Elica S p A : Corporate Governance and Ownership Structure Report - Financial Year 2023

CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE REPORT

In accordance with Article 123-bis of the CFA (traditional administration and control model)

https://corporate.elica.com/it

FY 2023

Approved by the Board of Directors on March 14, 2024

CONTENTS

• 1. ISSUER PROFILE .................................................................................................................................... 4

• 2. Information on the ownership structure (as per Article 123-bis, paragraph 1, CFA) at March 14,

2024 ………………………………………………………………………………………………………………………………………………… ...4

• a) Shareholders (as per Article 123-bis, paragraph 1, letter a), CFA) ....................................................... 4

• b) Restriction on the transfer of shares (as per Article 123-bis, paragraph 1, letter b), CFA)

................................................................................................................................................................. 4

• c) Significant holdings (as per Article 123-bis, paragraph 1, letter c), CFA) ............................................ 4

• d) Shares which confer special rights (as per Article 123-bis, paragraph 1, letter d),

CFA) ......................................................................................................................................................... 5 e) Employee shareholding: voting mechanism (as per Article 123-bis, paragraph 1, letter e),

CFA) .......................................................................................................................................................... 5

• f) Voting restrictions (as per Article 123-bis, paragraph 1, letter f), CFA ……… ...................................... ..5

• g) Shareholder agreements (as per Article 123-bis, paragraph 1, letter g), CFA) .................................... 5

• h) Change of control clause (as per Article 123-bis, paragraph 1, letter h), CFA) and Shareholder provisions concerning Public Purchase Offers (Article 104, paragraph 1-ter and 104-bis, paragraph

1) .............................................................................................................................................................. 5

i) Power to increase the share capital and authorisation to purchase treasury shares (as per Article 123-

bis, paragraph 1, letter m), CFA) ............................................................................................................... 6

l) Direction and co-ordination activities (as per Article 2497 of the Civil Code) ……………………………… .. ..... 6

3. COMPLIANCE (as per Article 123-bis, paragraph 2, letter A), first part, CFA) ...................................... 7

4. BOARD OF DIRECTORS ......................................................................................................................... 7

4.1 ROLE OF THE BOARD OF DIRECTORS ................................................................................................... 7

4.2 APPOINTMENT AND REPLACEMENT (as per Article 123-bis, paragraph 1, letter l), first part, CFA)

................................................................................................................................................................. 9

4.3 COMPOSITION (as per Article 123-bis, paragraph 2, letters d) and d-bis), CFA) ............................... 11

4.4 FUNCTIONING (as per Article 123-bis, paragraph 2, letter d), CFA) ................................................ 14

4.5 ROLE OF THE CHAIRPERSON OF THE BOARD OF DIRECTORS ............................................................ 16

4.6 EXECUTIVE DIRECTORS .................................................................................................................... 17

4.7 INDEPENDENT DIRECTORS AND LEAD INDEPENDENT DIRECTOR ..................................................... 19

5. MANAGEMENT OF CORPORATE INFORMATION ................................................................................ 20

6. INTERNAL COMMITTEES OF THE BOARD (as per Article 123-bis, paragraph 2, letter d), CFA

............................................................................................................................................................... 21

7. SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS - APPOINTMENTS COMMITTEE ....................... 21

7.1 SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS …………………………………………………………………… 22

7.2 APPOINTMENTS AND REMUNERATION COMMITTEE …………………………………………………… .. ………… ..23

• 8. REMUNERATION OF DIRECTORS …………………………………………………………………………………………………… .24

• 9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL, RISKS AND SUSTAINABILITY

COMMITTEE ........................................................................................................................................... 24

9.1 CHIEF EXECUTIVE OFFICER ............................................................................................................... 25

9.2 CONTROL, RISKS AND SUSTAINABILITY COMMITTEE ....................................................................... 25

