Minutes of the ordinary shareholders' meeting of Snam S.p.A. of 29 April 2015 The Ordinary Shareholders' Meeting of Snam S.p.A. began at 2 p.m.

Transcription

1 Minutes of the ordinary shareholders' meeting of Snam S.p.A. of 29 April 2015 The Ordinary Shareholders' Meeting of Snam S.p.A. began at 2 p.m. on 29 April 2015, in San Donato Milanese (MI), piazza Santa Barbara n. 7. In accordance with Article 11.2 of the Bylaws, Lorenzo Bini Smaghi took the chair, in his capacity as Chairman of the Board of Directors, who, with the unanimous consent of the shareholders' meeting, called the notary Carlo Marchetti to act as secretary, to whom he asked, again with the consent of those in attendance, that the information necessary for the meeting be provided. Therefore, the Secretary: - informed those present that an electronic voting system using a remote device had been adopted for the day's Shareholders' Meeting, with the intention of reducing the time taken for the counting operations. In the case of any technical problems in relation to voting using the remote device, voting would be carried out by a show of hands; - supplied, also by means of a brief explanatory film, the information necessary for the correct use of the remote control; - therefore recalled that those entitled to do so who were present in the room would be asked to express their vote using the specific remote voting devices provided to them when they registered and in this respect specified that: -- when asked to proceed to vote, the entitled person or their proxy should express their vote by pressing just one of the buttons on the remote device, labelled "FOR", "AGAINST" or "ABSTAIN". They should then immediately press the "OK" button. Until this last button had been pressed, the voter could change his or her vote, and the vote expressed would remain visible on the display until each voting session had ended; -- votes could be expressed within 1 minute of the start of each voting session; after this period of time voting would be declared to have closed; -- in the case of those entitled to vote who were present in person or through a proxy, and proxies representing more than one entitled person, the details of their individual proxies, or the groups of proxies for which they were called on to express a vote, would appear in succession on the display of the device; -- if the remote device could not be used for technical reasons, voting would take place by raising hands. Votes expressed in the room in ways other than those indicated would be void; 1

2 - informed those present that, in accordance with the current provisions, the call notice for the Meeting was published, in full, on the Company website on 27 March 2015, and on the same date a summary was published in the following newspapers: Il Sole 24 Ore, and, in English, in the Financial Times; - recalled that the agenda was as follows: 1. Financial statements of Snam S.p.A for the year ending on 31 December Consolidated financial statements at 31 December 2014 Directors' reports, reports by the Board of Statutory Auditors and the independent auditing firm. Required and consequent resolutions. 2. Allocation of the profits for the year and distribution of the dividend Long term monetary incentive plan. Required and consequent resolutions. 4. Policy on remuneration pursuant to article 123-ter of legislative decree no. 58 of 24 February Director appointment in accordance with Art of the Italian Civil Code. Required and consequent resolutions. - reported that, in addition to the Chairman, the Chief Executive Officer Carlo Malacarne and the following Directors were present: Sabrina Bruno, Alberto Clô, Francesco Gori, Yunpeng He Andrea Novelli, Elisabetta Oliveri, Pia Saraceno. The meeting was attended by the Chairman of the Board of Statutory Auditors, Massimo Gatto, and the Standing Auditors, Leo Amato and Stefania Chiaruttini (who arrived when works had already begun); Luigi Arturo Bianchi, Common representative of the Snam bond-holders (who arrived when works had already began) was in attendance; Stefania Boschetti, Massimiliano Formetta and Guido Corbetta, representing the independent auditing firm Reconta Ernst & Young S.p.A., appointed to audit the financial statements for the year and the consolidated financial statements of Snam as at 31 December 2014, were also present. - declared that share capital is 3,696,851,994 euros, divided into 3,500,638,294 shares without par value; - declared that those present numbered 1,742 for a total number of 2,166,423,616 shares, representing 61.89% of the voting capital; - pursuant to art. 13 of legislative decree no. 196 of 2003 Code on the protection of personal data, noted that the personal data (first and last name, place of birth, residence and professional qualifications) of those attending the Shareholders' Meeting were and would be requested in the forms and within the limits connected to the obligations, tasks and purposes set out in current law; said data would be included in the minutes of the Shareholders' Meeting, after manual and 2

3 automated processing, and could be the object of communication and dissemination, including abroad, also outside the European Union, in the forms and within the limits connected to the obligations, tasks and purposes set out in current law; - recalled that the list of names of those entitled to attend the meeting, on their own account or as proxies, indicating the number of shares held by each, and the delegating shareholder if appropriate, is available to the Shareholders' meeting and, accompanied by a list of the names of any persons who arrived after or left before each vote indicating the shares held by each, would be annexed to the minutes of the Shareholders' Meeting; before each vote, the number of participants in the voting procedure doing so on their own account, or through proxies, would be communicated; after each vote, its outcome would be announced; - informed those present that, as recommended by CONSOB, financial analysts, journalists and qualified experts would be enabled to follow the proceedings of the Shareholders' Meeting; - also informed attendees that pursuant to art. 5.2 of the Regulations for the meetings of the shareholders of Snam S.p.A, the Chairman's Office has been established, where Marco Reggiani, secretary of the Board of Directors, would be located, assisted by Stefano Sperzagni; - pointed out: that a system for the audio-visual recording of the proceedings was in operation in the room, solely for the purposes of assisting the preparation of the minutes; that the recording would be available, with a five minute delay, on the Company website, given that the attendees had expressed their consent; that pursuant to art. 4 of the Regulations for the meetings of the shareholders of Snam S.p.A., no recording devices other than those stated, nor photographic or similar equipment of any kind, could be used in the premises in which the Shareholders' Meeting was taking place; that simultaneous translation from Italian into English was provided; - recalled that, in accordance with Art. 7 of the Regulations for the meetings of the shareholders of Snam S.p.A.: -- requests to speak could be submitted to the Chairman's Office from the moment the Shareholders' Meeting was constituted until the moment debate on the corresponding item of the agenda was declared open; -- each entitled person could make a single speech on each item on the agenda; henceforth, the Chairman had set the maximum duration of each speech to 5 minutes on each item debated; in this way, all those entitled to do would have an adequate amount of time to speak and express their 3

