REPORT ON CORPORATE GOVERNANCE

Transcription

1 REPORT ON CORPORATE GOVERNANCE (pursuant to the Corporate Governance Code for Listed Companies and Section IA.2.6 of the Instructions to the Regulations of Markets organized and run by Borsa Italiana S.p.A.) Introduction Amplifon S.p.A., as resolved by the Shareholders Meeting on 9 February 2001, adopted the "Corporate Governance Code for Listed Companies" issued by the Italian Stock Exchange (heretofore referred to as the Corporate Governance Code ) and, subsequently, integrated its own corporate governance system with amendments made to said code in July 2002 and March Amplifon S.p.A. provides information on its corporate governance system and its compliance with the Corporate Governance Code in an annual report that describes the standards, recommendations and international best practices to which the company has adhered to. The annual reports are made available to shareholders, along with the other documentation relative to the AGM and sent to the market management companies, who makes them available to the general public; the annual reports are also made available by Amplifon S.p.A. on its corporate website ( Amplifon s management systems and activities are based on principles of good governance designed to maximize value for shareholders and ensure total transparency in the way the company is managed. The structure of the Company s corporate governance system is described below. Governance structure of the company Amplifon S.p.A. is structured on the basis of a traditional organizational model involving a general meeting of shareholders, a board of directors and a board of statutory auditors. The primary characteristics of the these corporate entities are indicated below and described more in detail throughout the present report. The shareholders meeting must be called at least once a year and is responsible, in ordinary session, for approving the company's financial statements, the appointment and dismissal of directors, statutory auditors and the Chairman of the Board of Statutory Auditors and the related remuneration and for passing resolutions on any other matter reserved for its attention under law. The extraordinary shareholders meeting votes on amendments to the company's articles of incorporation and Articles of Association and on any other matter reserved for its attention under law. The resolutions to open and close secondary offices, to specify which one of the directors shall be the company's representative, to reduce share capital in the event of shareholder withdrawal, to amend the Articles of Association for regulatory changes, to transfer the registered office within Italy, to vote for mergers in cases described in articles 2505 and 2505-bis and the demerger report discussed in Article 2506-ter of the Italian Civil Code. Without prejudice to the provisions of articles 2420-ter and 2443 of the Italian Civil Code, responsibility for passing these 1/12

2 resolutions is the exclusive responsibility of the Board of Directors, in accordance with Article 2346 of the Italian Civil Code. The company is run by a Board of Directors, comprised of between three and eleven members, as decided by the shareholders in the general meeting. Members of the Board of Directors are appointed for a maximum period of three years; they are reappointed and replaced in accordance with the law and are eligible for re-election. The Board of Directors is vested with every power for the company's ordinary and extraordinary administration. It meets at least once every three months and has adopted an organization and modus operandi that guarantee effective and efficient performance of its functions. The Board of Directors, including through its delegates, reports on a timely basis to the Board of Statutory Auditors on its work and on any transactions carried out by the company and its subsidiaries having a significant impact on profitability, assets and liabilities or financial position; in particular, it reports on transactions representing a potential conflict of interests. The Board of Statutory Auditors consists of three standing members and two alternate members, who satisfy the requirements established by law. The Board of Statutory Auditors is appointed on the basis of lists presented by the shareholders. Lists may be presented only by those shareholders who own, individually or together with other shareholders, at least 2% of the company's capital entitled to vote in ordinary general meetings. The company's share capital is Euro 3,958,700 at 31 December 2006, consisting of 197,935,000 ordinary shares with a par value of Euro 0.20 each, of which 197,559,890 shares with equal rights and 375,110 shares with voting rights suspended under paragraph 2, Article 2357-ter of the Italian Civil Code because they are held by the company itself. The controlling shareholder is Ampliter N.V., a Dutch company with registered office in Atrium 6 - Strawinskylaan 3111, Amsterdam, which owns 119,850,000 shares, corresponding to 60.55% of share capital. Pursuant to Article 2497 of the Italian Civil Code, it is reported that, as things stand, the company is not subject to direction and co-ordination by either the direct parent company Ampliter N.V. or any indirect parent companies. The company is currently unaware of the existence of any shareholder agreements. Role of the Board of Directors In accordance with the recommendations contained in Article 1 of the Corporate Governance Code, the Board of Directors plays a key role in managing the company, by setting policy and strategy, and the group, by co-ordinating its organization. The Board of Directors acts and decides autonomously, having full knowledge of the facts, in the interests of shareholders as a whole in order to maximize shareholder value, an essential prerequisite for having a beneficial relationship with the financial market. The Board of Directors is vested with the amplest of powers for the company's ordinary and extraordinary administration and management and is empowered to perform every action 2/12

