GVS S p A : Report on Corporate Governance and Ownership Structure 2023

April 16, 2024 at 01:26 pm EDT

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

2023

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

2023

Drawn up pursuant to Article 123-bis of the Consolidated Finance Act ("CFA") (traditional administration and auditing model)

Issuer: GVS S.p.A.

Website: www.gvs.com

Financial Year to which Report refers: 2023

Date of approval of Report: 26 March 2024

CONTENTS

Executive Summary	4
Glossary	12

01	Issuer profile	14
02	Information on the ownership structures as at 26 march 2024	16
	(pursuant to article 123-bis, paragraph 1, cfa)
03	Compliance	23
	(pursuant to article 123-bis, paragraph 2, letter a) of the cfa)
04	Board of Directors	24
05	Processing of corporate information	45
06	Board Committees	46
	(pursuant to article 123-bis, paragraph 2, letter d) of the cfa)
07	Self-assessment and succession of directors -	48
	appointments and remuneration committee
08	Remuneration of Directors - remuneration	54
	committee
09	Internal control and risk management system -	55
	control and risk committee
10	Interests of the directors and related party	70
	transactions

11	Board of Statutory Auditors	71
12	Shareholder relations	80
13	Meetings	84
14 Additional corporate governance practices	87
15 Changes to the closure of the financial year of	87
	reference
16 Considerations on the letter of 14 December 2023 from	88
	the chair of the corporate governance committee
Annex 1		90
Table 1	Information on the ownership structure as at 26 march 2024	118
Table 2A	Structure of the Board of Directors at the end of the financial year	120
Table 2B	Structure of the Board of Directors until approval of the 2022 financial	122
	statements
Table 3A	Structure of the Board Committees at the end of the financial year	124
Table 3B	Structure of the Board Committees until approval of the 2022 financial	126
	statements
Table 4A	Structure of the Board of Statutory Auditors at the end of the financial year	128
Table 4B	Structure of the Board of Statutory Auditors until approval of the 2022	130
	financial statements

Report on corporate governance and ownership structure 2023

Executive Summary

1. Main Company Highlights

	MAIN COMPANY HIGHLIGHTS'(*)

Figures in thousands of euro

Total revenues	432,357

Operating profit (EBIT)	48,036

Net profit	13,642

Net financial debt	(328,675)

Capitalisation	976,500

Average employees	4,386

(*) The values shown refer as at 31 December 2023 and the respective scope of consolidation.

2. Share Price Performance

(1 January 2021- 31 December 2023)

3. Shareholders Of GVS

At the approval date of this Report, the resolved, subscribed and paid-up share capital of GVS is equal to Euro 1,750,000, divided into 175,000,000 ordinary shares, fully paid up, with no nominal value. The main shareholder is GVS Group S.r.l.

Based on the results of the shareholders' register and other available information, as of the month of March 2024, the GVS shareholding structure is depicted in the graphs below.

		Breakdown of
Share Capital	Voting Capital	floating capital by
geographic area

Treasury Shares 0.1%	Treasury Shares 0.1%	Israel 10%

Retail 6.9%	Retail 4.2%	US 12%

Institutional Investors 33.0%	Institutional Investors 22.2%	Continental Europe 15%

Scagliarini Family 60.0%	Scagliarini Family 73.6%	UK 38%

		Italy 25%

Report on corporate governance and ownership structure 2023

4. Corporate Bodies

Our Governance Model

Focus on the Board of Directors

Alessandro Nasi

External Audir Firm	Shareholders'	Board Of Statutory Auditors
Registered in the appropriate	Meeting	Appointed by the Shareholders'
register and appointed by the			Meeting to supervise compliance
Shareholders' Meeting			with the law and with the Articles
			of Association, as well as to
			control management

Chairman

Independent

Age: 50

Grazia Valentini

Non executive director	Expertise:
Age: 82

Michela Schizzi

Independent

Expertise:

Age: 42

Committees:

Marco Scagliarini

Non executive director	Expertise:
Age: 60

Expertise:

Massimo Scagliarini

CEO	Expertise:

