Governance Information • Mar 31, 2021
Governance Information
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pursuant to Art. 123-bis of the Consolidated Law on Finance
(2020 Financial Year)
Traditional administration and control model
Issuer: BIESSE S.p.A. website: www.biessegroup.com
Financial year to which the Report refers: 1 January 2020 – 31 December 2020 Date of approval of the report: 15 March 2021
| GLOSSARY 4 | |||||
|---|---|---|---|---|---|
| 1. | ISSUER PROFILE 5 | ||||
| 2. | OWNERSHIP INFORMATION (at 31/12/2020) 6 | ||||
| a) | Share capital structure 6 | ||||
| b) | Restrictions on the transfer of securities 6 | ||||
| c) | Significant equity investments in the share capital 6 | ||||
| d) | Securities that grant special rights 7 | ||||
| e) | Employee share ownership: mechanism to exercise voting rights 7 | ||||
| f) | Restrictions on voting rights 7 | ||||
| g) | Shareholder agreements 7 | ||||
| h) | Change of control clauses and provisions of the Articles of Association concerning takeover bids 7 |
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| i) | Powers of attorney to increase share capital and authorisations for the acquisition of treasury shares 8 |
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| l) | Management and coordination 8 | ||||
| 3. | COMPLIANCE 8 | ||||
| 4. | BOARD OF DIRECTORS 9 | ||||
| 4.1 | APPOINTMENT AND SUBSTITUTION 9 | ||||
| 4.2 | COMPOSITION 11 | ||||
| 4.3 | ROLE OF THE BOARD OF DIRECTORS 14 | ||||
| 4.4 | AUTHORISED BODIES 17 | ||||
| 4.5 | OTHER EXECUTIVE DIRECTORS 19 | ||||
| 4.6 | INDEPENDENT DIRECTORS 19 | ||||
| 4.7 | LEAD INDEPENDENT DIRECTOR 20 | ||||
| 5. | PROCESSING OF CORPORATE INFORMATION 20 | ||||
| 6. | BOARD COMMITTEES 21 | ||||
| 7. | APPOINTMENTS COMMITTEE 21 | ||||
| 8. | REMUNERATION COMMITTEE 21 | ||||
| 9. | REMUNERATION OF GROUP DIRECTORS AND TOP MANAGEMENT 22 | ||||
| 10. | CONTROL AND RISK COMMITTEE 23 | ||||
| 11. | INTERNAL CONTROL SYSTEM 24 | ||||
| 11.1 EXECUTIVE DIRECTOR IN CHARGE OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 25 |
| 11.2 INTERNAL AUDIT MANAGER26 | |||||
|---|---|---|---|---|---|
| 11.3 | ORGANISATIONAL MODEL PURSUANT TO LEGISLATIVE DECREE 231/2001 AND THE CODE OF CONDUCT 27 |
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| 11.4 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 29 | |||||
| 11.5 INDEPENDENT AUDITORS 30 | |||||
| 11.6 FINANCIAL REPORTING OFFICER 30 | |||||
| 11.7 COORDINATION AMONG THOSE INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 31 |
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| 12. | INTERESTS OF DIRECTORS AND RELATED-PARTY TRANSACTIONS 31 | ||||
| 13. | APPOINTMENT OF STATUTORY AUDITORS 32 | ||||
| 14. | COMPOSITION AND FUNCTIONING OF THE BOARD OF STATUTORY AUDITORS (pursuant to Art. 123 bis(2)(d) and (d-bis) of the TUF) 33 |
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| 15. | SHAREHOLDER RELATIONS 35 | ||||
| 16. | SHAREHOLDERS' MEETINGS 36 | ||||
| 17. ADDITIONAL CORPORATE GOVERNANCE PRACTICES AND LETTER OF 22 DECEMBER 2020 SENT BY THE CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE TO THE CHAIRMEN OF THE BOARDS OF |
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| DIRECTORS OF LISTED COMPANIES 37 | |||||
| 18. | CHANGES AFTER THE CLOSE OF THE FINANCIAL PERIOD 38 | ||||
| 19. | SUMMARY TABLES 38 | ||||
| TABLE 1 39 | |||||
| INFORMATION ON THE OWNERSHIP STRUCTURE 39 | |||||
| TABLE 2 40 | |||||
| STRUCTURE OF THE BOARD OF DIRECTORS AND THE COMMITTEES 40 | |||||
| TABLE 3 41 | |||||
| STRUCTURE OF THE BOARD OF STATUTORY AUDITORS 41 |
Biesse or the Issuer or the Company: Biesse S.p.A., with its registered office at 16 Via della Meccanica, Pesaro
Code/Corporate Governance Code: the Corporate Governance Code for listed companies approved in July 2018 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria
Civ.code/ c.c.: the Civil Code
Board: the Issuer's Board of Directors
Financial year: the financial year to which the Report refers
Group or Biesse Group: collectively, the Issuer and its subsidiaries as per Art. 93 of the Consolidated Law on Finance
Long-Term Incentive 2018-2020: the "Long-Term Incentive 2018-2020 of Biesse S.p.A." submitted for the screening and approval of the Remuneration Committee on 11/05/2018 and available on the company's website.
Consob Issuers' Regulations: the Regulations promulgated by Consob with Resolution No. 11971 of 1999 (and subsequent amendments thereto) on issuers' matters
Consob Market Regulations: the Regulation issued by Consob with Resolution No. 20249 of 2017 on markets
Consob Related Party Regulations: the Regulations promulgated by Consob with Resolution No. 17221 of 12 March 2010 (and subsequent amendments thereto) on related party transactions
Report: this corporate governance and ownership report is required under Art. 123-bis of the Consolidated Law on Finance
TUF or Consolidated Law on Finance: Italian Legislative Decree No. 58 of 24 February 1998, as amended
Biesse Group operates in the market of machines and systems for processing wood, glass/stone and advanced materials. The Group offers modular solutions ranging from the design of "turnkey" systems for large-scale furniture manufacturers to individual automatic machines and work centres for small and medium businesses, up to the design and sale of individual high-tech components.
A multinational company with factories in Italy, India and China, today Biesse Group markets its products through a network of subsidiaries and 39 branches located in what are considered to be strategic markets. The branch offices ensure specialised after-sales service to customers, while also carrying out market research aimed at developing new products.
Biesse Group's mission is to provide technological solutions for the processing of wood, glass, marble and advanced materials with every-day uses, for companies associated with the furniture industry; as a global partner, provide reliable, cutting-edge solutions in addition to a specialist after-sales service that is quick, efficient and effective.
All the activities carried out by the Group are carried out with an awareness of its moral and social responsibility towards all its stakeholders (employees, shareholders, customers, suppliers, communities, commercial and financial partners, institutions, trade associations, union representatives, etc.), in the belief that the achievement of the Group's objectives (the first of which is to give added value to shareholders, customers and the community in which it operates) must be accompanied, not only by respect for specific company values, but also by compliance with current regulations and the general duties of honesty, integrity, fair competition, fairness and good faith.
Biesse shareholders exercise their rights through shareholders' meetings. Decisions taken at shareholders' meetings in compliance with law and the Articles of Association are binding on all shareholders, including those that dissent or abstain from voting. Ordinary and extraordinary shareholders' meetings and shareholder decisions are valid where the quorum, voting majorities and other statutory requirements set out in existing laws are satisfied.
The Company has adopted a traditional governance and control model, consisting of a Board of Directors, a Board of Statutory Auditors, and an independent auditor.
The Board of Directors is vested with all powers of ordinary and extraordinary administration. As such, it plays a central role in the Company's corporate governance. The Board has set up a Committee for the remuneration of Directors and an Audit and Risk Committee and a Related Parties Committee.
The Board of Statutory Auditors oversees compliance with the law and the Articles of Association and is responsible for monitoring the management of the Company.
As required by law, an independent auditor appointed by the shareholders and registered with Consob is responsible for the auditing of accounts.
Further on in this Report, a detailed description is provided of the role, responsibilities, composition and operation of each of the aforementioned governance bodies.
c) Information on the acquisition and maintenance of the SME status
The issuer falls within the parameters identified by Art. 1, paragraph 1, letter w-quater.1) of the Consolidated Law on Finance and by Art. 2-ter of the Consob Issuers' Regulation, as amended by Art. 44-bis of the Decree Law of 16 July 2020, No. 76 and subsequent Consob resolution No. 21625 of 11 December 2020, containing the implementing provisions of the definition of SMEs applicable to listed companies. On 21 December 2018 the Company submitted to Consob the information relating to its qualification as an SME, specifying the value of its capitalisation and turnover, as prescribed by resolution No. 20621 of 10 October 2018. During the Year, the Company did not make any new notifications, having maintained the qualification of SME, in compliance with the new parameters introduced following the regulatory update reported above, which abrogated the reference to the turnover parameter previously indicated in Art. 2-ter, paragraph 1, lett. b, RE).
| tax identification number |
company name | year end date if different from 31/12 |
first financial year | average capitalisation 2019* |
average capitalisation 2020* |
|---|---|---|---|---|---|
| 113220412 | Biesse S.p.A. | / | 2014 | 412,366.00 | 364,637.00 |
* To be completed only for the years/financial years corresponding with and subsequent to the starting date
The share capital, totalling €27,393,042 is fully paid up and divided into the same number of registered, ordinary shares with a par value of €1 each.
| SHARE CAPITAL STRUCTURE | ||||
|---|---|---|---|---|
| No. of shares |
% of share capital |
Listed/Not listed | Rights and obligations | |
| Ordinary shares |
27,393,0421 | 100% | Listed on the MTA, STAR segment |
The shares are registered, freely transferable, indivisible, and each of them gives the right to one vote at the ordinary and extraordinary shareholders' meetings of the Company in accordance with the law and the Articles of Association (except for what is provided for in the Articles of Association on the increase of the voting right) and attribute the additional administrative and property rights provided for by law for shares with voting rights. |
As at the date of this report, the Issuer had not issued any financial instruments convertible or exchangeable for shares.
The Company has not approved capital increases to service share-based incentive plans. The new long-term incentive plan called "Long-Term Incentive 2018-2020 of Biesse S.p.A." was approved by the Remuneration Committee on 11 May 2018. This plan provides for the payment of cash awards to the beneficiaries subject to the achievement of the Company's economic and financial objectives, therefore, not providing for the allocation of shares, pursuant to Art. 114-bis of the TUF, a resolution of the Shareholders' Meeting in this regard was not necessary, since a resolution of the Issuer's administrative body was deemed sufficient (14 May 2018).
There are no restrictions of any kind on the transfer of Company securities.
c) Significant equity investments in the share capital
At 31 December 2020, shareholders holding more than 5% of the subscribed share capital in the form of voting stock, as confirmed by the share register and disclosures received in accordance with Art. 120 of the TUF and other available information, are listed in the table below:
| Declarant | Direct | % of ordinary | % of voting share |
|---|---|---|---|
| shareholder | share capital | capital | |
| Selci Giancarlo | Bi.Fin S.r.l. | 51% | 51% |
The Issuer has not issued instruments that confer special rights.
During 2018, the Issuer proposed the introduction of shares with increased voting rights in order to achieve, on the one hand, the stabilisation of control and, on the other, a shareholding that is more active in the management of investments and less attentive to speculative logics and short termism.
The proposal, submitted to the Shareholders' Meeting held on 24 April 2018, was accepted with a vote in favour and led to the modification of Art. 6 of the Articles of Association, with the introduction of the ad hoc regulation of shares with increased voting rights, an extract of which is available on the Issuer's website www.biessegroup.com, in the section Investor Relations/Increased voting right. As a consequence, the Issuer has also fulfilled the obligation of maintaining a register of shares with increased voting rights, in which the shareholders who request it will be registered. The setting up of the register was ratified by a resolution of the Board of Directors on 14 May 2018 and its management was assigned to a third-party company by way of outsourcing.
