Gefran

Environmental & Social Information • Mar 29, 2024

Consolidated Non-Financial Statement 2023 pursuant to Legislative Decree 254/2016

GEFRAN GROUP SUSTAINABILITY REPORT

CONTENTS

7.	The contribution to the ecological transition	116
7.1	Energy efficiency and reduction of CO2 emissions (Scopes 1 and 2)	118
7.2	Mapping of other indirect CO2 emissions (Scope 3 )	130
7.3	Water management	140
8.	Sustainable product innovation	142
8.1	Product safety and quality	144
8.2	Technological innovation	14 7
8.3	The digital transformation	150
8.4	Customer care	153
9.	The sustainability of the supply chain	154
9.1	Sharing culture	156
9.2	The supply chain	158
9.3	The responsible management of the supply chain	160
9.4	Promotion and development of the territory and communities	163
9.5	Waste management	166
10.	Information pursuant to Article 8 of EU Regulation 2020/852
	(EU Taxonomy Regulation)	170
11.	Appendix	188
11.1	Responsible management of the business – appendix	190
11.2.	The centrality of people – appendix	194
11.3	The contribution to the ecological transition – appendix	204
11.4	The sustainability of the supply chain – appendix	209
12.	Note on methodology	214
13.	Table of correlation under Legislative Decree 254/16	220
14.	Auditor's Report on the Consolidated Non-Financial Statements	226

7.2 Mapping of other indirect CO2 emissions (Scope 3 7.3 8.2 9.5 11.1 Letter to stakeholders 4 Highlights 6 1. Gefran's identity and values 8 1.1 Our promise 11 1.2 Purpose 12 1.3 Beyond technology: what our payoff expresses 13 1.4 Values 14 1.5 Manifesto 15 2. Company 16 2.1 The path 18 2.2 The Group's activities 21 3. The organisational structure 28 3.1 The Corporate Governance Model 30 3.2 Responsible business management 36 3.2.1 The Group's Code of Ethics and policies 36 3.2.2 Integrated risk management 39 3.2.3 Fiscal Responsibility 50 3.2.4 Fight against corruption 52 4. Sustainability 56 4.1 Sustainability governance 58 4.2 The method of setting our priorities 60 4.2.1 Dialogue with stakeholders 60

	4.2.1 Dialogue with stakeholders	60
	4.2.2 Materiality analysis	65
5.	The Strategic Plan: the pillars	70
6.	The centrality of people	90
6.1	Human capital management	92	13.
6.2	Diversity, inclusion and equal opportunities	94
6.3	Employee welfare	102
6.4	Health and safety	106
6.5	Personnel training and development	110
6.6	Data protection and cybersecurity	114

Turning the pages of this document, I proudly retrace the path that Gefran has taken in recent years: we have pursued with determination a growth strategy that pays of great attention to the centrality of people, the carbon transition, sustainable product innovation, and the sustainability of the supply chain.

ese are the pillars of the strategic plan whose objectives were presented and launched in 2023, and which today accompany and guide our vision and investment choices.

is way of acting has led us to be firmly recognised today as one of the companies in Italy most attentive to ESG issues. is is demonstrated by the numerous awards obtained, which are received year after year.

And the pride is even greater, because the most important result is the awareness of the close tie between sustainability and business continuity, a vision that has always been in the mind of our founder Ennio Franceschetti.

e second generation is now formally on duty, the generational transition has ended... or perhaps not, because the new generation is already on the horizon. It is our responsibility to deliver to the next generation a healthy and prosperous company like the one that has been delivered to us, and so on over time, in the dream and in the sign of a company that creates value over time.

is continuity is guaranteed by the sustainable action of our company, which here in this document we talk about and report,

with numbers and results at hand.

e great commitment of our people in achieving important results emerges from the pages of the 2023 sustainability report: everyone deserves my great thanks for the work carried out with passion and dedication, with the awareness that "doing things well", not limited to compliance with directives and regulations, is what makes Gefran a great successful company.

Giovanna Franceschetti

Gefran Vice Chairwoman responsible for Sustainability

ENERGY INTENSITY GJ over Revenues 0.294

GEFRAN'S IDENTITY AND VALUES 01

1.1

A compass guides us in our daily decisions across all areas and business processes; it inspires every event and initiative and dictates our relationship management style with our partners.

is compass is the Gefran Way, which embodies the spirit, identity and values of the Group and its brand.

Promise, Purpose, Values and Manifesto best express the Gefran Way.

OUR PROMISE

We have solid roots in industrial automation and technological innovation. We listen and work with passion to find the most effective solutions, creating winning and sustainable relationships. is is our strength.

We work with companies that want to improve technological processes, with people who believe in professional growth and talent, with stakeholders who have an interest in creating value for the community and its surroundings. is is our world.

1.2 1.3 BEYOND TECHNOLOGY: WHAT OUR PAYOFF EXPRESSES

Beyond Technology embodies the essence of Gefran, conveying the sense of what it does, what it is, and what it brings with it. It means bringing out all that is behind technology and looking beyond the product, beyond meeting companies' needs. It means having a vision of the market of tomorrow.

PURPOSE

e future is our present.

Be protagonists in technology evolution, recognised as a point of reference for those who build industrial value and innovation.

Be interpreters of sustainable growth, open to the market, companies and the people we work and live with.

Based on this vision, we wish to give a clear and effective description of how the near future is imagined. Our goals are ambitious, but also concrete and specific.

We introduce the concept of economic, social and environmental sustainability in our statement of purpose: playing a leading role gives us responsibilities in relation to the world around us, on which we make a recognisable mark.

Promise and Purpose represent a prospective vision and a path aimed at building the foundations of the future, in the present. What is enunciated must include constant dialogue with our partners, which often takes the form of cooperation.

IS LOCAL TOO

1.4 1.5 VALUES

e Manifesto describes the experience Gefran wishes to have with its stakeholders: it is the benchmark for all our partners to deliver value and trust in their work.

Our identity is also underpinned by principles that guide attitudes and actions: these are the Group's cultural values, reflecting its convictions, aspirations and commitment to our stakeholders.

RELIABILITY

We believe in trust in all aspects – be it solid strategies, commitment to products or sustainable relationships with stakeholders. We have strong expertise to devise effective solutions and offer a service that can anticipate needs.

DYNAMISM

We believe in the importance of timely responses, in the flexibility of our recommendations and, above all, in proactively searching for the best solution.

INNOVATION

We anticipate the needs of the future and understand how to implement our vision in the present. We invest in designing premium quality solutions and services and possess the know-how for ongoing innovation and creativity.

GEFRAN

2.1 THE PATH

4 sensors factories

2 automation components factories

in Latin America

2 electric panels factories

1

in US

Since 1998, the shares of the Parent Company, Gefran SpA, have been listed on the Milan Stock Exchange, in the segment currently called Euronext STAR Milan.

Gefran is an Italian multi-national, specialised in the design and manufacturing of sensors, systems and automation components and the control of industrial processes.

It was established in the Sixties in Provaglio d'Iseo (BS) by brothers Giacomo and Ennio Franceschetti (which is the acronym GEFRAN) and immediately stood out in Italy and abroad, devising a tool to regulate the temperatures of plastics processing machinery. One innovation before a long series, which went on to set the standards for the industry.

e company soon evolved into an industrial group, expanding its product range and going international. In the Eighties, it began producing sensors. At the turn of the new century it enjoyed a growingly international presence, building a network of branches located in key strategic and commercial areas, allowing Gefran to reach many markets.

Gefran is now a global organisation, but at the same time it has maintained the characteristics of a family business and its headquarters have remained in Provaglio d'Iseo. In Italy, the Group operates through the Parent Company Gefran SpA and two subsidiaries: Gefran Soluzioni Srl, also based in Provaglio d'Iseo, and Elettropiemme Srl, based in Trento.

Its development abroad is driven by the need to monitor the markets and be close to customer companies, a key factor in providing a comprehensive, high-quality service. Stand next to the customers, knowing their needs and satisfying them in a timely manner ensures the Group is highly competitive. is is further strengthened by the study of specific applications, local technical support, compliance with delivery times and after-sales service.

e Gefran Group currently has 13 companies in Italy and abroad, 8 of which are also production units, guaranteeing full control of the supply chain. is comprises design, production, product distribution, global sales and technical support. Gefran operates directly in 11 countries and distributes products through its sales network in 74 countries.

2.2

THE GROUP'S ACTIVITIES

In 2022, the Group decided to focus its development strategy on strengthening sensors and automation components, the sectors in which it has invested the most in recent years and in which it aims to accelerate the growth of product lines and workforces. is orientation led to the sale of the drive business to the Brazilian Group WEG S.A., which included the shareholdings of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE) sold in the fourth quarter of 2022 and determining the change in the scope of the current non-financial reporting compared to the same in previous years. e transaction was completed with the sale of the business units related to the drives business of the subsidiaries Gefran Automation Technology Co Ltd (CN), on 3 January 2023, and Gefran India Private Ltd (IN), on 1 March 2023.

e Group's activity, therefore, is today exclusively focused on the design, production and distribution of industrial sensors and automation components. Unique in the market in terms of breadth, quality and specialisation, the product range helps to offer turnkey solutions for the automation of companies in different sectors which Gefran serves through multiple channels.

e Group stands out due to its strong innovative drive and technological leadership offering a comprehensive range of sensors for measuring the four physical values (position, pressure, force and temperature) used in many industrial sectors.

Gefran has two plants for the production of sensors in Italy, in Provaglio d'Iseo (BS), and three abroad: in North Andover (Massachusetts, United States), Aadorf (Switzerland) and Shanghai (China). is presence makes it possible to reach different markets and better respond to clients' needs.

e range is unique in terms of its completeness, and the Group holds a position of international leadership in a number of product families. Sensors are also at the heart of the production plants, i.e. the primary sensitive element.

From a technological point of view, during the year 2023 innovative products such as the miniaturised pressure sensor KM were launched on the market, which enriches the range of pressure sensors, offering the market a high-performance and spacesaving solution for Mobile Hydraulics applications. On the other hand, the new GSH-A transducer with integrated tilt angle measurement, represents the completion of the family of high-end wired position sensors. Innovations also in terms of connectivity of Gefran sensors, which today also implements the CANopen over EtherCAT protocol.

In recent years, the sensors business has been the subject of an investment plan focused on expanding production lines and floor space (indispensable in supporting the expansion of the business) with a particular focus on energy efficiency.

Investments have also focused on improving the efficiency of processes to adapt them to production capacity and on developing new technologies to be applied to products in the range, as well as on acquiring new patents in addition to those already in the portfolio.

With this in mind, the plan continued in 2023, focused mainly on strengthening production areas and improving efficiency, materialised in the introduction of automation and digital technologies such as robotics, vision systems and fool-proof quality control.

Each line of business is equipped with a specific organisation for the design, manufacture and distribution of products.

REVENUES OF THE SENSORS BUSINESS (values in Euro/000)

Total Revenues 2023 86,067

Total Revenues 2022 88,557

2023 vs 2022 -2.8 %

Automation components

e automation components business includes three macro product lines that are widely used in the control of industrial processes: instrumentation, power control and automation platforms.

Gefran offers customised and turnkey solutions for global automation, by developing a partnership in the design and production

of electrical panels.

Design, engineering and production are concentrated in Italy, divided between the Parent Company Gefran SpA and the subsidiary Gefran Soluzioni Srl (in the plants in Provaglio d'Iseo, historically dedicated to the business), to which is added the subsidiary Elettropiemme Srl based in Trento, which joined the Group in 2019 as a subsidiary of Gefran Soluzioni Srl. Some assembly lines are located in Sao Paulo (Brazil), supporting the South American market.

e introduction of new products to the market is continuous, in line with the strategy of renewal and completion of the range offered. e products launched on the market have proved to be competitive, thanks to the combination of functionality and price positioning, supported by the improvement of the internal organisation in providing assistance and customisations to end customers, who have recognised Gefran as a technological partner prepared to support them in the path of digital evolution of their machinery and systems. is has allowed for further consolidation of the relationship with existing customers and stabilizing it with those recently acquired, identifying opportunities achieved or to be pursued even in markets that are less traditional for the Group, but particularly interesting in terms of future prospects, such as semiconductors, glass, energy transition and decarbonization of industrial plants.

Like with the sensors business, for the automation components business also, in line with the multi-year plan for strengthening, development and growth, investments were made that included, in addition to the automation of manufacturing processes, also the expansion of the infrastructures that support the business, in a focus on compliance with the best standards of energy efficiency. In particular, in 2023 a new photovoltaic system was built that will cover about 30% of the energy needs of the Gefran SpA factory.

In the same direction, we should also consider the recent acquisition, concluded in 2023, of a minority share (24.83%) of the Italian startup Robot At Work Srl, a young dynamic and innovative company that carries out design, construction, sale and installation of industrial plants, including standard robotic cells, collaborative cells, visual control and Virtual Commissioning. e transaction strengthens the partnership with a strategic supplier for Gefran in the field of efficiency of the business' production lines, which in recent years have integrated raw robotic islands.

About 77% of the sensors business revenues are generated by exports.

From the point of view of results, 2023 was characterised, for the sensors business, as a year of consolidation of the growth absorbed in 2021 and 2022. Despite the drop in demand, highlighted above all in the second half of the year, the overall margins generated by the business remain largely positive, as a result of the effectiveness of the cost containment actions undertaken without jeopardizing any business opportunity.

TURNOVER OF THE AUTOMATION COMPONENTS BUSINESS

(values in Euro/000)

Total Italy Europe America Asia Rest of the world

In 2023, in a context of a general contraction, the automation components business was able to grow even if more modestly than the growth observed in the previous two years, maintaining a final operating margin slightly lower than that recorded in 2022, despite the decline in demand recorded in the second part of the year (decline recorded in Italy and subsequently in Europe). About 41% of the turnover of the business is achieved in the foreign market.

THE ORGANISATIONAL STRUCTURE 03

3.1

BOARD OF STATUTORY AUDITORS

SUPERVISORY BOARD

INTERNAL 
AUDIT

In the Investor Relations section of the Group's website (https://www.gefran.com/governance/corporate-bodies/), all the information and documentation on the governance system are available in more detail on the composition of the corporate

bodies.

THE CORPORATE GOVERNANCE MODEL

e Parent Company Gefran SpA provides direct and indirect coordination functions in the operational activities of business lines and subsidiaries. is responsibility lies with the HQ team, composed of the managers of the individual functions.

Each business line:

• / includes dedicated technical and production areas (operations), whose activities are focused on the reference product:
• − Production departments
• − R&D and design
• − Engineering
• − Production services
• − Logistics

/ Each business line has a sales organisation concerned with distribution of its products, which operates through:

• − Sales networks covering geographical regions
• − Internal order processing
• − Finished product warehouses

e centralised functions of the Parent Company support all business lines and subsidiaries, whether coordinated directly or indirectly. e functions are:

1. Administration, Finance and Control 2. Purchasing 3. Sales 4. Legal and Corporate 5. Communication and Image 6. Information Systems 7. People and Organisation

3. 1. Quality, Health, Safety and Environment

RATIO WOMEN VS MEN IN THE BoDs

Pursuant to and for the purposes of principle XIV and recommendations 19 and 21 of the Corporate Governance Code, the outgoing Board of Directors formulated on 9 March 2023 a positive assessment of the size, composition and functioning of the Board and its Committees, as well as a positive assessment of the three-year mandate as a whole, following the responses to the self-assessment questionnaires completed by the Directors.

e Board of Directors met 10 times in 2023, with an average

attendance of 92.2%.

Board of Directors	2023	2022	2021	2020	2019
Number of meetings	10	13	8	13	10
average attendance %	92.2%	96.0%	98.6%	98.3%	91.1%

ree Committees have been appointed within the Board of Directors: the Control and Risk Committee and the Appointments and Remuneration Committee, described below, as well as the Sustainability Committee, for which reference is made to the dedicated paragraph.

e Control and Risks Committee is currently composed of three Non-executive Directors (1 woman and 2 men), two of whom are independent, accounting, financial and/or risk management experts. e composition was deemed adequate by the Board of Directors.

OFFICE MEMBERS

Committee Chairwoman	Alessandra Maraffini
Non-executive Director	Luigi Franceschetti
Independent Director	Enrico Zampedri

e Control and Risks Committee met six times in 2023.

Control and risks committee	2023	2022	2021	2020	2019
Number of meetings	6	5	5	6	5
average attendance %	100.0%	93.3%	100.0%	100.0%	100.0%

e Board of Directors currently in office, appointed by the shareholders' meeting held on 21 April 2023 and in office until the approval of the 2025 Financial Statements, consists of 9 members (4 women and 5 men), four of whom are independent Directors:

OFFICE	MEMBERS
Chairwoman	Maria Chiara Franceschetti
Vice Chairman	Andrea Franceschetti
Vice Chairwoman	Giovanna Franceschetti
Chief Executive Officer	Marcello Perini
Director	Alessandra Maraffini (*)
Director	Enrico Zampedri (*)
Director	Cristina Mollis (*)
Director	Giorgio Metta (*)
Director	Luigi Franceschetti

(*) Independent directors pursuant to the Consolidated Law on Finance (TUF) and the Corporate Governance Code.

e Board's independence requirements are verified annually. As of the date of this Statement, the non-executive Directors Cristina Mollis (Lead Independent Director), Alessandra Maraffini, Enrico Zampedri and Giorgio Metta meet these requirements. Executive Directors are Maria Chiara Franceschetti, Andrea Franceschetti, Giovanna Franceschetti and Marcello Perini. Director Luigi Franceschetti is a non-executive non-independent Director.

As set forth in Legislative Decree 231/01, the Board also appointed the Supervisory Body (SB), composed of two members (Nicola Picchi, Chairman, and Monica Vecchiati), providing it with regulations and the appropriate means to operate. e Supervisory Body may use external collaborators for risk assessment activities and

the necessary audits.

In 2023, PierMario Barzaghi was responsible for Internal Audit, an external and independent entity. e appointment was approved by the Board of Directors on 9 February 2023, following a favourable opinion from the Control and Risks Committee and having consulted the Board of Statutory Auditors. KPMG Advisory SpA was tasked with conducting internal audit activities in the past year.

On 4 August 2022, following a favourable opinion of the Board of Statutory Auditors, the Board of Directors appointed Paolo Beccaria as Chief Financial Officer of the Group and, therefore, Director in charge of preparing the accounting and corporate documents of Gefran SpA. e Chief Financial Officer oversees direct supervision of the control model pursuant to Law 262/2005 and the related administrative and accounting procedures.

e activities and composition of various company bodies are also described in detail under Company bodies in the Gefran Group's Annual Financial Report and in the Report on Corporate Governance and Shareholding Structure to which reference is made.

e Appointments and Remuneration Committee is currently composed of three non-executive Directors (1 woman and 2 men), all independent, experts in finance and/or remuneration policies. e composition was deemed adequate by the Board of Directors.

OFFICE	MEMBERS
Committee Chairwoman	Cristina Mollis
Independent Director	Giorgio Metta
Independent Director	Enrico Zampedri

e Appointments and Remuneration Committee met 4 times in 2023.

Appointments and Remuneration Committee	2023	2022	2021	2020	2019
Number of meetings	4	3	3	5	4
average attendance %	91.7%	100.0%	100.0%	100.0%	100.0%

e Board of Statutory Auditors, appointed by the Shareholders' Meeting on 27 April 2021, and in office until the financial statements for 2023 are approved, is composed of three standing auditors and two deputy auditors.

OFFICE	MEMBERS
Chairwoman	Roberta Dell'Apa
Standing auditor	Luisa Anselmi
Standing auditor	Primo Ceppellini
Deputy auditor	Simona Bonomelli
Deputy auditor	Stefano Guerreschi

Number of meetings of the Board of Statutory Auditors is

presented here:
Board of Statutory Auditors	2023	2022	2021	2020	2019
Number of meetings	8	9	10	10	9
average attendance %	100.0%	100%	100.0%	100.0%	92.6%

e legal Auditing Firm on the Consolidated and Separate Financial Statements is appointed by the Shareholders' Meeting among those registered in the Register of Consob. e current audit firm is PricewaterhouseCoopers SpA, appointed by the shareholders meeting held on 21 April 2016 for the 2016–2024 period in response to a reasoned proposal of the Board of Statutory Auditors.

3.2

3.2.1

e directors and employees of Gefran are required to ensure that the code is respected within the Group and by all its stakeholders, who have the duty to act in accordance with its principles. e provisions of the Code must cover all business processes, with particular reference to employee selection and management, customer and public authority relationship management, and the selection and management of suppliers of goods and services, lenders and external collaborators (consultants, professionals and agents).

On 13 February 2008, the Board of Directors approved the adoption of an Organisation, Management and Control Model (referred to simply as the Organisational Model), aimed at preventing the offences envisaged in Decree 231/01. e Organisational Model, drawn up on the basis of the Confindustria Guidelines, is periodically updated in line with the evolution of the legislation. At least annually, Gefran carries out the updating of the risk assessment 231 activity, with the aim of evaluating any changes in the Company's risk profile and of incorporating any organisational changes or the introduction of new "predicate offences" or changes thereto. is activity is carried out both through interviews with the departments involved and through document analysis.

Anyone who becomes aware of possible breaches of the rules and principles established by the Code of Ethics and Conduct is required to report them to the Supervisory Body in the manner provided for by the Organization, Management and Control Model pursuant to Legislative Decree 231/2001 ("Model 231"). Gefran moreover declares that it is free not to enter into or continue any relationship with anyone who demonstrates that they fail to comply with the content and spirit of the Code or violates its principles and rules of conduct. In order to facilitate reports to the SB by subjects who become aware of violations of the Model, even potential ones, dedicated communication channels have been provided.

In particular, during 2023, a new internal channel was activated for the management of reports, with which it is possible to report breaches of the law, internal control principles, company procedures and standards, as required by the Gefran Group's Whistleblowing Procedure. e procedure, adopted in accordance with the provisions of the law, the Code of Ethics and the SA8000 standard on corporate social responsibility, protects the confidentiality of the whistleblower, forbids retaliation, and provides specific instructions for the management of reports. Specifically, the portal dedicated to whistleblowing includes two separate channels: one dedicated to whistleblowing for the Parent Company Gefran SpA and one shared by all the other Group

companies.

RESPONSIBLE BUSINESS MANAGEMENT

The Group's Code of Ethics and policies

Gefran has adopted a Code of Ethics and Conduct, applied to all Group companies, the most recent update of which was approved by the Board of Directors on 10 March 2022. Gefran conducts its internal and external activities in compliance with the laws in force, market rules and the following ethical principles and values:

e principles of the Code provide a clear benchmark for anyone working with the Group: observance of these principles is the fundamental condition for starting and/or continuing working with Gefran. e operational implementation of these principles is guaranteed by the company's procedures which raise awareness of them. e Code of Ethics and Conduct is published on the company intranet and on the Group's website, and it is delivered to each employee during the onboarding process on recruitment.

Integrated risk management 3.2.2

e Group adopts a process of periodically identifying, evaluating, managing and monitoring the main risk factors. is activity allows for identifying situations that could jeopardise the achievement of strategic objectives and for taking the appropriate decisions, aimed at mitigating risk exposure.

Gefran has long implemented an Enterprise Risk Management (ERM) system integrated into business processes, organisational structures and systems that contribute to the achievement of the Group's strategic objectives. From 2022, a further evolution of the system adopted was initiated, continued also in 2023, which led to the introduction, following the approval of the Enterprise Risk Management Policy (so-called ERM Policy) by the Board of Directors at its meeting on 8 November 2023.

It defines the governance as well as the phases of the Enterprise Risk Management process, providing guidelines for the identification, evaluation, management and monitoring of risks that could threaten the Group's ability to pursue its strategies and

affect performance.

In more detail, the policy governs the principles of reference to which the ERM system is inspired, the roles and responsibilities of the functions and/or subjects involved, the phases of the process and the main information flows that allow an adequate dissemination of information and the making of informed decisions.

Following its review, approved by the Board of Directors on 3 August 2023, the Company provided information on the updated procedure through publication on the company's website and bulletin boards. All employees employed by Gefran SpA and the Italian subsidiaries that adopt Model 231 have also been involved in a dedicated training course, also shared with new hires during the onboarding process.

e policy for the Management of dialogue with Shareholders and Investors, approved by Gefran on 10 March 2022 in application of the Corporate Governance Code approved by the Italian Corporate Governance Committee, reflects a principle that has always characterised the Group: to develop a correct comparison with stakeholders to create value in the medium to long term.

e other policies that guide Gefran in conducting the Group's business and governance relate to anti-corruption and risk management. For these areas, please refer to the dedicated paragraphs of this document.

Over the years, Gefran has defined the policies and procedures described below.

• / People in Gefran Policy. Sum up the principles and values that guide the management of people, including honesty, integrity and respect, safeguarding diversity and equal opportunities, and developing and promoting skills and competences.
• / Health, safety and environment Policy. It contains the guidelines which all Group companies undertake to comply with in the HSE field.
• / Social Media Policy. is is the line of conduct established by the Group to manage social media channels, which have assumed a central role in corporate communication and require special attention also on account of how they typically operate (high level of interactivity and instantaneous global deployment).
• / Quality Policy. e quality management system is the tool to ensure stakeholder satisfaction by identifying needs, expectations and solutions to their problems.
• / Regulations for the correct use of information technologies. In a current context, where more and more critical issues related to cybersecurity emerge, the policy aims to regulate the conditions for the correct use of IT tools by employees and contains useful information to understand what each employee can do to help ensure the cybersecurity of the company network and data.

e Board of Directors plays a primary role in the direction and oversight of the risk management system and specifically: (i) defines, in line with the organization's strategies, the guidelines for risk management, so that the main risks pertaining to the Group are identified, measured, managed and monitored; (ii) periodically evaluates the adequacy and effectiveness of the risk management system with respect to the assumed risk profile and the changes affecting the Group's reference context; (iii) delves into the information relating to the risks that emerged during the risk assessment.

e Control and Risk Committee plays an advisory, instructive and proactive role towards the Board of Directors and the Chief Executive Officer (CEO). Specifically: (i) supports, with an adequate investigative activity, the assessments and decisions of the Board of Directors regarding the risk management system, and periodically reports on its adequacy; (ii) supports the CEO in carrying out its tasks of design and implementation of the risk system; (iii) examines and discusses the summary document aimed at illustrating the main risks that have emerged to the Board of Directors.

e Chief Executive Officer is responsible for establishing and maintaining the internal control and risk management system. Specifically, the CEO: (i) ensures the execution of the guidelines defined by the Board of Directors, promoting the establishment and maintenance of an effective ERM process and constantly verifying its adequacy with respect to the dynamics of operating conditions and the legislative and regulatory landscape; (ii) validates the ERM approach, methodology and related support tools, periodically evaluating any development lines; (iii) validates the results of the risk assessment; (iv) monitors, with the support of the Risk Management and Internal Audit Functions, the implementation status and effectiveness of the defined risk response strategies; (v) periodically reports to the Board of Directors and the Risk Control Committee, with the support of the Risk Management Function, on the results of the risk assessment and, in general, on the evolution of the Group's overall risk profile and its consistency with the strategic objectives; (vi) evaluates the possible acceptance of risk.

e Risk Management Function was established during 2023 with roles and responsibilities attributed to the Group's Legal and Corporate Affairs Department.

Coordinating with the CEO, it is responsible for defining, implementing and maintaining an ERM methodology, promoting a systematic, structured and homogeneous process for identifying, measuring and managing risks. It conducts the risk assessment process, providing methodological support for the identification, analysis and management of risks. In addition, it periodically monitors the progress and effectiveness of the defined risk response strategies, as well as the evolution of the organization's risk profile.

e Management (Risk Owner & Action Owner) has the primary responsibility for the identification, assessment and management of risks that pertain to their function or area of expertise.

Specifically, each Risk Owner is therefore responsible for: (i) identifying and assessing the risks that may compromise the achievement of the Group's objectives, as well as its performance; (ii) proposing appropriate mitigation actions aimed at bringing the main corporate risks back to levels deemed "acceptable", also ensuring their implementation and periodic monitoring; (iii) identifying any support teams for the definition and implementation of the mitigation actions necessary to reduce or prevent the negative consequences of risks.

Action Owners are instead responsible for ensuring that the mitigation actions proposed to mitigate risks are implemented in line with the defined deadlines.

e Management includes, in addition to the Top Management of the Parent Company Gefran SpA, also the General Managers of the subsidiaries who, depending on the evolution of the reference context, can be involved in the process.

e Internal Audit Function, within the scope of its assurance responsibilities, is responsible for independently verifying the operation and suitability of the risk management system. Specifically, it has the task of coordinating with the Risk Management

Risk Governance

e operation of the Enterprise Risk Management system involves the structured participation of specific company roles and functions, as well as the involvement of the main control bodies. In line with the recommendations of the Corporate Governance Code, the governance model governing the roles and responsibilities of the subjects and bodies involved in the process has therefore been defined, divided into the following roles, bodies and levels of control:

1. Risk Monitoring

In the first months of 2023, monitoring of the progress and implementation of mitigation actions to monitor the most relevant risks took place (so-called Tier 1 or Top Risk), identified during the previous Risk Assessment, which took place in the period July-September 2022.

e Owners of each action have expressed evaluations on the

progress of the same.

