Annual additional months increase rate | 0.0% | 0.0% |
| Annual cost of electricity increase rate | 2.0% | 2.0% |
| Annual cost of gas increase rate | 0.0% | 0.0% |
| Annual salary increase rate | 1.0% | 1.0% |
| Annual TFR increase rate | 2.10% | 2.4% |
| Average annual increase rate of supplementary pensions | 1.1% | 1.1% |
| Annual turnover frequencies | 5.0% | 5.0% |
| Annual TFR advance frequencies | 2.0% | 2.0% |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
As required by IAS 19, the sensitivity for post-employment employee benefit obligations is outlined below:
| thousands of euro | Turnover rate | Turnover rate | Inflation rate | Inflation rate | Discount rate | Discount rate |
|---|---|---|---|---|---|---|
| +1.00% | -1.00% | +0.25% | -0.25% | +0.25% | -0.25% | |
| TFR | 23,865 | 24,153 | 24,238 | 23,771 | 23,632 | 24,384 |
| thousands of euro | Discount rate +0.25% |
Discount rate -0.25% |
Mortality table increased by 10% |
Mortality table decreased by 10% |
|---|---|---|---|---|
| Premungas | 17,527 | 18,132 | 16,871 | 18,901 |
| Electricity and gas discount | 75,336 | 84,168 | 81,981 | 82,387 |
| Additional months | 3,244 | 3,400 | n.s. | n.s. |
| thousands of euro | Balance at 12 31 2019 |
Provisions | Releases | Utilizations | Other changes |
Balance at 12 31 2020 |
|---|---|---|---|---|---|---|
| Decommissioning provisions | 3,965 | - | - | (64) | 3,310 | 7,211 |
| Tax provisions | 118 | 475 | (67) | (26) | - | 500 |
| Personnel lawsuits and disputes provisions | 7,827 | 6,140 | - | (572) | 993 | 14,388 |
| Other risk provisions | 98,453 | 6,810 | (5,232) | (10,881) | (6,656) | 82,494 |
| Provisions for risks, charges and liabilities for landfills |
110,363 | 13,425 | (5,299) | (11,543) | (2,353) | 104,593 |
"Decommissioning provisions", which amounted to 7,211 thousand euro (3,965 thousand euro at December 31, 2019), include charges for costs of dismantling and recovery of production sites related to hydroelectric plants of Valtellina and Calabria. The changes that occurred during the year included other increases of 3,310 thousand euro, which refer mainly to the effects of an appraisal prepared during the year to estimate future decommissioning and restoration costs for the Calabria hydroelectric power plants (3,297 thousand euro were offset by "Property, plant and equipment"), and uses of 64 thousand euro.
"Tax Provisions", which amounted to 500 thousand euro, refer to provisions for pending or potential litigation with the tax authorities or territorial entities for levies and direct and indirect taxes. Changes in the year relate to accruals of 475 thousand euro, for risks with the Revenue Agency for VAT, in addition to releases amounting to 67 thousand euro and uses amounting to 26 thousand euro, relating to the ICI/ IMU dispute with some local authorities.
The "Personnel lawsuits and disputes provisions" amounted to 14,388 thousand euro and refer to lawsuits pending with social security institutions, for contributions not paid for 998 thousand euro, to lawsuits with third parties for 12,383 thousand euro and with employees for 1,007 thousand euro, to cover the liabilities that could arise from litigations in progress. Provisions for the year, for 6,140 thousand euro, mainly refer to disputes pending with third parties. Uses, for 572 thousand euro, refer to both the payment made following the resolution of the disputes with third parties and employees. Other changes amounted to 993 thousand euro and refer to disputes with employees.
"Other risk provisions" of 82,494 thousand euro refer to provisions relating to public water derivation fees for 45,737 thousand euro, provisions for contractual expenses for 14,717 thousand euro, to the mobility provision for the costs arising from the corporate restructuring plan for 3,999 thousand euro, as well as other provisions for risks for 18,041 thousand euro. Provisions for the year amounted to 6,810 thousand euro and releases amounted to 5,232 thousand euro and refer to provisions relating to public water derivation fees. Uses amounted to 10,881 thousand euro and relate mainly to provisions for fees and the provision for mobility. Other changes include a decrease of 970 thousand euro in the provision for mobility and a 5,686 thousand euro in the provision for imbalances with Terna.
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Other non-current liabilities | 5,927 | (332) | 5,595 | - | - |
| Non-current derivatives | 5,637 | 12,584 | 18,221 | 5,637 | 18,221 |
| Total other non-current liabilities | 11,564 | 12,252 | 23,816 | 5,637 | 18,221 |
"Other non-current liabilities" amounted to 23,816 thousand euro and are divided as follows:
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Advances | 8 | - | 8 | ||
| Payables to suppliers | 671,538 | (44,976) | 626,562 | ||
| Trade payables to related parties: | 101,221 | 122,346 | 223,567 | ||
| - subsidiaries | 87,213 | 93,242 | 180,455 | ||
| - parent companies | 56 | - | 56 | ||
| - associates | 13,952 | 29,104 | 43,056 | ||
| Total trade payables | 772,767 | 77,370 | 850,137 | - | - |
| Payables to pension and social security institutions | 14,014 | (122) | 13,892 | ||
| Current derivatives | 380,090 | 23,051 | 403,141 | ||
| Other payables: | 113,502 | (9,689) | 103,813 | ||
| - payables for tax consolidation | 25,383 | 4,584 | 29,967 | ||
| - payables for tax transparency | 7,167 | - | 7,167 | ||
| - payables to personnel | 20,141 | 1,938 | 22,079 | ||
| - payables to Cassa per i Servizi Energetici e Ambientali | 3 | - | 3 | ||
| - tax payables | 49,383 | (34,587) | 14,796 | ||
| - payables for liabilities of competence of the following year | 453 | (401) | 52 | ||
| - payables for collections to be allocated | 5,113 | 2,321 | 7,434 | ||
| - payables to insurance companies | 1,614 | (12) | 1,602 | ||
| - payables to waterway municipalities | 1,478 | (1,478) | - | ||
| - other | 2,767 | 17,946 | 20,713 | ||
| Total other current liabilities | 507,606 | 13,240 | 520,846 | - | - |
| Total trade payables and other current liabilities | 1,280,373 | 90,610 | 1,370,983 | - | - |
"Trade payable and other current liabilities" amounted to 1,370,983 thousand euro (1,280,373 thousand euro at December 31, 2019), representing an overall increase of 90,610 thousand euro.
"Trade payables" amounted to 850,137 thousand euro and include both debt exposure to third-party suppliers (626,570 thousand euro) and trade payables to related parties (223,567 thousand euro).
"Payables to social security institutions" amounted to 13,892 thousand euro and relate to the company's debt position with social security and pension institutions, related to contributions of the month of December 2020 not yet paid.
"Current derivative instruments" amounted to 403,141 thousand euro and refer to the fair value valuation of commodity derivatives. The increase is due both to the increase in the fair value valuation of the year and to the change in the amounts covered. It should be noted that "Other current assets" include 425,952 thousand euro in "Current derivatives".
"Other current liabilities" mainly refer to:
| thousands of euro | Balance at 12 31 2019 |
Changes during the |
Balance at 12 31 2020 |
of which included in the NFP |
|
|---|---|---|---|---|---|
| year | 12 31 2019 | 12 31 2020 | |||
| Non-convertible bonds | 45,602 | 352,001 | 397,603 | 45,602 | 397,603 |
| Payables to banks | 107,726 | (28,602) | 79,124 | 107,726 | 79,124 |
| Current financial payables for rights of use to third parties |
3,366 | 1,111 | 4,477 | 3,366 | 4,477 |
| Current financial payables for rights of use to related parties |
333 | 5,303 | 5,636 | 333 | 5,636 |
| Financial payables to related parties | 432,800 | (39,753) | 393,047 | 432,800 | 393,047 |
| Total current financial liabilities | 589,827 | 290,060 | 879,887 | 589,827 | 879,887 |
"Current financial liabilities" amounted to 879,887 thousand euro, an overall increase of 290,060 thousand euro.
"Non-convertible Bonds" increased by 352,001 thousand euro due to the reclassification of "Non-current financial liabilities" of the bond with maturity in January 2021. At December 31, 2020, the calculation of interest coupons amounted to 46,165 thousand euro (45,602 thousand euro at December 31, 2019).
Current "Amounts due to banks" decreased by 28,602 thousand euro during the year, mainly due to the repayment of loan instalments that matured during the reporting year.
In accordance with IFRS 16 for leases previously classified as operating leases, "Financial payables for current rights of use", both from third parties and related parties amounted to 10,113 thousand euro, an increase of 6,414 thousand euro compared with the end of the previous year , mainly due to the reclassification of the portion of payable due within one year net of amounts paid during the reporting year.
"Financial payables to related parties" amounted to 393,047 thousand euro and relate to intercompany current accounts on which rates are applied at market conditions, with variable Euribor base with specific spreads for companies.
| thousands of euro | Balance at | Changes during | Balance at |
|---|---|---|---|
| 12 31 2019 | the year | 12 31 2020 | |
| Tax liabilities | 26 | (26) | - |
At December 31, 2020, this item had no value while at the end of 2019, it amounted to 26 thousand euro and referred to IRES for the Spanish branch. At December 31, 2020, the exposure to the tax authorities for current IRES and IRAP had a credit balance as in the previous year.
3 Notes
General information on
A2A S.p.A. Financial statements
Basis of
preparation Changes in
international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The following table provides details of net debt:
| thousands of euro | Notes | 12 31 2020 | 12 31 2019 |
|---|---|---|---|
| Bonds - non-current portion | 17 | 2,690,035 | 2,549,811 |
| Bank loans - non-current portion | 17 | 834,439 | 613,489 |
| Non-current payables to other lenders | 17 | 199,807 | - |
| Non-current financial payables for rights of use | 17 | 47,007 | 5,866 |
| Other non-current liabilities | 20 | 18,221 | 5,637 |
| Total medium/long-term debt | 3,789,509 | 3,174,803 | |
| Non-current financial assets with related parties | 3 | (1,468,752) | (1,147,559) |
| Other non-current financial assets and other non-current assets | 3-5 | (96) | (2,477) |
| Total medium/long-term financial receivables | (1,468,848) | (1,150,036) | |
| Total non-current net debt | 2,320,661 | 2,024,767 | |
| Bonds - current portion | 22 | 397,603 | 45,602 |
| Bank loans - current portion | 22 | 79,124 | 107,726 |
| Financial payables for current rights of use | 22 | 10,113 | 3,699 |
| Financial liabilities with related parties - current portion | 22 | 393,047 | 432,800 |
| Total short-term debt | 879,887 | 589,827 | |
| Financial assets with related parties - current portion | 9 | (412,777) | (386,297) |
| Total short-term financial receivables | (412,777) | (386,297) | |
| Cash and cash equivalents | 11 | (947,294) | (360,078) |
| Total current net debt | (480,184) | (156,548) | |
| Net debt | 1,840,477 | 1,868,219 |
Pursuant to IAS 7 "Cash Flow Statement", the following are the changes in financial assets and liabilities:
| thousands of euro | 12 31 2019 | Cash flow Non-cash flow |
||||
|---|---|---|---|---|---|---|
| Change in fair value |
Other changes |
|||||
| Bonds | 2,595,413 | 500,563 | (4,130) | (4,208) | 3,087,638 | |
| Financial payables | 1,163,580 | 344,954 | 55,003 | 1,563,537 | ||
| Other liabilities | 5,637 | - | 12,584 | - | 18,221 | |
| Financial assets | (1,533,952) | (347,673) | - | - | (1,881,625) | |
| Other assets | (2,381) | - | 2,381 | - | - | |
| Net liabilities deriving from financing activities | 2,228,297 | 497,844 | 10,835 | 50,795 | 2,787,771 | |
| Cash and cash equivalents | (360,078) | (587,216) | - | - | (947,294) | |
| Net debt | 1,868,219 | (89,372) | 10,835 | 50,795 | 1,840,477 |
Revenues in 2020 amounted to 3,988,772 thousand euro (4,489,116 thousand euro at December 31, 2019).
Details of the most important sources of revenues are provided below:
| Revenues thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Revenues from the sale of goods | 3,741,880 | 4,197,844 | (455,964) |
| Revenues from services | 201,471 | 185,728 | 15,743 |
| Total revenues from the sale of goods and services | 3,943,351 | 4,383,572 | (440,221) |
| Other operating income | 45,421 | 105,544 | (60,123) |
| Total revenues | 3,988,772 | 4,489,116 | (500,344) |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Details of the main items are as follows:
| thousands of euro | 12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Sales of electricity of which: | 2,299,687 | 2,514,982 | (215,295) |
| - third-party customers | 1,575,564 | 1,793,927 | (218,363) |
| - subsidiaries | 722,463 | 721,011 | 1,452 |
| - associates | 1,660 | 44 | 1,616 |
| Sales of gas and fuels of which: | 1,260,059 | 1,632,614 | (372,555) |
| - third-party customers | 786,048 | 1,020,479 | (234,431) |
| - subsidiaries | 471,830 | 606,111 | (134,281) |
| - associates | 2,181 | 6,024 | (3,843) |
| Sales of heat of which | 329 | 456 | (127) |
| - third-party customers | - | - | - |
| - subsidiaries | 329 | 456 | (127) |
| Sales of materials and equipment of which: | 8,034 | 8,058 | (24) |
| - third-party customers | 74 | 1,937 | (1,863) |
| - subsidiaries | 7,960 | 6,121 | 1,839 |
| - associates | - | - | - |
| Sales of emission certificates and allowances of which: | 173,771 | 41,734 | 132,037 |
| - third-party customers and inventory change | 27,547 | 13,785 | 13,762 |
| - subsidiaries | 121,947 | 27,949 | 93,998 |
| - associates | 24,277 | - | 24,277 |
| Total revenues from the sale of goods | 3,741,880 | 4,197,844 | (455,964) |
| Services of which: | |||
| - third-party customers | 930 | 2,956 | (2,026) |
| - subsidiaries | 197,698 | 180,013 | 17,685 |
| - Municipalities of Milan and Brescia | 2,668 | 2,469 | 199 |
| - associates | 175 | 290 | (115) |
| Total revenues from services | 201,471 | 185,728 | 15,743 |
| Total revenues from the sale of goods and services | 3,943,351 | 4,383,572 | (440,221) |
| Other operating income of which: | |||
| Other revenues from subsidiaries | 5,624 | 6,589 | (965) |
| Other revenues from associates | - | 62,977 | (62,977) |
| Damage compensation | 56 | 487 | (431) |
| Contingent assets | 8,432 | 2,026 | 6,406 |
| Incentives for production from renewable sources (feed-in-tariff) |
24,498 | 25,590 | (1,092) |
| Gains on disposals of tangible assets | 2,753 | 3,868 | (1,115) |
| Other revenues | 4,058 | 4,007 | 51 |
| Total other operating income | 45,421 | 105,544 | (60,123) |
| Total revenues | 3,988,772 | 4,489,116 | (500,344) |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Other information
"Revenues from the sale of goods and services" amounted to 3,943,351 thousand euro (4,383,572 thousand euro in 2019).
Sales revenues amounted to 3,741,880 thousand euro and mainly refer to the sale of electricity (2,299,687 thousand euro) to wholesalers and institutional operators (Gestore Mercato Elettrico S.p.A. and Terna S.p.A.), also through sales on the IPEX markets (Italian Power Exchange) as well as to subsidiaries and associates for a total of 13,536 million kWh (+13% compared to December 31, 2019); to the sale of gas and fuel to third parties and subsidiaries (1,260,059 thousand euro) from the commercialization of 3,702 million cubic meters of gas (-4% compared to the previous year); to the sale of heat (329 thousand euro), materials and plants to both third parties and subsidiaries (8,034 thousand euro), substantially in line with the previous year; and to the sale of environmental certificates to third parties and subsidiaries and associates (173,771 thousand euro). The decrease in sales revenues is mainly due to the sharp drop in prices on the wholesale markets for both electricity and gas and to the decline in demand, which was affected by the emergency situation that hit the energy sector. This decrease was partly offset by higher revenues from the sale of environmental certificates during the year, which relate to higher sales of CO2 due to the recognition of revenue from subsidiaries and associates whose plants are managed by A2A S.p.A. through tolling contracts.
Revenues from services amount to 201,471 thousand euro and mainly relate to revenues from provisions to subsidiaries of administrative, fiscal, legal, managerial and technical services, and revenues from the Municipality of Milan for the video surveillance service.
"Other operating revenues", equal to 45,421 thousand euro (105,544 thousand euro in the previous year), refer to the recognition of incentives on net production from renewable sources (24,498 thousand euro) for the entire remaining period of right to Green Certificates after 2015 recognized by the Energy Services Operator, in implementation of the Ministerial Decree of July 6, 2012 as regards plants from renewable sources (entered into service by December 31, 2012 and that have acquired the right to benefit from Green Certificates); as well as rents from subsidiaries, contingent assets recorded as a result of both the difference of appropriations in previous years and the release of a provision for risks relating to electrical imbalances following the conclusion of the pending lawsuit, reimbursements for damages and penalties received from customers, insurance and private entities, including an operating contribution received from the Udine Chamber of Commerce (CCIAA) as reimbursement for damages suffered during the Vaia flood (48 thousand euro). In the 2019 financial year, this item included 62,980 thousand euro related to the release of the provision for the excessive costs of the tolling contract with Ergosud. This release was possible as a result of new and positive assumptions about the future profitability of the Scandale power plant, also due to the award of the capacity market for 2022 and 2023, as well as the renegotiation of the tolling contract during the previous year.
"Operating expenses" totalled 3,736,101 thousand euro (4,127,459 thousand euro in 2019). The main components of this item are as follows:
| Operating expenses thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Costs for raw materials and consumables | 3,025,450 | 3,585,913 | (560,463) |
| Costs for services | 287,784 | 266,328 | 21,456 |
| Total costs for raw materials and services | 3,313,234 | 3,852,241 | (539,007) |
| Other operating expenses | 422,867 | 275,218 | 147,649 |
| Total operating expenses | 3,736,101 | 4,127,459 | (391,358) |
The following table sets out details of the more significant components:
| thousands of euro | 12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Purchases of power and fuel of which: | 2,813,148 | 3,429,203 | (616,055) |
| - third-party suppliers | 2,665,856 | 3,251,474 | (585,618) |
| - subsidiaries | 147,292 | 177,729 | (30,437) |
| - associates | - | - | - |
| Change in inventories of fuel | 36,948 | (5,009) | 41,957 |
| Purchases of water of which: | 39 | 122 | (83) |
| - third-party suppliers | 36 | 41 | (5) |
| - subsidiaries | 3 | 81 | (78) |
| Purchases of materials of which: | 10,960 | 9,881 | 1,079 |
| - third-party suppliers | 10,503 | 9,821 | 682 |
| - subsidiaries | 457 | 60 | 397 |
| Change in inventories of materials | (73) | 64 | (137) |
| Hedging gains on operating derivatives | (12,586) | (18,033) | 5,447 |
| Hedging losses on operating derivatives | 9,232 | 14,693 | (5,461) |
| Purchases of emission certificates and allowances of which: |
167,782 | 154,992 | 12,790 |
| - third-party suppliers | 165,603 | 154,842 | 10,761 |
| - subsidiaries | 2,179 | 150 | 2,029 |
| Total expenses for raw materials and consumables | 3,025,450 | 3,585,913 | (560,463) |
| Delivery and transmission costs of which: | 155,669 | 144,080 | 11,589 |
| - third-party suppliers | 147,517 | 140,323 | 7,194 |
| - subsidiaries | 8,152 | 3,757 | 4,395 |
| Maintenance and repairs | 42,373 | 34,510 | 7,863 |
| Services of which: | 89,742 | 87,738 | 2,004 |
| - third-party suppliers | 74,613 | 72,176 | 2,437 |
| - subsidiaries | 15,129 | 15,489 | (360) |
| - associates | - | 73 | (73) |
| Total costs for services | 287,784 | 266,328 | 21,456 |
| Total costs for raw materials and services | 3,313,234 | 3,852,241 | (539,007) |
| Leaseholds: | 354,848 | 213,655 | 141,193 |
| - third-party suppliers | 26,827 | 24,836 | 1,991 |
| - subsidiaries | 283,661 | 188,819 | 94,842 |
| - associates | 44,360 | - | 44,360 |
| Other operating expenses of which: | 68,019 | 61,563 | 6,456 |
| - other expenses from subsidiaries | 200 | 18 | 182 |
| - other expenses from associates | - | - | - |
| - water derivation concession fees | 41,173 | 34,820 | 6,353 |
| - damages and penalties | 815 | 807 | 8 |
| - contingent liabilities | 603 | 1,059 | (456) |
| - losses on disposal of tangible assets | 6 | 349 | (343) |
| - other operating expenses | 25,222 | 24,510 | 712 |
| Total other operating expenses | 422,867 | 275,218 | 147,649 |
| Total operating expenses | 3,736,101 | 4,127,459 | (391,358) |
"Expenses for raw materials and services" amounted to 3,313,234 thousand euro (3,852,241 thousand euro in 2019).
Costs for raw materials and consumables amounted to 3,025,450 thousand euro and refer to costs for purchases of electricity and fuel (2,813,148 thousand euro) from third parties and subsidiaries for both electricity production and for resale to customers and wholesalers, the decrease of which mainly derives from the decrease in procurement unit prices following the fall in the reference scenario; the change in inventories of fuels (36,948 thousand euro); the gains/losses from hedging derivatives (-3,354 thousand euro); the purchase of materials and water (10,926 thousand euro including the change in inventories); and the purchase of environmental certificates (167,782 thousand euro), the increase of which refers in particular to higher purchases of CO2 mainly due to the increase in the procurement price.
