Company Organisation

The company has a traditional organisational structure, consisting of:

  • a board of directors which runs the company;
  • a board of statutory auditors, which: (i) monitors compliance with the laws and deed of incorporation, in addition to the principles of good business administration; and (ii) verifies the adequacy of the organisational structure, internal audit procedures and administrative/accounting system;
  • shareholders which meet in ordinary or extraordinary meetings to discuss, inter alia: (i) the appointment or dismissal of members of the board of directors and the board of statutory auditors and their responsibilities and compensation; (ii) the approval of the financial statements and allocation of earnings; (iii) the repurchase and sale of treasury shares; (iv) changes to the articles of association; and (v) the issue of convertible bonds.

Independent auditors are engaged to audit the company’s financial statements. They must be registered with Consob and are specifically appointed by the shareholders on the basis of a reasoned proposal from the board of statutory auditors.

Information about the ownership structure33

STRUCTURE OF THE SHARE CAPITAL

At 31 December 2009, the company’s share capital was as follows:

Share class Number
of shares
Percentage of the
share capital (%)
Listing market Rights and obligations
Ordinary shares 3,570,768,494 100 Italian regulated market Shares are indivisible and each share carries the right to one vote. Shareholders may exercise the rights attendant on share ownership within the bounds of current legislation.

The company has not issued other financial instruments which entitle the holder to subscribe for newly issued shares.

Information about share-based incentive plans (stock option plans, stock grant plans, etc.), which involve (bonus) increases in the share capital can be found in the report on operations of Snam Rete Gas S.p.A. and in documents prepared in accordance with article 84-bis of the Issuer Regulations published by Consob and available on the company’s website (www.snamretegas.it).

RESTRICTIONS ON THE TRANSFER OF SHARES AND VOTING RIGHTS

The articles of association make no stipulation in this respect.

MAJOR SHAREHOLDINGS

According to the information available and the notification received in accordance with Consob resolution no. 11971/99, the following shareholders held more than 2% of the company’s share capital at 31 December 2009:

Percentage of share capital (%)
Shareholders31.12.200831.12.2009
Eni S.p.A. 50.03 52.54
Snam Rete Gas S.p.A. (*) 9.99 5.46
Pictet Funds (Europe) SA 4.98 2.90

(*) The company held 194,886,225 treasury shares at 31 December 2009 (195,429,850 shares at 31 December 2008).

GEOGRAPHICAL DISTRIBUTION OF SHAREHOLDERS

Based on the notification required by law and the information available to the company, the distribution of the shareholding structure by geographical region is as follows:

RegionPercentage of share capital (%)
Italy 73.30
Continental Europe 12.78
UK and Ireland 5.12
USA and Canada 6.96
Rest of the world 1.84
100

SHARES WITH SPECIAL RIGHTS

The company has not issued any shares with special rights.

SHAREHOLDER AGREEMENTS

The company is not aware of any shareholder agreement, nor has any such agreement been made public pursuant to the law.

CHANGE OF CONTROL CLAUSES

Snam Rete Gas S.p.A. and its subsidiaries are party to significant agreements which may be disclosed without causing harm to the company and which take effect, are amended or lapse in the event of a change in control of Snam Rete Gas S.p.A by Eni S.p.A.

Specifically, these concern:
  • a) agreements requiring the automatic termination of the contract, particularly short-term loans from Eni S.p.A (which at 31 December 2009 totalled around €1,585 million, including loans from subsidiaries) and guarantees issued in the interests of Snam Rete Gas S.p.A and the subsidiaries of Eni S.p.A or banks against Eni S.p.A: at 31 December 2009, guarantees outstanding totalled approximately €88 million.
  • b) agreements whereby the counterparty can terminate the contract early:
    • - medium to long-term credit facilities with Eni S.p.A (these amounted to €8,035 million at 31 December 2009);
    • - interest rate swaps (IRS) of €4,050 million.

By terminating loan agreements, guarantees and derivatives early, there is the risk that Snam Rete Gas S.p.A and its subsidiaries could be unable to secure financing from other sources under the same conditions.

Moreover, the early termination of fixed-rate loans and interest rate swaps takes place at fair value, which may differ from their carrying amount at the termination date. Snam Rete Gas S.p.A and its subsidiaries also have agreements with other Eni S.p.A. companies for the provision of services and trade union agreements for healthcare and other employee benefits. Should there be a change in control of Snam Rete Gas S.p.A by Eni S.p.A., other counterparties may need to be found to provide these services and benefits.

AUTHORISATION TO INCREASE THE SHARE CAPITAL AND REPURCHASE TREASURY SHARES

The board of directors does not currently have authority to increase the share capital pursuant to article 2443 of the Italian Civil Code. According to the Articles of Association, the company can issue bonus shares (including special shares) in accordance with article 2349 of the Italian Civil Code.

The company does not have any plans to repurchase treasury shares pursuant to article 2357 et seq. of the Italian Civil Code.

COMPENSATION FOR DIRECTORS IN THE EVENT OF THEIR RESIGNATION, REDUNDANCY OR DISMISSAL FOLLOWING A TAKEOVER BID

The company does not have any specific procedure for this.

MANAGEMENT AND COORDINATION

Snam Rete Gas S.p.A. is managed and coordinated by Eni S.p.A.

(33) Information about the ownership structure is given in accordance with Art. 123 bis, paragraphs 1 and 2, of the Testo Unico della Finanza, or Italian Financial Services Act (Legislative Decree no. 58/98). For information on:
- the appointment and substitution of directors, see the section in this report on the appointment, composition and term of office of the Board of directors;
- amendments to the articles of association, see the section in this report on the role and functions of the Board of directors and shareholders’ meeting and the rights of shareholders;
- the key characteristics of risk management and audit systems in relation to the financial reporting process (consolidated and non-consolidated), see the section on the risk management and audit system in relation to the financial reporting process;
- the mechanism for exercising voting rights in any employee share ownership scheme and the rules of procedure of the shareholders’ meeting, its powers, the rights of shareholders and how these are exercised, see the section in this report on shareholders’ meetings and the rights of shareholders;
- the composition and functioning of the various boards and their committees, see the section in this report on the Board of directors, its committees and other supervisory bodies.