Governance Information • Mar 28, 2022
Governance Information
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In accordance with Article 123-bis of the CFA (Traditional Administration and Control Model)
Approved by the Board of Directors on March 16, 2022
| 1. ISSUER PROFILE4 |
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| 2. INFORMATION ON THE OWNERSHIP STRUCTURE (as per Article 123-bis, paragraph 1, CFA) AT MARCH 16, 20224 |
| a) Shareholders (as per Article 123-bis, paragraph 1, letter a), cfa)4 |
| b) Restriction on the transfer of shares (as per Article 123-bis, paragraph 1, letter b), CFA) 4 |
| c) Significant holdings (as per Article 123-bis, paragraph 1, letter c), CFA)4 |
| d) Shares which confer special rights (as per Article 123-bis, paragraph 1, letter d), CFA)5 |
| e) Employee shareholding: voting mechanism (as per Article 123-bis, paragraph 1, letter e), CFA) 5 |
| f) Voting restrictions (as per Article 123-bis, paragraph 1, letter f), CFA) 5 |
| g) Shareholder agreements (as per Article 123-bis, paragraph 1, letter g), CFA)5 |
| h) Change of control clause (as per Article 123-bis, paragraph 1, letter h), CFA) and shareholder provisions concerning public purchase offers (Article 104, paragraph 1-ter and 104-bis, paragraph 1) 5 |
| i) Power to increase the share capital and authorisation to purchase treasury shares (as per Article 123-bis, paragraph 1, letter m), CFA) 6 |
| l) Direction and co-ordination activities (as per Article 2497 of the civil code)6 |
| 3. COMPLIANCE (as per Article 123-bis, paragraph 2, letter a), CFA)7 |
| 4. BOARD OF DIRECTORS 7 |
| 4.1 ROLE OF THE BOARD OF DIRECTORS 7 |
| 4.2 APPOINTMENT AND REPLACEMENT (as per Article 123-bis, paragraph 1, letter l), first part, CFA) .9 |
| 4.3 COMPOSITION (as per Article 123-bis, paragraph 2, letters d) and d) bis), CFA) 11 |
| 4.4 FUNCTIONING OF THE BOARD OF DIRECTORS (as per Article 123-bis, paragraph 2, letter d), CFA) |
| 14 |
| 4.5 ROLE OF THE CHAIRPERSON OF THE BOARD OF DIRECTORS 16 |
| 4.6 EXECUTIVE DIRECTORS………………………………………………………………………………………………………………17 4.7 INDEPENDENT DIRECTORS AND LEAD INDEPENDENT DIRECTOR…………………………………………………19 |
| 5. MANAGEMENT OF CORPORATE INFORMATION 21 |
| 6. INTERNAL COMMITTEES OF THE BOARD (as per Article 123-bis, paragraph 2, letter d), CFA 21 |
| 7. SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS - APPOINTMENTS COMMITTEE……………………22 7.1 SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS22 |
| 7.2 APPOINTMENTS AND REMUNERATION COMMITTEE23 |
| 8. REMUNERATION OF DIRECTORS24 |
| 9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL, RISKS AND SUSTAINABILITY COMMITTEE24 |
| 9.1 CHIEF EXECUTIVE OFFICER25 |
| 9.2 CONTROL, RISKS AND SUSTAINABILITY COMMITTEE 25 |
| 9.3 INTERNAL AUDIT MANAGER27 |
| 9.4 ORGANISATION MODEL AS PER LEGISLATIVE DECREE NO. 231/200127 |
| 9.5 INDEPENDENT AUDIT FIRM 29 |
| 9.6 CORPORATE FINANCIAL REPORTING OFFICER AND OTHER COMPANY ROLES AND FUNCTIONS 29 |
| 9.7 COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM……………………………………………………………………………………………………………………………………………29 |
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| 10.HOLDINGS OF DIRECTORS AND TRANSACTIONS WITH RELATED PARTIES 30 | |
| 11 BOARD OF STATUTORY AUDITORS 31 | |
| 11.1 APPOINTMENT OF STATUTORY AUDITORS31 | |
| 11.2 COMPOSITION AND FUNCTIONING (as per Article 123-bis, paragraph 2, letters d) and d-bis) CFA) 31 |
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| 12. RELATIONS WITH SHAREHOLDERS35 | |
| 13. SHAREHOLDERS' MEETINGS (as per Article 123-bis, letter i) and paragraph 2, letter c), CFA35 | |
| 14. FURTHER CORPORATE GOVERNANCE PRACTICES (as per Article 123-bis, paragraph 2, letter a), CFA)36 |
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| 15. CHANGES SUBSEQUENT TO THE YEAR-END. 36 | |
| 16. CONSIDERATIONS ON THE LETTER OF THE CHAIRPERSON OF THE CORPORATE GOVERNANCE COMMITTEE36 |
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| TABLE 1 - INFORMATION ON THE OWNERSHIP STRUCTURE AT 16/03/2022……………………………………38 | |
| TABLE 2 - STRUCTURE OF THE BOARD OF DIRECTORS……………………………………………………………………….39 | |
| TABLE 3 - STRUCTURE OF THE INTERNAL COMMITTEES…………………………………………………………………….40 | |
| TABLE 4 – STRUCTURE OF THE BOARD OF STATUTORY AUDITORS…………………………………………………….41 ATTACHMENT 1 42 |
Elica S.p.A. (also "Elica" or the "Company") is a joint-stock company structured with a traditional governance model. It has been listed on the MTA STAR segment of Borsa Italiana S.p.A. since November 2006. Its governance model is in line with the principles of the Corporate Governance Code, approved in January 2020 (the "Code").
Elica S.p.A is defined as an SME pursuant to Article 1, paragraph 1, letter w-quater.1 of Legislative Decree No. 58/98 ("Consolidated Finance Act" or "CFA") and Article 2-ter of Consob Resolution No. 11971/1999 and subsequent amendments and supplements ("Issuers' Regulation"); at December 31, 2021, the capitalisation of the Company was Euro 230,811,606 (63,322,800 shares for a value per share of Euro 3.645).1 Elica also falls within the definition of a "company with concentrated ownership" as referred to in the Code.
The Company's Board of Directors plays a pivotal role in defining the Company's strategies and processes in order to achieve the key objective of sustainable success, seeking to create long-term value for the benefit of stakeholders. The ways in which the Board interprets this role are set out in this report, and specifically in section 4.1.
In terms of sustainable success, Elica publishes the non-financial statement pursuant to Legislative Decree No. 254/2016, which is a mandatory requirement (see www.elica.com/corporation/it/investorrelations/bilanci-e-relazioni). In addition, it has launched an ESG project that includes business strategies designed to create long-term value for the benefit of shareholders, while taking into account the interests of other relevant stakeholders.
This report illustrates, in accordance with Article 123-bis of the CFA, the Corporate Governance system adopted by Elica S.p.A. in the year 2021 and updated at March 16, 2022, in line with the recommendations of the Code.
In addition, the present report will be published on the website of the Company https://elica.com/corporation (Corporate Governance section).
Amount of subscribed and paid-in share capital: Euro 12,664,560. Classes of shares that make up the share capital: 63,322,800 ordinary shares, with a nominal value of Euro 0.20 each (see "TABLE 1 – INFORMATION ON THE OWNERSHIP STRUCTURE AT 31/12/2021"). Elica has not issued other share classes at the date of this Report, or convertible financial instruments which confer newly-issued share subscription rights.
The By-Laws do not contain any restrictions on any type of share transfer.
The significant shareholdings are indicated in "TABLE 1 – INFORMATION ON THE OWNERSHIP STRUCTURE AT 31/12/2021"based on the information available to the Company at March 16, 2022.
1 See also the list of SMEs published by Consob on its website http://www.consob.it/web/area-pubblica/emittenti-quotati-pmi.
The Company has not issued shares which confer special controlling rights. No special powers exist and the By-Laws do not provide for shares with the right to more than one vote.
Not applicable.
The By-Laws do not contain any restrictions on voting rights.
In accordance with Article 122 of the CFA and Article 129 of the Issuers' Regulation, on July 24, 2019, FAN S.r.l., with registered office in Rome, via Parigi No. 11 and TAMBURI INVESTMENT PARTNERS S.p.A., with registered office in Milan, via Pontaccio No. 10, signed an agreement concerning 42,674,146 ordinary Elica S.p.A. shares, with voting rights, representing 67.391% of the share capital, broken down as follows:
The provisions of the Agreement shall apply to the shares referred to in points (a) and (b).
The Agreement also contains some provisions relating to the governance of Elica S.p.A. (the "Shareholders' Agreements"), such as the right to the appointment, for the entire duration of the Agreement, of a member of the Board of Directors of Elica.
The Agreement, which entered into force on July 26, 2019, extends until its third (third) anniversary, without prejudice to the additional provisions relating to renewal and withdrawal contained in the Agreement.
The key information regarding the Shareholder Agreements was published as per Article 130 of the Issuers' Regulation on Elica S.p.A.'s website, https://elica.com/corporation/it/corporategovernance/altridocumenti and on the website of the authorised storage mechanism at .
This did not impact control over Elica which, as per Article 93 of the CFA, is held by Mr. Francesco Casoli, Chairperson of the Board of Directors of the Company.
Agreements are in place of a commercial and financial nature and/or concerning investments of the Company in its subsidiaries, of a confidential nature, which provide, among other matters, for the right to withdrawal or to purchase/sell shares of the subsidiaries to the other contracting party, in the case of change of control of the Company. The resolution of an individual agreement would not significantly impact the Company.
2After signing the Shareholders' Agreement, TIP's holding increased, see TABLE 1 - "INFORMATION ON THE OWNERSHIP STRUCTURE AT 31/12/2021".
The Company By-Laws do not provide for exceptions to the passivity rule pursuant to Article 104, paragraphs 1 and 1 of the CFA, nor the application of the neutralisation rules pursuant to Article 104-bis, paragraphs 2 and 3 of the CFA.
At the date of the Present Report, the Board had not been granted powers to increase the share capital under Article 2443 of the Civil Code.
The Company, in accordance with Article 8.4 of the By-Laws, may issue non-convertible and convertible bond loans or with warrants, in accordance with Articles 2410 subsequent of the Civil Code.
The Board of Directors may also issue non-convertible bonds within the limits set out in Article 2412 of the Civil Code and convertible within the limits set by Article 2420-ter of the Civil Code.
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With reference to the purchase of treasury shares, the Shareholders' Meeting of April 29, 2021 of Elica approved, in accordance with Article 2357 and 2357-ter of the Civil Code, the procedures and delegated powers to the Board of Directors of the Company to purchase (for a period of 18 months) and utilise (without time limits) ordinary shares of the Company, establishing the manner of completion and delegating to the Board of Directors the power to take any necessary actions in order to give effect to resolutions in accordance with applicable laws.
At March 16, 2022, the Company did not hold treasury shares.
The Shareholders' Meeting called for the approval of the 2021 Annual Accounts will, among other things, be requested to renew the approval for the purchase and utilisation of treasury shares. Acceptance of the proposal would result in therefore, among other issues, the withdrawal of the previous authorisation granted on April 29, 2021.3
The Company is not subject to management and co-ordination pursuant to Art. 2497 and subsequent of the Civil Code. This conclusion derives from the fact that the controlling shareholder does not carry out management activities within the company and, although exercising voting rights at the Shareholders' Meeting, does not have any involvement in the financial, production or strategic programmed of the Company, which is governed by a Board of Directors responsible for operating control.
The Company's Board of Directors has also appointed an independent CEO for ordinary operational management.
With effect from July 2019, Tamburi Investments Partners ("TIP") acquired a minority interest in the Company which, at the date of the Report, amounts to 20.220% of Elica's capital.
The Company however continues to carry out its operations through a totally autonomous and independent decision-making process; it has independent decision-making capacity with customers and suppliers and independently manages its treasury in accordance with the business purpose.
The disclosure required by Article 123-bis, paragraph 1, letter i) of the CFA are contained in Section 1 of the Remuneration Report, while the disclosure required by Article 123-bis, paragraph 1, letter l) first part of the CFA are illustrated in the subsequent section "4.2 Appointment and Replacement" of the present Report.
3 For further information, reference should be made to the Report of the Board of Directors of Elica S.p.A. relating to the proposal to authorise and utilise Treasury Shares of March 16, 2022, available on the Company website.
The information required by Article 123-bis, paragraph 1, point (l) in part 2 of the CFA is detailed in section 13 below - "MEETINGS".
The Company adopted the new Corporate Governance Code approved in January 2020 and applicable from financial year 2021.
How each principle of the Code is applied in practice is set out in the relevant sections of this Report or through references to other documents which are also published.
The Corporate Governance Code is available on the website of Borsa Italiana S.p.A.: www.borsaitaliana.it/comitato-corporate-governance/codice/2020.pdf.
The Company, and its subsidiaries, are not subject to laws in force outside Italy which affect the Corporate Governance structure of Elica.
Elica's Board of Directors plays a key role in pursuing the Company's sustainable success and that of the Group it heads. In 2021, with the support of the Control, Risks and Sustainability Committee, the Board of Directors was involved in creating an ESG project. Its aim was to successfully integrate sustainability into the business and effectively manage it, and to improve relations with external stakeholders, in collaboration with management. The Board of Directors systematically monitors project implementation and relevant ESG issues at each meeting.
