Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

— the time horizon of the investment is medium-/long-term;— the value assigned to the Telecom Italia share price is consistent withthe results of applying a discounted cash flow model based on recentstrategic guidance and targets for the 2011-2013 period presented byTelecom Italia management on 25 February 2011, given the resultsdelivered by the Domestic business unit for the first months of thecurrent financial year, which reflect the deterioration in the financialmarket and the prospects of a weaker macro-economic scenario;— deals have been announced in the reference sector which implyvaluation multiples that are significantly higher than those reflected incurrent stock market prices.— the book value of the Bank’s shareholding in RCS MediaGroup fell from€208.5m to €191.8m, which is not considered to be higher than its value inuse based on a discounted cash flow model that takes into account theearnings prospects of the publishing industry and the company’sreorganization process, which involves developing multi-media business,brand valorization and structural cost cutting. The higher value compared tostock market prices at the reporting date, which reflect an implicit loss of€66.5m, is justified by the size of the Group’s holding, which constitutes arelative majority, and the unique nature of some of the company’s assets.10.3 Equity investments: movements during the periodType of transactions/value 30/6/11 30/6/10A. Balance at start of period 2,828,287 2,845,233B. Additions 404 541B.1 Acquisitions — 138B.2 Value adjustments — —B.3 Revaluations — —B.4 Other adjustments 404 403C. Reductions 157,706 17,487C.1 Disposals 72 55C.2 Value adjustments for impairment 157,634 17,432C.3 Other reductions — —D. Balance at end of period 2,670,985 2,828,287E. Total revaluations — —F. Total adjustments 411,897 254,263– 321