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Corporate Governance System
Report by the Board of Directors on the Corporate Governance of the Company on 26th March 2009
On a strictly voluntary basis and without referring to any specific editorial layout, this report describes the Corporate Governance model adopted by the company in the light of its charter in force with the aim at providing efficient and effective working rules within the company.
1. Role of the Board of Directors
In accordance with the new company charter, the Board of Directors will have exclusive responsibility for the management of the company. It will therefore be empowered to take all the action necessary or that it considers useful for the start-up of the company objective, with the sole exceptions of those actions reserved expressly by law to the shareholders' meeting. Within this framework, the Board of Directors has exclusive responsibility for resolutions regarding:
- the setting up or closure of secondary branches;
- the indication of the directors who legally represent the company;
- reduction of capital following withdrawal;
- transfer of the registered office within Italian territory;
- merger in the cases taken into consideration by articles 2505 and 2505(ii) of the civil code and, in the case of separation, those referred to in article 2506(iii) of the civil code;
- adaptation of the charter to regulatory provisions.
If the resolutions passed by the Board of Directors are to be valid, the presence of the majority of the directors in office is required and the resolutions will be passed by the absolute majority of the votes of those present. Those taking part in the meetings of the Board of Directors may intervene remotely by means of audio visual connections or telephone conference.
The primary function of the Board of Directors is the address and control of the general activities of the Group. More specifically, the Board of Directors is responsible for the following operations, among others:
- the laying down of the strategic management, development and financial lines of the company and group;
- the allocation and revocation of delegated powers to the chairman, vice-chairmen and managing directors (referred to below as the “Executive Directors”), as well as those of the Executive Committee, to the extent that this is taken into account in the company charter;
- after examining the committee salary proposals and consulting the Board of Auditors, the determination of the salaries payable to the Executive Directors and the directors in specific offices, as well as the subdivision of the total fees due to the single members of the Board of Directors as resolved by the shareholders' meeting;
- the monitoring of the general trend of company management, with particular reference to situations of conflict of interests, taking into consideration the information received from the Executive Directors and the relevant terms of the company charter;
- the examination and approval of the operations of significant economic, financial and capital importance, with particular reference to the operations with related parties, to the extent that these are taken into account in the company charter;
- reporting to the shareholders' meetings.
In particular, the Board of Directors reserve for its own all activities not delegated to Executive Directors as, by way of example: purchase or sale of real estate; acquisition and sales of shares in other companies, enterprises or branches of companies not yet controlled directly or indirectly by the Company, for value over 3.000.000 Euro per each acquisition or cession and, anyway, for all those deals that exceed the total annual amount of 3.000.000 Euro; provide mortgages, finance, guarantees or securities for a loaned amount or for a guarantee value over Euro 5.000.000, as well as all activities identified by the law as a competence of Board of Directors or, anyhow, not allow to be delegated.
In accordance with art. 22 of the Articles of Association, the Board of Directors will meet every quarter to approve its reports and for any other business. In 2008, nine meetings of the Board of Directors took place. In 2009, six meetings are foreseen to take place.
2. Composition of the Board of Directors
The company charter lays down that the company will be administered by a board made up of 11 (eleven) members; on the proposal of one or more category X partners and with the favorable vote of at least 65% of the company capital having the right to vote in the Ordinary General Meeting, the latter may elect a further 2 (two) Members. Members of the Board of Directors remain in office for three financial years, may be re-elected and fall from office on the date of the Meeting to approve the balance sheet relating to the last year of their mandate. The members of the Board of Directors are in office for three years, are eligible for re-election and stop holding their office on the date of the Meeting passing of the financial statement relating to their office last year.
The Shareholders Meeting appointed the Board of Directors currently in office on April 22nd, 2008.
It currently consists of the following members:
- Mr. Dardanio Manuli;
- Mr. Mario Manuli;
- Mr. Roberto Cagnazzo;
- Mr. Luca Coccioli;
- Mr. Maurizio Cossalter;
- Mr. Sergio Erede;
- Ms. Antonella Manuli;
- Mr. Antonello Manuli;
- Mr. Sandro Manuli;
- Mr. Stefano Meloni;
- Mr. Giuseppe Pirola;
- Mr. Guido Tarizzo;
- Mr. Matteo Marchisio*.