In addition, in 2021, in accordance with Recommendation No. 3 of the Code, the Board evaluated and approved the "ELICA S.P.A. SHAREHOLDER COMMUNICATION POLICY", available at www.elica.com/corporation/it/corporate-governance.4
In March 2021, the Board of Directors gave a positive assessment of the way in which the corporate system operates to carry out the Company's activities and pursue its strategies. Therefore, it proposed no changes to it.5
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In accordance with Article 19 of the By-Laws, the Board of Directors are attributed the widest powers for the management of the Company and the faculty to carry out all acts and operations considered necessary
4 See also Section 12 "Relations with Shareholders."
5 See also Section 13 - "Shareholders' Meetings"
for the reaching of the corporate objectives, except in the case of those attributed by law to the Shareholders' Meeting or deriving from specific authorisations required by the By-Laws.
The Board of Directors also have the following duties:
a) merger and spin-off resolutions in the cases established by articles 2505 and 2505-bis, of the Civil Code; b) the opening, transfer and closing of secondary offices;
c) the indication of which Directors may represent the Company;
d) the issue of non-convertible bonds within the limits set out in Article 2412 of the Civil Code and convertible within the limits set by Article 2420-ter of the Civil Code;
e) the reduction of the share capital in the case of return of shares by shareholders;
f) updating the company By-Laws and the Shareholders' Meeting regulation in accordance with law;
g) the transfer of the registered office to another municipality in the national territory;
h) the reduction of the share capital where losses are greater than one-third of the share capital and the Company has issued shares without nominal value.
Elica's Board of Directors is also responsible for:
6 See also Section 9, "INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL, RISKS AND SUSTAINABILITY COMMITTEE," below;
India Private Limited and the transactions that led to the establishment of the Italian subsidiary EMC FIME S.r.l., producing electric motors and ventilation systems;
For further powers assigned to the Board concerning: composition, functioning, appointment and selfassessment, remuneration policy and the Internal Control and Risk Management System, please see the following sections: 4.3, 4.4, 7.1, 8 and 9.
The appointment and replacement of Directors is governed by Article 16 of the By-Laws, which provides for slate voting. This mechanism was latterly adopted on the renewal of the Board of Directors by the Shareholders' Meeting of April 29, 2021.
The provisions for the appointment of the corporate boards are summarised below.
According to the provisions of the current By-Laws, the appointment of the Board of Directors and the Board of Statutory Auditors is carried out through the voting of slates, in accordance respectively with Articles 16 and 24 of the By-Laws.
Only shareholders who individually or collectively hold at least 2.50%8 of the share capital have the right to present slates or a differing minimum percentage provided for or allowed by regulations.
For the inclusion of the Directors to be elected, consideration is not taken of the slates which have not obtained at least half of the votes required for the presentation of the slates. All those entitled to vote shall vote for only one slate.
Directors must have the requisites of eligibility, professionalism and independence provided by law and the other applicable directives.
Statutory Auditors must also have the requisites of eligibility, professionalism and independence provided by law and the other applicable directives. Specifically, in relation to the professionalism requirement covered by article 1 of Justice Ministerial Decree of March 30, 2000, No. 162, the following fields are deemed to be closely related to the Company's activities: that relating to commercial or tax law, the economy and corporate finance, the manufacturing and design sector, as well as the activities listed in Article 2 of the By-Laws, to which reference should be made.
Except in the situation of ineligibility established by law, no person who covers offices of Statutory Auditor in five or more other companies listed on regulated markets may fulfil the role of Statutory Auditor and if nominated must vacate the office, with exclusion of the subsidiary companies as well as the parent companies and the companies controlled by such, or anyone who covers offices of direction and control in a number higher than that provided by law and the regulations in force.
The presentation of slates for the appointment of the Board of Directors will occur in the manner established by, and in compliance with, Article 16 of the By-Laws, to which reference should be made.
The presentation of slates for the appointment of the Board of Statutory Auditors will occur in the manner established by, and in compliance with, Article 24 of the By-Laws, to which reference should be made.
In relation to the appointment of the Board of Statutory Auditors, in the case in which twenty-five days prior to the Shareholders' Meeting only one slate is presented, or only slates related to it are presented, in accordance with Article 144-sexies, paragraph 5 of the Issuers' Regulation, slates may be presented up until the third subsequent day to this date or any other date stipulated by the applicable regulation. In this case, the percentage threshold established for the presentation of the slate is reduced by half (1.25% of the share capital).
The slates presented that do not comply in full with the By-Laws shall be considered as not presented. The By-Laws do not provide for the possibility of submitting slates for the outgoing Board. However, the Company has long adopted the best practice that has recently become common in Italy too, where the outgoing Board of Directors provides guidance on the composition of the Board.
7 For details, see Section 5 - "MANAGEMENT OF CORPORATE INFORMATION" and Section 12 "RELATIONS WITH SHAREHOLDERS".
8 The percentage indicated coincides with the percentage holding established by Consob in accordance with Article 144-quater of the Issuers' Regulation.
The Company assures that the shareholders are provided adequate information on the profile of the candidates for the offices of Director and Statutory Auditor in the manner set out in the aforementioned Articles, to which reference is made.
With reference to the method of election of the Board of Directors through the "voting of slates", the By-Laws provide that:
a) from the slate which obtained the highest number of votes (hereafter the "Majority Slate") all of the members of the Board of Directors are elected except one, as established by the Shareholders' Meeting, according to the progressive order of the slate;
b) from the slate which obtained the second highest number of votes (hereafter the "Minority Slate"), which is not connected in any way, even indirectly, with the shareholders who have presented or voted on the Majority Slate, the first candidate listed is elected to the Board of Directors.
If, with the candidates elected through the manners stated above, an adequate number of Independent Directors is not elected, however not lower than the amount provided by law, or if the gender balance provisions have not been complied with (including the rounding upwards of the number of members of the Board of Directors in the case of the application of the gender balance quotas not resulting in a full number), the non-independent candidate of the over-represented gender elected last on the progressive numbering of the Majority Slate will be replaced by the first independent candidate of the other gender, according to the respective progressive numbering, not elected on the same Majority Slate.
In the case in which the Majority Slate no longer presents non-elected candidates with the necessary requirements or in the case in which the Majority Slate does not contain a sufficient number of candidates to form the Board in accordance with that established by the Shareholders' Meeting, the meeting proceeds with their replacement/supplementation by Shareholder majority.
The candidate listed in first position on the Majority Slate is elected as Chairperson of Board of Directors. Should two or more slates receive the same number of votes, a second vote of the Shareholders' Meeting is taken, with only those tied taking part.
In the case in which only one slate is presented or voted upon, or where only one slate has received at least half of the required votes for presentation, all Directors will be elected from the slate, in compliance with the provisions concerning the composition of the Board of Directors.
Where no slate is presented, the Shareholders' Meeting votes by Shareholder majority, without following with the above stated procedure, however in such a manner that the applicable regulations concerning the composition of the Board of Directors are complied with.
In relation to the appointment of the Board of Statutory Auditors, considering also compliance with the applicable regulations concerning gender equality (including rounding down where necessary in relation to the under-represented gender), the following is applied:
1) from the slate which obtained the highest number of votes in the Shareholders' Meeting (hereafter the "Majority Slate"), based on the progressive order on the slate, two standing members and one alternate member are elected;
2) from the slate which obtained the second highest number of votes (hereafter the "Minority Slate") and which, in accordance with current regulations, was presented and voted upon by shareholders who are not connected in any way, even indirectly, with the shareholders who have presented or voted on the Majority Slate, based on the progressive order listed on the slate, one Statutory Auditor and one Alternate Auditor is elected.
The Chairperson of the Board of Statutory Auditors shall be the first candidate on the Minority Slate.
In the case of a tie in the number of votes between two or more slates, the eldest candidates shall be deemed elected.
If voting does not result in compliance with the applicable legal and regulatory provisions in relation to gender balance (including rounding downwards where necessary in relation to the under-represented gender), the elected Statutory Auditor candidate appearing last on the Majority Slate of the overrepresented gender is excluded and will be replaced by the next candidate from the same slate belonging to the other gender.
In the case in which the Majority Slate no longer presents non-elected candidates with the necessary requirements, or in the case in which the Majority Slate does not contain a sufficient number of candidates to form the Board of Statutory Auditors, the Shareholders' Meeting proceeds with their replacement/supplementation by Shareholder majority.
In the case of the replacement of a Statutory Auditor, the Alternate Auditor from the same slate joins the Board, on condition that the applicable legal and regulatory provisions are complied with.
The previous provisions in relation to the election of Shareholder auditors are not applied to Shareholders' Meeting for which only one slate is presented or voted upon or in the shareholders' meetings which provides in accordance with law for the appointment of Shareholder auditors and/or Alternate Auditors necessary to complete the Board of Statutory Auditors following replacement or resignation. In this case, the Shareholders' Meeting votes by majority.
The By-Laws are available on the website https://elica.com/corporation, in the Corporate Governance section, the Borsa Italiana S.p.A. website and at the registered office.
In accordance with the provisions of Principle V of the Code, the Company's Board of Directors consists of Executive and Non-Executive Directors with the skills and professionalism appropriate to their duties. As per Article 16 of the By-Laws, the Company is administered by a Board of Directors made up of between 5 and 11 members, including non-shareholders.
On April 29, 2021, the Shareholders' Meeting of the Company conferred administration to a Board of Directors comprising seven members, establishing the conclusion of mandate as the approval of the 2023 Annual Accounts.
The Shareholders' Meeting of April 29, 2021 was presented with a single slate by the majority shareholder FAN S.r.l. for the appointment of the Directors who proposed as Directors:
Francesco Casoli, Giulio Cocci, Elio Cosimo Catania, Angelo Catapano, Liliana Fratini Passi, Monica Nicolini and Susanna Zucchelli.
The result of the voting of Shareholders present at the Shareholders' Meeting was as follows:
votes in favour of Slate 1 – 51,645.667, equal to 99.920212% of votes;
votes against Slate 1 - 13,321, equal to 0.025772 of votes.
The candidates listed above were therefore elected and Francesco Casoli took the role of Chairperson. The Board of Directors delegated powers to Francesco Casoli and Giulio Cocci, appointing the latter Chief Executive Officer.
The composition of the Board of Directors has remained unchanged up until the date of this Report:
As at April 29, 2021, the Board consisted of: Francesco Casoli (Chairperson), Giulio Cocci (Chief Executive Officer), Giovanni Tamburi (Independent Director), Elio Cosimo Catania (Independent Director), Cristina Finocchi Mahne (Independent Director), Barbara Poggiali (Independent Director), Federica De Medici (Independent Director).
From January 1, 2021 to March 16, 2021, the role of Managing Director and Chief Executive Officer was held by Mauro Sacchetto. Following his resignation for personal reasons, effective March 16, 2021, Giulio Cocci was co-opted to replace him. The appointment of Giulio Cocci was in accordance with the Executive Director succession plan adopted by the Company, on the conclusion of a selection process and on the proposal of the Appointments and Remuneration Committee, reflecting its opinion and follows approval by the Board of Statutory Auditors.
In the current composition of the Board, the number and skills of the Non-Executive Directors are such as to ensure that they have a significant weight when Board resolutions are taken and to ensure that management is effectively monitored.
All Non-Executive Directors were independent after their appointment; the assessment of independence was carried out using the procedures set out in Recommendation No. 6 of the Code.
When submitting their applications, all members stated that there were no grounds that would give rise to their ineligibility, revocation of the office or incompatibility, and that they met the requirements imposed by law for holding the office, including the independence requirements, pursuant to both the Code and the CFA.
No Director who qualified as an Independent Director disclosed that he or she had any material business, financial or professional relationships within the meaning of Recommendation No. 7(c) or (d) of the Code. The Directors who qualified as independent confirmed that they do not have any direct or indirect shareholdings in the Company, nor had they had any in the previous year.
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Brief curricula vitae of the Directors in office at March 16, 2022 are presented below.
Francesco Casoli: Chairperson of the Board of Directors of the Company from April 12, 2006; previously he was the Chief Executive Officer. He is the son of Ermanno Casoli, founder of Elica S.p.A., in which he has worked since 1978; in 1990, at just 29 years of age, he was appointed Chief Executive Officer of the Company. He is the Chairperson and Chief Executive Officer of FAN S.r.l., the Sole Director of Fintrack S.p.A. and Vice-Chairperson and Director of the Ermanno Casoli Foundation. He is also Sole Director of Ermanno S.r.l. and Director of Fastnet S.p.A. (until November 21, 2021), Sole Director of SAFE S.r.l. and Chairperson of the Board of Directors of La Ceramica. He is a member of the Board of Directors of Polo del Gusto - Illy Group and of the Board of Directors of Fileni Alimentare S.p.A.. From June 2005 to March 2006, he was the Chairperson of Assindustria in the Province of Ancona. At the elections of April 9 and 10, 2006, he was elected to the Senate of the Italian Republic and re-elected in the elections of 2008, leaving the house in March 2013. In June 2017, he was knighted "Cavaliere del Lavoro" by the President of the Italian Republic. Between August 2013 and March 2015, he was a Director of the Finish company Efore PLC, listed on the Nasdaq Omx Helsinki OY (small cap segment). Since May 2019 he has been Chairperson of AIDAF (Italian Association of Family Businesses).
