Tesmec S p A : Report on Corporate Governance and Ownership Structure

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REPORT

ON CORPORATE GOVERNANCE AND

OWNERSHIP STRUCTURE

Pursuant to Article 123-bis Consolidated Law on Finance (T.U.F.)

traditional management and control model

Tesmec S.p.A.

www.tesmec.com

Financial Period as at 31/12/2020

Approved by the Board of Directors on 12 March 2021

To be submitted to the Shareholders' Meeting of 22 April 2021

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TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................................................................	4
GLOSSARY ...................................................................................................................................................................	6
1. ISSUER'S PROFILE ...................................................................................................................................................	8
2. INFORMATION ON THE OWNERSHIP STRUCTURE (pursuant to Article 123-bis, paragraph 1, Consolidated Law on
Finance (T.U.F.)), AT THE DATE OF THE REPORT .......................................................................................................	9
(A) Share capital structure (pursuant to Article 123-bis, paragraph 1, letter a) Consolidated Law on Finance (T.U.F.)..............	9
(B) Restrictions on the transfer of securities (pursuant to Article 123-bis, paragraph 1, letter b) Consolidated Law on Finance
(T.U.F.)) .........................................................................................................................................................................	9

1. Significant equity investments (pursuant to Article 123-bis, paragraph 1, letter c) Consolidated Law on Finance (T.U.F.)) 9
2. Securities granting special controlling rights (pursuant to Article 123-bis, paragraph 1, letter d) Consolidated Law on Finance

(T.U.F.)) .......................................................................................................................................................................	10
(E) Employee shareholding: exercise of voting rights (pursuant to Article 123-bis, paragraph 1, letter e) Consolidated Law on
Finance (T.U.F.))...........................................................................................................................................................	10

(F) Restrictions on voting rights (pursuant to Article 123-bis, paragraph 1, letter f) Consolidated Law on Finance (T.U.F.))...10

(G) Shareholder agreements (pursuant to Article 123-bis, paragraph 1, letter g) Consolidated Law on Finance (T.U.F.))........

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1. Change of control clauses (pursuant to Article 123-bis, paragraph 1, letter h) Consolidated Law on Finance (T.U.F.)) and provisions established by the Articles of Association on public purchase offers (pursuant to Articles 104, paragraph 1-ter, and

104-bis,paragraph 1) Consolidated Law on Finance (T.U.F.))...........................................................................................	10
(I) Powers to increase the share capital and authorisations to purchase treasury shares (pursuant to Article 123-bis, paragraph 1,
letter m) Consolidated Law on Finance (T.U.F.)) .............................................................................................................	10
(L) Management and co-ordination activities (pursuant to Article 2497 et seq. of the Italian Civil Code) ..............................	11
3. COMPLIANCE (pursuant to Article 123-bis, paragraph 2, letter a), Consolidated Law on Finance (T.U.F.)).....................	12
4. BOARD OF DIRECTORS .........................................................................................................................................	13

4.1 Appointment and replacement (pursuant to Article 123-bis, paragraph 1, letter l), Consolidated Law on Finance (T.U.F.))

....................................................................................................................................................................................13

4.2 Composition (pursuant to Article 123-bis, paragraph 2, letters d) and d-bis), Consolidated Law on Finance (T.U.F.)) ......

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4.3 Role of the Board of Directors (pursuant to Article 123-bis, paragraph 2, letter d), Consolidated Law on Finance (T.U.F.))

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4.4	Delegated bodies......................................................................................................................................................	21
4.5	Other executive directors ..........................................................................................................................................	25
4.6	Independent Directors ..............................................................................................................................................	28
4.7	Lead Independent Director........................................................................................................................................	28
5. PROCESSING CORPORATE INFORMATION..........................................................................................................	29

6. INTERNAL BOARD COMMITTEES (pursuant to Article 123-bis, paragraph 2, letter d), Consolidated Law on Finance

(T.U.F.)) .......................................................................................................................................................................	30
7. REMUNERATION AND APPOINTMENTS COMMITTEE ........................................................................................	31
8. REMUNERATION OF DIRECTORS .........................................................................................................................	33
9. CONTROL, RISK AND SUSTAINABILITY COMMITTEE .......................................................................................	34
10. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM ..............................................................................	36
10.1	Director in charge of internal control and risk management system.............................................................................	37
10.2	Head of the Internal Audit Function .........................................................................................................................	37
10.3	Organisational Model pursuant to Legislative Decree 231..........................................................................................	38
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10.4 Independent Auditors .............................................................................................................................................	39
10.5	Executive responsible for preparing the Company's accounting documents .................................................................	39
10.6	Coordination among subjects involved in the internal control and risk management system ..........................................	39
11. DIRECTORS' INTERESTS AND RELATED PARTY TRANSACTIONS ..................................................................	41
11.1	Related Party Transactions - investigation and approval............................................................................................	41
11.2	Related Party Transactions carried out by means of subsidiaries .................................................................................	41
11.3	Application of the Procedure for Related Party Transactions ......................................................................................	42
12. APPOINTMENT OF STATUTORY AUDITORS ......................................................................................................	43
13. COMPOSITION AND OPERATION OF THE BOARD OF STATUTORY AUDITORS (pursuant to Article 123-bis,
paragraph 2, letters d and d)-bis),Consolidated Law on Finance (T.U.F.))..........................................................................	46
14. INVESTOR RELATIONS........................................................................................................................................	49

1. SHAREHOLDERS' MEETINGS (pursuant to Article 123-bis, paragraph 2, letter c), Consolidated Law on Finance (T.U.F.))
   ....................................................................................................................................................................................50
2. ADDITIONAL CORPORATE GOVERNANCE PRACTICES(pursuant to Article 123-bis, paragraph 2, letter a),

Consolidated Law on Finance (T.U.F.))...........................................................................................................................	51
17. CHANGES SINCE THE END OF THE FINANCIAL PERIOD ..................................................................................	52
18. COMMENTS ON THE LETTER OF THE CHAIRMAN OF THE CORPORATE GOVERNANCE COMMITTEE DATED
22 DECEMBER 2020....................................................................................................................................................	53
TABLE 1: Information on Ownership Structure ...............................................................................................................	54
TABLE 2: Structure of the Board of Directors and of the Committees ...............................................................................	55
TABLE 3: Structure of the Board of Statutory Auditors ....................................................................................................	56
ANNEX A - List of existing offices held by the current members of the Board of Directors ................................................	58

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