RAI - Italian Radio and Television Spa Model of ...

RAI - Italian Radio and Television Spa

Model of organization, management and control Legislative Decree 231/01

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MODEL OF ORGANIZATION, MANAGEMENT AND CONTROL - GENERAL PART

LEGISLATIVE DECREE 231/01

TABLE OF CONTENTS

DEFINITIONS ......................................................................................................................................................................... 3

INTRODUCTION ..................................................................................................................................................................... 4

1. REFERENCE SCENARIO ............................................................................................................................................ 4

1.1 LEGISLATIVE DECREE 231/01 ......................................................................................................................................... 4

1.2 CONFINDUSTRIA GUIDELINES .......................................................................................................................................... 6

1.3 MODEL AND ETHICS CODE .............................................................................................................................................. 6

2. RAI – ITALIAN RADIO AND TELEVISION SPA .......................................................................................................... 6

2.1 MISSION ...................................................................................................................................................................... 6

2.2 INSTITUTIONAL STRUCTURE: UNITS AND DEPENDENTS ....................................................................................................... 8

2.3 GOVERNANCE TOOLS ................................................................................................................................................... 11

2.4 INTERNAL CONTROL SYSTEM .......................................................................................................................................... 12

2.5 GENERAL ORGANIZATION SYSTEM AND SYSTEM OF POWERS OF ATTORNEY ....................................................................... 13

2.6 INTERCOMPANY RELATIONS ........................................................................................................................................... 15

3. MODEL OF ORGANIZATION, MANAGEMENT AND CONTROL ............................................................................ 15

3.1 RAI PROJECT FOR DEFINING ITS OWN MODEL ................................................................................................................. 15

3.1.1 MAPPING AREAS AT RISK ............................................................................................................................................ 15

3.1.2 REVIEW/UPDATE OF ORGANIZATION, MANAGEMENT AND CONTROL MODEL .................................................................... 16

3.2 THE RAI MODEL ........................................................................................................................................................... 16

3.3 ADOPTING THE MODEL INSIDE THE GROUP .................................................................................................................... 19

4. THE SUPERVISORY BOARD PURSUANT TO LEGISLATIVE DECREE 231/01/01 FOR RAI ................................ 19

4.1 ESTABLISHMENT AND REVOCATION OF SUPERVISORY BOARD, APPOINTMENT AND REVOCATION OF COMPONENTS ................ 20

4.2 FUNCTIONS AND POWERS ............................................................................................................................................. 21

4.3. INFORMATION FLOWS TO AND FROM THE SB .................................................................................................................. 23

4.3.1. SB REPORTING TO COMPANY UNITS ........................................................................................................................... 23

4.3.2. DISCLOSURE TO THE SB ........................................................................................................................................... 24

4.4. CALL, VOTE AND RESOLUTIONS ..................................................................................................................................... 25

4.5. SUPERVISORY BODIES OF SUBSIDIARIES ....................................................................................................................... 26

5. TRAINING OF RESOURSES AND DISTRIBUTION OF MODEL ............................................................................. 26

5.1. INTRODUCTION ............................................................................................................................................................ 26

5.2 EMPLOYEES ................................................................................................................................................................. 26

5.3 OTHER RECIPIENTS....................................................................................................................................................... 27

6. PENALTY SYSTEM .................................................................................................................................................... 28

6.1 FUNCTION OF THE PENALTY SYSTEM ..................................................................................................................... 28

6.2 MEASURES AGAINST EMPLOYEES .................................................................................................................................. 28

6.2.1 DISCIPLINARY SYSTEM ............................................................................................................................................... 28

6.2.2 VIOLATION OF THE MODEL AND RELATIVE PENALTIES ................................................................................................... 29

6.3 MEASURES AGAINST DIRECTORS .................................................................................................................................. 30

6.4 MEASURES AGAINST AUDITORS .................................................................................................................................... 30

6.5 MEASURES AGAINST OUTSIDE COLLABORATORS ............................................................................................................ 30

7. ADOPTION OF THE MODEL – CRITERIA FOR UPDATING AND ADAPTING THE MODEL ................................. 30

8. TEMPORARY PROVISION ......................................................................................................................................... 31

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Definitions

- "Sensitive Activities" means RAI - Italian Radio and Television Spa activities in areas where there is a risk of committing offenses;

- “CCNL”: (Contratti Collettivi Nazionali di Lavoro - National Collective Labor Agreements] currently in force and applied;

- "Supervisory Board" (SB): internal body responsible for supervising the operation and observance of the Model;

- “"Outside Collaborators": all collaborators, in whatever capacity, including occasional and/or only temporary and all those who do business and/or have financial interests of any nature with RAI - Italian Radio and Television Spa, or act on behalf of the Company on the basis of specific tasks (for example, consultants, suppliers, partners, agents, dealers, brokers);

- “Recipients": all those who work to achieve the purpose and objectives of the company: Corporate Bodies, the General Manager, employees and all External Collaborators;

- "Employees": means all employees of RAI - Italian Radio and Television Spa (this also includes executives, journalists and musicians);

- “Legislative Decree 231/2001”: Legislative Decree 231 of 8 June 2001 as amended;

- “RAI”: RAI - Italian Radio and Television Spa;

- "Group": RAI - Italian Radio and Television Spa and its subsidiaries pursuant to art. 2359, first and second paragraph of the Italian Civil Code;

- "Guidelines": means the Guidelines for establishing organization, management and control models pursuant to Legislative Decree No. 231/2001 prepared by Confindustria;

- "Model": means the organization, management and control model provided for by Legislative Decree No. 231/2001 which will be adopted and effectively implemented on the basis of the reference principles referred to in this document;

- "Corporate Bodies": the members of the Board of Directors and Board of Statutory Auditors of RAI - Italian Radio and Television Spa

- "P. A.": the Public Administration, including its officers and public officials and those in charge of public service;

- "Offenses" means the offenses to which to apply the rules provided for by Legislative Decree No. 231/2001;

- "Company": RAI-Italian Radio and Television Spa.

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Introduction

RAI has decided to proceed with the preparation and adoption of the organization, management and control model pursuant to Legislative Decree No. 231/2001 (hereinafter, the "Model") since it is aware that such a system, although it constitutes a "right" and not an obligation, is an opportunity to strengthen its governance culture, at the same time seizing the opportunity of the activities performed (inventory of Sensitive Activities, analysis of potential risks, evaluation and adaptation of existing control systems on Sensitive Activities) to raise awareness in the resources used with respect to issues such as controlling business processes, aimed at “actively” preventing crimes. In the meeting of 4-5 October 2005, the Board of Directors of RAI approved the first version of the Model. Subsequently, in line with the spirit of the Law, the Model was updated in light of the results of the activity carried out by the Supervisory Board, as well as a result of the regulatory changes that have affected the catalog of predicate offenses and organizational changes within the Company and the Group.

Lastly, in November 2012 the Company started an internal project (hereinafter the Project) aimed at ensuring that the model is updated in order to take into account:

- organizational changes in the Company;

- development of case law and doctrine;

- of legislative changes;

- considerations arising from the application of the Model, including experiences resulting from criminal litigation;

- the practice of Italian and foreign companies regarding the adoption and implementation of organization, management and control models;

- the results of monitoring activities and the results of Internal Auditing.

1. Reference scenario

1.1 Legislative Decree 231/01

On 8 June 2001 - Legislative Decree 231, on the "administrative liability of legal persons, companies and associations without legal personality" - was issued in execution of the powers of Art. 11 of Law No. 300 of 29 September 2000. The primary origin of Legislative Decree No. 231/2001 is in some international and Community conventions ratified by Italy which require entities to have some form of liability for certain types of offenses. For the first time, Legislative Decree no. 231/2001 introduced in Italy criminal liability of companies for some intentional offenses committed or attempted, in the interest or benefit of the company, by members of senior management (the so-called individuals in "apical "or simply "top" positions) and those who are subject to the direction or supervision of the latter (Article 5, paragraph 1 of Legislative Decree No. 231/2001). The administrative responsibility of companies is independent of the criminal liability of the person who committed the crime and flanks the latter.

