Governance Information • Apr 17, 2020
Governance Information
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The board of directors approved this report on corporate governance and the ownership structure of Carel Industries S.p.A. on 5 March 2020.
in accordance with article 123-bis of Legislative decree no. 58 of 24 February 1998 (Traditional administration and control model)
Translation from the Italian original which remains the defi nitive version
| Glossary | 7 |
|---|---|
| Introduction | 9 |
| 1. Issuer profi le | 9 |
| 2. The Ownership structure (art. 123-Bis of the CFA) at the report date | 10 |
| 3. Compliance (art. 123-Bis of the CFA) | 15 |
| 4. Board of Directors | 15 |
| 5. Processing of Corporate Information | 25 |
| 6. Board Committees (article 123-bis.2.d) of the CFA) | 26 |
| 7. Appointments Committee | 26 |
| 8. Remuneration Committee | 26 |
| 9. Directors' Remuneration | 27 |
| 10. Control, risks and sustainability Committee | 28 |
| 11. Internal control and risk management system | 30 |
| 12. Directors' interests and related party transactions | 34 |
| 13. Appointment of statutory auditors | 35 |
| 14. Composition and working of the Board of Statutory Auditors (article 123-bis.2.d) and d-bis of the | |
| CFA) | 37 |
| 15. Engagement with shareholders | 40 |
| 16. Shareholders' meetings (article 123-bis.2.c) of the CFA) | 40 |
| 17. Additional corporate governance practices (article 123-bis.2.a) of the CFA) | 41 |
| 18.Changes since 31 december 2019 | 41 |
| 19. Considerations on the letter of 19 december 2019 of the Corporate Governance Committee | |
| Chairperson | 41 |
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| 231 decree | Legislative decree no. 231 of 8 June 2001 |
|---|---|
| Borsa Italiana | Borsa Italiana S.p.A., registered office in Piazza Affari 6, Milan |
| By-laws | The issuer's by-laws in force at the report date. |
| Carel, issuer or company | Carel Industries S.p.A., registered office in Via dell'Industria 11, Brugine (PD), VAT no. tax code and Padua company registration no. 04359090281. |
| CFA or Consolidated Finance Act |
Legislative decree no. 58 of 24 February 1998 as subsequently amended and integrated. |
| Code/Code of Conduct | The Code of Conduct of Listed Companies approved in March 2006 by the Corporate Governance Committee and promoted by Borsa Italiana, as subsequently amended, integrated and updated in July 2018. |
| Consob | The national commission for listed companies and the stock exchange, registered office in Via Martini 3, Rome |
| Group or Carel Group | Collectively Carel Industries S.p.A. and the companies it controls as per article 2359 of the Italian Civil Code and article 93 of the CFA. |
| Instructions to the Market Rules |
Instructions to the rules for the markets organised and managed by Borsa Italiana. |
| Issuers' Regulation | The regulation issued by Consob with resolution no. 11971 of 14 May 1999 for issuers, as subsequently amended and integrated. |
| Market Rules | The rules for the markets organised and managed by Borsa Italiana. |
| MTA | Stock market organised and managed by Borsa Italiana. |
| OPC procedure | This has the meaning set out in section 12 of this report, as defined below. |
| Related party regulation | The regulation issued by Consob with resolution no. 17221 of 12 March 2010 for issuers, as subsequently amended and integrated. |
| Report | This corporate governance report prepared in accordance with article 123-bis of the CFA and article 89-bis of the Issuers' Regulation (as defined above). |
| Report date | 5 March 2020, the date on which this report was approved by the issuer's board of directors. |
| Year | The year ended 31 December 2019 to which this report refers. |
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As required by the legislation and regulations applicable to boards of directors of companies listed on the Italian stock exchange and to ensure the correctness and transparency of corporate disclosures, this report presents Carel's corporate governance system.
Its format complies with that made available to issuers by Borsa Italiana in January 2019.
Carel has been listed on the STAR segment of the MTA organised and managed by Borsa Italiana since 23 May 2018.
The issuer complies with the Code of Conduct, which it has adapted to meet its characteristics.
The report has been published in the Investor Relations/ Shareholders' Meetings/Shareholders' Meeting 20 April 2020 section of the company's website www.carel.com
Carel's corporate governance structure, based on the traditional administration and control system, comprises the following bodies:
as the board's approval of the company's financial reports; it also advises on transactions with related and associated parties; it advises the board of statutory auditors and performs checks for it on the statutory audit of the company's accounts in accordance with Legislative decree no. 39 of 27 January 2010 and advises the board of directors about the company's equity investments;
v. the remuneration committee, which mainly advises the board of directors on remuneration issues and oversees the preparation of the documentation to be presented to the board of directors to support the relevant decisions. Each committee has three non-executive, independent directors as its members. They have an internal regulation which establishes their role and duties.
The statutory audit is performed by an independent audit company, included in the register of independent auditors, appointed by the shareholders on the basis of a reasoned proposal made by the board of statutory auditors. In addition and in accordance with the Code of Conduct and regulations in force, the company has also:
a. elected three independent directors out of a total of the seven members of the board of directors (Application Criterion 3.C.3 of the Code of Conduct);
e. appointed an Investor Relator to liaise with the shareholders (Application Criterion 9.C.1 of the Code of Conduct);
f. dopted a shareholders' meeting regulation (Application Criterion 9.C.3 of the Code of Conduct);
At the report date, the issuer qualified as an SME in accordance with article 1.1.w-quater.1) of the CFA and article 2-ter of the Issuers' Regulation as shown by the list of SMEs published by Consob on its website pursuant to article 2-ter.2 of the Issuers' Regulation.
At the report date, Carel's subscribed and paid-up share capital amounted to €10,000,000.00, split into 100,000,000 ordinary shares without a nominal amount.
The shares are dematerialised in accordance with article 83-bis and following articles of the CFA. They can be transferred and have the same dividend and voting rights established by the law and the by-laws, except for that provided for by article 13 of the by-laws.
At the report date, the company has not issued other share categories, convertible financial instruments or financial instruments that can be exchanged with shares.
Table 1 in the annex to this report provides more information about the ownership structure.
On 7 September 2018, the shareholders approved an incentive plan involving the free allocation of ordinary Carel shares, the "2018-2020 share-based performance plan (the "plan") to beneficiaries to be identified, including on more than one occasion, from among the executive directors, key management personnel and employees of the company or its subsidiaries depending on the strategic importance of their positions.
More information about the plan is available in the document prepared in accordance with article 114-bis of the CFA and article 84-bis of the Issuers' Regulation, which is available for consultation at the company's registered office, Borsa Italiana and the company's website (www. carel.com) in the Investor Relations/Shareholders' Meetings section. Information is also available in the Report on the policy regarding remuneration and fees paid drawn up in accordance with article 123-ter of the CFA and article 84-quater of the Issuers' Regulation, available on the company's website www.carel.com and as provided for by the ruling regulations.
At the report date, there were no restrictions to the transfer of Carel's shares.
The issuer is an SME as defined by article 1.1.w-quater.1 of the CFA, introduced by Decree law no. 91 of 24 June 2014, converted with amendments by Law no. 116 of 11 August 2014 and subsequently replaced by article 1 of Legislative
Therefore, the minimum investment percentage that requires disclosure in accordance with article 120 of the CFA is 5% rather than 3%.
At the report date, based on the shareholder register, communications received pursuant to article 120 of the CFA and other information available to the company, the parties indicated in Table 1 of the annex hereto hold company shares equal to or greater than 5% of its share capital directly or indirectly. Specifically, they are:
Luigi Rossi Luciani S.a.p.a., which directly holds shares equal to 36.17% of the share capital, with voting rights of 45.28% due to the shareholder's inclusion in the list of loyalty shares, set up as per article 127-quinquies of the CFA and article 143-quater of the Issuers' Regulation;
Luigi Nalini S.a.p.a., which directly holds shares equal to 23.58% of the share capital, with voting rights of 29.52% due to the shareholder's inclusion in the list of loyalty shares, set up as per article 127-quinquies of the CFA and article 143-quater of the Issuers' Regulation;
Capital Research and Management Company, which directly holds shares equal to 9.95% of the share capital, with voting rights of 6.23% as it is not included in the list of loyalty shares, including 8%, equal to 5.01% of the shares with voting rights, held by SMALLCAP World Fund, Inc. .
At the report date, the company has not issued shares that give special controlling rights, nor do the by-laws provide for special powers for certain shareholders or holders of specific categories of shares.
In accordance with article 127-quinquies of the CFA, article 13 of the by-laws establishes that each share held by the same party for at least 24 consecutive months from the date of its inclusion in the relevant register kept by the company has two votes. The holder of the voting rights may irrevocably waive its right, in whole or in part, to the second vote.
The company keeps a loyalty share list which it updates every three months (31 March, 30 June, 30 September and 31 December) or at other dates as provided for by the sector regulations and , moreover, before the record date.
Loyalty shares are considered in the calculation of the constitutive and deliberative quorums. They do not affect rights other than voting rights attributable to holders of specific investment percentages.
The by-laws and loyalty shares regulation provide more information about this and are available on the company's website www.carel.com. In accordance with article 143-quater of the Issuers' Regulation, identifying data of the shareholders that have requested inclusion in the special list and details of their investments (which are higher than the ceilings indicated in article 120.2 of the CFA) and the date of their inclusion are also available on the website.
At the report date, the company does not have sharebased plans for its employees that would give them voting rights. Information about the 2018-2022 sharebased performance plan is available in the Report on the policy regarding remuneration and fees paid and the document on the plan published in accordance with the ruling regulations and posted on the company's website www.carel.com
At the report date, there were no restrictions to the voting rights attributable to the company's shares, nor dividend or first option rights tied to the shares separate to ownership of the shares.
At the report date, the issuer was aware of two shareholder agreements.
On 10 June 2018, Luigi Rossi Luciani S.a.p.a. and Luigi Nalini S.a.p.a. entered into a shareholder agreement for the appointment of members to Carel's corporate bodies (the "agreement"). The agreement covers 59,750,000 Carel shares, equal to 59.75% of the company's share capital and 119,500,000 voting rights (due to the loyalty shares held by Luigi Rossi Luciani S.a.p.a. and Luigi Nalini S.a.p.a. as per the ruling by-laws) equal to roughly 74.80% of the share capital with voting rights. The agreement was entered into to create a voting syndicate for the appointment of the members of the company's corporate bodies in accordance with article 122.1 of the CFA.
