LU VE S p A : Report on the corporate governance and ownership structure

LU-VE S.p.A.

Via Vittorio Veneto 11 - 21100 Varese

REA [Economic and Administrative Index] Number: VA-191975

Tax Code: 01570130128

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURES

pursuant to art. 123-bis of the TUF (Consolidated Law on Finance)

(traditional administration and control model)

YEAR 2023

approved by the Board of Directors of 13 March 2024

LU-VE S.p.A.

Registered office: Via Vittorio Veneto n. 11 - 21100 VARESE (VA)

Administrative headquarters: Via Caduti della Liberazione no. 53 - 21040 UBOLDO (VA)www.luvegroup.com

CONTENTS

CONTENTS ............................................................................................................................................ 2

GLOSSARY ............................................................................................................................................. 7

INTRODUCTION .................................................................................................................................. 11

SUMMARY .......................................................................................................................................... 13

1.0	Company profile ..................................................................................................................... 17
2.0	Information on ownership structures (pursuant to art. 123-bis, paragraph 1, of the
Consolidated Law on Finance) as at 13 March 2024 ............................................................. 24
A)	Structure of the share capital (pursuant to art. 123-bis, paragraph 1, letter a), of the

Consolidated Law on Finance) ......................................................................................................... 24

B) Restrictions to the transfer of securities (pursuant to art. 123-bis, paragraph 1, letter b), of the Consolidated Law on Finance) ................................................................................................... 24

C) Relevant equity investment in the share capital (pursuant to art. 123-bis, paragraph 1, letter c), of the Consolidated Law on Finance) ................................................................................ 25

D) Securities that confer special rights (pursuant to art. 123-bis, paragraph 1, letter d), of the Consolidated Law on Finance) ......................................................................................................... 25

E) Employee ownership scheme: mechanism for the exercise of voting rights (pursuant to art. 123-bis, paragraph 1, letter e), of the Consolidated Law on Finance) ............................................ 26

F) Restriction to the right of vote (pursuant to art. 123-bis, paragraph 1, letter f), of the Consolidated Law on Finance) ......................................................................................................... 27

G) Agreements between shareholders (pursuant to art. 123-bis, paragraph 1, letter g), of the Consolidated Law on Finance) ......................................................................................................... 27

H) Change of control clause (pursuant to art. 123-bis, paragraph 1, letter h), of the Consolidated Law on Finance) and statutory provisions relating to the Public Offer (pursuant to art. 104, paragraph 1-ter, and 104-bis, paragraph 1, of the Consolidated Law on Finance) .......... 27

I) Delegations to increase the share capital and authorisations for the purchase of treasury shares (pursuant to art. 123-bis, paragraph 1, letter m), of the Consolidated Law on Finance) ... 27

L) Management and coordination activities (pursuant to art. 2497 et seq. of the Italian Civil Code) …………................................................................................................................................... 29

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

  Law on Finance) ...................................................................................................................... 31

• 4.0 Board of Directors .................................................................................................................. 33

• 4.1 Role of the Board of Directors ............................................................................................... 33

Reserved powers and activities carried out by the Board of Directors ........................................... 33

4.2 Appointment and replacement (pursuant to art. 123-bis, paragraph 1, letter l), first part, of the Consolidated Law on Finance) ................................................................................................... 41

4.3 Composition (pursuant to art. 123-bis, paragraph 2, letter d) and d-bis), of the Consolidated

Law on Finance) ................................................................................................................................ 44

Diversity criteria and policies in the composition of the Board and in the company

organization ............................................................................................................................ 54

Maximum number of offices held in other companies ......................................................... 57

4.4 Functioning of the Board of Directors (pursuant to art. 123-bis, paragraph 2, letter d), of the

Consolidated Law on Finance) ......................................................................................................... 57

4.5 Role of the Chairman of the Board of Directors ................................................................... 59

Secretary of the Board ........................................................................................................... 61

• 4.6 Executive directors ................................................................................................................ 63

  Managing Directors ................................................................................................................ 63

  Chairman of the Board of Directors ....................................................................................... 64

  Executive Committee (pursuant to art. 123-bis, paragraph 2, letter d), Consolidated Law on

  Finance) .................................................................................................................................. 65

  Disclosure to the Board by the directors/delegated bodies .................................................. 65

  Other executive directors ...................................................................................................... 66

  General Manager ................................................................................................................... 66

• 4.7 Independent Directors and Lead Independent Director ..................................................... 68

  Independent Directors ........................................................................................................... 68

  Lead Independent Director .................................................................................................... 72

• 5.0 Management of corporate information ................................................................................. 75

• 6.0 Internal Board committees (pursuant to art. 123-bis, paragraph 2, letter d), Consolidated Law

  on Finance) ............................................................................................................................. 79

  Additional committees (other than those required by law or recommended by the Code) 83

• 7.0 Self-assessment and succession of directors - Remuneration and Appointments Committee

  ................................................................................................................................................ 85

• 7.1. Self-assessment and succession of Directors ......................................................................... 85

