Dear Shareholders, of Gruppo Editoriale L Espresso S.p.A. 1 Reason and object of the mandate

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1 KPMG S.p.A. Accounting audit and organisation Via Ettore Petrolini, ROME RM Telephone e mail it fmauditaly@kpmg.it Certified e mail: kpmgspa@pec.kpmg.it Independent Auditors Report on the issue prices of the shares for a capital increase without option right pursuant to art. 158, first paragraph, of Italian Legislative Decree no. 58 of 24 February 1998 and art. 2441, paragraph four, first sentence, and paragraph six, of the Italian Civil Code Dear Shareholders, of Gruppo Editoriale L Espresso S.p.A. 1 Reason and object of the mandate In accordance with art. 158, first paragraph, of Italian Legislative Decree no. 58 of 24 February 1998 (hereinafter CFIA Consolidated Financial Intermediation Act), we have received from Gruppo Editoriale L Espresso S.p.A. (hereinafter also GELE, or the Company ) the report drawn up by the Board of Directors of said company (hereinafter also the Directors ) of 24 March 2017 which illustrates and explains, in compliance with art. 2441, paragraph 6, of the Italian Civil Code, the proposal for a capital increase without option right pursuant to art. 2441, first paragraph, of the Italian Civil Code, indicating the criteria adopted by the Company s Board of Directors to determine the price of the shares of the new GELE issue (hereinafter also the Directors Report or the Report ). The Company also made available to us in advance the draft version of said Directors Report approved on 24 March 2017 by the Board of Directors as well as the documentation necessary for the execution of our mandate. The Board of Directors proposal, as described in the Directors Report, regards an operation for a GELE share capital increase (the Operation ) to be carried out in accordance with art. 2441, paragraph four, first sentence, of the Italian Civil Code, for a maximum amount of 79,969,000.00, of which 14,497, is to be allocated to the nominal capital and 65,471, is to be allocated to the share premium, to be carried out by the issue of 96,651,191 new ordinary shares, each with a nominal value of 0.15 at a unit price of , of which as share premium (the Capital Increase ) to be underwritten and released by contribution in kind (the Contribution ) by Fiat Chrysler Automobiles N.V. ( FCA ) and by Ital Press Holding S.p.A. ( IPH, and jointly with FCA, the ITEDI Shareholders ), each according to their respective entitlement, of the stakes aggregately representing the entire share capital of Italiana Editrice S.p.A. ( ITEDI ). For the Operation referred to herein, the GELE Board of Directors has taken avail of the assistance of Banca IMI S.p.A. in the capacity of consultant (hereinafter the Consultant ). In relation to the Capital Increase described, the GELE Board of Directors requested our company, in accordance with the combined provision of paragraph four, first sentence, and paragraph six, of art. 2441