Age: 59

Anna Tanganelli

Independent

Expertise:

Age: 43

Committees: P

Simona Scarpaleggia

Independent		Expertise:
Age: 64	P
Committees:

	Board of Directors
	Guides the company by pursuing
	its sustainable success and is
	supported by committees with
Supervisory Body	advisory, propositional and

Marco Pacini	Pietro Cordova
Non executive director Expertise:	Independent	Expertise:
Age: 53	Age: 64

Committees:

It has duties and powers with	investigative functions
regard to the care, development
and promotion of regular			Control, Risk And Sustainability

updating of our Organisation and

		Committee (*)
Management Model

			Appointments And


			Remuneration Committee

Expertise of the Board of Directors

Expertise

Finance	Control and Risk

Managerial/	Legal and
Entrepreneurial	Governance

Strategy/M&A	ESG and

		Sustainability

			ag
		r	e	a
	e
v				g
A
				e

57 years

		m
			i
	m	t
	t
o			e
		e
C
				s

Control, Risk and

Sustainability

Committee

Appointments and

Remuneration

Committee

Chief Executive Officer

Primarily responsible for management of the Company, as Managing Director, also having the role of Director responsible for the internal control and risk management system

The Issuer has identified the Control, Risk and Sustainability Committee as the competent body in relation to related party transactions

HR				Digital

Report on corporate governance and ownership structure 2023

EVOLUTION SINCE THE PREVIOUS MANDATE

5. MAIN FEATURES OF THE INTERNAL

CONTROL AND RISK MANAGEMENT

	Last mandate

Number of Directors	9

% Executive Directors	44.5%

% Non-Executive Directors	55.5%

% Independent Directors	44.4%

Average age of Directors	55 years

Chair-CEO	No

Chair-Controlling Shareholder	No

Independent Chair	No

Lead Independent Director	No

Current mandate	Average MID CAP(*)

9	10.5

11.1%	25.2%

88.9%	25.8%

55.4%	49.0%

57 years	57.9

No	28.1%

No	36.8%

Si	12.3%

No	12.5%

SYSTEM

Structure of control levels

Board of	Board of
Directors	Statutory Auditors
Control, Risk and

(*)Assonime - Report on Corporate Governance in Italy: the implementation of the Italian Corporate Governance Code, 2023.

Board members by gender

Men 56%; 5

Women 44% ;4

	Number of meetings	Attendance rate

Appointments and Remuneration Committee	10	93.33%

Control, Risk and Sustainability Committee	14	97.62%

ANNUAL BOARD EVALUATION PROCESS

	Sustainability	CEO	Supervisory
		Body
	Committee

	t	le
		v
s				e
				l
1						Staff and Business


		l					Functions


	d e
n			v
			e
2					Compliance, Quality, �
					l

		l					Financial reporting manager


	d	e
		v
r
			e
3						l

Internal Audit

Implementation of the Board evaluation process

With / without the support of an independent advisor	Year 2022

	Year 2023

Self-assessment mode	Year 2022

	Year 2023

Yes

with the support of an independent advisor

without the support of an independent advisor

individual questionnaire + individual interview

conducted by the independent advisor

individual questionnaire

Report on corporate governance and ownership structure 2023

6. ESG (Environmental, Social, Governance)

Sustainability Governance Structure

Board of Directors

Responsible for corporate strategy on sustainability issues

Board level

Control, Risk and

Sustainability Committee

Supports the Board of Directors on sustainability issues

	Executive
Cross-functional Sustainability
level
Committee

Responsible for strategic direction and oversees the sustainability objectives

	Operational
Corporate Sustainability Department	level

Strategic Pillars	Description	Material issues	Sustainable Development
Goals

	We believe that corporate sustainability stems	Energy consumption and

	from the respectful use of natural resources
	greenhouse gas emissions
	and the transition to renewable energy as a
Ecological
means of combating climate change.
transition
	We are committed to taking synergetic
	action globally with the aim of reducing our	Waste management
	emissions.
	With our products, used in applications where	Product safety and quality

	health and safety are key, we contribute to

Responsible	a future where good health is a universally
innovation	attainable target.
	We are committed to bringing innovation	Product innovation and
	while respecting the environment and people.	eco-design
		Health and safety

	we promote initiatives whose main aim is	Management and
	to enable employees to work to the best of
Valuing people	enhancement of human capital
their ability, while striving to create a safe and
Discrimination, diversity and
	inclusive workplace that promotes people's
	equal opportunities
	well-being and development.

