Minutes of the ordinary Shareholders' Meeting of Snam S.p.A. on 26 March 2013

Transcription

1 Minutes of the ordinary Shareholders' Meeting of Snam S.p.A. on 26 March 2013 On 26 March 2013, at 10:40, in San Donato Milanese (MI), at Piazza Santa Barbara 7, the ordinary session of the Shareholders' Meeting of Snam S.p.A. was held, the extraordinary part of the agenda, which was separately minuted, having already been discussed. Pursuant to Article 11.2 of the Bylaws, the meeting was chaired by the Chairman of the Board of Directors, Lorenzo Bini Smaghi; with the unanimous consent of the Shareholders' Meeting, Piergaetano Marchetti, the Notary, acted as secretary for the ordinary session; the Chairman reiterated all the statements made at the beginning of the meeting, which are reproduced below: - a remote-control electronic voting system would again be used at this Shareholders Meeting in order to shorten the vote-counting process. The necessary information on how to correctly use the remote control given out during registration was provided at the beginning of the proceedings with the aid of a film and through the Notary, and attendees were informed that in the event of any technical problems with the remote-control voting system, votes would be taken by a hand count; - in accordance with current legislation, the notice of convocation for the Shareholders Meeting had been published on the Company s website and in the following daily newspapers on 13 February 2013: Il Sole 24 Ore, and, in English, the Financial Times; - the agenda was as follows: Extraordinary part (Omissis) Ordinary part 1. Separate financial statements of Snam S.p.A. as at 31 December Consolidated financial statements as at 31 December Reports from the Directors, the Board of Statutory Auditors and the External Auditors. Related resolutions. 2. Allocation of net profit for the period and distribution of dividends. 3. Compensation policy pursuant to Article 123-ter of Legislative Decree No. 58 of 24 February 1998.

2 4. Determination of the number of members of the Board of Directors. 5. Determination of the term of office of the directors. 6. Appointment of the directors. 7. Appointment of the Chairman of the Board of Directors. 8. Determination of the remuneration of the directors. 9. Appointment of the statutory auditors. 10. Appointment of the Chairman of the Board of Statutory Auditors. 11. Determination of the remuneration of the Chairman of the Board of Statutory Auditors and of the standing auditors. - as well as the Chairman, Chief Executive Officer Carlo Malacarne and the following directors were present: Davide Croff, Roberto Lonzar, Roberta Melfa, Andrea Novelli, Elisabetta Oliveri, Renato Santini and Mario Stella Richter; the Chairman of the Board of Statutory Auditors, Massimo Gatto, was also in attendance; standing auditors Roberto Mazzei and Francesco Schiavone Panni sent their apologies; - also present were Stefania Boschetti and Massimiliano Formetta as representatives of Reconta Ernst & Young S.p.A., the company tasked with auditing the separate and consolidated financial statements of Snam as at 31 December 2012; - the share capital was 3,571,187, and consisted of 3,381,638,294 shares without par value; - pursuant to Article 13 of Legislative Decree no. 196 of 2003, "Data Protection Code", the personal data (name, surname, birthplace, address and professional qualifications) of those present at the Shareholders Meeting had been and would be requested as per and within the limits of current legislation. Having been manually and automatically processed, these data would be included in the minutes of the Shareholders Meeting and could be communicated and disseminated abroad, including outside the European Union, as per and within the limits of current legislation; - the list of names of those with voting rights participating in the meeting in person or by proxy, indicating the number of shares held by each person and, where appropriate, the shareholder awarding the proxy, was available to the Shareholders Meeting and would be attached to the minutes of the meeting, complete with the names of those who arrived after or departed before each

3 vote and the number of shares held by each of these people. The number of people voting in person or by proxy would be announced before each vote, and the outcome of each vote would be declared; - as recommended by Consob, financial analysts, journalists and experts were able to observe the Shareholders Meeting; - pursuant to Article 5.2 of the Regulations, the office of the Chairmanship was established, in which Marco Reggiani, secretary of the Board of Directors, was assisted by Stefano Sperzagni; - an audiovisual recording device was in operation in the room for the sole purpose of facilitating the minute-taking process; - with the participants consent, this recording would be made available on a five-minute delay on the Company s website; - pursuant to Article 4 of the Regulations, no recording equipment of any kind, excluding the device already mentioned, nor cameras or similar devices, could be used at the location of the Shareholders' Meeting; - a simultaneous interpretation service from Italian into English was available; - pursuant to Article 7 of the Regulations: -- requests to speak could be submitted to the office of the Chairmanship from when the Shareholders' Meeting began until the debate on a particular agenda item had been declared open; -- each individual could speak only once on each agenda item; the Chairman set the maximum duration for each speech on each agenda item at five minutes. This would give all attendees a fair amount of time in which to speak and express their opinion, and would also limit the duration of the Shareholders Meeting appropriately for all those present; -- replies were not permitted and, after the end of the debate, explanations of votes would be allowed only for a total of two minutes for each person, with the Chairman reserving the right to decide at the time if there were any specific requests; - if amendments to the proposals put forward by the Board or proposals other than those put forward by the Board were submitted, the Board's proposal would be put to the vote first and, only if said proposal were rejected, the other proposals would subsequently be put to the vote; similarly, if points of order