As of the date of this report, only the shareholder Bi.Fin. Srl had applied to be entered on the list to be eligible for the increased vote rights, for its entire shareholding (amounting to 13,970,500 shares). The corresponding entry in the list took place on 18 May 2018. After 24 months of registration, i.e. 18 May 2020, the shareholder BI.FIN S.r.l. gained the increase in the voting rights due to the shares registered in the list, subject to notification by the depositary intermediary.
The Issuer has not adopted any system of employee participation in its share capital or share-based incentive plans.
There are no restrictions on the voting rights attaching to ordinary shares. The Issuer has issued ordinary shares only. During 2018, shares were introduced having increased voting rights (cf. paragraph d) above).
To the Company's knowledge, no shareholder agreements have been made pursuant to Art. 122 of the TUF.
During 2018, the Issuer signed an agreement with BNL Group BNP Paribas for a medium-long term bilateral loan up to a maximum of €50 million, usable both for the ordinary and extraordinary activities (growth by external lines) of the Issuer.
The aforementioned agreement provides, as a result of the change of control clause contained therein, for the right of withdrawal on the part of the credit institution if Giancarlo Selci ceases to hold, directly or indirectly, 51% of the shares with the right to vote in the ordinary and/or extraordinary shareholders' meeting or, equally, in the event that Giancarlo Selci ceases to control Biesse.
The Articles of Association of the Company do not provide for waivers of the provisions of Art. 104, paragraphs 1 and 1-bis of the TUF or application of the neutralisation rules provided for by Art. 104-bis, paragraphs 2 and 3 of the TUF.
i) Powers of attorney to increase share capital and authorisations for the acquisition of treasury shares
No authorisation has been given to the Board of Directors to increase the share capital in accordance with Art. 2443 of the Civil Code, or to issue equity instruments.
The Issuer is controlled by Bi.Fin S.r.l., which in turn is not controlled, as defined by Art. 93 of Legislative Decree No 58/1998, by any legal entity. The Issuer is managed and coordinated by its controlling shareholder Bi.Fin S.r.l.
As required by Art. 2497-bis of the Civil Code, all the Italian subsidiaries controlled directly by the Issuer have disclosed that they are managed and coordinated by the Issuer.
♦ ♦ ♦
The information required by Art. 123-bis(1)(i) and (l) is illustrated, respectively, in the Remuneration Report published pursuant to Art. 123-ter of the TUF and in the section of this Report on the appointment and replacement of directors (Section 4.1).
The Issuer has adhered to the "Corporate Governance Code for Listed Companies". In 2020, the July 2018 version was applicable. The new "Corporate Governance Code" came into force on 1 January 2021. The Code can be accessed by the public on the website of the Corporate Governance Committee at https://www.borsaitaliana.it/comitato-corporate-governance/codice/codice.htm. This Report indicates whether the Company has decided not to implement specific recommendations contained in the Code, highlighting the reasons for the failure to comply with it and providing information on the process that led to the decision to deviate from it and any alternative course of conduct adopted.
In compliance with Art. 123-ter of the TUF and Art. 6 of the Corporate Governance Code, also taking into consideration what is stated in the Recommendations of the European Commission No 2004/913/EC, 2005/162/EC and 2009/385/EC, the Company has adopted a general Remuneration Policy (which will be referred to in point 9 below).
With a view to protecting its values and to compliance in general, the Company has also decided to adopt an Antitrust Handbook (which will be referred to in point 5 below).
The Issuer's corporate governance system complies with the principles identified by the Code. Together, these principles form the cornerstone of the Company's corporate governance policy, namely:
The Issuer's key corporate governance documents are:
In order to promote the market's broader knowledge of the governance model adopted by the Issuer, the documents indicated above (with the exception of the ICFR model and the Treasury Policy) are available online (in Italian and English) on the website www.biessegroup.com, Investor Relations/Corporate Governance section.
The Issuer and its strategic subsidiaries are not subject to non-Italian laws that may in any way influence the Issuer's corporate governance structure.
Directors are appointed through a transparent procedure, designed to guarantee that timely and suitable background information on candidates is provided. As required by Art. 16 of the Articles of Association, nominations for the office of Director include exhaustive information on the personal and professional characteristics of the candidates, along with an indication of whether they satisfy independence criteria.
Directors are appointed through the "voting list" mechanism: the Company introduced the obligation to file the lists at the company headquarters no later than the 25th day prior to the date set for the Shareholders' Meeting and to make these available to the market, with the methods set forth by law and by Consob in its Regulation, at least 21 days prior to the Shareholders' Meeting.
The Articles of Association lay down that Shareholders have the right to present these lists only if, on their own or together with other Shareholders, they represent at least 2.5% (two point five percent) of the share capital or if they hold a different minimum number of shares as established by Consob in its Regulations (it should be noted in this regard that, pursuant to Consob Executive Resolution No. 44 of 29 January 2021, the minimum percentage established by Consob for the 2021 financial year is 2.5%).
No Shareholder may submit or participate in submitting more than one list, by proxy or by fiduciary company. Every vote holder may vote on only one list.
Members of the Board of Directors are elected through the following procedure:
a) all the directors to be elected, minus one, are selected from the candidate list which obtains the highest number of shareholder votes, based on the sequential order in which they appear in the list;
b) the first name on the candidate list which obtains the second highest number of shareholder votes is selected as the remaining director to be elected.
The first candidate on the candidate list obtaining the highest number of shareholder votes is appointed Chairman of the Board of Directors.
Where only one candidate list is filed or voted for, all the candidates on the list are appointed to the Board.
In the absence of a list, the Board of Directors is appointed by a Shareholders' Meeting with the majorities laid down by Italian law.
There are no specific mechanisms to ensure election of the minimum number of independent directors required by Art. 147-ter, paragraph 4 of the TUF, nor do the Articles of Association provide for requisites of independence for directors other than those required therein.
At the meeting held on 20 December 2019, the Board of Directors approved the so-called Succession Plan Policy, which provides that, in case of urgency (meaning the sudden incapacity of the Chief Executive Officer for any reason), the Board of Directors defines powers and proxies to ensure ordinary and extraordinary management during the transitional period.
In particular, it is provided that the Board of Directors:
(i) calls an emergency meeting of the so-called Succession Committee, consisting of the Group Chairman, the Chief Organization & HR Officer, the Chief Financial Officer and the Group General Manager. This Committee, on the one hand, is called upon to play a proactive and managerial role in relation to any extraordinary transactions deemed to be unable to be postponed and, on the other, to guarantee the ordinary management and operational decisions of normal responsibility of the Chief Executive Officer. The Succession Committee will be conferred the same powers as the Chief Executive Officer;
(ii) identifies a person (preferably a director) within the Succession Committee who will play the role of liaison between the Committee and the company structures and will manage external and internal communication;
(iii) assess whether, for operational management, to temporarily extend the powers for ordinary activities, within the limits of the approved budget.
This Committee, with the aid of the Remuneration Committee, will evaluate (internal and external) candidates and submit a shortlist of candidates for the final selection to the Board of Directors. At the end of the process, the Board of Directors will co-opt the most suitable candidate and confer operational powers and proxies on the same.
Under Art. 16 of the Articles of Association, the number of members of the Board of Directors may vary between a minimum of two and a maximum of fifteen directors, who may be either shareholders or non-shareholders, as determined by the Shareholders' Meeting.
The Board in office at 31 December 2020, is composed of eight members, including 3 members belonging to the less represented gender. The mandates of all the directors in office expire with the approval of the financial statements at 31 December 2020. Seven of the eight members were appointed by a resolution of the Shareholders' Meeting of 24 April 2018 on the basis of (i) the list presented by the majority shareholder Bi.Fin. Srl, which was voted for by shareholders representing 13,970,500 shares equal to 51% of the share capital and (ii) the minority list jointly presented by the shareholders who were in no way related to the majority shareholder: "Aletti Gestielle SGR S.p.A." fund manager: Gestielle Pro Italia; Amundì Asset Management SGR.p.A., fund manager of: Amundi Valore Italia PIR and Amundi Dividendo Italia; Arca Fondi SGR S.p.A., fund manager of Arca Economia Reale Equity Italia; Eurizon Capital SGR S.p.A., fund manager of: Eurizon PIR Italia 30, Eurizon Azioni Italia, Eurizon Progetto Italia 70, Eurizon Azioni PMI Italia, Eurizon PIR Italia Azioni, Eurizon Progetto Italia 20 and Eurizon Progetto Italia 40; Eurizon Capital SGR S.p.A., fund manager of: Eurizon Fund – Equity Italy and Eurizon Fund – Equity Small Mid Cap Italy; Fideuram Asset Management (Ireland) fund manager of Fonditalia Equity Italy; Fideuram Investimenti SGR S.p.A., fund manager of: Piano Azioni Italia, Piano Bilanciato Italia 50 and Piano Bilanciato Italia 30 and Mediolanum Gestione Fondi fund manager of Mediolanum Flessibile Futuro Italia, which was voted for by shareholders representing 7,913,565 shares, equating to 28.8% of the share capital.
In relation to the composition of the Board at the beginning of 2020, some important changes in the role of Director took place during the year: on 29 September 2020, Silvia Vanini gave her resignation from her position as Director due to personal reasons, a circumstance that required the co-optation of a new member of the Board of Directors, identified in the person of Massimo Potenza.
The office of Director, co-opted from 30 October 2020, will expire at the next Shareholders' Meeting and therefore together with the other directors in office.
In particular, at 31 December 2020, the Board of Directors is composed of five executive directors, with the exception of that specified below in relation to Stefano Porcellini:
Roberto Selci, CEO;
Massimo Potenza, Co-Chief Executive Officer and General Manager;
Stefano Porcellini held the position of General Manager of the Group until September 2020.
There are three independent non-executive directors as per the TUF and the Code:
| Term served by Directors since their initial appointment | |||
|---|---|---|---|
| Directors | Date of initial appointment | Total number of years in office |
|
| Roberto Selci | 2000 | 20 | |
| Giancarlo Selci | 1994 | 26 | |
| Alessandra Parpajola | 2005 | 15 | |
| Stefano Porcellini | 2006 | 14 | |
| Massimo Potenza | 2020 | / | |
| Elisabetta Righini | 2015 | 5 | |
| Giovanni Chiura | 2018 | 2 | |
| Federica Palazzi | 2018 | 2 |
Brief information is reported below on the personal and professional backgrounds of the individual members of the Board of Directors.
Roberto Selci, born in Pesaro on 18/04/1960, joined the Biesse Group in 1988. Initially holding various Sales/Marketing roles in the Company's Asian and US branches, he eventually went on to promote the internationalisation of the Biesse Group in subsequent years. Roberto Selci is the son of Giancarlo Selci, the Company's founder.
Giancarlo Selci, born in Pesaro on 02/01/1936, is the Company's founder. Awarded the honours of Ufficiale e Cavaliere del Lavoro, he has always been actively involved in all Biesse operations. It has been under his guidance that the Group has grown steadily in size to reach international proportions, becoming a leading multinational in the sector.
Alessandra Parpajola was born in Dolo, Venice, on 12/06/1973. After graduating in Business Economics from Bocconi University in Milan, she began her career working for the family business. Parpajola joined Biesse in September 2003 in the role of Credit Manager. Married to Roberto Selci, she actively participates in all the main departments and areas of General Management.
