Financial disclosure process

Financial reporting plays a pivotal role in establishing and consolidating solid and constructive relationships between the company and its stakeholders, making a significant contribution, together with business performances, to the creation of value for shareholders.

Edison, being aware of the significance of financial reporting, developed an internal control system aimed at ensuring the credibility, accuracy, reliability and timeliness of financial information, with respect both to internal entities and the market.

In order to foster efficient coordination and exchange of information between the Parent Company and the subsidiaries and ensure the correct construction of the separate and consolidated financial statements, the Group adopted, and constantly updates an adequate set of rules and documents. Specifically, this set of rules includes the Group’s accounting principles, administrative and accounting procedures, guidelines, the fast closing procedure, operating instructions, accounting manuals and accounts plan.


The Corporate Accounting Documents Officer

Edison is an Italian company with savings shares traded on an Italian regulated market, it is required to appoint a Corporate Accounting Documents Officer (the “Documents Officer”), who, pursuant to law, has specific attributions, responsibilities and certification and declaration obligations. Pursuant to the By-laws, the Documents Officer must be selected by the Board of Directors, based on a prior opinion from the Board of Statutory Auditors, as per mandatory requirements, among executives with proven multiyear experience in the fields of administration, finance and/or control at companies listed on regulated markets.

Upon appointment by the Board of Directors, the assignment was jointly entrusted to the Accounting & Tax Director and the Chief Financial Officer. Roberto Buccelli (appointed in 2012) and Ronan Lory (appointed in 2022, replacing the resigning DSidier Calvez) currently hold the office.

The respective compensation packages were defined consistent with the compensation policies for Group managers, taking into account the general guidelines reviewed by the Compensation Committee. More specifically, the incentive mechanisms for these managers are consistent with the tasks entrusted to them.

In accordance with statutory requirements, the Documents Officer is responsible for the internal control system insofar as it applies to financial reporting. Consequently, he defines the administrative and accounting procedures needed to ensure that adequate controls are applied in the preparation of periodic financial reports and any other financial communication and, in a special report annexed to the statutory financial statements, the semi-annual financial statements and the consolidated financial statements, certifies, together with the Chief Executive Officer, that the above-mentioned procedures were effectively applied.


262 Model

The guidelines that must be followed within the Edison Group in terms of the obligations deriving from art. 154-bis of the TUF with regard to the preparation of corporate accounting documents and the corresponding certification requirements are defined in the Model pursuant to Law No. 262/2005 (the “262 Model”).

In particular, the 262 Model, through its own “Accounting Control Model Regulation”:

• defined the roles and responsibilities of the Organisational Units involved in various capacities. Specifically, the Processes, Compliance and Systems Function of the Accounting & Tax Department is responsible for deploying and concretely implementing, through the Documents Officer, the activities needed to guarantee the effectiveness of the accounting control system;

• it defined the operating methods that should be used to carry out the activities to comply with the above-mentioned legal obligations;

• it introduced, in support of the drafting of the certifications and declarations by the Documents Officer and the Chief Executive Officer and requires the managers of the Company’s Operating Units and the CEOs/Chairmen of companies that do not fall within the scope of Edison’s management and coordination to provide an internal certification, through the associated internal communication process, of the completeness of the information and that the correct functioning of the accounting control system established pursuant to Law No. 262/2005;

• attributed testing activities to the Internal Auditing Department;

• formally identified specific managers of Divisions/ Departments/Business Units/ Functions and specific operational officials who serve as “focal points”, in order to effectively implement the above.

More specifically, the internal accounting control system outlined in the 262 Model rests on the following characterising elements:

• a body of corporate procedures governing the preparation and disclosure of financial information including, but not limited to, the Group Accounting Manual, a procedure for the preparation of period reports called “fast-closing” procedure (inspired by best international practices, which is updated monthly and defines in detail the roles and responsibilities of company Divisions/Departments, the support systems, the reporting details and the process deadlines), operating financial statement instructions, reporting procedures, accounting calendars, etc.;

• a process carried out under the supervision of the Documents Officer and in concert with the Chief Executive Officer to map the main risks related to accounting information and the key controls to monitor the identified risks (administrative/accounting risk assessment). The risk assessment process is performed every year;

• for each relevant area/accounting information, the establishment of accounting processes and flows that are deemed critical and specific control activities through the development of special control matrices that describe for each process (or accounting flow) that has been identified as critical and/or sensitive the standard control activities (key controls) and the relevant operating unit officers responsible for implementing the 262 Model. These controls are validated and, if necessary, updated on a quarterly basis;

• designation of a specific company function, identified as the Processes, Compliance and Systems Function of the Accounting & Tax Department, responsible, with the support of the organisational units, for reviewing and updating on a regular basis the body of Group accounting procedures;

• a process involving activities to assess periodically the adequacy and actual implementation of the 262 Model and the identified key controls. The assessment is broken down into two levels: a) self- assessment by the organisational units, carried out by each organisational unit officer with regard to the processes/flows under his jurisdiction; b) independent assessment performed by the Internal Auditing Department. The audit plan is reviewed by the Control and Risk Committee and approved by the Board of Directors; a process of documentation and internal communication, carried out by managers of company Divisions/Departments/Business Units/Functions and by the Chief Executive Officers/Chairmen of the companies that do not fall within the scope of Edison’s oversight and control or of companies that adopt specific accounting procedures;

• a process to provide the market with a formal attestation that the accounting control system pursuant to Law No. 262/2005 is functioning correctly.

Model 262 has been systematically updated and adapted. In particular, in 2016 it was supplemented to reflect the acquisition of control of the Fenice Group and in 2017 to include the Group’s TCF, a tool to support tax management activities, aimed at managing and controlling tax risk. Finally, in 2020 the 262 Model/TCF was extended to the Energy & Environmental Services Market Division for those processes identified as most relevant (including Receivables/Payables Cycle, Provisions for Risks and Charges, M&A).