4 were submitted for which no debate was scheduled, and if the Chairman decided to put these points of order to the vote, any proposals put forward by the Chairman would be put to the vote first and proposals by attendees would be put to the vote only in the event that the Chairman s proposals were rejected; the attendees' proposals would be put to the vote starting from the proposal submitted by those representing the greatest percentage of share capital. The next proposal in order of share capital represented would be put to the vote only in the event that the first proposal were rejected; - the requirements stipulated by civil legislation and provisions on regulated markets had been met in relation to the current Shareholders Meeting; - the Company had not received any requests to add to the agenda or any new draft resolutions pursuant to current legislation and specifically Article 126-bis of the Consolidated Finance Act (TUF); - checks were carried out, based on the circumstances known to the Company and the declarations made by the attendees, on the attendees' entitlement to vote; attendees were asked to declare, pursuant to the provisions of law, the regulations in force and the Bylaws, the existence of any situations that meant they were not entitled to vote or had been barred from voting and the existence of any shareholder agreements. This was in relation to all votes; - as at 22 March 2013, the Company held 2,723,350 treasury shares, representing 0.081% of share capital; - according to the shareholder register as at 22 March 2013 and to information received, the following shareholders held shares with voting rights representing more than 2% of the total number of shares issued: - CDP Reti S.r.l.: 30.00% - Eni S.p.A.: 20.23% - The Company was not aware of any shareholder agreements, nor had such agreements been published pursuant to law; - questions asked during both the ordinary and extraordinary sessions of the Shareholders' Meeting would be dealt with as follows: replies would be given after the end of all speeches on the agenda items, possibly after a brief pause required to structure the answers properly. At the end of the answers, the proposals on the various agenda items would be put to the vote separately;

5 - the only question asked pursuant to Article 127-ter of Legislative Decree No. 58 of 1998 (the TUF) to which a reply had not been given prior to the Shareholders' Meeting, and to which a reply would be given together with the aforementioned replies, was the question asked by shareholder Iannantuono, which is reproduced here: Point no. 1 - SNAM separate and consolidated financial statements - Having read the comprehensive and well-compiled documentation, I am fully satisfied that the SNAM Group has been run to a high standard, in terms of both management and operations. I am therefore asking only 'strategic' questions. 1.) Strategy concerning retail customers: the end customer figures are: ,897, ,907,000 and do not seem to have increased significantly. Could this be because the ITALGAS figure is missing? If so, please advise. Now that SNAM has become unbundled from ENI, it should rethink its commercial strategy. Bearing in mind that ENI has for some time pursued a plan of actively conquering the retail market, why is SNAM failing to take advantage of the margins it could generate by significantly opening up to the retail market using franchising? 2.) Market capitalisation and shareholders' equity: the market capitalisation - page 19 - is 11,893 million, compared with consolidated shareholders' equity - page of 5,930 million (a ratio of approximately 2:1). What should small shareholders make of this? 3.) Please advise, for the consolidated financial statements, the following amounts: gross receivables; provisions for gross receivables in relation to possible defaults (the amount in the financial statements is net of possible losses). What percentage of the Group's more than 5 million customers have owed bad debts in the last three years and what are the amounts involved? Point no. 9 - Appointment of the Statutory Auditors - The outgoing Board of Statutory Auditors has met 14 times and attended two Shareholders' Meetings, eight meetings of the Board of Directors and eight meetings of the Control and Risk Committee. This is a considerable commitment, which should be taken into account when assessing the candidacies for the new Board of Statutory Auditors. The CDP Reti S.r.l. candidates are extremely successful and committed in a number of areas, giving rise to reasonable doubt as to whether they could act in a full-time capacity for SNAM S.p.A. I hope I am proved wrong. The current

6 Chairman of the Board of Statutory Auditors, Massimo Gatto, whom I shall vote for, will be present in any case;" - pursuant to law, the Company had designated Georgeson S.r.l., represented at the meeting by Fabio Bianconi (the Representative), as the entity to which those with voting rights could assign a proxy with voting instructions for some or all of the agenda items; the Representative was asked to indicate, for each individual vote, the number of shares for which he did not intend to participate in the vote pursuant to Article 135-undecies of the TUF (instructions not having been given), to make the declarations required by the regulations in force in the event that, having met the conditions, he had to vote in a different way to the instructions received, and to declare any interests pursuant to Article 135- undecies, paragraph 4 of the TUF; - the Board of Directors Report containing the draft resolutions had been filed at the Company s registered office and at Borsa Italiana S.p.A., published on the Company s website in accordance with the law and sent to those who had requested a copy. The document containing said report, as well as the Snam 2012 Annual Report, 2013 Remuneration Report, 2012 Report on Corporate Governance and Ownership Structure and 2012 Sustainability Report, were also available upon entrance to the Shareholders Meeting; - with the unanimous consent of those present, for all agenda items, the reading of the aforementioned documentation was omitted; the draft resolutions and letter to the shareholders would be read in the usual way, however. Once these statements had been made, the Chairman: - informed shareholders that there were 1,340 of them present at the meeting, representing a total of 1,713,655,327 shares and 50.68% of the voting capital; - thus confirmed the validity of the ordinary part of this Shareholders' Meeting; - suggested dealing jointly with items 1) and 2) on the agenda, but stated that, naturally, each item would still be subject to a separate vote. The shareholders unanimously consented, and the Chairman, thus moving on to deal jointly with items 1) and 2) on the agenda for the ordinary part, concerning: 1) Separate financial statements of Snam S.p.A. as at 31 December Consolidated financial statements as at 31 December Reports from the Directors, the Board of Statutory Auditors and the External Auditors. Related resolutions; 2) Allocation of net profit for

