Annual report on corporate governance and the ownership ... - Indesit

The main objectives of the rationalization are on one hand a general simplification, by eliminating redundant
controls that reduce operating efficiency without bringing any real benefits in terms of strengthening the ICS
and, on the other, a sharper definition and more effective management of “primary” controls, also through
standardization of the mandatory documentation used in the controls.
3) Testing and <strong>report</strong>ing
The objective here is to make sure that the controls designed to reduce the identified risks to an acceptable
level are operative in the period considered and actually carried out according to plan.
In line with the Group’s organisational structure, characterized by a prevalently functional model, activities in
this phase privilege a structural approach to operating processes (procurement, sales, personnel, etc.) whilst
also applying a certain logic of sub-division of activities by legal entity.
Such activities thus involve:
st
• line (or 1 level) monitoring by the operating management in charge of major processes/activities;
nd
• 2 level monitoring by GAP; this too is functional/process-based;
nd
• 2 level monitoring of individual companies (operating horizontally across all the processes of the legal
entity) by a newly created figure, the Financial Compliance Officer 15 ;
rd
• 3 level monitoring by the Internal Audit function.
Having been reviewed by Internal Audit with the DP and the ICS, the results of 3 rd level monitoring provide
an independent assessment for the executive director that oversees the operation of the ICS, for the ICC
and the Statutory Auditors.
4) Remediation
On the basis of the results of the monitoring activities, the risk/control owners belonging to line
management, backed up by central control functions (GAP and Internal Audit), identify corrective action to
improve the ICS and the follow-up activities (defining timings and responsibilities for each of the points in
the specific remedial plans).
On the basis of suggested improvements that emerged in the testing phase, a project was initiated late in
2010 to strengthen and maintain the segregation of duties (aiming, among other things, to introduce a tool to
facilitate automatic management of accesses and roles in relation to the business risk matrix), with the direct
involvement of the IT Department and the Organisation function in the Human Resources Department.
II. Group Reporting Manual
One of the initiatives designed to maintain an effective financial <strong>report</strong>ing risk management and control
system is the Group’s new Manual (released 1/1/2008).
The Manual sets forth the Group’s accounting standards, which are based on IAS/IFRS (International
Accounting Standards/International Financial Reporting Standards) and which all the Subsidiaries must use
in order to ensure uniformity of content, accounting items and relative evaluation criteria, Such uniformity
is vital for a truthful and fair view representation of business events in the Company’s records and
communication to the market, including interim figures 16 .
The Manual also provides for a Group chart of accounts to guarantee not only uniformity of coding but also
unambiguousness in the accounting of business events that characterize the operations of the Group’s
various Subsidiaries.
In addition to defining Group <strong>report</strong>ing rules for the various business processes, the Manual, provides
principles and guidelines to apply across the Group in relation to obligations under art. 154-bis, TUIF
(drafting of corporate accounting documents and relative attestations).
In 2 nd half 2010, the GAP started an overall revision of the Manual (to be completed by mid 2011) which will
update its content in line with new legislation 17 and also simplify and make it easier to use.
15. This usually coincides with the Subsidiary’s admininistrative manager and/or market controller, who has specific tasks and
responsibilities in terms of compliance, as formally recognized in the job profiling of the Group’s Finance area.
16. In addition to the annual and interim financial <strong>report</strong>s required by law, the Group also approves quarterly financial <strong>report</strong>s.
17. Updates to the Manual to assimilate modifications to the relevant IFRS are in any case carried out periodically through the year by
the GAP.
Report on corporate governance and ownership at 22 March 2011 on 2010 35