Giulio Cocci: Senior Executive with over 20 years' international experience in complex multinational companies in the roles of Group CFO, Corporate Controller and I.R. An Economics and Business graduate from the "Giorgio Fuà" Faculty of Economics at Marche Polytechnic University, he has a thorough knowledge of operational and commercial processes, restructuring and turnaround, acquired through roles of increasing responsibility in the UK, Italy, Spain, Turkey and Russia. Hands-on, results-oriented, able to develop and build highly-motivated teams. He was Group Chief Financial Officer at Elica S.p.A. in the from 2019 to 2021; Group Controlling & IR Director, Elica S.p.A. (2018 - 2019); CFO Russian Federation & CIS, Whirlpool Corp. (2014 - 2017); Regional Finance Director East EU, Indesit Company (2013 - 2014); CFO Turkey, Indesit Company (2011 - 2013); CFO & Back Office Manager Spain, Indesit Company (2009 - 2011); Regional Controller Italy, Turkey & China, Indesit Company (2007 - 2009); Regional Controller UK Area, Indesit Company (2003 - 2007).
Angelo Catapano: Entrepreneur and manager, with more than 30 years' experience in financial and strategic consulting. His main focus is seeking to align the corporate aspects of business growth and development with creating value - including financial value - for partners and stakeholders. He graduated cum laude in Economics from the University Federico II of Naples, and obtained an MBA from the School of Business Administration (SDA) at Bocconi University. Since February 2021, Senior Partner and Co-Founder of Itaca Equity, an investment company - launched with Sergio Iasi and Massimo Lucchini and Tamburi Investment Partners (TIP), and involving 42 Italian Family Offices. The company's purpose is to provide financial support to companies in difficulty that need capital and/or strategic/industrial repositioning. From 1994 to 2020, founder, executive manager and senior advisor in strategic consulting companies (Long Term Partners) and financial consulting companies with a focus on M&A and Private Equity (mainly Medinvest S.p.A.). His assignments also included financial companies and Private Equity funds (Medinvest International ScA and Progressio II Fund). Previously, he held positions in Industrial Groups (Ferruzzi/Montedison Group, then Enimont Group and, at the beginning of his professional career, SIR Group.
Liliana Fratini Passi: A graduate in Economics from the University La Sapienza of Rome, she obtained a master's in Economics and Management of Financial and Insurance Intermediaries from the LUISS Business School in Rome. In over twenty years she has gained significant experience in the digitisation of financial and payment services. She is the author of numerous articles and papers, including in the international press, a key note speaker, and a recognised opinion leader in Transaction Banking, Fintech, Electronic Payments and Open Banking. She has served as an expert on electronic invoicing for the European Commission and has chaired the Trade Facilitation Table at the Ministry of Economic Development. She is General Manager of CBI S.c.p.a. and Independent Director of Banca Progetto S.p.A. Internationally, she is UN/CEFACT Vice President and Italian representative at ISO Technical Committee 68 Financial Services and ISO 20022 RMG. In 2021, among other achievements, she was included by Forbes Italy among the "100 winning women" and received an award in the "Women in Finance Italy Awards" in the "Woman in FinTech of the Year" category.
Elio Cosimo Catania: A graduate in Engineering from the University La Sapienza of Rome, he obtained a master's in management science from the 'Sloan Fellow School' of the Massachusetts Institute of Technology (MIT) in Boston. He spent part of his career at IBM, rising to senior positions such as President and CEO of IBM Latin America, Southern Europe and Italy and member of the global Management Council. He has been Chairperson and CEO of Ferrovie dello Stato, Chairperson and CEO of Azienda Trasporti Milanesi (ATM) and Deputy Vice-Chairperson of Alitalia. Former member of the Board of Directors of Luiss, Bnl, Intesa San Paolo, Telecom Italia. He has served as Chairperson of Confindustria Digitale, Vice-Chairperson of Cnel and Advisor to the Minister for Economic Development for the drafting of the NRRP. He is President of Innovatec, a listed company in the energy field, and President of Quid S.p.A. Technology company and member of the Board of the listed company He is Advisor to the Minister for Agricultural Policies.
He is a member of the Board of Assonime, of the Council for Relations between Italy and the United States (Crisu), and of the Board of Directors of Fondazione Asphi Onlus. He received the Cavaliere del Lavoro knighthood in 2001.
Monica Nicolini: born in Pesaro (PU) on April 16, 1963, Director on the Board and Lead Independent Director of Elica S.p.A. (FTSE Italia STAR), formerly Statutory Auditor. A court of cassation lawyer with experience in the field of M&A, Private Equity and Capital Markets for national and international groups, and in the field of credit with consulting assignments for leading banking groups. Lecturer on courses and seminars and speaker at conferences on corporate issues. Board member of the Ermanno Casoli Foundation, the Pesaro Nuovo Cinema Foundation and the Rossini Opera Festival Foundation. Chairperson of the ABIO Supervisory Board (hospital children's association) and member of the management board. Member of the Bellisario Foundation and WCD Women Foundation Corporate Directors.
Susanna Zucchelli: A graduate in Modern Foreign Languages and Literatures from the University of Bologna, she has completed several specialist courses in commerce and marketing, business management and leadership. She holds a two-year Executive MBA in business management from Profingest Management School in Bologna.
She has significant experience in numerous companies, where she held many different roles in Marketing, Communications, Business Development and Training. She was Head of Marketing and Communication at Marconi Bologna Airport S.p.A.; Sales and Marketing Director of Save S.p.A., Marco Polo Venice Airport; and Chief Executive Officer of Geasar S.p.A., the company that manages Costa Smeralda Airport. She has been a member of the Board of Directors of BolognaFiere S.p.A., SEA S.p.A - Milan Airports, Interporto Bologna S.p.A.; she has been Chairperson of Promobologna Scarl; member of the Executive Committee and Board of Directors and temporary lecturer at the Faculty of Economics, University of Sassari. Member of the Assaeroporti Board of Directors; Chairperson of the ACI "Marketing and Communication" European Committee, Vice-Chairperson and Director of Valore D; member of the President's Council of ANCE Emilia; member of the Board of Directors of Amici Hospice Seragnoli; Director of Namaste-Onlus; Director of FAI. At the Hera-Hera S.p.A. Group she has held various roles: Diversity Manager, General Manager, Director of Customer Technical Department, Managing Director, and her current position as Director of the Water Department. She is a member of the Board of Directors at Valsoia S.p.A..
Pursuant to Principle VII. of the Code, Elica applies diversity criteria, including gender criteria, for the composition of the Board of Directors, in compliance with the prime objective of ensuring sufficient skill levels and professionalism among its members. The Company has adopted a "Diversity Policy" setting out the diversity criteria generally adopted by Elica with regards to the composition of the corporate boards, including: age, gender, training and professional development. The criteria set out in the policy take account of the provisions of the Code and are utilised by the Board of Directors for the replacement of its members and the renewal of the Corporate Boards.
In implementing this policy, approved by the Board on November 13, 2017, on the proposal of the Appointments and Remuneration Committee and most recently updated on February 12, 2021, the Company seeks to ensure, on the appointment and replacement of Directors, the emergence of as diverse a range of candidates as possible in view of company requirements, establishing the conditions for "Group think", supporting therefore debate and potentially improving the quality of Board decision-making. In determining the criteria, the Company takes into account as many elements of diversity as possible with the aim of ensuring that the corporate board includes a sufficient diversity of viewpoints and skills. These are required for a good grasp of the business, risks, the long-term opportunities inherent in the company's activities and the impact of its activities on the interests of the various stakeholders.
The Appointments and Remuneration Committee, in drawing up its opinions for the Board of Directors with regards to the size and composition of the Board and in expressing recommendations with regards to the professional roles whose presence on the Board are considered beneficial (in compliance with and in implementation of the "Executive Director succession plan", where applicable), takes into consideration the "Diversity Policy" and at least adopts the criteria indicated therein. The Board, having assessed the proposals of the Appointments and Remuneration Committee, taking account of the "Executive Director succession plan", where applicable, the "Diversity Policy" and the results of the Board Evaluation, proposes candidate profiles considered most suitable for the Board.
In order to promote gender balance, one step Elica has taken is to amend its By-Laws, requiring two-fifths of the candidates of the under-represented gender in the composition of the Board; the Company's current Board of Directors consists of three members from the under-represented gender out of the seven.
When the new Chief Executive Officer Giulio Cocci was appointed on March 16, 2021, the Chairperson of the Appointments and Remuneration Committee noted that the candidacy had been consistent with the Diversity Policy adopted by the Board. Additionally, the Company wished to ensure that shareholders interested in presenting slates for the re-appointment of the corporate board had information available to them on the diversity criteria and objectives pursued. Therefore, in the Board's report to the Shareholders' Meeting held on March 16, 2021 for the renewal of the Board of Directors, to which reference should be made, the Board invited shareholders wishing to present slates to meet the diversity criteria in the above report. The majority shareholder FAN S.r.l. declared it had taken into account the diversity criteria set out by the Board in the composition of the slate it presented.
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Equal treatment and opportunities are valued and pursued across the whole company organisation. With the aim of promoting equal treatment, the Group adopts policies that to provide safeguards in the areas of selection, training, remuneration rewarding and management career prospects. Elica Group companies have also set up reporting channels and penalties in the event that these policies are infringed.
Although Elica does not fall within the definition of a large company as defined by the Code, Elica's Board of Directors, in the Explanatory Report of the Board of Directors to the Elica Shareholders' Meeting called for April 29, 2021 for the appointment of the new Board, expressed its view on the maximum number of Director or Statutory Auditor appointments that may be considered compatible with the proper fulfilment of the role of Company Director, fixing at five the maximum number of offices of administration and control in other listed companies (including abroad).
The candidates for appointment, current members of Elica's Board of Directors, meet this requirement.
The Company is managed, under a traditional governance system, by a Board of Directors, which sets out the rules and procedures for its operation, partly in order to ensure effective management of Board information in compliance with Principle IX of the Code.
For the rules on the operation of the Board of Directors, please refer to Articles 16 et seq. of the By-Laws, available at www.elica.com/corporation/it/corporate-governance. In addition, in compliance with Recommendation No. 11. of the Code, Elica has adopted a Board of Directors' Regulation, most recently amended on February 12, 2021, containing the operating rules of the Board itself (and of its committees, where applicable and where not governed by the committees' specific regulations). This Regulation sets out the roles and functions of the Directors and the Secretary, the methods for setting the meetings calendar and agenda, the procedures and deadlines for pre-meeting information, the conduct of meetings and minute-taking.
The Board's documents are made available to the Directors and Statutory Auditors, in compliance with the Code and the Regulation, using procedures that guarantee the required confidentiality. It should be
noted that, under the Regulation, the confidentiality of information is not a justification for delay in making Council documents available; the Board considers that the deadline of five days before the date of the meeting for sending documents is reasonable, and it is generally complied with. In any case, during the meeting, the Chairperson ensures that it is possible to obtain further information regarding all the issues to permit full and proper evaluation of the facts presented for the Board's consideration.
In order to ensure that there is an accurate and agreed record of what was said at the meeting and the key content, the Secretary sends the minutes to the Directors and Statutory Auditors as soon as possible after the meeting. The version of the minutes that is produced in print is normally presented at the next Board meeting; in the meantime, any resolutions passed remain in force.
The Board of Directors periodically evaluates the adequacy of the Regulation and pre-meeting information provided, and has given it a positive evaluation, most recently at its meeting of February 10, 2022.
In accepting their appointment, the Directors have concluded that they can devote the necessary time to diligently carrying out the office they hold, taking into account the commitments of their own working or professional activities and the number of positions they hold in other companies. In addition to the formal Board meetings, the Directors ensure that they have sufficient time to study in depth issues of strategic importance for the Company and to contribute, each within their area of competence, to setting the objectives in line with the Code's principles.
TABLE 2 - STRUCTURE OF THE BOARD OF DIRECTORS and TABLE 3 - STRUCTURE OF THE COMMITTEES, indicate, respectively, attendances by Directors at the meetings of the Board of Directors and the Committees (Control, Risks and Sustainability Committee and the Appointments and Remuneration Committee) in the period from January 1, 2021 to December 31, 2021.
In the year 2021:
Minutes are kept of the Board and Committee meetings and the Chairpersons of each Committee reported upon such at the next appropriate meeting.
In relation to 2022, at the date of this Report, five meetings of the Board of Directors are scheduled, on the approval of periodic financial statements and on the Shareholders' Meeting. For further details, the corporate events calendar of the Company may be consulted on the website http://elica.com/corporation in the Investor Relations section.
Also with reference to the year 2022, the Appointments and Remuneration Committee and the Control, Risks and Sustainability Committee have met twice on February 3 and March 10. At least five meetings are scheduled for each Committee in the year 2022, with pre-set calendar dates taking account of the sequence of board meetings with respect to those of the Board of Directors.
The Chairperson of the Board of Directors liaises, with the Secretary's support, between the Executive and Non-Executive Directors and ensures the effective functioning of the Board's activities in accordance with Principle X of the Code. More specifically, the Chairperson:
Moreover, the Chairperson has systematically focused on initiatives to provide the management and control bodies, after their appointment and during their term of office, with adequate knowledge of the business sectors in which the Company operates, of corporate dynamics and changes to them. This has been partially in terms of pursuing sustainable success, as well as the principles of proper risk management and the applicable regulatory and self-regulatory framework (Recommendation No. 12 letter (d) of the Code). The COVID-19 pandemic had a significant impact on in-person meetings and events: however, two induction events were held at the Company's headquarters during 2021 and were attended by Directors and Statutory Auditors. In addition, at the time of their appointment, Directors and Statutory Auditors received an information book containing all relevant information about the business and corporate governance. Directors and Statutory Auditors keep a channel of communication with the Company constantly open to allow them both to share important decision-making issues in advance and to discuss matters of interest in depth outside Board meetings.
At the Board meeting of February 12, 2021, the results of the 2021 self-assessment, conducted by an independent third party, were presented to the Board at the proposal of the Appointments and Remuneration Committee. See Section 7, "SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS - APPOINTMENTS COMMITTEE," for details.