9.3 INTERNAL AUDIT MANAGER ……………………………………………………………………………………………………… .27

• 9.4 ORGANISATION MODEL AS PER LEGISLATIVE DECREE NO. 231/2001 .............................................. 28

• 9.5 INDEPENDENT AUDIT FIRM .............................................................................................................. 28

• 9.6 CORPORATE FINANCIAL REPORTING OFFICER AND OTHER COMPANY ROLES AND FUNCTIONS …..29

• 9.7 COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT

SYSTEM .................................................................................................................................................. 30

10. HOLDINGS OF DIRECTORS AND RELATED PARTY TRANSACTIONS .................................................... 30

11. BOARD OF STATUTORY AUDITORS ................................................................................................... 31

11.1 APPOINTMENT OF STATUTORY AUDITORS ……………………………………………… . ……………………………… . 31

11.2 COMPOSITION AND FUNCTIONING (AS PER ARTICLE 123-BIS, PARAGRAPH 2, LETTERS D) AND D-

BIS) CFA) ................................................................................................................................................ 32

• 12. SHAREHOLDER RELATIONS ............................................................................................................... 34

• 13. SHAREHOLDERS' MEETINGS (as per Article 123-bis, paragraph 1, letter (l) and paragraph 2, letter

c), CFA) ................................................................................................................................................... 34

14. FURTHER CORPORATE GOVERNANCE PRACTICES (pursuant to Article 123-bis, paragraph 2, letter

a), CFA) .................................................................................................................................................. 35

• 15. CHANGES SUBSEQUENT TO THE YEAR-END .................................................................................... 36

• 16. CONSIDERATIONS ON THE LETTER OF THE CHAIRPERSON OF THE CORPORATE GOVERNANCE

COMMITTEE .......................................................................................................................................... 36

TABLE 1 - INFORMATION ON OWNERSHIP STRUCTURE AS OF DECEMBER 31,

2023 ……………………………………………………………………………………………………………….................................... 37

TABLE 2 - STRUCTURE OF THE BOARD OF DIRECTORS ........................................................................... 38

TABLE 3 - STRUCTURE OF INTERNAL COMMITTEES ................................................................................ 39

TABLE 4 - STRUCTURE OF THE BOARD OF STATUTORY AUDITORS ......................................................... 40

ANNEX 1 ................................................................................................................................................ 41

1. ISSUER PROFILE

Elica S.p.A. (also "Elica" or the "Company") is a joint-stock company structured with a traditional governance model. It has been listed on the Euronext STAR Milan Market since November 2006. Its governance model is in line with the principles of the Corporate Governance Code, version approved in January 2020 (the "Code").

Elica S.p.A is defined as an SME pursuant to Article 1, paragraph 1, letter w-quater.1 of Legislative Decree

No. 58/98 ("Consolidated Finance Act" or "CFA") and Article 2-ter of Consob Resolution No. 11971/1999 and subsequent amendments and supplements ("Issuers' Regulation"); at December 31, 2023, the

capitalisation of the Company was Euro 143,742,756 (63,322,800 shares for a value per share of Euro

2.27).1 Elica also falls within the definition of a "company with concentrated ownership" as referred to in

the Code.

The Company's Board of Directors plays a pivotal role in defining the Company's strategies and processes in order to achieve the key objective of sustainable success, seeking to create long-term value for the benefit of stakeholders. The ways in which the Board interprets this role are set out in this report, and specifically in section 4.1.

In terms of sustainable success, Elica publishes the non-financial statement pursuant to Legislative Decree No. 254/2016, which is a mandatory requirement(https://investors.elica.com/en/financial-reports-and-presentations/). In addition, it has launched an ESG project that includes business strategies designed to create long-term value for the benefit of shareholders, while taking into account the interests of other relevant stakeholders. For more details on this topic, please see the 2023 Non-Financial Report published on the Company's websitehttps://corporate.elica.com/en/governance/shareholders-meeting.