7 the period and distribution of dividends : - informed shareholders that the document containing the separate financial statements of Snam S.p.A. as at 31 December 2012, the consolidated financial statements and the reports from the Directors, the Board of Statutory Auditors and the External Auditors, as well as the proposals from the Board of Directors to the Shareholders' Meeting in relation to the approval of the separate financial statements and to the allocation of profit for the year, had been filed at the Company s registered office and at Borsa Italiana S.p.A. and published on the Company s website in accordance with the law. He also reminded shareholders that the financial statements had been handed out upon entrance to the Shareholders Meeting and sent to those who had requested a copy; - informed shareholders, pursuant to Consob Communication No of 18 April 1996, that the External Auditors, Reconta Ernst & Young S.p.A., had been paid 33, for 500 hours spent auditing the separate financial statements and conducting periodic checks, 35, for 520 hours spent auditing the consolidated financial statements, and 19, for 290 hours spent auditing the consolidated half-year financial report; Reconta Ernst & Young S.p.A. had proposed adjusting the fees for audits carried out in relation to the equity investments held jointly by Snam in Gasbridge 1 B.V. and Gasbridge 2 B.V., whose auditing firm is not part of the network of Reconta Ernst & Young, the Snam Group's sole auditor. The activities in question were necessary as part of the audit, in accordance with the auditing criteria and guidelines recommended by Consob, of the consolidated financial statements of the Snam Group as at 31 December 2012, prepared in accordance with international financial reporting standards ( IFRS ); the related additional fees totalled 10,000.00; the Board of Directors, at its meeting on 12 February 2013, approved the proposed recalculation of fees according to the terms set out, following a favourable opinion from the Board of Statutory Auditors. At the Chairman's request, the Chief Executive Officer then read out the letter to the shareholders and stakeholders, which is reproduced below: To our Shareholders and Stakeholders, Snam underwent significant changes in what was a hugely eventful The biggest of all saw the completion of the ownership unbundling from Eni, which lost control over the Company as a result, and the acquisition by Cassa Depositi

8 e Prestiti (CDP) of a 30% stake in our capital. Coming at the end of a busy period of legislative changes, this was a decisive moment in the history of Snam, further reinforcing our role as a key player in the development of the Italian gas market and facilitating ever-increasing levels of competitiveness, safety and diversification of sources with a view to fully integrating with other European markets. Against the background of a persistent economic downturn, which has been a severe test of the financial markets and their ability to support business growth, we managed to complete the refinancing of our debt to Eni within the space of a few months, in full compliance with the agreed terms and conditions. The healthy take-up of our bond issues was proof not only of our ability to access the capital markets but also of the strength of our business model, allowing us to further strengthen our capital structure and support the major investment programme announced in As well as confirming our ambitious programme of investments to support Italian businesses, we completed an important stage in our European growth strategy. At the beginning of 2012, we entered into a strategic alliance with Fluxys, the first concrete result of which was the joint acquisition of stakes in the Interconnector gas pipeline between mainland Europe and the UK. This provided a real boost to our international growth strategy, laying down solid foundations for the creation of an integrated European gas network. Thanks to the robust performance of our various activities and to our continual focus on operating efficiency, there was a healthy improvement in results in 2012, with EBIT up 7.8% on the previous year. Net profit was down slightly, by 1.4%, owing to higher financial expense (due in part to the debt refinancing) that was partly offset by lower income taxes. Snam s share price ended 2012 at 3.52, 3.8% higher than the closing price a year earlier ( 3.39) and outperforming the STOXX Euro 600 Utilities index, which fell by 0.7%. This was an excellent performance, although not quite as stellar as that of the FTSE MIB index of leading Italian shares, which rose by 7.8% in The Snam stock remained in the world s leading sustainability indices in 2012, serving as evidence of our continual commitment to achieving a sustainable growth that protects the environment and encourages transparent dialogue with

