Danieli & C — Remuneration Information 2016

Oct 6, 2016

DANIELI & C. – OFFICINE MECCANICHE S.p.A.

Headquarters: Buttrio (UD), via Nazionale 41 Fully paid-up share capital of euro 81,304,566 Tax and Registration Number with the Register of Companies of Udine: 00167460302.

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REMUNERATION REPORT

In accordance with article 123-ter of Legislative Decree n.58 dated February 24, 1998

Approved by the Board of Directors on September 27, 2016

This document is available on the Company's website www.danieli.com, "Investors" section.

TABLE OF CONTENTS

1. Remuneration Report (Schedule N. 7-bis)

Preamble and Regulatory Framework

Section I

Remuneration policy for fiscal 2016/2017 and procedures used to adopt and implement the policy

Section II

• a. Remuneration elements
• b. Amounts paid to members of governing and control bodies, general managers and other executives with strategic responsibilities.

2. Information on shares held by members of governing and control bodies, general managers and other executives with strategic responsibilities (Schedule N. 7-ter)

Table 1 - Shares held by members of governing and control bodies, general managers and other executives with strategic responsibilities.

1. Remuneration Report (Schedule N. 7-bis)

Preamble and Regulatory Framework

The Danieli Group is a world leader in the manufacture and sale of plants for the steelmaking industry (Plant Making) and one of the major producers of special steels in Europe (Steel Making).

Danieli & C. - Officine Meccaniche S.p.A. (DANIELI), the Parent Company, owns the subholding company Industrielle Beteiligung SA with headquarters in Luxembourg, which in turn holds shares in all the Group's operating companies.

This report on remuneration complies with article 123-ter of Legislative Decree n.58 of February 24, 1998 (Consolidated Law on Finance) and falls under the regulatory framework specified in art. 2389 of the civil code, in order to:

• align the remuneration system with market requirements;
• ensure the company's competitiveness through suitable remuneration policies;
• keep and attract highly professional resources to ensure the company's growth.

This report, approved by DANIELI's Board of Directors on September 27, 2016, is divided into two sections:

• the first section aims to explain the company's policy for fiscal 2016/2017, concerning the remuneration of the members of the Board of Directors and executives with strategic responsibilities, as well as the procedures applied to adopt and implement this policy (these policies and procedures will be submitted to the shareholders for approval at the next assembly);
• the second section lists the single elements making up the fees paid to each member of the governing and control bodies, and to executives with strategic responsibilities, verifying their consistency with the policy adopted in this respect by the company and its subsidiaries and affiliates, based on what was approved by the shareholders in the previous tax year. This section also analytically shows all the payments made to these members for whatever reason or purpose by the company and its subsidiaries during the reference year (2015/2016).

Finally, the last table (Schedule 7-ter) shows the number of shares held - in the company and in companies it controls - by the members of the governing and control boards and by executives with strategic responsibilities, as well as by subjects with close connections to the latter.

It should be noted that as of June 30, 2016, the company's current organizational and management structure has two Chief Operating Officers to head the "Plant Making" (currently not in office) and "Steel Making" operating segments, who are also on the board of directors of the Parent Company; that the role of general manager is not required – and lastly - that there is no executive with strategic responsibilities, as defined by Consob Regulations.

The adoption of a Remuneration Policy subject to the approval of the shareholders exonerates the company from applying the provisions of the Consob regulations and of the internal regulations on transactions with related parties as regards the remuneration of directors with particular responsibilities and executives with strategic responsibilities, if any.

During the meeting called to approve the financial report for the 2015/2016 tax year, the shareholders are asked to express an opinion, in a non-binding resolution, on the first section of this report (art. 123 ter paragraph 6 of Legislative Decree n. 58/1998).

The outcome of the vote is made public in the manner specified in the applicable regulations.

SECTION I

Remuneration policy for fiscal 2016/2017 and procedures used to adopt and implement the policy

The remuneration policy that the Board of Directors submits to the shareholders on a yearly basis is the result of collective action involving the department of Human Resources and the Chief Executive Officer, for the purpose of bringing transparency to the various types of remuneration and simplifying their application.

The total remuneration of the directors is determined by the assembly of shareholders; the Board of Directors establishes how this remuneration is to be distributed as well as the remuneration of the Chairman of the Board and of the other members of the board.

The remuneration of the members of DANIELI's Board of Directors is a fixed amount and is not linked to the company's financial performance or to the achievement of specific targets.

