LiuJo CodiceMod231 ENG

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Reference principles for the adoption of the organisation, management and control

model pursuant to Legislative Decree. 231/01

General Part

Approved by the Sole Director on 08th March 2018

Marco Marchi

IndexDefinitions 4

GeneralPart 5

1. Introduction1. Introduction 5

2. The Society2. The Society 6

2.1. TheInstitutionalStructure:bodiesandsubjects 7

2.2. Theorganisationalprinciples 9

2.3. Thecontrolandorganisationalsystem 9

2.4. ThegovernancetoolsofLiuJoSpa 11

2.5. Intragrouprelations 13

2.6. ModelandCodeofEthics 14

3. The Organisation, Management and Control Model of Society3. The Organisation, Management and Control Model of Society 14

3.1. FunctionoftheModel 14

3.2. RecipientsoftheModel 15

3.3. TheCompany’sProjectforthedefinitionofitsModel 15

3.3.1. Identificationoftheprocessesandactivitieswithinwhichthecrimesreferred

tobytheLegislativeDecree231/2001 16

3.3.2. IdentificationoftheKeyOfficers 16

3.3.3. Analysisofprocessesandsensitiveactivities 17

3.3.4. Gapanalysis 18

3.3.5. Definitionoftheorganisation,managementandcontrolmodel 18

3.4. OffensesrelevanttotheCompany 19

3.5. Extensionoftheprinciplesofthemodeltobranches/subsidiaries

andinvesteecompanieswithmajorityshares 20

4. The Supervisory Body4. The Supervisory Body 20

4.1. AppointmentandreplacementoftheSupervisoryBody 21

4.2. Functionsandpowers 23

4.3. InformationflowstoandfromtheSupervisoryBody 25

4.3.1. ReportingtothecorporatebodiesbytheSupervisoryBody 25

4.3.2. DisclosuretotheSupervisoryBody 26

4.3.3. Collectionandstorageofinformation 28

5. The penalty system5. The penalty system 28

5.1. Generalprinciples 28

5.2. Conductthatcanbesanctioned:fundamentalcategories 29

5.2.1. Measuresagainstemployees 29

5.2.2. Measuresagainstmanagers 31

5.3. Measuresagainstdirectorsandauditors 31

5.4. MeasuresagainstotherRecipients 31

6. The training and communication plan 6. The training and communication plan 32

6.1. Premise 32

6.2. Employees 33

6.3. Membersofthecorporatebodies,managersandexecutives 33

6.4. OtherRecipients 33

7. Adozione del Modello: Criteria for updating and adapting the Model7. Adozione del Modello: Criteria for updating and adapting the Model 34

7.1 VerificationsandcontrolsontheModel 34

7.2 Updateandadaptation 34

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DefinitionsSocietySociety LiuJoS.p.A.

Sensitive ActivitiesSensitive Activities activitiesoftheCompanyinwhichthereisariskofcommissionofCrimes;

CCNLCCNL ApplicableNationalCollectiveLabourAgreement;

Code of EthicsCode of Ethics CodeofEthicsadoptedbytheCompany;

ConsultantsConsultants thosewhoact in thenameof and/oronbehalf of theCompanyon thebasis of a

specificmandateorotherobligationofconsultancyorcollaboration;

DecreeDecree LegislativeDecree231/2001andsubsequentadditions;

RecipientsRecipients all those who work to achieve the purpose and objectives of the Company. The

Recipientsof theModel include themembersof theCorporateBodies, employees

(includingmanagers),agents/businessbrokers,consultants,suppliers,sub-contractors,

customers, consumers,and, ingeneral, all thosewhowork in thenameand/oron

behalfoftheCompany;

EmployeesEmployees allsubordinateworkersandmanagers;

GroupGroup LiuJoSpAandthecompaniesdirectlyorindirectlycontrolledbyitpursuanttoarticle

2359ofthecivilcode.civ..

ConfindustriaGuidelinesConfindustriaGuidelines the Guidelines for the preparation of organisational and management models

issued by Confindustria approved by the Ministry of Justice, at the end of the

inspectionprocedurecarriedoutonthesamepursuanttoart.6,paragraph3,of

thelegislativedecreen.231/2001andtheMinisterialDecreeof26June2003,n.201;

ModelModel theorganisation,managementandcontrolmodelenvisagedbyLegislativeDecree231/2001;

Supervisory BodySupervisory BodyorOdVOdV “SupervisorybodypursuanttoLegislativeDecreeno.231/2001;

Corporate BodiesCorporate Bodies theSoleDirectorandthemembersoftheCompany’sBoardofStatutoryAuditors;

PartnerPartner the contractual counterparts with which the Company enters into some form of

contractually regulated collaboration, (franchisee, license, agency, collaboration in

general)where intended to cooperatewith theCompany in the context of Sensitive

Activities);

P.A.P.A. thePublicAdministration, including therelatedofficials in theircapacityaspublic

officialsorpersonsinchargeofpublicservice;

OffensesOffenses theoffensesarethoseprovidedforbyLegislativeDecree.231/2001andsubsequent

additions;

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General Part1. Introduction1. IntroductionOn8th June2001, inexecutionofthedelegationpursuanttoart.11ofthelaw29September2000n.300-

Legislative Decree 231 (hereinafter, “The Legislative Decree” 231 “), containing the”Discipline of the

administrativeliabilityoflegalpersons,companiesandassociations,includingthosewithoutlegalpersonality”.

ThedecreefindsitsprimarygenesisinsomeinternationalandcommunityconventionsratifiedbyItalywhich

requiretheprovisionofformsofliabilityofcollectivebodiesforcertaintypesofcrime.

TheLegislativeDecree.231/2001,introducedforthefirsttimeinItaly,thecriminalliabilityofcompaniesfor

committedorattemptedintentionalcrimes,intheinterestortotheadvantageofthecompaniesthemselves,

bymembersofthetopmanagement(theso-called“topmanagement”orsimply“topmanagement”)andby

thosewhoaresubjecttothedirectionorsupervisionofthelatter(Article5,paragraph1,oftheLegislative

Decree231/2001).

Theadministrativeliabilityofentities is independentfromthecriminal liabilityoftheactualpersonwho

committed the crime; it does not replace, yet is added to the personal liability of the individual who

committedthecrime.Thecommissionorattemptedcommissionoftheaforementionedcrimes involves

theapplicationofafinancialpenaltyand,inthemostseriouscases,disqualificationsanctionsareapplied

(alsoapplicableasaprecautionarymeasure),suchasdisqualificationfromexercisingactivity;thesuspension

orwithdrawalofauthorisations,licensesorconcessionsfunctionaltothecommissionoftheoffense;the

banoncontractingwithpublicadministration;exclusionfromconcessions,loans,contributionsorsubsidies

andthepossiblewithdrawalofthosegranted;abanonadvertisinggoodsorservices.

The types of offenses to which the regulations in question apply can be included, for the sake of

convenience,inthefollowingcategories:

• crimesinrelationswiththePublicAdministration;

• crimesagainstpublicfaith;

• corporatecrimes;

• crimeswiththepurposeofterrorismorsubversionofthedemocraticorder;

• marketabuse;

• crimesagainsttheindividual;

• transnationalcrimes;

• crimesagainstlifeandindividualsafety;

• crimesofmanslaughter,seriousorveryseriousnegligentinjuries,committedinviolation

oftherulesprotectinghealthandsafetyintheworkplace;

• crimesofreceivingstolengoods,moneylaunderinganduseofmoney,goodsorutilitiesofillicitorigin,

aswellasself-laundering;

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• computercrimesandunlawfuldataprocessing;

• crimesagainstindustryandcommerce;

• organisedcrimeoffenses;

• crimesrelatingtotheviolationofcopyright;

• crimeofinducementnottomakestatementsortomakefalsestatementstothejudicialauthority;

• environmentalcrimes;

• crimesofemploymentofillegalthird-countrynationals;

• briberyoffensesbetweenindividualsandIncitementtobriberybetweenindividuals;

• crimesofracismandxenophobia.

Intheeventofthecommissionofacrimeintheinterestortotheadvantageoftheentity,theycaninany

casebeexempt fromsanction if theyprove that, before theoffensewas committed, anorganisation,

managementandcontrolmodelwasadoptedandeffectively implementedsuitable forpreventing the

typesofcrimesthatactuallyoccurred.

Theentityisnotliableifthecrimewascommittedintheexclusiveinterestoftheperpetratorofthecrime

orofthirdparties.

ForabroaderdiscussionoftheLegislativeDecree231/01pleaserefertoAppendixA.

2. The Society2. The SocietyInordertofurtherensureconditionsoffairnessandtransparencyintheconductofcompanyactivities,

TheCompanyhasdeemed itselfcompliantwithcompanypolicies toproceedwith theadoptionof the

Model,inlightoftheprovisionsoftheDecree.

TheinitiativetoadopttheModel,wastakenbytheCompanyinthebeliefthattheadoptionofthisModel

-beyondtheprovisionsoftheDecree,whichindicatetheModelasanoptionalandnotmandatoryelement-

couldconstituteavalidtoolforraisingawarenessoftheEmployees.

Corporate purposeCorporate purposeTheCompany isa joint stockcompanywhosecorporatepurpose is tocarryout the followingactivities;

production and trade of external knitwear, clothing and accessories in general, corsetry, underwear,

beachwear,householdlinen,footwear,eyewear,kindsofwatches,jewellery,giftsandrelateditemssuchas

gadgets,cartoleriaandperfumeryitems.

TheCompanymayacquireshareholdingsor interests inothercompanies,consortia,participate inother

formsofaggregationincludingtemporarybusinessassociationswhoseaimsandobjectsaresimilar,related

orcomplementaryandwillfulfill,inaccordancewithapplicablelaw,alloperationsthatwillbeconsidered

bytheadministrativebodyasnecessaryorusefulfortheachievementofthecorporatepurpose.

Onapurely instrumentalandancillarybasis, theCompanymaycarryout commercial, industrial, real

estate, securities and financial transactions, including the issue of sureties, endorsements and real

guarantees, deemednecessaryor evenonly appropriate for the realisationof the corporatepurpose,

withoutprejudicetothecompliancewiththeconditionsandlimitsimposedbylawsandregulationsfor

transactionsthatconstitutetheexerciseofreservedactivities;allbothinItalyandabroad.

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MissionMissionTheLiuJostyleprojectevolvestowardstheconstructionofatotallook,natureanddevelopmentofabrand

createdtoenhancethefemininityinallitsforms.Tothisend,,inadditiontoallwomen’sclothing,accessory

lines,children’sandsportslineswereintroducedandallowedthecreationoflicenses,startingfromthose

firstrepresentedbytheworldofhouseholdlinen,tomen,tochildren’sshoes,women’sshoes,watchesand

jewelleryuptothelatestonesrelatedtoperfumesandeyewear.

2.1. The Institutional Structure: bodies and subjects 2.1. The Institutional Structure: bodies and subjects AssemblyAssemblyTheordinaryshareholders’meetingresolvesthemattersreservedtoitbythelawandbythisstatute.