9 all stakeholders. As a result of our ability to add value, the recognised stability of our business model and the solidity of our capital structure, we are able to propose to the Shareholders Meeting a dividend of 0.25 per share, an increase of 4.2%, of which 0.10 was distributed as an interim dividend in October 2012, confirming our commitment to an attractive and sustainable remuneration of our shareholders. In a hugely uncertain and volatile market, the results we achieved in 2012 are excellent and demonstrate our ability not only to manage change but also to transform it into opportunities for growth, confirming once again the solidity of the Snam Group and its ability to add value." Pursuant to Article 153 of Legislative Decree 58/1998 and Article 2429 of the Italian Civil Code, the Chairman of the Board of Statutory Auditors, at the request of the Chairman, then read to the Shareholders Meeting the conclusion of the Report of the Board of Statutory Auditors, which is reproduced below: "In light of the above, and on the basis of the separate financial statements for the year ended 31 December 2012 presented to us by the Board of Directors on 27 February 2013, the Board of Statutory Auditors finds no reason not to approve the financial statements and declares itself in favour of the profit allocation and dividend distribution proposal made by the Board of Directors. Stefania Boschetti, a partner at Reconta Ernst & Young S.p.A., then read the conclusion of the Report of the External Auditors on the separate financial statements, which is reproduced below: In our opinion, the separate financial statements of Snam S.p.A. as at 31 December 2012 comply with the International Financial Reporting Standards adopted by the European Union and with the provisions enacting Article 9 of Legislative Decree 38/2005; accordingly, they present clearly and give a true and fair view of the financial position, the results of operations and the cash flows of Snam S.p.A. for the year then ended." The Secretary then read the draft resolutions of the Board of Directors on the agenda items, which are reproduced below. The Chairman then opened the debate on the first two items on the agenda. Shareholder Borlenghi then read out a speech, which was subsequently

10 submitted to the Chairman and is reproduced below: My name is Franco Borlenghi. I am a small shareholder who is committed to this great, profitable company and always actively participates in our Shareholders' Meetings. Mr Chairman, our company is concluding 2012 by rewarding shareholders with a dividend of 0.25, 4.1% more than the dividend received for Snam will therefore pay out 507,000,000 to its shareholders, 150,000,000 of which will go to the new leading shareholder, Cassa Depositi e Prestiti, in respect of its 30% stake. Mr Malacarne, I agree with you when you say that 2012 was a significant year, despite a particularly difficult economic climate, as proven by the 3% fall in gas volumes transported. I notice that revenues reached 3.6 billion, with income from regulated activities and from distribution and storage achieving particularly strong growth. I believe the increase of just 1.4% in adjusted net profit was due to the increase in financial expenses arising from the refinancing of the company's debt, which, if I am not mistaken, totalled around 146 million. I also believe that Snam offers an attractive dividend policy that is sustainable in the medium-to-long term, despite the fact that gas consumption will not recover before 2017, according to market forecasts. Mr Malacarne, can you confirm that there will be no need for new capital to finance the acquisition of the TIGF network in south-western France, which should be completed by the end of the summer? That is the end of my speech. I shall submit it to the Notary to be minuted. I announce my vote in favour of these excellent financial statements and ask that Ms Ziglioli, as always, kindly provide me with a copy of the minutes. Shareholder Spiller then read out a speech, which was subsequently submitted to the Chairman and is reproduced below: Good morning. My name is Federico Spiller and I have been a shareholder of Snam since its flotation. I would like to express my appreciation of the results achieved and the considerable dividend. I also appreciate and approve of the efficiency and effectiveness rules aimed at strengthening reliability and transparency with a view to improving shareholder confidence. In its sustainability report, Snam states its commitment to giving due consideration to the legitimate remarks expressed by shareholders whenever they are entitled to do so. Snam makes clear that it believes its sustainability report and the system of governance detailed therein to be one of its most important features, and approved the

11 document at a meeting of the Board of Directors in February before submitting it for the approval of the Shareholders' Meeting. In this regard, I must mention a number of issues that I would like to be clarified. Without going into the details, I will tell you that I, in my capacity as shareholder, sent correspondence to the following corporate bodies: the Supervisory Body of Snam Rete Gas (recorded-delivery letter dated 14 April 2011); the Chairman of the Board of Statutory Auditors of Snam Rete Gas (recorded-delivery letter dated 14 April 2011); the Supervisory Body of Stogit (recorded-delivery letter dated 14 April 2011); the Chairman of the Board of Statutory Auditors of Stogit (recorded-delivery letter dated 14 April 2011), the Supervisory Body of Snam Rete Gas (recorded-delivery letter dated December 2011), and the Chairman of the Board of Statutory Auditors of Snam Rete Gas (recorded-delivery letter dated December 2011). The letters were sent by recorded delivery with return receipt, and the acknowledgements of receipt sent to me all bore the same signature, that of Stefano Sperzagni. As far as I am aware, Mr Sperzagni is employed in the legal department and reports to Mr Reggiani. Now regardless of the content, which consisted of a recommendation concerning administrative responsibility pursuant to Legislative Decree 231/01 in relation to something I believed was missing from the table published on page 19 of the sustainability report under the item 'Internal audit activities carried out in 2010, 2011 and 2012' I have to wonder how the autonomous powers of initiative and control that each of the recipient bodies is supposed to enjoy are compatible with the legal department's apparent inspection and monitoring of the correspondence before it reached and could be read by the intended recipients. I would like to add that, to date, I have not received any response to these letters and that I plan to resend them to all the aforementioned corporate bodies, as well as to the new Board of Directors and to the Board of Statutory Auditors for reference, in the hope that this time I receive a reply. Before I do so, I would like clarification on the procedures that must be applied and complied with upon receipt of correspondence containing recommendations or other comments for the corporate bodies, including the Chairman, the Board of Directors and the Board of Statutory Auditors. So as to avoid misunderstandings and ensure that you are not mistaken as to the reasons for my request, which is far from a mere query concerning formal