2 of the Italian Civil Code, and art. 158 of the CFIA, to express an opinion on the adequacy of the criteria proposed by the Directors to determine the issue price of said shares. 2 Operation description To give a useful outline of the overall context in which the proposed Capital Increase is to take place, a summary of the information regarding said increase contained in the Directors Report is given below. In the said Report the Directors indicate that the underwriting of the Capital Increase proposal, in the terms described in the Report, is reserved to FCA and IPH, and is to be released by a contribution in kind by the ITEDI Shareholders, namely the shares, completely free of encumbrance, aggregately representing the entire share capital of ITEDI (hereinafter the Operation ). As described in the Directors Report, said Operation originates from the framework agreement entered into on 30 July 2016 by GELE, ITEDI and the respective shareholders within the sphere of which the Company is to buy the shares representing the entire ITEDI share capital. The Operation comprises the Capital Increase in kind excluding option rights in accordance with art. 2441, paragraph five, of the Italian Civil Code, for a maximum amount of 79,969,000.00, of which 14,497, to be allocated to the nominal capital and 65,471, to be allocated to a share premium, to be carried out by the issue of 96,651,191 new shares. The Capital Increase to be released by the Contribution is the manner chosen by GELE and its majority shareholder, Compagnie Industriali Riunite S.p.A., ( CIR ) and by the ITEDI Shareholders to execute the project for the integration of GELE s activities with those of ITEDI, as disclosed to the market in the press releases of 2 March 2016 and later on 1 August The acquisition of ITEDI, resulting from the execution of the Capital Increase to be released by the Contribution, represents a strategic goal for the Company, which intends to thus create an Italian leader in the sector of daily and periodical multi media information, as well as a leading European publishing group. After the completion of the integration Operation, CIR will hold 43.40% of GELE s post Capital Increase share capital, while FCA will hold 14.63% and IPH 4.37%. In this sphere, it must also be remembered that the Parties obligation to carry out the Capital Increase by the Contribution (the so called closing) depends on the fulfilment of certain conditions precedent, including the issue of all the necessary authorisations and/or approvals by the competent authorities involved, including the Communications Authority ( AGCOM ) and the Antitrust Authority ( AGCM ), without the imposition of any condition or reservation with a relevant incidence on the structure in question underlying the Integration Operation. In particular, under the Framework Agreement, should it be impossible to verify the fulfilment of the condition precedent relating to the so called regulatory authorisations, including those of AGCM and AGCOM, within 31 March 2017, the term for the fulfilment of said conditions precedent would be extended a further three months until 30 June With reference to the conditions precedent relating to the regulatory authorisations, the Directors represent as follows in the Report: on 1 September 2016, the Company notified AGCOM in advance of the integration operation, in compliance with art. 43, paragraph 1, of Italian Legislative Decree 177/2005, and successively AGCOM, on 30 September 2016, with resolution no. 433/16/CONS, resolved not to open the inquiries contemplated by art. 16 of the regulations adopted with resolution 368/14/CONS of 17 July 2014; 2

3 on 21 November 2016, in compliance with Italian Law no. 287/90 and Italian Presidential Decree no. 217/98, the Company notified AGCM of the integration operation, and ACCM, on 11 January 2017 resolved to open in depth inquiries into GELE and ITEDI, pursuant to art. 16, paragraph 4, of Italian Law no. 287/90. With a provision registered under no of 1 March 2017, notified to the Company on 9 March 2017, AGCM authorised the Operation referred to by this Report providing GELE adopted certain corrective measures, in accordance with art. 6, paragraph 2, of Italian Law no. 287/90, including: a) the conveyance to an independent third party, within 30 days from the serving of the provision (i.e. 08 April next), of its concession as the vendor of space for local advertising in the Turin edition of the daily newspaper La Repubblica on the basis of an agreement the framework of which AGCM has already agreed to; and b) the conveyance to an independent third party, within 30 days from the serving of the provision (i.e. 08 April next), of its concession as the vendor of space for local advertising in the Genoa edition of the daily newspaper La Repubblica on the basis of an agreement the framework of which AGCM has already agreed to. Said corrective measures will remain in force for 5 (five) years as of the date of the serving of the AGCM provision. To this regard, we mention that GELE has already identified the subjects to which to convey the local advertising concession referred to by the corrective measures prescribed by AGCM and negotiations are in progress for the stipulation of the final advertising concession agreements with said subjects in the forthcoming days and, in any case, within the terms prescribed by AGCM. The provision also prescribes that, in the case of the termination of the advertising concession agreements with the selected new concessionaires for reasons not ascribable to GELE or in the case of the contracting party s withdrawal, GELE will have to find new independent counterparties and stipulate new concession agreements, without prejudice to the fact that such new concessionaires and the new advertising concession agreements must have the prior authorisation of AGCM. With reference to the condition precedent relating to AGCOM, the Directors point out in the Report that on 17 March 2017 said authority published on its Internet site the official Italian circulation data of the daily newspapers for the year 2016, and it was therefore possible to check that, subsequent to the closing of the Operation, also by the effect of certain specific deconsolidation activities of the circulations of certain local daily newspapers (mentioned below) carried out by Gruppo Espresso, GELE will not reach the dominant position on the publishing market contemplated by art. 3 of Italian Law no. 67 of 25 February Nature and scope of this report This report, issued pursuant to art. 2441, paragraph six, of the Italian Civil Code and art. 158 of the CFIA, intends to enhance the information given to shareholders without option rights, pursuant to art. 2441, paragraph four, first sentence, of the Italian Civil Code, regarding the methods adopted by the Directors to determine the share issue price for the planned capital increase. In consideration of the specific nature and the features of the Operation outlined above and as illustrated in the Directors Report, this report therefore indicates the methods followed by the Directors with the Consultant s assistance to determine the issue price of the shares and the difficulties they encountered in 3

