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Report on Parent company fiancial statements

To the Shareholders,

During the year which ended 31 December 2009, as regards the activity of the Board of Statutory Auditors, we performed the supervision activity envisaged by the Law, observing the principles of conduct recommended by the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili).
The auditing activities were assigned to the Independent Auditors, PricewaterhouseCoopers SpA (hereinafter "PwC").

Our activities consisted of the following:

We carried out the monitoring activities envisaged by the Law and the Company Bylaws. Furthermore - in accordance with the new legislation of Corporate Law � the Board also met with the company executives in charge of certain Corporate Divisions to obtain, among other things, the information required to assess the adequacy of the organisational structure, the internal auditing systems and the administrative-accounting system.

45 audit visits were carried out during the year, some of which were at Regional and Foreign Correspondent Offices: the results of these visits, when it was deemed necessary to do so, were reported to the Chief Executive Officer and General Manager.

Specific meetings were also held with PwC, during which information was requested also on the audit of the accounts which the firm performed in compliance with regulations. No "censurable actions" were reported to us pursuant to article 2408 of the Civil Code. We have no knowledge of other facts or aspects of such nature as to require mention to the Shareholders' Meeting.

The Oversight Committee regularly reported, informing the Board of the progress made in the introduction of the provisions envisaged by Legislative Decree 231/2001 and of some deficiencies in the system currently being updated, also reporting constantly on its activity carried out with Internal Auditing. The Board of Statutory Auditors also acknowledged the activity of the Ethical Committee in the report received on 28.01.2009.

In 2009, the Statutory Auditors attended all the meetings of the Board of Directors (43 over 48 days) during which they obtained information from the Directors on the general performance of the business and its outlook, as well as on Company operations of greater economic, financial and capital significance, in terms of size and characteristics.

We report, in addition, that the Board of Directors, in its resolutions of the meetings held on 10 and 26 May 2009, like that of 25 October 2005, delegated to its members, pursuant to article 26 of the Company Bylaws, within the context of the two specially formed Committees of Enquiry for Administration and Organisation - "special assignments", aimed particularly at enquiry into strategic problems. During the year, the Board of Statutory Auditors, for its part, issued the opinions pursuant to article 2389 (3) of the Civil Code relating to the aforementioned "special assignments".

We also report that, in 2009, 3 Shareholders' Meetings were held, all of which were attended by the Board of Statutory Auditors.

The Company has drawn up the Parent Company Financial Statements for 2009 using the accounting principles and main valuation criteria with a view to considering the Company as a going concern and in compliance with the provisions of art. 2423 of the Civil Code and subsequent articles. The financial statements of Rai SpA at 31.12.2009, which were delivered to us by the Board on 26 May 2010 and are submitted for your approval, are expressed in euros, without cents, as indicated in article 2423 (5) of the Civil Code. These financial statements consist of the Parent Company's Balance Sheet, Income Statement and Notes to the Financial Statements and are accompanied by the Directors' Report on the operations. We hereby certify, also on the basis of meetings held with the Independent Auditors, PwC, that the Parent Company financial statements have been drawn up, in all three components (Balance Sheet, Income Statement and Notes to the Financial Statements), in accordance with the provisions of law.

In the Report on Operations, which should be referred to for further details, the Directors describe, first and foremost, that the Parent Company financial statements as at 31 December 2009 present a loss of 79.9 million euros, while the Group Consolidated financial statements present a loss of 61.8 million euros. The Directors also explain the most important events that occurred during 2009.

As regards the performance of resources, the Directors wish to particularly highlight certain aspects concerning the licence fee and advertising, formulating specific considerations. The Board of Statutory Auditors has also devoted its attention to these aspects on several occasions.

The Directors would like to point out that the per-unit licence fee for 2009 � which rose by 1.5 euros to 107.5 euros � continues to be one of the lowest in Europe. As mentioned in the past however, it is also subject to the highest rate of tax evasion, estimated at almost 30% for the ordinary licence fee, with losses in revenue determined at around 500/600 million euros/ year, and also a very high rate of tax evasion of the special fee. This negative situation could be contrasted with the introduction of new legislative tools, as has happened in other European countries, and the simultaneous revision of the collection mechanisms.

Advertising revenues fell by about 17% in 2009, largely as a result of the serious market crisis.

