1 Basis of presentation and valuation

The condensed interim consolidated financial statements at 30 of June, 2016, were prepared in consideration of future continuing business and in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and approved by the European Union (hereafter referred to as IFRS), as well as the laws and regulations in force in Italy.

The condensed interim consolidated financial statements at 30 of June, 2016 have been prepared in accordance with the provisions of IAS 34 “Interim Financial Reporting”. Pursuant to IAS 34, the condensed interim consolidated financial statements do not include all the information required in annual consolidated financial statements and, as such, they should be read in conjunction with the Snam Group’s consolidated financial statements for the year ended 31 of December 2015.

The formats of the financial statements are the same as those used in the annual report. In the condensed interim consolidated financial statements, the same consolidation principles and measurement criteria have been used as those used to prepare the annual report, which should be referred to, except for the IFRS which have entered into force since 1 of January, 2016, described in the 2015 Annual Report, Note 6 “Recently issued accounting standards”. The amendments made there was no impact in the condensed interim consolidated financial statements. The exclusion from the scope of consolidation of some subsidiaries, which are not significant either individually or collectively, had no material effect⁴ for the purposes of correctly representing the financial position, results of operations and cash flows of the Snam Group. Such investments are valued at cost.

The notes to the financial statements are in condensed form. Current income taxes are calculated based on taxable income at the reporting date. Tax receivables and payables for current income taxes are recognised based on the amount which is expected to be paid/recovered to/from the tax authorities under the prevailing tax regulations or those essentially approved at the reporting date and the rates estimated on an annual basis.

Consolidated companies, non-consolidated subsidiaries, companies under joint control, associates as well as other significant equity investments, reporting for which is covered by Article 126 of Consob Resolution 11971 of 14 of May 1999, as amended, are indicated separately in the appendix “Subsidiaries, associates and equity investments of Snam S.p.A. at 30 of June, 2016”, which is an integral part of these notes.

The condensed interim consolidated financial statements at 30 of June, 2016, approved by the Board of Directors of Snam S.p.A. at its meeting of 26 of July, 2016, were subject to a limited audit by Ernst & Young S.p.A. A limited audit is substantially less in scope than an audit performed in accordance with generally accepted auditing standards.

The condensed interim financial statements adopt the Euro as the presentation currency. Given their size, amounts in the financial statements and respective notes are expressed in millions of Euro.