Stefano Porcellini was born in Rimini on 23/11/1965. He graduated from Bocconi University in Milan with a degree in Business Economics, majoring in Finance. He began his career in Accenture, where he worked in Financial Markets for five years. He joined the Group in 1995, initially as Head of the Branch Division. In 1999 he became Biesse Plant Manager, before being transferred in 2001 to manage the Company's public float and stock exchange listing. He then became head of the Wood Division, and in October 2003 Group Chief Financial Officer in charge of administration, finance and control. In November 2006 he was appointed to the Board of Directors of Biesse. Subsequently, in 2012, he took on the role of Chief Operating Officer, which he held until September 2020.
Massimo Potenza, born in Bari on 23 April 1960, graduated in Business Administration from the University of Bari and subsequently obtained a Master's in the Tertiary Sector (Rome). After taking on increasing responsibilities in finance and control, he became General Manager of the Bakery Products Division and subsequently CEO and member of the Board of the Barilla Group until 2011. In the following years, he held the roles of Board Member and Senior Strategic Advisor in leading consulting companies for the Fashion & Luxury, Food, Pharma and Mechanical sectors. He joined Biesse in October 2020 and is Co-Chief Executive Officer and General Manager. As at 31/12/2020, Mr Potenza owns 2,050 Issuer shares.
Elisabetta Righini, Independent Director, was born in Forlì on 25/03/1961. She studied at the University of Bologna where she graduated in Law. She has had a brilliant university teaching career, becoming Director of Commercial Law and Financial Markets at the School of Economics at the University of Urbino, Commercial Law at the Fano campus of the School of Economics at the University of Urbino, and Commercial Law (first and second module) at the Law School at the University of Urbino. Author of a numerous legal and economic publications, since April 2013 she has been an Independent Director of Unipol Gruppo finanziario S.p.A. As at 31/12/2020, Prof Righini did not own any Issuer shares.
Giovanni Chiura, born in Turin on 06/07/1965, Independent Director, holds a degree in Economics and Commerce from the Economics Faculty of the University of Turin. He currently holds the position of CFO of the company Sorgenia S.p.A., where he was also an Advisor to the Board of Directors from February 2014 to March 2015. During the course of the year, he was a member of the Board of Directors of the main subsidiary companies, including Tirreno Power S.p.A., Sorgenia Power S.p.A. and Sorgenia Puglia S.p.A. Mr Chiura held no shares in the Issuer as at 31/12/2020.
Federica Palazzi, born 28/01/1979, Independent Director, she graduated in Business Economics from the University of Urbino and is currently a researcher at the Department of Economics, Society and Politics of the Carlo Bo University of Urbino as well as Professor of Programming and Monitoring at the School of Economics (Fano site) of the Carlo Bo University of Urbino. In 2015 she won the "Best Junior Contribution to the Intangibles and IC Theory and Practice Award" from the European Institute for Advanced Studies in
Management - EIASM, she is currently engaged in prestigious research projects also in collaboration with other universities nationally and internationally, and is the author of numerous economic-financial publications. As at 31/12/2020 Ms Palazzi did not own any Issuer shares.
For all members of the Board of Directors, the assessments of their integrity and professionalism as required by current legislation were carried out at the Board meeting of 31 July 2020. More specifically, the members of the Board of Directors meet the integrity requirements 1under Art. 148(4) of the TUF and the Regulation adopted by Decree No. 162 of the Ministry of Justice of 30 March 2000.
At the meeting of 31 July 2020, the directors Giovanni Chiura, Elisabetta Righini and Federica Palazzi confirmed that they fulfilled the independence requirements laid down in Art. 147-ter(4) of the TUF and the Corporate Governance Code.
Unless otherwise stated in the personal information relating to the Directors, none of the members of the Board of Directors has any personal ties as referred to in Book I, Title V of the Civil Code with other members of the Board of Directors, nor between them and the members of the Board of Statutory Auditors of the Issuer or executives and other persons in a strategic role.
At its meeting of 12 May 2017, the Board of Directors resolved not to set general criteria on the maximum number of offices directors may hold on the boards of directors and auditors in other companies considered compatible with the effective running of the Board of Directors of the Company, considering this assessment to be primarily the responsibility of Shareholders in designating directorships and subsequently, of each director in accepting the appointment. However, if the Board deems it to be appropriate based on the information received from the directors (and in light of the body's self-assessment process), it may carry out a check on it using primarily the following evaluation criteria: (i) the role of Director in the Company (executive, non-executive, independent, member of one or more committees); (ii) the nature and size of the organisation in which the positions are held and the role of the Director in these organisations (with regard to, among other things, the organisation's corporate purpose, the governance structure, the number of meetings the director must attend as a result of his role, the responsibilities assigned to the directors, and any other mandates; (iii) whether these organisations are related to the Issuer's group. In any case, it should be noted that at the meeting held on 31 July 2020 the adequacy of the time available to the members of the Board of Directors was positively verified on the basis of the results of the Time Commitments of each director, on the basis of which the Board is called upon to assess whether each of its members, in the light of all the professional activities normally carried out in addition to the office of Director of Biesse S.p.A., has the necessary time to devote to the management of the company itself.
In addition and with regard to the self-assessment of the body, during the Financial Year a process was initiated, which will be discussed in detail in paragraph 4.3 below.
In relation to Board Inductions, although aware that, in accordance with the Corporate Governance Code, such sessions are appropriate to provide directors and statutory auditors (as well as the issuer's top managers) with adequate knowledge of the business sector in which the Issuer operates, the company dynamics and their evolution, as well as the regulatory or self-regulatory framework of reference, the Board in office as of 31 December 2020, given the onset of the Covid 19 emergency, decided to postpone this activity to 2021, as a result
1 Art. 2 of Decree No. 162 of the Ministry of Justice of 30 March 2000: 1. The office of statutory auditor of the companies referred to in Art. 1(1) may not be held by persons who: a) have been subjected to preventive measures ordered by a judicial authority pursuant to Law No. 1423 of 27 December 1956, or Law No. 575 of 31 May 1965, as amended, unless their conviction is spent; (b) have been sentenced to one of the following by a final court ruling, unless their conviction is spent: 1) a custodial sentence for one of the offences under the laws on banking, financial and insurance activities and the laws on markets and financial instruments, tax and payment instruments; 2) imprisonment for one of the offences provided for in Title XI of Book V of the Italian Civil Code and Royal Decree No. 267 of 16 March 1942; 3) imprisonment for a period of not less than six months for a crime against the public administration, public faith, property, public order or the economy; 4) imprisonment for a period of not less than one year for any offence with criminal intent. 2. The office of statutory auditor in the companies referred to in Art. 1(1), may not be held by anyone subject, at the request of the parties, to one of the penalties provided for in paragraph 1(b), unless the offence has been extinguished.
of communication difficulties in the use of remote communication tools, which would not have made such training particularly effective.
This decision was also taken due to the fact that the induction mainly concerns Insider trading legislation, a subject on which the Issuer has already held two training sessions in the last three years; in addition, in the meantime the legislation has not undergone any changes.
In any event, the Company has provided adequate training on the subject of Market Abuse to the appointed Director Massimo Potenza, through a personal induction on 09/10/2020.
For 2021, the Issuer plans to restart training on Insider Trading regulations, as well as on the topics most relevant to the company business, if the Board requests it.
In addition to the above, it should be noted that on 22 December 2020, the Issuer provided information to the members of the Board of Directors and the Board of Statutory Auditors about the most salient projects in place, such as the new corporate organisational model being implemented, possible future M&A transactions and the proposed sale of shares in Dongguan Korex Machinery Co. LTD
With reference to the composition of the Board in office at 31 December 2020, the Board of Directors did not consider it appropriate to adopt diversity policies with regards to matters such as age and educational and professional background, considering this assessment to be primarily the responsibility of the Shareholders in designating directorships and, subsequently, of each director in accepting the appointment; in terms of gender diversity, the Issuer applies the provisions of articles 147-quater and 148 of the TUF (based on the provisos prior to the amendment of Law No. 160 of 27 December 2019) and a third of the Board of Directors in office at 31 December 2020 consists of directors of the less represented gender.
It should be noted that with regard to gender requirements for corporate bodies, Law 160 of 27 December 2019 (2020 Budget Law) amended articles 147-ter and 148 of the TUF, which extended the related obligations for six consecutive terms and increased the number of directors and statutory auditors of the least represented gender that must be elected to corporate bodies from 1/3 to 2/5. Issuers already listed are required to comply with these new proportion provisions as from the renewal of the bodies after the entry into force of the new provision (i.e. subsequent to January 2020). Therefore, the composition of Biesse's corporate bodies as reflected in this Report is that provided for by the regulations prior to the aforementioned legislative amendment, in force on the date of election of the Board. It should also be noted that, as a result of the aforementioned change in the duration of the legal obligation on gender balance and the mechanism for the automatic transposition of the regulations in force on the subject provided for in the Company's Articles of Association, Biesse has decided to submit to the Shareholders' Meeting called for the approval of the financial statements as at 31 December 2020, the amendments to the Articles of Association relating to the provisions on gender balance provided for in its Articles of Association to adapt them to the new legislation.
The Board of Directors is the central body of the Company's Corporate Governance system and is responsible for defining, applying and updating the rules of corporate governance, in compliance with the regulations in force, as well as determining the strategic management guidelines and top management of the Company and Group (understood as Biesse and the companies under its control, in accordance with the definition provided by Art. 93 of the TUF).
The actions and decisions of the directors are shaped by the primary objective of creating value for shareholders, in consideration of the directives and policies of the Group and the benefits connected with belonging to the Group.
The Board of Directors is vested with all powers of ordinary and extraordinary administration. It has the power to make all the decisions deemed necessary or conducive to the pursuit of the Company's business purpose, with the exclusion of decisions reserved to shareholders by law.
With a resolution of 2 May 2018, the Board of Directors in office was assigned a strategic and organisational role, in addition to responsibility for verifying the existence of the checks that are needed for monitoring the conduct of the Company and the Group as a whole.
The Board in office, as provided for by the Articles of Association and a resolution of 2 May 2018, is in particular responsible for:
reporting to shareholders at shareholders' meetings;
determining, by proxy granted to the Independent Directors, which proposals to submit to the Shareholder's Meeting and the Board itself for the remuneration of individual Board members;
The Shareholders' Meeting determined the remuneration of the directors during the Board meeting of 24 April 2018; on 30 October 2020, following Massimo Potenza's appointment, the remuneration due to him was also integrated, in line with the amount of remuneration approved by the Shareholders' Meeting on 24 April 2018 and in any event, after discussion and sharing with the Remuneration and Related Parties Committees, which expressed a favourable opinion. For more information, see paragraph 9.
The Board constantly monitored the general results of operations through its meetings, taking into consideration the information received from the authorised bodies, as well as periodically comparing the Company's performance to forecast results.
With regard to the prior approval by the Board of Directors of related-party transactions and/or transactions affecting the interests of one or more directors or third-party interests they may represent, see section 12 below.
The Board of Directors normally meets at least four times a year, in order to approve the financial reports required of companies listed on the Star segment of Borsa Italiana's electronic equity market (MTA).
During the financial year closed 31 December 2019, the Board of Directors held eight meetings, each lasting two hours and ten minutes on average. It should be noted that the various board meetings were convened under the terms of the Articles of Association by videoconference in compliance with the precautionary measures for the containment of the Covid-19 Pandemic. For the financial year ending 31 December 2021, the Board of Directors has scheduled seven meetings, two of which already held respectively on 20 January and 29 January 2021.
The attendance percentage of each director in office at 31 December 2020 at the meetings of the Board of Directors is shown below (as detailed in Table 2 below): Roberto Selci 100%, Giancarlo Selci 75%, Alessandra Parpajola 100%; Stefano Porcellini 100%, Massimo Potenza 100% (in relation to the number of meetings held during the actual period of office), Giovanni Chiura 100%; Elisabetta Righini 100% and Federica Palazzi 100%.