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The perpetration or attempted perpetration of the offenses mentioned above entails the application of a fine and, in more serious cases, disqualification penalties (also applicable as a precautionary measure), such as prohibition from carrying our activities; the suspension or revocation of authorizations, licenses or permits related to the offense; prohibition from negotiating with the Public Administration; exclusion from grants, loans, or subsidies and the possible revocation of those granted; prohibition from advertising goods or services.

The type of offenses covered by the rules in question can be included, for the sake of convenience, in the following categories:

- crimes in relations with the Public Administration;

- crimes against the public trust;

- corporate crimes;

- crimes of terrorism or subversion of the democratic order;

- market abuse;

- crimes against individuals;

- transnational crimes;

- crimes against life and individual safety;

- manslaughter and serious or grievous bodily harm, committed in violation of the rules on protection of health and safety at work;

- crimes of receiving, laundering and use of money, goods or assets of illicit origin;

- computer crimes and illegal data processing;

- crimes against industry and trade;

- organized crime;

- offenses relating to breach of copyright;

- offense of incitement not to make statements or to make false statements to the court;

- environmental offenses;

- Crime of employing third-country nationals who are in country illegally;

- offense of bribery between private individuals.

The adoption of the Model as a tool capable of guiding the behavior of individuals operating within the Company and to promote behavior based on legality and fairness at all levels of business, is reflected positively on the prevention of any crime or offense foreseen by the law.

However, in view of the analysis of the business context, the activities conducted by the Company and the areas potentially subject to the risk of crime, were considered relevant and therefore specifically examined in the Model, only those offenses that are subject of individual Special Parts, which should be consulted for their exact determination.

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A more extensive discussion of the Legislative Decree No. 231/01 can be found in Appendix A.

1.2 Confindustria Guidelines

In preparing this document the Company was inspired by the "Guidelines for the construction of organization, management and control models, pursuant to Legislative Decree No. 231/2001" issued by Confindustria in accordance with Art. 6, paragraph 3, of Legislative Decree No. 231/2001. The RAI Model is suitably adapted to the concrete reality of the company, also in light of the indications provided by these Guidelines.

1.3 Model and Ethics Code The rules of conduct contained in this Model are consistent with the Code of Ethics adopted by the Company, although the present Model serves specific purposes in accordance with Legislative Decree No. 231/01.

In this respect, in fact:

- The Code of Ethics is a tool to be adopted independently and can be generally applied by

Group companies, in order to express the principles of "business ethics" that the Group recognizes as its own and are to be observed by all Company Units, the General Manager, Employees and all external collaborators;

- The Model instead responds to specific provisions contained in Legislative Decree No.

231/2001, in order to prevent certain types of criminal violations from being committed (for facts which, apparently committed for the benefit of the company, may entail administrative criminal responsibility under the provisions of the Decree). The Model sets the rules and provides procedures that must be followed in order to establish extenuating circumstance for the Company for the purposes of liability referred to in Legislative Decree No. 231/2001.

2. RAI – Italian Radio and Television Spa

2.1 Mission

RAI - Italian Radio and Television Spa, is the exclusive concessionaire of public service broadcasting, which produces television, radio and satellite channels on digital terrestrial platform. The mission of the public service broadcaster is founded on the principles laid down by the Italian Constitution and the European Union with the Directive Television Without Frontiers of 1989, as amended, with the ninth protocol on public television attached to the Amsterdam Treaty of 1993 and the subsequent communication from the Commission of the European Communities 2009/C 257/01 published in the Official Journal of the European Union on 27 October 2009. This mission is governed by national legislative and regulatory laws in compliance with these standards.

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In particular, the public service obligations are defined by all of these sources, by Law of No. 249 of 31 July 1997, Law No. 112 of 3 May 2004, the Consolidated Act on audiovisual and radio media broadcasting services, approved by Legislative Decree No. 177 of 31 July 2005, and the Service Contract signed with the Ministry of Economic Development.

The public broadcasting service, in accordance with Article 45 of the Consolidated Law on audiovisual media and radio services, by establishing the minimum content requirements that can be integrated through the service contract, must establish the following: a) the dissemination of all television and radio public service transmissions with full coverage of the national

territory, to the extent allowed by science and technology;

b) an adequate number of hours of television and radio programs dedicated to education, information, training, cultural promotion, with particular emphasis on promoting theater, film, television programs, even in the original language, and music recognized as being of high artistic value or particularly innovative; the number of these hours is defined every three years by the Authority; these calculation exclude entertainment programs for children;

c) distribute broadcasting services referred to in point b), in a proportionate manner, in all time slots, including those with the largest audience, and on all television and radio programs;

d) access to programming, to the extent and in the manner provided for by law, in favor of political parties and groups represented in Parliament and in regional assemblies and councils, organizations, local government associations, national trade unions, religious groups, political movements, political and cultural institutions and associations, national associations of the cooperative movement legally recognized, the social promotion associations registered with the national and regional register, linguistic and ethnic groups and other groups of social significance as requested;

e) the formation of a company for the production, distribution and transmission of radio and television programs abroad, that serve to understand and appreciate the Italian language, culture and companies through the use of programs and the dissemination of the most significant productions on the national media scene;

f) producing radio and television broadcasts in German and Ladin for the autonomous province of Bolzano, in Ladin for the autonomous province of Trento, in the French for the autonomous region of Valle d' Aosta and in Slovene for the autonomous region of Friuli- Venezia Giulia ;

g) free transmission of socially useful messages or messages of public interest that are required by the Presidency of the Council of Ministers and the transmission of adequate information on the viability of Italian roads and highways;

h) the transmission, at appropriate times, of contents specifically designed for children, taking into account the needs and sensitivities of all childhood age groups;

i) the preservation of historical radio and television archives, guaranteeing public access to them;

l) allocation of no less than 15 percent of the total annual revenues to the production of European works , including those by independent producers ;

m) the realization, under the terms provided by Law No. 112 of 3 May 2004, of infrastructures for broadcasting digital terrestrial frequencies;

n) the realization of digital interactive services of public utility;

o) compliance with the limits on advertising laid down in Article 38 of the Consolidated Law;

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p) the division of the licensee company in one or more national offices and with offices in each region, and for the Trentino – Alto Adige region, in the independent provinces of Trento and Bolzano;

q) the adoption of appropriate measures for the protection of persons with sensorial disabilities;

r) the promotion and strengthening of decentralized production centers;

s) the realization of distance teaching activities.

Board of Directors

2.2 Institutional structure: units and individuals

The governing body manages the company and works with the diligence required by the nature of the appointment and based on the specific expertise of its individual members. Notwithstanding any other provision of law and except as provided by Article 29 of the Statute, the Board of Directors performs all operations necessary to achieve the corporate purpose, being endowed with all powers to manage the Company and the capacity to accomplish all actions deemed necessary or appropriate for achieving the company purpose. The Board, in addition to being the company governing body, also controls and guarantees the proper fulfillment of the purposes and obligations of the general public broadcasting service.

Based on the provisions of Article 25 of the Statute, as amended, the Board of Directors is responsible for deciding on:

a) the merger and division of companies with a participation of at least 90% (ninety percent), in compliance with articles 2505 and 2505-bis of the Italian Civil Code;

b) the reduction of capital in the event of withdrawal of a member;

c) the adaptation of the statute to regulatory instructions;

d) the establishment and abolition of secondary branches.