Thefollowingarestrictlyreservedtothecompetenceoftheordinaryassembly:

a) approvalofthefinancialstatements;

b)the appointment and dismissal of directors; the appointment of the statutory auditors and the

chairmanoftheboardofstatutoryauditorsand,whenrequired,thepersontowhomtheaccounting

controlisdelegated;

c) thedeterminationoftheremunerationofthedirectorsandstatutoryauditors,ifnotestablishedby

thearticlesofassociation;

d)theresolutionontheresponsibilityofdirectorsandstatutoryauditors.

Thefollowingaretheresponsibilityoftheextraordinaryassembly:

a) amendmentstothestatute;

b)theappointment,replacementanddeterminationofthepowersofliquidators;

c) theissuanceofconvertibleandnon-convertiblebonds;

d)theconstitutionofdestinedassetspursuanttoart.10oftheStatuteor;

e) othermattersattributedtoitbylawandbytheArticlesofAssociation.

Sole AdministratorSole AdministratorThelegalrepresentationofthecompanyinalllegalprocedures,aswellasthelegalrepresentationofthe

companytowardsthirdpartiesandthecorporatesignatureareentrustedtothesoledirector.

The sole director, or the board of directors, are vested with the broadest powers necessary for the

ordinaryandextraordinarymanagementof thecompany,withoutany limitationwhatsoever,with the

righttoperformallactsdeemedappropriatefortheachievementor implementationofthecorporate

purposes,withoutprejudicetotheneedforspecificauthorisationfromtheshareholders’meetinginthe

casesrequiredbylaw.

Board of Statutory AuditorsBoard of Statutory AuditorsTheboardofstatutoryauditorshasthedutiesandpowersreferredtoinarticles2403and2403-bisofthe

ItalianCivilCodeandalsoexercisesaccountingcontrol.

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Auditing firm Auditing firm WithadeeddatedJune28th2016,theCompanyentrustedthestatutoryauditassignmenttoanexternal

company,withthemandateuntiltheapprovalofthefinancialstatementsatDecember31st2018,maintaining

themanagementcontrolfunctionofthepreviousBoardofStatutoryAuditors.

DPODPOIncompliancewiththeprovisionsoftheGeneralDataProtectionRegulation(EU)2016/679,theDPOhas

beenidentifiedwiththetasksof:

a) monitoringcompliancewiththeGDPR,evaluatingtherisksofeachprocessinginlightofthenature,

scope,contextandpurposes;

b) collaboratingwith theDataController/Manager,wherenecessary, inconductingadataprotection

impactassessment(DPIA);

c) informing and sensitising the Data Controller orManager, aswell as the employees of the latter,

abouttheobligationsderivingfromtheRegulationsandotherprovisionsondataprotection;

d) cooperatingwiththeSupervisoryAuthorityandactingasacontactpointforthesameonanymatter

relatedtotheProcessing;

e) acting as a contact point with the interested party for the exercise of the rights referred to

inart.15-22oftheGDPR;

f) supportingtheDataControllerortheManagerinanyactivityrelatedtotheProcessingofPersonal

Data,alsowithregardtothepossiblekeepingofaregisterofprocessingactivities(Article30ofthe

GDPR).

Committees Committees Asignificantintegrationroleisplayedbythefollowingcommitteeswhohaveanadvisoryroleonpriority

issuesfortheCompanyorcoordinationofoperationalorfunctionalareas.

TheseCommitteesprovidefortheparticipationofpermanentmembersand,insomecases,participants

upon request. Also in the figures of external consultants,whomay from time to timebe involved as

expertsinsituationsthatrequireparticularskills.

Inparticular,thefollowingmanagementmeetingshavebeensetup:

•Steering and Coordination Committee (CIC, SCC)Steering and Coordination Committee (CIC, SCC)withthefollowingapprovaltasks:newprojectsandtheir

progress,presentationof strategic issuesand sharingofbusinesseconomicdata. (frequency: every

threeweeks);

• Steering CommitteeSteering Committeewiththefollowingtasks:assessmentoftheprogressofprojectsaimedatthelisting

process(frequency:monthly).

Furthermore,inter-functionaloperationalmeetingsaresetupbothrelatingtothecreativityandrealisation

oftheproductsandtothedistributionqualityofthesame.

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2.2. The organisational principles2.2. The organisational principlesProduction OrganisationProduction OrganisationTakingintoaccounttheorganisationoftheproductionoftheCompany,thecontrolofthesupplychainof

theproductassumesstrategicimportanceforthesame.

Tothisend,theCompanydecidedtoundertakethepathofadaptationtotheSA800:2014standardon

Social Responsibility and related certification by evaluating its suppliers to verify that they act in

accordancewith theapplicable labour laws (LegislativeDecree81/08;CCNLof referenceetc.)and that

theydotheirbesttoensurethattherearenoabusive,exploitativeorillegalconditionstothedetriment

ofworkersemployedintheirworkplaces,insummarythepointstobeexploredare:

• childlabour;• forcedandcompulsorylabor;

• Health&Safety;• discrimination;

• freedomofassociation;

• disciplinarypractices;• workinghoursandrelatedpay

Production OrganisationProduction OrganisationTheCompanyoffersitsproductsonthemarketthroughvariousdistributionchannels.

Fromthepointofviewofthefinalconsumer,theGroupispresentonthemarketthrough:

• the Retail distribution channel, i.e. the direct distribution channel (retail) forwhichwemake use of

stores to be managed directly by the Company (the DOS), of the outlets and the online boutique;

• themonobrandchannel,whichconsistsofmonobrandstoresmanagedincollaborationwithcommercial

partnersthemulti-brandwholesalechannel,whichincludesmulti-brandstoresisdedicatedspacesin

departmentstores(shopinshopandcorners).

For sales to single-brand andmulti-brand customers, the Groupmakes use of a network of agents/

representativeofficesanddistributors.

2.3. The control and organisational system 2.3. The control and organisational system TheCompanyhasaninternalcontrolsystem(hereinafterthe“InternalControlSystem”)whoseaimisto

overseethetypicalrisksofthecompanyovertime.

TheInternalControlSystemisasetofrules,proceduresandorganisationalstructureswiththepurpose

ofmonitoringcompliancewithstrategiesandtheachievementofthefollowinggoals:

(I) effectivenessandefficiencyofprocessesandoperations;

(II) qualityandreliabilityofeconomicandfinancialinformation;

(III) compliancewithlawsandregulations,rulesandinternalprocedures;

(IV) safeguardingthevalueofthecompany’soperationsandassets.

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TheCompanyadoptsregulatoryinstrumentsbasedonthegeneralprinciplesof:

a) cleardescriptionofthereportinglines;

b) knowledge,transparencyandpublicityofthepowersattributed(withintheCompany

andtowardsinterestedthirdparties);

c) clearandformaldelimitationofroles,withacompletedescriptionofthetasksofeachfunction,

therelatedpowersandresponsibilities.

Theinternalprocedurestobeadoptedmustbecharacterisedbythefollowingelements:

• separation,withineachprocessbetweenthepersonwhomakesthedecision(decision-makingimpulse),

thepersonwhoexecutes thedecisionand thepersonwho isentrustedwithcontrolling theprocess

(so-called“segregationoffunctions”);

• writtentraceofeachrelevantstepoftheprocess(so-called“traceability”);• adequatelevelofformalisation.

TheCompanyhas adopted a systemof proxies andpowers of attorney characterisedby elements of

“security”forthepurposesofcrimeprevention(traceabilityandhighlightingofsensitiveactivities)which,

atthesametime,allowstheefficientmanagementoftheCompany’sactivities.

By“delegation”wemeanthenon-occasionaltransferofresponsibilitiesandpowersfromonepersonto

another in a subordinate position, within the Company. By “power of attorney” we mean the legal

transactionbywhichonepartyconfersontheother,thepowertorepresentit(i..etoactinthenameand

onbehalfofthesame).Thepowerofattorney,unliketheproxy,ensurescounterpartiesnegotiateand

contractwiththepersonsofficiallyappointedtorepresenttheCompany.

InordertoeffectivelypreventCrimes,thesystemofproxiesandpowersofattorneymustcomplywith

thefollowingessentialrequirements:

a) theproxiesmustcombineeachpowerwiththerelatedresponsibilityandanadequatepositioninthe

organisationchart;

b) eachproxymustspecificallyandunequivocallydefine:

the powers of the delegate, and the subject (body or individual) to whom the delegate reports

hierarchically;

c) themanagementpowersassignedwith theproxiesand their implementation,mustbeconsistent

withtheCompany’sobjectives;

d) thedelegatemusthaveadequatespendingpowersforthefunctionsassignedtothem;

e) allthosewhohaverelationswiththePAand/orwithprivatepartiesonbehalfoftheCompany,must

haveaspecificpowerofattorneyinthisregard;

f) thepowerofattorneycanbegrantedtonaturalpersonsexplicitlyidentifiedintheproxyitself,orto

legalpersonswhowillactthroughtheirowninvestedattorneys,withinthesame,withsimilarpowers;

g) each power of attorney involving representation of the Company towards third parties,must be

accompaniedbyaninternaldelegationdescribingitsmanagementpower;

h) thepowersofattorneynormallyprovidespendingand/orcommitmentlimits;intheeventthatthey

donotexplicitlyprovidesuchlimits,compliancewithsaidrequirementsisensuredbyinternallimits

providedforbythedelegationsystemandmoregenerally,bytheInternalControlSystem;

i) an adhocproceduremust governmethods and responsibilities to ensure a timelyupdateof the

proxiesand/orpowersofattorneyintheeventofmodificationorwithdrawal(assumptionorextension

ofnewresponsibilitiesandpowers, transferof tasks incompatiblewiththoseforwhichtheywere

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assigned,resignation,dismissal,withdrawal,etc.),aswellasthemethodsof issueandsubsequent

communicationofthesametotheinterestedparties.Furthermore,acontentiouslyupdatedregister

of proxies andpowersof attorneyhasbeen set up,which summarises all proxies andpowersof

attorneyassignedwithintheCompanywithindication,amongstothers,ofthedelegatedsubject,the

delegatingbody,thedateofconfermentandthedescriptionofthepowersattributed;

j) copiesoftheproxiesandpowersofattorneyandrelatedupdateswillbesenttotheSB.

TheSBperiodicallychecksthesystemofproxiesandpowersofattorneyinforceandtheirconsistency

withtheorganisationalprovisions,withthesupportof theothercompetent functions,recommending

anychangesintheeventthatthemanagementpowerand/orthequalificationdoesnotcorrespondtothe

powersofrepresentationconferredonthedelegateorthereareotheranomalies.

2.4. The governance tools of Liu Jo Spa 2.4. The governance tools of Liu Jo Spa TheCompanyisequippedwithasetoforganisationalgovernancetoolsthatguaranteethefunctioningof

theCompanyandwhichcanbesummarisedasfollows:

Bylaws:Bylaws:incompliancewiththeprovisionsofthelawinforce,itcontemplatesvariousprovisionsrelating

tocorporategovernanceaimedatensuringthecorrectperformanceofmanagementactivities.

