Page 15 - ENAV eng_Relazione_Finanziaria_Annuale_2014

In this regard, in June the Company prepared the Performance Plan for the
second reference period and, after consultation with Italian authorities,
ENAC sent the Plan to the European Commission. Following a series of
comments from the Commission, the Company is revising its Plan and will
present it to the Commission by the end of July 2015.

Last but not least, to prepare for privatization the Company made great
efforts in its transition to IAS/IFRS and in related activities to adapt its
accounting system and management control model to best practices.

With regard to performance, foreign events last year undoubtedly
prejudiced the ENAV Group’s results. On the one hand, as mentioned
above, the socio-political crisis in North Africa and the consequent closing
of Libyan air space severely reduced billed traffic volumes compared to
forecasts, and on the other there were effects deriving from the substantial
difference between the programmed inflation used at the time of planning
and real inflation recorded at year-end. It should be remembered that the
methodology implicit in the Community’s economic performance scheme
provides that any differences between programmed inflation and real
inflation generate effects, whether positive or negative, on the Group’s
economic results. Considering that such difference at year-end was
negative by approximately 2%, the effect on last year’s income statement
amounts to a loss of ¤7.9 million, compared to a positive ¤14.2 million
reported in the 2013 financial statements.

Nevertheless, the negative effects of the above-described events were in
large part mitigated by steps taken by Group companies to safeguard their
economic-financial balance, including (with specific reference to ENAV)
in relation to the provisions of the National Performance Plan and the
Program Agreement.

For example, examination of the cost framework reveals that costs at the end
of 2014 were approximately 2% lower than calculated in the Performance
Plan. This result is highly significant in the calculation of performance if
one considers that, following the elimination of cost recovery provided by
the Community scheme, any differences between planned and final costs
are no longer applied to the charge via the balance, but are charged to the
service provider. In the case at hand, lower cost levels compared to those
calculated in the Plan generated approximately ¤10 million in the 2014
year-end result.

In addition to the positive effects deriving from methodical application of
the economic performance scheme in the year-end result, benefits were
also generated by excellent management, which, for the third consecutive
year, resulted in the awarding of a capacity bonus of ¤8 million. No less