In the composition and for the period set out in Article 21.8 of the Statute, pursuant to Article 21 paragraph 2 of Law No. 112 of 3 May 2004, the Board of Directors of the Company - notwithstanding the powers laid down in Article 25.2 of the Statute – in exercising the tasks referred to in Article 25.1 of the Statute: a) using the proposals of the Director-General, approves the Company budget proposal, the investment plan, financial plan, personnel policies and restructuring plans;

b) on the basis of specific plans allocates annual economic resources to the different areas of business activities;

c) upon the proposal of the General Manager: approves the annual transmission and production plans for the company and any changes that may be needed; appoints first and second level deputy general managers and decides on their placement in the company; approved the acts and contracts of a strategic nature, as well as those which, partly as a result of a multi-year duration, exceed the amount of Euro 2,582,284.50 (two million five hundred and eighty-two thousand two hundred and eighty-four point fifty);

d) periodically receive a report from the General Manager on costs and revenue management, as a well as data and information on direct costs and industrial accounting of television and radio programs, on company documents and contracts with a value exceeding the amount authorized to senior executives, on employee recruitment, transfer and promotion.

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The Board of Directors, without prejudice to the powers attributed by law to the General Manager, may delegate its powers to the Chairman alone, more specifically determining the contents and remuneration in accordance with Article 2389, paragraph 3, of the Italian Civil Code. The issues listed under Article 2381, paragraph 4 of the Italian Civil Code cannot be delegated.

The Board of Directors may confer powers for single acts to other members without additional compensation.

The appointed bodies ensure that the organizational, administrative and accounting structure is appropriate to the nature and size of the company and are required to report to the Board of Directors and the Statutory Auditors, at least every three months, on the general performance of the company, its prospects, and the most important operations for size or nature, carried out by the Company and its subsidiaries.

The representation of the Company in dealings with third parties, including in court, with the power to act in any location and to any extent of jurisdiction, even supranational or international, as well as revocation and Cassation, and to appoint special prosecutors and lawyers, is separately up to: a) the Chairman of the Board of Directors;

b) the General Manager, within his powers.

In the event that the Chairman is absent, incapacitated, or on vacation from office, the representation of the Company is granted, as determined by the previous article 22.3, to the Vice Chairman or, in his absence, the Director who replaces the Chairman in accordance with the same article. As regards third parties the signature of the person serving as representative takes precedence in the absence or impediment of the person replaced. The Chairman, in order to implement the decisions of the Board of Directors, may grant powers of attorney to employees or third parties for the completion of certain acts or categories of acts, including the resolution of disputes and legal representation; this option also lies with the General Manager as part of the powers and duties conferred.

Chairman

In accordance with the provisions of Article 26 of the Statute, the Board of Directors, without prejudice to the powers attributed by law to the General Manager, may delegate its powers to the Chairman alone, in accordance with the provisions of Article 2381 of the Italian Civil Code and also taking into account the provisions of Article 49, paragraph 2 or Legislative Decree No. 177/2005 – Consolidated Text on Broadcasting.

By resolution of the Board of Directors the Chairman has been delegated the following powers:

- to approve, upon proposal of the General Manager, acts and company contracts that, also as a

result of a multi-year duration, exceed the amount of Euro 2,582,284.50 up to Euro 10,000,000.00 provided that – with regard to contracts of an editorial nature (immediate usefulness, repeated utility and artistic writings) – the essential elements of such contracts comply with the choices and decisions made by the Board of Directors when approving production and transmission schedules, time slots and company budget lines. The Chairman will provide quarterly reports on the acts and contracts stipulated in the exercise of delegated powers;

- appointment, upon proposal of the General Manager, and determination of relative business placements of first and second level managers of non-editorial departments, meaning the editorial departments of the Channel, Type and Headline, both radio and television, as well as supporting Departments (TV Time Slots and Marketing, Shows and Radio); appointment of first and second level managers and relative positions therefore remains the responsibility of the Board of Directors.

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General Manager

Based on the provisions of Article 29 of the Statute, the General Manager is appointed by the Board of Directors in consultation with shareholders, in accordance with the powers recognized by law. The term of office for the General Manager has the same duration as that of the Board of Directors. In order to achieve an understanding with shareholders:

a) the Board of Directors formulates its intended appointment, by single or multiple indication, and mandates the Chairman to promote an agreement and also call an ordinary shareholders’ meeting;

b) the Chairman, after shareholders have approved the agreement, will convene the Board of Directors who will appoint a General Manager in compliance with the agreement reached.

The Board of Directors defines the duties of the General Manager, subject to the provisions of Article 3 of the Law No. 206 of 25 June 1993, as referred to in Article 28 letter e) of the Law No. 112 of 3 May 2004 as amended, and subsequent articles 29.3 and 29.4, and determines the remuneration. The General Manager:

a) answers to the company Board of Directors for the profiles under his jurisdiction and oversees the organization and operation of the company in the framework of plans and directives established by the Board of Directors;

b) participates, without the right to vote, in meetings of the Board of Directors;

c) in conjunction with the network and station directors ensures that radio and television programs are consistent with the editorial policies and guidelines formulated by the Board of Directors;

d) proposes to the Board of Directors the appointment of the Directors referred to in Article 25.3, letter c ) of the Statute;

e) employs, appoints, promotes and establishes positions for other Directors as well as journalists as proposed by station directors and in accordance with the contract for journalistic work, and promptly informs the Board of Directors,;

f) provides for personnel management;

g) propose acts and contracts of a corporate strategic nature and those which, partly as a result of a multi-year duration, exceed Euro 2,582,284.50 to the Board of Directors;

h) signs acts and business contracts of a non-strategic nature relating to the management of the Company amounting to less than Euro 2,582,284.50;

i) implements the plans referred to in Article 25.3, letter a) of the Statute and specific business projects approved by the Board regarding editorial policy, investments, corporate organization, financial policy and personnel policies;

j) transmits to the Board of Directors the information needed to verify the achievement of corporate objectives and the implementation of guidelines laid down by the competent authorities in accordance with the law.

The General Manager also prepares and submits to the Board of Directors the annual transmission and production plans of the company and any necessary changes.

Board of Auditors

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On the basis of the provisions of Article 30 of the Statute, the Assembly appoints the Board of Statutory Audits consisting of three standing auditors, one of who serves as Chairman, and determined their remuneration. The Assembly also appoints two alternate auditors. All auditors must be verified public accountants registered in the register held by the Ministry of Justice. The auditors remain in office for three fiscal years and expire on the date of the meeting called to approve the financial statements for the third fiscal year of their term; they can be re-elected.

The audit is carried out by a firm of auditors registered in the register held by the Ministry of Justice.

The Audit assignment is conferred by shareholders, after consulting with the Board of Auditors, for a period of three years and expires on the date the meeting of Shareholders is convened to approve the financial statements for the third fiscal year in office.

The Assembly also determines the remuneration to be paid to external auditors for the duration of their assignment.

The separate accounts maintained in accordance with Article 18, paragraph 1 of Law No. 112 of 3 May 2004 are subject to control by the external auditors appointed by the Assembly and selected by the Authority for Communications among those found in the appropriate register kept by the National Commission for Companies and the Stock Exchange, pursuant to Article 161 of the Consolidated Text in Legislative Decree No. 58 of 24 February 1998.

Internal controls organization

Article 31 of the Statute provides that the Board of Directors form a single or collegial body entrusted the task of controlling operations and monitoring organizational and managements models for preventing offenses under Legislative Decree No. 231 of 8 June 2001, as well as providing for their update. This body has autonomous powers of initiative and control for carrying out its functions.

2.3 Governance Instruments

Because of the role of RAI, as shown above, it is important to emphasize the fundamental contribution of corporate governance in implementing controls and, more specifically, preventing offenses under Legislative Decree 231/2001. The Company has developed a set of tools managing the organization that ensure the functioning of the Company and which may be summarized as follows:

- Statute: in compliance with applicable laws, it includes various provisions relating to corporate

governance to ensure proper management operations;

- Service Contract: dedicated to the activity that the concessionaire carried out in order to fulfill public broadcasting services and, in particular, television, radio and multimedia widespread across the different platforms, in all modes, the realization of editorial content, the delivery of technology services for the production and transmission of signals in analogue and digital, the creation and management of control and monitoring infrastructure. The Contract establishes a series of objectives, operational guidelines, standards of quality, types of programs the implementation of which is entrusted to the autonomous editorial capacity of the concessionaire in accordance with principles and reference national legislative and regulatory laws;

- Organizational configuration - Mission and Responsibility (Excluding Stations): shows the structures for which mission and responsibilities have been formalized;

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- Proxies and powers of attorney: establishes, by assigning specific powers of attorney, authority to represent or bind the company;

- Code of Ethics: expresses the ethical principles and professional ethics that RAI recognizes as its own and for which it requires compliance by all those who work for the achievement of Company objectives. The Code of Ethics expresses, among other things, guidelines and principles of conduct aimed at preventing the offenses referred to in Legislative Decree No. 231/2001 and expressly refers to the Model as a useful tool to operate in compliance with regulations;

- Procedures system, Policy, Regulations, Internal Communications, Instructions bent on clearly and effectively regulating processes that refer to the Company.

