9 Trade and other receivables

Trade and other receivables of €2,442 million (€2,048 million at 31 December 2012) comprise:

These are reported net of the provision for impairment losses of €44 million (€48 million at 31 December 2012). The activity in the provision for impairment losses on receivables during the year is shown below.

The provision of €7 million for the financial year refers mainly to the natural gas transportation business segment.

Other changes (-€9 million) relate to the use of the provision for impairment losses to write off bad debts mainly relating to the transportation business segment.

Trade receivables of €2,268 million (€1,921 million at 31 December 2012) mainly refer to the natural gas transportation (€1,158 million), storage (€735 million) and distribution (€356 million) business segments.

Trade receivables relating to the transportation sector (€1,158 million) include receivables arising from the natural gas balancing service (€612 million)¹⁰, in operation since 1 December 2011 pursuant to Electricity and Gas Authority Resolution ARG/gas 45/11. Under this measure, the leading natural gas transportation company (Snam Rete Gas), as Balancing Supervisor, is responsible for procuring the quantities of gas required to balance the system and offered on the market by users through a dedicated platform of the Energy Market Operator, and for financially settling the imbalances of individual users by buying and selling gas on the basis of a benchmark unit price (the “principle of economic merit”). Although the effects of this activity are essentially neutral in terms of the Company’s income statement and it does not receive specific compensation for performing this role, the gas sales generated by balancing activities in the 2013 financial year and offset in costs totalled around €2.3 billion.

For the storage business segment in particular, trade receivables (€735 million) mainly relate to fees charged on the use, by users, of strategic gas (€607 million) which, when collected, according to the reference regulatory framework, will be paid into the Electricity Equalisation Fund. To that end, under the regulatory regime preceding the current rules governing balancing¹¹, some users of the storage service made strategic gas withdrawals without paying the fees set out by the Authority or replacing the amounts withdrawn, accruing a significant debt towards the Company. Considering the applicable regulatory framework (see Resolution ARG/gas 119/10, Article 10, paragraph 5 in Annex A), which leaves the storage company in a neutral position with regard to the effects of the withdrawal of strategic gas by users, against fees for the use of strategic gas not replenished, a liability of equal amount was recognised¹².

Other receivables of €172 million (€125 million at 31 December 2012) comprise:

IRES receivables for the national tax consolidation scheme (€30 million) concern receivables with the former parent company, Eni, relating to the IRES refund request resulting from the partial IRAP deduction relating to tax years 2004-2007 (pursuant to Article 6 of Legislative Decree 185 of 28 November 2008, enacted by Law 2 of 28 January 2009) and tax years 2007-2011 (pursuant to Legislative Decree 201/2011).

Receivables from investment/divestment activities (€12 million) concern receivables for public and private grants entered against investment activities (€7 million) and transfers of property, plant and equipment and intangible assets (€5 million).

Receivables from the Electricity Equalisation Fund (€60 million) relate mainly to additional tariff components in the distribution segment.

Other receivables (€62 million) refer essentially to the natural gas distribution segment and concern receivables from government bodies and receivables associated with the management of energy efficiency certificates.

The fair value measurement of trade and other receivables has no material impact. All receivables are in euros. Receivables from related parties are described in Note 38, “Related-party transactions”. Information on credit risk can be found in Note 30 “Guarantees, commitments and risks – Credit risk”.