Code of Ethics: Code of Ethics: anintegralandsubstantialpartoftheModel,itregulatesthesetofrights,duties

andresponsibilitiesthattheCompanyrecognisesas itsownandassumestowardsitsstakeholders,

allrecipientsofthisCodemustcomplywithit.

Inparticular,theCompanyisguidedbythefollowingprinciples:

• compliancewithcurrentnationalandcommunitylawsandingeneraltheinternationallegislationofthe

countriesinwhichitoperates,internalregulationsorcodesandwhereapplicable,therulesof

professionalethics;

• reliability,correctnessandtransparencyofactionstakeninpursuitofitsobjectives;• promotion of the professional development of personnel, which is an indispensable asset for the

successofthecorporatemission,protectionofworkers’rightsandnon-discrimination;

• preventionofcorruption,includinginternationally,bothontheactiveandpassiveside.Tothisend,by way of example: favours, collusive behaviour, direct solicitations and/or through third parties are

prohibited, inorder toobtainadvantages for theCompany, foroneselfor forothers.Thepersonnel

mustnottrytoimproperlyinfluencethedecisionsofthecounterpart(publicofficials/representativesof

PrivateEntitieswhonegotiateormakedecisionsonbehalfofPublicAdministrationsandPrivateEntities

respectively);itisnotpermittedtopayoroffermoney,giftsoranybenefittothePublicAdministration

andtoPrivateEntitiesortotheirfamilies,directlyorindirectly,tocompensateforanactofone’soffice;

• repudiationofterrorismwhichisalsoimplementedthroughtheexecutionofchecksonthenon-belonging

ofpotentialpartnerstotheReferenceLists,publishedbytheFinancialInformationUnit(UIF),setupat

theBankof Italypursuant toart. 6 c. 1of LegislativeDecree231/2007, for thepreventionandfight

againstmoneylaunderingandthefinancingofterrorism;

• protectionoftheenvironmentandhealthandsafetyintheworkplace.

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Organisation Chart:Organisation Chart:showsthecurrentorganisationalstructureandhasbeendesignedanddevelopedinordertoalsoconsidertheterritorialdimensionoftheCompany,engagedinincreasinglymorediverse

foreigngeographicareas,aswellasinItaly.

Company portal:Company portal: is the gateway to the company network, made up of software, information and

documentservices(pressreleasesandmanuals)ortospecificexternalresourcesontheInternet.

Privacy governance model:Privacy governance model: theCompanyestablishedtheprivacycompliancemodelbyadoptingand

implementing:

• PrivacyPolicy;• Guidelines-theDataProtectionImpactAssessment(DPIA);

• Authorisationtoprocesspersonaldataasadministrator;

• Authorisationtoprocesspersonaldata;• Codeoftechnicalandorganisationalsecuritymeasures;

• Contractfordataprocessing(personresponsible);• Contractfordataprocessing(owner);• DeterminationontheDPO;

• Employeeinformation;

• Responsibleguidelines;• Guidelinesondataprotectionbydesignandbydefault;• GuidelinesonAuthorisedPersons;• Legalbasistreatmentpolicy;

• DataBreachManagementPolicy;

• ITtoolspolicy;• TransferPolicy;• RetentionPolicy;• PrivacyPolicyEvents;• Procedurefortheexerciseoftherightsoftheinterestedparty;• Procedureformanagingsocialchannels

The Model is integrated with further procedures and/policies deriving from the IT evolution in the

collectionandprocessingofdataandfromtherelatedstrategicpoliciesofthecompany,foraconstant

complianceadjustment.

The setofgovernance and regulatory toolsadoptedandsummarisedabove, and theprovisionsof this

Model,makeitpossibletoidentify,howthedecisionsoftheentitywereformedandimplemented,with

respecttoallactivities(seeart.6,paragraph2letterb,legislativedecreeno.231/2001).

Theparticularvalueoftheaforementionedsafeguardsforthepurposeofpreventingthecrimesreferred

tointheLegislativeDecree231/2001willbespecificallyhighlighted,withreferencetoeachtypeofcrime

relevantforthispurpose,intheSpecialSectionofthisdocument.

ThisModelisthereforepartofastrategyofariskmanagementsysteminspiredbythemaininternational

standards(COSOReport)andcontinuesaconstantobjectiveofintegratingthecontrolmeasuresinorder

tooptimisetheeffectivenessaofriskprevention.

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2.5. Intragroup relations 2.5. Intragroup relations Theperformanceofintra-groupservicesmustbegovernedbyawrittencontract,acopyofwhichmust

be sent, upon request, to the Supervisory Body of the Company. In particular, the service provision

contractmust:

• regulatetheroles,responsibilities,operatingmethodsand informationflowsfortheperformanceof

theservicescoveredbythecontract.

• provideforspecificcontrolmeasurestomonitorthecorrectexecutionoftheactivitiesentrustedtothe

service;

• definethefollowingclauses: • theobligationonbehalfofthecompanybenefitingfromtheservicetocertifythetruthfulnessand

completeness of the documentation or information communicated to the companyproviding the

service,forthepurposeofcarryingouttherequestedservices;

• thepoweroftheSupervisoryBodyofthecompanyprovidingtheservicetorequestinformationfrom

theSupervisoryBody,orothercontrolfunction,ofthecompanybenefitingfromtheservice,inorder

tocorrectlyperformitsfunctionswithintheservicesrequestedfromtheCompany;

• thepoweroftheSupervisoryBody,orothercontrolfunction,ofthecompanybenefitingfromthe

service to request information from the Supervisory Body of the company providing the service,

or-withtheconsentofthelatter-fromtheCompany’sDepartments/Functions;

• clausewithwhichthepartiesundertaketocomplywiththeprinciplesoforganisation,management

and suitable control for preventing the commission of illegal acts pursuant to the Legislative

Decree231/01,definedintheOrganisation,ManagementandControlModeladoptedoranother

compliance model containing control measures consistent with those provided for in the

Organisation,ManagementandControlModeladoptedbytheCompany;

• clause by which the parties declare that they have issued and implemented provisions to their

directors,employeesand/orcollaboratorsaimedatpreventingthecommission,evenifattempted,of

thebehaviourssanctionedbytheLegislativeDecree231/01andundertaketokeepthemalleffectively

implementedfortheentiredurationofthecontract;

• expressterminationclausesthatgivethepartiestherighttoterminatethecontractinquestionin

theeventofinvolvement,forwhateverreason,ofoneofthePartiesinarelevantproceedingpursuant

to and for the purposes of the Legislative Decree 231/2001 and subsequent amendments and

additionsand/orintheeventoftheissuanceofinterdictionmeasuresorsuspensionofworkofany

natureand/ordurationagainstoneoftheParties.

Inprovidingtheservices,theCompanycomplieswiththeprovisionsofthisModelandtheprocedures

establishedforitsimplementation.

If theservicesprovidedfallwithinthescopeofSensitiveActivitiesnotcontemplatedby itsModel, the

companyproviding the service,on theproposalof theSB,musthaveadequate rulesandprocedures

suitableforpreventingthecommissionofoffenses.

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2.6. Model and Code of Ethics 2.6. Model and Code of EthicsTherulesofconductcontainedinthisModelmustbeconsistentwiththoseoftheCodeofEthics,although

thisModelhasspecificpurposesincompliancewiththeLegislativeDecree231/01.

Inthisrespect,infact:

• theCodeofEthicsrepresentsaninstrumentofexpressionofthevaluesandprinciplesbuiltupoverthe

Company’shistory,throughwhichtheCompanyclearlystrengthensitsvalues;

• the Model, on the other hand, responds to specific provisions contained in the Legislative Decree.

231/2001, aimed at preventing the commission of particular types of crimes (for acts which, were

allegedlycommittedforthebenefitoftheCompany,mayentailadministrativeliabilityforacrimebased

on theprovisionsof theDecree itself). TheModel dictates rules andprovides for procedures to be

respectedinordertoconstituteanexemptionfortheCompanyforthepurposesofliabilitypursuantto

theLegislativeDecree231/2001.

3. The Organisation, Management 3. The Organisation, Management and Control Model of Society. and Control Model of Society. 3.1. Function of the Model 3.1. Function of the ModelTheCompanyintendstoenhanceanddisseminateitsvaluesandculturebasedon:

• legality:nounlawfulconduct,evenifcarriedoutintheinterestortotheadvantageoftheCompany,

canbeconsideredinlinewiththepolicyadoptedbytheCompanyitself;

• control:whichmustgovernall thedecision-makingandoperationalphasesoftheactivitycarried

out,infullawarenessoftherisksderivingfromthepossiblecommissionofcrimes.

The achievement of the aforementioned purposes takes the form of a coherent system of principles,

organisational,managementandcontrolproceduresandprovisionsthatgivelifetotheModelthatthe

Companyhaspreparedandadopted.

ThisModelhasthefollowingobjectives:

• toraiseawarenessamongtheRecipientsbyaskingthem,withinthelimitsoftheactivitiescarriedout

in the interest of theCompany, to adopt correct and transparent behaviour, in linewith the ethical

valuesthatinspireitinthepursuitofitscorporatepurposeandsuchastopreventtheriskofcommission

oftheoffensescontemplatedintheDecree;

• determinewithin theaforementionedsubjects, theawarenessofbeingable to incur, in theeventof

violationoftheprovisionsissuedbytheCompany,indisciplinaryand/orcontractualconsequences,as

wellasincriminalandadministrativesanctionsthatmaybeimposedagainstthem;

• establishand/orstrengthencontrolsthatallowtheCompanytopreventorreactpromptlytoprevent

thecommissionofoffensesbytopmanagementandpersonssubjecttothemanagementorsupervision

oftheformerwhichinvolvetheadministrativeresponsibilityoftheCompany;

• allowtheCompany, to intervenepromptly, inorder topreventoropposethecommissionof thecrimes

themselvesandtosanctionconductcontrarytoitsModel,thankstoamonitoringactionontheareasof

activityatrisk;

15

• improvetheeffectivenessandtransparencyinthemanagementofactivities;

• establishfullawarenessinthepotentialperpetratoroftheoffense,thatthecommissionofapossible

crimeisstronglycondemnedandopposednotonlybytheprovisionsofthelaw,butalsobytheethical

principleswhichtheCompanyintendstoabidebyandtheinterestsoftheCompanyitselfevenwhen

theycouldapparentlybenefitfromit.

3.2. Recipients of the Model 3.2. Recipients of the Model TherulescontainedintheModelapplyprimarilytothosewhoperformfunctionsofrepresentation,

administrationormanagementoftheCompanyaswellastothosewhoexercise,evendefacto,the

managementandcontroloftheCompany.

TheModelalsoapplies toallemployeesof theCompanywhoarerequired tocomplywith theutmost

correctnessanddiligence,withalltheprovisionsandcontrolscontainedtherein,aswellastherelated

implementationprocedures.

TheModelalsoapplies,withinthelimitsoftheexistingrelationship,tothosewho,althoughnotbelonging

totheCompany,operateunderamandateoronitsbehalf,orareinanycaselinkedtotheCompanyby

significant legal relationships. To this end, in the contracts or relationships with the aforementioned

subjects,referencetotheCodeofEthicsandtheModelisexplicitlyprovided.

