Statutory Auditors

Composition of the Board of Statutory Auditors

The Board of Statutory Auditors currently in office, appointed by the ordinary Shareholders’ Meeting of May 13, 2011, will be in office until the approval of the 2013 financial statements.

According to the resolution passed during the meeting on May 13, 2011, the Board of Statutory Auditors is formed by: Luca Aurelio Guarna (Chairman of the Board of Statutory Auditors appointed by the minority list submitted by shareholder Romano Minozzi and by his subsidiaries), Alberto Luigi Gusmeroli and Lorenzo Pozza (Standing Auditors appointed by the majority list submitted by Cassa Depositi e Prestiti S.p.A.).

Alternate Auditors were also appointed: Stefania Bettoni (included in the minority list submitted by the shareholder Romano Minozzi and by his subsidiaries), and Flavio Pizzini (included in the majority list submitted by Cassa Depositi e Prestiti S.p.A.).
The Auditors appointed represent both lists submitted for said meeting. Further information regarding the submitted lists of candidates and on the results of the voting is available on the Company’s website at www.terna.it in the section “Investor Relations/Corporate Governance/Shareholders’ Meetings/May 13, 2011”. Following the statements made for the appointment, the vote count and after the voting, a standing member was appointed by the minority members that are not connected, not even indirectly, with the members who have submitted or voted the list that won for a number of votes.

From its appointment, the Board of Statutory Auditors is unchanged.

A summary of the professional background of the Standing auditors is provided below.

Luca Aurelio Guarna, 39 years old - Chairman of the Board of Statutory Auditors

[born in Milan on December 20, 1972]

He has a degree in Business Administration from the Luigi Bocconi University; he qualified for the title of Tax Consultant in 2000 and since 2002 he has been enrolled as Auditor.
He has carried out professional activity with prestigious legal and tax offices and since 2001 he has been a member of the administrative, tax and Corporate consulting Spadaccini office in Milan.
He is presently the Chairman of the Board of Statutory Auditors at Gemina S.p.A. and Standing Auditor in other companies such as: Aereoporti di Roma S.p.A., Delmi S.p.A. (company belonging to the A2A Group which is part of Edison S.p.A.’s holding chain), Eagle Pictures S.p.A. and Bieffe Medital S.p.A.
He has worked as a Professor for the Arthur Andersen network and for the Foundation of Tax Consultants in Milan.

 

Alberto Luigi Gusmeroli, 51 years old - Standing Auditor

[born in Varese on February 27, 1961]

He has a degree in Economics from the University of Pavia, School of Economics, with a focus on company finance and credit, enrolled as a tax consultant in the Auditors Register.
He is Chairman of the Board of Auditors of the publishing house Editoriale Nord soc. Coop since 1997 and of Comecor coop a.r.l. since 1990, as well as member of the Board of Auditors of Bancoposta Fondi S.p.A. Sgr (Poste Italiane Group) since 2002 and of Enel Green Power Strambino Solar s.r.l.. He is also a member of the Board of Società Italiana per Azioni per il Traforo del Monte Bianco. Since 2000 he has also been member of the Board of Fondazione Salina, and since 2005 of the Centro Studi sulle Lingue Parlate Locali ed i Dialetti. He is a member of the Commission for study on local bodies of the National Council of Tax Consultants in Rome and general partner of the auditing company Fiduciaria Di Revisione Sas.
He was a member of the Board of the Hotel company 3S from 2000 to 2006, Chairman of the Board of Auditors of Frigorcoop from 1992 to 2000 and Auditor in Enel Energia S.p.A. from 2005 to 2007. In the municipalized company Aspem S.p.A. in Varese he was first Board member with powers, from 1998 to 2002, and then member of the Board of Auditors from 2003 to 2009. He has held many positions as consultant, including in Aero Club d’Italia, and he was an auditor in various local bodies as well as Member of the Inspection Committee of the Regional Council of the Region of Lombardy.

 

Lorenzo Pozza, 45 years old - Standing Auditor

[born in Milan on October 11, 1966]

He has a degree in Business Administration from the Luigi Bocconi University, tax consultant and auditor.
Since 2001, he has been Associate Professor of Business Administration at the Luigi Bocconi University and Professor of Methodology and Quantitative Standards for Companies after having held various positions as a Professor in International Accounting and Accounting and Budget since 1991 at the same university, and since 1992 at the Corporate Management School (SDA), and since 1996 at the University of Italian Switzerland.
He holds the position of Director or Auditor in various different companies, listed and unlisted, in the industrial, financial, real estate and insurance sectors, among which: Telecom Italia S.p.A., Gas Plus S.p.A., Bracco Imaging S.p.A., Leonardo & Co S.p.A. and Merloni Invest S.p.A.
He also carries out professional activity since 1990 and has been a founding member of the Partners S.p.A. consulting firm. He is the author of three books on budget and company evaluation as well as of numerous other publications, and has also written articles and essays on this subject for national and international magazines.

