Governance Information • Mar 14, 2019
Governance Information
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prepared pursuant to art. 123-bis, Italian Legislative Decree no. 58 of 24 February 1998 approved by the Board of Directors on 12 March 2019
Company website www.fieramilano.it
(in the section Investor Relations/Corporate Governance)
This document contains a true translation in English language of the Italian document "Relazione sul governo societario e gli assetti proprietari al 31 dicembre 2018". However, for information about Fiera Milano reference should be made exclusively to the original document in Italian language. The Italian version of the "Relazione sul governo societario e gli assetti proprietari al 31 dicembre 2018" shall prevail upon the English version.
7.1 Director responsible for the Internal Control and Risk Management System
7.2 Head of Internal Audit (the "Internal Audit Department")
In this Report on Corporate Governance and Ownership Structure (hereinafter the "Report"), Fiera Milano S.p.A. (hereinafter the "Company" or "Fiera Milano") provides an account of its corporate governance system, information regarding the ownership structure and disclosure on its compliance with the recommendations contained in the principles and application criteria of Borsa Italiana's Corporate Governance Code for Listed Companies, as amended in December 2011, July 2014, July 2015 and again in July 2018 (hereinafter the "Corporate Governance Code"). The term corporate governance is used to identify the body of rules and procedures for managing and controlling joint stock companies. An effective and efficient business organisation model must be capable of using the correct means to manage business risks and potential conflicts of interest that can arise between Directors and shareholders and between controlling and non-controlling interests. These aspects are of even greater significance in listed companies with a wide shareholder base.
The indications given by Borsa Italiana in the "Format for the Report on Corporate Governance and Ownership Structure" issued in January 2019 and Recommendations formulated by the Corporate Governance Committee have been taken into account in the preparation of this Report.
Fiera Milano, an issuer of shares listed in the STAR segment of the Electronic Equity Market (MTA – Mercato Telematico Azionario) regulated by Borsa Italiana S.p.A. (hereinafter "Borsa Italiana"), adopts a corporate governance system that meets the requirements of enacted laws, existing regulations and those of Borsa Italiana's Corporate Governance Code.
The Company, which exercises direction and coordination over its direct and indirect subsidiaries, uses a traditional administration and control model based on the existence of a Board of Directors and a Board of Statutory Auditors.
Fiera Milano qualifies as a Small and Medium Enterprise (hereinafter "SME") under Article 1, paragraph 1.w-quater).1 of Italian Legislative Decree no. 58 of 24 February 1998 (hereinafter the "Consolidated Finance Act"). The capitalisation of the Company, in fact, is Euro 242,130,261 with revenue of Euro 196,383,505.00 at 31 December 2018.
* * * *
On 20 April 2018, Borsa Italiana ordered the reassignment of the Company's ordinary shares to STAR qualification, as well as their trading in this segment of the MTA market from 30 April 2018.
Following the Judicial Administration measures to which Fiera Milano was subject between October 2016 and September 2017, the Company had asked Borsa Italiana for voluntary exclusion of the shares from the STAR segment, continuing their trading on the MTA market.
In the period of voluntary exclusion from the STAR segment, the Company continued to maintain the corporate governance, disclosure transparency and liquidity requirements in line with the quality standards of that segment.
* * * *
Fiera Milano publishes a consolidated disclosure of non-financial information, pursuant to Italian Legislative Decree 254/2016, the "Sustainability Report", which supplements the information contained in the Annual Financial Report, providing details of the performance and key sector indicators from the perspective of sustainability and social responsibility.
The paid in share capital is Euro 42,445,141.00 (forty-two million four hundred and forty-five thousand one hundred and forty-one) and comprises 71,917,829 (seventy-one million nine hundred and seventeen thousand eight hundred and twenty-nine) registered shares with no nominal value.
The shares are indivisible and carry one voting right each, except in the case of treasury shares held directly and indirectly which do not have this right.
The Company has issued no other financial instruments with rights to subscribe to newly issued shares.
At 31 December 2018, the Company had no share-based incentive schemes involving an increase, against payment or free of charge, in the share capital. Pursuant to art. 114-bis of the Consolidated Finance Act, the Shareholders' Meeting of 23 April 2018 approved a new medium/long-term incentive plan called the "Performance Shares Plan 2018-2019", with a hybrid "cash" and "performance shares" structure. In relation to the contents of the Performance Shares Plan 2018- 2019, please refer to the Report on Remuneration prepared according to art. 123-ter of the Consolidated Finance Act.
There are no restrictions on the transfer of shares.
The Company is classified as an SME and, therefore, under Article 120, paragraph 2, of the Consolidated Finance Act, the significant threshold for reporting significant shareholdings is 5%.
According to the shareholders' register and communications received pursuant to Article 120 of the Consolidated Finance Act, the shareholders who at 12 March 2019 held, directly or indirectly, shares equal to 5% or more of the share capital were as follows:
| Declarant | Direct Shareholder | No. shares |
% of Ordinary Share Capital |
% of Voting Capital |
|---|---|---|---|---|
| Fondazione E.A. Fiera Internazionale di Milano |
Fondazione E. A. Fiera Internazionale di Milano |
45,898,995 | 63.821 | 64.666 |
| Total | 45,898,995 | 63.821 | 64.666 | |
| Milan-Monza-Brianza-Lodi Chamber of Commerce (formerly Milan Chamber of Commerce, Industry and Agriculture) |
Parcam S.r.l. | 4,689,316 | 6.520 | 6.607 |
| Milan-Monza-Brianza-Lodi Chamber of Commerce (formerly Milan Chamber of Commerce, Industry and Agriculture) |
1 | 0.000 | 0.000 | |
| Total | 4,689,317 | 6.520 | 6.607 |
No shares with special rights have been issued.
At 31 December 2018, there were no employee stock option plans.
There are no restrictions on voting rights.
There are no shareholder agreements pursuant to art. 122 of the Consolidated Finance Act.
There are no change of control clauses pursuant to art. 123-bis, paragraph 1.h) of the Consolidated Finance Act.
As regards tender offers, the Company Articles of Association meet current regulations on the passivity rule and do not provide for application of the neutralisation measures under Article 104 bis, paragraphs 2 and 3 of the Consolidated Finance Act.
In 2018, the Shareholders' Meeting gave no authorisation to the Board of Directors to increase the share capital pursuant to art. 2443 of the Italian Civil Code.
The Ordinary Shareholders' Meeting of 23 April 2018 authorised the Board of Directors to acquire treasury shares for a period of 18 months. The authorisation stipulated that (i) the maximum number of shares acquired, including those already owned by the Company and its subsidiaries, could not exceed one-fifth of shares making up the share capital of the Company, (ii) the purchase price of each share could not be higher than the greater of the highest price of the last independent transaction and the current highest independent offer price on the trading date on which the acquisition is made, whilst respecting the requirement that the unit price of the shares must not be 10% higher or lower than the reference price of Fiera Milano shares on the MTA market organised and operated by Borsa Italiana on the trading day preceding any single transaction, (iii) shares could be disposed of in one or more transactions even before the authority to acquire the shares had been completed, and (iv) the disposal price could not be lower than the lowest price at which the shares were acquired; this restriction on the disposal price does not apply if the shares are disposed of as part of a stock option plan.
The Company did not implement the aforementioned plan.
At the date of this Report, Fiera Milano directly holds 939,018 treasury shares, equal to 1.31% of the share capital.
With reference to the total treasury shares indicated above, note that
As approved by the General Council of its controlling entity Fondazione Ente Autonomo Fiera Internazionale di Milano on 26 July 2004, Fiera Milano has autonomous organisational and decision-making powers and is not subject to direction or coordination - pursuant to Article 2497 et seq. of the Italian Civil Code - by the controlling entity.
Any presumption of direction and coordination is negated by the fact that Fondazione Ente Autonomo Fiera Internazionale di Milano exerts no decisive influence on the long-term strategic plans or annual budgets of Fiera Milano or on its investment decisions, nor does it determine its policies regarding the acquisition of goods and services on the market, or coordinates any business initiative or activity in the sectors in which the Company and its subsidiaries or associates operate.
Fiera Milano exercises direction and control over its direct and indirect subsidiaries. These activities are governed by the Regulations on Direction and Coordination (see §12.2).
Fiera Milano adheres to the Corporate Governance Code, approved by the Corporate Governance Committee of Borsa Italiana in March 2006 and amended in December 2011, July 2014, July 2015 and again in July 2018.
The Corporate Governance Code is publicly available on the website of the Committee for Corporate Governance at
https://www.borsaitaliana.it/borsaitaliana/regolamenti/corporategovernance/codice2018clean.pdf.
The corporate governance structure of Fiera Milano is not affected by non-Italian legal provisions.
The Board of Directors has a central role in the business organisation and is responsible for its activities and its strategic and operating guidelines, as well as for verifying the existence of controls necessary to monitor Company and Group performance.
The paragraph on composition of the Board of Directors describes the current structure of the Board.
As required by law and by the Articles of Association, the appointment of members of the Board of Directors is from lists presented by shareholders who, either alone or in concert with other shareholders, hold at least 2.5% of the Company share capital, as established by the Articles of Association and by Consob Resolution no. 13 of 24 January 2019. The lists must be filed with the registered office of the Company at least twenty-five days prior to the date set for the Shareholders' Meeting on first call and must be made publicly available at least twenty-one days prior to this date in compliance with current regulations.
Ownership of the minimum shareholding required to present lists is based on the shares confirmed as registered to the shareholder on the day on which the lists are filed with the Company. To prove ownership of the minimum number of shares required to present lists, shareholders must submit the relative certification released by authorised intermediaries in accordance with law by the Company's list publication deadline.
Each list must be filed, by the aforementioned deadlines, with (i) information concerning the identity of the shareholders that have presented the list and their percentage shareholding, (ii) statements in which each candidate accepts the candidacy, confirming that there is no cause that would make them ineligible or incompatible and that they meet the necessary requirements for appointment under current regulations, including any independence requirements for Statutory Auditors required by law and by the Corporate Governance Code, and that they do not exceed the limit to the total number of administration and control positions held in other companies, listed or unlisted; the statements of each candidate must confirm possession of the capacity for free expression and must also include a specific undertaking from each candidate that he/she will maintain his/her ability for independent judgement free from any external influence for the entire term of office, as well as a specific undertaking to dedicate an amount of time to the position consistent with correct and diligent fulfilment of the role and not to assume other administration and control positions that violate the internal regulation of the Company regarding the limit to the total number of positions held; (iii) a professional curriculum vitae from each candidate, indicating administrative and control and executive positions currently held and those held previously.
It is also a legal requirement that at least one Director be appointed from the list with the greatest number of votes presented by minority shareholders and that is in no way connected, even indirectly, with the shareholders who presented, or acted in concert to present, or voted for the list that received the highest number of votes.
With reference to the appointment and replacement of members of the Board of Directors, the Articles of Association, in compliance with the requirements of Article 147-ter, paragraph 1-ter, of the Consolidated Finance Act and Article 144-undecies 1 of Consob Regulation no. 11791 approved by resolution dated 14 May 1999, and subsequent amendments and modifications (hereinafter the "Issuers' Regulation"), require that:
The Directors must meet the professionalism and integrity requirements according to the relevant prevailing laws, under penalty of ineligibility or forfeiture of appointment should these requisites be found to be lacking subsequent to their appointment. The composition of the Board of Directors must reflect an adequate level of diversity in terms of skills, experience, age, gender and international profile.
