Independent auditors

The Independent Auditors retained to perform independent statutory audits of the financial statements are required by law to ascertain whether the accounting records are properly maintained and record faithfully the results from operations, and whether the statutory financial statements and the consolidated financial statements comply with the rules governing their preparation and provide a fair and truthful presentation of the financial position, cash flows and operating result for the period, rendering an opinion on the financial statements, also consolidated, and the consistency of the Report on Operations with the information provided in the financial statements. A similar review of the semiannual financial report is performed by the Independent Auditors on a voluntary basis, pursuant to a recommendation by the Consob. In addition, the Independent Statutory Auditors are required, pursuant to law, to review certain disclosures of the Report on Corporate Governance. The Independent Auditors also perform additional reviews required by industry regulations and provide additional services that the Board of Directors may ask them to perform, provided they are not incompatible with their assignment regarding the independent statutory audit of the financial statements.

The assignment for the independent statutory audit of the financial statements must be awarded to a company listed in the register of Independent Statutory Auditors. The Shareholders’ Meeting awards the assignment, based on a reasoned recommendation by the Board of Statutory Auditors, and determines the corresponding compensation.

The award of the assignment to the current Independent Auditors, KPMG Spa (KPMG) was approved by the Shareholders’ Meeting of April 28, 2020. As allowed under current laws, KPMG’s assignment will last for nine years, i.e., from 2020 to 2028. The current responsible partner is Umberto Scaccabarozzi. (Previously, for the nine-year period 2011-2019, the auditor was Deloitte & Touche Spa)

Within the framework of the Group’s general audit plan and in fulfilment of legal requirements, the Independent Auditors performed independent statutory audits of the financial statements of nearly all of the Italian and foreign subsidiaries.

As a rule, these assignments are awarded to Edison’s Independent Auditors in order to allow the Independent Auditors of the Parent Company to take direct responsibility for auditing the financial statements of the subsidiaries. With the change of Edison’s Independent Auditors, this rule was not immediately applied with regard to certain smaller Italian companies or that were subject to significant corporate restructuring operations during the year or merged by incorporation, and those transferred during 2020. The plan is to gradually assign the engagement to KPMG also from the subsidiaries that remain in the Group which retained the previous auditor Deloitte & Touche Spa. The engagements assigned by the subsidiaries make provision, based on the indications of EU Regulation 537/2014, differently from Edison, for a duration of three financial years.

Consistent with a firmly established Group policy, Edison and its principal subsidiaries have also asked their Independent Auditors to audit their semi-annual financial statements and, in the case of companies that operate in the electric power and/or natural gas sectors, the annual separate financial statements and perform special audits needed to comply with contractual requirements or regulations issued by the Italian Regulatory Authority for Energy, Networks and the Environment. The company tasked with the independent audit of Edison also checks the contents of the NFD and the preparation of “Section Two” of the Report on the compensation policy and on compensation paid.

KPMG and its international network, working in accordance with assignments they received directly, audited about 90% of total consolidated assets (2020) and about 97% of total consolidated revenues.

As already indicated in the previous Governance Reports, the guidelines for the assignment and management of auditing engagements which Edison adopted in 2011, were most recently amended and supplemented in 2017 to take into account the provisions introduced by EU Regulation 537/2014, mentioned above.

2020 Board of Statutory Auditors

(amounts in euros) KPMG S.p.A. Rete KPMG S.p.A

KPMG S.p.A. Total

Deloitte & Touche S.p.A. Rete Deloitte & Touche S.p.A Deloitte & Touche S.p.A. Total TOTAL
Edison S.p.A. 773.318 97.500 870.818 28.234 23.400 51.634 922.452
Legal and accounting audit 693.568 - 693.568 12.234 - 12.234 705.802
Certifications services 79.750 97.500 177.250 16.000 - 16.000 193.250
Other services - - - - 23.400 23.400 23.400
Group companies1 805.692 124.950 930.642 781.391 91.799 873.190 1.803.832
Legal and accounting audi 733.984 124.950 858.934 734.473 64.949 799.422 1.658.356
Certifications services 71.708 - 71.708 46.918 - 46.918 118.626
Other services - - - - 26.850 26.850 26.850
Total 1.579.010 222.450 1.801.460 809.625 115.199 924.824 2.726.284

1 Subsidiaries and other companies fully consolidated line by line.