On 27 July 2015, Cecilia Rossi Luciani, Carlotta Rossi Luciani and Vittorio Rossi Luciani, who have investments equal to 99.99% of Luigi Rossi Luciani S.a.p.a. as bare ownership with voting rights shared in an undivided co-ownership regime, agreed a regulation to govern this undivided co-ownership (the "regulation"). The regulation includes, inter alia, shareholder agreements for voting and blocking syndicates pursuant to article 122.1/5.b) of the CFA. In turn, Luigi Rossi Luciani S.c.p.a. holds 45.28% of Carel's shares carrying voting rights.
The complete versions of the agreement and the regulation were sent to Consob and filed with the Padua Company Registrar on 14 June 2018. The key information taken from these documents was published on the company's website www.carel.com in the Corporate Governance/Shareholders' Agreements section.
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The company has not entered into significant agreements that become effective, can be amended or voided in the case of a change of control over the company or its subsidiaries. Its by-laws do not provide for waivers from the passivity rule as per article 104.1/1-bis of the CFA or the application of the neutralisation rules as per article 104-bis.2/3 of the CFA.
The board of directors has not been given proxies to increase share capital as per article 2443 of the Italian Civil Code.
Pursuant to article 6 of the by-laws, the shareholders may authorise the board of directors to increase share capital or issue convertible bonds up to a set amount and for a maximum period of five years from the date on which they pass the related resolution.
In accordance with article 2441.4.2 of the Italian Civil Code, the company may resolve to increase share capital with the rights of first option for up to 10% of its existing capital, as long as the issue price matches the shares' market price and this is confirmed by the independent auditors in a specific report.
On 7 September 2018, the shareholders authorised the board of directors to repurchase shares, in one or more instalments, on the stock exchange over 18 months for up to 5% of the issuer's share capital within the limits of the distributable profits and reserves available in the most recent set of financial statements approved at the date of each transaction. During the 18-month period, the board of directors could repurchase shares of a number and on dates decided by it in compliance with the law, including that of the EU, and market practices allowed from time to time. The authorisation also included the option to subsequently sell (in whole or in part and in one or more transactions) the treasury shares held in portfolio, including before the board had repurchased the maximum number of shares authorised for repurchase and also to repurchase the same shares so that the shares held by the company and, if appropriate, by its subsidiaries, do not exceed the limit set in the proxy.
As per the board of directors' resolution of 25 January 2019, Carel commenced a treasury share repurchase programme for a maximum of 100,000 shares, equal to 0.01% of its share capital as the partial implementation of the 2018-2022 share-based performance plan in line with its terms and conditions (approved by the shareholders on 7 September 2018).
As a result of this programme, the company holds 83,335 treasury shares at the report date.
The issuer is not managed and coordinated by another party as per the provisions of article 2497 and following articles of the Italian Civil Code. After reviewing its situation, the company deems that it does not perform any of the activities that would require management and coordination in accordance with article 2497 and following articles of the Italian Civil Code. Specifically, although it is controlled by another company, CAREL does not deem it is required to comply with the disclosure requirements of article 16.1.a) of the Market Rules, as none of its shareholders, including Luigi Rossi Luciani S.a.p.a., which holds 45.28% of its share capital with voting rights, manages and coordinates it as per the provisions of article 2497 and following articles of the Italian Civil Code, as per the communication received by the issuer on 9 November 2015 and duly notified to the competent Company Registrar on 10 November 2015. In addition, the company is included in the consolidated financial statements of Luigi Rossi Luciani S.a.p.a..
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The following graph shows the group companies and the company's investments therein at the report date.
The information required by article 123-bis.1.i) (term of office entitlement paid to directors in the case of their resignation, dismissal without just cause or termination of the relationship due to a takeover bid) and point l) (appointment and replacement of directors and changes to by-laws) of the CFA is provided in i) the Report on the policy regarding remuneration and fees paid prepared in accordance with articles 123-ter of the CFA and article 84-quater of the Issuers' Regulation, which is available on the company's website (www.carel.com) and with the other legally-required methods; and ii) in paragraph 4.1 of this report.
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As resolved by the board of directors on 29 March 2019, the company complies with the Code of Conduct of Borsa Italiana S.p.A. as updated in July 2018 (the "Code of Conduct"), available for consultation on the Corporate Governance Committee's website (http://www. borsaitaliana.it/comitato-corporate-governance/codice/ codice.htm).
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of this report
Neither the company nor its subsidiaries are required to comply with non-Italian laws that would affect its corporate governance structure.
More information about the company's measures to
The company's main corporate governance tools are set out below (they comply with the most recent regulatory and legislative requirements, the Code of Conduct and national and international best practices):
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prevent risks of illegal behaviour or corruption in the public and private sectors is provided in paragraph 11.3
AIn accordance with article 17 of the by-laws, the company is managed by a board of directors which has between 5 (five) and 13 (thirteen) members, decided by the shareholders in an ordinary meeting when they appointed the directors or changed in a subsequent resolution.
The directors have a term of office of not more than three years, as decided by the shareholders. Their term of office expires when the shareholders meet to approve the financial statements related to their last year of office.
On 29 March 2018, the shareholders set the number of directors as seven and their term of office as three years, until approval of the financial statements at 31 December 2020.
The shareholders appoint the directors in an ordinary meeting using the lists system, except when decided otherwise or provided for by mandatory laws or regulations.
Shareholders that either individually or jointly hold a number of shares equal to the percentage established by Consob pursuant to the applicable legislation and regulations may present lists of candidate directors. In accordance with the applicable legal, regulatory and by-laws provisions and Consob management decision
no. 28 of 30 January 2020, the lists of candidates may be presented by shareholders that either individually or jointly hold a number of shares equal to at least 1% of the shares with voting rights in ordinary shareholders' meetings.
The lists are lodged at the company's registered office using the methods established by the ruling regulations at least 25 days before the meeting called to resolve on the appointment of directors. The company shall make the lists available to the public at least 21 days before the meeting date using the methods established by the ruling regulations.
Shareholders, including those belonging to the same group of companies or that have entered into a significant shareholder agreement as per article 122 of the CFA, may not present or jointly present more than one list, nor may they vote for more than one list, including via trustees or nominees.
Each candidate may be presented in just one list in order to be eligible.
Each list:
a. When two or more lists are presented, the candidates are voted for and the directors appointed using the following methods:
candidates from the two lists with the most votes are elected by applying the following criteria: (i) a number of candidates equal to the total number of directors to be elected less one is taken from the list that obtained the most votes (the "majority list") in consecutive order of presentation; (ii) one director, the first on the list, is taken from the list that received the second most votes and is not linked (including indirectly) to the shareholders that presented or voted for the majority list (the "minority list");
vote, without using the list voting mechanism.
As required by article 5.C.2 of the Code of Conduct, the board of directors has not deemed it necessary to adopt a succession plan for its executive directors given its duties and the size and ownership structure of the company and the group and the practice of appointing people with significant experience with the company as its executive
in their ordinary meeting of 29 March 2018 for a three-year term, i.e., until approval of the financial statements at 31 December 2020. It initially comprised Luigi Rossi Luciani, Luigi Nalini, Francesco Nalini, Carlotta Rossi Luciani, Corrado Sciolla, Cinzia Donalisio and Marina Manna.
On 15 January 2019, Corrado Sciolla resigned; on 25 January 2019, the board of directors approved the appointment of Prof. Giovanni Costa having co-opted him in substitution of Corrado Sciolla; Giovanni Costa was appointed, in substitution of Corrado Sciolla, by the shareholders in their meeting of 15 April 2019.
As the board of directors in office at 31 December 2019 was appointed on 29 March 2018 and the by-laws became applicable on the listing date of the Carel ordinary shares, the provisions about list voting included therein (which require that one member shall be elected from the list that received the second largest number of votes after the majority list and who is not linked in any way, including using the list mechanism, as long as the minimum number of independent directors and gender balance requirements are met.
Should directors leave office, the legal provisions apply without the obligation to use the list mechanism, as long as the minimum number of independent directors and gender balance requirements are met.
The loss of independence by a director entails their resignation pursuant to article 147-ter.4 of the CFA solely when the minimum number of independent directors established by the CFA is not met.
The issuer does not have to comply with any other regulations covering the composition of its board of directors.
As a result, CAREL does not have a succession plan for its executive directors at the report date. Given its ownership structure, it may request its board of directors to promptly take the necessary resolutions.
indirectly, to the shareholders that presented or voted for the majority list), will only become applicable when the board of directors is re-elected after the listing date of the Carel ordinary shares (23 May 2018).
As provided for by the by-laws, the board of directors appointed Luigi Rossi Luciani as the chairperson and Luigi Nalini and Francesco Nalini as the executive deputy chairperson and chief executive officer, respectively. Carlotta Rossi Luciani is the company's executive director. At the report date, the non-executive, independent (as per the definitions of article 147 of the CFA and article 3 of the Code of Conduct) directors are Giovanni Costa (replacing Corrado Sciolla, who resigned on 25 January 2019), Cinzia Donalisio and Marina Manna.
Pursuant to Principle 2.P.3 of the Code of Conduct, the company deems that the number of its independent directors is sufficient to ensure their opinions have a significant weight when board decisions are made.
The directors' personal and professional characteristics are summarised below.
Luigi Rossi Luciani, after earning a high school diploma in accounting, he commenced his business career in 1966, founding Nastrificio Victor S.p.A. in Piove di Sacco (Padua) of which he is the chairperson at the report date. Since the 1990s, he has been involved in various business associations; in particular, from 2000 to 2005, he was chairperson of Confindustria (General Confederation of Italian Industry) for the Veneto region and a member of Confindustria's executive board. He is one of the company's founders and serves as its chairperson, and still does at the report date.
Luigi Nalini, he obtained a degree in Mechanical Engineering from "La Sapienza" University of Rome in 1970. He began his career with Hiross Group, initially as R&D Manager and then as Technical Director. From 1988 to 1997, as co-founding shareholder, he served as Technical Director and General Manager of Uniflair S.p.A. He is one of the company's founders and was an executive director from 1997 to 2018. He is Carel's executive deputy chairperson, including at the report date.
Francesco Nalini, he obtained a degree in Engineering Management from the University of Padua in 1997, worked at McKinsey from 2001 to 2002 and, from 2002 to 2005, was ICT Manager at Errennegi S.r.l. He joined the company in 2005, where he served as Director of Operations before becoming general manager and director of the company from 2005 to 2018. Since March 2018, he has been the company's chief executive officer, including at the report date.
Carlotta Rossi Luciani, she holds a degree in Industrial Design from the Italian Design School of Padua, and a Master's Degree in Lean Management from the University Corporate Organization Center of Altavilla Vicentina (province of Vicenza). From 2009 to 2012 she was a graphic designer for a number of companies and joined Carel in 2013, specialising in the "lean" sector. Since January 2017 she has been Lean Development Office Manager for Carel Adriatic. Since March 2018, she has been a director of Carel, including at the report date.