2. Enterprise Risk Management Workshop

With the aim of spreading the Risk Management culture with a view to promoting the creation and protection of corporate value, a workshop dedicated to ERM activity, led by the Chief Executive Officer, was subsequently held with the involvement of the Managers responsible for all company functions and some functional reports.

It was an opportunity to review the fundamental elements of the Enterprise Risk Management system adopted by Gefran and to present the newly approved ERM Policy. During the work, a brainstorming session on emerging risks was carried out, preparatory to the start of the Risk Assessment, the next phase of the process.

Function with regard to the results of the Internal Audit activities carried out by enabling: (i) the monitoring of risks and the related mitigation actions that have emerged in the ERM field, favouring the identification of any deficiencies in the existing risk management system; (ii) the detection of additional unmapped risks in the ERM risk assessment phase and any deficiencies in the existing risk management system.

e internal control and risk management system also includes other people:

• / the Director in charge of preparing the accounting and corporate documents oversees the application of the control model pursuant to Law 262/2005, the related administrative and accounting procedures and any updates;
• / the Board of Statutory Auditors monitors the effectiveness of the internal control and risk management system;
• / the Supervisory Body monitors the correct application of the Organisational Model pursuant to Legislative Decree 231/01.

The Enterprise Risk Management Process

e process that Gefran conducted in 2023 was marked by four main moments:

ENTERPRISE RISK MANAGEMENT WORKSHOP

3. Risk assessments

e review of the risk catalogue in order to provide an up-to-date view of the Group's risk profile is the main objective of the Risk Assessment session.

Starting from the results of the process carried out in 2022 and the brainstorming on emerging risks, thanks to the involvement of all company functions reporting directly to the Chief Executive Officer, the risks have been confirmed, modified and/or eliminated from the catalogue, depending on the evolution of the internal and

key highlights

e mapped risks are presented in the Risk Model and grouped into four categories and eleven families:

• / External risks. ey result from factors that are difficult for the Group to influence (macroeconomic conditions, regulatory and/or market changes).
• / "Strategic" risks. ey might derive from the management of the business and influence the strategic choices and performance of the Group. Over the years, this category has mainly covered potential risks related to the timing of innovation processes, the composition of the product portfolio, the management of customers, suppliers and/or key partners, and the management of extraordinary operations.
• / "Internal" risks. ey are connected to the internal environment and depend, at least in part, on corporate choices. ey mainly concern aspects of governance, IT and cybersecurity issues, compliance with laws and regulations (internal and external) and corporate operations, including the selection and management of human resources.
• / ESG risks. ey derive from the management and evolution of the environmental and social impacts of the Group's activity and the system of governance. Growing stakeholder attention to these issues and the possible impact on financial and operational performance make these risks of primary importance. e management of these risks follows three directions: ensuring the protection of the environment, maintaining a relationship of trust with employees and external stakeholders, monitoring the implementation of sustainability strategies.

Taking into account both the abstract risk (so-called inherent risk) and the mitigation effects of the internal control system (so-called residual risk), risks are also classified into three categories (Tier 1,

Tier 2 and Tier 3), depending on their relevance. evolution, and in particular concern:

-

e Top Risks, i.e. the most relevant risks (so-called Tier 1) include issues related to cybersecurity, supply chain and product portfolio

/ the adoption of new technologies (e.g. artificial intelligence) and new methods of agile work increase exposure to hacker attacks, a phenomenon in constant evolution, which can cause business interruptions and loss of sensitive data with increasing costs;

/ the possible unavailability and/or increase in the cost of raw materials, semi-finished products and services critical to the Group, arising from and/or aggravated by environmental, social and business factors and the interference of nationalist policies to control resources, creates bottlenecks in international trade;

/ the importance of continuing to invest in product innovation, to ensure alignment with the best technologies in the market and support the pursuit of sustainability objectives.

e overview of the risks allows the Board of Directors and Management to reflect on the Group's propensity for risk, identify risk management strategies, assess which risks and priorities require new mitigation actions to be adopted, improve and optimise actions under way, or more simply monitor exposure to indi-

vidual risks over time.

In order to ensure the adequacy of the risk management system and assess its effectiveness, a reporting system and a dashboard are provided for monitoring the mitigation actions taken by individual functions (so-called Risk Reporting). Risk reporting and related information provides an authentic view of the strengths and weaknesses of risk management. e disclosure of this information to key stakeholders also supports decision-making processes and increases transparency on risks that could have an impact on the attainment of targets. Systematic monitoring of the risks identified and assets to manage them according to established metrics enables timely and proactive responses.

As a result of the Risk Management system, 17 Tier 1 risks were reduced to Tier 2 level and 5 Tier 3 risks were reduced to Tier 3 level

e main developments recently implemented in the ERM process concerned:

• / the integration into the Risk Model of the ESG risks among those that may have an impact;
• / strengthening the link between the Group's risks and the pillars of the business plan that may have an impact;
• / the link between the Group's risks and the pillars of the Strategic Sustainability Plan potentially impacted;
• / strengthening the link between the Group's risks and taking out insurance policies to mitigate them;
• / the comparison between inherent and residual risks, aimed at evaluating the effectiveness of the current management system.

4. ERM Maturity Assessment

Following the strengthening of the ERM process, in 2023 Gefran decided to renew the maturity assessment of its system, by following the methodology used previously.

e Maturity Assessment demonstrate the Group's good level with an improved assessment compared to 2021, in particular with reference to the areas of risk culture and governance, management, monitoring and reporting.

By analysing the Group's governance, the documents and the tools relating to risk management, the evolutionary guidelines have been defined to encourage alignment with best practices.

Comparing the residual risks and inherent risks reveals the safeguards, actions taken and the effectiveness of the internal control system.

Taxation by country							2023
		Entity's main activities	Number of employees at 31.12	Revenues from sales to third parties	Revenues from infragroup transactions with other tax jurisdictions	Profit/ (loss) pre-tax	Corporate income taxes accrued on profits/losses
				Euro/000	Euro/000	Euro/000	Euro/000
Italy			428	52,874	36,711	14,634	(2,368)
	Gefran Spa	Production, Sales and Central Services
	Gefran Soluzioni Srl	Production and Sales
	Elettropiemme Srl Production and	Sales
Belgium	Gefran Benelux NV Sales		15	6,387	-	610	(168)
France	Gefran France S.A. Sales		8	5,332	-	576	-
Germany	Gefran Deutschland GmbH	Sales	26	19,055	16	2,302	(652)
UK	Gefran UK Ltd	Sales	2	683	-	124	-
	Switzerland Sensormate A.G. Production and	Sales	17	2,052	1,992	(44)	-
United States	Gefran Inc	Production and Sales	35	12,793	1,274	1,441	(257)
Brazil	Gefran Brasil Elettroel. Ltda	Production and Sales	33	5,648	1	935	(127)
	Singapore Gefran Asia Pte Ltd	Sales	8	6,432	1	1,170	(49)
China (Peoples' Republic)	Gefran Automation Technology Co. Ltd	Production and Sales	59	14,823	661	271	-
India	Gefran India Private Ltd	Sales	20	5,228	-	632	(155)
	Total current taxes within the Group attributable to companies						(3,776)

3.2.3 Fiscal Responsibility

Relations with authorities is managed on the basis of the values of ethics and transparency, declared in its Code of Ethics and Conduct and applied in every area of business and all related activities. e Code also sets out the principles which guide Gefran in its relations with the public administration: legality, transparency, fairness and compliance with current legislation. e anti-corruption guidelines adopted by the Group prevent behaviour aimed at obtaining all undue advantages, including tax benefits. rough Enterprise Risk Assessment activity, which is carried out periodically, Gefran maps exposure to risks, including tax risks.

To ensure timely compliance with the rules in force in the different countries of operation, taxation is managed by the Group's national corporate entities, in collaboration with the Country's tax experts.

As with other business areas, the Parent Company also supervises and coordinates the actions carried out by the individual corporate entities through the Finance and Control Department of the Group. Any alerts can be carried out through the channels described in the Whistleblowing Procedure.

Information on the taxation impacts per Country deriving from the Group entities is provided below. e figures from the Group's Financial Report only refer to continuing activities. In particular, with regard to Corporate income tax accrued on profits/losses, current taxes accrued on company income are reported only (previous and deferred tax assets are therefore excluded).

3.2.4

e findings of the auditors, classified based on the seriousness and subject matter of the audit, are set out below.

number of findings, by degree of severity and type of audit	2023	2022	2021	2020	2019
High	12	2	9	1	4
of which:
Administrative and accounting control model 262	-	-	-	-	-
Organisational Model 231	-	-	-	1	-
Other 3	12	2	9	-	4
Medium	34	51	44	61	64
of which:
Administrative and accounting control model 262	-	-	-	3	-
Organisational Model 231	-	-	-	32	29
Other 3	34	51	44	26	35
Low	22	23	13	20	20
of which:
Administrative and accounting control model 262	-	-	-	2	2
Organisational Model 231	-	-	-	10	10
Other 3	22	23	13	8	1
TOTAL IRREGULARITIES	68	76	66	82	81

Fight against corruption

Gefran is committed to combating any form of corruption through the enforcement of Italian and international law and the voluntary adoption of ethical principles when carrying out business.

e main risk profiles linked to the Group's activities, with regard to corruption, are identified and mapped in risk assessments. For further information, please refer to section "3.2.2. Integrated risk and opportunity management."

To prevent corrupt activities, the Group has adopted, in the context of the 231 Organisational Model, the Code of Ethics and Conduct and a Procedures Manual which contain the principles of conduct that the Company's employees, contract staff, customers and suppliers are required to comply with. ese instruments are in addition to the procedures required by compliance with Administrative and Accounting Control Model 262.

e Group has also adopted Anti-Corruption Guidelines, shared with all subsidiaries, to outline typical situations in which an attempt at corruption may occur and how to manage them. In this regard, a training programme was implemented for all General Managers.

Compliance with anti-corruption procedures and guidelines is usually carried out through audits carried out at the Group's Italian and foreign sites. e following are the audits for the last three years and the related findings.

Audit activities1	2023	2022	2021	2020	2019
in the Parent Company Gefran Spa(*)	4	5	8	9	10
in the Subsidiaries	4	4	3	4	7
TOTAL AUDITS	8	9	11	13	17
Type of audit2	2023	2022	2021	2020	2019
Administrative and accounting control model 262	-	-	-	4	5
Organisational Model 231	-	-	-	5	5
Other (**)	8	9	11	4	7
TOTAL AUDITS	8	9	11	13	17

Audit activities1	2023	2022	2021	2020	2019
in the Parent Company Gefran Spa(*)	4	5	8	9	10
in the Subsidiaries	4	4	3	4	7
TOTAL AUDITS	8	9	11	13	17
Type of audit2	2023	2022	2021	2020	2019
Administrative and accounting control model 262	-	-	-	4	5
Organisational Model 231	-	-	-	5	5
Other (**)	8	9	11	4	7
TOTAL AUDITS	8	9	11	13	17

2 Other indicates audits of the following types: "Integrated" (Administrative and Accounting Control Model 262 and Organizational Model 231) on the Parent Company

Gefran SpA or "General Review" of Subsidiaries. Gefran SpA or "General Review" of Subsidiaries.

¹ Audits of the Parent Company apply to centrally managed processes.

³ Other indicates audits of the following types: "Integrated" (Administrative and Accounting Control Model 262 and Organizational Model 231) on the Parent Company

type of irregularity	2023	2022	2021	2020	2019
Related to corruption offences	-	-	-	-	-
Other	68	76	66	82	81
TOTAL IRREGULARITIES	68	76	66	82	81

e Group has implemented various channels of communication to the Supervisory Board, through which any breaches of the principles and procedures may be reported.

In addition, during 2023, a new internal channel was activated by Gefran for the management of whistleblowing reports, with which it is possible to report breaches of the law, internal control principles, company procedures and standards, as required by the Group's Whistleblowing Procedure. e procedure, adopted in accordance with the provisions of the law, the Code of Ethics and the Management System for the certification on corporate social responsibility SA8000, protects the confidentiality of the whistleblower, forbids retaliation, and provides specific instructions for the management of reports.

To date, no reports have been received.

It should be noted that the increase in the number of high-end surveys is a consequence of the increase in audit interventions, in particular carried out in foreign subsidiaries and concerning "General Review" activities.

4.1

To carry out its functions operationally, the Committee uses a Working Group, coordinated by the Sustainability Manager, which involves representatives of the main company functions to obtain an organic and complete point of view on sustainability issues. ose responsible for the procurement department, operations, people & organisation, HSE and quality, legal and representatives of the AFC and sales department are part of it. is team, working in close cooperation with the contact persons in all Group subsidiaries, was responsible for carrying out all preparatory activities for the definition and implementation of Gefran's sustainability

strategy.

Specifically, during 2023 the Working Group focused its activity on the projects of the Strategic Sustainability Plan formalised in 2022, a description of which is given in the dedicated paragraph.

SUSTAINABILITY GOVERNANCE

e Gefran Group is aware that, to achieve its sustainability objectives, it is essential to structure governance with a clear allocation of responsibilities and roles. In this regard, the Board of Directors plays a central role in pursuing the Group's sustainable success, as required by principle I of the Corporate Governance Code. With this in mind and with the desire to structure the Group's Governance in terms of sustainability, Gefran first established a steering committee and in 2020 the Board of Directors of Gefran SpA formally established, among its internal Committees, the Sustainability Committee and approved its rules. Gefran's Sustainability Committee is responsible for supervising all the Group's sustainability activities and reporting on its progress to the Board of Directors.

During 2023, with the expiry of the mandate of the Board of Directors, the three Committees established within the Board, including the Sustainability Committee, also expired. e newly appointed Board of Directors, at its first meeting on 21 April 2023, therefore appointed the members of the Sustainability Committee, renewing the appointment of the previous three members, and approved its rules.

e Sustainability Committee currently consists of:

OFFICE	MEMBERS
Committee Chairwoman	Giovanna Franceschetti
Chief Executive Officer	Marcello Perini
Independent Director	Cristina Mollis

e Sustainability Committee met twice during 2023.

Sustainability committee	2023	2022	2021	2020	2019
Number of meetings	2	3	2	3	N.A.
average attendance %	100.0%	100.0%	100.0%	100.0%	N.A.

4.2.1

Stakeholder category Methods of involvement and dialogue

4.2 THE METHOD OF SETTING OUR PRIORITIES

Employees	/ Intranet channel, with the publication of "Gefran News", "Policies" and useful documentation / KenFLY, the digital hub of the Gefran Talent Academy / Internal events dedicated to employees, at various levels / Dialogue through the People&Organization and Q-HSE functions / Website and social media / ‡ematic corporate welfare programme portal / Negotiating tables with trade unions / Regular meetings with top management
Suppliers	/ Industry meetings / Trade fairs / Dedicated events with the "Supplier Day" / Surveys/questions/survey / Dialogue through Purchasing / Dialogue/involvement during audits/inspections / Communication of values at the contractual stage and renewals / Request documentation for compliance with national and international regulations
Customers	/ Market research / Dedicated communication channels / Dialogue through Sales / Training for certain categories of customers / Website and social media / Meetings, workshops, focus groups / Participation in exhibitions, fairs, conventions / Membership meetings / Company visits
Local communities	/ Meetings with regional institutions / Media monitoring (press, specialist magazines, TV, web, social networks) / Orientation and involvement of high school and university students, recruit ment programmes / Involvement in social and educational initiatives for local associations
Shareholders Training and	/ Engagement Code / Shareholders' Meeting / Corporate Governance Report / Financial reports and periodic presentations / Dedicated website section / Mailing lists / Regular meetings with top management organised by Investor Relations / Collaboration projects
research bodies	/ PhD programmes
Institutions	/ Specific meetings / Discussion tables and dialogue with the Public Administration

/ Institutional communication

Dialogue with stakeholders

Gefran constantly strives to develop relationships of trust with its stakeholders. ese include individuals, groups or institutions that directly or indirectly contribute to the Group's sustainable success or those who have an interest in its activities.

Keeping open and stimulating regular dialogue with stakeholders allows better identification of risks, present and future challenges (social, environmental or economic) and opportunities for creating value over the medium to long term.

Stakeholder input is collected through different methods of involvement and dialogue set out below.

AFIL Lombardy Smart Factory Association	It represents the technological system within the advanced manufacturing sector of the Lombardy region. It brings together in a single ecosystem the companies, research centres, universities and industrial associations of the regional supply chain, with the aim of being a reference for the definition of strategies and policies in the field of research and innovation in the manufacturing sector.
IPAF International Powered Access Federation	Promotes and ensures the safe and effective use of mobile means of air access in the broadest sense of the term, providing advice and information of a technical nature, influencing and interpreting legislation and standards, organising safety initiatives and offering training programmes.
Technical associations and consortia
CEI	Publishes regulatory documents on good practice in Italy, is involved in drawing up the corresponding European and international standards, ensures that they are accepted with specific regard to European
Italian Electrotechnical Committee	regulatory documents harmonised with EU directives and regulations, and promotes technical and scientific culture in general and technical standards in particular.
UNI	Represents Italy in the European (CEN) and global (ISO) standardisation organisations and organises the involvement of national delegations in supranational standardisation work, to promote the harmonisation of
Italian standardisation organisation	standards needed for the single market to operate, and to implement the distinctive features of Italian production through techniques that recognise national experiences and production traditions.
CANOpen	Brings together users and producers of the CAN (Controller Area Network) protocol at the international level to provide a transparent platform for future development of the CAN protocol and promote the image of CAN technology.
PROFIBUS Network	Works closely with other organisations in the world of automation to promote the use of PROFIBUS, PROFINET and I/O Link technologies.
ODVA	Supports the network of technologies built on the Common Industrial Protocol (CIP™) — EtherNet/IP™, DeviceNet™, CompoNet™, and ControlNet™.
HART COMMUNICATION FOUNDATION	Žis is an organisation supporting and developing standards for the HART communication protocol.
ETG - Ethercat Technology Group	EtherCAT Technology Group is an organization that brings together device manufacturers, technology providers, and users to promote technology, in order to promote and make available EtherCAT technology. It consists of several technical working groups, in which experts work
	on the different aspects of EtherCAT.

Gefran encourages collaborative relations with industrial companies in the sectors in which it operates and is a member of various sector-based associations and technical consortia, at local and international level.

Trade associations		Trade associations
CONFINDUSTRIA BRESCIA	It represents and protects entrepreneurs and companies in the Brescia area. It is one of the major Italian associations for member companies and belongs to the Confindustria System. Že association contributes to protecting member companies by supporting the free enterprise, labour, and the expectations of industry, offering complete public representation and an integrated system of relations with local	Lombardy Smart Factory Association
ANIPLA	stakeholders. It aims to encourage and spread knowledge, studies and application of
Italian National Association for Automation	automation in Italy, in terms of the technological, economic and social aspects. Among the most active technical and scientific associations in Italy, it actively contributes to gradual developments in the country's technical culture.	International Powered Access Federation
ANIE Federation	It is one of the largest industry group organisations in terms of size	Technical associations and consortia
Assoautomazione	and representativeness. It plays a leading role in technological and regulatory monitoring, promoting initiatives to standardise products and systems, taking know-how and skills into the processes adopted by decision-making bodies at all levels.	Italian Electrotechnical Committee
AMAPLAST National Association of manufacturers of plastics and rubber machinery and moulds	It promotes Italian technology for the processing of plastics and rubber around the world. It aims to promote Italian companies in the sector abroad.
ANIMA Confindustria various mechanical industries	Žis is the industrial organisation in the Confindustria system that represents companies in mechanical industry. It consists of 34 associations and product groups, and counts over 1,000 member companies, at the top of their respective sectors of production.	Italian standardisation organisation
ASSONIME	It is the Italian joint-stock company association. Its purpose is to investigate and deal with problems relating directly or indirectly to the interests and development of Italy's economy.	CANOpen
GISI Association of Italian Instrumentation Companies	Brings together companies that operate in the production process instrumentation and automation field, including both manufacturers and economic operators.
AIM	A cultural entity promoting the science and technology of metals and	ODVA
Italian Metallurgy Association	of other engineering materials. Že purpose of the association is to promote the exchange of ideas and experiences among parties with an interest in developing knowledge of metal materials, promoting meetings between producers, users and researchers.	HART COMMUNICATION FOUNDATION
CTI	Concerned with regulation and standardisation in various sectors
Italian Žermotechnology Committee for Energy and the Environment	of thermotechnology. Že Committee aims to provide users with regulatory tools for the development of the thermotechnology sector.	ETG - Ethercat Technology Group

4.2.2 Materiality analysis

Gefran has conducted the materiality analysis process to identify and evaluate the company's sustainability information and define the relevant aspects on which to focus the relevant disclosure. e materiality matrix – the outcome of this analysis – has been updated several times over the years.

e materiality analysis conducted in 2022 was conducted in line with the new GRI Universal Standards 2021, which introduce the concept of impact materiality. An initial internal exercise was also conducted to comply with the future requests of the Corporate Sustainability Reporting Directive (CSRD) of the European Union, in accordance with the provisions of the European Financial Reporting Advisory Group (EFRAG).

e exercise has enabled new discussions on the impacts that the organisation generates (economy, environment, people) and the role in the regions where it operates with a long-term outlook to prevent and mitigate any negative impacts. e analysis was divided into three phases.

Identification. In the first phase, an internal assessment of the Group's characteristics (corporate identity, activities undertaken, stakeholder types) was carried out, followed by a benchmark analysis to assess the main trends in the sector. Similar competitors and the requirements of the main international standards, research institutions and investors were considered. A comparison was also made with the aspects identified in the previous analysis.

e Group's cooperation with the Associations is also developed by foreign branches. Gefran, has joined, for example, in Brazil the ABIMAQ (Brazilian Machinery and Equipment Industry Association), in the United States the Plastics Industry Association, the IHEA (Industrial Heating Equipment Association), the AEM (Association of Equipment Manufacturers) and the NFPA (National Fluid Power Association). In Europe, Gefran is a member of the AMA (Association for Sensor Technology and Measurement) and the VDMA (Association of German Mechanical Engineering Institutes), both in Germany.

Since 2022, Gefran has been a participant of the United Nations Global Compact, the world's largest voluntary and at the same time strategic corporate citizenship initiative. e UN Global Compact requires companies and organisations that adhere to them to share, support and implement a set of fundamental principles relating to human rights, labour standards, environmental protection and anti-corruption within their spheres of influence. ese can be summarised in 10 principles. ese are the same principles that have always characterised our actions and have made the Global Compact a natural conclusion.

IDENTIFICATION

Context analysis in order to identify the relevant aspects for Gefran in consideration of the activity carried out, the business relationships, the sustainability context and the expectations of the Group stakeholders

Internal and external stakeholders engagement in order to assess the significance of the impacts identified

Aggregation of the results in order to obtain an impact materiality value

for each topic

Prioritization of topics based on the values obtained and definition of a materiality bound

ASSESSMENT PRIORITISATION

Internally, the heads of the Parent Company departments were involved through an interview to assess potentially material issues and impacts of each department.

Selected among the Italian and foreign branches, 46 employees participated in the evaluation of the topics and impacts based on knowledge of the company and operational involvement in achieving sustainability projects.

Externally, a list of strategic stakeholders for the Group was shared, including customers, suppliers and research institutions. In order to gather thoughts for reflection and feedback, interviews were conducted with customers and suppliers on the expectations and main drivers of sustainability. Finally, two research organisations were contacted with which Gefran has historically partnered.

e main thoughts for reflection and feedback that emerged related to people and products. e issues related to the strategic pillar. e centrality of people is a priority for all stakeholders (internal and external), reflecting awareness that without proper human resources development it is not possible to achieve one's strategic objectives.

Product innovation is a theme of major interest, which is validates the company's long-term commitment to invest in developing a portfolio of environmentally sustainable products in synergy and collaboration with business partners.

Prioritisation. Out of the 18 potentially material issues, 3 were excluded as they were irrelevant. Prioritisation led to an orderly list of 15 material issues detailed in the table. e most significant for the Group include stakeholder relations, customer care and staff training and development.

e results confirmed a clear connection between the material issues and the business strategy based on valuing people, partners and customers and sharing a value system through choices and behaviours.

During 2023, no new evaluation factors emerged, therefore the materiality analysis carried out on time in the fourth quarter of 2022 was considered valid for the purposes of non-financial reporting for the year 2023.

e analysis will be updated again in 2024, when the assessment of financial impacts (so-called financial materiality) will also be integrated in accordance with the introduction of the Corporate Sustainability Reporting Directive (CSRD).

In accordance with the new GRI Universal Standards 2021, the analysis focused on the impacts: that is, the effects that an organization has or could have on the economy, the environment and people, including human rights, as a result of its activities or business relationships.

e analysis took into account impacts in various aspects, whether actual or potential, negative or positive, short- or long-term, fore seeable or unforeseeable, or reversible or irreversible. e negative impacts relate to the effects that Gefran directly causes or to which it contributes through its activities, in addition to those directly related to its processes, products or services. e positive impacts are linked to the way the Group contributes, or might contribute to sustainable development through its activities, its range of products and services, investments and procurement and recruitment policies.

An initial internal exercise was conducted aimed at the finan cial materiality envisaged by CSRD. Sustainability risks and opportunities were identified which may influence the creation of corporate value of each of the relevant aspects identified in the previous phase's analysis. e work, carried out voluntarily without impacting the 2023 Non-Financial Statement, is not subject to audit. Furthermore, this exercise is not yet to be considered complete or aligned with the new guideline in force from the reporting year 2024. During 2024, in particular, the analysis is expected to be completed, with the integration of the financial impact assessment.

Potentially material issues were reclassified according to stra tegic priorities and aligned with the industrial plan: the centrality of people, the contribution to the ecological transition, sustainable product innovation, sustainability of the supply chain (for more information see section "5. e Strategic Plan: the pillars").

Assessment. e identification phase was followed by the vali dation and/or integration of the identified themes and impacts involving internal and external stakeholders, with the aim of assessing the significance of the impacts that emerged, subsequently grouped into themes as indicated by GRI 3.

5 stakeholder categories were identified in relation to whom certain initiatives encouraging involvement were already under way, in individual form (visits, dedicated events in the company) and collective form (publications on websites, social networks and media, participation in and organisation of conferences).

Gefran Group's material issues

SDG	Pillar	Material issue	Description of the theme and its impacts	SDG	Pilastro	Tema materiale	Descrizione del tema e i relativi impatti
	e centrality of people e centrality	Stakeholder relations	e working relationships with stakeholders, generated by industrial synergies and collaborations with business partners (for example, co-design initiatives with customers) have a positive impact on the environment and customer satisfaction. rough its involvement with innovative models and		e centrality of people	Ethics, integrity and compliance	Business ethics and integrity, as well as regulatory compliance, are material themes of strong interest to a company. A lack of control can foster corruption and distort the competition. is also includes the commitment to tax transparency to ensure the regularity of transactions and respect for market
	of people e centrality of people	Customer focus Personnel training and development	the preparation of clear information, attention to the customer creates shared value. Training is essential to build employees' specialist technical know-how and enable them to grow professionally and improve their performance. If adequate opportunities for discussion and feedback are not promoted, there is a risk of not effectively		e centrality of people	Employee welfare	participants. Corporate welfare initiatives, support for families and a competitive compensation and benefits system have a positive impact on employees' welfare and lifestyle. An uninspiring and unrewarding work environment reduces well-being, efficiency and loyalty. e focus on waste reduction, proper disposal and
	e centrality of people	Employee health and safety management	integrating employees, of not aligning them with objectives and of hindering professional development. By spreading health and safety know-how and culture (inside and among third parties who interact with the company), beyond regulatory requirements and		e sustainability of the supply chain	Waste management	maximising the share of waste for reuse, recovery or recycling reduces the environmental impact. Reduced disposal capacity can lead to increased waste generation and environmental pollution (soil, water and air) with effects on human health and safety as well.
	Sustainable product innovation	Product innovation and technological development	through training and awareness, this reduces accident and illness levels. rough a circular economy approach, technological development and innovative design allows greater traceability of products as well as increasing customer satisfaction.		e sustainability of the supply	Responsible procurement	Sustainable procurement, guaranteed through responsible purchases (including minerals from conflict zones), ensures the traceability of the supply chain, has a positive impact on people (for example, it directly and indirectly increases employment) and has a positive impact on respect for human and social
	e centrality of people	Diversity, inclusion and equal opportunities	e company promotes respect for diversity, inclusion and equal opportunities through pay equality, meritocracy and a working environment that respects cultural, linguistic, religious, political and ethnic diversity.		chain		rights (hindering forced and child labour, infringement of the right to strike and collective bargaining). It also protects the environment from biodiversity reduction risks, the consumption of non-renewable raw materials and the pollution of water aqueducts or the soil.
	e contribution to the ecological transition	Climate change: GHG emissions and energy	Climate change, generated by air pollution and the exploitation of non-renewable resources, causes catastrophic natural events, which has a negative impact on the health and safety of people and communities. e effects of climate change can be mitigated through the use of renewable resources and		e centrality of people	Data protection and cybersecurity	Data protection and cybersecurity measures help protect business data and prevent the disclosure of sensitive data and information. An inappropriate level of cybersecurity could undermine the company's reputation and jeopardise the relationship of trust with stakeholders.
	Sustainable product innovation	Product quality and safety	energy efficiency initiatives. Compliance with the highest production standards maintains a high level of product quality and strengthens customer relationships.		e centrality of people	Respect for human rights	Respect for human rights is guaranteed only if forced and child labour practices are prohibited along the supply chain and if the right to strike and collective bargaining are guaranteed.
	e sustainability of the supply chain	Social, community and territorial development	A company can promote the social development of the communities and territories where it operates through donations and the development of projects that are not strictly business related. Establishing a lasting, participatory and mutually beneficial relationship between third sector entities, universities and research centres facilitates access to the work of new generations in areas where the company operates.			e correlation matrix between the material aspects and the indi cators provided for by the GRI is set out in Appendix.