4 opinion and the duration of the Shareholders' Meeting could be maintained within appropriate limits to respect all those present; -- response speeches were not permitted and, after debate had closed, only short declarations of voting intention were permitted, henceforth indicated by the Chairman to have a total duration of 2 minutes per subject, and he reserved the right to decide on any specific requests at the time; - the following was emphasised: -- if amendments to the resolutions formulated by the Board were proposed, or otherwise resolutions different than those formulated by the Board, the Board's resolution would be voted on first, and only if this resolution was rejected would the further resolutions be put to the vote; -- similarly, if motions for points on the agenda that had not been scheduled for discussion were presented, and if the Chairman decided to put them to a vote, any proposals formulated by the Chairman would be voted on first, and only if these were rejected would the proposals of the attendees be put to the vote; -- attendees' proposals would be put to the vote starting with the proposal presented by those who represent the highest percentage of capital. Only if the proposal put to the vote should be rejected, the next proposal, in order of capital represented, would be put to the vote; - finally, informed attendees that, regarding the day's Shareholders' Meeting, the requirements of civil law and of the regulations on regulated markets had been complied with. The Chairman therefore declared the day's Ordinary Shareholders' Meeting validly constituted in a single call and entitled to resolve on the items listed on the agenda. Continuing he then: - informed those present: -- that the Company had received no requests for the agenda to be supplemented or new proposals of resolutions, pursuant to the law and to art. 126-bis of Legislative decree no. 58 of 1998 (hereinafter also "CLFI"); -- that the attendees' entitlement to vote had been verified, based on the circumstances known to the Company and the declarations made by those present. In any event asked those present to report any deficiencies in entitlements to vote or exclusion from voting, or the existence of any shareholders' agreements, pursuant to the current law and regulations and the company By-laws. This in relation to all votes; - acknowledged that none of those in attendance had made any reports to that effect; At the request of the Chairman, and with the unanimous consent of those in attendance, the Secretary then provided additional information preparatory to the execution of the works of the day's Shareholders' Meeting, and namely: 4

5 - announced that: -- on 27 April 2015 the Company held 1,127,250 shares, equal to 0.03 % of the share capital; -- according to the information in the shareholder register on 27 April 2015 and from information received, those shareholders in possession of shares with voting rights that represented over 2% of the total shares issued were: - Cdp Reti : 28.98%; - eni S.p.A.: 8.25%; -- the Company was aware of the following shareholders' agreement published in accordance with the law on the Company's website: the shareholders' agreement between CDP, State Grid Europe Limited and State Grid International Development Limited, also regarding Snam, pursuant to art. 122 of the CLFI (Consolidated Law on Financial Intermediation) and art. 130 of the Issuer Regulations; -- regarding the questions formulated during the Shareholders' Meeting, the procedure would be: answers would be given after the conclusion of all the speeches on the items on the agenda and after any short pause needed to prepare the responses in a systematic way. At the end of the responses, the proposals on the agenda item would be put to the vote; - informed attendees that in relation to the right to ask questions in accordance with Art. 127-ter of the CLFI, no questions had been asked before the Shareholders' Meeting; - he recalled that, pursuant to the law, the company had appointed Georgeson S.r.l., represented here by Renato Di Vizia, as the subject (Representative) on whom those entitled might confer a proxy with voting instructions on all or some of the proposals on the agenda; the Representative was asked to specify, for each individual vote: the number of shares for which he did not intend to participate in voting pursuant to article 135 undecies of the CLFI (non conferment of instructions), and to make the declarations required by the applicable law in the case in which, providing the preconditions were met, he intended to vote against the instructions he had received; any interests pursuant to art. 135 undecies, subsection 4, of the CLFI. The Chairman then declared the works started and, before moving on to discuss the agenda: - informed those present that the Report by the Board of Directors containing the proposed resolutions had been filed at the Company's registered office, with Borsa Italiana S.p.A. and published on the Company's website according to law and sent to all those who had so requested; the printed document containing the aforementioned Reports, and the 2014 Annual Financial Report, the Information Document regarding the Long-Term Monetary Incentive Plan, 5

