Snam S.p.A. financial review
Separation of Italgas Reti S.p.A. from Snam S.p.A.
The 7th of November 2016 was the effective date of the operation involving the separation from Snam of the natural gas distribution business in Italy, divided into several steps both united and contextual among them, which led to the transfer of the entire share packet of Snam S.p.A. to Italgas Reti S.p.A. (previously Italgas S.p.A.) in favour of Italgas S.p.A. (previously ITG Holding S.p.A.). To complete the operation, Snam S.p.A. holds a linked share in Italgas S.p.A., with a 13.5% holding in the share capital of the company35.
The operation is configured as a system between entities “under common control” and, as such, it is excluded from the area of application of the IFRS 3 international accounting principles “Company Aggregations” and IFRIC 17 “Distribution to shareholders of assets not represented by available liquidity.” In particular, it has been shown that the companies participating in the transaction are controlled, in accordance with IFRS 10 international accounting principle “Consolidated Financial Statement”, for the same subject, that is, CDP, both before and after the realization of the aggregation itself and that this control is not of a temporary nature. It follows then that, for the purpose of the financial statement of Snam S.p.A., the transaction in its complexity, has been structured by applying the principle of continuity of values.
For the purpose of the present financial statement for the fiscal year, given the nature of Holding shares in Snam S.p.A., there is the circumstance that the asset which is the object of the separation transaction, represented by the share of Snam S.p.A. in Italgas Reti S.p.A., does not constitute “a discontinued operating asset” in accordance with section 32 of the IFRS 5 international accounting principle “Non-current assets held for sale and discontinued operating assets”36. For this reason, the economic results and the cash flow found on the financial statement for the fiscal year of Snam S.p.A. relating to the period January 1 – November 6, 2016 essentially constituted by the dividends distributed by Italgas Reti S.p.A. to Snam S.p.A. are not represented separately according to the measures of IFRS 5.
Snam S.p.A. is an industrial holding company listed on the Milan stock exchange. The company is placed at the top of the Snam Group and holds 100% of the share capital of the operating companies Snam Rete Gas S.p.A., Gnl Italia S.p.A., Stogit S.p.A., in addition to Gasrule Insurance D.A.C., which it heads, respectively, in the management and development of activities involving transport, re-gasification, storage of natural gas and shares with the most important players in the sector. Snam operates in Europe’s major markets through agreements with the leading industry players and direct equity investments in the share capital of companies. Snam S.p.A. is also responsible for the strategic planning, management, coordination and control of its subsidiaries.
Shareholder CDP S.p.A. declared, with effect from the financial statements as at 31 December 2014, that it had de facto control over Snam S.p.A. within the meaning of accounting standard IFRS 10 – “Consolidated Financial Statements”. No management and coordination activity has been formalised or exercised.
As at 31 December 2016 CDP S.p.A. holds 28.98% and 1.12% respectively of the share capital of Snam S.p.A. through CDP Reti S.p.A.37 and CDP GAS S.r.l.38
36 According to this principle, a discontinued operating activity is “a component of an entity that was discontinued or classified as held for sale and (a) represents a significant autonomous branch of an activity or geographical area of activity, (b) the part of a single program coordinated for the discontinuation of a significant branch of an activity or geographical area of activity; (c) is a subsidiary acquired exclusively as part of a resale.
37 CDP S.p.A. holds 59.10%.
38 Company wholly owned by CDP S.p.A.