3 considered necessary and useful for achieving its business purpose, except for those powers which the law or the Articles of Association reserves to the shareholders in the general meeting. In detail, the Board of Directors: examines and approves the company's strategic, operational and financial plans and the corporate structure of the group it heads; delegates powers to executive officers and revokes them, specifying the limits to such delegated powers, the manner of exercising them and the frequency with which these persons must report to the Board on the activity performed in the exercise of the powers delegated to them; determines, after examining proposals by the Remuneration Committee and consulting the Board of Statutory Auditors, the remuneration of the executive officers and of those directors who are appointed to particular positions within the company and, where the general meeting has not already done so, it allocates the total amount to which the members of the Board are entitled; supervises the general performance of the company, with special reference to conflicts of interest, paying particular attention to the information received from the executive officers and the Internal Control Committee and periodically comparing the results achieved with those planned; examines and approves transactions having a significant impact on the company's profitability, assets and liabilities or financial position, with special reference to transactions involving related parties; checks the adequacy of the general organizational and administrative structure established by the executive officers for the company and the group; evaluates, at least once a year, the size, the composition and the efficacy of the Board and its committees; reports to the shareholders at general meetings. The Board of Directors meets at least once every three months and adopts an organization and a modus operandi that enables it to guarantee effective and efficient performance of its functions. During the course of 2006 the Board of Directors met nine times. In accordance with Article 2.6.2, paragraph 1c, of the Italian Stock Exchange s Regulations, on 12 January 2006, the company advised the stock market regulator as to its 2006 calendar of corporate events. In compliance with the Corporate Governance Code for listed companies issued by the Italian Stock Exchange in March 2006, and in regard specifically to the role of the Board of Directors and the efficient performance of its functions, on 15 March 2007 Amplifon S.p.A s Board of Directors issued guidelines regarding the maximum number of appointments that a director or statutory auditor may hold that is deemed compatible with an effective performance of a director s or statutory auditor s duties; Directors may not accept more than ten assignments as directors or statutory auditors in other companies listed on regulated markets (including foreign markets), in financial, banking, insurance or large companies and said directors, upon acceptance of their 3/12

4 appointment, must diligently perform the duties assigned and dedicate the time necessary to do so. Please note that subsidiaries of Amplifon S.p.A. are not to be considered part of the limit on cumulative appointments. Composition of the Board of Directors In accordance with Article 2 of the Corporate Governance Code, the Board of Directors consists of one executive director and six non-executive directors. The number and standing of the nonexecutive directors is such that their views can carry significant weight in board decisions that are in the best interest of the company. The positions held by directors in other listed, financial, banking, insurance or large companies are reported below: Name Position held Other appointments Anna Maria Formiggini Chairman Chairman of Amplifin S.p.A. Susan Carol Holland Vice Chairman Vice Chairman of Amplifin S.p.A.. Franco Moscetti Chief Executive Officer Director of Eurizon Financial Group S.p.A. Giuseppe Daveri Umberto Rosa Vanni Emanuele Treves Non-executive director Independent Non-executive director Independent Non-executive director Chairman of SO.PA.F Società di Partecipazioni Finanziarie S.p.A. Chairman of SNIA S.p.A. Chairman of SORIN S.p.A Chairman of Nerviano Medical Sciences Chairman of Air Liquide S.p.A. Director of Actelios S.p.A. Director of Finlombarda Gestioni S.p.A. Chairman of Korn Ferry International Chairman of Equitable Life Assurance Society Chairman of Intertek Group PLC Chairman of the London Business School Director of Amplifin S.p.A. The Board's mandate ends on the date of approving the financial statements for the year ended 31 December Independent directors The Board has checked that the non-executive directors Giuseppe Daveri and Umberto Rosa continue to satisfy the requirements of independence set out in point 3 of the Corporate Governance Code, in the sense that they do not have any business or other type of relationships with the company or its shareholders such as to be able to influence their independence of judgement and exercise of their functions. In accordance with Article 2.C.3 of the Corporate Governance Code, on 12 December 2006 the Board of Directors appointed Umberto Rosa to Lead independent director. Chairman and Vice Chairman of the Board of Directors The Board of Directors voted on 9 November 2006 to revoke the specific powers of attorney granted to the Chairman, Anna Maria Formiggini and to the Vice Chairman, Susan Carol Holland, who will, therefore, continue to exercise those powers granted as per the law and the company s articles of association. The Chairman also: 4/12

