Recordati Industria Chimica e Farmaceutica

AGM Information • Mar 19, 2020

(29TH APRIL 2019 SINGLE CALL)

Report on item 3 on the agenda and the relative resolution submitted

Appointment of the Board of Statutory Auditors:

• a) Appointment of the members of the Board of Statutory Auditors and the relative Chairman.
• b) Determination of their remuneration.

To Our Shareholders,

The mandate of the Board of Statutory Auditors in office – granted by the Shareholders' Meeting on 11th April 2017 - expires on the date of the Shareholders' Meeting for the approval of the Annual Report for the year ended 31st December 2019.

The Shareholders' Meeting is therefore called upon to appoint a Board of Statutory Auditors in accordance with the terms and conditions of articles 26 of the Corporate By-Laws (available on the website of the Company www.recordati.it, in the Corporate Governance section) and with the applicable laws and regulations in force. The election shall take place according to list voting procedures and members may be re-elected.

In accordance with the Corporate By-Laws, the Board of Statutory Auditors is composed of three Statutory Auditors and two Alternate Auditors, who must be in possession of the requirements set by the laws and regulations in force. The requirements in question include those of professionalism, integrity and independence and also those concerning the total number of positions held, without prejudice to situations of incompatibility pursuant to the law.

For the purposes of the provisions of Art. 1, paragraph two letters B) and C) of Ministry of Justice Decree No. 162 of 30th March 2000, research, production and the sale of chemical and pharmaceutical products are considered sectors of activity that are strictly connected with those of the Company. In this respect, we also report that article 19, paragraph 3 of Legislative Decree No. 39/2010, as amended by Legislative Decree No. 135/2016, requires that members of the committee for internal control and the accounting audit – which for "public interest entities" is the Board of Statutory Auditors – are competent as a whole and also in the sector in which the company operates.

The Board of Statutory Auditors appointed in this manner shall remain in office, in accordance with the law, for three years and therefore until the Shareholders' Meeting held to approve the Annual Report for the year ending 31st December 2022.

The Shareholders' Meeting shall also pass resolutions on the remuneration of the Board of Statutory Auditors, which the Corporate Governance Code for listed companies in force¹ , to which the Company adheres, recommends should be commensurate to the commitment required, to the importance of the position occupied and also to the size of the company and the sector in which it operates. In this regard, the Corporate Governance Committee has recently recommended –

¹ Edition July 2018

through the letter of its Chair dated 19th December 2019 – the amount of compensation paid to members of the controlling bodies corresponds to the competence, professionalism and commitment required of their position.

As already reported, with regard to the annual remuneration of the Board of Statutory Auditors currently in office, shareholders set their annual remuneration at €50,000 gross for the Chairman and at €35,000 gross for each of the other Statutory Auditors.

Also in light of a benchmarking analysis conducted by Willis Towers Watson on the remuneration practices in industrial and services companies belonging to FTSE Mib index, the Remuneration Committee has recommended an adjustment of the remuneration paid to the Board of Statutory Auditors in order to reach the first quartile of the analysed market.

Therefore, the Board of Directors, following a proposal of the Remuneration Committee, recommends that the remuneration paid to the Board of Statutory Auditors should be equal at least to the following values:

• € 62.000 gross for the Chairman;
• € 45.000 gross for each other member of the board of the Statutory Auditor.

Procedures, time limits and requirements for the presentation of lists

The appointment of the Board of Statutory Auditors shall be performed on the basis of lists presented by shareholders on which the candidates are placed in numerical order. The list must specify whether each candidate is nominated for the position of Statutory Auditor or for the position of Alternate Auditor. The election of one full auditor, who is the Chairperson of that board, and one alternate auditor is reserved to the minority.

Only shareholders who, either singly or together with other shareholders presenting a list, own a total number of shares representing at least 1% of the share capital with voting rights shall be entitled to present lists in accordance with Consob Resolution No. 28 of 28 th January 2020.

