Activities and fees

Acting upon the reasoned proposal of the Board of Statutory Auditors, Eni’s Shareholders' Meeting of 29 April 2010 approved the engagement of EY SpA ( formerly Ernst & Young SpA) for the 2010-2018 period to perform the following: 

• auditing of the Company’s individual financial statements;
• auditing of the consolidated financial statements;
• verification, during the course of the financial period, that the Company's accounts are duly maintained and that operations are correctly entered in the accounting records;
• a limited audit of the semi-annual financial report;
• verification of Form 20-F.

Riccardo Rossi will be the audit partner responsible for providing these services to Eni starting from the Consolidated Financial Statement 2017 of Eni.

On May 10, 2018, the Shareholders’ Meeting, acting on a reasoned proposal by the Board of Statutory Auditors, awarded the statutory auditing engagement for the financial years 2019-2027 to PricewaterhouseCoopers SpA (“PwC”), whose offer received the highest technical score and offered the most attractive financial terms^[1].

 

[1] In order to ensure that the transition from the current audit firm to its successor is conducted in a manner appropriate to the size and complexity of the Eni Group, the Board of Statutory Auditors, acting as the Internal Control and Financial Auditing Committee, has agreed a proposal from the competent corporate units to move forward the selection procedure for the award of the external audit engagement for the 2019-2027 period and, following the assessment process, at its meeting of February 15, 2018, voted to recommend that the Eni Shareholders’ Meeting pursuant to Art. 16 of Regulation (EU) No. 537/2014, award the engagement for 2019-2027 to either PwC or KPMG, informing the Shareholders’ Meeting called for May 10, 2018 of its reasoned preference for the offer submitted by PwC.

Activities and fees of Eni SpA approved by the Shareholders’ Meeting for the period 2010 – 2018

ACTIVITIES AND FEES OF ENI S.P.A. APPROVED BY THE SHAREHOLDERS’ MEETING OF ENI FOR THE PERIOD 2010 – 2018

Activity	2010 -2018
	Hours	Fee (euro)
a. Auditing of the Company’s individual financial statements	166,898	11,351,734
b. Auditing of the consolidated financial statements	35,847	2,438,170
c. Verification, during the financial period, that the accounts are correctly kept	37,692	2,563,659
d. Limited audit of the semi-annual report	33,754	2,295,812
e. Verification of Form 20-F	24,955	1,697,339
Total	299,146	20,346,714

Activities and fees of Eni Group for the period 2010 – 2018

EY SpA has also been engaged to provide the same auditing services to the subsidiaries of Eni SpA. 

EY SpA also provides additional services, in the manner described in International Standard on Auditing no. 600 (ISA 600). This involves, for the purposes of preparing an opinion on the consolidated financial statements, the assumption of full liability for auditing activities performed by any other Audit Firms regarding the financial statements of subsidiaries that, taken together, account for an immaterial share of consolidated assets and revenues. By assuming this liability, EY SpA, in its report on the consolidated financial statements, has the role and responsibility of sole auditor for the Eni Group. 

Thus, the Audit Firm’s overall proposal for Eni’s Group as formulated in 2010 is structured as follows:

ACTIVITIES AND FEES of ENI GROUP FOR THE PERIOD 2010 – 2018

Activity	2010 -2018
	Hours	Fee (euro)
Eni S.p.A. and subsidiaries	2,097,856	133,379,211
of which, for statutory audit activities	1,346,425	83,513,742
of which, for SOX activities	597,135	40,136,103
of which, for additional services	154,296	9,729,365

Considering the significant time span covered by the assignment, it was envisaged to recognize EY SpA , adjustments of the fees in the presence of i) non-recurring and unforeseeable events at the time of the competition occurred during the financial year and ii) recurrent major activities of auditing review.

In carrying out its work, the Audit Firm shall have access to the information, data (both documentation and digital information), archives and property of the Company and its subsidiaries. 

The "Rules on the auditing of financial statements", approved by the Board of Statutory Auditors and the Board of Directors - following the issuance of a favorable opinion by the Control and Risk Committee - set out the general principles pertaining to: the granting and revocation of the engagement; relations between the primary auditor of the Group and secondary auditors; the independence of the Audit Firm and causes for incompatibility; reporting responsibilities and obligations of the Audit Firm; and the regulation of information flows towards the Company and the SEC. 

This regulatory instrument is under review as a result of the profound revision of sector legislation (1).

In the new regulatory framework of the statutory auditing, the Board of Statutory Auditors has been entrusted with the responsibility for the approval of additional assignments and extra work, subject to the opportunity for adequate disclosure to the Board of Directors.

The Board of Statutory Auditors of Eni SpA:

• approves the assignment of additional recurring assignments closely related to statutory auditing activity (e.g. costs certification under petroleum contracts) while conferring the Group's total assignment;
• previously approved the additional assignments provided by civil law or other regulations concerning subsidiaries (e.g. services requested to the auditor responsible for auditing the financial statements by the Authorities and / Control Entities);
• approves the proposals for additional assignments, non-forbidden and unforeseen in the contest of the definition of the assignment, which are submitted by the subsidiary to the Board of Statutory Auditors (e.g. agreed procedures on areas related to the internal control system);
• approves the audit firm requests on fees variations in case of non-preventable extra efforts when preparing the original offer.

 

(1) Formed by: i) European Regulation no. 537/2014, ii) European Directive no. 56/2014 and iii) Legislative Decree No.135 / 2016 which transposed the Directive, thus updating the provisions of the Legislative Decree no. 39/2010 currently in force.

Fees and services paid by Eni in 2017 and 2018

The following table shows total fees paid by Eni, its consolidated and non-consolidated subsidiaries and Eni’s share of fees incurred by joint  operations for services provided by Eni to its public auditors EY SpA and its respective member firms, for the years ended in December 31, 2017 and 2018, respectively: 

Fees and services paid by Eni in 2017 and 2018

Total fees2	31 December
	2017	2018
	(euro thousand)
Audit fees	23,193	25,445
Audit-related fees	1,712	1,628
Tax fees	-	-
All other fees	12	-
Total	24,917	27,073

2) Classification of services for the purpose of disclosure of the Annual Report on Form 20-F.

Audit fees:
include professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, including the audit on the Company’s internal control over financial reporting. The fees disclosed in this category include also services provided for by law and regulations such as services required by authorities and/or control bodies, or by national or supranational administrations. 

Audit-related fees:
include assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not provided for by law and regulations. The fees disclosed in this category mainly include issue of comfort letters, and consultations concerning financial accounting and reporting standards, review of the sustainability report and the contractual verification of tariffs and billing costs. 

Tax fees:
include professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. The fees disclosed in this category mainly include fees billed for the assistance with compliance and reporting of income and value added taxes, assistance with assessment of new or changing tax regimes, tax consultancy in connection with merger and acquisition deals, services rendered in connection with tax refunds, assistance rendered on occasion of tax inspections and in connection with tax claims and recourses and assistance with assessing relevant rules, regulations and facts going into Eni correspondence with tax authorities. 

All other fees: 
include products and services provided by the principal accountant, different from services previously reported.