4 the relative assessment, and it contains our opinion on the adequacy, as regards the reasonableness and non arbitrary nature, of such methods and on their correct application. In examining the evaluation methods adopted by the Directors with the Consultant s assistance, we have not carried out an independent assessment of the companies involved in the Operation. Said assessment was carried out only by the Directors. 4 Documents used In the performance of our work, we obtained from the Company the documents and information deemed useful for the case. For this purpose we have analysed the documentation made available to us, and specifically: the Directors Report drawn up pursuant to art. 2441, paragraph 6, of the Italian Civil Code, which illustrates and justifies, pursuant to art. 2441, paragraph 6, of the Italian Civil Code, the proposal for the GELE share capital increase without option right for the shareholders pursuant to art. 2441, paragraph 4, of the Italian Civil Code, and the criteria adopted by the Directors for determining the number of new shares to be issued approved on 27 March 2017; draft minutes of the Board of Directors meeting of 24 March 2017 which approved the Directors Report and resolved the issue price of the new shares; estimate report on the value of 100% of the ITEDI share capital pursuant to art.2343 ter, paragraph 2, letter b), of the Italian Civil Code, issued by PricewaterhouseCoopers Advisory S p A.; congruity opinion of 27 February 2017 issued by the Consultant to the Board of Directors on the congruity, from a financial viewpoint, of the swap ratio estimated for the Operation; confirmation of the conclusions of the congruity opinion issued by the Consultant on 24 March 2017; GELE s three year plan approved by the Board of Directors on 1 February 2017; the Consultant s work documentation for estimating the swap ratio containing analytical indication of the evaluation methods adopted and the values resulting from the application of said methods; other economic equity, financial and strategic data and information deemed relevant for the analyses, provided, in writing and verbally, to the GELE Board of Directors; the market trend of the GELE share prices registered in the six months prior to our report and other information, such as the volatility of the securities and average daily volumes; draft company and consolidated financial statements of GELE at 31 December 2016 approved by the Board of Directors on 27 February We also used data and information available to the public, in particular data and information obtained through Borsa Italiana, Mergermarket and Information Data Providers. Lastly, on 4 April 2017, we obtained certification, by means of a letter sent also in the name and on behalf of the Board of Directors, from the GELE legal representative, that the data and information made available 4

5 during the execution of our assignment were complete and that there have been no significant changes relating to the same. 5 Evaluation methods adopted by the Board of Directors to determine the share issue price Introduction The value of the ITEDI shares to be contributed to GELE has been agreed on the basis of an estimate of ITEDI equal to 79,969,000 (the Agreed Contribution Value ), corresponding to an evaluation of approximately for each of the 5,775,000 ordinary type A shares and the 1, ordinary type B shares, aggregately representing the entire ITEDI share capital. Therefore, the Capital Increase to serve the Contribution will have a total counter value of 79,969,000, with the issue of 96,651,191 new ordinary GELE shares ( New GELE Shares ). The Board of Directors, in determining the terms of the integration and, in particular, the Agreed Contribution Value, has adopted the procedures of law and has carried out the evaluations necessary to protect the intact nature of the share capital and the shareholders interests in view of the exclusion in compliance with the law of their option right. The economic financial values examined for the evaluation of the companies involved in the integration were taken considering the continuation of the companies activities and in the light of elements that can reasonably be forecast, without taking into account the occurrence of extraordinary events. In particular, the assessment analyses were based on the information and market conditions known at the date on which said analyses were carried out. In addition, the values examined refer to the companies as separate entities, i.e. from the stand alone viewpoint, therefore disregarding any consideration concerning the synergies expected from the Operation. Furthermore, the assessments connected to the determination of the Contribution terms aimed at estimating values relating to the economic capital of the companies involved in the integration and, therefore, such values cannot be assumed in reference to contexts other than the Operation itself. The GELE Board of Directors acknowledged that the ITEDI shareholders mandated PricewaterhouseCoopers Advisory S.p.A., as an independent expert holding adequate and proven professional skills, in compliance with art ter, paragraph two, letter b), of the Italian Civil Code (the Expert or also PWC Advisory ), to draw up an estimate report on the value of 100% of the ITEDI share capital, testifying to the fact that the value of the shares of the Contribution have at least the agreed value attributed to the same for the purpose of the GELE Capital Increase and the possible share premium. The Company s Board of Directors, in identifying the criteria for determining the New GELE Shares to be issued within the sphere of the Capital Increase, has also taken avail of the advisory services of Banca IMI S.p.A., which was appointed as financial advisor, to provide analyses and elements useful to support the Board of Directors decisions. The Consultant issued to the Board of Directors a fairness opinion testifying to the congruity, from a financial viewpoint, of the consideration for the Integration Operation, understood as the number of New GELE Shares (the Fairness Opinion ). The evaluations and the methods adopted by the Consultant and facts provided by the Directors to estimate the value of the number of GELE shares to be issued are illustrated below. 5

