AGM Information • Mar 11, 2021
AGM Information
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This report has been written pursuant to article 125-ter of Legislative Decree no. 58 of 24 February 1998 and articles 72 and 73 of Annex 3A schemes no. 3 and 4 of the regulation adopted by Consob under resolution no. 11971 on 14 May 1999 as amended (the "Issuers' Regulation"). The documentation on items on the agenda is available on the website https://www.gefran.com/en/gb/meetings and has been published pursuant to the laws in force.
Note that the date and/or place and/or methods for attending and/or voting and/or holding the Meeting shall be required to comply with current legislation and the orders of the competent authorities concerning the "Covid-19" epidemic.
In view of the current epidemiological emergency, in compliance with art. 106 of Decree Law no. 18 of 17 March 2020 (the "Decree"), concerning "Measures to strengthen the National Health Service and economic support for families, workers and businesses related to the Covid-19 epidemiological emergency" – the applicability of which has been extended, most recently by art. 3, paragraph 6, of Decree Law no. 183 of 31 December 2020 – the Company has determined that shareholders will be able to attend the Meeting exclusively by appointing a representative, in accordance with art. 135-undecies of Legislative Decree no. 58 of 24 February 1998 (the Consolidated Finance Act, referred to as "TUF").
The reader is referred to the notice for the Shareholders' Meeting for more information on attendance and voting methods
In accordance with Consob Memorandum no. 3 of 10 April 2020 - paragraph 6, anyone who is entitled to vote may present an individual proposal for a resolution concerning the topics on the agenda for the meeting, as permitted under art. 126-bis, paragraph 1, sentence three TUF, by the methods and within the deadline identified in the notice for the Shareholders' Meeting. Proposals will be published by the methods and within the deadline identified in the notice for the Shareholders' Meeting to permit all those entitled to vote to make a conscious decision, taking the new proposals into account.
In these cases, this "Explanatory Report by the Board of Directors on the topics on the agenda" may be amended and/or supplemented.
1.1 Approval of the annual financial statements for the year ending 31 December 2020, and of the reports of the Board of Directors, Board of Statutory Auditors and External Auditor. Presentation of the Consolidated Financial Statements for the year ending on 31 December 2020. Presentation of the nonfinancial declaration prepared under Legislative Decree no. 254/2016. Related and consequent resolutions;
Dear Shareholders,
We hereby submit for your approval the annual financial statements for the year ending on 31 December 2020, which show a net profit of EUR 6,279,771.
We therefore submit for your approval the following resolution:
"The Ordinary Shareholders' Meeting of Gefran S.p.A., having taken note of the Board of Statutory Auditors' Report and the External Auditors' Report,
hereby resolves:
Provaglio d'Iseo, 11 March 2021
2.1 Approval of the proposed allocation of dividends. Related and consequent resolutions; 2.2 Allocation of the remaining portion of annual profit. Related and consequent resolutions.
As stated in the first item on the agenda, the Annual Financial Statements for the year ending on 31 December 2020 reveal a profit of Euro 6.279.771.
Note that the legal reserve reached the limit set by the Italian Civil Code some time ago and that the available reserves amply cover the development costs recorded under non-current assets.
We therefore submit for your approval the following resolution:
"The Ordinary Shareholders' Meeting of Gefran S.p.A.
hereby resolves:
The dividend, in compliance with the provisions of the "Regulation of the markets organised and managed by Borsa Italiana S.p.A.", will be paid as follows: ex-dividend date 10 May 2021, record date 11 May 2021 and payment on 12 May 2021.
The amount of the dividend is fully covered by the profit for the period and sufficient financial funds are already available for the payment.
Provaglio d'Iseo, 11 March 2021
Third item on the agenda
3. Report on Remuneration Policy and on the compensation paid. Approval of the first section of the Report under paragraph 3-ter of art.123-ter of Legislative Decree no. 58/1998.
Dear Shareholders,
in compliance with the provisions of the Code of Conduct of Listed Companies and art. 123-ter of the Consolidated Finance Act , the company has adopted a Remuneration Policy, contained in the first part of its Remuneration Report, to be made available to shareholders as required by law, in the shareholders' meetings section of the company's internet site (https://www.gefran.com/en/gb/meetings).
