Code of Corporate Governance The Company implements its Code of Corporate Governance primarily by adopting regulations laid down in the relevant legislation, Laws 3016/2002, 3693/2008 and 3884/2010, but has also adopted practices going beyond those required by law, taking into account also the Code of Corporate Governance of the S.E.V. (Hellenic Federation of Enterprises).

The text of the Code is posted on the Company’s website, at www.petropoulos.com.
A printed version is also available at the Company’s head office at 96-104 Iera Odos, Athens.

The Company’s corporate governance is exercised by the following collective bodies, as follows:

a) Workings of Board of Directors and other Management Committees


Board of Directors

The Board of Directors is elected by the Company’s General Meeting of Shareholders. It serves a five-year term and may consist of 3 to 12 members, in accordance with the Company’s Articles of Association.

The Board of Directors convenes for four main meetings each year.

(a) At its December meeting the Board approves the budget for the following year and the remuneration to be paid to middle and senior management in the coming year.

(b) At its other meetings (April, July and October) the Board reviews the implementation of the budget and approves any necessary updating or revision. At the October meeting it assesses the Internal Audit system and approves the areas to be audited in the coming year.

(c) At all meetings the Board is informed of changes in the capital adequacy ratio and discusses the report of the Internal Audit Department.

(d) At the July meeting the Board turns its attention to long-term issues.

The agenda for Board meetings is drawn up by the Chairman, on the basis of proposals put forward by the Executive Board or individual members of the Board of Directors, including the C.E.O. and the Chairman himself.

Committees of the Board of Directors:

Audit Committee. The Audit Committee consists of three members. Two of them are non-executive, fully independent Board of Directors’ members and one third party – non BoD member, according to article 44 of L. 4449/2017. Its remit is to oversee the work of the Internal Audit Department, which reports to it, to scrutinize the financial statements before they are approved by the Company’s Board of Directors, and to nominate certified auditors to be recommended by the Board of Directors for approval by the General Meeting of Shareholders.

Executive Committee. The Executive Committee consists of five members of the Board of Directors, non-executive and independent. Its remit is to submit proposals on setting of all forms of salaries and fees for executive members of the Board of Directors and the Directors of Business Units and Business Divisions. The Committee is also charged with evaluation and training of candidates. It meets at least four times a year.

Nominations Committee. The Nominations Committee consists of five members of the Board of Directors, non-executive and independent. Its remit is to nominate suitable persons as candidates for positions on the Board, and to plan for succession and continuity in the Company’s Management. The Committee meets when there is a need to replace members of the Board or senior managers.

Members of the aforesaid Committees serve a five-year term.

Fees

Fees paid to the members of the Board of Directors are set by the Annual General Meeting. Fees paid to executive members are made up of a fixed amount and a variable sum dependent on the performance of the Company.

Fees for non-executive and independent members of the Board are fixed; provision is also made for fees to be paid to the Chairmen of the various Committees.

No other payments are made or benefits granted by the Company to the members of the Board of Directors apart from those decided on by the Ordinary General Meeting.

Executive Board

The Company's Executive Board - consisting of the C.E.O., the three Division Managers and the Administration & Financial Services Manager – is in charge of the everyday management of the Company. It meets every week and the Chairman of the Board of Directors is free to attend if he wishes.

Business Units

Because of the wide diversity of its activities, Petros Petropoulos SA has been organized in such a way as to operate more as a federation of autonomous business units than a single company. There is considerable decentralization of powers, in order to allow focus on each of its activities. The Business Units form the core of the Company’s management. They are vertical units, with their own operations in the areas of sales, marketing, parts and technical support. The Manager of each Business Unit operates in the same way as the General Manager of a conventional company.

The Business Units form part of three Business Divisions: Vehicles, Self-Propelled Machinery and Auto Care.

Remuneration

The performance of the Managers of the Business Units is evaluated by the Board of Directors on the basis of four parameters:

Α. ΕVA (Economic Value Added), and increasing of EVA

Β. Market Share

C. Satisfaction of Strategic Suppliers

D. Customer Satisfaction

50% of the remuneration paid to the Managers of the Business Units and Business Divisions is variable and related to performance as determined using the above parameters. There is no upper limit on possible remuneration.