12 aspects, I wish to make it clear that this correspondence involved, in my opinion, a clear incompatibility and conflict of roles in terms of unbundling and Legislative Decree 231/01. To sum up, the question I want to ask today is this: is it right that the legal department, through its staff, should receive correspondence addressed to other corporate bodies, which should be independent and have autonomous powers of initiative? If your answer is 'yes', please can you tell me on what rule, regulation or other provisions this is based? I would like to thank the Chairman and wish him a successful term; I ask that the Notary record the comments made during the meeting and provide me with a copy of the minutes of my speech, any discussion that may take place and the reply that Snam makes to the above points." Shareholder Croce firstly focused on the Company's financial situation, asking for a comparison between the situation before and after the sale of 30% of the share capital from ENI to CDP, including with regard to expenses and the rate curve. He asked for clarification on the expenses involved in closing out derivatives, asking whether, since ENI's sale of its stake had been discussed as a possibility for some time, it was appropriate for SNAM to look to the markets. He also asked whether SNAM was considering issuing any retail bonds or convertible bonds. He then talked about the dividend, which was higher than the reported and adjusted dividends, meaning it had involved distributing reserves. In this context, he asked whether the 'Robin Hood' tax was still applicable. Mr Croce, coming back to comments made in previous Shareholders' Meetings, then suggested that it might be a good idea to pay out a scrip dividend, even if only on an optional basis, which would fulfil the provisions of Article 47 of the Constitution. SNAM, which is a member of Confindustria and Assonime, could attempt to get a favourable tax regime for this form of dividend introduced in Italy. He then asked for news about the Galsi natural gas pipeline. He asked whether SNAM might be interested in the TAG pipeline, currently owned by Cassa Depositi e Prestiti; if SNAM were interested, there would be a situation similar to that of Stogit and Italgas, which were sold by Eni to SNAM in a deal that was completed very quickly. This was certainly ideal from a strategic perspective but, in terms of the time frames and methods used, was questionable at a time of severe financial crisis. He then asked for an explanation of the Company's credit situation, particularly with regard to the

13 timeliness of customer payments, before asking how the maintaining of the dividend level tallied with the negative forecasts for gas sales. Lastly, with regard to the acquisition of SNAM shares by Cassa Depositi e Prestiti, he pointed out that, while the transaction was scheduled to involve the purchase of a 30% stake minus one share, the financial statements listed a stake of 30.03% held by CDP; he therefore asked for clarification, particularly with regard to the failure to launch a takeover bid. Shareholder Magnani asked a number of detailed questions, which are described below. With regard to the receivables relating to the provision of natural gas balancing services in 2011 in the amount of around 430, he asked whether they had been collected and whether they were expected to accrue any interest. With regard to the composition of the Company's long-term floatingrate financial liabilities ( billion, equivalent to around 50% of total financial liabilities), he asked what the average interest rate was, whether the Company planned to convert the liabilities either fully or partially into fixed-rate liabilities using interest rate swap contracts (in light of the fact that as at 31 December 2011, 96% of the financial liabilities had a fixed rate), and lastly what the Company's expectations were concerning the Euribor for and whether it was possible, with the support of CDP, to obtain further loans from international bodies at more favourable rates. Furthermore, he pointed out that in the dispute between Italgas and the Municipality of Rome, the Company had been ordered to pay a fine of 5 million and had lodged an appeal; he asked whether the hearing on the merits scheduled for 20 February 2013 had taken place and whether there had been any good news for the Company which meant it had reason to believe it may recover all or part of the sum. Continuing, he asked what types of gas infrastructure and what countries the Company was interested in and what financial instruments it planned to use to finance any business developments or the integration of infrastructure both in Italy and across Europe, inquiring as to whether it planned to issue bonds, take out bank debt or launch a capital increase. Finally, he asked whether contact had been made with CDP in this regard. Shareholder Bove then read out a speech, which was subsequently submitted to the Chairman and is reproduced below: There are several reasons why I approve of the Company's results for 2012, the most important being the