6 the 2015 Remuneration Report, the 2014 Report on Corporate Governance and Share Ownership, and the 2014 Snam Sustainability Report were also distributed at the entrance to the meeting room. - in relation to the nature of the items on the agenda, proposed to discuss the items in points 1) and 2) together. Naturally the votes would be separate for each item on the agenda. The Shareholders' meeting unanimously consented and the Chairman therefore moved on to discuss items 1) and 2) of the agenda. At the request of the Chairman, therefore, and with the unanimous consent of those in attendance, the Secretary then supplied some information on the obligations fulfilled with regard to the financial statement documentation and the activities of the Independent Auditing Firm, and specifically: - informed attendees that the booklet containing the Financial Statements of Snam S.p.A. as at 31 December 2014, the consolidated financial statements, the directors' report on operations and the report by the Board of Statutory Auditors and by the Independent Auditing firm, as well as the proposals of the Board of Directors to the Shareholders' Meeting regarding the approval of the financial statements and the distribution of the dividend had been filed at the registered offices of the company, (and) at Borsa Italiana S.p.A. and published on the Company website on 7 April 2015; the financial statement booklet had been delivered to those so requesting at the entrance to the meeting room; - informed those present, pursuant to Consob Communication no of 18 April 1996, that independent auditing firm Reconta Ernst & Young S.p.A. had employed 461 hours for a fee of 31, euros for the independent audit of the financial statements and for periodic audits, 111 hours for a fee of 7, euros 272 hours for auditing the consolidated financial statements and 272 hours for a fee of 18, euros for auditing the consolidated interim financial report. Informed also that the auditing company Reconta Ernst & Young S.p.A.: (i) had formulated a proposal for the adjustment of the fees regarding the execution of audit procedures in relation to the Snam's holdings in joint venture companies Gasbridge 1 B.V. and Gasbridge 2 B.V., the Independent Auditor of which is not part of the network of Reconta Ernst & Young, the sole auditor of the Snam Group; these fees totalled 14, euros; (ii) following the acquisition in December 2014 of the jointly controlled shareholding in TAG, had presented the Company with a proposal, related to carrying out activities connected with examining the documents produced by the external auditor of TAG, which is not part of the Reconta Ernst & Young network. The fees for the additional auditing activities mentioned above amounted to a total of 4, euros for the 2014 fiscal year (the annual remuneration for the fiscal years amounts to a total of 14,000 euros). The 6

7 procedures in question became necessary as part of the audit of the consolidated financial statements of the Snam Group as at 31 December 2014 according to the audit principles and criteria recommended by Consob of the consolidated financial statements of the Snam Group as at 31 December 2014, drawn up according to international accounting principles ( IFRS ). At the request of the Chairman the Chief Executive Officer, Mr. Malacarne, then read out the letter to the Shareholders and Stakeholders as given below: Dear Shareholders and Stakeholders, in 2014 Snam confirmed positive results, despite the continuation of the economic crisis, contingent causes linked to weather conditions and, in particular, the fall in consumption in the thermoelectric industry, which again, for the fourth year running, caused consumption of gas to fall in Italy. The demand in our country for gas has fallen from billion cubic metres in 2010 to billion cubic metres in 2014, to levels recorded at the end of the 1990s, with a reduction of 25.5% compared to 2010, which will be difficult to absorb in the short term. In this context, with falling domestic production and high dependency on gas imports, Snam has focussed its development strategy on interconnection capacity and the integration of European gas networks, in line with the long term strategy recently developed by the European Union. These aims represent our development drivers, a necessary challenge to ensure secure procurement and greater liquidity in the gas system, the essential precondition to be able to structurally align our gas prices to those of the major European countries. From this standpoint, in addition to further strengthening gas infrastructure in Italy, in the broadest perspective of effective interconnection with the European networks, in 2014 Snam concluded a major operation in the international field of strategic importance for our country. In December 2014 the process that brought Snam to acquire 89% of the economic rights of its stake in Trans Austria Gasleitung GmbH (TAG) for a consideration of 505 million euros, settled by increasing the share capital of Snam. TAG is the company that owns the Austrian section of the gas pipeline from Russia to Italy, through Ukraine, Slovakia and Austria, aimed at satisfying, primarily, Italy's gas import requirements. This transaction, which follows the recent acquisition of 45% of TIGF in France, 31.5% of Interconnector UK in a joint venture with Fluxys, in the United Kingdom, as well as the signature, at the start of 2014, of a Memorandum of Understanding (MoU) with this latter Belgian company to pursue growth opportunities in Europe, strengthen the group's leadership among infrastructure 7

