IRCE S p A : Corporate Governance year 2022

Report on corporate governance and ownership structure

IRCE S.p.A.

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

pursuant to art. 123-bis of the Consolidated Financial Act

(traditional administration and control model)

Report approval date: 15/03/2023

Year to which the Report refers: 2022

www.irce.it

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Report on corporate governance and ownership structure

IRCE S.p.A.

TABLE OF CONTENTS

Glossary

• Issuer profile

• Information on the Ownership Structure (pursuant to art. 123-bis, paragraph 1 of the Consolidated Financial Act) as at 15 March 2022
• 1. Structure of share capital (pursuant to art. 123-bis, paragraph 1, letter a) of the Consolidated Financial Act);
  2. Restrictions regarding the transfer of shares (pursuant to art. 123-bis, paragraph 1, letter b) of the Consolidated Financial Act);
  3. Significant equity investments (pursuant to art. 123-bis, paragraph 1, letter c) of the Consolidated Financial Act);
  4. Shares granting special rights (pursuant to art. 123-bis, paragraph 1, letter d) of the Consolidated Financial Act);
  5. Employee stock ownership: mechanism for exercising voting rights (pursuant to art. 123-bis, paragraph 1, letter e) of the Consolidated Financial Act);
  6. Restrictions on voting rights (pursuant to art. 123-bis, paragraph 1, letter f) of the Consolidated Financial Act);
  7. Agreements among shareholders (pursuant to art. 123-bis, paragraph 1, letter g) of the Consolidated Financial Act);
  8. Change of control clauses (pursuant to art. 123-bis, paragraph 1, letter h) of the Consolidated Financial Act) and statutory provisions on takeover bids (as per art. 104, paragraph 1-ter and art. 104-bis, paragraph 1) of the Consolidated Financial Act);
  9. Delegated powers to increase share capital and authorisations to purchase treasury shares (pursuant to art. 123-bis, paragraph 1, letter m) of the Consolidated Financial Act);
  10. Management and coordination activities (pursuant to art. 2497 et seq. of the Italian Civil Code).

• Compliance (pursuant to art. 123-bis, paragraph 2, letter a), first section, of the Consolidated Financial Act)

• Board of Directors
• 1. Role of the Board of Directors
  2. Appointment and replacement (pursuant to art. 123-bis, paragraph 1, letter l) of the Consolidated Financial Act);
  3. Composition (pursuant to art. 123-bis, paragraph 2, letter d) and d)-bis of the Consolidated Financial Act);
  4. Functioning (pursuant to art. 123-bis, paragraph 2, letter d) of the Consolidated Financial Act);
  5. Role of the Chairman;
  6. Executive directors;
  7. Independent Directors;
  8. Lead Independent Director.

• Management of corporate information

6 Committees within the Board (pursuant to art. 123-bis, paragraph 2, letter d) of the

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Report on corporate governance and ownership structure

IRCE S.p.A.

Consolidated Financial Act)

• Directors' self-assessment and succession - Nomination Committee
• 1. Director's self-assessment and succession;
  2. Nomination Committee

• Directors' remuneration - Remuneration Committee
• 1. Directors' remuneration;
  2. Remuneration Committee

• Internal control and risk management system - Control and Risks Committee
• 1. Director responsible for the internal control and risk management system;
  2. Control and Risks Committee;
  3. Internal Audit;
  4. Organisational Model pursuant to Italian Legislative Decree 231/2001;
  5. Independent Auditors;
  6. Manager responsible for preparing the corporate accounting documents and other company roles and functions;
  7. Coordination among the parties involved in the internal control and risk management system.

1. Director interests and related-party transactions
2. Board of Statutory Auditors
3. 1. Appointment;
   2. Composition and functioning (pursuant to art. 123-bis, paragraph 2, letter d) and d)-bis of the Consolidated Financial Act).
4. Relations with shareholders
5. Shareholders' Meetings (pursuant to art. 123-bis, paragraph 1, letter l) and paragraph 2, letter c) of the Consolidated Financial Act)
6. Further corporate governance procedures (pursuant to art. 123-bis, paragraph 2, letter a)
7. Changes since the end of the reporting period
8. Considerations on the letter of the Chair of the Corporate Governance Committee

TABLES

TABLE 1: INFORMATION ON THE OWNERSHIP STRUCTURE

TABLE 2: COMPOSITION OF THE BOARD OF DIRECTORS

TABLE 3: COMPOSITION OF THE BOARD COMMITTEES

TABLE 4: COMPOSITION OF THE BOARD OF STATUTORY AUDITORS

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Report on corporate governance and ownership structure

IRCE S.p.A.

