Additional information

Purchase of treasury shares

No treasury shares were purchased on the market during 2011.
Saipem SpA holds treasury shares to the value of €73 million (€84 million at December 31, 2010) which are made up of 3,143,472 ordinary shares (3,710,372 at December 31, 2010) with a nominal value of €1 each.
At March 13, 2012, the share capital amounted to €441,410,900.
On the same day, the number of shares in circulation was 438,900,053.

Consob Regulation on Markets

Article 36 of Consob Regulation on Markets: conditions for the listing of shares of companies with control over companies established and regulated under the law of non-EU countries

With regard to the regulations setting out conditions for the listing of shares of companies with control over companies established and regulated under the law of non-EU countries that are deemed to be of material significance in relation to the consolidated financial statements, the Company discloses that at December 31, 2011, the following thirteen Saipem subsidiaries fell within the scope of application of the regulation in question, namely:

  • Petrex SA;
  • Snamprogetti Saudi Arabia Co Ltd Llc;
  • Saipem Contracting (Nigeria) Ltd;
  • Saipem Contracting Algérie SpA;
  • PT Saipem Indonesia;
  • Ersai Caspian Contractor Llc;
  • Saipem (Nigeria) Ltd;
  • Saudi Arabian Saipem Ltd;
  • Global Petroprojects Services AG;
  • Saipem America Inc;
  • Saipem Asia Sdn Bhd;
  • Snamprogetti Canada Inc;
  • Saipem Misr for Petroleum Services (S.A.E.).

Procedures designed to ensure full compliance with Article 36 have already been adopted.
No further regulatory compliance plans are therefore scheduled for 2012.

Article 37 of Consob Regulation on Markets: conditions preventing the admission to trading on an italian regulated market of the shares of subsidiaries subject to management and coordination by another company

Pursuant to the requirements set out in paragraph 11 of Article 2.6.2 of the Rules of the Markets Organized and Managed by Borsa Italiana SpA, the Board of Directors in its meeting of March 13, 2012, ascertained that the Company satisfies the conditions set out in Article 37 of Consob Regulation on Markets for the admission to trading on an Italian regulated market of the shares of subsidiaries subject to management and coordination by another company.
The Board of Directors meeting on March 13, 2012 also verified that the composition of the Board itself, as appointed by the Shareholders’ Meeting of May 4, 2011, and of its internal Committees, was in accordance with letter d), paragraph 1 of Article 37. The Board is in fact made up of a majority of independent directors and the Committees (the Compensation and Nomination Committee, which has taken on the role of Compensation and Nomination Committee, and the Audit Committee, which has taken on the role of Audit and Risk Committee) are composed exclusively of independent directors.

Disclosure of transactions with related parties

As of January 1, 2011, the new procedure ‘Transactions involving interests held by board directors and statutory auditors and transactions with related parties’ came into effect. The procedure can be consulted on Saipem’s website www.saipem.comunder the section ‘Corporate Governance’. For a description of its application with reference to transactions with related parties, see the ‘Corporate Governance Report’.
Transactions with related parties entered into by Saipem and identified by IAS 24 concern mainly the execution of contracts, the supply of services, and the provision and utilization of financial resources, including entering into derivative contracts. All such transactions are an integral part of ordinary day-to-day business and are carried out on an arm’s length basis (i.e. at conditions which would be applied between independent parties) and in the interest of Group companies.
Directors, general managers and senior managers with strategic responsibilities must declare, every six months, any transactions they enter into with Saipem SpA or its subsidiaries, directly or through a third party, in accordance with the provisions of IAS 24.
The amounts of trade, financial or other operations with related parties are provided in Note 44 to the consolidated financial statements.

Transactions with the parent company and its subsidiaries

Saipem is subject to the direction and coordination of Eni SpA.
Transactions with Eni SpA and with entities subject to its direction and coordination constitute transactions with related parties and are commented on in Note 44 ‘Transactions with related parties’ in the notes to the consolidated financial statements.