Legislative Decree no. 49 of 2019 implemented in Italian legislation, through amendments to the Civil Code and the Consolidated Law on Finance, the provisions of EU Directive 2017/828 (known as "Shareholders' Rights II"), including the specification that Remuneration Policy must be submitted to vote in the Shareholders' Meeting.
The Policy, approved by the Board of Directors on 11 March 2021 and published in full on the company's internet site, contains the guidelines for the remuneration of directors and managers. In particular, the policy defines the remuneration mix, specifying the fixed and variable components.
The Ordinary Shareholders' Meeting of Gefran S.p.A. shall therefore be asked to vote in a binding vote in favour of or against the Remuneration Policy adopted by the company and contained in section one of the Remuneration Report, and we therefore submit for your approval the following proposed resolution:
"The Gefran S.p.A. Shareholders' Meeting:
having examined the Report on Remuneration Policy and Pay under art. 123 ter of TUF
votes
Provaglio d'Iseo, 12 March 2020
Fourth item on the agenda
Dear Shareholders,
in compliance with the provisions of the Code of Conduct of Listed Companies and art. 123-ter of the Consolidated Finance Act , the company has prepared a report on remuneration and pay in the year 2019, contained in the second part of its Remuneration Report, to be made available to shareholders as required by law, in the shareholders' meetings section of the company's internet site (https://www.gefran.com/en/gb/meetings).
Legislative Decree no. 49 of 2019 implemented in Italian legislation, through amendments to the Civil Code and the Consolidated Law on Finance, the provisions of EU Directive 2017/828 (known as "Shareholders' Rights II"), including the specification that the Report on Remuneration and Pay must be submitted to vote in the Shareholders' Meeting.
The Report, approved by the Board of Directors on 11 March 2021, specifies the remuneration paid to directors and managers with strategic responsibilities, set forth in the form required by law.
The Gefran S.p.A. Shareholders' Meeting shall therefore be asked to express an opinion, in an advisory capacity, in favour of or against the second section of the Report on Remuneration and Pay in the year 2020, and we therefore submit the following proposed resolution for your approval: "The Gefran S.p.A. Shareholders' Meeting:
having examined the Report on Remuneration Policy and Pay under art. 123 ter of TUF
votes
Provaglio d'Iseo, 11 March 2021
5.1 Appointment of the Board of Statutory Auditors and its Chairman;
5.2 Determination of the annual fee paid to acting members of the Board of Statutory Auditors.
Dear Shareholders,
The three-year mandate granted to the Board of Statutory Auditors by the Shareholders' Meeting of 24 April 2018 is due to expire with the approval of the annual financial statements for the year ending 31 December 2020.
The Shareholders' Meeting is therefore called to appoint the new Board of Statutory Auditors, subject to establishment of the number of its members, of their term of office, and of the related fee.
In this regard, article 23 of the Company's Articles of Association (which may be consulted at the link: https://www.gefran.com/en/gb/corporate\_governances > By-laws) states that the Company's Board of Statutory Auditors shall be composed of three standing auditors and two deputy auditors, who shall remain in office for three years, until the date of the Shareholders' Meeting summoned to approve the financial statements for their last year in office. They may be re-elected.
The appointment shall be made by voting for the lists submitted by the Shareholders and filed at the registered office at least 25 days before the date set for the Shareholders' Meeting. Consob set the shareholding required to submit candidate lists at 2.5%. The methods and the conditions for the presentation of the lists, as well as the mechanisms for the election of the Board of Statutory Auditors by list voting, are specified in art. 23 of the Articles of Association, as well as in the notice to meet published on the Company's Internet site (https://www.gefran.com/en/gb/meetings).
Below is a summary, taken from art. 23 of the Articles of Association, of the methods for electing the members and Chairman of the Board of Statutory Auditors:
Statutory auditors are elected as follows: (i) from the list that obtained the highest number of votes ("Majority List"), two standing auditors and one deputy auditor are taken, based on their progressive number on the list; (ii) from the list that received the second highest number of votes ("Minority List"), which is not linked, even indirectly, to the shareholders who submitted or voted for the Majority List pursuant to applicable provisions, one standing auditor, who shall be the chairman of the Board of Statutory Auditors ("Minority Auditor"), and one deputy auditor ("Minority Deputy Auditor") are taken, based on their progressive number on the list. If the lists receive an equal number of votes, the winning list shall be the one submitted by the shareholders with the highest shareholding at the time the list is submitted or, subordinately, by the highest number of shareholders.
