Civitanavi S p A : L.231 Model

Organization, management and control model

Legislative Decree no. 231/2001

General Part

Version	Approval date
I edition	Resolution of the Board of Directors of 4 July 2022
II edition	Resolution of the Board of Directors of 22 December 2023

This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian
document, the interpretation of the Italian language document prevails.
INDEX
INDEX	2
A. PURPOSE OF THE ORGANISATION, MANAGEMENT AND CONTROL MODEL	4
B. RECIPIENTS OF THE 231 MODEL	4
C. STRUCTURE OF 231 MODEL 231	5
1. THE REGULATORY FRAMEWORK	5
1.1 THE RESPONSIBILITY OF THE ENTITIES	5
1.2 THE EXEMPTING CONDUCT	6
1.3 SANCTIONS	7
2. CIVITANAVI SYSTEMS S.p.A	9
3. THE CIVITANAVI SYSTEMS S.p.A. 231 MODEL	9
3.1. REALISATION, IMPLEMENTATION AND MODIFICATION OF THE 231 MODEL...	9
3.1.1 Risk assessment	9
3.1.2 Identification of sensitive areas and activities	11
3.1.3 Risk Management and Gap Analysis	11
3.1.4 Adoption and amendments of the 231 Model	12
3.1.5 Dissemination of the 231 Model and training of Company's units	12

3.2 THE MANAGEMENT AND CONTROL SYSTEM OF CIVITANAVI SYSTEMS S.P.A.

........................................................................................................................................................12

3.2.1. The Code of Ethics	13
3.2.2 Corporate governance	14
3.2.3 The Company Organization Chart	14
3.2.4 General principles of control and General principles of conduct	14
3.2.5 Management systems	15
3.2.6 Prevention measures	15
4. THE SUPERVISORY BODY	17
4.1 DEFINITION AND REQUIREMENTS OF THE SB	17
4.2 APPOINTMENT, REVOCATION AND RESIGNATION OF THE MEMBERS OF THE
SUPERVISORY BODY	18
4.3 FUNCTIONS AND POWERS OF THE SUPERVISORY BODY	19
4.4 WHISTLEBLOWING AND INFORMATION FLOWS	20
4.4.1 Protection of the Whistleblower	20
4.4.2 Internal reporting	24
4.4.3 External reporting and public disclosure	26
4.4.4 Confidentiality, Data Processing and Document Retention	27
4.4.5 The procedure for making and managing reports	27
4.4.6 Information requirements	28
4.5 REPORTING OF THE SB TO THE OTHER CORPORATE BODIES	28
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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian
document, the interpretation of the Italian language document prevails.
5. DISCIPLINARY AND SANCTIONING SYSTEM	29
5.1 GENERAL PRINCIPLES	29
5.2 VIOLATIONS OF THE MODEL AND THE ETHICAL CODE	30
5.3 WHISTLEBLOWING VIOLATIONS	30
5.4 MEASURES AGAINST EMPLOYEES	31
5.5 MEASURES AGAINST DIRECTORS	32
5.6 MEASURES AGAINST THE MEMBERS OF THE BOARD OF STATUTORY
AUDITORS, AUDITORS AND/OR OTHER CONTROL BODIES	32
5.7 MEASURES AGAINST THIRD PARTIES (SUPPLIERS, BUSINESS PARTNERS,
CONSULTANTS, SELF-EMPLOYEDWORKERS)	32
5.8 MEASURES AGAINST THE SUPERVISORY BODY	32
5.9 COMPENSATION FOR DAMAGES	33

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

INTRODUCTION

A. PURPOSE OF THE ORGANISATION, MANAGEMENT AND CONTROL MODEL

This document describes the Organization, Management and Control Model adopted by CIVITANAVI SYSTEMS S.p.a. (hereinafter "CIVITANAVI") pursuant to Legislative Decree no. 231 of 8 June 2001 (hereinafter also "Legislative Decree 231/01" or "Decree").

