38 Related party transactions

Snam’s related parties are associates and companies under joint control, as well as subsidiaries outside the Group’s scope of consolidation, and other companies owned or controlled by the State, particularly by Group companies Eni, Enel and CDP. Transactions with these entities refer to the exchange of assets and the provision of regulated services within the gas sector and, with regard to CDP, the provision of financial resources. Members of the Board of Directors, Statutory Auditors and Snam Group managers with strategic responsibilities, and their families, are also regarded as related parties.

Transactions between Snam and related parties are part of ordinary business operations and are generally settled under market conditions, i.e. the conditions that would be applied between two independent parties. All the transactions carried out were in the interest of the companies of the Snam Group.

Pursuant to the provisions of the relevant legislation, the Company has adopted internal procedures to ensure that transactions carried out by Snam or its subsidiaries with related parties are transparent and correct in their substance and procedure.

Directors and auditors declare their interests affecting the Company and the Group every six months, and/or when changes in said interests occur; they also inform the Chief Executive Officer (or the Chairman, in the case of the Chief Executive Officer), who in turns informs the other directors and the Board of Statutory Auditors, of individual transactions that the Company intends to carry out and in which they have an interest.

Snam is not subject to management and coordination. Snam manages and coordinates its subsidiaries, pursuant to Article 2497 et seq. of the Italian Civil Code.

Within the context of transactions with related parties, within the meaning of the disclosure requirements of Consob Regulation 17221 of 12 March 2010, in the course of 2013, note is made of the determination, on 26 September 2013, between Snam Rete Gas S.p.A. and Eni S.p.A., of the natural gas transportation capacity commitments on the Snam Rete Gas methane pipeline network for thermal year 2013-2014 (the period from 1 October 2013 to 30 September 2014) and for the thermal years between 2015-2016 and 2019-2020 (the period from 1 October 2015 to 30 September 2020).

The finalisation of these commitments, made in line with the procedures defined in the Network Code of Snam Rete Gas S.p.A., results in the calculation, as set forth in the contractual agreements, of the fees for services rendered by applying, for each thermal year of validity, the natural gas transportation and dispatching tariffs approved by the decision of the Electricity and Gas Authority. These fees are estimated at approximately €365 million.

Under Article 13 of the aforementioned Consob Regulation, these agreements are classed as ordinary transactions concluded under market-equivalent or standard conditions since, pursuant to Article 3 of the Procedure: (i) they fall within the scope of normal business operations and the associated financial activities; and (ii) the terms applied are similar to those usually practised with non-related parties for transactions of an equivalent nature, size and risk.

The amounts of related-party transactions of a commercial and financial nature for the 2012 and 2013 financial years are reported below. The nature of the most significant transactions is also stated.

Commercial and other transactions

Commercial transactions

Companies under joint control and associates

Transactions with companies under joint control and associates relate to the provision of IT services governed by contracts entered into under normal market conditions.

Companies owned or controlled by the State

Relations with other companies owned or controlled by the State mainly refer to the Eni group, and concern the provision of regulated gas services relating to transportation, regasification, distribution and storage, on the basis of tariffs established by the Electricity and Gas Authority.

The most significant passive commercial relations with the Eni group include: (i) the planning and supervision of works to build natural gas transportation infrastructure, governed by contracts concluded under normal market conditions; (ii) the provision of electricity and natural gas used in activities connected to the building of storage infrastructure, governed by contracts concluded under normal market conditions; and (iii) the provision of consultancy services and technical and operational assistance relating to storage reservoirs. These transactions are governed by service agreements on the basis of the costs incurred.

Other transactions

As at 31 December 2013, there were liabilities with Eni arising from price adjustment mechanisms, as established by the contract for the purchase of Italgas and Stogit from Eni signed on 30 June 2009, and assets posted in reference to transactions arising from the national tax consolidation scheme in force until 31 July 2012.

Transactions with other companies owned or controlled by the State relate mainly to the Enel group and concern natural gas transportation, regasification, distribution and storage services. These transactions are governed on the basis of tariffs established by the Electricity and Gas Authority.

Companies owned or controlled by the State

The transactions with the Cassa Depositi e Prestiti group relate to the granting of term loans to cover long-term financial requirements. These transactions are governed by contracts entered into under normal market conditions.

Jointly controlled entities

Transactions with Gasbridge 1 B.V. and Gasbridge 2 B.V. refer to financing received and repayable on demand.

For transactions with directors, auditors and key managers, please refer to the information set out in the paragraph relating to compensation in Note 32 “Operating costs”.

Impact of related-party transactions or positions on the balance sheet, income statement and statement of cash flows

The impact of related-party transactions or positions on the balance sheet is summarised in the following table:

The impact of related-party transactions or positions on the income statement is summarised in the following table.

Transactions with related parties are generally governed on the basis of market conditions, i.e. the conditions which would be applied between two independent parties.

The principal cash flows with related parties are shown in the following table.

The effect of cash flows with related parties is shown in the following table: