In compliance of the Consob Regulation on related parties transaction the Board of Directors approved the corporate procedure “Transactions with related parties, which has been applied since October 25, 2010 to ensure transparency and substantial and procedural fairness of such transactions.
The procedure and the subsequent amendments received the preliminary favourable opinion, expressed unanimously, of the Internal Control Committee.
The procedure reproduces mainly the provisions of the Consob Regulation, and, in a greater protection and efficiency perspective, it extends the procedural system for transactions carried out directly by Augustea Holding to all transactions undertaken by subsidiaries and other companies within the Group.
Transactions with related parties are divided into transactions of lesser importance, of greater importance and exempts, which are those among fully owned companies, typical or usual transactions, operations regulated on standard conditions and those whose price has been determined on the basis of official market quotations or tariffs set by the public Authorities. The procedure provides different procedural arrangements and transparency in relation to types and importance of transaction.
In general, the Internal Control Committee plays a central role in all relevant transactions with related parties, being required to express a reasoned and not binding opinion on the company’s interest in the completion of the transaction and the convenience and substantial correctness of the underlying terms.
A preliminary investigation by the Committee is always required for transactions where the amount is higher than Eur 50,000, or involving a director or an effective statutory auditor or even a manager with strategic responsibilities including their relatives.
Specific rules have been adopted for transactions in which a director or a statutory auditor have an interest, directly or on behalf of third parties.
Where a director is involved, directly or through a third party, in a transaction with related parties, he has to notify in due time the Board on the nature, the terms, the origin and the scope of his interest and will not attend the relevant Board’s meeting.
When an effective Statutory Auditor is involved, directly or through a third party, in a transaction with a related party, he has to notify in due time the Board of Statutory Auditors and the Board of Directors on the nature, the terms, the origin and the scope of his interest.
For transactions of greater importance, the responsibility to resolve is reserved to the Board of Directors.
In order to avoid a related party transaction being executed with conditions different than those negotiated with an unrelated party, both the Board of Directors and the Committee are entitled to rely on external consultants, selected from experts of proven competency and expertise.
The procedure also defines the timing, responsibilities, tools of verification by Augustea employees and bodies involved in the procedures and information flows that must be met for the correct application of the rules.
