Piovan S p A: 30.03.2022 – Report on corporate governance and ownership structure

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

pursuant to article 123-bis of Legislative Decree No. 58 of February 24, 1998

(Traditional administration and control model)

Issuer: Piovan SpA

Website:www.piovangroup.com

Reporting year: 2021

Report approval date: March 23, 2022

CONTENTS

GLOSSARY …………………………………………. ……………. …………………………… ……………. …………………………… ….. 6

  • 1. PROFILE OF THE ISSUER ……………………………………….. ……………………………………………. …. ………………….. 8

  • 2. INFORMATION ON THE SHAREHOLDER STRUCTURE (in accordance with article 123-bisparagraph 1, CFA) at 31/12/2021 ………………………………… ………………………………………….. ………………………….. 9

    • a. Structure of the share capital (in accordance with article 123-bisparagraph 1, letter a), CFA)

      ………………………………………….. ………………………………………….. …………………………….. 9

    • b. Restriction on the transfer of shares (in accordance with article 123-bisparagraph 1, letter

      b), FCA) ………………………………………….. … ……………………………………….. … ……………………. ten

    • vs. Significant holdings (in accordance with article 123-bisparagraph 1, letter c), CFA) ……….. 10

    • D. Shares conferring special rights (in accordance with article 123-bisparagraph 1, letter d),

      FCA) ………………………………………… ………………………………………….. .. ……………………… ten

    • e. Employee shareholding: voting mechanism (in accordance with article 123-bisparagraph

      1, letter e), CFA) ……………………………………. ………………………………………. …………. ………….. 11

    • F. Voting Restrictions (pursuant to Article 123-bisparagraph 1, letter f), CFA) …………. 12

    • g. Shareholders’ agreements (in accordance with article 123-bisparagraph 1, letter g), CFA) .. 12

    • h. Change of control clauses (in accordance with article 123-bisparagraph 1, letter h), CFA)

      and legal provisions relating to takeover bids (in accordance with Article 104,

      paragraph 1-terand article 104-bisparagraph 1, CFL) ……………………………………… ….. 12

    • I. Power to increase the share capital and authorization to purchase own shares

      (in accordance with article 123-bisparagraph 1, letter m), CFA) ……………………………. …. .. 13

    • J. Management and coordination activities (in accordance with article 2497 et seq.

      of the Civil Code) …………………………………………. ……………………………………………. …. ………. 13

  • 3. RESPECT (in accordance with article 123-bisparagraph 2, letter a), first part, CFA ………….. 15

  • 4. BOARD OF DIRECTORS …………………………………….. …………………………………………. ………… 15

    • 4.1 Role of the Board of Directors ……………………………………….. ………………………………… 15

    • 4.2 Appointment and replacement (in accordance with article 123-bisparagraph 1, letter l),

      first part of the CFA) …………………………………………. … ……………………………………….. … …… 19

    • 4.3 Composition (in accordance with article 123-bisparagraph 2(d) and (d-)bis), FCA) ………….. 23

    • 4.4 Operation of the board of directors (in accordance with article 123-bisparagraph 2, letter

      d), FCA) ………………………………………….. … ……………………………………….. … ………………….. 26

    • 4.5 Role of the Chairman of the Board of Directors ……………………………. ……………. ………….. 28

    • 4.6 Administrators ………………………………………… ……………. …………………………… ….. ….. 29

    • 4.6.1 Chief Executive Officers ……………………………. …………………………………………….. ….. … 29

    • 4.6.2 Chairman of the Board of Directors ……………………………. ………………………………………. 36

    • 4.6.3 Executive Committee ……………………………. …………………………………………….. ….. …… 43

  • 4.6.4 Communication to the Board by directors and delegated bodies ……………………………….. …………. …. 43

  • 4.6.5 Other executive directors ………………………………………….. ……………………………………………. …. 43

  • 4.7 Independent Directors and Lead Director ………………………………………….. ………… ……………. 43

  • 4.7.1 Independent directors ………………………………………….. …………………………………………….. ….. …. 43

  • 4.7.2 Lead Independent Director ………………………………………….. ………………………………………….. 45

  • 5. MANAGEMENT OF SOCIAL INFORMATION …………………………………….. …. ………………….. 45

  • 6. INTERNAL BOARD COMMITTEES (in accordance with article 123-bisparagraph 2, letter d),