8 operators at European level. Today Snam can rely on a new key asset in the East - West energy corridor, also in the perspective of a potential reverse flow towards Central Europe. In the year that has just ended, we have also provided continuity for the project to optimise our financial structure that started in 2013, aimed at making the structure more coherent with the needs of the business in terms of the duration of loans and exposure to interest rates, with major results in terms of cutting the overall costs of the debt. At 31 December 2014, fixed rate debt represented 69% of total financial indebtedness compared to 49% at the end of 2012 and 64% at the end of 2013; 76% of the debt is represented by bond issues. Here, in 2014 Snam successfully placed new issues for a total of 1.7 billion euros, further confirming the international market's appreciation of our business model. Thanks to the continuous attention (we pay) to operational and financial efficiency in 2014, we have confirmed positive results, which are even more significant when one considers that 2014 was the first year of the new regulation period, the fourth period, for the natural gas transport, regasification and distribution sectors. Gross operating margin (EBITDA) and pre-tax earnings (EBIT) total 2,776 and million euros respectively, substantially in line with the previous fiscal year's results. Net profits totalled 1,198 million euros, a 30.6% increase over The increase is due primarily to the reduction in income tax, followed, primarily, by effects connected to the adaptation to deferred taxation consequent on the recent declaration that the additional corporate tax applied to the natural gas transport and distribution industry (the so-called "Robin Hood Tax") was unlawful, the improvement in financial management, and the contribution of assets acquired as part of the business development strategy. Snam shares closed 2014 at an official price of 4.11 euros, a 1.9% increase compared to the price of 4.04 euros recorded at the end of last year, a better result than the Italian share price index (FTSE MIB: +0.2%) that reflects the market's appreciation of the solid foundations of the Company and its view of Snam's capacity to generate operational cash flow that can, over time, cover the financial requirements of the planned investments and sustain an attractive distribution of profits, in line with the strategic approach of the group. In 2014, Snam shares, already present in the most important world sustainability indices for businesses, including the Dow Jones Sustainability World Index, the FTSE4Good, the Climate Disclosure Leadership Index (CDLI) and the various ECPI and Vigeo indices, became part of the MSCI indices and of the United Nations Global Compact 100 (GC 100), which consists of the 100 enterprises that distinguished themselves globally both for attention to sustainability issues and for performance in the financial sphere. Apart from Snam, only four other Italian companies are included in the GC 100 index. 8

9 In the context of the values that define our group, which inspire the strategic thought and conduct of company business, in 2014, Snam's financial statements were awarded the "Oscar di Bilancio 2014" prize, in the "Listed Companies and Major Enterprises" category. For the group, this recognition represented confirmation of the efficacy of the reporting model adopted and of the many tools used for communication and reporting to our stakeholders, from the Annual Financial Report to the Sustainability Report, the Remuneration Report to the Corporate Governance report. In a changed energy context, the challenges that Snam is preparing to face in the next few years cannot not be based on a careful assessment of the dynamics of the gas markets and of the energy markets more generally. The aim of Snam's consistent investment plan, focussed on strengthening Italian gas infrastructure in line with the needs of the system, and the contemporaneous development at international level, is to promote ever greater integration of the European networks, and to consolidate Snam's role among the major integrated operators in Europe. In this journey, Snam must take a further step to strengthen its role as facilitator of the gas system, to develop and supply integrated services, through the coordinated use of various different infrastructures that are able to satisfy the needs of customers in terms of flexibility and the logistic availability of services. Then, the Chairman of the Board of Statutory Auditors read out the conclusions contained in the Report of the Board of Statutory Auditors to the Shareholders' Meeting pursuant to article 153 of the CLFI and Art of the Italian Civil Code, as specified below: Given the above, the Board of Statutory Auditors, based on the Financial Statements as at 31 December 2014, submitted to the Board of Directors on 11 March 2015 and again in the meeting on 3 April 2015, finds no reason to withhold its approval, and expresses its favourable opinion of the proposal for the allocation of profits and for the distribution of the dividend submitted by the Board of Directors. Following this, Stefania Boschetti, Partner of Reconta Ernst & Young S.p.A., at the request of the Chairman, read out the conclusive part of the Report of the Independent Auditing Firm on the financial statements, as given below: In our opinion, the financial statements of Snam S.p.A. as at 31 December 2014 comply with the International Financial Reporting Standards adopted by the European Union, as well as with the instructions issued implementing article 9 of legislative decree no. 38/2005; they are therefore drawn up clearly and represent the financial position, profit and loss and cash flows of Snam S.p.A. for the fiscal year that ended on that date. 9

10 The Directors of Snam S.p.A. have the responsibility of drawing up the report on operations and the report on corporate governance and share ownership, published in the "Governance" section of the website of Snam S.p.A., in accordance with the provisions of the law and regulations. It is our task to express an opinion of the coherence of the report on operations and the information set out in subsection 1, letters c), d), f), l), m) and subsection 2, letter b) of article 123-bis of legislative decree 58/98, presented in the report on corporate governance and share ownership, with the financial statements, as required by law. To this end, we have carried out the procedures indicated in audit principle 001 issued by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (Italian equivalent of association of chartered accountants) and recommended by Consob. In our opinion, the report on operations and the information set out in subsection 1, letters c), d), f), l), m) and subsection 2, letter b) of article. 123-bis of legislative decree 58/98, presented in the report on corporate governance and share ownership is coherent with the financial statements of Snam S.p.A. at 31 December The Secretary proceeded to read out the proposed resolutions of the Board of Directors regarding items 1) and 2) for the day's Shareholders' Meeting, as transcribed below. Dear Shareholders, you are invited to approve the Financial Statements of Snam S.p.A. as at 31 December 2014, ended with a profit of ,60 euros. Dear Shareholders, you are invited to: approve the Financial Statements as at 31 December 2014, ended with a profit of ,60 euros; reclassify the share premium reserve as a legal reserve to bring the latter to the limit set out in article 2430 of the Italian Civil Code; allocate the profit of 470,470, euros to the shareholders as a dividend of 0.25 euros per share in circulation on the coupon payment date, excluding treasury shares in the Company portfolio on that date, using all of the Profit from previous years and for the remaining part the share premium reserve, until the total amount of the dividend is reached; resolve to pay the dividend of 0.25 euros due on each share from 20 May 2015, with coupon payment date set for 18 May 2015 and record date of 19 May 2015." Following this, discussion began. 10

