REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

pursuant to Article 123-bis of Legislative Decree No. 58 of 24 February 1998 Approved by the Board of Directors on 25 February 2021

REPORT ON CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE

pursuant to Article 123-bis of Legislative Decree No. 58 of 24 February 1998 Approved by the Board of Directors on 25 February 2021

2.4.2 Appointment and replacement of Auditors 59
2.4.3 Tasks of the Board of Statutory Auditors	60
2.4.4 Meetings of the Board of Statutory Auditors 62
2.4.5 Remuneration	62
2.5 Training initiatives for Directors and Statutory Auditors	62
3. Internal Control and Risk Management System	63
3.1 Main features of the ICRMS	63
3.2 Persons involved in the ICRMS and associated responsibilities	68
3.2.1 Director in charge of the ICRMS	68
3.2.2 Head of Internal Auditing and the Internal 69 Auditing Department
3.2.3 Risk Officer	71
3.2.4 Officer in Charge of preparing the Company's accounting records	72
3.2.5 The Organisation Model under Legislative 73 Decree No. 231/2001 and the Supervisory Body
3.2.6 Management system for the prevention of corruption and Head of the Anticorruption Department	76
3.2.7 Board of Statutory Auditors	78
3.2.8 External auditors	78
4. Regulation on related party transactions and other corporate governance documents	80
4.1 Regulation on related party transactions	80
4.2 Inside Information	81
4.3 Code of Conduct	82
5. Relations with Shareholders and stakeholders	84
Annex 1 and 2	86
Curricula vitae of the members of the Board of Directors	86
Curricula vitae of the members of the Board of Statutory Auditors	96
Table 1	102
Structure of the Board of Directors and Committees in 2020	102
Table 2	104
Structure of the Board of Statutory Auditors in 2020	104

INDEX

Glossary	4
Executive summary	6
Shareholders	6
Composition of the Board of Directors to the date of the Report	6
Characteristics of Board of Directors members	7
Composition of the Board of Statutory Auditors from 9 June 2020 to the date of the Report	7
Composition of the Board of Statutory Auditors until 9 June 2020	7
Other information on the Board of Directors, Committees and Board of Statutory Auditors	8
Internal Control and Risk Management System	9
Introduction and summary 10 information on the implementation of the new

Corporate Governance Code Company Profile	11
Information on	12
the ownership structure
1. Ownership structure	12
1.1 Structure of the share capital 1.2 Significant shareholdings and shareholders' 12	12
agreements 1.3 Limits on shareholdings and on voting rights 12
1.4 Special powers of the Italian State	13
1.4.1 The Italian State's veto power over certain 14 corporate resolutions
1.4.2 Power of the Italian State to impose conditions or to oppose the purchase of shares in the Company	15
1.5 Employee shareholdings: mechanisms for exercising voting rights	17
1.6 Appointment and replacement of Directors and amendments to the Company's By-laws	18

1.8 Change of control clauses	19
1.9 Directors' allowances for early cessation, also following a public tender offer	25
Information on Corporate Governance	26
2. Corporate governance system	26
2.1 Shareholders' Meeting	26
2.1.1 Powers and quorum	26
2.1.2 Procedures for calling Shareholders' Meetings	27
2.1.3 Eligibility to attend Shareholders' Meetings and voting procedures	27
2.1.4 Shareholders' rights	29
2.1.5 Shareholders' Meeting Proceedings	29
2.2 Board of Directors	29
2.2.1 Composition of the Board	29
2.2.2 Professional qualification and integrity requirements and reasons for ineligibility and incompatibility of Directors	30
2.2.3 The Board's position on the maximum number of offices Directors can hold in other companies	31
2.2.4 Appointment and replacement of Directors	32
2.2.5 Tasks of the Board	35
2.2.6 Meetings and functioning of the Board	42
2.2.7 Chairman of the Board of Directors	42
2.2.8 CEO	44
2.2.9 Non-executive Directors	45
2.2.10 Independent directors	45
2.2.11 Assessment of the operation of the Board and of the Advisory Committees	46
2.2.12 Remuneration	47
2.3 Advisory Committees	47
2.3.1 Control and Risk Committee	48
2.3.2 Remuneration Committee	51
2.3.3 Nomination Committee	54
2.3.4 Sustainability Committee	56
2.4 Board of Statutory Auditors	58
2.4.1 Composition of the Board of Statutory Auditors	58

Head of Internal Auditing The Head of the Internal Auditing Department appointed pursuant to Article 7.1 of the Corporate Governance Code

Issuers' Regulations The Regulations issued by CONSOB by Resolution No. 11971 of 14 May 1999 on issuers, as amended

New Corporate Governance Code The Corporate Governance Code approved by the Corporate Governance Committee (promoted by Borsa Italiana S.p.A., ABI, ANIA, Assogestioni, Assonime, and Confindustria) and published on 31 January 2020 2

Nomination Committee The Committee set up by the Board of Directors under Article 5 of the Corporate Governance Code

Organisation Model The Organisation Model adopted by the Company under Legislative Decree No. 231 of 8 June 2001

Offering Circular The offering circular relating to the public offer for sale and subscription and admission to listing on the Mercato Telematico Azionario organised and managed by Borsa Italiana S.p.A. of ordinary shares issued by Fincantieri

Officer in Charge The Manager responsible for preparing the Company's financial reports under Law 262/2005

Remuneration Committee The Committee set up by the Board of Directors under Article 6 of the Corporate Governance Code

Risk Officer The Risk Officer supports the Director in charge of the ICRMS to determine the methodologies to identify, evaluate and monitor the main business risks

Sustainability Budget The statement on non-financial information drawn up under Legislative Decree No. 254 of 30 December 2016 approved by the Board of Directors

Sustainability Committee The Committee set up by the Board of Directors under Article 4 of the Corporate Governance Code

TUF Legislative Decree No. 58 of 24 February 1998, as amended

1 Available, in various editions, on the Internet website of the Corporate Governance Committee at http://www.borsaitaliana.it/comitato-corporate-governance/codice/codice.htm.

Glossary

Board of Directors or Board The Board of Directors of Fincantieri

Borsa Italiana Borsa Italiana S.p.A.

By-laws Fincantieri's By-laws in force as of the date of this Report

Code of Conduct The Code of Conduct adopted by the Company and described in paragraph 4.3 of this Report

Committee for Related Party Transactions or RPT Committee

The Committee involved in handling related party transactions under CONSOB (Stock Exchange Regulatory Authority) Regulation, approved by Resolution No. 17221 of 12 March 2010, as amended

CONSOB Regulation on Related Party Transactions

The Regulation issued by CONSOB (Stock Exchange Regulatory Authority) by Resolution No. 17221 of 12 March 2010, as amended

Control and Risk Committee The Committee set up by the Board of Directors under Article 7 of the Corporate Governance Code

Corporate Governance Code or Code

The Corporate Governance Code for listed companies, approved by the Corporate Governance Committee and promoted by Borsa Italiana S.p.A., ABI, ANIA, Assogestioni, Assonime, and Confindustria 1

Corporate Governance Report or Report

This Report on Corporate Governance and Ownership Structure drafted pursuant to Article 123-bis of the Italian Consolidated Law on Finance (TUF)

Corporate Governance Committee

The Corporate Governance Committee established by Borsa Italiana S.p.A., ABI, Ania, Assonime, Confindustria and Assogestioni

Director in charge of the ICRMS

The Director in charge of setting up and maintaining an effective internal control and risk management system (ICRMS) under Article 7 of the Corporate Governance Code

Fincantieri or the Company FINCANTIERI S.p.A.

Group Fincantieri and its subsidiaries under Article 93 of the Italian Consolidated Law on Finance (TUF)

Executive summary

Shareholders

The graphs and tables below detail the composition of the shareholder structure and type of investors.

CRC: Control and Risk Committee RC: Remuneration Committee NC: Nomination Committee SC: Sustainability Committee

COMPOSITION OF THE BOARD OF DIRECTORS TO THE DATE OF THE REPORT

) Member of the Control and Risk Committee in place of Director Santini when the Committee, meeting in its capacity as RPT Committee, examines transactions with related parties of greater significance.

DIRECTOR	OFFICE	EXPIRY OF TERM	ROLE	INDEP. BY LAW	INDEP. BY CODE	CRC CC NC SC
Giampiero Massolo	Chairman	Sh. Meeting to approve 2021 Financial Statements	Executive	-	-	-	-	-	-
Giuseppe Bono	CEO	Sh. Meeting to approve 2021 Financial Statements	Executive	-	-	-	-	-	-
Barbara Alemanni	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	X	X	-	-
Massimiliano Cesare	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	C	-	X	-
Luca Errico	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	-	-	X	X
Paola Muratorio	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	X1	C	-	X
Elisabetta Oliveri	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	-	X	-	C
Fabrizio Palermo	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	-	-	-	X	X	-
Federica Santini	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	-	-	X	-	-	X
Federica Seganti	Director	Sh. Meeting to approve 2021 Financial Statements	Non-executive	√	√	X	-	C	-
CRC: Control and Risk Committee		( 1 ) Member of the Control and Risk Committee in place of Director Santini			(C): Chairman of the Committee

(C): Chairman of the Committee (√): Satisfies the requirements (-): Not applicable (X): Member of the Committee

CHARACTERISTICS OF BOARD OF DIRECTORS MEMBERS

AREA OF EXPERTISE

33.3% 44.4% 55.5% INDUSTRIAL FINANCIAL INTERNATIONAL RELATIONS PLANNING AND STRATEGY 11.1%

LEGAL

11.1%

COMPOSITION OF THE BOARD OF STATUTORY AUDITORS FROM 9 JUNE 2020 TO THE DATE OF THE REPORT

COMPOSITION OF THE BOARD OF STATUTORY AUDITORS UNTIL 9 JUNE 2020

MEMBERS	ROLE	EXPIRY OF TERM
Gianluca Ferrero	Chairman	Sh. Meeting to approve 2022 Financial Statements
Rossella Tosini	Standing Auditor	Sh. Meeting to approve 2022 Financial Statements
Pasquale De Falco	Standing Auditor	Sh. Meeting to approve 2022 Financial Statements
Alberto De Nigro	Alternate Auditor	Sh. Meeting to approve 2022 Financial Statements
Valeria Maria Scuteri	Alternate Auditor	Sh. Meeting to approve 2022 Financial Statements
Aldo Anellucci	Alternate Auditor	Sh. Meeting to approve 2022 Financial Statements

MEMBERS	ROLE	EXPIRY OF TERM
Gianluca Ferrero	Chairman	Sh. Meeting to approve 2019 Financial Statements
Roberto Spada	Standing Auditor	Sh. Meeting to approve 2019 Financial Statements
Fioranna Vittoria Negri	Standing Auditor	Sh. Meeting to approve 2019 Financial Statements
Alberto De Nigro	Alternate Auditor	Sh. Meeting to approve 2019 Financial Statements
Flavia Daunia Minutillo	Alternate Auditor	Sh. Meeting to approve 2019 Financial Statements
Massimiliano Nova	Alternate Auditor	Sh. Meeting to approve 2019 Financial Statements

* The statistical data of this table for Fincantieri refer to the composition and operation of the Board of Directors, of its internal Committees and of the Board of Statutory Auditors during 2020. ** Last available data from the report of Assonime - Emittenti Titoli S.p.A. "Corporate Governance in Italy: corporate governance, remunerations and comply-or-explain (year 2020)" of 10 February 2021.

OTHER INFORMATION ON THE BOARD OF DIRECTORS, COMMITTEES AND BOARD OF STATUTORY AUDITORS *

	FINCANTIERI	AVERAGE FOR LISTED COMPANIES **
		All-share	Mid Cap
Number of Directors	10	9.9	11.1
Number of executives	2	2.5	2.5
Number of non-executives	8	7.4	8.6
Number of non-executives that do not qualify as independent under the Code	2	2.8	3
Number of independent under the Code	6	4.6	5.6
% less represented gender	50	-	-
Average age of Directors	57.3	57.1	-
No. BoD meetings	13	11	12.1
% attendance at BoD meetings	89.2	93	-
Average duration of BoD meetings	127 min.	141 min.	157 min.
Board evaluation	Implemented	83%	-
Position on multiple offices	Adopted	45%	54%

	FINCANTIERI		AVERAGE FOR LISTED COMPANIES **
		All-share	Mid Cap
No. of CRC meetings	11	8.6	10.1
% attendance at CRC meetings	93	77	-
Average duration of CRC meetings	90 min.	118 min.	127 min.
No. of RC meetings	8	5.2	6.4
% attendance at RC meetings	75	88	-
Average duration of RC meetings	76 min.	67 min.	72 min.
No. of NC meetings	3	6.5	5.4
% attendance at NC meetings	75	84	-
Average duration of NC meetings	63 min.	66 min.	62 min.
No. SC meetings	6	-	-
% attendance by SC	87.5	-	-
Average duration SC meetings	108 min.	-	-

	FINCANTIERI	FINCANTIERI	AVERAGE FOR LISTED COMPANIES **
	(from 1 january to 9 june 2020)	(from 10 june to 31 december 2020)	All-share	Mid Cap
Number of Auditors	3	3	-	-
Average age of Auditors	58.7	58	56.2	-
No. of meetings	4	5	14.2	16.8
Average duration of meetings	217 min.	93 min.	151 min.	153 min.
% attendance by Auditors	100	100	97	-

INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

BODY / DEPARTMENT	COORDINATOR	NOTES
Director in charge of the ICRMS	Chairman of the Board of Directors	-
Internal Auditing Department	-	Inside the Company
Head of Internal Auditing	Stefano Dentilli	Reports to the Board of Directors
Risk Officer	Stefano Dentilli	-
Officer in Charge	Felice Bonavolontà	Group Accounting and Administration Manager
Supervisory Body 3	Guido Zanardi (Chairman) Giorgio Pani Stefano Dentilli	External member External member Internal member
Head of Anticorruption Department	Stefano Dentilli	Reports to the Board of Directors
Board of Statutory Auditors in office until the Shareholders' Meeting of 9 June 2020	Gianluca Ferrero (Chairman) Roberto Spada Fioranna Vittoria Negri	-
Board of Statutory Auditors Appointed by the Shareholders' Meeting of 9 June 2020	Gianluca Ferrero (Chairman) Rossella Tosini Pasquale De Falco	-
External auditors	Deloitte & Touche S.p.A.	Expiry of term: Shareholders' Meeting to approve 2028 Financial Statements

3 On 25 February 2021, the Board appointed the new Supervisory Board with the following composition: Attilio Befera, Chairman, Fioranna Negri, external member, Stefano Dentilli, internal member.

Introduction and summary information on the implementation of the new Corporate Governance code

This Report contains the information required by Article 123-bis of the Italian Consolidated Law on Finance (TUF) and by the regulatory provisions in force applicable to the corporate governance system adopted by the Company and the associated ownership structure with regard to 2020. In line with the recommendations of the Corporate Governance Code, which the Company has complied with since 31 December 2020, this Report also contains complete and accurate information on the manner in which the Company complies with the principles and criteria of the Code, indicating (as relevant) any specific recommendations that the Company has not in fact adhered to.

Starting from January 2021, the Company has adjusted its corporate governance system to the new Corporate Governance Code. More specifically, with a resolution dated 28 January 2021, the Board of Directors, having consulted with the relevant Committees, approved the following documents:

a) Regulations for the Board of Directors
b) Regulations for the Nomination Committee, amended to incorporate the provisions of the new Corporate Governance Code;
c) Regulations for the Remuneration Committee, amended to incorporate the provisions of the new Corporate Governance Code;
d) Regulations for the Sustainability Committee, amended to incorporate the provisions of the new Corporate Governance Code;
e) Regulations for the Control and Risk Committee, amended to incorporate the provisions of the new Corporate Governance Code;
f) Procedure for the preparation of the Remuneration Policy and for the assessment of the consistency of the remuneration paid;
g) Procedure for the Board Evaluation;
h) Succession plan for the Chairman of the Board of Directors and the Chief Executive Officer;
i) Top Management Succession Guidelines;
j) Guidelines on the maximum number of offices that Directors may hold, amended to reflect the provisions of the new Corporate Governance Code;
k) Criteria of significance for reports and additional remuneration for the assessment of independence;
l) General criteria for identifying significant transactions by subsidiaries.

It should also be noted that, on 10 February 2021, following the adaptation of Fincantieri's corporate governance structure to the new Corporate Governance Code, the Board of Directors has already carried out, with regard to the Directors in office, the assessment of independence and compliance with the principles regarding the accumulation of offices on the basis of the new rules.

In addition, on 9 February 2021, the Board of Statutory Auditors performed a new review of the Statutory Auditors' independence requirements, also in light of the recommendations of the new Corporate Governance Code. These aspects will be better detailed in the report for the year 2021.

Company profile

Fincantieri is one of the most important shipbuilding groups in the world and the first of its kind for diversification and innovation. The Fincantieri Group is a world leader in designing and constructing cruise ships and is the point of reference for all areas of high-tech shipbuilding, from offshore military support vessels (OPV), special ships and highly complex ferries to mega-yachts. The Group is also a point of reference in the field of ship repairs and conversions, in the production of systems and components in the mechanical and electrical sectors, in naval furnishing solutions, in electronic systems and software, in infrastructures and maritime works as well as in the offer of after-sales services.

In the context of the abovementioned operations, Fincantieri operates through three operating segments: Shipbuilding, Offshore and Special Ships and Systems, Components and Services. Shipbuilding operations include the design and construction of ships for the cruise and expedition cruise vessels business areas, military vessels and other products and services (ferries, mega-yachts). Production takes place at the Group's Italian, European and US shipyards.