If only one list is submitted, the Shareholders' Meeting shall vote on it and if it obtains a relative majority of votes, without taking into account abstentions, all candidates on the list shall be elected to their positions as standing and deputy auditors. The Chairman of the Board of Statutory Auditors shall be the first candidate for the position of standing auditor.
The new Board of Statutory Auditors will remain in office for the three years 2021-2022-2023, that is, until the Shareholders' Meeting approves the financial statements for the year ending on 31 December 2023.
The shareholders are also called to resolve with regard to the determination of the annual overall fee, to be divided up between the members of the Board. We remind you that the gross annual fee for the current standing members of the Board of Statutory Auditors is EUR 30,000.00 for the Chairman of the Board of Statutory Auditors and EUR 20,000.00 for each standing auditor.
The outgoing Board of Statutory Auditors has prepared a document stating its considerations in view of the CNDCEC code of conduct, which will be published in the Meetings area of the Company's internet site (https://www.gefran.com/en/gb/meetings).
As for determination of the fee to be paid to members of the Board of Statutory Auditors, the company's Board of Directors, also in view of the considerations expressed by the outgoing Board of Statutory Auditors in the report identified above – section entitled "Art. Q.1.6 of the Code of Conduct for the Board of Statutory Auditors of Listed Companies", considers the current fee of EUR 70,000.00 per year in office, including EUR 30,000.00 for the Chairman of the Board of Statutory Auditors and EUR 20,000.00 for each standing auditor, to be appropriate.
***
We therefore submit for your approval the following resolution:
"Dear Shareholders,
Now therefore, having duly noted the provisions of the Articles of Association with regard to composition or appointment formalities for the Board of Statutory Auditors, you are invited:
***
For further details, refer to Article 23 of the current Article of Association (appended).
Provaglio d'Iseo, 11 March 2021
Article 23
"The Board of Statutory Auditors is composed of three standing auditors and two deputy auditors.
Auditors shall remain in office for three years, until the date of the Shareholders' Meeting called to approve the financial statements for the final financial year of their mandate, and may be re-elected. Their remuneration for the whole duration of their mandate is determined by the Shareholders' Meeting when they are appointed.
Statutory Auditors must possess the pre-requisites established by law and other applicable regulatory provisions. Concerning professional requirements, the Company strictly operates in the following areas and business sectors: electronic automation for the Sensors industry and industrial Components.
The members of the Board of Statutory Auditors are subject to the limit on the number of appointments held on boards of directors and statutory auditors established by Consob regulations.
The Shareholders' Meeting appoints the Board of Statutory Auditors based on lists submitted by the shareholders, following the procedures set out below, without prejudice to any different and additional provisions provided by binding laws or regulations.
Minority shareholders – who are not part of any associative relationship, even indirectly, pursuant to Article 148, paragraph 2 of Legislative Decree 58/1998 and related regulations – have the right to elect one standing auditor, who will be Chairman of the Board of Statutory Auditors, and one deputy auditor. Minority statutory auditors are elected at the same time as the other members of the board, with the exception of replacements, as provided for below.
Lists for appointment of Statutory Auditors may be presented by shareholders who, at the time of presentation of the list, have a shareholding, alone or with other presenting shareholders, at least equal to that determined by Consob. in Article 147-ter, paragraph 1, of Legislative Decree 58/1998 and in accordance with the provisions of the Issuers' Regulation approved by resolution no. 11971 on 14 May 1999 as amended.
Lists should be filed at the company's registered office at least twenty-five days prior to the Shareholders' Meeting called to appoint the Board of Statutory Auditors. They should also be published in accordance with the legal provisions in force at least twenty-one days prior to the same date.
The lists should contain the names of one or more candidates for the office of standing auditor and one or more candidates for the office of deputy auditor. The names of candidates shall be marked by a progressive number, and the number shall not exceed the members of the board to be elected.