14 dividend. Another reason is that the figures in these financial statements have been achieved in a difficult economic context for Italy, to say the least. I was also pleased to read that a substantial portion of the financial requirements associated with net investments of more than 1,350 million has been provided by drawing on positive cash flows, a sign that the Company is in good health. This year, you have established a dividend of an amount similar to last year's, since you claim it is in line with the current capital structure. My first question is this: what direction does the new leading shareholder plan to take in the future? And on what total shareholder return is its policy based (this is particularly important in a company like ours, which has always ensured it meets the needs of its small savings shareholders, starting with dividends)? I would like to know whether you believe the gas bubble caused by overinvestment, which was even mentioned in the recent National Energy Strategy, to be a real threat. How has the Company protected itself against such a possibility? What requirements does the acquisition of French firm TIGF from Total, in partnership with other companies, meet? It is clear that it is part of the Company's insourcing strategy, but with what aim? Perhaps it has the risk if not the intention of a gradual 'detachment' from the Company's Italian roots? My last question concerns the recent merger of Acegas-Aps with Hera. I assume that the agreements you have made with Acegas-Aps are exactly the same as those made with Hera, but I would like confirmation of this." He then announced his vote in favour of approving the financial statements. Shareholder Antoniazzi then read out a speech, which was subsequently submitted to the Chairman and is reproduced below: I represent Etica SGR, of which I am the Vice Chairman, which is attending the Shareholders' Meeting for the first time as an investor that is concerned with the Company's social and environmental performance as well as its financial results. Etica SGR is an Italian asset management firm that is dedicated exclusively to the creation and promotion of socially responsible mutual funds that invest in companies with a good socio-environmental profile; the fact that we are here therefore reflects a generally positive view of the Company. When carrying out our research and analysis activities, we use different databases from research firms that specialise in corporate social responsibility and we adopt methods that involve both exclusion criteria and assessment criteria concerning corporate

15 governance, the environment, respect for human rights and relations with stakeholders. Etica SGR is part of a network of socially responsible investors and, together with some of these, such as Boston Common East Management, which has assets under management of $1.8 billion, Tri-State Coalition, CREA (Centre for Reflection, Education and Action) and Triodos Bank, we would like to draw your attention to certain aspects of your company's sustainability. We would like to express our appreciation for the commitment and attention shown by the Company in reporting all aspects of its activity and in drawing up a sustainability report that meets the highest standard set out by the Global Reporting Initiative, earning an A+ rating. We also appreciate the fact that all reporting documents have been made available on the Company's website prior to the Shareholders' Meeting so that shareholders can analyse SNAM's results before voting. Although it does not directly operate in countries that are problematic from a human-rights perspective, SNAM is involved in a number of initiatives aimed at the proper management of such topics and the monitoring of supply chains; in 2012 your Company was involved in the 'Supply chain questionnaire' project conceived and developed by CREA, a US socio-economic research and education organisation. This questionnaire was put to Italian companies by Etica SGR with a view to strengthening initiatives aimed at properly dealing with issues related to human rights and supply chains. We therefore hope that dialogue on this matter continues in future and that SNAM can develop and publicise a specific policy and a system for managing and monitoring respect for human rights and workers, including in relation to the supply chain. Allocation of net profit for the year. We have read about the Group's strong performance in 2012, as proven by the main items in the financial statements, such as gross profit, revenues, EBITDA and EBIT. However, as responsible investors concerned with long-term sustainable development, we believe that the Board's dividend distribution proposal is not in line with the Company's high level of debt, which rose by 11% in 2012, or with the scale of the investments scheduled by Snam in its business plan. In this respect, we would have preferred a different strategic decision by the Company, such as a greater provision of profits to reserves or a dividend payment that did not consist exclusively of a monetary component, perhaps involving the granting of new

16 shares. We hope that our remarks can be interpreted as an encouragement to pay ever closer attention to keeping all stakeholders satisfied. Remuneration of the management and annual remuneration report. We appreciate the great amount of detail in the 2013 remuneration report, in line with the requirements set out by the supervisory authorities, and in particular the presence of an indicator linked to workplace health and safety (the accident frequency index), in defining the variable component of the compensation of the Chief Executive Officer and key management personnel. As responsible investors, we believe it is important that listed companies should include such indicators in their remuneration schemes and link the variable component of managers' compensation to them. We would like to thank the SNAM Board of Directors and investor relations department for listening and for the attention they have paid to Etica SGR's questions, and wish them continued success." Shareholder Rodinò pointed out that, as part of its reaffirmed capital return policy, as emphasised by the Chief Executive Officer in his letter to the shareholders, the Board of Directors decided once again this year to propose that the Shareholders' Meeting approve the distribution of a dividend and, furthermore, a slightly higher dividend than that of the previous year. This increase has a symbolic value in terms of optimism and, as such, is a very positive thing in the current crisis. As to whether it was appropriate to make this dividend distribution, instead of increasing reserves, Mr Rodinò pointed out that the reported net profit was lower than in 2011, but that this was due exclusively to technicalities related to the withdrawal from the share capital of ENI, whereas EBIT, which is the main indicator of operating results, was positive. He then asked whether ENI had an obligation or just an option to sell its residual interest in SNAM, equal to 12% of the share capital, saying that once the ownership unbundling had been completed, with the subsequent loss of ENI's control over SNAM, it was difficult to understand the logic behind an obligation to withdraw completely. Moving on, he asked why there were differences in the interest rate and the term of the four bond issues carried out during the year, for a total of 6 billion. Still with regard to financial debt, he asked what the time frame was for achieving a debt structure with a balanced composition of bonds and bank loans. He concluded by asking the Company's view of the rating agencies' opinions of its credit structure, also asking about the Company's prospects for