The Offshore and Special Ships operating segment includes the design and construction of high-end offshore support vessels, specialised vessels, offshore wind farm vessels and offshore aquaculture and unmanned vessels, offering innovative products with reduced environmental impact. The Fincantieri Group operates in this industry through FINCANTIERI S.p.A., Fincantieri Oil&Gas and the VARD Group.

Finally, the Systems, Components and Services operating segment includes ship repairs and conversion, logistical support, refitting, training and after-sales services, outfitting of cabins and public areas. The operational area also includes the design and integration of complex systems, such as integrated systems, and telecommunications, the design and manufacture of energy generation and storage systems, infrastructure and maritime works. These activities are carried out by Fincantieri and certain subsidiaries, mainly Fincantieri Infrastructure and Fincantieri Infrastructure Opere Marittime, Fincantieri NexTech, Fincantieri SI, Cetena, E-PHORS S.p.A., Isotta Fraschini Motori, Marine Interiors and Marine Interiors Cabins, SEASTEMA and Fincantieri Marine Systems North America Inc. ("FMSNA").

The Fincantieri Group, based in Trieste, has 18 shipyards in 4 continents and a total of approximately 20,157 employees, of whom over 9,844 in Italy. The main subsidiaries of Fincantieri are: Cetena, Isotta Fraschini Motori, Marine Interiors and Marine Interiors Cabins, SEASTEMA, Fincantieri Infrastructure and Fincantieri Infrastructure Opere Marittime, Fincantieri NexTech, Fincantieri Marine Systems North America Inc., Fincantieri Marine Group LLC and VARD, a group based in Norway.

-

10 11

Information on the ownership structure

1. Ownership structure

1.1 Structure of the share capital

The Company's share capital consists exclusively of ordinary shares without nominal value. The shares are registered, indivisible and each share entitles the holder to one vote. The shares are freely transferable.

At 31 December 2020, Fincantieri's share capital amounted to EUR 862,980,725.70 divided into

1,699,651,360 shares. This figure is also confirmed as of the date of this Report (for further information, see paragraph 1.7 below).

The Company's shares are listed on the Italian Electronic Stock Market (MTA) organised and managed by Borsa Italiana.

1.2 Significant shareholdings and shareholders' agreements

Fincantieri's shareholders' register, reports to CONSOB received by the Company and other information available to the Company reveal that, as of the date of this Report, no person, with the exception of the controlling shareholder (see below), holds a shareholding in Fincantieri that exceeds 3%, nor are there any known shareholders' agreements under Article 122 of the Italian Consolidated Law on Finance (TUF) involving the Company's shares.

71.32% of the share capital is indirectly held by Cassa Depositi e Prestiti S.p.A. (a subsidiary of the Ministry of the Economy and Finance) through its subsidiary CDP Industria S.p.A. ("CDP Industria").

The Company is not subject to the exercise of management and coordination activities under Articles 2497 and following of the Italian Civil Code by CDP Industria.

Consequently, Fincantieri: (i) operates independently with regard to how arrangements with customers and suppliers are conducted without any external intervention; (ii) independently prepares the Company's or the Group's strategic, industrial and financial plans and/or budget; (iii) is not subject to the rules issued by CDP Industria; (iv) has no agreements for cash and cash equivalents with CDP Industria, nor has it granted financial assistance or coordination duties to CDP Industria; and (v) receives no guidelines or instructions from CDP Industria either on financial and credit matters or with regard to extraordinary transactions or operating strategies.

1.3 Limits on shareholdings and on voting rights

Under Article 3 of Law Decree No. 332 of 31 May 1994, converted with amendments into Law No. 474 of 30 July 1994, ("Law on Privatisations"), Article 6-bis of the Company's By-laws provides that no person or entity other than the Italian State, public bodies or entities controlled by the same may, on any basis whatsoever, hold shares in Fincantieri representing more than 5% of its share capital unless permitted by applicable legislative and regulatory provisions.

This equity interest ceiling is calculated also by taking into account the overall shareholding held by the

controlling party, whether it be a natural or legal person or entity, by all direct and indirect subsidiaries, as well as by companies controlled by a single controlling entity, by affiliate entities and also by natural persons who are associated by family or kinship relations up to the second degree or by marriage, provided that the spouse in question is not legally separated. In calculating the abovementioned 5% ceiling, account is also taken of shares held through trust companies and/or indirectly through intermediaries in general. Voting rights and other rights unrelated to economic rights may not be exercised for shares held over and above this 5% limit, and the voting rights that would be exercisable by each of the parties subject to the shareholding ceiling shall be proportionately reduced, unless otherwise collectively indicated by the shareholders concerned. If the above rules are infringed, the shareholders' resolution may be challenged under Article 2377 of the Italian Civil Code if the required majority would not have been achieved without the votes that exceeded the maximum ceiling. Shares for which the voting rights may not be exercised are still taken into account, however, for purposes of determining whether the Shareholders' Meeting was duly constituted. However, the Law on Privatisations dictates that the By-laws clause that limits shareholdings and voting rights will not apply if the 5% limit is exceeded following a public tender offer as a result of which the offeror acquires an equity interest amounting to at least 75% of the share capital with rights to vote on resolutions related to the appointment and removal of Directors.

1.4 Special powers of the Italian State

By virtue of the type of activities carried out, the Company is subject to the provisions of Article 1 of Law Decree No. 21 of 15 March 2012 ("Law Decree No. 21/2012"), converted with amendments into Law No. 56 of 11 May 2012 ("Law No. 56/2012") and subsequently amended, on the Italian State's special powers concerning defence and national security ("golden powers").

MAIN SHAREHOLDERS		% SHARE CAPITAL FINCANTIERI
Indirect	Direct
Cassa Depositi e Prestiti S.p.A.	CDP Industria S.p.A.	71.32

Specifically, Article 1 specifies that, with reference to companies that engage in "activities of strategic importance for the defence and national security system", the Italian State, in the event of a serious threat to its key national defence and national security interests, and irrespective of any relevant provisions contained in the Company's By-laws4 , may:

a) impose specific conditions on the security of procurements, on the security of information, on technological transfers, on controls of exports where shareholdings are purchased (on any basis whatsoever) in enterprises that engage in business operations of strategic importance to national defence or national security interests;
b) prohibit the adoption of resolutions, acts or transactions by the Shareholders' Meeting or management bodies of an enterprise referred to in letter a) related to the Company's merger or de-merger, transfer of the Company or its business units or its subsidiaries, transfer abroad of the Company registered office, modification of the corporate purpose, dissolution of the Company, amendment of any provisions of the Company's By-laws adopted under Article 2351, paragraph 3, of the Italian Civil Code or introduced under Article 3, paragraph 1, of Law Decree No. 332 of 31 May 19945 , converted, with amendments, by Law No. 474 of 30 July 1994, sale of in rem rights or rights of use related to tangible or intangible assets or acceptance of constraints on their use, also due to the subjection of the company to insolvency proceedings; and
c) oppose the purchase, on any basis whatsoever, of equity interests in a company referred to in letter a) by an entity other than the Italian State, Italian public entities or entities controlled by the same, if the purchaser comes to hold, directly or indirectly, including through subsequent acquisitions, through intermediaries or otherwise affiliated entities, equity interests with voting rights to an extent that could compromise national defence and national security interests in specific cases. To this end, the above rules apply to any shareholding held by third parties with whom the purchaser has entered into any of the agreements referred to in Article 122 of the Italian Consolidated Law on Finance (TUF) or those referred to in Article 2341-bis of the Italian Civil Code6 .

In implementing Law Decree No. 21/2012, "activities of strategic importance for the defence and national security system" have been identified by Decree No. 253 of the President of the Council of Ministers of 30 November 2012, ("DPCM No. 253/2012"), subsequently repealed and replaced by Decree No. 108 of the President of the Council of Ministers of 6 June 2014, ("DPCM No. 108/2014").

1.4.1 The Italian State's veto power over certain corporate resolutions

As described above, the Italian State has veto powers over resolutions, acts or transactions adopted by the Fincantieri Shareholders' Meeting or Board of Directors, in the areas referred to in Article 1, paragraph 1, letter b) of Law Decree No. 21/2012 (see letter b) of paragraph 1.4 above.

The Italian government, in assessing the possibility that key defence and national security interests could be adversely affected as a result of such resolutions, acts or transactions referred to in letter b) of paragraph 1 of Article 1 of Law Decree No. 21/2012, takes into account – while also considering the subject matter of the resolution, act or transaction – the strategic importance of the assets or enterprises being transferred, the ability of the structure that results from the resolution, from the act or from the transaction to guarantee the integrity of the national defence and national security system, the security of military defence information, the State's international interests, the protection of the national territory, critical and strategic infrastructures and borders, as well as any other elements that need to be evaluated in the event that equity interests are purchased in the situations referred to in paragraph 1.4.2. below.

In accordance with the provisions of Article 1, paragraph 4, of Law Decree No. 21/2012, for the purposes of the potential exercise of the veto power, Fincantieri shall provide the President of the Council of Ministers with complete information on the resolution, act or transaction to be adopted – prior to adopting a resolution or act or transaction on the abovementioned matters – and the President of the Council of Ministers will take any necessary decisions and notify them to Fincantieri in accordance with the procedures and deadlines envisaged by Law Decree No. 21/2012 and by Presidential Decree No. 35 of 19 February 2014 ("DPR No. 35/2014"). More specifically, within forty-five business days from the notification (or a different term as indicated in Article 1, paragraph 4 of Law Decree No. 21/2012), the President of the Council of Ministers shall communicate any veto. If there is no veto by the time this deadline expires, the transaction may be implemented. The veto power referred to in Article 1, paragraph 4 of Law Decree No. 21/2012 shall be exercised in the form of the imposition of specific requirements or conditions whenever this can ensure that the country's key defence and national security interests are safeguarded.

Resolutions or acts adopted in breach of the abovementioned veto power shall be null and void. The Government may also order the company and any counterparty to restore the status quo ante at their expense. Law Decree No. 21/2012, unless the relevant conduct constitutes a criminal offence, imposes administrative fines of up to twice the value of the transaction and, in any case, not less than 1% of the accumulated turnover generated by the companies involved in the most recent financial year for which the financial statements have been approved, on anyone who fails to comply with the obligations, including those deriving from the measure exercising the power referred to in Article 1, paragraph 1, letter b) of Law Decree No. 21/2012, possibly exercised in the form of the imposition of specific requirements or conditions.

1.4.2 Power of the Italian State to impose conditions or to oppose the purchase of shares in the Company

Under Article 1, paragraph 5, of Law Decree No. 21/2012, any person – except for the Italian State, Italian public entities or entities controlled by them – that acquires a shareholding in the Company that exceeds the threshold provided under Article 120, paragraph 2, of the Italian Consolidated Law on Finance (TUF) or a shareholding that exceeds the 3%, 5%, 10%, 15%, 20%, 25% and 50% thresholds, shall, no later than ten days from such acquisition, inform the President of the Council of Ministers of the same, at the same time transmitting the necessary information, including a general description of the acquisition project, the purchaser and its area of operation, for the assessments referred to in Article 1, paragraph 3 of the Law Decree No. 21/2012. Following such notification, the Italian State, within forty-five days of receipt of the notification (or a different term as indicated by Article 1, paragraph 5 of Law Decree No. 21/2012), may impose specific conditions in accordance with Article 1, paragraph 1, letter a) of Law Decree No. 21/2012 (see the above letter a) of paragraph 1.4 above) or oppose the acquisition of the shareholding in accordance with Article 1, paragraph 1, letter c), of Law Decree No. 21/2012 (see letter c) of paragraph 1.4 above), if it considers that the State's key national defence and national security interests are adversely affected as a result of such acquisition.

In accordance with Article 1, paragraph 3 of Law Decree No. 21/2012, to assess the likelihood that the State's key national defence and national security interests will be adversely affected as a result of the acquisition of the shareholding referred to in letters a) and c) of Article 1, paragraph 1 of Law Decree No. 21/2012, the Government will take into account the following - based on principles of proportionality and reasonableness and considering the purchaser's potential influence over the Company, also by virtue of the size of the shareholding acquired:

a) the adequacy (also considering the manner in which the acquisition is financed) of the purchaser's economic, financial, technical and organisational capabilities and of the industrial plan, related to the regular continuance of operations, to ensure the maintenance of technological assets, including key strategic assets, the security and continuity of procurements, as well as the prompt implementation of contractual obligations that the company, whose shareholding is being acquired, entered into with public and government entities, whether directly or indirectly, specifically in relation to obligations associated with national defence, public order and national security; and b) the existence (taking due account of the official positions of the European Union) of objective reasons that suggest that links exist between the purchaser and third countries that do not recognise principles

⁴ These powers are exercised by Decree of the President of the Council of Ministers adopted based on a resolution of the Council of Ministers to be communicated promptly and by extract to the competent Parliamentary Commissions. 5 As most recently amended under Article 3 of Law Decree No. 21/2012.

⁶ Paragraph 1-bis of the same Article 1, introduced by Law No. 56 of 11 May 2012, which converted with amendments Law Decree No. 21/2012, also provides that "The decrees referred to in paragraph 1 [...] establish the type of acts or transactions within the same group to which the rules set forth in this Article do not apply".

of democracy or the rule of law, or do not honour rules of international law or have engaged in conduct threatening to the international community inferable from the nature of their alliances, or that have dealings with criminal or terrorist organisations or with persons or entities related to such organisations7 .

Under Article 1, paragraph 5 of Law Decree No. 21/2012, decisions involving the possible imposition of conditions or the exercise of the power of opposition are taken by the President of the Council and notified to the purchaser in accordance with the procedures and deadlines envisaged by Law Decree No. 21/2012 and Presidential Decree No. 35/2014.

More specifically, within forty-five business days from the notification (or a different term as indicated in Article 1, paragraph 5 of Law Decree No. 21/2012), the President of the Council of Ministers shall communicate any conditions imposed or the exercise of the veto power.

Up to the notification and in any case until the expiry of the deadline for the imposition of conditions or for the exercise of the power of opposition, voting rights and rights unrelated to economic rights associated with the shares representing the relevant shareholding, are suspended.

If the President of the Council of Ministers exercises the power to impose conditions, and if the conditions imposed upon the purchaser are infringed or not complied with (and for as long as any such infringement or noncompliance continues), the voting rights and rights, unrelated to the economic rights associated with the shares representing the relevant shareholding, are suspended.

Any resolutions that are adopted with the casting vote of such shares, as well as resolutions, agreements or actions adopted in breach of the conditions imposed, shall be null and void. A purchaser failing to honour the conditions imposed will – unless the relevant conduct constitutes a criminal offence – be fined an amount equal to twice the value of the transaction, but no less than 1% of the turnover generated in the most recent financial year for which the financial statements were approved.

Unless the fact constitutes a crime, and without prejudice to the invalidity provided for by law, anyone who fails to comply with the notification obligations set out in Article 1 of Law Decree No. 21/2012 shall be fined of up to twice the value of the transaction and, in any case, not less than 1% of the cumulative turnover generated by the companies involved in the last financial year for which the financial statements were approved.

If the power to oppose the shareholder's acquisition is exercised, the purchaser may not exercise voting rights or rights other than the property rights, related to the shares representing the shareholding in question, and will be obligated to transfer such shares within one year. If this requirement is infringed, the Court, at the request of the President of the Council of Ministers, will order the shareholding in question to be sold in accordance with the procedures envisaged by Article 2359-ter of the Italian Civil Code. Any Shareholders' Meeting resolutions adopted with the casting vote of such shares shall be null and void.

Therefore, without prejudice to the mandatory ceilings on shareholdings envisaged by Article 6-bis of the Company's By-laws (see paragraph 1.3 above), any party – with the exception of the Italian State, Italian public entities or entities controlled by them – acquiring shareholdings that exceed the thresholds provided for by Article 1, paragraph 5, of Law Decree No. 21/2012, will be subject to the procedure of notification to the President of the Council of Ministers to enable the Italian State to exercise its special powers if necessary, and this may in specific circumstances lead to the State imposing conditions on or opposing the acquisition of corporate shareholdings in the Company by third parties.

Moreover, note that under Article 3, paragraph 1, of Law Decree No. 21/2012, subject to the power to oppose the acquisition (referred to in Article 1, paragraph 1, letter c) of Law Decree No. 21/2012), any type of acquisition by a non-EU party8 of shareholdings in Fincantieri is permitted on condition of reciprocity, in accordance with international agreements signed by Italy or the European Union9 .

1.5 Employee shareholdings: mechanisms for exercising voting rights

Under Article 137, paragraph 3 of the Italian Consolidated Law on Finance (TUF), the By-laws of listed companies may contain provisions aimed to facilitate proxy voting by Shareholders who are employees. In line with the foregoing, expressly under Article 15.3 of Fincantieri's By-laws, to facilitate collecting proxies from Shareholders who are employees of the Company and its subsidiaries and members of associations of Shareholders who satisfy the requirements of applicable regulatory provisions, spaces to be used for communications and for collecting proxies should be made available to such associations of shareholders, according to the terms and procedures agreed at any time with their legal representatives. As of the date of this Report, the Company has not been notified of the establishment of any association of employee Shareholders.