5 calls meetings of the Board of Directors by sending a letter to the home of each director and standing member of the Board of Statutory Auditors at least five days beforehand and, in the event of urgency, by sending a telegram, telex, fax or with confirmation of receipt, at least one day prior to the meeting, such as to ensure that the members of the Board of Directors are provided reasonably in advance of the date of the meeting with the documentation and information needed for them to express an informed view on the matters they are required to examine and approve; co-ordinates the activities of the Board of Directors and moderates its meetings. Information to be provided to the Board of Directors For the purposes of making the company's management more efficient, the Board of Directors voted on 26 April 2005 to appoint the director Franco Moscetti as Chief Executive Officer, investing him with executive and operational functions. The Chief Executive Officer periodically reports to the Board of Directors and the Board of Statutory Auditors on the activities performed in the exercise of his delegated powers, providing due information on transactions that are atypical, unusual or with related parties whose examination and approval are not reserved to the Board of Directors. The Board of Directors, including through its delegates, reports on a timely basis to the Board of Statutory Auditors on its work and on any transactions carried out by the company and its subsidiaries having a significant impact on profitability, assets and liabilities or financial position; in particular, it reports on transactions representing a potential conflict of interests. The information is provided, at least once every three months, during Board meetings or by providing a written report to the Board of Statutory Auditors. Appointment of directors Proposals for appointments to the position of director, accompanied by detailed information on the personal traits and professional qualifications of the candidates must be deposited at the company's registered office at least ten days before the date fixed for the shareholders meeting by every shareholder and/or group of shareholders who represent 5% of share capital. The profiles of the candidates are made available in a timely manner on the company s coporate website. For the time being, the Board of Directors does not consider it necessary to set up a committee that proposes candidates for appointment to the position of director, since in the past there have not been any problems in identifying potential candidates partly thanks to the presence of a controlling shareholder. Remuneration committee The Board of Directors appointed a Directors' Remuneration Committee on 26 April 2004, consisting of Giuseppe Daveri (Chairman), Anna Maria Formiggini and Umberto Rosa. The Committee's duty is to draft proposals on the group's remuneration policy, the remuneration of members of the Board of Directors and of top management, basing such policies on criteria of internal balance, incentivization and market competitiveness. During the course of 2006, the 5/12

6 Directors' Remuneration Committee met five times (23 January, 9 March, 27 April, 22 September, 18 October). Directors' remuneration The overall amount of remuneration due to the Board of Directors is decided by the shareholders in the general meeting on an annual basis. The Board of Directors allocates an annual amount from this overall sum to the Chairman, the Vice Chairman and the directors which takes account of the position and responsibilities held. Top management remuneration The Board of Directors approved a top management remuneration policy in its meeting of 23 January All members of top management have a large part of their remuneration linked to the group's operating results and also to individual goals specific to their function. In 2006 the Amplifon Board of Directors approved the fourth grant of stock options, governed by the overall plan approved by the shareholders in the general meeting held on 19 February The purpose of granting stock options is to give beneficiaries, holding key positions within the group, the chance to become Amplifon shareholders and to align their interests with those of shareholders and to secure their loyalty in view of the important strategic objectives to be achieved by In detail, the fourth grant involved granting 183,000 options to 4 beneficiaries. Internal control The Board of Directors, and on its behalf the Chairman and Chief Executive Officer, ensure, through the Audit Committee created from among its members, the adequacy and proper working of this system, defined by point 8 of the Corporate Governance Code, as "the set of processes serving to monitor the efficiency of the company's operations, the reliability of financial information, compliance with laws and regulations, and the safeguarding of the company's assets". The organizational structure contains a person responsible for internal control who is not hierarchically under anyone responsible for operations and reports on their activity directly to the Chief Executive Officer and to the Audit Committee and the statutory auditors. Paolo Tacciaria has been appointed the company s Group Compliance Officer, who may request assistance from the company KPMG Advisory S.p.A. with the completion of internal audits. As part of a process of introducing a more efficient, effective system of internal control, the Board of Directors approved a Code of Ethics on 14 March 2005 (available on the corporate website), which describes the principles and values that must underlie the group's actions in respect of its various stakeholders. On 11 March 2004 the Board of Directors approved the "Programmatic Document on Security" required by letter G), Article 34 of Decree 196/2003 and subsequent amendments and additions thereto. In the meeting of 26 April 2005, Franco Moscetti was nominated as "Responsible for the personal data treatment" in accordance with the law. In the same meeting of 26 April 2005, Franco Moscetti was given the title of "Employer" pursuant to and for the purposes of Decree 626/94 and subsequent amendments. 6/12