• 7.2. Appointments Committee ...................................................................................................... 87

• 8.0 Remuneration of directors - Remuneration and Appointments Committee ........................ 89

• 8.1. Remuneration of Directors ..................................................................................................... 89

• 8.2. Remuneration and Appointments Committee ...................................................................... 89

  Composition and functioning of the Remuneration and Appointments Committee (pursuant

  to art. 123-bis, paragraph 2, letter d), of the Consolidated Law on Finance) ....................... 89

  Functions of the Remuneration and Appointments Committee ........................................... 90

• 9.0 Internal Control and Risk Management System - Control and Risk Committee .................... 96

  Characteristics of the Internal Control and Risk Management System ................................. 97

Main characteristics of Internal Control and Risk Management Systems in relation to the

financial disclosure process .................................................................................................... 99

Adequacy of the Internal Control and Risk Management System ....................................... 102

• 9.1. Chief Executive Officer ......................................................................................................... 102

• 9.2. Control and Risk Committee ................................................................................................ 104

  Composition and functioning of the Control and Risk Committee (pursuant to art. 123-bis,

  paragraph 2, letter d), of the Consolidated Law on Finance) .............................................. 104

  Functions assigned to the Control and Risk Committee ...................................................... 105

• 9.3. Head of the Internal Audit function ..................................................................................... 108

• 9.4. Organisation Model pursuant to Italian Legislative Decree no. 231/2001 .......................... 113

• 9.5. Auditing Firm ........................................................................................................................ 116

• 9.6. Financial reporting manager and other company roles and functions ............................... 116

• 9.7. Coordination between the entities involved in the Internal Control and Risk Management

  System .................................................................................................................................. 118

• 10.0 Directors' interests and related party transactions ............................................................. 121

• 11.0 Board of Statutory Auditors ................................................................................................. 126

• 11.1. Appointment and replacement ............................................................................................ 126

• 11.2. Composition and functioning of the Board of Statutory Auditors (pursuant to art. 123-bis,

  paragraph 2, letters d) and d-bis), of the Consolidated Law on Finance) ............................ 129

  Diversity policies and criteria ............................................................................................... 134

  Independence ....................................................................................................................... 136

  Remuneration ....................................................................................................................... 137

  Interest management ........................................................................................................... 137

  Induction Programme .......................................................................................................... 137

• 12.0 Relations with Shareholders ................................................................................................ 140

  Access to information .......................................................................................................... 140

  Dialogue with Shareholders ................................................................................................. 140

  Dialogue with other significant Stakeholders ...................................................................... 141

  Topics subject to Dialogue ................................................................................................... 142

• 13.0 Shareholders' Meeting ......................................................................................................... 144

• 14.0 Additional corporate governance procedures (pursuant to art. 123-bis, paragraph 2, letter

  a), second part of the Consolidated Law on Finance) .......................................................... 149

• 15.0 Changes after the close of the Financial Year ...................................................................... 151

• 16.0 Considerations on the Letter of the Chairman of the Corporate Governance Committee.154

Tables .. ............................................................................................................................................. 158

Table 1: Information on ownership structures ................................................................................. 158

Table 2: Structure of the Board of Directors at the closing date of the Financial Year .................... 159 4

Table 3: Structure of the board committees at the closing date of the Financial Year .................... 160

Table 4: Structure of the Board of Statutory Auditors at the closing date of the Financial Year ..... 161

Report on Corporate Governance and Ownership Structure 2023

GLOSSARY

Directors: the members of the LU-VE Board of Directors.

Meeting/Shareholders' meeting: the shareholders' meeting of LU-VE.

Shareholders: the LU-VE shareholders.

Borsa Italiana: Borsa Italiana S.p.A., with registered office in Milan, Piazza Affari, no. 6.

Chief Executive Officer/CEO: the main person responsible for the management of the company.

Chief Strategic Development Officer/CSDO: the director responsible for coordinating, in support of the CEO, the implementation of strategic industrial policies, dealing with the development of the individual Group plants with reference to both real estate and industrial profiles in close cooperation with the GM, in the pursuit of Sustainable Success, taking care of the development of all activities related to sustainability strategies and the integration of these strategies into the business plan.

Old Corporate Governance Code: the old Corporate Governance Code for listed companies approved for the first time in 1999 and last amended in July 2018 by the Corporate Governance Committee.

Corporate Governance Code: the Corporate Governance Code adopted by companies with listed shares approved by the Corporate Governance Committee in January 2020, to which the Company has adhered from 1 January 2021.

Civil Code/c.c.: the Italian Civil Code.

Code of Ethics: the code of ethics approved by the Board of Directors on 30 June 2016.

Board/Board of Statutory Auditors: the Board of Statutory Auditors of LU-VE.

Committees: the Control and Risk Committee, the Remuneration and Appointments Committee and the Independent Committee.

Control and Risk Committee/CCR: the Control and Risk Committee with responsibility for Transactions with Related Parties of LU-VE.

Independent Committee: the Independent Committee of LU-VE.