11 Mr. Borlenghi introduced himself as a small but faithful shareholder, always present at meetings, and highlighted some of the data from the financial statements discussed today that showed revenues that were basically stable and net profits growing strongly as compared with last year (+ 30.6%), also thanks to the continuous attention and operative and financial efficiency of the company; results that were even more positive considering the continued economic crisis and the reduced gas consumptions. He therefore expressed his appreciation of the dividend distributed, which could perhaps have been larger considering the increased taxation of financial returns and the abolition of the tax on commercial transactions. Finally, he appreciated the pursuit of the investment programmes with the acquisition of TAG - which enabled the promotion of increasing integration of the European networks and of the growing contribution made by foreign associates. He concluded by asking what the forecast results for 2015 were, also considering the negative effects of the continued economic crisis on consumption and employment. Mr. Gola highlighted how, under the firm guidance of Mr. Malacarne, Snam continued, over the years, to be one of the best-managed companies and, therefore, one of the most profitable for shareholders on the Italian stock market. He also expressed his appreciation of the appointment of Bini Smaghi as Chairman, a person held in very high esteem both in the banking world - as was shown by the forthcoming appointment to the position of Chairman of Société Générale - and in politics. The Company therefore appeared to be managed by very valid people and confirmation of this came from the entity of the profits, which had risen to the considerable figure of 1,198 million euros against a turnover of 3,566 million. Mr. Gola then paused to discuss some specific data from the financial statements, first and foremost he noted the positive effects of the February 2015 sentence of the Constitutional Court, which ruled at anti-constitutional the "Robin Hood Tax"; he asked whether it was correct that these effects had been recorded on the 2014 financial statements, or whether this was a violation of the principle of non-retroactive application of the sentence. As regards the acquisition of AES, the gas distribution company in the province of Turin, he asked what the purchase price was of the residual outstanding capital and enquired about the forecasts for the current year in terms of turnover and profitability. Also as regards the mentioned acquisition of TAG, the company that manages the gas pipeline connecting the border between Slovakia and Austria, he asked about forecasts in terms of turnover and profitability; he also asked if Cassa Depositi e Prestiti - which with the transfer of this shareholding acquired an interest in Snam, thereafter reducing it to below 2% - had made any further sales of Snam shares. As regards the regasification plant of Panigaglia, Mr. Gola pointed out that the plant had for some time recorded drastic reductions in turnover and what was now zero profitability; he asked if the plant was still 11

12 economically worthwhile, hoping that a restructuring operation could take place as soon as possible, to take it back to profitability, or alternatively to close it. He therefore made some general comments on the rather poor presence of regasification plants in Italy, highlighting that this was also due to the very lengthy bureaucratic requirements, which - both due to the authorisation procedures required with town, provincial and regional councils and to natural restrictions - prevented major foreign investments from being made in Italy. He concluded by asking for updates on the trend of operations during the first quarter and announcing that he would be voting in favour of approval of the financial statements. Mr. Bove pointed out that if Italy were to travel at the same speed as Snam, it would have left the crisis behind it some time ago; perhaps, in the last seven terrible, very long years, the country had been lacking a chief of staff fit for the extraordinary tasks that the times required and which, on the other hand, had been and is available to Snam. Snam's results, Mr. Bove stressed, were the result of forward-looking choices along with major investments that had enabled the difficulties to be faced and action to be taken to avoid any cyclical repetition. After having stated his hope that Italy was also facing new times (as the albeit weak signs of recovery allow us to hope), the shareholder expressed his satisfaction over the Company's trend and announced that he would be voting in favour of all items on the agenda. He then pointed out that confirmation of the dividend policy for FY 2014 too would strengthen the faith of the minor shareholders with regards to the Company and its directors. Mr. Bove then asked if the worsening of international tension, which had resulted in a real crisis, particularly in Eastern Europe and the Middle East, would affect Snam's performance and if so, to what extent. He also asked about the forecast effects of the aforesaid declaration of the anti-constitutional nature of the Robin Hood Tax and the Group's growth policy abroad. He then recalled the recent approval by the European Council of the Energy Union project, intended to significantly reduce the expenses of consumers, public administrations, businesses and families; on this point, he asked about the management's forecasts with specific reference to possible impacts on Snam. Lastly, Mr. Bove recalled that a great many opinionists believed that one of the major hindrances to the company's development and to the attraction of foreign capital was what is referred to as the "NIMBY" ("Not In My Back Yard") syndrome and, therefore, the phobia that surrounds any new work, particularly in the energy sector; he asked if Snam's experience confirmed these fears and how, also in educational and informative terms, the phenomenon could be reduced or halted. 12

