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SNAM RETE GAS S.P.A.

EXTRAORDINARY SHAREHOLDERS' MEETING OF 26, 27 AND 30 APRIL 2007 IN FIRST, SECOND AND THIRD CALL
ORDINARY SHAREHOLDERS' MEETING OF 26 AND 27 APRIL 2007 IN FIRST AND SECOND CALL

Report on the proposals of the Board of Directors on the items in the Shareholders' Meeting Agenda


EXTRAORDINARY PART


Item 1
Amendments to articles 11, 12, 15, 16, 18, 19, 20, and 22
of the Snam Rete Gas S.p.A. bylaws

Shareholders,
Legislative decree 58/98 ("Decree"), as amended by Law 262/2005 and by Legislative decree 303/2006, provides that:
- shareholders who, separately or jointly, represent at least one fortieth of the share capital may request, within five days of the publication of the notice convening the Meeting, additions to the agenda, specifying in the request the additional items they propose; additions to the agenda may not be made for matters on which the Shareholders' Meeting is required by law to resolve on in proposals put forward by the directors or on the basis of a plan or report they have prepared; notice of items added to the agenda upon the approval of the Board of Directors shall be given in the forms prescribed for the publication of the notice at least ten days before the date set for the Meeting (Article 126-bis);
- the bylaws establish that the members of the Board of Directors shall be elected on the basis of lists and specify the minimum shareholding needed to present a list, which shall not be more than one fortieth of the share capital or according to a different amount set forth in a Consob regulation, taking into consideration capitalisation, outstanding shares, and the property assets of the listed companies (Article 147-ter);
- the lists shall nominate directors who fulfil the independence requirements pursuant to the law and the bylaws and at least one of the Board Members shall be elected from the minority list that obtained the largest number of votes and is not linked in any way, even indirectly, with the shareholders who presented or voted for the list that ranked first by number of votes (Article 147-ter);
- at least one of the members of the Board of Directors, or two if the Board of Directors is composed of more than seven members, must satisfy the independence requirements prescribed by the law and the bylaws. Failure to satisfy the requirements shall result in disqualification from the position (Article 147-ter);
- directors and general managers must satisfy the integrity requirements established for members of the Board of Statutory Auditors in the regulation issued by the Minister of Justice pursuant to Article 148, paragraph 4 of the same legislative decree (Article 147- quinquies);
- the bylaws shall lay down the procedures for appointing a manager charged with preparing the company's financial reports, subject to the mandatory opinion of the internal control body, and shall indicate his requirements of professionalism; the Board of Directors shall ensure that the manager charged with preparing the company's financial reports be endowed with adequate powers and means for the performance of the tasks assigned to him and shall monitor that administrative and accounting procedures are effectively applied (Article 154-bis);
- the Consob regulation establishes that one member of the Board of Statutory Auditors shall be elected from the minority list that obtained the largest number of votes and is not linked in any way, even indirectly, with the shareholders who presented or voted for the list that ranked first by number of votes; the Chairman of the Board of Statutory Auditors shall be appointed by the Shareholders' Meeting from among the auditors elected by the minority (Article 148);
- Consob shall lay down in a regulation the limits to the cumulation of management and control positions that statutory auditors in companies may hold (Article 148-bis);
- the right to call Shareholders' Meetings may not be exercised by less than two auditors, while the right to call Meetings of the Board may be exercised individually (Article 151).
As pertains to the Board of Directors, the Code of Conduct of the listed company ("Code") establishes that:
- there must be an adequate number of non-executive administrators who are independent;
- one or more committees with consulting and proposal-making functions shall be formed with a majority of members who are independent directors.
In view of the above-mentioned provisions from the Decree and the Code, amendments to the company bylaws are hereby presented, expressly establishing that:
- shareholders who, separately or jointly, represent at least one fortieth of the share capital may request, within five days of the publication of the notice convening the Meeting, additions to the agenda, specifying in the request the additional items they propose; additions to the agenda may not be made for matters on which the Shareholders' Meeting is required by law to resolve on proposals put forward by the directors or on the basis of a plan or report they have prepared; notice of items added to the agenda upon approval by the Board of Directors shall be given in the forms prescribed for the publication of the notice convening the Meeting at least ten days before the date set for the Meeting;
- the lists for the appointment of the members of the Board of Directors shall be presented by the shareholders and filed at least fifteen days before the date of the Meeting in first call, along with the candidates' curriculum vitae, statements, and notifications issued by financial intermediaries who are authorised depositories of the shares; the lists must also be published in the forms prescribed by the law and regulations issued by Consob regarding the election of members of the management and internal control bodies.
- the different percentage established or referred to by Consob shall also be taken into consideration when presenting the lists and the minority lists shall not in any way be connected, even indirectly, with the shareholders who have presented or voted for the list that obtained the largest number of votes; lists presented for the appointment of the directors shall specify which candidates satisfy the independence requirements prescribed by the law for auditors of listed companies;
- all candidates for the post of director shall satisfy the integrity requirements prescribed by the law;
- at least one director, if the Board of Directors is composed of less than seven members, or at least three directors, if the Board of Directors is composed of more than seven members, shall satisfy the above-mentioned independence requirements; the procedure for voting on the lists shall ensure that this statutory provision is complied with;
- appointed directors shall inform the company in the event that they no longer satisfy the independence and integrity requirements, or should unexpected occurrences give rise to causes of ineligibility or incompatibility;
- the Board of Directors shall periodically evaluate the independence and integrity of the directors as well as ensure that there are no causes for ineligibility or incompatibility; in the event that a director does not satisfy or fails to fulfill the independence or integrity requirements declared and prescribed by law, or if there should be any causes of inelegibility or incompatibility, the Board of Directors shall declare the suspension of the director's office and see to his replacement or invite him to remedy the causes of incompatibility within a set term. Failure shall result in disqualification from the position;
- appointment of General Managers shall be subject to prior verification by the Board of Directors that the candidates satisfy the integrity requirement and the Board of Directors shall periodically evaluate if the General Managers satisfy the requirement;
- the Board of Directors may form internal committees charged with consulting and proposal-making roles on specific matters;
- the Board of Directors, as presented by the eldest managing director, upon agreement with the Chairman, subject to prior approval by the Board of Statutory Auditors, shall appoint the manager charged with preparing the company's financial reports and indicate his requirements of professionalism; the Board of Directors shall ensure that the manager charged with preparing the company's financial reports is endowed with adequate powers and means as well as monitor that the company's administrative and accounting procedures are effectively applied;
- the filing, presentation and publication of the lists for the appointment of the auditors shall be governed by the provisions of the law and those issued by Consob, with appropriate regulations on the election of the members of the administrative and internal control bodies; the different percentage established or referred to by Consob shall also be taken into consideration when presenting the lists;
- the limits to the cumulation of management and control positions that the company auditors may hold shall be set in compliance with the Consob regulation;
- the position of Chairman of the Board of Statutory Auditors shall be occupied by the auditor elected from the minority lists;
- the right to call Shareholders' Meetings may not be exercised by less than two auditors, while the right to call Meetings of the Board of Directors may be exercised individually.
The Board of Directors has taken this opportunity to propose a number of other modifications to the company bylaws that are not strictly connected with the Decree. They regard:
- Article 12, to bring it into line with current legislation on the right to participate in Shareholders' Meetings;
- Article 15, to assign the Board of Directors further responsibilities pursuant to Civil Code Article 2365:
  • to resolve on statutory modifications pursuant to legal provisions
  • to resolve on the transfer of the company's registered office within the domestic territory;
- Article 16, introducing a clause that provides for the disqualification of the entire Board of Directors in the event that a majority of members is lacking; the list voting procedure is applicable only in the case that the entire Board of Directors is being renewed;
- Article 18, in the case of the Chairman's absence or disability, to grant the power to convene the Board of Directors to the managing director and, subordinately, to the eldest member of the Board of Directors; (also in relation to Article 20) to more clearly specify that "chairman" is meant to refer to whoever is chairing the Meeting;
- Article 19, to establish that the appointment of the General Managers shall be presented by the eldest managing director, upon agreement with the Chairman;
- Article 22, to establish that the voting procedure for the lists is applicable solely in the event that the entire Board of Statutory Auditors is being renewed.
Shareholders,
You are invited to:
- approve the proposed modifications to the Snam Rete Gas S.pA. bylaws in the text shown below next to the current version.
 