At Board meetings, Giulio Cocci - who, in addition to his role as Chief Executive Officer, oversees the Investor Relations function - reports on the progress and key content of the dialogue with Stakeholders, in compliance with Recommendation No. 3 of the Code.
Following that resolved by the Board meeting of April 29, 2021, the following powers were attributed to the Chairperson of the Board of Directors:
representation of the Company against third parties and in legal matters, general supervision of the strategic policies of the Company as well as all powers which the By-Laws attribute to the Board of Directors with the exception of those not legally delegable and the following powers which remain the exclusive remit of the Board of Directors:
approval of the annual budget;
purchase and/or sale of investments, businesses and business units, rental of businesses and/or business units, for a unitary amount above Euro 3,500,000.00;
provision of secured and non-secured guarantees, including atypical, for third party obligations of a unitary amount above Euro 3,500,000.00;
obtainment of loans of a unitary amount above Euro 5,000,000.00;
conclusion of leasing or rental contracts for a unitary amount above Euro 3,500,000.00;
purchase and/or sale of assets for a unitary amount above Euro 3,500,000.00;
purchase and/or sale of brands, trademarks and industrial property rights in general, as well as the conclusion of related licences;
appointment of the General Manager of the Company;
A further exception to the powers attributed to the Chairperson Francesco Casoli relates to the powers concerning that of "employer" as per Legislative Decree No. 81/2008, of person in charge of the protection of the environment pursuant to Legislative Decree No. 152/2006, of "holder" of the processing for Elica S.p.A. of personal data pursuant to Legislative Decree No. 196/03, of person in charge of the substitute storage pursuant to the DPCM of 3/12/2013, and subsequent amendments and additions; powers which have been attributed to the Chief Executive Officer of the company.
The unitary limits stated above include also several operations of the same nature classifiable by manner, terms or scope as a single operation.
In relation to all of the powers conferred, the Executive Chairperson will have the faculty to appoint powers of attorney for single acts or categories of acts.
The Board of Directors conferred the powers above to the Chairperson, in consideration of the role which the Chairperson has had and has in the growth of the Company and based on his experience and professionalism in the sector.
On the proposal of the Chairperson, the Board of Directors appointed Francesca Pisani, the Company's General Counsel, as Secretary of the Board. The appointment was formalised at the meeting of February 12, 2021 following an evaluation of the requirements concerning professionalism, independence and experience. Pursuant to the By-Laws, the Chairperson of the Board of Directors is responsible for appointing the Secretary; however, the Board's rules provide that, as a general rule, the Chairperson shall submit the appointment of the Secretary to the Board for consideration.
The Board's Regulation lays down the requirements and duties of the Secretary in accordance with the Code.
In 2021, the Board of Directors was supported by the Secretary in the organisation of its work. Specifically, the Secretary provided assistance to the Chairperson on activities associated with the proper functioning of the Board of Directors, including the activities referred to in Recommendation No. 12 of the Code and impartially provided the Directors with legal assistance and advice on Corporate Governance matters.
The Secretary also took the minutes of the meetings in accordance with the provisions of the By-Laws and the Board's Regulation.
In carrying out his/her activities, the Secretary is assisted by in-house staff in the company secretariat and, if necessary, by external consultants.
Giulio Cocci was appointed Chief Executive Officer of the Company on March 16, 2021 and confirmed as a Director by the Shareholders' Meeting of April 29, 2021.
By resolution of April 29, 2021, the Board of Directors confirmed Giulio Cocci in his role as Chief Executive Officer, with the following powers:
representation of the Company against third parties and in legal matters, as well as all powers which the By-Laws attribute to the Board of Directors with the exception of those of extraordinary administration, those not legally delegable and the following powers which remain within the exclusive remit of the Board of Directors:
approval of the annual budget;
purchase and/or sale of investments, businesses and business units, rental of businesses and/or business units, for a unitary amount above Euro 3,500,000.00;
The unitary limits stated above also include several operations of the same nature classifiable by manner, terms or scope as a single operation.
In relation to all of the powers conferred, the Chief Executive Officer will have the faculty to appoint powers of attorney for single acts or categories of acts.
The Chief Executive Officer is the primary party responsible for the management of the issuer.
The Chief Executive Officer is also assigned the role of appointed officer for the protection of the environment, in accordance with Legislative Decree No. 152/2006 and associated decrees, with the power to delegate, as well as all the powers, none being excluded, concerning the programming, organisation, management and control of the company in relation to occupational health and safety and, in particular, the powers of organisation and selection and of prevention and protection measures in order to ensure the full discharge of legal and corporate obligations in implementing safety measures and associated control, guaranteeing full and prompt compliance and thorough observance by the company and all employees of rules concerning workplace safety and hygiene, suitably informing and instructing personnel in charge and all specialists, and assiduously controlling the facilities, offices and external building sites with full and total decision-making autonomy and independence, as well as with full and unlimited powers of expenditure in relation to all that is necessary to equip the company, facilities, offices and external building sites with all the suitable resources for the protection of the safety and health of workers and third parties required by laws on the security and protection of workers' health, enacted and to be enacted in future and, in particular, by Legislative Decree No. 81/2008 and subsequent amendments and supplements, and associated laws.
The Chief Executive Officer assumes the role and functions of "employer", pursuant to and in accordance with Article 2, paragraph 1, letter b) of Legislative Decree No. 81/2008 concerning the prevention of accidents and the protection of workers' health at the workplace, with reference to all the company's workers and work premises, wherever they are located, and in any case where the company has legal responsibility or legal title of the sites and organisation, with powers to delegate all the obligations to be complied with and the requirements to be implemented, in compliance with the provisions of Legislative Decree No. 81/2008 and the organisation, management and control model of Elica S.p.A. as per Legislative Decree No. 231/2001, with the exception of those that cannot be expressly delegated pursuant to Article 17, letters a) and b) of Legislative Decree No. 81/2008. Such powers of delegation, where exercised, should comply with the parameters indicated in Article 16 of the mentioned Decree.
In addition, the Chief Executive Officer is attributed all the powers, within the provisions of law, of the "holder" for the treatment by Elica S.p.A. of personal details in accordance with Legislative Decree No. 196/03 and subsequent amendments and integrations, including the representation of the Company with third parties and the Privacy Guarantee.
The Chief Executive Officer is also appointed electronic storage manager, granting him/her full decision-making powers and without expenditure limits, with the power to delegate some of his duties to persons with appropriate professional and technical characteristics.
Please refer to Section 4.5 above, "ROLE OF THE CHAIRPERSON OF THE BOARD OF DIRECTORS". 9
In order to guarantee transparency and proper disclosure within the Company relating to the activities carried out by the Directors with operational powers, and in conformity with the By-Laws and Board Regulations, the Executive Directors report in a timely manner, and at least quarterly, to the Board of Directors and the Board of Statutory Auditors in relation to the activities carried out in execution of the powers delegated, on the general performance and on the outlook, as well as on significant operations for size or characteristics carried out by the Company and its subsidiaries. The company boards also report upon any atypical and unusual transactions with related parties and/or which may cause potential conflicts of interest, on their own behalf or of third parties, as well as concerning the strategic plan, industrial and financial projects of the Company and of the Group.10
In 2021, the Executive Directors reported systematically to the Board in relation to the powers delegated to them.
No other Directors apart from those indicated in the present Section 4.6 are considered as Executive Directors within the Company.
Specifically, there are no other Directors on the Board who have been granted management powers by the Board or who hold the office of Chairperson, Chief Executive Officer or management positions within the Company, a subsidiary or the parent company.
When submitting their applications, all members of the Board of Directors stated that there were no grounds that would give rise to their ineligibility, revocation of the office or incompatibility, and that they met the requirements imposed by law for holding the office, including, where applicable, the independence requirements pursuant to the Code and the Consolidated Finance Act ("CFA").
Directors who qualify as Independent Directors have undertaken to maintain their independence during their term of office and, if appropriate, to resign.
On the appointment of the current Board of Directors on April 29, 2021, the Board - based on the statements made by each Director and the information available - verified the requirements relating to each of them and, specifically, the independence requirements in relation to Directors Angelo Catapano, Elio Catania, Liliana Fratini Passi, Monica Nicolini and Susanna Zucchelli. The assessment found them to be independent pursuant to the CFA and the Code. Francesco Casoli, Chairperson of the Board of Directors, and Giulio Cocci, Chief Executive Officer, do not qualify as independent.
At the beginning of its term of office, the Board also established quantitative and qualitative criteria for defining the significance of commercial, financial and professional relationships and additional remuneration for the purposes of the independence assessment, in accordance with Recommendation No. 7 of the Code. More specifically, the Board assessed the significant relations and additional remuneration of Directors and Statutory Auditors where (i) this exceed the total amount of fixed annual
9 The Chairperson of the Board of Directors, Francesco Casoli acts as the Sole Director of Fintrack S.p.A. and is the Executive Director of FAN S.r.l.
10 For further information on the procedures concerning transactions with related parties and/or those which may give rise to potential conflicts of interest, reference should be made to the subsequent section 10. "HOLDINGS OF DIRECTORS AND TRANSACTIONS WITH RELATED PARTIES", in addition to the "Procedure for Transactions with Related Parties", available on the Company website http://elica.com/corporation, in the Corporate Governance section.
remuneration for the office and for any participation in committees and (ii) the total annual remuneration exceeds Euro 25,000.
For the purposes of applying the circumstances set out in Recommendation No. 7 of the Code, the Board has defined the following as "close family members" of the person whose independence is being assessed: parents, children, spouses who are not legally separated and persons living with them and any other person who may fall within the definition of a "related party" pursuant to the Related Party Transactions Procedure.
No Director who qualified as an Independent Director disclosed that he or she had any significant commercial, financial or professional relationships within the meaning of Recommendation No. 7 letter (c) and (d) of the Code. None of the Directors appointed has declared that they have, or have had in the last three financial years, relations that compromise or appear to compromise their independence, pursuant to the Recommendation.
The criteria adopted are also applied for the purposes of assessing the independence of Statutory Auditors.
According to their statements and the information available to the Company, the close relatives of the Directors who have declared themselves to be independent and of the Statutory Auditors do not have any relationship with Group companies.
In assessing independence, the Board has considered all available information and has applied all the criteria set out in the Code. The Board of Statutory Auditors confirmed the correct application of the assessment criteria and procedures adopted by the Board to evaluate the independence of its members; this assessment was communicated to the market.
The number and skills of the Independent Directors are adequate for the needs of the Company and for the functioning of the Board, as well as for the establishment of the corresponding Committees, as provided for by Recommendation No. 5. of the Code.
The contribution of the Independent Directors permits the Board to evaluate with sufficient independence in cases of potential conflicts of interest of the Company with the controlling shareholders. In 2021, the Independent Directors, in accordance with Recommendation 5 of the Code, met on October 21, also to discuss the functioning of the Board and of the Committees, the role of the Directors and to agree proposals for ensuring the provision of better support to management and value to the Company: The meeting was coordinated by Monica Nicolini, the Lead Independent Director; for further details see the section "Lead Independent Director" below.
With regard to the verification of the independence of the members of the Board of Statutory Auditors, the latter successfully verified the independence of its members and notified the Board accordingly. The outcome of the independence assessment was publicised to the market via a press release.
Lead Independent Director
On April 29, 2021, following the appointment of the new Board of Directors, the Company assigned the role provided for in Recommendation No. 13. of the Code (Lead Independent Director), to Monica Nicolini. Until that date, Monica Nicolini had held the position of Statutory Auditor, while the role of Lead Independent Director had been held by Federica De Medici.
The Lead Independent Director has the right on their own initiative or upon the request of the other Directors, to summon meetings of the Independent Directors in order to discuss issues that are considered relevant regarding the functioning of the Board of Directors or management in general.
From the appointment date and for the year 2021, the Lead Independent Director operated as a reference point for the other Independent Directors, collaborating, among others, with the Chairperson of the Board of Directors, in order to guarantee complete and timely information for the Independent Directors.
The Board considered it necessary to appoint a Lead Independent Director in consideration, among other issues, of the extent of the duties conferred to the Chairperson of the Board of Directors (although he does not act as CEO.) and the offices held in the Company's holding company. The Chairperson of the Board of Directors Francesco Casoli is the majority shareholder of the holding company which indirectly controls the Company and holds the position of Director at Elica's parent companies; therefore, he indirectly controls the Company in accordance with Article 93 of the CFA.
Pursuant to Recommendation No. 1, letter f) of the Code, the Company has adopted a Regulation concerning the internal management and outside communication of documents and information regarding the Company, particularly in terms of inside information, as defined by the provisions of Article 7, Regulation 596/2014/EC and Article 114, paragraph 1 of the CFA. The Regulation was last updated in March 2020.
The regulation adopted by the Company is divided into two parts. The first part sets out the handling of company information and outlines in general, also with regards to the subsidiaries, the means for the identification and handling of inside information, including: the relative disclosure, the delay of communication to the public, penalties in the case of non-compliance with the regulation, in addition to the situations in which the Company may decide to carry out market soundings.
The second part governs the setting up, management and updating of the list of persons, who based on their work or professional activities or the duties conferred to them, have access to the information indicated at Reg. (EC) 596/2014/EU and Article 114, paragraph 1 of the CFA.
The Company has published the provisions of this regulation internally within the Company and its subsidiary companies and has systematically managed and communicated the inside information published from time to time in accordance with the regulation and applicable legislation.