Service costs amounted to 287,784 thousand euro and relate to the logistics costs for transport on the natural gas network (155,669 thousand euro), costs for maintenance and repairs (42,373 thousand euro) related to both the plants and information systems of the company, as well as costs for services from third parties and subsidiaries and associates (89,742 thousand euro) that include costs for administrative and technical professional services, costs for certification activities, gas storage costs, expenses for insurance, monitoring, banking and other services. The increase compared to the previous year is mainly due to higher costs for the transport and storage of natural gas, higher costs for IT services related to the development of new projects, as well as higher costs incurred related to the management of the COVID-19 emergency.
"Other operating costs" amounted to 422,867 thousand euro (275,218 thousand euro in 2019). This item includes the use of third-party assets for 354,848 thousand euro mainly relating to the contracting of thermoelectric production plants "tolling agreement" owned by the subsidiaries A2A Energiefuture S.p.A. and A2A gencogas S.p.A.; in 2019, the latter was zeroed following the release of the provision, set aside in previous years, as further described in the paragraph relating to "Other revenues and income". Other costs amounted to 68,019 thousand euro and mainly refer to public water derivation fees, damages and penalties and contingent liabilities.
During the year, the Company paid 2,000 thousand euro in donations to the AEM and ASM Foundations.
The following table sets out the results arising from the trading portfolio; these figures relate to trading in electricity, gas and environmental certificates.
| Trading margin thousands of euro |
Notes | 12 31 2020 | 12 31 2019 |
|---|---|---|---|
| Revenues | 25 | 1,367,930 | 2,168,810 |
| Operating expenses | 26 | (1,358,401) | (2,160,541) |
| Total trading margin | 9,529 | 8,269 |
Due to the effects of the epidemic on world markets, the year 2020 was characterized by multiple commodity price dynamics with sudden and extreme price changes and moments of scarce price liquidity for both spot and forward deliveries. The Market Making activity therefore played a primary role in ensuring the pricing of less liquid products and contributed substantially to the profit and volumes brokered.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Net of capitalized expenses, labour costs at December 31, 2020, amounted to 150,969 thousand euro (148,148 thousand euro in the previous year).
"Labour costs" may be analysed as follows:
| Labour costs thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Wages and salaries | 97,850 | 94,935 | 2,915 |
| Social security charges | 31,454 | 30,948 | 506 |
| Employee leaving entitlement (TFR) | 5,976 | 5,687 | 289 |
| Other costs | 18,669 | 19,628 | (959) |
| Total labour costs before capitalizations | 153,949 | 151,198 | 2,751 |
| Capitalized labour costs | (2,980) | (3,050) | 70 |
| Total labour costs | 150,969 | 148,148 | 2,821 |
The table below shows the average number of employees during the year, broken down by category:
| 2020 | 2019 | Change | |
|---|---|---|---|
| Managers | 98 | 100 | (2) |
| Supervisors | 311 | 295 | 16 |
| White-collar workers | 1,084 | 1,064 | 20 |
| Blue-collar workers | 167 | 167 | - |
| Total | 1,660 | 1,626 | 34 |
At December 31, 2020, A2A S.p.A. employees totalled 1,648, while at December 31, 2019, they were equal to 1,638.
Other personnel costs include 952 thousand euro (9,007 thousand euro at December 31, 2019) relating to the total cost of the company's restructuring plan related to future staff leaving for redundancy.
With reference to the COVID-19 emergency, the company made use of the Cassa Integrazione Guadagni (redundancy fund) during the year under review, which resulted in a reduction in labour costs of approximately 500 thousand euro.
The item also includes the remuneration paid by A2A S.p.A. to the members of the Board of Directors in the year for a total of 1,698 thousand euro; for further details, reference is made to the specific file "Remuneration Report - 2021".
Due to the effect of the dynamics explained above, "Gross operating income" totalled 101,702 thousand euro (213,509 thousand euro in 2019).
"Depreciation, amortization, provisions and write-downs" equalled 109,076 thousand euro (96,355 thousand euro at December 31, 2019).
The following table provides details of the individual items:
| Depreciation, amortization, provisions and write-downs thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Amortization of intangible assets | 20,811 | 14,032 | 6,779 |
| Depreciation of tangible assets | 79,980 | 76,047 | 3,933 |
| Other write-downs of fixed assets | - | 4,000 | (4,000) |
| Total depreciation, amortization and write-downs | 100,791 | 94,079 | 6,712 |
| Bad debt provision on receivables recognized as current assets | 159 | (404) | 563 |
| Provisions for risks | 8,126 | 2,680 | 5,446 |
| Total depreciation, amortization, provisions and write-downs |
109,076 | 96,355 | 12,721 |
In particular, "Depreciation and Amortization" totalled 100,791 thousand euro (90,079 thousand euro in 2019). This item includes depreciation and amortization resulting from capex during the year in question net of the depreciation and amortization following the conclusion of the process of depreciation of plant parts and disposals during the year. Depreciation is calculated on the basis of technical and economic rates considered representative of the remaining useful life of the related tangible assets.
At December 31, 2020, write-downs of fixed assets amounted to 0, while in the previous year, they amounted to 4,000 thousand euro and referred to the write-down of a portion of goodwill related to the A2A Reti elettriche CGU following the results of the Impairment Test carried out by an independent external expert.
The "Bad debt provision on receivables" showed a balance of 159 thousand euro (negative for 404 thousand euro at December 31, 2019) and related to the provision during the year under review.
The balance of "Provisions for risks" shows a net effect of 8,126 thousand euro (2,680 thousand euro at December 31, 2019) due to allocations of 13,425 thousand euro made during the year, offset by the 5,299 thousand euro of risk provisions made in previous years and released in the current year since the original disputes have ceased to exist. Provisions in the year included for 6,810 thousand euro provisions to "Other risk provisions" mainly related to public water derivation fees, for 6,140 thousand euro provisions to "Personnel lawsuits and disputes provision", for 475 thousand euro provisions to "Tax provisions"; releases mainly refer to provisions for water derivation fees. For further details, reference is made to note 19) Provisions for risks, charges and liabilities for landfills.
The "Net Operating Income" was negative by 7,374 thousand euro (positive by 117,154 thousand euro at December 31, 2019).
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The "Financial balance" reported a positive balance of 499,574 thousand euro (352,988 thousand euro at December 31, 2019). Details of the most significant items are as follows:
"Financial income" totalled 581,056 thousand euro (452,353 thousand euro at December 31, 2019), and relate to income from financial assets.
| Financial income thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Income on derivatives | - | - | - |
| Valuation of share exchange | 139,588 | - | 139,588 |
| Reversal of equity investments | - | 96,500 | (96,500) |
| Income on financial assets | 441,468 | 355,853 | 85,615 |
| Income on dividends: | 413,715 | 333,343 | 80,372 |
| - subsidiaries | 413,325 | 333,238 | 80,087 |
| - associates | 390 | 100 | 290 |
| - other companies | - | 5 | (5) |
| Gains on financial assets | - | - | - |
| Income on receivables/securities recorded as current assets: | 27,075 | 21,905 | 5,170 |
| - from subsidiaries | 26,727 | 21,403 | 5,324 |
| - from associates | 274 | 337 | (63) |
| - from others: | 74 | 165 | (91) |
| a) on bank accounts | 56 | 118 | (62) |
| b) on other receivables | 18 | 47 | (29) |
| Foreign exchange gains | 678 | 605 | 73 |
| Total financial income | 581,056 | 452,353 | 128,703 |
The exchange valuation of the shareholding of A2A S.p.A. in AEB S.p.A. led to the recognition of a higher value, compared to the carrying amount, of 139,588 thousand euro. This valuation was determined by an independent external expert as better described in note 3) Shareholdings and other non-current financial assets of these notes.
There were no reversals of impairment losses on shareholdings at December 31, 2020, while at December 31, 2019, this item had a balance of 96,500 thousand euro and related to the reversal of the impairment loss on the shareholding in A2A gencogas S.p.A. following the results of the specific impairment test performed by an external expert on the shareholdings attributable to the "Electricity" CGU.
Income on financial assets amounted to 441,468 thousand euro (355,853 thousand euro at December 31, 2019) and concerned:
| Financial expenses thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Expenses on financial assets held for trading | - | - | - |
| - Shareholdings write-downs/losses | - | - | - |
| Expenses on derivatives | 2,339 | 2,961 | (622) |
| Expenses on financial assets | 79,143 | 96,404 | (17,261) |
| - from subsidiaries | 414 | 53 | 361 |
| - from associates | 1 | 4 | (3) |
| - others: | 78,728 | 96,347 | (17,619) |
| a) interest on bond loans | 72,603 | 90,720 | (18,117) |
| b) banks | 2,563 | 2,728 | (165) |
| c) discounting charges | 1,008 | 1,872 | (864) |
| d) sundry | 705 | 303 | 402 |
| e) foreign exchange losses | 1,849 | 724 | 1,125 |
| Total financial expenses | 81,482 | 99,365 | (17,883) |
"Financial expenses" amounted to 81,482 thousand euro (99,365 thousand euro in 2019) and referred to:
The nature and content of derivatives are described in the section "Other information".
| Income taxes thousands of euro |
12 31 2020 | 12 31 2019 | Change |
|---|---|---|---|
| Current IRES | (7,814) | 3,769 | (11,583) |
| Current IRAP | - | 569 | (569) |
| Effect of differences - taxes of previous years | (53,291) | (1,452) | (51,839) |
| Total current taxes | (61,105) | 2,886 | (63,991) |
| Deferred tax assets | 23,562 | 35,700 | (12,138) |
| Deferred tax liabilities | (17,828) | (18,321) | 493 |
| Total losses/gains for income taxes | (55,371) | 20,265 | (75,636) |
It is noted that for IRES purposes, the company filed for tax on a consolidated basis, together with its main subsidiaries, in accordance with arts. 117-129 of DPR 917/86.
To this end, a contract has been entered into with each of the subsidiaries to regulate the tax benefits and burdens transferred, with specific reference to current items.
The deferred tax assets and liabilities calculated when determining the subsidiaries' taxable income, again only for IRES purposes, are not transferred to the parent company, A2A S.p.A., but are recognized in the income statement of the individual subsidiary each time there is an effective divergence between net income calculated for tax reporting purposes and net income calculated for financial reporting purposes due to any temporary differences. The deferred tax assets and liabilities shown in the income statement General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
of A2A are therefore calculated exclusively on the divergences between its income for taxable purposes and income for financial reporting purposes.
Current income tax (IRES) of A2A S.p.A. is calculated on its own taxable income net of the adjustments relating to the national tax consolidation filing, in accordance with appendix E of accounting standard OIC 25 of August 2014.
In compliance with accounting standard OIC 25, the "income/expense related to consolidation", which constitute the remuneration/counter-entry for the transfer to the parent company A2A of a tax loss or taxable income, are recognized in the balance sheet.
The total amount of IRAP is calculated at 5.57% of the net value of production, suitably adjusted for the items foreseen in the relevant tax legislation.
The deferred tax assets and liabilities for IRAP purposes are booked to the income statement so as to show the total tax charge for the year, taking into account the tax effects of temporary differences. The recoverability of the "IRES deferred tax assets" recorded in the financial statements is considered probable, as the future plans provide for IRES taxable income sufficient for the absorption of the temporary differences that will be reversed; on the other hand, deferred tax assets and liabilities recorded for IRAP purposes are those considered adequate with respect to the best forecast of absorption from future taxable income.
No items have been excluded from the calculation of deferred taxation for IRES or IRAP purposes, with the exceptions highlighted above, and deferred tax liabilities and assets are recognized according to the balance sheet method.
At December 31, 2020, income taxes for the year (IRES and IRAP), amounted to -55,371 thousand euro (20,265 thousand euro at the end of the previous year) and were made up as follows:
Taxes from previous years include the effect of the deduction of the loss on the sale of the shareholding in EPCG.
The main permanent increases in IRES include reversals for non-deductible amortization for 44,039 thousand euro, allocations to non-deductible provisions for risks for 15,671 thousand euro, as well as property taxes (IMU) for 5,245 thousand euro.
Reconciliation between the statutory tax rate and the effective tax rate for IRES and IRAP purposes are presented in the statements below.
A2A Separate financial statements 2020
| Pre-tax result | 490,357,582 | |
|---|---|---|
| Theoretical tax expense 24.00 % | 117,685,820 | |
| Permanent differences | (508,275,065) | |
| Income before taxes adjusted for permanent differences | (17,917,483) | |
| Current gains/losses on income for the year | (4,300,196) | |
| Temporary differences deductible in subsequent years | 17,937,097 | |
| Temporary differences taxable in subsequent years | (120,058) | |
| Reversal of prior year temporary differences | (13,698,822) | |
| Taxable income | (13,799,266) | |
| Current gains/losses on income for the year | (3,311,824) |
| Difference between production value and costs | 98,023,721 | |
|---|---|---|
| Costs not relevant for IRAP purposes | (85,274,651) | |
| Total | 12,749,070 | |
| Theoretical tax expense 5.57 % | 710,123 | |
| Temporary differences deductible in subsequent years | 15,671,041 | |
| Temporary differences taxable in subsequent years | (120,058) | |
| Reversal of prior year temporary differences | (28,300,053) | |
| Taxable income for IRAP purposes | - | |
| Current IRAP on income for the year | - |
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Details are provided below on the analytic situation of the deferred tax assets and liabilities which, as required by international accounting standards, also shows the changes in equity reserves.
| Case description amounts in euro |
Deferred tax liabilities previous year |
Adjustments (+/-) | Uses in current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | ||
| Measurement differences for tangible assets | 466,358,384 | 24% 111,926,012 | (10,014) | 24% | (2,403) | 43,609,785 | 24% | 10,466,348 | ||
| Adoption of the finance lease standard (IAS 17) | 1,449,587 | 24% | 347,901 | 15,054,024 | 24% | 3,612,966 | 267,751 | 24% | 64,260 | |
| Application of the financial instrument standard (IAS 39) | 0 | 24% | 0 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Measurement differences of intangible assets | 10,462,543 | 24% | 2,511,010 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Deferred capital gains | 62,689 | 24% | 15,045 | 0 | 24% | 0 | 31,344 | 24% | 7,523 | |
| Employee leaving entitlement (TFR) | 0 | 24% | 0 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Other deferred tax liabilities | 17,258,515 | 24% | 4,142,044 | 1,029 | 24% | 247 | 374,896 | 24% | 89,975 | |
| Total | 495,591,718 | 118,942,012 | 15,045,039 | 3,610,809 | 44,283,776 | 10,628,106 |
| Case description amounts in euro |
Deferred tax assets previous year |
Adjustments (+/-) | Uses in current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | ||
| Taxed risk provisions | 207,720,228 | 24% | 49,852,855 | 170,104 | 24% | 40,825 | 28,330,535 | 24% | 6,799,328 | |
| Amortization, depreciation and write-downs | 247,121,517 | 24% | 59,309,164 | 1,274,722 | 24% | 305,933 | 22,773,145 | 24% | 5,465,555 | |
| Application of the financial instrument standard (IAS 39) | 3,256,087 | 24% | 781,461 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Bad debts provision | 10,689,170 | 24% | 2,565,401 | 23,311 | 24% | 5,595 | 87,521 | 24% | 21,005 | |
| Costs for business combinations | 0 | 24% | 0 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Grants | 0 | 24% | 0 | 0 | 24% | 0 | 0 | 24% | 0 | |
| Goodwill | 198,729,915 | 24% | 47,695,180 | 173,449 | 24% | 41,628 | 5,967,101 | 24% | 1,432,104 | |
| Other deferred tax assets | 43,554,497 | 24% | 10,453,079 | (2) | 24% | 0 | 824,296 | 24% | 197,831 | |
| Total | 711,071,414 | 170,657,139 | 1,641,584 | 393,980 | 57,982,598 | 13,915,823 |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
| Uses in current year | Sub-total | Changes in tax rate | Increases for the year | Equity | Total deferred tax liabilities | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rate Tax |
Taxable amount |
Rate Tax |
Taxable amount |
Rate Tax |
amount | Taxable Rate |
Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate Tax |
| 10,466,348 | 422,738,585 | 24% 101,457,260 | 422,738,585 | 24% 101,457,260 | 0 24% |
0 | 0 | 24% | 0 | 422,738,585 | 24% 101,457,260 | |
| 64,260 | 16,235,860 | 24% 3,896,606 |
16,235,860 | 24% 3,896,606 |
0 24% |
0 | 0 | 24% | 0 | 16,235,860 | 24% 3,896,606 |
|
| 0 | 0 | 24% | 0 0 |
24% | 0 | 0 24% |
0 | 0 | 24% | 0 | 0 | 24% |
| 0 | 10,462,543 | 24% 2,511,010 |
10,462,543 | 24% 2,511,010 |
120,058 24% |
28,814 | 0 | 24% | 0 | 10,582,601 | 24% 2,539,824 |
|
| 7,523 | 31,345 | 24% 7,523 |
31,345 | 24% 7,523 |
0 24% |
0 | 0 | 24% | 0 | 31,345 | 24% | |
| 0 | 0 | 24% | 0 0 |
24% | 0 | 0 24% |
0 | 0 | 24% | 0 | 0 | 24% |
| 89,975 | 16,884,648 | 24% 4,052,316 |
16,884,648 | 24% 4,052,316 |
0 24% |
0 | 0 | 24% | 0 | 16,884,648 | 24% 4,052,316 |
|
| 466,352,981 | 111,924,715 | 466,352,981 | 111,924,715 | 120,058 | 28,814 | 0 | 0 | 466,473,039 | 111,953,529 |
| Increases for the year | Changes in tax rate | Sub-total | Equity | Total deferred tax assets | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Imponibile Aliquota | Imposta | Imposta | Imponibile Aliquota | Imponibile Aliquota | Imposta | Imponibile Aliquota | Imposta | Imponibile Aliquota | Imposta | |||||||||||||||||||||||||||||||
| 15,671,041 | 43,094,351 | 24% | 179,559,797 | 24% | 43,094,351 | 24% | 3,761,050 | (10,119,145) | 24% | (2,428,595) | 185,111,693 | 24% | 44,426,806 | |||||||||||||||||||||||||||
| 1,686,056 | 54,149,543 | 24% | 225,623,094 | 24% | 54,149,543 | 24% | 404,653 | 0 | 24% | 0 | 227,309,150 | 24% | 54,554,196 | |||||||||||||||||||||||||||
| 0 | 781,461 | 24% | 3,256,087 | 781,461 | 24% | 24% | 0 | 14,964,566 | 24% | 3,591,496 | 18,220,653 | 24% | 4,372,957 | |||||||||||||||||||||||||||
| 0 | 2,549,990 | 24% | 10,624,960 | 24% | 2,549,990 | 24% | 0 | 0 | 24% | 0 | 10,624,960 | 24% | 2,549,990 | |||||||||||||||||||||||||||
| 0 | 0 | 24% | 0 | 0 | 24% | 24% | 0 | 0 | 24% | 0 | 0 | 24% | 0 | |||||||||||||||||||||||||||
| 0 | 0 | 24% | 0 | 0 | 24% | 24% | 0 | 0 | 24% | 0 | 0 | 24% | ||||||||||||||||||||||||||||
| 0 | 46,304,703 | 24% | 192,936,263 | 24% | 46,304,703 | 24% | 0 | 0 | 24% | 0 | 192,936,263 | 24% | 46,304,703 | |||||||||||||||||||||||||||
| 580,000 | 10,255,248 | 24% | 42,730,199 | 24% | 10,255,248 | 24% | 139,200 | (43,481,971) | 24% (10,435,673) | (171,772) | 24% | (41,225) | ||||||||||||||||||||||||||||
| 17,937,097 | 157,135,296 | 654,730,400 | 157,135,296 | 4,304,903 (38,636,550) | (9,272,772) | 634,030,947 | 152,167,427 |
| Case description amounts in euro |
Deferred tax liabilities previous year |
Adjustments (+/-) | Uses in current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | ||
| Measurement differences for tangible assets | 356,984,589 | 5.57% | 19,884,042 (194,360,958) | 5.57% (10,825,905) | 0 | 5.57% | 0 | |||
| Adoption of the finance lease standard (IAS 17) | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | |
| Measurement differences of intangible assets | 195,992 | 5.57% | 10,917 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | |
| Other deferred tax liabilities | 4,711,102 | 5.57% | 262,408 | 0 | 5.57% | 0 | 371,741 | 5.57% | 20,706 | |
| Total | 361,891,683 | 20,157,367 (194,360,958) | (10,825,905) | 371,741 | 20,706 |
| Case description amounts in euro |
Deferred tax assets previous year |
Adjustments (+/-) | Uses in current year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | ||
| Taxed risk provisions | 201,056,293 | 5.57% | 11,198,836 | 651,973 | 5.57% | 36,315 | 27,811,439 | 5.57% | 1,549,097 | |
| Amortization, depreciation and write-downs | 219,375,077 | 5.57% | 12,219,192 (214,002,364) | 5.57% (11,919,932) | 788,998 | 5.57% | 43,947 | |||
| Costs for business combinations | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | |
| Grants | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | |
| Goodwill | 49,744,604 | 5.57% | 2,770,774 | (31,187,251) | 5.57% | (1,737,130) | 0 | 5.57% | 0 | |
| Other deferred tax assets | 34,851,904 | 5.57% | 1,941,251 | 0 | 5.57% | 0 | 71,357 | 5.57% | 3,975 | |
| Total | 505,027,878 | 28,130,053 (244,537,642) | (13,620,747) | 28,671,794 | 1,597,019 |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
| Sub-total | Changes in tax rate | Increases for the year | Equity | Total deferred tax liabilities | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Rate | Taxable amount |
Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax |
| 5.57% | 162,623,631 | 9,058,136 | 162,623,631 | 5.57% | 9,058,136 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 162,623,631 | 5.57% | 9,058,136 |
| 0 5.57% |
0 | 0 5.57% |
0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | |||
| 5.57% | 195,992 | 10,917 | 195,992 | 5.57% | 10,917 | 120,058 | 5.57% | 6,687 | 0 | 5.57% | 0 | 316,050 | 5.57% | 17,604 |
| 5.57% | 4,339,361 | 241,702 | 4,339,361 | 5.57% | 241,702 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 4,339,361 | 5.57% | 241,702 |
| 167,158,984 | 9,310,755 | 167,158,984 | 9,310,755 | 120,058 | 6,687 | 0 | 0 | 167,279,042 | 9,317,443 |
| Uses in current year | Sub-total | Changes in tax rate | Increases for the year | Equity | Total deferred tax assets | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Tax Taxable Rate Tax amount |
Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax | Taxable amount |
Rate | Tax |
| 36,315 27,811,439 5.57% 1,549,097 |
173,896,827 | 5.57% | 9,686,053 | 173,896,827 | 5.57% | 9,686,053 | 15,671,041 | 5.57% | 872,877 | (10,119,145) | 5.57% | (563,636) | 179,448,723 | 5.57% | 9,995,294 |
| 43,947 | 4,583,715 | 5.57% | 255,313 | 4,583,715 | 5.57% | 255,313 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 4,583,715 | 5.57% | 255,313 |
| 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | |
| 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 0 | 5.57% | 0 |
| 0 | 18,557,353 | 5.57% | 1,033,645 | 18,557,353 | 5.57% | 1,033,645 | 0 | 5.57% | 0 | 0 | 5.57% | 0 | 18,557,353 | 5.57% | 1,033,645 |
| 34,780,547 | 5.57% | 1,937,276 | 34,780,547 | 5.57% | 1,937,276 | 0 | 5.57% | 0 | (45,463,425) | 5.57% | (2,532,313) | (10,682,878) | 5.57% | (595,036) | |
| 1,597,019 | 231,818,442 | 12,912,287 | 231,818,442 | 12,912,287 | 15,671,041 | 872,877 (55,582,570) | (3,095,949) | 191,906,913 | 10,689,215 |
The "Net result from discontinued operations" was negative and equal to 1,842 thousand euro (positive for 746 thousand euro at December 31, 2019) and refers to the sale of the shares, equal to 4.16%, of the company Ascopiave S.p.A. for which A2A S.p.A. exercised the right of withdrawal, net of dividends collected. In 2019, this item included both dividends received and the income from discounting the shareholding in EPCG to fair value.