In relation to employee-held shareholdings, note that the Shareholders' Meetings of 19 May 2017 and 11 May 2018 approved share incentive plans called "Performance Share Plan 2016-2018" and "Performance Share Plan 2019-2021", respectively, which provide for the free allocation of Company shares to certain categories of employees. On 30 July 2019, 7,532,290 ordinary shares with no par value were issued with the same characteristics as the outstanding ordinary shares to service the first cycle of the "Performance Share Plan 2016-2018". The plans do not limit the exercise of voting rights for shares granted. On 3 July 2020, Fincantieri allocated, free of charge, 2,685,862 of its 7,226,303 treasury shares to the beneficiaries of the second cycle of the "Performance Share Plan 2016-2018", without therefore resorting to the issue of new shares. For further information on these plans, please refer to the Information Documents prepared under Article 114-bis of the Italian Consolidated Law on Finance (TUF) and Article 84-bis of the Issuers' Regulations, available on the Company's Internet website at www.fincantieri.com, in the Section relating to Shareholders' Meetings ("Ethics and Governance - Shareholders' Meetings - Archive - Shareholders' Meeting 2017" and "Ethics and Governance - Shareholders' Meetings - Archive - Shareholders' Meeting 2018").

7 Further specific aspects of the case in which the acquisition of the shareholdings is carried out by a non-EU subject are provided for by paragraph 3-bis of the same Article 1 of Law Decree No. 21/2012, introduced by Law Decree No. 105 of 21 September 2019, as converted with amendments by Law No. 133 of 18 November 2019. 8 For the definition of a non-EU party, reference should be made to Article 2, paragraph 5-bis of Law Decree No. 21/2012.

⁹ For any matters not expressly indicated in the preceding sections on golden power, reference should be made to the updated text of Law Decree No. 21/2012.

1.6 Appointment and replacement of Directors and amendments to the Company's By-laws

The laws and regulations and provisions of the By-laws that govern the appointment and replacement of the Company's Directors are described in paragraph 2.2.4 of this Report.

Amendments to the By-laws are adopted by the extraordinary Shareholders' Meeting, observing the quorums envisaged by applicable rules.

Subject to the foregoing, Article 25.3 of the By-laws empowers the Board of Directors, under Article 2365 of the Italian Civil Code:

to adopt resolutions relating to mergers and de-mergers in the cases envisaged by law;
to establish or close sub-offices;
to indicate which Directors are authorised to represent the Company;
to reduce the share capital in the event that one or more shareholders withdraw from the Company;
to adjust the By-laws to ensure compliance with applicable regulatory provisions; and
to transfer the registered office within Italy.

1.7 Authorisations to increase the share capital and to issue equity securities or purchase treasury shares

As of the date of this report, the Board of Directors has not been granted any powers to increase the share capital, pursuant to Article 2443 of the Italian Civil Code.

On 19 May 2017, the extraordinary Shareholders' Meeting resolved to issue in several tranches no later than the deadline of 31 December 2021 up to 50,000,000 ordinary shares, without nominal value and having the same characteristics as the outstanding ordinary shares, to service the "Performance Share Plan 2016-2018", to be granted free of charge, in accordance with Article 2349 of the Italian Civil Code, to the beneficiaries of the plan, without increasing the share capital. Similar approval for the issue, also in several tranches, within 31 December 2024, of maximum amount of 25,000,000 new ordinary shares to service the "Performance Share Plan 2019-2021" was resolved by the extraordinary Shareholders' Meeting of 11 May 2018. On 27 June 2019, the Board of Directors executed the powers granted by the Extraordinary Shareholders' Meeting of 19 May 2017, resolving to issue 7,532,290 ordinary shares with no par value, having the same characteristics as the outstanding ordinary shares, to service the "Performance Share Plan 2016-2018", to be allocated free of charge to the beneficiaries of the same without share capital increase under Article 2349 of the Italian Civil Code according to the terms and conditions set out therein. During the 2018 financial year, the purchase of treasury shares was approved in accordance with Article 2357 of the Italian Civil Code by virtue of the resolutions of the ordinary Shareholders' Meeting of 19 May 2017 and the ordinary Shareholders' Meeting of 11 May 2018 (the latter subject to cancellation of the previous approval). For further information, please refer to the Explanatory Report of the Board of Directors, available on the Company's Internet website at www.fincantieri.com, in the section "Ethics and Governance - Shareholders' Meetings - Shareholders' Meeting 2018".

A similar authorisation was approved by the Ordinary Shareholders' Meeting held on 5 April 2019, subject to cancelling the authorisation issued by the Shareholders' Meeting of 2018, and subsequently by the Ordinary Shareholders' Meeting of 9 June 2020, subject to cancelling the authorisation issued by the 2019 Shareholders' Meeting, for the purposes, within the limits and under the conditions, set out in the Explanatory Report of the Board of Directors available on the Company's Internet website at www.fincantieri.com, in the section "Ethics and Governance - Shareholders' Meetings - Shareholders' Meeting April 2020", including the commencement of the possibility to make purchases from 1 January 2021. At the date of this Report, no purchases had been made under this authorisation.

Another authorisation will be submitted to the Shareholders' Meeting called to approve the 2020 financial statements, subject to cancelling the authorisation issued by the 2020 Shareholders' Meeting, for the purposes, within the limits and under the conditions, set out in the Explanatory Report of the Board of Directors available on the Company's Internet website at www.fincantieri.com, in the "Ethics and Governance - Shareholders' Meetings - Shareholders' Meeting 2021" section.

The maximum number of treasury shares held by the Company at the end of the financial year amounted to 4,540,441, equal to 0.27% of the share capital.

1.8 Change of control clauses

A) Construction Financing

On 15 May 2020, a pool of banks consisting of Intesa Sanpaolo S.p.A. and Cassa Depositi e Prestiti S.p.A. with Banca IMI S.p.A. as agent, granted Fincantieri a short-term, 17-month secured credit line, expiring on 31 October 2021, for a maximum amount of EUR 400 million, to be used for work listed in the progress status reports and intended to finance the working capital requirements that may arise in the last months of constructing 6306 cruise ship for the shipowner COMPANIERA NAVIERA EVO 1 S.A. worth EUR 890 million and scheduled for delivery during July 2021.

Under this loan, the lenders are entitled, in the event of a change of control, to request the total prepayment of the loan amount used.

result of exercising dominant influence under Article 2359, paragraph 1, points 2 and 3 of the Italian Civil Code or otherwise), all or the majority of the members of Fincantieri's Board of Directors; or (c) issue binding instructions to Fincantieri's Board of Directors with reference to guidelines with a financial and operational direction. As a precaution to take into account the potential developments of the prospective cooperation between Fincantieri and Naval Group and between Italy and France in the military shipbuilding sector, of which Fincantieri has informed the market, it has been provided that assuming powers under points (a), (b) and (c) by the French Republic, its Ministries or entities directly or indirectly controlled by them will not amount to change of control. In the event that a change of control occurs, a period of fifteen business days for consultation has been provided during which the banks and Fincantieri can agree on the continuation of their relationship. If no agreement has been reached within said fifteen business days, the banks are entitled to cancel the credit line. In such event, Fincantieri would be obligated to repay all amounts disbursed in advance, including interest accrued up to that time and any other charges provided.

B) BNP Paribas S.A. Receivables Purchase Agreement

On 18 November 2019, Fincantieri and BNP Paribas - Italian Branch - Milan and Intesa Sanpaolo S.p.A. entered into a Receivables Purchase Agreement aimed at allowing the assignment, subject to final payment, of the flows to Fincantieri arising from cruise ship construction agreements.

The uncommitted agreement provides for a maximum amount of EUR 300 million, divided equally between the two lending banks.

In the agreement, a change of control is defined as the event or circumstance where one or more persons, other than the Italian Republic (or a Ministry) and/or any other company directly or indirectly controlled thereby or by its Ministries ("Qualified Italian Owner") acting in concert with one another in the case of a corporation or a partnership, will hold: (i) the power to (a) exercise or control the exercise of more than half of the votes that could be cast at the Ordinary Shareholders' Meeting of Fincantieri or (b) appoint or remove (as a result of the exercise of dominant influence under Article 2359, paragraph 1, Nos. 2 and 3, of the Italian Civil Code) all or a majority of the members of the Board of Directors of Fincantieri, or (c) issue binding instructions to the Board of Directors of Fincantieri concerning guidelines with a financial and operational direction; or (ii) exercise a dominant influence under Article 2359, paragraph 1, Nos. 2 and 3, of the Italian Civil Code on Fincantieri or on its parent company. However, cases are not considered a change of control where, as a result of reorganisation, Fincantieri becomes, directly or indirectly, jointly owned by a Qualified Italian Owner and by a similar public body of Germany, France, Norway, Spain, the Netherlands, Finland and the United Kingdom or another foreign government agency approved by the lending bank ("Qualified non-Italian Owner"), provided that the financial and operational strategic decisions are taken with the consent of the Qualified Italian Owner. The very broad scope of the clause is due to the fact that the agreement is a framework agreement, which does not have a pre-established expiry, and to the impossibility of anticipating political agreements that could result in companies controlled by some western states entering Fincantieri's capital. In these hypothetical situations, the above agreements may be put in place without the lender being able to request the mandatory prepayment of the loan.

In the event of a change in control there will be a period of thirty days of consultation where the bank and Fincantieri may arrange for the continuation of the relationship.

After thirty days without an agreement having been reached, the lending banks are entitled to consider the agreement terminated, in which case the line granted would be cancelled and Fincantieri would be required to repay any amounts disbursed in advance, including interest on the last business day of the current month. On 21 June 2019, an agreement was signed between Fincantieri and Intesa Sanpaolo S.p.A., with Banca IMI as agent and lead arranger, aimed at enabling the financing of the construction through the sale of the flows to Fincantieri resulting from cruise ship construction agreements.

The committed agreement provides for a maximum amount of EUR 500 million, and expires on 31 December 2022.

This agreement entitled the lending bank, in the event of a change of control, to request early repayment of the entire amount used for the loan.

The agreement defines change of control as an event or circumstance in which one or more parties other than the Italian Republic, its Ministries and/or entities or companies that are directly or indirectly controlled by the Italian Republic or its Ministries, have the power to (a) exercise or control the exercise of more than half of the votes that can be cast in Fincantieri's ordinary Shareholders' Meeting; or (b) appoint or remove (as a result of exercising dominant influence under Article 2359, paragraph 1, points 2 and 3 of the Italian Civil Code or otherwise), all or the majority of the members of Fincantieri's Board of Directors; or (c) issue binding instructions to Fincantieri's Board of Directors with reference to guidelines with a financial and operational direction. As a precaution to take into account the potential developments of the prospective cooperation between Fincantieri and Naval Group and between Italy and France in the military shipbuilding sector, of which Fincantieri has informed the market, it has been provided that assuming powers under points (a), (b) and (c) by the French Republic, its Ministries or entities directly or indirectly controlled by them will not amount to change of control. In the event of a change of control, a period of fifteen business days is provided for consultation during which the bank and Fincantieri may agree to continue the arrangement. If no agreement has been reached within fifteen business days, the bank will be entitled to cancel the line. In such event, Fincantieri would be obligated to repay all amounts disbursed in advance, including interest accrued up to that time and any other charges provided

C) Revolving Credit Facilities

The revolving credit facilities considered relevant at 31 December 2020 include the following committed revolving credit facilities ("RCF") that are current but not used by Fincantieri:

•RCF granted by Banco BPM Milano S.p.A., as of 26 February 2018, lasting 24 months (expiring on 26 February

•RCF granted by Banca Nazionale del Lavoro S.p.A. on 25 July 2018, with a duration of 18 months less one day (expiring on 24 January 2020) for a maximum available amount of EUR 80 million; on 28 February 2019, with a rider, the expiry of the line was extended by one year (24 January 2021);
2020) for a maximum amount of EUR 100 million; on 28 November 2018, with a deed of amendment, the credit line was extended by one year (26 February 2021);
•RCF granted by Commerzbank A.G. Milan branch as of 17 May 2019 lasting 24 months (expiring on 17 May 2021) for a maximum amount of EUR 50 million.

Fincantieri took out these credit lines to meet its general financial needs, including those related to carrying out its current activities.

The lines may be used in one or more payments within the RCF's validity period and each use may last, at Fincantieri's choice, for one or more weeks or one or more months (up to six maximum). On the expiration of the chosen period, the amounts used must be repaid together with the interest accrued and they may be reused again up to the final expiry date.

Change of control clauses are included in all individual agreements that, where triggered, could allow the financing bank to terminate the agreement and cancel the credit line.

These clauses are identical in all the above agreements and may be summarised as follows: A change of control is defined as the event or circumstance by virtue of which one or more entities, other than the Italian Republic or its Ministries and/or entities or companies directly or indirectly controlled by the same, or its Ministries acting in concert, succeed in holding: (i) the power to (a) exercise or control the exercise of more than half of the votes that may be cast at Fincantieri's Ordinary Shareholders' Meeting or (b) appoint or remove from office (as a result of the exercise of dominant influence under Article 2359, paragraph 1, Nos. 2 and 3, of the Italian Civil Code), all or a majority of the members of the Board of Directors of Fincantieri or (c) issue binding instructions to the Board of Directors of Fincantieri on guidelines and on operational and financial instructions; or (ii) the ability to exercise a dominant influence over Fincantieri or Fincantieri's parent company under Article 2359, paragraph 1, Nos. 2 and 3, of the Italian Civil Code.

As a precaution to take into account the potential developments of the prospective cooperation between Fincantieri and Naval Group and between Italy and France in the military shipbuilding sector, of which Fincantieri has informed

the market, it has been provided that assuming powers under points (i) and (ii) by the French Republic, its Ministries or entities directly or indirectly controlled by them will not amount to change of control. Also, the change of control clause in these agreements provides for a period (from fifteen to thirty business days) during which the parties may meet to discuss potentially adopting the contractual amendments necessary to maintain the RCF.

In case of failure to reach an agreement in this regard, Fincantieri will be required to repay in advance all the amounts used, plus interest accrued and any other amounts due within the set time limit (from five to thirty business days) with the consequent cancellation of the relevant credit line.

D) Medium-long term loans, "Decreto Liquidità" and Schuldschein loans

Among the medium/long-term loans outstanding at 31 December 2020, the following agreements entered into with the Company are considered significant:

•Bayerische LB Munich on 31 July 2019 lasting 3 years (expiring on 31 July 2022) for EUR 50 million disbursed on 1 August 2019 and to be repaid in one instalment on the expiry date;
•Banca Nazionale del Lavoro S.p.A., as of 25 July 2018, lasting 5 years (expiring on 25 July 2023) for EUR 100 million disbursed on 27 July 2018 and to be repaid in a single instalment on the expiry date;
Intesa San Paolo S.p.A., as of 30 July 2018, lasting 5 years (expiring on 30 July 2023) for EUR 100 million disbursed on 1 August 2018 and to be repaid in a single instalment on the expiry date;
•BPER Banca S.p.A., as of 2 August 2018, lasting 5 years (expiring on 2 August 2023) for EUR 50 million disbursed upon entering into the agreement; the agreement provides for a two-year pre-amortisation period and constant capital repayments over the following 3 years in 6 six-monthly instalments;
•Bayerische Landesbank Munich, as of 7 September 2018, lasting 5 years (expiring on 7 September 2023) for EUR 75 million disbursed on 27 September 2018 and to be repaid in a single instalment on the expiry date;
China Construction Bank (Europe) S.A. Milan Branch, as of 6 March 2020, lasting 3 years (expiring on 06 March 2023) for EUR 60 million disbursed on 18 March 2020 and to be repaid in a single instalment on the expiry date;
•Mediobanca Banca di credito finanziario S.p.A., as of 11 March 2020, lasting 3 years (expiring on 11 March 2023) for EUR 50 million disbursed at the time of signing the agreement and to be repaid in a single instalment on the expiry date;
•Unione di Banche Italiane S.p.A., as of 13 March 2020, lasting 3 years (expiring on 13 March 2023) for EUR 70 million disbursed at the time of signing the agreement and to be repaid in a single instalment on the expiry date;
•Banco BPM S.p.A., as of 28 May 2020, lasting 5 years (expiring on 28 May 2025) for EUR 50 million disbursed at the time of signing the agreement and to be repaid in a single instalment on the expiry date;
•Banca Monte dei Paschi di Siena S.p.A., as of 1 July 2020, lasting 3 years (expiring on 30 June 2023) for EUR 70 million disbursed at the time of signing the agreement and to be repaid in 6 six-monthly instalments ("balloon" payment at the end);
Pool of banks consisting of BNP Paribas, Italian Branch, Unicredit S.p.A., Banca Nazionale del Lavoro S.p.A., Banca Popolare di Sondrio S.C.p.A., Banco BPM S.p.A., BPER Banca S.p.A., Bayerische Landesbank and Unione di Banche Italiane S.p.A. with BNP Paribas, Italian Branch as Agent on 30 September 2020, lasting four years (expiring on 30 September 2024) for a total of EUR 1,150 million disbursed on 2 October 2020; the agreement provides for a two-year pre-amortisation period and constant capital repayments over the following 2 years in 6 quarterly instalments. This loan is part of the "Decreto Liquidità" (Law Decree No. 23/2020) under which the banks in the pool benefit from a SACE S.p.A. guarantee (counter-guaranteed by the Italian State) for 70% of the total loan amount.

On 8 November 2018, two Schuldschein loans were taken out with Bayerische Landesbank as Arranger and Paying Agent. The first loan is for EUR 29 million, lasting 3 years (expiring on 15 November 2021) and the second is for EUR 71 million, lasting 5 years (expiring on 15 November 2023). Both loans were disbursed on 15 November 2018 and will be repaid in a single instalment at the respective expiry dates. Schuldschein loans are debt financing instruments that are privately placed by an arranger bank with professional investors. Unlike a normal syndicated loan, this type of financing is securitised in a note (the "schuldschein") which is then transferred to investors.