Inparticularwithreferencetoanypartners,inItalyandabroad,withwhichtheCompanymayoperate,

whilerespectingtheautonomyoftheindividuallegalentities,theCompanywillpromotetheadoptionof

aninternalcontrolsystemdesignedtopreventthepremiseofoffensesoftheLegislativeDecree231/01

bymakingeveryeffort,throughtheprovisionofspecificcontractualclauses,toensurethattheyconform

theirconducttotheprinciplessetoutintheDecreeandenshrinedintheCodeofEthics.

3.3.TheCompany’sProjectforthedefinitionofitsModel 3.3.TheCompany’sProjectforthedefinitionofitsModelTheCompanyhasdecidedtoproceedwiththepreparationandadoptionoftheModelasitisawarethat

this system, although constituting a “faculty” and not an obligation, represents an opportunity to

strengthen its governance culture, at the same time seizing the opportunity of activities carried out

(inventoryofSensitiveActivities,analysisofpotentialrisks,assessmentandadjustmentofthesystemof

controls already existing on Sensitive Activities) to sensitise the resources employed to the issues of

processcontrol,aimedatan“active”preventionofCrimes.

TheCompanyhaslaunchedaninternalproject(hereinafter,the“Project”)aimedatensuringtheupdating

oftheModelasaresultoftheregulatorychangesaffectingthecatalogueofoffensesandtheorganisational

changesthathavetakenplacewithinit.

The methodology chosen to carry out the Project, in terms of organisation, definition of operating

methods, structuring in phases, assignment of responsibilities between the various functions, was

developedinordertoguaranteethequalityandauthoritativenessoftheresults.

The Project is divided into the phases summarised below, which are highlighted independently for a

methodologicalexplanation.

16

3.3.1. Indentification of the processes and activities within which 3.3.1. Indentification of the processes and activities within which the crimes referred to by the Legislative Decree 231/2001 the crimes referred to by the Legislative Decree 231/2001Theart.6,paragraph2,lett.a)oftheLegislativeDecree231/2001indicates,amongtherequirementsof

theModel,theidentificationoftheprocessesandactivitieswithinwhichthecrimesexplicitlyreferredto

intheDecreemaybecommitted.Inotherwords,theseareactivitiesandprocessesthatarecommonly

definedas“sensitive”(hereinafter,“SensitiveActivities”).

Thepurposeofthefirstphasewastoidentifytheareascoveredbytheinterventionandtofirstidentify

theSensitiveActivities.

AnanalysisoftheCompany’sorganisationalstructure,waspreliminarytotheidentificationofSensitive

Activities.ThiswascarriedoutinordertobetterunderstandtheCompany’sactivitiesandtoidentifythe

areascoveredbytheintervention.

TheanalysisoftheorganisationalstructureoftheCompany,allowedtheidentificationoftheSensitiveprocesses/

activitiesandthepreliminaryidentificationofthefunctionsresponsiblefortheseprocesses/activities.

Theactivitiescarriedoutinthefirstphasearelistedbelow:

• collectionofdocumentationrelatingtotheorganisationalstructureoftheCompany;

• analysisofthedocumentationcollectedtounderstandtheactivitiescarriedoutbytheCompany;

• historicalanalysis(“case history” )ofthecasesalreadyemergedinthepastrelatingtocriminal,civil,or

administrativeprecedentsagainsttheCompanyoritsemployeeswhohaveanypointsofcontactwith

thelegislationintroducedbytheLegislativeDecree231/2001;

• identificationoftheareasofactivityandrelatedfunctionalresponsibilities;• preliminaryidentificationofprocesses/SensitiveActivitiespursuanttotheLegislativeDecree231/2001;

• preliminaryidentificationofthedepartments/functionsresponsiblefortheSensitiveActivitiesidentified,

3.3.2. Identification of the Key Officers 3.3.2. Identification of the Key OfficersThepurposeofthesecondphasewastoidentifythemanagersoftheSensitiveProcesses/Activities,or

theresourceswithin-depthknowledgeoftheSensitiveProcesses/Activitiesandofthecontrolmechanisms

currentlyinplace(hereinafter,“key officer” ),completingandreinforcingthepreliminaryinventoryofthe

processes/SensitiveActivitiesaswellasofthefunctionsandsubjectsinvolved.

Theoperationalactivitiesfortheexecutionofthephaseinquestion,presupposedthecollectionofthe

informationnecessaryfor

I)understandingtherolesandresponsibilitiesofthesubjectsparticipatingintheSensitiveActivitiesand

II)identifyingthekey officers capableofprovidingtheoperationalsupportnecessarytodetailtheSensitive

Activitiesandrelatedcontrolmechanisms.

Inparticular,thekey officerswereidentifiedasthehighestorganisationallevelpeoplecapableofproviding

detailedinformationontheindividualprocessesandactivitiesoftheindividualfunctions.

Theactivitiescarriedoutduringthesecondphasearelistedbelow:

• collectionof further informationthrough in-depthanalysisof thedocumentsandmeetingswith the

internalrepresentativesoftheProject;

• identificationofadditionalsubjectscapableofmakingasignificantcontributiontotheunderstanding/

analysisofSensitiveActivitiesandtherelatedcontrolmechanisms.

17

At the end of the second phase, a preliminary “map of processes/Sensitive Activities”was defined to

directtheanalysisactivity,throughinterviewsandin-depthstudies,ofthesubsequentthirdphase.

3.3.3. Analysis of processes and sensitive activities 3.3.3. Analysis of processes and sensitive activitiesTheobjectiveofthethirdphasewastoanalyseandformalise,thefunctionsandroles/responsibilitiesof

the internal and external subjects involved, for each process/Sensitive Activity identified in the first,

secondandmainphases,theexistingcontrolelementsinordertoverifyinwhichareas/sectorsofactivity

andaccordingtowhatmodalitiesthetypesofoffensesreferredtointheLegislativeDecree.231/2001.

Inthisphasetherefore,amapoftheactivitieswascreatedwhich,inconsiderationofthespecificcontents,

couldbeexposedtothepotentialcommissionofthecrimesreferredtobytheLegislativeDecree231/2001.

Theanalysiswascarriedoutthroughpersonalinterviewswiththekey officerswhoalsohadthepurpose

ofestablishingthemanagementprocessesandcontroltoolsforeachSensitiveActivity,withparticular

attentiontocomplianceelementsandexistingpreventivecontrolsandtooverseethem.

Inidentifyingtheexistingcontrolsystem,amongotherthings,thefollowingcontrolprinciplesweretaken

asareference:

• existenceofformalisedprocedures;

• traceabilityandexpostverifiabilityoftransactionsthroughadequatedocumentary/informationsupports;

• segregationofduties;• existenceofformalisedproxiesconsistentwiththeorganisationalresponsibilitiesassigned.

Theactivitythatcharacterisedthethirdphaseinvolvedtheexecutionofstructuredinterviewswiththe

key officers,aswellaswiththepersonnelindicatedbythem,inordertocollecttheinformationrequired

tounderstandtheprocesses/SensitiveActivitiesidentifiedinthepreviousphases:

• theprocesses/activitiescarriedout;• theinternal/externalfunctions/subjectsinvolved;• therelativeroles/responsibilities;• theexistingcontrolsystem.

3.3.4. Gap analysis 3.3.4. Gap analysis

Thepurposeofthefourthphaseconsistedinidentifying

I) theorganisationalrequirementsthatcharacteriseanorganisationalmodelsuitableforpreventing

thecrimesreferredtointheLegislativeDecree231/2001and

II) theimprovementactionsoftheexistingorganisationalmodel.

Inordertodetectandanalysetheexistingcontrolmodelindetail,tomonitortherisksencounteredand

highlightedinthe risk assessment activity describedaboveandtoassessthecomplianceofthemodelwith

theprovisionsof theLegislativeDecree231/2001,acomparativeanalysis (theso-called “gap analysis” )

wascarriedoutbetweentheexistingorganisationalandcontrolmodel(“as-is” )andanabstractreference

model assessedon thebasis of theneeds expressedby the regulations referred to in the Legislative

Decree231/2001(“to be” ).

18

Throughthecomparisonmadewiththegapanalysis,itwaspossibletoinferareasforimprovementofthe

existinginternalcontrolsystemandonthebasisofwhatemerged,animplementationplanwasprepared

aimedat identifyingtheorganisationalrequirementscharacterisinganorganisation,managementand

controlincompliancewiththeprovisionsoftheLegislativeDecree231/2001andtheactionstoimprove

theinternalcontrolsystem.

Theactivitiescarriedoutinthisfourthphase,whichendedaftersharingtheresultsofthegapanalysis

andtheimplementationplan,arelistedbelow:

• gap analysisbetweenthecurrentmodel(“as-is”)andthemodeltostrivetowards(“to be”):comparative

analysis between the existing organisational model (“as-is”) and an organisation, management and

controlmodel“totend”inaccordancewiththeprovisionsoftheLegislativeDecree231/2001(“to be”)

withparticularreference,intermsofcompatibility,tothesystemofdelegationsandpowers,thesystem

of procedures, the Code of Ethics, the characteristics of the body to be entrusted with the task of

supervisingthefunctioningandcompliancewiththemodel;

• preparation of an implementation plan for the identification of the organisational requirements

characterising an organisation, management and control model pursuant to the Legislative Decree

231/2001andtheimprovementactionsofthecurrentcontrolsystem(processesandprocedures).

3.3.5. Definition of the organisation, management 3.3.5. Definition of the organisation, management and control model and control model

Thepurposeofthefifthphasewastopreparetheorganisation,managementandcontrolmodel,divided

intoallitscomponents,accordingtotheprovisionsoftheLegislativeDecree231/2001andtheguidelines

issuedbyConfindustria.

Theimplementationofthefifthphasewassupportedbothbytheresultsofthepreviousphasesandby

thepolicychoicesoftheCompany’sdecision-makingbodies.

TheModelincludesthefollowingconstitutiveelements:

• identificationoftheCompany’sactivitiesinthecontextofwhichtheoffensesreferredtointheLegislative

Decree231/2001;

• CodeofEthics;• controlstandards,generalandspecific,essentiallyconcerningthemethodsofformingandimplementing

thedecisionsoftheentityinrelationtothecrimestobeprevented;

• identificationofthemethodsformanagingfinancialresourcessuitableforpreventingthecommission

ofoffenses;

• Supervisorybody;• informationflowstoandfromtheSupervisoryBodyandspecificinformationobligationstowardsthe

SupervisoryBody;

• regulationofreportsofunlawfulconduct;• disciplinarysystemdesignedtosanctiontheviolationoftheprovisionscontainedintheModel;

• generalprinciplesfortheadoptionofthetrainingandcommunicationplanfortherecipients;

• criteriaforupdatingandadaptingtheModel.