		Human rights protection
	We are committed to conducting our activities	Responsible management of

	in compliance with the applicable regulations	the supply chain
Ethical conduct
and laws, and we adhere to values and
	ethical principles that ensure responsible	Corporate ethics and anti-
	management of all business processes.
	corruption

7. REMUNERATION

Pay mix Chief Executive Officer

24%	28%	Fixed	Maximum	30%	39%	31%
		TFM
		Admin remuneration	Target	34%	42%	24%
		STI Target
	5%	Annual LTI target 23-25	Thesold	51%	31%	18%
	1%
			Minimum		100%
	42%
				Fixed	STI	LTI
	Pay mix Key Managers
24%	43%		Maximum	34%	39%	27%
		Fixed
		STI Target	Target	43%	33%	24%
		Annual LTI target 23-25
			Thesold	61%	23%	16%
			Minimum		100%
33%
				Fixed	STI	LTI

Report on corporate governance and ownership structure 2023

GLOSSARY

Director(s): individually or collectively, as applicable, the members of the GVS Board of Directors.

Chief Executive Officer: the chief executive officer of GVS.

Appointed Director: the director in charge of the Issuer's internal control and risk management system, a position assigned by GVS to the CEO in accordance with Recommendation 32, letter b) of the Corporate Governance Code.

Shareholders' Meeting: the meeting of the Shareholders of GVS.

Shareholders: the shareholders of GVS.

Italian Stock Exchange or Borsa Italiana: Borsa Italiana S.p.A.

Code/Corporate Governance Code: the Corporate Governance Code of Listed Companies approved in January 2020 by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, Ania, Assogestioni, Assonime and Confindustria, applicable by issuers from the first financial year starting after 31 December 2020 and accessible to the public on Borsa Italiana's website (www.borsaitaliana.it).

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

Board of Statutory Auditors: the Issuer's Board of statutory Auditors.

Board Committee/Committees: individually or collectively, as appropriate, the committees formed within the Board of Directors.

Control, Risk and Sustainability Committee: GVS's Control, Risk and Sustainability Committee, established within the Board of Directors in accordance with Principle XI of the Corporate Governance Code and integrating the functions outlined in Recommendation 35 of the Code.

Appointments and Remuneration Committee: the appointments and remuneration committee set up within the Board of Directors pursuant to Principle XI of the Corporate Governance Code and incorporating the functions outlined in Recommendations 19 and 25 of the Code.

Board or Board of Directors: the board of directors of the Issuer.

CONSOB: the National Commission for Companies and the Stock Exchange.

Subsidiaries: the companies directly and indirectly controlled by GVS pursuant to Article 2359 of the Civil Code and Article 93 of the CFA.

Financial Reporting Manager: the manager in charge of drawing up the corporate accounting documents appointed by the Board of Directors pursuant to Article 154-bis of the Consolidated Finance Act and Article 30 of the Articles of Association.

Financial Year: the FY 2023 to which the Report refers.

Euronext Milan or EXM: the electronic share market organised and managed by Borsa Italiana.

GVS Group or the Group: jointly, GVS and the Subsidiaries.

GVS or the Company or the Issuer: GVS S.p.A.

Chair of the Board of Directors or Chair: Chair of the Issuer's Board of Directors.

Remuneration Report: the report on the remuneration policy and compensation paid by GVS, drafted pursuant to Article 123-ter of the CFA and Article 84-quater of the Issuers' Regulation and in compliance with Schedule No. 7-bis of Annex 3A of the same Issuers' Regulation.