The net result of the year amounted to 545,729 thousand euro (450,623 thousand euro at December 31, 2019).
"Related parties" are those indicated by the international accounting standard that concerns Related Party Disclosures (IAS 24 revised).
On October 5, 2007, the Municipalities of Milan and Brescia signed a Shareholders' Agreement to regulate the ownership structure of A2A S.p.A.; this gave the Municipalities joint control over the company.
Specifically, the merger effective January 1, 2008, regardless of the legal structure established, was considered a joint venture, whose joint control was exercised by the Municipalities of Milan and Brescia, each of which owned a share equal to 27.5%.
On June 13, 2014, the Shareholders' Meeting modified the company's governance system, passing from the original two-tier system, adopted in 2007, to a "traditional" system of management and control through the appointment of the Board of Directors.
In December 2014, the Municipalities of Milan and Brescia sold a total shareholding of 0.51% of A2A S.p.A., while in the first two months of 2015, the Municipalities of Milan and Brescia sold an additional shareholding of 4.5% of A2A S.p.A..
On October 4, 2016, the Municipalities of Milan and Brescia renewed for another three years, with effect from January 1, 2017, the Shareholders' Agreement signed on December 30, 2013, concerning 1,566,452,642 ordinary shares representing 50% plus two shares of the share capital of A2A S.p.A.. On May 20, 2016, the two Municipalities had proceeded to sign an appendix to the Agreement, which envisaged reducing from six months to three months the term of the agreement, during which it is possible to terminate the same.
On October 26, 2016, the Municipality of Milan received from the Municipality of Brescia the proposal, approved by the Council of said Municipality on October 25, 2016, to partially amend the shareholders' agreement relating to A2A S.p.A. existing between the two Municipalities. In particular, said proposal requires the commitment of the two Municipalities to maintain syndicated and bound, in the new agreement, a number of shares held by them in equal measure, equal to 42% of the share capital of A2A S.p.A.. On November 4, 2016, the Council of the Municipality of Milan, after having favourably examined the proposal of the Municipality of Brescia of a partial amendment to the shareholders' agreement, submitted to the Municipal Council the proposal of the new shareholders' agreement for the final determinations of competence.
On January 23, 2017, the Milan City Council approved the new Shareholders' Agreement between the Municipality of Milan and the Municipality of Brescia regarding the shareholding in A2A S.p.A. and has undertaken the commitment not to proceed with the disposal of any shares owned by the Municipality of Milan.
On August 2, 2019, the Municipality of Milan, also on behalf of the Municipality of Brescia, announced that the aforementioned Shareholders' Agreement was not subject to termination and therefore, the agreement must be considered renewed with effect from February 1, 2020 to January 31, 2023.
At the date of approval of these Separate Financial Statements at December 31, 2020, the two shareholders held a shareholding of 50% plus two shares that enables the two municipalities to maintain control over the Company.
The A2A Group companies and the Municipalities of Milan and Brescia routinely entertain commercial relationships related to the supply of electricity, gas, heat, and potable water, management of public lighting systems and street lights, management of water purification and sewers, garbage collection and street sweeping and video surveillance.
Similarly, the A2A Group companies entertain commercial relationships with the companies controlled by the Municipalities of Milan and Brescia, for example, Metropolitana Milanese S.p.A., ATM S.p.A., Brescia Mobilità S.p.A., Brescia Trasporti S.p.A. and Centrale del Latte di Brescia S.p.A., supplying them with electrical energy, gas, heat, water purification and sewer service at market rates appropriate to the supply conditions and providing the services required. Note that these companies are considered related parties in the preparation of the financial statement schedules pursuant to Consob Resolution 17221 of March 12, 2010.
The relationships between the Municipalities of Milan and Brescia and the A2A Group, in relation to granting the services associated with public lighting, street lights, management and supply of electricity, gas, heat, and water purification and sewer service are regulated by special conventions and specific contracts.
The relationships between the companies controlled by the Municipalities of Milan and Brescia, which refer to the supply of electricity, are at arm's length conditions.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
On April 12, 2017, Amsa S.p.A., a subsidiary of A2A S.p.A., signed a contract with the Municipality of Milan for the management of environmental protection services for the period January 1, 2017 - February 8, 2021, extended until May 31, 2021. On March 1, 2021, the Municipality of Milan published on its website a notice of suspension of the tender procedure in the following terms: "Notice is hereby given that by means of orders no. 226/2021 and no. 227/2021, published on February 26, 2021, the Lombardy Regional Administrative Court, Milan, Section I, granted the precautionary requests submitted by two economic operators and, as a result, suspended the tender procedure, setting the public hearing on October 21, 2021 for discussion of the merits of the appeal. On the Sintel Aria platform, the function Suspend the Proceedings will be activated". Amsa is waiting for further instructions from the Municipality of Milan to ensure the orderly provision of the service.
The parent company A2A S.p.A., operates like a centralized treasury for the majority of the subsidiaries. Relations between the companies are regulated through current accounts between the parent company and the subsidiaries, on which rates are applied, at market conditions, based on variable Euribor, with specific spreads for companies. For the financial year 2020, A2A S.p.A. and its subsidiaries have adopted the VAT procedure of the Group.
Note that for IRES purposes, A2A S.p.A. files for tax on a consolidated basis, together with its main subsidiaries, in accordance with arts. 117-129 of DPR 917/86. To this end, with each of the subsidiaries joining, a special contract was drawn up to regulate the tax advantages/disadvantages transferred, with specific reference to the current entries. These contracts also govern the transfer of any excess of ROL as set forth by prevailing legislation.
The parent company provides the subsidiaries and affiliates with administrative, fiscal, legal, management and technical services in order to optimize the resources available in the company and to use the existing expertise in terms of economic convenience. These services are governed by specific service contracts stipulated annually. A2A S.p.A. also makes office space and operating areas at its own premises available to subsidiaries and associates, as well as associated services. These are provided at market conditions. The companies A2A gencogas S.p.A. and A2A Energiefuture S.p.A., for a monthly fee related to the
actual availability of the thermoelectric plants, provide to the Parent Company the power generation service.
Telecommunication services are provided by the subsidiary A2A Smart City S.p.A..
As of July 1, 2018, the ACSM-AGAM Group's related-party transactions with related parties of the A2A Group are shown as related parties.
As of November 1, 2020, the AEB Group's related-party transactions with related parties of the A2A Group are shown as related parties.
Finally, note that pursuant to the Consob communication issued on September 24, 2010, bearing the provisions regarding related party transactions in accordance with Consob Resolution no. 17221 of March 12, 2010, as amended, on November 11, 2010, the Group had approved the procedure for related party transactions which took effect on January 1, 2011, and which aims to ensure the transparency and substantial fairness of the related party transactions executed by A2A S.p.A. directly, or through subsidiaries, identified in accordance with the IAS 24 revised accounting standard. The Board of Directors of June 20, 2016 resolved, with the approval of the Risk Control Committee, the review of the procedure "Regulation of transactions with Related Parties". The review of the procedure particularly involves the reduction, introduced optionally, of the threshold for transactions with subsidiaries of the Municipalities of Milan and Brescia, regarding which to provide for the application of the Procedure. Finally, the procedure was updated on June 22, 2017, following Consob Resolution no. 19925 of March 22, 2017.
Below are the tables with detail of the related party transactions, in accordance with the Consob Resolution no. 17221 of March 12, 2010:
| Balance sheet thousands of euro |
Total 12 31 2020 |
Of which with related parties | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Subsidiary companies |
Associated companies |
Munici pality of Milan |
Subsidiaries Munici pality of Milan |
Municipality of Brescia |
Subsidiaries Munici pality of Brescia |
Related parties individuals |
Total related parties |
% effect on the balance sheet item |
|||
| TOTAL ASSETS OF WHICH: | 9,450,130 | 6,287,598 | 28,550 | 3,994 | - | 246 | 139 | - | 6,320,527 | 66.9% | |
| Non-current assets | 6,585,050 | 5,466,484 | 1,611 | - | - | - | 139 | - | 5,468,234 | 83.0% | |
| Tangible assets | 1,000,419 | 45,307 | - | 45,307 | 4.5% | ||||||
| Shareholdings | 3,954,036 | 3,952,425 | 1,611 | - | 3,954,036 | 100.0% | |||||
| Other non-current financial assets | 1,476,272 | 1,468,752 | 139 | - | 1,468,891 | 99.5% | |||||
| Current assets | 2,864,614 | 821,114 | 26,473 | 3,994 | - | 246 | - | - | 851,827 | 29.7% | |
| Trade receivables | 872,116 | 354,166 | 26,473 | 3,994 | - | 246 | - | 384,879 | 44.1% | ||
| Other current assets | 505,534 | 54,171 | - | 54,171 | 10.7% | ||||||
| Current financial assets | 412,777 | 412,777 | - | 412,777 | 100.0% | ||||||
| Non-current assets held for sale | 466 | 466 | 466 | 100.0% | |||||||
| TOTAL LIABILITIES OF WHICH: |
6,273,519 | 650,355 | 51,223 | 56 | 50 | - | - | 133 | 701,817 | 11.2% | |
| Non-current liabilities | 4,022,649 | 41,191 | 1,000 | - | - | - | - | - | 42,191 | 1.0% | |
| Non-current financial liabilities | 3,771,288 | 41,191 | - | - | - | - | - | 41,191 | 1.1% | ||
| Provisions for risks, charges and liabilities for landfills |
104,593 | 1,000 | - | - | - | - | - | 1,000 | 1.0% | ||
| Current liabilities | 2,250,870 | 609,164 | 50,223 | 56 | 50 | - | - | 133 | 659,626 | 29.3% | |
| Trade payables | 850,137 | 180,455 | 43,056 | 56 | 50 | 223,617 | 26.3% | ||||
| Other current liabilities | 520,846 | 30,026 | 7,167 | 133 | 37,326 | 7.2% | |||||
| Current financial liabilities | 879,887 | 398,683 | 398,683 | 45.3% |
| Income statement thousands of euro |
Total 12 31 2020 |
Of which with related parties | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Subsidiary companies |
Associated companies |
Munici pality of Milan |
Subsidiaries Munici pality of Milan |
Municipality of Brescia |
Subsidiaries Munici pality of Brescia |
Related parties individuals |
Total related parties |
% effect on the balance sheet item |
||||||
| REVENUES | 3,988,772 | 1,527,851 | 28,293 | 2,595 | - | 73 | - | - | 1,558,812 | 39.1% | ||||
| Revenues from the sale of goods and services |
3,943,351 | 1,522,227 | 28,293 | 2,595 | 73 | 1,553,188 | 39.4% | |||||||
| Other operating income | 45,421 | 5,624 | 5,624 | 12.4% | ||||||||||
| OPERATING EXPENSES | 3,736,101 | 457,073 | 44,360 | - | 258 | - | 2 | 290 | 501,983 | 13.4% | ||||
| Expenses for raw materials and services |
3,313,234 | 173,212 | 258 | 2 | 290 | 173,762 | 5.2% | |||||||
| Other operating expenses | 422,867 | 283,861 | 44,360 | 328,221 | 77.6% | |||||||||
| LABOUR COSTS | 150,969 | - | - | - | - | - | - | 1,282 | 1,282 | 0.8% | ||||
| AMORTIZATION, DEPRECIATION, PROVISIONS AND WRITE-DOWNS |
109,076 | 4,374 | - | - | - | - | - | - | 4,374 | 4.0% | ||||
| FINANCIAL BALANCE | 499,574 | 579,226 | 663 | - | - | - | - | - | 579,889 | n.s. | ||||
| Financial income | 581,056 | 579,640 | 664 | - | - | - | - | - | 580,304 | 99.9% | ||||
| Financial expenses | 81,482 | 414 | 1 | - | - | - | - | - | 415 | 0.5% |
Section 2 of this file provides complete schedules as required under Consob Resolution no. 17221 of March 12, 2010.
With regard to the compensation paid to the corporate governance bodies, reference shall be made to the document "Remuneration Report – 2021" available on the website www.a2a.eu.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
36) Consob Communication no. DEM/6064293 of July 28, 2006
There were no atypical and/or unusual transactions during the year in question.
| thousands of euro | 12 31 2020 | 12 31 2019 |
|---|---|---|
| Guarantees received | 330,144 | 314,669 |
| Guarantees provided | 103,142 | 169,543 |
Guarantees received amounted to 330,144 thousand euro (314,669 thousand euro at December 31, 2019) and included 88,219 million euro for sureties and security deposits issued by subcontractors to guarantee the proper execution of the work assigned and 241,925 thousand euro for sureties and security deposits received from customers to guarantee the regularity of payments.
Guarantees provided amounted to 103,142 thousand euro (169,543 thousand euro at December 31, 2019), of which for obligations undertaken in the loan agreements of 2,600 thousand euro. Said guarantees include bank sureties for 101,730 thousand euro, insurance for 65 thousand euro and parent company guarantees related to associated companies for 1,347 thousand euro.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Reference should be made to the specific section of this Report on Operations for a description of subsequent events.
At December 31, 2020, A2A S.p.A. held 23,721,421 treasury shares, unchanged compared to December 31, 2019, equal to 0.757% of the share capital consisting of 3,132,905,277 shares.
At December 31, 2020, no treasury shares were held through subsidiaries, finance companies or nominees.
The item "Non-current assets held for sale" at December 31, 2020 was recognised for 466 thousand euro and refers to the reclassification of the investment in Ge.S.I. S.r.l., equal to 47% of the share capital, following the exercise of the put option subscribed on November 23, 2020 of the entire shareholding.
Pursuant to art. 1, paragraphs 125 et seq. of Law 124/17, considering that the Group companies have not received "subsidies, grants, advantages, contributions or aid, whether in cash or in kind, not general and with no consideration, remuneration or compensation", this note is negative.
It is understood that other information is (also in line with the principle set out in art. 18 of Law 241/1990) available elsewhere, including the State Aid Register, also under the criterion set out in paragraph 127 of the same art. 1 of Law 124/17, which prescribes to "avoid the accumulation of irrelevant information".
It should also be noted that the companies of the A2A Group operate (for the most part) in regulated sectors. Therefore, some sums are recognized by public bodies, but not as subsidies/contributions, but as recognition of the activities they provide or as forms of compensation for costs incurred to meet specific regulatory obligations and in any case by virtue of a general regime (e.g. energy incentives). Also all these forms of payment have not been indicated: also in compliance with both the literal aspect of the regulations and with the interpretation criteria that the Group companies have identified (see above).
The parent company, A2A S.p.A., provides centralized risk management for Group companies.
The A2A Group operates in the electricity, natural gas and district heating industry and is exposed to various financial risks in performing its activity:
The commodity price risk, related to the volatility of energy commodity prices (gas, electricity, fuel oil, coal, etc.) and prices of environmental securities (EUA/ETS emission rights, green certificates, white certificates, etc.), consists of the possible negative effects that a change in the market price of one or more commodities may have on the cash flows and income prospects of the company, including the exchange rate risk related to the same commodities.
Interest rate risk is the risk of additional financial costs as the result of an unfavourable change in interest rates.
Currency risk not related to commodities is the risk of higher costs or lower revenues because of an unfavourable change in exchange rates between currencies.
Liquidity risk is the risk that financial resources will not be sufficient to meet established financial and business obligations in a timely manner.
Credit risk is the exposure to potential losses deriving from non-performance of commitments by commercial, trading and financial counterparties.
General information on A2A S.p.A.
3 Notes
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
Other information
Equity risk is the possibility of incurring losses due to an unfavourable change in the price of shares. Default and covenant non-compliance risk represent the possibility that loan agreements or bond regulations to which one or more Group companies are party contain provisions allowing the counterparties, banks or bondholders, to ask the debtor for immediate reimbursement of the amounts lent if certain events take place.
Details on the risks to which A2A S.p.A. is exposed are provided below.
A2A S.p.A. is exposed to price risk, including the related exchange rate risk, on all of the energy commodities that it handles, namely electricity, natural gas, heat, coal, fuel oil, and environmental certificates; the financial performance of production, purchasing and sales activities is affected by the related price fluctuations. These fluctuations act both directly and indirectly, through formulas and indexing in the pricing structure.
To stabilize cash flows and to assure the Group's economic and financial stability, A2A S.p.A. has an Energy Risk Policy that sets out clear guidelines to manage and control the above risks, based on guidance by the Committee of Chief Risk Officers Organizational Independence and Governance Working Group ("CCRO") and the Group on Risk Management of Euroelectric. Reference was also made to the Accords of the Basel Committee on bank supervision and the requirements laid down in international accounting standards on how to recognize the volatility of commodity price and financial derivatives in the income statement and balance sheet.
In the A2A Group, assessment of this kind of risk is centralized at the holding company, which has established a Group Risk Management Organizational Unit as part of the Planning, Finance and Control Organizational Unit. This unit has the task to manage and monitor market and commodity risks, to create and evaluate structured products, to propose financial energy risk hedging strategies, and to support senior management in defining the Group's energy risk management policies.
Each year, the Board of Directors of A2A S.p.A. sets the Group's commodity risk limits approving the PaR and VaR proposed (prepared in the Risk Committee) in conjunction with approval of the Budget/ Business Plan; Group Risk Management supervises the situation to ensure compliance with these limits and proposes to senior management the hedging strategies designed to bring risk within the set limits, if exceeded.
The activities that are subject to risk management include all of the positions on the physical market for energy products, both purchasing/production and sales, and all of the positions in the energy derivatives market taken by Group companies.
For the purpose of monitoring risks, industrial and trading portfolios have been separated and are managed in different ways. The industrial portfolio consists of the physical and financial contracts directly relating to the Group's industrial operations, namely where the objective is to enhance production capacity also through the wholesaling and retailing of gas, electricity and heat.
The trading portfolio comprises all contracts, both physical and financial, entered into to supplement the profits made from the industrial activities, i.e. all contracts that are ancillary though not strictly necessary to the industrial activity.
In order to identify trading activity, the A2A Group follows the Capital Adequacy Directive and the definition of assets held for trading provided by International Accounting Standard (IFRS) 9: namely assets held for the purpose of short-term profit taking on market prices or margins, without being for hedging purposes, and designed to create a high-turnover portfolio.
Given that they exist for different purposes, the two portfolios have been segregated and are monitored separately with specific tools and limits. More specifically, the trading portfolio is subject to particular risk control and management procedures as laid down in Deal Life Cycle documents.
Senior management is systematically updated on changes in the Group's commodity risk by the Group Risk Management Unit, which controls the Group's net exposure. This is calculated centrally on the entire asset and contract portfolio and monitors the overall level of economic risk assumed by the industrial and trading portfolios (Profit at Risk - PaR, Value at Risk - VaR, Stop Loss).
The hedging of price risk by means of derivatives focuses on protecting against the volatility of energy prices on the power exchange (IPEX-EEX), stabilizing electricity price margins on the wholesale market with particular attention being paid to fixed price energy sales and purchases and stabilizing price differences deriving from various indexing mechanisms for the pricing of gas and electricity. To that end, hedging contracts were executed during the year on electricity purchase and sale agreements and on contracts to hedge the fee for the use of electricity transport capacity between the areas of the IPEX market (CCC contracts); hedging contracts were also concluded for the purchase and sale of gas so as to protect sales margins and at the same time keep the risk profile to within the limits set by the Group's Energy Risk Policy.
As part of the optimization of the portfolio of greenhouse gas emission allowances (see Directive 2003/87/ EC), A2A S.p.A. has stipulated Future contracts on the ICE ECX (European Climate Exchange) price. These are considered hedging transactions from an accounting point of view in the event of demonstrable surplus/deficit quotas.