Most recently in March 2020, the Board of Directors of the Company in addition updated the "Insider Information Policy" and the "Management of the Insider Register" policy.
Giulio Cocci has been given the role of Investor Relations Manager and the task of maintaining the Company's Insider Register. He is also the Company's Chief Executive Officer. The Investor Relations Manager is operationally supported by Lerxi Consulting, an outsourcing company that provides management consulting services in the fields of Investor Relations, Corporate, Financial Communication and Equity Capital Markets for listed and unlisted companies. Another consulting company provides support on the maintenance of the Insider Register and compliance activities.
The Investor Relations Manager is assigned the duties of (i) fostering the Company relationships with the financial community; (ii) enabling continuous dialogue between the company and the stakeholders and in particular the investors and shareholders; (iii) communicating to investors and the market the performance of the business and (iv) carrying out the operations and the duties relating to the Insider Register of the Company, in conformity with the "Regulation for the processing of corporate information and the constitution of the Insider Register". The Investor Relations Manager also acts as the Information Officer, responsible for relations with Borsa Italiana and Consob.
The role of deputy Information Officer continues to be held by Francesca Pisani, General Counsel of the Company, in office since November 11, 2010.
The Board of Directors of the Company, pursuant to Principle XI. and Recommendation No. 16 Code, approved and subsequently confirmed the setting-up of an "Appointments and Remuneration Committee" and a "Control, Risks and Sustainability Committee", formed by Independent Directors.
The Appointments and Remuneration Committee was established pursuant to Recommendation No. 16 of the Code. The decision to create and maintain a single Appointments and Remuneration Committee, confirmed latterly by the Board at the assessment of April 29, 2021, is based on the size of the Board and of the Company, in addition to the need of the company to maintain, and in compliance with the conditions of the Code, a responsive and effective organisation. The functions and activities of the Committee with regard to remuneration and the replacement of Directors are, in any case, clearly distinct. The Control, Risks and Sustainability Committee was established pursuant to Recommendation No. 16 of the Code and Recommendation No. 32 letter (c) of the Code.
The work of the Committees is co-ordinated by the respective Chairpersons.
Article 3.1 of the Board of Directors' Regulation states that the Board shall ensure an adequate internal division of its functions and, where necessary, establish Board committees with investigative, proposing and advisory functions. The Committees have adopted their own regulations which, for matters not governed by the Board of Directors' Regulation, set out the functions, operating procedures and taking of the minutes of each Committee. The provision of information to members of the Committee is governed and carried out in accordance with the Board of Directors' Regulation. At the meeting of February 12, 2021, the Regulations of both Committees were updated to bring them into line with the provisions of the new Code.
More information is provided in sections 7.2 and 9.2 below, including with regard to the criteria for establishing the committees in accordance with Recommendation No. 17 of the Code.
The Board of Directors ensures that the process of appointment and succession of Directors is transparent and designed to achieve the optimum Board composition in accordance with Principle XIII of the Code. The Board, on the termination of its mandate, undertook a self-assessment which focused on the size, composition and functioning of the Board of Directors and its Committees, also taking into account its role in defining strategies and monitoring the operating performance and the adequacy of the control and risk management system. On February 12, 2021, the Board assessed the outcome of the self-assessment process, for fiscal year 2020, for which it used the external support of GC Governance Consulting, a company specialising in corporate governance. The Board evaluation was conducted, through free interviews with the Directors, under the supervision of the Appointments and Remuneration Committee and, on its behalf, its Chairperson. It related to the three-year term of office expiring with the approval of the financial statements as at December 31, 2020. The outcome of the assessment and, specifically, the recommendations that emerged for the 2021-2023 Board term were adopted by the Board, which took them into account in producing the Board's report to the Shareholders' Meeting, available on the Company's website at www.elica.com/corporation/it/investor-relations/assemblea-azionisti.
When submitting the slate for the appointment of the members of the Board, the shareholder FAN took into account the information contained in the above report, as requested by the Board.
At the Board meeting held on October 27, 2021, at the proposal of the Appointments and Remuneration Committee, the Board decided not to carry out a self-assessment for 2021 through an external consultant, reserving the right to carry out internal evaluations of the effectiveness of its own activities and the activities of the Committees during 2022 and postponing the evaluation of the advisability of involving an independent consultant in the self-assessment process until the end of 2022, and in any case given the fact that the Board was to be renewed.
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On February 12, 2016, Elica's Board of Directors approved a succession plan for Executive Directors; in view of Recommendation 19 of the Code, under which it is possible for Elica to adopt a succession plan, on February 12, 2021 and February 10, 2022, the Board evaluated the current succession plan and considered whether it should be retained. In both circumstances, the Board of Directors considered that the plan represented an instrument to ensure the consistent management of risk, business continuity and the long-term sustainability of the Company, through governing the renewal and replacement of Executive Directors in the case of their unforeseeable discontinuation of service, with the most appropriate replacements.
Specifically, with the help of the Appointments and Remuneration Committee and, where necessary, the corporate structure, the Board of Directors ensures the above objectives are met through the procedure set out in the Plan. In line with the provisions of the Succession Plan, on March 16, 2021, Giulio Cocci was identified as the ideal candidate to replace Mauro Sacchetto as Chief Executive Officer.
The Committee reports annually to the Board on work done regarding the succession of Executive Directors and expresses a view on how far the associated risk is covered.
With the support of the Appointments and Remuneration Committee, the Board of Directors also monitors the systems adopted by the Company to ensure the replacement of top management and the corresponding succession tables.
In accordance with Recommendation No. 16 of the Code, the Company's Board of Directors has established an Appointments and Remuneration Committee.
The Company, following the latest assessment of April 29, 2021, decided not to set up a specific Appointments Committee. Consequently, the Appointments and Remuneration Committee was assigned also the functions of the Appointments Committee.
Committee members since April 29, 2021 and for all 2021 are the Independent Directors Elio Cosimo Catania (Chairperson), Angelo Catapano, Liliana Fratini Passi, Monica Nicolini and Susanna Zucchelli.11 Since April 29, 2021, the Committee members were Federica De Medici, Barbara Poggiali and Elio Cosimo Catania, the latter acting as Chairperson.
The Appointments and Remuneration Committee has been given all the functions required by Recommendations Nos. 19 and 25 of the Code. In addition, on February 12, 2016, the Appointments and Remuneration Committee, following the adoption by the Company of a succession plan for Executive Directors, were assigned the additional functions necessary for the effective implementation of the plan.12 The Board of Statutory Auditors is required to attend the meetings of the Committee, through the Chairperson and the Standing Members of the Board.
The members of the Committee have knowledge and experience in accounting and finance and/or in remuneration policies. When determining the composition of the Committee, the Board gave priority to the expertise and experience of its members, in accordance with Recommendation No. 17 of the Code, as well as to the need to ensure adequate involvement of all Independent Directors in the issues to be assessed by the Committee and subsequently approved by the Board.
This committee guarantees the greatest information and transparency on the remuneration of Directors vested with specific offices, as well as the manner for determining the remuneration.
The Committee has solely proposing and consultative functions, while the power of determining the remuneration of the Directors vested with specific offices remains with the Board of Directors, having consulted with the Board of Statutory Auditors.
In particular, the Committee, using the methods set out in its Regulation, provides the following support functions to the Board in the following activities:
(a)self-assessment of the Board and its committees, pursuant to Recommendations Nos. 21 and 22 of the Code, as applicable;
(b) deciding on the optimum composition of the Board and its committees, where deemed appropriate, in view of the fact that Recommendation No. 23 of the Code applies to companies other than those with concentrated ownership;
c) identify candidates for the position of Director in the event of co-option;
d) presentation of a slate by the outgoing Board of Directors to be carried out according to methods that ensure its transparent formation and presentation;
(e) preparing, updating and implementing the succession plan, if any, for the Chief Executive Officer and the other Executive Directors.
(f) producing the remuneration policy;
11 There were no changes to the Committee's composition in 2022.
12 For further information, reference should be made to Note 7.1. Section: Self-assessment and succession of Directors.
g) presenting proposals or expressing opinions on the remuneration of the Executive Directors and Other Directors in addition to establishing the performance objectives related to the variable component of this remuneration;
h) monitoring the concrete application of the remuneration policy, verifying, in particular, the effective achievement of the performance objectives;
(i) periodically assessing the adequacy and overall consistency of the remuneration policy for Directors and top management.
In relation to the activities undertaken by the Committee in 2021, the persons participating at the relative meetings and the instruments and resources available at the meetings, reference should be made to the first Section of the Remuneration Report.
For further information regarding the number of meetings held and the participation at the meetings for each of the members reference is made to TABLE 3 "STRUCTURE OF THE COMMITTEES".
For information on the present Section, reference should be made to the Remuneration Report, Section 1.
The Board, with responsibility for the overall Internal Control and Risk Management System, defines, also with the support of the Control, Risks and Sustainability Committee, the guidelines to ensure that the principal risks of the Company and of the Group are identified, measured, managed and monitored, in line with best practice domestic and international models.
In establishing the guidelines for the risk management and internal control system, the Board also assessed the compatibility of this system with the strategic objectives identified and the level of risk considered acceptable in terms of medium/long-term sustainability.
The Internal Control and Risk Management System, based on the "COSO Report" model and on the Code principles, comprises a set of rules, procedures and organisational structures with the objective to prevent or limit the consequences of unexpected results or permit the achievement of strategic and operational objectives, comply with law and applicable regulations (compliance) and correct and transparent disclosure (reporting). This system concerns all of the Company and involves different parties attributed specific duties and responsibilities.
The Board of Directors defined the guidelines of the Internal Control System, taking into account the nature and level of compatible risk with the corporate strategic objectives. These risks are identified based on the following criteria:
The Board of Directors, taking account of the Supervisory Board's reports, the Internal Audit's reports and the conclusions of the Internal Audit Manager in the annual report on the internal control system, of the information received from the appointed boards and of the opinion of the Director in charge of the Internal Control System, issued an opinion of substantial adequacy ("Defined" level of maturity"), efficiency and effective functioning of the Internal Control and Risk Management System, without prejudice to certain areas of improvement.
In addition, the Board of Directors, having consulted the Board of Statutory Auditors and Director in charge of the Internal Control and Risk Management System, approved the Audit Plan, prepared by the Internal Audit function.
The Company has appointed the Chief Executive Officer to act as the Director responsible for establishing and maintaining an effective Internal Control and Risk Management System, in accordance with Recommendation No. 32 letter (b) of the Code.
Specifically, during 2021 in accordance with Recommendation No. 34 of the Code, the Director responsible for the System, in the performance of his duties:
In accordance with Recommendation No. 32(c) of the Code, the Company's Board of Directors has established a Control, Risks and Sustainability Committee.
The members of the Committee, as from April 29, 2021, are the Independent Directors Susanna Zucchelli (Chairperson), Elio Cosimo Catania, Angelo Catapano, Liliana Fratini Passi and Monica Nicolini.13 Until April 29, 2021, the Committee was composed of Elio Cosimo Catania, Federica De Medici and Cristina Finocchi Mahne, as Chairperson.
The Control, Risks and Sustainability Committee is composed of members with adequate financial, accounting and risk management experience. At least one member has adequate knowledge and experience in accounting and finance and/or risk management, in accordance with Recommendation No. 35 of the Code.
The Board of Statutory Auditors is required to attend the meetings of the Committee, through the Chairperson and the Standing Members of the Board. In relation to the specific matters on the Agenda, and also on invitation, the following also attend: the Corporate Financial Reporting Officer, the Internal Audit Manager and Company Managers such as the CISO and the Chief Executive Officer.
The Control, Risks and Sustainability Committee, within the scope of its powers, in observance of the recommendations of the Code, supports, with appropriate preparatory activities, the assessments and decisions of the Board of Directors on the Internal Control and Risk Management System, in addition to those concerning the approval of the periodic financial reports. In accordance with Recommendation No. 35. of the Code, the Committee performs investigative, proposing and advisory functions. Specifically, the Committee, in assisting the Board of Directors:
13 There were no changes to the Committee's composition in 2022.
a) evaluates, having consulted with the Corporate Financial Reporting Officer, the independent audit firm and the Board of Statutory Auditors, the correct application of the accounting policies and, in the case of groups, their uniformity in the preparation of the consolidated financial statements;
b) assesses the suitability of periodic financial and non-financial information to correctly represent the Company's business model, strategies, impact of its activities and performance;
c) examines the periodic non-financial information relevant to the Internal Control and Risk Management System;
d) expresses opinions on specific aspects concerning the identification of the main corporate risks and supporting the assessments and decisions of the Board of Directors relating to the management of risks arising from prejudicial events of which the Board has become aware;
e) examines the periodic reports and those of particular relevance prepared by the Internal Audit function; (f) monitors the independence, adequacy, efficacy and efficiency of the Internal Audit department;
g) entrusts the Internal Audit department with verifications on specific operational areas, simultaneously communicating such to the Chairperson of the Board of Statutory Auditors;
h) reports, at least upon the approval of the annual and half-yearly accounts, to the Board of Directors on the work carried out and on the adequacy of the Internal Control and Risk Management System.
with regard to Related Party Transactions, the Committee performs the functions of the Related Party Transactions Committee.
In relation to sustainability, the Committee undertakes proposal and consultative functions with regards to the Board of Directors as per Legislative Decree No. 254/2016, in application of the European sustainability regulation, i.e. the processes, initiatives and activities required to communicate the Company's commitment to sustainable development throughout the supply chain. For example purposes, the Committee:
• examines and evaluates: (i) sustainability policies aimed at ensuring the creation of value over time for the collectivity of shareholders and for all other stakeholders over a medium-long term period in accordance with the principles of sustainable development; (ii) the guidelines, objectives and consequent processes of sustainability and sustainability reporting submitted annually to the Board of Directors; • examines any sustainability initiatives submitted to the Board of Directors;
• expresses an opinion on other sustainability issues at the Board's request.