BYLAWS
SNAM RETE GAS S.p.A.

CURRENT TEXT

PROPOSED TEXT

ART. 11

ART. 11

The Shareholders' Meeting is convened through a notice containing information on the date, time, location and agenda to be published                        

The Shareholders' Meeting is convened through a notice containing information on the date, time, location and agenda to be published  in the Official Gazette or in at least one of the following daily newspapers: "Il Sole 24 Ore", "Corriere della Sera", "La Repubblica" in the times established by law.

Shareholders who, separately or jointly, represent at least one fortieth of the share capital may request, within five days of the publication of the notice convening the Meeting, additions to the agenda, specifying in the request the additional items they propose. Additions to the agenda may not be made for matters on which the Shareholders' Meeting is required by law to resolve on in proposals put forward by the directors or on the basis of a plan or report they have prepared. Notice of items added to the agenda upon the approval of the Board of Directors shall be given at least ten days before the date set for the Meeting, in a notice to be published as described above .

The notice may also indicate the date, time and location of the second and third call.

The notice may also indicate the date, time and location of the second and third call.

ART.12

ART. 12

Participation in the Shareholders' Meeting is governed by the current legislation, by the by-laws and by the instructions contained in the notice convening the Meeting.

Participation in the Shareholders' Meeting is governed by the current legislation, by the by-laws and by the instructions contained in the notice convening the Meeting.

To participate in the Shareholders' Meeting, the shares or certificates issued pursuant to current law by the broker charged with keeping the accounts must be deposited in the ways established in the notice of call at least two days before the date set for the meeting in first call.

Persons who have been issued a communication pursuant to Civil Code Article 2370, paragraph 2 by an authorised financial intermediary at least two working days prior to the date set for the first call are entitled to participate in Shareholders' Meetings.

Entitled persons may delegate in writing another person to represent them as a proxy, according to law.

Entitled persons may delegate in writing another person to represent them as a proxy, according to law.

The Company shall provide space to enable shareholders who fulfil the relevant legal requirements to collect proxies on behalf of shareholders who are employees of the Company or its subsidiaries.

The Company shall provide space to enable shareholders who fulfil the relevant legal requirements to collect proxies on behalf of shareholders who are employees of the Company or its subsidiaries.

It is the duty of the Shareholders' Meeting Chairman to ensure the validity of proxies and participation in the Meeting.

It is the duty of the Shareholders' Meeting Chairman to ensure the validity of proxies and participation in the Meeting.

Shareholders' Meetings are governed by the regulations approved by the Ordinary Shareholders' Meeting.

Shareholders' Meetings are governed by the regulations approved by the Ordinary Shareholders' Meeting.

ART.15

ART. 15

The Shareholders' Meetings are considered valid under the terms of current legislation.

The Shareholders' Meetings are considered valid under the terms of current legislation.

Ordinary Shareholders' Meetings authorise resolutions regarding sell-offs, capital increase contributions, rent, use and any other dispositions, including those pertaining to joint ventures, which may limit the free disposability of the assets of the Company or its branches with strategic relevance related to gas transportation and dispatching activities, without prejudice, pursuant to article 2364 no. 5 of the Italian Civil Code, to the directors' responsibility for operations performed. Decisions regarding these matters shall be adopted, even in second call, with the majority  of at least three quarters of the share capital present at the meeting.