The fair value at December 31, 2020 was 23,952 thousand euro (-17,381 thousand euro at December 31, 2019).
Again with a view to optimising the Industrial Portfolio, A2A S.p.A. entered into Future contracts on the ICE ECX (European Climate Exchange) stock exchange price. These do not qualify as hedging transactions from an accounting point of view as they fail to meet the requirement set out in the accounting standards. The fair value at December 31, 2020 was -488 thousand euro (4 thousand euro at December 31, 2019).
As part of its trading activity, A2A S.p.A. has taken out Future contracts on major European energy stock exchanges (EEX, ICE) and forward contracts on the price of electricity with delivery in Italy and neighboring countries such as France, Germany and Switzerland. A2A S.p.A. has also stipulated Future contracts on the ICE ECX (European Climate Exchange) stock exchange price. Also as part of trading activities, both Future and Forward contracts were also stipulated for the market price of gas (ICE-Endex CEGH, PEGAS).
The fair value at December 31, 2020 was -654 thousand euro (8,765 thousand euro at December 31, 2019).
PaR1 or Profit at Risk, is used to assess the impact that fluctuations in the market price of the underlying have on the financial derivatives taken out by A2A S.p.A. that are attributable to the industrial portfolio. It is the change in the value of a financial instruments portfolio within set probability assumptions as the result of a shift in the market indices. The PaR is calculated using the Montecarlo Method (at least 10,000 trials) and a 99% confidence level. It simulates scenarios for each relevant price driver depending on the volatility and correlations associated with each one, using as the central level the forward market curves at the balance sheet date, if available. By means of this method, after having obtained a distribution of probability associated with changes in the result of outstanding financial contracts, it is possible to extrapolate the maximum change expected over a time horizon given by the accounting period at a set level of probability. Based on this methodology, over the time horizon of the accounting period and in the event of extreme market movements and at a 99% confidence level, the expected maximum change in financial derivatives outstanding at December 31, 2020 was 54,679 thousand euro (99,389 thousand euro at December 31, 2019).
The following are the results of the simulation with the related maximum variances:
| thousands of euro | 12 31 2020 | 12 31 2019 | ||||
|---|---|---|---|---|---|---|
| Profit at Risk (PaR) | Worst case | Best case | Worst case | Best case | ||
| Confidence level 99% | (54,679) | 73,733 | (99,389) | 119,873 |
1 Profit at Risk: statistical measurement of the maximum potential negative deviation of the margin of an asset portfolio in case of unfavourable market changes over a given time horizon and with a defined confidence interval.
This means that with a 99% probability, A2A S.p.A. expects not to have changes in fair value exceeding 54,679 thousand euro in the fair value of its entire portfolio of financial instruments at December 31, 2020 due to commodity price fluctuations in the 12 months following. If there are any negative changes in the fair value of derivatives, these would be compensated by changes in the underlying as the result of changes in market prices.
VaR2 (Value at Risk) is used to assess the impact that fluctuations in the market price of the underlying have on the financial derivatives taken out by A2A S.p.A. that are attributable to the trading portfolio. It is the negative change in the value of a financial instruments portfolio within set probability assumptions as the result of an unfavourable shift in the market indices. VaR is calculated using the RiskMetrics method with a holding period of 3 days and a confidence level of 99%. Alternative methods are used for contracts where it is not possible to perform a daily estimate of VaR such as stress test analysis.
Under this method, in the case of extreme market movements, with a confidence level of 99% and a holding period of 3 days, the maximum estimated loss on the derivatives in question was 315 thousand euro at December 31, 2020 (159 thousand euro at December 31, 2019).
In order to ensure closer monitoring of activities, VaR and Stop Loss (the sum of VaR, P&L Realized and P&L Unrealized) limits are also set.
The following are the results of the assessments:
| thousands of euro | 12 31 2020 | 12 31 2019 | |||||
|---|---|---|---|---|---|---|---|
| Value at Risk (VaR) | VaR | Stop Loss | VaR | Stop Loss | |||
| Confidence level 99%, holding period 3 days | (315) | (315) | (159) | (159) |
The volatility of financial expenses associated to the performance of interest rates is monitored and mitigated through a policy of interest rate risk management aimed at identifying a balanced mix of fixedrate and floating rate loans and the use of derivatives that limit the effects of fluctuations in interest rates.
The book value of bank borrowings and other financing may be analyzed as follows at December 31, 2020:
| millions of euro | 12 31 2020 | 12 31 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Without derivatives |
With derivatives |
% with derivatives |
Without derivatives |
With derivatives |
% with derivatives |
|||||
| Fixed rate | 2,975 | 3,145 | 75% | 2,529 | 2,721 | 82% | ||||
| Variable rate | 1,226 | 1,056 | 25% | 788 | 596 | 18% | ||||
| Total | 4,201 | 4,201 | 100% | 3,317 | 3,317 | 100% |
At December 31, 2020, the following are the hedging instruments for interest rate risk:
| millions of euro | 12 31 2020 | 12 31 2019 | |||
|---|---|---|---|---|---|
| HEDGING INSTRUMENT | HEDGED ASSET | Fair value | Notional | Fair value | Notional |
| Collar | Variable rate loan | (3.5) | 57.1 | (5.6) | 76.2 |
| Total | (3.5) | 57.1 | (5.6) | 76.2 |
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
2 Value at Risk: statistical measurement of the maximum potential drop in the fair value of an asset portfolio in the event of unfavourable movements in the market with a given time horizon and confidence level.
With reference to the accounting treatment, hedging derivatives for interest rate risk can be classified as follows:
millions of euro
| ACCOUNTING TREATMENT |
TYPE OF DERIVATIVES |
FINANCIAL ASSETS | FINANCIAL LIABILITIES | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair value at | Notional at | Fair value at | |||||||||||
| 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | ||||||
| Cash flow hedge | Collar | - | - | - | - | 57.1 | 76.2 | 3.5 | 5.6 | ||||
| Total | - | - | - | - | 57.1 | 76.2 | 3.5 | 5.6 |
The table below shows the technical characteristics and accounting treatment of derivatives existing at December 31, 2020:
| Hedged loan | Derivative | Accounting |
|---|---|---|
| A2A S.p.A. loan with BEI: expiring in November 2023, residual balance at December 31, 2020 amounting to 57.1 million euro, at variable rate. |
Collar to fully cover the loan and the same maturity, with a floor on Euribor rate 2.99% and 4.65% cap. At December 31, 2020, the fair value was negative for 3.5 million euro. |
The loan is measured at amortized cost. The collar is a cash flow hedge, with 100% recognized in a specific equity reserve. |
A2A performs sensitivity analysis by estimating the effects on the value of financial statement items relating to the portfolio of financial instruments deriving from changes in the level of interest rates.
In particular, the sensitivity analysis measures the potential impact on the Income Statement and shareholders' equity of different market scenarios that would determine the change in fair value of derivative financial instruments and the change in financial expenses related to the portion of gross debt not hedged.
These market scenarios are obtained by shifting the reference interest rate curve at the reporting date up and down in parallel.
Keeping all other variables constant, the pre-tax result is impacted by changes in the level of interest rates as follows:
| millions of euro | Statement (before tax) | Effect on the Income | Effect on Equity (before tax) |
|
|---|---|---|---|---|
| -50 bps | +50 bps | -50 bps | +50 bps | |
| Change in financial expenses on gross variable-rate debt after hedging |
0.4 | (2.5) | - | - |
| Change in fair value of derivative financial instruments classified as non-hedge |
- | - | - | - |
| Change in fair value of derivative financial instruments classified as hedge (excluding BCVA as per IFRS 13) |
||||
| Cash flow hedge | - | - | (0.5) | 0.5 |
| Fair value hedge | - | - | - | - |
In relation to exchange rate risk other than that included in the price of commodities, the hedging instrument at December 31, 2020 is as follows:
| millions of euro | 12 31 2020 | 12 31 2019 | |||
|---|---|---|---|---|---|
| HEDGING INSTRUMENT | HEDGED ASSET | Fair value | Notional | Fair value | Notional |
| Cross Currency IRS | Fixed rate loan in foreign currency |
(14.7) | 98.0 | 2.4 | 98.0 |
| Total | (14.7) | 98.0 | 2.4 | 98.0 |
The accounting treatment of the derivative indicated above is as follows:
| millions of euro | |
|---|---|
| ACCOUNTING TREATMENT |
TYPE OF DERIVATIVES |
FINANCIAL ASSETS | FINANCIAL LIABILITIES | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Notional at | Fair value at | Notional at | Fair value at | ||||||
| 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | 12/31/2020 | 12/31/2019 | ||
| Cash flow hedge | CCIRS | - | 98.0 | - | 2.4 | 98.0 | - | 14.7 | - |
| Total | - | 98.0 | - | 2.4 | 98.0 | - | 14.7 | - |
In particular, the underlying of the Cross Currency IRS derivative refers to the bond at fixed rate of 14 billion yen with maturity 2036 bullet issued in 2006.
A cross currency swap contract was stipulated for the entire duration of this loan, which converts the principal and interest payments from yen into euro.
At December 31, 2020, the fair value of the hedge was negative for 14.7 million euro. The fair value and, as a consequence, the effect on equity, would improve by 12.3 million euro in the event of a 10% increase in the forward curve of the euro/yen exchange rate (appreciation of the yen) and would worsen by 14.6 million euro in the event of a 10% drop in the forward curve of the euro/yen exchange rate (depreciation of the yen). The sensitivity analysis was performed with the aim of calculating the effect of changes in the forward curve of the euro/yen exchange rate on the fair value ignoring any impact on the adjustment due to the bCVA.
Liquidity risk is the risk that the company, despite being solvent, is unable to meet its obligations in a timely manner or that it is able to do so under unfavourable economic conditions.
| millions of euro | Accounting | Portions | Portions | Portions maturing by: | ||||
|---|---|---|---|---|---|---|---|---|
| Balance 12 31 2020 |
maturing within 12 months |
maturing beyond 12 months |
12 31 2022 | 12 31 2023 | 12 31 2024 | 12 31 2025 | After | |
| Bonds | 3,088 | 398 | 2,690 | 499 | 300 | 300 | 298 | 1,293 |
| Loans | 1,113 | 79 | 1,034 | 79 | 129 | 69 | 76 | 681 |
| Total | 4,201 | 477 | 3,724 | 578 | 429 | 369 | 374 | 1,974 |
The profile of the gross debt maturities of A2A is as follows:
The risk management policy is realized through (i) a debt management strategy diversified by funding sources and maturities, and (ii) maintenance of financial resources sufficient to meet scheduled and unexpected commitments over a given time horizon.
At December 31, 2020, the company had a total of 1,687 million euro, as follows: (i) committed revolving credit lines of 740 million euro, of which 140 million euro maturing in 2021 and 600 million euro maturing in 2023, unused; (ii) cash and cash equivalents for a total of 947 million euro.
A2A also maintains a Bond Issue Program (Euro Medium Term Note Programme) of 4 billion euro, of which 1,049 million euro still available at December 31, 2020 and 1,400 million available at the date of preparation of this report.
The following table analyses the worst case for financial liabilities (including trade payables) in which all of the flows shown are undiscounted future nominal cash flows determined on the basis of residual contractual maturities for both principal and interest; they also include the undiscounted nominal flows of derivative contracts on interest rates.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
| 12 31 2020 millions of euro | 1-3 MONTHS |
4-12 MONTHS |
AFTER 12 MONTHS |
|---|---|---|---|
| Bonds | 397 | 27 | 2,947 |
| Payables and other financial liabilities | - | 81 | 1,049 |
| Total financial flows | 397 | 108 | 3,996 |
| Payables to suppliers | 102 | 4 | - |
| Total trade payables | 102 | 4 | - |
| 12 31 2019 millions of euro | 1-3 MONTHS |
4-12 MONTHS |
AFTER 12 MONTHS |
|---|---|---|---|
| Bonds | 44 | 23 | 2,807 |
| Payables and other financial liabilities | 1 | 110 | 632 |
| Total financial flows | 45 | 133 | 3,439 |
| Payables to suppliers | 162 | 3 | - |
| Total trade payables | 162 | 3 | - |
Credit risk relates to the possibility that a counterparty may be in default, or fail to respect its commitment in the manner and timing provided by contract. This type of risk is managed by the Group through specific procedures (Credit Policy, Energy Risk Management procedure) and appropriate mitigation actions.
This risk is overseen by both the Credit Management function allocated centrally (and the corresponding functions of the operating companies) and the Group Risk Management Organizational Unit responsible for supporting the Group companies. Risk mitigation is through the prior assessment of the creditworthiness of the counterparty and the constant verification of compliance with exposure limit as well as through the request for adequate guarantees.
The credit terms granted to customers as a whole have a variety of deadlines, in accordance with applicable law and market practice. In cases of delayed payment, default interest is charged as explicitly prescribed by the underlying supply contracts or by current law (application of the default rate as per Legislative Decree 231/2002).
Trade receivables are recognized on the balance sheet net of any write-downs. It is felt that the amount shown provides and accurate representation of the fair value of the trade receivables portfolio. For the aging of trade receivables, reference is made to note 7) Trade receivables.
A2A S.p.A. was not exposed to equity risk at December 31, 2020.
At December 31, 2020, A2A S.p.A. held 23,721,421 treasury shares, representing 0.757% of the share capital consisting of 3,132,905,277 shares.
As prescribed by IAS/IFRS, treasury shares do not constitute an equity risk as their purchase cost is deducted from equity, and even if they are sold any gain or loss on the purchase cost does not have any effect on income statement.
Bonds, loans and committed revolving bank lines present Terms and Conditions in line with the market for each type of instrument. In particular, they envisage: (i) negative pledge clauses under which A2A S.p.A. undertakes not to pledge, with exceptions, guarantees on its assets or those of its directly held subsidiaries over and above a specific threshold; (ii) cross- default/acceleration clauses which entail immediate reimbursement of the loans in the event of serious non-performance; and (iii) clauses that provide for immediate repayment in the event of declared insolvency on the part of certain direct subsidiaries.
Bonds include (i) 2,951 million euro nominal (book value of 3,088 million euro at December 31, 2020) issued as part of the EMTN Programme, which provide to investors a Change of Control Put in the event of a change of control of the company resulting in a rating downgrade at sub-investment grade level in the following 180 days (if within said 180 days, the company's rating should return to investment grade, the option may not be exercised); (ii) 98 million euro nominal (book value of 111 million euro at December 31, 2020) relating to the private bond in yen with maturity 2036 with a Put right clause in favour of the investor in the event that the rating is lower than BBB- or equivalent level (sub-investment grade).
The loans stipulated with the European Investment Bank, with value of 762 million euro contain a Credit Rating clause (if rating below BBB- or equivalent level to sub-investment grade), and a change of control clause of A2A S.p.A., with the right for the bank to invoke, upon notice to the company containing indication of the reasons, the early repayment of the loan.
The committed revolving bank lines available, for a total of 740 million euro, provide a Change of Control clause which, in the event of a change of control of the parent company causing a Material Adverse Effect, allows the banks to request the facility to be extinguished and any amounts drawn down to be repaid. At December 31, 2020, there was no situation of non-compliance with the covenants of A2A S.p.A..
Tests were performed to determine whether these transactions qualify for hedge accounting in accordance with International Accounting Standard IFRS 9. In particular:
The use of derivatives in the A2A Group is governed by a coordinated set of procedures (Energy Risk Policy, Deal Life Cycle) which are based on industry best practices and designed to limit the risk of the Group being exposed to commodity price fluctuations, based on a cash flow hedging strategy.
The derivatives are measured at fair value based on the forward market curve at the balance sheet date, if the asset underlying the derivative is traded on markets with a forward pricing structure. In the absence of a forward market curve, fair value is measured on the basis of internal estimates using models that refer to industry best practices.
A2A S.p.A. uses "continuous-time" discounting to measure fair value. As a discount factor, it uses the interest rate for risk-free assets, identified in the Euro Overnight Index Average (EONIA) rate and represented in its forward structure by the Overnight Index Swap (OIS) curve. The fair value of the cash flow hedges has been classified on the basis of the underlying derivative contracts in accordance with IFRS 9.
In compliance with the provisions of IFRS 13, the fair value of an over-the-counter (OTC) financial instrument is determined taking into account the non-performance risk. To quantify the fair value adjustment attributable to this risk, A2A S.p.A. has, in line with best market practices, developed a proprietary model called the "bilateral Credit Value Adjustment" (bCVA), which takes into account changes in the creditworthiness of the counterpart as well as the changes in its own creditworthiness.
The bCVA has two addends, calculated by considering the possibility that both counterparties go bankrupt, known as the Credit Value Adjustment (CVA) and the Debit Value Adjustment (DVA):
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The bCVA is therefore calculated with reference to the exposure, measured on the basis of the market value of the derivative at the time of the default, the probability of default (PD) and the loss given default (LGD). This latter item, which represents the non- recoverable portion of the receivable in the case of default, is measured on the basis of the IRB Foundation Methodology as stated in the Basel 2 accords, whereas the PD is measured on the basis of the rating of the counterparties (internal rating based where not available) and the historic probability of default associated with this and published annually by Standard & Poor's.
Applying the above method did not result in significant changes in fair value measurements.
The following analyses show the outstanding amounts of derivative contracts stipulated and not expired at the balance sheet date, by maturity.
| thousands of euro | Notional value (a) | Balance | Progressive | |||||
|---|---|---|---|---|---|---|---|---|
| Due within 1 year | Due in 1 to 5 years | Due over 5 years | sheet value |
effect to Income |
||||
| to be received |
to be paid |
to be received |
to be paid |
to be received |
to be paid |
(b) | statement at 12 31 2020 (c) |
|
| Interest rate risk management | ||||||||
| cash flow hedges as per IFRS 9 | 19,048 | 38,095 | (3,549) | |||||
| not considered hedges as per IFRS 9 | ||||||||
| Total derivatives on interest rates | 19,048 | 38,095 | (3,549) | - | ||||
| Exchange rate risk management | ||||||||
| considered hedges as per IFRS 9 | ||||||||
| - on commercial transactions | ||||||||
| - on non-commercial transactions | 98,000 | (14,672) | ||||||
| not considered hedges as per IFRS 9 | ||||||||
| - on commercial transactions | ||||||||
| - on non-commercial transactions | ||||||||
| Total derivatives on exchange rates | 98,000 | (14,672) | - |
(a) Represents the sum of the notional value of the elementary contracts that derive from any dismantling of complex contracts. (b) Represents the net receivable (+) or payable (-) recognized in the balance sheet following the measurement of derivatives at fair value.
(c) Represents the adjustment of derivatives to fair value recognized progressively over time in the income statement from the stipulation of the contract to the present day.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The following is an analysis of the commodity derivative contracts outstanding at the balance sheet date set up for the purpose of managing the risk of the fluctuations in the market prices of commodities.
| Volume by Maturity | Notional | Fair Value | |||||
|---|---|---|---|---|---|---|---|
| Due within 1 year |
Due within two years |
Due within five years |
Value | Balance sheet value (*) |
Progressive effect to Income statement (**) |
||
| Energy product price risk management |
Unit of measurement |
Quantity | Thousands of euro | ||||
| A. Cash flow hedges as per IFRS 9, including: |
23,952.2 | - | |||||
| - Electricity | TWh | 11.2 | 0.4 | 162,416.2 | 147.9 | ||
| - Oil | Bbl | ||||||
| - Coal | Tons | ||||||
| - Natural Gas | TWh | 2.7 | 0.2 | 45,806.5 | 7,149.7 | ||
| - Natural Gas | Millions of cubic metres |
13.0 | 2,187.3 | (74.4) | |||
| - Natural Gas | Degrees day | ||||||
| - Exchange rate | Millions of dollars |
98,000 | |||||
| - Emission rights | Tons | 1,898,000 | 153,000 | 50,413.3 | 16,729.0 | ||
| B. considered fair value hedges as per IFRS 9 |
- | - | |||||
| C. not considered hedges as per IFRS 9 of which |
(1,141.2) | (9,911.0) | |||||
| C.1 hedge margin | (487.5) | (491.8) | |||||
| - Electricity | TWh | ||||||
| - Oil | Bbl | ||||||
| - Natural Gas | Degrees day | ||||||
| - Natural Gas | Millions of cubic metres |
||||||
| - CO2 Emission rights |
Tons | 75,000 | 1,966.5 | (487.5) | (491.8) | ||
| - Exchange rate | Millions of dollars |
||||||
| C.2 trading transactions | (653,7) | (9,419.2) | |||||
| - Electricity | TWh | 37.3 | 7.4 | 0.3 | 2,236,777.7 | (4,801.4) | (9,056.6) |
| - Natural Gas | TWh | 121.3 | 29.2 | 2.4 | 2,272,616.0 | 4,143.8 | (847.8) |
| - CO2 Emission rights |
Tons | 120,000 | 3,682.3 | 3.9 | 485.2 | ||
| - Environmental Certificates | MWh | ||||||
| - Environmental Certificates | Tep | ||||||
| Totale | 22,811.0 | (9,911.0) |
(*) Represents the net receivable (+) or payable (-) recognized in the balance sheet following the measurement of derivatives at fair value.
(**) Represents the adjustment of derivatives to fair value recognized over time in the Income Statement from stipulation of the contract to the present date.
At December 31, 2020, there are no derivatives on shareholdings like in the previous year.