The Organization, Management and Control Model (hereinafter also the "231 Model") represents a coherent set of principles and operating rules that govern the internal functioning of the Company and the ways in which it deals with the outside world and it describes the control system of sensitive activities, in order to prevent the committing of or attempts to commit offenses referred to in Legislative Decree 231/2001.

The adoption of 231 Model therefore allows the Company:

1. • to prevent and fighting against the committing of offenses established by Decree 231 and discipline the Company's units behaviour contrary to the Decree and Company's rules, thanks to monitoring actions on sensitive activities;
   • to bring to the attention of all personnel of the Company and third parties (customers, suppliers, collaborators, partners, etc.) the necessity to adopt, in the conduct of their activities, correct and transparent conduct in line with the ethical andsocial values of the Company in the pursuit of preventing the risk of committing an offense established by Decree 231;
   • to increase the awareness of the above-mentioned actors of the fact that illegal behavior could lead to administrative sanctions against the Company and those who are contrary to the interests of the Company even when it apparently could benefit from such behavior;
   • to verify, rationalize, review and integrate the decision-making and operational processes, as well as the control systems of the Company;
   • to introduce and disseminate the awareness among the personnel of the Company to respect and apply the rules of conduct and preventive protocols explaining that violation of their provisions potentially can be resulted in criminal, civil and disciplinary liability.
2. RECIPIENTS OF THE 231 MODEL

Personnel of the Company are considered to be recipients (hereinafter the "Recipients") of the 231 Model. Recipients undertake to comply with the content of the 231 Model, that applies to , by way of example:

• those who perform, even de facto, representative, managerial administrative, executive and controlling roles in the Company;
• employees and collaborators of the Company, of any degree and under any type of contractual relations.

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

These Recipients, and in particular those who carry out risk activities under the provisions of the 231 Model, must comply with all requirements timely, even in fulfillment of the duties of fairness and diligence arising out from the established legal relations with the Company.

In addition, provisions of the Code of Ethics of Ethics is binding, based on certaincontractual clauses, to all Third Parties, not belonging to the Company's organization, but operating on behalf of or in the interest of the Company.

C. STRUCTURE OF 231 MODEL 231

The CIVITANAVI 231 Model consists of:

• General Part, which describes the function of the 231 Model, the regulatory framework of reference, the structure of the 231 Model adopted by the Company, briefly illustrates the methods of identifying risks and analyzing prevention measures, the Management and Control System introduced in the Company, the functions and activities of the Supervisory Body and the current disciplinary system;
• Special Parts, which identify, in relation to the relevant types of offense, the business processes which are potentially at "risk 231", contain exemples of the hypothetical methods of committing offenses and define the behavioral principles to be respected as well as the reference safeguards for risk prevention.

The following are also to be considered integral and substantial parts of the 231 Model:

• the Code of Ethics, which defines the general values and principles of ethics, the Company's personnel must comply with;
• the Management and Control System of the Company, set forth in paragraph 3.2.
  1. THE REGULATORY FRAMEWORK

1.1 THE RESPONSIBILITY OF THE ENTITIES

Legislative Decree no. 231 of 8 June 2001 introduced in Italy the "Discipline of the administrative responsibility of legal persons, companies and associations even without legal personality", which establishes the direct responsibility of the Entities for unlawful acts committed in their interest or to the advantage of the Company's personnel in key positions or their subordinates.

It implies an administrative liability imposed on legal entities in addition to the criminal liability of the natural person belonging to the such entities, who committed the unlawful act.

In particular, legal entities areresponsible for offenses committed in its interest or for its own benefit by:

• top managers: natural persons who hold key positions.
  This concept includes those who have powers of representation, administration or direction of the legal entity or of one of its organizational units endowed with financial and functional autonomy and those who exercise, even de facto, the management and control of such legal entity;
• subordinates: natural persons subject to the direction or supervision by the top management.
  This concept covers employees and, more generally, all workers subject to the supervision of the top management.

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

The notions of "interest"or "advantage"of the legal entity, in according with the applicable law, represent two distinct criteria for attributing responsibility that may be alternatively present.