Ordinary Shareholders' Meetings authorise resolutions regarding sell-offs, capital increase contributions, rent, use and any other dispositions, including those pertaining to joint ventures, which may limit the free disposability of the assets of the Company or its branches with strategic relevance related to gas transportation and dispatching activities, without prejudice, pursuant to article 2364 no. 5 of the Italian Civil Code, to the directors' responsibility for operations performed. Decisions regarding these matters shall be adopted, even in second call, with the majority  of at least three quarters of the share capital present at the meeting.

For other matters it is concerned with, the Ordinary Shareholders' Meeting decides with the majorities set by the current law.

The Extraordinary Shareholders' Meeting decides, at the first, second and third call, with a majority of at least three quarters of the capital represented at the meeting.

For other matters it is concerned with, the Ordinary Shareholders' Meeting decides with the majorities set by the current law.

The Extraordinary Shareholders' Meeting decides, at the first, second and third call, with the majority  of at least three quarters of the share capital present at the meeting.

The Board of Directors is responsible for passing resolution on the following issues:

  • mergers in the cases envisaged in articles 2505 and 2505 bis of the Italian Civil Code, also in the case of demergers in the cases referred to in these clauses;
  • opening, modification and closure of branches;
  • reduction of the share capital in the case of withdrawal of shareholders.

The Board of Directors is responsible for passing resolution on the following issues:

  • mergers in the cases envisaged in articles 2505 and 2505 bis of the Italian Civil Code, also in the case of demergers in the cases referred to in these clauses;
  • opening, modification and closure of branches;
  • reduction of the share capital in the case of withdrawal of shareholders.
  • modifications to the bylaws in pursuance of legislative provisions ;
  • transfer of the company's registered office within the domestic territory .

ART.16

ART. 16

The Company's management is  entrusted to a Board of Directors consisting of not less than five members and no more than nine; their number and term of office are established by the shareholders' meeting at the time of appointment.

The directors can be appointed for a period of no longer than three financial periods, their term of office expires on the date set for the shareholders' meeting to approve the financial statements of the last financial year of their term of office and may be re-elected.

Holding the position of director is subject to the possession of the requirements of honour, professionalism and independence dictated by the provisions to which the Company must comply, also with reference to those envisaged by the codes of conduct drawn up by the company which manages the regulated markets.

If one or more directors should leave the Board during the year then the others shall replace them with resolution approved by the Board of Statutory Auditors, providing that the majority consists of directors appointed by the Shareholders' Meeting. Directors appointed in this way remain in office until the following Shareholders' Meeting.

The Shareholders' Meeting may change the number of Board members during the lifetime of the Board, within the numerical limits indicated in this article; if the Shareholders' Meeting increases the number, the new Board members are appointed according to the provisions contained in this article. The term of the members so appointed ceases at the same time as that of the members already appointed.

The members are appointed by the Shareholders' Meeting on the basis of lists in which the candidates are listed in numerical order.

The right to present such lists is held by the Board of Directors and Shareholders who individually or with other shareholders represent at least 2% of the voting shares for the ordinary shareholders' meeting.

Each shareholder may present individually or with other shareholders one list only and every candidate may appear  in one list only, or he/she will be ineligible.

Holding companies and those subject to shared control cannot present or contribute to the presentation of other lists; controlled companies are those indicated in article 2359, sub-paragraph 1 of the Civil Code.

The list presented by the Board of Directors and those presented by shareholders must be deposited at the Company's Head Office and published in at least two Italian national daily newspapers, one of which must be a financial paper, at least twenty and ten days respectively before the date of the Shareholders' Meeting on first call.

The title  of shares necessary to present a list shall be demonstrated by presenting at or sending to the Company's  Head Office at least five days before the Shareholders' Meeting first call a copy of the communications issued by the appropriate authorities. Together with each list, within the time limits indicated above, statements must be presented containing each candidate's acceptance of nomination, confirming that there is no cause for ineligibility or incompatibility, as well as the possession of the requisites which are legally necessary for performing the task in question, plus the CV of each candidate.

Each person entitled to vote may vote for one list only.

The elections of the Board members proceed as follows:

a)  Seven tenths of the members are taken from the list which obtains the most votes, in the numerical order they were listed, with numbers which are not whole rounded down;

b)      the other members are taken from the other lists; to this end, the votes obtained from these lists are subsequently divided by 1, 2 or 3 according to the number of members to be appointed. The quotients thus obtained are progressively assigned to the candidates on these lists, according to the order respectively envisaged. The quotients assigned in this way are then set out in  descending order. Those with the highest quotients are accordingly appointed. In the event of candidates having the same quotient, the candidate is appointed from a list which has so far not had any members appointed or which has had the lowest number of members appointed. If this is the first member to be appointed with this method and so no lists have yet supplied a member or if the lists have all contributed the same number of members, the candidate will be appointed  from the list which has received the  most votes. In the case of votes cast being the same and the quotient assigned to the candidates also being the same, the Shareholders' Meeting will vote again and the member obtaining the highest number of votes will be appointed;

c)      members who, for whatever reason, are not appointed as per the procedures indicated above, are appointed by the Meeting, which decides with the majority legally applicable.

The Company's management is  entrusted to a Board of Directors consisting of not less than five members and no more than nine; their number and term of office are established by the shareholders' meeting at the time of appointment.

The directors can be appointed for a period of no longer than three financial periods, their term of office expires on the date set for the Shareholders' Meeting to approve the financial statements of the last financial year of their term of office and may be re-elected.

The Board of Directors is appointed by the Shareholders' Meeting based on lists showing the candidates in numerical order.
The lists are presented by the shareholders and filed with the Company's Head Office, at least fifteen days before the date of the Shareholders' Meeting in first call, and must be published, according to the procedures prescribed by the law and regulations issued by Consob for electing the members of the administrative and internal control bodies.

All shareholders are entitled to present or jointly present only one list and to vote for only one list, in accordance with the above-mentioned legislative and regulatory provisions.

A candidate who appears on more than one list shall be ineligible.

