Recordati : Report of the Board of Statutory Auditors to the Shareholders’ Meeting

This is an unofficial English Language courtesy translation of the original Italian report prepared and issued in Italian by the Board of Statutory Auditors of Recordati S.p.A ('The Company').

As such this courtesy translation is for information purposes only and should not be relied upon. Only the original version in the Italian language has legal value and in case of any ambiguity, the Italian report (a copy of which is available on the Company's website) shall prevail. The Company and the Board of Statutory Auditors make no representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of this English Language Courtesy Translation.

Courtesy copy follows:

Report of the Board of Statutory Auditors to the Shareholders' Meeting of Recordati S.p.A. pursuant to article 153 of Italian Legislative Decree no. 58/1998 and to article 2429, paragraph 2, of the Italian Civil Code.

Dear Shareholders,

By this report, drafted pursuant to article 153 of Italian Legislative Decree no. 58/1998 (hereinafter also referred to as 'TUF' Consolidated Finance Law), also taking into account the applicable Consob Recommendations and the rules of conduct of the board of statutory auditors of listed companies issued by the National Board of Chartered Accountants and Accounting Consultants, the Board of Statutory Auditors of Recordati S.p.A. (hereinafter also referred to as the 'Company') reports to you on the supervisory activity carried out and the relevant outcomes.

1. Supervision carried out and information received

The Board of Statutory Auditors of the Company (hereinafter also referred to as the 'Board'), at the date of this report, is composed of Mr Antonio Santi (Chair), Mr Ezio Simonelli (statutory member) and Ms Livia Amidani Aliberti (statutory member) (the alternate auditors are Mr Andrea Balelli and Ms Patrizia Paleologo Oriundi). The Board of Statutory Auditors, in its current composition, was appointed by the Shareholders' Meeting of 29th April 2020 and will expire with the Shareholders' Meeting called to approve the financial statements for the year ended on 31st December 2022.

During the year ended on 31st December 2022, the Board of Statutory Auditors carried out the supervisory activities required by law. To this end, during the financial year, the Board has:

•  held 10 statutory auditors' board meetings, which were always attended by all members in office;

•  attended 9 Board of Directors' meetings;

•  attended 7 Risk, Control and CSR Committee's meetings;

•  attended 9 Remuneration and Nominations Committee;

•  attended the meetings of the Independent Directors;

•  attended the Shareholders' Meeting;

•  held meetings with the managers of the auditing firm, EY S.p.A. hereinafter also referred to as the 'Auditing Firm') pursuant to article 150, paragraph 3, of Italian Legislative Decree no. 58/1998, during which the appropriate information was exchanged and no other events or situations that were worth highlighting were detected;

•  met regularly with the Chief of the Internal Audit Function;

•  met regularly with the ODV (231 Compliance Body) appointed pursuant to Italian Legislative Decree no. 231/2001;

•  obtained the documents and information deemed relevant by the executive Directors and other company functions;

•  exchanged information with the boards of statutory auditors of the subsidiaries regarding the management and control systems and the general performance of the companies' operations.

Please note that the undersigned Board of Statutory Auditors usually attends as a guest, as a board or in person of its Chair, to the meetings of the Risk, Control and CSR Committee and of the Remuneration and Nominations Committee, during which matters relating to related-party transactions were also discussed.

During the Board of Directors' meetings, the Board of Statutory Auditors was informed by the Directors on the activities carried out and on the most significant economic, financial and capital transactions carried out by the Company and its subsidiaries.

It should be noted that on 29 October 2020, Recordati's Board of Directors resolved to adopt the new 2020 CG Code (hereinafter also referred to as the "CG Code"), the recommendations of which are applicable from 1 January 2021., with the additions and adjustments resulting from the characteristics of the Group indicated in the "Corporate Governance And Proprietary Assets Report" relating to the 2022 financial year (hereinafter also referred to as the "Corporate Governance Report").

During the meetings and contacts between the Board of Statutory Auditors and the Auditing Firm, no adverse events were detected.

With particular reference to the functions assumed pursuant to article 19 of Italian Legislative Decree no. 39/2010, amended by Italian Legislative Decree no. 135/2016 implementing Directive 2014/56/EU, the Board of Statutory Auditors - also in the context of the meetings held with the Auditing Firm and its attendance at the meetings of the Risk, Control and CSR Committee - examined the work plan adopted, received information on the accounting principles used, the accounting treatment of the most significant transactions carried out in the financial year in question as well as on the outcome of the audit engagements and on the key audit matters. The Auditing Firm did not report significant shortcomings in the internal control system in relation to the financial reporting process.

In this regard, the Board of Statutory Auditors also received detailed information on the impairment test performed by the Company to confirm the value of goodwill and of certain financial assets of significant amount recorded in the financial statements. The relevant details are provided by the Directors in the financial statements in accordance with the guidelines of the international accounting standards and of Consob.

With regard to the supervision of the financial reporting process and the independence of the Auditing Firm, please refer to the following sections of this report.