To co-opt Directors to the Board, the Board of Directors must ascertain in advance the optimum qualitative and quantitative composition in order to identify and ensure the correct theoretical profile (including their proven and continuing professionalism and independence) of the candidates.
The majority of members of the Board of Directors must meet the independence requirements for Statutory Auditors according to current law and also the independence requirements established in the Corporate Governance Code. Independent Directors, according to their documented experience, must possess the professionalism to ensure a high level of internal discussion in the Board of Directors and to make an effective contribution to its decision-making process.
The Board of Directors assesses the existence of independence requirements: (i) on the initial appointment of a new Director qualifying as independent; and (ii) on renewal of the appointment of all Directors qualifying as independent.
The Board of Directors will ascertain annually that the requirements for independence of Directors already been appointed are still met. In all cases, an assessment that each Director classified as independent meets the independence requirements must be carried out by the Board of Directors in accordance with the principle of substance over form. Should the requirements for independence, as defined above, be found to be lacking in any independent director, he/she will forfeit the position unless at least the majority of members of the Board of Directors still meets the independence requirements. An independent Director losing their independence requirements during the term of office must immediately inform the Board of Directors. Furthermore, the independence requirement will be considered not met if a Director has already held three consecutive positions as independent director of the Company.
It should be noted that, for information purposes, the full text of the Articles of Association, with the requirements given above, is available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/ Articles of Association.
The number of independent Directors on the current Board of Directors exceeds the legal requirements (the Consolidated Finance Act) and/or regulatory requirements (the requirements for the STAR segment of the Italian stock exchange and the Corporate Governance Code).
As indicated in the Corporate Governance Code, a Director of a listed issuer is not normally considered independent if he or she:
or who is, or in the last three financial years has been, an employee of any of the aforementioned entities;
d) receives or has received in the previous three financial years from the issuer, or one of its subsidiaries or from a parent company, significant additional remuneration to the compensation agreed for a non-executive Director of the issuer or remuneration as member of a committee recommended in the Corporate Governance Code, including any incentive plans linked to company performance, comprising those that are share-based;
On March 2019, the Company approved a procedure for the succession plan for executive directors with the aim to ensure their prompt replacement in the event of termination from their office different from the natural termination of the mandate, in order to guarantee an orderly succession in the top management positions through a rapid replacement of the discontinued executive directors, thus ensuring the continuity and stability of the management.
The implementation of the succession plan is expected by the end of the first half of 2019.
Pending the formal implementation of the succession plan, if for any reason one or more directors would be no longer able to exercise their responsibilities, the Board of Directors, on proposals put forward by the Appointments and Remuneration Committee, will, under Article 2386 of the Italian Civil Code and in compliance with rules governing the composition of the Board of Directors established by law and the Articles of Association, identify and assess that the replacement candidates meet the specific requirements of the aforementioned Regulations.
The current Board of Directors was appointed by the Shareholders' Meeting of 21 April 2017 and the term of office will expire with the Shareholders' Meeting called to approve the financial statements at 31 December 2019.
The Shareholders' Meeting of 21 April 2017 approved a Board of Directors composed of eight members with the right to increase the number of Directors at a subsequent meeting.
On 25 July 2017, the Shareholders' Meeting increased the number of members of the Board of Directors to nine and the latter then appointed Fabrizio Curci as new Director with a term from 1 September 2017 until the expiry date for the term of office of the other Directors. The Board of Directors met at the end of the Shareholders' Meeting and appointed Fabrizio Curci as Chief Executive Officer and General Manager of Fiera Milano effective from 1 September 2017.
Therefore, the Board of Directors is currently composed of nine Directors. A brief curriculum vitae for each Director in office at 12 March 2019 giving his/her main personal and professional details, as well as a list of positions held, is given below.
- Lorenzo Caprio, Chairperson, appointed by the Shareholders' Meeting of 21 April 2017. (Independent Non-executive Director - Chairperson) Born in Milan on 19 November 1957, he graduated in Economics from the Università Cattolica del Sacro Cuore in Milan. He is currently a tenured Professor of Corporate Finance in the Economics Faculty of the Università Cattolica del Sacro Cuore; he is also a Chartered Accountant registered in Milan and an External Auditor; since May 2007 and until 2018 he was the Chairperson of the Board of Statutory Auditors of Banca ITB S.p.A. and, from 23 April 2015, Chairperson of the Board of Statutory Auditors of RCS Mediagroup S.p.A.; he is a member of the scientific committees of the Journal of Management and Governance, Il controllo nelle società e negli enti, Banca Impresa e Società, and the Journal of Financial
Markets and Institutions and is a member of the Board of Governors of the Centro di Ateneo for the social doctrine of the Church at the Università Cattolica del Sacro Cuore.
- Fabrizio Curci, Chief Executive Officer, appointed on 25 July 2017 and in office since 1 September 2017. (Non-independent Executive Director - Chief Executive Officer)
Fabrizio Curci, Chief Executive Officer and General Manager of Fiera Milano, was born in Barletta on 28 November 1972.
He graduated in Economics, with a specialisation in marketing, from the Università Commerciale Luigi Bocconi in Milan and then attended its Intensive Managerial Programme in General Management.
At FCA – FIAT Chrysler Automobiles he headed up the EMEA after sales business unit and was responsible for the international launch of the Alfa Romeo brand and for Brand Operations in Europe, the Middle East and Africa.
At Olivetti – Tecnost he held several marketing and sales roles; in the Fiamm S.p.A. group, he was involved in sales, marketing & communication, and modern distribution for the automotive division.
Born in Este (Padua) on 11 August 1962, she has been a Chartered Accountant since 1997 and is a founding partner of the firm Chiaruttini & Associati.
For over 30 years she has exclusively practised as a Chartered Accountant and Auditor. She began her career with a prestigious Milan studio, in 1997 going on to establish Studio Chiaruttini & Associati.
Specialising in criminal economics law, market fraud and corporate crises, she has also gained experience with banks and financial institutions as commissioner, member of supervisory committees and curator appointed by the Ministry for the Economy. Since the start of her career, she has specialised in corporate crises and has been a consultant on behalf of business executives and courts, as well as judicial curator and commissioner. From the early 1990s she has played a part in significant listed company restructurings and has prepared and assessed the financial and business plans of companies in difficulty as advisor or expert witness.
Stefania Chiaruttini has gained particular experience in the prevention of administrative liability of companies and entities, holding numerous consulting positions for the preparation of organisational models pursuant to Italian Legislative Decree 231/2001, and accepting appointments as member of the supervisory bodies of banking and industrial companies.
An expert in business assessment, she also works alongside magistrates and major law offices as technical consultant, has held and still holds positions as Statutory Auditor, Director and Receiver in various listed and unlisted companies and is an Official Receiver under Italian Law 270/99 and the Marzano Law.
A speaker at conferences, university courses and post-university masters courses, in Italy and abroad, she is the author of several articles published in specialist magazines.
Born in Saronno (Varese) on 13 May 1962, she graduated with honours in Economics from the Università Cattolica del Sacro Cuore in Milan.
Since July 2017 she has been Chief Executive Officer of Società per la Gestione di Attività S.G.A. S.p.A., has held numerous positions in Unicredit S.p.A., the last of which was as Deputy General Manager after being appointed CFO in 2009 and having managed the most important external growth operations of the Group.
She is currently a member of the Investors Committee of the Italian Recovery Fund (formerly Atlante II) and a member of the Board of Directors of Valentino.
- Elena Vasco, Director, appointed by the Shareholders' Meeting of 21 April 2017, meets the independence requirements pursuant to art. 148, paragraph 3 of the Consolidated Finance Act and the Corporate Governance Code (Independent Non-executive Director). Born in Hartford (USA) on 31 December 1964, she graduated with honours in Economics in
Naples in 1989 and in 1991 received a Masters in Economics from Northeastern University, Boston.
She has been the General Secretary of the Milan-Monza-Brianza-Lodi Chamber of Commerce since May 2015 and has worked there since 2009. Prior to that, from 1992 to 1997, she worked in Mediobanca Servizio Partecipazioni e Affari Speciali (consultancy, M&A and corporate finance). She then held several executive positions in the Hdp-RCS Group and was a member of numerous boards of directors of group companies including Valentino, RCS Editori, RCS Libri and RAI Sat.
She is currently a member of the board of directors of the listed companies DeA Capital S.p.A., Parmalat S.p.A. and Terna S.p.A. She is also Deputy Chairperson of the Board of Directors of Fondazione La Triennale di Milano.
With the exception of the Chief Executive Officer, all members of the Board are non-executive Directors since none has any management responsibility.
For information on positions as Director or Statutory Auditor held by members of the Board of Directors in other companies listed on regulated markets, Italian or foreign, or in financial, banking or insurance companies or companies of significant size, please refer to the section above and Table 1 of this Report.
Note that the number of independent directors shown above exceeds the minimum ratio to the total number of Board Directors required under prevailing laws and regulations.
The Board of Directors verified the independence requirements of the Directors at its Board meeting on 12 February 2019, by obtaining self-certification from each Director, now held on Company records. On the aforementioned date, the Board of Statutory Auditors, as part of their duties under the law, certified that the Board of Directors had correctly applied the criteria and procedures for ascertaining and evaluating the independence of its members. The Chairperson of the Board of Directors and the Chairperson of the Board of Statutory Auditors therefore confirmed that the independence requirements were met by the aforementioned Directors.
Profiles of the members of the Board of Directors may be found on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/Corporate Bodies.
In the financial year under review, the following measures were implemented regarding the Company's strategy of diversity in the composition of the administration, management and control bodies.
Under the current Articles of Association, the composition of the Board of Directors must meet the legal requirements for gender balance. Moreover, the composition of the Board must reflect adequate diversity in terms of skills, experience, age, gender and international profile.
On 10 July 2017, the Board of Directors adopted the "Regulations of the Board of Directors of Fiera Milano S.p.A.", prepared in accordance with the provisions of current law and the Corporate Governance Code for Listed Companies, which identifies further requirements for Directors in addition to those required by law.
Also note that more than one-third of members of the Board of Directors of Fiera Milano are of the less represented gender, i.e. female, as also envisaged in the Corporate Governance Code and which, in addition to gender diversity, are also suitably represented by other generational and professional diversities.
In general, as regards composition of the Board of Directors, a priority objective was to ensure that members have appropriate expertise and professionalism in order to ensure effective action.
As required by the Company Articles of Association, in its Regulations the Board of Directors stipulated the maximum number of administration and control positions that can simultaneously be held by any Director to ensure that responsibilities as a Director of the Issuer are performed effectively.
The "Regulations of the Board of Directors of Fiera Milano S.p.A." specifies the total number of positions that may be held by all members of the Board of Directors. Where more rigorous, the limits on cumulation of office envisaged in pro tempore legal and regulatory provisions prevail. The Board of Directors assesses annually that the limit to the total number of positions that may be held is respected. Any Director that becomes aware that he/she exceeds this limit must, within 10 (ten) days of learning this fact, inform the Company of how the limit has been exceeded and, within 90 (ninety) days, resign from one or more of the positions held. Within 5 (five) days of resigning, the member of the Board of Directors must communicate the position or positions from which he/she has resigned.