19

ThedocumentrelatingtotheModelisstructured:

a) intheGeneral Part,whichdescribes:theoverallfunctioningoftheorganisation,managementand

control system adopted by the Company aimed at preventing the commission of the established

offenses,themethodologyadoptedforthepreparation/updatingoftheorganisation,management

and controlmodel; identification and appointment of the supervisory body, with specification of

powers,tasksandinformationflowsconcerningit;thegeneralprinciplesforregulatingthereporting

ofunlawful conduct, thedisciplinarysystemand the relatedsanctioningsystem; the trainingand

communicationplantobeadoptedinordertoensureknowledgeofthemeasuresandprovisionsof

theModel;thecriteriaforupdatingandadaptingtheModel;

b) nellaSpecial Part,aimedatintegratingthecontentoftheGeneralPartinrelationtocertaintypesof

crime.TheSpecialPartcontainsadescriptionrelatingto:

• thetypes of offensereferredtointheDecreethattheCompanydeemednecessarytotakeinto

considerationbasedonthecharacteristicsoftheactivitycarriedout;

• Sensitive Activities,orthoseactivitiespresentinthecompanywithinwhichtheriskofcommitting

oneofthecrimesreferredtointhepreviouspointcouldarise;

• the general control standards of transparency of the activities underlying the tools and

methodologiesusedtostructurethespecificcontrolstandards,whichmustalwaysbepresent

inallSensitiveActivitiestakenintoconsiderationbytheModel;

• the specific control standards, applicable to individual sensitive activities, developed on the

basisofthegeneralcontrolstandardslistedabove,suchasmonitoringmeasuresidentifiedto

mitigatethespecificriskofcommittingasinglecrime/categoryofcrime;

c) inAnnex A whichcontainsadescriptionofthereferenceregulatoryframework.

3.4. Offenses relevant to the Company 3.4. Offenses relevant to the Company TheadoptionoftheModelasatoolcapableofguidingthebehaviourofindividualsoperatingwithinthe

Companyandpromotingbehaviourbasedonlegalityandcorrectnessatalllevels,hasapositiveeffecton

thepreventionofanycrimeoroffenseenvisagedbythelegalsystem.

However, inconsiderationof theanalysisof thecontextof theCompany, theactivitycarriedoutby the

Companyandtheareaspotentiallysubjecttotherisk-offense,onlytheoffensesthatarethesubjectofthe

SpecialSectionwereconsideredrelevantand,therefore,specificallyexaminedintheModeltowhichwe

referforanexactidentification.Withregardtotheothertypesofcrimes,theCompanyhasassessedthat

theriskisnotconcretelyconceivableandthat,inanycase,thecontroltoolspreparedtopreventthecrimes

highlightedabove,onthebasisoftheanalysiscarriedout,mayconstitute,togetherwiththecompliance

withthelegislativeprovisionsandtheCodeofEthics,asafeguardalsoforthepreventionofsuchcrimes.

20

3.5. Extension of the principles of the model 3.5. Extension of the principles of the model to branches/subsidiaries and investee to branches/subsidiaries and investee companies with majority shares companies with majority shares TheCompanycommunicatesthisModel,andanysubsequentupdates,tothebranches,subsidiariesand

investeecompaniesinthemanneritdeemsmostappropriate.

The subsidiaries operating in Italy must adopt an organisational and control model pursuant to the

LegislativeDecree 231 of 2001 in full freedomand autonomy, in relation to the concrete operational

needs, which will be approved by a specific resolution by the Boards of Directors. of the companies

themselves.

Atthesametime,theBoardsofDirectorswillappointtheirownSupervisoryBodywithinthecompanyto

whichtheybelong,inchargeofcarryingoutthecontrolactivitiesoftheactivitiesatriskandthecorrect

applicationofthedefinedModel.

Withreferencetosubsidiaries/branchesandinvesteecompanieswithmajoritysharesoperatingabroad,

theCompany’sobjectiveistoensuretheinvolvementandenhancementofemployeesontheissuesof

riskprevention-offensesreferredtointheLegislativeDecree231/01.Tothisend,whilerespectingthe

autonomyoftheindividuallegalentities,theCompanywillpromotetheadoptionandimplementationof

a Compliance Model, containing, with reference to the management of activities at risk of crime,

organisationalandmanagementmeasuresandcontrolconsistentwiththoseenvisagedintheorganisation,

managementandcontrolmodeladoptedbytheCompany.

4 The Supervisory Body4 The Supervisory BodyBasedontheprovisionsoftheLegislativeDecree231/2001-art.6,paragraph1,lett.a)andb)-theentity

canbeexoneratedfromtheresponsibilityconsequenttothecommissionofcrimesbyqualifiedpersons

pursuanttoart.5oftheLegislativeDecree.231/2001,iftheSoleDirectorhas,amongotherthings:

• adopted and effectively implemented organisation, management and control models suitable for

preventingtheoffensesconsidered;

• entrustedthetaskofsupervisingthefunctioningandobservanceoftheModelandofupdatingittoa

bodyoftheentitywithautonomouspowersofinitiativeandcontrol.

Theentrustingoftheaforementionedtaskstoabodywithautonomouspowersofinitiativeandcontrol,

togetherwiththecorrectandeffectiveperformanceofthesame,thereforerepresentingindispensable

conditionsfortheexemptionfromliabilityprovidedforbytheLegislativeDecree231/2001.

TheConfindustriaGuidelines identify autonomyand independence, professionalismand continuity of

actionasthemainrequirementsofthesupervisorybody.

21

Inparticular,accordingtoConfindustria,theautonomyandindependencerequirementsstipulate:

I) theinclusionofthesupervisorybody“asaunitofstaffinthehighestpossiblehierarchicalposition”,

theprovisionofa“report”ofthesupervisorybodyatthehighestoperationaltopmanagement,the

absence,onthepartofthesupervisorybody,ofoperationaltaskswhich-byinvolvingindecisions

andoperationalactivities-wouldjeopardisetheobjectivityofjudgement;

II) the connotation of professionalismmust refer to the “set of tools and techniques” necessary to

effectivelycarryouttheactivityofsupervisorybody;

III) continuityofaction,whichguaranteeseffectiveandconstantimplementationoftheorganisational

modelpursuanttotheLegislativeDecree231/2001,particularlycomplexanarticulatedinlargeand

medium-sizedcompanies,isfavouredbythepresenceofastructurededicatedexclusivelyandfull-

timetothesupervisoryactivityofthemodeland“devoidofoperationaltasksthatcouldleaditto

takedecisionswitheconomicandfinancialeffects”.

TheLegislativeDecree.231/2001doesnotprovideinformationonthecompositionofthesupervisorybody.

In theabsenceofsuch indications, theCompanyhasoptedforamulti-subjectstructurewhich, taking

intoaccountthepurposespursuedbythelaw,isabletoensure,inrelationtoitssizeandorganisational

complexity,theeffectivenessofthecontrolswhichthebodyofsupervisionisincharge.

Incompliancewiththeprovisionsofart.6,paragraph1,lett.b)oftheLegislativeDecree231/2001andin

light of the aforementioned indications from Confindustria, the Company has identified its own

supervisorybodywiththedecisionoftheSoleDirector.

TheSupervisoryBodyisplacedinastaff positionwithrespecttotheSoleDirector.

4.1. Appointment and replacement of the Supervisory Body 4.1. Appointment and replacement of the Supervisory BodyTheSupervisoryBodyisestablishedwiththedecisionoftheSoleDirectorandlapsestogetherwiththe

administrativebodythatappointedhimwhilecontinuingtocarryout their functions ad interimuntilnew

representativesofthesameareappointed.

TheappointmentwithintheSupervisoryBodyisconditionalonthepresenceofthesubjectiverequisites

ofgoodrepute,integrityandrespectability,aswellastheabsenceofcausesofincompatibilitywiththe

appointmentitself,suchaskinshiprelationswithrepresentativesoftheCorporateBodiesandpotential

conflictsofinterestwiththeroleandtasksthatwouldbeperformed.

Inparticular,atthetimeoftheassignment,thepersonsdesignatedtotaketheroleofSupervisoryBody,

mustissueadeclarationinwhichtheycertifytheabsenceofreasonsofincompatibilitysuchas,byway

ofexampleonly:

• relationsofkinship,marriageoraffinitywithinthefourthdegreewithmembersoftheadministrative

body, senior management in general, company statutory auditors and auditors appointed by the

auditingcompany;

• conflictsofinterest,includingpotentialones,withtheCompanysuchastojeopardisetheindependence

requiredbytheroleanddutiesoftheSB;

• directorindirectownershipofshareholdingsofsuchanextentastoallowthemtoexercisesignificant

influenceovertheCompany;

22

• administrativefunctions-inthethreefinancialyearsprecedingtheappointmentasamemberoftheSB

ortheestablishmentoftheconsultancy/collaborationrelationshipwiththeSupervisoryBodyitself-of

companiessubjecttobankruptcy,compulsoryadministrativeliquidationorotherinsolvencyproceedings;

• sentenceofconviction,alsointhefirstinstance,orsentenceofapplicationofthepenaltyonrequest (the so-called plea bargain), in Italy or abroad, for the crimes referred to by the Legislative Decree

231/2001orsimilarcrimes;

• condemns,eveninthefirstinstance,toapenaltythatimpliestheinterdiction,eventemporary,from

publicoffices,orthetemporaryinterdictionfrommanagementofficesoflegalpersonsandcompanies.

InordertoensurethenecessarystabilityoftheSupervisoryBody,themethodsforrevokingthepowers

associatedwiththisappointmentareindicatedbelow.

ThewithdrawalofpowersoftheSupervisoryBodyandtheattributionofthesepowerstoanotherperson

canonly takeplace for just causebymeansof a specific resolutionof theSoleDirectorandwith the

approvaloftheBoardofStatutoryAuditors.

Inthisregard,for“justcause”ofwithdrawalofthepowersconnectedwiththeappointmentwithinthe

SupervisoryBody,itmaybeunderstood,bywayofexampleonly:

• the lossof the subjective requirementsofhonour-ability, integrity, respectability and independence

presentintheappointment;

• theoccurrenceofareasonforincompatibility;

• grossnegligenceintheperformanceoftasksconnectedwiththeassignmentsuchas(bywayofexample

only): failure to inform the administrative body and the Board of Statutory Auditors on the activity

carriedouteverysixmonthsorannuallyasperparagraph4.3.1below;

• the“omittedorinsufficientsupervision”bytheSupervisoryBody-inaccordancewiththeprovisionsof

art.6,paragraph1, lett.d), theLegislativeDecree231/2001 - resulting fromaconviction,whichhas

becomefinal,issuedagainsttheCompanypursuanttotheLegislativeDecree231/2001orbyasentence

fortheapplicationofthepenaltyuponrequest(theso-calledpleabargain);

• theassignmentofoperational functionsandresponsibilitieswithintheorganisationthatare incompatible

with the requirementsof “autonomyand independence”and “continuityofaction”of theSupervisory

Body.

Inparticularlyseriouscases,theadministrativebodymaydecide,afterhearingtheopinionoftheBoard

ofStatutoryAuditors,thesuspensionofthepowersoftheSupervisoryBodyandtheappointmentofan

ad interimSupervisoryBody.