In 2021, the Committee:
gave a favourable opinion on the Supervisory Board's proposal to update the 231 Model, restructured by business process;
monitored the performance of employee training activities, particularly following the update of the Model and of the members of the Committee;
The Committee had access to the information and departments for the undertaking of their duties as well as the assistance of external consultants, within the terms established by the Board. Therefore, as the Committee availed of the resources, the means and the structure of the Company, the provision of specific financial resources is not provided for.
The Board appointed Daniele Bruni as the Internal Audit Manager, appointed to verify if the Internal Control and Risk Management System is functional, adequate, and consistent with the guidelines set out by the Board of Directors. The Internal Audit Manager, who is not responsible for any operational activity, reports to the Board of Directors and adequately fulfils the requirements of professionalism and independence. The Internal Audit Manager makes use of specialised and independent external consultancy firms to carry out his/her activities and has direct access to all the information useful for carrying out his/her duties.
The remuneration of the Internal Audit Manager has been set by the Board of Directors in line with company policies.
In 2021, the Internal Audit function conducted its activities in line with the work plan prepared by the Head of the Department and approved by the Board, having consulted the Board of Statutory Auditors and the Chief Executive Officer. Specifically:
More specifically, the appointments concerned the various areas of coverage, in terms of financial audits, focused on processes of a financial nature, including those relating to risk management and the associated safeguards of an administrative and accounting nature adopted by Group companies for financial reporting purposes; compliance audits, to ensure the effective implementation of the control system for compliance with internal or external rules or regulations and operational audits, for an assessment of the efficiency and efficacy of instruments to offset operating process risks.
The assessments cited by the Internal Audit Manager in his reports did not identify situations detrimental, on the whole, to the suitability and functionality of the Internal Control and Risk Management System. The exceptions identified have been brought to the attention of the management personnel involved to take the necessary corrective measures, the completion of which is monitored over time.
The Company, with regards to the entry into force of Legislative Decree No. 231 of June 8, 2001 and subsequent amendments and supplements, which introduced a specific system of responsibility upon the company for certain types of offences, adopted appropriate measures to avoid, as per the regulation, the arising of such responsibility upon the company, with the setting up of specific protocols and oversight systems to prevent certain offences.
Therefore, with the Board of Directors' motion of March 27, 2008, the Company adopted the Organisation, Management and Control Model as per Legislative Decree No. 231/01, which was thereafter frequently updated, following regulatory and organisational amendments. As of February 2021, the Special Sections in the Model have been substantially reorganised, and are now structed by "business process". They consist of a General Section and eleven Special Sections.
The General Part essentially concerns the governance system of the company, adoption of the Organisation Model, the setting up of the Supervisory Board (hereafter "O.d.V") and the communication of information to this latter, in addition to the reporting of the O.d.V., from the corporate boards; the training of personnel and the system governing non-compliance with the models provisions.
The special sections relating to the specific business macro-processes include the various types of offence laid down by the decree and applicable, in theory, to the Company: (i) Research and Development, (ii) Procurement (iii) Logistics, (iv) Sales, (v) Health and Safety in the workplace, (vi) Environment, (vii) Human Resources, (viii) Information Systems, (ix) Administration, Finance and Control, (x) Legal Offences, (xi) External Relations.
The special parts of the Model list the areas of risk for the relative offences, stating the specific decisionmaking protocols and the relative conduct rules for those operating in the above areas and defining the monitoring procedures.
The attachments and supplements of the ELICA Organisational Model are:
For further details, reference should be made to https://elica.com/corporation/it/corporategovernance/area-231.
Elica's Board of Directors on October 27, 2021 resolved to extend the mandate of the Supervisory Board until December 31, 2024, confirming Paolo Massinissa Magini as Chairperson and Marco Cruciani and Daniele Bruni as members.
The Supervisory Board communicates to the Board of Directors, on a half-yearly basis, a written report on the implementation and effective functioning of the Organisation, Management and Control Model.
The Board of Directors also granted the Supervisory Board sufficient financial resources to carry out all required duties. This allocation however may be recalculated according to any necessary increases on the proposal of the Supervisory Board.
The Board of Directors, following an assessment, decided not to assign the duties of the Supervisory Board to the Board of Statutory Auditors, considering it appropriate to maintain two distinct bodies. The Internal Audit Manager attends the Control, Risks and Sustainability Committee (in which the Control Body participates) and there is a direct relationship between the Control Body and the Supervisory Board and the Internal Audit Manager, to ensure coordination between the various parties involved in the Internal Control and Risk Management System.
The Company on April 29, 2015 appointed the independent audit firm KPMG S.p.A. for the 2015-2023 nine-year period.
In accordance with the provisions of Article 154-bis of the Consolidated Finance Act as amended by Law No. 262 of 28 December 2005 (the "Savings Law") and in accordance with Article 26 of the By-Laws, on March 16, 2021 the Board of Directors appointed Emilio Silvi as Corporate Financial Reporting Officer; on the same date, Stefania Santarelli was made Chief Financial Officer. Previously, the role of Chief Financial Officer and Corporate Financial Reporting Officer was held by Giulio Cocci, who is currently Chief Executive Officer.
These roles were confirmed by the newly-appointed Board of Directors at its meeting of April 29, 2021. The appointment of the Financial Reporting Officer was made by the Board of Directors, as per Article 26 of the By-Laws and the applicable regulation, following a positive assessment of professionalism (featuring specific knowledge in terms of administration, finance and control) and also on the basis of his good standing.
The Company in addition provides the Financial Reporting Officer with appropriate resources and means for execution of the relative duties.
In particular, in order to fully carry out his duties, the Financial Reporting Officer, among others, may avail of the powers and resources established in the Guidelines drawn up by Confindustria in relation to the role (edition of December 13, 2007).
The Financial Reporting Officer, in the exercise of his institutional role, in application of the above-stated Article 154-bis of the CFA:
The Internal Accounting Control System seeks to provide reasonable certainty that the accounting disclosure provides users with a true and fair representation of the operational facts, corresponding to the documented results, books and underlying accounting entries as well as the adequacy and effective application of the administrative and accounting procedures during the period to which the accounting documents refer. To this end, the Financial Reporting Officer may avail himself/herself of the collaboration and verification activities carried out by the Internal Audit department in this area.
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The various company functions collaborate, pursuant to Recommendation No. 32, letter e) of the Code, each with regards to their respective scope, for the identification and management of risks; in particular, the Administration, Finance and Control Department, the Legal and Corporate Affairs Department and the Risk & Compliance Department support the bodies tasked with the identification and management of compliance activities.
In accordance with Recommendation No. 33 letter (d) of the Code, on October 27, 2021 the Board of Directors resolved not to adopt further measures to ensure the effectiveness and impartiality of judgment of the corporate functions involved in controls, as it considered they possessed sufficient professionalism and resources.
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For details of the principal characteristics of the Internal Control and Risk Management System in relation to the Financial Disclosure process, reference should be made to ATTACHMENT 1 of the present report.
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The Board of Directors has assigned specific functions, within the scope of their respective competences, to each person involved in the control system and has established reporting obligations to coordinate activities and regulate information flows to maximise the system's efficiency, reduce duplication of activities and guarantee that the duties of the Board of Statutory Auditors are performed effectively. The Internal Audit Manager and the member of the Supervisory Board performs an important coordination function, interfacing with all those involved in the control system.
The members of the Board of Statutory Auditors attend the meetings of the Control, Risks and Sustainability Committee, to which the Internal Audit Manager is always invited; this practice makes it possible to streamline the flow of information to the parties involved in the control system. In any event, the Control Body is given the opportunity to examine subjects of interest in depth during periodic inspections at the Company's premises.
Following Resolution No. 21624 of December 10, 2020, with which Consob amended the Regulation adopted with Resolution No. 17221 of March 12, 2010 containing provisions on related party transactions ("RPT Regulation") and the Regulation adopted with Resolution No. 20249 of December 28, 2017 on markets ("Market Regulation"), the Board meeting of February 12, 2021 took note of the need to update the policy before the entry into force of the Regulation, expected for July 1, 2021. Subsequently, on May 5, 2021, the Board of Directors approved the "Related Party Transactions Procedure" ("RPT Procedure"), available on the website http://corporation.elica.com in the Corporate Governance section.
In relation to transactions in which a Director has, on his own behalf or on behalf of third parties, an interest, the interested Director is called, except for specific circumstances, to abstain from the vote or to leave the meeting at the moment of discussion and resolution. When the transaction is not subject to the prior approval of the Board of Directors but within the powers delegated to the interested Director, also through the exercise of a specific proxy, this latter abstains from the carrying out of the transaction and provides in a timely and exhaustive manner information in relation to such to the Board.
In order to identify transactions in which a Director may have an interest, also on behalf of third parties, the Company utilises, among others, an electronic database containing information on related parties of Directors of the Company.
The Control, Risks and Sustainability Committee also acts as the Related Party Transactions Committee. For details of the Committee's composition, function and main activities carried out during the year, please see Section 9.2, "CONTROL, RISKS AND SUSTAINABILITY COMMITTEE".
With regard to the appointment of the Statutory Auditors, please see Section 4.2, "APPOINTMENT AND REPLACEMENT (pursuant to Article 123-bis, paragraph 1, point (l), first part of the CFA)".
This mechanism was latterly adopted on the renewal of the Board of Statutory Auditors by the Shareholders' Meeting of April 29, 2021.
The Company's By-Laws provide that the Board of Statutory Auditors consist of three Statutory Auditors and two Alternate Auditors.
The Board of Statutory Auditors currently in office was appointed, in accordance with the requisites of autonomy and independence, by the Shareholders' Meeting of April 29, 2021, and will remain in office until the Shareholders' Meeting called to approve the financial statements at December 31, 2023.
In particular, on appointment, a slate was presented by the majority shareholder FAN S.r.l., which proposed the following list of candidates:
STATUTORY AUDITORS
FREZZOTTI GIOVANNI
BELLI MASSIMILIANO
ROMAGNOLI SIMONA
ALTERNATE AUDITORS
TIRANTI LEANDRO
SPACCAPANICCIA SERENELLA
For further details on the slate, reference is made to the documentation relating to the above-stated Shareholders' Meeting available on the Company's website.
The result of the voting of Shareholders present at the Shareholders' Meeting was as follows:
At TABLE 4 – STRUCTURE OF THE BOARD OF STATUTORY AUDITORS attached to the present report, the composition is shown of the Board of Statutory Auditors at December 31, 2021, which has not changed at the preparation date of the present Report.
At the Shareholders' Meeting for the appointment of the new Board of Statutory Auditors, the meeting established the remuneration of the Shareholder auditors, taking account of the commitment required, the importance of the role, in addition to the size and sector of the company.
At the time of their appointment, the Statutory Auditors confirmed that they did not have any direct or indirect shareholdings in the Company, nor had they had any in the previous year.
Reported below is a brief curricula vitae of the members of the Board of Statutory Auditors:
Giovanni Frezzotti: Chairperson of the Board of Statutory Auditors of Elica S.p.A. He has been a member of the Accountants Association of Ancona since 12/03/1965 at No. 16/A as well as being on the Technical Consultants of the Civil and Criminal Court of Ancona roll. He is a member of the Auditors' Register at No. 25202 with Ministerial Decree 12/04/1995 published in the official gazette No.31-bis of 21/04/1995 – IV Special Series.
He holds the position of Director of Acbgroup S.p.A., Apell S.p.A., Compagnia Sviluppi Industriali ed Immobiliari S.p.A., Fileni Alimentare S.p.A., Fincrea S.r.l., Fondazione Renco, Renco Group S.p.A..
He is Chairperson of the Board of Statutory Auditors of Antares Private Equity S.p.A., Ceta S.p.A., Co.ge.fin. S.p.A., Fimag S.p.A., Federico II Stupor Mundi Foundation, Frapi S.p.A., Garinvest S.p.A., Garofoli S.p.A., Gilfin S.p.A., Engifin S.p.A., Golden Lady Company S.p.A., Goldenpoint S.p.A., Montenegro S.r.l. and SLL Group S.p.A..
He is a Statutory Auditor on the Board of Statutory Auditors of Bonomelli S.r.l., Enovetro S.p.A., of Lole S.p.A. and of Pieralisi International S.A..
He is the Sole Statutory Auditor of Fineldo S.r.l., Gi.gar. S.r.l., Autolinee F.lli Bucci Urbino Pesaro S.r.l. and della Società Trasporti F.lli Bucci S.r.l. He is legal auditor of Renogroup S.r.l..
Massimiliano Belli: Statutory Auditor of Elica S.p.A. Enrolled in the Bar Association of Ancona since 24/10/2000, he has been a Supreme Court Attorney since 28/11/2012.
Law Graduate from the LUISS "Guido Carli" University of Rome. Doctorate in Criminal Law and Procedure – University of Macerata.
Visiting Professor at the Specialisation School for Legal Professions - University of Bologna.
Vice-President of the Criminal Chamber of Ancona.
Member of the Legislative Decree No. 231/2001 Observatory of the Italian Union of Criminal Chambers.
Member of the Scientific Committee of the Forensic School of the Bar Association Council of Ancona.
Member of the Board of the National Association of Italian Tax Advisors - Marche-Abruzzo Section.