The quality and active commitment of the Managers of Business Units and Business Divisions is the most crucial element in the Company’s success, and for this reason the Company takes particular care in the selection, evaluation and training of managers and candidate managers.


(b) Main characteristics of the internal audit and risk management system


The Board of Directors has formally adopted the Articles of Association of the Audit Committee and Internal Audit Department, and they have been incorporated in the Company’s Regulations. The remit of the Audit Committee is to assist the Board of Directors in the performance of its duties in the area of Internal Audit, in order to ensure transparency in corporate activities, reliability of financial information, and the Company’s compliance with legislation and regulations.

The Board of Directors has entrusted the Company’s Executive Board with full control over and management of Company risks.

Monitoring of the workings of the internal audit system as a whole, as well as rotating audits, verification of proper working of the information systems from which information is drawn to compile the financial statements, and identification of weaknesses and proposals for improvement – all these are responsibilities of the Internal Audit Department which, in the performance of its duties, is authorized to have access to any document, file, bank account, portfolio and any other department of the Company.

Members of the Board of Directors, the Management of the Company and all its managers and officers are obliged to cooperate with and supply information to the Internal Audit Department, and in general to facilitate its work in all possible ways.

The Internal Audit Department is an independent department of the Company.


(c) Workings of the General Meeting of Shareholders and rights of Shareholders


General Meeting

The Company’s General Meeting of Shareholders is, under its Articles of Association, the senior managing body, deciding on any company affairs. Its decisions, lawfully taken, are binding on all shareholders.

The General Meeting of Shareholders is called by the Board of Directors and convenes regularly at a time and place determined by the Board of Directors, within the first six months of the end of each financial year.

Invitations to the General Meeting must be issued at least 20 days before the date of the Meeting, the invitation stating clearly the date, time and place of the meeting, the items on the agenda and the procedures to be followed by shareholders to ensure they are entitled to attend and vote. The invitation is published as required by law and posted, in Greek and English, on the Company’s website.

The General Meeting shall be deemed to be in lawful session and to have a quorum, when 1/5 of the share capital is present and represented, except in those cases where, under the Articles of Association, an enhanced quorum of 2/3 of the share capital is required.

The shareholders attending the General Meeting with voting rights shall elect a Chairman and Secretary. The Meeting shall then move on to discussion of the items on the agenda and take its decisions on those items by absolute majority.

Minutes are kept of the deliberations and decisions of the General Meeting, to be signed by its Chairman and Secretary.

A summary of the decisions of the General Meeting shall be published immediately, in Greek and English, and posted on the Company’s website.

The General Meeting is the only body competent to decide on the following matters:

a) extending the life of, conversion of, merging of or winding-up of the Company

b) amendment of the Articles of Association

c) increasing or reducing of share capital

d) appointment of members of Board of Directors and auditors

e) approval of annual financial statements

f) distribution of profits.

Shareholders’ Rights

The rights of the shareholders in the Company stemming from their share are determined by the percentage of the total share capital represented by the paid-up value of the share. Each share carries with it all the rights provided for by Codified Law 2190/1920, as amended and currently in force, and by the Company’s Articles of Association, specifically:

a) The right to a dividend from the Company’s annual profits. 35% of the net profits for each year, after withholding of the regular reserve, is distributed to the shareholders in the form of a dividend, while the General Meeting may decide to grant an additional dividend. The dividend is payable to each shareholder whose name appears on the register of shareholders kept by the Company on the date set for determining those entitled to dividend payments. The right to collect the dividend expires and the amount in question is forfeit to the state after five years from the end of the year in which the General Meeting approved distribution of the dividend.

b) Pre-emptive rights in any increase in share capital, by purchase for cash of the new shares.

c) The right to receive a copy of the financial statements, and of the reports by the certified auditors and Board of Directors.

d) The right to attend the General Meeting of Shareholders, further defined by various individual rights: legitimization, presence, participation in discussions, submission of proposals relating to items on the agenda, entering of views in minutes, and voting.


(d) Communication with Shareholders


The Board of Directors has appointed an officer responsible for communication with shareholders, and an officer responsible for maintaining the shareholders’ register, whose main duties are to keep all interested parties promptly and reliably informed of Company activities and of their rights.


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