17 international growth in relation to the strategic plan, particularly with regard to the strategic alliance with Fluxys and the acquisition of TIGF from Total. Since no one else asked to speak, the Chairman, moving on to discuss item 3) on the agenda of the ordinary part of the meeting concerning: 3) Remuneration policy pursuant to Article 123-ter of Legislative Decree No. 58 of 24 February 1998, informed shareholders that the 2013 Remuneration Report had been filed at the Company's registered office and at Borsa Italiana S.p.A., published on the Company's website in accordance with the law, given out at the entrance to the Shareholders' Meeting and sent to those who had requested a copy. At the Chairman's request, the Chairman of the Remuneration Committee, Davide Croff, representing the Remuneration Committee (which also consists of directors Andrea Novelli and Elisabetta Oliveri), then read out the following speech, which is reproduced below: The 2013 Remuneration Report, which is brought directly to the attention of the Shareholders' Meeting for the second year, consolidates the Company's desire to provide shareholders and investors with the utmost transparency with regard to the quality of the remuneration systems it adopts. This also complies with the obligation for listed companies, which was introduced into our regulations last year as part of a broader European trend, to make the first part of the Remuneration Report available to the public and put it to a vote by the Shareholders' Meeting, proof of the growing attention paid by investors and the public to the compensation of managers of listed companies. The guidelines of the 2013 Remuneration Policy, on which today's Shareholders' Meeting will be asked to give an opinion, have been formulated in strict continuity with those adopted in 2012 and represent an essential tool aimed at attracting, keeping and motivating a highly skilled management team, promoting the creation of value in the medium-to-long term. Together with my fellow directors Andrea Novelli and Elisabetta Oliveri, I believe that the Snam remuneration system properly recognises the responsibilities granted, the results achieved and the quality of the professional commitment of the Company s executives, in compliance with the principles of enhancing people value and providing equal opportunities, which are affirmed in the Code of Ethics and have always been

18 present in Snam s organisational culture. The Secretary then read the draft resolutions of the Board of Directors on this agenda item, which are reproduced below. The Chairman then opened the debate on the third item on the agenda. Since no one asked to speak, the Chairman, moved on to jointly discuss items 4) to 8) on the agenda of the ordinary part of the meeting concerning: 4) Determination of the number of members of the Board of Directors; 5) Determination of the term of office of the Directors; 6) Appointment of the Directors; 7) Appointment of the Chairman of the Board of Directors; 8) Determination of the remuneration of the Directors. The Secretary then read the draft resolutions of the Board of Directors on the agenda items, which are reproduced below. He also informed shareholders that: - under Article 13 of the Bylaws, the Board of Directors is appointed by the Shareholders Meeting based on lists in which the candidates are listed by consecutive number; - the list of candidates for the Board of Directors submitted by the shareholder CDP Reti S.r.l., representing % of Snam's share capital, is as follows: 1. Lorenzo Bini Smaghi 2. Carlo Malacarne 3. Roberta Melfa 4. Andrea Novelli 5. Alberto Clô 6. Pia Saraceno - the shareholders listed in the documentation accompanying the list (all pertaining to asset management companies), representing 1.055% of Snam's share capital in total, jointly presented the following list of candidates for the position of director of Snam S.p.A.: 1. Elisabetta Oliveri 2. Sabrina Bruno 3. Francesco Gori;

19 - the lists were made available to the public at the Company's registered office, at Borsa Italiana and on the Company's website. The Chairman then opened the debate on items 4) to 8) of the agenda. Since no one asked to speak, the Chairman, moved on to jointly discuss items 9) to 11) on the agenda of the ordinary part of the meeting concerning: u 9) Appointment of the Statutory Auditors; 10) Appointment of the Chairman of the Board of Statutory Auditors; 11) Determination of the remuneration of the Chairman of the Board of Statutory Auditors and of the standing auditors. The Secretary then read the draft resolutions of the Board of Directors on the agenda items, which are reproduced below. He also informed shareholders that: - under Article 20 of the Bylaws, the Board of Statutory Auditors is appointed by the Shareholders Meeting based on lists in which the candidates are listed by consecutive number; - the list of candidates for the Board of Statutory Auditors submitted by the shareholder CDP Reti S.r.l., representing % of Snam's share capital, is as follows: o for the office of Standing Auditor: 1. Leo Amato 2. Stefania Chiaruttini o for the office of Alternate Auditor: 1. Maria Gimigliano; - the shareholders listed in the documentation accompanying the list (all pertaining to asset management companies), representing 1.055% of Snam's share capital in total, jointly presented the following list of candidates for the position of statutory auditor of Snam S.p.A.: o for the office of Standing Auditor: 1. Massimo Gatto o for the office of Alternate Auditor: 1. Luigi Rinaldi;