The following table shows the balance sheet figures at December 31, 2020, for derivative transactions.
| thousands of euro | NOTES | TOTAL |
|---|---|---|
| ASSETS | ||
| NON-CURRENT ASSETS | - | |
| Other non-current assets - Derivatives | 5 | - |
| CURRENT ASSETS | 425,952 | |
| Other current assets - Derivatives | 8 | 425,952 |
| TOTAL ASSETS | 425,952 | |
| LIABILITIES | ||
| NON-CURRENT LIABILITIES | 18,221 | |
| Other non-current liabilities - Derivatives | 20 | 18,221 |
| CURRENT LIABILITIES | 403,141 | |
| Trade payables and other current liabilities - Derivatives | 21 | 403,141 |
| TOTAL LIABILITIES | 421,362 |
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The following table sets out the income statement figures at December 31, 2020 arising from the management of derivatives.
| thousands of euro | Notes | Realised during the year |
Change in fair value during the year |
Amounts recognized in the Income statement |
|---|---|---|---|---|
| REVENUES | 25 | |||
| REVENUES FROM THE SALE OF GOODS | ||||
| Energy product price risk management and exchange rate risk management on commodities |
||||
| - considered hedges as per IFRS 9 | 35,642 | - | 35,642 | |
| - not considered hedges as per IFRS 9 | 33,720 | (770,489) | (736,769) | |
| Total revenues from the sale of goods | 69,362 | (770,489) | (701,127) | |
| OPERATING EXPENSES | 26 | |||
| Expenses for raw materials and services | ||||
| Energy product price risk management and exchange rate risk management on commodities |
||||
| - considered hedges as per IFRS 9 | (88,768) | - | (88,768) | |
| - not considered hedges as per IFRS 9 | (59,912) | 760,578 | 700,666 | |
| Total costs for raw materials and services | (148,680) | 760,578 | 611,898 | |
| Total recognized in Gross Operating Income (*) | (79,318) | (9,911) | (89,229) | |
| FINANCIAL BALANCE | 31 | |||
| Financial income | ||||
| Interest rate risk management and equity risk management |
||||
| Income on derivatives | ||||
| - considered hedges as per IFRS 9 | - | - | - | |
| - not considered hedges as per IFRS 9 | - | - | - | |
| Total | - | - | - | |
| Total financial income | - | - | - | |
| Financial expenses | ||||
| Interest rate risk management and equity risk management |
||||
| Expenses on derivatives | ||||
| - considered hedges as per IFRS 9 | (2,339) | - | (2,339) | |
| - not considered hedges as per IFRS 9 | - | - | - | |
| Totale | (2,339) | - | (2,339) | |
| Total financial expenses | (2,339) | - | (2,339) | |
| TOTAL RECOGNIZED IN FINANCIAL BALANCE |
(2,339) | - | (2,339) |
(*) The figures do not include the effect of the net presentation of the negotiation margin of trading activities
To complete the analyses required by IFRS 7 and IFRS 13, the following table sets out the various types of financial instrument that are to be found in the various balance sheet items, with an indication of the accounting policies used and, in the case of financial instruments measured at fair value, an indication of where changes are recognized (income statement or equity). The last column of the table shows the fair value of the instrument at December 31, 2020, where applicable.
| thousands of euro | Criteria to measure the reported amount of financial instruments | ||||||
|---|---|---|---|---|---|---|---|
| Notes | Financial instruments measured at fair value with changes recognized in: |
Financial instruments |
Amount as stated in |
Fair value at 12 31 2020 |
|||
| Income statement |
Balance sheet | measured at amortized cost |
the Balance sheet at 12 31 2020 |
(*) | |||
| (1) | (2) | (3) | (4) | ||||
| ASSETS | |||||||
| Other non-current financial assets: | |||||||
| Financial assets measured at fair value of which: |
|||||||
| - unlisted | 897 | 897 | n.a. | ||||
| - listed | - | - | |||||
| Financial assets held to maturity | 96 | 96 | 96 | ||||
| Other non-current financial assets | 1,475,279 | 1,475,279 | 1,475,279 | ||||
| Total other non-current financial assets | 3 | 1,476,272 | - | ||||
| Other non-current assets | 5 | 11,918 | 11,918 | 11,918 | |||
| Trade receivables | 7 | 872,116 | 872,116 | 872,116 | |||
| Other current assets | 8 | 395,917 | 30,035 | 79,582 | 505,534 | 505,534 | |
| Current financial assets | 9 | 412,777 | 412,777 | 412,777 | |||
| Cash and cash equivalents | 11 | 947,294 | 947,294 | 947,294 | |||
| LIABILITIES | |||||||
| Financial liabilities | |||||||
| Non-current and current bonds | 17 and 22 |
112,374 | 2,975,264 | 3,087,638 | 3,087,638 | ||
| Other non-current and current financial liabilities |
17 and 22 |
1,563,537 | 1,563,537 | 1,563,537 | |||
| Other non-current liabilities | 20 | 18,221 | 5,595 | 23,816 | 23,816 | ||
| Trade payables | 21 | 850,137 | 850,137 | 850,137 | |||
| Other current liabilities | 21 | 6,083 | 397,058 | 117,705 | 520,846 | 520,846 |
(*) The fair value has not been calculated for receivables and payables not related to derivative contracts and loans as the corresponding carrying amount is a good approximation to this.
(1) Financial assets and liabilities measured at fair value with the changes in fair value recognized in the Income statement.
(2) Cash flow hedges.
(3) Financial assets available for sale measured at fair value with profit/loss recognized in equity.
(4) Loans and receivables and financial liabilities measured at amortized cost.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
IFRS 7 and IFRS 13 require that fair value classification of financial instruments to be based on the quality of the input source used to calculate the fair value.
In particular, IFRS 7 and IFRS 13 set out three levels of fair value:
An analysis of the assets and liabilities included in the three fair value levels is set out in the following fair value hierarchy table.
| thousands of euro | NOTE | LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL |
|---|---|---|---|---|---|
| Assets measured at fair value | 3 | 897 | 897 | ||
| Other current assets | 8 | 425,910 | 42 | 425,952 | |
| TOTAL ASSETS | 425,910 | 939 | - | 426,849 | |
| Non-current financial liabilities | 17 | 112,374 | 112,374 | ||
| Other non-current liabilities | 20 | 18,221 | 18,221 | ||
| Other current liabilities | 21 | 402,592 | 253 | 296 | 403,141 |
| TOTAL LIABILITIES | 514,966 | 18,474 | 296 | 533,736 |
The national regulations governing hydroelectric concessions were originally dictated by the Royal Decree December 11, 1933, no. 1775, which was based on the granting of concessions by the State in a long-term logic, also in order to allow the concessionaires to amortize the significant investments necessary for the construction of the plants. With a view to transferring the concessions and the ownership of the relative works to the State, Article 25 of the R.D. 1775/1933 cit. provided that:
This regulatory framework was subsequently superseded first by electricity sector nationalization Law no. 1643/1962, which resulted in Enel taking over the majority3 of hydroelectric concessions with the relative recognition of an unlimited duration, and then by the liberalisation of the electricity market as a result of Legislative Decree no. 79/1999 (implementing Directive 96/92/EC), which introduced with art. 12 (and subsequent amendments) the principles of:
Pending the reallocation of concessions, Legislative Decree 79/1999 (article 12, paragraph 8bis) provides that the outgoing concession holder is to continue to operate the concession under the same conditions as those laid down in the regulations and specifications in force. In this stalemate, some Regions have enacted laws aimed at regulating the "temporary continuation of operations" for expired concessions, also providing for the imposition of an additional fee.
Conversion Law no. 12/2019 of Law Decree December 14, 2018, no. 135 ("Simplification Law Decree"), art. 11-quater attributed to the Regions the power to regulate, by means of their own laws, to be adopted by March 31, 2020, the procedures and criteria for the allocation of concessions, the process for which must be completed by 2023 with the entrustment of economic operators through tenders or public/ private companies or through forms of partnership. The duration of the new concessions will be between 20 and 40 years, with the possibility of extending the maximum period by a further 10 years depending on the complexity of the project proposal and the amount of investment.
The new rule also provides that a specific regional measure (after consulting ARERA) will define:
For concessions expired or expiring on December 31, 2023, which are temporarily continued, an additional fee is also charged.
In terms of compensation to outgoing operators, the rule prescribes:
3 With the exception of derivations in the ownership of self-producers, municipal companies and local authorities.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
In view of this new regulatory framework, on March 7, 2019, the European Commission sent a second complementary letter of formal notice4 to Italy, complaining in particular that the Italian authorities made continuous extensions of expired concessions, and imposed on the incoming concessionaire the obligation to pay for "dry" works an indemnity higher than the non-depreciated value of the assets, in asymmetry of treatment in case of takeover by the Regions in the ownership of such assets.
On May 10, with reference to the criticisms raised by the European Commission, the Italian Government sent a specific letter of reply.
ARERA, pursuant to art. 12, paragraph 1-quinquies, of Law no. 12/2019, with Resolution no. 490/2019/I/ eel approved the preparatory Guidelines for the issue of a non-binding opinion on the regional legal schemes regarding state property fees, which must be issued within 20 days from the date of receipt of said scheme (in the event that ARERA's instructions have been complied with) and within 40 days in other cases. The Authority, in order to ensure regulatory uniformity, has issued indications in relation to the variable part5 of the state fee and the free transfer of energy to the Regions6 .
In compliance with the provisions of the legislative framework in force and in line with the provisions of the aforementioned ARERA Resolution, the Lombardy Region, with art. 31 of Regional Law 23/2019 di Assestamento al Bilancio (Budget Reconciliation) 2020-22, has defined, starting from 2020, the obligation to supply free energy to the Region by all holders of concessions of large derivation, whether they are exercised before or after expiry, providing both the physical delivery and its monetization (even in full) to be calculated on the basis of an average hourly zonal price weighted on the quantity of electricity fed into the grid by the plant.
Moreover, in April 2020, the Lombardy Region approved Regional Law no. 5/2020, which regulates the procedures for assigning concessions for large hydroelectric derivations and determines the state fee based on the new two-component structure7 , in addition to the additional fee payable by the outgoing concessionaire for the temporary continuation of expired concessions until the award procedures are completed (and, in any case, no later than July 31, 2024).
In terms of the way in which concessions are awarded, the ordinary procedure is the public procedure, while mixed public-private companies and forms of partnership are allowed as a secondary option, subject to a reasoned decision. The duration of the new concessions is set equal to a period between 20 and 40 years, which can be increased up to a maximum of 10 years depending on the complexity of the project proposal presented and the amount of the investment.
The law defines the criteria for the acquisition of the assets pertaining to the concession (see "dry works" and "wet works") by the Region and the reconnaissance activity aimed at the subsequent tendering, such as the possible compensation due to the outgoing operator with particular reference to the share of the residual value of the assets not yet depreciated.
The large-scale derivation hydroelectric concessions held by A2A S.p.A. located in Valtellina (with a nominal concession capacity of over 200 MW) have for the most part expired: the Lombardy Region with Regional Council Resolution (D.G.R.) no. XI/4182 of December 30, 2020 allowed the temporary continuation of the year until December 31, 20218 , establishing the payment of an additional fee and the non-application of the partial exemption from the state fee on the Premadio 19 , Grosio, Lovero and Stazzona plants (both forecasts challenged by the company10). Other A2A S.p.A. concessions (plants in Mese, Udine and Calabria with a total nominal concession capacity of about 345 MW), originally owned by Enel, expire in 2029. The three large-scale derivations of Linea Green S.p.A. (Resio, expired and under temporary continuation until December 31, 2020, Mazzuno and Darfo not yet expired), as well as the concession of Gravedona of ACSM-AGAM S.p.A. expiring in 2029 are also added.
pending".
4 Again on March 7, the Commission also issued formal notice to Austria, France, Germany, Poland, Portugal, the United Kingdom and Sweden to "ensure that public contracts in the hydroelectric energy sector are awarded and renewed in accordance with EU law".
5 The variable component of the fee should be equal to a percentage, in any case defined by the Regions, of the sum of the products between the hourly quantity of electricity fed into the grid and the corresponding hourly zonal price recorded on the Day-Ahead Market (MGP), while the fixed component should derive from environmental and/or water-userelated assessments that are outside the Authority's competence.
6 On this issue, the Authority suggested preferring the monetization of free energy instead of its physical supply, basing the valorization on the hourly zonal price recognized to the plant, to be determined as final balance for the calendar year, as the average of the hourly zonal prices formed on the MGP, weighted on the quantity of energy fed into the grid on an hourly basis.
7 With reference to the fixed component, the Council Resolution provided for 35 €/kW from 2021.
8 Only for the Sernio-Stazzona plant has the concession been extended until June 30, 2021. 9 On this subject, we note sentence no. 15990/2020 of the Court of Cassation, which rejected the reasons put forward by
A2A S.p.A., including, in particular, that relating to the revocation - ordered by the Region - of the benefit of the partial exemption from state fees previously benefited from for Premadio 1. 10 For further information, reference should be made to the section entitled "Update of the main legal and tax disputes still
Adequate provisions are provided where necessary for the disputes and litigation described below. It is noted that if there is no explicit reference to the presence of a provision, the company assessed the corresponding risk as possible without appropriating provisions in the financial statements.
It should be noted that some of the disputes illustrated above that are still ongoing are not further reported due to the absence of updates and the disappearance of potential risks.
On May 27, 2011, Consorzio Euroviluppo Industriale S.c.a.r.l. served a writ on Ergosud S.p.A. and A2A S.p.A. with the following claims: (i) compensation for damages, of both a contractual and extra-contractual nature, jointly, or alternatively exclusively and separately, in the amount of 35,411,997 euro (of which 1,065,529 euro as the residual portion of their share of the expenses); (ii) compensation for damages for the stoppage at the worksite and the failure to return the areas of pertinence to the Consortium.
In the filing of appearance Ergosud S.p.A. and A2A S.p.A. called for the request to be rejected in full because it is unfounded in its merit and in its substance, and pointed out: (i) the lack of the right of the Consortium to institute proceedings as it is in a state of bankruptcy, (ii) the lack of the right of the Consortium to institute proceedings for the damages allegedly suffered by Fin Podella at the item "anticipation of program contract" for 6,153,437 euro and the damages allegedly suffered by Conservificio Laratta S.r.l. for 359,000 euro.
After lengthy proceedings, Sentence no. 13961 was filed on October 13, 2020, rejecting the appeal and ordering the claimants to pay the costs of the litigation, after having ascertained Ergosud's contractual fulfilment and the Consortium's non-fulfilment on the basis of documents and by means of the experts (CTU). On the other hand, the ruling rejected the request made by Ergosud and A2A to order SFC to pay damages as a result of the Consortium's non-fulfilment.
On March 24, 2015, Carlo Tassara S.p.A. notified A2A, Electricité de France (EDF) and Edison a summons requesting the Court of Milan to condemn A2A and EDF to compensation for damages allegedly suffered by Carlo Tassara, in its capacity as minority shareholder of Edison, in relation to the mandatory tender offer launched by EDF on Edison shares consequently to the transaction by which, in 2012, A2A sold its indirect shareholding in Edison to EDF and simultaneously acquired 70% of the capital of Edipower from Edison and Alpiq.
Until 2012, in fact, A2A and EDF held joint control of Edison S.p.A.. Edison, in turn, held 50% of Edipower S.p.A. (the remaining capital of Edipower was held 20% by Alpiq, 20% by A2A and the remaining 10% by Iren).
In the 2012 transaction, A2A sold its indirect shareholding in Edison to EDF and simultaneously acquired 70% of the capital of Edipower from Edison and Alpiq.
In the summons notified, Carlo Tassara complained that, in the transaction, EDF and A2A agreed on a mutual "discount" on the price paid by EDF for the purchase of Edison shares, on the one hand, and on the price paid by A2A for the purchase of 70% of Edipower, on the other. This discount was expected to be the result of abusive conduct by EDF and A2A as shareholders of Edison and the violation, among other things, of the regulations on transactions with related parties. This - according to Carlo Tassara - was expected to allow maintaining artificially low the price of the Edison shares paid to A2A and consequently the tender offer price paid to minorities of Edison (which by law was expected to be equal to that paid to A2A).
However, in 2012, A2A and EDF had voluntarily subjected the Transaction to the prior examination of Consob precisely in order to confirm the correctness of the tender offer price. Following extensive examinations, Consob had deemed that a compensatory mechanism could be detected in the transaction as a whole (i.e. between the sale of Edipower on the one hand and the sale of Edison shares on the other) and that therefore the tender offer price was to be increased from 0.84 euro to 0.89 euro per share.
In light of said decision, the parties had increased the sale price of the shareholding in Edison based on the price of 0.89 euro per share, for a total increase of around 84 million euro. EDF launched the tender offer at 0.89 euro per share.
Carlo Tassara resorted to Consob in order to further increase the price of the tender offer, but Consob rejected the request.
3 Notes
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
In addition, pending the tender offer, Carlo Tassara challenged before the TAR the tender offer document and the related resolution of approval by Consob requesting suspensions thereof for reasons of urgency. However, the TAR postponed the decision on the suspension to a date following the closing of the tender offer and, as a result of this, Carlo Tassara adhered to the tender offer and waived the cautionary request.
The writ of summons did not quantify the damage allegedly suffered by Carlo Tassara as a result of such transactions. However, with brief on February 20, 2017, Carlo Tassara requested that the court have an expert witness to calculate the damages (specifying that they be quantified in the alleged difference between the tender offer price and the market value that the Edison shares had previously). Carlo Tassara also filed an appraisal in which such damages were quantified in a total amount between 197 and 232 million euro, amount to calculate the compensation due from each of the companies that will be considered responsible by the judge.
After several postponements justified also by modifications of the judge, on October 17, 2018, the judge rejected the requests for investigation of the plaintiffs, setting March 19, 2019 as the hearing for clarification of conclusions. The Company has filed its pleadings within the time limits and the ruling is pending. The Group, having fulfilled the requirements of the regulations in force, does not consider likely the risk for which it has not allocated any provisions.
A number of appeals are still pending in which A2A and Linea Green have challenged the measures issued by the Lombardy Region to regulate the continuation of water derivation for hydroelectric use even after the expiry of their respective concessions.
In particular, D.G.R. (Regional Council Resolution) of Lombardy no. 5130-2016 ordered, by implementing paragraph 5 of art. 53-bis of Regional Law 26/2003 introduced by Regional Law 19/2010, the subjection of the Lombardy hydroelectric concessions already expired to an "additional fee" established "provisionally" at 20 €/kW of nominal power of concession, and reserved the request for settlement at the outcome of the assessments by the regional offices regarding the profitability of expired concessions. The additional fee was imposed retroactively from the original expiry of each concession; therefore, for the Grosotto, Lovero and Stazzona concessions, it would be effective from January 1, 2011, for the Premadio 1 concession from July 29, 2013 and for the Grosio concession from November 15, 2016.
A2A and Linea Green, which have always contested, also in the courts, the legitimacy, also constitutional, of article 53-bis, paragraph 5, of Regional Law 26/2003, challenged, together with other operators, the D.G.R. 5130-2016 before the High Court of Public Waters, the related and consequent measures that governed the conditions for the temporary continuation of each concession, and which, where provided for, ordered the revocation of the exemption of part of the State fee.
At the competent offices, A2A challenged Sentence no. 65/2020, by means of which TSAP rejected the appeal brought by A2A in relation to the first resolutions by which the Lombardy Region regulated the temporary continuation of the Grosotto, Lovero and Stazzona concession, thereby inducing A2A to make a prudent assessment of the remedies available at the competent offices. Other disputes related to other concessions and other regional decisions are also still ongoing.
The provisions of the Regions concerning the temporary continuation of expired or expiring concessions could, as from 2019, be justified by the provisions introduced by the Conversion Law no. 12/2019 of Legislative Decree no. 135/2018, the constitutional compatibility of which is nevertheless controversial. In this last regard, it should be pointed out that A2A and Linea Green recently appealed before the TSAP for the annulment of General Director Decree (D.D.G.) no. 10544/2019 by means of which the Lombardy Region ascertained and determined the amounts allegedly owed by the concessionaires as additional fees for 2019, disputes subsequently integrated with reference to the additional fee for the year 2020, and with these appeals, they also requested referral to the Constitutional Court of a matter of constitutional legitimacy in relation to the aforementioned provisions introduced by the law converting Law Decree Simplifications with regard to hydroelectric concessions.
Also Regional Law 5/2020 issued by the Lombardy region in implementation of Law 12/2019 has been submitted for constitutionality review by the Government and the hearing is set for May 11, 2021.
For disputes relating to public water derivation fees, the Company allocated adequate provisions for risks at December 31, 2020, on a prudent basis, and also taking into account the payment - subject to any subsequent repayment upon the final outcome of the respective legal proceedings - of certain positions, for the sole purpose of avoiding compulsory collection proceedings and thus defusing the litigation.
With two initial appeals with cautionary request (R.G. 971/2020 submitted by CST Centro Servizi Termici, Decabo S.r.l. and Lombardy Regional Councillor Marco Fumagalli; R.G. 983/2020 submitted by Seregno Municipal Councillor Tiziano Mariani) filed with the Milan Regional Administrative Court, the Resolution of the Seregno Municipal Council, which approved the merger between A2A and AEB, was challenged.
Following the Chamber of Council of June 24, 2020, with Ordinances no. 868/2020 and no. 869/2020, the Regional Administrative Court upheld the cautionary requests submitted by the claimants and suspended the effectiveness of the Resolution of the Seregno Municipal Council, fixing the hearing on the merits for December 2, 2020. The Regional Administrative Court, despite the cautionary phase, did not appreciate the questions referred for a preliminary ruling and referred to the danger and made a summary assessment of the alleged flaws in the transaction represented by the claimants; as a result, it considered that the transaction violated the rules on public companies because there were conditions for the application of public procedures.
A third appeal was subsequently filed (R.G. 1095/2020 filed by Idrotech and Eco Term S.r.l.s.), for which the Chamber of Council of July 15, 2020 has been set for this appeal as well as the hearing on December 2, 2020.