Only shareholders who individually or jointly hold at least 2% of shares with the right to vote in the Ordinary Meeting, or a different percentage fixed or referred to by legislative or regulatory provisions, are entitled to present lists. In order to prove ownership of the number of shares required to present lists, shareholders shall present or have delivered to the Head Office, along with the lists, a copy of the communication issued by the financial intermediaries who are authorised depositories of the shares.

At least one member, if the Board of Directors is composed of less than seven members, or at least three members, if the Board of Directors is composed of more than seven members, shall satisfy the independence requirements established for members of the Board of Statutory Auditors of listed companies.

The lists shall identify the candidates who satisfy the above-mentioned independence requirements.

All candidates shall further satisfy the integrity requirements established by current regulations.

The curriculum vita of each candidate and statements by each candidate accepting the nomination and certifying under their own responsibility that there are no causes of ineligibility or incompatibility and that they satisfy the integrity requirement and, if pertinent, the independence requirement, must be filed at the same time as the list. Failure to comply will result in the candidate's inadmissibility.

Appointed directors shall inform the company in the event that they no longer satisfy the independence and integrity requirements, or should unexpected occurrences create causes of ineligibility or incompatibility.

The Board of Directors shall periodically evaluate the independence and integrity of the members as well as ensure that there are no causes for ineligibility or incompatibility. In the event that a director does not satisfy or fails to fulfil the independence or integrity requirements declared and prescribed by law, or if there should be any causes of inelegibility or incompatibility, the Board of Directors shall declare the suspension of the director's office and see to his replacement or invite him to remedy the causes of incompatibility within a set term. Failure shall result in disqualification from the position.

Members of the board shall be elected as follows:

a) seven-tenths of the members to be elected, rounded off to the next smallest number in the case of a fractional number less than unity, shall be taken from the list that received the majority of shareholder votes in the numerical order they were listed;

b) the rest of the members shall be taken from the other lists that are in no way connected, even indirectly, to the shareholders who presented or voted for the list that had the largest number of votes; to this end, the votes obtained from these lists are subsequently divided by one, two or three according to the number of members to be appointed. The quotients thus obtained are progressively assigned to the candidates on these lists, according to the order respectively envisaged. The quotients assigned in this way are then set out in descending order. Those with the highest quotients are accordingly appointed. In the event of candidates having the same quotient, the candidate is appointed from a list which has so far not had any members appointed or which has had the lowest number of members appointed. In the case that none of these lists has elected a member or all of them have elected the same number of members, the candidate who has received the largest number of votes shall be elected from these lists. Should there be an equal number of list votes, and all with the same quotient, a new vote shall be taken from the entire Shareholders' Meeting, and the candidate who receives the simple majority of votes shall be elected;

c) in the event that the minimum number of independent members pursuant to statutory regulations are not appointed, the quotient of votes to be assigned to each candidate on the various lists shall be calculated following the system described in letter b); the number of candidates required to ensure compliance with the statutory provision shall be elected from those who have not yet been taken from the lists as per letters a) and b), who satisfy the independence requirements, and who have received the highest quotients. These members shall take the place of the non-independent members who were assigned the lowest quotients. In the event that there are not enough candidates to fulfil the minimum required number of independent members, the Shareholders' Meeting shall resolve, according to the legally prescribed majorities, to replace the candidates who do not satisfy the independence requirements and who received the lowest quotients;

d) to appoint members who for any other reason are not appointed following the above procedure, the Shareholders' Meeting shall pass resolutions, according to the legally prescribed majorities, so as to ensure that the membership of the Board of Directors complies with the law and the bylaw.

Other mandatory provisions of the law in force, including regulations, are not affected and remain in force.

The list voting procedure is applicable only in the case that the entire Board of Directors is being renewed.

The Shareholders' Meeting can change the number of members of the Board of Directors, including while it is in office, within the limit specified in the first paragraph of this article, seeing to the relative appointments. Appointments of members who are elected in this manner shall expire at the same time as those who are in office.

If one or more members are lacking during the term,  Article 2386 of the Civil Code shall be applied. If a majority of members is lacking, the entire Board of Directors shall be considered disqualified and the Board of Directors shall promptly convene the Shareholders' Meeting in order to re-form it.

The Board of Directors may form internal committees charged with consulting and proposal-making roles on specific matters.

ART.18

ART. 18

The Board of Directors is convened by the Chairman whenever he thinks it appropriate or when at least two Board members asks in writing for it to meet. The request must indicate the reasons for convening the Board.

 

The Board of Directors is convened by the Chairman - or, in his absence or disability, by a managing director, or, finally, in his absence or disability, by the eldest board member- whenever he thinks it appropriate or when at least two Board members ask in writing for it to meet. The request must indicate the reasons for convening the Board.

 

The Board of Directors meets in the location indicated in the notice of the meeting. The notice is sent at least five days before the meeting; the Board of Directors will define any other elements regarding the holding of its meetings.

The Board of Directors meets in the location indicated in the notice of the meeting. The notice is sent at least five days before the meeting; the Board of Directors will define any other elements regarding the  meetings.

The Board of Directors' Meetings may be held in tele or video conference on condition that all participants are identifiable and can follow the discussion, examine, receive and transmit documents and participate in real time in the discussions. The meeting is considered as having taken place where the Chairman and Secretary are  located.

The Board of Directors' Meetings may be held in tele or video conference on condition that all participants are identifiable and can follow the discussion, examine, receive and transmit documents and participate in real time in the discussions. The meeting is considered as having taken place where the person acting as the Chairman of the meeting and the Secretary are located.

The meetings of the Board of Directors are chaired by the Chairman; in the event that he or she is absent or unable to participate, the oldest managing director present will chair the meeting, or if he or she is absent or unable to participate the oldest board member present.

The meetings of the Board of Directors are chaired by the Chairman; in the event that he or she is absent or unable to participate, the oldest managing director present will chair the meeting, or if he or she is absent or unable to participate the oldest board member present.

