(Translation from the Italian original which remains the definitive version)

To the chairman of the board of directors of Hera S.p.A.

1. We have carried out the compliance procedures and analyses on the sustainability report of the Hera Group at 31 December 2004, described in paragraph 2 of this report. The aim of the procedures was to evaluate the board of directors' statement, included in the paragraph entitled "Methodological premise" of the sustainability report of the Hera Group at 31 December 2004, that such report was prepared in compliance with theguidelines established by GRI (Global Reporting Initiative) and by GBS (Study Group far Italian social reporting standards). The preparation of the sustainability report in line with such principles is the responsibility of the parent company's management.
2. In order to evaluate the statement mentioned in paragraph 1, in accordance with the "International Standard on Assurance Engagements 3000 - Assurance Engagements other than Audits or Reviews of Historical Information (ISAE 3000)" issued by the International Auditing and Assurance Standards Board (IAASB) and with Research Document no. 1 "Guidelines for the audit of social reports" issued by GBS, we performed the following procedures:
   • verifying that the financial figures and information are consistent with those included in the consolidated financial statements of the Hera Group as at and for the year ended 31 December 2004, approved by the shareholders, with respect to which other auditors issued their audit report dated 12 Aprii 2005;
   • analysing how the processes underlying the generation, recording and management of quantitative data operate. In particular:
     • interviews and discussions with the parent company's management and personnel of certain Hera Group companies, to obtain an overview of the group's activity, to gather information on the IT, accounting and reporting systems used in preparing the sustainability report, and to chart the processes and the internal control system used to gather, combine, process and transmit data and information of the various group companies to the Hera S.p.A. office that prepares the sustainability report;
     • sample-based analysis of supporting documentation used in preparing the sustainability report to confirm the reliability of the interview-derived information, as well as the effectiveness of processes and their adequacy in relation to business objectives, and that the internal control system correctly manages data and information for the preparation of the sustainability report;
   • analysing the completeness of the qualitative information included in the Hera Group sustainability report and its consistency throughout. This activity was carried out in line with the ISAE 3000 and with the Research Document n.1 issued by GBS, referred above;
   • verifying the stakeholders' involvement process, in terms of the methods used, whether all stakeholders were involved and if the salient features arising from meeting with them are in line with those included in the sustainability report;
   • obtaining the representation letter signed by the parent company's legal representative on the reliability and completeness of the sustainability report, on the information and data contained therein and its compliance with the guidelines mentioned in paragraph 1.
   Reference should be made to the report dated 24 May 2004 for our attestation on the prior year figures, which are presented for comparative purposes as required by the guidelines referred above.
3. Based on the procedures listed in paragraph 2, we believe that the sustainability report of the Hera Group at 31 December 2004 complies with the preparation guidelines described in the paragraph entitled "Methodological premise" of such report. Moreover, the financial figures and information contained in the sustainability report afe consistent with the figures and information included in the consolidated financial statements of the Hera Group as at and far the year ended 31 December 2004 and with the documentation we were provided with, and meet the content requirements established by the guidelines governing sustainability report preparation.
4. We draw your attention to the following information provided in the paragraph entitled "Improvement objectives" of the Hera Group sustainability report as at and far the year ended 31 December 2004, far the purpose of complying with the guidelines governing the sustainability development management process and the sustainability report.
   4.1 With reference to the improvement process undertaken in the field of social responsibility during 2004:
   • the Hera Group developed a system to survey stakeholders' expectations, in line with the guidelines mentioned in paragraph 1. Moreover, the Hera Group intends to increase and encourage the dialogue concerning the group's conduct with its main internal and external stakeholders;
   • with respect to 2003, the sustainability report of the Hera Group presents an increased number of social and environmental performance indicators, which are detailed in the annexes and compared with the indicators suggested by GRI, GBS and the Ministry for Welfare, in order to facilitate the reading and checking of the completeness of the information provided, for all categories of stakeholders. The Hera Group intends to continue improving the sustainability report with further information and social and environmental indicators, in order to report the improvement processes undertaken in relation to the results emerging from meetings with the stakeholders.

Bologna, 18 May 2005
KPMG S.p.A.
(Signed on the original)
Massimo Tamburini
Director of Audit

KPMG S.p.A.
an Italian limited liability share capital company, is a member firm of KPMG International, a Swiss cooperative.

Milano, Ancona, Bari, Bergamo, Bologna, Bolzano, Brescia, Catania, Como, Firenze, Genova, Lecce, Napoli, Novara, Padova, Palermo, Parma, Perugia, Pescara, Roma, Torino, Treviso, Trieste, Udine, Varese, Verona.

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Capitale sociale Euro 5.222.011.95 i.v.
Registro Imprese Milano e Codice Fiscale N. 00709600159
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Part. IVA 00709600159
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