Following the start-up of the trading of shares on the MTA stock market organised and managed by Borsa Italiana S.p.A. in June 2004, Terna adopted a corporate governance system that is compliant with the standards set out in the Governance Code prepared by the Corporate Governance Committee of listed companies promoted by Borsa Italiana and has progressively approved adjustments of the system as required by the further editions of the Governance Code - of which the latest was in December 2011 - implementing them in order to ensure compliance with the commitments made up until the date of approval of the draft financial statements for FY 2012 according to that set out below.

Therefore, the Corporate Governance system in place at Terna is in line with the principles of the December 2011 edition of the Governance Code (hereinafter the "Governance Code"), with CONSOB recommendations in this respect and, more generally, with international best practices.

This corporate governance system is essentially focused on the objective of creating value for shareholders, aware of the corporate relevance of the activities in which the Group is involved and the consequent need to suitably consider, in the related implementation, all interests involved and which - as noted by CONSOB - "good corporate governance can create a virtuous cycle in terms of efficiency and business integrity, such as to also have a positive impact on the other stakeholders".

Since 2004, Terna has used this annual report to provide information on the evolution of its corporate governance system with reference to the recommendations contained in the different subsequent editions of the Governance Code and the conduct effectively adopted.

This Report on Corporate Governance and Ownership Structures - prepared in consideration of the instructions given by Borsa Italiana - in a specific section provides the information required by Article 123-bis of Italian Legislative Decree no. 58/98 (the Consolidated Law on Finance) and by Article 144-decies of the "Regulation enacting Italian Legislative Decree no. 58 of February 24, 1998, concerning issuer regulations" adopted by CONSOB (Issuers Regulation) and is complete with a specific attachment that explains the main characteristics of the internal control and risk management systems existing in relation to the financial disclosure process.

Failure to comply with certain provisions of the Governance Code is explained in the section of the report that concerns the relative practice of governance otherwise applied by the Company.

All the information included in the report, unless otherwise specified, was updated on the basis of information available as of the date of the Report's approval.

With reference to the new features introduced by the Governance Code in its December 2011 edition, this Report summarises the information on conduct adopted with regard to the provisions of the Governance Code that have already come into force according to the terms required for adjustment as established by transitional legislation. Therefore, it is otherwise specified where the disclosure refers to the recommendations of the previous edition of the Governance Code of listed company published by Borsa Italiana in 2006, as amended in March 2010.