7 Audit committee The Audit Committee (the "Committee") was appointed during the Board meeting held on 26 April 2004 and consists of Umberto Rosa (Committee Chairman), a non-executive, independent director, Susan Carol Holland, non-executive Vice Chairman of the company and Giuseppe Daveri, non-executive independent director. Paolo Tacciaria, the person responsible for internal control appointed by the Chief Executive Officer at the start of March 2005, reports to this Committee. The Chairman of the Board of Statutory Auditors (or another member appointed by the same) and the person responsible for internal control attend this Committee's meetings, while the Chief Executive Officer participates when so required for specific reasons. If required, representatives of the independent auditors, representatives of KPMG Advisory S.p.A., a co-sourcer for internal control activities, and members of the company's management are invited to attend committee meetings. The Committee acts in a consultative capacity and makes recommendations to the Board of Directors and the Chief Executive Officer. The Audit Committee has been charged with the following duties: to assist the Board in performing the tasks of assessing the adequacy and proper working of the internal control system and in identifying the company s primary risks; to examine and approve the proposals presented by management, the person responsible for internal control and the independent auditors for improving the structure of the economic and financial reporting needed to monitor and fully represent the company's performance; to assess the work programme prepared by the person responsible for internal control and receive their periodic reports; to assess any findings emerging from the periodic reports by the person responsible for internal control, from communications by the Board of Statutory Auditors and by individual members of the same; to report to the Board of Directors on its activity and the adequacy of the internal control system at least once every six months, at the time the annual and half-year financial statements are approved; to assess the appropriateness of the accounting standards adopted and their uniformity with a view to the preparation of the consolidated financial statements; to assess the work of the independent auditors, also as regards the independence of their opinions, as well as the work programme for carrying out the audit and the results thereof as set out in the independent auditors' report and their letter of recommendations; to assess the proposals put forward by independent auditing firms to obtain the audit engagement; to perform the other duties entrusted to it by the Board of Directors, particularly as regards relations with the independent auditors. The Committee, which sought to meet with a certain regularity, met six times during the course of 2006: 16 January, 9 March, 4 May, 18 July, 18 October and 4 December. 7/12

8 All members of the Audit Committee attended the meetings, along with the Chairman of the Board of Statutory Auditors or a delegated representative and the person responsible for internal control. In order to facilitate a more effective exchange of information the Chief Executive Officer was invited to attend; when specific topics were to be addressed and when deemed appropriate company managers, KPMG Advisory S.p.A. consultants and auditors from the company Ernst & Young were also invited to attend. The internal control activities carried out in 2006 were outlined in "audit plan " and were in accordance with current statutes and regulations, as well as the Internal Organizational Model provided for in Legislative Decree 231/2001. The Committee examined the internal audit reports prepared related to both planned auditing and specific follow-up procedures. The Committee also shared with the Country Italy personnel the results of the administrative inspections made at the Italian branches, which not only pointed out areas for improvement, but also encouraged a new control culture that resulted in enhanced quality in the sales activities. The Committee participated, along with the company s legal department and external consultants, in the company s efforts to comply with the new norms and regulations: more specifically, the company instituted a Register of subjects having access to privileged information, updated the Internal Dealing Code and is evaluating what steps must be taken in order to comply with the Law 262/05 and the updated version of the Corporate Governance Code issued by the Italian Stock Exchange in March The Committee, in cooperation with the Supervisory Body, supervised the implementation of the Internal Organizational Model as per Legislative Decree 231/2001. Relations with institutional investors, other shareholders and financial analysts At the time of its listing on the stock exchange, the company adopted a communications policy designed to develop an ongoing dialogue with institutional investors, shareholders and the market and to ensure the systematic, prompt disclosure of comprehensive documents and information about its business, except for the restrictions imposed by the confidentiality of certain information. The company's press releases, periodic meetings with institutional investors and the financial community and the documentation published and constantly updated on its website all ensure that investors, the market and the press are provided with due information about the company. In compliance with Article 11 of the Corporate Governance Code, the Board of Directors voted on 30 May 2001 to appoint Anjelika Chiltsyna Head of Investor Relations. Transactions with related parties On 15 March 2007 Amplifon S.p.A s Board of Directors, as part of the process designed to update its governance system and as per Articles 1.C.1.f) and 9. of the Corporate Governance Code, voted to adopt a Code for conducting significant transactions and other operations with related parties that substitutes the previously adopted "Code for related-party transactions". The Code was made available in a timely fashion on the company s corporate website. 8/12