The limits to the total number of administration, direction and control positions under the Regulations of the Board of Directors are summarised in the following table.
| Fiera Milano S.p.A. | Listed companies and/or banks, financial or insurance entities and/or those of material size (Italian/Foreign) |
|||
|---|---|---|---|---|
| Executive positions |
Non-executive positions or positions without control |
Total no. of positions | ||
| Chief Executive Officer |
no | 2 | 5 | |
| Executive positions |
Non-executive positions or positions without control |
Total no. of positions | ||
| Chairperson | no | In companies in which Fiera Milano S.p.A. has NO shareholding |
In companies in which Fiera Milano S.p.A. has a shareholding |
8 |
| 3 | 5 | |||
| Executive positions |
Non-executive positions or positions without control |
Total no. of positions | ||
| Executive positions held | ||||
| Non-executive Directors |
3 | 5 | 10 | |
| NO executive positions held |
| 7 | ||
|---|---|---|
In accordance with the Regulation:
Lastly, in addition to any other incompatibilities according to law, any political or trade union positions are also considered incompatible.
In 2018, the Chairperson and Chief Executive Officer provided adequate information to the Board of Directors on the exhibition sector in which Fiera Milano operates, on the business organisation and its evolution and on the reference legal framework.
Moreover, at meetings held during the year under review, the Board of Directors was given constant and timely notification of measures to update the corporate processes and procedures, as well as of the development of the organisational structure of the Fiera Milano Group.
The Board of Directors is vested with the widest possible powers for ordinary and extraordinary management of the Company. In particular, it has the power to take any action it deems appropriate or useful to achieving the corporate purpose, with the exception of actions which, by law, are the prerogative of the Shareholders' Meeting.
In addition, pursuant to Article 17.1 of the Articles of Association, responsibility for the following is also attributed to the Board of Directors:
Under art. 17.2 of the Articles of Association, in addition to the responsibilities that by law may not be delegated, the Board of Directors also has exclusive responsibility for:
(b) approval of all risk assumption and risk management policies, with no exceptions, as well as evaluation of the functionality, efficiency and effectiveness of the internal control system of the Company;
(c) the spin-off of property and movable assets to other companies, both those in the process of being constituted and those already constituted;
The Board of Directors also decided that it should have exclusive responsibility for the following:
The Regulations of the Board of Directors aim to bring the organisation and operations of the Company's Board of Directors in line with current law, the Articles of Association, the Corporate Governance Code and internal governance procedures.
Together with their attachments, the Regulations of the Board of Directors govern the appointment and composition, the operating methods, responsibilities, powers and funds of the Board of Directors, the assessment procedure and amendments to the Regulations. Any omission in the Regulations is covered by the provisions of laws and regulations ratione temporis.
Board of Directors' meeting are usually held according to a timetable that is approved at the start of the year in order to ensure maximum attendance at the meetings. They are also held whenever required or if there is a request from at least one third of the members of the Board or from a Statutory Auditor and in any circumstances in cases envisaged by law.
The corporate calendar is available on the Company website www.fieramilano.it in the section Investor Relations/Financial Calendar.
The Chairperson ensures the proper conduct of Board meetings and is supported by the Secretary in ensuring the timely delivery and adequacy of the documentation supplied ahead of the Board meetings and in ensuring confidentiality of the data and information given is maintained. In the absence or impediment of the Chairperson, Board of Directors' meeting are chaired by the most senior independent Director by age.
Under the Articles of Association, the majority of the current members of the Board of Directors must be present for any Board decision to be valid. Decisions are made on absolute majority vote of Directors present. In case of a split outcome, the meeting Chairperson will have the casting vote.
Under art. 2391 of the Italian Civil Code, each Director must notify the Board of Directors and the Board of Statutory Auditors of any interest he/she may have or may have on behalf of third parties in any given transaction and must provide adequate information of such an interest as required by law.
In the Regulations of the Board of Directors, the Board has identified a fair and suitable deadline, prior to Board of Directors' meetings, for the receipt of documentation and information necessary to allow them to speak knowledgeably on the topics submitted for their examination and approval.
The Board of Directors decided that the appropriate advance period for documentation given to Directors and Statutory Auditors ahead of Board meetings, as indicated in the Regulations of the Board of Directors, was three days prior to the date of a meeting, except in emergency situations when the documentation will be made available as soon as possible. The documents relating to approval of the draft financial statements and interim financial reports must instead be submitted at least 7 days prior to the date set for the Board of Directors' meeting. The Chairperson ascertains that the aforementioned information has been provided to the Directors and the Statutory Auditors, confirming this at the start of the meeting. During the year ending 31 December 2018, compliance with deadlines was a constant focus of the Chairperson and Chief Executive Officer, to ensure the adoption of suitable Board decisions, and general compliance with the deadlines was confirmed.
The relevant Company department prepares support documentation by compiling information and/or decision-related sheets that provide all the elements necessary for the Directors to make informed decisions.
The support documentation is considered available when it may be viewed and downloaded from the Restricted Area (https://filebox.fieramilano.it - Consiglio di Amministrazione folder). The members of the Board of Directors and interested parties are notified by the Chairperson that the documents are available in the Restricted Area through the appropriate corporate departments and the documents are accessed using the accreditation methods set up by these departments.
Reports presented and decisions made at Board of Directors' meeting are minuted. Under the Articles of Association, the Secretary to the Board prepares the minutes of the meetings. Following a Board meeting, a draft of the minutes is given to all Directors and Statutory Auditors for their comments, which must be submitted to the Secretary. The final version of the minutes, prepared by the Secretary, is approved at the next Board meeting and signed off by the Chairperson and the Secretary to the Board and included in the Company records.
During the year ending 31 December 2018, the Board of Directors met 9 times with a high attendance rate for all Directors (the number of meetings attended by each member of the Board of Directors is shown in Table 1). The average duration of the Board meetings was approximately 3 hours 30 minutes. At the date of approval of this Report, 2 Board meetings had been held during the current year.
The members of the Board of Directors have declared and have guaranteed that they will effectively carry out their roles and dedicate the necessary time to them. This was also confirmed by the significant number of Board of Directors' meetings held in 2018 and by the high attendance rate of Directors at those meetings.
Group executives, responsible for corporate activities pertaining to matters on the agenda, are invited to attend Board meetings and provide additional information on matters under discussion.
Pursuant to art. 18 of the Articles of Association, the Chairperson of the Board of Directors is appointed from among the directors originally meeting the independence requirements indicated in the Articles of Association. In addition to his legal responsibilities, the Chairperson of the Board of Directors has further duties, pursuant to specific requirements in the Articles of Association, as recognised in the relevant resolutions approved by the Board of Directors on 2 May 2017 and 10 July 2017. In particular, he convenes and sets the agenda for the Board of Directors, encourages internal discussion, promotes the actual operations of the corporate governance system, ensuring the balance of powers with respect to the Chief Executive Officer. The Chairperson of the Board of Directors coordinates the work of the Board and ensures that adequate information regarding items on the agenda of meetings is provided to all members. Specifically, the Chairperson ensures that (i) the Directors receive sufficiently in advance any documentation regarding matters to be discussed at the meeting or, at least, basic information on these matters; (ii) the documentation on matters to be discussed and, in particular that provided to the Non-executive Directors, is both qualitatively and quantitatively sufficient as regards the items on the agenda.
The Chairperson is the direct point of contact between the Board of Directors and the internal control bodies, the Board of Directors' committees and the Internal Audit Department.
The Chairperson of the Board of Directors supervises and coordinates with the Chief Executive Officer on external institutional relations and then arranges their implementation.
The Chairperson of the Board of Directors cannot be assigned any executive role.
Under Article 13 of the Articles of Association, the Chairperson manages Shareholders' meetings, verifies the proper constitution of the meeting, ascertains the identity and eligibility of those present, regulates meeting proceedings - including the order and duration of spoken contributions, stipulates the voting system, the counting of votes - and scrutinises the results of voting.
Lastly, under Article 19 of the Articles of Association, the Chairperson of the Board of Directors represents the Company before any judicial or administrative authority and has corporate signature powers.
On 25 July 2017, the Ordinary Shareholders' Meeting of Fiera Milano approved an increase in the number of Board Directors to nine and appointed Fabrizio Curci as the new Director effective from 1 September 2017 until expiry of the term of office of the other Directors, i.e. until the Shareholders' Meeting held to approve the financial statements at 31 December 2019. The Board
of Directors met at the end of the Shareholders' Meeting and appointed Fabrizio Curci as Chief Executive Officer and General Manager of Fiera Milano effective from 1 September 2017.
The Chief Executive Officer is invested with all the powers necessary for the management and ordinary administration of the Company except for those that are reserved by law to the Board of Directors and those indicated in Article 17.1 and 17.2 of the Articles of Association and any other matters that remain the responsibility of the Board of Directors.
On 25 July 2017 and effective from 1 September 2017, further amended on 18 September 2017 and 22 May 2018, the Board of Directors invested Mr Curci with the following powers:
representative the annual tax returns, the VAT returns, the annual withholding tax forms; sign, present and negotiate statements, appeals, claims and disputes with the Tax and Customs Authorities, the Tax Commissions of all levels, including the Central Tax Commission, and the Judicial Authority, negotiate and settle tax disputes, appointing and dismissing as necessary solicitors, defence lawyers, consultants and expert witnesses;
for use, hire, agency and carrier services agreements for sums not exceeding Euro 20,000,000.00 for any transaction;
envisaged in Regulation (EU) 2016/679 - the General Data Protection Regulation - and Italian regulations on personal data protection and related amendments, as well as adopt all measures necessary for this purpose, and to represent the Company as data processing controller with the right to sub-delegate all or part of the aforementioned powers and/or assign the duty of complying with such obligations to other internal (executives, employees) or external parties (consultants);
Lastly, by decision of 13 December 2018, the Chief Executive Officer was granted powers to negotiate, authorise and sign transactions involving the temporary commitment of liquidity through available funds of Fiera Milano, in compliance with the provisions of the Financial Resources Management Policy as approved by the Board of Directors, up to a limit of Euro 20 million per investment, with the option as part of the delegated powers to grant special power of attorney for certain actions or categories of actions with a limit of Euro 10 million per investment.
In addition, the Board of Directors assigned further roles and responsibilities to the Chief Executive Officer, in particular the role of Director appointed to oversee the internal control and risk management system, pursuant to indications in the Corporate Governance Code; appointment as Statutory Employer of Fiera Milano under Article 2, paragraph 1, letter B) of Italian Legislative Decree 81/08 and designating him as the person responsible for environmental safety and protection, with all the necessary executive, management and decision-making powers and funds required to ensure compliance with laws regarding environmental safety and protection.
The Chief Executive Officer reports to the Board of Directors, at least quarterly and whenever the Board meets, on his activities, the operating performance and business outlook, as well as the main economic, financial and equity transactions or those of most significant size and nature carried out by the Company and its subsidiaries.
The Board of Directors also gave Mr Curci specific responsibilities regarding his role as General Manager of Fiera Milano and required him to report to the Board of Directors on these responsibilities at least quarterly.