ART. 19

ART. 19

The Board of Directors may delegate powers to one or more of its members, defining the limits of this delegation, subject to the provisions of Article  2381 of the Civil Code.

 

The Board of Directors may delegate powers to one or more of its members, defining the limits of this delegation, subject to the provisions of Article 2381 of the Civil Code.

 

The Board of Directors may appoint one or more General Managers, defining their powers

The Board of Directors may appoint, as proposed by the eldest managing director, upon agreement with the Chairman, one or more General Managers, defining their powers, subject to verification that they satisfy the legally prescribed integrity requirements. The Board of Directors shall periodically evaluate the integrity of the managing directors. Failure to satisfy the requirements shall result in disqualification from the position.  

The Board of Directors may also delegate powers for single acts or categories of acts to Company employees and third parties.

The Board of Directors may also delegate powers for single acts or categories of acts to Company employees and third parties.

On the occasion of meetings and at least once every three months, the Board of Directors and the Board of Auditors are informed, also through the Chairman or any directors granted powers pursuant to the by-laws, and also as regards the subsidiaries, about the general trend of operations with the most significant impact in economic, financial and asset terms with special reference to operations in which directors have a personal or indirect interest and which are affected by any party exercising management or coordination activities.

On the occasion of meetings and at least once every three months, the Board of Directors and the Board of Statutory Auditors are informed, also through the Chairman or any directors granted powers pursuant to the by-laws, and also as regards the subsidiaries, about the general trend of operations with the most significant impact in economic, financial and asset terms with special reference to operations in which directors have a personal or indirect interest and which are affected by any party exercising management or coordination activities.

 

The Board of Directors, as proposed by the eldest managing director and upon agreement with the Chairman, subject to prior approval by the Board of Statutory Auditors, shall appoint the manager charged with preparing the company's financial reports from those who satisfy the  requirements of professionalism specified below.

The manager charged with preparing the company's financial reports shall be chosen from among those who have performed the following roles for at least three years:

a)      administrative or internal control responsibilities or management at a listed company in Italian or European Union regulated markets, or markets in countries who are members of OCSE that have a share capital no less than two million Euros, or

b)      legal auditing of the accounts of companies described in letter a), or

c)      professional practice or university professorship in the subject, either financial or accounting, or

d)      managerial functions with public or private organisations with responsibilities in the financial, accounting, or auditing sectors.

The Board of Directors shall ensure that the manager charged with preparing the company's financial reports is endowed with adequate powers and means as well as monitor that the company's administrative and accounting procedures are effectively applied.

ART. 20

ART. 20

A Board of Directors meeting is valid if a majority of members is present.

 

A Board of Directors meeting is valid if a majority of members is present.

 

The decisions are agreed by a simple majority of members present and, in the event of a tie, by the meeting chairman's casting vote.

The decisions are agreed by a simple majority of members present and, in the event of a tie, by the meeting chairman's casting vote.

The minutes of the board meetings are written by the Secretary of the Board of Directors and signed by the Secretary of the Board of Directors and countersigned by the Chairman of the meeting and the Secretary. Copies of minutes certified by the Chairman and the Secretary are valid for legal purposes.

The minutes of the board meetings are written by the Secretary of the Board of Directors and signed by the Secretary of the Board of Directors and countersigned by the Chairman of the meeting and the Secretary. Copies of minutes certified by the Chairman of the meeting and the Secretary are valid for legal purposes.

Art. 22

ART. 22

The Board of Auditors consists of three Effective Auditors; two additional Alternate Auditors must also be appointed.

The Auditors are chosen from those possessing the professional requisites and standing indicated in the Justice Ministry decree of 30 March 2000, n. 162.

According to the provisions of this decree, the subjects strictly connected to the Company's activities are: commercial law, business economics, corporate finance.

The sector strictly connected to the Company's business is engineering.

Auditors may not be appointed, or if appointed, will cease to be so, who are already statutory auditors, members of the supervisory board or of the management control committee in at least  five companies issuing shares listed in regulated markets, other than the controlling company and the companies it controls.

The Effective Auditors and the Alternate Auditors are appointed by the Shareholders' Meeting on the basis of lists presented by the shareholders in which the candidates are listed in numerical order.

Auditors remain in office for three financial periods and their term of office expires on the date set for the shareholders' meeting to approve the financial statements of the last financial year of their term of office; auditors may be re-elected.

The Board of Auditors may meet in tele or video conference providing that all participants are identifiable and can follow the discussion, examine, receive and transmit documents and participate in real time in the discussions.

The meeting is considered as having taken place where the Chairman of the Board of Auditors and Secretary, if appointed, are  located.

For the presentation, delivery and publication of the lists the provisions of Article 16 above apply.

The lists are divided into two sections: the first regards candidates for the post of Effective Auditor, the second is for that of Alternate Auditor. At least the first  candidate for each section must be enrolled in the auditors register and have carried out legal control of accounts for at least three years.

From the list which has obtained the most votes two Effective Auditors and one Alternate Auditor are taken in order. The other Effective Auditor and Alternate Auditor are nominated using the procedure set out in  Article 16, line b), to apply separately to each of the sections into which the other lists are divided.

The Chairmanship of the Board of Auditors will be given to the first candidate on the list containing the most votes.

In  case of substitution of an auditor taken from the list obtaining the most votes, the Alternate Auditor from the same list will take his place; in the case of substitution of an auditor taken from the other lists the Alternate Auditor appointed will take his place under the procedures set out in  Article 16.

The auditors not appointed  for whatever reason according to the procedures indicated above are appointed by the Shareholders' Meeting which decides with the majority legally applicable.

The Board of Auditors may, subject to communication of the fact to the Chairman of the Board of Directors, convene the Shareholders' Meeting and the Board of Directors. The powers for convening may also be exercised by at least two members of the Board of Auditors.

 

The Board of Statutory Auditors consists of three Effective Auditors; two Alternate Auditors shall also be appointed. The Shareholders' Meeting shall appoint the auditors and determine their compensation. Auditors shall be chosen from among those who satisfy the integrity and professionalism requirements established by the applicable laws, particularly Ministry of Justice Decree no. 162 of 30 March 2000.