It should be noted that in the context of the Board of Statutory Auditors' activities:  no charges have been received pursuant to article 2408 of the Italian Civil Code;  no complaints have been received.

In 2022, the Company is subject to the management and coordination activities of Rossini Luxembourg S.àr.l, pursuant to article 2497 et seq. of the Italian Civil Code.

In this regard, it seems appropriate to bear in mind that, in 2019, specific regulations on the management and coordination activity exercised by Rossini Luxembourg S.àr.l. on Recordati S.p.A. and on the information flows of Recordati S.p.A. towards, in particular, Rossini Luxembourg S.àr.l, had been approved by the Board of Directors of Recordati S.p.A., following a process which had involved the independent Directors and the Board of Statutory Auditors from the earliest drafting stages.

As illustrated by the Directors in the Corporate Governance Report, the exercise of management and coordination by Rossini Luxembourg S.àr.l. can be achieved, among other things, through multiple tools, such as: the formulation of general guidelines, in compliance with the legislation governing listed companies; the establishment of directives and the formulation of instructions for thetransmission of management and accounting information; the formulation by Rossini Luxembourg of non-binding opinions on certain significant transactions and decisions.

The Company exercises management and coordination activities, pursuant to article 2497 and following of the Italian Civil Code, over the directly or indirectly controlled Italian companies belonging to the Recordati Group. As illustrated by the Directors in the Corporate Governance

Report, the wholly-owned Italian subsidiaries have acknowledged the management and coordination activities performed by the Company and have complied with the disclosure requirements provided for by Law.

With reference to events occurring after the end of the financial year, it should be noted that there were no company events occurred after the end of the financial year that would require changes to the values of assets, liabilities and the profit and loss account.

It should be noted that, with reference to the impact of the earthquake that severely hit Turkey in

February 2023, although at the moment the Company sees no signs of weakness even considering the natural resilience of the pharmaceutical sector, the consolidated financial statements as at 31 December 2022 represented that it is difficult to predict whether there may be potential negative impacts on the performance of the business.

Furthermore, it should be noted that in February 2023, the Company concluded an agreement with ARS Pharmaceuticals for the return of the licence on ARS‐1.

Except for the above, no significant events occurred subsequent to the reporting date.

2.

Supervising relations with subsidiaries and parent companies and related-party transactions

The Board of Statutory Auditors supervised the ordinary or recurring related-party transactions and/or intra-group transactions in relation to which it reports as follows:

•  commercial and financial intra-group transactions referring to subsidiaries and the parent company are regulated on an equivalent basis to those prevailing in transactions between independent parties;

•  the most significant related-party transaction items are:

  • a) receivables for loans granted to Group companies;

  • b) payables for loans received from Group companies;

  • c) trade receivables from subsidiaries;

  • d) trade payables to subsidiaries;

  • e) receivables of a diverse nature from subsidiaries;

  • f) payables of a diverse nature from subsidiaries;

  • g) receivables from subsidiaries for the management of the centralised treasury;

  h)payables to subsidiaries for the management of the centralised treasury;

•  it should be noted that related-party transactions do not include any non-standard or unusual transactions and that during 2022 there were no transactions or contracts with related-parties that, with reference to materiality of effects on the financial statements, could be considered significant in terms of value or conditions;

•  in compliance with the requirements of article 4, paragraph 7, of the Regulations for related-party transactions adopted by CONSOB, resolution no. 17221 of 12th March 2010 as subsequently amended, as well as by article 2391-bis, paragraph 1, of the Italian Civil Code, the Company adopted the 'Procedure for regulating related-party transactions' available on the Company's website.

• 3. Financial statements, consolidated financial statements and Report on Operations

With specific regard to the examination of the financial statements for the year ended on 31st December 2022, the consolidated financial statements for the year ended on 31st December 2022 (prepared in accordance with the IAS/IFRS international accounting standards issued by theInternational Accounting Standards Board (IASB) and approved by the European Union, as well as in accordance with the provisions issued by Consob in implementation of paragraph 3 of article 9 of Italian Legislative Decree no. 38/2005 and in the European Single Electronic Format ('ESEF') as required by the applicable regulations) and the Report on Operations, the Board of Statutory Auditors reports the following:

•  the financial statements file was delivered to the Board of Statutory Auditors in due time to be deposited at the Company's registered office together with this report;

•  the Board of Statutory Auditors has verified that the Company's financial statements and the consolidated financial statements have been prepared in accordance with the structure and layouts required by applicable regulations and are accompanied by the documents required by the Italian Civil Code and the TUF;

•  the Board of Statutory Auditors verified the rationality for the valuation procedures applied and their compliance with the international accounting standards.