A2A, the Municipality of Seregno and AEB have filed separate cautionary appeals before the Council of State to obtain the annulment and/or reform of the ordinances. The Council of State, at the outcome of the Council Chamber set for August 27, 2020, on August 28, 2020, upheld the appeals "due to the clear lack of legitimacy and interest of the claimants at first instance and the consequent clear lack of the assumption of direct and immediate harm involving the same claimants from the contested deeds, in view of the nature of the corporate change and the inapplicability of the transaction subject to the appeal at first instance". The resolution of the Municipality of Seregno, therefore, also took effect for the purposes of the corporate deeds.
The resolution of the Municipality of Seregno, therefore, also took effect for the purposes of the corporate deeds that were in fact carried out. The company has evaluated the content of the Council of State's orders and the appeals and, also in light of the position of the appointed lawyers, has considered the prevalence of the principles of legal certainty and market confidence in consideration of the performance of corporate acts.
After the hearing on the merits on December 2, 2020, on February 15, 2021, the Milan Regional Administrative Court published the judgments upholding the three appeals filed respectively by (i) CST Centro Servizi Termici di Calzolari Maurizio, Depositi Carboni Bovisa DE.CA.BO. S.r.l. and Marco Fumagalli (Councillor Lombardy Region) Sentence no. 412/21, (ii) Tiziano Mariani (Councillor Municipality of Seregno) Sentence no. 413/21 and (iii) Idrotech di Corno Irwin Maria Sentence no. 414/21. The sentences do not have any effect on corporate acts that have taken place and are effective in the meantime.
To enforce Sentence 413, an appeal was also notified to the Milan Regional Administrative Court for compliance, for which a hearing has been set for April 28, 2021. On March 2, the Regional Administrative Court, at the claimant's request, issued a precautionary decree in which it denied single-court precautionary measures, but set a council chamber for March 24, 2021. AEB and the Municipality of Seregno have filed an appeal with the Council of State requesting a suspension of the effects of the sentence. On March 22, 2021, the Council of State denied the suspension because it found that the ruling did not jeopardize the stability of the corporate integration transaction and, given the peculiarity and delicacy of the matter, scheduled a merit hearing as early as July 1, 2021.
The two sentences 412 and 414 qualify the business combination as a transformation of AEB S.p.A. into a mixed company carried out in alleged violation of art. 17 Legislative Decree 175/16 and art. 3 Legislative Decree 50/16 and consider that the conditions do not exist for exemption from the procedures dictated by art. 10 of the same Legislative Decree no. 175/16. A2A, as well as AEB and the Municipality of Seregno, has notified appeal to the Council of State to request the annulment of the sentences and has joined the appeal in compliance.
* * *
The following information is provided in connection with the main litigation of a fiscal nature.
On April 4, 2016, the Provincial Directorate I of Milan - Regional Office of Milan 1 - notified the invitation to appear to provide clarifications on a business transfer in the company Chi.na.co. S.r.l. and the subsequent sale of the investment held in it under control for registration tax purposes. The invitation was followed by a contradictory with the Office and subsequent notification by the latter of the notice of liquidation to the acquiring counterparty, which filed an appeal on September 28, 2016.
General information on A2A S.p.A.
Financial statements
Basis of preparation
Changes in international accounting standards
Accounting standards and policies
Notes to the balance sheet
Net debt
Notes to the income statement
Note on related party transactions
Consob Communication no. DEM/6064293 of July 28, 2006
Guarantees and commitments with third parties
The Provincial Tax Commission of Milan rejected the appeal with sentence filed on July 07, 2017. On February 13, 2018, the acquiring company filed an appeal, which was rejected by the Milan Regional Administrative Court. On April 8, 2019, the Company filed an appeal with the Supreme Court. On February 21, 2020, the Office filed a counter-appeal and a cross-appeal with the Supreme Court. The risks provision recognized for 1.4 million euro was fully used for the payment of the amounts requested with the liquidation notice.
In early 2006, the Italian Finance Police – Lombardy Regional Unit, Milan – carried out a tax audit of AMSA Holding S.p.A. (now A2A S.p.A.) for VAT purposes for tax years 2001 to 2005.
The audit ended with the issue of a final report contesting the legitimacy of the ordinary VAT rate, in place of the special rate applied by suppliers for waste disposal and plant maintenance, as well as the subsequent deduction made after the invoices issued for these services were duly paid.
The report was followed by formal notices of assessment from the Tax Revenue Office (Milan 3 Office) for each year audited; appeals were then filed with the Provincial Tax Commission within the term provided by law.
The appeals for 2001 and for 2004 and 2005 were discussed on January 25, 2010 and on February 17, 2010 respectively, with a favourable outcome for the company in all cases. The Tax Revenue Office appealed against the verdict of the first court. The Regional Tax Commission rejected this appeal for all three years, 2001, 2004 and 2005.
For 2011, the Tax Revenue Office filed an appeal with the Supreme Court against which AMSA Holding S.p.A. (now A2A S.p.A.), filed a cross-appeal on November 9, 2012. At the hearing on December 12, 2018, the Company requested that the case be suspended in order to assess the facilitated settlement of the dispute. On May 24, 2019, the company filed an application for a facilitated settlement of pending tax disputes and definitively settled its tax claim.
The outcomes of the 2002 and 2003 disputes were also favourable for the company but the Tax Revenue Office filed an appeal against both sentences. The appeal for 2002 was discussed on November 30, 2010, and by way of a sentence lodged on February 2, 2011 the Milan Regional Tax Commission overturned the sentence of the first court, upholding the Tax Revenue Office's appeal on almost all counts with the exception of the hazardous waste category. The Company filed an appeal with the Supreme Court for 2002. The hearing was held on December 12, 2018 and the appeal was upheld and the judgement was adjourned to the Regional Technical Committee (CTR). On December 23, 2019, the Company filed an appeal for reinstatement in CTR and an appeal for revocation with the Supreme Court. For 2003 the appeal made by the Tax Revenue Office was discussed on November 7, 2011 before the Regional Tax Commission which rejected it with a sentence filed on November 11, 2011. The Tax Revenue Office has not appealed to the Supreme Court for 2003, 2004 and 2005 and the sentence has become final, thereby closing the litigation.
No provisions for risks have been recognized.
At December 31, 2020, A2A S.p.A. had a surplus of environmental certificates.
In accordance with art. 2427, paragraph 16-bis, of the Italian civil code, it is hereby reported that the company paid EY S.p.A. total fees for the legally required auditing of the annual accounts and for other services provided during the year in the amount of 294 thousand euro.
The registered office of the company is in Brescia in Via Lamarmora 230.
| BALANCE AT 12 31 2019 | CHANGES DURING THE YEAR | ||||||
|---|---|---|---|---|---|---|---|
| Tangible assets thousands of euro |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
PROVISION WRITE-DOWN |
RESIDUAL VALUE |
ACQUISITIONS | CHANGES IN CATEGORY |
|
| Land | 41,564 | (2,594) | (6,635) | 32,335 | 214 | ||
| Buildings | 466,341 | (220,598) | (30,759) | 214,984 | 538 | 246 | |
| Plant and machinery | 2,210,887 | (1,179,620) | (315,095) | 716,172 | 1,661 | 6,655 | |
| Industrial and commercial equipment | 19,817 | (17,721) | 2,096 | 722 | |||
| Other assets | 51,502 | (39,726) | 11,776 | 2,787 | |||
| Construction in progress and advances | 15,560 | 15,560 | 15,409 | (7,115) | |||
| Leasehold improvements | 374 | (312) | 62 | 3 | |||
| Assets for rights of use | 13,667 | (4,046) | 9,621 | ||||
| Total tangible assets | 2,819,712 | (1,464,617) | (352,489) | 1,002,606 | 21,120 | - |
| BALANCE AT 12 31 2018 | CHANGES DURING THE YEAR | ||||||
|---|---|---|---|---|---|---|---|
| Tangible assets thousands of euro |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
PROVISION WRITE-DOWN |
RESIDUAL VALUE |
ACQUISITIONS | CHANGES IN CATEGORY |
|
| Land | 41,903 | (2,594) | (6,635) | 32,674 | 29 | 1 | |
| Buildings | 471,509 | (215,762) | (30,759) | 224,988 | 1,363 | 1,464 | |
| Plant and machinery | 2,201,615 | (1,132,088) | (315,095) | 754,432 | 3,378 | 9,747 | |
| Industrial and commercial equipment | 18,983 | (17,497) | 1,486 | 875 | 58 | ||
| Other assets | 46,990 | (35,345) | 11,645 | 4,647 | 182 | ||
| Construction in progress and advances | 13,712 | 13,712 | 13,309 | (11,452) | |||
| Leasehold improvements | 316 | (306) | 10 | 58 | |||
| Assets for rights of use | - | ||||||
| Total tangible assets | 2,795,028 | (1,403,592) | (352,489) | 1,038,947 | 23,659 | - |
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| CHANGES DURING THE YEAR | BALANCE AT 12 31 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| RECLASSIFICATIONS/ OTHER CHANGES |
DISPOSALS | TOTAL | |||||||
| GROSS VALUE |
ACCUMULATED DEPRECIATION |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
DEPRECIATION | CHANGES FOR THE YEAR |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
PROVISION WRITE-DOWN |
RESIDUAL VALUE |
| (52) | 162 | 41,726 | (2,594) | (6,635) | 32,497 | ||||
| 37 | (29) | (3,066) | 1,358 | (9,646) | (10,562) | 464,096 | (228,915) | (30,759) | 204,422 |
| 3,257 | 31 | (336) | 331 | (55,526) | (43,927) | 2,222,124 | (1,234,784) | (315,095) | 672,245 |
| 1 | (1) | (380) | 380 | (366) | 356 | 20,160 | (17,708) | - | 2,452 |
| 6 | (37) | (521) | 521 | (5,211) | (2,455) | 53,774 | (44,453) | - | 9,321 |
| 8,294 | 23,854 | - | - | 23,854 | |||||
| (15) | (12) | 377 | (327) | - | 50 | ||||
| 54,125 | 1,048 | (9,216) | 45,957 | 67,792 | (12,214) | 55,578 | |||
| 57,426 | 1,012 | (4,355) | 2,590 | (79,980) | (2,187) | 2,893,903 | (1,540,995) | (352,489) | 1,000,419 |
| CHANGES DURING THE YEAR | BALANCE AT 12 31 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| RECLASSIFICATIONS/ OTHER CHANGES |
DISPOSALS | TOTAL | ||||||||
| GROSS VALUE |
ACCUMULATED DEPRECIATION |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
DEPRECIATION | CHANGES FOR THE YEAR |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
PROVISION WRITE-DOWN |
RESIDUAL VALUE |
|
| (369) | (339) | 41,564 | (2,594) | (6,635) | 32,335 | |||||
| (7,995) | 7,223 | (12,059) | (10,004) | 466,341 | (220,598) | (30,759) | 214,984 | |||
| 3,965 | (7,818) | 7,384 | (54,916) | (38,260) | 2,210,887 | (1,179,620) | (315,095) | 716,172 | ||
| (99) | 99 | (323) | 610 | 19,817 | (17,721) | - | 2,096 | |||
| (31) | (286) | 286 | (4,667) | 131 | 51,502 | (39,726) | - | 11,776 | ||
| (9) | 1,848 | 15,560 | - | - | 15,560 | |||||
| (6) | 52 | 374 | (312) | - | 62 | |||||
| 30 | 13,667 | (4,076) | 9,621 | 13,667 | (4,046) | - | 9,621 | |||
| 30 | 17,592 | (16,567) | 14,992 | (76,047) | (36,341) | 2,819,712 | (1,464,617) | (352,489) | 1,002,606 |
| BALANCE AT 12 31 2019 | CHANGES DURING THE YEAR | |||||
|---|---|---|---|---|---|---|
| Intangible assets thousands of euro |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
RESIDUAL VALUE |
ACQUISITIONS | CHANGES IN CATEGORY |
|
| Industrial patent and intellectual property rights | 130,595 | (114,369) | 16,226 | 5,581 | 3,331 | |
| Concessions, licences, trademarks and similar rights | 69,510 | (48,220) | 21,290 | 18,202 | 1,066 | |
| Goodwill | 35,641 | 35,641 | ||||
| Assets in progress | 9,080 | 9,080 | 14,276 | (4,412) | ||
| Other intangible assets | 6,117 | (1,236) | 4,881 | 96 | 15 | |
| Total intangible assets | 250,943 | (163,825) | 87,118 | 38,155 | - |
| BALANCE AT 12 31 2018 | EFFECT NON RECURRING TRANSACTIONS |
|||||
|---|---|---|---|---|---|---|
| Intangible assets thousands of euro |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
RESIDUAL VALUE |
GROSS VALUE | ||
| Industrial patent and intellectual property rights | 117,101 | (109,527) | 7,574 | |||
| Concessions, licences, trademarks and similar rights | 56,066 | (39,041) | 17,025 | |||
| Goodwill | 38,687 | 38,687 | 954 | |||
| Assets in progress | 14,126 | 14,126 | ||||
| Other intangible assets | 4,063 | (1,225) | 2,838 | |||
| Total intangible assets | 230,043 | (149,793) | 80,250 | 954 |
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| CHANGES DURING THE YEAR | BALANCE AT 12 31 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| OTHER CHANGES | DISPOSALS/SALES | TOTAL | |||||||
| GROSS VALUE |
ACCUMULATED DEPRECIATION |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
DEPRECIATION | CHANGES FOR THE YEAR |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
RESIDUAL VALUE |
|
| (427) | 38 | (8,254) | 269 | 139,080 | (122,585) | 16,495 | |||
| (218) | 1 | (12,531) | 6,520 | 88,560 | (60,750) | 27,810 | |||
| - | 35,641 | - | 35,641 | ||||||
| (2) | (294) | 9,568 | 18,648 | - | 18,648 | ||||
| (2,739) | (2) | (26) | (2,656) | 3,489 | (1,264) | 2,225 | |||
| (3,386) | 37 | (294) | - | (20,811) | 13,701 | 285,418 | (184,599) | 100,819 |
| CHANGES DURING THE YEAR | BALANCE AT 12 31 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| ACQUISITIONS | CHANGES IN CATEGORY |
OTHER CHANGES |
WRITE-DOWNS | DEPRECIATION | TOTAL CHANGES FOR THE YEAR |
GROSS VALUE |
ACCUMULATED DEPRECIATION |
RESIDUAL VALUE |
| 3,714 | 9,818 (38) |
(4,842) | 8,652 | 130,595 | (114,369) | 16,226 | ||
| 5,673 | 7,777 (6) |
(9,179) | 4,265 | 69,510 | (48,220) | 21,290 | ||
| (4,000) | (4,000) | 35,641 | - | 35,641 | ||||
| 12,549 | (17,595) | (5,046) | 9,080 | - | 9,080 | |||
| 2,054 | (11) | 2,043 | 6,117 | (1,236) | 4,881 | |||
| 21,936 | - 2,010 |
(4,000) | (14,032) | 5,914 | 250,943 | (163,825) | 87,118 |
| CHANGES IN 2020 | ||||
|---|---|---|---|---|
| Shareholdings thousands of euro |
BALANCE AT FINANCIAL STATEMENTS 12 31 2019 |
INCREASES | DECREASES | REVERSALS OF IMPAIRMENT LOSS WRITE-DOWNS |
| FINANCIAL ASSETS | ||||
| Subsidiaries: | ||||
| Unareti S.p.A. | 1,381,881 | 19,000 | (19,050) | |
| A2A Ambiente S.p.A. | 634,894 | |||
| A2A Calore & Servizi S.r.l. | 330,627 | |||
| A2A Ciclo Idrico S.p.A. | 167,000 | |||
| A2A gencogas S.p.A. | 606,817 | |||
| A2A Energiefuture S.p.A. | 189,730 | |||
| A2A Energia S.p.A. | 97,039 | |||
| Retragas S.r.l. | 30,105 | |||
| A2A Smart City S.p.A. | 9,222 | |||
| Proaris S.r.l. | 3,557 | |||
| Camuna Energia S.r.l. | 740 | |||
| Plurigas S.p.A. in liquidation | 560 | |||
| SEASM S.r.l. | 469 | |||
| Linea Group Holding S.p.A. | 106,385 | |||
| A2A Illuminazione Pubblica S.r.l. | 19,000 | (19,000) | ||
| A2A Montenegro d.o.o. | 102 | |||
| Azienda Servizi Valtrompia S.p.A. | 10,758 | |||
| A2A Security S.c.p.A. | 23 | |||
| A2A Energy Solution S.r.l. | 4,575 | |||
| A2A Rinnovabili S.p.A. | 50 | |||
| A2A Alfa S.r.l. in liquidation | - | |||
| A2Abroad S.p.A. | 4,586 | |||
| ACSM-AGAM S.p.A. | 190,422 | |||
| Yada Energia S.r.l. | 5,010 | 15,000 | ||
| Suncity Energy S.r.l. | 4,275 | |||
| A2A Idrogen2 S.r.l. | 10 | |||
| Ambiente Energia Brianza S.p.A. | 19,050 | |||
| Total subsidiaries | 3,793,552 | 57,335 | (38,050) | - |
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| SHARE OF EQUITY | CHANGES IN 2020 | |||||
|---|---|---|---|---|---|---|
| PRO-RATA AMOUNT |
EQUITY AT 12 31 2020 |
% HELD |
BALANCE AT FINANCIAL STATEMENTS 12 31 2020 |
RECLASSIFICATIONS | OTHERS CHANGES |
EXCHANGE ASSESSMENTS |
| 1,483,851 | 1,483,851 | 100.00% | 1,381,831 | |||
| 556,639 | 556,639 | 100.00% | 634,894 | |||
| 354,925 | 354,925 | 100.00% | 330,627 | |||
| 217,898 | 217,898 | 100.00% | 167,000 | |||
| 640,700 | 640,700 | 100.00% | 606,817 | |||
| 207,182 | 207,182 | 100.00% | 189,730 | |||
| 192,456 | 220,706 | 87.20% | 97,039 | |||
| 34,889 | 39,979 | 87.27% | 30,105 | |||
| 13,494 | 15,511 | 87.00% | 9,222 | |||
| 3,600 | 6,000 | 60.00% | 3,557 | |||
| 1,023 | 74.50% | 740 | ||||
| 2,968 | 70.00% | 560 | ||||
| 1,013 | 67.00% | 469 | ||||
| 96,642 | 189,494 | 51.00% | 106,385 | |||
| 51,046 | - | |||||
| 108 | 100.00% | 102 | ||||
| 22,609 | 74.55% | 10,758 | ||||
| 366 | 45.77% | 23 | ||||
| 7,075 | 100.00% | 4,575 | ||||
| 8,116 | 100.00% | 50 | ||||
| 1 | 70.00% | - | ||||
| 2,998 | 100.00% | 4,586 | ||||
| 182,707 | 441,962 | 41.34% | 190,422 | |||
| 13,251 | 100.00% | 20,010 | ||||
| 781 | 100.00% | 4,275 | ||||
| 10 | 100.00% | 10 | ||||
| 136,786 | 408,074 | 33.52% | 158,638 | 139,588 | ||
| 4,174,651 | 4,894,286 | 3,952,425 | - | - | 139,588 |
| CHANGES IN 2020 | |||
|---|---|---|---|
| Shareholdings thousands of euro |
BALANCE AT FINANCIAL STATEMENTS 12 31 2019 |
INCREASES | DECREASES |
| FINANCIAL ASSETS | |||
| Affiliates: | |||
| Sviluppo Turistico Lago d'Iseo S.p.A. | 735 | ||
| SET S.p.A. | 466 | ||
| Serio Energia S.r.l. | 400 | ||
| Ge.S.I. S.r.l. | 466 | ||
| Visano Società Trattamento Reflui S.c.a.r.l. | 10 | ||
| Ergon Energia S.r.l. in liquidation | - | ||
| Total affiliates | 2,077 | - | - |
| Equity investments held for sale | |||
| Ge.S.I. S.r.l. |
(*) Figures of the financial statements at December 31, 2019 latest available financial statements.
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| CHANGES IN 2020 SHARE OF EQUITY |
|
|---|---|
| BALANCE AT FINANCIAL STATEMENTS REVALUATIONS OTHER % EQUITY AT 12 31 2020 WRITE-DOWNS CHANGES HELD 12 31 2019 (*) |
PRO-RATA AMOUNT |
| 735 24.29% 3,078 |
748 |
| 466 49.00% 2,296 |
1,125 |
| 400 40.00% 1,861 |
744 |
| (466) - |
|
| 10 40.00% 26 |
10 |
| - 50.00% (219) |
(110) |
| - (466) 1,611 7,042 |
2,518 |
| 466 466 47.00% 5,172 |
2,431 |
| Company Name thousands of euro |
SHAREHOLDING % |
SHAREHOLDER | CARRYING AMOUNT AT 12 31 2020 |
|---|---|---|---|
| Available-for-sale financial assets | |||
| Immobiliare-Fiera di Brescia S.p.A. | 0.90% | A2A S.p.A. | 280 |
| Others: | |||
| AQM S.r.l. | 7.52% | A2A S.p.A. | |
| AvioValtellina S.p.A. | 0.18% | A2A S.p.A. | |
| Banca di Credito Cooperativo dell'Oglio e del Serio s.c. | n.s. | A2A S.p.A. | |
| Brescia Mobilità S.p.A. | 0.25% | A2A S.p.A. | |
| L.E.A.P. S.c.a.r.l. | 8.57% | A2A S.p.A. | |
| E.M.I.T. S.r.l. in liquidation | 10.00% | A2A S.p.A. | |
| Isfor 2000 S.c.p.a. | 4.94% | A2A S.p.A. | |
| Stradivaria S.p.A. | n.s. | A2A S.p.A. | |
| DI.T.N.E. S.c.a.r.l. | 1.82% | A2A S.p.A. | |
| Total other financial assets | 617 | ||
| Total available-for-sale financial assets | 897 |
Note: A2A S.p.A. took part in the setting up of Società Cooperativa Polo dell'innovazione della Valtellina, subscribing 5 shares having a nominal value of 50 euro.