The array of corporate governance tools adopted, very briefly mentioned above, and the provisions of this Model makes it possible to identify, with respect to all activities, how decisions are formed and implemented (see Article 6 ,paragraph 2, letter b of Legislative Decree No. 231/2001). In addition, the system of the aforementioned internal documentation, as well as constant monitoring on the part of the Authorities in charge are also a valuable tool to oversee the prevention of unlawful behavior in general, including that set out in the relevant legislation which assigns administrative responsibility to the institutions

2.4 Internal Control System

The Company has an internal control system designed to protect against typical business risks over time

The Internal Control System is a set of rules, procedures and organizational structures that serve to monitor compliance with strategies and the achievement of the following goals: (i) effectiveness and efficiency of business processes and operations;

(ii) quality and reliability of economic and financial information;

(iii) compliance with laws and regulations, standards and company procedures

(iv) safeguard the value of the company activities and company assets and prevent losses.

Consistent with the adoption of a traditional management and control system, the main individuals currently responsible for the monitoring, control and surveillance processes in the Company are:

- Board of Directors: defines the guidelines of the Internal Control System so that the main company risks are properly identified, adequately measured, managed and monitored; evaluates the adequacy and effectiveness of the Internal Control System; in the context of management and coordination, the Parent defines the guidelines for the internal control system of Group companies.

- Statutory Auditors: monitor observation of the law, compliance with the principals of correct administration, the adequacy of the company’s organizational structure in carrying out its duties, the Internal Control System and accounting system, as well as the reliability to correctly represents the management facts;

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- General Manager has the task of implementing the policies formulated by the Board of Directors by planning, carrying out and managing the Internal Control System and risk management, constantly monitoring the adequacy and effectiveness;

- Supervisory Body: has the task of monitoring the adequacy, functionality and application of the Model;

- Internal Auditing: is the business function that is entrusted with the task of verifying the operation and proper application of the internal control system and provide assessments and recommendations in order to promote the efficiency and effectiveness;

- Management: ensures the adequacy of the control system, participating actively in its proper operation, even by establishing specific control and monitoring processes aimed at ensuring the effectiveness and efficiency over time.

Furthermore, as part of the control system the financial statements are entrusted to an external audit company.

2.5 General organizational system and system of powers of attorney

For the implementation of the organization, management and control model pursuant to Legislative Decree No. 231/2001, the organizational structure of the Company is of crucial importance, based upon which the essential organizational structures, their respective areas of expertise and the major of responsibilities assigned to them are identified.

Today RAI is structured into 6 areas:

- TV editorial;

- New media editorial;

- Radio editorial;

- Commercial;

- Broadcasting and digital terrestrial television (DTT);

- Staff.

The publishing areas conceive, develop and implement programs and TV radio channels, on satellite and digital terrestrial platform and new media. The staff area oversees the management, economic and operational efficiency of the Company while other areas are the focal point for implementing the Group’s multimedia, digital and business strategy. In particular, the broadcasting and DTT area supports broadcasting and publishing by managing aspects of infrastructure and technological innovation, the commercial area identifies, develops and manages issues related to the commercial exploitation of the intellectual property rights of RAI or third parties. The organizational system of the Company is based on regulatory instruments (Policy, Regulations, Internal Communications, Directions etc..) based upon the following general principles:

a) clear description of the reporting lines;

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b) knowability, transparency and publication of the powers conferred (within the Company and in respect of third

parties);

c) clear and formal definition of roles, with a complete description of the duties of each function, its powers and responsibilities.

Internal procedures should be characterized by the following elements:

i. segregation, within each process, between the person who makes decisions (decision-making), the

person who carries out these decisions and the one who is entrusted with controlling the process (so-called "segregation of duties");

ii. documentable track of each step of the process (so-called "traceability"); iii. adequate level of formalization.

In principle, the system of powers of attorney must be characterized by elements of "security" in order to prevent Crimes (tracing and highlighting sensitive activities) and, at the same time, however, allow for efficient business management. "Proxy" refers to the transfer, not occasional, within the company, of responsibilities and powers from one individual to another subordinate individual. "Power of Attorney" means a legal transaction in which one party gives the other the power to represent it (i.e. to act in its name and on its behalf). The main difference compared to the proxy is that it allows counterparties to negotiate and contract with the persons responsible for officially representing the company. The essential requirements of the proxy and powers of attorney systems, in order to effectively prevent criminal offenses, are as follows:

a) proxies must combine each power with the relative responsibility and with an appropriate position in the organization; each proxy must specifically and unambiguously define the powers of the delegated person and the individual (body or individual) to whom the delegated person reports hierarchically;

b) anyone (including employees or corporate bodies of other Group companies) who, on behalf of the

Company, maintain relations with the P.A. shall be provided with an official in this regard;

c) management powers assigned with the proxies and their implementation must be consistent with corporate objectives;

d) the delegate must have spending powers appropriate for the functions conferred;

e) the power of attorney may be granted to individuals specifically identified in the proxy itself, or to legal

persons, which act through their agents who are vested under the same, similar powers;

f) as ad hoc procedure must regulate procedures and responsibilities to ensure timely update of proxies

and/or powers of attorney;

g) each power of attorney that involves the power to represent the company in dealings with third parties must be accompanied by an internal proxy which described the relative management powers;

h) powers of attorney normally involve spending limits and/or commitments; if these limits are for not

specifically provided for and/or there is no need for joint signature, compliance with these requirements is ensured by internal limits provided for by the Internal Control System.

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2.6 Intercompany relations

The provision of services, conducted by the Company in favor of Group companies must be governed by a written contract. In particular, the contract for the provision of services should include the roles and responsibilities for the activity in question and the definition of the following clauses:

- the obligation on the part of Group companies receiving the service, to provide, in a complete,

timely, correct manner, information and documents for the purpose of carrying out the services required;

- clause by which the parties undertake to respect the principles of organization, management

and control to prevent the unlawful acts referred to in Legislative Decree no. 231/01, set out in the Organization, Management and Control Model adopted;

- clause whereby the parties declare that they have imparted and implemented the provisions of

its directors, employees and/or contractors in order to prevent the behavior sanctioned by Legislative Decree 231/01 to be committed or attempted, and undertake to keep them all effectively implemented for the duration of the contract;

- - termination clauses that give the parties the right to terminate the contract in question in the

event of violation of the previous requirement; the defaulting party will be required to indemnify and hold harmless the other party for losses, damages, expenses, liabilities and actions that may result from this violation.

3. Organization, Management and Control Model

3.1 The RAI project for defining its own Model

The methodology chosen to execute the project, in terms of organization, definition of operating modes, structuring in phases, allocation of responsibilities among the various functions, has been drafted in order to ensure the quality and credibility of the results. The project is divided into phases briefly summarized below that, only for a methodological explanation, are shown individually.

3.1.1 Mapping risk areas

Article. 6, paragraph 2, letter a) of Legislative Decree No. 231/2001 indicates, among the requirements of the model, the identification of processes and activities within which may be committed the offenses specified in the decree. In other words, those activities and processes that are commonly defined as "sensitive" (hereinafter, "sensitive activity").

The purpose of Phase 1 was precisely the identification of business areas for intervention and the preliminary identification of sensitive activities.

The analysis, mostly documentary, of the corporate structure and the organization of the company have been preparatory for identifying sensitive activities, carried out in order to understand the context in which the Company operates and to identify business processes for intervention.