During the same meeting, the Shareholders Meeting appointed Mr. Dardanio Manuli Chairman of the Board of Directors.
* Mr. Matteo Marchisio was appointed member of the Board of Directors by the Shareholders Meeting of April 22nd, 2009.
3. Chairman of the Board of Directors – Managing Director – Information to the Board of Directors
By means of a resolution passed on April 22nd, 2008, the Board of Directors appointed Dardanio Manuli to the posts of Chairman and Managing Director, and Mario Manuli to the post of Managing Director, with the powers required for the normal management of the company. By means of a resolution passed on May 14th, 2009, the Board of Directors also appointed Mr. Matteo Marchisio to the post of Managing Director.
The Chairman and the Managing Directors legally represent the company, within the limits of their powers.
The Chairman calls the Board of Directors’ meetings and acts to ensure that the directors are provided with suitable information on the matters to be discussed. He coordinates Board of Directors’ activities and directs discussions.
In accordance with the Company Charter, every half-year, the Managing Directors inform the Board of Directors and the Board of Auditors about the general management trend and its foreseeable evolution as well as about the most significant operations carried out by the company and its subsidiaries.
4. Directors' remuneration
The Salaries Committee is made up of three directors. It was nominated by the Board of Directors on April 22nd, 2008 and is made up as follows:
- Roberto Cagnazzo – Chairman
- Stefano Meloni
- Guido Tarizzo
The Chairman and Managing Director, Chairman of the Board of Auditors and, upon invitation, other company members, take part in the meetings of the Committee.
The Salaries Committee, which met three times in 2008, is mainly responsible for drafting proposals to be put to the Board of Directors for the fixed and variable payment of the Executive Directors and those with specific responsibilities. On the instructions of the Executive Directors, it is also responsible for the determination of the criteria for the variable part of the salaries payable to top management of the Company. As concerns the calculation of the variable component of the payment, the Committee proposes specific Group economic/financial objectives.
5. Internal control
The Internal Audit function is set up within the Company. The responsibility of Internal Audit is to deal with the implementation, correct operation and monitoring of the internal control system.
Internal Audit reports to the Chairman and Executive Directors, to enable these to take prompt action as needs require. It also reports to the Internal Audit Committee and Auditors to keep them updated on its operations.
As concerns the organizational, management and control model, as provided for the legislative decree no. 231/2001 adopted by the Board of Directors of the Company on April 22nd, 2008, the head of Internal Audit is entrusted with the internal control operations – to be carried out by a compliance officer – with a view to monitoring the running, effectiveness, compliance and updating of the model.
6. Internal Audit Committee
The Internal Audit Committee consists of two Directors. It was appointed by means of a resolution by the Board, passed on April 22nd, 2008, and is made up as follows:
- Stefano Meloni - chairman
- Roberto Cagnazzo
The Internal Audit Committee met four times in 2008.
The Internal Auditing Committee provides advice and puts forward proposals as regards the internal auditing system’s structure and operation. Said system is intended to verify the efficacy and respect of existing or future internal procedures aimed at guaranteeing efficient management and identifying and preventing, as much as possible, financial and operational risks and fraud to the detriment of the Company. In particular, the Internal Auditing Committee (a) assesses whether the internal auditing system and work plan drawn up by the Internal Auditing function Manager are appropriate; (b) receives periodic reports from the same; (c) assesses the proposals put forward by the auditing company to obtain the relative assignment, as well as the audit work plan draw up and results set out in the auditing company’s report and letter of recommendations; (d) reports to the Board at least every six months, when approving the balance sheet and six monthly reports, on the activities carried out and appropriateness of the internal auditing system; (e) carries out any additional tasks the Board attributes it, especially as regards relationships with the auditing company.
The Chairman and Managing Director, the Chairman of the Board of Auditors and, on invitation, other company members and representatives of the auditing company take part in the meetings of the Committee.