CFA)45

7. SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS – APPOINTMENT AND REMUNERATION

COMMITTEE ………………………………………… ………………………………………….. ………………………… 46

7.1 Self-assessment and succession of Directors ……………………………………….. ………………….. 46

7.2 Appointments and Remuneration Committee ……………………………………. ….. ………………. 47

Composition and operation of the committee …………………………………………. ………………………………. 47

Functions of the committee ……………………………. … ……………………………………….. … …… 48

8. COMPENSATION OF DIRECTORS ………………………………………….. ……………………………………. 50

9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM – CONTROL, RISKS AND

SUSTAINABILITY COMMITTEE ………………………………………… ………………………………………. …………. …. 50

9.1 Chief Executive Officer ………………………………………….. ……………………………………….. 52

9.2 Control, Risks and Sustainable Development Committee ……………………………………….. ………………. 52

Composition and operation of the Committee ……………………………. ………………………………… 52

Functions of the Control, Risks and Sustainable Development Committee ……………………………. …. ………….. 53

  • 9.3 Internal Audit Manager ………………………………………….. ……………………………………… 55

  • 9.4 Organizational model according to Legislative Decree no. 231/2001 ……………… 57

  • 9.5 Independent auditing firm …………………………………….. …… …………………………………….. …… 59

  • 9.6 Executive Officer for Financial Reporting and other corporate roles and functions…60

  • 9.7 Coordination of Internal Control and Risk Management players

    System ………………………………………… ………………………………………….. ………………….. 62

  • ten. INTERESTS OF DIRECTORS AND TRANSACTIONS WITH RELATED PARTIES ………………………………………….. 63

    • 10.1 Procedure for transactions with related parties …………………………………….. ………………………………… 63

    • 10.2 Related Party Transactions Committee ………………………………………….. ………………………………… 63

    • 10.3 Directors’ interests ………………………………………….. ………………………………………….. .. 65

  • 11. COMMITTEE OF STATUTORY AUDITORS ……………………………………….. …………………………………………….. ….. 65

    • 11.1 Appointment and replacement ………………………………………. ……………………………………………….. 65

    • 11.2 Composition and operation (in accordance with article 123-bisparagraph 2, letters d) and d-bis) FCA) ………………………………………….. … ……………………………………….. … ………………. 68

  • 12. RELATIONS WITH SHAREHOLDERS ………………………………………….. ……….. …………………………………….. 74

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  • 13. GENERAL MEETINGS ………………………………………….. ……………………………………….. 75

  • 14. OTHER CORPORATE GOVERNANCE PRACTICES (in accordance with Article 123-bisparagraph 2,

letter a), second section, CFA) ………………………………… … ……………………………………….. … ……. 78

  • 15. MODIFICATIONS SUBSEQUENT TO THE CLOSING OF THE FINANCIAL YEAR ………………………… .. ………………………….. 78

  • 16. CONSIDERATIONS ON THE LETTER FROM THE COMPANY PRESIDENT

GOVERNANCE COMMITTEE ………………………………………….. … ……………………………………….. … ……. 78

ANNEX 1 ………………………………………… ………………………………………….. ………………….. 82

THE TABLES ………………………………………… …………………………………………. ………………………………… 85

TABLE 1: INFORMATION ON THE SHAREHOLDER STRUCTURE AS OF 12/31/2021 ………………….. 85

TABLE 2: STRUCTURE OF THE BOARD OF DIRECTORS AT THE END OF THE YEAR …. 87

TABLE 3: STRUCTURE OF THE BOARD’S INTERNAL COMMITTEES AT THE END OF THE YEAR ………………… 89

TABLE 4: STRUCTURE OF THE BOARD OF STATUTORY AUDITORS AT THE END OF THE YEAR

FISCAL YEAR ………………………………………… ………………………………………….. …….. 90

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Ida M. Morgan