PRINCIPLES FOR THE DRAFTING OF THE FINANCIAL STATEMENTS

exercising management and coordination activities and with other companies subject to it.

Significant events occurring after the end of the financial year, the proposed allocation of the year's result, and the total amount of commitments, guarantees and contingent liabilities not shown in the balance sheet are disclosed in specific sections of these Explanatory Notes.

Please note that KPMG S.p.A. performs the statutory audit pursuant to Article 14 of Legislative Decree 39/2010.

Pursuant to Article 2497 et seq. of the Italian Civil Code, the Company is subject to the direction and coordination of RFI - Rete Ferroviaria Italiana S.p.A., and therefore, the Explanatory Notes include a summary of the essential data of the last financial statements of this company.

PRINCIPLES FOR THE DRAFTING OF THE FINANCIAL STATEMENTS

The annual financial statements were prepared in accordance with legal provisions, supplemented by the OIC national accounting standards, without any exceptions or waivers.

The items in the financial statements were valued according to the general principles of prudence and accrual, on a going concern basis, and taking into account the economic function of the asset or liability item considered, where compatible with the provisions of the Italian Civil Code and the OIC accounting principles. The principles of consistency in valuation criteria, relevance and comparability of information were also respected.

In application of the principles mentioned above:

The elements that make up the individual asset or liability items were valued separately, to avoid the possibility that capital gains of some items could offset capital losses of others. In particular, gains have been included only if the gain materialised by the end of the financial year, while risks and losses pertaining to the financial year were taken into account, even if they became known after the end of the financial year.

Income and expenses pertaining to the year were taken into account regardless of the date of receipt or payment. Accrual is the time criterion by which positive and negative income components are charged to the profit and loss account for the purpose of determining the result for the year. The directors conducted a forward-looking assessment of the company's ability to be a functioning economic entity intended to generate income over a foreseeable future period of at least twelve months from the reporting date. The assessment conducted did not identify any significant uncertainties with regard to this capacity.

The rights, obligations and conditions were identified based on the contractual terms of the transactions and their alignment with the accounting standards to ascertain the correctness of the recording or removal from the balance sheet and profit and loss account.

The valuation criteria did not change year-on-year to achieve a homogeneous measurement of the Company's results over the years.

During the year, there were no exceptional cases that made it necessary to derogate from the valuation criteria, pursuant to Article 2423, Section 5, of the Italian Civil Code, insofar as they were incompatible with the true and fair representation of the Company's financial position and economic results.

Also, assets were not revalued during the year pursuant to special laws on the subject.

The relevance of individual items was judged in the overall context of the financial statements. Both qualitative and quantitative elements were taken into account to quantify relevance.

The corresponding values as at 31 December 2020 are shown for each item in the Balance Sheet, Profit and Loss Account and Cash Flow Statement. If the items were not comparable, those for the previous year were adjusted providing the relevant comments in the Explanatory Notes for the pertinent circumstances.