Science from the University of Pisa in 1984. She held a number of managerial positions, mostly in financing and insurance related roles, in companies such as Olivetti S.p.A., Ericsson Telecomunicazioni S.p.A., SIA S.p.A. and Thesia S.p.A. From 2011 and 2012, she was the Head of Banking Division of Wincor-Nixdorf S.p.A. Since 2013, she has been a founding shareholder and she is also a managing partner of Governance Advisory S.r.l., including at the report date, which provides support to companies in the development of corporate strategies and corporate governance policies. She does not hold positions as a director or statutory auditor in other companies or bodies. Marina Manna, she obtained a degree in Economics and Business from the Ca' Foscari University of Venice in 1984. She is included in the register of chartered accountants of the Padua Court and the register of independent auditors
since 1989. She has worked as a chartered accountant since 1989 mostly providing tax consulting services and technical services for civil and criminal proceedings. She is a lecturer at the Scuola di Alta Formazione of the Italian Association of Chartered Accountants. She has held positions as part of the Padua branch of the Italian Association of Chartered Accountants. She was a director of Banco di Napoli S.p.A.. She is currently a nonexecutive director of Carraro S.p.A. and Busitalia Veneto and a statutory auditor of medium and large companies (including Nice Group S.p.A., BLM S.p.A. and Pandolfo Alluminio S.p.A.).
Giovanni Costa, he is Professor Emeritus of Business Strategy and Organizational Theory and Design at the University of Padua where he lectured from 1996 to 2017. He has carried out business consultancy activities for many years supporting management development projects for Italian and international companies and public administrations. He has also held governance roles in many companies and bodies.
More information about the company's board of directors is provided in table 2 (in the annexes).
This report also includes a list of all the positions held by the directors in other companies at the report date, using the criteria established herein, in the annexes.
Cinzia Donalisio, she obtained a degree in Computer
Given the company's structure and size, as well as its ownership structure and list-based voting system provided for by the by-laws, which guarantees transparent elections and a balanced composition of the board of directors, in its meeting of 27 February 2020, the board of directors did not deem it necessary to adopt specific diversity policies and/or practices with respect to the composition of the boards of directors and statutory auditors and the age, gender and educational and professional background of the various members.
As required by Application Criterion 2.C.3 of the Code of Conduct, at least one third of the board's members is made up directors from the less represented gender.
In this regard, note that on 1 January 2020 the provisions of Italian Law no. 160 of 27 December 2019 ("2020 Budget Law") came into force, amending Articles 147 ter, paragraph 1-ter, and 148, paragraph 1-bis, of the Consolidated Law on Finance (T.U.F.), introduced by Italian Law no. 120 of 12 July 2011 (known as "Gulf-Moscow Law"), on the subject of gender balance in the corporate bodies of companies with listed shares. The 2020 Budget Law envisaged that the management and control bodies of listed companies reserve "at least two fifths" of the members (instead of one third) to the less represented gender and established that this distribution criterion applies for "six subsequent mandates" (instead of three). Therefore, as part of the next renewal of the company bodies, lists will have to be drawn up and their members elected in accordance with the relevant provisions of the 2020 Budget Law and CONSOB regulations.
On 27 February 2020, the board of directors agreed not to define general criteria about the maximum number of positions as director or statutory auditor that can be considered acceptable for the effective performance of duties as a director of the company, without prejudice to each director's obligation to assess the compatibility of their positions as director and statutory auditor in other listed companies (including abroad), financial companies, banks, insurance companies or large companies with their
SThe company deems that the directors and, especially the executive directors, have sufficient knowledge of the business sectors in which the company and the group operate.
With respect to the projects designed to provide the directors and, specifically the independent directors, with a suitable understanding of the business sectors in which Carel operates, the chairperson of the board of directors has organised board induction sessions to provide its members with a suitable understanding of the business sectors, also in the light of the company's performance and changes in its ownership structure.
diligent performance of their duties taken on as a director of Carel, also considering their involvement in board committees as established by Application Criterion 1.C.3 of the Code of Conduct.
Considering their positions held in other companies, the company's board of directors deemed that the number and nature of such positions did not interfere with and are, therefore, compatible with their efficient performance of their duties as director of Carel on the same date.
These sessions provided an overview and in-depth look at the company's various business segments through reports and presentations prepared by those who report to the CEO in the areas of R&D, marketing and sales, HR and organisation, operations and administration and finance and control. Thanks to these meetings, the directors obtained an understanding of the group's business model and products/markets, its competitive leverage, its typical activities and R&D, HRM strategies and the working of the administration, finance and control unit, especially as regards critical issues and risks.
In 2019, an induction session was also held for the board
members and some members of the senior management team to update them on the activities performed for non-financial reporting purposes (Legislative decree no. 254/2016) and corporate social responsibility as per the reference legislation. In October, all senior managers attended a classroom refresher course on companies' administrative liability in accordance with Legislative decree no. 231/01. All the white collar employees received on-line training on non-financial reporting, companies' administrative liability and anti-corruption procedures.
In addition, the company organised a course for all its directors, senior managers and some employees during the year on the Market Abuse Regulation (Regulation (EC) no. 596/2014). This course covered market abuse, inside information management and related party transactions while the company also adopted the related procedures. When the company was listed, it carried out procedures to analyse the main issues dealt with by the Code of Conduct and especially the best practices for the internal control and risk management system.
During board meetings, the chief executive officer regularly reports on the business sectors in which the company operates, providing updates on its performance and future trends, the legislative framework and internal regulations.
IThe board of directors plays a pivotal role in guiding and managing the company. In accordance with article 20 of the ruling by-laws, it has exclusive powers for the company's management. It has the most wide-ranging powers to carry out all those transactions deemed necessary or suitable to achieve the company's business object, except for those reserved to the shareholders by law or the by-laws.
Again as provided for by the by-laws, in accordance with article 2365.2 of the Italian Civil Code, the board of directors is responsible for taking the following decisions, without prejudice to the shareholders' powers: (i) mergers and demergers in the instances covered by articles 2505 and 2505-bis of the Italian Civil Code; (ii) the opening or closing of branches; (iii) the reduction of share capital should one or more shareholders withdraw; (iv) the alignment of the by-laws with regulations; and (v) the transfer of the registered offices within Italy.
During the year, the board of directors met 10 times with the following attendance percentages of each director:
| Luigi Rossi Luciani, Chairperson | 10/10 | 100% |
|---|---|---|
| Luigi Nalini, Deputy Chairperson | 10/10 | 100% |
| Francesco Nalini, CEO | 10/10 | 100% |
| Carlotta Rossi Luciani, Executive Director | 10/10 | 100% |
| Cinzia Donalisio, Director | 9/10 | 90% |
| Marina Manna, Director | 10/10 | 100% |
| Giovanni Costa*, Director | 10/10 | 100% |
*Co-opted by the board of directors on 25 January 2019 and appointed as director by the shareholders on 15 April 2019..
Each meeting lasted an average of three hours.
Six meetings have been scheduled for 2020, of which three already held at the report date.
In accordance with the requirements of Application Criterion 1.C.5 of the Code of Conduct, the chairperson of the board of directors ensures that all the information and documents necessary to allow the directors take decisions are made available to them in due time and using the appropriate methods. During the year, documentation about the meeting agendas was sent to the directors and statutory auditors roughly three to four days before the meeting date.
When the documentation was large or bulky, the information was provided in brief presentations accompanied by tables and charts.
As provided for by the by-laws, the chairperson calls a board meeting whenever they deem it opportune or when at least two directors request it be called. If the chairperson is absent or unable to do so, the board meeting is called by the deputy chairperson, when appointed, or the longestserving delegated director.
The board of statutory auditors or just one standing statutory auditor may also call a board meeting in accordance with article 151 of the CFA.
Board meetings are called by a notice sent by letter, telegram, telefax or e-mail with notice of receipt to the address of each director or standing statutory auditor at least three days before the date set for the meeting. Urgent meetings can be called with notice sent one day beforehand. Board meetings and their resolutions are valid, even when the meeting has not been formally called, when all the directors and standing statutory auditors in office are present. Should the chairperson be absent or unable to attend, meetings are chaired by the deputy chairperson, if appointed, or in their absence or inability to attend, by the longest- serving delegated director present at the meeting or, in their absence or inability to attend, the longest-serving director present.
Board meetings can be held by audio or video conference as long as: (i) the meeting chair and meeting secretary are present in the same place and write and sign the minutes given that the meeting is deemed to have been held in that location; (ii) the meeting chair can check the identity of the participants, direct the meeting and check and announce the results of any votes; (iii) the meeting secretary can adequately follow the meeting for which they are taking the minutes; and (iv) the participants can participate in the discussions and simultaneous voting on the matters on the agenda and can view, receive and send documents.
Board resolutions can be taken when the majority of the directors in office are present and by majority vote. In the case of a tie, the vote of the meeting chair prevails.
The chairperson of the board of directors has always
ensured that adequate time is given to each of the matters on the agenda to allow a constructive debate and exchange of ideas.
Accordingly, non-members are often invited to take part in the board meetings, mainly the company's managers and unit heads depending on the matters to be discussed, to ensure the directors and statutory auditors are provided with sufficient details thereon.
As the company complies with the Code of Conduct for Listed Companies (July 2018 version), the board of directors has responsibility for:
The board of directors did not deem it necessary to define general criteria to identify these key transactions as it prefers to assess each situation individually based on the information received from the executive directors.
During the year, the board of directors:
assessed the independence of the directors Marina Manna, Cinzia Donalisio and Giovanni Costa;
• with respect to Application Criterion 7.C.1.c) of the Code of Conduct, approved the audit plan prepared by the internal audit manager for 2019 after consulting the control, risks and sustainability committee, the board of statutory auditors and the director in charge of the internal control and risk management system.
The shareholders have not authorised departures from the competition ban as per article 2390 of the Italian Civil Code.
In addition, during 2020, the board of directors:
• with respect to Application Criterion 1.C.1.g) of the Code of Conduct, assessed the board itself and its committees, the working, size and composition of the board and the committees using the questionnaires completed by the directors which included (i) assessments on the compliance of the company's corporate governance system with the recommendations of the Code of Conduct; and (ii) recommendations for their better application. The directors sent the questionnaires anonymously through the company secretary to the
The board of directors comprises executive and nonexecutive directors.
As provided for by the by-laws, the board of directors appoints one or more delegated directors, establishing their operating and representation powers within the limits of the law and the by-laws. These powers, limited to certain transactions or categories of transactions or duties, may be delegated to other members of the board of directors.