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The collection of relevant documentation and analysis of these from a technical, organizational and legal point of view has allowed the identification of sensitive activities and a preliminary identification of the functions responsible for these activities.

Following is a list of activities carried out in Phase 1:

- collection and analysis of organizational and corporate documents, as well as existing business

documents regarding Legislative Decree 231/01; - identification of areas and activities susceptible to potential offenses covered by Legislative

Decree No. 231/2001 (risk areas); - identification of points of contact (hereinafter Key Officers) responsible for managing sensitive

activities, the control environment and the results of the Gap Analysis and sharing with competent Departments/Structures;

- definition of control standards suitable for preventing offenses/crimes (model to be used "to

be"); - preparation of a questionnaire and standard report (evaluation forms) to be used to measure

the control environment of individual sensitive activities and to conduct the Gap Analysis; - sharing control standards, questionnaires and standard reports; - definition of Interview Plans with Key Officers to study issues related to risk and control systems

ex Legislative Decree 231/01 ; - mapping and gap analysis; - definition of action plan for strengthening control procedures.

3.1.2 Review/Update of organization, management and control model

The purpose of Phase 2 was to update the Company organization, management and control model pursuant to Legislative Decree 231/2001, divided in all its components, according to the provisions of Legislative Decree 231/2001, the reference best practice and indications provided by Confindustria.

The implementation of Phase 2 was supported by the results of the previous phase.

3.2 The RAI Model The Legislative Decree No. 231/2001 confers, together with the occurrence of other circumstances provided for by Articles 6 and 7 of the decree, a discriminant value in the adoption and effective implementation of models of organization and management to the extent that the latter are capable of preventing, with reasonable certainty, the offenses or attempted offences mentioned in the decree. In particular, pursuant to paragraph 2 of article 6 of Legislative Decree No. 231/2001, a model of organization and management must meet the following requirements:

a) identify the activities in which offenses may be committed;

b) establish specific protocols aimed at planning the formation and implementation of decisions in relation to the prevention of offenses;

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c) identify ways of managing financial resources in order to prevent offenses from being committed;

d) establish the requirement to inform the entity responsible for supervising the operation and compliance of the models;

e) introduce a disciplinary system to punish non-compliance with the measures specified in the model.

With reference to the offenses relating to health and safety, from which can derive the organization’s administrative responsibility, Legislative Decree No. 81 of 9 April 2008 containing the Consolidated Law on health and safety at work provides in Article 30 (Models of organization and management), that an organization and management model that is suitable and can effectively exempt from administrative liability, adopted and effectively implemented, must ensure a company system for fulfilling all legal obligations relating to:

a) compliance with the technical and structural standards of the law relating to equipment, structures,

workplaces, chemical, physical and biological agents;

b) the activities of risk assessment and preparation of measures of prevention and protection;

c) organizational activities, such as emergencies, first aid, management of contracts, periodic safety meetings, consultations with workers' representatives for safety;

d) the activities of health surveillance;

e) the activities of information and training of workers;

f) monitoring activities with regards to compliance with procedures and work safety instructions by workers;

g) acquisition of documentation and certifications required by law;

h) periodic control of the application and effectiveness of the procedures adopted.

Article 30 of Legislative Decree 81/2008 states that: "In the first application, the models of business organization are presumed to comply with the requirements of Article 30 of Legislative Decree 81/2008 for the corresponding parts, if defined in accordance with the UNI-INAIL system for managing health and safety at work (OHSMS) of 28 September 2001 or the British Standard OHSAS 18001:2007. For the same purposes more models of organization and management may be indicated by the Standing Advisory Commission on health and safety at work. In light of the foregoing, the Company has prepared a model that, even on the basis of information provided by the Code of Conduct drawn up by Confindustria, considers its own particular company reality. The Model, therefore, represents a coherent set of principles, procedures and provisions which:

Affect the internal functioning of the Company and the way in which it interacts with the outside world and

Govern the operation of a control system for Sensitive Activities, aimed at preventing the offenses or attempted offences referred to in Legislative Decree 231/2001.

The Model, structured into a complex set of documents, is connected to the following constituent elements:

Identification of business activities where the offences referred to in Legislative Decree No. 231/2001 may be committed;

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- - Provision of control standards in relation to sensitive activities identified, such as:

- a system for regulating activities;

- traceability and documentation of every relevant transaction for the purposes of Legislative Decree No. 231/2001;

- compliance for the principle of separation of functions;

- definition of authority consistent with the responsibilities assigned;

- identifying ways of managing financial resources in order to prevent offenses from being

committed;

- identifying reference ethics principles;

- anticipation of the SB;

- information flows to and from the SB;

- program of periodic checks on Sensitive Activities and related control standards;

- disciplinary system designed to punish the violation of provisions contained in the Model;

- plan for training and communicating with employees and other individuals who interact with the Company;

- updating policies and adaptation criteria for the Model.

The above-mentioned constituent elements are implemented in the following documents:

Reference principles of the Model (this document);

Code of Ethics.

The document relating to the Principles of the Model contains:

(i) in the general part, a description of:

The regulatory framework (detailed in Appendix A);

The methodology adopted for risk assessment and gap analysis activities;

Identification and appointment of the SB, with specification of powers, tasks and information flows that concern him;

How the disciplinary system works and the relative penalties;

Training and communication plan to be adopted in order to ensure knowledge of the measures and provisions of the Model;

The criteria for updating and modifying the Model;

(ii) In the individual special parts, a description of:

- The major offenses referred to by Legislative Decree No. 231/2001;

- The sensitive processes/activities and related control standards.

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3.3 Adopting the Model inside the Group

The principles and general rules laid down in this Model must be incorporated in the Model adopted by other Group companies. RAI will distribute to the companies belonging to the Group, this Model and any subsequent updates, in the manner it deems most appropriate. Each company will have to adopt their own organizational and control model pursuant to Legislative Decree No. 231/2001, in relation to specific operational requirements, which will be approved by special resolution of the Board of Directors of the companies themselves and sent to RAI. In preparing their model companies belonging to the Group base themselves on the principles of this Model and take into account the contents, unless the analysis of their business risk highlight the need to adopt different or more specific measures of prevention rather than as indicated in this Model. The companies in the Group inform RAI of any problematic issues encountered in shaping their own model with the provisions of this document.

4. Supervisory Board pursuant to RAI Legislative Decree 231/01

In accordance with the provisions of Legislative Decree No. 231/2001 - Article 6, paragraph 1, letters a) and b) - the Company may be exempted from liability arising from offenses committed by qualified persons pursuant to article 5 of Legislative Decree No. 231/2001, if the governing body has, among other things:

- adopted and effectively implemented organizational, management and control Models to prevent offenses;

- entrusted the task of supervising operations and complying with the Model and its upgrade to a

body with independent powers of initiative and control.

The assignment of the above tasks to an organization with independent powers of initiative and control, together with the proper and effective performance therefore represent indispensable prerequisites for exemption from the liability provided for by Legislative Decree No. 231/2001. The Company, in the absence of specific indications of the relevant legislation, opted for a solution that is able to ensure, in relation to its size and to its organizational complexity, the effectiveness of the controls for which the supervisory body is responsible . In compliance with the provisions of article 6, paragraph 1, letter b) of Legislative Decree No . 231/2001 , the Company has identified its supervisory body (hereinafter "Supervisory Board" or "SB") in an entity with various individuals composed of the Director of Internal Auditing pro tempore and two external members, one of whom shall act as chairman . The SB is placed in a staff position with respect to the Board of Directors and refers through information flows governed by paragraph 4.3 .

