The Control and Risks Committee consists of three independent, non-executive directors:
Members of the committee hold office until the expiry of their mandate as directors and, therefore, until approval of the financial statements for the year ending 31 December 2017.
The Control and Risks Committee has consultative and advisory functions vis-à-vis the Board of Directors, with the task of supporting, through adequate preliminary analysis, the assessments and decisions of the Board of Directors with regard to adequacy of the internal control and risk management system and definition of its guidelines, as well as those regarding approval of the periodic financial reports.
Within the terms of its competence, the Committee coordinates its activity with that of the following persons and bodies: the Board of Statutory Auditors; the external audit firm; the Head of Internal Audit; the Director in charge of the system of internal control and risk management; and the Manager in charge of financial reporting.
In particular, the committee was assigned the following tasks:
- to assess the action plan drawn up by the head of Internal Audit, and examine the periodic reports that the latter prepares based on the assessment of the system of internal control and risk management, as well as any other reports of particular relevance that are prepared by the Internal Audit function;
- to assess the proper implementation of the accounting standards in use, as well as their suitability for the preparation of the consolidated financial statements. This is to be done in conjunction with the Manager in charge of financial reporting, after consulting with the external auditor and the Board of Statutory Auditors;
- to assess the proposals formulated by the external auditors in order to secure the instruction, the work plan drawn up for the audit and the results presented in the report, as well as oversee the effectiveness of the auditing process;
- to monitor the independence, adequacy, effectiveness and efficiency of the Internal Audit function;
- to ask the Internal Audit function to carry out checks on specific operational areas, and inform the Chairman of the Board of Statutory Auditors of such requests at the time they are made;
- to periodically report to the Board of Directors on the adequacy of the system of internal control and risk management, at least every six months in conjunction with the annual and semi-annual financial reports;
- to provide counsel on specific aspects regarding identification of the company’s main risks and on the design, implementation and supervision of the internal control and risk management system;
- to provide counsel to the Board of Directors on the findings of the external auditors, presented in the letter of recommendation and in the audit report on the key issues that emerged during the audit;
- to provide counsel to the Board of Directors on the appointment and removal of the Head of Internal Audit, as well as on the resources made available to him/her and his/her remuneration.
The Control and Risks Committee held 8 meetings in 2015, each duly recorded in their respective minutes. The meetings were attended at different times by members of the Board of Statutory Auditors, the Head of Internal Audit, the Supervisory and Oversight Body and the Head of Legal and Corporate Affairs, as well as by the audit firm Deloitte & Touche and the Heads of some corporate functions.
As far as the 2015 fiscal year is concerned, the Control and Risks Committee carried out the following activities worthy of note:
- it approved the 2015 Annual Internal Audit Plan for the Company and its subsidiaries – prepared by the Head of Internal Audit – and confirmed its implementation;
- it examined the activities carried out by the Internal Audit department in 2015, agreeing with the recommendations made and proposing recommendations of its own; within this context, the follow-ups to the Internal Audit interventions were reviewed;
- it acknowledged the operational guidelines implemented by the Company during the year;
- it approved the impairment testing to be adopted by the company relative to the financial statements for the fiscal year ended 31 December 2014. It acknowledged the fact that the impairment tests’ definitive findings on the potential decline in value of property, plant and equipment, intangible assets and/or equity investments would be subject to specific review and approval by the Board of Directors;
- it examined the 2014 annual report and the report drawn up by the Control and Risks Committee in September 2015, which did not contain any irregularities;
- it analysed the results of the year’s Risk Assessment process along with the relative Report on the matter, prepared and presented by the Head of Internal Audit. The activity referred to both the Parent Company and its associate companies in Italy and France;
- it acknowledged the report prepared by the Head of Internal Audit on the Self-assessment of the Mondadori Group System of Internal Control and Risk Management;
- it analysed the findings of the external auditor as presented in the report on the key issues that emerged during the audit; no failings were observed in the internal control system in terms of financial disclosure, and there were no uncertainties worthy of note regarding business continuity;
- it presented the updated version of the Organisation, Management and Control Model which took into account the regulatory amendments and organisational changes within the issuer company; within this area, it also acknowledged the relative training provided to employees on the Model itself;
- it examined the transactions for disposal of 80% of the share capital of Monradio S.r.l. to R.T.I. S.p.A. and the update of activities for integration with RCS Libri.