Contents

Part I

General Arrangements

1. Adoption, implementation, update, publication

1.1.1.1. CIMOLAI S.p.A.’s organizational and management system aims to guarantee the performance of company business according to prevailing regulations and the provisions of the Code of Ethics adopted by resolution of the Board of Directors on 8 October 2009.

1.2. 1.2. With a view to planning and managing company activities in terms of efficiency, correctness, transparency and quality, the Company has adopted and implements the organisational, management and control measures described in this document, hereinafter called the Model, approved by resolution of the Board of Directors on 8 October 2009, in compliance with the instructions contained in the Code of behaviour for construction companies adopted by A.N.C.E. – the National Association of Building Constructors – to which the Company conforms, since these correspond to the characteristics of the Company itself.

1.3.To avoid the risk of crimes being committed for which the Company may be held responsible according to Legislative Decree 231/2001, the Model provides for the following:
· The identification of activities in the context of which crimes may be committed;
· specific protocols directed at programming the formulation and implementation of Company decisions relating to crimes to be prevented;
· identifying methods of managing appropriate financial resources for preventing crimes from being committed;
· obligations to provide information to the Board assigned to supervise the working and the observance of the Model;
· the introduction of a suitable disciplinary system to sanction failure to observe the measures shown in the Model.

1.4. The Model is subject to periodic checks and is modified if significant infringements of the instructions are discovered or if changes should occur in the Company’s organization or activities, or in the reference regulations.

1.5. Anybody working in the Company or collaborating with it is obliged to adhere to the relevant instructions in the Model, and especially to observe the obligations for information laid down to enable checking that the work complies with the instructions themselves.

1.6. A copy of the Model, the documents attached to it and its updates is lodged at the Company’s headquarters and the offices of its stable operational units and is available to anybody who is entitled to consult it.

1.7. The Company provides for notifying each person who is obliged to follow the Model of the relevant instructions referring to the specific activity or function.
1.8. Notice of adoption of the Model is given to the A.C.A.I. (Association of Italian Steel Constructors), of which the Company is a member. 

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2. Identification of activities with risk of crimes being committed

2.1 2.1. With regard to the activities carried out by the Company, following specific risks analyses, the following areas or functional sectors have been identified as being contexts where risk factors may appear, relating to breaches of the rules of Legislative Decree No. 231 of 2001 or, in general, of the Company’s Code of Ethics.

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3. Sensitive processes relating to the risk areas

3.1. The following sensitive processes, common to the performance of the Company’s activities in the areas or functional sectors referred to in point 2 above, are identified:

P.01 Procurement process
P.02 Commercial process
P.03 Financial process
P.04 Administrative process (registration, drawing up and checking accounting and non-accounting documents)
P.05 Process for managing investments and expenses created with public funds
P.06 Process for managing information systems
P.07 Process for managing human resources
P.08 Process for managing safety
P.09 Process for managing the environment

3.2. The Model (Part II) gives, for each sensitive process identified, the methods for carrying out the relative activities and indicates, where relevant, the specific procedures to be adhered to, providing in particular for the following:

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4. Protocols for formulating and implementing decisions

4.1. On the basis of the many areas of its business and its organisational complexity, the Company adopts a system of delegating powers and functions.
4.2. Each delegated power, formalized and knowingly accepted by the delegate, provides in explicit and specific terms for the assignment of duties to persons with suitable abilities and skills, guaranteeing that the delegate has the necessary autonomy and the powers to carry out the function.
4.3. The Company’s Organisation Chart, indicating the functions assigned to each position, is attached to the Model and is updated whenever there is any significant variation in it.
4.4. With reference to the activities relating to the expressly identified sensitive processes, the Model (Part II) provides for specific protocols containing the formalized description of the following:
1) internal procedures for taking up and implementing management decisions (including the normal performance of the relative activities), with an indication of the relative methods and the persons who have the functions, skills and responsibilities; ;
2) methods of documenting and conserving the documents of the procedures, so as to ensure the transparency and verifiability of these;
3) methods of checking the compliance between the procedures laid down and their implementation and documentation.
4.5. The internal procedures laid down by the protocols ensure the separation and hierarchical independence between those who process the decision, those who implement it and those who undertake to carry out checks.
4.6. Limits to decisional autonomy for making use of financial resources are established, by fixing precise thresholds for amounts, consistently with management abilities and the organizational responsibilities assigned to individuals.
4.7. Exceeding the limits for amounts as referred to in the previous point may take place according to established procedures for authorisation and representation, always ensuring the separation and hierarchical independence between those who authorize the expenditure, those who have to implement it and those who have the duty of checking it.
4.8. If methods of joint representation are provided for, the principle of hierarchical independence is guaranteed between those who jointly have the power of representation.
4.9. Departures from the protocols and the procedures laid down in the Model are allowed in cases of emergency or of the temporary impossibility to implement them. The departure, with the reason for it being expressly indicated, is immediately communicated to the Supervisory Body.
4.10. Protocols are also updated on the suggestion or notification of the Supervisory Body.