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| Company Name thousands of euro |
REGISTERED OFFICE | CURRENCY | SHARE CAPITAL AT 12 31 2020 |
|
|---|---|---|---|---|
| Subsidiaries: | ||||
| Unareti S.p.A. | Brescia | Euro | 965,250 | |
| A2A Ambiente S.p.A. | Brescia | Euro | 220,000 | |
| A2A Calore & Servizi S.r.l. | Brescia | Euro | 150,000 | |
| A2A Ciclo Idrico S.p.A. | Brescia | Euro | 70,000 | |
| A2A gencogas S.p.A. | Gissi (Ch) | Euro | 450,000 | |
| A2A Energia S.p.A. | Milan | Euro | 3,000 | |
| Retragas S.r.l. | Brescia | Euro | 34,495 | |
| A2A Smart City S.p.A. | Brescia | Euro | 3,448 | |
| Proaris S.r.l. | Milan | Euro | 1,875 | |
| Camuna Energia S.r.l. | Cedegolo (Bs) | Euro | 900 | |
| SEASM S.r.l. | Brescia | Euro | 700 | |
| Plurigas S.p.A. in liquidation | Milan | Euro | 800 | |
| A2A Montenegro d.o.o. | Podgorica (Montenegro) | Euro | 100 | |
| A2A Energiefuture S.p.A. | Milan | Euro | 50,000 | |
| Linea Group Holding S.p.A. | Brescia | Euro | 189,494 | |
| Azienda Servizi Valtrompia S.p.A. | Gardone Val Trompia (Bs) | Euro | 8,939 | |
| A2A Security S.c.p.A. | Milan | Euro | 52 | |
| A2A Energy Solution S.r.l. | Milan | Euro | 4,000 | |
| A2A Rinnovabili S.p.A. | Trento | Euro | 50 | |
| ACSM-AGAM S.p.A. | Monza | Euro | 197,344 | |
| A2A Alfa S.r.l. in liquidation | Milan | Euro | 100 | |
| A2Abroad S.p.A. | Milan | Euro | 500 | |
| Yada Energia S.r.l. | Milan | Euro | 2,400 | |
| Suncity Energy S.r.l. | Milan | Euro | 100 | |
| A2A Idrogen2 S.r.l. | Milan | Euro | 10 | |
| Ambiente Energia Brianza S.p.A. | Seregno (MB) | Euro | 119,496 |
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| EQUITY AT 12 31 2020 |
RESULT AT 12 31 2020 |
% HELD |
PRO RATA AMOUNT (A) |
BALANCE AT FINANCIAL STATEMENSTS |
DELTA (A-B) |
|---|---|---|---|---|---|
| (B) | |||||
| 1,483,851 | 100,069 | 100.00% | 1,483,851 | 1,381,831 | 102,020 |
| 556,639 | 137,482 | 100.00% | 556,639 | 634,894 | (78,255) |
| 354,925 | 20,005 | 100.00% | 354,925 | 330,627 | 24,298 |
| 217,898 | 20,373 | 100.00% | 217,898 | 167,000 | 50,898 |
| 640,700 | 1,735 | 100.00% | 640,700 | 606,817 | 33,883 |
| 220,706 | 98,557 | 87.20% | 192,456 | 97,039 | 95,417 |
| 39,979 | 858 | 87.27% | 34,889 | 30,105 | 4,784 |
| 15,511 | 810 | 87.00% | 13,494 | 9,222 | 4,272 |
| 6,000 | 85 | 60.00% | 3,600 | 3,557 | 43 |
| 1,023 | (67) | 74.50% | 762 | 740 | 22 |
| 1,013 | 81 | 67.00% | 679 | 469 | 210 |
| 2,968 | 287 | 70.00% | 2,078 | 560 | 1,518 |
| 108 | (58) | 100.00% | 108 | 102 | 6 |
| 207,182 | 12,652 | 100.00% | 207,182 | 189,730 | 17,452 |
| 330,216 | (21,247) | 51.00% | 168,410 | 106,385 | 62,025 |
| 22,609 | 1,043 | 74.55% | 16,855 | 10,758 | 6,097 |
| 367 | 99 | 45.77% | 168 | 23 | 145 |
| 7,075 | (97) | 100.00% | 7,075 | 4,575 | 2,500 |
| 8,116 | 6,854 | 100.00% | 8,116 | 50 | 8,066 |
| 441,962 | 15,335 | 41.34% | 182,707 | 190,422 | (7,715) |
| 1 | (6) | 70.00% | 1 | - | 1 |
| 2,998 | (868) | 100.00% | 2,998 | 4,586 | (1,588) |
| 13,251 | (6,500) | 100.00% | 13,251 | 20,010 | (6,759) |
| 781 10 |
(627) - |
100.00% 100.00% |
781 10 |
4,275 10 |
(3,494) - |
| 408,074 | 3,699 | 33.52% | 136,786 | 158,638 | (21,852) |
| Company Name thousands of euro |
REGISTERED OFFICE | CURRENCY | SHARE CAPITAL AT 12 31 2019 (*) |
|---|---|---|---|
| Sviluppo Turistico Lago d'Iseo S.p.A. | Iseo (Bs) | Euro | 1,616 |
| SET S.p.A. | Toscolano Maderno (Bs) | Euro | 104 |
| Serio Energia S.r.l. | Concordia sulla Secchia (Mo) | Euro | 1,000 |
| Visano Società Trattamento Reflui S.c.a.r.l. | Brescia | Euro | 25 |
| Ergon Energia S.r.l. in liquidation | Milan | Euro | 600 |
| Equity investments held for sale | |||
| Ge.S.I. S.r.l. | Brescia | Euro | 1,000 |
(*) Figures of the financial statements at December 31, 2019 latest available financial statements.
A2A Separate financial statements 2020
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| DELTA (A-B) |
BALANCE AT FINANCIAL STATEMENSTS (B) |
PRO RATA AMOUNT (A) |
% HELD |
RESULT AT 12 31 2019 (*) |
EQUITY AT 12 31 2019 (*) |
|---|---|---|---|---|---|
| 13 | 735 | 748 | 24.29% | 19 | 3,078 |
| 659 | 466 | 1,125 | 49.00% | 377 | 2,296 |
| 344 | 400 | 744 | 40.00% | 247 | 1,861 |
| - | 10 | 10 | 40.00% | - | 26 |
| (110) | - | (110) | 50.00% | (58) | (219) |
| 2,431 | - | 2,431 | 47.00% | 13 | 5,172 |
| SUBSIDIARIES | A2A gencogas S.p.A. |
A2A Energiefuture S.p.A. |
S.p.A. | A2A Ambiente | A2A Smart City S.p.A. |
Retragas S.r.l. | A2A Ciclo Idrico S.p.A. |
SEASM S.r.l. | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Euro | 450,000,000 Euro | 50,000,000 Euro | 220,000,000 Euro | 3,448,276 Euro | 34,494,650 Euro | 70,000,000 Euro | 700,000 | |||||||
| % held | A2A S.p.A. | 100.00% A2A S.p.A. | 100.00% A2A S.p.A. | 100.00% A2A S.p.A. Linea Group Holding S.p.A. |
87.00% 13.00% |
A2A S.p.A. Unareti S.p.A. |
87.27% 4.33% |
A2A S.p.A. | 100.00% A2A S.p.A. | 67.00% | |||||
| Description thousands of euro |
12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 | Revised | 12 31 2020 12 31 2019 | ||||||||||||
| Revenues | 240,588 | 151,967 | 171,938 | 193,347 | 477,348 | 460,411 | 53,341 | 62,845 | 5,984 | 7,336 | 99,131 | 104,307 | 357 | 357 | |
| Gross operating income | 71,624 | 69,188 | 36,145 | 34,472 | 194,095 | 190,776 | 9,780 | 10,838 | 3,735 | 4,250 | 48,541 | 53,185 | 287 | 296 | |
| Net operating income | 12,005 | 146,778 | 18,240 | 18,111 | 154,792 | 141,492 | 2,242 | 3,955 | 1,294 | 1,915 | 30,120 | 34,722 | 119 | 128 | |
| Result before taxes | 6,682 | 141,108 | 18,373 | 17,846 | 178,062 | 170,404 | 1,448 | 3,005 | 1,295 | 1,915 | 28,948 | 33,757 | 113 | 110 | |
| Result of the year | 1,735 | 97,576 | 12,652 | 13,420 | 137,482 | 130,708 | 810 | 1,877 | 858 | 1,311 | 20,373 | 23,774 | 81 | 79 | |
| Assets | 1,159,795 | 1,076,189 | 402,624 | 374,777 | 897,326 | 917,663 | 127,106 | 128,998 | 42,595 | 43,945 | 429,939 | 396,689 | 1,231 | 1,379 | |
| Liabilities | 519,095 | 431,263 | 195,442 | 167,791 | 340,687 | 370,928 | 111,595 | 112,363 | 2,617 | 3,587 | 212,041 | 176,804 | 218 | 447 | |
| Equity | 640,700 | 644,926 | 207,182 | 206,986 | 556,639 | 546,736 | 15,511 | 16,634 | 39,979 | 40,358 | 217,898 | 219,885 | 1,013 | 932 | |
| Net financial position | (213,380) | (249,118) | 125,826 | 115,596 | 122,671 | 261,188 | (77,708) | (70,171) | 9,297 | 9,659 | (161,170) | (127,446) | (251) | (537) |
| AFFILIATES | Ergon Energia S.r.l. in liquidation |
|
|---|---|---|
| Share capital | Euro | 600,000 |
| % held | A2A S.p.A. | 50.00% |
| Description thousands of euro |
12 31 2019 12 31 2018 | |
| Revenues | 14 | 87 |
| Gross operating income | (79) | 35 |
| Net operating income | (50) | 30 |
| Result before taxes | (58) | 24 |
| Result of the year | (58) | 23 |
| Assets | 1,231 | 6,963 |
| Liabilities | 1,450 | 7,124 |
| Equity | (219) | (161) |
| Net financial position | (343) | (810) |
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| 70,000,000 Euro 700,000 Euro 189,494,116 Euro 8,938,941 Euro 52,000 Euro 50,000 Euro 4,000,000 Euro 2,400,000 Euro 197,343,794 Euro 119,495,575 100.00% A2A S.p.A. 67.00% A2A S.p.A. 51.00% A2A S.p.A. 74.55% A2A S.p.A. 100.00% A2A S.p.A. 100.00% A2A S.p.A. 100.00% A2A S.p.A. 41.34% A2A S.p.A. 33.52% 45.77% A2A S.p.A. Unareti S.p.A. 0.25% 18.37% Unareti S.p.A. 10.49% A2A Ciclo Idrico S.p.A. 9.14% Amsa S.p.A. 3.95% A2A gencogas S.p.A. 3.95% A2A Ambiente S.p.A. A2A Calore 2.60% & Servizi S.r.l. A2A Energiefuture 1.93% S.p.A. 3.80% Altre società 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 12 31 2020 12 31 2019 357 357 22,409 20,568 13,219 13,249 1,375 1,191 8,451 6,975 26,814 51,016 2,237 - 24,131 27,452 16,157 16,291 287 296 (204) (7,804) 3,907 3,779 387 375 6,124 4,773 615 2,293 (7,800) (327) 1,073 1,093 (177) 1,483 119 128 (2,993) (9,026) 1,495 1,271 145 135 2,493 714 (1,571) 1,232 (8,793) (327) (6,608) (5,199) (4,732) (1,458) 113 110 (22,184) 164,188 1,413 1,181 138 118 3,936 1,943 (307) 1,880 (8,793) (327) 13,825 14,915 2,935 4,616 81 79 (21,247) 166,405 1,043 838 99 89 6,854 1,644 (97) 1,438 (6,500) (249) 15,335 15,449 3,699 4,760 1,231 1,379 756,282 759,929 47,417 41,144 1,189 1,310 103,918 89,426 45,325 42,162 20,605 7,823 652,524 633,823 467,233 273,929 218 447 426,066 396,256 24,807 19,586 822 1,056 95,802 86,286 38,249 34,990 7,355 3,064 210,562 191,457 59,159 23,658 1,013 932 330,216 363,674 22,609 21,558 367 254 8,116 3,140 7,075 7,171 13,251 4,759 441,962 442,366 408,074 250,270 (251) (537) 229,891 (170,573) (17,019) (8,513) 520 (734) (37,032) (25,520) (27,640) (26,818) 3,602 4,443 (75,183) (81,910) (36,128) (6,359) |
Linea Group Holding S.p.A. |
Valtrompia S.p.A. | Azienda Servizi | A2A Security S.c.p.a. | A2A Rinnovabili S.p.A. |
S.r.l. | A2A Energy Solution | S.r.l. | Yada Energia | S.p.A. | ACSM-AGAM | Ambiente Energia Brianza S.p.A. |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SUBSIDIARIES | Unareti S.p.A. | A2A Calore & Servizi S.r.l. | |||
|---|---|---|---|---|---|
| Share capital | Euro | 965,250,000 Euro | 150,000,000 | ||
| % held | A2A S.p.A. | 100.00% | A2A S.p.A. | 100.00% | |
| Description thousands of euro |
12 31 2020 | 12 31 2019 | 12 31 2020 | 12 31 2019 | |
| Revenues | 514,199 | 505,684 | 245,183 | 239,121 | |
| Gross operating income | 241,453 | 257,973 | 70,017 | 78,557 | |
| Net operating income | 139,554 | 170,714 | 31,628 | 45,181 | |
| Result before taxes | 137,166 | 168,911 | 27,894 | 46,657 | |
| Result of the year | 100,069 | 118,322 | 20,005 | 33,019 | |
| Assets | 2,330,205 | 2,245,410 | 712,550 | 696,805 | |
| Liabilities | 846,354 | 745,949 | 357,625 | 330,585 | |
| Equity | 1,483,851 | 1,499,462 | 354,925 | 366,220 | |
| Net financial position | (369,260) | (237,123) | (232,447) | (212,552) |
| AFFILIATES | Sviluppo Turistico del Lago d'Iseo S.p.A. |
Società Elettrica di Toscolano Maderno S.r.l. |
|||
|---|---|---|---|---|---|
| Share capital | Euro | 1,616,298 | Euro | 104,000 | |
| % held | A2A S.p.A. | 24.29% | A2A S.p.A. | 49.00% | |
| Description thousands of euro |
12 31 2019 | 12 31 2018 | 12 31 2019 | 12 31 2018 | |
| Revenues | 1,461 | 1,314 | 990 | 857 | |
| Gross operating income | 381 | 303 | 698 | 611 | |
| Net operating income | 93 | 60 | 347 | 377 | |
| Result before taxes | 27 | 2 | 525 | 436 | |
| Result of the year | 19 | (12) | 377 | 312 | |
| Assets | 6,312 | 6,591 | 3,259 | 3,053 | |
| Liabilities | 3,234 | 3,512 | 963 | 1,134 | |
| Equity | 3,078 | 3,079 | 2,296 | 1,919 | |
| Net financial position | (2,151) | (2,537) | (50) | (434) |
1. Statement of changes in tangible assets
2. Statement of changes in intangible assets
3/a. Statement of changes in investments in subsidiaries
3/b. Statement of changes in investments in affiliates
3/c. Statement of changes in investments in other companies
4/a. List of investments in subsidiaries
4/b. List of investments in affiliates
Key data of the financial statements of the main subsidiaries and affiliates prepared according to IAS/IFRS (pursuant to art. 2429.4 of the Italian Civil Code)
Key data of the financial statements of
the main subsidiaries and affiliates prepared according to ITALIAN GAAP (pursuant to art. 2429.4 of the Italian Civil Code)
Certification of the financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98
| PROARIS S.r.l. | Suncity Energy S.r.l. | A2A Energia S.p.A. | A2Abroad S.p.A. | ||||
|---|---|---|---|---|---|---|---|
| 1,875,000 | 100,200 Euro | Euro | 3,000,000 | 500,000 Euro | Euro | ||
| 60.00% | A2A S.p.A. | 100.00% | A2A S.p.A. | 87.20% 12.80% |
A2A S.p.A. Linea Group Holding S.p.A. |
100.00% | A2A S.p.A. |
| 12 31 2020 12 31 2019 |
12 31 2019 | 12 31 2020 | 12 31 2019 | 12 31 2020 | 12 31 2019 | 12 31 2020 | |
| 2,632 3,099 |
28,406 | 40,077 | 2,263,121 | 2,155,691 | 124 | 778 | |
| 355 | (380) | (635) | 178,182 | 178,497 | (963) | (1,138) | |
| 180 | (659) | (990) | 136,326 | 139,068 | (963) | (1,138) | |
| 181 | (656) | (1,062) | 137,174 | 139,073 | (964) | (1,137) | |
| 85 | (656) | (627) | 93,345 | 98,557 | (721) | (868) | |
| 6,600 6,540 |
3,840 | 5,746 | 833,543 | 842,397 | 4,552 | 3,658 | |
| 600 | 3,440 | 4,965 | 618,190 | 621,691 | 686 | 661 | |
| 6,000 6,014 |
400 | 781 | 215,353 | 220,706 | 3,866 | 2,998 | |
| 3,092 3,278 |
968 | 2,237 | (57,201) | (33,278) | 3,635 | 2,381 |
| Sviluppo Turistico Società Elettrica Serio Energia S.r.l. Visano Società Trattamento del Lago d'Iseo S.p.A. di Toscolano Maderno S.r.l. Reflui S.c.a.r.l. |
Ge.S.I. S.r.l. | |
|---|---|---|
| Euro 1,616,298 Euro 104,000 Euro 1,000,000 Euro 25,000 |
Euro | 1,000,000 |
| A2A S.p.A. 24.29% A2A S.p.A. 49.00% A2A S.p.A. 40.00% A2A S.p.A. 40.00% |
A2A S.p.A. | 47.00% |
| 12 31 2019 12 31 2018 12 31 2019 12 31 2018 12 31 2019 12 31 2018 12 31 2019 12 31 2018 |
12 31 2019 | 12 31 2018 |
| 1,461 1,314 990 857 2,193 2,138 31 8 |
5,886 | 6,148 |
| 381 303 698 611 585 6,100 - - |
355 | 711 |
| 93 60 347 377 347 377 - - |
54 | 410 |
| 27 2 525 436 347 377 - - |
54 | 413 |
| 19 (12) 377 312 247 269 - - |
13 | 299 |
| 6,312 6,591 3,259 3,053 2,197 2,209 48 26 |
6,988 | 7,298 |
| 3,234 3,512 963 1,134 335 345 22 - |
1,815 | 2,138 |
| 3,078 3,079 2,296 1,919 1,861 1,864 26 26 |
5,172 | 5,160 |
| (2,537) (50) (434) 703 532 - 5 |
592 | 2,361 |
of administrative and accounting procedures for the preparation of financial statements in the year 2020.
Milan, March 18, 2021
Renato Mazzoncini Andrea Crenna (CEO) (Financial Reporting Manager)
Independent Auditors' Report
EY S.p.A. Via Meravigli, 12 20123 Milano
Tel: +39 02 722121 Fax: +39 02 722122037 ey.com
Independent auditor's report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010 and article 10 of EU Regulation n. 537/ 2014
(Translation from t he original Italian text)
To the Shareholders of A2A S.p.A.
We have audited the financial statements of A2A S.p.A. (the Company), which comprise the balance sheet as at 31 December 2020, and the income statement, the statement of comprehensive income, statement of changes in equity and the cash flows statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/2005.
We conducted our audit in accordance with International Standards on Auditing (ISA Italia). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the regulations and standards on ethics and independence applicable to audits of financial statements under Italian Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
EY S.p.A. Sede Legale: Via Lombardia, 31 - 00187 Roma Capitale Sociale Euro 2.525.000,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la C.C.I.A.A. di Roma Codice fiscale e numero di iscrizione 00434000584 - numero R.E.A. 250904 P.IVA 00891231003 Iscritta al Registro Revisori Legali al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/ 2/ 1998 Iscritta all'Albo Speciale delle società di revisione Consob al progressivo n. 2 delibera n.10831 del 16/ 7/ 1997
A member firm of Ernst & Young Global Limited
Valuation of Shareholdings in subsidiaries
At December 31, 2020, the Shareholdings in subsidiaries balance amount to 3.952 million euro.
The management assesses at least annually the existence of impairment indicators of each investment, in compliance with its strategy of managing legal entities within the group and, in case of occurrence, these assets are subject to impairment test.
The processes and methodologies for assessing and determining the recoverable amount of each shareholdings in subsidiaries are based on complex assumptions, that by their nature imply the use of the management's judgment, in particular with reference to the identification of impairment indicators, to forecast of future cash flows relating to the period covered by the Group's strategic plan, the normalized cash flows or the net realized value of the assets assumed as a basis for the terminal value, as well as the long-term growth rates and discount rates applied to such cash flows forecasts. Such assumptions could be affected by future expectation on energy market conditions, by the expectation of possible effects determined by the pandemic Covid-19, by the authorization processes in progress and by regulatory and macroeconomic scenarios.
In consideration of the judgment required and of the complexity of the assumptions used in the estimate of the recoverable amount of investments, we have considered that this area represents a key audit matter.
The disclosures related to the recoverability of the investment in subsidiaries are included in the paragraph "Use of estimates" and in note n.3 "Shareholdings and other non-current financial assets" of the notes to the financial statements.
Our audit procedures related to this key audit matters included, among others:
In performing our procedures, we leveraged the used of EY valuation specialists who performed an independent calculation and sensitivity analysis on key assumptions, in order to determine any changes that could significantly impact the valuation of recoverable amount.
Lastly, we reviewed the adequacy of the disclosures included in the notes to the financial statements.