This report illustrates, in accordance with Article 123-bis of the CFA, the Corporate Governance system adopted by Elica S.p.A. in the year 2023 and updated at March 14, 2024, in line with the recommendations of the Code.

In addition, the present report will be published on the website of the Companyhttps://corporate.elica.com/en/governance/shareholders-meeting.

2. INFORMATION ON THE OWNERSHIP STRUCTURE (as per Article 123-bis, paragraph 1, CFA) AT MARCH 14, 2024

a) Shareholders (as per Article 123-bis, paragraph 1, letter a), CFA)

Share Capital subscribed and paid-in Euro 12,664,560.

Classes of shares that make up the share capital: 63,322,800 ordinary shares, with a nominal value of Euro 0.20 each (see "TABLE 1 - INFORMATION ON THE OWNERSHIP STRUCTURE AT 31/12/2023").

Elica has not issued other share classes at the date of this Report, or convertible financial instruments which confer newly-issued share subscription rights.

b) Restriction on the transfer of shares (as per Article 123-bis, paragraph 1, letter b), CFA)

The By-Laws do not contain any restrictions on any type of share transfer.

c) Significant holdings (as per Article 123-bis, paragraph 1, letter c), CFA)

The significant shareholdings are indicated in "TABLE 1 - INFORMATION ON THE OWNERSHIP STRUCTURE AT 31/12/2023" based on the information available to the Company at March 14, 2024.

1 See also the list of SMEs published by Consob on its websitehttp://www.consob.it/web/area-pubblica/emittenti-quotati-pmi.

d) Shares which confer special rights (as per Article 123-bis, paragraph 1, letter d), CFA)

The Company has not issued shares which confer special controlling rights.

No special powers exist and the By-Laws do not provide for shares with the right to more than one vote.

e) Employee shareholding: voting mechanism (as per Article 123-bis, paragraph 1, letter e), CFA)

Not applicable.

f) Voting restrictions (as per Article 123-bis, paragraph 1, letter f), CFA)

The By-Laws do not contain any restrictions on voting rights.

g) Shareholder agreements (as per Article 123-bis, paragraph 1, letter g), CFA)

In accordance with Article 122 of the CFA and Article 129 of the Issuers' Regulation, on July 22, 2022, FAN S.r.l., with registered office in Rome, via Parigi No. 11 ("FAN") and TAMBURI INVESTMENT PARTNERS S.p.A., with registered office in Milan, via Pontaccio No. 10 ("TIP"), signed an agreement concerning

42,674,146 ordinary Elica S.p.A. shares, with voting rights, representing 67.391% of the share capital, broken down as follows:

• a) FAN: 33,440,445 shares with voting rights, representing 52.809% of the entire share capital of Elica;

• b) TIP: 9,233,701 shares with voting rights, representing 14.582%2 of the entire share capital of Elica;

The provisions of the Agreement shall apply to the shares referred to in points (a) and (b).

In line with the previous agreement, which is expiring, the FAN and TIP Agreement seeks to govern certain aspects concerning: (i) Elica's corporate governance, (ii) the transfer of interests in Elica's capital, and (iii) mutual consultation before casting votes at Elica's Shareholders' Meeting, to identify Elica's best interest (without seeking to give rise to any constraints on voting), effective July 22, 2022.

The key information regarding the Shareholder Agreements was published as per Article 130 of the Issuers' Regulation on Elica S.p.A.'s website,https://corporate.elica.com/en/governance/corporate-documents and on the website of the authorised storage mechanism "1INFO" atwww.1info.it.

As of today's date, TIP has a minority interest in the Company, which, as of the date of this report, amounts to 21.53% of the share capital.