THE STRATEGIC PLAN: THE PILLARS

e emergence of new risks, including the growing instability of the global geopolitical and economic scenario, as well as the rapid spread of new environmental and social sensitivities, have in recent years forced companies to undergo a transformation, which have been called upon to reconsider their longer-term strategies in addition to immediate response actions. Incorporating sustainability into business development plans has become an essential factor in maintaining competitiveness and laying the foundations for sustainable growth.

e principle of sustainability has historically guided Gefran's development and operational management, allowing the Group to grow steadily and gain strength over the years. In 2020, for the first time, Gefran formalized the sustainability strategy, inspired by the United Nations Sustainable Development Goals, accompanying it with a commitment plan divided into 4 projects, which today have achieved the objectives set through the implementation of an employee evaluation system, the dissemination of the culture of sustainability along the supply chain, the obtaining of new certifications and the development of sustainable product solutions.

In 2022, commitments were strengthened with a new Plan which, without prejudice to the strategy announced in 2020, sets measurable targets consistent with the Business Plan. e 2022 Sustainability Strategic Plan is an integral part of the Group's business model and its day-to-day activities: Gefran intends to be an interpreter of sustainable growth, attentive to the expectations of the market, people and companies with which it works, in the areas where it operates.

e plan to achieve the Sustainable Development Goals today consists of four pillars, an expression of the company's DNA: the centrality of people, the contribution to the ecological transition, sustainable product innovation and the sustainability of the supply chain.

Specific objectives have been defined for each pillar to be pursued through 26 medium and long-term projects.

e objectives are the outcome of a process that began with the analysis of Gefran's positioning and the risk/opportunity framework of the reference market. Dialogue has been opened with stakeholders and people who work in Gefran have been heard. e management, at all levels of the Group, was involved to define the projects that will lead Gefran to achieve the set objectives, as well as to determine the key indicators and that will allow for monitoring the results over time.

decarbonisation levers sources

For an initiative to be successful and generate long-term value, it must be global. Since the formalisation of the 2022 Strategic Sustainability Plan, some moments have taken place to share the values that inspire sustainability at Gefran and the objectives that the Group has set itself. At the events organized, all the people of Gefran were involved, in order to spread the knowledge of the Strategic Plan at all levels and bring it to a global horizon that embraces the entire Gefran community in the world.

One of the key steps was to integrate the three-year plans of the various Group companies with actions planned in line with the projects of the Strategic Sustainability Plan, thus providing them with the adequate resources necessary for their development in the 2024-2026 three-year period.

e most recent event, "ACTING THE SUSTAINABILITY – A Group Event" held at the beginning of 2024, was particularly significant: all Gefran people connected simultaneously, with the support of a platform and a translation service of the 6 languages spoken in the Group, shared the theme of sustainability. It is therefore in connection with all the geographical areas in which the Group operates that Gefran has decided to decline through all its facets how and how much sustainability is integrated into the Group's activity, thus making it a distinctive and strategic element. is was the opportunity to present to the whole Gefran world a new "Gefran Sustainability Games" project, dedicated to all employees, to whom a "healthy" competition inspired by Gefran's 4 pillars of sustainability is proposed with a view a "learning experience". e project also includes moments for the dissemination of information material and educational messages on sustainability issues and on the progress of the Plan's projects, as well as useful indications to generate virtuous behaviours that will contribute to the achievement of the Group's ESG objectives.

In the following paragraphs, the Plan is described and the policies that relate to each of the four pillars are illustrated, accompanied by the projects to implement the strategy and its objectives, with evidence of the progress made.

THE CENTRALITY OF PEOPLE

ere is no distinction between company and people: Gefran is its people. With its own specific features, each contributes to a fundamental asset for long-term value creation. Gefran is Beyond Technology and beyond technology you have people: the promise is to create value for all stakeholders through a professional organisation which people enjoy belonging to. e Group has set ambitious goals in terms of quality of life within the company and outside it, health and safety in the workplace, equal opportunities for professional growth and career development, respect for diversity and customer satisfaction.

For this reason, it is essential to offer employees continuous and quality training focused on the development of key skills. Raising awareness of the importance of ESG aspects for company performance. To strengthen this dimension, Gefran considers it important to introduce MBOs and performance bonuses upon achievement of purely ESG objectives. In 2023, 42.9% of Italian managers included at least one ESG objective in the assessment of MBO and/ or LTI.

Awareness around sustainability also means educating in respect of diversity and inclusion, an objective that, internally, will be pursued by creating a dedicated community and, externally, through educational activities in local schools aimed at encouraging girls to study STEM disciplines (Science, Technology, Engineering and Mathematics).

is design also includes the implementation of an Integrated Management System which, thanks to the work carried out, in 2023 saw the obtaining of important certifications. Today all the Group's Italian sites are certified to the standards ISO 14001:2015 (Environment), ISO 45001:2018 (Health and safety in the workplace) and SA 8000:2014 (Corporate Social Responsibility), as well as ISO 9001:2015. e project to extend the integrated management system is continuing towards the main production branches abroad, based on the model developed on Italian companies.

Cyber security also depends on the human factor: the goal is to maintain a medium-to-low level of IT risk through employee training and the use of advanced technologies. In 2023, in addition to the interventions on the company's IT infrastructure and the strengthening of the IT function, the first training program was held, which covered four specific courses on the topics of security awareness. It involved all Gefran staff in Italy who were issued company devices (270 people) and everyone participated. Work will continue in 2024, with new courses both in Italy and at the companies abroad.

Particular attention is paid to customer satisfaction: a two-year listening course has been created to meet expectations and

increase satisfaction.

Below are the projects envisaged in the Plan, in relation to the centrality of people, the objectives defined and the progress

achieved in 2023.

Projects	Objectives	Progress made in 2023
Develop training plans	By 2026, train 90% of employees in skills that are crucial to Gefran's development in the coming years	82.9% of employees at Group level had access to training on key competencies for the Group, through the dedicated platform does not include training activities covered by other projects (i.e., HSE and cybersecurity)
Deliver a sustainability training plan	By 2026, involve 80% of employees in training activities on ESG issues, tailored to the needs of corporate functions	Project in the start-up phase, whose progress will be monitored later
Integrate ESG goals into annual MBOs and all managers' LTIs	By 2024, extend an evaluation system on the achievement of ESG targets to all Italian managers	42.9% of managers in Italy have at least one ESG objective on the MBO / LTI scorecard
Integrate ESG into employees' and workers' performance bonus	Attribute, by 2024, a part of the result premium for clerical staff and manual workers with a supplementary contract following the achievement of ESG objectives	Roughly 6.1% of the result premium allocated for employees with a supplementary contract (Gefran SpA and Gefran Soluzioni) was achieved following the reaching of ESG objectives
Create a community on D&I	Create a space dedicated to the D&I community on the kenFLY platform to promote opportunities for discussion and training and to promote diversity and inclusion values at all levels. By 2028, reach 80% of employees through space access	Project in the start-up phase, whose progress will be monitored later

Projects	Objectives	Progress made in 2023
Boost female access to STEM disciplines	By 2024, start an educational campaign in local schools	Project in the start-up phase, whose progress will be monitored later
Introduce an Integrated Management System to harmonise the operating standards of Group companies	By 2025, obtain all certifications (ISO 9001, ISO 45001, ISO 14001 and SA 8000) at the Group's production sites	—e certifications identified are obtained for all Italian sites and achieved ISO 9001 in China, the United States and Switzerland
Promote a culture of safety	Reaching the Group's zero injuries target by 2025 * –e objective will be considered achieved if the severity index (number of days lost due to accidents x 1,000 / hours worked) =< 0.01	Severity index of 0.04 (4 injuries occurred, none fatal or with serious consequences, with 47 days of work lost)
Train employees on IT risks	Train all employees on cyber and cybersecurity risks by 2024	All employees in Italy with a company device have received training
Minimise IT risk	By 2024, reach and maintain a low-to medium level of cyber risk 4.0	Cyber risk level at 4.22 (was 4.45 in 2022)
Monitor Customer Satisfaction	Conduct a biennial customer survey, reaching a rate of compliance (RI) greater than 95% by 2028	Project in the start-up phase, whose progress will be monitored later

THE CONTRIBUTION TO THE ECOLOGICAL TRANSITION

In order to counter the negative effects of climate change, the international community has set itself a goal of reducing greenhouse gas emissions by 55% by 2030, and of achieving climate neutrality by 2050. Achieving these objectives requires the implementation of energy efficiency strategies and the deployment of energy from renewable sources.

ese issues have characterised and guided governments' actions in recent years, but have further accelerated following Russia's invasion of Ukraine and the ensuing conflict, which has led to a situation of possible criticality in the supply of traditional energy resources. Accelerating the energy transition to stop relying on electricity produced through fossil fuels has become a very short-term objective and has fostered further investment in electricity produced from alternative and renewable sources.

Additional factors have pushed companies like Gefran to continue on the path of improving environmental performance.

Global temperatures have reached record levels, and scientists say 2023 was the hottest year on record and extreme weather events are increasingly affecting people around the world, with inevitable repercussions also on the economy and business activity.

To combat climate change and its consequences on the environment, on the quality of life of populations and on the business of companies, the path to follow is dictated by the challenges and objectives of the ecological transition. One of these is decarbonisation, i.e., the conversion to a system in which carbon dioxide emissions are progressively reduced, until they are neutralised.

Explicit objectives are those signed by the countries that participated in the COP28 in Dubai, the United Nations Conference on Climate Change held in December 2023: triple renewable energy and double energy efficiency by 2030.

Gefran will participate in these challenges with a decarbonisation strategy by providing more levers and involving the entire value chain, from suppliers to the end customer.

With regard to energy efficiency, the investment plan of factories continues, which in 2023 included the installation of an additional photovoltaic plant in Italy, solar panels at the German headquarters that was also equipped with charging stations for electric vehicles. Gefran's goal is to use, by 2025, electricity exclusively from certified renewable sources, even through the signing of contracts for the purchase of certified renewable energy, to date stipulated in Italy, Germany and Belgium, to which Switzerland has been added since January 2024.

Other levers identified concern mobility, with respect to which projects have been launched to reduce the environmental impact of the company's fleet of vehicles and air travel.

Below are the projects envisaged in the Plan, in relation to the contribution to the energy transition, the objectives defined and

the progress achieved in 2023.

Projects	Objectives	Progress made in 2023
Map emissions	Develop a carbon footprint management model to collect and calculate Scope 1, 2 and 3 data by 2023	e model developed evaluated a total production of 11,779 tCOe (reference year 2022) that includes upstream and downstream processes (Scope3), completing the carbon footprint, which already included Scope 1 and 2
Develop a decarbonisation strategy	By 2024, identify the initiatives to reduce CO2 emissions (taking into account regulatory, economic, technological and market contexts) estimating the impact of the initiatives in relation to the levers activated	An analysis of the most impactful processes and categories is underway, in order to identify improvement initiatives, prioritize them and start them according to a plan
Only use electricity from certified renewable sources	Ensure all energy used by all Group companies is from certified renewable sources by 2025	Approximately 82.4% of the electricity consumed at Group level derives from renewable sources, (it was 80.5% in 2022)
Reduce the environmental impact of the fleet	Introduce vehicles with a reduced environmental impact in the company fleet by 2029	Project in the start-up phase, whose progress will be monitored later
Only use airlines with sustainable policies	By 2026, draw up a plan to use airlines that have already adopted policies to reduce impacts	e mapping for Italy and Switzerland has been completed and is in progress in other geographical areas

SUSTAINABLE PRODUCT INNOVATION

Supply innovation must take into account the principles of environmental protection and natural ecosystems. Hence Gefran's commitment to responsible consumption of resources, resulting in an environmentally sustainable approach to the development of new products and the use of components made from recycled materials. Evaluating sustainable components in the early stages of the product life cycle (PLC) has led the company to strengthen interaction between the Innovation and Technology Development and Purchasing departments, aimed at identifying sustainable materials and defining the trade-off thresholds between cost and material sustainability level. To this end, training initiatives will be launched on the PLC, enhanced by a sustainability analysis.

e Group intends to invest the necessary resources to develop a commercial strategy, with the aim of achieving at least 15% of total revenues from sustainable innovative products by 2025.

e pillar of low-impact, innovative products includes the packaging component. Packaging, often made to be disposed of, feeds a linear economy based on waste. Gefran intends to promote the circular economy by using recyclable and more easily biodegradable packaging that reconciles respect for the environment, minimising waste and packaging functionality, starting with product protection. e project currently concerns Gefran SpA and will be divided into three phases: mapping the composition of the product packaging and the logistics packaging; identification of the materials to be replaced; evaluation of alternatives, up to the development of specific projects.

e Smart Manufacturing project aiming for paperless production is part of this design. e project was launched in 2023 with a preliminary analysis of the use of paper in production and logistics, as well as in other company processes. A pilot project will then be carried out at Gefran SpA for the complete digitisation of information, including technical documentation on the outgoing product. Paying attention to the overall impacts, Gefran has decided not only to reduce, but also to work on the origin of the paper purchased, with the aim, by 2026, of providing the entire Group exclusively with certified paper (FSC, PEFC or other similar recognised standards).

With the gradual improvement of processes, Gefran also aims to reduce production waste for Group companies that have a mass production process. is has meant defining KPIs on the generation of waste for each assembly line and periodically analysing the economically relevant aspects. e monitoring outcome will also generate projects to eliminate/reduce the causes of waste or monitor variables directly or indirectly related to waste.

Below are the projects envisaged in the Plan, in relation to sustainable product innovation, the objectives defined and the progress

made in 2023.

Projects	Objectives
Offer developed products with a sustainable approach	Achieve 15% of total revenues from developed products with a sustainable approach by 2025	Roughly 13.1% of Group-wide revenues are generated by products developed with a sustainable approach (it was 11.7% in 2022)
Reduce production waste	Reduce production waste by 30% by 2028 and compared to 2022 through process controls and the use of more effective materials in production processes, both internal and at suppliers	­e defined indicator (ratio between the value of production scraps and the total value paid) of 2023 shows an increase of 8.4% at Group level compared to 2022
For Group products, use packaging that is completely recyclable and easily biodegradable	By 2028, use 100% recyclable material for the packaging of logistics processes and reduce the impact by using more easily biodegradable materials. Considered as hardly biodegradable materials are: litmus paperboard, plastics, packaging film, polyurethanes, polystyrene, iron	Nearly 100% of the material used for packaging at Gefran SpA is recyclable (in terms of weight 77.6% is biodegradable)
Reduce paper purchase and consumption	Purchase 100% certified paper (FSC, PEFC or similar recognised standards) by 2026. By 2026, reduce the percentage of paper used with respect to the previous year by raising employee awareness	Almost 50.1% of the paper purchased at Group level (in terms of value) is of certified origin
As part of the Smart Manufacturing project, achieve paperless production (including product technical documentation)	By 2028, eliminate paper consumption on the number of production orders generated and handled in a year	At companies with mass production, an average of 6.2 A4 sheets are used for each production order
Introduce products with a recycled raw material component	By 2025, ensure 25% of product life cycles (PLCy) are completed and approved in the year for which recycled raw material content is expected to exceed 30% of the weight of the product	Project in the start-up phase, whose progress will be monitored later

THE SUSTAINABILITY OF THE SUPPLY CHAIN

Gefran constantly monitors the strength of the supply chain, which has received a growing amount of attention from stakeholders and institutions in recent years, as a result of increased exposure to disruption risks. Proper chain due diligence is now considered essential.

e aim of the Group is to gradually ensure that the majority of suppliers adhere to the Sustainability Pact. In particular, this includes suppliers contributing to 80% of purchases, labour-intensive suppliers, waste disposal suppliers and suppliers whose product or service explicitly mentions any point expressed in the Sustainability Pact. e project is developing in several stages before progressively reaching all foreign branches.

In order to verify compliance with the criteria of the Sustainability Pact and, more generally, assess areas for improvement in relations with suppliers, the objective envisages a multi-annual audit plan for the Group's main suppliers up to total coverage.

In addition, Gefran undertakes to implement initiatives to ensure up-to-date and easy-to-use data is collected on conflict minerals, in accordance with the European Regulation 2017/821, establishing duty and diligence obligations in the supply chain for importers in the European Union of tin, tantalum, tungsten, minerals and gold originating in conflict or high risk areas.

e Group's objective is to reduce the share of waste for landfill or incineration to 30% and develop plans to increase the share of waste for reuse and recycling.

Below are the projects envisaged in the Plan, in relation to sustainable product innovation, the objectives defined and the progress made in 2023.

Reduce the proportion of waste disposal

Projects	Objectives	Progress made in 2023
Reduce the proportion of waste disposal	By 2025, reach a share of unsorted waste of less than 30%	Roughly 32.9% of the waste generated at Group level is destined for disposal (it was 33.8% in 2022)
Standardise collection from Conflict Minerals Reporting Template (CMRT) suppliers	By 2023, keep a CMRT file updated annually, automating the processing of the annual survey results	CMRT file available, and a guideline for its periodic update has been defined and applied
Introduce the Sustainability Pact for new suppliers and gradually ensure that all suppliers in the register adhere to it	By 2024, ensure 80% of the participating suppliers, selected according to certain criteria (excluding distributors) Direct, indirect suppliers and services for turnover, strategic/critic suppliers, labour intensive suppliers, waste management suppliers	Nearly 284 suppliers were selected, of which 192 agreed to join (67.6% of the panel)
Establish a multi-annual audit plan on suppliers of direct materials globally	By 2027, carry out an audit of 10 suppliers of direct materials per year	A total of 17 suppliers were audited

THE CENTRALITY OF PEOPLE 06

6.1 HUMAN CAPITAL MANAGEMENT4

For Gefran, people come first: protecting and enhancing their identity, views, diversity, qualities and skills is essential to be competitive and successful.

Care and attention is the basis for each phase of the relationship. Gefran's commitment to its employees is to provide a working environment that respects the ethical principles of the company, is inclusive and safe and supports personal, technical and professional growth.

A cross-pollination of experiences, international cultures and the ability to work with people from different cultures vitally contribute to the smooth functioning of the company. is requires systems that promote integration, involvement and sharing of information and experiences, enabling everyone to make their own contribution. Gefran sees cultural and gender diversity working in tandem to achieve common goals as a strong point, a driver for innovation and sustainable value.

e document summarising the company policy (Gefran and its people), the Code of Ethics and Conduct and the Brand Book, which defines the Gefran Way, specify the Group's values, starting with the protection of diversity, equal opportunities and respect for human rights.

Empowering people also helps to manage the risk of losing talent and skills. ere are many actions aimed at employer branding and improving employee experience, starting with onboarding, engagement and loyalty plans ranging from the WELLFRAN people in Gefran organisational welfare programme to international mobility. For example, employees' performance-related pay can be converted fully or partly into goods and welfare services allowing tax and social security benefits, guaranteed by law, and a company bonus of up to 10%.

ere has been a strong focus on training skills with customised plans in collaboration with universities, research centres and high schools, and through the FLY Gefran Talent Academy. Gefran also has a digital platform (hub) that employees around the world can access to acquire skills and know-how, and exchange experience

and knowledge.

e results of the commitment to recognising people and their qualities are reflected in the stability of the workforce.

e exit turnover rate, calculated as the ratio of exits to the number of employees and excluding inter-company movements, was up at the end of 2023 was down compared to 2022, but nevertheless up compared to 2021. e 2022 figure does not take into account the exit from the Group of employees, who were employed by Gefran Drives and Motion Srl and Siei Areg Gmbh (a total of 154), as part of

the sale of shares in both companies.

No. leavers/No. employees

31.12	2023			2022				2021
	W	M	T	W	M	T	W	M	T
Turnover rate of leavers		6.9% 22.6%		17.1% 36.6% 68.5%			57.7% 6.2% 11.7%		10.1%

Appreciation of the company's human resources management policy has come from many different quarters. Gefran has been mentioned on national radio and television programs as an example of excellence, has won the prestigious Top Job Best Employers award for four years (awarded by the German Institute for Quality and Finance), has hosted the Senate Labour Commission and is often invited to share its experience at the conferences of universities and training schools (Bocconi University, Politecnico di Milano, Statale di Brescia and RCS Business School). Gefran plays a key role in the HR Innovation Practice Observatory of the Milan Polytechnic, has won the She SPS Italia Award and e Factory of the Future Contest organised by Confindustria for Brescia Bergamo Capital of Culture.

⁴ Reporting on data on personnel management, on gender equality, on discussions with social partners and on respect for human rights, except as otherwise provided, involved all Gefran Group companies. It should be noted that, in light of the sale of the drives, the 2022 and 2023 reporting scope differs from the same in 2021, due to the exit of the subsidiaries Gefran Drives and Motion S.r.l. (IT) and Siei Areg (DE). To provide more transparent information to the reader, key data relating to these two entities are highlighted in the section "11.2. e centrality of people – appendix".

AMERICA

68

AMERICA 68

6.2 DIVERSITY, INCLUSION AND EQUAL OPPORTUNITIES5

Protecting diversity is one of the principles of business ethics. Inclusion is one of the values.

Gefran believes that people's uniqueness should be duly recognised and is a great potential for growth. In a working environment, diversity (of gender or age, sexual or religious orientation, physical or technical skills, ethnic or cultural background) fosters dialogue, new ideas and innovation. Inclusion is expressed in the most diverse forms, from reverse mentoring programs to enhance generational diversity to respect for food styles through meals served at work, to the definition of an employee experience that takes into account different needs, to transparent career paths based on the shared skills matrix.

e figures recorded during the 2023 reporting period and a comparison with the same for previous years are presented below.

As at 31 December 2023, the Group had 651 employees: 65.7% employed in Italy, 13.4% in Asia, 10.4% in Europe, 10.4% in America.

2023

2022

e number of female employees has grown, from 34% in 2022 to 35.5% in 2023 (in 2021 it was only 30.7%).

Below is the ratio of the gross annual average basic salary (excluding the variable portion) of female employees and that of

male employees.

Gender pay ratio throughout the Group6	2023	2022	2021
GROUP average	82%	82%	81%
Managers	103%	100%	101%
Middle managers	98%	104%	91%
Clerical staff	75%	74%	75%
Manual workers	88%	92%	89%

weighted by number of employees, where the calculation was applicable.

⁶ e ratios were determined as the ratio between the gross annual average basic salary (excluding the variable portion) of female employees and that of male employees, in individual Group companies, for each job classification. e Group indicators are calculated weighting the ratios of the individual companies by the number of employees in each, for each job classification, where the calculation was applicable. e Group average is determined as the average of the ratios of each job classification,

2023 EMPLOYEES BY AGE GROUP AND BY GENDER

N. PART-TIME EMPLOYEES 4.6%

11%

An analysis of contract types shows that almost all employees have open-ended contracts, which does not deviate significantly from previous years.

In terms of job type, 4.6% of employees, mainly women, signed a part-time contract with the company (as at 31 December 2023).

In 2023, the breakdown of employees by age group sees 11% under 30 (in line with 2022 and 2021), 62% between 30 and 50 (in line with 2022, but up from 59% in 2021) and 27% in the age group over 50 (in line with 2022, but down from 30% in 2021).

Below is a breakdown of Group employees by classification and gender as at 31 December 2023.

As in previous years, there were no cases of discrimination in Group companies in 2023.

6.3 EMPLOYEE WELFARE7

7 Reporting on data on personnel management, on gender equality, on discussions with social partners and on respect for human rights, except as otherwise provided, involved all Gefran Group companies. It should be noted that, in light of the sale of the drives, the 2022 and 2023 reporting scope differs from the same in

2021, due to the exit of the subsidiaries Gefran Drives and Motion S.r.l. (IT) and Siei Areg (DE).

e Wellfran – People in Gefran programme represents the actions adopted by Gefran to take care of its people and protect their overall well-being. An emphasis is placed on feeling well and being able to express oneself to the best of one's abilities.

e company provides employees with a corporate welfare programme, together with a comprehensive and innovative package of flexible benefits, consisting of services, facilities and agreements that are easily accessible through a dedicated web portal.

FAMILY PENSIONS SPORT, CULTURE AND LEISURE

WORK LIFE BALANCE

LOANS TRAVEL TRAVEL AND GIFT BOXES

To cope with school or family expenses, you can ask for incurred costs to be reimbursed in just a few clicks: boarding school fees for younger children as well as university studies, and other expenses for older family members, will no longer be a

problem.

e supplementary pension fund offers added security and our employees can use this service to put their bonus in their chosen fund.

We cover all aspects of lifestyle in providing many activities to enhance your life and make it easier; there are over 2000 partner facilities across the country to choose from.

Balancing work commitments and private life has never been so easy. e Wellfran portal provides a host of services to solve all day-to-day problems, from home maintenance to filling in your tax return.

e loan service makes it easy for you to claim for reimbursement of a proportion of the interest payments on loans such as those to buy, build

or renovate your home.

Indulge your passions and treat yourself to some relaxing time off on a weekend break, a romantic get-away, a wellness package or a sports course.

We offer a wide range of gift boxes and cards, from petrol vouchers to shopping cards, so that you can choose from the best brands on the market.

Employees are also entitled to parental leave. ose who took advantage of it in 2023 returned to work in 91.3% of cases (96% in 2022 and 84.6% in 2021) while the job retention rate in the 12 months following parental leave was 76% (50% in 2022 and 88.5% in 2021).

Employees who return from maternity leave, if requested, are guaranteed part-time hours until their child is two years old.

Parental leave rate				2023
		W	M	T
Employees using the right to parental leave	No.	14	9	23
of whom returned to work after using the right to parental leave	No.	12	9	21
Rate of return after parental leave	%	85.7%	100.0%	91.3%
Employees working at Gefran 12 months after using the right to
parental leave the previous year	No.	13	6	19
Rate of jobs kept after parental leave (ref. previous year)	%	86.7%	60.0%	76.0%

All employees have 10 hours/year of paid leave available for medical visits for themselves or to accompany minor children or

senior family members.

In addition to the benefits referred to, employees can benefit from a Medical Costs Support Fund and paid leave for medical

appointments.

Smart working has been introduced for business functions that are compatible with this way of working to facilitate a better worklife balance. Smart working is in place for all employees in staff positions. Production operators have been defined as so-called menu times, which improve work-life balance while ensuring flexibility, efficiency and effective production processes.

RATE OF RETURN AND JOB RETENTION AFTER PARENTAL LEAVE

6.4 HEALTH AND SAFETY8

Protecting the health and safety of employees and workers from outside companies operating in the Group's plants is a core value that the company puts into practice in all areas.

Underlying this is the constant mapping of operational risks, the monitoring of their development and the implementation of actions to minimise them.

e company has implemented a system of best practices affecting all Group companies through regular meetings with safety actors, aiming to consolidate a culture of occupational health and safety. In addition to being a regulatory obligation, this represents an important act of social responsibility.

is process involves securing new certifications that will lead to an Integrated Management System (SGI) for all of the Group's manufacturing companies, with the aim of harmonising the working mechanisms between the different companies and facilitating the development of continuous improvement processes. e consolidated base, established by ISO 9001 (Quality), allows the System to evolve to include the ISO 14001 (Environment), ISO 45001 (Health and Safety) and SA 8000 (Social Responsibility) requirements. In 2022, the Quality, Safety and Environment team worked on developing the work plan to fully align with the requirements of the standards and carried out audits to assess the implementation of the Integrated Management System. In January and February 2023 the initial audits carried out by the accreditation body to obtain ISO 45001 and ISO 14001 certification were successfully completed, and the issuance of the certificates by the third entity for all sites in Italy took place in March 2023. In the second part of 2023, the initial verification activities were also carried out in the SA8000 area, with the certification obtained for the Group's Italian offices at the end of the year.

e plan to obtain new certifications continues in 2024 with the extension of the model developed to production companies in

China, Switzerland and the United States.

e effectiveness of health and safety policies and practices are confirmed by the small number of accidents over the last three years (4 in 2023, 1 in 2022 and 2 in 2021). In general, the main causes of accidents are attributable to shocks, slipping and shear injuries in assembly production or when handling goods.

ere were no fatal or serious accidents (i.e. with permanent damage 6 months from the accident). In 2023 there were 4 accidents, of which 3 at the Italian subsidiary Elettropiemme Srl and 1 at the Brazilian headquarters. e accidents involved 2 employees who were working at a customer's site and suffered burns due to a short circuit, 1 operator suffered a hand injury during assembly tasks and 1 employee was injured due to slipping. For 2023, a total

of 47 working days were lost.

