Internal control and risk management system

Ansaldo STS’s internal control and risk management system provides for the involvement of the following officers:

  • Board of directors;
  • Director responsible for the internal control and risk management system;
  • Risk and control committee;
  • Internal Audit Manager;
  • Manager in charge of financial reporting pursuant to Law no. 262/2005;
  • Supervisory body set up in implementation of Legislative decree no. 231 of 8 June 2001;
  • Board of statutory auditors.

With the assistance of the risk and control committee and also on the basis of the activities of the director responsible for the internal control and risk management system, the Board of Directors defines guidelines for this system, so that the main risks to which the company is exposed are correctly identified and adequately measured, managed and monitored. It also determines the degree of compatibility of such risks with business management in line with the strategic objectives identified. In addition, within the scope of the definition of strategic business and financial plans, the Board of Directors defines the nature and level of risks, in accordance with the issuer’s strategic objectives.

The methodological approach taken to evaluate and manage the internal control and risk management system refers to the internationally recognised Enterprise Risk Management framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO report).

The Internal audit unit’s audit plan was approved by the Board of Directors as required by Borsa Italiana’s code of conduct for listed companies and the unit head prepares regular reports for the risk and control committee. Specifically, audit procedures performed in 2015 covered contract, engineering and development, purchases and compliance of certain significant procedures for compliance purposes and monitoring progress of the actions plans drawn up as a result of the audit work.

In order to ensure that the conduct of all those operating on the company’s behalf or in its interests is always consistent with the principles of correctness and transparency in business dealings and company activities, Ansaldo STS has adopted an Organizational, management and control model (the “Model”) in line with the requirements of Legislative decree no. 231/01 and the guidelines issued by Confindustria, Italy’s main Organization representing Italian manufacturing and service companies. The code of ethics is an integral part of this Model. The company has also set up a supervisory body to monitor application of the Model.

The Model was last updated by resolution of the Board of Directors on 25 February 201510, mainly to include the self-laundering crime (introduced by Law no. 186 of 15 December 2014), certain regulatory updates (Law no. 69/2015 on “Anti-corruption law” and Law no. 68/2015 on “Environmental crimes”) and some Organizational updates.

The Model is available on the company’s web site.

Ansaldo STS S.p.A.’s supervisory body has several members, including two external members, one of whom serves as Chairman, and both of whom were selected among academics and professionals with demonstrated expertise and experience in legal, economic and financial issues, as well as one internal member who is the interim General Counsel & Compliance manager. The Board of Directors approved the current composition of the supervisory body on 6 May 2013, providing for the presence of two external members to further accentuate the board’s independence and autonomy.

Any conduct contrasting with the ethical principles described in the code of ethics or the indications in the Organizational, management and control model pursuant to Legislative decree no. 231/01 can be anonymously reported to the supervisory body, which evaluates the reports in accordance with the relevant company procedure currently in place. In this respect, in 2015, no reports were made and no sanctions were imposed following violations pursuant to Legislative decree no. 231/01.

10. For additional details, reference should be made to the “Directors’ report on the corporate governance system and the implementation of the code of conduct for listed companies for 2015”.