The medium and long-term loans, as well as the loan obtained on the basis of the "Decreto Liquidità", and the Schuldschein loans provide for change of control clauses which, if activated, could permit the lender to cancel the relevant credit line and, consequently, obtain prepayment of the amount disbursed within a specified period (from ten to thirty days), plus interest accrued and any charges provided. These clauses are the same as those provided for in the RCF; as a matter of fact, also in this case a period is provided (from fifteen to forty-five business days) during which the parties can discuss assessing the possible adoption of contractual amendments necessary to maintain the loan.

E) Facility Indemnity and Agreement First Bank of Abu Dhabi to issue guarantees

On 6 November 2012, a Guarantee Facility Indemnity and Agreement was signed by Fincantieri and First Bank of Abu Dhabi (former National Bank of Abu Dhabi) to allow the issue of the guarantees provided for in Fincantieri's commercial agreements, currently available for a maximum value of EUR 9 million (currently fully utilised). Since this is an uncommitted credit line, there is no expiry date. This agreement provides that if a change of control occurs, the banks will be able to request either: (i) within 90

days, the issuance of one or more counter-guarantees in its favour to cover the amounts still due; (ii) an escrow deposit in favour of the bank to cover that part of the commitment which has not been counter-guaranteed by means of collateral acceptable to the bank.

F) Guarantee Issuance and Indemnity Agreement - Qatar

On 12 July 2017, a Guarantee Issuance and Indemnity Agreement was signed by Fincantieri, UniCredit, SACE, Intesa Sanpaolo and Deutsche Bank to allow the issue of the guarantees provided for in agreement N GHQ/3/ CA/003/16 of 16 June 2016 between the Qatar Armed Forces and Fincantieri for a maximum value of credit lines of EUR 1,140 million (currently EUR 910.88 million) expiring on 14 January 2025.

The agreement serves as a credit line and indemnity document for all guarantees issued by UniCredit and counter-guaranteed by SACE for EUR 380 million (currently EUR 303.63 million), Intesa Sanpaolo for EUR 285 million (currently EUR 227.72 million) and Deutsche Bank for EUR 95 million (currently EUR 75.91 million), distributed in proportion to the value of the same guarantees.

Under this agreement, in the event of a change of control, after a period of negotiation intended to maintain the arrangements unchanged, the banks are entitled to ask Fincantieri within 30 days: (i) for the release from the commitment by cancelling the guarantees issued; or, if this is not possible (ii) for a counter-guarantee; or, if this is not possible (iii) for the availability of an escrow deposit to cover the amounts still guaranteed.

G) BLB Uncommitted Bond Issuance Facility Agreement

On 18 December 2017, an Uncommitted Bond Issuance Facility Agreement was signed between Fincantieri and Bayerische Landesbank to allow the issue of guarantees under Fincantieri's commercial agreements for a maximum value of EUR 150 million (currently used for EUR 67.95 million). Since this is an uncommitted credit line, there is no expiry date.

In the event that a change of control occurs, the bank will be able to request: (i) the cancellation of outstanding collateral; or if this is not possible (ii) the issuance of one or more counter-guarantees in favour of such bank to cover the outstanding commitment; or if this is not possible (iii) the availability of an escrow deposit to cover the amounts still guaranteed.

H) Establishment of the joint venture in China - CSSC - Fincantieri Cruise Industry Development Ltd.

On 4 July 2016, a joint venture agreement was signed for the establishment in Hong Kong of the company CSSC - Fincantieri Cruise Industry Development Ltd. (the "JVPC"), with Fincantieri (40%) and CSSC Cruise Technology Development Co. Ltd. (60%) as shareholders, for the design, development, marketing and sale of cruise ships for the Chinese market to be built at one of the shipyards of CSSC Cruise Technology Development Co. Ltd. ("CSSC"). On 17 July 2017, after meeting the relevant conditions precedent, the agreement became enforceable. The agreement envisages a change of control, in respect of which, in the event that a transaction on Fincantieri's shareholding results in a change of control in favour of a competitor that designs and develops or constructs cruise ships in Asia (as defined in the agreement) (i) the other shareholder may exercise the option to acquire the defaulting shareholder's stake and require it to sell such stake, or (ii) the company will be wound up. A further consequence of the change of control will be to terminate (i) the Technology License and Consultancy Services Agreement entered into by Fincantieri and JVPC, and (ii) the Technology Licence and Consultancy Services Agreement and the Supply Chain Management Services Agreement entered into by Fincantieri and Shanghai Waigaoqiao Shipbuilding Co. Ltd., the local shipbuilder previously chosen by CSSC to construct the cruise ships covered by the joint venture.

1.9 Directors' allowances for early cessation, also following a public tender offer

For a description of the allowances provided in the event of early termination of the arrangement, refer to the information provided in paragraphs 2.3.6 (Section I) and 5 (Section II) of the Report on the policy regarding remuneration and fees paid approved by the Board of Directors on 25 February 2021 in accordance with Article 123-ter of the Italian Consolidated Law on Finance (TUF) and available on the Company's Internet website at www.fincantieri.com, in the "Ethics and Governance - Remuneration" Section and in the "Ethics and Governance - Shareholders' Meetings 2021" Section.

transactions such as mergers, demergers and capital increases, without prejudice to the Board of Directors' remit on the matters indicated in paragraph 1.6 above.

Resolutions of the ordinary and extraordinary Shareholders' Meeting in first, second or third call, or in single call, are generally adopted in accordance with the majorities required by law in specific cases. The corporate bodies and officers are elected in accordance with the "slate voting" system described in paragraphs 2.2.4 and 2.4.2 below.

Article 29 of the By-laws requires specific majorities for related party transactions where the Shareholders' Meeting is called to adopt resolutions (i) in urgent cases associated with company crisis where the audit body forms a negative assessment as to the presence of urgent conditions, (ii) if the Related Party Transaction Committee (RPT Committee) forms a negative opinion about the most significant transactions (definitions are given in paragraph 4.1 below). In such cases, Shareholders' Meeting resolutions are considered approved if (a) the quora for valid meetings and for valid resolutions under the By-laws have been met, and (b) if the non-related shareholders attending the Shareholders' Meeting represent at least ten percent of the voting share capital and the majority of the non-related voting shareholders do not vote against the transaction.

2.1.2 Procedures for calling Shareholders' Meetings

Ordinary and extraordinary Shareholders' Meetings are normally held on single call, pursuant to Article 13.2 of the By-laws. The Board of Directors may decide, however, that ordinary and/or extraordinary Shareholders' Meetings should be held in more than one single call, if it considers this appropriate. The ordinary Shareholders' Meeting must be called at least once a year to approve the financial statements, and no later than one hundred eighty days from the end of the financial year. The Shareholders' Meeting is called by means of a call notice drawn up in accordance with the law and published at least thirty days prior to the date scheduled for the Shareholders' Meeting in the manner provided for by current legislation10. The deadline is brought forward to forty days in the event of a Shareholders' Meeting called to appoint the corporate bodies.

The Board of Directors – unless otherwise provided by law – releases a report on the items on the Shareholders' Meeting agenda, in accordance with the same procedures and by the same deadline for publishing the notice of call.

2.1.3 Eligibility to attend Shareholders' Meetings and voting procedures

The right to attend Shareholders' Meetings and the procedures for exercising voting rights are regulated by applicable legislative and regulatory provisions.

More specifically, Article 83-sexies of the Italian Consolidated Law on Finance (TUF) states that eligibility to participate in Shareholders' Meeting and to exercise voting rights must be certified by a qualified intermediary, who notifies the Company of such eligibility on behalf of the eligible shareholder. This communication is made by the intermediary on the basis of the accounting records relating to the end of the accounting day of the seventh trading day prior to the date scheduled for the Company's Shareholders' Meeting (i.e., "record date"). Credit or debit entries made on the intermediary's accounts after this seven-day deadline are not relevant for purposes of eligibility to vote in the Shareholders' Meeting.

The Company must receive the intermediary's notifications by the applicable regulatory deadlines, without prejudice to the shareholder's right to attend and vote in cases where the Company receives the notifications after the abovementioned deadline, but before the start of the Shareholders' Meeting thus convened. Pursuant to Article 15 of the By-laws, each Shareholder entitled to attend the Shareholders' Meeting may be represented by a proxy – given in written or electronic form – under applicable regulatory provisions. The Company may be notified of the voting proxy by certified electronic mail or through the relevant section of its website, as specified from at any time in the call notice. Furthermore, to facilitate the process of obtaining proxies from Shareholders who are employees of the

Information on Corporate Governance

2. Corporate Governance System

Fincantieri's corporate governance is structured as follows:

* On 30 July 2020, the Board of Directors, at the proposal of the Chief Executive Officer, appointed Fabio Gallia as General Manager, effective 1 September 2020, to replace Alberto Maestrini.

2.1 Shareholders' Meeting

The Shareholders' Meeting is the corporate body where Shareholders participate in the Company's decisions on matters reserved to them by law and the By-laws.

At the Shareholders' Meeting called to approve the 2020 financial statements, the Board of Directors will report on activities that were planned and implemented, and will ensure that the Shareholders are given adequate information on matters necessary to enable them to take informed and considered decisions.

2.1.1 Powers and quorum

The Shareholders' Meeting resolves upon all matters reserved to it by law or the By-laws. The Ordinary Shareholders' Meeting is therefore competent to resolve upon the following (among other things): (i) the approval of the financial statements and allocation of profits; (ii) the appointment and remunerations of the corporate bodies; (iii) the removal/dismissal of corporate bodies and officers, and liability actions; (iv) the appointment of the statutory auditor; (v) the purchase of treasury shares; and (vi) the approval of the Shareholders' Meeting Regulations.

The extraordinary Shareholders' Meeting resolves upon amendments to the By-laws and extraordinary

10 The call notice is published on the company website, and an abridged form thereof is published in at least one daily newspaper with national circulation, and also as required by applicable regulatory provisions.

Company and its subsidiaries associated with associations of Shareholders that satisfy the requirements of applicable regulatory provisions, the By-laws provide that areas should be made available to such associations for communications purposes and for collecting proxies, in accordance with the terms agreed at any time with their legal representatives.

The Company may also – for each Shareholders' Meeting – appoint a person to whom shareholders may grant proxies with voting instructions in relation to all or some of the items on the agenda, as envisaged by applicable regulatory provisions. In such cases, the proxy will not be valid for agenda items for which no voting instructions were given.

Pursuant to the By-laws, the call notice may also provide, on a case-by-case basis, that shareholders with voting rights may (i) attend the Shareholders' Meeting using telecommunications means and exercise the right to vote electronically; and/or (ii) exercise the right to vote by correspondence and/or electronically, in accordance with applicable regulatory provisions.

To minimise the risks related to the current COVID-19 health emergency, the Company, during the Shareholders' Meeting for the approval of the financial statements at 31 December 2019, held on 9 June 2020, made use of the option established by Law Decree No. 18 of 17 March 2020 laying down the "Measures to strengthen the National Health Service and economic support for families, workers and businesses associated with the COVID-19 epidemic emergency" providing that the shareholders' participation in the aforementioned Shareholders' Meeting would take place exclusively through the representative appointed under Article 135-undecies of TUF, without the Shareholders' physical participation.

2.1.4 Shareholders' rights

Pursuant to applicable regulatory provisions:

shareholders who represent (individually or collectively) at least one fortieth of the share capital may no later than ten days from the date when the Shareholders' Meeting call notice is published (except on matters which the Shareholders' Meeting decides based on a proposal from Directors or based on plans or reports prepared by them): (i) request that specific items be added to the agenda, specifying the proposed additional items in this request, and (ii) submit draft resolutions on matters already on the agenda; and
shareholders with voting rights may ask questions on the items on the agenda even before the Shareholders' Meeting, no later than the deadline indicated in the call notice. Replies will be given to these questions - at the latest - during the Shareholders' Meeting.

In any case, shareholders with voting rights will also be entitled to submit questions or draft resolutions – individually or otherwise – during the Shareholders' Meeting.

2.1.5 Shareholders' Meeting Proceedings

Pursuant to Article 16 the By-laws, the Shareholders' Meeting is chaired by the Chairman of the Board of Directors or, where the latter is absent or indisposed, by the Deputy Chairman if appointed; if the latter is absent or indisposed, the meeting will be chaired by another person delegated by the Board of Directors. If this other person is not present, the Shareholders' Meeting will elect its own Chairman. The Shareholders' Meeting appoints a Secretary, who need not be a shareholder, and it may appoint one or more scrutineers from among the meeting's attendees.

On 5 May 2014, the ordinary Shareholders' Meeting of the Company approved the Shareholders' Meetings Regulations with effect from the start of trading of Fincantieri shares on the Electronic Stock Market (MTA). These Regulations (among other things) regulate the procedures for ascertaining shareholder eligibility to attend Shareholders' Meetings, access to Shareholders' Meeting venues, voting procedures, the role of the Shareholders' Meeting Chairman – who is also responsible for directing the meeting's proceedings, ensuring that fair procedures are followed for the meeting discussions and for ensuring that attendees' rights are respected. Accordingly, the Chairman of the Shareholders' Meeting – upon opening the meeting's proceedings – sets the maximum duration of each attendee's contribution, which should not generally exceed fifteen minutes. A shareholder may request the Chair for permission to address the meeting on specific agenda items, after the Shareholders' Meeting has been validly constituted but before the Chairman has actually opened discussions on each specific agenda item. Each participant may make only one contribution for each item on the agenda. After discussions are closed, only brief voting declarations are allowed. The Chairman and the Secretary draw up and sign the minutes of Shareholders' Meetings. A Notary Public must draw up the minutes of extraordinary Shareholders' Meetings. For further provisions contained in the Regulations for Shareholders' Meetings, refer to the full text of the same published on the Company's Internet website at www.fincantieri.com, in the Section "Ethics and Governance - Meetings - Tasks and Regulations".

2.2 Board of Directors

2.2.1 Composition of the Board

Pursuant Article 19 of the By-laws, the Board of Directors has seven or more members, up to a maximum of thirteen members, appointed by the Shareholders' Meeting in accordance with the procedures described in paragraph 2.2.4 below. The Shareholders' Meeting determines the number of Board members from time to time, subject to the abovementioned limits.

The acting Board of Directors, whose term of office will expire at the meeting to approve the financial statements for the year ended on 31 December 2021, consists of: Giampiero Massolo (Chairman),

Giuseppe Bono (CEO)11, Barbara Alemanni, Massimiliano Cesare, Luca Errico, Paola Muratorio, Elisabetta Oliveri, Fabrizio Palermo, Federica Santini and Federica Seganti.

The Board of Directors was appointed by the Ordinary Shareholders' Meeting of the Company on 5 April 2019, for the financial years 2019, 2020 and 2021. This appointment complied with Article 19 of the Company's By-laws12. Three slates of candidates were submitted within the terms and in the manner prescribed by applicable regulations:

on 8 March 2019, the slate was filed as presented by the following Shareholders: Arca Fondi S.G.R. S.p.A., manager of the funds Arca Economia Reale Bilanciato Italia 30 and Arca Azioni Italia; Eurizon Capital SGR S.p.A. fund manager Eurizon Progetto Italia 20, Eurizon Pir Italia 30, Eurizon Progetto Italia 70, Eurizon Azioni Italia, Eurizon PIR Italia Azioni, Eurizon Azioni PMI Italia and Eurizon Progetto Italia 40; Eurizon Capital SA - Eurizon Fund - Equity Small Mid Cap Italy and Eurizon Fund - Equity Italy; Fideuram Asset Management (Ireland) - Fonditalia Equity Italy; Fideuram Investimenti SGR S.p.A. fund manager: Fideuram Italia, PIR Piano Azioni Italia, PIR Piano Bilanciato Italia 50 and PIR Piano Bilanciato Italia 30; Interfund Sicav - Interfund Equity Italy; Mediolanum Gestione Fondi SGR S.p.A. fund manager: Mediolanum Flessibile Futuro Italia and Mediolanum Flessibile Sviluppo Italia and Mediolanum International Funds Limited - Challenge Funds - Challenge Italian Equity, holders of a total of 22,754,462 ordinary shares, representing 1.34848% of Fincantieri's share capital. This slate was identified with number 1 and contained the following candidates: Luca Errico, Elisabetta Oliveri, Danilo Vivarelli;
on 11 March 2019, the slate was filed as presented by Shareholder INARCASSA, holder of 31,301,462 ordinary shares representing 1.85% of Fincantieri's share capital. This slate was identified with number 2 and contained the following candidates: Paola Muratorio, Gianfranco Agostinetto, Giuseppe Ferri; and
on 11 March 2019, the slate was filed as presented by the Shareholder FINTECNA S.p.A., owner of 1,212,163,614 ordinary shares representing 71.636% of the share capital of Fincantieri. This slate was identified with number 3 and contained the following candidates: Federica Seganti, Giampiero Massolo, Giuseppe Bono, Fabrizio Palermo, Massimiliano Cesare, Federica Santini, Barbara Alemanni.

In view of the fact that the abovementioned Shareholders' Meeting set the number of members of the Company's Board of Directors at ten and in accordance with the provisions of the By-laws, the seven members of slate number 3, the first candidate of slate number 2 and the first two candidates of slate number 1 were elected to the Board of Directors.

The Board of Directors therefore consists of ten members, two of whom (the CEO and the Chairman of the Board of Directors) are executive Directors.

