To, The Financial Supervision Authority The Bucharest Stock Exchange THE CURRENT REPORT SC ROMCAB SA In accordance with Law no. 297/2004 and Regulation CNVM no. 1/2006 Date of the report 26 January 2016 Name of the issuing entity: SC ROMCAB SA Registered office: Targu Mures, Mures County, 35 Voinicenilor Street Unique registration number with the Office of the Trade Register: 7947193 Registration no. with the Trade Register: J26/764/1995 Subscribed and paid up share capital: 23.465.165 RON Regulated market where the securities issued are transacted: Segment, Standard Category Bucharest Stock Exchange, Main Important event to be reported: Status of compliance with the corporate governance code of the Bucharest Stock Exchange SC ROMCAB SA ( the company ) has joined the corporate governance code ( CGC ) issued by the Bucharest Stock Exchange ( BSE ), starting with January. The details on the Company s compliance with the principles and recommendations provided in CGC will be presented in a complete and detailed Statement included in the Annual Report which relates to the year 2015. SC ROMCAB SA has developed a code of corporate governance, updated according to the provisions contained in the new code of corporate governance of the BVB. This document will be reviewed and approved by the Board of Directors of Romcab until the end of February. At the time of approval, this document will be published on the company s website. The company s compliance status with the new provisions of the code on 31 December 2015 is presented in Annex 1. SC ROMCAB SA is located in full compliance or partial compliance with the majority of these provisions. The main cause of the failure to comply /partial compliance with the Code derives from peculiarities and Company s history. For example, certain governance structures (Audit or Remuneration Committee) are not yet functional in the absence of any concrete perspectives relating to the members who may possess these responsibilities. Page1 of12
SC ROMCAB SA will continue to evaluate the provisions of the Code and any subsequent progress, which the company will do for the purposes of compliance with these, will be reported to the capital market. SECTION A - Responsibilities Provisions of the Code Compliance Failure to comply Partial compliance A.1. All companies must have internal rules of the Board that includes the The company has in its portfolio internal terms of reference corporate /responsibilities of the governance Board and key functions of company and that applies, regulation ( regulation ), which inter alia, the general include the principles of this Section. requirements imposed by this code to be published subsequently to the approval by the Board of Directors. A.2. The provisions for the management of conflicts of interest should be included in the Council rules. A.3. The Board of Directors must be composed of at least five members A.4. The majority of the members of the Board of Directors must not have executive position. In the case of companies of Premium category, no less than two non-executive members of the Supervision Council have to file a statement upon their Page2 of12 Such provisions are included in the rules Although the number of members of the Board of Directors is still only 3, at present an Invitation is being prepared for a General Assembly intended to change the number of the The company is going to prepare an Invitation for the organization of the General Assembly of the Shareholders which will regulate this issue
appointment for reelection, as well as when any change in his status occurs, indicating the elements based on which it is deemed that he is independent from the point of view of his character and judgment. A.5. Other commitments and professional obligations, relatively permanent of a member of the Council, including executive and nonexecutive positions in the Board of some companies and non-profit institutions, should be made known to the shareholders and possible investors before appointment or during their mandate. A.6. Any member of the Board should present to the Board information on any relation with a shareholder that owns directly or indirectly shares representing over 5% of all voting rights. A.7. The company must appoint a Secretary of the Board responsible for supporting the Board s activity. Board members from 3 to 5 to comply with the requirements. In the current form, of the 3 members of the Board of Directors 2 out of 3 have nonexecutive position. A statement model by which the members of the Board of Directors make adequate disclosures related to such commitments and professional obligations upon acceptance of the mandate has been prepared. The statement is revised whenever necessary, to include any change in relation to the state of affairs. A statement model by which the members of the Board of Directors make adequate disclosures related to such commitments and professional obligations upon acceptance of the mandate has been prepared. The statement is revised whenever necessary, to include any change in relation to the state of affairs. There is a Secretary of the Board who attends all Board meetings. Page3 of12
A.8. The statement on the corporate governance will inform whether there has been an evaluation of the Board under the leadership of Chairman or the appointment committee and, if so, it will summarize the key measures and changes resulting from it. The company must have a policy/guide on the evaluation criteria of the Board containing the scope, criteria and frequency of the assessment process. A.9. The statement on the corporate governance should consider the information on the number of meetings of the Board and committee during the past year, the participation of directors (in person and in absence) and a report of the board and committees related to the activities thereof. A.10. The statement on the corporate governance should include information related to the exact number of independent members of the Board of Directors. A.11. The Board of the companies in the Premium category should set up an appointment committee Page4 of12 Currently we are working on drafting a statement concerning corporate governance. This will inform if an assessment of the Board has taken place under the leadership of the President or the appointment committee. The company is working on improving a guide on the assessment of the board. This guide includes information about the scope, criteria and frequency of the assessment process. This document will be finalized in the first quarter of the year. Currently they are working on drafting a statement concerning the corporate governance that will be completed in the first quarter of the year. Currently they are working on drafting a statement concerning the corporate governance that will be completed in the first quarter of the year. This provision shall not apply to the issuer, taking into