In 2023 there were no on-going accidents.

Accident ratios - accidents to employees	2023	2022	2021
Total accident frequency rate	3.61	0.89	1.46
No. of accidents, excluding accidents on the way to or from work, per 1,000,000 hours worked
Accident frequency rate recorded (with number of lost working days) No. accidents recorded, with number of lost working days, per 1,000,000 hours worked	3.61	0.89	1.46
Severity ratio No. of working days lost due to accidents recorded per 1,000 hours worked	0.04	0.01	0.03

In 2023 there were no injuries to non-employee workers 9 (2 in

2022, 1 in 2021).

carrying out their tasks in the Group's plants and under its control.

⁸ It is specified that some companies have been omitted from the data reporting on health and safety because though they are included in the Group's structure, they are purely concerned with marketing, and have a limited volume of business and a small number of employees. For these reasons, their impact on this form of data reporting is deemed to be of marginal relevance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), in addition to Gefran Benelux Nv (BE) until 2022. Moreover, in light of the sale of the drives described in the section "Group Activities: the Businesses", the 2022 and 2023 reporting scope differs from the same in 2021, due to the exit of the subsidiaries Gefran Drives and Motion S.r.l. (IT) and Siei Areg Gmbh (DE). For further details, please refer to section "11.2. e centrality of people – appendix".

⁹ With reference to the GRI 403 "Occupational health and safety 2018", non-employee partners are to be understood as temporary workers and/or workers

Training

Protecting health and safety is the subject of constant training activities. Gefran has chosen to rely on a team of professionals in the sector so that training might provide opportunity to further examine themes and grasp content through effective teaching methodologies. In addition to this, the work of the internal team allows actions to be taken to change individual behaviour, promote a safety culture and, where necessary, adapt the company organisation.

During 2023, the aspects related to the role of the Supervisors in the field of health and safety in the dissemination of the company culture were further consolidated, continuing on the path of increasing involvement through meetings aimed at information and sharing of the relevant issues for each site.

In addition, monitoring the risk of interference in contract works continued in 2023; this confirmed the adequacy of management and the absence of critical issues.

e reporting of health and safety training activities organised at Group level since 2018 shows a fall in hours in 2020 compared to 2019, due to the necessary reorganisation of company activities and priorities in response to the health and economic emergency. Although not returning to the levels of 2019 detected in a pre-pandemic context, in 2021 and 2022 the hours dedicated to these activities increased significantly (2,281 in 2021 and 2,503 in 2022, to consolidate in 2023 (a total of 1,979 hours carried out in the Group)

Health and safety in business

activities

Gefran's commitment is to provide employees and collaborators of external companies with all the tools to allow activities to be carried out in the plants under safe conditions, be they safety or information devices and structured training. is commitment is at the heart of the Health, Safety and Environment System Policy, which defines the Group's guidelines on the issue and is subject to continuous improvement, thanks to the management system, certified according to ISO 45001, developed in recent years. To minimise operational risks (for example, those generated by handling materials and products in inappropriate areas) and to reduce the risks of storage build-up, the company adopts a lean manufacturing logic by organising work islands according to the specific features of the assembly process (differentiated for each product) and clearly defining the spaces dedicated to materials handling and storage spaces.

e revision of some production lines continued also in 2023. To linearize flows, as described, particular attention was paid to the handling and storage of materials under safe conditions and the reduction of ergonomic loads on operators. At the same time, in the areas where the layout was revised, internal colour coding continued to be applied in horizontal identification and floor markings. e specification not only complies with the recommendations of standard OSHA 1910.144 but goes further, providing a complete colour scheme helping visually identify work areas and pathways and clearly indicating designated storage locations for materials, finished products, instruments and tools.

With the creation of the Gefran Soluzioni Srl headquarters in 2021, conditions were created to improve and expand the layout of the production area, which was carried out in 2022.

In 2022, a series of activities were carried out to review the structure of the Via Cave 11 plant (production of sensors) and completed in 2023 with the restructuring of some areas of the plant, dedicated to reception and technical offices.

HOURS OF OCCUPATIONAL HEALTH AND SAFETY INSTRUCTION

6.5 PERSONNEL TRAINING AND DEVELOPMENT10

e company of today and its successes of tomorrow are also the result of recognising people and their talents. For Gefran, talent is an individual's unique qualities. It encompasses skill, passion, concentration, courage and tenacity. Bringing out talent requires a willingness to innovate, a focus that is expressed in everyday work.

Gefran has always heavily invested in employees' development, knowing that competitiveness also depends on each individual's contribution to achieving goals.

People's skills therefore become not only individual assets, but also corporate assets, since the strategy is defined and implemented through them.

Over the years many different programmes, initiatives and partnerships with academic institutions and training schools have helped to give shape to the company's vision of developing business potential.

In 2023, training hours per capita were 17.6 (24 in 2022 and 16.7 in 2021).

To better understand the data, it should be noted that until 2021 the training hours provided to employees of the companies sold following the transaction described in section "2.2 e Group's activities" (a total of 1,376 hours in 2021) are also reported.

training hours			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Managers	67		949 1,016		160 1,529 1,689				70 1,775 1,845
Middle managers			849 1,154 2,003		737 1,124 1,861				749 1,243 1,992
Clerical staff						1,743 4,374 6,117 1,900 7,437 9,337 1,066 5,410 6,476
Manual workers			887 1,261 2,148 1,139 1,188 2,327						904 1,522 2,426
TOTAL TRAINING HOURS						3,545 7,738 11,283 3,936 11,278 15,214 2,788 9,950 12,738
AVERAGE NUMBER OF HOURS (hours/no. employees)	15.5	18.7	17.6	18.1	27.0	24.0	11.9	18.8	16.7

¹⁰ With reference to the Gefran Group, all Group companies are included. It should also be noted that until 2021 the training hours offered to employees of the divested companies were also accounted for in the context of the sale described in section "2.2 e Group's activities" (a total of 1,376 hours in 2021). For further details, please refer to section "11.2. e centrality of people – appendix".

FLY is the Talent Academy of Gefran. Its mission is to develop the company's distinctive skills and to bring out its people's talents.

e programmes are aimed at both new and existing members of the organisation:

• / collaboration with universities;
• / masters in innovation;
• / managerial coaching;
• / mentoring and reciprocal mentoring;
• / on the job training;
• / participation in focus groups and workshops;
• / training (in the classroom and online) divided into activities to develop technical and professional skills (e.g. language courses and commu nication, courses on technical matters) and activities to improve cross-sectoral skills.

In March 2021 kenFLY was launched, a digital hub of the Academy which employees around the world can access to acquire skills and know-how, and exchange experiences and knowledge.

kenFLY was created to open up to options available to FLY Gefran Talent Academy to all Gefran personnel worldwide. It is a strategic project that adds to the range of training tools based on individual strengths.

rough kenFLY it is possible to follow courses on the six skill areas that make up the matrix of skills (intellectual, relational, manage ment, innovative, emotional and technical/business). e platform and its communication, learning and engagement dynamics have been designed taking into account the particular features of each genera tion. Gamification plays an important role in the training methodology.

kenFLY shows you which strengths are being trained in the most and which areas can be successfully improved. e language, which is common for the whole Group, encourages people to take responsibility for their own training and clear feedback.

e FLY Performance plan was launched in 2022: a transparent system to regularly analyse and compare performance evaluation, competence development and feedback sharing. e first sessions of performance management were held in the second half. In 2023, the

system will be completed with the Individual Development Plan.

KenFLY has already received a number of awards and acknowledge ments, and was shortlisted for an innovation award by the Observatory

of Politecnico di Milano.

Gefran continues to offer opportunities for students and recent secondary school and university graduates. anks to the partnerships with universities and secondary schools, curricular and extra-cur ricular apprenticeships are offered, while school/work agreements and opportunities also exist for students to begin work in the areas studied, leading to possible employment compatibly with the compa ny's capacity and the talent demonstrated.

Gefran offers access to and use of kenFLY to university students, and from 2024 also high school students taking the three-year course.

During 2023, work was carried out to make the user experience even simpler and more engaging, even on mobile devices, and the founda tions were laid to offer the content not only in Italian and English, but also in the other languages of the Group's countries, with the aim of making the platform increasingly inclusive.

FLY Youth is the programme dedicated to recent graduates, grad ually integrated into the company to allow for generational change. e FLY Youth structure is called 4x4: Four workshops on the devel opment of 4 fundamentals on soft skills led by teachers and external coaches and sessions held by the managers of the main company functions that also make workshop participants understand Gefran as a Company System; it also includes an induction process to facil itate the knowledge of processes, products/services and people (the function they belong to and interdependent functions).

ese young people, guided by senior mentors, also participate in initi atives for research or presentation of the company in the country's principal universities.

At the end of the training course, FLY Youth participants compete in contests on the development of innovative projects. One of these gave rise to "INNOWAY": the open innovation program sponsored by the Lombardy Region. In 2023, the contest led young participants to work together on the Gefran people's awareness and engagement develop ment plan on the objectives and projects of the Strategic Sustainability Plan. is gave rise to the "Gefran Sustainability Games" project which, developed in 2024, will involve all employees in the Group in a "healthy" competition inspired by Gefran's 4 pillars of sustainability. It will be an opportunity to share information on projects and sustainability issues, as well as useful information to encourage virtuous behaviours that will contribute to the achievement of the Group's ESG objectives.

6.6 DATA PROTECTION AND CYBERSECURITY

Another aspect to which Gefran has been paying particular attention in recent years is the protection and security of data and information. is theme has become particularly important in the global political and economic landscape due to the growing influence of new technologies, the digitisation of processes and the proliferation of cyber-attacks. Motivated by these issues, a number of actions were taken in recent years to prevent and mitigate risk factors related to cybersecurity issues and their possible negative impacts.

In collaboration with the External SOC (Security Operation Center) new sources of data network logs have been added to increase the scope of analysis. Secondly, the antivirus solution that was in place has been replaced with a new, much more powerful and advanced system.

In addition, company firewalls interventions were carried out by updating the latest versions and the configurations have been revised and improved. In particular:

• / a software tool has been implemented for centralised patching management (Qualys);
• / the group's spam system has been updated;
• / a new, more secure backup policy has been implemented (immutable back-up);
• / cyber risk insurance has been renewed.

As has been the case for some years now, an internal score card has been used to analyse the results of the remedial actions put in place. Current risk has improved and is defined as "Medium". In addition to this indicator, reports generated by the various protection systems in use are analysed on a weekly basis. Data analysis is carried out quarterly to define the actions required to improve the Group's cybersecurity set-up.

e solutions put in place show that the number of vulnerabilities

is decreasing significantly.

e activities planned for 2023 have all been completed. We summarize the most significant:

/ training on the topic of security awareness for Italian branches (the first four courses were carried out with 100% participation

/ the recruitment of a dedicated figure within the IT department

• of the selected users);
• (July 2023);
• with ZTNA for the entire Group.

/ the installation of new firewalls for the headquarters in Provaglio;

/ the introduction of a new Vpn ssl system for remote employees

On the other hand, these activities are planned for 2024:

/ training on security awareness for foreign branches;

/ an IAS-ENPT-OSINT security assessment carried out by external

• suppliers;

/ migration of the email system and the implementation of the MFA;

/ installation of new software tools for managing logs and alerts;

/ installation of new software tools for managing firewalls.

THE CONTRIBUTION TO THE ECOLOGICAL TRANSITION

7.1 ENERGY EFFICIENCY AND REDUCTION OF CO2 EMISSIONS (SCOPES 1 AND 2)11

e company continually analyses the risks associated with production and management processes and focuses on the most innovative solutions to ensure the energy efficiency of plants and the use of energy from renewable sources. An investment plan supports this commitment.

Gefran, among its targets, has chosen to include the United Nations Sustainable Development Goal 13 (fight against climate change) and this is materialised by implementing a policy of environmental responsibility to reduce atmospheric greenhouse gas emissions, focusing on continuous improvements in the energy efficiency levels of plants and the search for sustainable solutions in various different business areas.

In order to identify any potential environmental risk and comply with legal requirements, Gefran controls and monitors environmental aspects of industrial activity, in particular atmospheric emissions.

e monitoring data has revealed that the most significant electricity consumption is from the use of machinery in the production departments, from cooling and ventilation circuits and, in particular, from lighting. Hence a plan of actions, partly already implemented, partly planned for the near future, which aims not only to reduce the use of resources by improving efficiency, but also to spread the use of renewable energy.

Over the years, resources have been invested (in total about 1.5 million euros) to build photovoltaic plants dedicated to the production of solar energy (with a total power of 848 kWp today), which serve the plants in Provaglio d'Iseo and the commercial headquarters of the German subsidiary.

In 2022, another analysis was carried out of potential areas to increase the Group's photovoltaic park to improve energy performance (reduction of energy consumption taken from the grid and consequent reduction in CO2 equivalent emitted). e head office plant has turned out to be the best opportunity. e new project was started and completed in 2023: thanks to a synergy with the subsidiary Elettropiemme Srl, which also deals with energy efficiency among its business activities, it was possible to build a system to cover the parking lot for employees who today have a more functional parking area and are protected from atmospheric events. At full capacity, it is estimated that the new plant will cover about 30% of the electricity needs of the plant in question (equal to a production of about 100 tCO2e per year), reducing its dependence on third-party supplies.

Also in 2023, a plant was built at the subsidiary Gefran Gmbh (DE), which partially covers the energy needs of the commercial branch, where 2 charging stations for electric vehicles have also been

installed.

Gefran's constant attention is focused on the efficiency of the production plants and buildings that house the Group's activities. Numerous interventions, carried out over the years and planned, aimed at implementing more efficient solutions: timely monitoring of the energy consumption of machinery to optimize maintenance activities and, if necessary, to plan its replacement, installation of LED lighting fixtures, as well as the evaluation of energy performance in the property adaptation plan.

During 2023, in accordance with current regulations, a new energy diagnosis was also carried out by a specialized company on Gefran SpA and the company system was evaluated in detail and in terms of consumption of the various energy carriers (reference period 2022). Compared to the previous diagnosis, carried out in 2019, there was a significant improvement in the Company's energy performance, above all possible thanks to investments in machinery for the production areas and in installations to support the most efficient plants.

e digitalization projects launched in 2021 to optimise operational (Gefran Smart Factory) and logistical (Gefran Smart Logistic) processes have also been considered. In the second case, the aim is to better manage outgoing finished product packaging to streamline transport and reduce its environmental impact.

¹¹ e reporting of energy efficiency and emissions data, except as otherwise provided, has been carried out involving all the companies in the Gefran Group with the exception of certain companies, since they are purely concerned with marketing, as well as having a limited volume of business and a small number of employees. For these reasons, their impact on reporting energy and environmental data is deemed to be of marginal relevance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), which until 2022 included Gefran Benelux Nv (BE). It is also specified that, in light of the sale of the drives, the 2022 and 2023 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion S.r.l. (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, key data relating to these two entities are highlighted in "11.3. e contribution to the ecological transition – appendix".

ISO 14001: sets out the requirements for an adequate management system to keep the environmental impacts of an entity's activities under control, and systematically seeks to improve them in a consistent, eective and above all sustainable manner.

In addition, Gefran has launched initiatives in collaboration with some partners in line with sustainable development goal 17 (partnership for objectives). Examples include the signing of contracts with suppliers for the supply of certified renewable electricity or technologically innovative equipment that, depending on their use, allow for a reduction in emissions produced compared to equipment with standard energy performance.

In 2022 a project was developed, which became operational in January 2023, and which led to a review of the areas used for employee breaks in all the Group's Italian sites. e objective pursued is to reduce the use of single-use plastic and therefore of the related environmental impacts, both in terms of emissions and waste produced. In collaboration with the company supplying vending machines for the break areas, distribution points of the appropriately microfiltered mains water were created to replace the beverage dispensers in disposable plastic bottles. All employees have been provided with a personalised steel water bottle, so they can use the service free of charge while working at the company. In addition to this, it was also decided to improve the environmental impact of the supply of hot drinks: low-impact materials were introduced, in particular by evaluating the use of lightweight plastic pallets and especially low-impact cups, thanks to the use of mixed plastic/cellulose material. ese actions lead to a reduction in emissions produced throughout the cycle, estimated at a total of 2 tCOe per year).

e path that the Group is taking towards an Integrated Management System (IMS) also involves obtaining environmental certifications for all the Group's production plants, both in Italy and abroad. e project was started in 2021 by the integrated Quality, Safety and Environment function and in the first quarter of 2023 it obtained environmental certification according to the ISO14001 standard for all Group companies in Italy. e project is continuing today, with a focus on companies based in Switzerland, the United States and China, for which we believe it is concrete to complete the process by 2025.

companies included in the scope of reporting.

e energy intensity indicator12 has steadily improved over the last five years, with the exception of 2020 due to the decline in revenues caused by the pandemic. In 2019 the energy intensity index was 0.371, while today it stands at 0.294 with a 20.8% improvement. is result was achieved thanks to the implementation of investments and the care taken to adopt technologically advanced solutions aimed not only at satisfying the requirements of the business but improving energy performance, in both buildings and production plants, and in the organisation of processes.

In 2023, energy consumption amounted to 37,284 GJ (38,421 GJ

in 2022).

Total energy consumption	2023	2022	2021	2020	2019
Total energy consumption in GJ	37,284	38,421	52,986	45,359	48,078

Until 2021, the energy consumption for companies outside the 2022 scope was also reported following the sale of the motion control business to the WEG Group. With reference only to 2021, consumption totals 13,755 GJ (for further details refer to "11.3. e contribution to the ecological transition – appendix").

Comparing the data recorded in 2023 with the 2022 data, there is an overall decrease of 3%, despite the fact that from 2023 the reporting scope also includes the data of the Gefran Benelux commercial branch, previously excluded.

¹² e Group's energy intensity indicator is calculated as the ratio between the energy consumed (GJ) and the revenues achieved (in thousands of euro), limited to the

With regard to the breakdown, 53.9% of consumption is related to electricity (55.1% in 2022), 24.7% to fuels (up from 22.1% in 2022) mainly for the company's fleet of vehicles and 21.4% to the use of natural gas (22.8% in 2022) for the heating of work environments.

e electricity consumed, which accounts for more than half of its total energy consumption (53.9% in 2023), is mainly used in production processes, in the cooling and ventilation circuits and for lighting of the workspace.

Electricity in GJ	2023	2022	2021	2020	2019
Self-generated electricity		1,067 1,505 1,506		738	813
Electricity purchased from the grid, from non-certified sources	3,546		4,137 4,103 16,869		25,041
Electricity from certified renewable sources purchased from the grid		15,495 15,543 22,066 6,894			-
Total Electricity					20,108 21,185 27,675 24,501 25,854

In 2023, 82.4% of the electricity consumed globally by the Group derives from renewable sources , an increase compared to 2022, when it represented 80.5%: 5.3% of the total is produced through photovoltaic systems installed at some of the Group's plants in Italy belonging to Gefran SpA, Gefran Soluzioni Srl and Gefran Gmbh (self-generated electricity).

Production doubled from 738 GJ in 2020 to 1,506 GJ in 2021 (level confirmed in 2022), a result that is also due to the increased efficiency achieved by renovating the plant (replacement of some panels). In 2023 there was a drop in production, which totalled 1,346 GJ, including the share put into the grid and sold.

Nearly 77.1% of the total is purchased by suppliers who certify its renewable origin (electricity purchased from the grid).

In Italy, the electricity purchased from the grid comes from signing contracts for the purchase of 100% GREEN energy from certified renewable sources as of September 202013. ese contracts initially concerned the Gefran SpA and Gefran Soluzioni Srl plants, the companies with the highest electricity consumption. In 2022, Elettropiemme was also added and today all Group companies in Italy are covered by the supply.

During 2023, the project also extended to foreign subsidiaries, in particular the German company, Gefran Gmbh, and the Belgian company, Gefran Benelux, which in turn signed specific contracts with their local energy suppliers. Gefran's goal is to cover 100% of the Group's electricity needs with energy from certified renewable

sources.

Natural gas, the second largest source of energy used in the Group (21.4% in 2023), is not used in the production process. Consumption is therefore for heating of the workplace.

Natural gas in GJ	2023	2022	2021	2020	2019
Natural Gas for heating	7,968	8,752	16,438	13,682	12,041
Natural Gas for other uses	3	-	-	-	-
Total Natural Gas	7,971		8,752 16,438 13,682		12,041

e increase in natural gas consumption between 2020 and 2021 is driven by the expansion of operating areas. e 2022 drop is mainly attributable to the change in the reporting scope following the sale of the motion control business. In 2023, thanks also to the building efficiency activities carried out, we have recorded a decrease in gas consumption compared to 2022, equal to about 9%.

¹³ According to Article 2 of Legislative Decree 387/03, energy sources are: "Non-fossil energy sources (wind, solar, geothermal, wave motion, tidal motion, hydraulics, biomass, landfill gas, residual gas from purification and biogas processes). Biomass specifically refers to the biodegradable part of products, waste and residues from agriculture, including plant and animal substances, and from forestry and related industries, as well as the biodegradable portion of industrial and urban waste."

CONSUMPTIONS BY SCOPE IN GJ

Fuel consumption represents 24.7% of total energy consumption and comes mainly from diesel and petrol for company vehicles; the item diesel for other uses relates to the supply of fire pumps and emergency generators.

Fuel in GJ	2023	2022	2021	2020	2019
Diesel for company vehicles	7,002	6,567	7,763	6,186	8,616
Diesel for other uses	17	17	18	26	48
Petrol for company vehicles	2,186	1,900	1,092	964	1,519
Total Fuel	9,205	8,484	8,873	7,175	10,182

e increase of 8.5% recorded between 2022 and 2023 derives in part (about half) from the inclusion of Gefran Benelux Nv (BE) in the reporting scope, a company that was excluded until 2022. e remainder of the increase is linked to the expansion of the company's fleet, particularly in Italy.

In 2022, there was a 4.4% decrease in consumption compared to 2021, influenced by the sale of the drives business, while the figure recorded in 2020 did not consider the effect of the pandemic and the temporary lockdowns imposed to counter it, which led to a reduction in fuel consumption for company vehicles.

In analysis of the Group's activities and the energy consumption associated with them, Gefran takes into consideration direct consumption of energy:

• / the use of fuels for company vehicles and for emergency generator units which only come into operation in the event of a blackout;
• / the electricity self-generated by photovoltaic systems installed on the rooftops of factories and used for the operation of systems;
• / the natural gas purchased and used for heating workplaces.

A summary is given in the table below.

Direct energy consumption in GJ	2023	2022	2021	2020	2019
Diesel	7,019	6,584	7,781	6,211	8,664
Petrol	2,186	1,900	1,092	964	1,519
Self-generated electricity	1,067	1,505	1,506	738	813
Natural gas	7,971	8,752	16,438	13,682	12,041
Total direct consumption	18,244	18,741	26,817	21,595	23,036

e indirect energy consumption (reported in the table) refers to electricity from the grid, used mainly in offices.

Indirect energy consumption in GJ	2023	2022	2021	2020	2019
Electricity purchased from the grid, from non-certified sources	3,546	4,137		4,103 16,869 25,041
Electricity from certified renewable sources purchased from the grid		15,495 15,543 22,066 6,894			-
Total indirect consumption		19,041 19,680 26,169 23,764 25,041

After gathering data on energy consumption for various purposes, greenhouse gas emissions were calculated. Greenhouse gas emissions connected to Gefran's activities arise from the direct and indirect consumption of energy, and from leakage resulting from consumption of refrigerant gas (F Gas).

Scope 1 emissions in tCO2e	2023	2022	2021	2020	2019
Diesel for company vehicles	521	487	576	459	639
Diesel for other uses	1	1	1	2	4
Petrol for company vehicles	155	129	74	65	103
Natural gas	452	423	794	661	582
Other (F Gas)	-	-	26	61	-
Total direct emissions	1,130	1,040	1,471	1,249	1,328

GREENHOUSE GAS EMISSIONS IN TCO2e - LOCATION BASED

GREENHOUSE GAS EMISSION IN tCO2e - MARKET BASED

With reference to the emissions deriving from indirect consumption of electricity acquired from the grid, the calculation is provided with two different approaches: location-based14 and market-based15.

14 Emissions calculated according to the so-called location-based method, taking into account the average intensity of GHG emissions from the grids in which energy consumption is being calculated, using primarily data from the average grid emissions factor.

Scope 2 emissions in tCO2e - Location-based method		2023 2022	2021 2020	2019
Electricity purchased from the grid, from non-certified sources	443	546	550 1,869 2,677
Electricity from certified renewable sources purchased from the grid		1,506 1,360 1,931	688	-
Total indirect emissions			1,949 1,906 2,480 2,556 2,677

Scope 2 emissions in tCO2e - Market based method		2023 2022		2021 2020	2019
Electricity purchased from the grid, from non-certified sources	444	515		532 2,215 3,274
Electricity from certified renewable sources purchased from the
grid	-	-	-	-	-
Total indirect emissions	444	515		532 2,215 3,274

Analysing the emissions produced by the Company's direct and indirect activities, depending on verified source of supply, a total of 1,573 tCOe were produced in 2023, substantially aligned to 2022, despite the inclusion in the reporting scope of Gefran Benelux, a trading company that until 2022 was of marginal importance for the Gefran Group's business.

¹⁵ Emissions calculated according to the market-based method, taking into account the different forms of supply that the Company has chosen, where the energy generation method is certified; the "residual mix" parameter was used in the calculation where the organisation's emissions intensity level is not specified in the signed contracts; for countries where the "residual mix" reference benchmark did not apply (particularly China, Brazil, India, and Singapore), location-based conversion factors are applied.

e emissions intensity indicator16 in recent years, calculated as the ratio between the emissions produced (in tCO2e) and the turnover (in thousands of euro) of the plants reported, is set out in the table.

Emissions intensity	2023	2022	2021	2020	2019
tCO2e on revenues	0.024	0.023	0.026	0.032	0.031

By calculating the indicator with the so-called market-based approach, the 2023 data is reduced to 0.012.

e table below shows the value of the avoided emissions17 thanks to the production of electricity obtained from the photovoltaic systems installed at the plants and the purchase of electricity from certified renewable sources.

Avoided emissions in tCO2e	2023	2022	2021	2020	2019
Yield of PV systems (in MWh)	374	418	418	205	226
Electricity purchased from the grid,
from certified renewable sources (in MWh)	4,304	4,317	6,130	1,915	-
Avoided emissions (in tCO2e)	1,637	1,492	2,063	761	81

Figures for Nox (nitrogen oxide), SO2 (sulphur oxide) and other significant emissions are reported below for companies included in the scope of reporting, breaking them down into vehicle emissions and emissions from production processes:

Emissions in t	2023	2022	2021	2020	2019
Emissions into the atmosphere from motor vehicles
NOx	2.208	2.047	2.344	1.874	2.622
SO2	0.003	0.003	0.003	0.002	0.003
PM10	0.144	0.133	0.150	0.120	0.169
VOC	0.503	0.438	0.275	0.239	0.369
Atmospheric emissions from production processes
VOC	0.844	0.961	1.180	0.223	0.293

17 For calculation purposes, the so-called location-based approach was used, with country-specific conversion factors of grams CO2e/KWh (International Energy Agency forecast 2022 data) for 2023, a factor of equal to 315 KgCO2//MWh (Terna 2019 data) for 2021 and 2022 and a conversion factor of 359 KgCO2/MWh (Terna 2014 data) for previous years.

7.2 MAPPING OF OTHER INDIRECT CO2 EMISSIONS (SCOPE 3)18

A concrete commitment to reducing the impact on the environment must begin with an objective awareness of the CO2 emissions produced throughout the value chain.

It means knowing the emissions generated by the activities managed directly or indirectly in the Group's plants (Scope 1 and 2), but above all being aware of the emissions produced by so-called upstream and downstream processes (Scope 3).

Gefran has been monitoring Scope 1 and 2 emissions on time since 2017 and in 2023 decided to complete the mapping of its carbon footprint, also evaluating the other indirect emissions of Scope 3, in accordance with the Greenhouse Gas Protocol (so-called GHG) and with the support of a consulting firm of industry experts.