Only via provisions relating to public resources, enacted via measures to contrast evasion of payment of the ordinary licence fee (without adjusting the per-unit amount) could Rai have a chance to stabilise its accounts, also considering that similar measures should be adopted for the evasion of special fees, with is much higher on a percentage basis.

In terms of costs, the Directors point out that work has continued to contain costs and increase efficiency, achieved in part by intervening on the programming arrangements of all the structures.

In 2009, Rai went ahead with the merger of the subsidiary (99.94%) Rai Click, effective from 01 January 2009 (net shareholders' equity of 1.4 million euros). This operation has had no relevant influence in economic and equity terms, as can be seen in the detail reported in the various accounting schedules annexed to the financial statements.

The Directors also wish to draw attention � pursuant to art. 2428 of the Civil Code � to the Company's situation and its operating performance in general as well as in the individual sectors in which it operates through its own structures and subsidiaries. As envisaged by legislation, news is provided on research and development activities, on relations with the subsidiaries and associated companies, with regard to the outlook, on important events which occurred after the end of the financial year and also on the aims and policies concerning financial risk management and exposure to the interest rate, credit and liquidity risks, thus fulfilling the reporting obligations relating to the main risks for the Company and the Group.

Three tables have been drawn up for the economic, equity and financial analysis of operations, with the aim of offering an effective key to the reading of the financial statements.

Mention is also made of the results of Separate Accounting which was applied in 2009 � in compliance with the legislation in force � to the financial statements for the year ended 31 December 2008 (the latest approved), which were audited by Deloitte & Touche. The results highlighted that, contrary to that established by article 47 of the Consolidated Radio and Television Law, public funds (licence fees) do not entirely cover the costs of the Public Service. The deficit for 2008 was 548.4 million euros, which fell to 335.3 million after the attribution of the portion of advertising revenues (213.1 million euros) to the programming arrangement of the same Public Service.

The chapter dedicated to the Service Agreement describes the framework of the main tasks, which include the guidelines for the new Agreement for 2010-2012, which is being renewed. The last Agreement expired on 31 December 2009.

There is also a chapter dedicated to the television market which, in recent years, has witnessed the launch and consolidation 184 Rai SpA of the new multi-channel platforms, which have altered the competitive scenario characterised by the increased articulation of the distribution platforms. 2009 was characterised by the gradual switchover to the Digital Terrestrial platform, which had reached about 30% of the population. As established by the specific legislation, this platform will completely replace analogue broadcasting throughout the whole of Italy by the end of 2012, with pertinent investments of approximately 300 million euros envisaged.
Thirteen free digital channels are now offered in the areas covered by this new technology.
To cope with this extensive programme, it is therefore fundamental, as sustained by the Report, that Rai be guaranteed higher licence-fee revenues, eliminating the consistent evasion and recovering all or part of the missing 500/600 million euros in revenues per annum, as mentioned earlier, in order to combat the effects of the declining advertising market resources and limited assignment of public funding.
These assessments take on even greater importance if we consider that the Public Service is required to safeguard the wide range of radio and television communication media, but this has to occur without altering the general competitive and market principles. To achieve these aims it is necessary to guarantee the editorial and institutional independence of the public television service.
To simultaneously safeguard Rai's independence and competitive capacity it would appear to be necessary also to improve its operating efficiency, by speeding up operational action and quickly adapting its organisational structure to the changed market conditions.
In the absence of improvements in terms of revenue, such as the reduction of tax evasion with the parallel and correct use of Separate Accounting, the Board of Statutory Auditors must express its concern with regard to the deterioration of the results of the financial statements and the forecast negative result for 2010.

The Notes to the Parent Company Financial Statements contain a description of the accounting policies adopted and provide, with the supplementary schedules presented, the other disclosures required under article 2427 of the Civil Code; in accordance with the various regulations, information is given on revaluations made to tangible assets still carried in the balance sheet.

For all the items recorded in the Balance Sheet and Income Statement, details are given in relation to the reasons for the differences from the corresponding items of the financial statements at 31 December 2008, as envisaged by article 2423 ter (5) of the Civil Code.

Pursuant to article 2429 (3) of the Civil Code, complete copies of the latest financial statements of the subsidiaries have been deposited at the Company's registered office together with the reports of the relative Boards of Statutory Auditors and Independent Auditors, as well as a summary statement of the key data from the latest financial statements of the associated companies.

