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Contents
PART I. THE BOARD OF DIRECTORS AND ITS MEMBERS ... 2
PART II. OPERATIONAL RISK MANAGEMENT ... 5
PART III. INTERNAL AUDIT FUNCTION ... 6
PART IV. INVESTOR RELATIONS ... 8
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PART I. THE BOARD OF DIRECTORS AND ITS MEMBERS
COMPOSITION OF THE BOARD OF DIRECTORS
1. The Board is composed of five to seven (7) executive and non executive members. At least three members are non executive out of whom two members at least, are independent. The executive members are dealing with the daily management issues while the non executive members are responsible for the progress of all corporate issues. Among the non executive members independent members are appointed as well, at least two of whom are responsible for supervising the corporate activities. The members of the Board are chosen by professionally rewarding people who have experience, according to the criteria of the educational level and integrity. Thus, these members by inference are able to have an impartial overview and state an objective opinion on corporate matters.
2. During their tenure the independent non executive members may not own more than 0.5% of the share capital of the company or have any relation of dependence to the company or people that are connected to the company in any way when the member:
is (according the law 3016/2002 or has been employee, executive officer or chairman of the Board of Directors of the company or subsidiary within the last three years,
receives or has received within the last 12 months prior to the appointment of any other compensation except for the remuneration as member of the Board, which has been approved by the General Meeting of Shareholders,
3 has been within the last three years a regular auditor of the company or subsidiary
partner or employee providing a full audit of the company or subsidiary,
has (according to the law 3016/2002) second degree affinity or marital relation with a non independent member of the Board, executive officer,director or major shareholder of the company or subsidiary,
controls directly or indirectly through people connected with each other over 10% of the voting rights of the company or represent a significant shareholder of the company or the subsidiary,
has been for more than twelve years on the board since the date of the first choice. 3. Nominations for the Board of Directors are audited by the Nomination Committee. This Committee ensures the efficiency and transparency of the process for the selection of board members.
Responsibilities of the Committee:
establishes the criteria and procedures for selecting and appointing members of the Board.
evaluates at times the size and the composition of the Board and submits the proposals for review on the required profile,
evaluates the current balance of qualifications, knowledge and experience in BoD and following this evaluation describes clearly the role and qualifications required to fill vacancies,
identifies and selects the candidates,
submits to the Board the proposals for the election of the BoD members.
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Board Committees
The Board of Directors has appointed three committees, a Remuneration Committee, an Audit Committee and a Nomination Committee.
The Remuneration Committee is composed of the chairman of the BoD as well as an independent non executive member.
The Audit Committee is composed of two independent non executive members and one independent member.
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PART II. OPERATIONAL RISK MANAGEMENT
RISK MANAGEMENT
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PART III. INTERNAL AUDIT FUNCTION
INTRODUCTION
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responsibility of the auditee as the quality of the decision cannot be checked. It can be checked though the decision, the execution of the decision as well as the result of the decision. Responsible for the core of the project remains the auditee.
PRINCIPLES OF THE INTERNAL AUDIT, QUALIFICATIONS AND RESPONSIBILITIES OF THE AUDITORS
Article 4 – Organizational independence of internal audit Head of Internal Audit:
• He is appointed by the BoD. The BoD approves the articles of Association under which the Internal Audit works.
• Reports operationally to the BoD and the Audit Committee of the Board. • reports administratively to the Chief Executive officer of the company.
Specifically the Board of Directors:
• Approves all the decisions regarding the appointment or the elimination of the Head of Internal Audit.
Approves the Internal Audit Charter Operation.
• Approves the annual compensation of the Head of Internal Audit. Within the framework of functional reference the BoD as well as the Audit Committee: • Receive notifications from the Head of Internal Audit on the results of internal
Audit functions as well as other matters which the Head of Internal Audit considers most important.