The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the regulations issued for implementing art. 9 of Legislative Decree n. 38/ 2005, and, within the terms provided by the law, for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
The Directors are responsible for assessing the Company's ability to continue as a going concern and, when preparing the financial statements, for the appropriateness of the going concern assumption, and for appropriate disclosure thereof. The Directors prepare the financial statements on a going concern basis unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The statutory audit committee ("Collegio Sindacale") is responsible, within the terms provided by the law, for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISA Italia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with International Standards on Auditing (ISA Italia), we have exercised professional judgment and maintained professional skepticism throughout the audit. In addition:
or, if such disclosures are inadequate, to consider this matter in forming our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;
we have evaluated the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We have communicated with those charged with governance, identified at an appropriate level as required by ISA Italia, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We have provided those charged with governance with a statement that we have complied with the ethical and independence requirements applicable in Italy, and we have communicated with them all matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we have determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We have described these matters in our auditor's report.
The shareholders of A2A S.p.A., in the general meeting held on 11 June 2015, engaged us to perform the audits of the financial statements for each of the years ending 31 December 2016 to 31 December 2024.
We declare that we have not provided prohibited non-audit services, referred to article 5, par. 1, of EU Regulation n. 537/ 2014, and that we have remained independent of the Company in conducting the audit.
We confirm that the opinion on the financial statements included in this report is consistent with the content of the additional report to the audit committee (Collegio Sindacale) in their capacity as audit committee, prepared pursuant to article 11 of the EU Regulation n. 537/ 2014.
Opinion pursuant to article 14, paragraph 2, subparagraph e), of Legislative Decree n. 39 dated 27 January 2010 and of article 123-bis, paragraph 4, of Legislat ive Decree n. 58, dated 24 February 1998
The Directors of A2A S.p.A. are responsible for the preparation of the Report on Operation and of the Report on Corporate Governance and Ownership Structure of A2A S.p.A. as at 31 December 2020, including their consistency with the related financial statements and their compliance with the applicable laws and regulations.
We have performed the procedures required under audit standard SA Italia n. 720B, in order to express an opinion on the consistency of the Report on Operations and of specific information included in the Report on Corporate Governance and Ownership Structure as provided for by article 123-bis, paragraph 4, of Legislative Decree n. 58, dated 24 February 1998, with the financial statements of A2A S.p.A. as at 31 December 2020 and on their compliance with the applicable laws and regulations, and in order to assess whether they contain material misstatements.
In our opinion, the Report on Operation and the above mentioned specific information included in the Report on Corporate Governance and Ownership Structure are consistent with the financial statements of A2A S.p.A. as at 31 December 2020 and comply with the applicable laws and regulations.
With reference to the statement required by art. 14, paragraph 2, subparagraph e), of Legislative Decree n. 39, dated 27 January 2010, based on our knowledge and understanding of the entity and its environment obtained through our audit, we have no matters to report.
Milan, April 1, 2021
EY S.p.A. Signed by: Paolo Zocchi, Auditor
This report has been translated into the English language solely for the convenience of international readers.
REPORT OF THE BOARD OF STATUTORY AUDITORS PURSUANT TO ARTICLE 153 OF LEGISLATIVE DECREE 58/1998 AND ARTICLE 2429 PARAGRAPH 3, CIVIL CODE TO THE SHAREHOLDERS' MEETING OF A2A S.P.A. OF APRIL 29, 2021 (SECOND CALL, IF APPLICABLE, APRIL 30, 2021)
Shareholders,
The Board of Statutory Auditors in office was appointed by the Shareholders' Meeting of A2A S.p.A. (hereinafter referred to as the Company) of May 13, 2020 and will end its term of office with the Shareholders' Meeting convened to approve the financial statements at December 31, 2022.
Pursuant to article 153, paragraph 1, of Legislative Decree no. 58 of February 24, 1998 (hereinafter the "T.U.F."), the Board of Statutory Auditors hereby informs that, during the year ended December 31, 2020, it carried out the supervisory and control activities required by current regulations, with particular regard to the provisions of the Italian Civil Code, Legislative Decree 58/1998, Legislative Decree no. 39 of January 27, 2010 and Legislative Decree no. 254 of 2016, also taking into account the indications contained in CONSOB communications relating to corporate controls and the activities of the Board of Statutory Auditors, the indications contained in the Corporate Governance Code for listed companies as well as the Rules of Conduct for the Board of Statutory Auditors of listed companies recommended by the National Council of Chartered Accountants and Accounting Experts.
This Report is given to the Shareholders of the Company in view of the Shareholders' Meeting called, on first call, on April 29, 2021 and, if necessary, on second call, on April 30, 2021 for the approval of the Financial Statements at December 31, 2020.
That said, the activities carried out by the Board of Statutory Auditors during 2020 and up to the date of today's report are set out below, also with reference to the requirements of CONSOB Communication no. DEM/1025564 of April 6, 2001 and subsequent amendments.
***
The most significant economic, financial and equity transactions and events that took place in 2020 were as follows:
Details of all transactions having a significant impact on the Company's profitability, assets and liabilities or financial position are provided in the "Significant events during the year" section of the Report on Operations.
The Board of Statutory Auditors received from the Directors and top management, with due periodicity, information on the activities carried out and transactions of major economic, financial and equity importance carried out by the Company and its subsidiaries. The Directors have reported on these transactions in their Report on Operations, to which reference is made, also with regard to the characteristics of the transactions and their economic effects. The Board of Statutory Auditors has acquired adequate information, which have allowed it to reasonably believe that the above transactions complied with the law, By-laws and the principles of correct administration and were not imprudent, risky or in conflict with the resolutions passed by the shareholders' meeting or in any case such as to compromise the integrity of the company's assets.
Transactions with related parties have been subject to the transparency procedures provided for by current legislation.
The Board of Statutory Auditors has not found or received any indications from the Board of Directors, the Independent Auditors or the Head of Internal Audit regarding the existence of atypical and/or unusual transactions, as defined by Consob communication DEM/6064293 of July 28, 2006, carried out with third parties, related parties or intragroup.
In the notes to the financial statements, the Directors reported on ordinary transactions carried out during the year with Group companies and related parties, to which reference should be made, also with regard to the characteristics of the transactions and their economic effects.
Their examination did not reveal any critical issues with regard to their suitability, congruity or correspondence to the interests of the Company.
The Board of Statutory Auditors verified the actual implementation and functioning of the Procedure for Transactions with Related Parties adopted by the Company, including periodic information from the Board of Directors in the event of such transactions being carried out.
On April 1, 2021, the independent auditors EY S.p.A. issued their report pursuant to article 14 of Legislative Decree no. 39 of January 27, 2010, and article 10 of Regulation (EU) no. 537 of April 16, 2014, in which the independent auditors certify that in their opinion:
On April 1, 2021, the independent auditors EY S.p.A. also issued their additional report pursuant to article 11 of Regulation (EU) 537/2014, which, among other things, confirms that, during the audit of the Company's annual financial statements and the Group's consolidated financial statements for the year ended December 31, 2020, no significant deficiencies were
identified in the internal control system for financial information and/or in the accounting system.
The auditor's reports highlight the key aspects of the audit, to which reference should be made.
The independent auditors EY S.p.A., also on April 1, 2021, issued the certificate of conformity of the information provided in the Consolidated Non-financial Disclosure prepared by the Company required by articles 3 and 4 of Legislative Decree no. 254/2016.
In 2020, no complaints were received pursuant to article 2408 of the Civil Code nor petitions of any kind by third parties.
In this regard, it should be recalled that the Company has adopted a whistleblowing procedure that provides for the establishment of suitable information channels to ensure the reception, analysis and processing of reports, related internal control issues, corporate information, administrative liability of the Company, fraud or other matters, sent by employees, members of corporate bodies or third parties, including in confidential or anonymous form.
The annual financial statements of A2A S.p.A. and its subsidiaries have been subject to a full audit by EY S.p.A. on the basis of the appointment conferred by the shareholders' meeting for financial years 2016 to 2024.
The following table provides a summary of the fees paid for audit work performed within the Group during 2020.
| Description thousands of euro |
Leading Auditor |
Other auditors |
|---|---|---|
| A2A S.p.A. | ||
| Audit of annual financial statements | 147 | |
| Audit of consolidated financial statements | 43 | |
| Periodic tests of accounting | 21 | |
| Review of half-yearly report | 68 | |
| Audit of the separate annual accounts for ARERA | 15 | |
| Total | 294 | - |
| Subsidiaries | ||
| Audit of annual financial statements | 831 | |
| Periodic tests of accounting | 208 | |
| Review of half-yearly report | 191 | |
| Audit of the separate annual accounts for ARERA | 72 | |
| Other consolidated groups (LGH, ACSM-AGAM, AEB) | 637 | |
| Total | 1,939 | - |
| Associates and joint ventures | ||
| Audit of the information sent to shareholders for the consolidation | 29 | |
| Total | 29 | |
| TOTAL A2A GROUP | 2,262 | - |
The Board of Statutory Auditors has been informed by the Company that the following additional fees paid to companies or professional firms connected to the international network of EY S.p.A. in relation to the offices specified below have been recorded (amounts in euro):
| Company | Purpose | Amount |
|---|---|---|
| Retragas S.r.l. | Certification of revenues relating to 2019. Resolution 114/2019/R/GAS of March 29, 2019 – art. 4 |
1,000.00 |
| A2A S.p.A. | Attestation activities related to the updating of the EMTN program |
45,000.00 |
| A2A Energiefuture S.p.A. | Request for reinstatement of 2019 costs San Filippo del Mela - Essential plants resolution ARERA 111/06 |
1,000.00 |
| A2A Smart City S.p.A. | Certification of 2019 tax credit and three-year period 2012-14 for research and development activities |
10,000.00 |
|---|---|---|
| A2A S.p.A. | Comfort letter in connection with the issuance of a 500 million euro bond with a maturity of 12 years, under its Euro Medium Term Notes Program |
25,000.00 |
| A2A S.p.A. | Certification of 2019 tax credit for research and development activities |
14,500.00 |
| A2A Ambiente S.p.A. | Certification of 2019 tax credit for research and development activities |
12,000.00 |
| A2A Calore & Servizi S.r.l. | Certification of 2019 tax credit for research and development activities |
13,200.00 |
| Unareti S.p.A. | Certification of 2019 tax credit for research and development activities |
13,300.00 |
| A2A Energiefuture S.p.A. | Certification of 2019 tax credit for research and development activities |
9,500.00 |
| A2A Ciclo Idrico S.p.A. | Certification of 2019 tax credit for research and development activities |
15,000.00 |
| Yada Energia S.r.l. | Certification of 2019 tax credit for research and development activities |
7,500.00 |
| Total | 167,000.00 |
The conferral of the above appointments was approved in advance by the Board of Statutory Auditors.
The Board of Statutory Auditors received, in accordance with the provisions of article 6 paragraph 2 letter a) of Regulation (EU) no. 537/2014, from EY S.p.A., certification of the declaration relating to the independence of EY S.p.A., pursuant to article 6 of Regulation (EU) no. 537/2014, contained in the additional report, from which no situations emerge that could compromise its independence.
In 2020, the Board of Statutory Auditors, in particular:
Legislative Decree no. 39 of January 27, 2010 and article 5 of European Community Regulation no. 537 of April 16, 2014, in relation to the assignment of "non audit services" to the independent auditors.
After the end of the financial year and up to the date of this report, the Board of Statutory Auditors has also:
The year 2020 was characterized by a situation of profound uncertainty regarding the genesis and evolution of the COVID-19 pandemic. The governmental indications and measures issued from March 2020 and throughout the financial year, in declaring a state of emergency, imposed particularly stringent measures to limit the spread of the pandemic in the national territory, such as situations of total or partial lockdown and stringent measures of "social distancing".
In this context, the Company's activities were not interrupted and continued, where possible, "remotely" for office personnel.
The activities of the Board of Statutory Auditors were also conducted in this manner, through the acquisition of data and information in electronic format and the holding of its meetings via video/audio conference.
Considering the degree of reliability and timeliness of the Company in ensuring the proper conduct of meetings and an adequate system for sending information flows, the Board of Statutory Auditors believes that the adoption of these methods has not diminished or affected the degree of reliability of the information received or the effectiveness of its activities.
In 2020, the Board attended all the meetings of the Board of Directors, for a total of 22 sessions, during which it was informed about the activities carried out and the most significant transactions made by the Company and its subsidiaries. In this context, the Board received from the Chairman and CEO the information regarding the exercise of the respective proxies.
Moreover, the Board held 24 meetings in 2020, during which information was also exchanged with the independent auditors in order to ensure that no transactions were carried that were imprudent, risky, in potential conflict of interest, in contrast with the law, By-laws or the resolutions of the shareholders' meeting or such to affect the integrity of the Company's assets.
The Board of Statutory Auditors also attended 16 meetings of the Control and Risk Committee, 20 meetings of the Remuneration and Appointments Committee, and 7 meetings of the Committee for Transactions with Related Parties, gaining knowledge of the work they performed during the year.
The Control Body also participated in the Shareholders' Meeting of May 13, 2020. In 2021 up to the present date, the Board of Statutory Auditors has attended 6 meetings of the
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Board of Directors, 5 meetings of the Control and Risk Committee, 7 meetings of the Remuneration and Appointments Committee, 3 meetings of the Committee for Transactions with Related Parties and has held 9 meetings of the Board of Statutory Auditors.
The Board of Statutory Auditors, following its supervisory activity, has no observations to make regarding compliance with the principles of correct administration and has verified that the Directors are aware of the riskiness and effects of the operations carried out.
In particular, the Board of Statutory Auditors verified that the management decisions were taken in the interest of the Company, compatible with the Company's resources and assets and adequately supported by information, analysis and verification processes, also with recourse, when deemed necessary, to the advisory activities of the Committees and external professionals.
The Board of Statutory Auditors constantly collected information on the organizational structure of the Company and changes thereto, also meeting with the related managers of the Company. In light of what has been verified, the Board of Statutory Auditors believes that the organizational structure of the Company, the procedures, expertise and responsibilities are adequate in relation to the size of the Company and the type of activity performed.
The Board of Statutory Auditors also verified the adequacy of the organizational structure of subsidiaries with strategic importance of A2A S.p.A., with particular reference to the internal control and risk management system.
The Board of Statutory Auditors monitored the adequacy of the Internal Control and Risk Management System of A2A S.p.A. and its strategically important subsidiaries, by means of:
f) the examination of reports on the prevention, monitoring and management of the risk of legislative non-compliance and anti-corruption risk.
The Board of Statutory Auditors has also:
a) regulatory compliance with "tax crimes", provided for by Legislative Decree 74/2000 and introduced into the scope of Legislative Decree no. 231/01 by Law 157/2019, with specific reference to the following offences: fraudulent declaration using invoices or other documents for non-existent transactions (article 2 of Legislative Decree no. 74/2000), fraudulent declaration using other devices (article 3 of Legislative Decree no. 74/2000), issuance of invoices or other documents for non-existent transactions (article 8 of Legislative Decree no. 74/2000), concealment or destruction of accounting documents (article 10 of Legislative Decree no. 74/2000), fraudulent evasion of taxes (article 11 of Legislative Decree no. 74/2000);
b) the entry into force of Legislative Decree no. 75/2020 (implementing EU Directive 2017/1371 on the combat against fraud affecting the financial interests of the Union by means of criminal law - "PIF Directive"), mainly relating to the following main areas: inclusion in article 25-quinquiesdecies of further tax crimes, such as the offences of false declaration pursuant to article 4 of Legislative Decree no. 74/2000, non-declaration pursuant to article 5 of Legislative Decree no. 74/2000 and undue compensation pursuant to art. 10-quater of Legislative Decree no. 74/2000, if committed within the scope of crossborder fraudulent systems and in order to evade value added tax for a total amount of not
less than ten million euro, punishability of certain types of declaratory tax offences even in cases of attempted crime, inclusion in the scope of crimes 231 of fraud in public supplies, fraud in agriculture and smuggling, crimes of embezzlement and abuse of office, extension of the case of corruption to certain areas of the EU context;
Therefore, in the course of carrying out the above activities, the Board of Statutory Auditors:
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adequacy and effective functioning of the Internal Control and Risk Management System for 2020.
The Board of Statutory Auditors explored and constantly monitored the events during the year regarding ongoing tax, administrative, civil and criminal litigation involving the Company and the Group, for which reference is made to as detailed in the 2020 Consolidated Annual Report, Section 3) Other Information, section 8) Update on the main legal and tax disputes currently pending.
The Board of Statutory Auditors, to the extent of its competence, monitored the adequacy of the administrative-accounting system and its reliability in correctly representing operating events as well as the activities carried out, under the coordination of the Head of Financial Reporting, for the purposes of compliance with Law 262/05 "Provisions for the protection of savings and the regulation of financial markets" and subsequent amendments and additions, by means of:
d) meetings with the Independent Auditors and analysis of the results of their work;
e) examination of company documents.
The Board of Statutory Auditors also noted that, following the favourable opinion issued by the Control and Risks Committee, in accordance with the recommendations made by the European Securities and Markets Authority ("ESMA") on January 21, 2013, the joint document Bank of Italy/Consob/ISVAP no. 4 of March 3, 2010 and Consob Communication no. 3907 of January 19, 2015, on March 18, 2021, the Board of Directors autonomously and prior to the approval of the annual financial statements, approved the impairment test procedures applied by the Company in preparing the financial statements at December 31, 2020 and the impairment test procedures to be applied to the annual financial statements of the companies of the A2A Group.
In the course of carrying out the activity described above, the Board of Statutory Auditors did not identify any critical situations or facts that might lead to the conclusion, in relation to 2020, that the administrative-accounting system of A2A S.p.A. is inadequate and/or unreliable.
It should be noted that the Company regulates, by means of specific procedures, the flow of information to it from its subsidiaries, particularly with regard to major transactions.
The Board of Statutory Auditors considers the instructions given by the Company to its subsidiaries pursuant to article 114, paragraph 2 of the Consolidated Law on Finance to be adequate, in order to comply with the communication obligations provided for by law.
The Board of Statutory Auditors met with the independent auditors in relation to the Annual Report at December 31, 2020:
a) to exchange information on the verifications carried out by the latter pursuant to
Legislative Decree 39/2010 and article 150, paragraph 3 of the Consolidated Law on Finance, on the regular accounting and correct reporting of events in the accounting records. During these meetings, there were no reports of problems or abnormalities;
b) for the examination and evaluation of the preparation process, including the evaluation of the correct application of accounting standards and homogeneity of the same, the Half-Year Report of the Group at June 30, 2020 and the Annual Report of the Group at December 31, 2020, as well as the outcomes of the audit and evaluation of these documents.
In particular, the Board of Statutory Auditors:
analyzed the work carried out by the independent auditors, and in particular, the methodological framework, the audit approach used for the various significant areas of the financial statements and the planning of the audit work;
shared with the independent auditors issues related to business risks, thus being able to appreciate the adequacy of the response planned by the independent auditors with the structural and risk profiles of the Company and the Group.
The Board of Statutory Auditors:
with the independent auditors the risks relating to the independence of the same and the measures adopted by the independent auditors to mitigate said risks.
The Board of Statutory Auditors verified that the Board of Directors of December 17, 2020 resolved that the Company will adhere to the new Corporate Governance Code 2020 edition of listed companies applicable from January 1, 2021.
It therefore supervised, pursuant to article 149, paragraph 1, letter c-bis) of the Consolidated Law on Finance, the procedures for the concrete implementation of the rules of corporate governance provided for by the Self-Regulation Code (and, from January 1, 2021, the Corporate Governance Code), with particular regard to:
The Board of Statutory Auditors also acknowledges that the Board of Directors, at its meeting of March 26, 2021, examined the recommendations of the Corporate Governance Committee contained in the letter of December 22, 2020 addressed by the Chair of the Committee to the Chairpersons of the Boards of Directors of Italian listed companies and, for information, to the relative Chief Executive Officers and Chairpersons of the control bodies, in order to make the necessary decisions in this regard.
The Board of Statutory Auditors monitored the activities carried out by the Control and Risk Committee, the Remuneration and Appointments Committee and the Related Parties Committee, also through participation in their meetings.
****
In addition to the above, the Board of Statutory Auditors:
Final evaluations of the supervisory activity carried out and proposal to the Shareholders'
Having regard to the foregoing, and having, in the year under consideration:
6 Report of the Board of Auditors
in particular the adequacy of the administrative and accounting organization structure adopted by the Company and proper functioning thereof;
Consob Regulation no. 20267/2018, examining, among other things, the consolidated nonfinancial disclosure and also verifying compliance with the provisions governing its preparation pursuant to the aforementioned decree and therefore its preparation in compliance with these rules. The Board of Statutory Auditors verified the approval by the Board of Directors on March 18, 2021 of the aforementioned Disclosure and the issue on April 1, 2021, by the independent auditors, of the attestation of conformity of the information provided in said document with the requirements of articles 3 and 4 of Legislative Decree 254/2016 and the "Global Reporting Initiative Sustainability Reporting Standards", identified as the reporting standard by the Directors of A2A S.p.A..
The Board of Statutory Auditors also noted that, as required by the ESMA Statement and Consob, the Company allocated a section in the Report on Operations to the Covid-19 health emergency and the effects of the pandemic on the half-year and annual results and the value of assets, to which reference is made.
Providing the foregoing, the Board of Statutory Auditors states that, during the supervision activities described above, no reprehensible facts, omissions, or irregularities arose that require reporting to the competent bodies.
In view of the above, the Board of Statutory Auditors kindly requests that you approve the financial statements at December 31, 2020 presented by the Board of Directors along with the report on operations and the proposed distribution of a dividend.
Milan, April 3, 2021
6 Report of the Board of Auditors
| (Signed Giacinto Sarubbi) | - Chairman |
|---|---|
| (Signed Maurizio Leonardo Lombardi) | - Statutory Auditor |
| (Signed Chiara Segala) | - Statutory Auditor |
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