Scope 3, therefore, refers to emissions that come from sources and resources owned or controlled by other entities in the value chain (e.g., material suppliers, third-party logistics service providers, waste management service providers, travel providers, lessees and lessors, affiliates, retailers, employees, and customers). In order to avoid double counting, the Company's scope 3 inventory does not include any issues already accounted for as scope 1 or scope 2 by the Company itself.

e GHG Protocol, a widely recognised standard for emissions accounting, provides a framework for classifying Scope 3 emissions into 15 different categories. Here is a description of each category:

1	Purchased goods and services
2	Capital goods
3	Fuel and energy-related activities not included in scopes 1-2 (Fuel and energy-related activities)
5	Waste generated in operations
8	Upstream leased assets
9	Downstream transportation and distribution
	10 Processing of sold products
11	Use of sold products
	15 Investments in JVs or other companies (Investments)

	No. GHG Category	Description of the GHG category
		Emissions associated with the production of goods and
1	Purchased goods and services	services purchased by the organization, including raw
		materials, components and finished products
		Emissions associated with the production of capital goods
2	Capital goods	such as buildings, infrastructure and equipment purchased
		or leased by the organisation
	Fuel and energy-related activities not	Emissions from the extraction, production and transport of
3	included in scopes 1-2	fuels and energy consumed by the organisation, including
	(Fuel and energy-related activities)	electricity, heat and steam
4		Upstream transportation and distribution Emissions associated with the transport and distribution of
		goods and services purchased
5		Emissions from the production and disposal of waste
	Waste generated in operations	produced by the organisation's activities, including solid and
		liquid waste
6		Emissions from employee travel for work purposes, including
	Business Travel	flights, train travel, car rental and other modes of transport
		Emissions from the daily commute of employees to and
7	Employee commuting	from work, whether by car, public transport or other means
	Upstream leased assets	Emissions associated with the production and maintenance
8		of assets leased or leased by the organization, such as
		buildings, vehicles and equipment
	Downstream transportation and	Emissions from the transport and distribution of the
9	distribution	organisation's products to customers
		Emissions associated with the treatment, use and disposal
	10 Processing of sold products	of the products sold by the organization, including the use of
		the products by customers
		Emissions from the use of the products sold by the
		organization, including energy consumed during the use of
11	Use of sold products	the product and any subsequent emissions associated with
		the use of the products.
	12 End-of-life treatment of sold products	Emissions from the disposal, recycling or treatment of
		products at the end of their life cycle
		Emissions associated with the production and maintenance
	13 Downstream leased assets	of assets leased or leased by the organization's customers
		Emissions from franchise or branch activities under the
	14 Franchises	control of the organization
		Issues associated with the organization's investments in
	15 Investments in JVs or other companies	other companies or projects, including equity investments,
	(Investments)	loans and other financial instruments

e first phase of the project saw the definition of the "relevant" categories for Gefran's Scope 3 emissions inventory, evaluating industry standards, Gefran product characteristics and the organisation of processes in the

18 e assessment, conducted including all Group Companies, took 2022 as the reference period.

Group. Considering also the Business Plan and the defined ESG strategy, as well as the best practices of the Industry sector, a specific focus was made on the categories that represent the "upstream" processes of the organization (so-called Upstream) and on the category of transport and distribution "downstream" (so-called Downstream), also by virtue of the commitment necessary for the collection and analysis of data, as well as the subsequent improvement actions to be implemented. is is the approach followed in the assessment carried out, which highlighted the intensively emissive categories, represented in the following scheme and described in the table below. Employee Commuting

Categories not included in Scope3 calculation Categories not included in Scope3 calculation Categories not included in Scope3 calculation Categories not included in Scope3 calculation

Materials transportation

	No. GHG Category	In-Scope? Rationale
1	Purchased goods and services	Yes	Gefran has more than 1000 suppliers from which all raw materials and services are procured and the impact of the emissions produced by their processes is considered significant for the purposes of the Gefran Scope 3 assessment
2	Capital goods	Yes	Capital investments involve the construction or acquisition of tangible assets, such as buildings, plants, machinery or equipment, which typically have a duration and generate emissions during their operational life
3	Fuel and energy-related activities not included in scopes 1-2 (Fuel and energy-related activities)	No	All fuel and energy consumption are included in Gefran's Scopes 1 and 2
4	Upstream transportation and distribution	Yes	A portion of supply comes from different countries, through multimodal routes, generating a significant share of emissions in a product cycle
5	Waste generated in operations	No	Insignificant emissions from the waste produced, by virtue of their nature
6	Business Travel	Yes	Gefran is a multinational company with a direct presence in 11 countries, distributes products through its sales network in 74 countries and manages an international supply chain; business trips are necessary and contribute significantly to the Group's indirect emissions profile
7	Employee commuting	Yes	Being a manufacturing company with about 650 employees, the carbon footprint resulting from daily "home-work" commutes is significant
8	Upstream leased assets	No	Irrelevant, emissions generated from the use of leased assets are included in Gefran's Scope 1 and 2
9	Downstream transportation and distribution	Yes	A portion of finished products is distributed to customers in different countries, through multimodal routes, generating a significant share of emissions in a product cycle
10 11 12	Processing of sold products Use of sold products End-of-life treatment of sold products	No	Not relevant, by virtue of the nature of the Gefran product which does not exercise an independent function
13 14 15	Downstream leased assets Franchises Investments in JVs or other companies (Investments)	No	Not relevant to Gefran

It should be noted in particular that, for categories 10-11-12, an in-depth evaluation was carried out, involving the engineering and research and development teams, in order to estimate the impact of the emissions of the products sold. e analysis highlighted the nature of Gefran products, which do not perform an independent function: the products made and sold by the Group are not used by customers as a final product, but rather components incorporated into their final products, which in an overall assessment will also include emissions related to the Gefran products included therein. Emissions associated with use by customers therefore do not have a significant effect on the overall carbon footprint of Gefran's activities.

e second phase of the project was dedicated to the collection of information, taking 2022 as the reference period, and involved the Parent Company Gefran SpA and all the Group's subsidiaries, depending on their involvement in the various processes, with the support of the company's information system.

e spending was then classified according to the product category of the goods and services purchased as well as, for some categories (for example, employee travel, transport and distribution), the supplier and the accounting nature of the expenditure. At the end of the process, 100% of Gefran's expenditure was mapped and classified through a 4-level taxonomy, in accordance with the

category codes shared with Site Leads.

Subsequently, we focused on the calculation of the emissions generated, applying the emission factors identified for each

category.

e emission factor (so-called EF) represents the amount of a specific pollutant released into the environment, per unit of a particular activity or source. It helps to estimate the emissions generated by a specific process and can vary depending on the approach taken. e ones used are summarised below:

	C1 – C2	C6	C7	C4 – C9
Categories	Purchased goods and services + Capital goods	Business Travel	Employee commuting	Transport and distribution (Upstream & Downstream)
Data source and details included	Extraction of the Spending from corporate information system (Direct, Indirect, Capex)	Extraction of the Spending from corporate information system + Travel Agencies Report (Means of transport, Distance and Expense, Hotel Accommodation)	Employee surveys (Type of transport and vehicle, Frequency, Distance,	Inbound and outbound transport (Expense, Distance, Mode of transport)
EF Database	Specific information from suppliers + CPA08 Product based Database	ICAO Database + UK Defra + Hotel Foodprint	UK Defra	UK Defra
Emissions calculation method		Spend Based Fuel + Spend Based	Distance Based	Distance Based

From the exercise, carried out on the data of 2022, it was possible to obtain the first evaluation of Gefran's Scope 3, for each category

Gefran will continue the mapping work of Scope 3, setting up periodic updates and constantly improving the process and assumptions behind the calculation. By the end of 2023, thanks to the direct involvement of some suppliers, the foundations have been laid to refine the assessment, which in the future will increasingly be based on specific data with respect to the average emissions factors by product category currently applied.

C2 - Capital Expenditure (Capex) 575

C4 - Material transport (upstream) 142

C6 - Business travel 177

e activity carried out in 2023 has also made it possible to obtain a complete view of the Group's carbon footprint, with evidence of the most impacting areas and categories (so-called hotspots). anks to this first step, today Gefran is committed to defining actions and projects with a medium-long term roadmap in order to pursue a decarbonisation strategy, with a first goal of neutralising 25% of CO2e emissions by 2030, partly also through offsetting activities.

CARBON

IMPACT

25%

2030

REDUCTION OF

GEFRAN THE

BY

7.3 WATER MANAGEMENT19

e contribution to the ecological transition also means protecting water resources. Gefran operates to ensure proper management and monitoring of water withdrawals, discharges and consumption, although it is not used in production processes. e company's consumption is only civil in nature and relates mainly to the water withdrawals.

As with energy data, for water withdrawals, as well, in 2020, due to the effects of the pandemic, a reduction was recorded compared to the previous year. Less recourse to smart working in 2021 contributed to increased withdrawals. It should also be noted that beginning in 2021, groundwater withdrawals by Gefran SpA for the irrigation of green areas are also invariably reported.

As already noted for other types of consumption, water withdrawals in 2022 were also lower than 2021 due to the sale of the drives to the WEG group. In 2023, there was a 20.8% increase in water withdrawals compared to 2022, mainly due to the recognition of an adjustment on the previous withdrawals of the US subsidiary.

Water withdrawals in m3	2023	2022	2021	2020	2019
underground water	2,397	2,304	2,055	-	-
third-party water resources (from water mains)	13,324	10,713	17,648	17,252	19,970
Total volume of water withdrawn	15,721	13,017	19,703	17,252	19,970

Some Group companies were unable to report and therefore estimates have been reported based on average consumption for employees in companies of a similar size. is applies to Gefran Siei Asia Pte Ltd (Singapore), while up to the year 2020, estimates were made not only for Gefran Siei Asia Pte Ltd but for Gefran India Private Ltd (India) as well.

e water withdrawal analysis was also conducted, in relation to geographical areas, in terms of water stress, according to the World Resources Institute classification. In 2023, the share of water withdrawn from areas classified as high or extremely high water stress decreased significantly, reaching 47.2% of total withdrawals (91.2% of total volume in 2022). ese categories include the withdrawals of Gefran SpA and Gefran Soluzioni Srl (Italy), Gefran Automation Technology Pte Ltd (China), Gefran Brasil Elettroel. Ltda (Brazil), Gefran Deutschland Gmbh (Germany), Gefran Benelux Nv (Belgium) and Gefran India Private Ltd (India), the latter two being the only Group companies located in an area classified as extremely high water stress. e significant reduction recorded compared to 2022 is the result of the decrease in withdrawals in areas classified as high or extremely high water stress (such as Italy and India) and the updating of the classification itself by the World Resources Institute: in 2022 the areas where the Brazilian and Chinese subsidiaries are located were classified as high water stress, today they are classified as medium-high.

¹⁹ e reporting of water withdrawal data, except as otherwise provided, has been carried out involving all the companies in the Gefran Group with the exception of certain companies, since they are purely concerned with marketing, as well as having a limited volume of business and a small number of employees. For these reasons, their impact on reporting energy and environmental data is deemed to be of marginal relevance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), which until 2022 included the company Gefran Benelux Nv (BE). It is also specified that, in light of the sale of the drives, the 2022 and 2023 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion S.r.l. (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, key data relating to these two entities are highlighted in section "11.3. e contribution to the ecological transition – appendix".

SUSTAINABLE PRODUCT

8.1 PRODUCT SAFETY AND QUALITY

Safety and product quality are key factors and competitive levers of strategic importance.

Gefran has obtained specific certifications guaranteeing operator safety such as, for example, those based on the Atex specifications or Sil2/Pl'd' industrial safety standards. e development processes of new products, the acceptance of the material, the intermediate production phases and final testing are carried out with particular attention to the management of the regulations to be applied and the evaluation of performance.

e commitment to supply cutting-edge safety products is also reflected by the involvement in the work of the Italian Electronic Technical Committee (CEI), which enables the acquisition of knowledge to be applied in product innovation, and the employment of specialised consultants in product certification.

ere is an ongoing commitment to product innovation taking into account European and international safety directives. Since 2017, Gefran has been developing production processes, products and technologies that reduce the potential negative impacts on the environment and people in compliance with the ROHS directive, which introduced restrictions on the use of hazardous materials in electrical and electronic equipment. As a downstream user of chemicals, Gefran operates to ensure that its supply chain fulfils the tasks set out in the European REACH Regulation, ensuring continuity of supply and information to client companies when required.

With specific reference to the pressure sensor range, Gefran provides customers and end users with products with high standards of functional safety (PL-Performance Level and SIL-Safety Integrity Level) and sensors suitable for use in areas exposed to explosion risk (IECEx, ATEX, FM, EAC Ex, Kosha, PESO, Nepsi Ex).

e automation components range also demonstrates the ongoing effort to operate in line with high functioning and safety standards (such as SCCR approval under UL 508) to guarantee that users enjoy a level of protection.

To maintain leadership in product quality and health and safety assurance for users, Gefran has established an effective quality management system, which is systematically updated in compliance with the ISO 9001:2015 requirements. e standard ensures that products comply with certain requirements and applicable regulations (also on a voluntary basis). It is also aimed at finding, selecting and working with suppliers that best meet the company's needs in terms of technological capacity, quality and service. e system contributes to the correct interpretation of needs by laying the foundations for better service delivery, full customer satisfaction and the building of lasting relationships.

e following is an outline of the processes, involving several company areas, that are applied under the Quality Management

-System.

• − Strategy
• − Product plan approval − ree-year plan

Strategic processes	Operative processes	Support processes
− Strategy − Product plan approval − ree-year plan	− Commercial − Innovation − Operations − Procurement	− Management control − Information Systems − Human resources − Measurement, analysis and improvement − Risk management (ERM)

For each process, specific responsibilities are attributed to ensure product quality and safety:

-

/ the Operations Departments and the Chief Technology Officer define the product plan and submit it to the CEO for approval, even for integration into the company's three-year plan;

/ Product Managers indicate the requirements of the customer or the market served (with the assistance of the sales staff), integrate input from the innovation area on trends in technological evolution, and monitor the development of binding regulations and certifications which increase security and therefore add a competitive advantage;

/ R&D develops the product and certifies that it complies with all the characteristics and standards in the technical specifications identified by the Product Managers, including any

additional certifications;

8.2

• / the Product Compliance department, in collaboration with the R&D area, continuously strives to adapt product characteristics to meet the safety requirements of different application sectors and best meet customer needs and meet the mandatory requirements in the various markets in which the company operates;
• / Engineering industrialises and develops products through the analysis and identification of production procedures that mitigate possible risks deriving from the incorrect management of production processes;
• / the Operations area takes care of manufacturing: during the process the necessary control points are in place to ensure compliance with the product characteristics (Gefran performs control tests for 100% of the products and aims to insert automated controls to make them more effective than the manual controls);
• / Quality measures and analyses performance to guide continuous improvement.

In case of critical issues, Purchasing and R&D are promptly involved, which implement specific investigations to diagnose problems, minimise risks and implement prevention plans. If necessary, with the support of the Marketing team, actions are performed to recall the product with repair or replacement to protect the market.

TECHNOLOGICAL INNOVATION

Gefran came about and established itself through important investments in innovation: R&D is a fundamental trait of the company and still represents the fundamental value creation lever. is mission naturally equips the company to achieve the sustainability objectives, which require the ability to innovate processes and products.

R&D is therefore focused on the investigation and application of eco-friendly solutions products, which improve energy consumption.

Sustainable innovation is developed along two lines, both focused on producing products that have evolved functionality, and can guarantee better performance and energy savings: incremental innovation and discontinuous innovation.

Incremental innovation involves enhancement and development of new capabilities and functionalities of products that guarantee energy savings thanks to the intrinsic efficiency of the product and the possibility of managing the process more efficiently (through the greater availability of field data and more advanced control functions).

e company has laid out a product development roadmap across both business areas, which resulted in three main lines of action in 2023:

• / completion of the range of static units equipped with IO-Link and Modbus connectivity, also able to digitalise the deepest components of the machinery and extract the data needed to increase process efficiency;
• / evolution of the multivariate sensor portfolio, i.e., able to reconstruct the three-dimensional movement of a machine element, in order to more accurately predict any malfunctions and contribute to improving cycle efficiency;

output modules, aimed at developing applications for the control of automatic machines that allow better energy performance and greater use of recycled raw materials.

Discontinuous innovation is mainly aimed at expanding the product range of industry 4.0 solutions. e goal is to promote digital culture, the open innovation focus and a market approach to result in an offer that can complement the product with innovative services. Services made possible by collecting data from our sensors and devices and transforming data into information, through algorithms and business intelligence, to improve our customers' core processes.

In 2023, the R&D area of automation components released new products that allow substantial changes in production processes by optimising performance, energy efficiency and error prediction/prevention. e GRM-H range of power controllers, launched in 2022 with the IO-Link digital bus option, has been enhanced, adding the version equipped with Modbus buses. e GRZ-H two- and three-phase static unit and versions of GRP and GRM products without integrated heatsink - also available with IO-Link options – were also developed. Work has also been done to further improve the ability of Gefran regulators to make the customer's thermal processes more efficient: the results of this activity consist of a new version of the 1850 and GFX Termo4 regulators.

In the R&D area of sensors, significant resources have been invested to expand the range of available field buses. Development of the first Gefran magnetostrictive sensor has been completed for Ethercat machine architectures, with high metrological performance and the ability to collect and transmit diagnostic data useful for preventing or mitigating plant failures. is sensor, launched in the second half of the year, fits into the context of the Ethercat-based automation architecture being developed by Gefran.

e miniaturised KM pressure probe was also brought to the market. is probe, in addition to allowing a reduction in the environmental "footprint" thanks to lesser use of raw materials, also constitutes the basis on which to implement digital buses. In particular, the development of the KMC sensor has been started, which implements CanOpen communication based on the KM sensor. is sensor, dedicated to agricultural, construction and material handling machines, allows a greater amount of data to be collected in digital format and therefore contributes to the development of more efficient and safer vehicles for operators.

Finally, the GSH-A multivariate sensor was launched, which combines the tilt and acceleration measurement with the position measurement with thread technology; this sensor allows for identifying the movements of the machine to which it is applied, anticipating malfunctions and providing useful indications to improve the efficiency of the machine.

In 2023, Innovation continued to develop Digital Twin solutions, condition monitoring algorithms and architectures for data transmission from the field to the edge and cloud. In particular, Digital Twin models have been developed both focused on Gefran products and on the production processes managed by them, in order to improve their efficiency. Digital Twin, algorithms and integration towards edge and cloud maximise the potential of products in Ethercat and IO-Link, allowing the use of data generated to develop predictive maintenance or performance optimisation solutions.

8.3 THE DIGITAL TRANSFORMATION

Gefran has long launched important digital transformation projects aimed at optimising operations processes (Gefran Smart Manufacturing). Smart Manufacturing, conceived with a multi-year vision and declined in the areas of Logistics, Factory and Supply Chain, provides for the analysis and review of processes to rationalize them and improve their quality and efficiency, with the ultimate goal of redesigning and digitizing them. Digitalization in particular will also enable environmental impact benefits, allowing a better use of resources to support the execution of processes.

Digitalization makes it possible to acquire a large number of data from the process, exponentially enhancing the possibilities of analysis and monitoring. With the support of standardized procedures, this allows for increased control of the parameters that guarantee production efficiency, improving performance and reducing the risks of error and therefore the generation of waste material. e digital management of documentation and production orders allows a faster and more targeted information flow and at the same time the reduction of the use of supporting paper; the better management of the different types of packaging of the outgoing product rationalises transport.

Some issues addressed in recent years have now become consolidated processes that have led to more efficient communication and a reduction in the use of paper:

• / the management of meetings held by the company's governance bodies through the support of digital tools avoids documents being printed on paper; optical archiving of invoices and books reduces paper consumption;
• / the management of documents concerning relations with employees (pay slips, refunds, etc.) is carried out through a dedicated digital platform avoiding the use of paper forms;
• / the forwarding in digital form to customers of information related to the shipment of the products they have ordered (within Smart Logistics, branch of the Smart Manufacturing project)

/ the management of digital technical information for the SMT area, which allowed to go from 4 sheets to 1 sheet of paper for

each production order.

is last action is the first step towards the goal of a sharp reduction in the use of paper to support production flows (multi-year "Paperless Production" project within Smart Manufacturing).

Gefran is not only involved in the revision of processes with a view to reducing paper consumption, but also in the use of inkjet printers that allow better energy performance and lower material consumption. e set of installed devices leads to savings in electricity and emissions produced, calculated at approximately 11,064 kWh of consumption and 3,662 Kg of CO2 in the 2020-2025 period, certified by Energy Savings.

In packaging management (made with entirely recyclable material), digital transformation helps to optimise transport by more efficiently managing the different types of output product packaging and has helped to replace the printed product manuals, initially (2012) with digital CD media, later (2019) through the publication of online documentation that provides customers and end users with the most up-to-date version.

8.4 CUSTOMER CARE

One of the Gefran's key goals is to support customer companies in improving the performance of technological processes, by ensuring continuity and maximising value. Passion, energy, expertise and innovation allow effective and targeted responses through proprietary technologies that deliver the company promises of reliability, quality and safety.

Customers are overseen by Sales staff in collaboration with the Marketing area, which work together to study specific needs, fields of application and the areas in which the products will be installed to guide the companies' choice as well as possible in compliance with the safety protocols of each application sector.

Gefran also offers its customers a pre- and after-sales technical service and a RMA (Reparation) service accessible from the company portal, which, depending on the geographical area, directs to a telephone contact or an e-mail address to take care of the need.

e customer care also entails the ongoing assessment of the health and safety impacts associated with the use of the products and services provided by the Group. e analysis of the product categories sold, and excluding the binding certifications, shows that for 48% of the series available in the catalogue and sold by the Group in 2023 third-party voluntary product certifications were obtained, which require certain safety requirements in the various areas of application (UL/FM, CSA, EX, PL / SIL and E1 to name a few).

THE SUSTAINABILITY OF THE SUPPLY CHAIN 09

9.1 SHARING CULTURE

Sharing values and ethical principles with the components of the supply chain is a requirement that Gefran considers primary to achieve sustainability objectives. It means ensuring that suppliers are committed to respecting human rights, protecting workers' health and safety, protecting the environment and ensuring traceability of raw materials.

In 2020, Gefran launched the project Promoting a sustainability culture. is targets local suppliers, which are generally small and mid-sized companies with limited access to sustainability solutions and not always equipped with resources to develop actions in this area, even when sensitive to the issues.

e project launch was structured into three phases. In the first phase, an internal training session was held for the working group (the Purchasing and Quality, Safety and Environment department) to acquire basic skills. In the second phase, the documentation used for supplier evaluation audits was reviewed by integrating it with a section dedicated to sustainability issues. In the third phase, an event was organised to involve suppliers: on 25 November 2021, the day Gefran had been dedicating to sustainability for the past three years, the first Supplier Day took place.

e project continued in 2022 with a focus on cutting emissions, the core objective of the business strategy. Two projects were developed with local suppliers, arising from ideas and requests following the 2021 Supplier Day. e first project led to the replacement of traditional packaging that can only be used once with an innovative solution developed to be fully reusable and recyclable. Packaging is specially designed to pack, protect and ship the materials to Gefran and, once delivered, the packaging is returned to the supplier for reuse. is solution reduces the carbon footprint of both Gefran and the supplier.

e second project was carried out by a company that, thanks to the support of Gefran and a specialised consulting company, was able to start the path towards sustainability with an on-site assessment of its context. e evaluation report generated recommendations and possible applications which were translated into an action plan implemented by the company.

During Supplier Day 2022, the Scope 3 emissions calculation plan was shared with suppliers. At the end of the day, a membership pact (ZeroImPact) was symbolically signed which the relevant

suppliers then formally signed themselves.

As usual, Supplier Day was also held in 2023, with the symbolic and evocative title, Step 3, signifying the achievement of a first important goal, the calculation of Gefran's scope 3, but also an ideal starting point for the decarbonisation process. In fact, the focus of the day was to share Gefran's decarbonisation objectives with suppliers, stimulating guests to actively participate in the result through the proposal to implement projects chosen from

a selected list.

e meeting was also an opportunity to reward, with a symbolic recognition, the suppliers who, following the commitment made during supplier day 2022, made a concrete contribution to the

calculation of Scope 3.

FROM OTHER MARKET SUPPLIERS 8,228

9.2 THE SUPPLY CHAIN

Gefran's strategic stakeholders are its suppliers and business partners. Closely involved in the running of the business, they are an essential factor in ensuring the highest quality standards and achieving performance, economic and sustainability objectives.

And not just that: it is often the case that some suppliers, owing to their skills and know-how, are involved from the development phase of new products in jointly designing components and specific or custom parts.

e market in which Gefran operates has variable demand and offers very quick delivery times. Add to this the fact that most of the production is classifiable as high mix-low volume (many finished product codes in the catalogue, each with recurring volumes that are not high), the need arises for a short supply chain, capable of acting quickly and flexibly. For this reason, local suppliers are involved in drawing up procurement plans to respond to rapidly changing demand.

ey make up the supply chain: suppliers of materials in BOM; suppliers of materials not in BOM and services. Gefran's supplier base consists of large multinational groups and local suppliers with specific know-how and flexibility where local suppliers means suppliers belonging to the country where the plant is located.

An analysis was carried out on the expenditure of local suppliers of the companies with the most relevant supply flows for the Group, which includes all production companies and some commercial companies that buy and resell products not manufactured within the Group. for the remaining sales companies, the analysis was conducted in a marginal way, as 90.9% of their procurement comes from intercompany purchases and the remaining part from local supplies.

e analysis showed that in 2023 the total expenditure on procurement was 68.8 million euros (72.8 million in 2022), with an incidence of local supply of 88% on total purchases (89.1% in 2021). To provide more transparent information to the reader, key data relating to these two entities are highlighted in section "11.4. e sustainability of the supply chain – appendix".

Looking at the trend of the last three years, 2021 was also marked by a strong demand for active electronic components (especially microcontrollers and chips), which resulted in significant increases in supply times and a general shortage of materials. For this reason, purchases were also made on the open market (independent suppliers not located in the territory and not belonging to large distributors of electronic components) which guaranteed the continuity of flows of materials and prevented production shutdowns.

In 2022, the chip market crisis intensified, prompting Gefran to introduce new and more effective measures. Collaboration with R&D intensified and made it possible, through partial or total product redesign, to activate second sources for materials that are more difficult to source and yet fundamental to product implementation. At the same time, inter-departmental teams (Purchasing, Logistics and Production) were created to overcome the increase in delivery times, with flexible and dynamic solutions adapted to the complexity and unpredictability of the moment. It has thus been possible to guarantee the continuity of the flows along the supply chain and avoid interruption of production.

9.3 THE RESPONSIBLE MANAGEMENT OF THE SUPPLY CHAIN

Gefran purchases raw materials, products and services from suppliers in culturally and economically different countries. is is why Gefran sets out the general standards for evaluating suppliers and the principles that characterise the Group's approach to sustainable management of the supply chain. Monitoring procurement processes is essential to ensure the highest standards of quality and product security, while respecting the environment and human rights.

Responsible procurement is based on the selection of suppliers through a qualification process that is applied differently according to the category of the purchase (direct, indirect or services). Gefran uses an e-procurement portal on which a form allows preliminary registration and accreditation of new suppliers.

In the case of suppliers of materials employed directly in the production process, information on the productive and economic structure is collected through evaluation questionnaires and information from third parties. e Quality department also performs an audit to certify the suitability of suppliers of components deemed strategic.

For suppliers of indirect materials and services, the qualification procedure is simplified, with the exception of undertakings for the disposal of waste and suppliers of contracted services, which are required to produce the documentation stipulated by the regulations in force for qualification purposes. Since 2020, a dedicated procedure has been developed for service providers. In compliance with the regulations in force, all service providers who require the physical presence of personnel on company premises for the provision of the service are obliged to complete a procedural accreditation process involving the signature and delivery of documents attesting to their professional and documentary qualifications in terms of safety and job protection.

During the qualification process for new suppliers of BOM, the signing of the Sustainability Pact, which integrates adherence to the principles of the Global Compact and the Group Code of Ethics and Conduct, is required as a prerequisite for activating a partnership with aspects relating to the management of environ-

mental, reputational and financial risks.

e key goal of this document is to direct Group companies to work with suppliers who share and implement the Group's vision of sustainability and manage their business in an ethical, responsible way, demonstrating respect for people and the environment.

ese are the assumptions on which the Pact is based, which includes the elements considered essential for a supplier to have a commercial relationship with Gefran:

• / Human rights;
• / Occupational health and safety;
• / Environment;
• / Fight against corruption;
• / Financial solidity;
• / Reputation.

To mitigate the risks of non-respect for human rights, work accidents by minors, forced labour and breaches of freedom of association and collective bargaining, the supplier's evaluation and qualification sheet has been integrated with a section dedicated to workplace health, safety and ethics.

9.4

Gefran has established procurement policies published on the Group's website (https://www.gefran.com/en/pages/85-product-compliance) to assure customers that products comply with the main European and international human rights regulations.

As regards minerals from conflict zones (referred to as Conflict Minerals), Gefran undertakes to procure responsibly and considers mining activities that fuel conflicts to be unacceptable. Gefran's commitment is in line with the activity carried out by the Electronic Industry Citizenship Coalition® (EICC®) and of the Global and Sustainability Initiative (GeSI) to improve the transparency and traceability of metals in the supply chain.

For this purpose, the BOM of the products manufactured by the Group is periodically mapped to identify the presence of the four minerals covered by the regulations (tungsten, tantalum, gold and tin). After this first check, suppliers are subsequently identified who could potentially use such minerals in their production process, and they are required to certify that their procurement does not occur in conflict zones, collecting information according to standards made available by Responsible Minerals Initiatives (RMI).