Specifically, as General Manager, Mr Curci is responsible for:
Pursuant to the Corporate Governance Code and art. 12.1 of the Regulations of the Board of Directors, at least once a year the Board of Directors carries out a self-appraisal of the functioning, composition and size of the Board of Directors and of its committees, providing information of any professional qualities it deems should be present in the Board of Directors.
The appraisal is carried out under the Regulations of the Board of Directors of Fiera Milano.
This Report includes notification that the appraisal has been done and, where considered appropriate, indicates the results.
The Chairperson of the Board of Directors instigates and manages the self-appraisal and identifies any internal and/or external persons that should be involved in the process. The self-appraisal involves the following steps:
In particular, during the meeting of 13 December 2018, the Board of Directors, as owner of the self-appraisal process and with a view to continuous improvement of Board operations and governance processes, integrated this process by approving (i) strengthening of minimum areas identified for the annual appraisal process, to also guarantee efficiency of the Control and Risk Management Committee and the Appointments and Remuneration Committee; (ii) integration of the self-appraisal questionnaire on Board operations by adding a further 10 questions.
For the correct discharge of the self-appraisal process, each Director completed the following to the extent of his/her responsibilities:
The results of the process, relating to self-assessment of the operations, membership and number of members of the Board of Directors and its committees in reference to 2018, were obtained through the active cooperation of all Directors and were processed with operating support from the Secretariat of Fiera Milano.
In particular, as part of the self-assessment carried out for the year ending 31 December 2018, specific areas of competence were identified as essential within the Board of Directors. These were:
The self-appraisal, under the supervision of the Chairperson of the Board of Directors, was carried out by each Director completing a questionnaire in aggregate and anonymous form; the results were presented during the Board Meeting of 12 February 2019.
The questions were designed to analyse (i) the size and composition of the Board of Directors with reference to the nature and professional experience of the Directors; (ii) its modus operandi, (iii) the composition and responsibilities of the internal committees of the Board; (iv) the knowledge of the legal framework of the sector and the participation of Directors at meetings and in the decisionmaking process.
The results of the questionnaire showed that the Board of Directors believes that the number of members, composition, modus operandi, pre-meeting information and information flows between the Board of Directors and other corporate bodies are considered adequate. In addition, at the time of the appraisal, members of the Board of Directors had the opportunity to indicate specific areas for further improvement so as to ensure greater efficiency of its operations, and to formulate proposals for training and further study.
During 2018, the Independent Directors actively contributed to the corporate decisions adopted. Note in this respect that, as detailed below, the Appointments and Remuneration Committee is primarily composed of Independent Directors and the Control and Risk Management Committee is composed entirely of Independent Directors.
Moreover, the Independent Directors discerned no circumstances necessitating a meeting to be held without the presence of the other Directors as, inter alia, the Directors always received, well in advance, all the information necessary to ensure their participation at the Board meetings was effective and informed and not merely a formality; this enabled them to formulate any appropriate comments on the advisability and correctness of decisions put forward for the approval of the Board.
The continued possession of independence requirements of Directors is verified annually on the basis of criteria established in the Corporate Governance Code and other regulatory measures in force.
At the time of the self-appraisal, each Director provided self-certification to confirm whether these requirements were met in accordance with provisions of the Corporate Governance Code.
Pursuant to the Corporate Governance Code, companies not listed on the FTSE-Mib index are required to appoint a Lead Independent Director only in the following cases: (i) if the Chairperson of the Board of Directors is the company's Chief Executive Officer; (ii) if the office of Chairperson is covered by the person who controls the issuer.
For this reason, as Fiera Milano is under no such obligation, at the meeting of 2 May 2017 the Board of Directors decided not to appoint a Lead Independent Director.
The Board of Directors, in compliance with the provisions of the Corporate Governance Code has set up internal committees to assist the Board in carrying out its role.
Specifically, the Board of Directors has set up the Control and Risk Management Committee and the Appointments and Remuneration Committee; their roles in offering advice and/or making recommendations are in line with the standard required by the Corporate Governance Code and corporate governance best practices.
In particular, as regards the Appointments and Remuneration Committee, the Company decided to continue grouping together the activities relating to remuneration and appointments under a single committee, in view of the fact that the approach was confirmed capable of achieving the objectives established by the Corporate Governance Code, and given the limited size of the Company and the high degree of ownership concentration at 31 December 2018.
Special regulations approved by the Board of Directors govern the work of these Committees.
The Committees report periodically on their activities to the Board of Directors.
An Appointments and Remuneration Committee was set up within the Board of Directors.
The Appointments and Remuneration Committee comprises at least three Non-executive Directors, the majority of which are Independent Directors, in compliance with the Articles of Association. At least one member of the Committee has adequate knowledge and experience of financial matters or remuneration policies. This is assessed at the time of his/her appointment.
The Committee assists the Board of Directors in preparatory work, advises and makes recommendations on appointments and remuneration matters. In particular:
for remuneration:
a. presents the Report on Remuneration to the Board of Directors for its approval, particularly the remuneration policy, that will be presented to the Shareholders' Meeting convened to approve the financial statements as required by law;
d.1 annual and long-term incentive schemes, including share-based;
d.2 criteria for all types of remuneration of top management and those that could be part of any long-term incentive schemes;
d.3 identifies performance targets and the corporate results achieved in relation to the performance plans and their effect on the variable remuneration of Directors with specific responsibilities and on the implementation of the incentive scheme;
j. it gives opinions regarding any problems that could arise from general and prior authorisations by the Shareholders' Meeting for exceptions to competing activities under Article 2390 of the Italian Civil Code;
k. reports to the Board of Directors on its activities at least every six months and before the latest dates for the approval of the full-year and six-month interim financial statements in a meeting indicated by the Chairperson of the Board of Directors;
The members of the Appointments and Remuneration Committee, in office until approval of the financial statements at 31 December 2018, are the Directors: Alberto Baldan, Marina Natale and Elena Vasco, who acts as Chairperson. Members of the Appointments and Remuneration Committee have the necessary experience to carry out their assigned duties with respect both to appointments and remuneration.
Members of the Appointments and Remuneration Committee are remunerated for their activities.
During the financial year ended 31 December 2018, the Committee held 4 duly minuted meetings and carried out its responsibility to table proposals to the Board of Directors. The average duration of the meetings of this Committee was approximately 1 hour and 45 minutes. At the date of approval of this Report, 3 meetings had been held in the current financial year.
At the first opportunity, the Committee Chairperson arranges for the Board of Directors to be informed of issues of particular significance or of interest raised during the meetings.
Detailed information on the composition, role and functioning of the Appointments and Remuneration Committee are given in the Report on Remuneration prepared in accordance with Article 123-ter of the Consolidated Finance Act.
During the financial year under review, the work of the Appointments and Remuneration Committee concerned:
The Board of Directors set up a Control and Risk Management Committee composed of independent and non-executive Directors.
The Committee is composed of a minimum of three Non-executive Directors who, in accordance with the Articles of Association, must all be independent. At least one member of the Committee must have appropriate experience in accounting and finance and the Board of Directors must ascertain this at the time of appointment.
The Board of Directors appoints one of the independent members of the Committee as Chairperson to coordinate the work of the Committee.
The Committee has an advisory role, makes proposals and carries out preliminary research to aid the Board of Directors in its decisions and assessments of the internal control and risk management system, as well as relating to approval of interim financial reports and the disclosure of nonfinancial information (hereinafter "NFI" – Non-financial Information).
The Committee meets periodically with a frequency suited to correctly carrying out its duties. It in any event meets to approve the annual financial statements, the six-month interim financial statements and the NFI.
The responsibilities of the Control and Risk Management Committee are the following:
the Internal Audit Department on the internal control and risk management system, and any other important evaluations;
The Chairperson of the Board of Statutory Auditors (or a member of the Board of Statutory Auditors delegated by the Chairperson) and the Head of Internal Audit for Fiera Milano attend meetings of the Control and Risk Management Committee. Other Statutory Auditors may also attend.
If considered appropriate, the Committee may invite Directors and executives of Fiera Milano or of Group companies to attend its meetings so that they may give their opinion on specific matters; it may also invite other persons who may be able to assist in the business of the Committee.
The Control and Risk Management Committee has access to all the information and Company departments required to carry out its duties and may also use external consultants.
The current members of the Control and Risk Management Committee are the directors Stefania Chiaruttini, acting as Chairperson, Francesca Golfetto and Angelo Meregalli.
Members of the Control and Risk Management Committee are remunerated for their activities.
In the year ending 31 December 2018, the Control and Risk Management Committee held 9 duly minuted meetings. The average duration of the meetings of this Committee was approximately 1 hour and 40 minutes. At the date of the approval of this Report, 2 meetings had been held in the current financial year.
During the financial year under review, subject to approval of its action plan and to the extent of its responsibilities, the Control and Risk Management Committee expressed its opinion on the following:
the "Impairment Test Procedure";
the "ERM Policy Enterprise Risk Management", presentation of the ERM Risk Assessment and related reports;
The Control and Risk Management Committee also exercised its prerogative to provide the Board of Directors with a preliminary analysis identifying, measuring, managing and monitoring the main risks to the Company and, as part of its annual assessment, the adequacy of the internal control and risk management system given the characteristics of the business and its risk profile, as well as its effectiveness.
On the subject of related-party transactions, the Committee examined the substantive and procedural fairness of the main economic, equity and financial transactions with related parties.
The variable part of the remuneration of the Chief Executive Officer and the Executive with Strategic Responsibilities is linked to achievement of the specific performance targets, indicated in advance and determined in accordance with the Remuneration Policy approved by the Board of Directors. For details, reference should be made to the Report on Remuneration published in accordance with Article 123-ter of the Consolidated Finance Act for:
The internal control and risk management system of the Company and the Group is made up of a set of rules, procedures and organisational structures designed to identify, measure, manage and monitor the main risks. It contributes to the conduct of the Company and the Group, consistent with the corporate purposes established by the Board of Directors of the Parent Company, and encourages the adoption of informed decisions. It assists in ensuring: (i) the protection of equity, (ii) efficient and effective corporate procedures, (iii) reliability of financial reporting to corporate bodies and the market, and (iv) compliance with applicable laws and regulations, the Articles of Association, and internal procedures.
The Fiera Milano Group has developed an integrated risk management model based on internationally recognised Enterprise Risk Management (ERM) standards.
The main aim is to have a systematic and proactive approach to the main risks to which the Group – and each of its companies - is exposed in carrying out its business and pursuing its preestablished targets, to assess in advance the potential negative effects, implement appropriate actions to mitigate these effects, and to monitor relative exposure over time.
In order to achieve this Fiera Milano has compiled a catalogue of Group risks and a risk mapping and risk scoring methodology. Specifically, the Group consolidated process entails periodic:
The organisational monitoring for the ERM process is guaranteed by the establishment of the Risk Management Department, responsible for supporting the planning, design and implementation of the global business risk management process and subsequent adoption of a specific Policy ("the ERM Policy") that governs the roles and responsibilities for identifying, measuring, monitoring and reporting of corporate risks in Fiera Milano Group.
The Control and Risk Management Committee and the Board of Statutory Auditors are periodically informed of the process results.