If binding criteria relating to gender quotas are applicable, every list that presents at least three candidates must contain a number of candidates of the less represented gender at least equal to the minimum required by the provisions in force at the time.
Additionally, the lists should contain, also annexed, the information, statements and other documents required by law and by applicable regulatory provisions.
If by the deadline for the submission of lists, only one list has been submitted, or only lists have been
submitted by shareholders associated with one another under applicable provisions, lists may be submitted within the terms established by law. In this case, the threshold mentioned above for submitting lists is reduced by half.
Shareholders may not submit nor vote for more than one list, even through a third party or a trust company. Shareholders belonging to the same group and shareholders who enter into a shareholders' agreement regarding the issuer's shares may not submit or vote for more than one list, even through a third party or a trust company. A candidate may be present on only one list, or else be deemed ineligible.
Statutory auditors are elected as follows: (i) from the list that obtained the highest number of votes ("Majority List"), two standing auditors and one deputy auditor are taken, based on their progressive number on the list; (ii) from the list that received the second highest number of votes ("Minority List"), which is not linked, even indirectly, to the shareholders who submitted or voted for the Majority List pursuant to applicable provisions, one standing auditor, who shall be the chairman of the Board of Statutory Auditors ("Minority Auditor"), and one deputy auditor ("Minority Deputy Auditor") are taken, based on their progressive number on the list. If the lists receive an equal number of votes, the winning list shall be the one submitted by the shareholders with the highest shareholding at the time the list is submitted or, subordinately, by the highest number of shareholders.
If the Board of Statutory Auditors formed in this way does not include a standing auditor of the less represented gender, if required by the legislation in force at the time, the last candidate elected from the majority list shall be replaced by the first unelected candidate of the same list belonging to the less represented gender. Where this is not possible, the standing auditor of the less represented gender shall be appointed by the Shareholders' Meeting by the majority required by law, replacing the last candidate of the majority list.
If only one list is submitted, the Shareholders' Meeting shall vote on it and if it obtains a relative majority of votes, without taking into account abstentions, all candidates on the list shall be elected to their positions as standing and deputy auditors. The Chairman of the Board of Statutory Auditors shall be the first candidate for the position of standing auditor.
If the Board of Statutory Auditors formed in this way does not include a standing auditor of the less represented gender, if required by the legislation in force at the time, the standing auditor of the less represented gender shall be appointed by the Shareholders' Meeting by the majority required by law, replacing the last candidate of the single list.
In the absence of lists, the Board of Statutory Auditors and the Chairman shall be appointed by the Shareholders' Meeting by the ordinary majority required by law, without prejudice to the obligation to appoint at least one standing auditor of the less represented gender, if required by the legislation in force at the time.
If for any reason the Majority Auditor is not available, he/she shall be replaced by the deputy auditor taken from the Majority List.
If for any reason the Minority Auditor is not available, he/she shall be replaced by the Minority Deputy Auditor.
When the Shareholders' Meeting is asked to appoint members to the Board of Statutory Auditors to replace auditors elected from the Minority List, where allowed by applicable provisions, appointments shall be by relative majority. The votes of shareholders who hold - according to the communications made pursuant to the laws in force, and also indirectly or jointly with other shareholders that have entered into significant
shareholders' agreements pursuant to Article 122 of Legislative Decree 58/1998 - the relative majority of the votes that can be exercised at the Shareholder's Meeting, as well as shareholders who control, are controlled or are subject to joint control by the aforementioned, are not taken into account.
In any event, the new Minority Auditor shall also take on the role of Chairman.
In the event that any standing auditor is replaced, gender balance obligations, to the extent that these are provided for by the legislation in force at the time, shall remain binding.
Sixth item on the agenda
Dear Shareholders,
In its 11 March 2021 meeting, the Board decided to submit for the approval of the Shareholders' Meeting – convened in ordinary session for 27 April 2021 – pursuant to sections 2357 and 2357-ter of the Italian Civil Code and Article 132 of Legislative Decree 58 of 24 February 1998 (the Consolidated Finance Act or "TUF"), authorisation to purchase and sell, on one or more occasions, a number of ordinary shares in the company representing a maximum of 10% of the share capital (at the date of this report, a maximum of 1,440,000.00 ordinary shares with a nominal value of Euro 1.00 per share).