This did not impact control over Elica which, as per Article 93 of the CFA, is held by Mr. Francesco Casoli, Chairperson of the Board of Directors of the Company.

h) Change of control clause (as per Article 123-bis, paragraph 1, letter h), CFA) and Shareholder provisions concerning Public Purchase Offers (Article 104, paragraph 1-ter and 104-bis, paragraph 1)

Agreements are in place of a commercial and financial nature and/or concerning investments of the Company in its subsidiaries, of a confidential nature, which provide, among other matters, for the right to

2 see "TABLE 1 - INFORMATION ON THE OWNERSHIP STRUCTURE at 31/12/2023".

withdrawal or to purchase/sell shares of the subsidiaries to the other contracting party, in the case of change of control of the Company. The resolution of an individual agreement would not significantly impact the Company.

The Company By-Laws do not provide for exceptions to the passivity rule pursuant to Article 104, paragraphs 1 and 1 of the CFA, nor the application of the neutralisation rules pursuant to Article 104-bis, paragraphs 2 and 3 of the CFA.

i) Power to increase the share capital and authorisation to purchase treasury shares (as per Article 123-bis, paragraph 1, letter m), CFA)

At the date of the Present Report, the Board had not been granted powers to increase the share capital under Article 2443 of the Civil Code.

The Company, in accordance with Article 8.4 of the By-Laws, may issue non-convertible and convertible bond loans or with warrants, in accordance with Articles 2410 subsequent of the Civil Code.

The Board of Directors may also issue non-convertible bonds within the limits set out in Article 2412 of the Civil Code and convertible within the limits set by Article 2420-ter of the Civil Code.

***

With reference to the purchase of treasury shares, the Shareholders' Meeting of April 27, 2023 of Elica again approved, in accordance with Article 2357 and 2357-ter of the Civil Code, the procedures and delegated powers to the Board of Directors of the Company to purchase (for a period of 18 months) and utilise (without time limits) ordinary shares of the Company, establishing the manner of completion and delegating to the Board of Directors the power to take any necessary actions in order to give effect to resolutions in accordance with applicable laws.

Acting pursuant to its powers, the Board of Directors authorised a treasury share buy-back programme divided into several tranches.

At March 14, 2024, the Company held 1,277,164 treasury shares.

The Shareholders' Meeting called for the approval of the 2023 Annual Accounts will, among other things,

be requested to renew the approval for the purchase and utilisation of treasury shares. Acceptance of the proposal would result in therefore, among other issues, the withdrawal of the previous authorisation granted on April 27, 2023.3

l) Direction and co-ordination activities (as per Article 2497 of the Civil Code)

The Company is not subject to management and co-ordination pursuant to Art. 2497 and subsequent of the Civil Code. This conclusion derives from the fact that the controlling shareholder does not carry out management activities within the company and, although exercising voting rights at the Shareholders'

Meeting, does not have any involvement in the financial, production or strategic programmed of the

Company, which is governed by a Board of Directors responsible for operating control.

The Company's Board of Directors has also appointed a CEO for ordinary operational management.

The Company however continues to carry out its operations through a totally autonomous and independent decision-making process; it has independent decision-making capacity with customers and suppliers and independently manages its treasury in accordance with the business purpose.

The disclosure required by Article 123-bis, paragraph 1, letter i) of the CFA are contained in Section 1 of the Remuneration Report, while the disclosure required by Article 123-bis, paragraph 1, letter l) first part

3 For further information, reference should be made to the Report of the Board of Directors' of Elica S.p.A. relating to the proposal to authorise and utilise Treasury Shares of March 14, 2024, available on the Company website.

of the CFA are illustrated in the subsequent section "4.2 Appointment and Replacement" of the present

Report.

The information required by Article 123-bis, paragraph 1, point (l) in part 2 of the CFA is detailed in section 13 below - "MEETINGS".

3. COMPLIANCE (as per Article 123-bis, PARAGRAPH 2, letter A), CFA)

The Company complies with the Corporate Governance Code approved in January 2020.

How each principle of the Code is applied in practice is set out in the relevant sections of this Report or through references to other documents which are also published.

The Corporate Governance Code is available on the website of Borsa Italiana S.p.A.:www.borsaitaliana.it/comitato-corporate-governance/codice/2020.pdf.