In particular, the criterion of "interest" expresses an appreciable evaluation "ex ante", that is, at the time of the offense was committed due to a markedly subjective criterion, while "advantage" has an essentially objective meaning"ex post" based on the concequences derived from the realization of the offense.

On the other hand, the legal entity is not liable when the predicate offense was committed by a company functioning exclusively for the purpose of pursuing its own interest or of third parties.

The administrative liability of the legal entity exists only for certain offenses, expressly indicated by the legislator in the Decree itself or provided for by specific laws, which are commonly defined as "predicate offenses".

For the list of predicate offenses, updated to the last legislative intervention, please refer to Annex 1 - List of predicate offenses.

The responsibility of the legal entity is independent of the responsibility of a natural person, which means that it exists even when the offender has not been identified or is not attributable to and when an offense is extinguished for a cause other than amnesty.

This liability also exists for offenses committed abroad, provided that the state of the place where the act is committed does not proceed against these legal entities.

The responsibility of the legal entity also occurs in the event that the predicate offenses are carried out in the forms of the attempt. In the latter case, the penalties are reduced from one third to the half. However, the legal entity does not respond when it voluntarily prevents the completion of the action or the realization of the event.

1.2 THE EXEMPTING CONDUCT

Articles 6 and 7 of Legislative Decree no. 231/2001 provide for specific forms of exemption from the administrative liability of legal entities, depending on whether offenses are committed by top managers or by employees directed or supervised byothers.

When an offense is committed by employees in key positions, Art. 6 provides for the exemption of liability if the legal entity demonstrates that:

• the management body has adopted and effectively implemented, before an offense was committed, a model of organization and management to prevent the offensesof the kind that was occurred;
• Supervisory Body with autonomous powers of initiative and control is empowered to supervise, monitor and update the 231 Model;
• the person responsible for has committed an offense by evading the 231 Model in a fraudulent manner;
• there has been no omission or insufficient supervision made by the Supervisory Body.

Provided an offense was committed by subordinates, the legal entity is held responsible if such action became possible due to the infringement of the management and supervision obligations. The Decree provides that non-compliance with the obligations of management and supervision can be avoided provided the legal entity, before an offense was committed, had adopted and had implemented an appropriate Organization and Management Model suited for preventing offenses of the kind that occurred.

The legal entity's exemption from liabilityis not based on the mere adoption of the Organizational and Management Model, but based on its effective implementation, which must be achieved through appropriate application of all preventive measures and controls necessary to limit the risk of committing the predicate offenses.

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

In this sense, Legislative Decree 231/2001 provides specific indications regarding the minimum content of the 231 Model. In particular, the Decree requires that the Model contains:

1. the identification of the actions resulted in committing offenses;

1. suitable measures to ensure the performance of the activity in compliance with the law and to promptly discover risk situations, taking into account the type of actions carried out, the

nature and the dimension of the legal entity;

1. specific protocols aimed at planning the training and implementation of the legal entity body's decisions with regard to prevent offenses;

1. the identification of the methods of managing the financial resources suitable to prevent the committing of the offenses;

1. reporting obligations towards the Supervisory Body;

1. introduction and implementation of a disciplinary system suitable for sanctioning non- compliance with the measures indicated in the 231 Model;

1. periodic inspections and procedures to amend the 231 Model in case when significant violations of the legal requirements are discovered or if significant changes occur in the organization or activity of the legal entity.

1.3 SANCTIONS

The judge on criminal cases who takes decision on legal liability of individuals shall assess the legal entity's liability and corresponding use of sanctions.

The administrative sanctions provided for by Legislative Decree 231/2001 in Articles. 9 ss. are divided into:

• Financial penalties.

The financial penalties shall apply in all cases when administrative liability of the legal entity is recognized. It is calculated in accordance with a quota system.