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4.1 Establishment and revocation of Supervisory Board, appointment and revocation of its components

The Supervisory Board is established by resolution of the Board of Directors and shall expire on the date of expiry of the mandate of the administrative body that appointed it, while continuing to perform its functions ad interim until a new Supervisory Board is appointed by the new Board of Directors, except as provided in chapter 8, "Transitional regulations". The appointment as a member of the SB is conditioned by the presence of the subjective requirements of integrity, independence and professionalism as well as the absence of grounds for incompatibility with the appointment. The members are chosen from among persons who have the professional skills needed to carry out the tasks. The following constitute grounds for ineligibility or disqualification of members of the Supervisory Board:

- conviction or penalty upon request pursuant to article 444 et seq. of the Code of Criminal

Procedure, with a measure also in first instance, for one of the offenses provided for by Legislative Decree 231/2001, or for their particular gravity affect the individual’s moral and professional reliability;

- conviction, even with a measure of first instance, to a penalty which bans, even temporarily,

from holding public offices, or the temporary disqualification from the executive offices of legal entities and companies;

- the legal status of interdicted, incapacitated or bankrupt;

- the application of preventive measures referred to in Law of No.1423 of 27 December 1956 and subsequent amendments and additions; and anti-mafia measures of Law No. 575 of 31 May 1965 and subsequent amendments and additions.

Members of the SB must declare, under their own responsibility, that they are not in any of the situations of ineligibility, or in any other situation of conflict of interest, for the functions/tasks of the Supervisory Board, and undertaking to immediately notify the Chairman of the Board of Directors and the General Manager, should any of these situations occur, and notwithstanding that in such cases there is an absolute and binding obligation to abstain. The termination of appointment is determined by waiver, forfeiture, revocation or permanent incapacity and, as regards the members appointed by virtue of the position which they hold in the company, by the loss this position. A waiver may be exercised by members of the SB at any time and must be communicated in writing to the Board of Directors, together with the reasons that led to the decision. The appointment of members of the SB may be revoked by decision of the Board of Directors for just cause. In this regard, a "just cause" for revocation of the powers associated with the office of members of the SB can be understood as, but not limited to:

- the loss of the subjective requirements of integrity, independence and professionalism present when appointed;

- any reason for incompatibility;

- gross negligence in performing tasks associated with the professional appointment;

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- “lack of or insufficient supervision” by the SB - according to article 6, paragraph 1, letter d) of Legislative Decree 231/2001 - resulting from a sentence, even in the first instance, issued against the Company pursuant to Legislative Decree No. 231/2001 or by application of the sentence upon demand (so-called plea bargaining);

- the allocation of functions and operational responsibilities within the organization that are incompatible with the requirements of "autonomy and independence" and "continuity of action" of the SB;

- breach of the prohibition of disclosure of information referred to in paragraph 4.2.

The Board of Directors, however, in cases of particular and manifest gravity, which may involve the entire Supervisory Board, may order - after consultation with the Board of Auditors - the suspension of their powers and the appointment of a Supervisory Board ad interim.

4.2 Functions and powers

The Supervisory Board, an internal control organization established according to article 31 of the RAI Statute, has autonomous powers of initiative and control that must be exercised in order to promptly and effectively carry out the functions specified in the organization, management and control Model pursuant to Legislative Decree 231/01 adopted by the Company (hereinafter the Model) and the rules for its implementation. These powers, which extend to all areas and functions of the Company, are aimed at ensuring effective and efficient supervision of operations and compliance with the Model according to the provisions of Article 6 of Legislative Decree No. 231/2001.

Verification and control activities of the Supervisory Body serve strictly to meet the purpose of effectively implementing the Model. In order to help define and carry out the relative activities and fully comply with the requirements of professionalism and continuity of action and tasks required by law, the Supervisory Body uses a Technical Secretariat. In particular, the Supervisory Board is granted the following duties and powers to perform its tasks:

- regulate its operation and inform the Board of Directors. The regulation of SB activities must also include: scheduling activities, determining the timing for controls, identifying the criteria and procedures of analysis, regulate information flows from corporate structures ;

- approve the annual program of supervisory activities in accordance with the principles and

contents of the Model, based on a proposed plan for 231 audits prepared by Internal Auditing as well as the results of activities carried out by the SB itself;

- verify the adequacy of the Model, both compared to the prevention of crimes referred to in

Legislative Decree No. 231/2001 and the ability to have emerge any illicit behavior; - verify the efficiency and effectiveness of the Model, in terms of the correspondence between

operational practices adopted and procedures formally provided for in the Model; - attend to, develop and promote the continuous updating of the Model indicating, where

appropriate, updates and adjustments as provided for in Chapter 7. Adoption of the Model - Criteria for updating and modifying the Model;

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- note any deviations with respect to the behavioral pattern that might emerge from an analysis of the information flow and from information to be submitted by the heads of the various departments/structures;

- promptly report to the Chairman of the Board of Directors and the General Manager for appropriate action, any violations of the Model that could give rise to liability for the Company;

- maintain relations and ensure the flow of information to the Board of Directors, the Chairman of the Board of Directors, the General Manager and to the Board of Auditors;

- promote, with corporate departments responsible for training, initiatives for the diffusion of knowledge and understanding of the Model, as well as training of staff and the need to observe the principles contained in the Model;

- promote, with corporate departments responsible for education, communication and training interventions on the contents of Legislative Decree No. 231/2001, on the impact of the legislation on Company activities and on behavioral standards;

- setup of an effective internal communication system to enable the transmission of information that is important under Legislative Decree 231/2001, guaranteeing the protection and confidentiality of the informants;

- report to the bodies/Departments concerned that the Model has been violated and monitor, in consultation with the Human Resources and Organization Office, the application of disciplinary sanctions;

- verify and evaluate, in collaboration with the Director of Human Resources and Organization, the suitability of the disciplinary system in accordance with and for the purposes of Legislative Decree No. 231/2001.

To carry out the duties and exercise the powers, the Supervisory Board:

- has free access to documents and business information;

- can rely on the support and cooperation of the Departments/Structures and external specialists and consultants;

- may request information from Corporate Bodies and external auditors;

- makes use of Internal Auditing to plan and carry out the supervisory activities in order to use operating procedures already established with adequate resources and technical expertise, in order to avoid duplication of activities.

Anticipated expenditures for performing assigned duties, which must ensure that business is conducted properly, is approved by the Board of Directors. For the use of such spending powers refer to the procedures. The Board of Directors will ensure that corporate structures are suitably notified of the tasks and powers of the SB. The SB does not have management or decision-making powers with regards to conducting Company business, organizational powers to amend the corporate structure, nor powers for disciplinary sanctions. The members of the SB and the entities which the Supervisory Board, for any reason, uses, are required to ensure the confidentiality of the documents and their contents, and to respect the confidentiality of all information of which they become aware while exercising their functions.

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The information, messages, documents and reports provided in the Model are kept in an appropriate archive by the SB (electronic or hardcopy) for a period of at least 10 years.

4.3. Information flows to and from the SB

4.3.1. SB reporting to company units

The Supervisory Board reports on the implementation of the Model, the emergence of any critical issues, the need to make changes. The following reporting lines are provided:

I. on an ongoing basis, directly to the Chairman of the Board of Directors and the Director General who shall inform the Board of Directors as part of the information required in exercising his powers;

II. on a semiannual basis, to the Board of Directors, the Chairman of the Board of Directors, the General Manager and the Board of Auditors.

In particular, the Supervisory Board shall prepare a written report every six months which must contain at least:

a) a summary of the activities carried out during the six months;

b) any issues or problems that arose in the course of supervision ;

c) indications regarding corrective actions to be made in order to ensure the effectiveness and/or the efficiency of the Model, including those necessary to remedy the organizational or procedural shortcomings ascertained and that could potentially expose the Company to the risk of committing offenses that are important for the purposes of the Decree;

d) indication of any behavior not in line with the Model and possible report of sanctions against the party responsible for the violation or Department/Facility and/or process concerned, in accordance with the terms and conditions specified in the sanctions system adopted by the Company pursuant to the Legislative Decree 231/01;

e) record of reports received from internal and external parties and those observed directly by the SB, with regard to alleged violation of the provisions of the Model, of prevention protocols and implementation procedures, including the results of subsequent inspections, as well as violation of the provisions of the Code of Ethics, reported to the Permanent Commission for the Code of Ethics;

f) information regarding possible offenses committed under the Decree ;

g) any sanctions applied by the Company with respect to infringements of the provisions of this Model, of prevention protocols and relative implementation procedures;

h) an overall assessment of the function and effectiveness of the Model with possible indications for its integration, correction or amendment, which take into account any new sensitive activities identified;

i) reporting any changes in the regulatory framework and/or significant changes in the Company's internal setup and/or methods for conducting business activities that require updating of the Model;

j) signaling any possible conflict of interest, even potential, of a member of the SB;

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k) a summary of the activities carried out during the six months;

l) an account of expenses incurred during the reporting period.