The company's remuneration policy, which is periodically reviewed, has not undergone any significant changes over the years and is expected to be confirmed for next year as well.

As for the directors who hold special positions:

• The remuneration of the CEO (who in this case is also the Chairman of the Board), is included in the total remuneration approved by the shareholders for the governing body, and decided by the Board of Directors (after being examined by the independent directors, who also have the role of "monitoring" transactions between related parties), and in any case with the agreement of the Board of Statutory Auditors. The current remuneration, set at euro 650,000 per annum by the Board of Directors on October 26, 2015, is based on and declared to be consistent with the commitment, availability and competence of the CEO. The Board of Directors, with the agreement of the Board of Statutory Auditors, also has the authority to pay the Chairman and CEO a one-time bonus, in appreciation of his substantial commitment; his remuneration and any bonuses paid to him are subject to the approval of the shareholders;
• The Board of Directors decided not to additionally remunerate the Executive Committee directors (the only committee on the Board of Directors).

The Board of Directors – whose Chairman and CEO represents the majority shareholder – did not feel it was necessary to set up a Remuneration Committee, or to avail itself of independent experts to draw up a remuneration policy. It is the CEO – with the assistance of the Human Resources Department who is authorized to award monetary bonuses to executives, which are based on merit and aimed at rewarding both commitment and results obtained.

The remuneration of personnel holding positions with greater responsibility is generally subject to review on a yearly basis in order to ensure that it is in line with the market situation and with the remuneration policy implemented by companies of comparable size operating in the same field.

The variable element of the remuneration of executives (based only on short-term decisions) is linked to actual results (total company results or the results of a single product line, compared to budget figures) and does not exceed 30% of the remuneration itself. Any exceptions are subject to deliberation by the Board of Directors.

The company's remuneration policy does not pursue long-term interests nor is it affected by risk management strategies.

There is no remuneration policy that provides for non-monetary benefits.

There are no incentive plans based on shares or other financial instruments in favor of directors (including executive directors) or executives.

There are no vesting periods or deferred payment mechanisms or ex post correction mechanisms; there are no clauses to keep financial instruments in the portfolio after they are purchased by directors or executives.

There are no collective agreements or erga omnes practices requiring that executives who have ceased to hold office automatically receive compensation in exchange for non-competition or other commitments.

The remuneration policy does not provide for additional pay for directors or executives in case of cessation of office, resignation, dismissal or early termination of employment; only the provisions of the National Employment Agreement for Industry Executives are applicable.

Other than the mandatory coverage or the coverage specified in the National Employment Agreement for Industry Executives, there is no additional insurance, social security or pension coverage for directors and executives, with the exception of insurance to cover accidents resulting in death and/or permanent disability for members of the Board of Directors, and "D&O" (Directors and Officers) professional liability insurance.

No reference whatsoever is made to the policies of others in determining the company's remuneration policy.

SECTION II

Part One

BOARD OF DIRECTORS

Fees

Payments made to the members of the governing and control bodies were determined by the shareholders during the meeting of October 26, 2015; the yearly fees paid to directors are a total, fixed amount, and distributed equally among them by the Board of Directors.

Remuneration

The remuneration for the CEO is an additional, set amount decided by the Board of Directors on October 26, 2015.

The remuneration of the executive director (who is also Chief Operating Officer of the Plant Making segment), an employee of the company up to June 30, 2016, is based – as is the case of the remuneration of the other executives - on the National Employment Agreement for Industry Executives.

The total remuneration of the executive director who also holds the position of Chief Operating Officer for the Steel Making segment includes the fees received as Chairman of the Board of Directors of Acciaierie Bertoli Safau S.p.A. (ABS), which operates in the field of special steel production.

No additional remuneration is paid to the directors on the Executive Committee.

Extra bonuses

The board of directors did not pay out any additional bonuses to the CEO.

Non-monetary benefits

There is an insurance policy to cover accidents resulting in death and/or permanent disability for members of the Board of Directors, as well as a "D&O" (Directors and Officers) professional liability insurance policy.

Cessation of office or termination of employment

Notwithstanding the provisions of the national collective bargaining system (National Collective Employment Agreement for the Metalworking and Mechanical Engineering Industry, and National Collective Employment Agreement for Industry Executives), DANIELI has not entered into any collective agreements or company practices that provide for additional compensation in case of cessation of office or termination of employment without just cause.

The amount of compensation is proportional to the person's seniority within the company and the position he/she holds.

