Management report

Board of director's proposal

Dear Shareholders,

We close this report by inviting you:

• to approve the ERG S.p.A. Annual Financial Statements for the period ended 31 December 2013, which closes with a net profit of EUR 29,165,637.14;
• to pay Shareholders a dividend of EUR 1.00 per share, including a non-recurring component of EUR 0.50 per share which we propose be distributed bearing in mind the successful conclusion of an essential phase of the strategic industrial reorganisation project commenced in 2008. The dividend will be paid for each share having dividend rights outstanding at the coupon detachment date, excluding therefore the company's treasury shares, in accordance with Article 2357-ter of the Italian Civil Code, by distribution of the year's net profit and for the residual part by use of retained earnings;
• to release part of the unavailable portion of the "Reserve for first-time adoption of IAS/IFRS and retained earnings", i.e. EUR 83,966,160.55 corresponding to the write-down by the same amount, net of the related tax effects, of the equity investment in the TotalErg S.p.A. Joint Venture. In fact, it should be mentioned that, at the time of approving the 2010 Financial Statements, an unavailable reserve was allocated pursuant to Article 6, paragraph 1.a) of Legislative Decree No. 38/2005, using a part of the profit amounting to EUR 346,403,569.83 corresponding to the unrealised portion, net of tax charges, of the capital gain deriving from incorporation of the TotalErg Joint Venture, and that part of the reserve for a total of EUR 145,484,000.00 had already released last year following the write-down of the TotalErg shareholding made in the 2012 financial statements;
• to make the dividend payable starting from 22 May 2014, with an ex-dividend date as of 19 May 2014 and record date of 21 May 2014.

Genoa, Italy, 11 March 2014

On behalf of the Board of Directors
The Chairman
Edoardo Garrone