13 Ms. Colombo, representing Etica SGR, recalled that the latter was participating in the Shareholders' meeting as investor for the third year running and was attentive to the company's economic and financial performance, as well as its social and environmental success and therefore aimed to draw management's attention to certain aspects relating to the company's sustainability, with a view to ensuring positive, profitable dialogue that would last over time. This year too, Etica SGR stresses the commitment and attention paid by Snam in reporting all aspects of the business activity and in the preparation of a complete Sustainability Report made available to the Stakeholders before the Shareholders' Meeting: Snam is one of the best Italian companies in terms of the most significant environmental performance reports: the data of the CDP - Carbon Disclosure Project, confirm that as regards climate change, Snam has improved its performance indicators. Etica SGR also appreciated Snam's commitment, together with that of very few other businesses, to answering the questionnaire of said CDP in relation to water management; on this point, it was hoped that the Sustainability Report would provide greater detail, yet acknowledged that water was not an essential aspect of the company's business. Etica SGR also asked that attention be paid to environmental matters also as regards the supply chain; it therefore appreciated the integrations made on the point in 2014 and asked that environmental factors be considered in selecting and monitoring suppliers. In terms of human rights and the respect of workers rights, Etica SGR appreciated the commitment made by Snam and its participation in the working groups promoted by Global Compact. In view of these elements and the Company's entrance into the UN Global Compact 100 index, Etica SGR asked, like last year, for a concrete commitment to adopt a specific policy on the matter of compliance with human rights, with quantitative objectives to be achieved and specified in the Sustainability Report, which may then result in the obtaining of an internationally-recognised certificate, such as the SA Etica SGR then continued by asking for an update on the Italgas affair and, in particular, if Snam envisaged implementing measures, over and above those already existing, for the prevention of similar events. As then regards the allocation of the profits for the year, Etica SGR positively assessed the Snam dividends policy, but, like in the past, expressed its preference for greater allocations to reserves for greater sustainability of investments over time, which constituted the essential part of the development of Snam's business. The Chairman then moved on to discuss item 3) on the agenda of the Shareholders' meeting and in this respect declared that the information document on the Long term monetary incentive plan", drawn up based on the provisions of article 114-bis of the CLFI and article 84-bis of the Issuers' Regulations (adopted by Consob with resolution no of 14 May 1999 and subsequent amendments), introduced with Consob resolution no of 23 December 2011, had 13

14 been filed at the registered offices of the company, with Borsa Italiana S.p.A. and published on the Company website on 27 March 2015; the document was delivered at the entrance to the meeting room and had been sent to those so requesting. The Secretary proceeded to read out the proposed resolution of the Board of Directors regarding item 3) for the day's Shareholders' Meeting, as transcribed below. Dear Shareholders, We therefore invite you to resolve on the following resolution: The ordinary Shareholders' Meeting, pursuant to and for the purposes of article 114-bis of the CLFI, resolves to approve the Long Term Monetary Incentive Plan in the terms and according to the conditions described in the Information Document, conferring on the Board of Directors all powers necessary to implement the Plan, also through subjects delegated to do so, including the powers to i) proceed to make the annual allocation of the incentive for the Chief Executive Officer; ii) approve the regulations for each annual allocation; iii) identify the Beneficiaries based on the defined criteria; iv) as well as defining all other terms and conditions for the implementation of the LTMI Plan, to the extent that this does not conflict with the provisions of this resolution. Following this, discussion began. No-one took the floor. The Chairman therefore moved on to the discussion of item 4) on the agenda of the Shareholders' Meeting and in this regard: - declared that the 2015 Report on Remuneration had been filed at the company's registered offices, with Borsa Italiana S.p.A. and published on the Company's website on 7 April 2015; he also recalled that the Report had been delivered at the entrance to the meeting room and sent to all those who had so requested; - passed the floor to the Chairwoman of the Remuneration Committee Ms Elisabetta Olivera, representing the Remuneration Committee (composed also of Directors Andrea Novelli and Pia Saraceno), for all possible further information on the presentation of the Report approved by the Board of Directors in its meeting on 11 March 2015, and on the principal activities carried out by the Committee during 2014, to whom he passed the floor for a short summary of the contents of the Report. The Chairwoman of the Remuneration Committee then read out the report transcribed below. 14

15 "Dear Shareholders as in previous years, we bring to your attention the Remuneration Report, with which we intend to assure you of the maximum transparency regarding the structure and quality of the remuneration systems adopted by the Company, also in line with the provisions of the Consolidated Law on Finance which requires listed Companies to make their Remuneration Report available to the public. As Chairwoman of the Remuneration Committee, and jointly with directors Pia Saraceno and Andrea Novelli, who make up the Committee, I have assumed the obligation of guaranteeing that the remuneration system is aligned with international best practice and with European and Italian law, and with it to contribute to support and promote the development of the Company in coherence with its strategic plan. This year, too, it proved useful to listen to the indications of improvement on remuneration Policy, and on the Report that illustrates it, confirming our desire to install a dialogue with all stakeholders that is transparent, constructive and ongoing. Thanks to this dialogue, suggestions and indications have emerged to further improve the transparency and readability of the Report, which have been implemented, broadening the graphic illustrations, introducing an initial summary section and inserting further information on the company results. The guidelines of the remuneration Policy for 2015, on which today's Shareholders' Meeting is called on to express itself, are illustrated in the first sections. These guidelines, confirmed in continuity with those adopted in 2014, have been updated with some new elements. In particular, the proposal, extensively elaborated by the Committee and approved by the Board of Directors, has developed in the direction of strengthening the link between Snam's strategic objectives and the variable incentive systems, at the same time improving the alignment between the interests of the management and the creation of value for the shareholders, over a medium to long time frame. The proposal to introduce Total Shareholder Return, widely used in international practice as a performance indicator for the Long Term Incentive Plan, is in line with these aims. Today's Shareholders' Meeting is called on to express its opinion with reference to the specific plan made public, based on the indications in the current regulations. The overall intent of the Snam remuneration policy is to be a primary tool to attract, retain and motivate a management equipped with high professional qualities, recognising the responsibilities attributed to them, the results achieved and the quality of their contribution, promoting the creation of value over the medium and long term. 15