The Board of Statutory Auditors points out that the Transparency Directive (2004/109/EC) requires the annual financial report prepared by listed companies to be published in a single electronic reporting format. EU Regulation 2019/815 ('ESEF Regulation') imposes that the aforementioned annual financial report is to be prepared in the XHTML format, marking certain information in the consolidated financial statements with the Inline XBRL specifics. At the national level, the Italian Law converting the 'Decreto Milleproroghe' (Italian Decree-Law no. 183 of 31st December 2020), in the text finally approved by the Italian Chamber of Deputies and by the Italian Senate of the Republic, in order to benefit from the aforementioned extension, provided, in Article 3, paragraph 11-sexies, that the provisions of the ESEF Regulation would apply to financial reports relating to financial years starting as from 1st January 2021. Therefore, with respect to financial reports starting from with financial year ending 31st December 2021, the obligation to prepare and publish them in accordance with the provisions of the ESEF Regulation shall apply.

It should also be noted that the auditing firm is required to carry out audit procedures also in this respect and, to this end, the Italian Ministry of Economy and Finance has approved the auditing standard SA Italy 700B 'The responsibilities of the entity entrusted with the statutory audit with reference to the financial statements prepared in accordance with the single electronic reporting format'.

The Board of Statutory Auditors bears in mind that the Company has reported that, since last year, it has already proceeded to prepare the activities and processes aimed at producing the annual financial report according to the single electronic reporting format (ESEF), and precisely with integrated XHTML computer language by appropriate markings in XBRL, in order to facilitate the accessibility, analysis and comparability of the consolidated financial statements drawn up according to the International Financial Reporting Standards (IFRS).

The Board of Statutory Auditors points out that the Auditing Firm has stated that it has audited, with the support of a team of specialists, Recordati's annual financial report on the issue in question, the outcome of which is finalised with the opinion on compliance included in the audit report.

4.

Transactions and events of major economic, financial and asset importance

In relation to the most significant transactions under an economic, financial and asset point of view carried out by the Company and the Group during the 2022 financial year, and, more generally, with regard to the most significant events, the Board reports the following:  several initiatives were undertaken in line with the Group's strategy of continuous development and growth;



initiatives were undertaken in the field of sustainability. In particular, the Group has decided to continue the structured and organic process to sustainability through which the stakeholders' expectations in relation to social, environmental and economic objectives are also taken into account. This process - which in previous years had already led to the preparation of non-financial information, through which to highlight the objectives that the Group has set itself and the results achieved in the environmental, social and economic fields - led, in 2020, to the establishment of the Environmental, Social & Governance function,dedicated to supporting the integration of social and environmental aspects in the business processes, and the formalisation of the Group's first Sustainability Plan and, during 2022, with a view to continuous improvement, the updating of the goals included in the aforementioned Plan, also following up on the commitments made in that Plan, by achieving important social and environmental goals;



in March 2022, the acquisition of EUSA Pharma (UK) Ltd - a global biopharmaceutical company focused on rare oncological diseases - was completed' it reinforces the Group's footprint in the rare disease segment, expands the product portfolio, enriches Recordati with new skills;

During 2022, the Board of Directors periodically monitored the operating performance, also by comparing the results achieved with those planned as per 2022 Budget.

In 2022, Recordati updated its Risk Catalogue during approval of the 2023 Budget, at the meeting of the Board of Directors held on 20 December 2022.

Furthermore, on 21 February 2023, the Board of Directors approved the new 2023-2025 Three-Year Plan.

It should be noted that in 2022, the Board of Directors, on the proposal of the Remuneration and

Nominations Committee, approved the allocation of new stock options based on the 2021-2023 Stock Option Plan.

In particular, it should be noted that on 29th April 2022 the ordinary Shareholders' Meeting passed a resolution renewing the authorisation to purchase and dispose of treasury shares pursuant to articles 2357 and following of the Italian Civil Code until the approval of the financial statements for the year ended on 31st December 2022. On the basis of the said shareholders' resolution, on 20th June 2022, a share buy-back program was launched to service the Recordati's Group management's stock option plans already adopted by the Company and those which may be adopted in the future, which was completed on 10th March 2023.

It should also be noted that the Board of Directors approved changes to the MBO system for 2023 and began, in 2022, analyses and assessments regarding a new long-term incentive system.

In this regard, it should be noted that in the meeting of the Board of Directors held on 16 March 2023, this Board approved, among other things, the adoption of a new long-term incentive plan, in line with prevailing market practice, known as the "2023-2025 Performance Shares Plan", subject to revocation of the "2021-2023 Stock Option Plan" for the assignment of stock options scheduled for 2023.

Furthermore, as the current authorisation will expire with the Shareholders' Meeting called to approve the financial statements for the year ended on 31st December 2022, the Board of Directors, resolved to propose to the same meeting that the authorisation to purchase and dispose of treasury shares be renewed in order to maintain the necessary operational flexibility over an adequate time period.

In 2022, the Board of Directors approved the project to revise and update the Group Corporate Governance Guidelines and the Group Powers Model, also in the light of international best practices, regarding the corporate governance system of the group structure and assessment the adequacy of the organisational, administrative and accounting structure of the Company and its strategically relevant subsidiaries, with particular reference to the internal control and risk management system.

The Board of Directors expects to continue in the coming years the process of acquiring products and expanding into new markets, while respecting prudent parameters of financial sustainability.