The aforementioned integrated risk management model cannot be considered separately from the internal control system used for the financial reporting process as both are elements of the overall internal control and risk management system of Fiera Milano Group. Note that the process for preparing the annual and interim financial statements and, in particular, the procedures to describe the principal risks and uncertainties to which Fiera Milano and the Group are exposed, are strictly linked and coordinated to the information flows deriving from the Enterprise Risk Management (ERM) processes of the Company and of the Group, which aim to identify, assess and mitigate any corporate risks.
In recent financial years, Fiera Milano has modified its internal control system for financial reporting in keeping with the provisions of Law 262/05 so as to document, where necessary, the administrative and accounting control model adopted and to schedule and implement periodic checks on the operational efficacy of the controls that are behind the certification processes of the Manager responsible for preparing the Company accounts.
The aforementioned administrative and accounting control model combines the internal procedures and methods used by the Company to attain the corporate targets of integrity, accuracy, reliability and timeliness of financial reporting. The approach of Fiera Milano in formulating, implementing and continually updating the aforementioned administrative and accounting control model follows a development process in line with generally accepted best practice, with the guidelines for the duties of the Manager responsible for preparing the Company accounts under Article 154-bis of the Consolidated Finance Act issued by Confindustria, and with the control elements identified in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
This reference model, based on the components of the internal control system (Control environment, Risk assessment, Control activities, Information & Communications, and Monitoring) necessary to attain the aforementioned financial reporting objectives favours, inter alia, the identification of coordination opportunities and the development of synergies among, for example, Enterprise Risk Management activities, activities undertaken to comply with Italian Legislative Decree 231/2001 and the activities of the Head of Internal Audit.
The internal control system phases relating to the financial reporting system of Fiera Milano can be divided into the following macro-categories:
As part of the responsibilities and powers given him/her by the Board of Directors, the Manager responsible for preparing the Company accounts must effectively implement any actions falling into the above categories.
The main activities referred to in the adopted model, and included in the macro-categories listed above, are summarised below.
This category includes all activities concerned with identifying or updating the extent of analysis and monitoring carried out, the identification and assessment of risks, the mapping of administrative and accounting processes and then the formulation and assessment of controls to mitigate those risks.
At least once a year, the Manager responsible for preparing the Company accounts decides the areas of the Company and Group processes that will be subject to risk analysis and to monitoring of the controls existing in the administrative and accounting control model. This is done using both quantitative and qualitative parameters to ensure that the most significant areas and/or those that pose the greatest risk of failing to meet the objectives of the financial reporting controls are included in the aforementioned areas.
Defining the areas to be analysed and monitored necessitates identification of the relevant accounts, disclosures and associated procedures so that the subsequent identification and assessment of controls, both at entity level and at procedure and transaction level, can effectively mitigate the risks inherent in the financial reporting preparation process.
With regard to identifying and assessing risk in financial reporting, the approach adopted considers both the risk of unintentional errors and those that may be caused by fraudulent activity, providing for the formulation and monitoring of checks and balances that address these types of risk, as well as coordinating the controls implemented with others in the overall internal control system.
To support the assessment of inherent risk levels, the reference criteria used are based on the following main potential risk indicators, generally recognised by reference best practices: changes in information systems, processes and procedures and other complex elements, for example, the complexity of information processing required by a certain procedure, a high level of transactions, or, for example, in processes that employ a considerable amount of estimates and valuations, the adequacy of the documentation and the reliability of the assumptions made.
When significant risks in financial reporting are identified, the administrative and accounting control model provides for the appropriate identification of controls to mitigate these risks. Specifically, the approach adopted takes adequate account of both manual controls and the data system controls in the administrative and accounting procedures, the so-called automatic system controls application, the general IT control that govern system access, control of developments and amendments to the application systems, and the adequacy of the IT structures.
The administrative and accounting model, in line with reference best practices, ensures that the surveillance procedures for the processes, risks and controls is updated for significant changes in the Group administrative and accounting procedures whenever necessary.
Based on the results of activities to identify the processes, risks and controls, the Manager responsible for preparing the Company accounts defines or updates the administrative and accounting procedures and guarantees their adequacy as regards the internal control system and monitors the various phases of the process for defining or updating the procedures.
In particular, the administrative and accounting procedures are updated in conjunction with an assessment of the form and design of the controls and the continuous monitoring of their implementation.
The Manager responsible for preparing the Company accounts constantly monitors the administrative and accounting procedures, with particular reference to those linked to the preparation of the financial statements, the consolidated financial statements and the condensed six-month interim financial statements, as well as any action or communication of a financial nature that requires statements, attestations and declarations under paragraphs 2 and 5 of Article 154-bis of the Consolidated Finance Act, so as to ensure the adequacy and effective implementation of these procedures.
To achieve this, specific audit activities are planned to ascertain correct implementation of the controls incorporated in the administrative and accounting procedures. The control, analysis and audit activities for the administrative and accounting procedures are based on defining a test strategy that determines the modus operandi, the controls and ways of monitoring the procedural systems implemented.
The timetable of the control testing activity is prepared in such a way as to give priority to verifications of identified "key" controls, and to balance the objectives of efficiency with the requirement of achieving adequate coverage of the verification activities, introducing rotational tests for the significant processes and sub-processes of subsequent financial reporting dates.
From 2017, as part of the continuous development of the administrative and accounting control model, given the organisational development of the Company, without prejudice to the role and responsibilities of the Manager responsible for preparing the Company accounts regarding declarations under Article 154-bis of the Consolidated Finance Act, the responsibility of carrying out the key control tests of the administrative and accounting processes was given to the Internal Audit Department of the Company.
On the basis of the information received from the Manager responsible for preparing the Company accounts, the Head of Internal Audit, with the support of his/her department, identifies the timing and operating means for carrying out the tests on the key controls identified by the Manager responsible for preparing the Company accounts.
Following the tests, the Head of Internal Audit advises the Manager responsible for preparing the Company accounts of the outcome of tests carried out on each key control and indicates any shortcomings and/or areas of improvement arising therefrom.
With regard to the organisational aspects and to the roles involved in the various phases of formulating, implementing, monitoring and updating the administrative and accounting control model over time, it should be noted that specific information flows have been defined between the Manager responsible for preparing the Company accounts and the corporate, administrative and control committees and the corporate executives and/or areas that, outside the Department of Administration, Finance and Tax, are involved in compiling, preparing and circulating the annual financial statements, the consolidated financial statements, the condensed six-month interim financial statements, the interim report on operations and, more in general, any information subject to attestation/declaration by the Manager responsible for preparing the Company accounts. The accounting and administrative control model also covers specific information flows among Group companies and internal attestations/declarations.
In preparing the annual and interim financial statements and describing the principal risks and uncertainties to which Fiera Milano and the Group are exposed, the Manager responsible for preparing the Company accounts works with employees involved in the Enterprise Risk Management processes of the Company and of the Group in order to identify and assess all corporate risks.
In accordance with the provisions of Article 15, as referred to in Article 18, paragraph 1 of the Regulation on Markets adopted by Resolution no. 20249 of 28 December 2017, the Company and its subsidiaries have administrative and accounting systems which allow public disclosure of the accounting positions used to prepare the consolidated financial statements of companies to which this law is applicable, and which permit the regular communication of data to the Parent Company management and its independent auditors as required to prepare the Consolidated Financial Statements.
Therefore, the conditions exist under the aforementioned Article 15, letters a), b) and c) of the Consob Regulation on Markets.
The Board of Directors is responsible for internal control and risk management and, with the help of the Control and Risk Management Committee, for establishing its guidelines and periodically verifying that it is fit for purpose and is functioning effectively, ensuring that the principal corporate risks are identified and managed in an appropriate manner.
On 25 July 2017 – effective from 1 September 2017 – the Board of Directors delegated responsibilities under Article 7 of the Corporate Governance Code governing internal control and the risk management system to the Chief Executive Officer, Fabrizio Curci.
The Internal Audit Department performs third level, independent and assurance controls designed to audit and assess the operations and adequacy of the Internal Control and Risk Management System (ICRMS) and related organisation, with the duty of:
In line with reference best practices, the Board of Directors approved the Internal Audit Manual which defines the aims, powers and responsibilities of the Internal Audit Department.
The Head of Internal Audit, Basilio Postiglione, was appointed at the considered proposal of the Director responsible for the internal control system by the Board of Directors of Fiera Milano at its meeting of 10 July 2017, after obtaining opinion in favour from the Control and Risk Management Committee and after consulting the Board of Statutory Auditors.
The Internal Audit Department is not responsible for any area of operations and reports to the Chairperson of the Board of Directors, so as to ensure its independence and autonomy and its direct access to information useful in carrying out its duties.
The remuneration of the Head of Internal Audit is defined by the Chief Executive Officer, in agreement with the Chairperson, and is updated in compliance with company remuneration policies and with due regard to the role covered.
In particular, the Head of Internal Audit:
submits the aforementioned reports to the Control and Risk Management Committee, the Board of Statutory Auditors and the Chairperson of the Board of Directors, as well as to the Director responsible for the internal control system;
as part of the audit plan, audits the reliability of the IT systems, including accounting records systems.
In order to perform the assigned duties, in addition to the Head of Internal Audit, the Internal Audit Department has four members of staff with specific skills relating to internal control and economic and financial matters.
If considered appropriate and subject to authorisation of the delegated bodies, the Head of Internal Audit can also make use of external audit professionals or tools to support activities.
The Company has adopted an Organisation, Management and Control Model in accordance with Italian Legislative Decree 231/01.
As a result of its need to guarantee transparency and correctness in the conduct of its corporate affairs, the Company considered it appropriate to adopt an Organisation, Management and Control Model pursuant to Italian Legislative Decree 231/01 (hereinafter the "Model 231"), which was most recently updated on 13 December 2018, particularly the General Section and Special Section relating to "Occupational Health and Safety offences".
The adoption and maintenance of the Model 231 aims to create a business strategy based on the principles of correctness and legality; for this reason, the Company has organisational and management control protocols and an internal control system aimed at preventing any risk that the crimes referred to in Legislative Decree 231/01 are committed.
The Company Model is composed of:
As an attachment, the Code of Ethics of the Fiera Milano Group (hereinafter the "Code of Ethics" or "Code") is included to complete and form an integral part of the Model.
The Code of Ethics clearly defines the set of values recognised, accepted and shared by the Company and the responsibilities it assumes both internally and externally. Compliance with the Code of Ethics by employees of Fiera Milano is of fundamental importance to the operations, reliability and reputation of the Company - factors that are a decisive asset in the success of the Group. The employees of Fiera Milano, in addition to meeting the normal requirements of loyalty, correct behaviour, and acting in good faith under the terms of the employment contract, must avoid carrying out any activity that is in competition with Fiera Milano, must respect the company rules and comply with the requirements of the Code of Ethics. All those who have business relations with the Company are made aware of the Code.
The general section of the Model 231 of the Company is available on the website www.fieramilano.it in the section Investor Relations/Corporate Governance/Model 231, as is the Code of Ethics, published in the section Investor Relations/Corporate Governance/Code of Ethics.
Following the update to the Model 231 and, in order to continue the training of recent years, information and training initiatives for all corporate employees were implemented.