Speaker and lecturer in master's programmes, conferences and seminars; author of publications primarily on corporate criminal law.
Simona Romagnoli: Statutory Auditor of Elica S.p.A. She has been a member of the Accountants Association of Ancona since 13/10/2020 at No. 486/A as well as being on the Technical Consultants of the Civil and Criminal Court of Ancona roll. Enrolled in the Auditors' Register with Ministerial Decree of 27/07/2001, published in the Official Gazette No. 67 - IV special series of 24/08/2001.
Appointed by the Court of Ancona as Legal Commissioner and Insolvency Practitioner, she specialises in the management of administration procedures and business crisis management.
She was the liquidator of a major industrial company based in the province of Ascoli Piceno, dealing with the issues of industrial management and sales of companies as going concerns.
She is a member of various Boards of Statutory Auditors and was a member of the Board of Directors of a local Cooperative Credit Bank.
She is also a member of the Steering Committee of the Centre for the Study of Insolvency Law, in the role of Treasurer. Leandro Tiranti: born in Sassoferrato (AN) on 04/05/1966, Alternate Auditor of Elica S.p.A., he has been enrolled at the Accountants Association of Ancona at No. 321, Section A since 1994; enrolled at the Technical Consultants register of the Court of Ancona; enrolled in the Auditors' Register at No. 72,312 as per Decree of the Director General of civil affairs and professions of May 26, 1999, published in the Official Gazette 4a, special series No. 45 of June 8, 1999. He holds the position of Chairperson of the Board of Statutory Auditors at TR V.I.C. S.p.A. - OV S.p.A. - Tre Pini S.p.a. - F.I.D.E.A. S.p.A.; the position of Statutory Auditor at Fintrack S.p.A. - Air Force S.p.A. - Industriaumbra S.p.a. - Diatech S.r.l. - TOOA S.p.A.
Spaccapaniccia Serenella: Alternate Auditor of Elica S.p.A. Member of the Accountants Association of Ancona since 12/04/1994 at No. 308, as well as being on the Technical Consultants of the Civil and Criminal Court of Ancona roll since 1/01/1997. Enrolled in the Auditor's Register with Ministerial Decree of 26/05/1999, published in the Official Gazette No. 45 - IV special series of 8/06/1999 at No. 72269. She is an Alternate Auditor with Moncaro S.p.A., a standing member of the Board of Statutory Auditors at 8 Non-Profit Entities in the Marche Region; Sole Auditor on the Regional Professional Roll; Director of ODCEC (Accountants Association) of Ancona; Executive Director of the Non-Profit/Tertiary Sector Entities and Equal Opportunities Research Commissions at the ODCEC of Ancona; a Working Group member of the CNDCEC (National Accountants' Committee) on the Tertiary Sector; she is Vice Chairman of the Board of Directors of A.FO.PROF representing the ODCEC of the province of Ancona; member of the Consultation Committee of the Real Estate Market Research Institute at the Provincial Tax Agency of Ancona; Director of Conerobus S.p.A.; Director of ATMA S.C. P A; Statutory Auditor of Web Forniture soc.coop.
With regard to the activities carried out, the Board of Statutory Auditors met twenty-one times in FY 2021, on January 25, February 12, February 25 (twice), March 9, March 11, March 16, March 17, March 22, March 25, April 23, April 29, May 5, July 15, August 23, October 15 (twice), November 4, November 30, December 16 and December 23, 2021.
The average duration of meetings was two hours.
In 2022, the Board of Statutory Auditors has met five times: on February 3, February 10, February 15, March 1 and March 11, 2022.
The activities of the Board of Statutory Auditors concern, among others, the verification of the criteria and procedures adopted by the Board to evaluate the independence of its members. The Board of Statutory Auditors in the course of the above-stated verifications did not record anomalies, as per the minutes drawn up of April 29, 2021 and March 11, 2022.
The Board of Statutory Auditors positively established the independence of its members in the meetings of April 29, 2021 and March 11, 2022.
On April 29, 2021 and March 16, 2022, the Board of Directors noted the annual self-assessment by the Board of Statutory Auditors of the independence of its members, also as per the Code. The selfassessment was conducted taking into account all information made available by each member and the circumstances known.
The quantitative and qualitative criteria set for defining the significance of Statutory Auditors' relationships and the definition of "close relatives" laid down by the Board at the beginning of its mandate also applies to the Board of Statutory Auditors. 14
The self-assessment made by the Board also established the appropriateness of Board of Statutory Auditors to carry out its duties and its adequate composition in terms of professional profiles, expertise, standing and gender parity.
The members of the Board of Statutory Auditors have adequate experience and knowledge of the sector in which the Company operates; however, in order to improve such knowledge, and of the corporate activities and performance, in addition to the regulatory framework, the Board of Statutory Auditors attends the meetings of the Board and of the Committees, in addition to, during its mandate, specially organized meetings.
The members of the Board of Statutory Auditors can assign the time necessary to properly execute their office and have adequate resources for such. The number of positions held was lower than the maximum permitted by the applicable regulation.
The Company announced the outcome of this self-assessment to the market.
The Board of Statutory Auditors finally established through the assessment made that the previously planned activities had been successfully executed until the date of this report.
The Board has constantly monitored the independence of the Independent Audit Firm in carrying out its duties, verifying compliance with law and monitoring the other activities carried out apart from accounting control.
The Board of Statutory Auditors, in carrying out its duties, coordinated its activities with the Internal Audit department and the Control, Risks and Sustainability Committee through the exchange of information relating to their respective activities and through participation in the Control, Risks and Sustainability Committee meetings during the year. Therefore, the Board of Statutory Auditors attends also the meetings of the Appointments and Remuneration Committee.
14 For further information, please refer to Section 4.7, "Independent Directors and Lead Independent Director"
In 2017, Elica adopted a "Policy on the Diversity of Management and Control Bodies", in which the diversity criteria generally adopted to define the composition of the corporate boards are set out in detail. The criteria set out in the policy take into account the provisions of the Code and also apply when the control body is renewed. The policy was most recently updated in February 2021.
In order to ensure that shareholders interested in submitting slates, on the renewal of corporate boards, are provided with the information concerning the criteria and diversity objectives pursued, in the Board of Directors report to the Shareholders' Meeting, of March 16, 2021, for the renewal of the Board of Statutory Auditors, to which reference is made, the Board of Directors stated its wish to see diversity on the Board of Statutory Auditors in terms of age, gender and training and professional background.
During the Supervisory Board's renewal, the slate composition submitted by the majority shareholder FAN S.r.l., took account of the diversity criteria issued by the Board in so far as it included candidates of different gender on a one to three ratio for Statutory Auditors and a one to two ratio for Alternate Auditors; it also included different profiles by professional experience and age.
For more information, please refer to Section 4.3, "Diversity Criteria and Policies in Board Composition and Corporate Organisation", above.
See previous section 11.2 COMPOSITION AND FUNCTIONING (as per Article 123-bis, paragraph 2, letters d) and d-bis) of the CFA.
The remuneration for the members of the Board of Statutory Auditors was determined by the Shareholders' Meeting at the time of their appointment. During the presentation of the slates, the Board invited the shareholders to make proposals concerning the remuneration to be paid to each member of the Board, since it did not deem it appropriate to make proposals without knowing the identity of the candidates, making it impossible to determine adequate remuneration.
In accordance with the Board's request, the shareholder FAN proposed the remuneration during the presentation of the slates, and it was subsequently approved by the Shareholders' Meeting. In producing the proposal, the shareholder stated that it had taken into account the professionalism, expertise and commitment required of the candidates; the responsibilities involved in acquiring the role; and the compensation practices at comparable companies. For details on the remuneration of the Board of Statutory Auditors, please refer to the Remuneration Report, published at the same time as this report on the Company's corporate website.
The Board of Statutory Auditors notes that the Company, having complied with the Code, provides that where a Statutory Auditor, on his/her own behalf or that of third parties, has an interest in a determined transaction of the Company, he/she must inform the other Statutory Auditors and the Chairperson of the Board, in a timely and comprehensive manner, regarding the nature, terms, origin and extent of his/her interest. In accordance with the Consob Regulation concerning transactions with "related parties" the members of the Board of Statutory Auditors drew up a document for the identification of related parties in accordance with Article 4, paragraph 8 of Consob Regulation, adopted with resolution No. 17221 of March 12, 2010 and No. 17389 of June 23, 2010.
Elica has a dedicated section of its website on investor relations and governance. All of the documents relating to the Corporate Governance and the other information relating to the Company, which have significance for shareholders, may be consulted on the website https://elica.com/corporation. When it was first listed, the Company identified an Investor Relations Manager.15
Elica has adopted a special policy for dialogue with shareholders governing stakeholder involvement and communication procedures. This policy was approved by the Board of Directors, upon the recommendation of the Chairperson and in consultation with the Chief Executive Officer, on October 27, 2021. The primary objective of the Policy is to ensure effective communication between the Company and its shareholders and allow for improved investment stability and the sustainable success of the Company. The implementation of the principles set out therein enables enable the exchange of ideas and the generation of value over the long term, through more targeted shareholders participation in investment choices and in the exercise of their rights.
The policy can be found on the Company's website at www.elica.com/corporation/it/corporategovernance.
The By-Laws of the Company do not provide for a method of functioning other than those as prescribed by law and regulations.16
Normally, all of the Directors attend the Shareholders' Meetings. All seven Directors attended the Shareholders' Meeting of April 29, 2021, which was conducted remotely, pursuant to Decree-Law No. 18/2020 ("Cura Italia") due to the COVID-19 emergency.
All of the matters on the Agenda of the Shareholders' Meeting were reported upon in the Directors' Report to the Shareholders' Meeting or in the documents filed, available to the Shareholders and published on the company website.
***
All those who have sent the company the communication provided by the intermediary appointed by the end of the third market day preceding the date fixed for the Shareholders' Meeting in first call or in single call, have the right to attend the shareholders' meeting, or within a different time period established by existing regulations, as long as the communications are sent to the Company within the above-stated time periods, provided by the beginning of the business of the shareholders' meeting.
Every shareholder may be represented by a third party conferring upon him proxy in accordance with law, the By-Laws and the Shareholders' Meeting regulation.
The notification through electronic means of proxy to the Company by those with the right to vote may take place through sending an e-mail to the address indicated in the call notice.
The Shareholders' Meeting of the Company on April 12, 2006 approved the Shareholders' Meeting Regulation, proposed by the Board of Directors, subsequently amended by the Shareholders' Meeting of April 28, 2011 in order to guarantee the proper carrying out of the Shareholders' Meetings as well as the rights of each shareholder to contribute to discussions on the matters on the Agenda. The Regulation is published on the Company website https://elica.com/corporation, in the Corporate Governance section. With particular reference to the procedures for guaranteeing the right of each shareholder to speak on the items on the agenda, please refer to the provisions of the said Shareholders' Meetings Regulation.
15 For further details see Section 5, "Management of Corporate Information".
16 The Shareholders' Meeting assigned the Board the duties as per Article 19.2 of the By-Laws, in accordance with the Article 2365 of the Civil Code.
The Board reported on the activities carried out and programmed in the Shareholders' Meetings and endeavoured to ensure shareholders have adequate information regarding the necessary elements so that they could take, in a knowledgeable manner, the decisions within the authority of a Shareholders' Meeting.
The shareholder FAN, at the Board's invitation, when presenting the slates for the appointment of corporate boards, communicated the proposals that it would have submitted for approval by the Shareholders' Meeting. The Board did not express any opinions in this regard, and specifically did not express a view on the proposals for the remuneration of the corporate boards to be appointed.
***
The Board assessed the corporate governance system adopted and found that it met the Company's needs. Therefore, it did not draw up any proposal to be submitted to the Shareholders' Meeting on choosing a different corporate model, nor did it establish any additional or different percentages for the exercise of voting rights compared to those in previous years. Given the size and current needs of the Company, the Board confirmed the number of seven Directors as members and a term of office of three years, upon renewal of the Board.
With reference to the other corporate governance practices applied, the Company, as parent company of European and non-European companies, adopts management and organisational models that are suitable for supervising business and governance. These models are systematically updated in the event of changes to the corporate structure or organisation, taking into account: (i) the need to streamline decision-making processes to ensure management is able to effectively deal with the numerous changes caused by the market and unforeseen situations (e.g. pandemic, increase in raw materials, etc.), (ii) the need to ensure compliance and sustainability in the long term.
Reference should be made in addition to previous sections of this report. In particular, sections 9.4 "ORGANISATION MODEL AS PER LEGISLATIVE DECREE No. 231/2001" and 9.7 "COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM".
The text of the present report was supplemented, in the individual paragraphs, with the information concerning the changes between December 31, 2021 and March 16, 2022, date of its approval.
The Board of Directors of the Company on February 10, 2022, assessed the letter of the Chairperson of the Corporate Governance Committee dated December 3, 2021.
The 2022 Recommendations are intended to support companies in the process of complying with the new Code and to highlight the importance of having an appropriate compliance process.
Among the recommendations applicable to Elica, which has been evaluated in accordance with the Code's definitions and is classified as a "non-large" company with concentrated ownership, the Board is asked to consider:
The Board also found the assessment process to be adequate, based on the following considerations: In 2021, in accordance with the Code's requirements, Elica introduced quantitative and qualitative parameters to assess the significance of relationships with Directors.
The check on independence is carried out in accordance with the Code.