6 5.1 Methods applied by the Consultant and adopted by the Board of Directors In consideration of the nature of the Integration Operation, the assessment analysis was carried out to identify value ranges similar and comparable to those of the companies participating in the Operation. For the assessment analysis, taking into account the purpose of the estimates, the generally accepted evaluation principles normally adopted for similar operations, and the specific features of the companies participating in the Integration Operation as a whole, the Board of Directors applied the following evaluation methods: the Unlevered Discounted Cash Flow Method ( DCF ); the Trading Multiples method. For the Board of Directors, other methods common to professional practice, such as the analysis of market prices and of the target price, were not applicable to the case in point in consideration of the fact that ITEDI is a private company; in addition, the specific features of the companies involved in the Operation limited the applicability of the multiples method used for previous transactions in the sector of reference since the core businesses of the companies involved in the Operation have a low level of comparability. Discounted Cash Flow The Board of Directors deemed it opportune to adopt an assessment approach based on the discounted cash flow method (or DCF ) method: this method involves an evaluation of the company s capital directly connected to the revenues expected from its management and it requires a precise analysis of the forecast cash flows, of their risk level and of their distribution over time. The method was applied in its unlevered (or asset side ) form, referring to the cash flows of the return on the invested capital gross of the financial structure. The Unlevered Discounted Cash Flow method estimates a company s Enterprise Value as the sum of the following elements: (i) the estimated unlevered operating cash flows that the company is expected to generate in a specific period according to an analytical forecast, discounted at the reference date of the evaluation on the basis of a discount rate equal to the weighted average cost of the capital ( WACC ); (ii) discounted net operating cash flows estimated after the specific period of the analytical forecast ( Terminal Value ), calculated as the current value of a perpetual income equal to a net operating cash flow sustainable for perpetuity. To estimate the value of the economic capital of the Enterprise Value, (i) the net financial debt and any equity items equivalent to financial debt, and (ii) third party interests ( Minorities ) are subtracted and, if present, the values related to any accessory assets or equity investments (Surplus Assets), not inherent to the core business and therefore not included in the operating cash flows, are then added. The application of the Unlevered Discounted Cash Flow entails the use of the following formula: in which: W = the value of the company s economic capital 6

7 FCt = VT = SA = IFN = M = N = annual unlevered operating cash flows expected in the period t Terminal Value Surplus Assets Net Financial Debt at the moment t = 0 (including all the equity items equivalent to financial debt) Minorities Number of projected periods WACC = weighted average cost of capital The unlevered operating cash flows, relating to the company s core business and subject to assessment, can be analytically estimated as follows: + EBIT (earnings before interests and taxes) figurative tax effect on the Operating Income = NOPAT (Net Operating Profit After Taxes) + write downs + non monetary costs ± Δ net working capital ± Δ other liabilities/assets net investments = net operating cash flow The Terminal Value, instead, is a summarised figure that represents the current value of the unlevered cash flows forecast for the period after the specific period in time and determined on the basis of two main variables: (i) (ii) the normalised operating cash flows of the first year after the period of the analytic forecast; the growth rate of said flow expected in perpetuity. In particular, the Terminal Value is estimated by the application of the following formula: where: FCFO (n+1) = the normalised (sustainable) operating cash flow of the first year after the period of the analytic forecast (n); 7