23

4.2. Functions and powers 4.2. Functions and powersTheactivitiescarriedoutbytheSBcannotbesyndicatedbyanyotherbodyorstructureoftheCompany,

itbeingunderstood,however,thattheSoleDirectorisinanycasecalledupontocarryoutasupervisory

activityontheadequacyoftheirwork,asultimateresponsibilityforthefunctioningandeffectivenessof

theModelrestswiththeSoleDirector.

TheSBisgrantedthenecessarypowersofinitiativeandcontroltoensureeffectiveandefficientsupervision

of the functioning and observance of the Model, in accordance with the provisions of art. 6 of the

LegislativeDecree.231/2001.

Inparticular,thefollowingtasksandpowersareassignedtotheSupervisoryBodyfortheperformance

andexerciseofitsfunctions:

• regulateitsfunctioninginordertoprovidefor:theschedulingofactivities,thedeterminationofthe

timing of controls, the identification of the criteria and analysis procedures, the regulation of

informationflowsfromthestructures,tobebroughttotheattentionoftheadministrativebody;

• verify theadequacyof theModelbothwithrespect to thepreventionof thecommissionof the

crimesreferredtobytheLegislativeDecree231/2001bothwithreferencetotheabilitytobring

outtheoccurrenceofanyillegalconduct;

• verify the efficiency and effectiveness of the Model also in terms of correspondence between the

operationalmethodsadoptedinpracticeandtheproceduresformallyenvisagedbytheModelitself;

• verifythemaintenanceovertimeoftheefficiencyandeffectivenessrequirementsoftheModel;

• carryout,alsothroughtherelevantfunctions,periodicinspectionandcontrolactivities,ofanongoing andsurprisenature,inconsiderationofthevarioussectorsofinterventionorthetypesofactivitiesand

theircriticalpointsinordertoverifytheTemplate;

• takecare,developandpromotetheconstantupdatingoftheModel,formulating,wherenecessary,the

managementbodytheproposals foranyupdatesandadjustments tobemadethroughthechanges

and/oradditionsthatmaybecomenecessaryasaresultof:

• (I) significantviolationsoftheprovisionsoftheModel;

• (II) significantchangestotheinternalstructureoftheCompany;

• (III) regulatorychanges;

• monitortheperiodicupdatingofthesystemforidentifying,mappingandclassifyingSensitiveActivities;

• maintainaconstantconnectionwiththeauditingfirm,safeguardingitsnecessaryindependence,and

withtheotherconsultantsandcollaborators involved intheactivitiesofeffective implementationof

theModel;

• detectanybehaviouraldeviationsthatmayemergefromtheanalysisoftheinformationflowsandfrom

thereportstowhichtheheadsofthevariousfunctionsarerequired;

• promptly report to the management body, for the appropriate measures, violations of the Model

ascertainedthatcouldleadtotheonsetofliabilityonthepartoftheCompany;

• handling relationsandensuring the informationflowsof competence to theadministrativebody,as

wellastotheBoardofStatutoryAuditors;

• promote,atthetrainingfunctions,initiativesforthedisseminationofknowledgeandunderstandingof

theModel,aswellasforthetrainingofpersonnelandtheawarenessofthesametotheobservanceof

theprinciplescontainedintheModel;

24

• promote,atthetrainingfunctions,communicationandtraininginterventionsonthecontentsoftheLegislative

Decree231/2001,ontheimpactsofthelegislationontheCompany’sactivityandonbehaviouralrules;

• provideclarificationsregardingthemeaningandapplicationoftheprovisionscontainedintheModel;

• prepareaneffectiveinternalcommunicationsystemtoallowthetransmissionofrelevantinformation

forthepurposesoftheLegislativeDecree231/2001guaranteeingtheprotectionandconfidentialityof

thewhistle-blower;

• freelyaccessanystructureof theCompany,without theneed foranyprior consent, to requestand

acquire information, documentation and data, deemed necessary for the performance of the tasks

providedforbytheLegislativeDecree231/2001,byallemployeesandmanagers;

• supporttheCompanyandtheentityinthepreparationofaspecificproceduregoverningthemethods

ofreportingoffenses;verifytheadequacyoftheinformationchannels,preparedinapplicationofthe

rulesonwhistleblowing,sothattheyaresuchastoensurethecorrectreportingofcrimesorirregularities

bytheemployeesofthecompanyandtoensuretheconfidentialityofthelatterthroughouttheprocess

reportingmanagement;managetheprocessofanalysingandevaluatingthereport;

• promotetheactivationofanydisciplinaryproceedingsreferredtoinchapter5ofthisModel;

• verifyandevaluate,togetherwiththerelevantfunctions,thesuitabilityofthedisciplinarysystempursuant

toandforthepurposesoftheLegislativeDecree231/2001,supervisingcompliancewiththeprohibitionof

“retaliation or discriminatory acts, direct or indirect, against the whistle-blower for reasons connected,

directlyorindirectly,tothereport”.

TheSoleDirectorwillensureadequatecommunicationtothestructuresofthedutiesoftheSupervisory

Bodyanditspowers.

TheSBdoesnothavemanagementpowersordecision-makingpowersrelatingtotheperformanceofthe

Company’sactivities,organisationalpowersorpowerstochangetheCompany’sstructure,orsanctioning

powers.TheSupervisoryBody,aswellasthesubjectswhichtheSupervisoryBodymakesuseofforany

reason,arerequired torespect theobligationofconfidentialityonall informationwhich theybecome

awareofintheexerciseoftheirfunctions.

In the context of theprocedures for preparing thebudget, the administrative bodymust approve an

adequateallocationoffinancialresourceswhichtheSupervisoryBodymayhaveatitsdisposalforevery

neednecessaryforthecorrectperformanceofthetasks(e.g.specialistconsultancy,travel,etc.).

4.3.InformationflowstoandfromtheSupervisoryBody 4.3.InformationflowstoandfromtheSupervisoryBody 4.3.1. 4.3.1. Reporting Reporting to the corporate bodies by the Supervisory Body to the corporate bodies by the Supervisory Body

TheSupervisoryBodyreportsontheimplementationoftheModel,theemergenceofanycriticalaspects,

theneedformodifications.Therearetwodistinctreportinglines:

• thefirst,onanongoingbasis,directlytotheSoleDirector;• thesecond,onasix-monthlybasis,totheSoleDirectorandtheBoardofStatutoryAuditors.

25

TheSupervisoryBody:

I) reports to the Sole Director informing him, whenever he deems it appropriate, on significant

circumstances and facts of his office. The SB immediately communicates the occurrence of

extraordinarysituations(forexample:significantviolationsoftheprinciplescontainedintheModel

thatemergedasaresultofasupervisoryactivity,legislativeinnovationsregardingtheadministrative

liabilityofentities,etc.)andthereportsreceivedwhichareofanurgentstatus;

II) submitsawritten report, ona six-monthlybasis, to theSoleDirectorand theBoardof Statutory

Auditors,whichmustcontain,atleast,thefollowinginformation:

a) thesummaryoftheactivitiescarriedoutinthesemester;

b) anyproblemsorcriticaloccurrencesthathavearisenduringthesupervisoryactivity;

c) ifnotsubjecttopreviousandspecificreports:

• thecorrectiveactionstobetakeninordertoensuretheefficiencyand/oreffectivenessofthe

Model, including those necessary to remedy the organisational or procedural deficiencies

ascertainedandsuitableforexposingtheCompanytothedangerofcrimesrelevantforthe

purposes of the Decree being committed, including a description of any new “sensitive”

activitiesidentified;

• alwaysincompliancewiththetermsandmethodsindicatedinthedisciplinarysystemadopted

bytheCompanypursuanttotheDecree,anindicationoftheconductascertainedandresults

notinlinewiththeModel;

d) thesummaryof thereports received from internalandexternalsubjects, includingwhatwas

directlyfound,inrelationtoallegedviolationsoftheprovisionsofthisModel,oftheprevention

protocolsandof the related implementationproceduresand theoutcomeof the consequent

checkscarriedout;

e) informationonthepossiblecommissionofcrimesrelevantforthepurposesoftheDecree;

f) thedisciplinarymeasuresandsanctionsthatmaybeappliedbytheCompany,withreferenceto

violations of the provisions of this Model, of the prevention protocols and of the related

implementationprocedures;

g) anoverallassessmentofthefunctioningandeffectivenessoftheModelwithanyproposalsfor

additions,correctionsormodifications;

h) the reporting of any changes in the regulatory framework and/or significant changes to the

internalstructureoftheCompanythatrequireanupdateoftheModel;

I)thereportingofanysituationofconflictofinterest,evenifonlypotential,ofamemberofthe

Body;

II) thestatementofexpensesincurred;

III)prepares,asummaryreportoftheactivitycarriedoutinthecurrentyearandaplanofthe

activitiesplannedforthefollowingyear,tobepresentedtotheSoleDirectorandtheBoard

ofStatutoryAuditors,onanannualbasis.

Themeetingswiththecorporatebodies,towhichtheSupervisoryBodyreports,mustbedocumented.

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4.3.2. Disclosure to the Supervisory Body 4.3.2. Disclosure to the Supervisory Body

TherequirementofinformationonanyconductcontrarytotheprovisionscontainedintheModelthat

hasbecomeknownduetothefunctionsperformed,fallwithinthebroaderdutyofdiligenceandloyalty

obligationoftheemployeepursuanttoArticles2104and2105cc.

Thecorrectfulfillmentoftheinformationobligationbytheemployeeshallnotgiverisetotheapplication

ofdisciplinarysanctions.

With regards to Consultants and Partners, etc., a contractual obligation of immediate disclosure is

envisaged in the event that they receive a request for behaviour that could lead to a violationof the

Templatedirectlyorindirectly,fromanemployee/representativeoftheCompany.

Inordertoallowfortimelycompliancewiththeprovisionsreferredtointhisparagraph,ane-mailbox

has been established: [email protected] to which information and reports may be sent, the latter also

anonymously.

Inaddition, reports canalsobe sentbypostalmail to the followingaddressof theSupervisoryBody,

Viale J.A. Fleming 17, Carpi.

TheOdVwill use the samee-mail address for sending, even selective, specific update or information

e-mailsandmayalsobeusedby theRecipients torequestclarificationsandaskquestionsonspecific

topicsofinterestrelatingtotheModeland,moregenerally,totheLegislativeDecree231/01.

All theRecipientsas identifiedabovecommunicate to theSupervisoryBodyanyuseful informationto

facilitatethecarryingoutofchecksonthecorrectimplementationoftheModel.