The checks carried out did not reveal any further relationships between the Company and the Independent Directors, who were chosen from third parties not related to the Company or to family members of major figures within the Company. 17
Elica has adopted a regulation, which, in line with the Code's recommendation, does not permit the confidentiality of information to be used as a justification for delay in making Council documents available. The Board considers that deadline of five days before the date of the meeting is reasonable, and it is generally complied with. In any case, during the meeting, the Chairperson ensures that it is possible to obtain further information regarding all the issues to permit full and proper evaluation of the facts presented for the Board's consideration.
The Board considered the pre-Board meeting information received to be adequate.18
The Appointments and Remuneration Committee assessed the presence of the under-represented gender in the workforce of Elica S.p.A. and the gender payment to identify any differences in remuneration for equivalent roles. The assessment found that the Company has begun a process of aligning its compensation, which it intends to continue with the 2022 and 2023 salary reviews, while complying with eligibility criteria and merit policies. 19
The Board periodically assesses remuneration policies with a view to setting clear and measurable rules for the disbursement of variable components of remuneration and severance allowances, to align them with the strategic objectives of the business. The Company has launched an ESG project, aligned with the business strategies. This will make it possible to identify predetermined and measurable KPIs to be used as a non-financial parameter to determine the variable components of the remuneration of Executive Directors and top management.20
Elica S.p.A. The Chairperson of the Board of Directors
17 See also Section 4.7 "Independent Directors and Lead Independent Director."
18 See also Section 4.4, "Functioning of the Board of Directors (pursuant to Article 123-bis, paragraph 2, point (d) of the CFA).
19 See also Section 4.3 "Diversity Criteria and Policies in Board Composition and Corporate Organisation."
20 For the additional assessments required by the point cited above, see also Section 4.1, "Role of the Board of Directors" and Section 12, the "Shareholder Dialogue and Remuneration Report" part.
| NO. OF | NO. OF VOTING | LISTED/NON | RIGHTS & | |
|---|---|---|---|---|
| SHARES | RIGHTS | LISTED | OBLIGATIONS | |
| Ordinary shares | 63,322,800 | 100% | Listed on Euronext STAR Milan, formerly MTA Star |
Voting rights at the Ordinary and Extraordinary Shareholders' Meeting, right to a dividend and repayment of capital in the case of liquidation |
| Shareholder | Direct shareholder | % of ordinary share capital |
% of voting share capital |
NOTES |
|---|---|---|---|---|
| CASOLI FRANCESCO | FAN S.r.l. | 52.809% | 52.809% | * |
| CASOLI FRANCESCO | CASOLI FRANCESCO | 0.252% | 0.252% | * |
| TIP-Tamburi | TIP - TAMBURI INVESTMENT PARTNERS | 20.220% | 20.150% | * |
| Investment Partners S.p.A. | S.P.A. |
*Data updated on the basis of declarations presented to Consob and Internal Dealing declarations.
| Name | Year of birth | Office | In office from |
In office until |
No. other Offices (i) |
Exe c. |
Ind. Cod. / Ind. |
Participation (ii) |
|---|---|---|---|---|---|---|---|---|
| CFA | ||||||||
| Francesco Casoli | 05/06/1961 | Chairperson of the Board of Directors |
29/04/20 21 |
Approval 2023 Accs. |
- | yes | no | 7/7 |
| Giulio Cocci | 13/04/1970 | Chief Executive Officer |
16/03/20 21(iv) |
Approval 2023 Accs. |
- | yes | no | 7/7 |
| Elio Cosimo Catania | 05/06/1946 | Director | 29/04 2021 |
Approval 2023 Accs. |
1 | no | yes/yes | 7/7 |
| Angelo Catapano | 9/12/1958 | Director | 29/04/20 21 |
Approval 2023 Accs. |
no | yes/yes | 6/7 | |
| Liliana Fratini Passi | 19/06/1970 | Director | 29/04/20 21 |
Approval 2023 Accs. |
1 | no | yes/yes | 7/7 |
| Monica Nicolini (iii) | 16/04/1963 | Director | 29/04/20 21 |
Approval 2023 Accs. |
no | yes/yes | 7/7 | |
| Susanna Zucchelli | 19/12/1956 | Director | 29/04/20 21 |
Approval 2023 Accs. |
1 | no | yes/yes | 6/7 |
| DIRECTORS LEAVING OFFICE DURING THE YEAR | ||||||||
| Mauro Sacchetto | 9/01/1959 | Chief Executive Officer |
08/07/ 2019 |
16/03/2021 | - | yes | no | 2/2 |
| Giovanni Tamburi | 21/04/1954 | Director | 26/09/ 2019 |
Approval 2020 Accs. |
n/a | no | No | - |
| Elio Cosimo Catania | 05/06/1946 | Director | 27/04 2018 |
Approval 2020 Accs. |
no | yes/yes | 2/2 | |
| Barbara Poggiali | 4/03/1963 | Director | 27/04 2018 |
Approval 2020 Accs. |
n/a | no | yes/yes | 2/2 |
| Cristina Finocchi Mahne |
01/07/1965 | Director | 27/04 2018 |
Approval 2020 Accs. |
n/a | no | yes/yes | 2/2 |
| Federica De Medici (iii) |
24/08/1972 | Director | 27/04 2018 |
Approval 2020 Accs. |
n/a | no | yes/yes | 2/2 |
(i) No. of offices held in other listed companies, including abroad, in financial, banking and insurance companies or of significant size. Those positions held in financial companies not registered on the list, as per Article 106 of Legislative Decree No. 385/93 – Banking Act, are excluded. For further information, reference should be made to the list at the section "Maximum number of offices held in other companies" and curricula of the Directors.
(ii) this column indicates the attendance of the Director at the Board meetings;
(iii) Lead Independent Director;
(iv) The date indicated refers to the date on which the previous Chief Executive Officer Mauro Sacchetto was co-opted; subsequently, Giulio Cocci was appointed by the Shareholders' Meeting on April 29, 2021.
| Name | Office/Category | In office from | In office until | Appointments and | Control, Risks and |
|---|---|---|---|---|---|
| Remuneration Committee- | Sustainability | ||||
| (v) | Committee Participation (v) |
||||
| Non-Executive Dir. - | April 29, 2021 | Approval 2023 | 3/3 | 2/2 | |
| Angelo Catapano | Indep. Code/CFA | Accs. | |||
| Non-Executive Dir. - | April 29, 2021 | Approval 2023 | 3/3 | 2/2 | |
| Liliana Fratini Passi | Indep. Code/CFA | Accs. | |||
| Monica Nicolini (iv) | Non-Executive Dir. - Indep. Code/CFA |
April 29, 2021 | Approval 2023 Accs. |
3/3 | 2/2 |
| Susanna Zucchelli | Non-Executive Dir. - | April 29, 2021 | Approval 2023 | 2/3 | |
| Indep. Code/CFA | Accs. | ||||
| Susanna Zucchelli | Chairperson - Indep. | April 29, 2021 | Approval 2023 | 2/2 | |
| Code/CFA | Accs. | ||||
| April 29, 2021 | Approval 2023 | 3/3 | |||
| Elio Cosimo Catania | Chairperson - Indep. | Accs. | |||
| Code/CFA | |||||
| Non-Executive Dir. - | April 29, 2021 | Approval 2023 | 2/2 | ||
| Elio Cosimo Catania | Indep. Code/CFA | Accs. | |||
| Directors leaving office during the year | |||||
| Elio Cosimo Catania | Chairperson - Indep. | April 27, 2018 | Approval 2021 | 2/2 | |
| Elio Cosimo Catania | Chairperson - Indep. Code/CFA |
April 27, 2018 | Approval 2021 Accs. |
2/2 | |
|---|---|---|---|---|---|
| Elio Cosimo Catania | Non-Executive Dir. - Indep. Code/CFA |
April 27, 2018 | Approval 2021 Accs. |
2/2 | |
| Barbara Poggiali | Non-Executive Dir. - Indep. Code/CFA |
April 27, 2018 | Approval 2021 Accs. |
2/2 | |
| Cristina Finocchi Mahne |
Non-Executive Dir. - Indep. Code/CFA |
April 27, 2018 | March 11, 2020 | 1/2 | |
| Cristina Finocchi Mahne |
Chairperson - Indep. Code/CFA |
March 12, 2020 | Approval 2021 Accs. |
1/2 | |
| Federica De Medici | Non-Executive Dir. - Indep. Code/CFA |
March 12, 2020 | Approval 2021 Accs. |
2/2 | 2/2 |
(V) this column indicates member attendance at Committee meetings.
| Office | Members | Year of birth |
Date of first appointment |
In office from | In office until | Slate | Ind. Code | Attendance at Board meetings |
No. other offices |
|---|---|---|---|---|---|---|---|---|---|
| Chairperson | FREZZOTTI GIOVANNI |
1944 | 27/04/2018 | 29/04/2021 | Approval 2023 Accs. | M | YES | 21/21 | 7 |
| Statutory Auditor |
BELLI MASSIMILIANO |
1972 | 27/04/2018 | 29/04/2021 | Approval 2023 Accs. | M | YES | 21/21 | 0 |
| Statutory Auditor |
ROMAGNOLI SIMONA | 1971 | 29/04/2021 | 29/04/2021 | Approval 2023 Accs. | M | YES | 10/21 | 0 |
| Alternate Auditor | TIRANTI LEANDRO |
1966 | 27/04/2018 | 29/04/2021 | Approval 2023 Accs. | M | YES | 0/21 | 0 |
| Alternate Auditor | SPACCAPANICCIA SERENELLA |
1965 | 27/04/2018 | 29/04/2021 | Approval 2023 Accs. | M | YES | 0/21 | 0 |
| Statutory Auditors leaving office during the year | |||||||||
| Statutory Auditor NICOLINI MONICA 1963 27/04/2018 | 27/04/2018 | Approval 2020 Accs. M |
YES | 11/21 | 0 |
Number of meetings held in the year: 21
Within the general process for the recording and analysis of Group risk areas, undertaken to structure an internal control system which allows for the best possible governance of company risks, a particular focus is placed on the internal control system on the financial disclosure process, which is not considered a separate component, but rather an integral part of Elica's overall internal control system. The above accounting-administrative control model comprises a set of procedures and internal instruments adopted to enable the reaching of the assurance, accuracy, reliability and timeliness of financial reporting objectives.
Employing a single and integrated approach the Company therefore considered it correct to base the guidelines for the design, implementation and maintenance of the Internal Control System on the best international practices, which currently stem from the study conducted by the Committee of Sponsoring Organizations of the Threadway Commission (CoSO Report). In addition to this, the development and implementation of the control procedures were conducted taking account of the Control Objectives for IT and related technology (COBIT Framework) and the Corporate Governance Code of Borsa Italiana S.p.A., of the Confindustria "Guidelines", of the "Ethics Code" and further regulations and rules in force, as well as national and international standards and guidelines concerning Internal Control Systems in general, and specifically concerning Financial Disclosure Control Systems.
With specific regard to the administrative-accounting processes, the Internal Control System, as described above, supports the basis of the declaration which the Corporate Financial Reporting Officer must issue in accordance with Article 154-bis of Legislative Decree No. 58/98.
The structuring and organisation of administrative-accounting processes, in continuous development, is focused on achieving maximum synergy between achieving the compliance objectives and the optimisation objectives, through actions focused on formalising the processes and their efficiency, the identification and the evaluation of risks and the design of mitigating controls according to a structured methodology, with an overall view to achieving maturation of the entire System, extendible to the Group in the medium term.
The Financial Disclosure Control System of Elica is based on the phases described below:
This activity involves continuous monitoring of the risks to which each Group company is exposed, by carrying out both quantitative assessments of the main account items and qualitative assessments.
The administrative-accounting processes identified by the assessments described above are documented in order to allow for their analysis and maintenance, as well as to provide a full description of the associated risks and existing controls.
The approach adopted takes into consideration the possible risk of failing to correctly represent operating events in the financial disclosure, designing and monitoring controls to guarantee the coverage of these risks, in addition to coordinating with the control mechanisms implemented for other components of the overall internal control system. In particular, the administrative-accounting processes include risks related to the non-achievement of the control objectives to ensure true and correct financial disclosure and to minimise the probability and impact of any occurrence. These objectives concern the financial statement affirmations (typically: existence and occurrence, completeness, rights and obligations, valuation and recording, presentation and disclosure) and other elements concerning the internal control environment of the organisation (such as, for example, compliance with authorisation limits, segregation of duties, controls on the physical security and the existence of assets, documentation and traceability of operations). The risk analysis related to financial disclosure, developed according to the guidelines and the scope defined by the Financial Reporting Officer, provides for periodic updating in order to identify the principal amendments made to the administrative-accounting processes with the natural development of the business and the organisation.
On the basis of the results of the recording and assessment of financial disclosure process risks at an inherent level (i.e. independently of the existence of controls upon occurrence), the Company defines the structure and the means for execution of administrative-accounting controls considered adequate to guarantee the containment and mitigation of residual risks to an acceptable level.
The system of controls defined to guarantee their containment is subject to periodic monitoring and to periodic verification of the effectiveness of the administrative-accounting controls, i.e. the performance of specific tests in order to ascertain the correct execution by the corporate functions involved, as well as the implementation of the defined corrective measures.
The Risk and Control Management System, in relation to the Financial Disclosure of Elica is overseen by the Financial Reporting Officer who draws up adequate administrative and accounting procedures for the preparation of the parent company and consolidated financial statements, in addition to all communications of a financial nature. The Financial Reporting Officer declares upon the adequacy and the effective application of these procedures with regard to the half-year and annual financial statements, both for the parent company and for the group. In carrying out the duties assigned by the Board of Directors, the Financial Reporting Officer:
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