The remaining Directors are non-executive; six of these are independent in accordance with the law and, with reference to the 2020 financial year, the Corporate Governance Code13.

The Directors' curricula vitae are attached to this Report, which detail the key personal and professional information of the Directors from which their competence and experience in business management emerge (see Annex 1).

2.2.2 Professional qualification and integrity requirements and reasons for ineligibility and incompatibility of Directors

Pursuant to Article 19.4 of the By-laws, Directors must be selected using criteria of professional qualification and expertise, from among persons who have received a total of at least three years' experience in:

a) management or control activities, or management tasks in companies, or

b) professional activities or academic positions in law, economics, finance or in technical-scientific are as

related to or useful for business or corporate activities, or

c) administrative/management/executive roles in public or government administrations or entities operating in sectors related to the Company's sectors of activities, or in public or government administrations or entities operating in unrelated sectors on condition that the responsibilities in question involved the management of economic-financial resources.

In accordance with applicable rules, Directors must satisfy the integrity requirements provided for by the Italian Consolidated Law on Finance (TUF) and by associated implementing regulations, and also by any other regulatory provisions in force applicable to the Company's Directors. Pursuant to Article 19.5 of the Company's By-laws, the failure to satisfy the abovementioned requirements results in ineligibility for office or in the automatic forfeiture of office; where a Director forfeits their office, they will not be entitled to compensation for damages.

Directors who during their term of office no longer satisfy the abovementioned integrity requirements shall immediately notify the Board of Directors of this.

Without prejudice to the foregoing, a Director will become ineligible for the office of Director with delegated powers, or will automatically forfeit that office for cause if interim measures are imposed that prevent those delegated powers from being exercised, following proceedings under Article 309 or Article 311, paragraph 2, of the Italian Code of Criminal Procedure, or after the expiry of the deadline for bringing those proceedings, without entitlement to compensation for loss, and all associated delegated powers will be instantly revoked. Where particular cases/facts fall within the jurisdiction of foreign legal systems, the Board of Directors shall ascertain the existence of the situations described above by conducting an assessment of substantial equivalence.

2.2.3 The Board's position on the maximum number of offices Directors can hold in other companies

In line with provisions of the Corporate Governance Code, on 19 December 2014 the Board of Directors – on a proposal from the Nomination Committee – set out its position on the maximum number of offices as director or standing auditor compatible with the effective performance of a director's duties, also taking into account the Directors' participation in Committees set up within the Board. On 28 January 2020, the Board of Directors of the Company, on the proposal of the Nomination Committee, analysed the above document and approved its updating.

In accordance with this position, Company Directors may accept and continue to hold office if they consider that they are able to devote the necessary time to effectively perform their duties, taking into account the number and nature of their positions in the management and supervisory/audit bodies of other companies that are relevant for calculating the total number of offices held in them, and the commitment required of them by the further professional activities carried out and the membership positions held. For these purposes, the companies that are relevant for calculating the cumulation of offices held in them are:

a) companies whose shares are listed on regulated markets, including foreign markets; b) Italian or foreign companies whose shares are listed on regulated markets and operating predominantly in the insurance, banking, securities brokerage, asset management or financial sectors;

c) other Italian or foreign companies whose shares are not listed on regulated markets and which, while operating in sectors other than those indicated in letter b) above, have assets in excess of EUR 1,000,000
companies of significant size).

and/or revenues in excess of EUR 1,700,000 based on the latest approved financial statements (i.e.,

More specifically, the Board's policy provides as follows:

1) the acting CEO and the executive Directors (with specifically delegated management powers) of Fincantieri: 11 Giuseppe Bono was appointed for the first time as the Company's CEO on 29 April 2002.

¹² For this appointment, the outgoing Board of Directors did not submit its own slate of candidates or give the Shareholders any guidelines on the composition of the incoming Board of Directors. 13 For a complete description of the characteristics of executive, non-executive and independent Directors, please refer to paragraphs 2.2.7, 2.2.8, 2.2.9 and 2.2.10 below.

(i) are not permitted in principle – unless the Board of Directors expressly decides otherwise and with reasons – to hold any office as Chief Executive Officer in the companies indicated in letter a) above; (ii) are allowed a maximum of 3 offices as a Director (executive with specific management or non-executive) and/ or Standing Auditor in the companies indicated in letter a) above; and (iii) a maximum of 5 offices as Director (executive with specific management or non-executive) and/or as Standing Auditor in the companies indicated at letters b) and c) above. If the above limit is reached, if the offices held also include that of Executive Director with specific management powers, the Board of Directors, considering the content of the powers assigned, is called upon to assess compliance with the principles under which the Directors of the Company accept the office and retain it when they believe they can dedicate the necessary time to effectively perform their duties, considering both the number and nature of the offices held on the boards of directors and statutory auditors of other companies that are relevant for calculating the total number of offices held in them, and the commitment required of them by the further professional activities carried out and the membership positions held.

In any case, unless the Board of Directors expressly decides otherwise, Fincantieri's CEO may not hold the office of Director in one of the companies indicated in letter a) above which does not belong to the Fincantieri Group and of which a Director of Fincantieri is Chief Executive Officer;

2) for Fincantieri's Directors other than the CEO and Executive Directors (with specifically delegated management powers), the number of offices held on the boards of directors or control bodies of other companies referred to in letters a), b) and c) above may not exceed 5.

In calculating the number of offices indicated in paragraphs 1) and 2) above, offices held in direct and/or indirect subsidiaries or affiliates of Fincantieri are not taken into account. Moreover, if a Director holds offices in several companies from the same group, only one appointment within such group is taken into account for the purpose of calculating the number of offices.

Without prejudice to the foregoing, the Board of Directors of the Company may grant exceptions (including temporary ones) from the parameters specified in points 1) and 2) above, based on the total number of offices held by the relevant members on the boards of directors and statutory auditors of other companies that are relevant for calculating the total number of offices held in them. In granting such exemptions, the Board of Directors takes the following factors into consideration: (i) the specific characteristics of the offices held by the person in question, also taking into account the nature and size of the company in which such offices are held; (ii) the commitment demanded by any additional professional activities in which that person engages and by any offices in associations which they hold; and (iii) the commitment demanded from that person in the Board of Directors (particularly where a non-executive Director is involved who is not a member of any Committee). Based on the communications made by the Directors to the Company – verified by the Corporate Secretarial Staff of the Board of Directors and the Nomination Committee and submitted to the Board of Statutory Auditors on 28 January 2020 – the number of offices held by Fincantieri's Directors in the management or audit/supervisory bodies of other companies that are relevant for calculating the number of positions held in them is in line with the abovementioned approach.

Information on the offices held by the Directors of Fincantieri in the boards of directors and statutory auditors of other companies that are relevant for calculating the total number of positions held in them is shown in the table attached to this Report.

2.2.4 Appointment and replacement of Directors

Directors are appointed by the ordinary Shareholders' Meeting in accordance with the procedures described below, for a term not to exceed three financial years, and they may be re-elected after their mandate expires. The appointment of Directors is regulated by Article 19 of the By-laws, which provide a full description of the relevant provisions14.

Slate voting

The Board of Directors is appointed by the Shareholders' Meeting on the basis of slates submitted by the Shareholders and by the Board of Directors and in accordance with applicable regulatory provisions on equal access to corporate bodies by the less represented gender (gender balance).

Entitlement to submit slates

Each Shareholder may submit or contribute to the submission of only one slate. Shareholders are entitled to submit slates only if they represent – individually or collectively with other Shareholders – at least 1% of the share capital or such other percentage, if lower, that is established by CONSOB in the CONSOB Regulation. Ownership of the minimum shareholding required to submit slates must be proven in accordance with the procedures and by the deadline laid down by regulatory provisions applicable from time to time. Candidate slates may also be submitted by the outgoing Board of Directors. Each person with voting rights may only vote for one slate.

Composition and filing of slates

Each candidate may appear on one slate only, and shall otherwise be ineligible. Candidates must be listed in sequential order in the slates. Each slate must include at least two candidates who satisfy legally-required independence criteria, and must specify the names of those candidates and indicate one of the candidates in the first position on the slate. Furthermore, slates that present three or more candidates must include candidates of different genders, as detailed in the Shareholders' Meeting call notice, thus ensuring that the composition of the Board of Directors is compliant with the applicable laws on gender equality.

The slates must be filed with at the Company's headquarters in accordance with the deadlines and procedures envisaged by applicable rules (i.e. at least twenty-five days prior to the date of the Shareholders' Meeting called to appoint the Board of Directors).

The filing of each slate must include the filing of the professional curricula of the candidates and the declarations

14 The By-laws are available on the Company's Internet website at www.fincantieri.com, in the Section "Ethics and Governance - Corporate Governance System ".

in which they accept their candidature and certify, under their own responsibility, that there are no grounds for ineligibility and incompatibility, and that they meet the requirements of good repute provided for by current legislation and the By-laws (see paragraph 2.2.2 above) and the requirements of independence established by law and/or the Corporate Governance Code (see paragraph 2.2.10 below).

Procedure for appointments

Directors are elected as follows:

a) the following are taken from the slate that obtains the majority of votes, in the sequential order in which they are listed on that slate:
two-thirds of the Directors, with fractions being rounded down to the next lower integer, where the Board consists of 9 members at most;
7 Directors, if the Board consists of 10 members;
8 Directors, if the Board consists of 11 members;
9 Directors, if the Board consists of 12 members; and
10 Directors, if the Board consists of 13 members;
b) the remaining Directors are drawn from the other slates (subject to applicable regulations protecting minority shareholders), which are not associated in any way, even indirectly, with shareholders who submitted or voted for the slate that obtained the highest number of votes. Accordingly, the votes obtained from these slates are subsequently divided by one, two or three, depending upon the number of Directors to be elected. The ratios thus obtained are assigned in sequential order to the candidates of each of these slates, in the order respectively envisaged by each. The ratios thus assigned to the candidates on the various slates are then arranged in a single descending ranking. Candidates who obtain the highest ratios are elected.

Where more than one candidate has obtained the same ratio, the candidate elected will be the candidate from the slate that has not yet elected a Director or that has elected the lesser number of Directors. If none of these slates has elected a Director or if all have elected the same number of Directors, the candidate elected will be the candidate from the slate that has obtained the highest number of votes. In the event of a tie in slate votes and in circumstances where the ratios are tied, the Shareholders' Meeting will vote again – subject to legally applicable majorities – from among candidates who attained the same ratio from the slates that elected the same number of Directors (or no Director) and obtained the same number of votes;

c) if, following the application of this procedure, the minimum number of independent Directors required by applicable rules has not been elected (see paragraph 2.2.10 below), the ratio of votes attributable to each candidate drawn from the slates is calculated by dividing the number of votes obtained from each slate by the ranking number of each of the candidates, thus forming a single ranking in descending order; candidates who do not satisfy applicable independence requirements and who obtain the lowest ratios among the candidates taken from all of the slates will be replaced – beginning from the last and until the minimum number of independent Directors required under applicable rules has been reached – by independent candidates indicated on the same slate as the replaced candidate (following the order in which they are indicated) or by persons who satisfy the relevant independence criteria and who are appointed in accordance with the procedure referred to in letter e) of Article 19.8 of the By-laws. If candidates on different slates achieve the same ratio, the candidate to be replaced is the candidate from
the slate from which the highest number of Directors has been drawn or, if the same number of Directors are elected, the candidate from the slate that has obtained the lowest number of votes or, in the event of a tie, the candidate who obtains fewer votes in a special vote of the Shareholders' Meeting (subject to the legally-required quorums) from among all of the candidates who obtained the same ratio from slates that elected the same number of Directors and obtained the same number of votes;

d) if the application of the procedure described in letters a) and b) above fails to ensure compliance with applicable rules on gender balance, the ratio of votes to be assigned to each candidate drawn from the slates comprised of at least three candidates is calculated by dividing the number of votes obtained from each slate by the ranking number of each of these candidates, thus forming a single ranking in descending order; candidates of the better represented gender who have the lowest ratios among the candidates taken from the above mentioned slates are replaced – until the number of Directors is achieved that ensures compliance with applicable gender balance rules and subject to the minimum required number of independent Directors – by the candidate of the less represented gender who is (as relevant) indicated (with the next lowest slate ranking number) on the same slate as the candidate who is replaced. If candidates on more than one of the abovementioned slates have achieved the same ratio, the candidate to be replaced is the candidate from the slate from which the highest number of Directors has been drawn or, if the same number of Directors are elected, the candidate from the slate that has obtained the lowest number of votes or, in the event of a tie, the candidate who obtains fewer votes in a special vote of the Shareholders' Meeting (subject to the legally required quorums) from among all of the candidates who obtained the same ratio from slates that elected the same number of Directors and obtained the same number of votes.

The slate voting procedure described above applies only where the entire Board of Directors is appointed. Directors who, for any reason, are not appointed in accordance with the above procedure are appointed by the Shareholders' Meeting subject to the statutory majorities, thus ensuring that the Board's composition complies with law and with the By-laws, and with applicable rules on gender balance.

Replacement

If one or more Directors should cease from office or become available during the year, due to resignation or for any other reason, the procedure detailed in Article 2386 of the Italian Civil Code shall be applicable. In any case, the Board of Directors must have the legally required minimum number of independent Directors, and the rules relating to gender balance and protection of minorities must be complied with. If the majority of Directors should cease from office due to resignation or for any other reason, the entire Board shall cease to hold office and the Shareholders' Meeting shall be called to reconstitute the Board in accordance with the procedures envisaged by Article 2386 of the Italian Civil Code.

2.2.5 Tasks of the Board

The Board of Directors is the key body of the Company's corporate governance system, as it has the broadest powers of ordinary and extraordinary administration thereof, and these extend to determining the Company's and the Group's strategic, organisational and control policies. More specifically, the Board of Directors, in accordance with applicable provisions of law, of the By-laws, of its own resolutions (most recently, the resolution adopted on 5 April 2019) and, as regards the 2020 financial year, in accordance with the Corporate Governance Code's recommendations:

may delegate all or some of its powers except those that cannot be delegated by law to one or more of its members and/or to an executive committee;
appoints a Secretary of the Board of Directors, who need not be a company member;
defines the Company's strategic and organisational lines by approving industrial plans and annual budgets, and determines the nature and level of risk compatible with the objectives of those strategic and organisational lines, including in its assessments all risks which may prove significant in the context of medium to long term sustainability;
convenes ordinary and extraordinary Shareholders' Meetings in compliance with the procedures and deadlines envisaged by applicable regulatory provisions, ensuring that the Shareholders are provided with detailed knowledge and information that enables them to adequately participate in such meetings;

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establishes Committees within the Board of Directors with powers of consultation and powers to propose draft resolutions, as recommended by the Corporate Governance Code, appointing its members and determining their duties and the associated operational rules and, as relevant, approving associated remunerations and budgets;
as to internal control and risk management:
appoints from within it one or more Directors to set up and maintain an effective internal control and risk management system (ICRMS), as well as a Control and Risk Committee tasked with supporting (by adequate investigative proposition and consultation activities) the Board of Directors in its assessments and decisions related to the ICRMS and related to the approval of periodic reports;
establishes guidelines for the ICRMS, subject to the opinion of the Control and Risk Committee;
appoints the Head of Internal Auditing, ensuring that he/she has adequate resources to fulfil his or her responsibilities, determining his/her remunerations in line with Company policy – on a proposal of the Director in charge of the ICRMS, and after having received approval from the Control and Risk Committee and consulted with the Board of Statutory Auditors;
assesses annually subject to the Control and Risk Committee's opinion the extent to which the ICRMS is adequate to the nature and risk profile of the Company, and also to assess its effectiveness;
approves annually the work programme prepared by the Head of Internal Auditing, after consulting with the Control and Risk Committee and with the Board of Statutory Auditors, and with the Director in charge of the ICRMS;
describes the key characteristics of the ICRMS and the coordination procedures for the persons involved, in the Corporate Governance Report, after having received the opinion of the Control and Risk Committee, giving an assessment of its adequacy;
assesses the results presented by the independent auditor in the letter of suggestions, if any, and in the report on key issues arising during the audit, subject to the Control and Risk Committee's opinion and after having consulted with the Board of Statutory Auditors;
appoints the Officer in Charge, after having received the mandatory opinion of the Board of Statutory Auditors, such appointment to last at least for the duration of the Board's term of office and for no more than six financial years, determining the term of office and the duties, powers and remunerations; it may also revoke this appointment if necessary;
approves the Organisation, Management and Control Model under Legislative Decree No. 231 of 8 June 2001 ("Legislative Decree No. 231/2001");
determines the composition of the Supervisory Body and appoint its members and determine their remunerations, on a proposal from the CEO;
determines the remunerations policy for Directors, General Manager, Executives with Strategic Responsibilities and for the other Key Executives, on a proposal from the Remuneration Committee;
assesses whether or not to adopt a plan for the succession of executive Directors;
on the proposal of the Nomination Committee, expresses its position on the maximum number of offices as director or statutory auditor in companies that are relevant for calculating the number of offices held in them that can be considered compatible with effectively performing the office of Director of the Company;
approves the sustainability model, the sustainability charter and the sustainability plan of the Company after consulting the Sustainability Committee, and approves the Sustainability Budget published each year subject to the Sustainability Committee's investigations;
adopts company procedures for the internal management and outbound communication of information on the Company, particularly with reference to inside information;
determines rules that ensure the transparency and substantive and procedural propriety of related party transactions;
has reserved for itself responsibilities in the following areas: - engaging in strategically relevant agreements;
incorporating companies, associations or entities and purchasing and selling shareholdings, enterprises or business units;
drawing up, amending and cancelling binding letters of intent or agreements (if not already included in those letters of intent) for the supply of goods or services by the Company for amounts in excess of EUR 500 million per agreement;
purchasing, exchanging and selling real estate, establishing other in rem rights and leases exceeding 9 years for amounts in excess of EUR 40 million;
engaging in medium/long-term lending/borrowing transactions for amounts in excess of EUR 500 million per transaction;
issuing sureties in excess of EUR 500 million per transaction, except in the case of emergency sureties issued by the Chief Executive Officer;
hires, appoints and revokes the appointment of General Managers;
grants assignments for professional services for amounts in excess of EUR 100,000 (individually or collectively) in the case of natural persons and EUR 500,000 in the case of professional associations or legal persons, excluding assignments granted to: (i) natural persons enrolled in professional rolls or registers; (ii) professional associations between such natural persons; and (iii) legal persons of national and international standing.