In accordance with that set out in the Code of Conduct, executive directors are:
• the company's delegated directors (or those of the key group companies) and its chairperson, when the latter
On 29 March 2018, the board of directors identified Luigi Rossi Luciani, as chairperson of the board of directors, Luigi Nalini and Francesco Nalini, as the chief executive officer lead independent director and the board reviewed them on 27 February 2020;
has specific individual management powers or a certain role in the preparation of company strategies;
• the directors who hold management positions in the company (or in the key group companies) or in the parent, when this position also refers to the company.
As provided for by the by-laws, the board may delegate part of its duties to an executive committee, comprised of between 3 (three) and 5 (five) directors, setting their powers, the number of members and the committee's modus operandi.
At the report date, the company does not have an executive committee.
and joint chief executive officer, respectively of Carel as its executive directors.
On 11 May 2018, the board of directors amended
this decision in part, confirming Luigi Rossi Luciani as chairperson of the board of directors and Francesco Nalini as chief executive officer and appointing Luigi Nalini as deputy executive chairperson.
On 29 March 2018, the chief executive officer was given the following operating powers by the board of directors: (i) all ordinary administration powers not reserved by law or the by-laws solely to the board of directors and/or the shareholders to be exercised by single and joint signature up to the threshold of €1,000,000.00 (one million) or its equivalent in another currency or up to the threshold of €5,000,000.00 (five million) or its equivalent in another currency to agree framework supply or sale agreements for each individual transaction; and (ii) all extraordinary
On 11 May 2018, the board of directors gave the chairperson of the board of directors the following powers with individual signatory powers and the option to sub-delegate: (i) to explore and assess the strategies and opportunities for business combination (for example and not limited to mergers, acquisitions, joint ventures) or business development; (ii) to maintain and enter into transactions with banks and credit institutions to agree, amend and terminate loan and financing agreements of all types within the threshold of €5,000,000 (or its equivalent in another currency) per transaction and for a total of €15,000,000 (or its equivalent in another currency) per year; (iii) to maintain relations and manage communications within the group; and (iv) to assign mandates to management consultants up to a threshold
On 11 May 2018, the board of directors appointed Luigi Nalini as executive deputy chairperson of the company giving him the powers, to be exercised with single signature and that can be sub-delegated, to define, explore, assess and propose commercial strategic projects for the company and the group as well as responsibility administration powers not reserved by law or the bylaws solely to the directors and/or the shareholders to be exercised by single or joint signature up to the threshold of €1,500,000.00 (one million and five hundred thousand) or its equivalent in another currency or up to the threshold of €5,000,000.00 (five million) or its equivalent in another currency to agree, amend or terminate loan or financing agreements for each individual transaction and for a total of €15,000,000 (fifteen million) or its equivalent in another currency on an annual basis); and (iii) the specific power to sub-delegate and/or give proxies within the limits of the powers received. The chief executive officer has principal responsibility for the company's operations.
of €500,000 (or its equivalent in another currency). The chairperson of the board of directors is the representative of the company's majority shareholder and is a separate person to the chief executive officer, who has principal responsibility for the company's operations. The allocation of powers to the chairperson is in line with the company's traditional structure for its management body and is balanced by the appointment of a lead independent director (Giovanni Costa since 25 January 2019) as required by article 2.C.4 of the Code of Conduct. In addition, the chairperson does not hold positions as a director in other companies of the same group for which a company director is a chief executive officer, as required by Application Criterion 2.C. 6 of the Code of Conduct.
for the new products and technologies sector. He was also given the same powers assigned to the chief executive officer Francesco Nalini to be exercised with single signature and that can be sub-delegated in the case of the chief executive officer's absence or inability..
In accordance with Application Criterion 1.C.1.e) of the Code of Conduct, the delegated bodies report on their
activities at the first board meeting and, in particular, on any atypical, unusual or related party transactions and those of economic, financial or capital significance performed by the company and its subsidiaries.
In addition and pursuant to the by-laws, the directors promptly report to the board of directors or send a written report to the board of statutory auditors at least
On 29 March 2018, the board of directors resolved to assign Carlotta Rossi Lucini the following operating powers: to define (together with the lean development office manager) policies and guidelines for the improvement of processes and structures in the various company units by raising awareness of the lean approach and method, initially by focusing on the production site in Croatia and then gradually extending this to all the group's sites; to propose and plan continuous improvement manufacturing work sites and projects in line with the goals set by the group's operations department; to encourage the definition of training courses on the lean method, identifying the
On 27 February 2020, the board of directors checked that the non-executive directors Cinzia Donalisio, Marina Manna and Giovanni Costa met the independence requirements of article 147-ter.4 of the Consolidated Finance Act (which refers to article 148.3 of the Consolidated Finance Act) and the independence requirements of article 3 of the Code of Conduct using the documents provided by each director. On the same date, the board of statutory auditors checked that the assessment criteria and procedures applied by the
In accordance with the recommendations included in Application Criteria 2.C.4 and 2.C.5 of the Code of Conduct, following Corrado Sciolla's resignation from the board of directors on 15 January 2019, the company's board of once a quarter on the activities and transactions of economic, financial or capital significance performed by the company and its subsidiaries. Specifically, they report on transactions in which they have a direct interest or an interest on behalf of third parties or transactions that are affected by the party that carries out management and coordination activities.
main topics and training paths to be developed for each internal unit; to provide feedback on the methods used to the various internal units involved; to regularly report to the board of directors on their results, changes made and the different methods used.
As part of the approach to strengthen the continuous improvement processes and develop a lean culture at international group level, on 1 July 2019, Carlotta Rossi Luciani was appointed manager of a new group lean management staff unit (group head of lean management). She reports directly to the group's general manager, Giandomenico Lombello.
board of directors to assess its members' independence had been applied correctly.
At the report date, the independent directors had met on 25 January 2019 and 13 December 2019 to discuss the working of the board of directors and its committees, the powers assigned to the directors and the information provided by the executive directors to the independent directors
directors co-opted Giovanni Costa in its meeting of 25 January 2019 in accordance with the ruling regulations and by-laws. He is now the company's lead independent director.
On 29 March 2018, the company's board of directors introduced a procedure for the management of inside information and the insider register of the people who have regular or infrequent access to inside information due to their professional or business activities or duties with effect from the date of presentation of its IPO to Borsa Italiana. The procedure regulates (i) the management and processing of inside information as defined in the procedure; (ii) the operating procedures to be complied with for the communication of such information inside or outside the company, and (iii) the operating procedures to be complied with to keep the register.
The procedure identifies, inter alia, (i) the parties required to comply therewith; (iii) the responsibilities and duties of the board of directors and other parties identified by the procedure; (iv) how to identify and manage inside
On 29 March 2018, the company's board of directors adopted a procedure to manage the disclosure requirements for internal dealing as per article 19 of the MAR, article 114.7 of the CFA and article 152-quinquies and following articles of the Issuers' Regulation effective from the first day of the listing of its shares. The procedure defines (i) the rules to comply with the company's disclosure obligations visà-vis Consob and the market on significant transactions involving financial instruments issued by the company or other related financial instruments, performed by the directors or statutory auditors of the company, including indirectly, or other senior managers with regular access to inside information, "relevant shareholders" (as defined elsewhere) and persons closely linked to them; as well as (ii) the related limitations.
The internal dealing procedure regulates, inter alia, disclosure obligations with the market and limitations to transactions involving purchases, sales, subscriptions and exchanges performed by or on behalf of: (i) the company's directors or statutory auditors; (ii) senior managers who, while they are not directors or statutory information, (v) the process to activate the procedure to delay the communication of inside information to the market and check that the conditions for delaying the communication continue to exist; and (iv) the methods for communicating the inside information to the market. With respect to the insider register, the procedure establishes: (i) the identification of the parties that will keep the register; (ii) the criteria to identify the people to be included in the register (in the "infrequent section" or the "permanent section"); (iii) how the register will be kept; (iv) the content and notification of entries; and (v) updates to the register.
Reference should be made to the procedure available in the Corporate Governance/Procedures and Regulations section of the company's website www.carel.com
auditors, have regular access to inside information directly or indirectly about the company or have the power to take management decisions that would affect the company's future development and outlook; (iii) any party that has an investment of at least 10% of the company's share capital, calculated in accordance with article 118 of the Issuers' Regulation, consisting of shares with voting rights or another party that controls the company; and (iv) persons closely linked to the above parties.
In accordance with the internal dealing procedure, the following are not communicated: (a) transactions of amounts that do not exceed €20,000 before year end; (b) transactions performed by the relevant party with persons closely linked to it; and (c) transactions performed by the company and its subsidiaries.
More information is available in the internal dealing procedure in the Corporate Governance/Procedures and Regulations section of the company's website www.carel. com.
On 29 March 2018, in order to ensure the effective performance of its duties in line with article 18 of the by-laws, the board of directors set up a control and risks committee, effective from the first day of the listing of the company's shares, and defined its regulation. This committee was given the duties of the related party transactions committee and the remuneration committee. On 28 February 2019, the board of directors also gave the control and risks committee responsibility for sustainability issues, renaming it the control, risks and sustainability committee.
Given the structure and size of the company, its ownership structure, the list voting mechanism provided for in its bylaws, which ensures the transparent election and balanced composition of the board of directors, including with respect to a sufficient number of independent directors, the board of directors has not deemed it necessary to set up an appointments committee (which it confirmed in its meeting of 7 March 2019). Its duties are carried out by the board of directors as set out in the Code of Conduct.
1 Composition and working of the remuneration committee
Except for that set out below, reference should be made to the relevant sections of the Report on the policy regarding remuneration and fees paid published in accordance with article 123-ter of the CFA for information about this committee.
In accordance with Principle 6.P.3 of the Code of Conduct, on 29 March 2018, the board of directors set up a remuneration committee, comprising three nonexecutive, independent directors, Cinzia Donalisio (chairperson), Corrado Sciolla and Marina Manna, effective from the first day of the listing of the company's shares. It also approved the committee's regulation. On the same date, the board of directors checked that all the committee members had experience and familiarity with financial and or remuneration policies. Following Corrado Sciolla's resignation, Giovanni Costa, co-opted on 25 January 2019, is now a member of this committee.
The remuneration committee meets when called by its chairperson who coordinates the meetings. Minutes are duly drawn up.
During the year, the remuneration committee met nine times, with the participation of all the independent directors and the board of statutory auditors. The HR manager also attended all the meetings upon the chairperson's invitation.
The average length of the committee meetings was two hours.
The committee has scheduled six meetings for 2020, of which two have already been held at the report date.
During the meetings, the content of the remuneration policy approved by the board of directors on 5 March 2020 was discussed in-depth. The remuneration committee also rolled out a procedure to assess and review the criteria for the executive directors' and key management personnel's
fixed and variable remuneration and fees.
