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ENAV S.p.A. Financial Statement

policies aimed at containing the cost of funding over time, by limiting the volatility
of results. The Company pursues this objective by systematically undertaking
negotiations with credit institutions, selected from among banks of top standing,
so as to optimise the average cost of debt. It also strategically diversifies financial
liabilities based on the type of contract, duration and rate conditions (variable/
fixed rate). During 2015, the average cost of bank debt stood at around 1.7%, which
was substantially in line with the previous year, whereas average debt recorded an
increase. This was influenced, inter alia, by the combined effect of the extent of the
use made of available short-time funding over the reference period, and the ongoing
general favourable trend in the interest rate market and the spreads applied.

Currency risk
The exposure to the risk on adverse fluctuations in the current level of currency rates
results from ENAV’s operations in currencies other than the Euro and could have a
negative impact on economic results and the capital figures in foreign currencies.
Despite the fact that the Company operates mainly on the Italian market, exposure
to currency risk essentially arises from cash flows relating to investments in other
currencies, mainly the US dollar, referring to the acquisition of a 12.5% stake in
the American incorporated company Aireon. It is noted that ENAV North Atlantic
currently holds a 5.41% shareholding in Aireon’s share capital; to complete the
purchase of the shareholding, the Company still needs to make two more payments,
the last of which by 2017, for an amount of US$ 22.9 million. It is noted further
that the third instalment that was initially envisaged for September 2015 has been
postponed to 2016, as set out in the addendum to the principal contract. In this
regard, the Company has entered into a forward flexitime contract for buying forward
the American currency for each of the payment tranches required by the agreement
to purchase said shareholding.
To a lesser extent, ENAV is exposed to currency risk relating to the contracts
entered into to provide unregulated services expressed in foreign currency (mainly
in Malaysian Ringitts and United Arab Emirates’ Dirhams). In order to manage the
residual exposure to currency risk, the Company has drawn up a Policy to manage
currency risk, and on the premise of a specific assessment on individual transactions,
different types of derivative instruments are used, especially swaps and forwards, as
well as currency options. No speculative activities are however permitted within the
scope of these policies. With regard to the fair value measurement of derivatives on
exchange rates, these are calculated on the basis of standard evaluation algorithms
and on market listings/contributions provided by a leading public info-provider. It
should be noted nonetheless that the risk arising from income accrued in a currency
other than the Euro, or from converting the assets and liabilities of ENAV subsidiaries
that prepare their financial statements in currencies other than the Euro, is not
normally subject to hedging.

ENAV - Annual financial report 2015 241