The Board has set up an Internal Audit Committee within the Board itself, formed by the Director Roberto Cravero (independent and non-executive) with the role of coordinator and by the Directors Leopoldo Conti (non-executive and not independent), Riccardo Conti (independent and non-executive) and Andrea Martin (independent and non-executive).

During 2011 the Committee met 12 times, as shown in Table 2 attached to this Report, while, on average, meetings lasted one and a half hour. 6 of these were joint meetings with the Board of Statutory Auditors and 1 was a joint meeting with the Board of Statutory Auditors and the Supervisory Body.

The coordinator Roberto Cravero took part in all the meetings, the member Leopoldo Conti, was absent from 3 meetings and the members Andrea Martin and Riccardo Preve were absent from 2 meetings.

The Chairman of the Board of Statutory Auditors attended all 12 meetings.

During the current financial year, the Company has already held 4 meetings, 3 of which were joint meetings with the Board of Statutory Auditors.

During its meetings the Committee also interacted, based on prior agreement and to address individual topics, with the CEO, the Corporate Accounting Reporting Officer and the auditing firm. It systematically interacted with the Internal Audit Officer and Compliance Officer, who normally attend the Committee’s meetings with a view to achieving synergy between the various players in the internal audit system.

In assessing directors’ compliance with the requirements of integrity, professionalism and independence, and subsequently on occasion of the top-management's self-assessment on 16 February 2012, the Board of Directors ascertained that Roberto Cravero, the Committee’s coordinator, has accounting and financial experience, deemed appropriate by the Board.

The Committee makes proposals and provides advice to the Board, and in particular it has to:

  • aid the Board of Directors in performing its task of setting guidelines for the internal audit system and of periodically checking its appropriateness and operation, satisfying itself that the main corporate risks are properly identified and managed;

  • evaluate the work plan drawn up by the Internal Audit Officer and receive the latter’s periodically reports;

  • assess the results set out in the Independent Auditors’ report and in any letter of recommendations prepared by the same;

  • express its opinion on the “Work Plan” of the Compliance Department and on the reports concerning the plan’s implementation, in view of their presentation to the Board of Directors;

  • evaluate, together with the Corporate Accounting Reporting Officer and external auditors, proper utilization of accounting standards and their uniformity for the purpose of drawing up consolidated financial statements;

  • perform any further tasks assigned to it by the Board of Directors.

As regards related-party transactions, the Internal Audit Committee – or rather the part of it consisting solely of independent directors – also performs the functions attributed to it by the Board, as governed by the “Procedure for related-party transactions”.

The amendments made to the 2011 Corporate Governance Code include, amongst other things, the re-naming of the Committee (which must be re-named the “Control and Risks Committee”) and the accurate clarification of the different function carried out by this Committee compared with that of the Board of Statutory Auditors also in consideration of the innovations introduced by Legislative Decree no. 39/2010. The Regulation is therefore expected to be updated by the end of 2012.

During 2011 the Committee’s activity regarded some key guidelines, i.e.:

  • updating of the Committee Regulations;

  • examination of the work plan and checks of the Compliance Department;

  • anti-money laundering regulations – internal arrangements and safeguards (with particular reference to the obligations concerning the Centralized Computer Database);

  • 2011 Internal Audit Plan and Inspection Report;

  • “Procedure for related-party transactions” – application and review;

  • discussion with the Board of Statutory Auditors, the Corporate Accounting Reporting Officer and the auditing firm on some of the items in the financial Report as at 30 June and the Interim Report as at 30 September (also with regard to some specific requests of the Bank of Italy);

  • fees recognized to the Independent Auditors;

  • financial autonomy of control bodies and functions;

  • Bank of Italy inspection – adjustment plan;

  • use of external consultancies;

  • results of the investigation carried out by the Internal Audit Department on the acquisition of tax receivables by Fast Finance;

  • remuneration and incentive system;

  • forecasts on the 2012 Plan of the Internal Audit Department and the 2011 Report.

Upon conclusion of its interim reports to the Board of Directors, the Committee stated that it had not found any inadequacies in the internal audit system.

Committee meetings were properly documented in minutes.

In performing its functions, the Internal Audit Committee can access the information and corporate functions necessary to carry out its tasks. The Committee can also ask for the presence at its meetings of:

  • Experts if the technical content of transactions becomes particularly important, to be identified also among Board members. These experts can be called to take part in meetings on an advisory basis;

  • All members of company staff concerned, who can be called to take part in the meetings on an advisory basis.

With resolution of 19 January 2012 the Board of Directors allocated the Internal Audit Committee annual economic resources of 60,000 Euro, to be used autonomously, subject to reporting to the Board concerning the use of funds within the sphere of the already envisaged six-monthly Report.