In accordance with Application Criterion 6.C.6 of the Code of Conduct and the remuneration committee's regulation,
8.2 The remuneration committee's duties
The remuneration committee provides input, makes recommendations and performs supervisory activities to ensure that the group defines and applies remuneration policies designed to motivate and retain resources with the professional skills required to achieve the group's objectives and that also merge management's interests with those of the shareholders.
Specifically, the committee:
directors do not attend committee meetings at which their fees are being discussed..
When carrying out its duties, the committee has access to information and the company units necessary to perform its duties as well as external experts, within the budget approved by the board of directors (€35,000 for 2019).
Information about the directors' remuneration is available in the Report on the policy regarding remuneration and fees paid, prepared in accordance with article 123-ter of the CFA and article 84-quater of the Issuers' Regulation, which can be found on the company's website (www. carel.com) or consulted using the other methods provided for by the ruling regulations.
At the report date, the company has not entered into agreements with its directors that provide for entitlement to be paid in the case of their retirement, dismissal/ revocation without just cause or termination of the relationship due to a takeover bid.
During 2019, none of the executive directors or the general manager left office.
More information is available in the Report on the policy regarding remuneration and fees paid, prepared in accordance with article 123-ter of the CFA and article 84-quater of the Issuers' Regulation, which can be found on the company's website (www.carel.com) or consulted using the other methods provided for by the ruling regulations.
In accordance with Principle 7.P.4 of the Code of Conduct, on 29 March 2018, the board of directors set up a controls and risks committee, comprising three non-executive, independent directors, Marina Manna (chairperson), Corrado Sciolla and Cinzia Donalisio, effective from the first day of the listing of the company's shares. It also approved the committee's regulation.
On the same date, the board of directors checked that all the committee members had experience and familiarity with financial and or remuneration policies.
Following Corrado Sciolla's resignation, Giovanni Costa, co-opted on 25 January 2019, is now a member of this committee, following the inclusion in its tasks also of the supervision of the sustainability issues.
The committee supports the board of directors' assessments and decisions on the internal control and risk management system as well as the board's approval of the
ISpecifically, the control, risks and sustainability committee's duties include:
company's financial reports in accordance with article 7 of the Code of Conduct.
The control, risks and sustainability committee meets when called by its chairperson, Marina Manna, who coordinates the meetings. Minutes are duly drawn up.
During the year, the committee met thirteen times, with the participation of all the independent directors, the chief executive office, the internal audit manager and the board of statutory auditors in its role as the internal audit committee in accordance with Legislative decree no. 39 of 27 January 2010.
Non-members were also invited to attend meetings by the chairperson depending on the matters on the agenda. The average length of the committee meetings was two hours.
The committee has scheduled nine meetings for 2020, of which three have already been held at the report date.
prepared by the internal audit unit and other units with specific responsibilities for ensuring compliance with regulations;
statements and the interim financial statements;
In addition, pursuant to its regulation and article 7 of the Code of Conduct, the committee:
When carrying out its duties, the committee has access to information and the company units necessary to perform its duties as well as external experts, within the budget approved by the board of directors (€35,000 for 2019).
In addition, the board of directors gave the control, risks and sustainability committee, comprising nonexecutive, independent directors, the duties of the related party transactions committee as well as the duties and responsibilities that, pursuant to the regulation setting out provisions for related party transactions, adopted by Consob with its resolution no. 17221 of 12 March 2010, as subsequently amended and integrated (the "OPC regulation"), are attributed to committees whose members are all or mostly independent.
On 28 February 2019, the board of directors approved amendments to the committee's regulation with respect to the inclusion of sustainability duties and responsibilities. To this end, the committee, inter alia:
The company's internal control and risk management system is designed to contribute to the company's management in line with the objectives set by the board of directors through a process to identify, manage and monitor the key risks.
The system allows the identification, measurement, management and monitoring of the key risks and ensures the reliability, accuracy and timeliness of the financial reporting.
The system allows the mapping, monitoring and management of risks that could compromise the internal processes' adequacy in terms of their efficiency and effectiveness, the reliability of the information provided to the corporate bodies and the market, the protection of the company's assets and compliance with external regulations, the by-laws and internal procedures. Specifically, the latter are tied to the sector and market context as well as all the stakeholders' perception of the group's operations.
Carel's risk management procedures are based on the Italian and international best practices, such as, for example, the Code of Conduct for Listed Companies.
The following bodies monitor the internal controls and risk management system, to the extent of their responsibilities:
Responsibility for the introduction of an adequate internal control and risk management system lies with the board of directors. Assisted by the control, risk and sustainability committee, the board of directors carries out its duties as assigned by the Code of Conduct, including:
With respect to Application Criterion 7.C.1.a) of the Code of Conduct, on 27 February 2020, the board of directors updated the guidelines for the internal control and risk management system, defined on 7 March 2019, and assessed its adequacy and effectiveness in accordance with Application Criterion 7.C.1.b).
On 29 March 2018, the board of directors appointed Francesco Nalini as the director in charge of the internal control and risk management system to reinforce the system and work with the control, risks and sustainability
committee. He carries out the duties listed in Application Criterion 7.C.4 of the Code of Conduct. The company deems that the appointment of a chief executive officer, i.e., Francesco Nalini, to this position is in line with that required by the Code of Conduct, which emphasises the positive aspects of this decision, also based on the specific knowledge acquired by the appointee.
The director has ensured the identification of the main corporate risks (strategic, operational, financial and compliance), considering the company's activities and those of its subsidiaries and periodically reports thereon to the board of directors. He has introduced a process to identify and formalise the guidelines defined by the board of directors, which has involved the design, drafting and management of the internal controls. He also monitors the system's overall adequacy, effectiveness and efficiency on an ongoing basis. The director ensured that the system reflects the company's operating conditions and the legislative and regulatory framework.
The director in charge of the internal control and risk management system may ask the internal audit unit to carry out checks of specific operating areas and of compliance with internal rules and procedures. He reports thereon to the chairperson of the board of directors, the chairperson of the control, risks and sustainability committee and the chairperson of the board of statutory auditors. He also reported promptly to the control, risks and sustainability committee on the issues and critical matters that were identified during his activities or that he was informed of so that the committee could take the necessary actions. .
On 18 June 2018 and again to strengthen the company's internal control and risk management system, in accordance with the instructions set out in the Code of Conduct (Application Criterion 7.C.1), the board of directors appointed Andrea Baggio, a company employee, as the internal audit manager as proposed by the director in charge of the internal control and risk management system, approved by the control, risks and sustainability committee and after consulting the board of statutory auditors. The board of directors resolved that the internal audit manager is not in charge of any operating area and reports directly to the board as required by Application Criterion 7.C.5.b) of the Code of Conduct .
On 7 September 2018, the company's board of directors set the internal audit manager's remuneration again as proposed by the director in charge of the internal control and risk management system, approved by the control, risks and sustainability committee and after consulting the board of statutory auditors. It gave the internal audit manager spending autonomy and sufficient resources to carry out its activities, although the manager has to respect the annual budget for the internal audit unit, unless this is amended and/or integrated should this be necessary.
In addition, on 12 December 2018, the board of directors
approved the audit plan and the related investment plan prepared by the internal audit manager for 2019 after consulting the control, risks and sustainability committee, the board of statutory auditors and the director in charge of the internal control and risk management system.
The audit plan covered the audit activities to assist the board of directors, to provide operating assistance to the supervisory body and to coordinate with the control, risks and sustainability committee and the board of statutory auditors.
The internal audit manager is assisted in the performance of the audit by external experts from an independent audit company with the appropriate professional, independence and organisational requirements.
Upon completion of the audit, the existing procedures are updated and fine-tuned to strengthen and improve the most significant aspects of the internal control system.
The audit calendar includes updating activities from September to December 2018. These were successfully carried out and the audit plan was prepared for 2019 and the 2020-2021 period and approved by the board of directors on 13 December 2019.
The internal audit manager:
• checks the functioning and suitability of the internal control
and risk management system on an ongoing basis and in line with the company's specific requirements and compliance with international standards, using the audit plan approved by the board of directors based on a structured process of analyses and prioritisation of the main risks;
Legislative decree no. 231/01 (the "231 model") as resolved by the board of directors on 30 March 2017. This Legislative decree is the Italian reference framework for companies' administrative liability. The company also adopted a Code of Ethics that is designed to regulate the activities and conduct of all those parties that operate on behalf of the company and the group through norms of behaviour in line with the company's principles of correctness, loyalty and honesty.
Carel's 231 model has been prepared on the basis of an analysis of the areas at risk to crime. Specifically, it mapped the risks and assessed the various internal processes assisted by a leading consultancy company. Following this risk self-assessment, performed by interviewing the company's key management personnel about the risks to which the company is exposed, especially with respect to corruption, the company updated the model to reflect changes to the relevant regulations during 2018. Specifically, as resolved by the board of directors on 12 November 2018, the model: - was integrated with the regulations about the protection of whistleblowers in line with the provisions of Law no. 179/2017; - was amended to include (i) the crimes provided for by article 2622 of the Italian Civil Code ("False corporate communications of listed companies") and article 2638 of the Italian Civil Code ("Hindering the work of public supervisory authorities") of the board of statutory auditors, the control, risks and sustainability committee and the board of directors and the director in charge of the internal control and risk management system;
and (ii) the reformation of private to private corruption as per article 2635 of the Italian Civil Code and (iii) the instigation to private corruption as per article 2635 of the Italian Civil Code; - introduced the special sections on the crimes (and administrative offences) of the abuse of inside information and market manipulation by the CFA (market abuse) and the crimes of racism and xenophobia, the latter introduced in the list of predicate crimes of Legislative decree no. 231/2001 as per Law no. 167 of 20 November 2017.
The company has general and specific controls and measures to mitigate the risk of unlawful behaviour and ensure compliance with these principles.
The supervisory body, appointed by the company's board of directors on 30 March 2017, is responsible for implementing the model. It also monitors the model's effectiveness and efficiency and proposes updates or amendments to align it with changes in the company's structure or legislation, including through periodic checks of the areas at risk. The supervisory body also ensures compliance with, and the correct functioning and application of the model and the Code of Ethics. It receives any requests for information or reports of violations of either the 231 model or the Code of Ethics.
At the report date, the supervisory body comprises Fabio Pinelli (external member, chairperson), Andrea Baggio
(internal member) and Alessandro Grassetto (external member).
The general section of the 231 model and the Code of Ethics are published in the "Legal & Compliance" section of the company's website www.carel.com.
On 28 February 2019, the board of directors approved the group's anti-corruption procedure to combat unlawful practices and corruption in the public and private sector.