9 Confidential and price sensitive information In light of the importance of regulating the flow of statutory information, both externally and internally, with particular reference to price sensitive information, as well as Articles 114, 115-bis and Title I-bis of Legislative Decree. n. 58/1998 and Article n. 66 of Consob regulation n /1999 and subsequent amendments therein, on 15 March 2007 Amplifon S.p.A s Board of Directors voted to adopt a specific procedure that includes these regulations as well as the recommendations contained in current codes of conduct. The Company also instituted a Register of subjects having access to privileged information providing those concerned with detailed descriptions and updated the Internal Dealing Code (as described below). Internal dealing code In compliance with Legislative Decree n. 58/1998, referred to as the Uniform Securities Trading Act, and the related regulations issued by Consob in resolution n /1999, and the subsequent amendments therein, on 10 May 2006 Amplifon S.p.A s Board of Directors approved the updated version of the Internal Dealing Code that governs the reporting of transactions involving the Company s listed shares or other financial instruments by so-called "relevant persons" to the company and the market. The provisions of the code adopted by the company, available on the company s corporate website, indicate that the Group s Head of Human Resources should manage and distribute the information related to transactions completed by relevant persons or closely related associates. The same party, under the supervision of the Chief Executive Officer, is also responsible for implementing the procedure designed to identify said relevant persons. General meetings The Board of Directors: encourages and facilitates the broadest possible participation of shareholders in general meetings, choosing an appropriate date, time and place for the calling of such meetings; recommends that, except for unavoidable impediment, all its members shall usually attend shareholders meetings, particularly those who, by virtue of the position held, may make a useful contribution to the meeting's debate; believes that shareholders meetings are an opportunity to provide shareholders with information on the company, while complying with the rules on price-sensitive information and the internal procedures on confidential information. Pursuant to the provisions of Article 11.C.5 of the Corporate Governance Code, the Board of Directors deems it opportune to submit the Regulations for Shareholders Meeting to the Shareholders Meeting for approval in order to guarantee the right of each shareholder to participate in any discussions that may ensue during meetings. Statutory auditors As provided for in Article 22 of the Articles of Association, the Board of Statutory Auditors consists of three standing members and two alternate auditors, who satisfy the requirements (including 9/12