TheinformationflowstotheSBmainly:

A.In structured formIn structured form• by the heads of functions operating in the context of Sensitive Activitieswhomust transmit to the

SupervisoryBody,informationconcerning

I) theperiodicresultsofthecontrolactivitycarriedoutbythem,alsoattherequestoftheSBthemselves

(summaryreportsoftheactivitycarriedout,etc.),inimplementationoftheModelandtheindications

providedbytheSupervisoryBody;

II)anyanomaliesoratypicalitiesfoundintheinformationavailable;

• gives the functions identified in accordance with the respective organisational powers that must

communicate,withthenecessarypromptness,totheSBbymeansofawrittennote,anyinformation

regarding:

•theissueand/orupdatingoforganisationaldocuments;

•thechangesintheresponsibilityofthefunctionsaffectedbytheactivitiesatriskandthepossible updatingofthesystemofproxiesandpowerofattorneys;

•thereportspreparedbythecontrolfunctions/bodies(includingtheauditingcompany)aspartof

theirverificationactivities, fromwhichfacts,acts,eventsoromissionswithcriticalprofilesmay

emerge,withrespecttocompliancewiththeprovisionsoftheDecreeorprovisionsoftheModel;

• disciplinary proceedings initiated for violations of the Model, the dismissal measures of such

proceedingsandtherelatedreasons,theapplicationofsanctionsforviolationoftheModelorof

theproceduresestablishedforitsimplementation;

27

•themeasuresand/ornewsfromjudicialpolicebodies,orfromanyotherauthority,fromwhichit

is inferred thecarryingoutof investigations,alsoagainstunknownpersons, for thecrimes

contemplatedbytheLegislativeDecreen.231/2001andwhichmayinvolvetheCompany;

•requestsforlegalassistancemadebyemployeesintheeventofjudicialproceedingsagainstthem

andinrelationtotheoffensesreferredtointheLegislativeDecreeno.231/2001,unlessexplicitly

prohibitedbythejudicialauthority;

B.In the form of reportsIn the form of reports• by all employees andmembers of the Company’s bodiesmust promptly report the commission or

allegedcommissionofcrimesorthereasonabledangerofcommission,aspertheDecreeofwhichthey

becomeaware,aswellasanyviolationorallegedviolationoftheModelortheproceduresestablished

inimplementationofthesame,ofwhichtheybecomeaware

• bytheotherRecipientsoftheModel,externaltotheCompany,arerequiredtoimmediatelyinformthe

SupervisoryBodyintheeventthattheyreceive,directlyorindirectly,arequestforbehaviourthatcould

leadtoaviolationoftheModel,fromanemployee/representativeoftheCompany.

Inthisregard,thefollowinggeneralprovisionsapply:

• thereportsofunlawfulconduct,presentedtoprotecttheintegrityofthecompany,mustbedetailed

andbasedonpreciseandconsistentfacts;

• theSBevaluates thereports received;anyconsequentmeasuresareapplied incompliancewith the

provisionsofthefollowingchapter4(DisciplinarySystem);

• thedecisionsregardingtheoutcomeoftheassessmentmustbemotivatedinwriting;

• bonafidewhistle-blowerswillbeguaranteedagainstanyformofretaliation,discriminationorpenalisation

andinanycasetheconfidentialityofthewhistle-blower’sidentitywillbeensured,withoutprejudicetolegal

obligationsandtheprotectionoftherightsofthecompanyorofthepersonswronglyaccusedand/orinbad

faith.

Aspecificprocedurewillbeadoptedtogoverntheprocessofreceiving,analysingandprocessingReports,

byanyonesentortransmitted.

Furthermore,theSBmayrequestinformationthatmayconcern,bywayofexampleonly:

• operationsthatfallunderSensitiveActivities;• anyotherinformationwhich,althoughnotincludedintheabovelist,isrelevantforthepurposesofa

correctandcompletesupervisionandupdatingoftheModel.

Inadditiontothereportsrelatingtoviolationsofageneralnatureandtheinformationdescribedabove,

specific reporting activities are defined in a specific procedure “Information flows to the Supervisory

Body”, referring to thevariousSensitiveActivities identified in theSpecial Sections, inwhich theyare

identified:responsibleparty,thefrequencyandtheinformationtobetransmitted.

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4.3.3. Collection and storage of information 4.3.3. Collection and storage of information

Allinformation,notices,reports,reportsprovidedforintheModelarekeptbytheSupervisoryBodyina

specialarchive(computerorpaper).

5. The penalty system5. The penalty system 5.1. General principles 5.1. General principles Theart. 6,paragraph2, lett. e) andart. 7,paragraph4, lett.b)of theLegislativeDecreeno.231/2001

indicate,asaconditionforeffectiveimplementationoftheorganisation,managementandcontrolmodel,

the introduction of a disciplinary system suitable for sanctioning non-compliancewith themeasures

indicatedintheModelitself.Therefore,thedefinitionofanadequatedisciplinarysystemconstitutesan

essentialprerequisiteforthediscriminatingvalueoftheorganisation,managementandcontrolmodel

pursuant to theLegislativeDecreeno.231/2001with respect to theadministrative liabilityofentities.

The sanctions envisaged will be applied to any violation of the provisions contained in the Model,

regardless of the commission of a crime and the conduct and outcome of any criminal proceedings

initiatedbythejudicialauthority.

TheSupervisoryBody,havingreceivedthereportandcarriedouttheappropriatechecks,formulatesa

proposal regarding themeasures to be adopted and communicates its assessment to the competent

bodiesbasedonthedisciplinarysystem,whichwilldecideonthepossibleadoptionand/ormodification

ofthemeasuresproposedbytheSupervisoryBody.

ForrelevantfactsandactspursuanttotheLegislativeDecree231/01,theholderofthesanctioningpower

is the Employer, who is responsible for determining the amount of the sanction on the basis of the

provisionsoftherespectiveCCNL.ItshouldbenotedthatbyemployerwemeantheSoleDirector,except

fortheissueofexplicitproxiesconferredinfavourofcertainsubjects,withinthelimitsofwhathasbeen

delegated.

Inanycase,thestagesofcontestationoftheviolation,aswellasthoseofdeterminationandeffective

applicationofthesanctions,arecarriedoutincompliancewiththelawsandregulationsinforce,aswell

astheprovisionsofcollectivebargaining.

5.2. Conduct that can be sanctioned: fundamental categories 5.2. Conduct that can be sanctioned: fundamental categoriesActionsand/oractionsinviolationoftheCodeofEthics,theModelandtheinternaloperatingproceduresand

the non-compliance and any indications and prescriptions coming from the Supervisory Body can be

sanctioned.

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Theviolationsthatcanbesanctionedcanbedividedintofourbasiccategoriesaccordingtoanorderof

increasingseverity:

a) violationsnotrelatedtoSensitiveActivities;

b)violationsrelatedtoSensitiveActivities;

c) violationscapableofintegratingthesolefact(objectiveelement)ofoneofthecrimesforwhichthe

administrativeliabilityoflegalpersonsisenvisaged;

d)violationsaimedat thecommissionofoffensesprovided forbyDecree231/2001orwhich, inany

case,entailthepossibilityofattributingadministrativeresponsibilitytotheCompany.

Bywayofexample,thefollowingarepunishableconducts:

1. failuretocomplywiththeproceduresprescribedintheModeland/orreferredtotherein;

2. failuretocomplywiththedisclosureobligationsprescribedinthecontrolsystem;

3. theomittedoruntruthfuldocumentationofthetransactionsinaccordancewiththeprinciple

oftransparency;

4. theomissionofcontrolsbyresponsibleparties;

5. theunjustifiedfailuretocomplywiththedisclosureobligations;

6. failuretocontrolthedisseminationoftheCodeofEthicsbytheresponsibleparties;

7. theadoptionofanyevasiveactofthecontrolsystems;

8. theadoptionofbehavioursthatexposetheCompanytothecommunicationofthesanctionsprovided

forbytheLegislativeDecree231/2001;

9. violationsofthemeasurestoprotectthewhistle-blowerreferredtoinparagraph4.3.2above.aswell

asthemaking,withwillfulmisconductorgrossnegligence,ofreportsthatprovetobeunfounded.

5.2.1. Measures against employees 5.2.1. Measures against employees

Theviolationof the individualprovisionsand rulesof conduct referred to in theModelbyemployees

alwaysconstitutesadisciplinaryoffense.

TheCompanyasksitsemployeestoreportanyviolations.TheCompanyassessesthecontributionmade

positively,evenifthepersonwhomadethereportcontributedtothisviolation.

Asforthetypeofsanctionsthatcanbeimposed,inthecaseofasubordinateemploymentrelationship,

anysanctioningmeasuremustcomplywiththeproceduresprovidedforbyart.7oftheWorkers’Statute,

characterisednotonlybytheprincipleofthetypicalnatureoftheviolations,butalsobytheprincipleof

thetypicalnatureofthesanctions.Furthermore,theCompanyensuresthattheapplicationofdisciplinary

practiceswillbeconductedrespecting,asestablishedbytheSA8000Standard,thephysical,mentaland

emotionalintegrityoftheworkers.

30

Inparticular,takingintoaccounttheprovisions:

• intheCCNL4/2/2014fortheFASHIONandTEXTILEINDUSTRY,thefollowingdisciplinarysanctionsare envisaged:

1.Verbal warninginthecaseof:

non-compliancewiththeprinciplesandrulesofconductprovidedforbytheModel,orviolationof

theinternalproceduresandrulesenvisagedand/orreferredtoorstillintheadoption,inthecontext

ofsensitiveactivities,ofconductthatisnotcompliantornotadequatetotheprovisionsoftheModel,

correlatingsaidbehaviourtoaslightnon-compliancewiththecontractualrulesorthedirectivesand

instructionsgivenbythemanagementorsuperiors,notattributabletoadeliberateintentiontofail

inone’sduty;

2.Written warning inthecaseof:

• slightnon-compliancewiththeprinciplesandrulesofconductprovidedforbytheModelorviolation

oftheinternalproceduresandrulesenvisagedand/orreferredtoorstillintheadoption,inthecontext

ofsensitiveactivities,ofconductthatisnotcompliantornotadequatetotheprovisionsoftheModelin

measuresuchthatitcanbeconsideredevenifslight,andinanycasenotserious,althoughtheywilltend

torepeatthemselvesanditisthereforenecessarytowarn,inalesslabileform,oftheverbalreprimand;

3. Fine

up to an equivalent amount of two hours of the salary element or, in cases of greater seriousness

or relapse, suspension from work for a maximum of three days,inthecaseof:

• non-compliancewiththeprinciplesandrulesofconductprovidedforbytheModelorviolationofthe

internalproceduresandrulesenvisagedand/orreferredto,orstillintheadoption,inthecontextof

sensitiveactivities,ofconductthatisnotcompliantornotadequatetotheprovisionsoftheModelin

measuresuchastobeconsideredofacertaingravity,evenifdependentonrecidivism,correlating

saidbehaviourtoanon-compliance-repeatedorofacertainseriousness,ofthecontractualrulesor

ofthedirectivesandinstructionsgivenbythemanagementorsuperiors;

• performanceofactscontrarytotheinterestoftheCompanyorwhichcausedamageorexposetheCompany’s

assetstoasituationofobjectivedanger,havingtorecogniseinsuchbehavioura“non-compliancewiththe

provisionsbroughttotheattentionoftheEntitywithserviceordersorothermeanssuitable“referred

tointheaforementioned“Correlationcriteria”;

4. Withdrawal by the employer of the permanent contract pursuant to Article 2119 of the Italian Civil

Codeinthecaseof:

• adoption,incarryingouttheactivitiesincludedinthe“sensitiveactivities”,ofabehaviourcharacterised byasignificantbreachoftheprovisionsand/orproceduresand/orinternalrulesestablishedbythis

Model, even if it is only likely to constituteoneof theoffenses towhich theDecree is applicable,

correlatingsaidbehaviourtoaviolationsuchastoconstitutea“significant”breachoftherelative

obligations;

• adoption in carrying out sensitive activities with a behaviour that does not comply with the

prescriptions of theModel and is unequivocally aimed at committing a crime sanctioned by the

decree, since such behaviour must be recognised as an “act from which the employee’s gross

negligenceemerges”referredtointheaforementionedcorrelationcriteria.