In compliance with the foregoing, the Board of Directors during the 2020 financial year:

approved Fincantieri's 2020 corporate events calendar;
after investigation by the Nomination Committee, ascertained that the independence and integrity requirements applicable to members of the Board of Directors were duly satisfied, and that there was no basis for their incompatibility, ineligibility or lapse;
after investigation by the Nomination Committee, verified that the number of positions held by Directors was in line with the guidelines on the maximum number of offices as director or statutory auditor that can be considered compatible to effectively perform the office of Director of the Company, adopted by the Board of Directors on 19 December 2014;
after investigation by the Nomination Committee, approved the updating of the guidelines concerning the maximum number of offices of a director or statutory auditor that may be considered compatible to effectively perform the office of a Director of the Company;
after investigation by the Sustainability Committee, approved the sustainability policies: (i) "Fincantieri Group initiatives for Communities and Territories"; (ii) "Supplier Code of Ethics"; (iii) "Human Rights - Commitment to Respect for Human Rights and Diversity";
resolved to establish the Anticorruption Department and appointed its head;
under Article 25.3 of the By-laws, approved the adjustment of the By-laws to the regulatory provisions introduced by Prime Ministerial Decree of 15 November 2019, which amended Prime Ministerial Decree of 25 May 2012 on the "Criteria, conditions and procedures for adopting the ownership unbundling model for SNAM S.p.A. under Article 15 of Law No. 27 of 24 March 2012," referred to in Fincantieri's By-laws;

after investigation by the Nomination Committee, examined the recommendations contained in the annual report on the implementation by the issuers of the Corporate Governance Code (the "CG Report"), drawn up by the Italian Corporate Governance Committee (the "CG Committee") and the cover letter drafted by the Chairman of the CG Committee and sent to the Chairmen of Italian listed companies on 19 December 2019. Specifically, the Board analysed in detail the most relevant points of the CG Report and the improvements that the CG Committee expected, considering that also in light of the results of self-assessment process by the Board of Directors and the Advisory Committees for 2019, the Company is substantially compliant with the issues pointed out in the CG Report;
examined the report on the Board of Directors' self-assessment for the 2019 financial year, prepared by the Nomination Committee;
after receiving the Nomination Committee's opinions, confirmed that, considering the nature and composition of Fincantieri's current shareholding structure and the circumstance that, under the law and the By-laws, Directors and Statutory Auditors are appointed on the basis of slates submitted by Shareholders and voted at the Shareholders' Meeting, and considering the experience gained during past nominations and according to the assessments of the Board of Directors of previous years, there appears to be no need to adopt a succession plan for executive directors and a diversity policy for the composition of management and supervisory bodies. With regard to the latter, it has been noted that the composition of Fincantieri's Board of Directors, which reflects the presence of a controlling Shareholder, already integrates different profiles, ensuring a that different experiences and skills complement each other, together with diversity of gender and age groups of the Directors;
after receiving the Nomination Committee's views, to effectively ensure the continuity of the Company's ordinary operations with adequate timeliness in case of events that, during the course of his/her term of office, prevent the Chief Executive Officer from exercising his/her duties, resolved, taking into account the Company's governance structure, the recommendations of the Corporate Governance Code and the experience gained by other issuers, to launch a task to establish an internal procedure to deal with potential crisis management situations;
after receiving the Control and Risk Committee's views, approved the updates to the 231 Organisation System;
after investigation by the Control and Risk Committee, examined the periodic report of the Head of Internal Auditing for 2019, which also contained an assessment of the adequacy of the internal control and risk management system;
after receiving the Control and Risk Committee's views, considered the ICRMS adequate with respect to the characteristics of the enterprise and the risk profile undertaken;
after consultation with the Director in charge of the ICRMS, after receiving the Control and Risk Committee's approval and after consultation with the Board of Statutory Auditors, ascertained that the Head of Internal Auditing has adequate means and resources to carry out the relevant responsibilities;
after receiving the Control and Risk Committee's views and after consultation with the Board of Statutory Auditors and with the Director in charge of the ICRMS, approved the annual Audit plan for 2020 prepared by the Head of Internal Auditing;
after receiving the Control and Risk Committee's views, examined the ERM Risk Assessment Report as at 31 December 2019;
after receiving the Control and Risk Committee's views, acknowledged that there were no changes to the impairment test procedure approved by the Board of Directors at its meeting of 14 February 2019, which was then reconfirmed, and approved the results of the tests relating to the 2019 financial year;
after investigation by the Control and Risk Committee, assessed the adequacy of the organisational, administrative and accounting structure of the Company and its main subsidiaries, verifying that the Officer in Charge has adequate powers and means to perform the tasks assigned to him/her and supervising his/ her effective compliance with administrative and accounting procedures;
examined the periodic report transmitted by the Supervisory Body;

examined the periodic reports of the Control and Risk Committee;
after investigation by the Control and Risk Committee, approved the draft financial statements and the consolidated financial statements as at 31 December 2019;
after investigation by the Control and Risk Committee, approved the proposal for profit allocation as per the financial statements as at 31 December 2019;
approved the 2019 reporting package for Cassa Depositi e Prestiti S.p.A.;
based on the illustration provided by the Board of Statutory Auditors, acknowledged the report of the Company's independent auditor, prepared in accordance with Article 11 of Regulation (EU) 537/2014 for the financial year ended 31 December 2019;
after receiving the Control and Risk Committee's views, approved the Report on Corporate Governance and Ownership Structure for the year 2019;
upon proposal of the Remuneration Committee, approved the Remuneration Policy for the Directors, the General Manager, Executives with Strategic Responsibilities and for the other Key Executives for the 2020 financial year, to be submitted for binding vote by the Shareholders' Meeting convened to approve the 2019 financial statements;
based on a proposal from the Remuneration Committee, approved the Report on the policy regarding remuneration and fees paid under Article 123-ter of the Italian Consolidated Law on Finance (TUF);
after investigation by the Sustainability Committee, approved the Sustainability Report for 2019;
after investigation by the Sustainability Committee, approved the updates to the 2018-2022 Sustainability Plan;
approved the notice of call for the Company's Shareholders' Meeting of 9 June 2020 and the explanatory reports of the Board of Directors for the discussion of the items on its agenda;
after receiving the Control and Risk Committee's views, positively acknowledged the tests in accordance with Law No. 262/2005 and approved the relevant results;
acknowledged the information provided by the Board of Statutory Auditors on the results of the verification conducted by the same on the existence of the independence requirements for its members, following the appointment of the Board of Statutory Auditors by the Shareholders' Meeting of 9 June 2020;
after receiving the Control and Risk Committee's views, approved the periodic financial reports, positively acknowledging the absence of observations and compliance with the relevant legislation in drafting them;
based on a proposal from the Remuneration Committee, reported the 2019 operating results related to the short-term variable incentive plan ("MBO") of the Chairman and the CEO;
based on a proposal from the Remuneration Committee, defined the 2020 MBO performance objectives of the Chairman and the CEO;
after investigation by the Remuneration Committee, approved the Company's proposals regarding the achievement of objectives and on allocating the shares to the beneficiaries of the second cycle of the Performance Share Plan 2016-2018;
after investigation by the Remuneration Committee, approved the Company's proposals regarding the identification of the objectives and of the beneficiaries of the second cycle of the Performance Share Plan 2019-2021 and the allocation of rights to each of them;
appointed Fabio Gallia as General Manager of the Company, to replace Alberto Maestrini;
also with the support of the Control and Risk Committee, since the start of the COVID-19 pandemic, has constantly monitored the actions and measures that the Company has implemented to deal with the emergency, also with a view to guaranteeing the workers' health and safety.

It also describes the activities carried out by the Board of Directors in the first months of 2021. Specifically, the Board:

approved Fincantieri's 2021 corporate events calendar;
examined the recommendations set out in the annual report on the implementation by the issuers of the Corporate Governance Code (the "CG Report"), drafted by the Italian Corporate Governance Committee (the

"CG Committee") and the cover letter drafted by the Chairman of the CG Committee and sent to the Chairmen of Italian listed companies on 22 December 2020. Specifically, the Board analysed the most important points of the Report and the ideas for improvement sought by the CG Committee in detail, considering that the Company is substantially compliant with the Recommendations dictated by the CG Committee, also in light of the decision to comply with the new Corporate Governance Code;

made the necessary adjustments to the Company's corporate governance structure to implement the new Corporate Governance Code, details of which will be provided in the Report on Corporate Governance and Ownership Structure to be published in 2022;
after receiving the Control and Risk Committee's views, approved the updates to the 231 Organisation System; • after receiving the Sustainability Committee's views, approved Fincantieri's Materiality Matrix and the updates of the Fincantieri's Charter of Sustainability Commitments.
after investigation by the Nomination Committee, verified the existence of the requirements of independence and integrity of the members of the Board of Directors and the absence of reasons for their incompatibility, ineligibility or disqualification;
after investigation by the Nomination Committee, verified that the number of positions held by Directors and Statutory Auditors was in line with the guidelines on the maximum number of offices as director or statutory auditor that can be considered compatible to effectively perform the office of Director of the Company, most recently adopted by the Board of Directors on 28 January 2021 as part of the adjustment of the Company's corporate governance system to the new Corporate Governance Code;
after receiving the Nomination Committee's views, confirmed that there is no need to adopt a policy on diversity in relation to the composition of the Board of Directors and Statutory Auditors, in view of the composition of the Board of Directors currently in office, which can be considered to reflect adequate diversification in terms of age, gender, educational and professional background, and considering the Company's lack of discretionary power in defining diversity policies, resulting from the requirements for Directors and Statutory Auditors already established by current laws, regulations and the By-laws, as well as the new Corporate Governance Code;
after receiving the Control and Risk Committee's views, examined the ERM Risk Assessment Report as at 31 December 2020;
after investigation by the Control and Risk Committee, examined the periodic report of the Head of Internal Auditing for 2020, which also contained an assessment of the adequacy of the internal control and risk management system;
after receiving the Control and Risk Committee's views, considered the ICRMS adequate with respect to the characteristics of the enterprise and the risk profile undertaken;
after receiving the Control and Risk Committee's views and after consultation with the Board of Statutory Auditors and with the Director in charge of the ICRMS, approved the annual Audit plan for 2021 prepared by the Head of Internal Auditing;
after receiving the Control and Risk Committee's approval, ascertained that the Head of Internal Auditing has adequate means and resources to carry out the relevant responsibilities;
after receiving the Control and Risk Committee's views, acknowledged that there were no changes to the impairment test procedure approved by the Board of Directors at its meeting of 14 February 2019, which was then reconfirmed and approved the relevant results;
after investigation by the Control and Risk Committee, assessed the adequacy of the organisational, administrative and accounting structure of the Company and its main subsidiaries, verifying that the Officer in Charge has adequate powers and means to perform the tasks assigned to him/her and supervising his/her effective compliance with administrative and accounting procedures;
after investigation by the Remuneration Committee, approved the guidelines for a new medium-long term incentive plan for Fincantieri's management;
after investigation by the Sustainability Committee, approved the "Fiscal Strategy" document prepared by the Company for the purpose of achieving the objectives set out in the Sustainability Plan.

Further activities performed by the Board of Directors in connection with the internal control and risk management system (ICRMS) are described in paragraph 3 below.

2.2.6 Meetings and functioning of the Board

During 2020, the Board of Directors met 13 times, with an average duration of the meetings of about 127 minutes and, on average, 89.2% of Directors attending. On average, 94.83% of the Independent Directors attended the above meetings.

The meetings were regularly attended by members of the Board of Statutory Auditors and also, at the Chairman's invitation, by the heads of the corporate Departments whose purview extended from time to time to the individual items on the agenda.

The Chairman duly convened all of the meetings, generally with at least five days' notice. The Chairman also guaranteed that all Directors and Auditors would receive any documents related to the items on the agenda in good time, prior to each meeting and, where this was not possible, that an accurate and adequate in-depth analysis of the individual items on the agenda would be provided during the meetings.

Eleven meetings have been scheduled for the 2021 financial year at the date of this Report, two of which have already been held during the first months of the year.

Table 1 attached to this Report indicates the attendance record (as a percentage) of each Director at meetings of the Board of Directors and associated Committees.

2.2.7 Chairman of the Board of Directors

The Chairman is vested with all powers provided for by law and by the By-laws in relation to the functioning of the corporate bodies (Shareholders' Meeting and Board of Directors) and with the legal representation of the Company, and also the power to verify that the Board of Directors' resolutions are implemented.

Moreover, on 5 April 2019, the Board of Directors resolved to grant the following delegated powers to the Chairman Giampiero Massolo, to be exercised in coordination with the CEO in order to ensure uniformity and effectiveness of the Company's operations:

representing the Company before institutions, entities, national and international organisations with a view to promoting the Company's image and activities, subject to the CEO's responsibility for the Company's administration and management;
cooperating with the Chief Executive Officer to establish international strategies and the Company's internationalisation activities;
cooperating with the Chief Executive Officer to establish the Company's communication strategies and activities and institutional relations;
supervising and coordinating the ICRMS of the Company and its subsidiaries, the continuous improvement of its effectiveness and efficiency, and the implementation of specific resolutions on internal control adopted by the Board of Directors, based on a mandate from the Board;
supervising and coordinating the development and management of the Company's security system aimed at safeguarding its tangible and intangible assets and resources, including the assets referred to in Articles 12 et seq. of Decree of the President of the Council of Ministers No. 4 of 22 July 2011 on the administrative protection of State secrecy and classified information and the management of relations in the area of industrial safety with the National Safety Authority.

The Board of Directors on 18 April 2019 also vested the Chairman with the role of Director in charge of the ICRMS (see paragraph 3.2.1 below).

2.2.8 CEO

Without prejudice to the powers reserved to the Board, the CEO - acting as the leading figure in the Company - has the power to legally represent the Company, within the limits of the powers granted, and to manage the Company, on the basis of the guidelines formulated by the Board of Directors and in accordance with the information duties under Article 2381 of the Italian Civil Code, and is vested with the following tasks and delegated powers to be exercised by single signature:

a) to submit to the Board of Directors the business plans and budgets in which the Company's strategic lines are defined;
b) to implement the resolutions of the Corporate Bodies, carrying out the acts, including those of extraordinary administration, resolved thereby;
c) to carry out all acts of ordinary and extraordinary administration of the Company, except for acts that cannot be delegated by law and those that are reserved exclusively to the Board of Directors.

The CEO's powers include the following (for purposes of illustration only):

to represent the Company as claimant and defendant before any administrative, tax and judicial authority, to appoint attorneys and general representatives and special attorneys ad litem;
to represent the Company before public and private, national and international bodies, entities and operators;
to issue third parties including state administrations, banks and lending institutions with guarantees for a maximum of EUR 500 million per transaction/operation as collateral for obligations undertaken and to be undertaken towards any party, including by Fincantieri's subsidiaries or any other company in which Fincantieri may have an interest, according to terms and conditions that may be sought and, in cases of urgency, guarantees for over EUR 500 million, subject to the duty to report same to the Directors at the next Board meeting;
to enter into any lending/borrowing transaction for amounts not exceeding EUR 500 million per transaction/ operation, including loans, undertaking the necessary commitments and implementing the necessary formalities;
to enter into, amend and terminate any act, deed or agreement related to the corporate purpose; also to establish, renew, reduce, subordinate and cancel mortgages and liens on ships or other products under construction or already built by the Company including for third parties, settling any disputes in which the Company may be involved;
to represent the Company also delegating others for this purpose vis-à-vis the entities and companies in which Fincantieri holds interests, quotas, shares, and participations or that Fincantieri represents, and therefore also at the ordinary and extraordinary shareholders' meetings of the entities and companies themselves, exercising all other rights relating to the shares themselves;
to establish the organisation of the Company after informing the Board of Directors;
to recruit, appoint and remove personnel at all levels from their position including managers, but excluding General Managers; to manage personnel at all levels without limitation, also by changing the economic and regulatory conditions contained in employment agreements and settling any related disputes;
to grant work assignments amounting to, individually or cumulatively, less than EUR 100,000 in the case of natural persons and EUR 500,000 in the case of professional associations or legal persons, without prejudice to the right to grant assignments of an amount exceeding the above limits when granted to: (i) natural persons registered in professional registers or lists, (ii) professional associations among such natural persons or (iii) legal persons of national or international importance.

The CEO may – in the context of the abovementioned delegated powers – issue and revoke general and special powers of attorney for individual acts or transactions or for categories of acts or transactions to/from employees of the Company and to third parties, including those not intended to be temporary.

The CEO ensures that the Company's organisational and accounting structure is adequate to the nature and dimensions of the Company, and this figure reports at least on a quarterly basis to the Board of Directors and to the Board of Statutory Auditors on the Company's operating performance, on its anticipated development, on any significant transactions and on the exercise of the delegated powers.

