Chairman’s message

Dear Terna Shareholders and Stakeholders,

the 2006 Annual Report marks an important step for Terna, that of consolidation. Consolidation of a company that is already strong and rich in experience and value and that has entered the market with a new image and a renewed structure, with many projects to be implemented and to be communicated. We have come a long way to the present, essentially pursuing two objectives: the first has been that of strengthening Terna’s presence and impact on the markets as an independent operator of the large electricity transportation grids, nationally and internationally. The second objective has been that of profoundly rethinking our mission and our values, to continue improving our relations with the community, the environment and the world surrounding us. We have also conceived a specific reference system for Terna for its human and professional conduct since our stakeholders continue to place the same trust in us as they did in the past, only more so.

To strengthen Terna’s presence on the market and increase its impact, first of all we aimed at greater competitiveness and professionalism of those who work in our company. A combination of knowledge, experience acquired over the years in this sector that is significantly strengthened by the use of the most advanced technology. In these twelve months we have developed the national grid and undertaken many activities abroad, in particular in Brazil, through our subsidiary Terna Participações.
For us, developing the grid has a broad meaning: it does not only mean building new lines in addition to the existing ones. Building new plants allows to implement "rationalization" measures that call for dismantling parts of the grid with positive consequences in terms of environmental impact and the new plants have improved technical characteristics that replace the old ones. The past and present challenge, even more so for the future, is that of having an electricity system which is safer, more efficient and reliable. This is the essential condition for favoring national competitiveness to the benefit of enterprises and citizens and of the countries where Terna operates. A top priority challenge.

Rethinking our mission and our values was a key aspect in elaborating Terna’s new ethical system. Several months of joint and coordinated work were required to draw up the new Code of Ethics, a milestone in the company’s relations with stakeholders and the community. At the same time, a large commitment was undertaken in drawing up and publishing the first sustainability report that brought Terna to being reconfirmed in the ethical rating it had previously reached when it belonged to the Enel Group. Today we are working on the new edition, but above all we continue to improve our activity’s environmental impact aspects. Even though we are pleased with the results, we are just as aware that sustainability, ethics, respect and responsibility are commitments to be pursued and enriched each day and are not merely transient superficial concerns.

Terna is a young, competitive company that has entered the market successfully and innovatively. It is responsible for an essential service: safely managing, 365 days a year, 24 hours a day, electricity flows on the national high voltage and extra high voltage transmission grid. At the same time, Terna aims at economic results and at creating value for shareholders.

These two "souls" make Terna a strategic company for the country’s interest, with a high and responsible socio-environmental profile; yet a company which also pursues industrial objectives and produces revenues for its shareholders. We strongly feel this responsibility towards shareholders and all stakeholders, to the point that we have coined a slogan in the claim of our advertising campaign: "an asset for the country". We believe in this role and wish to continue being viewed this way.

The Chairman

LUIGI ROTH