With regard to matters falling within the sphere of competence of the Board of Statutory Auditors, we report that, in connection with valuation and accounting aspects, we concur with the accounting policies reported for the individual financial statement components, which have remained unchanged from 2008, and are in accordance with the general principles indicated in article 2423 bis of the Civil Code and with the more specific provisions of the following article 2426.

In addition, we wish to point out that:

- there are no formation, start-up and expansion costs, nor deferred costs for research, development or advertising, carried under intangible assets in the balance sheet;
- deferred tax assets relate mainly to the negative taxable amount for the year, which is completely offset by the taxable amounts of subsidiaries within the 2009 scope of consolidation, and have been disclosed within the limits of the tax benefits which can be obtained in future years;
- the deferred tax provision has been reduced due to the adjustment of accelerated depreciation on tangible assets and increased amortisation on programmes allocated in previous years;
- there have been no "exceptional cases" during the year which would entail making derogations from standard accounting principles as permitted under article 2423 (4) of the Civil Code.

Since tax year 2004, Rai has opted to be taxed on a Group consolidated tax basis, pursuant to article 117 of the Consolidated Income Tax Law as amended by Legislative Decree no. 344/2003.

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We consider it useful, for information purposes, to supplement our report with information on the following aspects.
The critical matter of evasion of the licence fee � an issue examined by the Court of Auditors in the Report presented to Parliament on 4 December 2008 � is absolutely unacceptable, especially considering the fact that it is decidedly lower than that paid in other European countries. The fight against evasion must be pursued with decision, due to the respect which should be paid to the directives of the Order and to the relative damages which it causes to the income statement of the Concession holder and to that of the Government, both in its capacity as holder of 99.56% of the shares and as owner of part of the same fee.

The considerable resources unlawfully subtracted from the Rai finances not only have potential negative effects on the quality of the company's television product, but also place the company's entire capital at risk due to the fact that, in recent years, it has no longer been possible to partially offset the problem with advertising revenues, which are currently suffering a severe decline.

Specifically, using - as is customary - information obtained from the Internal Auditing Department and from contacts with the Independent Auditors PwC, the Board of Statutory Auditors has directed its attention to the status of corporate procedures and internal control, both within Rai SpA and the Group.

As regards Rai SpA, the process for updating and completing the overall system of procedures has not yet been completed.

Therefore, the Board renews its recommendation to continue with the rapid completion and updating of the procedures manual in order to benefit from a more integrated system of internal controls. The Board recommends that a similar commitment be dedicated to the so-called "System 231", i.e.: the updating of the Organisational Model envisaged by the Decree, to the implementation of the training of those concerned and of the internal system of sanctions.

Finally, we wish to make a few brief comments on the Internal Auditing Department, the activities of which were dedicated to its inherent functions which are aimed at the systematic audit of the various corporate areas and in-depth analysis of specific operations performed following specific requests by General Management, as in the past. This type of work absorbed a significant portion of the Department's resources, to the detriment of the completion of the scheduled operations typical of this function, which is particularly important within the sphere of company operations.

On this matter, it was noted that Management continues to cooperate with the proceedings for the activities of the Oversight Committee, as requested by the latter. Moreover, it is present within all the Oversight Committees of the subsidiaries, apart from RaiNet and Rai Way.

In the light of the increasing commitments mentioned above, the Board feels that it would be wise to assess the need to take appropriate management action to permit the Internal Auditing Department to effectively perform its functions over Rai and the entire Group.

As regards relations between Rai and the Group companies, the Board of Statutory Auditors recommends action to strengthen the standardisation of Group "conduct", also with a view to developing an internal auditing system within the Group, extended also to the areas which are not strictly administrative. This would take place via the issue and formalisation of operating procedures relating to the main company processes, in compliance with a mid-term schedule.

In the light of all the matters described and considered above, we express our favour for the approval of the Parent Company financial statements at 31 December 2009, as proposed by the Board of Directors, closing with a loss of 79,929,950.22 euros. We also agree with the further request, contained in the same proposal for resolution, regarding the entire coverage of the loss of 79,929,950.22 euros with the use of:

� Other reserves � merger surplus for the same amount.

Rome, 10 June 2010

THE STATUTORY AUDITORS

Mr Domenico TUDINI
Prof. Gennaro FERRARA
Prof. Paolo GERMANI