Independent Statutory Auditors

Attributions

The awarding of the audit assignment (now independent statutory audit), which includes auditing the separate and consolidated financial statements and performing the related regular reviews of the accounting records, to a company listed in the special register established for this purpose, is a prerogative of the Shareholders’ Meeting, which also determines the corresponding compensation. Since 2007, the Shareholders’ Meeting has been selecting the Independent Auditors based on a detailed recommendation by the Board of Statutory Auditors. Previously, the recommendation was submitted by the Board of Directors and the Board of Statutory Auditors merely provided a factual opinion.

The award of the assignment to the current Independent Auditors, PricewaterhouseCoopers Spa (PWC), who were retained in accordance with the regulations in force at that time, was approved by the Shareholders’ Meeting of April 19, 2005 for a duration of three years. Subsequently, the Shareholders’ Meeting of April 5, 2007, acting on a recommendation by the Board of Statutory Auditors, extended the duration to the maximum statutory term of nine years, as allowed by newly enacted regulations. As a result, the current audit assignment will end with the next Shareholders’ Meeting convened to approve the 2010 financial statements.

The Italian subsidiaries, with very few exceptions, have also awarded the independent statutory audit assignment to Independent Auditors chosen from those listed in the special register established for that purpose, as required by Legislative Decree No. 58/1998. Usually, the Independent Auditors thus selected are the same as those retained by Edison, so as to allow the Independent Auditors of the Group’s Parent Company to assume direct responsibility for the audits of its subsidiaries. While complying with the restriction that the audit assignment may not be awarded to the same Independent Auditors for more than nine years, when permissible, the expiration of the assignments awarded to PWC by the Italian subsidiaries was aligned with that of the Edison assignment. The only exception are:

• the Edison Trading Spa subsidiary, whose nine-year assignment to PWC ended with the Shareholders’ Meeting convened to approve the 2009 financial statements. This company appointed Deloitte & Touche as its Independent Auditors for 2010.
• The Termica Cologno Srl subsidiary, whose assignment to PWC ended with the Shareholders’ Meeting convened to approve the 2009 financial statements and, under the provisions of the Civil Code previously in force, was renewed to PWC for three years.

In addition to the Italian subsidiaries, major foreign subsidiaries have also retained Independent Auditors as required under the Group’s general audit plan. In principle, the purpose of this plan is to ensure that the financial statements of all Group companies, and not just those that meet the Consob’s “materiality” requirements, undergo an independent statutory audit by Independent Auditors. With some exceptions, companies that are either dormant or in liquidation are exempt from this requirement. In the remaining cases, in which only a Board of Statutory Auditors has been appointed, the Board of Statutory Auditors was also asked to perform an independent statutory audit, pursuant to law.

Consistent with a firmly established Group policy, Edison and its principal subsidiaries have also asked their Independent Auditors to audit their semiannual financial statements and, in the case of companies that operate in the electric power and natural gas industries, the separate financial statements that are prepared annually for the Electric Power and Hydrocarbons operations and to perform special audits needed to comply with contractual requirements or required by the Electric Power and Gas Authority. These audits assignments have been revised to comply with relevant regulations issued recently by the Electric Power and Gas Authority. Edison’s Independent Auditors, PWC and its international network, working in accordance with assignments they received directly, audited about 94% of total consolidated assets (2010) and about 76% of total consolidated revenue; taking into account the assignments to other independent statutory auditors, the percentages raise respectively to 99% and to 100%.

Fees

Edison’s Shareholders’ Meeting that granted the independent statutory audit assignment also approved the corresponding fees.

The total consideration owed for the provision at the Group level of independent statutory auditing services and services other than auditing amounted to 2,074,000 euros in 2010. A breakdown is provided below:

Starting in 2008, Edison’s auditing costs include the review performed to ascertain that the Report on Operations was consistent with the financial statements, as required by Legislative Decree No. 32/2007, enacted to implement EU Directive No. 51/2003 (content of the Report on Operations and wording of the Independent Auditors’ Report), as well as the tests performed to comply with the requirements of Article 9 of Legislative Decree No. 471/1997. Starting in 2009, the auditing costs include a review of the Corporate Governance Report, as required by current regulations. Additional review assignments performed by the Independent Auditors PricewaterhouseCoopers and its network in 2010 included mainly certifications issued to satisfy contractual obligations, as well as reviews of accounting data and certifications of certain accounting and financial information contained in documents concerning the placement of bonds issued during the year.