Information on ownership structure
The information pursuant to Article 123 bis of Legislative Decree 58 of February 24, 1998 can be found in the Report on Corporate Governance and the Structure of Share Ownership, included in this Annual Financial Report and published in the Governance section of the Company website (pirelli.com).
Security Policy Document
Although Decree Law 5 of February 9, 2013 (entitled “Urgent Measures for Simplification and Development”) converted, with amendments, by Law 35 of April 4, 2012, abrogated the obligation to draft/update the Security Policy Document, Pirelli & C. S.p.A has nonetheless updated this document for 2013, for the purpose of effectively monitoring its adoption of and compliance with security measures.
Foreign subsidiaries not in the European Union (Non-EU Companies)
Pirelli & C. S.p.A. directly or indirectly controls a number of companies with registered offices in countries that are not members of the European Union (Non-EU Companies) and which are of significant importance under the terms of Article 36 of Consob Regulation 16191/2007 on market regulation (“Market Regulation”). At December 31, 2013, the Non-EU Companies that were directly or indirectly controlled by Pirelli & C. S.p.A. and of material interest pursuant to Article 36 of the Market Regulation were Pirelli Pneus Ltda (Brazil); Pirelli Tire LLC (USA); Pirelli Tyre Co. Ltd (China); Turk Pirelli Lastikleri A.S. (Turkey); Pirelli de Venezuela C.A. (Venezuela); Pirelli Neumaticos S.A.I.C. (Argentina); Pirelli Neumaticos S.A. de C.V. (Mexico).
Also under the terms of the same regulations, the Company has in place specific and appropriate “Group Operating Rules” which ensure immediate, constant and full compliance with the provisions contained in the said Consob Regulations. Under the terms of the said Operating Rules, the delegated corporate functions of the parent precisely and periodically identify and disclose all Non-EU Companies of material interest under the Market Regulations, and – with the necessary and timely collaboration of the companies involved – guarantee collection of the data and information and verification of the circumstances as required by Article 36 of the Market Regulations, ensuring that the information and figures provided by the subsidiaries are available in the event of a request by Consob. Furthermore, a regular flow of information is provided in order to ensure that the Board of Statutory Auditors of the Company can carry out the required and appropriate audits.
Finally, in keeping with the regulatory provisions, the above “Operating Rules” prescribe how the financial statements (the statement of financial position and income statement) of material Non-EU Companies prepared for use in the consolidated financial statements are to be made available to the public.
Therefore, it is certified that the Company has fully complied with the provisions of Article 36 of Consob Regulation 16197/2007 and that its conditions have been satisfied.
Related party transactions
Pursuant to Article 5(8) of Consob Regulation no. 17221 of March 12, 2010, concerning related party transactions, and the subsequent Consob Resolution no. 17389 of June 23, 2010, between January 1, 2013 and December 31, 2013 the Pirelli Board of Directors approved a most significant transaction, as defined in Article 3(1)(a) of the aforementioned regulation, after receiving the favourable opinion of the Related-Party Transactions Committee. This transaction involved the financial restructuring and relaunching of the business prospects of Prelios S.p.A., to be implemented by means of recapitalising it and restructuring its financial debt.
In particular, Pirelli participated in that transaction through (i) conversion into Prelios ordinary shares of a portion of the financial receivable claimed against Prelios totalling about euro 21.5 million, compared with an authorised maximum amount of euro 26.3 million and (ii) restructuring of an additional portion of the financial receivable claimed against Prelios into a “convertendo” equity instrument, having a total value of about euro 148.4 million – of which about euro 67.5 million into Prelios class B shares – compared with an authorised maximum amount of euro 157.9 million, while (iii) Pirelli was not asked to make any payment against the guarantee – for a maximum of euro 2.3 million – envisaged in the connection with the aforementioned capital increase.
For more information about the description of the transaction, reference is made to the Information Document published pursuant to the cited Consob Regulation and available – complete with the changes thereto – on the Company website.
There were no other related party transactions that had a material impact on the Group's financial position or earnings.
Furthermore, there were no material, non-recurring, unusual and/or atypical related transactions, including intercompany transactions.
The information on related party transactions required pursuant to Consob Notice no. DEM/6064293 of July 28, 2006 is presented in the financial statements and in the Explanatory Note “Related party transactions” of the Annual Financial Report at December 31, 2013.
In the 2010 financial year, the Board of Directors approved the Procedure for Related Party Transactions in view of, inter alia, implementing the aforementioned Consob regulation. In implementation of, inter alia, a specific recommendation by Consob on this matter, and since three years had passed since its adoption, the Board of Directors, after receiving the favourable opinion of the Internal Control, Risks and Corporate Governance Committee and the Related-Party Transactions Committee, found at its November 5, 2013 meeting that the overall Procedure for Related Party Transactions was valid and effective, limiting itself to introducing the definition of “transaction” and eliminating the previous clause 22.2, a transitory rule which was no longer applicable. For more details on the Procedure for Related Party Transactions, please see the section Interests of Directors and Related Party Transactions in the Annual Report on Governance and Share Ownership and the procedure published on the Group website pirelli.com.
Waiver to publish disclosure documents
In light of the simplifications to regulatory measures introduced by Consob in the Issuers Regulation no. 11971/99, the Board of Directors has resolved to exercise the waiver, granted in Article 70(8) and Article 71(1-bis) of that regulation, of the obligation to publish the disclosure documents that are prescribed in the event of significant mergers, demergers, capital increases through contribution in kind, acquisitions and disposals.
The Board of Directors Milan,
March 27, 2014