Tiscali 2007 Annual Report Download - page 59

The Internal Audit Committee is a sub-group of the Board of
Directors, its sole function being to advise and recommend.
Its objective is to improve the effectiveness and strategic guid-
ance capacity of the Board of Directors with regard to the Inter-
nal Audit system.
Based on the model adopted by the Company, the Internal
Audit Committee has three members. These must be non-exec-
utive Directors, and as such are entitled to provide independ-
ent, impartial opinions on topics for which they are responsi-
ble, since they have no first-hand involvement in running the
Company.
The majority of the members are qualified as independent, as
per the Instructions to the Regulations for Markets organized
and run by Borsa Italiana S.p.A. Should it not be possible to
guarantee that the composition of the Internal Audit Commit-
tee has a majority of non-executive and independent Direc-
tors, the Committee will have just two members, including at
least one who is independent. This solution is preferable to
having a majority of non-independent Directors, albeit tempo-
rary. If for a certain period the Internal Audit Committee is com-
posed of two members only, the entire Board of Statutory Audi-
tors is always invited to attend committee meetings. In addi-
tion, if for a certain period the Committee membership is
reduced to two members only, and the number of votes is
equal, then the independent Director has the casting vote.
The entire Board of Statutory Auditors is always invited to attend
committee meetings.
The Chairman of the Internal Audit Committee may invite the
CEO and other parties, e.g. the independent auditing firm, the
General Manager, if appointed, and the CFO, to Committee
meetings in relation to specific items on the agenda for which
their presence may prove useful.
Meetings of the Internal Audit Committee are normally held
prior to Board of Directors’ meetings scheduled for approval
of the quarterly, half-year and draft annual reports, and in any
event at least once every six months. The Chairman of the
Internal Audit Committee ensures that the committee mem-
bers receive the necessary documentation and information well
in advance of the meeting, unless necessity and urgency pre-
vail. Minutes of the meetings are in any event summarised in
writing.
Up until 28 February 2008, the Internal Audit Committee com-
prised two members, Vittorio Serafino (Chairman of said Com-
mittee), Chairman of the Board of Directors and non-execu-
tive Director, and Gabriele Racugno, non-executive and inde-
pendent Director.
Following the resignation of the Director Gabriele Racugno,
which took place during the Board meeting held on 27 and 28
February 2008, the Internal Audit Committee was temporari-
ly wound-up and since there are no other non-executive and
independent directors on the board, it will be re-established
by the new Board of Directors, which will be appointed by the
shareholders’ meeting called to approve the 2007 financial
statements.
During 2007, the Internal Audit Committee met seven times
on the following dates: 18 January; 8 February,15 March; 20
March 2007; 30 May 2007; 28 June 2007; 8 November 2007.
The Board of Statutory Auditors attended all these meetings.
6.3 Organization, management and control model pursuant to
Italian Legislative Decree no. 231/2001
The Board meeting held on 21 December 2005 approved the
new “Organization, management and control model pursuant
to Italian Legislative Decree No. 231/2001”, which compris-
es a general section and two special sections, in force as from
1 March 2006. Following the introduction of the new types of
offences within the sphere of application of Italian Legislative
Decree No. 231/2001 introduced by Italian Law No. 146/2006
(transactional offences) and Italian Law No. 123/2007 (viola-
tions of accident-prevention norms);
with the support of a consulting firm specialized in this sub-
ject, the Company has launched a project for up-dating the
Model.
The Boards of Directors of Tiscali Italia S.p.A. and Tiscali Ser-
vices S.p.A. adopted the “Organization, management and con-
trol model”, respectively, on 28 March 2006 and 22 March
2006, at the same time appointing the required Supervisory
Body. Further to the changed organizational structure conse-
quent to the merger of Tiscali Services S.p.A. within Tiscali
Italia S.p.A. and the introduction of the new types of offence
indicated above, the Tiscali Italia S.p.A. model is undergoing
a review with the aid of a consulting firm specialized in this
subject.
7. Related Parties
It is Company practice to keep transactions with related par-
ties (i.e. operations considered such pursuant to Consob Com-
munication No. 2064231 of 30 September 2002) to a mini-
mum. Any transactions of this nature are in any event con-
ducted in such a way as to ensure compliance with legal and
procedural standards pursuant to Article 9 of the Code.
On approval of transactions with related parties in which Direc-
tors may have a direct or indirect interest, the latter must
inform the Board of Directors of their interest and leave the
board room during the vote.
Lastly, pursuant to Article 14 (Powers of the Board of Direc-
tors) of the Articles of Association, the Board of Directors must
REPORT ON OPERATIONS
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