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Theapplicationofthetypeandextentoftheaforementionedsanctionsdependsonthefollowingfactors:

I. INTENTIONALITYtocarryoutthebehaviour,

II. RECURRENCE,oreventualpresenceofdisciplinarymeasuresalreadyputinplace

inthepastagainsttheworker;

III. DEGREE OF RESPONSIBILITY dellavoratore.

5.2.2. Measures against managers 5.2.2. Measures against managers

IntheeventofaviolationoftheOrganisationalModelbymanagers, theCompanywillapplythemost

suitablemeasurestothemanagersincompliancewiththeprovisionsofthelaw.

5.3. Measures against directors and auditors 5.3. Measures against directors and auditorsIn theeventofabreachof theModelby theSoleDirector, theSBshallpromptly informtheBoardof

StatutoryAuditorssothatitcanproceedwithoutdelayandinaccordancewiththepowersprovidedfor

bylawand/ortheArticlesofAssociation,tocalltheShareholders’Meetingtotakeappropriatemeasures.

IncaseofviolationofthisModelbyoneormoreStatutoryAuditors, theSBshallpromptly informthe

entireBoardofStatutoryAuditorssothatitcanproceedwithoutdelayandinaccordancewiththepowers

provided for by the law and/or the Articles of Association, to call the Shareholders’Meeting, for the

appropriateresolutions,whichmayproceedwiththewithdrawaloftheassignmentforjustcause.

5.4. Measures against other Recipients 5.4. Measures against other Recipients TheviolationbytheotherRecipientsoftheModel,havingcontractualrelationshipswiththeCompanyforthe

performanceofactivitiesdeemedsensitive,oftheprovisionsandrulesofconductprovidedforbytheModelor

thepossiblecommissionoftheoffensescontemplatedbytheLegislativeDecree231/2001,willbesanctioned

accordingtotheprovisionsofthespecificcontractualclausesthatwillbeincludedintherelativecontracts.

Theseclauses,makingexplicitreferencetocompliancewiththeprovisionsandrulesofconductsetoutinthe

Model,mayprovide,forexample,fortheobligationonthepartofthesethirdpartiesnottoadoptactsorengage

inbehaviourthatcouldleadtoaviolationoftheModel,bytheCompany.

32

6. The training and communication plan6. The training and communication plan 6.1. Premise 6.1. PremiseInordertoeffectivelyimplementtheModel,theCompanyensurescorrectdisclosureofitscontentsand

principleswithinandoutsideitsorganisation.

TheCompany’sobjectiveistocommunicatethecontentsandprinciplesoftheModelalsotosubjectswho,

whilenothavingtheformalqualificationofemployee,work-evenoccasionally-toachievetheCompany’s

objectivesbyvirtueofcontractualrelationships.

TheCompany,infact,intendsto:

• determine,inallthosewhooperateinitsnameandonitsbehalfin“sensitive”activities,theawareness

ofbeingabletoincur,intheeventofviolationoftheprovisionscontainedtherein,anoffensesubjectto

sanctions;

• informallthosewhooperateinanycapacityinitsname,onitsbehalforinanycaseinitsinterestthat

theviolationoftheprovisionscontainedintheModelwillresultintheapplicationofspecificsanctions

ortheterminationofthecontractualrelationship;

• reiterate that the Company does not tolerate unlawful conduct, of any type and regardless of any

purpose,assuchconduct(eveniftheCompanywasapparentlyinapositiontotakeadvantageofit)are

inanycasecontrarytotheethicalprincipleswhichtheCompanyintendstoabideby.

Thecommunicationandtrainingactivityisdiversifiedaccordingtotherecipientstowhomitisaddressed,

butis, inanycase,basedonprinciplesofcompleteness,clarity,accessibilityandcontinuityinorderto

allowthevariousrecipientstobefullyawareofthoseprovisionsthattheyarerequiredtorespectand

ethicalrulesthatmustinspiretheirbehaviour.

ThecommunicationandtrainingactivityissupervisedbytheSupervisoryBody,whichisassigned,among

others,thetasksof“promotinginitiativesforthedisseminationofknowledgeandunderstandingofthe

Model,aswellasforpersonneltrainingandawarenessofthesametotheobservanceoftheprinciples

containedintheModel“andto”promotecommunicationandtraininginterventionsonthecontentsof

theLegislativeDecreeno.231/2001,ontheimpactsofthelegislationontheCompany’sbusinessandon

therulesofconduct“.

Thetrainingactivityiscarriedoutthrough:

• classroomand/oronlinetraining

• emailupdate.

Participationintrainingactivitiesisanobligationandisformalisedbysigningtheattendanceregistration

form(orregisteringaccesstothee-learningtrainingmodules).Thenamesofthetrainedpersonnelare

enteredinadatabasebythePersonnelDepartment.

33

6.2. Employees 6.2. EmployeesEachemployeeisrequiredto:

I) becomeawareoftheprinciplesandcontentsoftheModel;

II) knowtheoperatingmethodswithwhichtheirbusinessmustbecarriedout;

III) actively contribute, in relation to one’s role and responsibilities, to the effective implementation

oftheModel,reportinganyshortcomingsfoundinit.

Inordertoguaranteeaneffectiveandrationalcommunicationactivity,theCompanyintendstopromote

andfacilitateknowledgeofthecontentsandprinciplesoftheModelandoftheproceduresimplemented,

withadiversifieddegreeofdetailaccordingtothepositionandrolecoveredbythem.

Employeesandnewhiresareprovidedwithashortmanualand/orthroughtheuseofaportal,acopyof

anextractoftheReferencePrinciplesoftheModelandtheyareaskedtosignadeclarationofknowledge

andcompliancewiththeprinciplesdescribedtherein.

EveryoneisalsorequiredtosystematicallyconsultthedocumentsoftheModeldirectlyontheCompany’s

internalandexternalwebsite.

In any case, the possibility of consulting the documents directly on the Company’s bulletin board is

guaranteed.

Suitablecommunicationtoolsareadoptedtoupdatetherecipientsofthisparagraphaboutanychanges

madetotheModel,aswellasanysignificantprocedural,regulatoryororganisationalchange.

6.3. Members of the corporate bodies, 6.3. Members of the corporate bodies, managers and executivesmanagers and executivesAcopyofthefullversionoftheModelisdeliveredtothemembersofthecorporatebodies,executives

andmiddlemanagers,inashortmanualand/orthroughtheuseoftheportal,theyareaskedtosigna

declarationofknowledgeandobservanceoftheprinciplesdescribedtherein.

SuitablecommunicationtoolswillbeadoptedtoupdatethemregardinganychangesmadetotheModel,

aswellasanyrelevantprocedural,regulatoryororganisationalchanges.

6.4. Other Recipients6.4. Other RecipientsThecommunicationactivityofthecontentsandprinciplesoftheModelmustalsobeaddressedtothirdparties

whoentertaincontractuallyregulatedcollaborationrelationshipswiththeCompany,withparticularreference

tothosewhooperateinthefieldofactivitiesdeemedsensitivepursuanttotheLegislativeDecree231/2001.

34

7. Adozione del Modello: Criteria for 7. Adozione del Modello: Criteria for updating and adapting the Model. updating and adapting the Model. 7.1 Verifications and controls on the Model 7.1 Verifications and controls on the ModelIn carryingout its activities, the SupervisoryBodymayavail itself of both the support of functions and

internalstructuresoftheCompanywithspecificskillsinthesectors,subjecttocontrolfromtimetotimeand

withreferencetotheexecutionofthetechnicaloperationsnecessaryfortheperformanceofthecontrol,of

externalconsultants. Inthiscase, theconsultantsmustalwaysreport theresultsof theirworktotheSB.

Duringtheauditsandinspections,theSupervisoryBodyisgrantedthewidestpowersinordertocarry

outthetasksentrustedtothemefficiently.

7.2 Update and adaptation 7.2 Update and adaptationTheSoleDirector resolves theupdatingof theModeland itsadaptation in relation tochangesand/or

additionsthatmaybecomenecessaryasaresultof:

• violationsoftheprovisionsoftheModel;

• changestotheinternalstructureoftheCompany;

• regulatorychanges;• resultsofcontrols.

Onceapproved,thechangesandinstructionsfortheirimmediateapplicationarecommunicatedtothe

SB, inturntheywillmakethesamechangesoperationalandensurethecorrectcommunicationofthe

contentswithinandoutsidetheCompanywithoutdelay.

TheSBwillalso,bymeansofaspecificreport, informtheSoleDirectorabouttheoutcomeoftheactivity

undertakenincompliancewiththeresolutionthatprovidesfortheupdatingand/oradaptationoftheModel.

TheSBretains,inanycase,specificdutiesandpowersregardingthecare,developmentandpromotionof

theconstantupdatingoftheModel.Tothisend,itformulatesobservationsandproposals,relatingtothe

organisationandthecontrolsystem,tothestructuresinchargeor,incasesofparticularimportance,tothe

SoleDirector.

Inparticular,inordertoensurethatthechangestotheModelarecarriedoutwiththenecessarytimeliness

andeffectiveness,withoutincurringanylackofcoordinationbetweentheoperationalprocessesatthe

same time, theprovisionscontained in theModeland theirdissemination, theSoleDirectordeems it

necessarytodelegatetotheSB,thetaskofperiodicallymaking,wherenecessary,changestotheModel

thatrelatetoaspectsofadescriptivenature.

35

It should be noted that the expression “descriptive aspects” refers to elements and information that

derivefromactsapprovedbytheSoleDirector(suchas,forexample,theredefinitionoftheorganisation

chart)orfromfunctionswithspecificpowers(e.g.newprocedures).

Ontheoccasionofthepresentationoftheannualsummaryreport,theSBpresentstotheSoleDirector

aspecificinformationnoteonthechangesmadeinimplementationofthedelegationreceived,inorder

tomakeitthesubjectofaresolutionofratificationbytheSoleDirector.

In any case, the resolution of updates and/or adjustments to theModel due to the following factors

remainsthesoleresponsibilityoftheSoleDirector:

• interventionofregulatorychangesregardingtheadministrativeliabilityofentities;

• identification of new Sensitive Activities, or changes to those previously identified, also possibly

connectedtothestart-upofnewactivities;

• commission of the offenses referred to in the Legislative Decree 231/2001 by the recipients of the

provisionsoftheModelor,moregenerally,ofsignificantviolationsoftheModel;

• findingsofshortcomingsand/orgapsintheprovisionsoftheModelfollowingchecksontheeffectiveness

ofthesame.

TheModelwillinanycase,besubjecttoaperiodicreviewprocedureeverythreeyearstobearrangedby

resolutionoftheSoleDirector.

Carpi,8thMarch2018

MarcoMarchi