Meetings with corporate bodies, with the Company's Chairman and Chief Executive Officer to which the SB reports must all be documented.

4.3.2. Disclosure to the SB

The Supervisory Board must be promptly informed regarding acts, conduct or events that may result in violation of the Model or, more generally, are important for improving the efficiency and effectiveness of the Model. All recipients of the Model communicate to the SB all relevant information that can be used to properly implement the Model. In particular: 1. the Departments/Structures identified, in accordance with the respective organizational responsibilities, must notify the SB in writing, as quickly as possible, of any information concerning:

- the emission and/or updating of organizational documents;

- the alternation of responsibilities of the Departments/Structures affected by activities at risk and the upgrading of the company’s system of powers of attorney;

- reports prepared by the Internal Audit Department and other organs/departments/control structures (including the Independent Auditors ) as part of their verification activities, which may reveal facts, acts, events or omissions that are critical for compliance with the provisions of the Decree or provisions of the Model;

- requests for legal assistance made by employees in the event of judicial proceedings against them and in relation to the offenses referred to in Legislative Decree No. 231/2001, unless expressly prohibited by the Legal Authorities;

- proceedings for violation of the Model, the dismissal of these proceedings and the relative reasons, the application of penalties for violation of the Code of Ethics, the Model or procedures established for its implementation;

- measures and/or the news from the Police Department, or from any other authority or from the parties concerned, which indicate that investigations are being carried out for offenses covered by Legislative Decree No. 231/2001 and which may involve the Company in accordance with the obligations imposed by law on the subject and given the expected regime of secrecy and disclosure of acts of criminal proceedings;

- reports prepared by the heads of other company Departments/Structures as part of their control activities, which might possibly reveal facts, acts, events or omissions critical to compliance with the rules and provisions of the Model;

2. each Director/Manager sends the SB, when the Model and any amendments thereto are is adopted, a declaration of knowledge and adherence to the principles of the Model described herein and declares, every six months, not to be aware of behaviors that are not in line with the principles and contents of Model of as part of Sensitive Activities within its jurisdiction, except as may already have been reported;

3. the members of the governing bodies, the General Manager and Employees of the Company must promptly notify any offenses committed or allegedly committed under the Decree, or the reasonable risk of offense committed by a third party of which they are aware and any breach or alleged violation of the Model or the procedures established thereunder of which they are aware;

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4. External Collaborators and other recipients of the Model outside the Company are required to immediately inform the SB directly, should they receive, directly or indirectly, from an employee/representative of the Company, a request for behavior that could lead to violation of the Model.

The Supervisory Board evaluates the reports received in writing giving reasons for their decisions . The obligation to provide information about any conduct contrary to the provisions contained in the Model are part of an employees’ more extensive duty of care and loyalty. The correct fulfillment of the obligation to provide information by an employee cannot result in the application of disciplinary sanctions . The Company shall take appropriate and effective measures to ensure the confidentiality of the identity of the person providing information to the SB that is useful for identifying behaviors that differ from the provisions of the Model, from the procedures established for its implementation and the procedures established by the Internal Control System, notwithstanding the requirements of the law and the protection of the rights of the Company or of persons wrongly accused and/or in bad faith. Any form of retaliation, discrimination or retribution against those who to the SB in good faith is prohibited. The Company reserves any action against any person making untrue reports in bad-faith. In order to enable timely compliance with the provisions and to facilitate the flow of communication and information for the purposes of the Model a dedicated e-mail box has been set up.

4.4. Convening, voting and deliberations

The Chairman of the SB calls meetings of the SB, verifies the correct constitution, oversees the proceedings and ascertains the results of the voting. In case of temporary absence or incapacity of the Chairman of the SB, the functions are performed by the most senior member of the SB. The Supervisory Board meets whenever it is deemed appropriate by the Chairman of the SB or if requested by at least two members. In any case the SB is required to meet at least once every three months.

The Supervisory Board is convened by the Chairman of the SB. The meeting is convened by a notice containing the agenda, to be sent to the members of the SB by e-mail or other methods currently in use. The documentation required to discuss the agenda items will be made available to all members of the SB. Each component also has the right to request that an item be included in the agenda. For reasons of urgency, the agenda can be integrated before the beginning of each meeting. In this case, each member of the SB may oppose the discussion, if not feel sufficiently informed and may request a postponement of the discussion on this agenda item, with a new date fixed not later than five days after.

The meeting may also take place with participants located in different places, near or distant, connected by audio or video conferencing, in a manner which must be recorded in the minutes. The meeting will be deemed to have taken place where the Chairman of the SB is located. The members of the SB who are unable to attend meetings are required to notify the Chairman of the SB. The meetings of the SB are valid with the presence of a majority of the members in office and are chaired by the Chairman of the SB. However, the meeting is considered validly convened when all members of the SB are present, even in the absence of a formal convocation.

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The resolutions are adopted by a majority of the SB members present with voting rights.

In case of a decision-making deadlock which prevents the attainment of a decisional majority, the SB collegially, by a formal act, refers the matter to the Chairman of the Board of Directors and informs the General Manager. It is mandatory for each member of the SB to notify the other components of any interest which, for themselves or a third party, regards an activity which is the responsibility of the SB, specifying the nature, terms, origin and scope. This circumstance must be recorded.

4.5. Supervisory Boards of subsidiaries

Each subsidiary with an Organization, Management and Control Model pursuant to Legislative Decree No. 231/2001, for the purposes indicated in the Decree and under its responsibility, establishes its own autonomous and independent Supervisory Board whose powers and functions may be attributed to the Board of Statutory Auditors in accordance with the directions of the parent company.

5. Training of resources and the distribution of the Model

5.1. Introduction

The Company, in order to effectively implement the Model, must adequately disclose its contents and principles inside and outside of its organization. In particular, the Company's objective is to extend the communication of the content and principles of the Model not only to its employees but also to those who, while not formally qualified as an employee, work - even occasionally – to achieve RAI objectives under a contractual relationship. Communication and training will be varied depending on the recipient to whom it is addressed, but shall be, in any case, based on the principles of completeness, clarity, accessibility and continuity so that the various recipients are fully aware of the company provisions they must comply with and the ethical standards that should govern their behavior. Communication and training on the principles and contents of the Model are guaranteed by the heads of the various departments/structures, as indicated and planned by the SB, identify the best manner in which to use these services (e.g. training programs, staff meetings, etc.). Communication and training are supervised by the Supervisory Board, which is assigned, among other things, the task of “promoting, with the corporate departments responsible for training, initiatives for the diffusion of knowledge and understanding of the Model, as well as staff training and the need for them to be aware of the principles contained in the Mode” and to “promote, with the corporate departments responsible for training, communication and training on the contents of Legislative Decree No. 231/2001, on the impact of the legislation on company activities and behavioral standards”.

5.2 Employees

Each employee must:

become aware of the principles and contents of the Model;

learn the operating procedures to use to carry out their work;

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actively contribute, in relation to their role and responsibilities, to the successful implementation of the Model, reporting any shortcomings found therein.

In order to ensure effective and efficient communication, the Company intends to promote and facilitate understanding of the contents and principles of the Model by employees, with different degrees of knowledge depending on their position and the role, as well as the areas in which they operate. The adoption of this Model is communicated to all resources in the company at the time of its adoption. Employees are also guaranteed the possibility of accessing and consulting the documentation that constitutes the Model (Reference Principles for the Model, Code of Ethics, information on the organization structure of the Company, on the assets and business processes) directly on the corporate intranet, in a dedicated area . New employees will be provided, when recruited, a copy of the reference Principles of the Model and the Code of Ethics, and will be made to sign a declaration that they are aware of and will observe the principles of the Model described therein.

