Page 145 - ENAV eng_Relazione_Finanziaria_Annuale_2014

Notes to the Consolidated Financial Statements of the Enav Group 143

Currency risk

Currency risk arises from the possibility of adverse changes in exchange
rates between the euro and the leading foreign currencies with resulting
negative changes on items of the income statement and balance sheet
denominated in foreign currency. The ENAV Group operates mainly on the
Italian market and therefore has only a limited exposure to currency risk.
The present exposure to currency risk essentially arises from cash flows
relating to investments in foreign currency, principally the US dollar, for
the purchase of the investment in the US registered company Aireon LLC,
which has been hedged by entering a forward contract for the purchase
of US dollars for an amount corresponding to the consideration agreed
for the purchase of that investment. Further details may be found in note
32 on derivative hedging contracts. In addition, the consolidated financial
statements are subject to the currency risk inherent in the balances used
for consolidatinginvestees denominated in a currency other than the euro.
Currency risk management is pursued as part of a Group hedging policy
based on a specific assessment of transactions, which normally also
requires the use of derivative financial contracts.

Litigation risks

Litigation of a fiscal, administrative, civil and labor nature is followed by
the competent functions of the ENAV Group, which for the preparation
of these financial statements have drawn up a complete and exhaustive
description of the various civil, administrative and labor law proceedings.
The Group has carried out a precise assessment of the risk of an adverse
outcome in these proceedings, from which the need emerged to prudently
set up specific provisions for those disputes in which an adverse outcome
is considered probable and is reasonably quantifiable. In those cases where
an adverse outcome is only considered possible, no specific provisions
were recognized, in accordance with the accounting standards used to
prepare the financial statements.

At the present time it is not considered that the conclusion of the
outstanding disputes will lead to significant costs for the Group other than
the amounts provided for this purpose at 31 December 2014.

Judicial investigations and proceedings

The year ended 31 December 2014 was characterized by the continuation
of the steps already taken in previous years designed to protect the Group
in respect of certain pending judicial actions.

The parent company has brought a civil action in the criminal proceedings
against a former managing director and former executive of the Company for
alleged offences pursuant to articles 319 and 321 of the Italian criminal code.
The proceeding against the former managing director for alleged complicity
in the offence pursuant to article 7, paragraphs 2 and 3 of Law no. 194/1975
and article 4, paragraph 1 of Law no. 659/1981 has been joined for reasons
of connection with this proceeding, which is currently at a preliminary stage,