Each shareholder, including shareholders who have signed a shareholders' agreement identified in article 122 of Legislative Decree No. 58/1998, controlling entities, subsidiaries, and jointlycontrolled entities are prohibited from individually or jointly submitting more than one list or voting for different lists, even through a third party or trust company. Each candidate may only run on one list on penalty of disqualification. Endorsements of lists and votes cast in violation of this prohibition shall not be attributed to any list.

The lists, signed by those who present them, must be deposited by sending of an email from a certified email address to the address recordati@pec.recordati.it, at least 25 days prior to the date set for the shareholders' meeting (not later than 6:00 p.m. on Saturday 4th April 2020).

The following documents shall be submitted together with each list by the deadline specified above:

• a. information on the identity of the shareholders who have submitted the lists, indicating the total percentage of capital stock held.
• b. a declaration by shareholders other than those who hold, including jointly, a controlling interest or relative majority, attesting to the absence of any forms of connection with such shareholders, as provided for by the laws and regulations currently in force;

c. a thorough report of the personal characteristics of candidates and a declaration from the said candidates attesting that they possess the requirements established by law, together with their acceptance of the candidature.

Lists containing a number of candidates equal to or greater than three must be composed of candidates belonging to both genders, so that a percentage equal to that required by the legislation in force at the time concerning gender balance for the composition of the Board of Directors belongs to the least represented gender: a proportion equal to at least one fifth of the Statutory Auditors elected is reserved to the least represented gender (with the figure rounded up to the lower unit, if the number is a fraction, as indicated by Consob with its communication n. 1/20).

The specific certification demonstrating title to the necessary number of shares for the presentation of the list, issued by a legally authorised intermediary, must also be deposited within the time limits set by the relative regulations – i.e. not later than 6:00 p.m. on Wednesday 8 th April 2020 – at the time when the list is deposited at the Company.

Lists which do not comply with these requirements are considered as not having been presented.

With respect to the above, shareholders are also invited to consider the following:

• the recommendations contained in Consob communication No. DEM/9017893 of 26th February 2009 (more specifically, the recommendation to shareholders who present a minority list to deposit a declaration together with the list certifying the absence of connections, in accordance with art. 144-quinquies of the Issuers' Regulations, between the minority shareholders and the shareholders who hold a controlling interest);
• the provisions of the Corporate Governance Code for listed companies (which requires Statutory Auditors to be selected from among persons who qualify as independent according to the same criteria employed to qualify as an independent Director, established by the Board of Directors on the basis of the provisions of that Code);
• the provisions of the last paragraph of Art. 2400 of the Italian Civil Code with reference to the list of management and supervision positions held by the candidate in other companies which must be reported to shareholders at the time of nomination and first acceptance of the appointment: candidates are therefore invited to furnish a declaration in this respect in the information given on their personal and professional characteristics, with the recommendation that they maintain it up-to-date until the day on which the Shareholders' Meeting is actually held.

In the event of only one list or only lists presented by shareholders related to each other having been presented within the time limits just mentioned, the time limit for the presentation of lists shall be extended by three calendar days (i.e. not later than 6:00 p.m. on Tuesday 7th April 2020) and the percentage for the presentation of lists shall be reduced by half (i.e. to 0.5%).

*

In consideration of the foregoing, the shareholders are invited to:

First resolution:

• vote on the appointment of the Board of Statutory Auditors and its Chairman according to the aforementioned procedures;

Second resolution:

• set the remuneration of the Board of Statutory Auditors.

The Company shall disclose the lists of candidates deposited by shareholders together with the relative documentation to the public on the Recordati website (www.recordati.it) and on the authorised storage facility () at least twenty-one days prior to the date set for the shareholders' meeting (not later than 8 th April 2020).

Milan, 18th March 2020

For the Board of Directors The Chief Executive Officer Andrea Recordati