made of non-executive members, who will lead the nomination procedure for new members in the Board and will make recommendations to the Board. The majority of the members of the appointment committee must be independent. consideration the transaction market segment (Standard) Section B - risk management system and internal control Provisions of the Code Compliance Failure to comply Partial compliance B.1. The Council must set up an audit committee in which at least one member should The appointment of the Audit Committee be independent nonexecutive will be made in the director. In the Ordinary General case of companies in the Assembly of the Premium category, the audit committee should be made Shareholders that will appoint the members of at least three members of that Board (5 and the majority of the audit members) committee members should be independent. B.2. The Chairman of the audit committee must be an independent non-executive member B.3. According to its responsibilities, the audit committee must conduct an annual assessment of the internal control system. B.4. The assessment must take into account the effectiveness and scope of the internal audit function, The appointment of the Audit Committee will be made in the Ordinary General Assembly of the Shareholders that will appoint the members of that Board (5 members) The appointment of the Audit Committee will be made in the The company is going to prepare an Invitation for the organization of the General Assembly of the Shareholders which will regulate this issue Page5 of12
the adequacy of the risk management and internal control reports presented to the Board s audit committee, readiness and the effectiveness of the executive management in solving the deficiencies or weaknesses identified upon the internal inspection and submission of relevant reports to the attention of the Board. B.5. The audit committee should assess the conflicts of interest in connection with the transactions of the company and its subsidiaries with affiliated parties B.6. The audit committee shall assess the effectiveness of the internal control system and risk management system. B.7. The audit committee shall monitor the application of legal standards and internal audit standards generally accepted. The audit committee should receive and evaluate the reports of the internal audit team. B.8. Whenever the code mentions reports or analyzes undertaken by the Audit Committee, these should be followed by periodic reports (at least annually) or ad hoc to be Ordinary General Assembly of the Shareholders that will appoint the members of that Board (5 members) The appointment of the Audit Committee will be made in the Ordinary General Assembly of the Shareholders that will appoint the members of that Board (5 members) The appointment of the Audit Committee will be made in the Ordinary General Assembly of the Shareholders that will appoint the members of that Board (5 members) The appointment of the Audit Committee will be made in the Ordinary General Assembly of the Shareholders that will appoint the members of that Board (5 members) This recommendation will also be implemented in the corporate governance Page6 of12
submitted to the Council at a later date. B.9. No shareholder may be given preferential treatment related to other shareholders in connection with transactions and agreements concluded by the company and its affiliates. B.10. The Board should adopt a policy to ensure that any transaction of the company with any of the companies with which it has close relationships, whose value is equal to or greater than 5% of the company s net assets (according to the latest financial report) is approved by the Board, following a mandatory opinion of the audit committee. B.11. The internal audits should be conducted by a structural division (internal audit department) within the company or by hiring an independent third party entity. B.12. In order to ensure the fulfillment of the main functions of the internal audit department, it should report functionally to the Board through the audit committee. For administrative purposes, and under the management s obligations regulation that will include such an obligation for the Audit Committee. The rights of shareholders should be publicly disclosed, either in the Corporate Governance Regulations, or a presentation document, under section "Shareholders" This recommendation will also be implemented in the corporate governance regulation that will include such an obligation for the Audit Committee. Under the annual plan approved by the Board of Directors. Normally, this plan is approved by the Audit Committee, so, further to its setting up, the text will be amended. According statutory duties and professional standards, the internal audit department will report to the Board of Directors and the Management on Page7 of12
to monitor and reduce the risks, it should report directly to the General Manager. matters mentioned in this requirement. Section C - Just reward and motivation Provisions of the Code Compliance Failure to comply Partial compliance C.1 The company shall publish on its website The company will publish the remuneration this information in the policy and shall include first quarter of 2016. in the annual report a statement on the implementation of the remuneration policy during the period covered by the analysis. Any fundamental change in the remuneration policy should be published on time on the company s website. Section D - Adding value through relationships with investors Provisions of the Code Compliance Failure to comply Partial compliance D.1. The company must organize a service for the On the company s relations with the investors website there is a indicating to the general distinct section public the person / persons partially regulating in charge or the these issues. This organizational unit. In section will be addition to the information updated during the required by law, the first quarter of 2016. company must include on its website a section dedicated to the relations with the investor, in Romanian and English, with all relevant information of interest to investors. D.1.1. The main corporate Page8 of12
