Main Actors Of The Internal Control System

Board of Directors

The Board of Directors plays a central role in the internal control system by defining the fundamental guidelines relative to the organizational, administrative and accounting structure of the Company and of the subsidiaries and the Group.

It defines, in particular, examined the proposals of the Internal Control Committee,  the guidelines of the internal control system in order to ensure the identification, measurement, management and monitoring of the primary risks of the Company and its subsidiaries. In formulating these guidelines, the Board applies sector regulations and takes into adequate consideration the reference models and the best national and international practices.

In its meeting of 13 March 2009, the Board – having examined the report of the Internal Control Committee – assessed the internal control system and considered it overall adequate with respect to the Eni’s characteristics in addition to being effective and functioning.

Board of Statutory Auditors

The Board of Statutory Auditors monitors:

• compliance with the law and the By-laws,
• compliance with the principles of correct administration;
• the adequacy of the organizational structure of the Company,  for that falling under its competencies , as well as of the internal control system and the administrative and accounting system and on the reliability of the latter in correctly reporting the Company's transactions;
• the modalities for correctly implementing the corporate governance rules provided for in the Borsa Italiana Code of to which the Company adheres;
• the adequacy of the instructions imparted from the Company to subsidiaries in order to guarantee the correct fulfillment of information requirements established by the law.

The Board of Statutory Auditors also has other responsibilities deriving from its corporate governance rules as well as from national and international regulations. As of 1 June 2005, in fact, the Board of Statutory Auditors has been implementing – within the limits allowed by Italian regulations – the Audit Committee functions required for foreign issuers by the Sarbanes-Oxley Act and by the regulations of the Stock Exchange Commission.

Chief Executive Officer

The Chief Executive Officer (Chief Executive Officer) is entrusted by the Board of Directors with supervising the functionalities of the internal control system.

For this purpose, the Chief Executive Officer identifies the main Company risks and – when implementing the policy guidelines pertaining to the internal control system, as defined by the Board – provides for the relative planning, realization and management.

The Chief Executive Officer is also entrusted with the task of constantly verifying the overall adequacy, efficiency and efficacy of the internal control system and ensuring that it is adjusted to Company operations and to legislative and regulatory framework.

Internal Control Committee

The Internal Control Committee is entrusted with consulting and advisory functions with respect to the Board of Directors in relation to the internal control system. The Committee implements the following primary functions:

• Together with the Officer in charge of preparing financial reports and the audit firm, it evaluates the correct utilization of accounting principles and their consistency for the purposes of drafting the consolidated financial statements;
• in the contest of the assessmernt  of the adequacy of the internal control system, it evaluates: i) auditing reports, even in relation to the internal control system over financial reporting; ii) communications of the Board of Statutory Auditors and of the Statutory Auditors, even with regards to preliminary activities managed by the Internal Auditing Department in connection with  complaints received, also in anonymous form (whistleblowing); iii) evidence deducible from the reports and management letters of the audit firms; iv) reports of the Watch Structure, even in terms of its role as Guarantor of the Code of Ethics; v) evidence deducible from the periodical reports of the Officer in charge of preparing financial reports  and of the Officer in charge of internal control as well as from investigations and reviews implemented by third parties;
• upon request of the Chief Executive Officer, provides specific advice on specific topics concerning the identification of the primary Company risks as well as the design, implementations and management of the internal control system;
• Monitors the Internal Auditing activities;
• Implements additional tasks which are assigned by the Board and, in particular, assesses the rules for substantive and procedural correctness of transactions with related parties - with a significant role played in the preliminary analisys and deliberative process of these transactions – as well as in those the Director retains a personal or third party interest;
• reports to the Board on implemented activities and on the adequacy of the internal control system on at least a half-year basis at the time of approval of the periodical financial statements.

Officer in charge of preparing financial reports

In compliance with legal regulations, the Officer in charge of preparing financial reports is responsible for the internal control system over financial reporting and, for this purpose, prepares the administrative and accounting procedures for the drafting of the periodical accounting documentation as well as of any other financial communication; he/she also certifies - along with the Chief Executive Officer and with the relative report on the financial statements of the year, the  half-year financial statements and the consolidated financial statements – the adequacy and effective application of the cited accounting procedures during the course of their period of reference. The Board of Directors supervises in order to ensure that the Officer in charge of preparing financial reports is equipped with adequate powers and means in order to exercise these tasks as well as on the effective compliance with these procedures.

The activities of the Officer in charge of preparing financial reports are implemented on the basis of the "Guidelines on Internal Control over  Financial Reporting" which are defined in accordance with the provisions of Article 154-bis of the Consolidated Law on Finance as well as the provisions of the US Sarbanes-Oxley Act of 2002 (SOA) with which Eni must comply given that it is a "foreign private issuer" listed on the New York Stock Exchange (NYSE); these guidelines were approved by the Board of Directors on 20 June 2007.

Officer in charge of internal control

The Officer in charge of internal control – appointed by the Board of Directors upon proposal of the Chief Executive Officer, in agreement with the Chairman and following a consultation from the Internal Control Committee – is primarily entrusted with the tasks of i) verifying that the internal control system is always adequate and fully operational, and functioning ii) providing an evaluation on its suitability.

This Manager is not responsible for any operational area, retains direct access to information which may be useful for the implementation of his/her task and is equipped with adequate means for fulfilling his/her tasks while reporting to the Board of Directors, the Board of Statutory Auditors and the Chief Executive Officer by means of periodical reports sent through the Internal Control Committee.

Internal Audit

The Board of Directors, on 30 October 2008, approved the "Guidelines on Internal Audit activities" in which the objectives, areas of intervention and functioning modalities were defined in accordance with the best reference practices.

The Internal Auditing Department is entrusted with the task of providing the following to the Chief Executive Officer and, by means of the Internal Control Committee, to the Board of Directors as well as to the Board of Statutory Auditors as "Audit Committee" under US law: audits, analyses, assessments and recommendations pertaining to the design and functioning of the internal control system of the Company and of the Group in order to promote its efficiency and efficacy.

The Internal Auditing Department reports to the Chief Executive Officer who is entrusted with overseeing the overall functionality of the Internal Control System; the Internal Control Committee oversees the Internal Auditing Activities.

The Internal Auditing Department implements its activities of competence with reference to Eni SpA and the subsidiaries in which Eni retains majority voting rights, and with the exception of those with listed shares or those subject to unbundling regulations or subject to supervision by the Bank of Italy. In these cases, auditing activities are implemented independently.