It is noted that the outgoing director, Silvia Vanini, in relation to the number of meetings held during her actual period in office, achieved an attendance record of 85.7%.
The assessment of the requirements of professionalism, integrity and independence of the members of the Board of Directors and of the committees was carried out positively by the Board of Directors on 31 July 2020 and, following the co-option of Massimo Potenza, in relation to the requirements of professionalism and integrity of the same, on 30 October 2020.
The Board of Directors, in accordance with the Corporate Governance Code, implemented a self-assessment process for the Year concerning the adequacy and functioning of the body itself and also focused on identifying any roles that may be considered useful for strengthen the powers of the BoD itself, in view of the renewal of corporate offices to be held at the Shareholders' Meeting to approve the Company's 2020 financial statements.
The proposal was presented to the members of the Board at the meeting of 31 July 2020 and approved by the same and subsequently implemented through (i) filling in questionnaires addressed to all members of the Board of Directors and (ii) the collegial assessment of the meeting body, based on the results of the first assessment. The self-assessment was carried out in a disciplined manner and with the active participation of all the Directors involved.
The questionnaire and the collegial assessment concerned: analysis of the composition and internal dynamics of the Board and Committees; examination of the tasks and duties of the Board and certain reflections on the remuneration issue.
The Board then specifically assessed the adequacy of its functioning during the Board meeting of 30 October 2020, analysing the results of, inter alia, the self-assessment process.
From the analysis, it emerged that the work on the body is considered, on the whole, good, with a degree of satisfaction expressed on average by the directors of more than 75%.
The suggestions for corrections were uniformly identified among the directors and related to the prior assessment by the Biesse Board of Directors of the composition of the Boards of subsidiaries and the updating of the Board itself following any new appointments.
As a correction to this point, the Issuer specifies that a procedure is being prepared to support the Group for the definition of the qualitative-quantitative composition of the Board of Directors of all Biesse subsidiaries which, once completed, will be submitted for prior approval to the Company's Board of Directors.
In relation to entrusting the self-assessment process of the administrative body to an external and independent party, starting from the assumption that the Corporate Governance Code suggests recourse to a consultant is an option but not an obligation, the Issuer decided not to proceed in this way, due to the fact that the Company belongs to the reference shareholder group of listed companies, considering its own features in terms of size and turnover and, lastly, the limited size of the administrative body.
During the Financial year, the Board also specifically assessed the adequacy of the administrative and accounting structure of the Issuer and its subsidiaries prepared by the Chief Executive Officer during the Board meeting of 31 July 2020.
On the same date, the Board carried out an assessment of the adequacy, effectiveness and effective functioning of the internal control system, based on the activities carried out and reported by the Control and Risk Committee, approving a project to update the Group's internal control system and the control system pursuant to Law 262/2005, in the light of implementation of the Oracle ERP in all the Group's main subsidiaries, resulting in an intrinsic improvement in the level of effectiveness of the control system itself.
For Board meetings, directors are provided with the documents and information needed by the Board in order to discuss the issues examined. In any event, the Chairman ensures that specific and appropriate clarification is given at Board meetings. Achille Marchionni participates at Board meetings in the capacity of permanent secretary of the Board of Directors for the entire duration of the mandate of the administrative body currently in office.
In addition to the secretary, the following directors normally attend board meetings as guests: the Group CFO Pierre La Tour, the Group Finance Director Alberto Amurri and the Head of the Legal Affairs Office of the Group Elena Grassetti.
The Shareholders' Meeting has not authorised in advance waivers to the prohibition of competition pursuant to Art. 2390 of the Civil Code.
Based on the powers conferred in the meeting of 2 May 2018, subsequently reconfirmed at the meeting of 30 October 2020, the Board of Directors reserved the powers for the following matters:
a. Start-up of new businesses.
b. Opening or closing factories, branches, remote facilities, sales offices and the like.
c. Acquiring or disposing of shareholdings, branches or companies and the like.
d. Stipulation of agreements with third parties of strategic importance (alliances, associations, joint ventures, long-term cooperation, etc.).
e. Purchase or sale of real estate (land and buildings) and associated rights; establishment of guarantees on immovable property such as, by way of example only, the granting of mortgages, privileges and guarantees.
f. Issuing of sureties in the interest of third parties and for reasons other than those of commercial management and granting of privileges on movable assets, issuing guarantees and granting loans; this limit will not be effective for transactions involving the acceptance and endorsement of credit instruments.
g. Stipulation of contracts that create a situation of conflict of interest between the Company and its directors, internal auditors or managers. A conflict of interest is presumed, in particular, if the other party to the contract is a relative either direct or by marriage of directors, auditors or managers of the Company, or is a Company or entity with direct or indirect links to such relatives.
h. Stipulating, substantially modifying or terminating contracts which, due to their possibly stifling competition by their nature or content, may be subject to notification to the competent national or international antitrust authorities.
The following are the main powers attributed to the directors at this meeting, as well as subsequently amended following the changes that occurred during the year. An Executive Committee has not been appointed.
The Chairman of the Board of Directors, Giancarlo Selci, due to the size of the company and the activities of the same, as well as the many years of knowledge and experience acquired in managing the Group, with a
resolution of the Board of Directors adopted on 2 May 2018, has been delegated all powers of ordinary administration, including therein the power to manage relations with credit institutions and all the signatory powers necessary for the lodging of tax returns of all kinds, human resources management, the purchase and sale of motor vehicles and capital goods registered in public registers, the subscription and negotiation of bills of exchange issued pursuant to Law No. 1329 of 28 November 1965 (so-called "Sabatini Act") and leasing contracts. The Chairman is also empowered to represent the Company legally. By virtue of the powers conferred, the Chairman is one of the main persons responsible for management of the Issuer (Chief Executive Officer).
The Chairman, Giancarlo Selci, also controls Bi.Fin S.r.l. and therefore controls the Company.
The CEO Roberto Selci, in a resolution dated 2 May 2018, was given the legal representation of the Company at any public and private office and before any judicial authority, as well as the attribution of powers in matters of the definition of strategy and the general coordination of Group policies, for the preparation of the annual budget to be submitted to the Board of Directors, the definition of the functional structures of the Company and of the subsidiaries within the framework of the general organisational guidelines established by the Board, the setting of the criteria for recruitment and general management of personnel in compliance with the annual budget. The CEO is in charge of the ordinary administrative and commercial management of the company, including the management of relations with credit institutions.
The CEO has also been assigned the duties and responsibilities pursuant to Italian Legislative Decree 19 September 1994, No 626, as well as Legislative Decree 9 April 2008 No 81 as amended concerning the health and safety of workers in the workplace, all with the power to delegate; in particular, the CEO was given the legal role of "Employer" pursuant to and for the purposes of Art. 2 of Italian Legislative Decree 19 September 1994 No 626 and of Art. 2 of Italian Legislative Decree 9 April 2008 No 81 as amended, with the duties laid down therein with the power to delegate, to the extent permitted by law, the performance of any useful and/or necessary activity aimed at ensuring compliance with the law.
The CEO was assigned the authority and responsibilities, with the power of delegation, as per Regulation (EU) No. 2016/679, and any subsequent supplementary and/or amending regulations, concerning the protection of persons and other bodies in connection with the processing of personal data.
Finally, during the year, the Chief Executive Officer was appointed Director in charge of the internal control and risk management system as of 31 July 2020, as well as FGIP (Department in charge of the Management of Inside Information), replacing Stefano Porcellini from 9 September 2020.
Based on the granted powers Roberto Selci can be considered one of the Chief Executive Officers of the Company.
No interlocking directorate are present included in application criterion 2, paragraph 5 of the Code.
The Co-Chief Executive Officer Massimo Potenza, appointed with the resolution of 30 October 2020, was granted the same powers as the Director Roberto Selci, except for the identification of the roles of Employer, Person in charge of protecting people in relation to processing of personal data, Director in charge of the internal control and risk management system and FGIP.
The offices assigned to the director Alessandra Parpajola, with the resolution of 31 July 2020, were reduced compared to those assigned in the resolution of 2 May 2018, including the role of Director in charge of the internal control and risk management system; in view of this reduction, after a discussion with the Remuneration Committee and after consulting the Board of Statutory Auditors, a consequent and proportional reduction of remuneration was also approved.
The new offices and the new remuneration take effect from 1 August 2020 until the end date of the mandate of the Board in office which coincides with the Shareholders' Meeting for the approval of the Company's 2020 financial statements.
By virtue of the agreements entered into during the consensual termination of the employment relationship between the Issuer and director Stefano Porcellini during the Year, the latter will continue to hold the office of director until the date of the end of the mandate of the Board in office, which coincides with the Shareholders' Meeting for the approval of the Company's 2020 Financial Statements.
The aforementioned executive directors all duly reported to the Board of Directors on the performance of their duties and responsibilities at each Board meeting held.
There are no other executive directors on the Board of Directors other than those indicated in point 4.4 above.
The Company, in compliance with principle 3.C.3 of the Code, has three independent directors who are Giovanni Chiura, Prof Elisabetta Righini and Federica Palazzi.
The independent directors are such, based on the provisions of the TUF and the Code, because:
The independence requirements of each of the independent directors was verified, in compliance with TUF and the Code, in the meeting of 31 July 2020.
The Board of Statutory Auditors investigated the correct application of the criteria and procedures adopted by the Board for assessing the independence of its members, and produced no findings requiring reporting.
The number and authority of Independent Directors is such that they ensure that their opinion has a significant weight in decisions taken by the Issuer's Board of Directors, in the light of the size and organisational structure of the Board in office at 31 December 2020. These directors bring their specific competencies to Board discussions and contribute to decisions being made in the Company's interest. They confirmed their suitability to qualify as independent directors at the time of presenting the lists for the reconstitution of the Board and also committed themselves to maintaining their independence throughout their mandate.
During 2020, the Independent Directors held an autonomous meeting on 02/12/2020, during which they discussed issues relating to: role and involvement of independent directors; provision of documents relating to the agenda of Board meetings; inductions; conduct of Board meetings; Committee reports in Board meetings and remote connection to Board meetings.
The Board, acknowledging that international best practice recommends avoiding the concentration of offices on a single person without adequate checks and balances in order to ensure full compliance with the Principles of the Code, has established the function of Lead Independent Director, appointing to fill this role independent director Elisabetta Righini. The Lead Independent Director acts as a coordinator for non-executive Board members, with a view to encouraging their greater contribution to the work and operation of the Board.
The Lead Independent Director is specifically responsible for:
In 2020, the Lead Independent Director called:
In accordance with the Code, directors and statutory auditors are required to uphold the confidentiality of the documents they view and the information they learn in the due course of their duties, and to comply with Company procedures for the internal management and disclosure of such documents and information.
External communications of documents and information regarding the Company or/and the Group, with particular attention to so-called "Price sensitive", inside information, are regulated by a procedure, approved by the Board of Directors in the meeting of 27 March 2006, as amended (the last time on 3 August 2018) following the entry into force of European Regulation No 596/2014 (so-called Market Abuse Regulation, hereinafter "MAR"). This regulation ensures the complete, correct, clear, transparent, timely, continuous and maximum dissemination of information concerning the Company and its subsidiaries, as well as compliance with the primary and secondary legislation in force. These procedures also require a Register to be set up of individuals having access to inside information. Following the publication of the new Consob Guidelines of October 2017 on inside information, the Company decided to update its regulations. The changes introduced by the Guidelines include the list of all persons who have access to "relevant information" (RIL: relevant information list), which the Company has established. This procedure is available on the Company's website, www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
On 3 August 2016, the Board of Directors revised its internal regulation on internal dealing in view of the entry into force of the MAR, subsequently updating it on 9 September 2020. This procedure is available on the Company's website www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
At the Board of Directors meeting on 11 November 2011, the Company approved the adoption of an "Antitrust Handbook", subsequently updated in May 2016, which provides employees with the basic rules of conduct for reducing the risk of engaging in anti-competitive conduct. This code will coordinate with the Group Code of Conduct which already in paragraph 5.1.13 provides as a general rule the prohibition of engaging in anticompetitive conduct.