According to the provisions of this decree, the subjects strictly connected to the Company's activities are: commercial law, business economics, corporate finance.

The sector strictly connected to the Company's business is engineering.

The auditors may hold positions as members of administrative and control bodies in other companies, within the limits established by Consob in its regulation.

Until these regulations come into force, auditors may not be appointed, or if appointed, will cease to be so, who are already effective auditors in at least five companies issuing shares listed in regulated markets that are not controlled by Eni S.p.A..

The Board of Statutory Auditors shall be appointed by the Shareholders' Meeting based on lists presenting the candidates in numerical order.

The legal provisions and those issued by Consob in its regulation on election of the members of administrative and internal control bodies shall be applied for matters concerning the filing, presentation, and publication of the lists.

All shareholders are entitled to present or jointly present only one list and to vote for only one list, in accordance with the above-mentioned legislative and regulatory provisions.

Only shareholders who at the time of the presentation of lists have the right to vote and who alone or jointly with other shareholders hold at least 2% of shares with the right to vote in the Ordinary Meeting, or a different percentage fixed or referred to by legislative or regulatory provisions, are entitled to present lists.

In order to prove ownership of the number of shares required to present lists, shareholders shall present or have delivered to the Head Office, along with the lists, a copy of the communication issued by the financial intermediaries who are authorised depositories of the shares.

A candidate who appears on more than one list shall be ineligible.

The lists are divided into two sections: the first regards candidates for the post of Effective Auditor, the second is for that of Alternate Auditor. At least the first candidate for each section must be enrolled in the auditors register and have carried out legal control of accounts for at least three years.

The two Effective and one Alternate Auditors shall be taken from the list that receives the majority of votes. The other Effective and Alternate auditors shall be appointed according to the procedures set forth in Article 16, letter b), to be applied individually to each of the sections in which the other lists are divided.

The Shareholders' Meeting shall appoint the Effective Auditor who was elected according to the procedures set forth in Article 16, letter b) as Chairman of the Board of Statutory Auditors.

In the event that an auditor taken from the list that received the majority of votes is replaced, the Alternate Auditor from the same list shall take his or her place; in the event an auditor taken from the other lists is replaced, the Alternate Auditor from these lists shall be appointed.

The list voting procedure is applicable only in the event that the entire Board of Statutory Auditors is being renewed.

Other mandatory provisions of the law in force, including regulations, are not affected and remain in force.

Outgoing auditors are eligible for re-election.

The Board of Statutory Auditors may meet in tele or video conference providing that all participants are identifiable and can follow the discussion, examine, receive and transmit documents and participate in real time in the discussions.

The meeting is considered as having taken place where the Chairman of the Board of Statutory Auditors and Secretary, if appointed, are located.

The right to convene the Board of Directors may be exercised individually by each member of the Board of Statutory Auditors; the right to convene the Shareholders' Meeting may be exercised by no less than two members of the Board of Statutory Auditors.

 

- grant the Chairman full powers to execute this resolution, through proxies if desired, as well as to bring about formal additions, modifications or cancellations that may be requested by the competent Authorities for registration in the Register of Companies.

  

ORDINARY PART

Item 1
Financial Statements as at 31 December 2006, Consolidated Financial Statements as at 31 December 2006; Directors' Report, Reports of the Board of Statutory Auditors and of the Independent Auditors

Shareholders,
The Financial Statements of Snam Rete Gas S.p.A. for the 2006 year which close with a fiscal year profit amounting to 447,561,309.82 Euros and the Consolidated Financial Statements which close with a net profit of 448 million Euros are illustrated in the "2006 Annual Report" folder filed at the Company's Registered Office and at Borsa Italiana S.p.A.. The current report therefore refers to this document.
To the Shareholders,
You are invited to receive the Financial Statements of Snam Rete Gas S.p.A. as of 31 December 2006 which closed with a profit of 447,561,309.82 Euros.
 

Item 2
Allocation of net income and payment of dividend

Shareholders,
The Board of Directors proposes to assign the fiscal year profit of 447,561,309.82 Euros as follows:
• the amount needed to the "Legal reserve" to ensure that it is one fifth of the Share Capital called up at the date of the Shareholders' Meeting;
• a 0.19 Euro dividend per share to shares which are outstanding at the ex dividend date, excluding the treasury shares at that date;
• to carry forward, after the proposed allocations, the remaining amount.
Shareholders,
You are invited to allocate the fiscal year profit amounting to 447,561,309.82 Euros as follows:
• the amount needed to the "Legal reserve" to ensure that it is one fifth of the Share Capital called up at the date of the Shareholders' Meeting;
• a 0.19 Euro dividend per share to shares which are outstanding at the ex dividend date, excluding the treasury shares at that date;
• to carry forward, after the proposed allocations, the remaining amount.
You are also invited to approve the proposal to pay the dividend commencing from 24 th May 2007, with the ex-dividend date on 21st May 2007.

 

Item 3
Appointment of directors, with prior decision on their number and term of office; determination of relative compensation

Shareholders,
The mandate granted to the Board of Directors in the Shareholders' Meeting of 27 April 2004 expires on the date set for the Shareholders' Meeting to approve the Financial Statements as at 31 December 2006. Article 16 of the bylaws states that the company is administered by a Board of Directors comprising a minimum of five and a maximum of nine members, delegating to the Shareholders' Meeting the determination of the number, and establishes that the directors are appointed on the basis of lists presented by entitled parties, filed at the company's registered office and published in daily newspapers in accordance with statutory provisions.
To guarantee that the formation of the board is appropriate for the size of the company and complexity of the activities it performs, the Board of Directors proposes to set at eight the number of directors and at three financial periods their term of office, with expiry at the Shareholders' Meeting called to approve the financial statements as at 31 December 2009.
The Board of Directors also proposes to determine the annual gross compensation due to each director at 30,000.00 Euros, plus reimbursement of expenses borne.
Finally, the Board of Directors proposes that directors shall be due 500.00 Euros each time they participate in a meeting of the Committees formed within the Board of Directors, in addition to having their expenses reimbursed.
Shareholders,
You are invited to approve the proposal of setting at eight the number of directors and at three financial periods their term of office with expiry at the Shareholders' Meeting called to approve the financial statements as at 31 December 2009 and to vote a list from those presented and made known in accordance with the bylaws.
You are also invited to determine the annual gross compensation due to each director at 30,000.00 Euros, plus reimbursement of expenses borne and to approve the payment of 500.00 Euros to directors each time they participate in a meeting of the Committees formed within the Board of Directors, plus reimbursement of expenses borne.
 