regulations: articles of incorporation, procedures on the general assembly of the shareholders; D.1.2. Professional CVs of the members of the company s management bodies, other professional engagements of the Board members, including executive and non-executive positions in the Board of Directors of companies or non-profit institutions; D.1.3. Current reports and periodic reports (quarterly, half-yearly and yearly); D.1.4. Information relating to the general assemblies of the shareholders. D.1.5. Information on corporate events D.1.6. Name and contact data of the person who can provide, upon request, relevant information; D.1.7. Company s presentations (e.g. Presentation for investors, presentations of quarterly results etc.), financial statements (quarterly, halfyearly, yearly), audit reports and annual reports Page9 of12 This information can be found on the company s website in the section "Shareholders". This information can be found on the company s website in the section "Shareholders". This information can be found in the section "Shareholders". This information can be found on the company s website in the section "Shareholders". This information can be found on the company s website in the section "Shareholders". On the company s website there is a distinct section partially regulating these issues. This section will be updated during the first quarter of 2016. On the company s website there is a distinct section partially regulating these issues. This section will be updated during the first quarter of 2016.
D.2. The company will have a policy on the annual distribution of dividends or other benefits to shareholders. The principles of annual distribution policy to shareholders will be published on the company s website. D.3. The company will adopt a policy regarding forecasts, whether they are made public or not. The policy regarding forecasts shall be published on the company s website. D.4. The rules of the general assemblies of the shareholders must not restrict the participation of the shareholders at the general assemblies and the exercise of their rights. The changes of the rules will come into force at the earliest starting with the next assembly of the shareholders. D.5. The external auditors will be present at the general assembly of the shareholders when their reports are presented in these meetings. D.6. The Council shall submit to the annual general assembly of shareholders a brief appraisal on the The company is preparing an Invitation that will be published in February and that will include information related to the voting by correspondence, general / special powers of attorney, etc. This coordination already exists, the There is a statement on the dividend policy, which will be published following the approval by the Board of Directors. Due to the recent listing on the Bucharest Stock Exchange, the company has yet to adopted such a policy but it will be adopted during the first quarter of 2016. In the upcoming General Assemblies of the Shareholders of 2016, the company will send invitations of participation to the external auditors that would present the audit report (2015) and also a summary of the conclusions to the shareholders. Page10 of12
internal control and significant risks management systems, as well as opinions on some issues subject to the decision of the General Assembly. D.7. Any specialist, consultant, expert or financial analyst may participate in the assembly of the shareholders based on an invitation from the Board. Accredited journalists may also participate in the general assembly of the shareholders, except for the case when the Chairman of the Board decides otherwise. D.8. Quarterly and halfyearly financial reports will include information in Romanian and English, concerning the key factors influencing changes in the level of sales, operational profit, net profit and other relevant financial indicators, both from one quarter to another, and from one year to another. D.9. A company will organize at least two meetings/ teleconferences with analysts and investors, every year. The information submitted on these occasions will be published in the sections relations with shareholders being informed about the internal control and significant risk management systems, etc. The company has an interest to present the results. These results will be immediately subsequent publishing of the preliminary financial results. The text should be adapted accordingly: For better transparency, the issuer intends to convene the consultants, experts and financial analysts, after the publication of the preliminary results or intermediary and yearly results. The company s website has a section called "Shareholders". This information related to financial, quarterly reports may be found there. This information will be published both in Romanian and English. This provision is included in the financial calendar to be approved by the Board of Directors and subsequently published in the first Page11 of12
investors of the company s website on the date the meetings / teleconferences. D.10. Where a company supports various forms of artistic and cultural expression, sports, scientific and educational activities or considers that their impact on the company s competitiveness and innovative character are part of its mission and strategy of development, it will publish the policy with regard to its work in this area. quarter of 2016. The company is also open to support activities of artistic, cultural expression, etc. As such, it will publish information in this regard when appropriate. Chairman of the Board of Directors, Sebastian Teodor Gheorghe Vladescu Page12 of12