59INFORME ANUAL Y DE RESPONSABILIDAD CORPORATIVA 2017

Internal control over financial reporting (ICFR)

Competition protection programme

The Board s Audit, Compliance and eth- ics Committee is tasked with overseeing ICFR, which seeks to ensure a reason- able control environment in the prepara- tion of the financial statements. We have considered fraud risk as a relevant fac- tor in the design of the control system. The implementation and supervision of

ICFR has been undertaken pursuant to a methodology based on CoSo 2013. This control model, made up of 856 controls, is updated, assessed and certified each year by the Company s Management. In 2017, Management certified this system without having identified any significant weakness.

Regarding open cases related to competi- tion, there is an open litigation before the Spanish competition authority (CNMC), in which the subdirectorate of Surveillance proposed that the Board of the CNMC de- clare that Cepsa had complied with two previous rulings in full. however, in Au- gust 2017, the Board of the CNMC ruled that it was not able to consider the reso- lution fully implemented as set out by the Competition department, and urged the latter to continue to monitor the case. The ruling does not imply a failure to comply, nor does it demand that any kind of sanc-

tioning file be opened, rather it states that it has been unable to reach definitive con- clusions on important issues.

In terms of the appeals filed by the Com- pany against the Rulings of the CNMC in January and February 2015, which imposed fines of 10 million and 2.5 million on Cepsa, both were appealed be- fore the Spanish high Court. The plead- ing stage of both appeals is now over and only the announcement of the vote and judgement date is now pending.

2017 ANNuAL ANd Co PoRATe ReSPoNSIBILITy EPORT