2.2.9 Non-executive Directors

Non-executive Directors bring their specific professional skills and experience to bear on discussions of the Board of Directors, and their specific concern is to ensure that the Board's decisions are properly considered and justified, particularly in areas that are particularly sensitive from the point of view of conflict of interest. The number, competence, and availability of non-executive Directors (who represent the majority of the Board) ensure that their judgement has a significant influence on Board decisions.

2.2.10 Independent directors

Pursuant to Article 147-ter, paragraph 4, of the Italian Consolidated Law on Finance (TUF), at least two members of the Board of Directors – when it has over seven members – must satisfy the independence requirements required for Statutory Auditors by Article 148, paragraph 3, of the Italian Consolidated Law on Finance (TUF). Article 3 of the Corporate Governance Code also recommends that an adequate number of non-executive Directors should be independent, in the sense that they do not have dealings or have not had recent dealings – direct or otherwise – with the issuer or with persons/entities associated with the issuer, which could compromise their independence of judgment. The Code also recommends that the number and the expertise of independent Directors should be adequate to the size of the Board and to the activities of the issuer, and should also facilitate the establishment of Committees within the Board.

The Board of Directors assesses the independence of its non-executive members by paying more attention to substance rather than form, while noting that a Director does not generally satisfy independence criteria in the cases (not exhaustive) described in Article 3.C.1 of the Corporate Governance Code. In accordance with the foregoing, the Company's Board of Directors has an adequate number of independent Directors, who contribute significantly to the Board through their independent and unbiased judgement on the matters for discussion and decision, and the presence of independent Directors ensures that the Advisory Committees have a composition that reflects the recommendations of the Corporate Governance Code. More specifically, the Board of Directors in office on the date of this Report consists of six independent Directors in accordance with the law. These Directors are also independent, as far as 2020 is concerned, in light of the recommendations of the Corporate Governance Code.

These Directors submitted special declarations testifying to their independence at the time of their appointment. After investigation by the Nomination Committee, the verification procedure was carried out at the Board of Directors' meeting of 28 January 2020, where the criteria referred to in the abovementioned Article 3.C.1 of the Corporate Governance Code were applied. During this meeting, the Board also verified that the Directors Barbara Alemanni, Massimiliano Cesare, Luca Errico, Paola Muratorio, Elisabetta Oliveri and Federica Seganti met the independence requirements set forth in Articles 147-ter, paragraph 4, and 148, paragraph 3, of the Consolidated Law on Finance (TUF), as well as in the Corporate Governance Code. On the same date, the Board of Statutory Auditors carried out its assessment of the continued independence requirements for Directors who had declared their independence at the time of their appointment, in order to subsequently verify the correct application of the assessment criteria and procedures adopted by the Board to assess the independence of its members.

The Board of Directors did not designate a lead independent director, given that the conditions for such appointment envisaged by the Corporate Governance Code were not met. The Chairman of the Board of Directors is not, in fact, the key person responsible for managing the Company, nor does he hold a controlling stake in the Company.

During 2020, the independent Directors met twice in the absence of the other Directors and took advantage of numerous opportunities for informal discussions at board meetings. Among other matters, the aforementioned

Directors discussed issues related to the functioning and effectiveness of the Board of Directors and its Committees.

2.2.11 Assessment of the operation of the Board and of the Advisory Committees

The "board review" procedure commenced during the second half of 2019 on the initiative of the Nomination Committee, concluded in early 2020.

The Board of Directors acknowledged the results of the Board evaluation activities at the meeting of 10 March 2020.

The analysis was carried out with the support of the Board of Directors' Corporate Secretarial Staff, by filling in a self-assessment questionnaire and conducting individual interviews with some Directors, in order to gather the perception of individuals in relation to the size, composition, functioning and efficiency of the Board itself and its Committees.

The results suggested that the Board conducts its operations in a manner that is consistent with and appropriate to its mandate.

The survey provided an important opportunity to examine in depth the functioning and operation of the Board of Directors. Specifically, some of the observations illustrated in the body of the Report, together with the indications offered by the Directors during the individual interviews, revealed the Directors' assessment of the size, composition and functioning of the Board, also indicating some suggestions for improvement. Specifically, the Directors acknowledged the Company's growing commitment to improving the integrity, accessibility and timeliness of Board information.

Arrangements between the Board of Directors and the Advisory Committees have been viewed positively, having considered that the importance given inside the Board of Directors to the indications that materialised and to the proposals made by the Committees, whose Chairmen may have adequate space within the Board discussion to report on the activities carried out by the individual Committees, is adequate.

2.2.12 Remuneration

Directors' remunerations are established by the ordinary session of the Shareholders' Meeting at the time of appointment. The remunerations of Directors vested with the particular tasks referred to in Article 2389, paragraph 3, of the Italian Civil Code is, on the other hand, established by the Board of Directors in compliance with applicable regulatory provisions.

Further information on the remuneration of Directors, the General Manager and other Executives with strategic responsibilities and Key Executives can be found in the Report on the policy regarding remuneration and fees paid drawn up by the Company pursuant to Article 123-ter of the Italian Consolidated Law on Finance (TUF) and available on the Company's Internet website at www.fincantieri.com in the "Ethics and Governance - Remuneration" Section and the "Ethics and Governance - Shareholders' Meetings 2021" Section.

2.3 Advisory Committees

The Board of Directors has set up four internal Committees with proactive proposal and consultation tasks, namely: The Control and Risk Committee, the Remuneration Committee, the Nomination Committee and the Sustainability Committee15.

Their composition, duties and operating procedures, as well as their powers and resources, are governed by specific regulations approved by the Board of Directors when the abovementioned Committees were established and subsequently amended, on the basis of the amendments introduced from time to time to the Corporate Governance Code and in order to make them more functional to their task of providing advice and support to the Board of Directors.

The Advisory Committees consist of four Directors. All Committees members are non-executive Directors, the majority of whom are independent and have functional powers to perform the tasks assigned to them. Moreover, at least one member of the Control and Risk Committee must have adequate knowledge and experience in financial and accounting areas or in the risk management area, while the Remuneration Committee must include at least one member with adequate knowledge and experience in the financial or remunerations policy area. The Chairman of each Committee is appointed by the Board of Directors and informs the next Board of Directors meeting of the items discussed at the relevant meetings. The Secretary of each Committee is identified by the Chairman of the Committee within the Corporate Secretarial Staff of Fincantieri, while the Secretary of the Board of Directors attends the meetings of the Committees at the invitation of their Chairman. The Committees meet with the frequency required to perform their tasks. Meetings are called by the Committee Chairman, or when a request is made by at least two members of the same to discuss specific matters that are considered particularly relevant. The notice of call is transmitted by the Secretary at the Committee Chairman's request, in general at least three days before the meeting. The Secretary provides the committee members with any available documentation related to the items on the agenda, usually to accompany the notice of call. With the exception of the Sustainability Committee, a Committee is validly convened in the presence of the majority of its members in office and decides by an absolute majority of those present. In the event of a tie, the vote of the Committee Chairman prevails. The Sustainability Committee is validly convened in the presence of half of its members in office and decides by an absolute majority of those present. In the event of a tie, the vote of the Committee Chairman prevails.

The Committees are entitled to access the Company information and corporate Departments needed to enable them to perform their duties.

In order to carry out their duties, the Committees may rely on external consultants using the Company's structures and at the Company's expense, provided that they are subject to the necessary confidentiality obligations. In addition, the Committees, if they consider it necessary, may prepare an annual budget to be submitted to the Board of Directors for its approval.

¹⁵ The Sustainability Committee was established by the Board of Directors on 8 June 2016, and the Control and Risk Committee and the Nomination Committee were established by the Board of Directors on 5 May 2014, to come into effect only after the commencement of trading of the Company's shares on the Electronic Share Market (MTA) managed by Borsa Italiana. The Remuneration Committee had already been established. The composition of the Committees - in conformity with the Corporate Governance Code's recommendations - was thus determined for the first time by the Board of Directors at its meeting held on 21 July 2014.

2.3.1 Control and Risk Committee

Composition

The Control and Risk Committee is composed of the Directors Massimiliano Cesare (non-executive and independent), Federica Seganti (non-executive and independent), Barbara Alemanni (non-executive and independent) and Federica Santini (non-executive and non-independent), appointed by the Board of Directors on 18 April 2019. The Director Massimiliano Cesare was made Chairman at the same Board of Directors' meeting.

At the time of appointment, the Board acknowledged that all the Committee members satisfied at least one of the following requirements: (i) adequate experience in the accounting and financial fields; and (ii) adequate experience in the risk management area. Without prejudice to the foregoing, when the Control and Risk Committee meets to express its opinion on transactions with related parties of greater importance (see paragraph "Tasks" below), it is composed of four non-executive Directors, all of whom are independent and, therefore, the non-independent member - Director Federica Santini - is replaced by the non-executive and independent Director Paola Muratorio, identified for this purpose by the Board of Directors during the meeting held on 18 April 2019. The meetings of the Control and Risk Committee are attended by the Chairman of the Board of Statutory Auditors or a Standing Auditor designated by the latter. The Chairman of the Board of Directors, (also acting as Director in charge of the ICRMS), the CEO and the Head of Internal Auditing may also attend. The other Auditors and – at the Committee's invitation – other persons including other members of the Board or people belonging to the company structure may also attend these meetings, to provide information on and to assess (within their respective competencies) the individual items on the agenda.

Tasks

The Control and Risk Committee is tasked with supporting the Board of Directors – by adequate investigative activities including consultative and proposal powers – in its assessments and decisions related to the ICRMS and related to the approval of periodic financial reports. The Committee submits its opinion in advance to the Board, on the following:

on the guidelines of the ICRMS, to enable the main risks to Fincantieri and its subsidiaries to be properly identified and adequately measured, managed and monitored;
on the degree to which the abovementioned risks are compatible with managing the Company consistently with the strategic objectives identified;
on the extent to which the ICRMS is adequate and appropriate to the nature of the Company and its risk profile, and on the effectiveness of that system;
on the work program drawn up by the Head of Internal Auditing;
on the description contained in the Report on Corporate Governance and Ownership Structure of the main characteristics of the ICRMS and of the coordination methods of those involved therein, also assessing the adequacy of that system;
on the external auditors' findings indicated in the letter of suggestions, if any, and in the report on key issues arising during the audit;
on the proposed terms of appointment, removal and remuneration of the Head of Internal Auditing, and on the adequacy of the resources assigned to the latter for the performance of the relevant tasks.

The Committee, in assisting the Board, also has the following duties:

to assess together with the Officer in Charge and after having consulted with the external auditors and the Board of Statutory Auditors – the proper application of accounting standards and their uniformity for the purposes of drawing up periodic financial reports;
to give its views on specific matters pertaining to the key risks to which the Company is exposed;
to examine the periodic reports assessing the ICRMS, and key reports drawn up by the Internal Auditing Department;
notifying this to the Chairman of the Board of Statutory Auditors and the Director in charge of the ICRMS, except where the subject-matter of the request relates to the activities of these persons;
to monitor the independence, adequacy, effectiveness and efficiency of the Internal Auditing Department; • to request the Internal Auditing Department to carry out checks on specific operating areas, simultaneously
to report to the Board on the activities carried out and also on the adequacy of the ICRMS at least every six months, and no later than the deadline for approving the annual financial statements and the half-year financial report, at the Board meeting indicated by the Chairman of the Board of Directors;
to support (with adequate investigative activities) the Board's assessments and decisions related to the management of risks deriving from adverse events that have come to the Board's attention.

Furthermore, the Control and Risk Committee was provisionally assigned Committee tasks with remit in the area of related party transactions under the CONSOB Regulation on Related Party Transactions, as described in greater detail in paragraph 4.1 below. The Remuneration Committee was provisionally assigned to act as a committee with competence in the area of related party transactions for remunerations policy, as described on the paragraph 2.3.2 below.

Activities conducted

During 2020, the Control and Risk Committee met 11 times, with an average duration of the meetings of about 90 minutes and, on average, 93% of its members attending. Table 1 attached to this Report shows the percentage of attendance of each member at Committee meetings. The meetings were regularly attended by at least one member of the Board of Statutory Auditors. The meetings were all duly convened by the Committee Chairman, with at least three days advance notice. The members were provided with the documentation on the items on the agenda by the same deadline. The Secretary duly recorded the meetings in the minutes. The Committee Chairman reports on the Committee's activities and presents the Committee's periodic report at each Board of Directors meeting.

For the 2021 financial year, the Committee has decided to meet, as a rule, at the same time as the meetings of the Board of Directors; as of the date of this Report, 3 meetings have been held. During the meetings held in 2020, the Committee:

approved the updates to the 231 Organisation System;
assessed the results of the audits conducted in 2019 and presented by the Head of Internal Auditing;
received and examined the periodic report of the Head of Internal Auditing for 2019, which also contains an assessment of the adequacy of the internal control and risk management system;
assessed the adequacy of the organisation, administrative and accounting structure of the Company and its main subsidiaries, also verifying that the Officer in Charge has adequate powers and means to carry out the tasks assigned to him/her and supervising his/her effective compliance with administrative and accounting procedures;
expressed to the Board of Directors its opinion on the approval of the annual audit plan for 2020 prepared by the Head of Internal Auditing;
after consulting the Director in Charge of the ICRMS, expressed to the Board of Directors its opinion on the fact that the Head of Internal Auditing has adequate resources to carry out his/her responsibilities;
judged the ICRMS to be adequate and effective considering the nature of the Company and its risk profile, giving the Board of Directors its views and monitoring the independence, adequacy, effectiveness and efficiency of the Internal Auditing Department;
expressed to the Board of Directors its opinion on the impairment test on equity investments and goodwill as at 31 December 2019 and the related results;
verified compliance with the administrative and accounting procedures under Law No. 262/2005 and issued its approval of the 2020 version of the relevant Manual;

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gave the Board of Directors its views on the external auditors' findings indicated in the letter of suggestions and in the report on key issues arising during the statutory audit;
assisted the Board of Directors by evaluating together with the Officer in Charge and after having consulted with the external auditors and the Board of Statutory Auditors – the proper application of the accounting principles and their uniformity for the purposes of drawing up periodic financial reports;
examined the draft financial statements and consolidated financial statements at 31 December 2019; • submitted to the Board of Directors the proposal for allocating the profit resulting from the financial
statements as at 31 December 2019;
examined the presentation of the main business risks, with reference to the analysis conducted during 2019;
expressed to the Board of Directors that it is in favour of approving the Report on Corporate Governance and Ownership Structure for the year 2019;
received and examined the periodic reports of the Head of Internal Auditing relating to the progress of activities in 2020;
reported to the Board of Directors, on a half-yearly basis, on the activities carried out, also presenting the relevant reports;
gave its approval on the ERM Risk Assessment Report as at 31 December 2019 and as at 30 June 2020;
supported the Board of Directors in its evaluations and decisions regarding the approval of the periodic financial reports;
has repeatedly audited the Company's General Manager, the Chief Financial Officer and the Head of Internal Auditing on the management of the Company's main risks.

During the first months of 2021, the Committee:

reviewed the relevant documentation relating to the Company's compliance with the new Corporate Governance Code;
approved the ERM Risk Assessment Report at 31 December 2020;
approved the updates to the 231 Organisation System;
assessed the results of the audits conducted during 2020 on the basis of an examination of the periodic report of the Head of Internal Auditing, which also contains an assessment of the adequacy of the internal control and risk management system;
expressed to the Board of Directors its opinion on the approval of the annual audit plan for 2021 prepared by the Head of Internal Auditing;
assessed the adequacy of the organisation, administrative and accounting structure of the Company and its main subsidiaries, also verifying that the Officer in Charge has adequate powers and means to carry out the tasks assigned to him/her and supervising his/her effective compliance with administrative and accounting procedures;
expressed to the Board of Directors its positive opinion on the fact that the Head of Internal Auditing is provided with adequate resources to carry out his/her responsibilities;
judged the ICRMS to be adequate and effective considering the nature of the Company and its risk profile, giving the Board of Directors its views and monitoring the independence, adequacy, effectiveness and efficiency of the Internal Auditing Department;
carried out the activities falling within its remit in preparation for the calling of the Shareholders' Meeting to approve the financial statements as at 31 December 2020.

The Chairman of the Control and Risk Committee, following the start of the COVID-19 emergency, deemed it appropriate to convene the same Committee on a permanent basis, in order to receive information and carry out ongoing monitoring, both inside and outside the Company, of the potential and direct effects deriving from the aforementioned pandemic.

Therefore, the Committee, in order to carry out its function of the ongoing monitoring of the situation in progress, has met in this capacity in 6 sessions as of the date of this Report. The Chairman of the Company, the Chief Executive Officer, the General Manager and the Chief Financial Officer were audited in these meeting on several occasions.

The Committee is currently still operating.

Following each meeting of the Committee, the Committee Chairman promptly reported to the Board of Directors on the outcome of the discussions.

To perform its tasks, the Committee relies on the Company's means and corporate structures, as well as, if necessary, the cost centre provided for the Board of Directors.

2.3.2 Remuneration Committee

Composition

The Remuneration Committee is composed of the Directors Paola Muratorio (non-executive and independent), Barbara Alemanni (non-executive and independent), Elisabetta Oliveri (non-executive and independent) and Fabrizio Palermo (non-executive and non-independent), appointed by the Board of Directors on 18 April 2019. Director Paola Muratorio was made Chairman at the same Board of Directors' meeting.