16 The Secretary proceeded to read out the proposed resolution of the Board of Directors regarding item 4) for the day's Shareholders' Meeting, as transcribed below. Dear Shareholders, In an advisory capacity, you are invited to approve the Remuneration Report pursuant to subsection three of article 123-ter of the CLFI." Following this, discussion began. Ms. Colombo reported that Etica SGR had this year too appreciated the level of detail of the information contained in the document; he asked for more quantitative details on the parameters comprising "investments" and "operative efficiency" identified as indicators to which, amongst others, the annual incentives of the Chief Executive Officer and managers with strategic responsibilities are to be linked. Etica SGR also asked that the introduction of incentives connected with environmental matters and, in particular, management of climate change be taken into consideration also for the senior managers mentioned, extending a practice that was already implemented in Snam for other professional roles and by 75% of competitors worldwide. Finally, Etica SGR stressed the importance of communication, in corporate documents, of the data relating to the ratio of the average remuneration of full-time Snam employees with that of the Chief Executive Officer: as well as being useful to the analyses of Etica SGR, this information was also particularly important internationally, as was confirmed by the proposed amendments in this respect of the shareholders' rights directive, which - with a view to greater evidence of the correlation between total remuneration and the creation of value in the long-term - provides precisely for detailed information on all criteria and all choice methods used in the same criteria by which remuneration is determined. It concluded by asking that consideration be taken of these remarks for forthcoming years, with Etica SGR trusting that they may be interpreted as a further stimulus and a point for mutual enrichment as part of the dialogue established for years with the Company. Mr. Croce expressed his agreement with the last request made by Etica SGR, pointing out that he believed that the most significant criterion was the ratio of the remuneration of the Chief Executive Officer and the average remuneration of the first category of permanent employees and fixed-term employees. 16

17 The Chairman therefore moved on to the discussion of item 5) on the agenda of the Shareholders' Meeting. The Secretary recalled that on 26 January 2015, at the proposal of the Nomination Committee and by resolution approved by the Board of Statutory Auditors, the Board of Directors co-opted Yunpeng He as the new, non-executive, non-independent member of the Board of Directors, replacing Director Roberta Melfa. The new Director was appointed by the reference shareholder CDP RETI, on the basis of shareholders' agreement reached following the entrance of State Grid Europe Limited into the ownership structure of CDP RETI. In accordance with the first subsection of Art of the Italian Civil Code, the office of said Director expired at the day's Meeting. A director therefore needed to be appointed who would remain in office until expiry of the current Board of Directors and, therefore, until the Shareholders' Meeting convened to approve the financial statements as at 31 December It should be remembered that, since this was a mere integration of the Board of Directors, in accordance with article 2386 of the Italian Civil Code, and article 13.6 of the Company's By-laws, the Shareholders' Meeting was called on to vote with the majorities required by the law and in compliance with the principles of composition of the Board established by the law, without the application of legal and statutory provisions regarding slate voting. He then proceeded to read out the proposed resolution of the Board of Directors regarding item 5) for the day's Shareholders' Meeting, as transcribed below. Dear Shareholders, you are therefore asked to please confirm Yunpeng He as Director, who shall remain in office until expiry of the current Board of Directors and, therefore, until the Shareholders' meeting convened to approve the Financial Statements as at 31 December Following this, discussion began. No-one having requested the floor, at 3.02 p.m., the Chairman suspended the meeting to allow for the preparation of the answers to the questions raised on the items on the agenda of the day's Shareholders' meeting and at 3.20 p.m. the Chairman resumed the meeting and passed the floor to the Chief Executive Officer. The Chief Executive Officer, Mr. Malacarne, first recalled that the LNG sector was suffering, throughout Europe, the commercial conditions and, notably, the competition offered by the significantly lower Asian prices, with the consequence that a great many of the European regasification plants were operating at reduced capacity. This is why, with regards to the Panigaglia 17