It is also proposed to revoke the previous authorisation granted by the Shareholders' Meeting on 28 April 2020, which will be replaced by the new authorisation mentioned in this report.
There therefore follows a brief outline of the reasons and procedures for purchasing and selling own shares in the company for which the Board of Directors seeks authorisation.
The request for authorisation to purchase and sell own shares is in order to give the company a valuable tool providing strategic and operational flexibility that would enable it to:
act directly or through authorised brokers to limit any irregular movement in trading of the share and to regulate trading performance and runs due to excessive volatility or lack of liquidity in trading; these measures shall be taken without prejudice to the equal treatment of shareholders;
offer shareholders an additional tool to monetise investments.
The Board of Directors recommends that the company have this option at its disposal, particularly when disposing of the own shares
purchased, also in order to capitalise on opportunities to maximise value that may arise on the market, therefore for the purpose of trading.
As of the date of this report, the share capital was Euro 14,400,000.00, represented by 14,400,000 ordinary shares with a nominal value of Euro 1.00 per share.
The maximum number of own shares to be purchased is 1,440,000.00, or a maximum of 10% of the share capital, taking into account the own shares held directly and any shares held by subsidiaries in the case of
resolutions for increases and reductions while this authorisation remains effective.
In any case, the number of own shares that may be purchased shall not exceed the amount that can be covered, in relation to the purchase price, by the available reserves shown in the last set of approved financial statements.
In this regard, it should be noted that the following figures were shown in the financial statements for the year ending 31 December 2019, duly approved on 28 April 2020:
In order to assess compliance with the limits set out in section 2357, paragraph three, as of today's date, the company and its subsidiaries hold 27,220 own shares in their portfolio.
The authorisation to purchase own shares is requested for a period of 18 months from the date of the Shareholders' Meeting that voted to grant the authorisation.
Authorisation to dispose of any own shares purchased is requested without a time limit.
The Board of Directors proposes that own shares should be purchased at a unit price that is no less than their nominal value and no higher than the average price over the last three trading days prior to the purchase date plus 15%.
Concerning the price at which to sell own shares purchased, the Board of Directors shall have discretionary power to determine at the time any additional condition, procedure and deadline, while taking into consideration the procedures used, the share prices in the period prior to the transaction and the company's best interests. The minimum price may not be more than 10% lower than the price registered during the trading session prior to each disposal.
This price minimum shall not be applied in the case of disposal by means of exchange, transfer or any other means possible for acquiring shareholdings, implementation of industrial projects and other extraordinary financial transactions that involve assigning or disposing of own shares (such as, but not limited to, mergers, spin-offs, etc.).
The Board of Directors also proposes that, based on a prudent appraisal, own shares may be assigned, in full or partially, as dividends.
Purchase transactions shall start and end within the time frame established by the Board of Directors following this authorisation.
Own shares shall be purchased in compliance with applicable law and regulatory provisions in force and, in particular, with Article 132 of the Consolidated Finance Act and Article 144-bis, letters a) and b) of the Issuers' Regulations:
a) through a public tender or exchange offer;
b) on regulated markets in accordance with the operational procedures set out in the rules of the markets in question, which do not allow direct association of purchase proposals with pre-determined sales offers.
Amongst the various procedures allowed by the Issuers' Regulations, conducting purchases on regulated markets is considered preferable for the purposes mentioned above, particularly with a view to stabilising the share price. This objective can be achieved more effectively through a simple, flexible mechanism such as direct purchase on the market in a timely and gradual manner according to need. Possible recourse to a public tender or exchange offer is therefore not ruled out.
Own shares may be purchased in a different manner from those set out above where allowed by Article 132, paragraph 3 of the Consolidated Finance Act or other provisions applicable as of the date of the transaction.
Furthermore, share purchases may be conducted in accordance with Article 3 of Regulation (EC) 2273/2003, in order to benefit, where possible, from the derogation from the provisions on market abuse pursuant to Article 183 of the Consolidated Finance Act, concerning insider dealing and market rigging.
Shareholders and the market shall be given timely information pursuant to Article 144-bis, paragraphs 3 and 5 of the Issuer Regulation.
