Saras S p A : Corporate Governance report 2020

ANNUAL CORPORATE GOVERNANCE REPORT AND

INFORMATION ON THE OWNERSHIP STRUCTURE - 2020 Financial year

PURSUANT TO ART. 123-bis OF LEGISLATIVE DECREE NO. 58 OF 24 FEBRUARY 1998 ("TUF" - Consolidated Financial Law).

March 2021

www.saras.it/en

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Foreword

Saras SpA ("Saras" or the "Company") adheres to the self-regulatory code approved by the Corporate Governance Committee promoted, among others, by Borsa Italiana SpA in 2006 and subsequently amended and updated, most recently in July 2018 (the "Corporate Governance Code" or "Code").

In January 2020, the aforementioned Corporate Governance Committee approved a new corporate governance code (the "New Corporate Governance Code") which provides, inter alia, that companies that adopt the New Corporate Governance Code "apply it starting from the first financial year that starts after 31 December 2020, informing the market in the report on corporate governance to be published in 2022".

In this regard, it is hereby specified that although the system of corporate governance rules adopted by Saras is already substantially in line with the principles of the New Corporate Governance Code,, during the current year the Company will consider, what changes, if any, need to be made to its corporate practices according to the guidelines that inspired the revision of the Code and which will be disclosed to the market in the report on corporate governance that will be published in 2022.

The Code, as well as the New Corporate Governance Code, is accessible to the public on the Borsa Italiana SpA website at https://www.borsaitaliana.it/comitato-corporate- governance/codice/codice.en.htm.

Saras is aware that an efficient corporate governance system is one of the essential elements for achieving the objectives of creating sustainable value.

The sections below describe - according to the "comply or explain" principle, which is the foundation of the Corporate Governance Code - the main features of Saras' corporate governance system and the operation of its various components, especially as regards compliance with the recommendations contained in the Corporate Governance Code.

This report has been prepared in accordance with Article 123-bis, first paragraph of Legislative Decree no. 58 of 24 February 1998, as subsequently amended ("TUF" - Consolidated Financial Law).

This report was approved by the Board of Directors of Saras ("Board") at the meeting on 30 March 2021, to be made available to shareholders, also by means of publication on the Company website (https://www.saras.it/en), in view of the meeting called to approve the financial statements for the financial year ended on 31 December 2020. The report refers to the 2020 financial year and, where relevant, also to corporate events occurring in 2021 until its approval date.

Saras does not fall under the definition of SME pursuant to Article 1, paragraph 1, letter w- quater.1), of the TUF and Article 2-ter of the Consob Issuers' Regulation.

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Summary
SECTION I...............................................................................................................................................	4
1. Ownership Structure ....................................................................................................	4
2. Company Organisation.................................................................................................	7
3. Compliance with the Corporate Governance Code 2018 (pursuant to Art. 123-bis, paragraph
2, letter a) of the TUF)......................................................................................................	8
SECTION II............................................................................................................................................	10
1.	The Board of Directors ...........................................................................................	10
2.	Board Committees .................................................................................................	21
3.	Remuneration of directors and managers with strategic responsibilities.............	27
4.	The Internal Control and Risk Management System .............................................	29
5.	Processing of corporate information .....................................................................	35
6.	Internal Dealing procedure ....................................................................................	36
7.	Directors' interests and significant transactions with related parties...................	37
8.	Designated manager responsible for drafting company accounting documents..	37

9. Additional Financial Information pursuant to the amended Art. 82-ter of the Issuers'

Regulations.....................................................................................................................	38
10.	Board of Statutory Auditors ...................................................................................	38
11.	Shareholder relations.............................................................................................	40
12.	Shareholders' Meetings .........................................................................................	41
13.	Guidance on the composition of the new Board of Directors ...............................	43

14. Considerations on the letter of the Chair of the Corporate Governance Committee of 22

December 2020..............................................................................................................

43

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SECTION I

1. Ownership Structure

The Company's subscribed and paid-up share capital comprises 951,000,000 ordinary registered shares, fully paid up, with voting rights at both ordinary and extraordinary shareholders' meetings.