 

During the appointment and taking account of the information provided by the individuals involved, the Board of Directors, based on the envisaged terms, has confirmed and verified the existence of the requirements of integrity, professionalism and independence of the members of the Board of Statutory Auditors appointed by the Shareholders’ Meeting held on May 13, 2011.

In the attached table 2, information is included regarding the composition of the Board of Statutory Auditors as of March 20, 2012.

No Standing Auditor holds five assignments in other Italian companies issuing stocks listed in the Italian regulated markets or in other countries of the European Union and in companies issuing financial instruments available to the public in significant amounts pursuant to Article 116 of the Consolidated Law on Finance as defined by Article 2 bis of the Issuer Regulations.

The total number of assignments as Director or Auditor in other companies according to Book V, Title V, Chapters V (S.p.A.), VI (S.A.p.A.) and VII (S.r.l.) of the Civil Code, relevant according to Article 148 bis of the Consolidated Law on Finance, is indicated in the attached table 2. The total number of assignments according to Article 144 quinquiesdecies of the abovementioned Issuer Regulations based on CONSOB resolution no. 17326 dated Mary 13, 2010, is published by CONSOB and is available on its website (www.consob.it ). In this regard, it should be remembered that following the amendments to articles 144 terdecies and 144 quaterdecies of the Issuer Regulations as per the CONSOB resolution no. 18079 of January 20, 2012 (published in the Official Journal on February 7, 2012), the limits on the total number of assignments and the consequent obligation to notify CONSOB are not applicable to standing members of the control body who hold the position of standing member of the control body “in one issuer only”.

During 2011, the Board of Statutory Auditors held ten meetings which lasted on average approximately one hour and fifty minutes each, with the regular participation of the Standing Auditors.

As a result of the renewal of the Board of Auditors (May 13, 2011), the first five meetings were carried out by the outgoing members and subsequent meetings were carried out by the newly appointed members.

In 2012, all the preliminary meetings are scheduled for reviewing the economic-financial data on the part of the Board of Directors. During the year in progress up to the date of approval of this Report, the Board of Statutory Auditors held 3 meetings.
The Board of Statutory Auditors of February 23, 2012 - on the basis of the criteria set out for evaluating the independence of its own members consistently with the criteria indicated in the Governance Code adopted by the Directors, the same criteria which the new Board of Statutory Auditors also has decided to make reference to, and on the basis of the information provided by each single member – certified that all Standing Auditors met the independence requirement.

Terna’s Board of Statutory Auditors, already from March 16, 2007, decided to voluntarily adapt to a system of transparency analogous to that of the Directors in case of operations in which they bear an interest for themselves or third parties (Article 10.C.4 of the Governance Code). This orientation was also confirmed by the new Board of Statutory Auditors in the meeting held on February 23, 2011.

During 2011, the Board of Statutory Auditors carried out the activities that are typical to auditing as envisaged by the national regulations regarding (i) the observance of the Law and of the founding deed, including the respect of principles of proper administration in carrying out Corporate activities, (ii) the adequacy of the organizational structure, of the internal auditing system and of the Company’s administrative-accounting system. It has also verified the implementation of the provisions pursuant to Article 114, paragraph 2 of the Consolidated Law on Finance relative to communication obligations. The Board of Statutory Auditors also monitored the independence of the auditing company verifying both the respect of the provisions applicable on the matter, and the nature and entity of the services different from the accounting and auditing provided to Terna and to its subsidiaries by KPMG S.p.A. and the bodies belonging to its network, as well as Pricewaterhouse&Coopers S.p.A., the auditing firm appointed to replace KPMG S.p.A., whose mandated term had expired, and bodies belonging to the network of the latter (Article 10.C.5 of the Governance Code). With respect to the appointment of the auditing firm Pricewaterhouse&Coopers S.p.A., the Board submitted the required proposal to the Shareholders’ Meeting.

The Board of Statutory Auditors verified the proper application of criteria and of procedures adopted by the Board of Directors for evaluating the independence of its members and also analyzed the implementation of the regulations pursuant to Legislative Decree no. 231/01 and of the Regulations for the Executive in Charge of the preparation of financial documents pursuant to Law no. 262/05.
In carrying out its activity, the Board of Statutory Auditors was coordinated with the internal Audit Department and with the Internal Control Committee according to the terms included in the previous “Section XI: Internal Control System” (art. 10.C.6 and 10.C.7 of the Governance Code), with the Vigilance Body pursuant to Legislative Decree no. 231/01, with the Executive in Charge pursuant to Law no. 262/05, as well as with the Boards of Statutory Auditors of subsidiaries and with the auditing company.