8 g = the average growth rate of the FCFO expected in the period after the explicit period. The weighted average cost of capital (WACC) used to discount the forecast unlevered cash flows and the Terminal Value is calculated as the average cost of the company s own capital and of the weighted debt capital for, respectively, the incidence of the market value of the economic capital and of the debt capital on all sources of financing, by means of the following formula: where: D = the company s net financial debt (including all the equity items equivalent to financial debt); E = the current value of the shareholders equity; Kd = cost of the debt capital; Ke = cost of the equity capital; t = tax rate. In particular, the cost of the debt capital represents the long term lending rate applicable to companies or economic enterprises subject to a similar risk level. The cost of the equity capital, instead, reflects the investor s expected return, taking into account the risk related to the investment, and according to prevalent practice it is estimated on the basis of the Capital Asset Pricing Model (CAPM), defined by the following formula: where: Ke = cost of the risk capital; rf = expected return rate on risk free assets; β = coefficient that measures the ratio between the expected return on the investment in question and the expected returns of the stock market of reference; rm = average expected return on investments in the stock market of reference; (rm rf) = yield premium on the stock market of reference (rm) compared to the investment in risk free assets (rf). DCF: application of the method 8

9 The estimated values of the economic capital of GELE and of ITEDI have been determined by the Directors on the basis of (i) the business plans of the two companies drawn up by their respective managements on a so called stand alone basis (therefore disregarding any consideration concerning the possible synergies expected from the integration process), approved by their respective Boards of Directors, on 01 February 2017 for GELE and on 08 February 2017 for ITEDl, and (ii) the estimated data at the closure of the financial year In the definition of the main hypotheses for determining the estimated Terminal Value, the Directors have applied the same criteria for both the companies (GELE and ITEDl). In particular, the income margins have been aligned with those of the respective business plans for the year 2019; in addition, the Directors have assumed: i) that the investments will be maintained in line with the respective plans; ii) amortisation will be equal to the investments; and iii) change in the working capital will be in line with the trend of the revenues. Lastly, the economic capital of the two companies, GELE and ITEDl, was estimated adjusting the Enterprise Value to take into account the respective net financial debt and any other equity items equivalent to financial debt, third party interests ( Minorities ) and values relating to any accessory assets or equity investments (Surplus Assets), all at 31 December The weighted average cost of the capital (WACC) was determined by the Directors as within a range between 6.26% and 6.76% for GELE, and within a range between 6.31% and 6.81% for ITEDI. The results of the analysis reached by the Directors by means of the DCF method are summed up in the following table: mln Unlevered Discounted Cash Flow GELE evaluation ITEDI evaluation Shareholding percentages WACC 6.76% 6.26% 6.81% 6.31% Min Max Min Max Min Max Equity Value % 23% Trading Multiples The Trading Multiples method consists of determining a company s value by observing the evaluations expressed by the financial markets for companies with features similar to those of the company subject to the evaluation. With this method, a company s value derives from the evaluation attributed by the market to other companies with comparable features and, in particular, by determining the ratio between the stock exchange value of comparable companies and certain financial values (for example, the EBITDA, the revenues and the cash flows) and by successively applying the multiples thus determined to the corresponding financial values of the company subject to evaluation, in order to determine the value. The main steps in the application of this method are: (i) the definition of the reference sample of companies with features that are comparable in terms of business sector, business model, dimension and the stage of the company s lifetime; (ii) the choice of the appropriate multiples; (iii) the calculation of the multiples for the companies with comparable features and the identification of a range of values to apply to the company subject to evaluation; and (iv) the application of the multiples to the corresponding financial values of the company subject to evaluation. 9