Regulation of the Board of Directors: the Regulation of the Board of Directors of GVS approved by the Board of Directors on 10 September 2020, as amended and supplemented over time, most recently on 03 May 2023.

Issuers' Regulation: the Regulation issued by Consob with resolution No. 11971 of 1999 (and subsequent amendments) on the matter of issuers.

Market Regulation: the Regulation issued by Consob under the 2017 resolution No. 20249 relating to markets.

Related Parties Regulation: the Regulation issued by Consob with resolution No. 17221 of 12 March 2010 (and subsequent amendments) on related party transactions.

Report: this report on corporate governance and ownership structure, drawn up pursuant to Article 123- bis of the CFA.

Independent Auditing Firm: the company appointed to audit GVS.

Articles of Association: the articles of association of GVS.

CFA: Legislative Decree 24 February 1998, No. 58 (Consolidated Finance Act).

Unless otherwise specified, the definitions in the Corporate Governance Code relating to: directors, executive directors, independent directors, significant shareholder, Chief Executive Officer (CEO), administrative body, control body, business plan, concentrated ownership company, large company, sustainable success, and top management, shall also be considered by reference.

1. ISSUER PROFILE

GVS S.p.A. (hereinafter also "GVS" or the "Company" or "Issuer") is incorporated as a joint- stock company, is registered with the Bologna Register of Companies under No. 03636630372, VAT No. 00644831208 and in the Economic and Administrative Index (REA) at the Bologna Register of Companies under No. BO - 305386 and has its registered office in Zola Predosa (BO), at Via Roma n. 50, 40069.

The Company is organised according to the traditional administration and control model as per Articles 2380-biset seq. of the Civil Code, which provides for the Shareholders' Meeting, the Board of Directors and the Board of Statutory Auditors.

The GVS Group offers advanced filtration solutions for many applications in various highly regulated sectors, being one of the world's leading manufacturers of filter components and materials. The Group is a vertically integrated manufacturer able to offer high-tech solutions that allow a wide range of filters, membranes and other filter technologies to be adapted to specific customer needs.

The GVS Group currently has 19 plants in Italy, the United Kingdom, Brazil, the United States, China, Mexico, Romania and Puerto Rico and 29 sales offices located across the world. Sustainability

Pursuant to the Code of Corporate Governance, it is the duty of the Board of Directors to guide the Company by pursuing its sustainable success; an objective which is embodied in the creation of long-term value for the benefit of shareholders, taking into account the interests of other stakeholders relevant to GVS.

For guidance on how this objective is implemented by the Board of Directors in GVS's strategies, remuneration policies, and system of internal control and risk management, see Sections 4, 8, and 9 of the Report below, respectively.

Non-Financial Statement

In accordance with Articles 3 and 4 of Legislative Decree 254/2016, the Company has prepared the consolidated non-financial statement for the Financial Year, which is available on the Company's website (www.gvs.com- Governance Section).

Declaration on SME status

Pursuant to Article 1, paragraph 1, letter w)-quater.1 of the CFA, until 26 March 20241, "SMEs" are considered to be small and medium-sized enterprises, issuers of listed shares with a market capitalisation of less than 500 million euro. Issuers of listed shares which have exceeded this limit for three consecutive years are not considered SMEs.2

Pursuant to Article 2-ter of the Issuers' Regulation, for the acquisition of the SME qualification, the capitalisation corresponds to the simple average of the daily capitalisations calculated with reference to the official price, recorded during the year.

1As from 27 March 2024 (i.e., from the date of entry into force of the so-called "Capitali" Law Decree), "SMEs" are considered to be small and medium-sized enterprises, issuers of listed shares with a market capitalisation of less than 1 billion euro.