18 plant, a partial conversion project had been launched based on the combining of the original use for the winter emergency period, with new forms of use such as the so-called "Small Scale Service", namely the refuelling of ships and the automotive industry. Mr. Malacarne then specified that as regards the Robin Hood Tax, the benefit posted in 2014 only related to the reduction of debts deriving from deferred tax, which, therefore, would have been paid in the future; he then stressed that from the abrogation of the tax, which confirmed the Company's approach on the point, estimated benefits were expected of approximately 90,000,000 euros. He then noted that CDP Gas, which had become a shareholder through the transfer of TAG, had deposited shares accounting for 1.12% of the share capital for the day's Shareholders' meeting. Then pausing to discuss the TAG operation further, Mr. Malacarne specified that for this company, results were expected to be in line with those of 2013 year in which revenues came to approximately 300,000,000 euros and EBIT stood at around 40%. As regards AES, Mr. Malacarne recalled that the operation had not been implemented by means of acquisition, but rather by means of the application of a non-proportional breakup and declared that the company's annual turnover for the gas sector came to approximately 75 million euros with profitability in line with that of Italgas. With reference to that to be declared after the Board of Directors' meeting of 13 May on the results of the first quarter of 2015, he pointed out that at present, it was expected that operating results would basically continue to be in line with Mr. Malacarne then reminded Etica SGR that the dividend distributed limited neither the asset structure of the Company nor currently envisaged investments in maintenance and development; indeed, it ensured close attention to maintaining the financial flexibility envisaged by the investment plan and he recalled, on this point, that the Snam business model generated cash flow that enabled both the investment plan and the dividend allocation to be supported. On this point, he concluded by highlighting the fact that the RAB index that measured the ratio of debt and asset value, was stable at around 52%. As regards the Italgas affair, Mr. Malacarne first declared that at the end of the first six months of Receivership the Court had extended, as was envisaged by the law, the prevention measures for a further six months, asking the Receivers to prepare a plan that would identify the action to be taken, including through the establishment of a technical round table with the Company. He then recalled that, in line with the preventive nature of the measure, the receivers were operating in the management in complete compliance with the strategic plan, the budget and the Group procedures and, therefore, there were no elements that could prevent or prejudice the financial and operative consolidation of Italgas. Snam, the Chief Executive Officer stressed, acknowledged the measure and assured maximum attention to the implementation of prevention measures, first and foremost 18

19 by strengthening the reputational analysis of suppliers right from the very first contact. In order to prevent all potential risk, a reputational database had been prepared, which allowed for the verification, at any time and with absolute transparency, of the supplier's position with respect to corruption, Mafia and similar. As regards the "NIMBY syndrome", Mr. Malacarne acknowledged that this was a hindrance but stressed the key role played in this respect by the market operators' approach; Snam did everything within its power to share new projects with the local institutions sufficiently in advance and was developing programmes, including in schools, for the dissemination of information and awareness to matters of energy and gas, like the "stories that tell the future" programme. The Chairman of the Remuneration Committee, Ms. Oliveri, then took the floor to answer the questions raised on remuneration, specifying that the parameters of "investments" and "operative efficiency" consisted of the following: the first was structured into two components, one referring to total expenditure with respect to budget and the other to the achievement of specific, pre-established milestones, in five of the most important projects in which the Group companies are involved; for the operative efficiency target, reference was made to the total of the fixed costs that can be controlled and managed within the Group with respect to the budget. In thanking Etica SGR for the ideas on the introduction of further parameters connected with climate change and the ratio of the remuneration of the Chief Executive Officer with that of the employees, he assured that these would be considered although there were some critical issues involved in their application. He particularly highlighted the difficulties in identifying, as regards climate change, objectives that were significant and measurable and that could be connected with the actual incidence of managerial action, particularly at a senior level. He then pointed out the need, in terms of the ratio of senior and other remuneration, to identify an applicable method. In reply, Mr. Croce recommended that this latter aspect, which had already been raised in the past, be duly considered. The Chairman then asked the Chairman's Office if there were any requests from shareholders to make voting declarations on the items on the agenda of the Shareholders' meeting and reminded those present that no replies were permitted, only declarations for a total of 2 minutes. He acknowledged that no shareholder had requested the floor and at 3.40 p.m. declared closed the discussion of the items on the agenda for the day's Shareholders' Meeting and, with the consent of those present, asked the Notary to proceed to carry out the voting operations on the aforementioned items of the agenda. 19

20 The Secretary then: - reminded shareholders of the voting methods and recommendations; - acknowledged that those present numbered 1,744 for a total number of 2,169,149,140 shares, representing 61.96% of the voting capital; - put to the vote (at 3.40 p.m.) the proposal of the Board of Directors on item 1) on the agenda for the Shareholders' Meeting, as transcribed above. The resolution was approved by a majority of the Shareholders. Abstained: 3,659,257 shares. In favour the remaining no. 2,165,489,883 shares. All as detailed in the annexes. Having proclaimed the results, with those in attendance not having changed, he put to the vote (at 3.41 p.m.) the proposal of the Board of Directors on item 2) on the agenda for the Shareholders' Meeting, as transcribed above. The resolution was approved by a majority of the Shareholders. Against: 4,928,850 shares. Abstained: 4,945,018 shares. In favour the remaining no. 2,159,275,272 shares. All as detailed in the annexes. Having proclaimed the results, with those in attendance not having changed, he put to the vote (at 3.42 p.m.) the proposal of the Board of Directors on item 3) on the agenda for the Shareholders' Meeting, as transcribed above. The resolution was approved by a majority of the Shareholders. Against: 58,307,042 shares. Abstained: 3,760,969 shares. In favour the remaining no. 2,107,081,129 shares. All as detailed in the annexes. Having proclaimed the results, with those in attendance not having changed, he put to the vote (at 3.43 p.m.) the proposal of the Board of Directors on item 4) on the agenda for the Shareholders' Meeting, as transcribed above. The resolution was approved by a majority of the Shareholders. Against: 59,399,694 shares. Abstained: 4,112,451 shares. 20