By means of a resolution dated 2 May 2018, the Board of Directors, as reconstituted on 24 April 2018, formed a committee that performs the functions laid down by the Code for the Control and Risk Committee, the Committee for transactions with related parties and the Remuneration Committee, each composed of two independent directors. The Board of Directors has no other committees.
The internal rules of procedures for these committees were approved by the Board of Directors on 3 August 2016 and are available on the Company's website www.biessegroup.com, on the "Corporate Governance" page in the Investor Relations section.
The Board of Directors decided not to set up an Appointments Committee due to the small size of the Board itself and the requirements of the Articles of Association regarding candidate list voting system, which ensures the transparency of the appointment procedures and a balanced make up of the Board of Directors.
The Board of Directors has set up a Remuneration Committee which, in compliance with the Code, currently consists of two non-executive independent directors:
The Board of Directors considered, when appointing the members of the Remuneration Committee, that the directors Elisabetta Righini and Federica Palazzi had adequate knowledge and experience in accounting and finance.
The Committee has the task to (i) submit to the Board proposals for the definition of the general policy for the remuneration of CEOs, executive directors, of other directors holding particular offices and executives with strategic responsibilities, monitoring the implementation of resolutions adopted by the Board; (ii) periodically evaluate the criteria adopted for the remuneration of key management personnel, monitoring their application and making recommendations to the Board in general; (iii) submit proposals to the Board on the remuneration of executive directors and other directors who hold particular offices as well as setting performance targets related to the variable component of remuneration; (iv) monitor the implementation of Board resolutions, verifying, in particular, the actual achievement of performance targets. Directors must abstain from taking part in Committee meetings which include discussion of the Board remuneration proposals.
When carrying out its duties, the Remuneration Committee can access the necessary company information and functions, as well as call upon external consultants under the terms established by the Board of Directors.
During the year, the Committee met four times, on 12/03/2020, 25/03/2020, 27/07/2020 and 22/10/2020, and on these occasions was called to: assess the report on remuneration relating to 2019; resolve on the modification of powers and remuneration of the Director Alessandra Parpajola; resolve on the proposal for the assignment of proxies to Massimo Potenza as a new member of the Board of Directors of Biesse S.p.A and assess the total remuneration proposed for the assignment in line with the Biesse Remuneration Policy. At the end of the meetings, the Committee voted in favour of the various items on the agenda submitted for its examination. The Board has two meetings scheduled in 2021.
As in previous years, no financial resources were allocated to the Committee since, in order to fulfil its duties, it used the Issuer's corporate resources and facilities.
On 11 November 2011, the Board of Directors adopted a Remuneration Policy of the Issuer and its subsidiaries, prepared in compliance with Art. 123-ter of Legislative Decree No. 58 of 24 February 1998 ("Consolidated Law on Finance") and Art. 6 of the Corporate Governance Code, also taking into consideration that specified in the Recommendations of the European Commission No. 2004/913/EC, 2005/162/EC and 2009/385/EC. The current Policy complies with the update to the Corporate Governance Code of July 2018 and implements, as envisaged by the application criterion 6.C.1 (f) of the Code, the possibility to reclaim the variable components of remuneration in cases where these had been allocated on the basis of information subsequently proved to be manifestly incorrect.
The Policy, as amended by the Board of Directors on 13 March 2020, following the entry into force of Legislative Decree 49/2019, was subsequently approved (without comments) by the Ordinary Shareholders' Meeting of 21 April 2020, pursuant to Art.123- ter, paragraphs 3-bis and 3-ter, of Legislative Decree 58/98.
The Policy establishes guidelines and principles for definition of the remuneration of the main managerial figures of Biesse and the Group aimed at attracting, retaining and motivating people with the professional qualities required to successfully manage the Company and the Group and contributes to company strategies, the pursuit of medium-long term interests and the Company's sustainability.
The Policy outlines, in particular, the criteria and procedures to be followed for determining the remuneration of the following key figures identified as:
It should be noted that, even prior to the adoption of the Policy and already with a view to the provisions of Art. 6 of the Corporate Governance Code, the Company, in order to attract, retain and motivate Directors with specific professional qualities necessary to successfully manage Biesse and to ensure that the interests of Executive Directors were aligned with the primary objective of creating value for shareholders in the medium to long term, introduced mechanisms which provide for a significant part of the remuneration of Executive Directors and Top Management of the Group to be made up of performance-linked compensation and/or individual targets (also known as variable incentive bonuses or schemes).
The new long-term incentive plan called "Long-Term Incentive 2018-2020 of Biesse S.p.A." was approved by the Remuneration Committee on 11 May 2018 and, being an exclusively monetary incentive plan without the assignment of shares, pursuant to Art. 114-bis of the TUF, a resolution of the Shareholders' Meeting in this regard was not necessary, since a resolution of the Issuer's administrative body (14 May 2018) was deemed sufficient.
This plan provides for the payment of cash bonuses to the beneficiaries subject to the reaching of economic and financial targets by the Company (cash flow objectives and EBITDA).
Remuneration of non-executive directors is not linked to the performance results achieved by the Issuer. No share-based incentives plan has been made for non-executive directors.
For further information on the Biesse remuneration policy, please refer to the corresponding Report pursuant to Art. 123ter of the TUF, which has been published as provided by law. It is pointed out that the claw-back clause provided for in application criterion 6.C.1. (f) of the Code was adopted in the Remuneration Policy approved by the Shareholders' Meeting called to approve the financial statements as at 31 December 2015. On this point, please refer to that indicated in the corresponding Remuneration Report that will be published according to legislation.
In view of the consensual termination of the employment relationship with Stefano Porcellini, the Issuer recognised the Director around 15 months of gross annual salary in a single payment, in addition to the ordinary fees associated with the termination of the relationship.
The Board of Directors has set up an internal Control and Risk Committee which, in compliance with the Code, currently consists of two non-executive directors, both independent:
The aforementioned Directors have experience, respectively, in risk management and in accounting and financial matters, deemed adequate by the Board at the time of their appointment.
The Committee not only assists the Board of Directors in carrying out their duties, it is also responsible for:
The Committee reports periodically with the Internal Audit department and the Board of Statutory Auditors.
During the year, the Control and Risk Committee held 6 meetings, duly recorded, with average duration of ninety minutes.
Both Directors Elisabetta Righini and Federica Palazzi attended 100% of the Committee meetings.
The Board has four meetings scheduled in 2021, one of which was held in March.
The Chairman of the Board of Statutory Auditors and the Standing Auditors, as well as the Internal Audit Manager, Domenico Ciccopiedi, attended the meetings of the Control and Risk Committee.
In carrying out its duties in 2020, the Control and Risk Committee assessed the documentation on the Issuer's risks, overseeing the detailed operational update of the risk assessment conducted by the Issuer during the listing phase. It also assessed the accounting principles that served as a basis for the financial reports, and reviewed the activities of the Internal Audit department. It was able to access the necessary company information and functions to carry out its duties. In order to perform its functions, the Control and Risk Committee was provided with the human resources deemed adequate for the activities to be carried out. The Chairman reports on the work carried out by the Committee during the Board's plenary meetings.
The internal control system of the Biesse Group consists of a set of rules that define behaviours, values and procedures to be followed by all employees and contractors. The aim is to ensure good corporate governance and monitor the key business risks, as well as ensure the reliability of all financial and other information given to the Company's various bodies and to the market.
During 2020 the Board of Directors evaluated the adequacy, efficiency and effectiveness of the control system in consideration of the verifications carried out in this regard by the Control and Risk Committee.
The Internal Control and Risk Management System reduces but cannot eliminate the possibility of wrong decisions, human errors, fraudulent violation of control systems and unpredictable events. Therefore a good Internal Control and Risk Management System provides reasonable, but not absolute, assurances that the Company will not be hindered in achieving its business objectives or in the orderly and legitimate conduct of its activities, by circumstances which may reasonably be foreseen.
The Internal Control and Risk Management System of the Company, defined according to national and international leading practice, consists of the following three levels of control:
First level: operational functions identify and assess risks and define specific actions for their management;
Second level: functions responsible for controlling risks define risk management methodologies and tools and carry out risk-monitoring activities;
Third level: the Internal Audit department provides independent assessments of the entire System.
The guidelines of the internal control system have been defined by the Board of Directors in order that the main risks relating to the Issuer and its subsidiary are correctly identified and adequately measured, managed and monitored, also determining compatibility criteria of such risks with sound and proper business management. The guidelines also took into account all the risks that could affect the long-term sustainability of the Company's business.
The hierarchy of this control system can be defined in the points below.
By resolution of 31 July 2020, the reference person of the Control and Risks Committee, who is responsible for supervising the implementation and evolution of the same, identifying the main business risks so as to design, implement, and manage the internal control system and adapting this system to the changing corporate operating conditions in compliance with current regulations and legislation, was identified in the person of the Chief Executive Officer Roberto Selci, replacing Alessandra Parpajola.
The identification of the Chief Executive Officer as the director chosen to fill this role came ahead of its requirement in the new Corporate Governance code, in force from 01/01/2021, which identifies this role as the person able to establish and maintain the Internal Control and Risk Management System.
In evaluating the main risks, the Director responsible is assisted by the Internal Audit Manager. The Internal Audit Manager, Mr Domenico Ciccopiedi, was appointed on 4 August 2014 at the proposal of the Chairman of the Board of Directors, who also proposed his remuneration.
The above-mentioned representative:
e) has promptly reported to the Control and Risk Committee (or the Board of Directors) on issues and problems emerging in the course of his activities or which, nevertheless, came to his knowledge, in order for the Committee (or the Board) to take appropriate action.
The Internal Audit Manager, Domenico Ciccopiedi, was appointed by the Chairman of the Board of Directors, in agreement with the Control and Risk Committee; he meets the independence requirements in compliance with the Corporate Governance Code.
According to the Corporate Governance Code, the Internal Audit Manager does not hierarchically report to any manager of operating areas, has free access to all the company information and has his own appropriate financial resources. He has direct access to all information useful to perform his mandate and is committed to providing assurances on the internal control system reporting the results directly to the Chairman of the Board of Directors, the Control and Risk Committee, and the Board of Statutory Auditors. His remuneration was defined in line with corporate policies by the Board at the proposal of its Chairman. The financial resources made available to the Internal Audit Manager in 2020, as a contingency pending the finalisation of the correct dimensioning of the department, amounted to Euro 100,000.00 (one hundred thousand/00 euros) and the same mainly carried out an audit activity in the same period, to verify the correct application of the Group's accounting procedures (Internal Control over Financial Reporting Model) in the preparation of financial reporting. The following companies were the subject of these audits: Biesse Group Australia Pty Ltd., Biesse Manufacturing Pvt Ltd, Biesse S.p.A., HSD USA Inc., HSD Mechatronics (Shanghai) Co. Ltd., HSD Mechatronics Korea LLCd., Biesse America Inc., HSD Deutschland GmbH.
The purposes, powers and responsibilities of Internal Audit's activities are formally defined by an Internal Audit Charter, consistent with the definition of Internal Auditing defined by the Corporate Governance Code, the Code of Ethics and the reference Standards.