To guarantee the functioning, effectiveness and compliance with the Model 231, the Company has set up a collective body known as the Supervisory Committee. The current Supervisory Committee, appointed on 29 May 2017, is made up of its Chairperson Piero Antonio Capitini and members Luigi Bricocoli and Jean-Paule Castagno. This Committee is charged with the control and updating of the Model 231 to ensure that it is both efficient and effective, as well as coordinating its own activities with those of other bodies and internal audit departments.
The members of the Supervisory Committee are remunerated for their activities.
The Model 231, in application of the provisions of Article 6 paragraph 2 of Italian Legislative Decree no. 231/01, provides for specific information flows to the Supervisory Committee so that the functional and compliance supervision of the Model 231 is more effective.
With reference to the unlisted Italian companies of the Group that have adopted their own organisational model, the Supervisory Committee has conducted research on each of these in order to identify adequate technical/operational solutions that, while respecting the mandate and powers reserved for the same by the prevailing regulations, are appropriate to the dimensions and organisational context of each corporate entity, also taking account of the relevant guidelines issued by the Parent Company.
As regards subsidiaries operating under foreign jurisdictions, which are not required to adhere to the provisions of Italian Legislative Decree no. 231/01 and which do not have their own Organisation, Management and Control Models pursuant to the aforementioned Decree 231, these have adopted the Code of Ethics, the guidelines for anti-corruption and other compliance programmes in order to have a systematic reference framework of crime prevention regulations and standards.
Accounting audit and control has been entrusted to EY S.p.A. (previously known as Reconta Ernst & Young S.p.A.), a company registered in the special Consob Register, in compliance with prevailing law. The mandate was conferred by the Shareholders' Meeting of 29 April 2014 and relates to financial years ending 31 December 2014-2022.
After previously seeking opinion in favour from the Board of Statutory Auditors, on 11 May 2018 the Board of Directors of the Company appointed Marco Pacini, previously Chief Financial Officer of the Fiera Milano Group from 13 November 2017, as Manager responsible for preparing the Company accounts. At the same time, through the appropriate delegation of responsibilities, the Board granted him adequate means and powers to carry out the duties attributed to this position under enacted law. The Board of Directors also supervises the effective compliance with administrative and accounting procedures. The Articles of Association require this Manager to be an expert in matters of administration, finance and control and to meet the same integrity requirements as Statutory Auditors under current legislation. The Manager's appointment is for three financial years and must not exceed the term of office of the Board of Directors that made the appointment.
The coordination of persons involved in the internal control and risk management system is through a series of mechanisms and means of interaction: i) scheduling and holding joint meetings of the various corporate bodies and departments responsible for internal control and risk management; ii) attendance at meetings of the Control and Risk Management Committee by the Chairperson of the Board of Statutory Auditors and other members of the Board of Statutory Auditors and by the Head of Internal Audit and Head of Compliance; iii) attendance by the Head of Internal Audit and Head of Compliance at the meetings of the Supervisory Committee under Legislative Decree 231/01.
The Articles of Association currently require that the appointment of Statutory Auditors is on the basis of lists presented by the shareholders; the Articles state that the position of Chairperson of the Board of Statutory Auditors is granted to the first candidate on the second list by number of votes and who is in no way related, even indirectly, to those shareholders who presented, or acted in concert to present, or voted for the first-placed list by number of votes. Only those shareholders who, individually or together, represent at least 2.5% of the share capital and are entitled to vote in the ordinary shareholders' meeting have the right to present a list, as required by the Articles of Association and by Consob Resolution no. 13 of 24 January 2019. A shareholder who intends to present a list of candidates and who does not own a controlling interest or the relative majority of the share capital of the Company must deposit a declaration stating the absence of any relationship with the controlling shareholders, as required by the regulatory provisions. The lists must be filed with the registered office of the Company at least twenty-five days prior to the date set for the Shareholders' Meeting on first call and must be made publicly available at least twenty-one days prior to this date.
Ownership of the minimum shareholding required to present lists is based on the shares confirmed as registered to the shareholder on the day on which the lists are filed with the Company. To prove ownership of the minimum number of shares required to present lists, by the deadline for publication of the lists by the Company the shareholders must provide the relative certification issued by the authorised intermediaries in accordance with law.
Each list, deposited at least twenty-five days before the date fixed for the Shareholders' Meeting on first call, must be accompanied by a declaration in which each candidate accepts the candidacy and declares that no reasons of ineligibility or incompatibility exist also with reference to the accumulation of positions referred to below, that the requirements of prevailing law relating to the assumption of the position are fulfilled, and must include a curriculum vitae of the candidate that indicates the administration and control positions held.
The lists presented by shareholders must have two sections: one for the appointment of Standing Statutory Auditors and the other for Substitute Statutory Auditors. The lists should not contain more candidates than there are positions to be filled, and should be numbered sequentially. The lists must include candidates of both genders. Each candidate may only appear on one list under penalty of ineligibility.
The Articles of Association also provide that, without prejudice to situations of incompatibility under prevailing law, any person who is already an acting Statutory Auditor in 4 companies listed on regulated markets may not take up a position as Statutory Auditor and, if elected, their mandate is nullified, except where different limits are established by laws periodically in force.
To meet the requirements of Article 148, paragraph 1-bis of the Consolidated Finance Act and Article 144-undecies.1 of the Issuers' Regulation regarding the appointment and replacement of members of the Board of Statutory Auditors, the Articles of Association contain the same criteria and requirements as those for the appointment and replacement of members of the Board of Directors described above.
The complete Articles of Association are available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/ Articles of Association.
Under Article 20 of the Articles of Association and in compliance with provisions of the Corporate Governance Code, the Board of Statutory Auditors is well represented in terms of gender diversity as it has three Standing Statutory Auditors of which at least one is of the least represented gender and two Substitute Statutory Auditors, one of each gender - and also in terms of generational diversity as its members come from various age and professional ranges.
The replacement procedure complies with the requirement for gender balance.
The members of the Board of Statutory Auditors must also meet the integrity, professionalism and independence requirements of laws and regulations; they must also be independent under the criteria required of directors in the Corporate Governance Code. In this context, as part of its annual assessment, the Board of Statutory Auditors verified the independence requirements by obtaining self-certification from each of its members, now held on Company records, and reported the results to the Board of Directors.
An indication of further requirements to be appointed as a Statutory Auditor was considered unnecessary as enacted rules and regulations ensure the identification of persons that have the necessary skills and experience to carry out the role.
The Board of Statutory Auditors was appointed by the Shareholders' Meeting of 23 April 2018, based on a single list presented by the controlling shareholder, Ente Autonomo Fiera Internazionale di Milano, and will remain in office until approval of the Financial Statements at 31 December 2020.
The following is a short curriculum vitae, indicating the personal and professional experience of each of the Statutory Auditors currently on the Board of Statutory Auditors:
Riccardo Raul Bauer, Chairperson of the Board of Statutory Auditors of Fiera Milano since 23 April 2018.
Born in Milan on 12 January 1951, he graduated in Economics from the Università Cattolica del Sacro Cuore in Milan in 1983. He has been a practising Chartered Accountant since 1984 and is on the National Register of Auditors.
He is a founder member of Studio OMNIA, where he practises his profession under consulting and assistance assignments in business acquisitions of leading Italian group, with pro veritate opinions on accounting and auditing principles.
He has held and currently holds many administration and control positions, such as Chairperson of the Board of Statutory Auditors of Avio S.p.A., Chairperson of the Board of Statutory Auditors of the Unione delle Comunità Ebraiche Italiane, Chairperson of the Board of Statutory Auditors of the Ospedale Israelitico, Member of the Board of Statutory Auditors of the Museo dell'Ebraismo e della
Shoà, Financial Statements Assessor on the Board of Directors of Istituto Pitigliani and Substitute Statutory Auditor on the Board of Statutory Auditors of the Fondazione Collegio delle Università Milanesi.
Author of 30 books and numerous other publications, he has also held academic positions and, for over twenty-five years, he has been Professor under contract of Business Audit and Control for daytime and evening courses at the Università Cattolica del Sacro Cuore. For eight years he was a professor of accounting at the Università Bocconi, and was and is professor of the second-level Masters in Business Administration in Italian and English.
Daniele Federico Monarca, Standing Statutory Auditor of Fiera Milano since 23 April 2018.
Born in Milan on 22 April 1959, he graduated in Economics from the Università Commerciale Luigi Bocconi in 1981. He has been a practising Chartered Accountant since 1982 and is on the National Register of Auditors.
He has held several administration and control positions and is currently Standing Statutory Auditor of Costruzioni Giuseppe Maltauro S.p.A., Independent Director of BFC Blue Financial Communication S.p.A., Partner/Co-Founder and Chief Executive Officer of Pigreco Corporate Finance S.r.l., Chairperson of the Board of Statutory Auditors of Advalora S.p.A. with legal audit duties, Partner of Abacus Partners S.A. and Substitute Statutory Auditor of Banca Monte dei Paschi di Siena S.p.A.
Entered in the Register of Court Appointed Experts with the Court of Milan, to date he is also Professor under contract in accounting at the Università Commerciale Luigi Bocconi in Milan for the Post-Graduate Course for Company Lawyers and Professor of the Family Officer Masters Course organised by AIFO Academy.
Mariella Tagliabue, Standing Statutory Auditor of Fiera Milano since 23 April 2018.
Born in Monza on 31 August 1970. Graduated with honours in Economics from the Università Cattolica. She is a chartered accountant, auditor and is on the register of technical consultants of the Court of Milan. Professor under contract for the Masters in Credit Risk Management at the Università Cattolica.
She is a technical consultant on financial statements, extraordinary corporate transactions and business assessment.
Author of "Introduzione ai principi guida degli Standards Contabili Internazionali", published by Educatt, and contributor to the scientific series "Economia degli intermediari finanziari" published by McGraw Hill.
She was Senior Manager of KPMG S.p.A. Financial Services as head of audit planning and supervision for listed Italian banks and large international groups.
Currently, she also holds the position of Chairperson of the Board of Statutory Auditors of Anima Holding S.p.A., Standing Statutory Auditor of Nexi S.p.A., Mercury Payment Services S.p.A., Nexi Payments S.p.A., Substitute Statutory Auditor and Substitute Member of the Supervisory Board of Banca Prossima S.p.A., Substitute Statutory Auditor and Substitute Member of the Supervisory Board of Intesa Sanpaolo Provis and Substitute Statutory Auditor of Poliform S.p.A.
She was a member of the Board of Statutory Auditors and Supervisory Board of companies in listed groups (Intesa Sanpaolo and Mittel).
Daniele Beretta, Substitute Statutory Auditor of Fiera Milano since 23 April 2018.
Born in Milan on 25 April 1980, he graduated in Economics of financial institutions and markets from the Università Commerciale Luigi Bocconi in Milan in 2003. He has been a qualified Chartered Accountant since 2011 and is on the National Register of Auditors.
He holds positions as Standing Statutory Auditor and Legal Auditor with companies operating in the industrial, financial and services sectors.
He currently has a partnership arrangement with the Studio Corbella Villa Crostarosa - Giucciardi in Milan and is treasurer of Confprofessioni at the Lombardy Regional Council.
Marina Scandurra, Substitute Statutory Auditor of Fiera Milano since 23 April 2018.