20 - the lists were made available to the public at the Company's registered office, at Borsa Italiana and on the Company's website; pursuant to Article 2400, last paragraph, of the Italian Civil Code, the lists of management and control offices held in other companies by candidates for the position of statutory auditor, according to the curricula vitae submitted and any subsequent updates received, were made available to the attendees. The Chairman then opened the debate on items 9) to 11) of the agenda. Since nobody asked to speak, the Chairman adjourned the meeting at 11:35. Mr Croce asked to see a list of those present and their proxies, where applicable; the list was provided. The meeting was resumed at 12:15. The Chief Executive Officer proceeded to give the following responses. First of all, he responded to the questions on financial issues, stating that the average cost of debt in 2012 was approximately 3.6%, while the cost of the Company's current financial debt (the result of the refinancing carried out in 2012, comprising 6 billion of bonds and floating-rate bank loans), based on current interest rates, was around 4%. The rates applicable to the bond issues carried out in 2012 (the details of which can be found in the financial statements) differed from one another due to the market conditions at the time the bonds were issued; the term of the bonds varied from 4 to 10 years. The total cost was 3.5%. The spread of the new debt is between 250 and 320 basis points, perfectly in line with that of previous years. He went on to say that the Company's objective, in termsof exposure to interest rates,was to have floating-rate debt and fixed-rate debt make up approximately one third and two thirds of its total debt respectively. With regard to the aforementioned derivative transactions, bearing in mind that these consisted of interest rate swap contracts (and therefore transactions carried out not for speculative purposes, but solely to hedge interest rate risk), he pointed out that the expense recorded in the financial statements was just the advance payment of the fixed-rate cost that was already due, this advance payment being necessary pursuant to applicable regulations. He confirmed that the mediumterm strategy was to increase the funds raised from institutional investors and pursue a policy of disintermediation of bank funding, adding that no retail

21 operations or convertible-bond issues were currently being considered. With regard to the questions about gas balancing receivables, he said that trade receivables totalled 1,921 million as at 21 December 2012, including the current value of outstanding receivables and associated interest arising from balancing services, equal to 88 million. This amount was covered by the Cassa Conguaglio del Settore Elettrico (Electricity Equalisation Fund), pursuant to Electricity and Gas Authority resolution 351/2012/R/gas, and would become payable after the next year due to the repayment schedule provided for by the aforementioned resolution. During the course of 2012, the Electricity Equalisation Fund paid SNAM a total of 13 million, and the assignment without recourse of a receivable to the Fund, with notification, was put in place. The receivable in question amounted to 300 million, equivalent to the principal alone. In response to the remarks made by some shareholders about the adjusted net profit, the Chief Executive Officer pointed out that this figure was provided in order to aid understanding of the Group's performance, and was obtained by subtracting from the reported profit the income components resulting from non-recurring events and which did not represent normal business activity. Specifically, these components concerned: in 2012, the financial expenses arising from the termination of interest rate swap contracts; in 2011, the one-off deferred-tax adjustment as at 31 December 2010 following the introduction of the Robin Hood tax. The ordinary component of the Robin Hood tax (which resulted in an increase of 10.5 percentage points in the IRES (corporation tax) rate for natural gas transportation and distribution activities), however, was not part of these non-recurring income components. The consolidated pay-out in 2012 was equal to 85.2% of adjusted net profit, and therefore was more or less in line with that of These levels had been affected by the Robin Hood tax, the Chief Executive Officer said, whereas the consolidated adjusted pay-out was expected to stabilise at 80% in the medium term. Referring more generally to the dividend policy, he said that the dividend distribution was considered adequate in light of the Company's capital structure. In particular, with regard to the increase in debt, he pointed out that net debt had grown in 2012 not only due to the payment of dividends, but also as a result of certain significant extraordinary factors, such as the Robin Hood tax and the payment of 60% of financial expenses due to the termination of loan

22 agreements. Bearing this in mind, he deemed the Board's proposal to be perfectly in line with the Company's strategy, which was to involve a solid financial structure that would be balanced in terms of debt-to-asset-value ratio and would also be able to support the investment programme set out for the period. He considered the rating agencies' opinions to be consistent with the assessments they had carried out in relation to Italy's economy. In response to Mr Spiller's questions, the Chief Executive Officer pointed out that one of the responsibilities of the corporate affairs department is to aid the functioning of the corporate and supervisory bodies and, to that end, pursuant to standard rules of good practice, it may receive correspondence addressed to these bodies, all of which are domiciled at the Snam Group's registered office. He added that all correspondence was promptly made fully available to the relevant bodies. The Chairman of the Board of Statutory Auditors then took the floor, confirming that the correspondence to which Mr Spiller had referred had been promptly made available to the Board itself and immediately handled in accordance with the Notifications from known and unknown sources procedure. In response to the suggestion of paying out a scrip dividend, Mr Malacarne said that, while this tool was used abroad by utilities and other firms, the Company regardless of the fact that scrip dividends did not currently benefit from a favourable tax regime in Italy, as already mentioned believed that, in light of its capital structure, there was no need to create additional equity capital such as would result from the issuance of scrip dividends, which constituted a form of capital increase. With regard to ENI's withdrawal from the Company's share capital, the Chief Executive Officer pointed out that on October 15 CDP acquired ordinary shares accounting for 30% of the share capital less one share; subsequently, on November 1, it acquired additional shares, taking its total stake to 30.3%. These acquisitions did not give rise to an obligation to launch a takeover bid, since Consob issued a resolution exempting CDP from said obligation pursuant to Article 106, paragraph 1 of the TUF. A decree of 25 May 2012 stipulated that ENI must sell its residual stake in SNAM, but did not give a specific deadline for the sale.