10 In addition, the economic financial data can be adjusted to eliminate any extraordinary components and, more in general, to neutralise budget policies. the most commonly used multiples, known as asset side multiples, such as EV/Sales and EV/EBITDA together with the multiples that refer to the capacity to generate cash of the companies subject to evaluation or the EV/EBIT, allow for estimating the company s Enterprise Value. To estimate the value of the economic capital ( Equity Value ), (i) the net financial debt and any equity items equivalent to financial debt, and (ii) third party interests ( Minorities ) are subtracted from the Enterprise Value and, if present, (iii) the values related to any accessory assets or equity investments (Surplus Assets), whose value is not expressed by the application of the multiples to the company s fundamental values, are then added. Trading Multiples: application of the method To provide empirical elements for the estimate based on market parameters, the Directors have analysed the multiplier expressed by the stock exchange prices of listed companies operating in the press, digital and radio sector for GELE and in the press and digital sector for ITEDI. In this specific case, they selected, as the multiplier, the ratio between the value of the invested operating capital (Enterprise Value EV) and the gross operating margin (EBITDA) of the companies analysed. They then determined the Enterprise Value as the sum of the market value of the financial sources, or the shareholders equity (evaluated by means of stock market capitalisation), and the net financial debt. The EBITDA [earnings before interests, taxes, depreciation and amortisation] corresponds to the result before write downs, financial management, extraordinary items and taxes, and it represents a particularly suitable economic indicator for sector comparisons at international level. For the application of this method, the Directors defined a series of comparable companies operating in the press and digital sector and a series of comparable companies operating in the radio sector. Within the sphere of the method for the press and digital sector and for the radio sector, the Directors identified certain EV/EBITDA multipliers falling within a range of respectively 7.3 x 8.3 x for the press and digital sector, and 9 x 10 x for the radio business. In particular, the press and digital, and the radio multipliers were applied to the EBITDA of the respective business units to determine the Equity Value of GELE, whereas for ITEDI multipliers relative to the press and the digital sectors were used. mln Market multiples of comparable companies EV/EBITDA GELE evaluation ITEDI evaluation Shareholding percentages Min Max Min Max Min Max Equity Value % 23% 5.2 Determination of the issue price On the basis of the application of the above described methods, which the Board of Directors deemed reasonable and consistent with market practice for this type of evaluation, the issue price of the New GELE Shares was defined by said Board on the basis of a contribution ratio of 81% 19%. 10

11 In relation to said contribution ratio, therefore, the ITEDI shareholders will receive an aggregate total of 96,651,191 ordinary GELE shares, each with a value of (of which is the share premium), corresponding to 19% of the GELE capital after the Capital Increase. 6 Evaluation difficulties encountered by the Directors The evaluations that the Board of Directors reached to determine the price of the new ordinary GELE shares must be considered in the light of certain difficulties and limits which, in this specific case, can be summarised as follows: the evaluation methods were applied also using the data of economic financial forecasts relating to the companies involved in the Integration Operation and forecast market scenarios. Said data, by their nature, are uncertain and undetermined to some extent; different accounting principles adopted for the drafting of the forecast economic financial data by the companies involved in the Operation (the international accounting principles IAS IFRS for GELE and Italian accounting principles for ITEDI), which, however, did not generate significant effects on the expected cash flows inasmuch as mainly regarding the different accounting methods for the provisions of the defined benefit plans; ITEDI is not a listed company, and therefore it is not possible to directly compare the values of the GELE capitalisation for determining a ratio between the ITEDI shares of the contribution and the new GELE shares to be issued for the Capital Increase; GELE and ITEDI, for their core business and business models, do not allow for full comparison with other listed companies and, consequently, with any company included in the series used for calculating the Trading Multiples; other methods that are common in professional practice, such as the method of the multiples of previous sector transactions ( Transaction Multiples ) were not possible, in view of the limited comparability of the companies involved in M&A operations with the companies involved in the Integration Operation. 7 Work performed For the fulfilment of our assignment, taking into account its nature and on the basis of the Documentation used, indicated in paragraph 4, we carried out the following analyses and verifications: examination of the Directors Report, and the criteria adopted by the Directors to determine the number of new shares to be issued; examination of the Consultant s congruity opinion of 27 February 2017 on the determination of the post contribution shareholding ratios; examination of the confirmation of the conclusions of the congruity opinion issued by the Consultant on 24 March 2017; examination of the evaluation methods adopted by the Board of Directors on the basis of the elements given to us, in order to check, under the circumstances in question, that the content was reasonable, justified and not arbitrary; 11