The members of the governing bodies, the General Manager, management staff, those that serve as representatives, and employees who work in specific risk areas will be provided a printed copy of the full version of the Model. Conversely to what is expected for employees, the new Directors and new members of the corporate bodies will be handed a hard copy of the full version of the Model when they accept the appointment and will be made to sign a statement of compliance with the principles of the Model. Appropriate communication tools will be adopted to inform employees about any changes made to the Model, as well as any relevant procedural, regulatory or organizational changes.

5.3 Other recipients

The communication of the contents and principles of the Model will also be addressed to third parties who maintain contractually regulated working relationships with the Company or that represent the Company without being directly employed (e.g. Consultants). To this end, the Company will provide third parties an extract of the reference Principles of the Model and the Code of Ethics. The Company, taking into account the purposes of the Model, will consider whether to communicate the contents and principles of the Model to a third party, not related to the individuals indicated above by way of example, and more generally to the market.

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6. Penalty system

6.1 Function of the penalty system

Article 6, paragraph 2, letter e) and Article 7, paragraph 4, letter b) of Legislative Decree No. 231/2001 indicate, as a condition for the effective implementation of the organization, management and control Model, the introduction of a disciplinary system to punish non-compliance with the measures set out in the Model. Therefore, the definition of an appropriate disciplinary system is an essential requirement for justifying the value of the organization, management and control Model pursuant to Legislative Decree No. 231/2001 with regards to the administrative responsibility of the organizations. The application of a disciplinary system and the related penalties is independent from the conduct and outcome of the legal proceedings initiated by the legal authorities in cases where the conduct to be censored serves also to integrate a criminal offenses under Decree 231/2001.

6.2 Measures against Employees

6.2.1 Disciplinary system

Compliance with the provisions and rules of conduct established by the Model represents fulfillment by the employee of the obligations under article 2104, paragraph 2 of the Italian Civil Code, obligations for which the contents of that Model are a substantial and integral part. The violation of individual behavioral rules and provisions of the Model by employees always constitutes a disciplinary offense. The measures set out in the Model, as implemented by the company Rules of Discipline, the non-compliance with which is punishable, shall be posted in a place accessible to all and binding for all employees of the Company.

The disciplinary measures that may be imposed against employees in accordance with the procedures provided for in Article 7 of the Law 300 of 30 May 1970. (so-called "Workers' Statute") and any special applicable rules, are those provided by the disciplinary rules contained in the Rules of Discipline and the rules of the National Collective Bargaining Agreement and precisely, depending on the seriousness of the offense:

- written reprimand; - fine of up to 4 hours of pay; - suspension from work without pay from 1 to 3 days; - suspension from work without pay from 4 to 6 days; - suspension from work without pay from 7 to 10 days; - dismissal.

For each report of a violation of the Model received from the competent offices, an investigation will be initiated in the event that the report is true. In particular, if it is found that there is a likely violation of the model, disciplinary action will be taken. In the assessment phase the employee will be charged, and will also be ensured defense by law and under the terms of the contract.

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Once the violation is ascertained, the author will be charged a disciplinary fine proportionate to the gravity of the violation committed. It is understood that the procedures, provisions and guarantees provided for under article 7 of the Statute of Workers and the National Collective Bargaining Agreement, relating to disciplinary action, will be complied with.

6.2.2 Violation of the Model and related penalties

In accordance with the provisions of the relevant legislation and in accordance with the principles of typicality of the violations and typicality of the sanctions, the Company intends to inform its employees of the provisions and rules of conduct contained in the Model, the violation of which constitutes a disciplinary offense, as well as the applicable penalties, taking into account the seriousness of the offenses in accordance with the provisions of the company Rules of Discipline. Without prejudice to the obligations of the Company arising from the Workers' Statute, the behaviors that constitute violation of the Model, together with the related penalties are specified in the Company Rules of Discipline. The type and extent of each of the above-mentioned penalties will be formulated also taking into account:

- The intentionality of the behavior or the degree of negligence, imprudence or inexperience with regard to the predictability of the event;

- the overall conduct of the worker with particular reference to the existence or otherwise of

previous disciplinary proceedings against him, to the extent permitted by law; - the worker's duties; - the functional position of the persons involved in the facts constituting the violation; - other special circumstances surrounding the disciplinary offense, including the level of risk to

which the Company reasonably believes it was exposed - under and for the purposes of Legislative Decree No. 231/2001 - as a result of the censured behavior.

Notwithstanding the prerogative of the Company to seek compensation for damages resulting from the violation of the Model by an employee. Any compensation for damages will be commensurate with:

- the level of responsibility and autonomy of the offending employee; - the existence of any previous disciplinary action against the same; - the degree of intentionality of the behavior; - to the severity of the effects of the same.

With regards to the assessment of the offenses, disciplinary proceedings and the imposition of penalties, existing powers remain with RAI management, within the limits of the respective proxies and competences, and according to the provisions of paragraph 6.2.1 of this document.

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6.3 Measures against Directors

In case of violation of the Model by one or more members of the Board of Directors, the Supervisory Board shall promptly inform the Board of Auditors and the entire Board of Directors for a decision on the case.

6.4 Measures against Auditors

In case of violation of this Model by one or more Auditors, the Supervisory Board shall promptly inform the entire Board of Statutory Auditors and the Board of Directors for a decision in their field.

6.5 Measures against Outside Collaborators

Any violation or Offense committed by an External Collaborator of the applicable rules laid down in this Model, is punished in accordance with the specific contractual clauses that are included in their contracts. This does not affect the prerogative of the Company to claim for damages if the conduct resulted in material damage, as in the case of application by the court of measures provided for by Legislative Decree No. 231/2001.

7. Adoption of the Model – Criteria for updating and adapting the Model

The Board of Directors shall decide on the updating of the Model and to adapt it to changes and/or additions that may become necessary as a result of:

- regulatory changes regarding the administrative responsibility of the entities; - changes to the structure of the Company and/or procedures for the conducting business; - identification of new Sensitive Activities, or variation of those previously identified, also in relation to

the launching of new company activities; - committing crimes referred to in Legislative Decree No. 231/2001 by recipients of the provisions of

the Model or, more generally, significant violations of the Model; - deficiencies and/or gaps found in the provisions of the Model after controlling its effectiveness.

Proposals for updating and/or adaptation, presented by the General Manager to the Board of Directors, are directed by Team 231, after informing the Supervisory Board. The updating and/or adaptation initiative may be initiated by the Supervisory Board, the Directors/ Managers and Team 231 itself. Team 231 comprises the Legal Affairs Office (that serves as coordinator), Internal Auditing (that serves as listener only), Human Resources and Organization, the Staff of the General Manager, Finance and Planning, Secretary to the Board of Directors and the Chairman’s Technical Secretariat Structure. Team 231, in turn, will identify Departments/Structures that will complement the composition of the Team itself. In addition, in order to ensure that changes in the Model are made with the necessary speed and efficiency, while not incurring in defects of coordination between the operational processes, the provisions contained in the Model and its distribution, the Board of Directors decided to delegate to the General Manager, with the support of Team 231, the task of making changes to the model, where necessary, that relate to aspects of a descriptive character, after having informed the Supervisory Board. The General Manager shall inform the Board of Directors of the changes made.

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It should be noted that the term “descriptive aspects” refers to elements and information that result from acts decided by the Board of Directors (such as the redefinition of the organizational chart) or from corporate sections granted special powers (e.g. new company procedures). The model will, in any case, be subject to periodic review every three years to be arranged by the Board of Directors.

8. Temporary provision

The provisions of paragraph 4.1 of the Model, limited to the term of the Supervisory Board with reference to the expiration of the mandate of the Board, the expiration date for the current Supervisory Board will apply.

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