Concerning sales transactions, the Board proposes that the authorisation should enable these to be conducted, on one or more occasions, without time limits, and in the manner deemed appropriate to achieve the objective in question, including selling on the stock market, lot trading, institutional placement, through the placement of structured securities of any kind and nature or as payment for the acquisition of shareholdings in companies and/or goods and/or assets.
It should be pointed out that the request for authorisation concerns the ability to carry out repeated and consecutive transactions to buy, sell or dispose of own shares in a revolving manner (meaning the maximum amount of own shares held in the portfolio at the time) also for fractions of the maximum amount authorised.
The Board proposes that the authorisation should provide an obligation for the Board of Directors to carry out transactions to buy and sell own shares while guaranteeing not to jeopardise the company's capacity to maintain the minimum amount of floating securities required for STAR qualification.
The purchase of own shares shall not be used to reduce share capital by cancelling the own shares purchased.
***
For the reasons set out above, the Board of Directors of Gefran S.p.A. asks you to adopt the following resolutions:
"The Ordinary Shareholders' Meeting of Gefran S.p.A.
having acknowledged the Board of Directors' Report;
having considered Articles 2357 et seq. of the Italian Civil Code, Article 132 of Italian Legislative Decree 58 of 24 February 1998, Article 144-bis of the regulation adopted with Consob resolution 11971 of 14 May 1999 as subsequently amended;
having taken into consideration the 27,220 own shares in the portfolio of Gefran S.p.A. and its subsidiaries as of 12 March 2020;
having considered the annual financial statements for the year ending 31 December 2019
votes
1. to revoke the previous authorisation to purchase and sell own shares, approved by the Shareholders' Meeting of 28 April 2020, lasting 18 months;
2. to authorise the Board of Directors, pursuant to Article 2357 et seq. of the Italian Civil Code, to purchase a maximum number of 1,440,000.00 ordinary shares or a different amount representing 10% of the share capital in the case of resolutions to increase and/or reduce the share capital during the authorisation period, also taking into account shares that may be held by the company's subsidiaries, and in any case in compliance with the limits laid down by law, in order to pursue the objectives set out in the Board of Directors' Report, and in accordance with the following terms and conditions:
transactions to buy own shares may be conducted on one or more occasions in a revolving manner (meaning the maximum amount of own shares held in the portfolio at the time), until the end of the eighteenth month starting from the date of this resolution;
purchases may be conducted according to one of the methods provided for by Article 132 of Legislative Decree 58 of 24 February 1998 and Article 144-bis, letters a) and b) of the Issuers' Regulations adopted with Consob resolution 11971/1999, taking into consideration – where necessary – the exception provided by paragraph 3 of Article 132 of Legislative Decree 58/1998, and in any case using any other method provided for by the laws and regulatory provisions in force at the date of the purchase;
the unit price to purchase own shares may not be less than their nominal value and may not be higher than the average price over the last three trading days prior to the purchase date plus 15%.
transactions to buy and sell own shares shall be conducted by the Board of Directors in a manner so as not to jeopardise the company's capacity to maintain the minimum amount of floating securities required for STAR qualification;
3. to authorise the Board of Directors, pursuant to section 2357-ter of the Italian Civil Code, to sell, on one or more occasions, the own shares purchased from time to time and held in the portfolio, in accordance with the regulatory provisions and legal rules in force at the time and to pursue the objectives set out in the Board of Directors' Report to the shareholders, and under the following terms and conditions:
the shares may be disposed of or sold at any time and without any time limit, and may also be assigned, also partially, as dividends;
transactions may be conducted even before all purchases have been made, and may be conducted on one or more occasions in the manner deemed appropriate to achieve the objective in question, including selling on the stock market, lot trading, institutional placement,
through the placement of structured securities of any kind and nature or as payment for the acquisition of shareholdings in companies and/or goods and/or assets;
4. to grant the Board of Directors, with the express right to delegate, the broadest powers, without exception, necessary and useful for the execution of this resolution, also approving all provisions of the purchase plan, in accordance with any requirements set by the competent authorities; as well as the introduction in the wording of the resolutions passed of any amendments required by the aforementioned authorities, the Notary or the competent Companies' Register for registration.
Provaglio d'Iseo, 11 March 2021
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