12 verification that the Board of Directors explanations regarding the evaluation methods that they adopted to set the share issue price, were complete and not contradictory; verification of the elements necessary to ascertain that said methods were technically suitable, under the specific circumstances, for determining the issue price of the new shares; verification of uniformity in the application of the adopted evaluation methods; verification of the consistency of the data used in respect of the reference sources and, in particular, in respect of the documentation used, listed in paragraph 4; verification to ensure that the calculations carried out by the Consultant and adopted by the Board of Directors within the evaluation process, were mathematically correct; discussions and in depth examinations with the Consultant relating to the evaluation methods adopted for the fairness opinion; sensitivity analysis of the results reached by the Board of Directors as far as concerning changes to the assumptions and the parameters adopted; analysis of the stock market trend of the GELE securities in the six months prior to the date of the Directors Report; verification of the correspondence between the documentation received during the execution of the assignment and the final versions of the documents, adopted by the Board of Directors; the written certification signed by the GELE legal representative, also in the name of the Board of Directors, confirming that on the date of this report there have been no changes in the data or in the contents of the documentation analysed, and that no events have occurred such as to change the Board of Directors conclusions on the value and number of shares to be issued to serve the capital increase. 8 Comments on the adequacy of the method used and on the validity of the resulting estimates With reference to this assignment, and in consideration of the features of the Operation, we wish to emphasise that the main purpose of the decision making procedure followed by the Board of Directors, which took as a reference and adopted the Consultant s evaluations, was to estimate the economic values of GELE and ITEDI, obtained by the application of methods that expressed comparative values for the companies subject to evaluation. In such operations, in fact, the ultimate purpose of the evaluations calculated by the Directors is not so much to determine the absolute values of the economic capital of the companies involved, but rather to identify comparable values for the determination of the number of shares to be issued. For this reason, the evaluations carried out by the Directors have significance only as regards their relative profile and cannot be assumed as estimates for other purposes of the absolute value of the companies involved in the Operation. Given the above, the main considerations on the evaluation methods chosen by the Directors, with the Consultant s assistance, are reported below: 12

13 the Directors decision to adopt the methods described in paragraph 5 to determine the economic value of GELE and ITEDI, also in the light of market practice and the features of the Operation, are reasonable and not arbitrary. In addition, the Report drawn up by the Directors to illustrate the Operation in question describe the features of the different methods used and how they were applied; the evaluation methods adopted by the Board of Directors, assisted by the Consultant, are commonly accepted and used, at both national and international levels, and are in accordance with the corporate and financial theory of companies operating in the sector of reference; the application of several evaluation methods allowed the Directors to expand the evaluation process and for the results deriving from the application of the different evaluation methods to be controlled; the evaluations were carried out by the Directors, with the Consultant s assistance, on a stand alone basis and, therefore, the results of the analysis disregard all considerations concerning possible operating synergies resulting from the contribution, which could generate increased value for the shareholders. This approach is generally followed for similar evaluations and it is common practice in the sector; in their Report, the Directors adequately describe the methods by which they overcame the difficulties encountered in their evaluation. 9 Specific limits and difficulties encountered by the auditor in the execution of this assignment With regard to the main difficulties and limits encountered in the execution of this assignment, we mention the following: the application of the DCF method chosen by the Directors required not only reference to past income parameters, but also the use of economic financial forecasts which are, by their nature, uncertain and subject to significant changes of the scenario and to considerable variations in the market context and in the macro economic situation, especially in the business sector of the companies involved in the Operation. the evaluations based on methods that use market variables and parameters, such as the stock exchange multiples method adopted by the Board of Directors, are subject to the trend of the financial markets, which were found to have a tendency to swing considerably over time, especially in relation to the uncertainty of the general economic situation. The application of the stock exchange multiples method may, therefore, indicate values that differ from each other to a more or less significant extent, according to the moment when the market registrations are made; The above mentioned objective difficulties were carefully considered in the drafting of this report. 10 Conclusions On the basis of the documentation examined and the above indicated procedures, and taking into account the nature and scope of our work, as illustrated in this report, and without prejudice to what is highlighted in paragraph 10, we maintain that the evaluation methods adopted by the GELE Board of Directors, also on the basis of the indications expressed by the Consultant, are adequate, inasmuch as reasonable and non arbitrary under the circumstances, and that they have been correctly applied for determining the issue 13

14 prices of the GELE shares for the capital increase without option right, expressed in this case by the ratio between the economic values of GELE and of ITEDI. Rome, KPMG S.p.A. [illegible signature] Benedetto Gamucci Partner 14