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23

Corporate Governance

Corporate Social Responsibility Report 2014

BME

IRMS Image

Risk management

BME has a risk management system in place which

ensures that any significant risks which could affect

the Group’s objectives and activities are identified,

evaluated and controlled as described in BME’s Annual

Corporate Governance Report.

The Risk Committee, the Internal Audit Department

and the Compliance Department assist the Board of

Directors and the Audit Committee in developing a

suitable risk management programme.

The

Risk Committee,

under the helm of the General

Manager, reports to the Coordination Committee.

These two units work together to implement the risk

control and management policy laid down by the

Board of Directors. The committee monitors and

analyses the risks arising in the day-to-day activities of

BME group companies.

The Risk Committee has created an integrated risk

management system (IRMS) following the method-

ological framework specified in the COSO II paper. It

also maintains the Corporate Risk Map, in close coop-

eration with the business units and corporate areas.

In addition to the IRMS, the

Risk Committee

has

formally incorporated the Internal Control over Finan-

cial Reporting (ICFR) system. A description of the IRMS,

including the ICFR, is available in the Annual Corporate

Governance Report for 2014.

At its meeting of 29 November 2012, the Board of

Directors resolved to set up a Penalty Prevention

System, as described in Chapter 3 of this report. The

system is being gradually implemented throughout

the group.

The

Internal Audit Department

is charged with

providing senior management and the board with

information that enables them to fulfil the company’s

objectives, including the assessment and evaluation

of the efficiency of the risk assessment tasks carried

out. Its task is therefore aimed at assessing and

improving the efficiency of the processes concerning

risk management, control and governance by identi-

fying key risks and controls.

In order to create an independent body that could

monitor compliance with the regulations governing

the activities of BME and its group companies, in 2013

the Executive Committee approved the formation of

a group-wide

Compliance Department.

The Compli-

ance Department’s primary duties include super-

vising compliance with prevailing regulations, codes

of conduct and commercial agreements; verifying

the suitability of procedures and compliance there-

with; supporting the Audit Committee in supervising

regulatory compliance risk; and helping employees to

monitor regulatory changes that could affect the activ-

ities carried out by the Group.