In determining the financial penalties, the Judge takes into account the financial and economic conditions of the legal entity, the seriousness of the offense, its degree of responsibility and the actions carried out by the entity to eliminate or mitigate the consequences of the offense, as well as the actions aimed to to prevent the committing of such offenses in the future.

Art. 12 Legislative Decree 231/01 illustrates cases when financial penalty can be reduced:

1. an offender has committed an action in the best interests of himself or of a third party and the legal entity has not benefited from it or a minimal advantage has derived from it;

1. a material damage caused is particularly insignificant;

1. during the pre-trial procedure at first instance, the legal entity fully compensated damages

and eliminated the harmful or dangerous consequences of an offense or in any case effectively worked in this regard;

• 1. where, before the declaration of the opening of the trial at first instance, an organizational model has been adopted and made operational to prevent s of the kind that occurred.
• Bans.

In some cases, bans may also be applied in addition to financial penalties. It applies exclusively with regard to offenses expressly envisaged by law.

The bans provided for by the Decree are:

1. prohibition to exercise business activity;

1. suspension or revocation of authorizations, licenses or concessions functional to the commission of the offense;

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

1. prohibition of contracting with the Public Administration, except for to obtain the provisions of

a public service;

1. exclusion from benefits, loans, contributions and subsidies, or the revocation of any

concessions already granted;

1. prohibition to advertise goods or services.

These bans shall be imposed where at least one of the following conditions is met:

• the legal entity has significantly benefited from an offense which was committed by top managers or by subordinates , provided such an offense was resulted from serious organizational deficiencies;
• in the event of recurrence of an offense.

However, the bans cannot be applied in the mitigated cases examined above where the financial damage caused is particularly minor or the offender has committed an act in the best interest of himself or of third parties and the legal entity has not benefited from it or has obtained a minimum advantage from it.

Without prejudice to the application of financial penalties, the bans also shall not apply where all of the following conditions are met within a pre-trial procedure:

• the legal entity has fully compensated for the damage and has eliminated the harmful or dangerous consequences of an offense or has in any case effectively worked in this regard;
• the legal entity has eliminated the organizational deficiencies that led to the offense through the adoption of an appropriate organizational modelsto preventoffenses of the same kind that occurred;
• the legal entity has made available the profit obtained for the purposes of confiscation.

Bans are, in principle, temporary.

However, in the event that the legal entity has significantly profitted from an offense and a temporary ban on its activity had been imposed on it , at least three times, in the last seven years, , this sanction may be resulted in a total ban.

In the same way, the Judge may compel the legal entity to prohibit entering into contracts with the public administration or to prohibit advertising goods or services provided the legal entity has already been imposed to the same sanction at least three times in the last seven years.

The total ban on the activity is always ordered if the legal entity or one of its organizational units is permanently used for the sole/primary purpose to commit or facilitate offenses in relation to which its responsibility is foreseen.

In cases where the conditions for the total ban existand it provides public services or services of public utility interruption of which may cause a serious harm to the society, or in case of the importance of the legal entity's dimension and the economic conditions of the territory in which it is located, that may have a significant impact on employment, the Judge is entitled, instead of imposing bans, to decide on continuation of the legal entity's activity under the supervision of a commissioner for a period equal to the duration of the sanction that would have been imposed.

The bans can also be imposed as a form of precautionary measureduring the criminal proceedings, at the request of the Public Prosecutor, in the event that there are serious grounds indicating the legal entity's liability or there are signs evidencing that offenses of the same nature will be committed in the future.

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

• Confiscation.

The judgement shall always followed by confiscation of the value or profit obtained from an offense committed, except for the part that can be returned to the injured party and without prejudice to the rights acquired by third parties in good faith.

Where it is not possible to carry out the confiscation of the goods which constituted the value or profit of the offense, it may also relate to sums of money, property or other benefits of equivalent value.

• Publication of the judgment.

The publication, even if only by extract, at the expense of the offender - the legal entity, can be ordered by the judge provided the ban is imposed.