The company engaged to perform the statutory auditor of the company's accounts is Deloitte & Touche S.p.A. ("Deloitte" or the "audit company"), registered and administrative office in Via Tortona 25, Milan, included in the register of statutory auditors as per article 6 and following articles of Legislative decree no. 39/2010 as amended by Legislative decree no. 135 of 17 July 2016.
On 13 April 2018, the company's shareholders engaged the audit company, with effect from the first day of the listing of the company's shares, to perform: (i) the statutory audit of the company's accounts (including checks of the regular keeping of the accounting records and the related checks of the facts included therein) pursuant to
On 29 March 2018, the board of directors appointed the group's CFO, Giuseppe Viscovich, as the manager in charge of financial reporting effective from the first day of the listing of the company's shares. It acknowledged his eligibility to hold this position, considering also the professional and reputation requirements as per article 25 of the by-laws, whereby the manager in charge of financial reporting shall have at least three years experience in administration and control or management and consultancy with a listed company and/or group or a company or body of a significant size and importance, including with respect to the preparation and checking of accounting and corporate documents.
In accordance with article 154-bis of the CFA, the manager in charge of financial reporting: (a) prepares written statements to accompany the company's communications to the market and for financial reports (including The procedure is based on the principles and norms of behaviour set out in the company's Code of Ethics. Its aim is to achieve the objectives of preventing and combating corruption provided for in the 231 model. It describes the conduct policies and principles about anti-corruption, including in accordance with the requirements of Legislative decree no. 254/2016.
articles 13 and 17 of Legislative decree no. 39/2010 for the years from 2018 to 2026 for the purposes of the separate and consolidated financial statements and all additional related audit work; and (ii) the review of the condensed interim consolidated financial statements at 30 June of the years from 2019 to 2027.
Following the introduction of the obligation to prepare a non-financial statement by Legislative decree no. 254/2016, on 12 November 2018, the company's board of directors also engaged Deloitte & Touche S.p.A. to review this statement for 2018 and 2019, as required by the Legislative decree.
interim ones); (b) performs adequate administrative and accounting procedures for the preparation of the annual financial statements (and the consolidated financial statements if these are prepared) and all other financial reports; and (c) confirms in a specific report on the annual financial statements, the condensed interim financial statements and, if prepared, the consolidated financial statements (i) the adequacy and effective application of the administrative and accounting procedures for the preparation of the financial statements; (ii) that the financial statements have been prepared in accordance with the applicable IFRS endorsed by the European Community in accordance with Regulation (EU) 1606/2002 of the European Parliament and of the Council of 19 July 2002; (iii) that the financial statements provide a true and fair view of the financial position, financial performance and cash flows of the issuer and the companies included in the consolidation scope; (v) that, with respect to the annual and consolidated financial statements, the directors' report includes a reliable analysis of the company's performance and results, the situation of the issuer and the companies included in the consolidation scope together with a description of the main risks and uncertainties to which they are exposed; and (vi) with respect to the condensed interim financial statements, that the directors' report includes a reliable analysis of the information as per article 154-ter.4 of the CFA.
On 28 February 2019, the board of directors checked that: (i) the manager in charge of financial reporting had suitable powers and means to carry out the duties assigned to him in accordance with article 154-bis of the CFA; and (ii) the administrative and accounting procedures were effectively respected.
On 4 December 2019, Giuseppe Viscovich resigned from his position as CFO, maintaining his duties and responsibilities as the manager in charge of financial reporting and as chief financial officer and strategic manager of the CAREL Group until the date of approval of the draft separate and consolidated financial statements at 31 December 2019 by the company's board of directors. Following Giuseppe Viscovich's resignation, the Company has immediately started the research for a candidate of equal high standing. More information on this matter is available in the press release published by the Company on 5 March 2020.
The parties involved in the internal control and risk management system carry out their duties in the manner envisaged by the company to maximise the system's efficiency and to avoid the duplication of procedures. It is normal practice that the board of statutory auditors and the internal audit manager attend meetings of the control, risks and sustainability committee, as do the legal affairs & compliance officer and the manager in charge of financial reporting when matters of interest to them are discussed. The committee chairperson ensure that ongoing and comprehensive information about the committee's work is provided to the board of directors
In order to align the company's corporate governance system with the laws and regulations applicable to listed companies and given the guidelines set out in Consob communication no. DEM/10078683 of 24 September 2010, on 29 March 2018, the board of directors resolved to adopt the related party transactions procedure effective from the stock market listing date. Pursuant to article 4 of the related party transactions regulation, after obtaining the favourable opinion of the control, risks and sustainability committee, in its role as the related party transactions committee, the board of directors definitively approved the OPC procedure on 18 June 2018.
The procedure regulates, inter alia, how to structure and approve more relevant related party transactions, using the criteria set out in the regulation, and less relevant related party transactions, which are those that individually involve an amount of over €200,000 or €100,000, respectively, depending on whether the related party is a company or an individual.
As provided for by the related party transactions regulation, the procedure establishes that more relevant related party transactions are those in which at least one of the relevance parameters in Annex 3 to the regulation is higher than 5%. In this case, the company's finance unit checks whether the procedure needs to be applied to the specific transaction, be it either a more or less relevant related party transaction.
The board of directors instructed the finance unit to identify and develop operating solutions for the timely identification of parties that classify as "related" and an
efficient system to monitor transactions carried out with these parties.
The full version of the related party transactions procedure is available in the Corporate Governance/Procedures and Regulations section of the company's website www.carel. com.
Unless provided for by the applicable instructions, the directors are not subject to specific obligations when they have interests in a certain transaction either directly or on behalf of third parties. Before the related resolution is passed, the board of directors asks its members whether they have an interest in the transaction to be resolved on either directly or on behalf of a third party.
Note that, in relation to the resolution taken on 7 March 2019 regarding the 2018 MBO of the CEO, the Board of Directors has acquired the positive opinion of the control, risks and sustainability committee, in its role as the related party transactions committee..
The board of statutory auditors comprises 3 (three) standing statutory auditors and 2 (two) alternate statutory auditors. The statutory auditors shall meet the reputation, professional and independence requirements and the limit to the number of positions they may hold established by the law and regulations in force from time to time. In accordance with article 1.2.b) and c) of the Ministry of Justice's decree no. 162 of 30 March 2000, subjects related to commercial law, company law, tax law, economics, finance and similar or identical subjects are those considered to be closely related to the company's activities as are the subjects and sectors related to the company's business sector.
The statutory auditors have a term of office of three years, can be re-elected and fall from office at the shareholders' meeting held to approve the financial statements for the third year of their office.
As provided for by article 23 of the by-laws, the statutory auditors are elected by the shareholders using lists presented by them.
Shareholders that either individually or jointly hold a number of shares equal to the percentage established by Consob pursuant to the applicable legislation and regulations for the presentation of lists of candidate directors may present lists of candidate statutory auditors. In accordance with the applicable legal, regulatory and by-laws provisions and Consob management decision no. 28 of 30 January 2020, the lists of candidates may be presented by shareholders that either individually or jointly hold a number of shares equal to at least 1% of the shares with voting rights in ordinary shareholders' meetings.
The lists are lodged at the company's registered office using the methods established by the ruling regulations at least 25 days before the meeting called to resolve on the appointment of directors. The company shall make the lists available to the public at least 21 days before the meeting date using the methods established by the ruling regulations.
If just one list has been lodged by the deadline for the presentation of the lists, additional lists may be presented up to the third day after the deadline by shareholders that, when the list is presented, either individually or jointly hold a number of shares equal to at least half the minimum number required by the above regulations. Each list:
board of statutory auditors, both for the standing and alternate statutory auditors, that complies with the laws and regulations in force from time to time, and the gender balance requirement (should allocation of this requirement not give rise to a whole number, it shall be rounded upwards);
• shall have the documentation required by the by-laws and all other statements, information and/or documents required by law and the application regulations attached as an annex thereto.
Shareholders, including those belonging to the same group of companies or that have entered into a significant shareholder agreement as per article 122 of the CFA, may not present or jointly present more than one list, nor may they vote for more than one list, including via trustees or nominees. Each candidate may be presented in just one list in order to be eligible.
of standing statutory auditor or alternate statutory auditor of the most represented gender elected last in consecutive order from the majority list is excluded and is replaced with the first unelected candidate on the same list of the other gender;
Should a standing statutory auditor leave office for any reason, without prejudice to the legal and regulatory provisions in force from time to time about gender balance, the following procedure is adopted: (i) should a standing statutory auditor elected from the majority list leave office, they are replaced by the alternate statutory auditor elected from the same majority list; (ii) should minority statutory auditor, who is also the chairperson, leave office, they are replaced by the minority alternate statutory auditor, who becomes the chairperson. If, for any reason, it is not possible to adopt this procedure, a shareholders' meeting is called so that the shareholders can elect a new statutory auditor using the ordinary majority vote system and without applying the list voting mechanism, as long as the gender balance requirements in place from time to time are met.
In accordance with Principle 8.P.1 of the Code of Conduct, the statutory auditors are independent of the shareholders, including those that elected them.
The board of statutory auditors in office at 31 December 2019 was elected by the shareholders in their ordinary meeting of 29 March 2018 for a three-year term, i.e., until approval of the financial statements at 31 December 2020. It comprises Saverio Bozzolan, as chairperson, Paolo Ferrin and Claudia Civolani as standing statutory auditors and Giovanni Fonte and Fabio Gallio as the alternate statutory auditors.
As the board of statutory auditors in office at 31 December 2019 was appointed on 29 March 2018 and the by-laws became applicable on the stock market listing date of the Carel ordinary shares, the provisions about list voting included therein (which require that a standing statutory auditor, who shall also act as chairperson, and an alternate statutory auditor shall be elected from the list that received the second largest number of vote after the majority list and who is not linked in any way, including indirectly, to the shareholders that presented or voted for the majority list), will only become applicable when the board of statutory auditors is re-elected after the listing date of the Carel ordinary shares (23 May 2018).
The statutory auditors' professional profiles are summarised below.
Saverio Bozzolan, he obtained a degree in Statistics and Economics (business specialisation) from Padua University in 1991 and a PhD in Economics from the "Ca' Foscari" University of Venice. He is a full professor of Business Economics at the LUISS Guido Carli University of Rome and, before that, a full professor at Padua University. He mainly focuses on corporate governance, risk analysis and assessment, internal controls/company compliance and economic and financial reporting and has gained experience in research in these areas (publishing books and articles in national and international journals) and professional experience. He holds positions as statutory auditor in listed and unlisted companies. At the report date, he is chairperson of the company's board of statutory auditors.