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At the time of appointment, the Board acknowledged that all Committee members satisfied at least one of the following requirements: (i) adequate knowledge and experience in the financial area; and (ii) adequate knowledge and experience in the remunerations policy area.

The meetings of the Remuneration Committee may be attended by the Chairman of the Board of Directors, the CEO and the Chairman of the Board of Statutory Auditors or a Standing Auditor designated by the latter. The other Auditors and – at the Committee's invitation – other persons, including other members of the Board or people belonging to the company structure, may also attend these meetings, to provide information on and to assess (within their respective competencies) the individual items on the agenda.

No Director, however, may attend meetings of the Committee that drafts proposals to the Board relating to that Director's remunerations

Tasks

The Remuneration Committee, pursuant the Corporate Governance Code of listed companies and its own Regulations, carries out the following proactive proposal and consultation tasks on remunerations:

• draws up proposals for the Board of Directors on the Remunerations Policy for Directors, for the General Manager, for Managers with Strategic Responsibilities and for the other Key Executives, periodically assessing the adequacy, overall consistency and concrete application of the Policy adopted, using the information provided by the CEO on the implementation of this Policy with regard to Executives with Strategic Responsibility and the other Key Executives;

submits proposals and gives its views to the Board of Directors on remunerations payable to the Chairman, the CEO and to other Directors who carry out particular offices, and on establishing performance targets linked to the variable component of such remunerations;
monitors the application of Board decisions, ascertaining in particular that the performance targets in question have been achieved;
reports on activities carried out at each Board meeting;
reports on its own operating procedures at the Shareholders' Meeting called to approve the annual financial statements, through the Chairman of the Committee or through a member nominated by him/her.

Furthermore, the Remuneration Committee was provisionally assigned to act as a committee with competence in the area of related party transactions where resolutions are to be adopted in the area of remunerations.

Activities conducted

During 2020, the Remuneration Committee met 8 times, with an average duration of the meetings of about 76 minutes and, on average, 75% of members attending.

Table 1 attached to this Report shows the percentage of attendance of each member at Committee meetings. The meetings were regularly attended by at least one member of the Board of Statutory Auditors. The meetings were all duly convened by the Committee Chairman, with at least three days advance notice. The members were provided with the documentation on the items on the agenda by the same deadline. The Secretary duly recorded the meetings in the minutes. The Committee Chairman shall report to each meeting of the Board of Directors on the activities carried out by the Committee.

For the 2021 financial year, the Committee has decided to meet, as a rule, at the same time as the meetings of the Board of Directors. As of the date of this Report, 3 meetings have been held. During 2020, the Remuneration Committee met on several occasions in order to:

formulate a new Remunerations Policy for the Directors, the General Manager, Executives with Strategic Responsibilities and for the other Key Executives, to be submitted for approval by the Board of Directors for 2020;
express its opinion on the Report on the policy regarding remuneration and fees paid under Article 123-ter of the Italian Consolidated Law on Finance (TUF);
express its opinion on the achievement of objectives, both corporate and individual, tied to granting the short-term variable remuneration ("MBO") of the Chairman and the Chief Executive Officer and on the definition of the objectives for 2020;
express its approval on the Company's proposals regarding the identification of objectives and beneficiaries of the second cycle of the Performance Share Plan 2019-2021 as well as regarding the allocation of rights to each of them;
express its approval on the Company's proposals regarding the achievement of objectives and on allocating the shares to the beneficiaries of the second cycle of the Performance Share Plan 2016-2018;
carry out, with the support of the Mercer consulting firm, a benchmarking exercise to assess the remuneration of the Chief Executive Officer and Key Executives;
examine the programme of work for which the Committee is responsible in order to adjust to the new Corporate Governance Code;
carry out the activities falling within its remit in preparation for the calling of the Shareholders' Meeting to approve the financial statements as at 31 December 2020.

In the first months of 2021, the Committee met in order to:

• examine the documentation relating to the Company's adherence to the new Corporate Governance Code;

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prepare the first section of the Report on the policy regarding remuneration and fees paid pursuant to Article 123-ter of the Italian Consolidated Law on Finance (TUF), containing a new proposal for the Company's Policy on the remuneration of Directors, Statutory Auditors, General Manager, Executives with Strategic Responsibilities and other Key Executives for 2021, to be submitted to the Board of Directors for approval;
examine and prepare a new medium and long-term share incentive plan for the three-year period 2022-2024

To perform its tasks, the Committee relies on the Company's means and corporate structures, as well as, if necessary, the cost centre provided for the Board of Directors.

2.3.3 Nomination Committee

Composition

The Nomination Committee is composed of the Directors Federica Seganti (non-executive and independent), Massimiliano Cesare (non-executive and independent), Luca Errico (non-executive and independent) and Fabrizio Palermo (non-executive and non-independent), appointed by the Board of Directors on 18 April 2019. The Chairman's tasks have been assigned by the same Board of Directors to the Director Federica Seganti. The meetings of the Nomination Committee may be attended by the Chairman of the Board of Directors, the CEO and – for matters within the purview of the Board of Statutory Auditors – the Chairman of the Board of Statutory Auditors or a Standing Auditor designated by the latter. The other Auditors and – at the Committee's invitation – other persons, including other members of the Board or people belonging to the company structure, may also attend these meetings, to provide information on and to assess (within their respective competencies) the individual items on the agenda.

Tasks

The Nomination Committee has proactive proposal and consultation powers in relation to the Board of Directors and, more specifically it:

provides opinions for the Board on the size and composition of the Board of Directors, and makes recommendations about the professional offices that should be represented on the Board;
provides opinions for the Board of Directors upon its reappointment, when it presents a slate of candidates for the office of Director;
proposes candidates to the Board for the office of Director in the event of co-optation, or where Independent Directors need to be replaced;
proposes to the Board a policy on the maximum number of directorships or auditor ships that a Director may hold, and conducts the relevant periodic investigations and assessments, to be submitted to the Board;
if the Shareholders' Meeting authorises, in general, prior exemptions from the prohibition on competition provided for by Article 2390 of the Italian Civil Code, the Committee formulates observations for the Board on any Directors' activities that are in competition with the Company's activities;
supervises the annual self-assessment of the Board and of its Committees and, taking into account the results of that assessment, makes its views known to the Board about the size and composition of the Board and its Committees, and also about the general competences and professional offices considered desirable to have on the Board or the Committees to ensure that the Board can make its position known to Shareholders before the new Board is appointed;
investigates the annual assessments of the Directors' independence and integrity, based on applicable criteria, and of whether or not a basis exists for their incompatibility, ineligibility or lapse;
reports on the actions taken at each Board meeting.

Activities conducted

During 2020, the Nomination Committee met 3 times, with an average duration of the meetings of about 63 minutes and, on average, 75% of members attending. Table 1 attached to this Report shows the percentage of attendance of each member at Committee meetings. The meetings were regularly attended by at least one member of the Board of Statutory Auditors. The meetings were all duly convened by the Chairman, generally with at least three days' advance notice. The members were provided with the documentation on the items on the agenda by the same deadline. The Secretary duly recorded the meetings in the minutes. The Committee Chairman shall report to each meeting of the Board of Directors on the activities carried out by the Committee.

For the 2021 financial year, the Committee has decided to meet, as a rule, at the same time as the meetings of the Board of Directors. As of the date of this Report, 2 meetings have been held. During the meetings held in 2020, the Committee:

supported the Board of Directors in investigating assessments of the Directors' independence and integrity, based on applicable criteria, and of whether or not a basis exists for their incompatibility, ineligibility or lapse;
supported the Board of Directors in investigating assessments of the number of offices held by Directors, in relation to the guidelines on the maximum number of offices as director or statutory auditor that can be considered compatible to effectively perform the office of Director of the Company, adopted by the Board of Directors on 19 December 2014 and updated by the same on 28 January 2020;
completed tasks involving the board evaluation of the Board of Directors for 2019, including: (i) updating, with the support of the Secretary of the Board of Directors, of the questionnaire for all members of the Board of Directors; (ii) examination of the findings of the abovementioned questionnaire; (iii) individual interviews with

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some Directors; (iv) drafting a report containing the results of the abovementioned board evaluation; and (v) presenting the report to the Board of Directors;

for the purpose of completing the board evaluation activity indicated above, examined the recommendations contained in the annual report on the implementation by the issuers of the Corporate Governance Code (the "CG Report"), drawn up by the Italian Corporate Governance Committee (the "CG Committee") and the cover letter drafted by the Chairman of the CG Committee and sent to the Chairmen of Italian listed companies on 19 December 2019;
confirmed that, considering the nature and composition of Fincantieri's current shareholding structure and the fact that, under the law and the By-laws, Directors and Statutory Auditors are appointed on the basis of slates submitted by Shareholders and voted at the Shareholders' Meeting, and considering the experience gained during the past nominations and according to the assessments of the Board of Directors of previous years, there appears to be no need to adopt a succession plan for executive directors and a diversity policy for the composition of management and supervisory bodies. With regard to the latter, it has been noted that the composition of Fincantieri's Board of Directors, which reflects the presence of a controlling shareholder, already integrates different profiles, ensuring a that different experiences and skills complement each other, together with diversity of gender and age groups of the Directors.

During the first months of 2021, the Committee:

reviewed the relevant documentation relating to the Company's adherence to the new Corporate Governance Code;
supported the Board of Directors in investigating assessments of the Directors' independence and integrity, based on applicable criteria, and of whether or not a basis exists for their incompatibility, ineligibility or lapse;
supported the Board of Directors in investigating assessments of the number of offices held by Directors and Statutory Auditors, in relation to the guidelines on the maximum number of offices as director or statutory auditor that can be considered compatible to effectively perform the office of Director of the Company, adopted by the Board of Directors on 28 January 2021, as part of the adjustments of the Company's corporate governance system to the new Corporate Governance Code;
confirmed that there is no need to adopt a policy on diversity in relation to the composition of the Board of Directors and the Board of Statutory Auditors in view of the composition of the Board of Directors currently in office, which can be considered to reflect adequate diversification in terms of age, gender, educational and professional background, and considering the Company's lack of discretionary power in defining diversity policies, resulting from the requirements for Directors and Statutory Auditors already established by current laws, regulations and the By-laws, as well as by the new Corporate Governance Code.

To perform its tasks, the Committee relies on the Company's means and corporate structures, as well as, if necessary, the cost centre provided for the Board of Directors.

2.3.4 Sustainability Committee

Composition

The Sustainability Committee is composed of the Directors Elisabetta Oliveri (non-executive and independent), Luca Errico (non-executive and independent), Paola Muratorio (non-executive and independent) and Federica Santini (non-executive and non-independent) appointed by the Board of Directors on 18 April 2019. The Chairman's tasks were assigned by the Board of Directors on 18 April 2019 to Director Elisabetta Oliveri. Meetings of the Sustainability Committee may be attended by the Chairman of the Board of Directors, the CEO, the Director in charge of the ICRMS, the Head of Internal Auditing and, for matters falling within the competence of the Board of Statutory Auditors, by the Chairman of the Board of Statutory Auditors or a Standing Auditor designated by it. The other Auditors and – at the Committee's invitation – other persons, including other

members of the Board or people belonging to the company structure, may also attend these meetings, to provide information on and to assess (within their respective competencies) the individual items on the agenda.

Tasks

The Sustainability Committee has proactive proposal and consultation powers in relation to the Board of Directors and, more specifically it:

carries out suitable investigative activities related to sustainability issues associated with the Company's activities and with its interaction dynamics with all stakeholders;
supports the Board in matters related to the Company's compliance with and promotion of human rights, labour rights, environmental rights, transparency and combating corruption, health and safety of corporate activities, the rights of all stakeholders, product liability and product innovation.
The Committee benefits from the participation of a multifunctional team (the "Team") coordinated by the Group
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Accounting and Administration Department, whose participants include representatives nominated for this purpose by the Legal Affairs Department; Human Resources and Industrial Relations Department; Marketing, Communication and Media Relations Department; as well as the Internal Auditing and Research and Innovation Departments.

Activities conducted

During 2020, the Sustainability Committee met 6 times, with an average duration of the meetings of about 108 minutes and, on average, 87.5% of members attending. Table 1 attached to this Report shows the percentage of attendance of each member at Committee meetings. The meetings were regularly attended by at least one member of the Board of Statutory Auditors. The meetings were all duly convened by the Chairman, generally with at least three days' advance notice. The members were provided with the documentation on the items on the agenda by the same deadline. The Secretary duly recorded the meetings in the minutes. The Committee Chairman shall report to each meeting of the Board of Directors on the activities carried out by the Committee.

expressed its approval as to the contents of the documents "Fincantieri Group's Initiatives for Communities and Territories", "Supplier Code of Ethics", and "Human Rights - Commitment to Respect for Human Rights and Diversity" in order to submit them to the Board of Directors for examination by meeting with representatives of the Human Resources and Industrial Relations, Marketing Communication, Media Relations, Public Affairs and Procurement Departments;
met with the external audit firm PricewaterhouseCoopers S.p.A. for the Audit Plan on the 2019 Sustainability Report;
examined the sustainability profiles of the ERM Risk Assessment Report as at 31 December 2019;
examined the draft 2020-2024 Sustainability Plan;
examined the Sustainability Budget for 2019;
proposed an update to the 2018-2022 Sustainability Plan;
examined the programme of work for which the Sustainability Committee is responsible in order to adjust to the new Corporate Governance Code;
examined the sustainability ratings attributed to the Company;
examined the proposed table of contents for the Sustainability Report 2020.

During the first months of 2021, the Committee:

reviewed the relevant documentation relating to the Company's adherence to the new Corporate Governance Code;
examined the draft Sustainability Budget for 2020;
acknowledged the information received on the stakeholder engagement process underway;
expressed its opinion on the Materiality Matrix for 2021;
examined the updates of Fincantieri's Charter of Sustainability Commitments;
examined the sustainability profiles of the ERM Risk Assessment Report as at 31 December 2020;
expressed its approval on the content of the "Fiscal Strategy" document in order to submit it to the Board of Directors for examination;
carried out the activities falling within its remit in preparation for the calling of the Shareholders' Meeting to approve the financial statements as at 31 December 2020.

To perform its tasks, the Committee relies on the Company's means and corporate structures, as well as, if necessary, the cost centre provided for the Board of Directors.

2.4 Board of Statutory Auditors

2.4.1 Composition of the Board of Statutory Auditors

Pursuant to Article 30.1 of the By-laws, the Board of Statutory Auditors consists of three Standing Auditors and three Alternate Auditors appointed by the Shareholders' Meeting in ordinary session in accordance with the procedures described in paragraph 2.4.2 below.

The acting Board of Statutory Auditors – appointed by the Ordinary Shareholders' Meeting of the Company on 9 June 2020 – whose term of office will expire at the meeting to approve the financial statements for the year ended on 31 December 2022 – is composed of the following Statutory Auditors: Gianluca Ferrero (Chairman), Rossella Tosini and Pasquale De Falco.

The Shareholders' Meeting of 9 June 2020 also appointed Alberto De Nigro, Valeria Maria Scuteri and Aldo Anellucci as Alternate Auditors.

From 19 May 2017 until the Shareholders' Meeting of 9 June 2020, the Board of Statutory Auditors consisted of Gianluca Ferrero, Chairman, Fioranna Vittoria Negri and Roberto Spada, Standing Auditors, Alberto De Nigro, Flavia Daunia Minutillo and Massimiliano Nova, Alternate Auditors. Gianluca Ferrero and Alberto De Nigro were taken from the minority list submitted by the shareholder INARCASSA, while Rossella Tosini, Pasquale De Falco, Valeria Maria Scuteri and Aldo Anellucci were taken from the list that received the highest number of votes, submitted by the majority shareholder CDP Industria S.p.A. The acting Statutory Auditors satisfy the integrity and professionalism requirements of Article 148, paragraph 4, of the Italian Consolidated Law on Finance (TUF) and by the Regulation adopted by Ministry of Justice Decree No. 162 of 30 March,2000. For the purposes of Article 1, paragraph 2, letters b) and c), of that Decree, the Company's activities are closely associated with the areas of commercial law, tax law, business economics and corporate finance, as well as areas related to naval engineering.

The members of the Board of Statutory Auditors also meet the independence requirements set forth in Article 148, paragraph 3, of the Italian Consolidated Law on Finance (TUF), as well as those recommended by the Corporate Governance Code. The satisfaction of the abovementioned requirements was certified by suitable declarations issued at the time of the appointment and subsequently verified by the Board of Statutory Auditors on 23 January 2020.

The Auditors, also by virtue of the foregoing, act independently from all Shareholders. Therefore, an Auditor who – independently or on behalf of third parties – has an interest in a particular transaction/operation of the Company must promptly and fully inform the other Auditors and the Chairman of the Board of Directors about the nature, terms, origins and extent of this interest.

The Auditors are also required to respect the limits on multiple offices held as director and auditor in Italian joint stock companies provided for by applicable regulatory provisions and by the By-laws (see Table 2 on the "Structure of the Board of Statutory Auditors" attached to this Report). Attached to this Report are the curricula vitae of the Statutory Auditors, which contain their main personal and professional information (see Annex 2).

2.4.2 Appointment and replacement of Auditors

The Board of Statutory Auditors is appointed by the ordinary Shareholders' Meeting in accordance with the procedures described below. The Auditors remain in office for three years, and they will cease from office at the date of the Shareholders' Meeting called to approve the financial statements for their third year of office; they may be re-elected.

The appointment of Auditors is governed by Article 30 of the By-laws, in which a full description of the relevant provisions is given16.