7. Supervisory Board
As provided in the Organization, Management and Control Model provided by the Legislative Decree no. 231/2001 and adopted by Company on April 22nd, 2008, the Company appointed a Supervisory Board, an internal collective body provided with autonomy and independence from the other Company’s bodies and from the Internal Control Committee, entrusting it the supervision of the functioning and accomplishment of the Organization, Management and Control Model, as well as its update.
In particular, the Supervisory Board is assigned the following tasks:
- start control procedures, considering that the primary responsibility of the activities control, even those related to the risk areas, is assigned to the management;
- lead acknowledgment of the company activity in order to draw up an updated map of the risk areas;
- carry out periodical controls on specific activities or acts into the risk areas;
- collect, elaborate and preserve all relevant information;
- coordinate with the other company’s functions to monitor all activities in the risk areas.
At present the Supervisory Board in office has been appointed by the Board of Directors on April 22nd, 2008 and it consists in of the following members:
- Carlo Ticozzi Valerio – Chairman;
- Luca Coccioli
- Marc Sinagra.
8. Shareholders’ Meeting
The Shareholders’ Meeting, regularly constituted, is the body expressing the shareholders’ want through its resolutions. The resolutions, in compliance with the law and the charter, bind on every associate, including the absent or the dissentient ones.
In accordance with the company charter, the meeting is convened by registered letter with receipt slip or fax, at least eight days prior to the day set for the meeting. The meeting can also take place in a number of adjacent or remote locations by means of telephone or video connection, provided the joint method and the principles of good faith and fair treatment of the shareholders are complied with
9. Auditors
The Board of Auditors is made up of five effective members and two substitute. Regular and Substitute Auditors are appointed according to lists presented by Shareholders. The Shareholders’ Meeting that took place on April 22nd, 2008 decided on the nomination of the Statutory Auditors, charged with auditing the law and charter observance, as well as the management control.
The Statutory Auditors do not practice any audit functions. It is the auditing company that deals with it. In general, the powers, duties, duration in office and methods for the nomination of the statutory auditors are those laid down by law.
The current Board of Auditors consists of:
- Mr. Carlo Ticozzi Valerio - Chairman
- Mr. Nicolino Cavalluzzo – Regular Auditor
- Mr. Giorgio De Giorgi – Regular Auditor
- Mr. Giorio Ferrante – Regular Auditor
- Mr. Raffaele Stracquadanio – Regular Auditor
- Mr. Franco Caramanti – Substitute Auditor
- Mr. Giorgio Caldart – Substitute Auditor.
10. Regulations governing shares and their transfer
In accordance with the Articles of Association, there are 2 (two) categories of shares: category “X” and category “Y”. Both categories have certain rights in accordance with the Articles of Association, as well as those provided for in law.
Transfer of shares is regulated by art. 8 and subsequent of the Articles of Association, that set out specific rights of pre-emption and co-sales obligations in certain conditions. Moreover, the Articles of Association regulate preliminary and necessary transfer procedures.
11. Periodic reports and certifications
According to art. 28 of the Articles of Association, the Company arrange and provides its shareholders with an annual balance sheet and an annual consolidated balance sheet in accordance with the provisions of law, as well as, on the basis of the same accounting principles utilized for the balance sheet, a six-month management report within 90 days from the six-month closing, as well as three quarterly management reports within 45 days from the closing of each quarter, according to schemes applied to the listed companies, except the possibility to postpone the second quarterly financial report if the six-month report is arranged within 60 days from the closing of the semester.
Moreover, the Company intends submitting its balance sheet, as well as the Group’s consolidated balance sheet for certification by a major auditing company as well as submitting its six-monthly management reports for auditing.
12. Operations with related parties
The operations carried out by the company with its related parties essentially involve the exchange of goods, the provision and use of financial means and the provision of services, with the subsidiaries and other organizations indicated as correlated parties by the IAS 24. All these operations form part of normal management and are subject to market conditions, that is, on the conditions that would apply between two independent parties.
For the Board of Directors
Dardanio Manuli
Chairman and C.E.O.
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