Paolo Ferrin, he obtained a degree in Economics and Commerce from the "Ca' Foscari" University of Venice in 1981 and is included in the register of chartered accountants. Since 1983, he has held positions as statutory auditor or director in several industrial and commercial companies, mostly in north east Italy. He provides tax, corporate and financial consultancy services to industrial companies and was the chairperson of the company's board of statutory auditors in 2017. At the report date, he is a standing statutory auditor of the company.
Claudia Civolani, she obtained a degree in Economics and Commerce from the "Ca' Foscari" University of Venice in 1993 and is included in the register of chartered accountants. She is an associate of Studio Ferrin and provides tax, corporate and financial consultancy services. She acts as statutory auditor for several companies. At the report date, she is a standing statutory auditor of the company.
Giovanni Fonte, he obtained a degree in Economics and Commerce from Verona University in 1999 and is included in the register of chartered accountants. He worked as an auditor with PWC and subsequently with Studio Pirola Pennuto Zei & Associati and with Studio Legale NCTM (for 11 years). He was partner of Roedl & Partner Italy. He holds several positions as statutory auditor for companies in the industrial sector and was a standing statutory auditor of the company in 2017. At the report date, he is an alternate statutory auditor of the company.
Fabio Gallio, he obtained a degree in Economics from the "Ca' Foscari" University of Venice in 1985 and in Law from Parma University in 1997. He worked with the legal companies of the Ernst & Young and Deloitte & Touche networks in the period from 1998 to 2004. Since 2005, he has been an associate of Studio Terrin, based in Padua and Milan. He was a standing statutory auditor for the company for the 2014-2016 three-year period. In 2017, he was an alternate statutory auditor for the company, as he is at the date of this report.
The board of statutory auditors was elected without using the list voting mechanism described above, which will be
applied when the board is re-elected.
times, with the following attendance percentage of each standing statutory auditor. The average length of the meetings was three hours.
During the year, the board of statutory auditors met 13
| Saverio Bozzolan | 13/13 | 100% |
|---|---|---|
| Paolo Ferrin | 13/13 | 100% |
| Claudia Civolani | 13/13 | 100% |
meetings have been scheduled for 2020, of which three already held at the report date.
A board of statutory auditors' meeting can be called by any of the statutory auditors. It is deemed to be validly constituted when the majority of its members are present and it passes resolutions by absolute majority vote.
During the year, none of the statutory auditors left office nor were changes made to the board of statutory auditors either at 31 December 2019 or the report date.
More information about the company's board of statutory auditors is provided in table 3 (in the annexes).
In order to carry out their duties, the statutory auditors may, also individually, ask the directors for updates and clarifications about the information sent to them and, more generally, about the company's operations or specific transactions. They may perform inspections or checks of such information at any time. The board of statutory auditors, the audit company and the control, risks and sustainability committee exchange information and data useful for carrying out their respective duties..
Given the company's structure and size, as well as its ownership structure and list-based voting system provided for by the by-laws, which guarantees transparent elections and a balanced composition of the management body, the board of directors did not deem it necessary to adopt specific diversity policies and/or practices with respect to the composition of the board of statutory auditors and the age, gender and educational and professional background of the various members.
At least one third of the standing statutory auditors is made up of the less represented gender.
In this regard, note that on 1 January 2020 the provisions of Italian Law no. 160 of 27 December 2019 ("2020 Budget Law") came into force, amending Articles 147 ter, paragraph 1-ter, and 148, paragraph 1-bis, of the Consolidated Law on Finance (T.U.F.), introduced by Italian Law no. 120 of 12 July 2011 (known as "Gulf-Moscow Law"), on the subject of gender balance in the corporate bodies of companies with listed shares. The 2020 Budget Law envisaged that the management and control bodies of listed companies reserve "at least two fifths" of the members (instead of one third) to the less represented gender and established that this distribution criterion applies for "six subsequent mandates" (instead of three). Therefore, as part of the next renewal of the company bodies, lists will have to be drawn up and their members elected in accordance with the relevant provisions of the 2020 Budget Law and CONSOB regulations
On 3 April 2018, the board of statutory auditors found that its elected members meet the independence requirement. On 1 March 2019 and 27 February 2020, it carried out its annual check that they continued to do so and found that, in accordance with Application Criterion 8.C.1 of the Code of Conduct, based on the information provided by its members and that available to the company, there were no situations that would compromise the independence
or independent judgement of the board members. It applied all the criteria set out in the Code of Conduct applicable to the independence of directors in carrying out this check. The board of statutory auditors informed the board of directors of the results of the check.
The statutory auditors are not subject to specific obligations when they have interests in a certain transaction either directly or on behalf of third parties. Before the related resolution is passed, the board of directors asks the members of the board of statutory auditors whether they have an interest in the transaction to be resolved on.
The board of statutory auditors has also checked the independence of the audit company in accordance with the relevant legislation and regulations. It also checked the nature and scope of the services provided other than the statutory audit by the audit company and its network companies to the company and its subsidiaries . It informed the board of directors of the results of its work. In the period from 31 December 2019 to the report date, the board of statutory auditors performed its selfassessment as required by the code of conduct for boards of statutory auditors of listed companies (Rule Q.1.1) and informed the board of directors of its findings. On 26 February 2020, the board of statutory auditors sent to the board of directors, which took note of this on 27 February 2020, the periodical "Report of self-evaluation" of the board of statutory auditors, pursuant to and for the effects referred to in "Rule Q.1.1" of the "Rules of conduct of the board of statutory auditors of listed companies", issued by the Italian National Council of Chartered Accountants and Auditors, illustrating its contents. Such procedure of verification included, inter alia, an evaluation of the following:
composition of components;
With respect to the projects designed to provide the statutory auditors with a suitable understanding of the business sectors in which Carel operates, the chairperson of the board of directors has organised board induction sessions to provide its statutory auditors with a suitable understanding of the business sectors, also in the light of the company's performance and changes in its ownership structure
These sessions provided an overview and in-depth look at the company's various business segments through reports and presentations prepared by senior management in the areas of R&D, marketing and sales, HR and organisation, operations and administration and finance and control. Thanks to these meetings, the statutory auditors obtained an understanding of the group's business model and products/markets, its competitive leverage, its typical activities and R&D, HRM strategies and the working of the administration, finance and control unit, especially as regards critical issues and risks.
The statutory auditors' remuneration reflects their commitment and roles as well as the company's size and business.
The board of statutory auditors liaises regularly with the internal audit unit and the control, risks and sustainability committee. They share their action plans and, when possible, coordinate their activities. Accordingly, and in line with the priorities of each corporate body, the board of statutory auditors availed of the assistance of the internal audit unit to carry out some procedures and vice versa. Coordination with the control, risks and sustainability committee and the exchange of information consisted of the statutory auditors' attendance at committee meetings and the discussion of some matters on the agenda of common interest.
In accordance with the recommendations set out in Application Criterion 9.C.1 of the Code of Conduct, on 29 March 2018, the board of directors set up an investor relations unit and appointed Francesco Nalini as the investor relations manager, effective from the stock market listing date, to manage relations with the shareholders. He was replaced by Giampiero Grosso on 27 August 2018. More information about the unit is available in the Investor Relations/Corporate Governance section of the company's website www.carel.com.
Ordinary and extraordinary meetings of the shareholders are held on single call in accordance with article 2369.1 of the Italian Civil Code. However, the board of directors may provided that a meeting (either ordinary or extraordinary) can be held on more than one call if this is necessary and specifically stated in the notice of the meeting. In this case, the majority votes established by law for meetings that take place on more than one call for listed companies are applied.
The board of directors has the authority to call meetings of the shareholders, while the board of statutory auditors or at least two of its members may also call a meeting as provided for by article 151 of the CFA and other applicable laws and regulations.
In accordance with article 10 of the by-laws, the legitimate participation in a meeting is confirmed by a communication sent to the company by the broker authorised to do so by law, based on the information in its accounts at the end of the accounting day of the seventh open market day before that set for the meeting on single call, as legally provided for.
Shareholders that may legitimately participate in a meeting may be represented by proxy as provided for by law. Electronic notification of the proxy may be made using the methods specified in the notice calling the meeting either by email to the company's certified email address specified in the notice or using the specific section on the company's website.
For each meeting and as specified in the notice calling the meeting, the company may designate a party to which the shareholders can give their proxy with voting instructions on all or some of the matters on the agenda using the methods and timeframe established by law.
Shareholders' meetings can take place in more than one location, near or far apart, by audio or video conference, as long as the collegial method and principles of good faith and equal treatment of the shareholders are respected as well as any other conditions established by the by-laws.
The shareholders pass resolutions on matters reserved to them by law or the by-laws in ordinary and extraordinary meetings using the majority votes established by law.
Each share has one voting right to be exercised at meetings, unless provided for otherwise by article 13 of the by-laws about the loyalty shares.
Meetings are chaired by the chairperson of the board of directors. Should they be absent or unable to attend, the meeting is chaired by the deputy chairperson, if appointed, or if they are absent or unable to attend, by the person designed by the shareholders.
The meeting chair's duties, powers and functions are regulated by law.
As provided for by article 16 of the by-laws, the chair is assisted by a secretary appointed by the shareholders and proposed by the chair. The secretary takes minutes.
In the case of extraordinary meetings or when deemed opportune by the chair, a notary public is elected secretary, upon the chair's recommendation and in accordance with the law.
Meeting minutes are written up as per article 2375 of the Italian Civil Code and other ruling laws and regulations.
In addition to the law and the by-laws, the meeting proceedings are regulated by the meeting regulation approved by the shareholders on 29 March 2018, effective from the stock market listing date. This regulation can be consulted on the company's website www.carel.com in the Corporate Governance/Procedures and Regulations section. In accordance with the meeting resolution, parties that intend to speak at meetings must request the permission of the meeting chair or the secretary, specifying the matter on the agenda they wish to speak on. Requests may be made until the meeting chair states that the discussions on the relevant matter have ended.
Participants may request to speak for a second time during
the same discussion for not more than five minutes solely to respond to another party or to communicate how they intend to vote.
The shareholders met once during the year.
All the directors were present at this meeting.
During the year, no changes took place in the market capitalisation of the issuer's shares or in its ownership structure that would have lead the board of directors to propose to the shareholders amendments to the by-laws about the percentages necessary to exercise voting rights and the measures in place to protect non-controlling interests..
At the report date, the company has not adopted any additional corporate governance practices to those indicated herein.
Except for that set out herein, no changes in the company's corporate governance structure have taken place in the period from 31 December 2019 to the report date.
The content of the letter of 19 December 2019 written by the chairperson of Borsa Italiana's Corporate Governance Committee was brought to the attention of the board of directors and its committees on 27 February 2020.