The Internal Audit Manager:
In 2020, the main activities carried out by the Internal Audit Manager were as follows: analysis and testing of the internal control system pursuant to Law No. 262/05; participation in Supervisory Bodies and audits under Legislative Decree 231/01 for the companies Biesse S.p.A., HSD S.p.A., Viet S.r.l., Uniteam S.p.A. and Bre.Ma. Srl; overseeing the certification of related-party transactions involving the Group's senior management; managing the Enterprise Risk Management process; identifying and managing risks internal to the Group; implementation of the Non-Financial Declaration reporting process pursuant to Italian Legislative Decree 254/2016 and preparation of the Biesse Group Sustainability Report; management of activities related to Anticorruption and Antitrust compliance.
In March 2010, the Biesse Group adopted a Code of Conduct as an integral part of its Internal Control System. The Code of Conduct enshrines the principles of ethics and professionalism that the Group expects all directors, auditors, employees, associates, consultants, and partners to strive for. The Code of Conduct was adopted by all the Group companies in Italy and abroad. This Code aims to convey the importance of operating in a way that is sustainable and that can protect the interests of all stakeholders; it has been integrated in order to provide guidelines for environmental protection, health and safety and ethical business practices too.
The Code of Conduct is an official document that expresses the ethical commitments and responsibilities for Biesse and other Group companies when conducting business and managing the company's affairs. The document also governs the rights, duties and responsibilities expressly exercised and undertaken by Biesse in relation to the parties it deals with in carrying out its business.
The Code of Conduct is an integral part of Biesse's Organisation, Management and Control Model pursuant to Italian Legislative Decree of 8 June 2001 No 231 (hereinafter the "Model"), approved by the Board of Directors in 2007 and containing provisions on the administrative Responsibility of its entities.
On the proposal of the Supervisory Body, on 30 October 2018, the Board of Directors approved the latest version of the Model, modified in both the general and in the special sections in order to incorporate the following cases, within the framework of the predicate offences pursuant to Leg. Decree 231/01:
The Model is the result of a long and in-depth analysis of the risks associated with Biesse's legal status. It is consistent with the principles enshrined in Legislative Decree 231/01, in line with national best practices and the instructions of Confindustria, and is sufficient to prevent the risk that employees and associates of the Company commit the offences set forth in the aforementioned decree and in subsequent amendments.
It represents an additional guarantee of the sense of responsibility in relationships within the Group and with external parties, offering Shareholders sufficient guarantees of correct and efficient management.
The Model contains a detailed analysis of the risks of committing the offences provided for in Legislative Decree No. 231/01, with specific reference to significant offences in relation to Biesse's business, and a list of procedures required to fill any gaps between the areas found to be potentially at risk and the procedures already in place and operational at Biesse.
Presently, the areas identified as at risk and monitored pursuant to the regulations are:
A Supervisory Body was also set up, consisting of the Chairman, Giuseppe Carnesecchi, of the Head of the Biesse Legal Affairs Office and of the Head of the Biesse Internal Auditing Office, with the task of:
To complete the Model, note that the Company has set up a structured and unified system of procedures and control activities (which includes bolstering the efficacy of those already existing and by implementing new ones) aimed at covering any possible risks arising from sensitive and instrumental activities for the purpose of committing the offences set forth in the aforementioned decree.
The Model, as well as the Code of Conduct, are available on the company's website at www.biessegroup.com, Investor Relations section.
The risk management and internal control over financial reporting of the Company is based on the "COSO Report" reference model, which can be defined as a set of rules, procedures and organisational structures that uses an appropriate risk identification, measurement, management and monitoring process, according to a Risk Based methodology to run a healthy, sound, correct and transparent company that meets the predefined objectives.
The system aims to ensure:
compliance with laws and regulations;
and protection of the company wealth.
The Board of Directors is responsible for the internal control and risk management system and sets its guidelines, periodically checking its adequacy and effective functioning, also through the Control and Risk Committee and finally, describes its essential elements in relation to corporate governance.
At the meeting of 3 August 2012, following the prior approval of the Control and Risk Committee, the company adopted the Policy for managing risks/opportunities (or ERM, Enterprise Risk Management). On 20 December 2019, the Board of Directors approved the amendments made to the Policy, aimed at simplifying it and making it more consistent with the current risk management within the company. In this Policy, in line with the Corporate Governance Code, the management of risks/opportunities plays a central role in the corporate governance rules; it is the responsibility of the Board of Directors to ensure proper management of key risks/opportunities, while the Committee must play a role of assurance on the adequacy of the internal control system. Via the ERM, the rules with which the Biesse Group performs the evaluation of risks/opportunities are established and formalised, thus introducing a structured process and adequate operational tools. The document was drafted taking inspiration from the main benchmarks on Enterprise risk management, in particular the COSO Enterprise Risk Management framework. Adopting adequate and modern tools in this field allows the internal functions to adequately structure the process, also with the aim of internally sharing in-depth knowledge about the management of risks/opportunities able to ensure a more strategic/preventive (rather than the typical reactive) approach.
The ERM process is structured in three phases described as follows:
The first is the risk assessment that aims to identify, describe, classify and assess risks/opportunities. This phase is carried out in two separate moments; Risk Identification and Risk Evaluation through identification of the various types of risks to which the Company is exposed and their assessment.
The second is the risk treatment that aims to define targets and the owners responsible for implementing and maintaining appropriate risk/opportunity management measures.
The third is the Risk monitoring that aims to implement an effective internal control process on the effectiveness and effective implementation of the ERM Policy and of the tools defined by the Group for risk/opportunity management.
The controls set up can be split into the following categories:
First level checks carried out in individual legal entities, offices and divisions based on the assignment of responsibilities, powers and mandates, separation of duties, assignment of privileges and rights of access in IT applications;
Second level checks through the issuing of authorisations by individual department managers (e.g. budget, investment and/or purchase requests, signing of service contracts) or through the operative supervision of the individual responsibilities (e.g. verification of reconciliations, analysis of the coherence of data, etc.);
Third level checks entrusted to the internal control bodies (e.g. Internal Audit Department, Quality Management, Internal Control Committee, Supervisory Board under Legislative Decree No. 231/01) and external control bodies (Board of Statutory Auditors, Independent Auditor, Certifying Bodies).
With a view to creating value for shareholders, Biesse Group – believing it to be essential to work towards this goal by increasing the safeguards set up to protect the integrity of information intended for shareholders – has taken action to improve efficiency and focus on achieving compliance with the provisions of Law No. 262/2005. Specifically, in order to protect shareholders and stakeholders in general, in 2007 the Biesse Group introduced procedures to ensure the veracity, correctness and transparency of the data by (i) a preliminary scoping activity aimed at identifying the significant types of transactions, transactions not considered routine, and accounting estimates to be included in the scope of the analysis in relation to significant related accounts at a consolidated level, based on defined qualitative and quantitative criteria (e.g. materiality, inherent risk, etc.); (ii) a risk evaluation activity aimed at certifying that processes and sub-processes identified in the scoping phase are not invalidated by irregularities, errors or omissions not detected by the internal monitoring system and, generally, by the "Corporate Governance" system; (iii) implementation of new control procedures to prevent the risk under point (ii) above; (iv) planning and implementation of a round of tests on the entire internal control system designed to verify its relevance and effectiveness and preparation of a Remediation Plan with a view to completely achieving the control objectives defined in the scoping phase.
During 2020, the project to update the control and documentation system pursuant to Law 262/05 continued, launched following the implementation of the Oracle ERP in all the main Group branches and with the main objective of standardising the control rules and procedures to standardise the safeguards for the protection of correct financial reporting.
To fully implement the ICFR model, Biesse has set out requirements regarding: i) the compliance plan, which establishes the rules for the formalisation, maintenance, management and control of the model; ii) the collation procedure, whose purpose is to ensure that the Chairman of the Board of Directors and the Financial Reporting Officer receive the internal affidavit of the process owners responsible within the company for applying the model.
On 20 June 2018, the Biesse Shareholders' Meeting, following the opinion of the Board of Statutory Auditors and the Board of Directors on 14 May 2018, resolved to appoint Deloitte S.p.A. as independent auditors for the period 2019-2027, establishing the relative remuneration.
On 30 October 2019, in compliance with Law No. 262 of 28 December 2005, in addition to the provisions of the Articles of Association, the Board of Directors, at the proposal of the Chairman and subject to the favourable opinion of the Board of Statutory Auditors, approved the appointment of Mr Pierre Giorgio Sallier de La Tour, new CFO of the Biesse Group, as Financial Reporting Officer.
The Financial Reporting Officer, Mr La Tour, possesses all the requirements of professionalism and integrity required by applicable law to carry out this task, being an expert in the fields of administration, finance and control and in possession of the necessary integrity requirements.
The Manager has been granted all the necessary powers under Art. 154-bis of Legislative Decree 58 of 24 February 1998, as introduced by Art. 14 (1) of Law 262 which include but are not limited to:
The issuer provides for coordination procedures among those involved in the Internal Control and Risk Management System in order to maximise the efficiency of the internal control and risk management system and to reduce duplication of effort. To this end, the Board of Directors receives and examines the periodic reports prepared by the Internal Audit Manager, by the Control and Risk Committee and by the Director in charge of the Internal Control and Risk Management System, in order to verify (i) whether the structure of the Internal Control and Risk Management System in place within the Group is effective in achieving the objectives and (ii) whether any reported weaknesses imply the need for System improvement.
According to the Regulation adopted by Consob with Resolution No. 17221 of 12 March 2010, as amended by Resolution No. 17389 of 23 June 2010 ("Consob Regulation"), on 12 November 2010 the Board of Directors of the Company adopted, with the prior approval of the Internal Control Committee at the time, the procedure governing transactions with related parties, laying down the rules for transactions with related parties with the aim of ensuring, for itself and its subsidiaries, the transparency and substantive and procedural fairness of transactions with related parties entered into by the Company.
The Regulation aims to identify the principles and procedures which Biesse uses in order to ensure the substantial and procedural transparency and correctness of Related-Party transactions (as defined below), executed by the Company, directly or through its subsidiaries.
For the purposes of the Regulation, related-party transactions ("RPT") may be defined as any transfer of services, resources, or obligations between related parties, regardless of whether or not a consideration has been agreed, which may include:
merger or spin off transactions in the narrow sense and not proportional, provided these are executed with Related Parties;
every decision related to the assignment of remuneration and economic benefits, in any form, to members of the Board of Directors and Statutory Auditors and to key managers.
The bodies involved in examination and approval of the transactions and bodies which have supervisory duties on enforcement of the Regulation, each for their own sphere of responsibility, for the purpose of identifying the RPT in accordance with the Regulation, are required to give preference to and consider the substance of the relationship and not only its legal form. Taking into account the reports and comments made by other company bodies, the Board of Directors of the Company reviews the effectiveness of the Regulation at least every three years and decides whether any changes are necessary or appropriate.
As the Company is a smaller listed company and pursuant to the recent amendments to the Articles of Association, Biesse is taking advantage of the ability to apply the procedural system allowed for Minor RPTs to Major RPTs, in accordance with Art. 10 of the Consob Regulation.
This Regulation includes the establishment of a Committee for vetting Related-Party transactions which consists of the two independent directors and uses the prerequisites set forth by applicable law and regulations. This Committee is the Control and Risk Committee.
During the financial year, the Committee held three meetings, with minutes taken as required, lasting an average of forty minutes. All members participated in those meetings. One meeting is planned in 2021.
The Board of Directors has found operating solutions that can facilitate the identification and adequate management of the situations in which a director holds an interest on his own behalf or on behalf of third parties.
