Sabaf S p A : 2022 Report on Corporate Governance and ownership structure

REPORT ON CORPORATE

GOVERNANCE AND

OWNERSHIP STRUCTURE

Pursuant to Article 123-bis of the TUF

Traditional model of management and control

Name of Issuer: SABAF S.p.A.

Website: www.sabafgroup.com

Report financial year: 2022

Report approval date: 21 March 2023

	TABLE OF CONTENTS
TABLE OF CONTENTS	............................................................................................................................................2
GLOSSARY	4
1. ISSUER PROFILE	5

2. INFORMATION on the OWNERSHIP STRUCTURES (pursuant to Art. 123-bis, (1), TUF) on

21 March 2023	7
a)	Structure of the share capital (pursuant to Art. 123-bis (1)(a) TUF)	7
b)	Restrictions on the transfer of financial instruments (pursuant to Art. 123-bis (1)(b) TUF)	7
c)	Major shareholdings (pursuant to Art. 123-bis (1)(c) TUF)	7
d)	Financial instruments granting special rights (pursuant to Art. 123-bis (1)(d) TUF)	8

1. Employee stock plans: mechanism for the exercise of voting rights (pursuant to Art. 123-bis (1)(e) TUF) 9

f)	Restrictions on voting rights (pursuant to Art. 123-bis (1)(f) TUF)	9
g)	Shareholders' agreements (pursuant to Art. 123-bis (1)(g) TUF)	9

1. Change of control clauses (pursuant to Art. 123-bis (1)(h) TUF) and statutory provisions for takeovers

(pursuant to Arts. 104, (1-ter), and 104-bis, (1))

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1. Delegations of powers for recapitalisation and authorisations for buyback of treasury stock

	(pursuant to Art. 123-bis, (1)(m) TUF)	10
	l)	Management and coordination activities (pursuant to Art. 2497 and ff. of the Italian Civil Code.)...	10
3.	COMPLIANCE (pursuant to Art. 123-bis, (2)(a) TUF)	11
4.	BOARD OF DIRECTORS	12
	4.1.	ROLE OF THE BOARD OF DIRECTORS	12
	4.2.	APPOINTMENT AND REPLACEMENT (pursuant to Art. 123-bis (1)(l) TUF)	18
	4.3.	COMPOSITION (pursuant to Art. 123-bis, (2)(d) and d-bis), TUF)	19
	4.4.	FUNCTIONING OF THE BOARD OF DIRECTORS (pursuant to Art. 123-bis, (2)(d) TUF)	24
	4.5.	ROLE OF THE CHAIRMAN OF THE BOARD OF DIRECTORS	26
	4.6.	EXECUTIVE DIRECTORS	27
	4.7.	INDEPENDENT DIRECTORS AND LEAD INDEPENDENT DIRECTOR	30
5.	MANAGEMENT OF CORPORATE INFORMATION	32
6.	INTERNAL BOARD COMMITTEES (pursuant to Art. 123-bis, (2)(d) TUF)	33

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

NOMINATION COMMITTEE	34
7.1.	SELF-ASSESSMENT AND SUCCESSION OF DIRECTORS	34
7.2.	REMUNERATION AND NOMINATION COMMITTEE	35
8. REMUNERATION OF DIRECTORS	38

9. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM - CONTROL, RISK AND

SUSTAINABILITY COMMITTEE	40
9.1.	CHIEF EXECUTIVE OFFICER	44
9.2.	CONTROL, RISK AND SUSTAINABILITY COMMITTEE	45
9.3.	HEAD OF INTERNAL AUDIT	48
9.4.	ORGANISATIONAL MODEL PURSUANT TO LEGISLATIVE DECREE 231/2001	50
9.5	INDEPENDENT AUDITORS	51
9.6.	FINANCIAL REPORTING OFFICER AND OTHER ROLES AND CORPORATE FUNCTIONS	52

9.7. COORDINATION BETWEEN PERSONS INVOLVED IN THE INTERNAL CONTROL AND RISK

MANAGEMENT SYSTEM

53

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10.	DIRECTORS' INTERESTS AND TRANSACTIONS WITH RELATED PARTIES	56
11.	BOARD OF STATUTORY AUDITORS	57
11.1. APPOINTMENT AND REPLACEMENT	57
11.2. COMPOSITION AND OPERATION (pursuant to art. 123-bis, (2), (d) and (d-bis), TUF)	58
12.	SHAREHOLDER RELATIONS	63
13.	SHAREHOLDERS' MEETINGS	64
14.	OTHER CORPORATE GOVERNANCE PRACTICES (pursuant to Art. 123-bis, (2)(c) TUF) 66
15.	CHANGES SINCE THE END OF THE REPORTING YEAR	67
16.	CONSIDERATIONS ON THE LETTER OF 25 JANUARY 2023 OF THE CHAIRMAN OF THE
CORPORATE GOVERNANCE COMMITTEE	68

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GLOSSARY

Shareholders' Meeting: the Shareholders' Meeting of Sabaf S.p.A.