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5. Methods of managing financial

5.1. Referring to the activities relating to the expressly identified sensitive processes, the Model (Part II) provides for specific methods of managing financial resources.
5.2. The management methods ensure the separation and independence between those who contribute to forming the decisions to make use of financial resources, those who implement these decisions and it and those who have the duty of checking the use of the financial resources.
5.3. To implement decisions for using financial resources, the Company makes use, also abroad and whenever possible, of financial and banking brokers subject to a regulation of transparency and stability complying with that adopted by in the EU member States.
5.4. All operations involving the use or commitment of economic or financial resources must have an adequate motive and be documented and registered, manually or electronically, according to principles of professional and accounting correctness; the relative decisional process must be verifiable.
5.5. All operations concerning atypical or unusual activities or services must have a specific, clear motivation and be notified to the Supervisory Body.
5.6. The methods of management methods are also updated on the suggestion or notification of the Supervisory Body.

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6. Obligations to provide information

6.1. For the activities relating to the expressly identified sensitive processes, the Model lays down specific obligations for providing information to the Supervisory Body.
6.2. In any case the Supervisory Body has access to all the documentation relating to the sensitive processes shown in point 3.
6.3. All the Company’s personnel are guaranteed the complete freedom to apply directly to the Supervisory Body to notify it of breaches of the Model or possible irregularities.

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7. Disciplinary system.

7.1. The Company’s disciplinary Code, adopted in compliance with prevailing laws and the national and territorial contractual negotiations for the sector, is supplemented on the basis on the following provision. It is a disciplinary offence by a Company employee:

1. to fail to document, to document incompletely or untruthfully an activity carried out that is prescribed for sensitive processes;
2. to obstruct checks, by unjustifiably preventing access to information and documentation by persons appointed to check procedures and decisions, including the Supervisory Body, or to perform other actions aimed at breaching or avoiding the control system;
3. to omit or infringe any provision aimed at guaranteeing health and safety in the work place, or at preventing pollution or damage to the environment
4. to infringe the other provisions of the Model without justification or repeatedly.

7.2. The disciplinary sanction, graded according to the gravity of the infringement, is applied to the employee also by notification and request of the Supervisory Body, in compliance with the prevailing legal and contractual regulations.
7.3. Work contracts stipulated by the Company with temporary workers, consultants, agents, representatives and the like must contain a clause for terminating the contract for non-fulfilment of the provisions of the Model that refer to, and are expressly indicated for them.
7.4. In individual contracts stipulated with Company directors, or in an appropriate supplementary letter signed for acceptance, infringements of the provisions of the Model that refer to them and that may incur the anticipatory termination of the relationship are expressly shown.
7.5. Significant infringements of the relevant provisions of the Model committed by persons who fulfil functions of representation, administration or direction of the Company or any of its organisational units having financial and functional autonomy, or by persons who have these functions carried out by others, are notified by the Supervisory Body to the administrative body or to the shareholders for determination of the case, which, depending on the gravity of the infringement, may consist in the following:

• a formal warning, in writing, censuring the infringement of the provisions of the Model;
• suspension of the appointment and the remuneration for a period of from one month to six months, for particularly serious, repeated or multiple infringements;
• the proposal or decision to revoke the appointment, in the case of infringements of exceptional gravity.