PROMOTION AND DEVELOPMENT OF THE TERRITORY AND COMMUNITIES

Gefran's close ties with the region where it operates is reflected by its partnership with schools and universities, and the social, educational, health and sports initiatives carried out by the Parent Company Gefran SpA, which bring together several local organisations.

Social projects

In 2023 Gefran supported La corsa di Maya, an event organized by Unicef in support of the fight against climate change, which represents a threat to children at every latitude.

In particular, the proceeds of the race went to the "Schools of recycled plastic" project, with which UNICEF, together with the Colombian start-up Conceptos Plasticos, recycles plastic waste that is suffocating Africa and that would otherwise be burned, fuelling emissions into the atmosphere that cause global warming. is threat to the world is instead transformed into an opportunity for girls and boys in the Ivory Coast: plastic is used to make bricks to build schools.

Gefran has supported the Brescia Respiro Association, which aims to support the clinical, organisational and scientific activities of pneumology in Brescia and throughout the country.

Floods and flooding in Emilia-Romagna in the spring of 2023 shocked an entire community: Gefran has joined the fundraising campaign promoted by the Italian Red Cross, which immediately took action to respond to the emergency and continues to be close to the population of the affected territories even in the reconstruction phase.

TRAINING PROJECTS

In 2023, the Parent Company Gefran SpA financed a number of initiatives to better educate young people.

e company is one of the promoters of Fondazione Itis Benedetto Castelli, a foundation which:

• / proposes and manages initiatives of all kinds aimed at preserving and adding to the technical infrastructure at Istituto di Istruzione Superiore Benedetto Castelli in Brescia;
• / proposes and manages initiatives of all kinds aimed at involving teachers and students from the I.I.S. Castelli to improve the efficacy and efficiency of teaching and learning;
• / promotes and manages initiatives of all kinds aimed at developing synergies between businesses and I.I.S. Castelli to help educate students in the best possible way;
• / promotes initiatives of all kinds aimed at helping I.I.S. Castelli graduates find employment, also by promoting on-the-job experience opportunities.

Gefran helped an I.S.E.O. student participate with a scholarship. Summer School: an academic course on matters relating to the global economy, organised by the Istituto di Studi Economici e per l'Occupazione (Institute for Studies on Economics and Employment), currently chaired by Professor Robert Solow, the winner of the 1987 Nobel Prize for economics.

He has undertaken a project, in collaboration with the Soldano foundation, which will last three years, whose objective is training and education in the use of technology: to provide local boys and girls with ideas and insights through meetings and exchanges with leading figures, witnesses of our contemporaneity. e project involves fourth and fifth year students from some high schools in the province of Brescia.

CULTURAL PROJECTS

e cultural project Alleanza Arte Cultura, which Gefran has joined, continues, which aims to build a lasting relationship, based on participation and mutual benefit between the foundation, companies, educational institutions, institutions and foundations to enhance the artistic heritage of the city of Brescia even by supporting major cultural events.

In 2023 Gefran helped to complete the restoration of the frescoes of the Presbytery, the Cantories, the Transect and the Dome of the Parish Church of Sant'Andrea di Iseo.

PROJECTS FOR SPORT

An essential component for the psychophysical development of the human being, sport has always played a decisive role in our culture, social and family, thanks to its educational function. It represents, in fact, an important moment of training, both from a motor and psychological-emotional point of view, capable of actively contributing to the training of children and young people.

A true educational agency, sport is synonymous with commitment and perseverance, which puts each of us to the test, helping us to overcome limits and achieve dreams.

Aware that today many young people are experiencing an identity crisis capable of triggering feelings of insecurity, vulnerability and fragility, Gefran chooses to support and sponsor sports through support for local sports clubs such as Basket Iseo, Rugby Brescia, ASD Olimpia Lumezzane.

NON-HAZARDOUS 87.7%

9.5 WASTE MANAGEMENT20

e responsible disposal of waste produced is an integral part of the environmental sustainability policy.

Gefran manages it in compliance with the regulations in force in the various countries where it operates, collecting information and data on waste produced to ensure constant monitoring. e activity is implemented through a timely reporting system, followed by the integrated Quality, Safety and Environment function.

For all Group companies, there is a systematic classification of waste types with timely collection of the relevant quantities produced. is allows the identification of waste compliant with the European Waste Code (EWC) and the standardisation of temporary storage areas prior to collection.

^{20 .} e reporting of data on waste produced, where not expressly indicated, was carried out involving all Group companies with the exception of some companies, as they are purely commercial in nature, ana have a limited turnover and small number of employees, so the impact on the reporting of waste produced is considered marginal. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), which until 2022 included Gefran Benelux Nv (BE). Following the sale of the motion control business, the 2022 and 2023 reporting scope changed from the previous years as a result of the subsidiaries Gefran Drives and Motion S.r.l. leaving the Group. (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, key data relating to these two entities are highlighted in section "11.4. e sustainability of the supply chain – appendix".

To facilitate data monitoring and reporting, aggregate indicators based on the values generated by individual establishments have been defined, paying particular attention to the distinction between hazardous and non-hazardous waste and how they are disposed and recovered.

At the same time, training activities (for those involved in handling, providing and managing temporary deposits) and awareness-raising takes place among workers.

In addition, reference figures for the implementation of the Environmental Management System have been appointed and an internal waste management audit programme has been introduced. ese latter activities, together with the monitoring of performance indicators, help to identify the actions necessary to continuously improve environmental performance. For example, internal personnel were involved in the redesign of the processes that generate certain types of waste and technical and technological measures were introduced to improve the processes and in particular reduce the waste produced by the manufacturing departments. Increasing attention is paid to the use of materials and packaging with less environmental impact in the products made by Gefran and in active collaboration with external partners in order to improve the impact of the Group's transport activities

and procurement logistics.

In 2023, waste produced, a total of 346 t, decreased by 22.8% compared to the previous year when 448 t had been produced. e reduction is mainly attributable to the Group's Italian plants that have reduced the waste produced by 21%, partly thanks to the actions implemented and partly as a result of lower production volumes compared to 2022.

e waste generated by Gefran's activities is mainly of a non-hazardous nature and only a small part of these are defined as hazardous (only 12.3% of the total). In particular, 43 t of hazardous waste were produced in 2023 (47 t in 2022), continuing the trend of reduction compared to previous years (-9.6% compared to 2022).

To increase sensitivity to the effects of climate change, the European Union urges companies to assess the impact of its activities and define business strategies taking into account environmental and social variables.

In order to guarantee transparency and comparability, the European Union has defined common criteria to establish the effective environmental sustainability of an economic activity collected in the so-called EU Taxonomy (Reg. EU 2020/852). e Regulation, an important step towards a clear reporting of commitments made and activities carried out by companies, is a tool that makes it possible to identify environmentally sustainable economic activities, to promote a transition towards a zerocarbon future/society and to direct financing towards solutions to address the climate crisis and prevent further environmental degradation.

In particular, an economic activity can be considered eligible if it contributes in a concrete way to the achievement of at least one of the four defined objectives:

In order for a business activity to be admissible, it is also necessary for it not significantly damage the attainment of the environmental goals identified, to be carried out in compliance with the minimum safeguards (CSR and Human Rights Requirements, OECD Guidelines and UN Guiding Principles on Business and Human Rights, etc.) and comply with the technical criteria set out in the Delegate Act of 4.6.2021 and its Annexes I and II.

Regulation 2020/852 (article 8), requires in particular that companies subject to the obligation to publish non-financial information pursuant to article 19 bis or article 29 bis of Directive 2013/34/EU (and therefore Directive 2014/95/EU - NFRD and the Legislative Decree of 30 December 2016, No. 254, which has transposed it into Italian law) include, in their Non-Financial Statements starting on 1 January 2022, information on how and to what extent their activities are environmentally sustainable. e methodology and indicators to be reported are specified in the underlying Delegate Act C2021/4987 and its Annexes.

To date, the European legislator requires us to provide a measure of aligned economic activities with respect to the first two objectives concerning climate aspects, specifically activities that contribute to climate change mitigation and adaptation objectives, while it requires us to provide a measure of eligibility with respect to all 6 objectives.

It should be noted in this regard that "eligible activity" means the economic activity described in the delegated acts adopted pursuant to articles 10 to 15 of EU Regulation 2020/852, regardless of whether it meets some or all of the technical examination criteria laid down in the acts. As of 1January 2023, it is necessary to verify and confirm whether the activities identified are aligned with the technical criteria described in the Annexes to the Regulation, for the first two objectives.

is paragraph gives evidence of Gefran's activities related to the objectives set out above, through the share of turnover generated (Revenues), investments (Capex) and operating costs (Opex) for 2023. e following were considered:

/ revenues from the sale of goods and services to third parties by the Group in accordance with international accounting standards as set forth in the Group's Annual Financial Report;

/ investments made by the Group, as an increase in the historical cost of intangible assets, tangible fixed assets and usage rights, in accordance with international accounting standards as set

• forth in the Group's Annual Financial Report;

/ operating costs of the Group, understood as non-capitalized direct costs related to research and development, building renovation measures, short-term leasing, maintenance and repair necessary to ensure the continuous and effective operation of these assets.

For the purpose of calculating the share of operating costs relating to eligible and aligned economic activities, repair and maintenance costs (including functional IT costs), research and development costs, personnel costs for repairs and maintenance, building renovation refurbishment measures, and short-term rentals for the activities subject to reporting shall be taken into account.

To identify eligible and aligned activities, the Group carried out an analysis in different areas.

An analysis of the activities included in the scope was carried out (also following the statistical classification of economic activities of the European Union, NACE code) identifying, if any, the correlation with the activities declared eligible as indicated in the Delegate Act and the respective Annex.

Subsequently, the characteristics of the activities described in the Regulations were considered and the relevance to the operational activities carried out by the Gefran Group companies was assessed.

Following the analysis, the activities listed in the table are considered to be aimed at climate change mitigation and adaptation objectives and suitable for taxonomy.

ID Activity

	Climate change mitigation	Adaptation to climate change	Water Pollution Circular		economy Biodiversity
Manufacture of electrical and electronic equipment				X
Collection and transport of non-hazardous and hazardous waste				X
Provision of data-driven IT/ OT solutions				X
Repair, redevelopment and remanufacturing				X
Production of electricity using solar photovoltaic technology	X
Construction of new buildings	X
Installation, maintenance and repair of energy efficiency devices	X
Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces pertaining to buildings)	X
Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance of buildings	X
Installation, maintenance and repair of renewable energy technologies	X

CE 1.2	Manufacture of electrical
CE 2.3	Collection and transport of non-hazardous and hazardous waste
CE 4.1	Provision of data-driven IT/
CE 5.1	Repair, redevelopment and
CCM 4.1	Production of electricity using solar photovoltaic technology
CCM 7.1	Construction of new
CCM 7.3	Installation, maintenance and repair of energy efficiency devices
CCM 7.4	Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces pertaining to buildings)
CCM 7.5	Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance of buildings
CCM 7.6	Installation, maintenance and repair of renewable energy technologies

ese activities led to the recording in 2023 of the data reported

below.

	Circular adaptation Water Pollution economy Biodiversity		Minimum safeguards	Share of taxonomy aligned (A.1.) or eligible (A.2.) Revenues, year 2022	Enabling activities category	Transition activities category	Qualitative comments and/or information
Yes/No	Yes/No Yes/No	Yes/No	Yes/No	Yes/No	Yes/No	%	A	T

								Criteria for substantial contribution						DNSH criteria ("do no significant harm") (h)
Economic activities		Code (a) Revenues Revenues,	year 2023	"Climate change mitigation "	Adaptation to climate change Water		Pollution	Circular	economy Biodiversity	Climate change mitigation Climate change		adaptation Water		Pollution	Circular	economy Biodiversity	Minimum safeguards	Share of taxonomy aligned (A.1.) or eligible (A.2.) Revenues, year 2022	Enabling activities category	Transition activities category
Text		Euro/000		% "Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"		Yes/No	Yes/No Yes/No		Yes/No	Yes/No	Yes/No	Yes/No	%	A	T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (taxonomy aligned)
CCM 7.3 Installation, maintenance and repair of energy efficiency devices	CCM 7.3		0.0%															0.0%
CCM 7.6 Installation, maintenance and repair of renewable energy technologies	CCM 7.6		0.0%															0.5%
Revenues of environmentally sustainable activities ( taxonomy aligned) (A.1)		0,00	0.0%	0.0%		0.0% 0.0%	0.0%	0.0%	0.0%		Yes	Yes	Yes	Yes	Yes	Yes	Yes	0.6%
Of which enabling			0.0%	%	%	%	%	%	%		Yes	Yes	Yes	Yes	Yes	Yes	Yes	0.6%	A
Of which transition			0.0%	%	%	%	%	%	%		Yes	Yes	Yes	Yes	Yes	Yes	Yes	%		T
A.2 Taxonomy-eligible but not environmentally sustainable activities (taxonomy non-aligned activities) (g)
		Euro/000	%	EL; N/EL (f)	EL; N/EL (f)	EL; N/ EL (f)		EL; N/EL (f) EL; N/EL (f) EL; N/EL (f)
CE 1.2 Manufacture of electrical and electronic equipment	CE 1.2	117,666	89.6%	N/EL	N/EL	N/EL	N/EL	EL	N/EL									%
EC 2.3 Collection and transport of non-hazardous and hazardous waste	CE 2.3	-	0.0%	N/EL	N/EL	N/EL	N/EL	EL	N/EL									%
CE 4.1 Provision of data-driven IT/OT solutions	CE 4.1	495	0.4%	N/EL	N/EL	N/EL	N/EL	EL	N/EL									%
CE 5.1 Repair, redevelopment and remanufacturing	CE 5.1	1,113	0.8%	N/EL	N/EL	N/EL	N/EL	EL	N/EL									%
CCM 4.1 Production of electricity using solar photovoltaic technology CCM 4.1		-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
CCM 7.1 Construction of new buildings	CCM 7.1	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
CCM 7.3 Installation, maintenance and repair of energy efficiency devices	CCM 7.3	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces pertaining to buildings)	CCM 7.4	12	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance of buildings	CCM 7.5	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
CCM 7.6 Installation, maintenance and repair of renewable energy technologies	CCM 7.6	1,197	0.9%	EL	N/EL	N/EL	N/EL	N/EL	N/EL									%
Revenues of taxonomy-eligible but not environmentally sustainable activities (taxonomy non-aligned activities) (A.2)		120,483	91.8%	0.9%		0.0% 0.0%	0.0%	90.8%	0.0%									%
A. Revenues of taxonomy eligible activities (A.1+A.2)		120,483	91.8%	0.9%		0.0% 0.0%	0.0%	90.8%	0.0%									0.6%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Revenues of taxonomy non-eligible activities		10,824	8.2%
Total (A + B)		131,307 100.0%

Qualitative comments and/or information	Transition activities category	Enabling activities category	Share of taxonomy aligned (A.1.) or eligible (A.2.) CapEx, year 2022	Minimum safeguards	economy Biodiversity	Circular	Pollution		adaptation Water
	T	A	%	Yes/No	Yes/No	Yes/No	Yes/No		Yes/No Yes/No	Yes/No

								Criteria for substantial contribution					DNSH criteria ("do no significant harm") (h)
Economic activities	Code (a)	CapEx	CapEx share, year 2023	Climate change mitigation	Climate change adaptation Water		Pollution	Circular	economy Biodiversity	Climate change mitigation Climate change	adaptation Water		Pollution	Circular	economy Biodiversity	Minimum safeguards	Share of taxonomy aligned (A.1.) or eligible (A.2.) CapEx, year 2022	Enabling activities category	Transition activities category
Text		Euro/000		% "Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	Yes/No		Yes/No Yes/No	Yes/No	Yes/No	Yes/No	Yes/No	%	A	T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (taxonomy aligned)
CapEx of environmentally sustainable activities (taxonomy aligned) (A.1)		0,00	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	0.0%
Of which enabling			0.0%	%	%	%	%	%	%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	%	A
Of which transition A.2 Taxonomy-eligible but not environmentally sustainable			0.0%	%	%	%	%	%	%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	%		T
activities (taxonomy non-aligned activities) (g)		Euro/000	%	EL; N/EL (f)	EL; N/EL (f)	EL; N/ EL (f)		EL; N/EL (f) EL; N/EL (f) EL; N/EL (f)									%
CE 1.2 Manufacture of electrical and electronic equipment	CE 1.2	1,887	17.9%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
EC 2.3 Collection and transport of non-hazardous and hazardous waste	CE 2.3	18	0.2%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CE 4.1 Provision of data-driven IT/OT solutions	CE 4.1	12	0.1%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CE 5.1 Repair, redevelopment and remanufacturing	CE 5.1	-	0.0%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CCM 4.1 Production of electricity using solar photovoltaic technology CCM 4.1		752	7.1%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.1 Construction of new buildings	CCM 7.1	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.3 Installation, maintenance and repair of energy efficiency devices	CCM 7.3	506	4.8%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces pertaining to buildings)	CCM 7.4	28	0.3%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance of buildings	CCM 7.5	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.6 Installation, maintenance and repair of renewable energy technologies	CCM 7.6	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CapEx of taxonomy-eligible but not environmentally sustainable activities (taxonomy non-aligned activities) (A.2)			3,203 30.3%	12.2%		0.0% 0.0%	0.0%	18.1%	0.0%								0%
A. CapEx of taxonomy eligible activities (A.1+A.2)			3,203 30.3%	12.2%		0.0% 0.0%	0.0%	18.1%	0.0%								0%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CapEx of taxonomy non-eligible activities		7,360	69.7%

Total (A + B) 10,563 100.0%

		Criteria for substantial contribution				DNSH criteria ("do no significant harm") (h)
		economy Biodiversity	Climate change mitigation Climate change	adaptation Water		Pollution	Circular	economy Biodiversity	Minimum safeguards	Share of taxonomy aligned (A.1.) or eligible (A.2.) OpEx, year 2022	Enabling activities category	Transition activities category	Qualitative comments and/or information
(b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	Yes/No		Yes/No Yes/No	Yes/No	Yes/No	Yes/No	Yes/No	%	A	T

œ
	. 07

Economic activities	Code (a)	Opex	OpEx share, year 2023	Climate change mitigation	Climate change adaptation Water		Pollution	Circular	economy Biodiversity	Climate change mitigation Climate change	adaptation Water		Pollution	Circular	economy Biodiversity	Minimum safeguards	taxonomy aligned (A.1.) or eligible (A.2.) OpEx, year 2022	Enabling activities category	Transition activities category
Text		Euro/000		% "Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	"Yes; No; N/EL (b) (c)"	Yes/No	Yes/No Yes/No		Yes/No	Yes/No	Yes/No	Yes/No	%	A	T
A. TAXONOMY ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (taxonomy aligned)
CCM 7.3 Installation, maintenance and repair of energy efficiency devices	CCM 7.3		0.0%														0.0%
CCM 7.6 Installation, maintenance and repair of renewable energy technologies	CCM 7.6		0.0%														0.1%
OpEx of environmentally sustainable activities ( taxonomy aligned) (A.1)		0,00	0.0%	0.0%		0.0% 0.0%	0.0%	0.0%	0.0%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	0.1%
Of which enabling			0.0%	%	%	%	%	%	%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	0.1%	A
Of which transition			0.0%	%	%	%	%	%	%	Yes	Yes	Yes	Yes	Yes	Yes	Yes	%		T
A.2 Taxonomy-eligible but not environmentally sustainable activities (taxonomy non-aligned activities) (g)
		Euro/000	%	EL; N/EL (f)	EL; N/EL (f)	EL; N/ EL (f)			EL; N/EL (f) EL; N/EL (f) EL; N/EL (f)
CE 1.2 Manufacture of electrical and electronic equipment	CE 1.2	1,260	24.9%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
EC 2.3 Collection and transport of non-hazardous and hazardous waste	CE 2.3	-	0.0%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CE 4.1 Provision of data-driven IT/OT solutions	CE 4.1	179	3.5%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CE 5.1 Repair, redevelopment and remanufacturing	CE 5.1	-	0.0%	N/EL	N/EL	N/EL	N/EL	EL	N/EL								%
CCM 4.1 Production of electricity using solar photovoltaic technology CCM 4.1		-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.1 Construction of new buildings	CCM 7.1	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.3 Installation, maintenance and repair of energy efficiency devices	CCM 7.3	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces pertaining to buildings)	CCM 7.4	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
CCM 7.5 Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance	CCM 7.5	12	0.2%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
of buildings CCM 7.6 Installation, maintenance and repair of renewable energy technologies	CCM 7.6	-	0.0%	EL	N/EL	N/EL	N/EL	N/EL	N/EL								%
OpEx of taxonomy-eligible but not environmentally sustainable activities (taxonomy non-aligned activities) (A.2)		1,451	28.7%	0.2%		0.0% 0.0%	0.0%	28.4%	0.0%								%
A. OpEx of taxonomy eligible activities (A.1+A.2)		1,451	28.7%	0.2%		0.0% 0.0%	0.0%	28.4%	0.0%								0.1%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
OpEx of taxonomy non-eligible activities			3,608 71.3%
Total (A + B)			5,059 100.0%

Legend:

a)

e code contains the abbreviation of the objective the economic activity can make a substantial contribution to, and the section number of the activity in the

corresponding annex of the objective, namely:

• / climate change mitigation: CCM
• / climate change adaptation: CCA
• / water and marine resources: WTR
• / circular economy: CE
• / prevention and reduction of pollution: PPC
• / biodiversity and ecosystems: ORGANIC

If activities can make a substantial contribution to more than one objective, codes for all objectives should be indicated.

(b)

Yes – e activity is taxonomy eligible and taxonomy aligned with the relevant environmental objective

No – e activity is taxonomy eligible but taxonomy non-aligned with the relevant environmental objective

N/EL – Non-eligible; the activity is taxonomy non-eligible for the relevant objective (c) If the economic activity contributes substantially to more than one environmental objective, non-financial corporations shall indicate, in bold, the most important environmental objective for the purpose of calculating the KPIs of financial corporations, avoiding double counting. If the use of financing proceeds is not known, financial firms calculate in their respective KPIs the financing of economic activities that contribute to multiple environmental objectives under the most important environmental objective indicated in bold in this model by non-financial firms. An environmental objective can be indicated in bold only once in a row to avoid double counting of economic activities in the KPIs of financial firms. is does not apply to the calculation of taxonomy aligned economic activities for financial products defined in Article 2 (12) of Regulation (EU) 2019/2088. Non-financial corporations also report the degree of eligibility and alignment by environmental objective, including the alignment to each environmental objective of activities that contribute substantially to various objectives, using the following model:

SHARE OF CAPEEX/CAPEEX TOTAL

	Taxonomy aligned with objective	Taxonomy eligible for objective
CCM	0,0%	12,2%
CCA	0,0%	0,0%
WTR	0,0%	0,0%
CE	0,0%	0,0%
PPC	0,0%	18,1%
BIOORGANIC	0,0%	0,0%

OPEX SHARE/OPEX TOTALS

	Taxonomy aligned with objective Taxonomy eligible for objective
CCM	0,0%	0,2%
CCA	0,0%	0,0%
WTR	0,0%	0,0%
CE	0,0%	0,0%
PPC	0,0%	28,4%
ORGANIC	0,0%	0,0%

An activity may be aligned with one or more environmental objectives for which it is eligible.

An activity may be eligible and not aligned with the relevant environmental objectives.

EL – Taxonomy eligible activity for the relevant objective; N/EL – Taxonomy non-eligible activity for the relevant objective

(d)
(e)
(f)
(g)
(h)

e activities are indicated in section A.2 of this model only if they are not aligned with any environmental objective for which they are eligible. Activities that align with at least one environmental objective are indicated in section A.1 of this model.

In order to be able to enter an activity in section A.1, it must comply with all DNSH criteria and the related minimum safeguards. For the activities listed in section A.2 non-financial corporations may voluntarily fill in columns 5 to 17. Non-financial corporations may indicate in section A.2 the substantial contribution and DNSH criteria met or not met, using: a) for the substantial contribution – Yes/No and N/EL codes instead of EL and N/EL and b) for DNSH – Yes/No codes.

REVENUES SHARE/TOTAL REVENUES

Taxonomy aligned with objective Taxonomy eligible for objective

CCM	0,0%	0,9%
CCA	0,0%	0,0%
WTR	0,0%	0,0%
CE	0,0%	0,0%
PPC	0,0%	90,8%
ORGANIC	0,0%	0,0%

e analysis was carried out with the support of the R&D, Operations, Q-HSE functions, and the product portfolio, the investment plan as well as the details of operating expenses were verified.

In particular, the activities that contribute to the objective of climate change mitigation, identified according to their descrip-

tion, are:

/ Production of electricity using solar photovoltaic technology (CCM 4.1): refers to the production of solar energy, through the photovoltaic systems installed at the Group's plants; investments in new installations are considered eligible (in 2023 one new plant was installed in Italy and one in Germany, for a total of

/ Construction of new buildings (CCM 7.1): refers to the construction of new areas, built in compliance with efficiency criteria; in 2023 there were no operations related to this activity.

/ Installation, maintenance and repair of energy efficiency devices (CCM 7.3): refers to the renovation of systems, in favour of the efficiency of the buildings that house the work areas; investments that have concerned the installation of efficient lighting systems (LEDs), new heating and cooling systems (in 2023 a total of €506,000 was invested) are considered eligible.

/ Installation, maintenance and repair of charging stations for electric vehicles in buildings and spaces used for parking pertaining to buildings (CCM 7.4): this includes charging stations; revenues generated from installations carried out at customers by the subsidiary Elettropiemme Srl (Euro 12 thousand in 2023), investments in new installations (Euro 28 thousand in 2023, in subsidiaries in Germany and Benelux) are considered eligible.

- Euro 752 thousand).

-

• 2023 Euro 12 thousand).
• (Euro 1,197 thousand in 2023).

/ Installation, maintenance and repair of instruments and devices for measuring, adjusting and controlling the energy performance of buildings (CCM 7.5): the Company uses this type of device (Datalogger) to monitor the energy performance of machinery and plants; no new installations have been carried out, however, maintenance costs have been incurred for existing ones (in

/ Installation, maintenance and repair of renewable energy technologies (CCM 7.6): refers to the installation of photovoltaic systems at customers carried out by the Italian subsidiary Elettropiemme Srl, which also provides maintenance services; the revenues generated by this business are considered eligible

With regard to the activities that contribute to the Circular Economy objective, depending on the description, the following are noted:

• / Manufacture of electrical and electronic equipment (EC 1.2): refers to the production of sensors, instruments, static units, power controllers, programmable automation, as well as electrical panels; the revenues generated from the sale of these products (in 2023 Euro 117,666 thousand), investments and research and development costs necessary for their maintenance and evolution (in 2023 respectively Euro 1,887 thousand and Euro 1,260 thousand) are considered eligible.
• / Collection and transport of non-hazardous and hazardous waste (EC 2.3): refers to the activity of collecting separated waste, for which investments were made in new equipment in 2023 (in 2023 Euro 18 thousand).
• / Provision of data-oriented IT/OT solutions (CE 4.1): refers to the production of static units and power controllers with functionalities based on IT/OT technology; the revenues generated from the sale of these products (in 2023 Euro 495 thousand) and the research and development costs necessary for their maintenance and evolution (in 2023 Euro 1779 thousand) are considered eligible.
• / Repair, requalification and remanufacturing (EC 5.1): refers to the activity carried out by the Company to repair out-of-warranty products; the revenues generated from the provision of this type of service are considered eligible (in 2023 Euro 1,113 thousand).

e analysis for the eligibility of the aforementioned activities is based on the interpretation of the legislation in force on the date of publication of this document. It is not certain that in the future the evolution of the legislation will allow us to continue to report these activities as admissible, and/or to expand the scope of alignment. To date, in fact, based on the analyses carried out, the characteristics of the activities identified as eligible for the Climate Change Mitigation objective do not fully comply with the technical criteria defined by the taxonomy for alignment purposes, and therefore none of them can be considered aligned.

During 2023 Gefran expanded the analysis of taxonomic activities to include the 4 new environmental objectives. Although the Regulation only required an analysis for the purposes of the eligibility of the activities of the new objectives, Gefran conducted an examination in order to also evaluate a possible alignment of the same not detectable today. However, any evolution of the taxonomic legislation and future clarifications of the same, Gefran does not exclude the possibility that these activities become in all respects environmentally sustainable.

In 2024, the analysis will continue, in order to incorporate possible evolutions of the legislation or of the technical characteristics of the activities carried out by the Group, with the ultimate objective of identifying possible activities eligible to date that are not accountable, and assessing the actual degree of alignment with the technical criteria of environmental sustainability of the taxonomy with respect to which to provide the necessary disclosure.

EU Regulation 2022/1214, amending EU Delegated Regulation 2021/2139, establishes the procedures for the communication of information on economic activities related to nuclear energy and fossil fuels. Gefran carried out the necessary verification activities and no economic activities related to nuclear energy or fossil fuels were found.

MODEL 1 - NUCLEAR AND FOSSIL GAS RELATED ACTIVITIES.