The Issuer has taken note of the amendments made by Consob to the Regulation on Related Party Transactions, to the Issuers' Regulation and to the Market Regulation with resolutions Nos. 21624 and 21623 of 11 December 2020 and aimed at implementing the delegation contained in Legislative Decree of 10 June 2019, No. 49 and will adapt its Regulations in accordance in the first half of 2021.
The Biesse Related Party Transactions Regulation is available on the company's website at www.biessegroup.com, in the section "Investor Relations".
The Board of Statutory Auditors supervises compliance with the law and the Articles of Association and provides control of operations, while it is not responsible for accounting controls which are the responsibility of independent auditors designated by the Shareholders' Meeting among those registered in the Consob roll.
The Articles of Association provide that the Board of Statutory Auditors is made up of three standing Auditors and two alternate Auditors and that the appointment is made on the basis of lists presented by the Shareholders representing at least 2% (two percent) of the share capital with voting rights in the ordinary Shareholders' Meeting or the different minimum quota established by Consob (for 2021, as established with Consob Executive Resolution No.44 of 29 January 2021, it established that the minimum percentage for the presentation of lists for the appointment of the statutory auditors of Biesse SpA is equal to 2.5% - it should be noted that any lower percentage provided for in the Articles of Association and therefore the 2% threshold established in the Company's Articles of Association applies). Each Shareholder, as well as the Shareholders belonging to the same group may not present, not even through a third party or trust company, more than one list nor can they vote for different lists. If this rule is broken, the vote of the Shareholder in question will not be taken into account for any of the candidate lists filed. Each candidate may only be on one list. Failure to comply will mean ineligibility.
A statutory auditor is elected as follows: two standing auditors and one alternate auditor are selected, in the consecutive order in which they are listed, from the candidate list that obtained the highest number of votes in the Shareholders' Meeting; the names of one standing and another alternate auditor are selected from the candidate list with the second highest number of shareholder votes, according to the sequential order in which they appear in the list. The standing auditor will assume the role of Chairman. If there is a tie among two or more candidate lists, the Statutory Auditors appointed will be those most senior in age.
The lists must be filed no later than the twenty-fifth day prior to the date of the Shareholders' Meeting and must be posted, as required by law and by the Consob Regulations, at least twenty-one days prior to the meeting. Candidatures must be accompanied by a professional curriculum vitae and the statements whereby each candidate accepts the candidature and attests, under personal responsibility, the absence of ineligibility and incompatibility, as well as the existence of the requirements prescribed by law and by the Articles of Association for these roles.
In the event of the replacement or expiry of the term of a statutory auditor, the substitute from the same list as the terminated or expired auditor takes his place. Should this not be possible, the Shareholders' Meeting shall be responsible, with the legal majority, subject to that provided by law on the appointment of statutory auditors representing the majority.
The Board of Statutory Auditors in office was appointed by the ordinary Shareholders' Meeting on 24 April 2018 and remains in office until approval of the financial statements of the year ended 31 December 2020. The members of the Board of Statutory Auditors were appointed on the basis of (i) the list presented by the majority shareholder Bi.Fin. S.r.l and (ii) of the minority list jointly presented by "Aletti Gestielle SGR S.p.A.", fund manager of: Gestielle Pro Italia; Amundì Asset Management SGR.p.A., fund manager of: Amundi Valore Italia PIR and Amundi Dividendo Italia; Arca Fondi SGR S.p.A., fund manager of Arca Economia Reale Equity Italia; Eurizon Capital SGR S.p.A., fund manager of: Eurizon PIR Italia 30, Eurizon Azioni Italia, Eurizon Progetto Italia 70, Eurizon Azioni PMI Italia, Eurizon PIR Italia Azioni, Eurizon Progetto Italia 20 and Eurizon Progetto Italia 40; Eurizon Capital S.A., fund manager of: Eurizon Fund – Equity Italy and Eurizon Fund – Equity Small Mid Cap Italy; Fideuram Asset Management (Ireland) fund manager of Fonditalia Equity Italy; Fideuram Investimenti SGR S.p.A., fund manager of: Piano Azioni Italia, Piano Bilanciato Italia 50 and Piano Bilanciato Italia 30 and Mediolanum Gestione Fondi, manager of the Mediolanum Flessibile Futuro Italia fund, holding a total of 1.4046% of the Issuer's share capital.
During 2020, the Board of Statutory Auditors met 16 times, in compliance with the precautionary measures for the containment of the Covid-19 Pandemic.
As at the date of preparation of this Report, 11 are planned for 2021.
For more information on the composition of the Board and the equity investment of each member, see the summary tables. At the end of year, the Board of Statutory Auditors was made up as follows:
Paolo De Mitri (Chairman), born in Milan, on 14/10/1963, obtained the qualification of accountant and commercial expert in 1982. He has been on the Register of Practitioners of the Professional Association of Chartered Accountants and Accounting Experts of the Province of Mantua since 1987 at number 215, Section A; in the Register of Arbiters, Arbitrators and Contract Experts of the Arbitration Board of Mantua since 1994; in the register of consultants to the judge in the categories: auditors, companies, company and asset valuations and taxation since 1993; in the register of auditors at No 18347. During the year, he served as Chairman of the Board of Statutory Auditors in the following companies: BPER Banca S.p.A., Hyle Capital Partners Societa' di Gestione del Risparmio S.p.A., Riello Investimenti S.p.A.; Towerclean S.p.A; Ghibli S.p.A.; Fhs&C S.p.A., Foodness S.p.A. and First Advisory Srl; he also held the role of Sole Auditor in the following companies; Aereogel Srl, Omniafibre Srl; finally, he held the position of Statutory Auditor in the following company: Investitori First Srl.
As at 31 December 2020 he does not own shares of the Issuer
Silvia Cecchini (Standing Auditor), born in Petriano (PU) on 28 March 1960, with a first-class honours degree in Business and Economics from the University of Ancona in 1985, enrolled in the Board of Chartered Accountants of the Province of Pesaro-Urbino since 1985, auditor, technical consultant at the court of Pesaro and Urbino, Bankruptcy Receiver at the Court of Pesaro and Urbino and technical consultant at the public prosecutors office of Urbino. She has an numerous collaborations with the Faculty of Business and Economics at Urbino.
As at 31 December 2020, she does not own any Issuer shares.
Dario De Rosa (Standing Auditor), born in Savona on 07/09/1965, graduated in Business Administration from Bocconi University and is a Chartered Accountant. On the Register of Auditors since 1995, he works as a Chartered Accountant specialising in business, tax, corporate, business planning and management control consultancy. Technical consultant to the Court of Pesaro in both civil and criminal corporate matters, he holds the position of member of the Board of Statutory Auditors and auditor in several private companies.
As at 31 December 2020, she does not own any Issuer shares.
Silvia Muzi (Substitute Auditor), born in Rome on 18/07/1969, graduated in Economics and Commerce at La Sapienza University of Rome. Since 1999 she has worked as a Chartered Accountant and Accounting Expert, an Auditor and a UNCI-accredited Auditor. She holds the office of Chairman of the Board of Statutory Auditors of Rai Way S.p.A. and, since December 2020, she has been a member of the Board of Directors of Biancamano S.p.A.
As at 31 December 2020, she does not own any Issuer shares.
Silvia Farina (Alternate Auditor), born in Pesaro on 04/09/1968, graduated in Economics and Commerce from the Catholic University of the Sacred Heart in Milan in 1993 and subsequently obtained a Master's degree from the "International Summer School of Management for Young Graduates" of Brdo pri Kranju, Slovenia in July 1994. From September 1995, she worked in Pesaro in a firm in association with her father, an accountant, where she dealt with tax consultancy and litigation; she has been part of the Farina & Gennari firm since 2006, and mainly deals with tax litigation, as well as holding the position of Statutory Auditor in various companies.
As at 31 December 2020, she does not own any Issuer shares.
The meeting attendance record of the new auditors in 2020 was as follows: Paolo De Mitri: [100%]; Dario De Rosa: [100%]; Silvia Cecchini: [100%].
Statutory auditors with personal or third party conflict of interest in a resolution shall promptly and fully inform the Chairman of the Board and the other members.
In carrying out its activities, the Board of Statutory Auditors monitored the independence of its members with a verification carried out on 22 June 2020, as well as with a self-assessment referred to the Board itself, which the body reported in the board meeting of 29 January 2021.
In performing its duties, the Board has supervised the independence of the external auditors, verifying both the compliance with legal requirements and the nature and entity of the services other than account auditing provided to the Issuer and its subsidiaries by the independent auditors.
In carrying out its duties, the Board of Statutory Auditors liaised with the Internal Audit department and with the Control and Risk Committee. It participated in all Committee meetings, to which the Internal Audit Manager reported on the work carried out.
The remuneration of the Statutory Auditors is commensurate with the commitment involved and the importance of the role held, as well as the size and sectoral characteristics of the Company.
Regarding the composition of the Board in office at 31 December 2020, the Issuer did not consider it appropriate to adopt a diversity policy for aspects such as age, gender, education and professional background, since: (i) the provisions of Art. 148 of the TUF on gender equality were applied for the election of the board (prior to the amendment introduced by Law No. 160 of 27 December 2019), (ii) the requisites of professionalism called for by the applicable laws and regulations are already required for the election of the Board of Statutory Auditors.
It should be noted that with regard to gender requirements for corporate bodies, Law 160 of 27 December 2019 (2020 Budget Law) amended articles 147-ter and 148 of the TUF, which extended the related obligations for six consecutive terms and increased the number of directors and statutory auditors of the least represented gender that must be elected to corporate bodies from 1/3 to 2/5. Issuers already listed are required to comply with these new proportion provisions as from the renewal of the bodies after the entry into force of the new provision (i.e. subsequent to January 2020). Therefore, the composition of Biesse's corporate bodies as reflected in this Report is that provided for by the regulations prior to the aforementioned legislative amendment, in force on the date of election of the Board. It should also be noted that, as a result of the aforementioned change in the duration of the legal obligation on gender balance and the mechanism for the automatic transposition of the regulations in force on the subject provided for in the Company's Articles of Association, Biesse has decided to submit to the Shareholders' Meeting called for the approval of the financial statements as at 31 December 2020, the amendments to the Articles of Association relating to the provisions on gender balance provided for in its Articles of Association to adapt them to the new legislation.
Financial communication plays an essential role at Biesse in the value creation process for the Group: the Issuer has adopted a strategy to promote continuous and correct flows of information between the financial community, the market and the Issuer. Biesse has always actively worked to establish continuous dialogue with institutional investors, shareholders and the market, in compliance with the procedures adopted for public disclosure of internal documents and information. For this reason, the specific corporate function of "Investor Relations" was established, which Alberto Amurri was appointed to lead, working with the Board of Directors with the aim of ensuring the systematic publication of complete and timely disclosure through press releases, meetings with the financial community and periodic updates of the Company's website (www.biessegroup.com).
In 2020, Biesse participated in all events organised by Borsa Italiana (STAR events in Milan and London) and independently created various opportunities for meeting and dialogue with the Italian and international financial community.
To foster financial communication, the Board of Directors of Biesse works to provide easy and timely access to the information regarding the Issuer which is relevant for its shareholders to knowledgeably exercise their rights. To achieve this, the Company felt it would be appropriate to set up a dedicated space on its website with economic and financial information (financial statements, quarterly and interim reports) and data and documents of interest to shareholders, including the Code of Conduct, the Organisation and Management Model and the Sustainability Report (www.biessegroup.com - section "Investor Relations"). The documentation will remain available on the site for at least five years.
Shareholders' Meetings are legally constituted when all shareholders are represented and its resolutions, taken in compliance with the law and the Articles of Association, are binding for all shareholders, even if absent or in disagreement. Shareholders' Meetings may be called in Italy at the company headquarters or elsewhere. The Shareholders' Meeting is called by the Board of Directors by issuing a notice to be published according to the deadlines and procedures provided for by applicable legislation.