Item 4
Appointment of the Chairman of the Board of Directors

Shareholders,
Pursuant to Article 17 of the bylaws, the Chairman of the Board of Directors is elected by the Shareholders' Meeting; should the Meeting not have done so, the Board of Directors shall elect the Chairman from among its members.
The Board of Directors proposes that the Shareholders' Meeting elect as Chairman of the Board of Directors the first candidate of the list which obtains the majority of the votes.
Shareholders,
You are invited to elect as Chairman of the Board of Directors the first candidate of the list which obtains the majority of the votes.
 

Item 5
Appointment of the Board of Statutory Auditors and determination of the compensation of Statutory Auditors

Shareholders,
The mandate granted to the Board of Statutory Auditors of the Company in the Shareholders' Meeting of 27 April 2004 expires on the date set for the Shareholders' Meeting to approve the Financial Statements as at 31 December 2006.
Pursuant to Article 22 of the bylaws, the Shareholders' Meeting is called on to appoint three effective and two alternate auditors on the basis of lists presented by entitled parties, filed at the company's registered office and published in daily newspapers in accordance with the bylaws. The candidates for the position of auditor must possess the requirements of integrity and professionalism envisaged in Ministry of Justice Decree no. 162 of 30 March 2000 and those of professionalism indicated in Article 22 of the bylaws.
Pursuant to article 22 of the bylaws, the Auditors remain in office for three financial years; the term of office expires on the date of the Shareholders' Meeting called to approve the financial statements as at 31 December 2009.
Article 148 of Legislative Decree No. 58/98, as amended by Law 262/2005, establishes that the Chairman of the Board of Statutory Auditors shall be appointed by the Shareholders' Meeting from the auditors elected from the minority lists. Consequently, the statutory clause that provides for the first candidate on the list that receives the largest number of votes to be appointed Chairman of the Board of Statutory Auditors is not applicable.
In view of the complexity and breadth of the supervisory tasks entrusted to the auditors and their responsibilities, the Board of Directors proposes to set the annual gross compensation due to the Chairman of the Board of Statutory Auditors and to each statutory auditor at 45,000.00 Euros and 30,000.00 Euros respectively, plus reimbursement of expenses borne.
Finally, the Board of Directors proposes that 500.00 Euros be paid to the auditors each time they attend a meeting of the Committees formed within the Board of Directors, plus reimbursement of expenses borne.
Shareholders,
You are invited to vote for one of the lists presented and made known in accordance with the bylaws, noting that the candidate for Effective Auditor from the minority list that receives the largest number of votes shall be appointed as Chairman of the Board of Statutory Auditors. You are also invited to set the annual gross compensation due to the Chairman of the Board of Statutory Auditors and to each statutory auditor at 45,000.00 Euros and 30,000.00 Euros respectively, plus reimbursement of expenses borne.
Finally, you are invited to approve the payment of 500.00 Euros to the auditors for each meeting of the Committees formed within the Board of Directors that they attend, plus reimbursement of expenses borne.
 

Item 6
Extension of the mandate to PricewaterhouseCoopers S.p.A. for the accounting audit of the financial years 2007-2012