Activities related to nuclear energy

- 1.

- 2.

• 1. in their safety.

1.	'e company carries out, finances or has exposures to research, development, demonstration and construction of innovative plants for the generation of electricity that produce energy from nuclear processes with a minimum amount of waste from the fuel cycle.	NO
2.	'e company carries out, finances or has exposures to the construction and safe operation of new nuclear plants for the generation of electricity or process heat, also for district heating purposes or for industrial processes such as the production of hydrogen, and improvements in their safety, with the help of the best available technologies.	NO
3.	'e company carries out, finances or has exposures towards the safe operation of existing nuclear plants that generate electricity or process heat, including for district heating or for industrial processes such as the production of hydrogen from nuclear energy, and improvements in their safety.	NO
	Fossil gas activities
	4. 'e company carries out, finances or has exposures the construction or operation of plants for the production of electricity using natural gas fossil fuels.	NO
	'e company carries out, finances or has exposures to the construction, redevelopment and
5.	management of combined heat/cold and electricity generation plants that use natural gas fossil fuels.	NO
	6. 'e company carries out, finances or has exposures to the construction, redevelopment and
	management of heat generation plants that produce heat/cold using natural gas fossil fuels.	NO

Fossil gas activities

1. fuels.

11.1 RESPONSIBLE MANAGEMENT OF THE BUSINESS – APPENDIX

Information on the tax impact of the Group's entities operating in each jurisdiction is provided below. Note that the figures derive from the Group's Financial Report, referring only to ongoing activities and in particular, with regard to the item Income taxes of the companies accrued on profits/losses, report only current taxes accrued on corporate income during the period (deferred tax assets and liabilities are therefore excluded).

Taxation by country							2023
		Entity's main activities	Number of employees at 31.12	Revenues from sales to third parties	Revenues from infragroup transactions with other tax jurisdictions	Pre-tax profit/ (loss)	Corporate income taxes accrued on profits/ losses
				Euro/000	Euro/000	Euro/000	Euro/000
Italy			428	52,874	36,711	14,634	(2,368)
	Gefran Spa	Production, Marketing and Central Services
	Gefran Soluzioni Srl	Production and Sales
	Elettropiemme Srl	Production and Sales
Belgium	Gefran Benelux NV	Sales	15	6,387	-	610	(168)
France	Gefran France S.A.	Sales	8	5,332	-	576	-
Germany	Gefran Deutschland GmbH	Sales	26	19,055	16	2,302	(652)
UK	Gefran UK Ltd	Sales	2	683	-	124	-
	Switzerland Sensormate A.G.	Production and Sales	17	2,052	1,992	(44)	-
United States	Gefran Inc	Production and Sales	35	12,793	1,274	1,441	(257)
Brazil	Gefran Brasil Elettroel. Ltda	Production and Sales	33	5,648	1	935	(127)
	Singapore Gefran Asia Pte Ltd	Sales	8	6,432	1	1,170	(49)
China (Peoples' Republic)	Gefran Automation Technology Co. Ltd	Production and Sales	59	14,823	661	271	-
India	Gefran India Private Ltd	Sales	20	5,228	-	632	(155)
	Total current taxes within the Group attributable to companies						(3,776)

Taxation by country			2021
activities	Number of Entity's main employees at 31.12	Revenues from sales Revenues from to third infragroup parties transactions with other tax jurisdictions	Corporate Pre-tax income profit/ taxes (loss) accrued on profits/ losses

Euro/000

Italy Gefran Spa Gefran Drives and Motion Srl Gefran Soluzioni Srl Elettropiemme Srl Belgium Gefran Benelux NV Sales France Gefran France S.A. Sales Germany Gefran Deutschland Sales GmbH Siei Areg Gmbh Gefran UK Ltd Sales Gefran Middle East Sales Ltd Sti Gefran Inc Gefran Brasil Elettroel. Ltda Gefran Siei Drives Tech. Pte Ltd			Euro/000		Euro/000 Euro/000
UK Switzerland Sensormate A.G. Turkey United States Brazil Singapore Gefran Siei Asia Pte Ltd Sales China (Peoples'	Production, Marketing and Central Services	542	75,532	42,503	14,312	(3,215)
	Production and Sales
	Production and Sales
	Production and Sales
		16	5,284	-	426	(119)
		5	4,646	-	558	-
		34	20,996	107	1,337	(375)
	Production and Sales
		2	615	4	52	-
	Production and Sales	17	1,481	2,671	(57)	-
		-	-	-	(48)	-
	Production and Sales	32	9,943	1,194	593	(131)
	Production and Sales	29	3,725	2	472	(142)
		10	7,587	1	538	(65)
Republic)	Production and Sales	69	20,233	983	1,455	-
India Gefran India Private Ltd Production and Sales		30	8,340	6	391	-
Total current taxes within the Group attributable to companies						(4,047)

Taxation by country							2022
		Entity's main activities	Number of employees at 31.12	Revenues from sales to third parties	Revenues from infragroup transactions with other tax jurisdictions	Pre-tax profit/ (loss)	Corporate income taxes accrued on profits/ losses
				Euro/000	Euro/000	Euro/000	Euro/000
Italy			424	52,767	40,223	14,658	(3,235)
	Gefran Spa	Production, Marketing and Central Services

		Central Services
	Gefran Soluzioni Srl	Production and Sales
	Elettropiemme Srl	Production and Sales
Belgium	Gefran Benelux NV	Sales	16	6,100	-	581	(157)
France	Gefran France S.A.	Sales	6	4,969	-	620	-
Germany	Gefran Deutschland GmbH	Sales	26	20,512	18	2,519	(760)
UK	Gefran UK Ltd	Sales	2	671	-	112	-
	Switzerland Sensormate A.G.	Production and Sales	16	1,962	2,968	(1,100)	-
Turkey	Gefran Middle East Ltd Sti	Sales	-	-	-	(12)	-
United States	Gefran Inc	Production and Sales	36	13,754	1,418	1,496	(460)
Brazil	Gefran Brasil Elettroel. Ltda	Production and Sales	32	5,169	2	975	(281)
	Singapore Gefran Siei Asia Pte Ltd	Sales	10	6,016	1	261	(27)
China (Peoples' Republic)	Gefran Siei Drives Tech. Pte Ltd	Production and Sales	63	15,516	406	434	-
India	Gefran India Private Ltd	Production and Sales	28	5,056	-	(6)	(48)
		Total current taxes within the Group attributable to companies					(4,968)

11.2 - THE CENTRALITY OF PEOPLE – APPENDIX

Reporting on data on personnel management, on gender equality, discussions with social partners and respect for human rights, except as otherwise provided, involved all Group companies. It should be noted that, in light of the sale of the drives, the 2022 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg (DE).

Employees by company and gender		2023			2022				2021
		W	M	T	W	M	T	W	M	T
Gefran Spa	Italy						142 199 341 136 195 331 127 183 310
Gefran Drives and Motion Srl	Italy	-	-	-	-	-	-		32 110 142
Gefran Soluzioni Srl	Italy	8	45	53	8	51	59	9	46	55
Elettropiemme Srl	Italy	3	31	34	2	32	34	2	33	35
Gefran Benelux NV	Belgium	5	10	15	5	11	16	5	11	16
Gefran France S.A.	France	1	7	8	1	5	6	1	4	5
Gefran Deutschland GmbH	Germany	8	18	26	9	17	26	7	15	22
Siei Areg Gmbh	Germany	-	-	-	-	-	-	1	11	12
Gefran UK Ltd	UK	1	1	2	1	1	2	1	1	2
Sensormate A.G.	Switzerland	4	13	17	4	12	16	3	14	17
Gefran Inc	United States	12	23	35	10	26	36	6	26	32
Gefran Brasil Elettroel. Ltda	Brazil	12	21	33	9	23	32	7	22	29
Gefran Asia Pte Ltd	Singapore	4	4	8	5	5	10	5	5	10
Gefran Automation Technology Co. Ltd	China (People's Republic)	28	31	59	30	33	63	32	37	69
Gefran India Private Ltd	India	3	17	20	4	24	28	4	26	30
TOTAL GROUP							231 420 651 224 435 659 242 544 786

Employees by geographical area and gender			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Italy				153 275 428 146 278 424 170 372					542
Europe	19	49	68	20	46	66	18	56	74
America	24	44	68	19	49	68	13	48	61
Asia	35	52	87	39	62	101	41	68	109
TOTAL GROUP				231 420 651 224 435 659 242 544 786

Employees by age group and gender			2023			2022			2021
	W	M	T	W	M	T	W	M	T
<= 29 years	26	48	74	23	47	70	26	57	83
30-50 years		155 248		403 155 254			409 159 308		467
>= 51 years		50 124	174		46 134	180		57 179	236
TOTAL GROUP		231 420		651 224 435			659 242 544		786
<= 29 years	4%	7%		11% 3%	7%		11% 3%	7%	11%
30-50 years		24% 38%		62% 24% 39%			62% 20% 39%		59%
>= 51 years		8% 19%	27%		7% 20%	27%		7% 23%	30%
TOTAL GROUP						35% 65% 100% 34% 66% 100% 31% 69% 100%
Employees by contract type and

Open-ended
Fixed term
TOTAL GROUP

gender			2023		2021
	W	M	T	W	M	T	W	M	T
Open-ended		229 415 644 223 433 656 241 544 785
Fixed term	2	5	7	1	2	3	1	-	1
TOTAL GROUP		231 420 651 224 435 659 242 544 786

Employees by employment type and gender			2023				2021
	W	M	T	W	M	T	W	M	T
No. full time employees		205 416 621 200 432 632 214 539 753
No. part-time employees	26	4	30	24	3	27	28	5	33
TOTAL GROUP		231 420 651 224 435 659 242 544 786

Employees by classification and gender			2023			2021
	W	M	T	W	M	T	W	M	T
Managers	3	25	28	1	29	30	2	31	33
Middle managers	10	42	52	11	45	56	14	52	66
Clerical staff		111 247 358 109 249 358						112 310 422
Manual workers		107 106 213 103				112 215	114		151 265
TOTAL GROUP		231 420 651 224 435 659 242 544 786

		NO. OF							NO. OF
2023 movements21		EMPLOYEES		NEW HIRES					EMPLOYEES
		31.12.2022							31.12.2023
			W	M	T	W	M	T
Gefran Spa	Italy	331					8 24 32 (2) (20) (22)		341
Gefran Soluzioni Srl	Italy	59	-	9	9		- (15) (15)		53
Elettropiemme Srl	Italy	34	2	4			6 (1) (5) (6)		34
Gefran Benelux NV	Belgium	16	-	1	1		- (2) (2)		15
Gefran France S.A.	France	6	-	2	2	-	-	-	8
Gefran Deutschland GmbH	Germany	26	-	2			2 (1) (1) (2)		26
Gefran UK Ltd	UK	2	-	-	-	-	-	-	2
Sensormate A.G.	Switzerland	16	1	1		2 (1)		- (1)	17
	United
Gefran Inc	States	36	2	4	6		- (7) (7)		35
Gefran Brasil Elettroel. Ltda	Brazil	32	6				5 11 (3) (7) (10)		33
Gefran Asia Pte Ltd	Singapore	10	-	-			- (1) (1) (2)		8
	China
Gefran Automation	(People's	63	2	7			9 (4) (9) (13)		59
Technology Co. Ltd	Republic)
Gefran India Private Ltd	India	28	-	4			4 (1) (11) (12)		20
TOTAL GROUP							659 21 63 84 (14) (78) (92)		651

2022 Movements22		NO. OF EMPLOYEES 31.12.2021				NEW HIRES			NO. OF EMPLOYEES 31.12.2022
			W	M	T	W	M	T
Gefran Spa	Italy						310 13 25 38 (4) (13)	(17)	331
Gefran Drives and Motion Srl Italy		142	1	7			8 (33) (117) (150)		-
Gefran Soluzioni Srl	Italy	55	1	7		8 (2)	(2)	(4)	59
Elettropiemme Srl	Italy	35	1	3	4	(1)	(4)	(5)	34
Gefran Benelux NV	Belgium	16	1	-	1	(1)	-	(1)	16
Gefran France S.A.	France	5	-	1	1	-	-	-	6
Gefran Deutschland GmbH	Germany	22	2	4	6	-	(2)	(2)	26
Siei Areg Gmbh	Germany	12	-	-	-		(1) (11) (12)		-
Gefran UK Ltd	UK	2	-	-	-	-	-	-	2
Sensormate A.G.	Switzerland	17	2	-	2	(1)	(2)	(3)	16
Gefran Middle East Ltd Sti	Turkey	-	-	-	-	-	-	-	-
Gefran Inc	United States	32	5		5 10	(1)	(5)	(6)	36
Gefran Brasil Elettroel. Ltda	Brazil	29	3	4	7	(1)	(3)	(4)	32
Gefran Siei Asia Pte Ltd	Singapore	10	-	-	-	-	-	-	10
Gefran Siei Drives Tech. Pte	China (People's	69	2	6			8 (4) (10)	(14)	63
Ltd	Republic)
Gefran India Private Ltd	India	30	-	1	1	-	(3)	(3)	28
TOTAL GROUP							786 31 63 94 (49) (172) (221)		659

they worked for until 31 December 2021 and as having been hired by their new company (+2). In addition, in view of the sale of the drives to the WEG Group (as described in section "2.2 the Group's activities"), a total of 159 employees (33 women and 126 men) left the Gefran Group during 2022.

23 It should be specified that 5 employees moved to a different company during 2021, but still within the Group; five people (-5) are recorded as having left the company they worked for until 31 December 2020 and as having been hired by their new company (+5).

2021 Movements23		NO. OF EMPLOYEES 31.12.2020	NEW HIRES			LEAVERS			NO. OF EMPLOYEES 31.12.2021
			W	M	T	W	M	T
Gefran Spa	Italy						311 6 17 23 (9) (15) (24)		310
Gefran Drives and Motion Srl Italy			147 2	6			8 (1) (12) (13)		142
Gefran Soluzioni Srl	Italy			48 2 10 12			- (5)	(5)	55
Elettropiemme Srl	Italy		36 -	6	6		- (7)	(7)	35
Gefran Benelux NV	Belgium		16 -	-	-	-	-	-	16
Gefran France S.A.	France		8 -	-	-		- (3)	(3)	5
Gefran Deutschland GmbH	Germany		22 1	2	3		- (3)	(3)	22
Siei Areg Gmbh	Germany		12 1	-	1	-	(1)	(1)	12
Gefran UK Ltd	UK		2 -	-	-	-	-	-	2
Sensormate A.G.	Switzerland		16 -	3		3 (1)	(1)	(2)	17
Gefran Middle East Ltd Sti	Turkey		2 -	-	-		- (2)	(2)	-
Gefran Inc	United States		31 1	6		7 (2)	(4)	(6)	32
Gefran Brasil Elettroel. Ltda	Brazil		27 1	4	5		- (3)	(3)	29
Gefran Siei Asia Pte Ltd	Singapore		10 -	-	-	-	-	-	10
Gefran Siei Drives	China (People's
Tech. Pte Ltd	Republic)		67 3	2		5 (2)	(1)	(3)	69
Gefran India Private Ltd	India		32 1	4	5		- (7)	(7)	30
TOTAL GROUP							787 18 60 78 (15) (64) (79)		786

^{21 6} employees moved to a different company during 2023, but still within the Group; two people (-6) are recorded as having left the company they worked for until 31 December 2022 and as having been hired by their new company (+6). In addition, in view of the sale of the drives to the WEG Group (as described in section "2.2 the Group's activities"), a total of 13 employees (1 women and 12 men) left the Gefran Group during 2023.

No. of leavers/No. of employees 31.1224			2023			2022	2021
	W	M	T	W	M	T	W	M	T
Turnover rate of leavers		6.9% 22.6%		17.1% 36.6% 68.5%				57.7% 6.2% 11.7% 10.1%

Reason for leaving	2023					2022			2021
	W	M	T	W	M	T	W	M	T
Voluntary leavers	9	38	47	7		30 37	9		48 57
Retirement	-	8	8	5		6 11	1	4	5
Dismissal	3	11	14	4		7 11	3	6	9
Other25	2	21	23	33		129 162	2	6	8
TOTAL LEAVERS	14		78 92	49		172 221 15			64 79

Parental leave rate				2023
		W	M	T
Employees using the right to parental leave	No.	14	9	23
of whom returned to work after using the right to parental leave	No.	12	9	21
Rate of return after parental leave	%	85.7%	100.0%	91.3%
Employees working at Gefran 12 months after using the right to
parental leave the previous year
Dipendenti in servizio aEmployees working at Gefran 12 mesi
dopo avonths after usufruito del diritto al congeding the right to	No.	13	6	19
parentale l'anno precedente leave the previous year
Rate of jobs kept after parental leave (ref. previous year)	%	86.7%	60.0%	76.0%

Reporting on data on personnel training, as well as that on personnel management, where not expressly indicated, was carried out involving all Group companies. It should also be noted that until 2021 the training hours offered to employees of the divested companies were also accounted for in the context of the sale described in section "2.2 e Group's activities" (a total of

1,376 hours in 2021).

Training hours			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Managers	67		949 1,016		160 1,529 1,689			70 1,775 1,845
Middle managers			849 1,154 2,003		737 1,124 1,861			749 1,243 1,992
Clerical staff						1,743 4,374 6,117 1,900 7,437 9,337 1,066 5,410 6,476
Manual workers			887 1,261 2,148 1,139 1,188 2,327					904 1,522 2,426
TOTAL TRAINING HOURS						3,545 7,738 11,283 3,936 11,278 15,214 2,788 9,950 12,738
AVERAGE NUMBER OF HOURS (hours/no. employees)	15.5	18.7	17.6	18.1		27.0 24.0	11.9	18.8	16.7

Parental leave rate				2021
		W	M	T
Employees using the right to parental leave	No.	11	15	26
of whom returned to work after using the right to parental leave	No.	8	14	22
Rate of return after parental leave	%	72.7%	93.3%	84.6%
Employees working at Gefran 12 months after using the right to parental leave the previous year	No.	6	17	23
Rate of jobs kept after parental leave (ref. previous year)	%	75.0%	85.0%	88.5%
Gender pay ratio throughout the Group26	2023		2022	2021
GROUP average	82%		82%	81%
Managers	103%	100%		101%
Middle managers	98%	104%		91%
Clerical staff	75%	74%		75%
Manual workers	88%		92%	89%

number of employees, where the calculation was applicable.

Parental leave rate				2022
		W	M	T
Employees using the right to parental leave	No.	15	10	25
of whom returned to work after using the right to parental leave	No.	14	10	24
Rate of return after parental leave	%	93.3%	100.0%	96.0%
Employees working at Gefran 12 months after using the right to		9
parental leave the previous year	No.		4	13
Rate of jobs kept after parental leave (ref. previous year)	%	81.8%	26.7%	50.0%

²⁴ Calculated net of inter-company movements

²⁵ e reasons "Other" include terminations of fixed-term contracts and exits linked to extraordinary movements between Group companies and, for 2022, exits connected with employees leaving the Group due to the sale of the drives to the WEG group described in section "2.2 e Group's activities".

²⁶ e ratios were determined as the ratio between the gross annual average basic salary (excluding the variable portion) of female employees and that of male employees, in individual Group companies, for each job classification. e Group indicators are calculated weighting the ratios of the individual companies by the number of employees in each, for each job classification, where the calculation was applicable. e Group average is determined as the average of the ratios of each job classification, weighted by

Training hours by geographic region			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Italy		1,065 3,499		4,564 1,564	4,373	5,936		610 4,591	5,201
Europe	41	248	288	16	1,354	1,370	-	138	138
America		224 1,168	1,392	318	2,784	3,102		339 2,585	2,924
Asia		2,216 2,823		5,039 2,038	2,768		4,806 1,839 2,637		4,476
TOTAL GROUP		3,545 7,738			11,283 3,936 11,278		15,214 2,788 9,950		12,738

Technical training hours			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Managers	47	395	442	34	456	490	42	874	916
Middle managers	212	406	618	180	424	604	186	584	770
Clerical staff						1,008 2,957 3,965 1,049 5,776 6,825		668 4,731 5,399
Manual workers				825 1,130 1,955 1,043 1,114		2,157		726 1,246 1,972
TOTAL HOURS OF TECHNICAL TRAINING						2,091 4,888 6,979 2,306 7,770 10,076 1,621 7,435 9,056

Training hours spent on development of cross-cutting skills			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Managers	20	554	574		126 1,073 1,199		28	901	929
Middle managers	637		748 1,385	557		700 1,257	563		659 1,222
Clerical staff	735		1,417 2,152		851 1,661 2,512		398		679 1,077
Manual workers	63	131	193	96	74	170	178	276	454
TOTAL HOURS OF
CROSS-CUTTING SKILL					1,454 2,850 4,304 1,630 3,508 5,138 1,167 2,515 3,682
TRAINING

Certain companies have been omitted because though they are included in the Group's structure, they are purely concerned with marketing, and have a limited volume of business and a small number of employees, and so their impact on the reporting of the data in question is considered of marginal importance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK) or Gefran France S.A. (FR), in addition to Gefran Benelux Nv (BE) until 2022. Moreover, in light of the sale of the drives described in the section "2.2 e Group's activities", the 2022 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, in addition to the aggregated statements, key data relating to these two entities are also highlighted.

Type of employee injury	2023	2022		2021	2020	2019
Total accidents on the job	4		1	2	5	5
Injuries registered without lost work days	-		-	-	-	-
Fatal accidents (No. of deaths)	-		-	-	-	-
Accidents recorded with lost work days	4		1	2	5	5
including serious injuries (with serious
consequences)	-		-	-	-	-
Working days lost due to accidents	47		9	44	119	317
Total hours worked	1,109,215 1,127,459 1,368,376 1,286,899 1,467,541
Type of accident to employees on the way to and from work		2023	2022	2021	2020	2019
Accidents on the way to or from work		-	1	3	-	2
Working days lost due to accidents on the way to or from work		-	4	25	-	5
Accident ratios - accidents to employees		2023	2022	2021	2020	2019
Total accident frequency rate No. of accidents, excluding accidents on the way to or from work, per 1,000,000 hours worked		3.61	0.89	1.46	3.89	3.41
Accident frequency rate recorded (with number of lost working days) No. accidents recorded, with number of lost working days, per 1,000,000 hours worked		3.61	0.89	1.46	3.89	3.41
Severity ratio No. of working days lost due to accidents recorded per		0.04	0.01	0.03	0.09	0.22

including serious injuries (with serious Total accident frequency rate from work, per 1,000,000 hours worked working days) per 1,000,000 hours worked Severity ratio

1,000 hours worked

Type of injury to non-employee	2023	2022	2021	2020	2019
Total accidents on the job	-	2	1	-	-
Injuries registered without lost work days	-	-	-	-	-
Fatal accidents (No. of deaths)	-	-	-	-	-
Accidents recorded with lost work days	-	2	1	-	-
including serious injuries (with serious consequences)	-	-	-	-	-
Total hours worked		114,830 146,354 171,993 90,008 27,130
Working days lost due to accidents	-	32	7	-	-

Accident ratios - accidents to non-employees	2023	2022	2021	2020	2019
Total accident frequency rate
No. of accidents, excluding accidents on the way to or from work,		- 13.67	5.81	-	-
per 1,000,000 hours worked
Accident frequency rate recorded (with number of lost working days)
No. accidents recorded, with number of lost working days, per		- 13.67	5.81	-	-
1,000,000 hours worked
Severity ratio
No. of working days lost due to accidents recorded per 1,000	-	0.22	0.04	-	-
hours worked

Type of accident to employees on the way to and from work, companies out of scope in 2022	2021	2020	2019
Accidents on the way to or from work	1	-	2
Working days lost due to accidents on the way to or from work	6	-	5

Hours of Occupational Health and Safety instruction			2023			2022			2021
	W	M	T	W	M	T	W	M	T
Managers	-	18	18	-	29	29	7	191	198
Middle managers	12	91	103	8	21		29 39	157	196
Clerical staff	240	845	1,085 111		855		965 169	891	1,060
Manual workers	232	553		785 720	760	1,480 195		633	828
TOTAL hours in the Group		484 1,508			1,992 839 1,664	2,503 410		1,871	2,281

Specifically, as regards Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE), out of scope in 2022:

Type of injury to employees, companies out of scope in 2022	2021	2020	2019
Total accidents on the job	-	1	1
Injuries registered without lost work days	-	-	-
Fatal accidents (No. of deaths)	-	-	-
Accidents recorded with lost work days	-	1	1
including serious injuries (with serious consequences)	-	-	-
Working days lost due to accidents	22	2	13
Total hours worked		250,516 243,389 265,513

In the reporting period presented, at the companies that left the scope, in 2022 there were no accidents involving "non-employees"

of the companies.

Managers
Middle managers
Clerical staff
Manual workers
TOTTAL

Health training hours, companies out of scope in 2022			2021
	W	M	T
Managers	-	-	-
Middle managers	-	90	90
Clerical staff	4	149	153
Manual workers	-	104	104
TOTAL	4	343	347

11.3 THE CONTRIBUTION TO THE ECOLOGICAL TRANSITION – APPENDIX

Data on energy efficiency, emissions and water withdrawals, except as otherwise provided, has been reported with the involvement of all Group companies, with the exception of some companies, since they are purely concerned with marketing, as well as having a limited turnover and a small number of employees, whose impact on energy and environmental data is considered of marginal importance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), to which Gefran Benelux Nv (BE) will also be added until 2022. It is also specified that, in light of the sale of the drives, the 2022 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, in addition to the aggregated statements, key data relating to these two entities are also highlighted.

27 e Group's energy intensity indicator is calculated as the ratio between the energy consumed (GJ) and the revenues achieved (in thousands of euro), limited to the companies included in the scope of reporting.

Energy intensity27	2023	2022	2021	2020	2019
GJ over revenues	0.294	0.299	0.354	0.376	0.371
Total energy consumption	2023	2022	2021	2020	2019
Total energy consumption in GJ	37,284	38,421	52,986	45,359	48,078
Electricity in GJ		2023	2022 2021	2020	2019
Self-generated electricity		1,067	1,505 1,506	738	813
Electricity purchased from the grid, from non-certified sources		3,546	4,137 4,103	16,869	25,041
Electricity from certified renewable sources purchased from the grid		15,495 15,543	22,066	6,894	-
Total Electricity		20,108 21,185	27,675	24,501	25,854
Percentage of total energy consumption		53.9% 55.1%	52.2%	54.0%	53.8%

Natural gas in GJ	2023	2022	2021	2020	2019
Natural Gas for heating	7,968	8,752	16,438	13,682	12,041
Natural Gas for other uses	3	-	-	-	-
Total Natural Gas	7,971		8,752 16,438 13,682		12,041
Percentage of total energy consumption	21.4%	22.8%	31.0%	30.2%	25.0%

Fuel in GJ	2023	2022	2021	2020	2019
Diesel for company vehicles	7,002	6,567	7,763	6,186	8,616
Diesel for other uses	17	17	18	26	48
Petrol for company vehicles	2,186	1,900	1,092	964	1,519
Total Fuel	9,205	8,484	8,873	7,175	10,182
Percentage of total energy consumption	24.7%	22.1%	16.7%	15.8%	21.2%

Direct energy consumption in GJ	2023	2022	2021	2020	2019
Diesel	7,019	6,584	7,781	6,211	8,664
Petrol	2,186	1,900	1,092	964	1,519
Self-generated electricity	1,067	1,505	1,506	738	813
Natural gas	7,971	8,752	16,438	13,682	12,041
Total direct consumption	18,244	18,741		26,817 21,595 23,036

Diesel
Petrol
Self-generated electric
Natural gas
Total direct consum

Electricity purchased from the grid, from non-certified
sources
Electricity from certified renewable sources

Indirect energy consumption in GJ	2023	2022	2021	2020	2019
Electricity purchased from the grid, from non-certified sources	3,546	4,137	4,103	16,869	25,041
Electricity from certified renewable sources purchased from the grid	15,495	15,543	22,066	6,894	-
Total indirect consumption		19,041 19,680 26,169 23,764 25,041
Emissions intensity28	2023	2022	2021	2020	2019
tCO2e on revenues	0.024	0.023	0.026	0.032	0.031

28 For the purposes of calculating the emission intensity indicator, the so-called location-based approach was used, with country-specific conversion factors of grams CO2e/KWh (International Energy Agency forecast 2022 data) for 2023, a factor of 315 KgCO2/MWh (Terna 2019 data) for the years 2022 and 2021 and a conversion factor of 359 KgCO2/MWh (Terna 2014 data) for the previous years.

