2012 Annual Report - Italcementi Group

2012 Annual Report
Presentation 4
General information 14
Annual Report Consolidated Annual Report Directors’ report 146
Sustainability disclosure Italcementi S.p.A. Annual Report Separate financial statements 241
Extraordinary session 351
- Level 3: the Internal Audit function, as well as any other parties that provide objective and independent
assessments (the so-called assurance) on the design and operation of the overall System.
2. Enterprise Risk Management
An essential part of the Internal Control and Risk Management System is represented by Enterprise Risk
Management (“ERM”), understood as an integrated model, prepared in accordance with international best
practices, to optimize the management of business risks and to define the resulting strategies for their
mitigation, supporting the managers’ decision-making process through analysis of “risks, expected returns,
opportunities for growth in the business”.
Within Enterprise Risk Management, Italcementi appointed a Chief Risk Officer, head of the Risk Management
Dept. with the goal of improving the ability to create value for stakeholders also through a better management
of business risk.
ERM uses the COSO methodology (Committee of Sponsoring Organizations of the Treadway Commission)
and was divided into the following phases:
- identification of the main areas of risk in relation to the Group’s strategic objectives and definition of
methodologies and tools for the analysis and assessment of related risk events;
- assessment, both at country and Group level, of identified events of risk in terms of impact, chance of
happening and time frame, in order to have an overall picture of the Group’s risk portfolio;
- selection of priority risks and definition of relevant reaction strategies, governance rules within the Group as
well as the actions needed to supplement and improve risk management systems; several risks are
managed locally at the subsidiaries level, while the management of those requiring specific expertise or a
cross coordination, is centralized;
- implementation of mitigation strategies/actions defined from time to time and development of the Enterprise
Risk Management process;
- information to the top management and control bodies on the main risks and their management and
evolution. The risk quantification and occurrence are integrated into the company’s management system
such as budgets, re-forecasts or analysis studies on the most important investment projects.
Italcementi puts in place continuous actions, detailed in paragraph 4.1 below, which represents the subject of a
program of activities integrated into business processes for the purpose of ensuring trustworthiness, accuracy,
reliability and timeliness of financial reporting.
The Company, in accordance with the ERM principles, has identified and categorized the risks considered
significant (among which the one relating to financial reporting) and, for each significant risk, has developed
appropriate containment actions, has attributed responsibilities to a main contact person (“Primary Risk
Owner”) with the task of coordinating and ensuring consistency in responses to risk, has defined guidelines,
actions and controls common to the different areas of risk (“Risk Management Guidelines”), and has defined
and implemented strategies aimed at aligning the risk management systems to the desired standards.
3. Definition of the nature and level of risk consistent with strategic objectives
The Board of Directors establishes a multiannual strategic plan under which it approves a budget on an annual
basis.
When approving the annual budget, usually occurring at the first Board meeting of each fiscal year, the Board
of Directors examines and quantifies the risks, in terms of impact on gross operating profit or loss, which the
Company and the Group as a whole are subject to, depending on the strategic objectives it sets for itself.
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