The board of directors made the following considerations: • with respect to the integration to the sustainability of the company's activities and definition of the remuneration strategies and policy, including on the basis of an analysis of the relevance of factors that may impact the generation of long-term value, as set out in in paragraph 6 of this report, on 28 February 2019, the control and risks committee was assigned the
duties and responsibilities for sustainability, renaming the committee the control, risks and sustainability committee. Specifically, the committee carried out the duties described in paragraph 10.2 of this report about sustainability;
the independence requirements using the documents provided by each director upon their appointment on 29 March 2018 and subsequently on 28 February 2019 and 27 February 2020 in line with the Code of Conduct recommendations. Specifically, none of the independent directors were found to fall into the cases provided for by Application Criterion 3.C.1 of the Code of Conduct. In accordance with the recommendations, the board of statutory auditors checked the correct application of the criteria and procedures applied by the board of directors to check its members' independence on 3 April 2018, 25 January 2019 (solely for the director co-opted on that date), 1 March 2019 and 27 February 2020;
• the remuneration of the non-executive directors and the statutory auditors was deemed adequate given their expertise, professionalism and commitment.
* * *
Brugine, 5 March 2020
CAREL INDUSTRIES S.p.A. IChairperson of the Board of directors Luigi Rossi Luciani
| Share Capital | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| No. of shares | % of share capital |
Listed (indicate market) / unlisted |
Rights and obligations | ||||||
| Ordinary shares (of which loyalty shares)) |
100,000,000 (59,750,000) |
100% (59.75%) |
Listed (STAR segment of the Italian stock market organised by Borsa Italiana) |
Dematerialised shares in accordance with article 83-bis and following articles of the CFA. They can be transferred and have the same dividend and voting rights established by the law and the by-laws, except for that provided for by article 13 of the by-laws. |
|||||
| Shares with multiple voting rights | - | - | - | - | |||||
| Shares with limited voting rights | - | - | - | - | |||||
| Shares without voting rights | - | - | - | - | |||||
| Other | - | - | - | - |
| Other Financial Instruments (giving the right to subscribe new shares) |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Listed (indicate market) / unlisted |
No. of instruments outstanding |
Category of shares to serve conversion/exercise |
No. of shares to serve conversion/exercise |
||||||
| Convertible bonds | - | - | - | - | |||||
| Warrant | - | - | - | - |
| Significant Investments | ||||||
|---|---|---|---|---|---|---|
| Declarant | Direct shareholder | % of ordinary shares | % of shares with voting rights | |||
| Carlotta Rossi Luciani (as joint representative of the undivided co-ownership of shares with Cecilia and Vittorio Rossi Luciani) |
Luigi Rossi Luciani S.A.P.A |
36,17% | 45,28% | |||
| Valerio Nalini (as joint representative of the undivided co-ownership of shares with Francesco and Chiara Nalini) |
Luigi Nalini S.A.P.A. | 23,58% | 29,52% | |||
| Capital Research and Management Company* |
Capital Research and Management Company* |
9,95% | 6,23% |
44
| Board of directors | ||||||||
|---|---|---|---|---|---|---|---|---|
| Position | Members | Year of birth | Date of first appointment * |
In office since | In office until | List ** | Executive | |
| Chairperson | Luigi Rossi Luciani |
1945 | 23/01/2009 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | YES | |
| Deputy chairperson |
Luigi Nalini | 1942 | 23/01/2009 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | YES | |
| CEO | Francesco Nalini |
1973 | 23/01/2009 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | YES | |
| Director | Carlotta Rossi Luciani |
1982 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | YES | |
| Director | Cinzia Donalisio |
1960 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | NO | |
| Director | Marina Manna |
1960 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | NO | |
| Director | Corrado Sciolla |
1963 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | NO | |
| Director | Giovanni Costa |
1942 | 25/01/2019 | 15/04/2019 | Approval of financial statements at 31/12/2020 |
n.a. | NO |
| Control, risks and sustainability committee |
Remuneration committee |
|||||||
|---|---|---|---|---|---|---|---|---|
| Non-exec. | Indep. as per Code |
Indep. as per CFA |
No. of other positions |
(*) | (*) | (**) | (*) | (**) |
| *** | NO | NO | 17 | 10/10 | - | - | - | - |
| NO | NO | NO | 5 | 10/10 | - | - | - | - |
| NO | NO | NO | 6 | 10/10 | - | - | - | - |
| NO | NO | NO | 1 | 10/10 | - | - | - | - |
| YES | YES | YES | 0 | 10/10 | 13/13 | M | 10/10 | P |
| YES | YES | YES | 15 | 10/10 | 13/13 | P | 10/10 | M |
| YES | YES | YES | 2 | 1/1 | 1/13 | M | 10/10 | M |
| YES | SI | SI | 3 | 10/10 | 12/12 | M | - | - |
NOTE:
The following symbols shall be included in the "Position" column:
Indicates the director in charge of the internal control and risk management system.
Indicates the CEO
QuesIndicates the lead independent director (LID).
* The date of first appointment of each director is the date on which they were elected for the first time as a member of the company's board of directors.
** IThe board of directors in office was elected without using the list voting mechanism.
*** This column shows the number of positions as director or statutory auditor held by the person in other listed companies, including abroad, financial companies, banks, insurance companies or large companies. These positions are detailed in the report on corporate governance.
(*). This column shows the directors' attendance at board and committee meetings (indicate the number of meetings attended compared to the total number, e.g., 6/8, 8/8, etc.).).
(**). This column shows the position of the director in the committee: "C": chairperson; "M": member
| Statutory Auditors | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Position | Members | Year of birth |
Date of first appointment * |
In office since |
In office until | List ** |
Indep. as per Code |
Participation at meetings *** |
No. of other positions **** |
| Chairperson | Saverio Bozzolan |
1967 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | SI | 22/23 | 7 |
| Standing statutory auditor |
Claudia Civolani |
1966 | 29/03/2018 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | SI | 22/23 | 8 |
| Standing statutory auditor |
Paolo Ferrin |
1955 | 08/05/2017 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | SI | 22/23 | 17 |
| Alternate statutory auditor |
Fabio Gallio |
1970 | 16/05/2011 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | SI | - | 47 |
| Alternate statutory auditor |
Giovanni Fonte |
1973 | 16/05/2011 | 29/03/2018 | Approval of financial statements at 31/12/2020 |
n.a. | SI | - | 0 |
| Statutory auditors who left office during the year | |||||||||
| n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
Indicate quorum necessary to present lists by non-controlling interests to elect one or more members (article 147-ter of the CFA): 2.5%
NOTE
* The date of first appointment of each statutory auditor is the date on which they were elected for the first time as a member of the company's board of statutory auditors
** This column indicates the list from which the statutory auditor was taken ("M": majority list; "m": minority list)
*** This column shows the statutory auditors' attendance at board meetings (indicate the number of meetings attended compared to the total number, e.g., 6/8, 8/8, etc.)
**** This column shows the number of positions as director or statutory auditor held by the statutory auditors as per article 148-bis of the CFA and related implementation guidelines set out in the Issuers' Regulation. A complete list of the positions is published by Consob on its website in accordance with article 144-quinquiesdecies of the Issuers' Regulation.
List of positions held by Luigi Rossi Luciani
| Company | Position |
|---|---|
| CAREL INDUSTRIES Spa | Chairperson of the board of directors |
| Luigi Rossi Luciani Sapa * | Chairperson of the board of directors and general partner |
| Nastrificio Victor Spa * | Chairperson of the board of directors |
| Eurotest Laboratori Srl * | Chairperson of the board of directors |
| Panther Srl * | Chairperson of the board of directors |
| Ots srl * | Chairperson of the board of directors |
| Rn Real Estate srl * | Chairperson of the board of directors |
| New Frontier srl * | Director |
| Its Meccatronico di Vicenza * | Chairperson |
| Soc. Agricola Monte Fasolo srl * | Chairperson of the board of directors |
| CAREL Acr Systems India Pvt ltd. | Chairperson of the board of directors |
| CAREL Middle East dwc | Chairperson of the board of directors |
| Garmont International srl * | Director |
| Femogas S.p.A. * | Director |
| Chairperson of the board of directors |
* The company is not part of the group headed by the issuer. .
| Position |
|---|
| Deputy chairperson of the board of directors |
| Chairperson of the board of directors - general partner |
| Director |
| Chief Executive Officer |
| Chief Executive Officer |
* The company is not part of the group headed by the issuer.
| Company | Position |
|---|---|
| CAREL INDUSTRIES S.p.A. | Chief Executive Officer |
| Università degli Studi di Padova * | Director |
| RN Real Estate Srl * | Director |
| RN Real Estate Adriatic doo * | Director |
| Associazione Amici Università di Padova * |
Member of the management board |
CAREL INDUSTRIES GROUP Report on Corporate Governance and the Ownership Structure 2019 * The company is not part of the group headed by the issuer.
| Company | Position |
|---|---|
| CAREL INDUSTRIES S.p.A. | Director |
| Company | Position | |
|---|---|---|
| BLM S.p.A. * | Chairperson of the board of statutory auditors | |
| Celenit S.p.A. * | Standing statutory auditor | |
| Superauto S.p.A. * | Standing statutory auditor | |
| Clodia – Soc. Imm. S.p.A. * | Standing statutory auditor | |
| Pagnan Finanziaria S.p.A. * | Standing statutory auditor | |
| FPT Industrie S.p.A. * | Standing statutory auditor | |
| Nice Group S.p.A. * | Standing statutory auditor | |
| Fonderie Pandolfo S.p.A. * | Standing statutory auditor | |
| Tiche S.p.A. * | Alternate statutory auditor | |
| Busitalia Veneto S.p.A. * | Member of the board of directors being formalised | |
| Laboratorio Morseletto S.r.L. * | Sole statutory auditor | |
| Veneto Logistica S.r.l. * | Sole statutory auditor | |
| Fond. Ist. Ricerca Pediatrica Città della Speranza * |
Chairperson of the audit body | |
| Carraro S.p.A. * | Director | |
| CAREL INDUSTRIES S.p.A. | Director | |
| Cavour srl * | Sole director |
* The company is not part of the group headed by the issuer.
| Company | Position |
|---|---|
| CAREL INDUSTRIES S.p.A. | Director |
| Company | Position |
|---|---|
| CAREL INDUSTRIES S.p.A. | Director |
| Gibus S.p.A. * | Director |
| Edizione srl - holding di partecipazione di rilevanti dimensioni * |
Director |
* The company is not part of the group headed by the issuer..
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CAREL INDUSTRIES HQs Via dell'Industria, 11 35020 Brugine - Padova (Italy) Tel. (+39) 0499 716611 Fax (+39) 0499 716600 [email protected]
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