Based on the findings in the shareholders' register and public information or information available to the Company on the publication date of this report, there are no parties whose Company share capital ownership exceeds 1%1, except (i) Massimo Moratti S.a.p.A. di Massimo Moratti, which owns a 20.011% stake in the Company's share capital (ii) STELLA HOLDING S.p.A.2, which owns a 10.005% stake in the Company's share capital, (iii) ANGEL CAPITAL MANAGEMENT S.p.A., which owns a 10.005% stake in the Company's share capital, (iv) PLATINUM INVESTMENT MANAGEMENT LTD, which holds a 3.055% stake in the Company's share capital, and (v) URION HOLDINGS (MALTA) LIMITED which owns a 3.010% stake in the Company's share capital.

By virtue of the shareholders' agreement3 in force between STELLA HOLDING S.p.A., ANGEL CAPITAL MANAGEMENT S.p.A. and Massimo Moratti S.a.p.A. di Massimo Moratti, signed on 1 October 2013 (and, subsequently amended and supplemented) with regard to the shares they each own in Saras, it should be noted that the three companies exercise joint control over the issuer (also available on the website, https://www.saras.it/en).

The following table provides details of the above:

1As per Consob resolution no. 21304 of 17 March 2020, which entered into force on 18 March 2020, containing "Reduction of the initial percentage threshold of communication pursuant to Article 120, paragraph 2-bis, of Legislative Decree no. 58 of 1998 for shareholdings in the share capital of listed companies - having Italy as the member State of origin - with a high current market value and widely distributed shareholding structure".

1. It should be noted that, as per the press release of 1 July 2019 published on the site www.saras.it, on 24 June 2019, a deed was stipulated for the full non-proportionalspin-off of the company Mobro S.p.A. ("Mobro") in favour of the companies Angel Capital Management S.p.A. ("ACM") and Stella Holding S.p.A. ("Stella"). The aforementioned spin-off determined the winding-up of Mobro and the allocation of Saras shares already held by Mobro to ACM and Stella, which became holders of 95,152,280 and 95,152,279 Saras S.p.A. shares respectively. From 3 July 2019, the effective date of the spin-off, Stella and ACM took over Mobro's position as the sole party of the shareholders' agreement signed with Saras uninterruptedly.
2. It is noted that the key information concerning the Shareholders' Agreement was updated on 6 July 2019, more

specifically the preambles and certain paragraphs, to take into account, in particular, the completion, on 3 July 2019, of the full non-proportionalspin-off of the company Mobro in favour of the companies ACM and Stella.

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SHAREHOLDERS	No. ORDINARY		% OF SHARE
	SHARES		CAPITAL

	STELLA HOLDING S.P.A.		95,152,279		10.005
	ANGEL CAPITAL MANAGEMENT S.p.A.		95,152,280		10.005
	MASSIMO MORATTI S.A.P.A. DI MASSIMO		190,304,558		20.011
	MORATTI
	PLATINUM INVESTMENT MANAGEMENT LTD
			29,049,570		3.055
	URION HOLDINGS (MALTA) LIMITED		28,625,100		3.010

The company owns 9,220,216,000 treasury shares, equal to 0.97% of the share capital.

Furthermore, the following is noted:

1. there are no share transfer restrictions;
2. no shares or securities have been issued granting special control rights;
3. there is no specific mechanism for exercising voting rights in the case of employee share ownership;
4. there are no voting right restrictions;
5. there is a shareholders' agreement4 pursuant to Art. 122, paragraph 5, letters (a) and
6. 1. of the TUF filed with the Companies' Register of Cagliari on 2 October 2013, communicated to Consob and available as an extract on the website, www.saras.it;
7. based on the communications received from the Company pursuant to Art. 120 of the TUF, the subjects that are, either directly or indirectly, holders of relevant shareholdings (pursuant to Art. 123-bis, paragraph 1, letter c), TUF) that exceed 1% of the share capital subscribed and paid up, are those indicated in the table attached to this Report (page 5).
8. the following is worth noting with regard to significant agreements entered into by Saras or its subsidiaries that could become effective, be amended or terminated in the event of a change in the Company's control:
9. 
   - the financing agreement signed on 12 February 2020, amounting to EUR 50 million;

4See note 3.

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