2 The definition of SME in the CFA was amended by Article 44-bis, paragraph one of Law Decree 16 July 2020, No. 76, introduced by Conversion Law 11 September 2020, No. 120. Before the amendment, Article 1, paragraph 1, letter w-quater.1 of the Consolidated Finance Act defined "SME" as small and medium-sized enterprises, issuers of listed shares, whose turnover (also prior to the admission of their shares to trading) was less than 300 million euro, or which had a market capitalisation of less than 500 million, specifying that "issuers of listed shares that have exceeded both these limits for three consecutive years are not considered SMEs". The amendment has eliminated the reference to the turnover parameter, so that, as of today, small and medium-sized enterprises, issuers of listed shares, with a market capitalisation of less than 500 million euro are considered "SMEs" and "issuers of listed shares that have exceeded this limit for three consecutive years are not considered SMEs".

The same Article 44-bis of the aforementioned decree, in paragraph two, has provided for a transitional regime on the basis of which: "Issuers that on the effective date of the law converting this decree [i.e. as of 15 September 2020] assume the status of SME based solely on the criterion of turnover continue to maintain this status for two financial years following the current one."

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GVS S.p.A. published this content on 16 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 April 2024 17:25:05 UTC.

Market Closed - Borsa Italiana Other stock markets 11:44:59 2024-05-10 am EDT			5-day change	1st Jan Change
5.46 ^EUR	-0.36%		-0.36%	-2.06%

May. 09	Mib bearish; focus on quarterly reports and BoE	AN
May. 08	Milan lone in red; Leonardo tops Mib	AN

Mib bearish; focus on quarterly reports and BoE	May. 09	AN
Milan lone in red; Leonardo tops Mib	May. 08	AN
Mib lone bearish; Leonardo shines in Milan	May. 08	AN
Marshall Wace increases short on Saipem and SAES.	May. 07	AN
Indices in green; Intesa tops the Mib.	May. 06	AN
Mib correction at 34,000; strength on Fincantieri	Apr. 09	AN
Lists bearish; DiaSorin rises against the tide	Apr. 09	AN
JPMorgan revises three bearish positions.	Apr. 02	AN
Futures tentatively up, eyes on macros	Mar. 28	AN
Mib bullish; A2A and Mediobanca among the best	Mar. 27	AN
Futures on parity, eyes on MPS and yen	Mar. 27	AN
Mib up slightly, Saipem runs again	Mar. 26	AN
GVS closes with profit down in 2023; revenues increase	Mar. 26	AN
Mib rises to 34,700; Iveco at annual high	Mar. 26	AN
Mib still bullish; Rai Way bullish after accounts	Mar. 26	AN
Mib bearish; traders await US PCE	Mar. 26	AN
GVS S.p.A. Reports Earnings Results for the Full Year Ended December 31, 2023	Mar. 25	CI
Mib up, Saipem and TIM lead the list	Mar. 25	AN
Futures up; US inflation does not dampen buying	Mar. 13	AN
Mib rises to 33,700; MPS and BPER at annual highs	Mar. 12	AN
Futures cautious; Evergrande, liquidation demanded	Jan. 29	AN
Europeans up after US core PCE.	Jan. 26	AN
Mib pushes to 30,300 mark; luxury sector advances	Jan. 26	AN
Mib bullish; Alerion good on mid-cap	Jan. 11	AN
Mib up; Iveco and Stellantis best performers	Jan. 11	AN

	1st Jan change	Capi.
GVS S.P.A.	-2.06%	1.03B
COLOPLAST A/S	+9.48%	27.43B
SHANDONG WEIGAO GROUP MEDICAL POLYMER COMPANY LIMITED	-28.65%	3.18B
WINNER MEDICAL CO., LTD.	-16.08%	2.53B
INTCO MEDICAL TECHNOLOGY CO., LTD.	+19.05%	2.49B
HARTALEGA HOLDINGS	+11.11%	2.16B
HARBIN FUERJIA TECHNOLOGY CO., LTD.	-4.24%	2.03B
NAKANISHI INC.	+1.69%	1.31B
KOSSAN RUBBER INDUSTRIES	+29.73%	1.29B
KANGJI MEDICAL HOLDINGS LIMITED	+8.01%	1.17B

GVS S.p.A.

Equities

GVS

IT0005411209

Medical Equipment, Supplies & Distribution

GVS S p A : Report on Corporate Governance and Ownership Structure 2023

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