Scope 1 emissions in tCO2e	2023	2022	2021	2020	2019
Diesel for company vehicles	521	487	576	459	639
Diesel for other uses	1	1	1	2	4
Petrol for company vehicles	155	129	74	65	103
Natural gas	452	423	794	661	582
Other (F Gas)	-	-	26	61	-
Total direct emissions	1,130	1,040	1,471	1,249	1,328

Scope 2 emissions in tCO2e - Location based method29		2023 2022			2021 2020	2019
		443
Electricity purchased from the grid, from non-certified sources			546		550 1,869 2,677
Electricity from certified renewable sources purchased from the			1,506 1,360 1,931		688	-
grid
Total indirect emissions					1,949 1,906 2,480 2,556 2,677
Scope 2 emissions in tCO2e - Market based method30		2023 2022			2021 2020	2019
Electricity purchased from the grid, from non-certified sources		444	515		532 2,215	3,274
Electricity from certified renewable sources purchased from the
grid		-	-	-	-	-
Total indirect emissions		444	515		532 2,215 3,274
Emissions avoided31	2023	2022		2021	2020	2019
Yield of PV systems (in MWh)	374	418		418	205	226
Electricity purchased from the grid,	4,304	4,317		6,130	1,915	-
from certified renewable sources (in MWh)
Avoided emissions (in tCO2e)	1,637	1,492		2,063		81
Emissions in t	2023	2022		2021	2020	2019
Emissions into the atmosphere from motor
vehicles
NOx	2.208	2.047		2.344	1.874	2.622
SO2	0.003	0.003		0.003	0.002	0.003
PM10	0.144	0.133		0.150	0.120	0.169
VOC	0.503	0.438		0.275	0.239	0.369
Atmospheric emissions from production
processes
VOC	0.844	0.961		1.180	0.223	0.293

29 Emissions calculated according to the so-called location-based method, taking into account the average intensity of GHG emissions from the grids in which energy consumption is being calculated, using primarily data from the average grid emissions factor.

Water withdrawals in m3	2023	2022	2021	2020	2019
underground water	2,397	2,304	2,055	-	-
third-party water resources (from water mains)	13,324	10,713	17,648	17,252	19,970
Total volume of water withdrawn	15,721		13,017 19,703		17,252 19,970
Water withdrawals in "high" or "extremely high" water stress areas in m3 32	2023	2022	2021	2020	2019
underground water	2,397	2,304	2,055	-	-

third-party water resources (from water mains) 5,018 9,483 8,711 9,796 9,707 Total volume of water withdrawn 7,415 11,787 10,766 9,796 9,707

To better understand the trend of environmental indicators, the aggregated GRI for the periods 2021-2020-2029 and the companies Gefran Drives and Motion Srl are shown below. (IT) and Siei Areg Gmbh (DE), subject to the sale of the drives business and included in the scope of the non-financial reporting of the Gefran Group until 2021.

Total energy consumption,

Total energy consumption, companies out of scope in 2022	2021	2020	2019
Total energy consumption in GJ	13,755	12,210	13,045

Electricity in GJ,

companies out of scope in 2022	2021	2020	2019
Self-generated electricity	60	61	69
Electricity purchased from the grid	170	5,900	6,891
Electricity from certified renewable sources purchased from the grid	6,497	625	-
Total Electricity	6,727	6,587	6,959
Percentage of total energy consumption	48.9%	53.9%	53.3%

Natural gas in GJ,

Natural gas in GJ, companies out of scope in 2022	2021	2020	2019
Total Natural gas for heating	5,688	4,531	4,592
Percentage of total energy consumption	41.4%	37.1%	35.2%

³⁰ Emissions calculated according to the so-called market-based method , taking into account the different forms of supply that the Company has chosen, where the energy generation method is certified; the "residual mix" parameter was used in the calculation where the organisation's emissions intensity level is not specified in the signed contracts; for countries where the "residual mix" reference benchmark did not apply (particularly China, Brazil, India, and Singapore), location-based conversion factors are applied.

³¹ Emissions calculated according to the so-called location-based method, taking into account the average intensity of GHG emissions from the grids in which energy consumption is being calculated, using primarily data from the average grid emissions factor.

³² according to World Resources Institute classification

Fuel in GJ,
companies out of scope in 2022	2021	2020		2019
Diesel for company vehicles	1,334	1,087		1,476
Diesel for other uses	5		5	18
Petrol for company vehicles	-		-	-
Total Fuel	1,340	1,092		1,494
Percentage of total energy consumption	9.7%	8.9%		11.5%
Scope 1 emissions in tCO2,
companies out of scope in 2022	2021	2020		2019
Diesel for company vehicles	99		81	110
Diesel for other uses	0		0	1
Natural gas	275		219	222
Other (F Gas)	26		5	-
Total direct emissions	400		305	333
Scope 2 emissions in tCO2 - location based method33,
companies out of scope in 2022		2021	2020	2019
Electricity purchased from the grid		19	433	695
Electricity from certified renewable sources purchased from the grid		569	225	-
Total indirect emissions		587	658	695
Scope 2 emissions in tCO2 - market based method34,
companies out of scope in 2022		2021	2020	2019
Electricity purchased from the grid		28	560	884
Electricity from certified renewable sources purchased from the grid		-	-	-
Total indirect emissions		28	560	884
Water withdrawals in m3,		2021	2020	2019
companies out of scope in 2022
third-party water resources (from water mains)		8,185	6,933	8,808
Total volume of water withdrawn			8,185 6,933	8,808

11.4 THE SUSTAINABILITY OF THE SUPPLY CHAIN – APPENDIX

e reporting of data on waste produced has been reported with the involvement of all Group companies, excluding certain companies, since they are purely concerned with marketing, as well as having a limited turnover and a small number of employees, whose impact on this type of reporting is considered of marginal importance. e 2023 scope therefore does not include the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), in addition to Gefran Benelux Nv (BE) until 2022. In addition to this, for Gefran Asia Pte Ltd, a company purely concerned with marketing and operating in the market through triangular sales with the other Group companies, it was not possible to report precisely and therefore estimates were made based on quantities of paper purchased and packaging consumed.

It is also specified that, in light of the sale of the drives, the 2022 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE). To provide more transparent information to the reader, in addition to the Group aggregated statements, key GRI relating to these two entities are also highlighted.

Waste produced in kg	2023	2022	2021	2020	2019
Total waste produced	345,932	448,102		531,899 467,989	507,379
of which hazardous	42,622	47,147	72,039	39,498	34,347
% of total	12.3%	10.5%	13.5%	8.4%	6.8%
of which non-hazardous	303,310	400,955	459,860	428,492	473,032
% of total	87.7%	89.5%	86.5%	91.6%	93.2%

³³ Emissions calculated according to the so-called location-based method, taking into account the average intensity of GHG emissions from the grids in which energy consumption is being calculated, using primarily data from the average grid emissions factor.

³⁴ Emissions calculated according to the so-called market-based method , taking into account the different forms of supply that the Company has chosen, where the energy generation method is certified; the "residual mix" parameter was used in the calculation where the organisation's emissions intensity level is not specified in the signed contracts; for countries where the "residual mix" reference benchmark did not apply (particularly China, Brazil, India, and Singapore), location-based conversion factors are applied.

Waste produced in kg, by intended purpose	2023	2022	2021	2020	2019
Total waste for recovery (reuse or recycling)			232,268 296,866 360,500 294,987 312,123
% of total	67.1%	66.2%	67.8%	63.0%	61.5%
of which hazardous	11,058	11,918	10,858	11,934	10,509
of which non-hazardous			221,210 284,948 349,642 283,053 301,614
Total waste to be disposed of (landfill or waste-to-energy)			113,663 151,236 171,400 173,002 195,256
% of total	32.9%	33.8%	32.2%	37.0%	38.5%
of which hazardous	31,564	35,229	61,181	27,564	23,838
of which non-hazardous			82,099 116,007 110,219 145,439		171,418

Specifically, with regard to the aggregate indicators on waste produced by Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE), out of scope in 2022:

Waste produced in kg, companies out of scope in 2022	2021	2020	2019
Total waste produced	89,106	92,649	88,898
of which hazardous	1,900	5,903	1,700
% of total	2.1%	6.4%	1.9%
of which non-hazardous	87,206	86,746	87,198
% of total	97.9%	93.6%	98.1%

Waste produced in kg, by intended purpose companies out of scope in 2022	2021	2020	2019
Total waste for recovery
(reuse or recycling)	84,825	89,391	85,401
% of total	95.2%	96.5%	96.1%
of which hazardous	1,650	5,614	1,360
of which non-hazardous	83,175	83,777	84,041
Total waste for disposal
(landfill or waste-to-energy)	4,281	3,258	3,197
% of total	4.8%	3.5%	3.6%
of which hazardous	250	289	340
of which non-hazardous	4,031	2,969	2,857

An analysis was carried out on the expenditure for supply of the companies with the most relevant flows for the Group, which includes all production companies and some commercial companies that buy and resell products not made within the Group. for the remaining sales companies, the analysis was conducted in a marginal way, as 90.9% of their procurement comes from intercompany purchases and the remaining part from local supplies. Specifically, in 2023 not included in the expenditure for the under-exposed supply are the companies Gefran UK Ltd (UK), Gefran France S.A. (FR), Gefran Deutschland Gmbh (DE) and Gefran Asia Pte Ltd (SG), in addition to Gefran Benelux Nv (BE) until 2022.

Moreover, in light of the sale of the drives also for procurement expenditure, the 2022 reporting scope differs from the same in previous years, due to the exit of the subsidiaries Gefran Drives and Motion Srl (IT) and Siei Areg Gmbh (DE).

It should be noted that local suppliers mean suppliers from the country where the company is based.

Group procurement expenditure (Euro/000)	2023	2022	2021	2020	2019
Group procurement expenditure	69,326	72,813	93,178	66,501	82,284
of which from local suppliers	61,101	64,851	79,951	58,563	73,691
% expenditure from market	88.1%	89.1%	85.8%	88.1%	89.6%

To provide more transparent information to the reader, in addition to the Group aggregated statements, individual entities are also highlighted.

procurement expenditure (Euro /000)	2023	2022	2021	2020	2019
Plants of Gefran Spa (IT)	50,527	53,041	45,832	30,479	37,976
from the market	48,250	51,412	44,123	29,177	36,274
of which from local suppliers	43,672	45,626	38,479	26,474	33,672
% expenditure from market	90.5%	88.7%	87.2%	90.7%	92.8%
Gefran Drives and Motion Srl plant (IT)	-	-	28,119	19,520	23,469
from the market	-	-	26,130	17,811	20,708
of which from local suppliers	-	-	21,825	15,221	17,924
% expenditure from market	N.A.	N.A.	83.5%	85.5%	86.6%
Gefran Soluzioni Srl plant (IT)	7,137	7,436	7,037	5,011	6,318
from the market	4,898	4,389	3,740	2,251	3,168
of which from local suppliers	4,827	4,213	3,532	2,066	2,937
% expenditure from market	98.6%	96.0%	94.4%	91.8%	92.7%
Elettropiemme Srl plant (IT)	4,666	3,750	4,452	2,004	3,438
from the market	4,400	3,630	4,366	1,977	3,414
of which from local suppliers	4,385	3,607	4,343	1,932	3,343
% expenditure from market	99.7%	99.4%	99.5%	97.7%	97.9%
Gefran Inc plant (US)	7,650	8,655	7,217	9,404	12,862
from the market	2,939	3,126	2,599	6,023	7,248
of which from local suppliers	2,748	2,980	2,493	5,892	7,088
% expenditure from market	93.5%	95.3%	95.9%	97.8%	97.8%
plant of Gefran Brasil Elettroel. Ltda (BR)	3,465	3,583	2,786	2,081	2,252
from the market	1,432	1,779	1,083	949	887
of which from local suppliers	1,432	1,779	1,083	949	887
% expenditure from market	100.0%	100.0%	100.0%	100.0%	100.0%

procurement expenditure (Euro /000)	2023	2022	2021	2020	2019
plant of Gefran Automation Technology Co. Ltd (CN)	10,941	15,961	17,614	11,231	10,194
from the market	2,246	4,901	5,442	3,594	3,714
of which from local suppliers	2,197	4,771	5,129	3,367	3,606
% expenditure from market	97.8%	97.3%	94.2%	93.7%	97.1%
Siei Areg GmbH plant (DE)	-	-	3,083	3,994	5,637
from the market	-	-	1,431	1,956	3,097
of which from local suppliers	-	-	880	1,168	2,048
% expenditure from market	N.A.	N.A.	61.5%	59.7%	66.1%
Sensormate AG plant (CH)	2,029	2,492	2,547	1,983	2,798
from the market	939	1,418	1,713	1,061	1,676
of which from local suppliers (*)	709	1,076	1,449	821	1,451
% expenditure from market (*)	75.5%	75.9%	84.6%	77.4%	86.6%
Gefran India Private Ltd plant (IN)	3,801	6,248	7,175	4,292	5,355
from the market	728	2,158	2,551	1,702	2,098
of which from local suppliers	341	799	738	673	735
% expenditure from market	46.8%	37.0%	28.9%	39.5%	35.0%
Gefran Benelux Nv (BL) plant	4,824	-	-	-	-
from the market	3,494	-	-	-	-
of which from local suppliers	790	-	-	-	-
% expenditure from market	22.6%	N.A.	N.A.	N.A.	N.A.

NOTE ON METHODOLOGY 12

e Gefran Group's Consolidated Non-Financial Statement was drawn up pursuant to Legislative Decree 254/16 and with reference to the international reporting standards issued by the Global Reporting Initiative "Sustainability Reporting Standards" in the GRI Standard 2021 version, with a "with reference to" application level. e list of selected indicators that was inspired for the purpose of drafting this Statement is shown in an appendix in this document, in the "Table of correlation to Legislative Decree 254/16". e GRI Standards state that the Statement should contain information about aspects considered material, which reflect the significant impacts for the organisation from an economic, environmental and social point of view.

e process of collecting the data and information for preparing this Statement was managed in conjunction with the various company functions, in accordance with the following principles set out in the GRI Standards:

• / comparability and clarity: to make the Statement usable by all stakeholders, clear and concise language was used together with tables and charts. e information appearing in the report refers to the period between 1 January 2023 and 31 December 2023. Where possible, data relating to previous years was recorded for comparison purposes so that the trend of the Group's activities can be evaluated over several time periods. However, the absence of such a comparison is due either to the trend over the years not being important or to the impossibility of recovering information about previous years. Finally, with regard to the quantitative information in this document for which estimates were used, this detail is appropriately indicated in the various sections;
• / balance: the data and information in the Statement are represented objectively and meticulously; the indicators reflect the Group's performance in the reporting period;
• / accuracy: the data and information in the Statement were checked by the respective function heads to confirm their accuracy and authenticity;
• / timeliness: the Consolidated Non-Financial Statement will be published annually at the same time as the Annual Financial Report;

/ reliability: the Consolidated Non-Financial Statement was drafted by an ad-hoc working group whose members were chosen from the Group's various departments and who validated the contents relating to their areas of responsibility. e final document, in its entirety, was presented and discussed by the Board of Directors.

e Consolidated Non-Financial Statement was reviewed by the independent external auditor PricewaterhouseCoopers Spa

In general terms, the data and information in this Statement refer to the companies consolidated using the line-by-line method in the Gefran Group's Annual Financial Report at 31 December 2023.

Specifically, based on the distribution of personnel within the Gefran Group (where 88% of the workforce is concentrated in the Group's production companies), the sales companies are excluded from the reporting scope for some aspects where, given the nature of their activities, their contribution was not significant.

Please refer to section "2. e company" for details of the compo-

sition of the Group.

In summary, based on the information about the scope given in

each section:

/ for the social and occupational health and safety areas, all of the Group companies are included in the scope;

/ for the consumer health and safety area, the policies and practices implemented by the production companies and the Parent

/ with regard to the environment, the analysis was carried out for all production companies and the main commercial companies (Gefran UK Ltd and Gefran France S.A. are excluded from the 2023 scope, as their impact on this type of reporting is consid-

• Company are analysed;
• ered of marginal importance);

• / the aspects concerning involvement of local communities and governance were dealt with based on the initiatives/policies and practices implemented by the production companies and the Parent Company;
• / with regard to the supply chain, the analysis was conducted for all production companies and the main trading companies while, for the remaining trading companies (Gefran Uk Ltd, Gefran France S.A., Gefran Deutschland Gmbh and Gefran Asia Pte Ltd), it was conducted in a marginal way, as their supply derives approximately 90.9% from intercompany purchases and the remainder from local supplies.

In addition, this Statement includes the information required by art. 8 of Regulation (EU) 2020/852 of 18 June 2020 (so-called Taxonomy Regulation) and the related Delegated Regulations (EU) 2021/2178 and (EU) 2021/2139. e limited examination carried out by the external auditor (PricewaterhouseCoopers Spa) on this Consolidated Non-Financial Statement does not extend to the information provided pursuant to the Taxonomy Regulation in section "10. Information pursuant to Article 8 of EU Regulations 2020/852 (EU Taxonomy Regulation)".

TABLE OF CORRELATION UNDER LEGISLATIVE DECREE 254/16

Overview	GRI		Disclosure Section ref. Page ref. Omissions
Company and Group activities	2-1 2-6	Organizational details Assets, Value chain and other commercial activities	2	18-27	Stakeholder relations
Information on employees	2-7 2-8	Employees Non-employee workers		11.2 196-197
Supply chain information	2-6	Assets, Value chain and other commercial activities		9.2 158-159	Customer focus
Industrial relations	2-28	Membership of associations	4.2.1	62-64
Governance model	2-9 2-13 2-11	Structure and composition of governance Delegation of responsibility for impact management Chairman of the highest governance body	3.1	30-35	Personnel training and development
Sustainability governance	2-9 2-13	Structure and composition of governance Delegation of responsibility for impact management	4.1	58-59

Material issue	GRI	Disclosure	Section ref. Page ref. Omissions
Stakeholder relations	2-29	Stakeholder engagement approach	4.2.1	60-61
	3-1	Process of determining material issues	4.2.2	65-69
	3-2	List of material issues	4.2.2	68-69
	3-3	Management of material issues	4.2.2	65-69
	3-3	Management of material issues	8.4	153
Customer focus		Categories of products and services
	416-1 a	that are significant for the assessment	8.4	153
		of health and safety impacts
	3-3	Management of material issues		6.5 110-113
Personnel training	404-1	Average annual training hours per	6.5, 11.2	111,
and development		employee		199-200
	404-2 a	Professional development and digital
		transition assistance programmes for		6.5 110-113
		employees
	3-3	Management of material issues		6.4 106-109
		403-2 a Hazard identification, risk assessment and accident investigation		6.4 106-109
		Occupational health and safety training
Employee health	403-5	for workers		6.4, 11.2 108, 202
and safety		403-6 b Promoting workers' health	6.3	105
management		Prevention and mitigation of
	403-7	occupational health and safety		6.4 106-109
		impacts
				6.4, 11.2 106-107,
		403-9 a Accidents on the job		201-202
	3-3	Management of material issues	6.2	94-101
	401-1	New hires and staff turnover	6.1, 11.2	92-93,
Diversity, inclusion and equal opportunities				196-198
				32-34,
	405-1	Diversity in governing bodies and	3.1, 4.1, 6.2,	58,
	a, b	employees	11.2	96-100,
				194-200
	405-2	Ratio between basic salary and	6.2, 11.2
	a, b	remuneration of women compared to		97, 199
		men

Material issue	GRI	Disclosure	Section ref. Page ref. Omissions				Material issue	GRI	Disclosure	Section ref. Page ref. Omissions
Ethics, integrity and compliance
	3-3	Management of material issues	3.2.1, 3.2.3, 3.2.4	36-38, 50-53			Social, community	3-3	Management of material issues Activities involving local communities,		9.4 163-165
		205-1 b Transactions evaluated for corruption	3.2.4	52-53			and territorial development	413-1 a (iv), a (vii)	impact assessments and development		9.4 163-165
		risks							programmes
		Occurrences of discrimination
	205-3 a	identified and actions taken in	3.2.4	52-53			3-3	Management of material issues		9.5 166-168
		response					Waste management	306-3	Waste produced		9.5, 11.4 167, 209
	207-2 a	Fiscal governance, risk assessment	3.2.3	50-51			a, b
	(ii) (iii), b	and control							306-4 a Waste not intended for disposal		9.5, 11.4 168, 210
	207-4 a,		3.2.3, 11.1	50-51, 191-193		Responsible		306-5 a Waste for disposal		9.5, 11.4 168, 210
	b (i) (ii)	Reporting by country						3-3	Management of material issues		9.2, 9.3 158-162
	(iii) (iv) (v) (vi) (ix), c							Proportion of expenditure spend with
							procurement	201-1 a	local suppliers		9.2, 11.4 158-159, 211-213
	3-3	Management of material issues		6.3 102-105
Employee welfare	401-3 c,								308-2 c Negative environmental impact in the supply chain and actions undertaken		9.3 160-162
	d, e	Parental leave		6.3, 11.2 104-105, 198-199
Data protection and
cybersecurity	3-3	Management of material issues	6.6	114-115
Respect for human rights				36-38,
	3-3	Management of material issues	3.2.1, 6.2 9.3	94,
				160-162
		406-1 a Episodes of discrimination and	6.2	101
		corrective measures taken
Product innovation
and technological	3-3	Management of material issues		8.2 147-149
development
Product quality and safety	3-3	Management of material issues		8.1 144-146
Climate change: GHG emissions and energy	3-3	Management of material issues		7.1 118-129
	302-1 a,	Energy consumed within the
	c, e	organisation		7.1, 11.3 121-125, 204-205
	302-3 a, b, c	Energy intensity		7.1, 11.3 121, 204
	303-3	Water consumption		7.3, 11.3 140-141,
	a, b			207
		305-5 a Reduction of GHG emissions		7.1, 11.3 128, 206
		305-1 a Direct GHG emissions (Scope 1)		7.1, 11.3 125, 205
		305-2 a Indirect GHG emissions from energy		7.1, 11.3 126-127,
	305-4	consumption (Scope 2)		206
	a, b	Intensity of GHG emissions		7.1, 11.3 128, 205
		305-7 a Nitrogen oxides (NOX), sulphur oxides (SOX) and other significant emissions		7.1, 11.3 129, 206

3-3	Management of material issues		9.4 163-165
413-1 a (iv), a (vii)	Activities involving local communities,
	impact assessments and development		9.4 163-165
	programmes
3-3	Management of material issues		9.5 166-168
306-3 a, b	Waste produced		9.5, 11.4 167, 209
	306-4 a Waste not intended for disposal		9.5, 11.4 168, 210
	306-5 a Waste for disposal		9.5, 11.4 168, 210
3-3	Management of material issues		9.2, 9.3 158-162
201-1 a	Proportion of expenditure spend with		9.2, 11.4 158-159,
	local suppliers		211-213
	308-2 c Negative environmental impact in the
	supply chain and actions undertaken		9.3 160-162

AUDITOR'S REPORT ON THE CONSOLIDATED NON-FINANCIAL STATEMENTS

Independent auditor's report on the consolidated nonfinancial statement

pursuant to article 3, paragraph 10, of Legislative Decree no. 254/2016 and article 5 of CONSOB regulation adopted with resolution no. 20267 of January 2018

To the Board of Directors of Gefran SpA

Pursuant to article 3, paragraph 10, of Legislative Decree No. 254 of 30 December 2016 (the "Decree") and article 5, paragraph 1 g), of CONSOB Regulation No. 20267/2018, we have undertaken a limited assurance engagement on the consolidated non-financial statement of Gefran SpA and its subsidiaries (hereinafter the "Group") for the year ended 31 December 2023 prepared in accordance with article 4 of the Decree, and approved by the board of directors on dd month year (the "NFS").

Our review does not extend to the information set out in the section titled "10 - Informativa a norma dell' art 8 del Regolamento UE 2020/852 (Regolamento sulla Tassonomia UE)" of the Group's NFS, required by article 8 of Regulation (EU) 2020/852.

Responsibilities of the Directors and the Board of Statutory Auditors for the NFS

The Directors are responsible for the preparation of the NFS in accordance with articles 3 and 4 of the Decree and with the "Global Reporting Initiative Sustainability Reporting Standards" defined in 2016, and updated to 2021, by GRI – Global Reporting Initiative (the "GRI Standards"), with reference to a selection of GRI Standards, indicated in the paragraph "12. Nota Metodologica" of NFS" , which they identified as the reporting standards.

The Directors are also responsible, in the terms prescribed by law, for such internal control as they determine is necessary to enable the preparation of a NFS that is free from material misstatement, whether due to fraud or error.

Moreover, the Directors are responsible for identifying the content of the NFS, within the matters mentioned in article 3, paragraph 1, of the Decree, considering the activities and characteristics of the Group and to the extent necessary for an understanding of the Group's activities, development, performance and related impacts.

Finally, the Directors are responsible for defining the business and organisational model of the Group and, with reference to the matters identified and reported in the NFS, for the policies adopted by the Group and for identifying and managing the risks generated and/or faced by the latter.

The Board of Statutory auditors is responsible for overseeing, in the terms prescribed by law, compliance with the Decree.

Auditor's Independence and Quality Control

We are independent in accordance with the principles of ethics and independence set out in the Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. In the period this engagement refers to our firm applied International Standard on Quality Control 1 (ISQC Italia 1) and, accordingly, maintained a comprehensive system of quality control including policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Auditor's responsibilities

Our responsibility is to express a limited assurance conclusion, based on the procedures we have performed, regarding the compliance of the NFS with the Decree and with GRI Standards. We conducted our engagement in accordance with International Standard on Assurance Engagements ISAE 3000 (Revised) - Assurance Engagements Other than Audits or Reviews of Historical Financial Information (hereinafter "ISAE 3000 Revised"), issued by the International Auditing and Assurance Standards Board (IAASB) for limited assurance engagements. That standard requires that we plan and perform procedures to obtain limited assurance about whether the NFS is free from material misstatement. Therefore, the procedures performed were less in extent than for a reasonable assurance engagement conducted in accordance with ISAE 3000 Revised and, consequently, do not provide us with a sufficient level of assurance that we have become aware of all significant facts and circumstances that might be identified in a reasonable assurance engagement.

The procedures performed on the NFS were based on our professional judgement and included inquiries, mainly of personnel of the Company responsible for the preparation of the information presented in the NFS, inspection of documents, recalculations and other procedures designed to obtain

evidence considered useful.

-

-

-

In detail, we performed the following procedures:

1. Analysis of the relevant matters reported in the NFS in relation to the activities and characteristics of the Group, in order to assess the reasonableness of the selection process used, in accordance with article 3 of the Decree and with the reporting standard adopted; 2. Analysis and assessment of the criteria used to identify the consolidation perimeter, in order to assess their compliance with the Decree;

2. Comparison of the financial information reported in the NFS with the information reported in the Group's consolidated financial statements;

3. Understanding of the following matters:

− Business and organisational model of the Group with reference to the management of the matters specified in article 3 of the Decree;

− Policies adopted by the Group with reference to the matters specified in article 3 of the Decree, actual results and related key performance indicators;

− Key risks generated and/or faced by the Group with reference to the matters specified in article 3 of the Decree.

With reference to those matters, we compared the information obtained with the information presented in the NFS and carried out the procedures described under item 5 a) below.

Independent auditor's report on the consolidated nonfinancial statement

pursuant to article 3, paragraph 10, of Legislative Decree no. 254/2016 and article 5 of CONSOB regulation adopted with resolution no. 20267 of January 2018

To the Board of Directors of Gefran SpA

Pursuant to article 3, paragraph 10, of Legislative Decree No. 254 of 30 December 2016 (the "Decree") and article 5, paragraph 1 g), of CONSOB Regulation No. 20267/2018, we have undertaken a limited assurance engagement on the consolidated non-financial statement of Gefran SpA and its subsidiaries (hereinafter the "Group") for the year ended 31 December 2023 prepared in accordance with article 4 of the Decree, and approved by the board of directors on dd month year (the "NFS").

Our review does not extend to the information set out in the section titled "10 - Informativa a norma dell' art 8 del Regolamento UE 2020/852 (Regolamento sulla Tassonomia UE)" of the Group's NFS, required by article 8 of Regulation (EU) 2020/852.

Responsibilities of the Directors and the Board of Statutory Auditors for the NFS

The Directors are responsible for the preparation of the NFS in accordance with articles 3 and 4 of the Decree and with the "Global Reporting Initiative Sustainability Reporting Standards" defined in 2016, and updated to 2021, by GRI – Global Reporting Initiative (the "GRI Standards"), with reference to a selection of GRI Standards, indicated in the paragraph "12. Nota Metodologica" of NFS" , which they identified as the reporting standards.

The Directors are also responsible, in the terms prescribed by law, for such internal control as they determine is necessary to enable the preparation of a NFS that is free from material misstatement, whether due to fraud or error.

Moreover, the Directors are responsible for identifying the content of the NFS, within the matters mentioned in article 3, paragraph 1, of the Decree, considering the activities and characteristics of the Group and to the extent necessary for an understanding of the Group's activities, development, performance and related impacts.

Finally, the Directors are responsible for defining the business and organisational model of the Group and, with reference to the matters identified and reported in the NFS, for the policies adopted by the Group and for identifying and managing the risks generated and/or faced by the latter.

The Board of Statutory auditors is responsible for overseeing, in the terms prescribed by law, compliance with the Decree.

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Gefran EDITORIAL COORDINATION

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GEFRAN S.p.A.

Share capital 14,400,000 fully paid up. Registered offices in Provaglio d'Iseo (BS), Via Sebina, no. 74 Tax code and Brescia Companies' Register No. 03032420170

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