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8. Supervisory Body

8.1. An internal body, called the Supervisory Body, is set up, with the task of constantly supervising the effective functioning and observance of the Model, as well as being in charge of updating of it.
8.2. The Supervisory Body comprises three members, who can be either external persons or persons internal to the Company.
Independently of its composition, the Body must:

be in possession of the necessary professional qualifications (consultancy for analysing control, auditing, legal and administrative systems), or have the freedom to take on the necessary specialist support for acquiring the skills not directly possessed by the members of the Body itself. •
• guarantee the independence and autonomy of checking initiatives for all the people in the organization, including those at the top; this means that members of the Supervisory Body may not also have operational duties in the company.
• guarantee continuity in the action of supervision.
• be in possession of the necessary professional qualifications (consultancy for analysing control, auditing, legal and administrative systems), or have the freedom to take on the necessary specialist support for acquiring the skills not directly possessed by the members of the Body itself.
• possess, in all its members, requirements of honour and absence of conflicts of interest.

8.3. Duration in office of members of the Body is for three years, and may be renewed.
8.4. Members of the Board of Directors who have, directly or indirectly, economic relationships with the company or its higher-level administrators such as might condition their independence of judgement, also in relation to its financial position, are incompatible with the office of member of the Body; those who hold, directly or indirectly, shares in the Company’s capital, or who are close family members of executive administrators are also incompatible with the office of member of the Body.
8.5. The member of the Supervisory Body chosen from the Company’s employees must at the time of appointment certify, with an appropriate written declaration, that he/she is not in a condition of incompatibility with the office to be filled because of his/her position in the company.
8.6. The external expert must at the time of appointment certify, with an appropriate written declaration, that he/she is not in a condition as referred to in point 8.4 above, and that he/she is not in a condition of incompatibility with the office to be filled because of any other appointments granted to him/her by the company, or by other bodies that have relationships with the company.
8.7. The following comprise reasons for ineligibility for membership of the Supervisory Body, or of cancellation in the case where they occur suddenly after the appointment:

1. situations of incompatibility as referred to in points 8.4, 8.5, 8.6;
2. the conviction, even without a final judgement, or the plea bargaining for having committed one of the crimes provided for by Legislative Decree 231/2001;
3. the conviction, even without a final judgement, to a penalty that involves the debarment from public office, or the temporary debarment from the management offices of corporate bodies and companies.

8.8. In cases of particular gravity, even before final judgement, the administrative body may arrange for the suspension of the member of the Supervisory body and the appointment of an interim replacement.
8.9. The revocation of the Supervisory Body’s specific powers may take place only with a true and just cause, with prior resolution of the Board of Directors, having heard the opinion of the Board of Auditors.
8.10. The Supervisory Body, which answers for its activities directly to the Company’s Board of Directors, is acknowledged to have autonomous powers of initiative and control in carrying out its functions and it may not be assigned operational duties or decisional powers, nor powers to obstruct, relating to the performance of the Company’s business.
8.11. The Supervisory Body constantly monitors the effective performance of the Model, and for this purpose:

1. carries out inspection activities with methods that are predetermined and approved by the administrative body;
2. has access to all documents relating to the Model;
3. may ask for information from anybody working on behalf of the Company in the risk areas identified in point 2 and the sensitive processes areas shown in point 3, even without advance authorization from the Board of Directors;
4. receives the information specifically shown as obligatory in the Model;
5. proposes the implementation of the procedures for sanctions provided for in point 5;
6. subjects the Model to periodic checking and is in charge of updating it, suggesting suitable modifications to the administrative body;
7. expresses its opinion about the suitability and appropriateness of modifications to the Model worked out by initiative of the Board of Directors, before these are adopted.

8.12. At the end of any inspection activity the Supervisory Body draws up an analysis, the contents of which are shown in an appropriate minute book and communicated to the administrative body.
8.13. The Supervisory Body draws up annually a written report of the activity carried out, sent to the administrative body and shown in the minute book.
8.14. In order to carry out its activity the Supervisory Body may make use of external consultants, limited to the carrying out of technical operations.

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Organigram of CIMOLAI S.p.A.

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