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

Remuneration and Appointments Committee/CRN: the Remuneration and Appointments Committee of LU-VE.

Board of Directors/Board/BoD: the Board of Directors of LU-VE.

CONSOB: Commissione Nazionale per le Società e la Borsa, the Italian financial markets regulator, with registered office in Rome, via G.B. Martini, no. 3.

General Manager/GM: the party entrusted with the ordinary management of the Group's activities, in support of the CEO.

Financial year: the company year from 1 January to 31 December 2022.

Euronext Milan: the market segment managed by Borsa Italiana S.p.A. in which the Issuer's shares were traded up to 20 September 2022, known as "Mercato Telematico Azionario" (MTA) until 25 October 2021.

Euronext STAR Milan: the market segment managed by Borsa Italiana S.p.A. in which the Issuer's shares are traded from 22 September 2022.

Group/LU-VE Group: LU-VE and its direct or indirect subsidiaries pursuant to art. 93 of the Consolidated Law on Finance and art. 2359 of the Italian Civil Code.

Guidelines: the "Guidelines for the identification and performance of the significant transactions of the LU-VE S.p.A. Group", approved by the Board of Directors on 8 February 2018.

SCIGR Guidelines: the "Guidelines of the Internal Control and Risk Management System of the LU-VE S.p.A. Group", approved by the Board of Directors on 21 September 2017 and lastly amended on 21 December 2022.

LU-VE/Company/Issuer: LU-VE S.p.A., with registered office in Varese, via Vittorio Veneto no. 11.

Supervisory Body/SB: the supervisory body of the Company established pursuant to art. 6 of Italian Legislative Decree no. 231 of 8 June 2001 as subsequently amended.

Business Plan: the planning document approved by the Board of Directors which defines the company's strategic objectives and the actions to be taken in order to achieve these objectives in line with the level of exposure to the chosen risk, with a view to promoting the Company's Sustainable Success.

Chairman/Chairman of the BoD: the chairman of the Issuer's Board of Directors.

Honorary Chairman: individual of high standing/or who has contributed significantly to the affirmation and/or the development and/or reputation of the Company LU-VE, appointed by the Board of Directors, also identifying him/her outside its members.

OPC Procedure: the "Related Party Transactions Procedure", with the updated version adopted by the Board of Directors on 3 May 2017, as subsequently amended and supplemented in the version updated by the Board of Directors on 29 June 2021.

BoD and Committees Regulations: the Regulations of the Board of Directors and of the Internal Board Committees approved by the Board of Directors on 24 February 2021 and lastly amended on 20 December 2023.

Consob Issuers' Regulation: the Regulation issued by Consob by means of resolution no. 11971 of 1999 (as subsequently amended) regarding issuers.

Consob Markets Regulation: the Regulation issued by Consob by means of resolution no. 20249 of 2017 (as subsequently amended) regarding markets.

Consob Related Party Regulation: the Regulation issued by Consob by means of resolution no. 17221 of 12 March 2010 (as subsequently amended) regarding transactions with related parties.

Report: this report on corporate governance and ownership structures drafted by LU-VE pursuant to art. 123-bis of the Consolidated Law on Finance.

Remuneration Report: the "Annual report on the remuneration policy and the remuneration paid" that the Company is required to draft annually in accordance with art. 123-ter of the Consolidated Law on Finance and art. 84-quater of the Consob Issuers' Regulation.

Sustainability Report: the "Consolidated non-financial statement" that the Company prepares annually pursuant to Italian Legislative Decree no. 254/2016.

Subsidiaries: direct or indirect subsidiaries of LU-VE pursuant to art. 93 of the Consolidated Law on Finance and art. 2359 of the Italian Civil Code.

Concentrated Ownership Company: a company in which one or more shareholders who participate in a shareholder voting agreement have, directly or indirectly (through subsidiaries, trustees or third parties), a majority of the votes that can be exercised at an ordinary meeting.

Large Company: a company whose capitalization exceeded Euro 1 billion on the last trading day of each of the previous three calendar years.

Close Relative: shall mean the close relatives of a person, defined as such in accordance with the International Accounting Standards in force at the time negotiations on a RPT are entered into or, in the absence of negotiations, at the time the relevant decision is adopted.

Sustainable Success: objective that guides the action of the Board of Directors and which takes the form of creating long-term value for the benefit of shareholders, taking into account the interests of the other stakeholders relevant to the Company.

Top Management: the senior executives of the Company and the Group who are not members of the Board of Directors and have power and responsibility for planning, managing and controlling the activities of the LU-VE Company and Group.

Articles of Association/Articles: the Articles of Association of LU-VE, in force at the date of presentation of this Report.

Consolidated Law on Finance (TUF): Italian Legislative Decree no. 58 of 24 February 1998 as subsequently amended.

In addition to the aforementioned definitions, unless otherwise specified, the definitions of the Corporate Governance Code must also be understood as being recalled by reference.

Introduction

Report on Corporate Governance and Ownership Structure 2023

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