Events subsequent to year-end

New contracts

In January, new contracts worth $1.8 billion were awarded, as reported in the press release of January 18, 2012.

Outlook

Overall investments in the oil industry are predicted to increase in 2012, although uncertainties over global economic trends may have an impact on the time frames for the approval of planned projects. Buoyant markets are expected in West Africa (Nigeria and Angola in particular), Azerbaijan, Brazil, South East Asia and Australia (Offshore) and in Nigeria, Canada, Iraq and Australia (Onshore). Furthermore, several projects related to the development and transportation of gas may be approved during the year, namely phase one of Shtokman in the Barents Sea, the Brass liquefaction plant in Nigeria and the Galsi Algeria-Italy pipeline. Market prospects for contractors are therefore expected to improve in 2012. As regards Saipem, the distinctiveness of its fleet, its significant local presence and its good track record suggest that the Company will be capable of taking full advantage, in terms of new contracts, of the predicted market improvement. It is expected that the Offshore Drilling sector will benefit from the entering into service of the Scarabeo 9 on January 19 and of the Scarabeo 8 forecast for April, in part offset by the upgrading of the Scarabeo 6 which will force the vessel to cease operations for approximately 6 and a half months. The Onshore Drilling sector should once again see the good rig utilization rates seen in 2011 and benefit from a slight increase in day rates. Both the Offshore and Onshore sectors of Engineering & Construction, should have slightly higher volumes in 2012 compared to 2011, with similar margins. Overall, revenues in the region of €13 billion are predicted for 2012, as is an EBITi of €1.6 billion and a net profit of €1 billion. Investments planned for 2012 mainly concern maintenance, completion of the pipelay vessel Castorone, upgrading of Scarabeo 6 to make it suitable for operations in water depths of up to 1,100 metres and, finally, commencement of construction of the new yard in Brazil. In total, an outlay of approximately €900 million is envisaged.

Chairman of the Board of Directors

In compliance with the provisions of the new Corporate Governance Code for listed companies, the Board of Directors has resolved to form:

  • the Compensation and Nomination Committee: the existing Compensation and Nomination Committee will thus take on consultative and advisory functions vis-à-vis the Board of Directors with regard to, Italy appointments;
  • the Audit and Risk Committee, replacing the Audit Committee.
    The Audit and Risk Committee will provide support to the Board in connection with issues regarding the internal control and risk management system.

Non-GAAP measures

Some of the performance indicators used in the ‘Operating and Financial Review’ are not included in the IFRS (i.e. they are non-GAAP measures).
They are disclosed to enhance the user’s understanding of the Group’s performance and are not intended to be considered as a substitute for IFRS measures.
The Non-GAAP measures used in the Directors’ Report are as follows:

  • cash flow: the sum of net profit plus depreciation and amortization;
  • capital expenditure: calculated by excluding investments in equity interests from total investments;
  • gross operating profit: a useful measure for evaluating the operating performance of the Group as a whole and of the individual sectors of activity, in addition to operating profit.
    Gross operating profit is an intermediate measure, which is calculated by adding depreciation and amortization to operating profit;
  • non-current assets: the sum of net tangible assets, net intangible assets and investments;
  • net current assets: includes working capital and provisions for contingencies;
  • net capital employed: the sum of non-current assets, working capital and the provision for employee benefits;
  • total liabilities and shareholders’ equity: the sum of shareholders’ equity, minority interest and net borrowings.

Declaration pursuant to Legislative Decree No. 196 of June 30, 2003

In his capacity as data controller of personal data, the Chairman declares that the Security Policy Document has been updated pursuant to Legislative Decree No. 196 of June 30, 2003.

Secondary offices

Pursuant to Article 2428 of the Italian Civil Code, the Company declares that it has a secondary office in Cortemaggiore (PC), Via Enrico Mattei 20, Italy.