Annual Corporate Governance Report 2017

40 F. RISK MANAGEMENT SYSTEMS AND INTERNAL CONTROL OVER FINANCIAL REPORTING (ICFR) Describe mechanisms of the risk management and control systems in relation to Internal Control over Financial Reporting (ICFR) at your entity. F.1 Control environment of the entity Disclose the existence of and describe the main features of at least: F.1.1. The organs and/or functions responsible for: (i) the existence and maintenance of an adequate and effective Internal Control over Financial Reporting (ICFR) system; (ii) its implementation; and (iii) its supervision. Atresmedia’s current internal control system is applied uniformly throughout the entire organisation and encompasses a duly documented normative environment. The body responsible for the supervision of the Internal Control over Financial Reporting (ICFR) system is the Audit and Control Committee, which has the support of the Internal Audit and Process Control Division and the Finance Department for implementation and maintenance. In 2012, new Board Regulations were approved to adapt their content to the legal reforms in relation to the powers, duties and functioning of Board Committees. In 2016, amendment of the Regulations was approved, specifically, articles 22 and 23, to adapt them to the modification of article 529 quaterdecies of the Spanish Companies Act, which entered into force in June 2016, introduced by Ley 22/2015 , Spain’s statute on account auditing. The scheme of powers, duties and structure of the Audit and Control Committee in relation to ICFR was updated. Specifically, the Audit and Control Committee’s powers and duties in respect of ICFR include: Supervision of the integrity, preparation and presentation of the regulated financial reporting relating to the Company and, where appropriate, to the Group, reviewing compliance with regulatory requirements, adequate definition of the consolidation scope and correct application of accounting policies. Regular supervision of the internal control and risk management systems, in order that the main risks are adequately identified, managed and notified, discussing with the auditor or audit firm any significant weaknesses of the risk control system detected in the course of the audit. Oversight of the independence and effectiveness of the internal audit function; proposing the selection, appointment, re-election and removal of the internal audit service head, and the estimate for that service; receiving periodic information on its activities; and verifying whether senior management has taken into account the conclusions and recommendations of its reports. In addition, the Compliance Committee assumes, among other functions, that of providing support and coordination in conjunction with Internal Audit and Process Control in the monitoring and supervision of Internal Control over Financial Reporting (ICFR) rules, approval in the implementation of the Code of Conduct and the implementation and monitoring of the functioning of the Whistleblowing Channel. The Finance Department is responsible for implementing ICFR through the Accounting and Consolidation, Billing, and Management and Administration Control areas. These areas use information from other areas and management systems, and must ensure correct transfer of information among different management systems and adequate accounting record entry in the financial management system (SAP). Likewise, the Investor Relations area specifically ensures that all information sent to the markets and to investors is clear and understandable and coincides - despite differences of presentation - with the financial information in the related financial statements. Internal Audit works with the Financial Department on supervising the correct functioning of ICFR and on defining and implementing the controls required to ensure and guarantee the reliability of the information. In this regard, numerous controls have been defined in Atresmedia’s Risk Management and Control System relating to Internal Control over Financial Reporting (ICFR), which are regularly assessed by the organisational areas responsible for the ICFR.