Ordinary and extraordinary shareholders' meetings and shareholder decisions are valid where the quorum, voting majorities and other statutory requirements set out in existing laws, are satisfied. The Shareholders' Meeting may be held with a single call.
The Articles of Association do not provide for postal or electronic voting, as well as the possibility of participating in the Shareholders' Meeting by video or audio conference. However, given the Covid-19 virus pandemic situation, Art. 106 of Decree Law No. 18 of 17 March 2020, (the so-called Cura Italia decree, hereinafter the "Decree"), has extended the ordinary terms for Shareholders' Meetings and has allowed for derogations from said statutory and legal provisions, to ensure the meetings can be held in line with public health measures, leaving the decision of which participation instrument is deemed most suitable to the individual Issuers.
In light of the above, the Issuer has deemed to resort to the institution of the "designated exclusive representative", pursuant to Art. 106 paragraph 4 of the Decree, appointing Computershare S.p.A. to represent the Shareholders pursuant to Art. 135-undecies of Legislative Decree 58/98 and the aforementioned Decree.
Participation in the Shareholders' Meeting by the shareholders was allowed exclusively through the designated exclusive representative, within the terms and in the manner set out in the notice of meeting.
The other provisions of Art. 135-undecies TUF for the designated sole representative remain the same, in particular those relating to the granting of proxies with voting instructions (including the possibility of different voting), the obligation to declare any interests that the designated representative has on their own behalf or on behalf of third parties with respect to the proposed resolutions, the duty of confidentiality of the designated representative (and their employees and auxiliaries) and the methods for calculating the quorums in relation to the delegated powers.
Since 2001, the Company has had a set of shareholders' meeting rules that govern the orderly and practical running of the ordinary and extraordinary meetings, ensuring each shareholder the ability to participate in the discussion of items on the agenda. All those who participate as representatives of shareholdings are entitled to speak on any of the issues set forth for discussion. Shareholders who wish to speak must ask the Chairman for the floor, submitting a written request including indication of the topic of the question. This is done after the chairman has read aloud the items on the agenda and until he has declared the discussion of the issue closed.
The regulations for the meetings can be viewed in the specific section of the website www.biessegroup.com.
During 2020, the Shareholders' Meeting met on 21 April 2020, on first call, to resolve on the approval of the financial statements of Biesse S.p.A. as at 31 December 2019, the allocation of the 2019 profits, the approval of the Remuneration Policy of the Biesse Group, the presentation of the Remuneration Report and the resolutions relating to the second section of the Report, the integration of the Board of Statutory Auditors and finally on the authorisation to purchase and dispose of treasury shares,
4 directors belonging to the administrative body participated in this Shareholders' Meeting (Stefano Porcellini, Silvia Vanini, Elisabetta Righini and Federica Palazzi), as did the entire Board of Statutory Auditors.
On that occasion, the Board reported to the Meeting on the work carried out and on its planned activities, and endeavoured to ensure that shareholders had adequate information so that they could make the fully informed
decisions required of the Shareholders' Meeting, including through the publication of the reports required by applicable laws and regulations.
During 2020, there were no significant changes in capitalisation or corporate structure such as to suggest to the Board to propose amendments to the Articles of Association regarding the percentages required for exercise of shares and prerogatives in defence of minorities.
There are no other corporate governance practices other than the above. With regard to the letter of 22 December 2020 addressed by the Chairman of the Corporate Governance Committee to the Chairmen of the Boards of Directors of the listed companies, it should be noted that on 26 February 2021, the Board of Directors took note of the recommendations received, which were illustrated and discussed in the presence of the members of the Board of Statutory Auditors and are already largely being followed by the Issuer.
In particular, the Board, in relation to the specific indications formulated by the Corporate Governance Committee in the recommendations for the year referring to 2021, noted that:
1) the Issuer is aligned with the recommendations on the sustainability of business activity, as an integrated issue in the definition of strategies, the internal control and risk management system and remuneration policy, also on the basis of an analysis of the relevance of the factors that may affect generation of value in the long term;
2) the Issuer has taken note of the recommendations regarding pre-meeting information and will implement its documentation through the adoption, in the course of 2021, of a Board of Directors Regulation, in which this issue will be covered and regulated;
3) the Issuer, in relation to the correct application of the independence criteria defined by the Code, has launched the activities for the ex ante identification of the quantitative and/or qualitative criteria to be used for the assessment of the significance of the relationships under examination, to delegate the supervisory bodies to supervise the application of these criteria;
4) the Issuer is already aligned with the self-assessment recommendations of the management body, having assessed the contribution of the board to the definition of strategic plans and having coordinated and supervised the board review process during the year;
5) the Issuer is already aligned with the recommendations on the issue of the appointment and succession of directors, having taken steps to adopt a specific succession plan in the event of early termination of the office of the Chairman of the management body.
6) the Issuer is already aligned with regard to remuneration policies, having adopted a Remuneration Policy prepared pursuant to Art. 123-ter of Legislative Decree 24 February 1998, No. 58 and Art. 6 of the Corporate Governance Code for listed companies, also taking into consideration what is indicated in the Recommendations of the European Commission Nos. 2004/913/EC, 2005/162/EC and 2009/385/EC, in which the recommendations of the Committee are in fact fully implemented.
It should be noted that on 28 January 2021, following a resolution of the Board of Directors of 20 January 2021, the Biesse Group reached an agreement for the total sale of the Dongguan Korex Machinery Co. LTD company based in Dongguan (Guangdong province-China).
Below is summary information on the make up of the Board of Directors and the Board of Statutory Auditors.
Included with this report is a list of any offices held by each director of the Issuer in companies listed on regulated markets, including foreign markets, in financial, banking, insurance or other companies of significant size.
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| De lar t c an |
D ire ha ho lde ct s re r |
% f o rd ina ha ita l o ry s re cap |
% f v ing ha ita l ot o s re cap |
|||||||
| ian lo lc i G Se car |
BI .FI N SR L |
5 1% |
5 1% |
| Con tro l and Ri sk Com mit te e (C CR ) |
Rem rat i une on Com mit tee (CR ) |
Ap intm po ent s Com mit te e, if any |
cut ive mit te any |
Rel d ate Par ties Com mit te e (CP C) |
||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Off ice |
Me mb ers |
Yea r of bir th |
Da te o f firs t oin t app nt* me |
In o ffic e fro m |
In o ffic ntil e u |
Lis t (M /m) ** |
Exe c. |
Non - exe c. |
Ind ep. pur sua nt t o the Cod e |
Ind ep. pur sua nt t o Con soli dat ed Law on Fin anc e |
(% ) *** |
No oth er offi ces ** |
* |
* |
* |
* |
* |
* |
* |
* |
* |
* |
||||||||||||||||||
| Ch air. |
ci Gia Sel rlo nca |
6 193 |
199 4 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | 75 | / | |||||||||||||||||||||||||||||||
| CE O |
Sel ci R obe rto |
196 0 |
200 0 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | 100 | / | |||||||||||||||||||||||||||||||
| Co- Ch ief Exe cut ive Off icer |
Pot enz a Ma ssim o |
196 0 |
202 0 |
30. 10.2 0 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
/ | x | 100 | / | |||||||||||||||||||||||||||||||
| Dir ecto r |
la Ale Par jo pa dra ssan |
197 3 |
200 5 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | 100 | / | |||||||||||||||||||||||||||||||
| Dir ecto r |
Por ini Ste cell fan o |
196 5 |
200 6 |
24.4 .18 |
al o f th App rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | 100 | / | |||||||||||||||||||||||||||||||
| Dir ecto r |
Chi ura Gio ni van |
5 196 |
201 8 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
m | x | x | x | 100 | 3 | |||||||||||||||||||||||||||||
| LID | i Elis Rig hin abe tta |
196 1 |
5 201 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | x | x | 100 | 1 | x | 100 | x | 100 | x | 100 | |||||||||||||||||||||||
| Dir ecto r |
i Fed Pal azz eric a |
197 9 |
201 8 |
24.4 .18 |
App al o f th rov e fina nci al s tate ts a t men 31/ 12/2 020 |
M | x | x | x | 100 | / | x | 100 | x | 100 | x | 100 | |||||||||||||||||||||||
| Not e th e q |
uir uor um req |
ed for fili the list the s at ng |
las intm t ap ent po |
: 2. 5% |
||||||||||||||||||||||||||||||||||||
| . of No me |
etin uri hel d d gs |
fin ial r in the ng anc yea qu |
C: 6 BoD : 8 CR RC :4 |
AC : / |
EC : / |
CPC | :3 |
| ---D IRE CT OR S L EA VIN G O FFI CE DU RIN G T HE YE AR ---- ---- ---- --- ---- ---- ---- |
||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dir ecto r |
Van ini Silv ia |
195 2 |
201 9 |
30.4 .19 |
29/ 09/ 202 0 |
M | x | 85.7 | / |
* By date of first appointment of each director is meant the date on which the director was appointed for the first time (ever) to the Board of Directors of the issuer
** This column indicates M/m depending on whether the member was voted from the majority list (M) or a minority list (m).
*** This column indicates the directors' attendance at meetings of the Board of Directors and the committees (number of attendances / number of meetings held during the period of office).
**** This column indicates the number of offices of director or auditor held by the individual in other companies listed on regulated markets, Italian or foreign, in financial, banking, insurance or other companies of significant size.
***** This column indicates with an "X" if the member of the Board of Directors is also a member of the committee.
| d o f S B oar |
Au dito tatu tor y rs |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| Off ice |
Me mb ers |
Yea r of bir th |
Da f fir st app te o oin tme nt* |
In o ffic e fr om |
In o ffic ntil e u |
Lis t (M/ Ind nde epe nce m) ** o th nt t pur sua e Cod e |
) * (% |
f ot Nu mb her er o offi ces ** |
|
| Ch airm an |
lo D itri Pao e M |
196 3 |
201 8 |
24. 04. 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
m | x | 100 | 11 |
| Sta ndi Au dito ng r |
Silv ia C hin i ecc |
196 0 |
201 1 |
24. 04. 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
M | x | 100 | / |
| Sta ndi Au dito ng r |
Dar io D e R osa |
196 5 |
201 8 |
24. 04. 18 |
al o f th e fi cial App rov nan t 31 /12 /20 stat nts eme as a |
M | x | 100 | / |
| Alt Au dito ate ern r |
Silv ia M uzi |
196 9 |
201 8 |
24. 04. 18 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
m | x | / | 2 |
| Alt Au dito ate ern r |
ina Silv ia Far |
196 8 |
202 0 |
21. 04. 202 0 |
App al o f th e fi cial rov nan t 31 /12 /20 stat nts eme as a |
M | x | / | / |
| Not e th e q uor um req |
uir ed for fili the list ng |
the las intm s at t ap ent po |
: 2. 5% |
||||||
| . of etin No hel me gs |
uri fin ial d d the ng anc |
r in esti 16 yea qu on: |
* By date of first appointment of each director is meant the date on which the director was appointed for the first time (ever) to the Board of Statutory Auditors of the issuer
** This column indicates M/m depending on whether the member was voted from the majority list (M) or a minority list (m).
*** This column indicates the auditors' attendance at meetings of the Board of Statutory Auditors (number of attendances / number of meetings held during the period of office).
**** This column indicates the number of director or auditor offices held by the individual, which are relevant for the purposes of Art. 148-bis of the TUF. The complete list of the offices is attached, in accordance with Art. 144(15) of the Consob Issuers' Regulation to the report on the supervisory activities, drawn up by the auditors in accordance with Art. 153(1) of the TUF.
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