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

CG Code /Code: the Corporate Governance Code for Listed Companies approved in January 2020 by the Corporate Governance Committee.

Committee/CG Committee/Corporate Governance Committee: the Italian Committee for Corporate Governance of listed companies, promoted not only by Borsa Italiana S.p.A., but also by ABI, Ania, Assogestioni, Assonime and Confindustria.

Board of Directors: the Board of Directors of Sabaf S.p.A.

Issuer: Sabaf S.p.A, i.e. the issuer of transferable securities to which the Report refers.

Financial year: the 2022 financial year to which the Report refers.

Group: the Sabaf Group (Sabaf S.p.A. and its subsidiaries).

Savings Law/Law 262/2005: Law 262 of 28 December 2005 concerning "Provisions for the protection of savings and regulation of financial markets".

Stock Exchange Regulations: the Regulations of Markets organised and managed by Borsa Italiana S.p.A.

Consob Issuers' Regulation: the Regulations issued by Consob pursuant to Resolution 11971 of 1999 (as successively amended) on issuers.

Consob Markets' Regulation: the Regulations issued by Consob pursuant to Resolution 20249 of 2017 on markets.

Consob Related Party Regulation: the Regulations issued by Consob pursuant to resolution 17221 of 12 March 2010 (as successively amended) on related-party transactions.

Report: the report on corporate governance and ownership structure that companies must prepare and publish pursuant to Art. 123-bis of the TUF.

Remuneration Report: the report on remuneration policy and remuneration paid that companies are required to draw up and publish pursuant to Art. 123-ter TUF and Art. 84- quarter Consob Issuers' Regulations.

Company: Sabaf S.p.A., hereinafter also referred to as Sabaf.

Articles of Association: the Articles of Association approved by the Shareholders' Meeting of Sabaf S.p.A.

Testo Unico della Finanza/TUF: Legislative Decree 58 of 24 February 1998.

Unless otherwise specified, the definitions in the CG Code relating to: directors, executive directors, independent directors, significant shareholder, chief executive officer (CEO), board of directors, control body, business plan, concentrated ownership company, large company, sustainable success, top management shall also be referred to by reference.

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1. ISSUER PROFILE

The entrepreneurial model of Sabaf S.p.A. is rendered explicit in its corporate vision, i.e. to combine business decisions and results with ethical values by going beyond family capitalism and opting for a managerial rationale oriented not only towards the creation of value but also towards the respect of values.

Since its listing on the stock exchange in 1998, the corporate governance model of Sabaf has been based on a strict separation between the shareholding structure and management of the Company and of the Group.

The constant alignment with the reference recommendations and best practices in terms of corporate governance confirms the choice of adopting a corporate governance system that considers the creation of sustainable value as the reference parameter for the work of the Directors.

As a further step along this path, Sabaf's management believes that ethics founded on the centrality of the individual and respect for common values, set at the head of the creation of value, are able to help take decisions that are in line with the corporate culture and significantly contribute to assuring the Company's sustainable long-term growth.

For this purpose, Sabaf has prepared and published the Charter of Values, prepared in accordance with the existing national and international regulatory principles, guidelines and documents with regard to human rights of corporate social responsibility and corporate governance. The document is the governance tool through which Sabaf clearly explains the Company's values, standards of behaviour and commitments in relations with all the stakeholders - shareholders, employees, customers, suppliers, lenders, the Public Administration, the community and the environment.

The latest version of the Charter of Values was approved by the Board of Directors on 11 February 2014 and is available on the website www.sabafgroup.comunder the section "Sustainability".

In line with the Company's "vision", the company's "Mission" and in accordance with the Charter of Values, the strategic and operational decisions implemented by the Sabaf Group are intended to ensure sustainable development, by balancing business and financial requirements with social and environmental needs. The contents of the Sabaf Group's Vision, Mission and approach to sustainable development are set out in the Non-Financial Statement published pursuant to Legislative Decree No. 254/2016 and available on the website www.sabafgroup.comin the "Sustainability" section.

Role of the Board of Directors

The Board of Directors is the central body of Sabaf's Corporate Governance system and has the power and duty to direct the Company in the pursuit of sustainable success, understood as the objective of creating long-term value for the benefit of the shareholders, taking into account the interests of the Company's other stakeholders. This is also referred to in the company's "Mission", in which sustainable development is promoted by balancing economic and financial requirements with those related to the social and environmental dimension. In the pursuit of sustainable success, the Board ensures compliance with the values, principles of conduct and commitments stated in the Charter of Values adopted by Sabaf. To this end, it shall take all decisions required or useful to implement the object of the Company.

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