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ENAV S.p.A. Financial Statement

Derivative financial instruments

The derivative financial instruments entered into by the ENAV Group consist
of forward foreign exchange contracts, for the purpose of hedging currency risk.
Derivative financial instruments are recognized at fair value initially at the contract
date and then, subsequently, at each reporting date. Derivatives are recognised as
financial assets when the fair value is positive, and as financial liabilities when the
fair value is negative.
Derivative financial instruments used for hedging purposes, which is the only use by
the ENAV Group, qualify for hedge accounting if, and only if, the following conditions
are met:
• at the inception of the hedge, there is a formal designation and documentation of

the hedging relationship, ENAV’s risk management objective and the strategy for
undertaking the hedge;
• the hedge is expected to be highly effective;
• the effectiveness of the hedge can be reliably measured;
• the hedge is highly effective throughout the various periods for which it was
designated.
If all the above conditions are met with the intention of hedging the Group’s
exposure to future cash flow risks associated with an asset, a liability or a highly
probable transaction, cash flow hedge accounting is applied. Accordingly the portion
of the gain or loss on the hedging instrument that is determined to be an effective
hedge is classified as a change in other comprehensive income and recognized in the
cash flow hedge reserve in equity, while the ineffective portion of the gain or loss
on the hedging instrument is recognized in the separate profit or loss among other
operating expenses caption.
The amounts recognised as part of other comprehensive income are reclassified to
profit or loss in the period in which the hedged transaction affects profit or loss, for
example if a sale occurs or if there is a write-down.
If a hedging instrument expires or is sold,terminated or exercised without replacement,
or if it is no longer designated as a hedging instrument, or if the hedging instrument
no longer provides effective hedging against the risk the operation was established
for, the relevant portion of the cash flow hedge reserve is kept until the underlying
contract materialises.
When a transaction is no longer deemed probable, the gains or losses recognised in
shareholders’ equity (OCI) are immediately released to the Income Statement.ENAV
does not enter into derivative contracts for speculative purposes. With reference to
measuring fair value, ENAV complies with the requirements of IFRS 13 whenever
IFRSs require fair value measurement to be used for recognition and/or measurement
purposes or in providing disclosures with respect to a specific asset or liability. Fair
value represents the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement
date. The fair value of instruments listed on public markets is determined by referring
to the bid price at the reporting date.
The fair value of unlisted instruments is measured by reference to financial valuation
techniques.

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