Shareholders,
The auditing mandate of PricewaterhouseCoopers S.p.A. (PwC) granted by the Shareholders' Meeting on 27 April 2004 expires with the Shareholders' Meeting to approve the financial statements for the year ended 31 December 2006.
The Board of Directors is presenting the Meeting with this proposal, worded by the Board of Statutory Auditors as follows, to extend the auditing mandate referred to above.
"Shareholders,
The auditing mandate of PricewaterhouseCoopers S.p.A. (PwC) granted by the Shareholders' Meeting on 27 April 2004 expires with the Shareholders' Meeting to approve the Financial Statements for the year ended 31 December 2006. On 20 March 2007, the Board of Statutory Auditors examined the extension proposal, which contains the audit plan for the 2007 - 2008 - 2009 - 2010 - 2011 - 2012 financial statements and the consolidated financial statements associated with them, in order to express an opinion in its regard, pursuant to Article 156 of Legislative Decree 58/98, and found that the plan is adequate and complete.
The Board of Statutory Auditors has considered whether the proposal to extend the current contract with PwC for the 2007-2012 period is feasible, seeing as it fills a need arising from circumstantial operating motivations and does not go against applicable laws.
It fills a need arising from operating motivations inasmuch as it would:
• allow increased "work burdens" to be avoided that would inevitably be experienced by changing the auditing firm after only one year of applying the Sarbanes Oxley Act (SOA) in accordance with the accounting principles and methods decided upon in conjunction with PwC;
• permit the activities initiated to comply with the above-mentioned law to be pursued, taking advantage, from the second year of applying the SOA onwards, of the work that has already been set up and begun with the auditor;
• offer greater possibilities to avail ourselves of the operational efficiency and consequent optimising effects between auditing and SOA activities.
The proposal does not go against any laws or regulations currently in force, since Legislative Decree 303 of 29 December 2006 explicitly states in paragraph 7 of Article 8: "appointments that are in progress on the date this legislative decree comes into force whose total duration, including past renewals or extensions, is less than nine financial years can be extended, by the date of the first Shareholders' Meeting called to approve the financial statements, for the purpose of bringing the term into line with the limit set forth in Article 159, pararaph 4."
Based on these facts, and on the finding that PwC satisfies the independence requirements prescribed by the law, and that no incompatibility conditions exist at this time, the Board of Statutory Auditors proposes to extend the mandate of PwC to the financial years from 2007 to 2012 as auditor of the accounts and the consolidated financial statements, the mandate to verify proper bookkeeping during the year, the mandate of limited auditing of the half-yearly report of Snam Rete Gas S.p.A. as well as verification of the adjustments needed to adapt the consolidated figures from the financial statements prepared on the basis of accounting principles applicable in Italy to those used in the United States (US GAAP) for the purpose of fulfilling Eni Group's American information obligations.
The proposal foresees Marilena Cederna as the member in charge of the appointment.
Should the member in charge be replaced, Consob and the Company will be informed accordingly, within the time limits specified in Article 162, paragraph 3-bis of Legislative Decree 58/1998. Pursuant to Article 115-bis of Legislative Decree 58/1998, PricewaterhouseCoopers shall have access to privileged information and, consequently, the reference person for any correspondence on this matter is the person in charge of the appointment.
You are accordingly invited to approve the proposal to extend the mandates of PricewaterhouseCoopers S.p.A. to the financial years from 2007 to 2012:
• to audit the accounts and the consolidated financial statements, pursuant to Article 159 of Legislative Decree no. 58 of 24 February 1998, as amended by Legislative Decree 303/2006;
• to verify proper bookkeeping during the course of the year and accurate disclosure of operational factors in the accounts, in compliance with Article 155 of Legislative Decree no. 58 of 24 February 1998;
• to perform limited auditing of the half-yearly report, in compliance with the provisions set forth in Consob communication no. 97001574 of 20 February 1997;
• to verify the adjustments needed to adapt the consolidated figures from the financial statements prepared on the basis of accounting principles applicable in Italy to those used in the United States (US GAAP) for the purpose of fulfilling Eni Group's American information obligations.
From a cost point of view, the PwC proposal also involves the subsidiary GNL Italia S.p.A. and compensation will amount to a total of 196,700 Euros (2,810 hours) per financial year. Their fee schedule appears to be in line with the market.
The PwC proposal on auditing activities solely for Snam Rete Gas S.p.A. foresees a compensation of 174,300 Euros (2,490 hours) per financial year, broken down as follows:
 

   

(amounts in euro)

 

Hours

Compensation

Audit of the financial statements for the year

1,460

102,200

Audit of the consolidated financial statements

130

9,100

Audit of the half-yearly report

320

22,400

Verification of proper bookkeeping during the financial year

350

24,500

Verification of US GAAP adjustments

230

16,100

Total

2,490

174,300

 

Individual responsibilities are reported below.
 

Audit of the financial statements for the year

       

(amounts in euro)

Role

Units

Hours

% of hours

Compensation

     

%

Hourly

Total

Partner

1

131

9

195

25,545

Director

1

365

25

128

46,720

Expert auditor

2

511

35

78

39,858

Assistant

3

453

31

50

22,650

         

134,773

Reduction

       

(32,573)

Total

 

1,460

100

 

102,200



 

Audit of the consolidated financial statements

       

(amounts in euro)

Role

Units

Hours

% of hours

Compensation

 

 

 

%

Hourly

Total

Partner

1

13

10

195

2,535

Director

1

39

30

128

4,992

Expert auditor

1

46

35

78

3,588

Assistant

1

32

25

50

1,600

         

    12,715

Reduction

       

(3,615)

Total

 

130

100

 

9,100



 

Verification of proper bookkeeping during the financial year

       

(amounts in euro)

Role

Units

Hours

% of hours

Compensation

 

 

 

%

Hourly

Total

Partner

1

31

9

195

6,045

Director

1

87

25

128

11,136

Expert auditor

1

123

35

78

9,594

Assistant

1

109

31

50

5,450

         

32,225

Reduction

       

(7,725)

Total

 

350

100

 

24,500



 

Audit of the half-year report

       

(amounts in euro)

Role

Units

Hours

% of hours

Compensation

 

 

 

%

Hourly

Total

Partner

1

32

10

195

6,240

Director

1

96

30

128

12,288

Expert auditor

1

112

35

78

8,736

Assistant

1

80

25

50

4,000

         

31,264

Reduction

       

(8,864)

Total

 

320

100

 

22,400



 

Verification of US GAAP adjustments

       

(amounts in euro)

Role

Units

Hours

% of hours

Compensation

 

 

 

%

Hourly

Total

Partner

1

23

10

195

4,485

Director

1

69

30

128

8,832

Expert auditor

1

104

45

78

8,112

Assistant

1

34

15

50

1,700

         

23,129

Reduction

       

(7,029)

Total

 

230

100

 

16,100

 

Travel and accommodation expenses for jobs performed away from the auditing company offices shall be reimbursed at their cost, within normal limits.
The supervisory contribution due to Consob by the auditing company shall by reimbursed by Snam Rete Gas S.p.A. at cost, and in any case for an amount based on the payment billed for the audit of the financial statements for the year and the consolidated statements.
The compensation shown above may be adapted to the final results only under exceptional circumstances or unexpected occurrences at the time the offer is being drawn up that necessitate a larger number of hours and/or different allocations of the professional qualifications. Should the final cost based on the hours and net fees applied to the staff that were effectively employed be less than the expected amount, the compensation will be accordingly reduced.
The Board of Statutory Auditors"
Shareholders,
You are invited to approve the proposal to extend the auditing mandate, to the financial years from 2007 to 2012, to PricewaterhouseCoopers S.p.A. granted by the Shareholders' Meeting on 27 April 2004, in accordance with the terms and procedures proposed by the Board of Statutory Auditors.
 

 

The Chairman of the Board of Directors
Mr. Alberto Meomartini

 
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05 August 2016 - 15:42 CEST