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Article 16 – Internal Auditor access to books and records
The Internal Audit Service has full access to all files and data, employees, places and activities of the company, data which is necessary for the implementation of the project audit. The internal audit service is completely responsible for preserving the confidentiality of this data. The Board members should cooperate and provide information to the Internal Auditors and facilitate in general their work by all means. Restrict access to the above may constitute limitation of the Internal audit operational framework and it is applied what has been metioned in the relevant point.
AUDIT COMMITTEE
Article 39 – Audit Committee. The principle of the Committee.
To help the Council in meeting its supervisory role regarding the financial reports, the Internal Audit System, the Internal Audit procedures as well as the procedures for checking the company’s compliance with the laws, regulations and the internal operational policy.
PART IV. INVESTOR RELATIONS
The Investor Relations Department is responsible for direct and equal information for all shareholders and their service on the exercise of their rights. In particular, it must notify shareholders on their obligations of routine updating of the Company, as presented to the regulations of AIM Italia where companies of small and medium capitalization fall under, such as:
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• provide information about the ordinary and extraordinary general meetings and decisions.
• the acquisition and disposal of treasury shares or possible cancellation of any of these.
• the keeping and updating of the Company's share register, by contacting the AIM stock market in Milan.
Disclosure of Information (price sensitive and non price sensitive information) This section of the company is responsible for monitoring the obligations of the
company to the capital market and the stock exchange of Milan. In particular the office for company release is responsible for:
• Company’s compliance with disclosure requirements as set out by the capital market commission of Milan.
• The company’s contact with the responsible authorities of the Stock Exchange and the Capital Market Commission of Milan. Below there are described the obligations of the company to the relevant bodies which are monitored by the corporate announcements department.
Liabilities of the company to the Capital Market Commission of Milan
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PART V. REMUNERATIONS
LEVEL AND STRUCTURE OF REMUNERATIONS
The Board will establish a remuneration committee consisting exclusively of non-executive and independent members of the Board under the chairman. The committee should consist of at least three (3) members and the chair should be an independent non-executive board member.
The duties of the Remuneration Committee are:
• The proposals to the Board on the remuneration of each executive member, including bonus and incentive-based remuneration related to the distribution of shares.
• The examination and submission of proposals to the Board concerning the overall size of the annual variable (ie excluding salary) compensation in the business.
Remuneration disclosures
The report of the remuneration of the Board will be included in the corporate governance statement and for each corporate use, should include:
• Policy and principles of the Company for the remuneration development of executive board members.
• The evaluation method of performance and calculation of the remuneration variable of executives, including quantitative and qualitative criteria taken into account.
• The main elements of the employment contracts of executives, including the duration of the contract
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ANNEX I
Instructions for preparing corporate governance statement
The company for each corporate use will need to:
1. Include a special section of the annual management report, corporate governance statement, which contains, in conjunction with the provisions of Law 3873/2010:
Notification of the voluntary compliance of the company with this Code.
2. Include the corporate governance statement in conjunction with Law 3873/2010 and the Code:
Brief description of how the Board of Directors operates and information on:
i. the number of Board meetings and the frequency of participation of each member in these meetings
ii. the number of Board committee meetings and frequency of participation of each member in these meetings
iii. brief description of the composition and operating conditions of work and responsibilities of board committees and a description of matters discussed at meetings
iv. description of how performance evaluation of the Board and its committees Information for members of the Board, such as the following:
i. determination of the President, Vice President (if any), the CEO and members of Board Committees and their Chairmen
ii. determination of non-executive members that the Board considers independent and, where necessary, an explanation of the reasons that support this position iii. brief CVs of each member of the Board
13 v. reference to external professional commitments of Board members (including professional obligations as executive directors in other companies and non-profit organizations)
Information on risk management and internal audit:
i. description of the main elements of risk management and internal audit
ii. statement of the Board in relation to the conduction of an annual review of the corporate strategy, key business risks and audit control systems
iii. if the statutory auditor or audit firm provide non-audit services to the company, evaluation of the impact that can this have on the objectivity and effectiveness of the statutory audit, taking into account the provisions in Law 3693/2008.