The Company, and its subsidiaries, are not subject to laws in force outside Italy which affect the Corporate Governance structure of Elica.

4. BOARD OF DIRECTORS

4.1 ROLE OF THE BOARD OF DIRECTORS

Elica's Board of Directors plays a key role in pursuing the Company's sustainable success and that of the

Group it heads. In 2023, the Board of Directors assessed and systematically monitored the progress of the

ESG project launched in 2022, with the support of the Control, Risks and Sustainability Committee. The issue was systematically discussed in the Committee meetings, reporting to and involving the Board in the discussion of the most relevant issues and proposals.

In addition, the Board promotes dialogue with shareholders and other relevant stakeholders, in the most appropriate forms through the "ELICA S.P.A. SHAREHOLDER COMMUNICATION POLICY", approved in

2021, in accordance with Recommendation No. 3 of the Code. The content of the policy, which may be found on the Company's website, was confirmed at the meeting of October 26, 2023.

In the meetings that precede the Shareholders' Meeting for approval of the financial statements, which take place periodically and at least annually, the Board of Directors assesses the functionality of the corporate governance system for the purposes of operations and the pursuit of sustainable success. The assessment, last performed in February 2024, did not lead to proposed changes.4

***

In accordance with Article 19 of the By-Laws, the Board of Directors are attributed the widest powers for the management of the Company and the faculty to carry out all acts and operations considered necessary

4 See also Section 13 - "Shareholders' Meetings"

for the reaching of the corporate objectives, except in the case of those attributed by law to the

Shareholders' Meeting or deriving from specific authorisations required by the By-Laws.

The Board of Directors also have the following duties:

• a) merger and spin-off motions in the cases established by Articles 2505 and 2505-bis, of the Civil

  Code;

• b) the opening, transfer and closing of secondary offices;

• c) the indication of which Directors hold powers of representation for the Company;

• d) the issue of non-convertible bonds within the limits set out in Article 2412 of the Civil Code and convertible within the limits set by Article 2420-ter of the Civil Code;

• e) the decrease of the share capital in the event of the withdrawal of shareholders;

• f) the updating of the Company's By-Laws and the shareholder meeting regulation in accordance with law;

• g) the transfer of the registered office to another municipality within Italy;

• h) the reduction of the share capital where losses are greater than one-third of the share capital and the Company has issued shares without nominal value.

Elica's Board of Directors is also responsible for:

• - the review and approval of the Company's and the Group's business plan, including an analysis of issues relevant to the creation of long-term value (Recommendation No. 1(a)). In this regard, the Board was involved in a specific meeting with the attendance of the Company management and the management of some of the subsidiaries, during which the investment and development strategy and projects that they intend to implement in the three-year period 2024-2026 were presented, discussed and shared. The projects target the Group's sustainable development, protecting shareholders

  without sacrificing the necessary investments for the long-term generation of value. In view of the imminent conclusion of the Board's mandate, and of the international geopolitical and economic-

  financial situation, the management and the Board of Directors did not consider it appropriate to proceed with the formalisation of the plan submitted. However, the Board of Directors has assessed the appropriateness of the estimated investments for the implementation of the projects shared and for the sustainable development of the business.

• - periodic monitoring of the implementation of the business plan and assessment of general operating performance, periodically comparing the results achieved with those planned (Recommendation No.

