Internal control system

In order to ensure the correctness, accuracy, reliability and timeliness of the information communicated to shareholders and the market, Italgas is committed to promoting and maintaining an adequate Corporate Reporting Internal Control System (hereinafter also referred to as the “SCIS”) and should be seen as the set of all instruments necessary or useful to guiding, managing and verifying the corporate business.

In line with the decision to drawn up an Integrated Annual Report that includes both financial and non-financial information, Italgas has aligned its internal control system also in respect of non-financial information.

The Corporate Internal Control System adopted by Italgas and its subsidiaries was defined in accordance with the provisions of the above-mentioned Article 154-bis of the CLF that Italgas is required to ensure compliance with, and is based in methodological terms on the “COSO Framework” (“Internal Control – Integrated Framework”, issued by the Committee of Sponsoring Organisations of the Treadway Commission), the international reference model for the establishment, updating, analysis and assessment of the control system in respect of both financial and non-financial information.

The reference “COSO Framework” for Italgas is updated to May 2013 and this is the last version available.

The design, establishment and maintenance of the Corporate Reporting Internal Control System are guaranteed through scoping, identifying and assessing risks and controls (at corporate and process level, through risk assessment and monitoring activities), and the relevant information flows (reporting).

The control system structure provides for entity-level controls (CELCs – Company Entity Level Controls) which apply across the entire entity in question (group/individual company), and process-level controls (PLCs).

The controls, both at the entity level and process level, are subject to regular evaluation (monitoring) to verify the adequacy of the design and actual operability over time. For that purpose, there is provision for ongoing monitoring activities, assigned to the management responsible for the relevant procedures/ activities, as well as independent monitoring assigned to Internal Audit, which operates according to an annual plan agreed with the Executive responsible for preparing the corporate accounting documents (DP), which aims to define the scope and objectives of its actions through concerted audit procedures.

In 2021, all 10 audits envisaged in the Audit Plan were carried out and 27 monitoring reports: 16 relating to the monitoring in a single session in 2020, which was concluded during the early months of 2021 and 11 relative to the first session of 2021, which was concluded late 2021.

In order to allow for the assessment of the efficacy of the Internal Control and Risk Management System with respect to Italgas’s specific characteristics and the risk profile adopted, the findings relating to the monitoring of the main risks and relative management plans are presented to the Control, Risk and Related Party Transactions Committee periodically.

The results are also used by the Internal Audit Department to prepare the audit plan and carry out the audits set out therein, with the aim of verifying that the internal control and risk management system is functional and adequate.

Control of presumed breaches of the principles and rules of conduct for company activities is also exercised through the analysis of the reports received, which may also be anonymous, made through the channels prescribed in the Whistleblowing Procedure, applicable to all Group companies.

In 2021, 15 reports were received, of which 12 regarded the internal control system, 2 administrative liability pursuant to Italian Legislative Decree no. 231/2001 and 1 other matters (Code of Ethics). As at 31 December 2021, all reports received during the year had been properly processed and closed.

Cooperative Compliance

In order to promote forms of communication and cooperation with the Financial Administration based on reciprocal reliance, in December 2020, Italgas S.p.A. and Italgas Reti S.p.A. adhered to the cooperative compliance regime with the Revenue Agency.

Italgas regulatory system

In accordance with the evolving process aimed at continually improving the effectiveness and efficiency of its internal control and risk management system, Italgas has adopted its own regulatory system comprising the following regulatory levels:

• Italgas Enterprise System (level one regulations);
• process standards and Compliance standards (level two regulations);
• operating instructions (level three regulations).

The regulatory system also includes as an integral part thereof, the documents belonging to the certified management systems for health, safety, environment, quality, energy and, lastly, anticorruption in accordance with international ISO standard (Policies, Manuals, Procedures and Operating Instructions). Lastly, there are regulatory circulars to govern specific issues (sometimes with temporary validity). The Bylaws, the Code of Ethics, the Corporate Governance Code, Model 231 and the Internal Control System on Corporate Information are placed in the general framework of the Regulatory System, as, although specific tools, the principles that inspire them are recognised as the founding principles of the conduct of the Italgas Group and, therefore, part of the general framework of the entire regulatory system. These regulatory tools are part of the efficient handling of the Management and Coordination activities performed by Italgas concerning Subsidiaries, and they are subject to regular delivery to, and/or formal adoption by the Boards of Directors of the Subsidiaries.