2. CIVITANAVI SYSTEMS S.p.A.

CIVITANAVI is an Italian company, based in Pedaso (63827), Via del Progresso n. 5; it provides inertial solutions at national level and is quickly growing on the international market for generating its specialized products.

The company was founded in 2012 with anaim tobecomee a leading player in the supply of design, development, production and consulting in relation to high-tech georeference inertial navigation solutions and stabilization systems for both industrial and defense (dual-use) use.

Since 2022 CIVITANAVI is a company listed on Euronext Milano and is controlled by CIVITANAVI SYSTEMS Ltd (holding company) which unites an international pool of strategic investors (v. company profile on www.civitanavi.com).

3. THE CIVITANAVI SYSTEMS S.p.A. 231 MODEL

In observance with Legislative Decree 231/01, CIVITANAVI is deemed to be in compliance with its company's policy to proceed with the adoption of the Organization, Management and Control Model. The purpose of the 231 Model is the definition of a structured and integral system of prevention, management and control, aimed at reducing the risk of committing offenses, through the identification of sensitive activities, defined as activities mainly of " risk", and their corresponding regulation.

At the methodological level, the CONFINDUSTRIA guidelines on the introduction of organizational models of June 2021 were also taken into consideration.

3.1. REALISATION, IMPLEMENTATION AND MODIFICATION OF THE 231 MODEL 3.1.1 Risk assessment

The first step for introduction of the 231 Model is the risk assessment, that means identification and evaluation of the factors that, in the context of the different activities of the Company, can determine the risk of committing the offenses envisaged in Legislative Decree no. 231/2001.

The Company's structure has been analyzed in detailed wayin order to identify sensitive areas and activities for the prevention of offenses with regard to relations and internal operational structures of the Company, relations including contactual with third parties (that are not belong to the Company's organization, like consultants, customers, suppliers and partners of any other kind).

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This is an English translation of the original Italian document. In cases of conflict between the English language document and the Italian document, the interpretation of the Italian language document prevails.

The in-depth survey of the organizational structure and social activities, carried out with the help of legal consultants, firstly required the examination of the company documentation (like certificate of registration issued by the chamber of commerce, organizational chart, organizational provisions, procedures, etc.).

Subsequently, a series of interviews were conducted with the key managers resulting from the Company's organization chart, aimed at providing an effective and complete picture of the Company's activity, its articulations and the aspects characterizing each management and operational process.

In particular, the following employees were interviewed:

• the Chief Executive Officer;
• the Chief Financial Officer;
• the Supervisor for administrative activity;
• the CTO;
• the Executive Vice-President for Institutional Strategies and Relations;
• the Head of Design Verification Engineering;
• the Director of the Engineering Area;
• the H.R. Manager;
• the Quality manager;
• the the Prevention and Protection Service manager;
• the IT administrator - Head of Information Systems and IT security;
• the Manufacturing Manager;
• the Operations Manager;
• the Product and Manufacturing Engineering Manager;
• the Logistics Officer;
• the Procurement and Logistics Manager;
• the Production Manager and Proposal Program Manager

All individual interviews have been recorded and attached to this General Part (Annex 2 - Interviews with key managers).

The "mapping of risk areas" focused on the following aspects: -identification of the types of activity;

-identification of the internal Company's unitsresponsible for the business processes; -identification of the predicate offense;

-the ways in which such offenses might be committed;

-analysis of the degree of probability of the committing offenses highlighted with regard to both the type of market and the history of the Company;

• analysis of the severity of the applicable sanctions, assessed in relation to the hypothetical impact on the Company's corporate activity;
• analysis of the risk level related to each individual predicate offense, assessed according to the degree of probability of the committing the offense and the seriousness of the applicable sanctions; -analysis of the tools already existing in the Company to control the risk of committing offenses; -evidence of the improvement of the offenses prevention system and the system of verification types of activities of to be controlled by the SB.

The results of the mapping activity (which has also considered the risk assessment carried out in the preparation of the Prospectus for listing on the stock exchange) have been transformed into a specific Synoptic Table of risk mapping attached to this General Part (Annex 3).

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