  1(b)), on a quarterly basis. In this regard, at each meeting the Board receives updates on operating and business performance in relation to the planned results;

• - defining the nature and level of risk compatible with the strategic objectives of the Company, including in its assessments every element considered significant with regard to the sustainability success of the

  Company (Recommendation No. 1(d)). The Board of Directors is systematically involved in setting Group strategic objectives and assesses their sustainability and compatibility with the defined level of risk. On a six-monthly basis, with the support of the Control, Risks and Sustainability Committee, it assesses the adequacy of the control system in relation to the level of risk; it receives updates on a quarterly basis from the Internal Audit department and from the Director in charge of the Internal

  Control System;

• - establishing the Company's corporate governance system and the structure of the Group it heads

  (Recommendation No. 1(d), first part). The Board periodically monitors the adequacy of the corporate governance system and expresses an opinion on the subject at least annually;

• - evaluation of the adequacy of the organisational, administration and general accounting system of the Issuer and of its subsidiaries having strategic importance, with particular reference to the Internal

  Control and Risk Management System (Recommendation No. 1(d), second part). In March and July 2023, the Board concluded that the general operating performance, which has the goal of safeguarding the Company's continuity and competitiveness, was good. It considered that the general

  organisational, administrative and accounting structure of the Company and its subsidiaries was adequate in terms of the Group's current structure and ongoing strategic projects. Finally, it

considered that the Internal Control and Risk Management System was adequate and effective within the parameters identified;5

• - taking decisions on transactions by the Company and its subsidiaries that have a significant strategic, business or financial impact or an impact in terms of the Company's capital, establishing the general criteria for identifying significant transactions (Recommendation No. 1(e)). During the meeting of April 27, 2023, for example, the Board of Directors authorised the incorporation and capitalisation of the new United States distribution company called South East Appliance Inc.; during the meeting of October 26, 2023, the Board of Directors authorised the acquisition of shares in a newly incorporated Canadian company called A.G. International Inc.;

• - the adoption, on the proposal of the Chairperson, together with the Chief Executive Officer, of a procedure for the internal management and external communication of documents and information relating to the Company, with particular regard to inside information (Recommendation No. 1, letter f)).6

For further powers assigned to the Board concerning: composition, functioning, appointment and self-assessment, remuneration policy and the Internal Control and Risk Management System, please see the following sections: 4.3, 4.4, 7.1, 8 and 9.

4.2 APPOINTMENT AND REPLACEMENT (as per Article 123-bis, paragraph 1, letter l), first part, CFA)

The appointment and replacement of Directors is governed by Article 16 of the By-Laws, which provides for slate voting. This mechanism was latterly adopted on the renewal of the Board of Directors by the

Shareholders' Meeting of April 29, 2021.

The provisions for the appointment of the corporate boards are summarised below.

According to the provisions of the current By-Laws, the appointment of the Board of Directors and the Board of Statutory Auditors is carried out through the voting of slates, in accordance respectively with Articles 16 and 24 of the By-Laws.

Only shareholders who individually or collectively hold at least 2.5%7 of the share capital have the right to present slates or a differing minimum percentage provided for or allowed by regulations.

For the inclusion of the Directors to be elected, consideration is not taken of the slates which have not obtained at least half of the votes required for the presentation of the slates. All those entitled to vote shall vote for only one slate.

Directors must have the requisites of eligibility, professionalism and independence provided by law and the other applicable directives.

Despite not being a large-scale company as defined in the Code, the Company expressed its guidance on the maximum number of appointments on the governing or control bodies of other listed or large companies considered compatible with the effective performance of the role as company Director, setting the maximum number of administration and control positions in other listed companies (including overseas) at five, excluding subsidiaries and parent companies and subsidiaries thereof.

Statutory Auditors must also have the requisites of eligibility, professionalism and independence provided by law and the other applicable directives. Specifically, in relation to the professionalism requirement covered by Article 1 of Justice Ministerial Decree of March 30, 2000, No. 162, the following fields are deemed to be closely related to the Company's activities: that relating to commercial or tax law, the economy and corporate finance, the manufacturing and design sector, as well as the activities listed in Article 2 of the By-Laws, to which reference should be made. Except in the situation of ineligibility established by law, no person who covers offices of Statutory Auditor in five or more other companies listed on regulated markets may fulfil the role of Statutory Auditor and if nominated must vacate the office, with exclusion of the subsidiary companies as well as the parent companies and the companies

5 See also Section 9, "INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL, RISKS AND SUSTAINABILITY

COMMITTEE," below;

• 6 For details, see Section 5 - "MANAGEMENT OF CORPORATE INFORMATION" and Section 12 "RELATIONS WITH SHAREHOLDERS".