10 those regarding experience and integrity) and carry out the functions established by law. As regards the requirement of experience, for the purposes of paragraph 3 of Article 1 of Ministerial Decree 162 of 30 March 2000 with reference to paragraph 2 letters b) and c) of this article, "matters strictly associated with the company's activities" indicate commercial law, company law, micro-economics, public finance and statistics as well as subjects relating to the field of medicine and electronic engineering and disciplines with the same or similar purpose, while "sectors of activity strictly associated with the sectors in which the company operates" stand for the sectors of producing, wholesaling and retailing the instruments, equipment and products mentioned in Article 2 of the Articles of Association. The ordinary shareholders meeting elects the Board of Statutory Auditors and decides its remuneration. The minority shareholders are entitled to elect one standing member of the Board of Statutory Auditors and one alternate member. Except as provided in the penultimate paragraph of Articles 22 of the Articles of Association, the Board of Statutory Auditors is appointed on the basis of lists presented by the shareholders in which the candidates are listed with a progressive number. The current Board of Statutory Auditors, appointed at the shareholders meeting held on 27 April 2006 and so due to end its term in office at the ordinary shareholders meeting called to approve the financial statements for the year ending 31 December 2008, consists of three standing members and two alternate members, in the persons of Gian Paolo Giannini (Chairman), Giuseppe Levi and Cristina Seregni (Standing members), Emanuele Borgonovo and Alessandra Cislaghi (Alternate members). The Board of Statutory Auditors met seven times over the course of The principal positions held by the statutory auditors in other companies are reported below: Name Position Other appointments Gian Paolo Giannini Giuseppe Levi Cristina Seregni Chairman Standing member Standing member 27 appointments as chairman or standing member of the Board of Statutory Auditors. The principal appointments are: Chairman of the Board of Statutory Auditors of Amplifin S.p.A. Chairman of the Board of Statutory Auditors of AMC Italia S.p.A. Chairman of the Board of Statutory Auditors of Sun Microsystems Italia S.p.A. Chairman of the Board of Statutory Auditors of Ametek Italia S.r.l Standing member of the Board of Statutory Auditors of Mileto Finance S.r.l.. 18 appointments as chairman or standing member of the Board of Statutory Auditors. The principal appointments are: Standing member of the Board of Statutory Auditors of Borsa Italiana S.p.A. Standing member of the Board of Statutory Auditors of Monte Titoli S.p.A. Chairman of the Board of Statutory Auditors of Cassa di Compensazione e Garanzia S.p.A. Chairman of the Board of Statutory Auditors of Banca Esperia S.p.A. Chairman of the Board of Statutory Auditors of Duemme Hedge SGR S.p.A. Standing member of the Board of Statutory Auditors of Touring Club Italiano 17 appointments as a standing member of the Board of Statutory Auditors. The principal appointments are: Standing member of the Board of Statutory Auditors of Amplifin S.p.a. Standing member of the Board of Statutory Auditors of AMC Italia S.p.A. Standing member of the Board of Statutory Auditors of Ametek Italia S.r.l. Standing member of the Board of Statutory Auditors of Chemtura Manufacturing Italy S.r.l. Standing member of the Board of Statutory Auditors of Chemtura Sales Italy S.r.l. 10/12

11 Organizational model under Decree 231/2001 The Board of Directors voted on 14 March 2005 to adopt an Internal Organizational Model (the "Model") in accordance with the recommendations of Decree 231/2001 which has made companies administratively responsible in criminal proceedings for certain types of crimes committed by directors, managers or employees in the interests or to the benefit of the companies themselves. The model has been prepared with the purpose of preventing the committing of crimes envisaged under the Decree and is based on the guidelines for Organizational Models issued by Confindustria (the Federation of Italian Industrialists) and other industry associations. The model consists of a general part and an operational part. The general part sets out the guiding principles underlying the conduct of company transactions, identifies so-called "sensitive" company activities, describes how the Supervisory Committee is formed and works and describes the system of penalties. The operational part includes the model's working procedures and way of carrying out certain "sensitive" activities. The model's adoption is a way for fostering the conduct of company activities in accordance with the principles of fairness and transparency in order to safeguard the company's image, the work of its employees and staff, while at the same time fostering the achievement of greater efficiency. In 2006 the company not only monitored implementation of and compliance with the Internal Organizational Model, but on 12 December 2006 the Board of Directors also approved the revised version of the types of crimes to be included therein as well as the improvements made to both general and specific areas deemed opportune following first time application. The Supervisory Body, comprised of two Independent Directors and the personal responsible for internal control, met seven times in Directors' powers The resolution by the Board of Directors dated 9 November 2004 revoked the special powers granted to the Chairman, Anna Maria Formiggini, and to the Vice Chairman, Susan Carol Holland, who will continue to exercise the powers provided for by law and in the Articles of Association and confirmed the granting of the powers listed below to Franco Moscetti, Chief Executive Officer, effective as from the vestment date. FRANCO MOSCETTI: in his dual capacity as Chief Executive Officer and Chief Operating Officer, will be vested with the power to represent the company before third parties and in a court of law with the authority to decide to take legal actions including appeals and annulments, and all the powers of ordinary and extraordinary administration that the Articles of Association reserve to the Board of Directors, including those of decision, in the widest sense, regarding the company's movable assets within the maximum spending limit of Euro 10,000, and excluding those powers that may not be delegated under law and the following powers which are reserved for the Board of Directors: 11/12

12 1) approval of the budget and strategic operational plans; 2) decisions of any kind involving controlling interests in companies and with a value in excess of Euro 10,000,000.00; 3) resolutions to assume, extend or amend long-term loans for an amount in excess of Euro 10,000, The Chief Executive Officer is empowered within these limits to give and revoke special and general mandates, investing the proxies with authority to sign on the company's behalf either on their own or jointly with others, granting them the related powers of attorney. 12/12