Born in Rome on 15 December 1969, she graduated in Economics from the Università La Sapienza in Rome in 1994. She is qualified as a Chartered Accountant and is on the National Register of Auditors.
Currently she holds the following corporate offices: she is a Standing Statutory Auditor on the Board of GEDI Gruppo Editoriale S.p.A., Member of the Supervisory Board of GEDI Gruppo Editoriale S.p.A., Standing Statutory Auditor on the Board of Fidia S.p.A., Standing Statutory Auditor on the Board of Acea Produzione S.p.A., Standing Statutory Auditor on the Board, also with Supervisory Board duties, of Bredamenarinibus S.p.A., Standing Statutory Auditor on the Board of MICO DMC S.r.l., Standing Statutory Auditor on the Board of Morini S.r.l., Chairperson of the Board of Statutory Auditors, also with legal audit duties, of Citelum Napoli Illuminazione Scarl, Chairperson of the Board of Statutory Auditors of Stretto di Messina S.p.A. and Standing Statutory Auditor on the Board of Transmed S.p.A.
During 2018, the Board of Statutory Auditors met 14 times. The average duration of the meetings of the current Board of Statutory Auditors was approximately 3 hours and 5 minutes. At the date of approval of this Report, 3 Board meetings had been held during the current year.
The Board of Statutory Auditors, in compliance with Article 149 of the Consolidated Finance Act and the powers invested in it by Article 2403-bis of the Italian Civil Code, monitors the Company's activities to: ensure compliance with the principles of correct administration; ensure the adequacy of the company's organisational structure regarding positions and responsibilities, the internal control system and the administrative/accounting system, as well as the reliability of the latter in accurately representing management information; ensure there exist the means of concrete implementation of the rules of corporate governance provided by the codes of conduct prepared by the companies responsible for the organisation and management of regulated markets and to ensure the adequacy of the regulations prepared by the Company and applicable to its subsidiaries, in accordance with Article 114 paragraph 2 of Italian Legislative Decree 58/98. In compliance with Article 19 of Italian Legislative Decree 39/2010, the Board of Statutory Auditors also oversees the legal audit of the annual and consolidated financial statements, the effectiveness of the internal control, internal audit and risk management systems, as well as the process for financial reporting. The Board of Statutory Auditors also oversees compliance with the provisions for the disclosure of non-financial information under Italian Legislative Decree 254/2016 and reviews this in its annual report to the Shareholders' Meeting.
Under Article 20.1 of the Articles of Association, in addition to its responsibilities under Article 2403, paragraph 1 of the Italian Civil Code and the powers it has under Article 2403-bis of the Italian Civil Code, the Board of Statutory Auditors must also monitor:
In addition, as Internal Control and Audit Committee pursuant to art. 19, Italian Legislative Decree 39/2010, the Board of Statutory Auditors is responsible for the procedure for selection of the independent auditors. The Board of Statutory Auditors must also inform the Board of Directors of the results of the audit and submit the additional report to the Board pursuant to art. 11, Regulation (EU) 537/2014 received from the independent auditors, accompanied by any remarks.
The Board of Statutory Auditors also monitors the independence of the independent auditors, ensuring compliance with existing regulations, and the nature and scale of non-audit services provided to the Company and its subsidiaries by the independent auditors and its network of entities. To carry out its responsibilities the Board of Statutory Auditors also works in conjunction with the Internal Audit Department and with the Control and Risk Management Committee on matters of common interest through meetings and exchanges of information.
With all its members, the Board of Statutory Auditors attends meetings of the Control and Risk Management Committee.
In compliance with the Code of Conduct for the Boards of Statutory Auditors of Listed Companies, published by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili - CNDCEC, on 26 April 2018 the Board of Statutory Auditors completed an appraisal in relation to:
membership suitability and adequate composition of the board, with reference to the professionalism, expertise, integrity and independence requirements of the regulations;
availability of time and resources suited to the complexity of the position.
The Board of Statutory Auditors also performs periodic self-appraisals of its operations in relation to the actual planning of its activities.
The Chairperson of the Board of Statutory Auditors, with operating support from the relevant company departments, prepares the self-appraisal report of the Board, which describes the methodology used and the different stages that constitute the self-appraisal process; lists those involved in the self-appraisal; the results obtained, highlighting any strengths or weaknesses; the remedial actions suggested by the Statutory Auditors; and describes the progress or state of implementation of remedial actions stemming from the previous self-appraisal. The self-appraisal document is presented to the Board of Statutory Auditors for its approval and then agreed with the Board of Directors.
At its meeting on 17 January 2019, the Board of Statutory Auditors of Fiera Milano established qualitative and quantitative criteria in order to organise the self-appraisal in relation to the operations, composition and number of members of the Board for 2018.
The self-appraisal, instigated by the Chairperson of the Board of Statutory Auditors, was carried out by each Statutory Auditor completing a questionnaire; the results were presented to the Board of Statutory Auditors during its meeting of 7 February 2019.
The questions were designed to analyse (i) the size and composition of the Board of Statutory Auditors with reference to the nature and professional experience of the Statutory Auditors; (ii) its modus operandi, (iii) the composition and responsibilities of the internal committees of the Board; (iv) the knowledge of the legal framework of the sector and the participation of Statutory Auditors in meetings and in the decision-making process.
Each Statutory Auditor completed this questionnaire and the analysed results were aggregated and presented to the Board of Statutory Auditors in an anonymous format.
The results were obtained through the active cooperation of all Statutory Auditors and were processed with operating support from the Secretariat of Fiera Milano.
In particular, each Statutory Auditor completed:
Analysis of the results of the questionnaire showed that the Board of Statutory Auditors believes that the number of members, composition, modus operandi, information flows between the Board of Statutory Auditors and other corporate bodies, as well as the role assigned to the Chairperson, are considered adequate.
In addition, at the time of the self-appraisal, members of the Board of Statutory Auditors formulated explicit proposals for training and further study, reporting aspects designed to improve the activities carried out and thereby guarantee greater effectiveness of its role within the Company.
The Company has adopted an Internal Dealing Code, prepared in accordance with EU Regulation no. 596 of 16 April 2014 (Market Abuse Regulation – "MAR") and related implementing regulations (all together "Internal Dealing Regulations").
Under the Internal Dealing Code, most recently updated on 15 December 2017, a number of relevant persons, and persons close to them, who have regular access to inside information and the power to make management decisions that could affect the performance and prospects of the listed issuer, are obliged to inform the market of any transaction involving listed financial instruments issued by the company. Relevant persons under the provisions of the Internal Dealing Code are those with administrative, direction and control responsibilities within Fiera Milano.
The relevant persons identified above must communicate to the Company and to Consob any transactions they have made or that have been made by Persons Closely Associated with them within three trading days of the date of the transaction.
Consistent with the requirements of the MAR, the current Internal Dealing Code provides for a black-out period of thirty days preceding the public announcement of interim results or year-end financial statements during which the relevant persons are prohibited from trading in financial instruments issued by the Company.
Communications made in compliance with the Internal Dealing Code (filing models) and the Internal Dealing Code itself are available on the Company website www.fieramilano.it in the section Investor Relations/ Corporate Governance/ Internal Dealing.
The Company has adopted a "Procedure for the management of relevant and inside information and Register maintenance", most recently updated by the Board of Directors on 27 July 2018, which incorporates the provisions of regulations on market abuse.
The Procedure contains specific sections covering the definition of relevant and inside information, the related management procedures, ways of managing so-called market rumours, governs instances of delays in disclosure to the market, the approval process for press releases, persons authorised to maintain external relations and persons obliged to maintain confidentiality.
The Procedure also covers the maintenance and updating of the Relevant Information List (RIL) and the Insider List, which identifies the responsibilities and ways of maintaining and updating it. The procedure identifies the individual responsible for managing the list, an info room committee and the individuals that can be registered in it; it also governs the procedures for initial inclusion and subsequent updating as well as aspects regarding confidentiality obligations.
The Company has a Procedure for Related-Party Transactions (hereinafter the "Procedure"). The Procedure was adopted on 5 November 2010 and implemented from 1 January 2011. It was prepared in compliance with the Provisions relating to transactions with Related Parties approved by Consob Resolution no. 17221 of 12 March 2010, first amended by Consob Resolution no. 17389 of 23 June 2010 and later by Resolution no. 19974 of 27 April 2017 (hereinafter the "Regulation"), with recommendations contained in the Corporate Governance Code and with the guidelines for application of the Provisions relating to transactions with Related Parties issued by Consob with Communication no. DEM/10078683 of 24 September 2010.
The current Procedures were reviewed twice in 2018. In particular, the amendments were agreed by Board of Directors decision of 19 February 2018 and again on 11 May 2018, also to align the document and its provisions to the amendments to the reference regulations and as regards the organisational structure of the Company.
In general, the Procedure provides rules and measures to be adopted to ensure transparency and the substantial and procedural correctness of related-party transactions carried out directly by Fiera Milano or through its subsidiaries. The Control and Risk Management Committee has been identified as the body designated to express a considered opinion on the interests of the Company and on the substantial fairness of the relevant conditions for the completion of related-party transactions.
The Procedure takes advantage of the exception granted in the Regulation that, without prejudice to provisions on public disclosure, allows smaller listed companies – or for those with balance sheet assets or revenues that do not exceed Euro 500 million as shown in the most recently approved Consolidated Financial Statements - the possibility of applying to Transactions of Greater Importance the guidance and approval procedures for Transactions of Lesser Importance.
The Board of Directors of the Company will periodically, and in any event at least every three years, assess whether to update the Procedure taking into account, inter alia, any changes to its ownership structures, as well as the effective application of the rules and guidance in use.
The Procedure is available on the Company website, www.fieramilano.it, in the section Investor Relations/Corporate Governance/Related Parties.
The Company has also adopted Organisational Implementing Instructions with regard to the Procedure for Related-Party Transactions – that were updated during the Board of Directors meeting of 19 February 2018 – in order to:
With regard to the new version of the Instructions associated with the aforementioned Procedure, note that the main amendments aim to align its contents with the current organisational structure of the Company and with European Commission's MAR on market abuse.
In particular, note that the Instructions define the new composition of the Advisory Committee on Related Parties.
The Company has adopted a communication policy with the aim of establishing continuous dialogue with all shareholders and, in particular, with institutional investors, ensuring the systematic and prompt dissemination of exhaustive information regarding its activities, while complying with the regulations on inside information.
The Company has an Investor Relations Department, headed by Gianna La Rana as Investor Relations Manager, responsible for relations with the financial community.
The methods adopted for financial disclosure are those of systematic contact with financial analysts, institutional investors and the specialist media in order to ensure a full and proper understanding of trends in the Company's strategic direction, the implementation of strategy and the impact on the business results.
In addition, the Company believes that dialogue with investors is fostered by providing sufficient information to allow them to make informed decisions when exercising their rights and by organising the content of the Company's website (www.fieramilano.it in the Investor Relations section) so that they can access economic and financial information (annual financial statements, half-yearly and quarterly interim financial statements, presentations to the financial community), as well as updated data and documents of general interest to shareholders (press releases, the corporate calendar, composition of the Company's governing bodies, the Articles of Association, minutes of Shareholders' Meetings, the Code of Ethics, the Procedure for Related-Party Transactions, the Internal Dealing Code, and the related filing models etc.).