• 7 The percentage indicated coincides with the percentage holding established by Consob in accordance with Article 144-quater of the Issuers' Regulation.

controlled by such, or anyone who covers offices of direction and control in a number higher than that provided by law and the regulations in force.

The presentation of slates for the appointment of the Board of Directors will occur in the manner established by, and in compliance with, Article 16 of the By-Laws, to which reference should be made. The presentation of slates for the appointment of the Board of Statutory Auditors will occur in the manner established by, and in compliance with, Article 24 of the By-Laws, to which reference should be made. In relation to the appointment of the Board of Statutory Auditors, in the case in which twenty-five days prior to the Shareholders' Meeting only one slate is presented, or only slates related to it are presented, in accordance with Article 144-sexies, paragraph 5 of the Issuers' Regulation, slates may be presented up until the third subsequent day to this date or any other date stipulated by the applicable regulation. In this case, the percentage threshold established for the presentation of the slate is reduced by half (1.25% of the share capital).

The slates presented that do not comply in full with the By-Laws shall be considered as not presented. The By-Laws do not allow for an outgoing Board of Directors to submit a slate and, as a concentrated ownership company, it is not subject to recommendation No. 23 of the Code.

With reference to the method of election of the Board of Directors through the "voting of slates", the By-

Laws provide that:

a)from the slate which obtained the highest number of votes (hereafter the "Majority Slate") all of the members of the Board of Directors are elected except one, as established by the

Shareholders' Meeting, according to the progressive order of the slate;

b) from the slate which obtained the second highest number of votes (hereafter the "Minority Slate"), which is not connected in any way, even indirectly, with the shareholders who have

presented or voted on the Majority Slate, the first candidate listed is elected to the Board of Directors.

If, with the candidates elected through the manners stated above, an adequate number of Independent Directors is not elected, however not lower than the amount provided by law, or if the gender balance provisions have not been complied with (including the rounding upwards of the number of members of the Board of Directors in the case of the application of the gender balance quotas not resulting in a full number), the non-independent candidate of the over-represented gender elected last on the progressive numbering of the Majority Slate will be replaced by the first independent candidate of the other gender, according to the respective progressive numbering, not elected on the same Majority Slate.

In the case in which the Majority Slate no longer presents non-elected candidates with the necessary requirements or in the case in which the Majority Slate does not contain a sufficient number of candidates to form the Board in accordance with that established by the Shareholders' Meeting, the meeting

proceeds with their replacement/supplementation by Shareholder majority.

The candidate listed in first position on the Majority Slate is elected as Chairperson of Board of Directors.

Should two or more slates receive the same number of votes, a second vote of the Shareholders' Meeting

is taken, with only those tied taking part.

In the case in which only one slate is presented or voted upon, or where only one slate has received at least half of the required votes for presentation, all Directors will be elected from the slate, in compliance with the provisions concerning the composition of the Board of Directors.

Where no slate is presented, the Shareholders' Meeting votes by Shareholder majority, without following

with the above stated procedure, however in such a manner that the applicable regulations concerning the composition of the Board of Directors are complied with.

In relation to the appointment of the Board of Statutory Auditors, considering also compliance with the applicable regulations concerning gender equality (including rounding down where necessary in relation to the under-represented gender), the following is applied:

• 1) from the slate which obtained the highest number of votes in the Shareholders' Meeting

  (hereafter the "Majority Slate"), based on the progressive order on the slate, two standing

  members and one alternate member are elected;

• 2) from the slate which obtained the second highest number of votes (hereafter the "Minority

  Slate") and which, in accordance with current regulations, was presented and voted upon by shareholders who are not connected in any way, even indirectly, with the shareholders who have

10