GLOSSARY

Code/Corporate Governance Code: the Corporate Governance Code of listed companies approved in January 2020 by the Corporate Governance Committee.

Civil Code. : the Italian Civil Code.

Committee/CG Committee/Corporate Governance Committee: the Italian Corporate Governance Committee for listed companies promoted by Borsa Italiana S.p.A., and by ABI, Ania, Assogestioni, Assonime and Confindustria.

Board: the Board of Directors of the Issuer.

Issuer: the issuer of securities to which the Report refers.

Year: the year to which the Report refers.

Consob Issuers' Regulations: Regulations issued by Consob with Resolution No. 11971 of 1999 (as subsequently amended) concerning issuers.

Consob Markets Regulations: Regulations issued by Consob with Resolution No. 20249 of 2017 (as subsequently amended) concerning markets.

Consob Regulations on related-party transactions: Regulations issued by Consob with Resolution No. 17221 of 12 March 2010 (as subsequently amended) concerning transactions with related parties.

Report: the report on corporate governance and ownership structure that companies shall prepare in compliance with art. 123-bis of the Consolidated Financial Act.

Remuneration Report: the report on the remuneration policy and on the fees paid that companies are required to prepare and disclose as per art. 123-ter of the Consolidated Financial Act, and art. 84-quater of Consob Issuers' Regulations.

Consolidated Financial Act: Italian Legislative Decree No. 58 of 24 February 1998.

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Report on corporate governance and ownership structure

IRCE S.p.A.

1. Issuer profile

GOVERNANCE

The company's governance structure is based on the traditional model and consists of the Shareholders' Meeting, the Board of Directors and the Board of Statutory Auditors.

MISSION

The IRCE Group is an important industrial player of European significance, which manufactures and trades the following products:

• Winding wires for electrical machines.This type of product is used in a wide range of applications such as engines and electric generators, transformers, inductors and relays, and its use has grown over the years mainly due to the constant expansion of automation. The production of wires accounts for around 80% of the group's total turnover.
• Insulated electrical cables. This product is used in the production of residential and industrial electrical systems and for the supply and connection of electrical equipment. The production of insulated electrical cables represents around 20% of the group's total turnover.

CORPORATE RESPONSIBILITY

With Board of Directors' resolution of 28 March 2008, the company established its Code of Ethics (last updated on 15 March 2022) which states all the rights, duties and responsibilities of company bodies with respect to all stakeholders involved in achieving the business purpose (customers, debtors, suppliers, employees and/or external staff, shareholders, supervisory bodies, institutions). These conduct guidelines shall thus be taken into consideration in daily work and in compliance with the laws and regulations in force in all the Countries in which the company operates. The code establishes reference standards and rules of conduct aimed at strengthening company decision-making processes and guiding the conduct of all those working for the company.

The company promotes gender equality in treatment and opportunity and avoids any discrimination internally as expressly envisaged by the Code of Ethics adopted.

NON-FINANCIAL STATEMENT

The company falls within the scope of application of Italian Legislative Decree no. 254/2016, issued in implementation of Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014, which provides for the obligation to disclose non-financial information. The company therefore arranges the annual preparation and publication of the Non-financial statement which is integrated in the annual financial statements and included in the Directors' Report.

SME STATUS

The company falls within the definition of SME pursuant to art. 1, letter w-quater.1) of the Consolidated Financial Act, and pursuant to art. 2-ter) of Consob Issuers' Regulations. This is due to the fact that for three consecutive years the company has not exceeded either of the limits as per the aforesaid art.1, letter w-quater.1) of the Consolidated Financial Act.

The company notified Consob of its SME status.

The capitalisation and turnover shown in the SME list published by Consob on its website (art. 2-ter, paragraph 2 of Consob Issuers' Regulations) are as follows:

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