The Shareholders' Meeting represents all shareholders and its decisions, taken in accordance with the law and the Articles of Association, are mandatory and binding on all shareholders, including those who did not attend, abstained or dissented, although dissenting shareholders have rights of rescission under certain circumstances.
Also in accordance with the provisions of Article 9.C.3 of the Corporate Governance Code, the Shareholders' Meeting of 23 April 2013 adopted Rules of Procedure that govern the conduct of Ordinary and Extraordinary Shareholders' Meetings. These Rules are publicly available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/ Shareholders' Meetings.
The aforementioned Rules of Procedure define the procedures to be followed to ensure the orderly and correct conduct of Shareholders' Meetings whilst guaranteeing the right of each shareholder to speak on the matters under discussion.
The Shareholders' Meeting is convened and deliberates, under the law and regulations for companies with listed shares, on matters that are its responsibility by law.
The Shareholders' Meeting is authorised to approve, inter alia, in an ordinary or extraordinary meeting (i) the appointment or removal of members of the Board of Directors and of the Board of Statutory Auditors and their relevant remuneration and responsibilities, (ii) the Financial Statements and the allocation of profits, (iii) the purchase and disposal of treasury stock, (iv) changes to the Articles of Association, (v) the issue of convertible bonds.
Under enacted law, legitimate attendance and the exercise of the right to vote in Shareholders' Meetings is restricted to those who appear as shareholders at close of business on the seventh trading day prior to the date of the Shareholders' Meeting and who present to the issuer the relevant communication from an intermediary that accords with the latter's accounting records on behalf of the person having the right to vote at the Shareholders' Meeting using the aforementioned mechanism.
On 8 November 2016, a Management policy for whistleblowing disclosures, including anonymous disclosures, received by the Group companies was adopted. It was most recently updated at the meeting of the Company's Board of Directors held on 11 May 2018. The Procedure governs the receipt, analysis and treatment of whistleblowing disclosures alleging irregularities, including those made anonymously or in confidence, from third parties or from Fiera Milano Group personnel.
The disclosures may include, inter alia: crimes, illicit or anomalous activities and/or behaviour of any kind, also omissive, attributable to the employees of the Fiera Milano Group or third parties that violate the Code of Ethics, the Models 231 adopted by companies of Fiera Milano Group, internal regulations issued by the Fiera Milano Group, laws or regulations or obligations issued by the Authorities or any acts that could cause damage or detriment of any kind to the Fiera Milano Group.
The latest review of the Procedure amended the composition of the Disclosure Committee, in which the Head of Human Resources, in place of the Head of Compliance, currently participates with the Head of Security and the Head of Internal Audit. This Committee reports to the Supervisory Committee on any checks that have been carried out when significant provisions of Legislative Decree 231/01 have been breached.
Although whistleblowing notifications may be made in any way, the Company has set up different channels of communication that include: the website, an e-mail address, a toll-free number and a postal address. The channels set up for direct disclosure to the Supervisory Committees of Group companies under Legislative Decree 231 remain valid (dedicated accounts).
The Company has regulations governing the exercise of direction and coordination by the Parent Company.
This document was prepared to set guidelines for the direction and coordination activity of the higher authority over the subordinate entities, with the aim of providing a solid base for stronger research and development and more effective interrelationships.
The Regulations identify precise responsibilities regarding, respectively, the Company and its subsidiaries, within an unambiguous and reciprocal assumption of duties, and it establishes precise governance procedures appropriately gauged to provide an equitable balance between requirements for centralisation and respect for the autonomous management of the subsidiaries. In order to be fully effective, the Regulations and any amendments or additions, once adopted by the Company's Board of Directors, must be presented to shareholders of Fiera Milano and, subsequently to the shareholders' meetings of individual Group companies so that each may adopt them independently on the basis of their own business activities.
It also specifies that in the Group's regulatory hierarchy the organisational regulations come below the Parent Company's Articles of Association and those of the various companies of the Group.
The Parent Company Shareholders' Meeting approved these Regulations on 15 April 2010 and, subsequently, in order for them to be adopted, the Regulations were presented to the Shareholders' Meetings of the individual companies of the Group so that each could independently adopt them as the basis for their own operations.
Lastly, on 23 April 2013, the Shareholders' Meeting of the Parent Company approved the integration of the Regulation with a recommendation that the members of the Board of Statutory Auditors of the Parent Company, in line with best practices on this matter, should be appointed as Statutory Auditors in the Boards of Statutory Auditors of the subsidiaries. The primary aim of this change was rationalisation and simplification, allowing the creation of important synergies to guarantee greater effectiveness and efficiency of control systems to benefit the entire Group.
There have been no changes in the corporate governance of the Company subsequent to the end of the financial year under review.
By letter dated 21 December 2018, the Chairperson of the Corporate Governance Committee informed the top management of Italian listed companies of a number of recommendations to ensure a higher degree of alignment between corporate governance practices and instructions contained in the Corporate Governance Code. For 2019 in particular, in that letter, issuers were invited to:
a. express an explicit opinion on the adequacy of pre-meeting information received during the year;
b. apply more strictly the independence criteria defined in the Corporate Governance Code;
c. ensure greater transparency on how the board review is conducted;
d. assess the adequacy of remuneration policies with pursuit of the objective of sustainability of business activities in the medium/long term.
These recommendations - immediately brought to the attention of the Chairperson of the Board of Directors and the Board of Statutory Auditors - were shared with the entire Board of Directors of Fiera Milano at the meeting held on 12 February 2019. On that occasion, the Board of Directors verified that the Company is in alignment with the recommendations issued by the Corporate Governance Committee.
The two tables on the following pages summarise the Company's adherence to the main corporate governance requirements of the Corporate Governance Code.
The first table gives the structure of the Board of Directors and its internal committees. It lists the Directors and their category (Executive, Non-executive and Independent). It also shows the composition of the various committees.
The second table summarises the characteristics of the Board of Statutory Auditors. It lists the members of the Board, both standing and substitute, and indicates if they have been nominated from lists put forward by non-controlling interests.
Both tables give information on the number of meetings held by the Board of Directors, the various committees and the Board of Statutory Auditors and the attendance rate of individual members. The tables also show the number of administrative positions held in other companies; these are also detailed in the text of this Report and are used for the necessary checks to ascertain compliance with Cumulation of Office rules.
| BOARD OF DIRECTORS | Control and Risk Management Committee |
Appointments and Remuneration Committee |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Position | Member | Year of birth |
Date first appointed |
In office from/until |
List Exec. | Non exec. |
Independent under the Code |
Independent under the Cons. Fin. Act |
BoD attenda nce * |
No. of other positions held ** |
*** | * | *** | * | |
| Chairperson | Lorenzo Caprio | 1957 21.04.2017 | a | b | X | X | 9/9 | 1 | |||||||
| Chief Executive Officer | Fabrizio Curci° | 1972 25.07.2017 | a | b | X | 9/9 | 0 | ||||||||
| Director | Marina Natale ᵜ | 1962 21.04.2017 | a | b | X | X | 8/9 | 2 | M | 4/4 | |||||
| Director | Alberto Baldan | 1960 21.04.2017 | a | b | X | X | X | 8/9 | 4 | M | 4/4 | ||||
| Director | Stefania Chiaruttini | 1962 21.04.2017 | a | b | X | X | X | 9/9 | 3 | C | 9/9 | ||||
| Director | Gianpietro Corbari | 1961 21.04.2017 | a | b | X | X | X | 6/9 | 1 | ||||||
| Director | Francesca Golfetto | 1950 21.04.2017 | a | b | X | X | X | 9/9 | 2 | M | 9/9 | ||||
| Director | Angelo Meregalli | 1967 21.04.2017 | a | b | X | X | X | 6/9 | 0 | M | 7/9 | ||||
| Director | Elena Vasco | 1964 21.04.2017 | a | b | X | X | X | 9/9 | 4 | C | 4/4 | ||||
| Board of Directors | Control and Risk Management Committee |
Appointments and Remuneration Committee |
|||||||||||||
| Number of meetings held in the financial year ended 31 December 2018 | 9 9 |
4 | |||||||||||||
| Shareholding required by non-controlling shareholders to present lists (under Article147-ter of the Consolidated Finance Act): | 2,50% |
** This column shows the number of other positions of Director or Statutory Auditor held in listed companies, banks or in companies of material size on regulated markets, including those outside Italy.
*** This column shows the role of the Director on the committee: "C" = Chairperson, "M" = member.
°This indicates the Director responsible for the internal control and risk management system. ᵜ Ms Marina Natale held the position of Chief Executive Officer of the Company until 31 August 2017.
a Appointed by the Shareholders' Meeting of 21 April 2017 for a three-year period ending with the approval of the Financial Statements at 31 December 2019. The Board of Directors took office on 2 May 2017. Mr Curci was appointed Chief Executive Officer at the Shareholders' Meeting of 25 July 2017 when the number of Directors was increased to nine. Mr Curci's mandate runs from 1 September 2017 until the date the mandate of the other Directors expires.
b Appointed from the only list presented by the controlling shareholder Fondazione E. A. Fiera Internazionale di Milano.
| BOARD OF STATUTORY AUDITORS | ||||||||
|---|---|---|---|---|---|---|---|---|
| Position | Member | Year of birth | Date first appointed |
In office from/until |
List | Independent under the Code |
Attendance at meetings of the Board of Statutory Auditors* |
No. of other positions held** |
| Chairperson | Riccardo Raul Bauer | 1951 | 23/04/2018 | a | b | X | 11/11 | 1 |
| Statutory Auditor | Daniele Federico Monarca | 1959 | 23/04/2018 | a | b | X | 11/11 | 0 |
| Statutory Auditor | Mariella Tagliabue | 1970 | 23/04/2018 | a | b | X | 11/11 | 5 |
| Substitute Auditor | Daniele Beretta | 1980 | 23/04/2018 | a | b | |||
| Substitute Auditor | Marina Scandurra | 1969 | 23/04/2018 | a | b | |||
| ……………………AUDITORS NO LONGER IN POSITION IN THE FINANCIAL PERIOD UNDER REVIEW………………………… | ||||||||
| Chairperson | Federica Palmira Nolli | 1959 | 29/04/2015 | c | b | X | 3/3 | 0 |
| Statutory Auditor | Antonio Guastoni | 1951 | 29/04/2015 | c | b | X | 3/3 | 4 |
| Statutory Auditor | Carmine Pallino | 1967 | 29/04/2015 | c | b | X | 3/3 | 0 |
| Substitute Auditor | Francesca Maria D'Alessandro | 1970 | 29/04/2015 | c | b | |||
| Substitute Auditor | Alessandro Carlo Galli | 1973 | 29/04/2015 | c | b | |||
| Number of meetings held in the financial year to 31 December 2018 | 14 | |||||||
| Shareholding required by non-controlling interests to present lists of candidates (under Article 148 of the Consolidated Finance Act) | 2,50% |
b Appointed from the only list presented by the controlling shareholder Fondazione E. A. Fiera Internazionale di Milano.
c Appointed by the Shareholders' Meeting of 29 April 2015 for a three-year period ending with the approval of the Financial Statements at 31 December 2017.
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