EXECUTIVES WITH STRATEGIC RESPONSIBILITIES

The company does not employ executives with strategic responsibilities as defined in the Consob regulations.

However, the salary of the company's executives is in line with market figures; the variable element, if any, of the above-mentioned remuneration (exclusively based on short-term decisions) is linked to actual results (total company results or the results of a single product line, compared to budget figures) and does not exceed 30% of the remuneration itself. The decision as to whether or not to award bonuses for particular commitments or results is made by the CEO.

The following tables show: the first one lists the items making up the fees paid to directors and auditors during the reference year for whatever reason or purpose, by the company or its subsidiaries or affiliates, confirming the continuity and consistency of the company's remuneration policy (which is also implemented by its subsidiaries and affiliates), according to the indications approved by the shareholders on October 26, 2015; the second one shows the shares held by these directors and auditors in the company.

Part two

TABLE 1: AMOUNTS PAID TO THE BOARD OF DIRECTORS, BOARD OF STATUTORY AUDITORS, GENERAL MANAGERS AND OTHER EXECUTIVES WITH

STRATEGIC RESPONSIBILITIES, BY DANIELI & C. OFFICINE MECCANICHE SPA AND ITS SUBSIDIARIES UP TO 30.6.2016

(Amounts in thousands of Euro)

First name and surname	Office held	Period in Office	Expiry of Term	Fixed	Committee	Variable non-equity		Non-monetary Other		Total	Fair value	Indemnity for
					remuneration membership	remuneratioin			benefits compensation		of equity	termination of
						remuneration Bonuses and	Profit					remuneration office or termination
						other incentives	sharing					of employment
Directors
GIANPIETRO BENEDETTI	Chairman	01.07.2015 - 30.06.2016	30.6.2018
	Chief Executive Officer
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders			11						11
	- remuneration for the position of CEO Total			650 661						650 661
CARLA DE COLLE	Vice-Chairman and Director	01.07.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders			11						11
	Remuneration from subsidiaries and affiliates					70			305	375
	Total			11		70			305	386
FRANCO ALZETTA	Director Remuneration from the company drawing up	01.07.2015 - 30.06.2016	30.6.2016
	the financial statements:							4			4
	- remuneration decided by the shareholders			11						11
	- employment income			376						376
	Total			387				4		391
CAMILLA BENEDETTI	Director	26.10.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders			7							7
	- employment income Total			73 80						73 80
ALESSANDRO BRUSSI	Director	26.10.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders			7							7
	- employment income			193		25		6		224
	Remuneration from subsidiaries and affiliates								62	62
	Total			200		25		6	62	293
AUGUSTO CLERICI BAGOZZI	Director	01.07.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up the financial statements:
	- remuneration decided by the shareholders			19						19
	Total			19						19
GIACOMO MARESCHI DANIELI Director		01.07.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders			11						11
	- employment income			104					5	104
	Remuneration from subsidiaries and affiliates Total			115					5	5 120
MIO CHIARA	Director	26.10.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:								11	11
	- remuneration decided by the shareholders			14						14
	Total			14					11	25
ALESSANDRO TRIVILLIN	Director	26.10.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements:
	- remuneration decided by the shareholders Remuneration from subsidiaries and affiliates			7				11	248	259	7
	Total			7				11	248	266
			Total remuneration	1.494		95		21	631	2.241
Statutory Auditors
RENATO VENTURINI	Chairman	01.07.2015 - 30.06.2016	30.6.2018
	Remuneration from the company drawing up
	the financial statements: Remuneration from subsidiaries and affiliates			57					57	57 57
	Total			57					57	114
GAETANO TERRIN	Standing auditor	01.07.2015- 30.06.2016	30.6.2018	38						38
VINCENZA BELLETTINI	Standing auditor	26.10.2015 - 30.06.2016	30.6.2018	25						25
CHIARA MIO	Standing auditor	01.07.2015 - 26.10.2015	26.10.2015	12						12
			Total remuneration	132					57	189

There are no managers with strategic responsibilites.

2. Information on shares held by members of the governing and control bodies, general managers and other executives with strategic responsibilities for the year ended June 30, 2016 (Schedule N. 7-ter)

TABLE 1: Shares held by members of governing and control bodies

Surname and Name	Position held	Company in which shares are held	Number of shares held at the end of the previous tax year (30.6.2016)	Number of shares purchase d	Number of shares sold	Number of shares held at the end of the tax year (1.7.2015- 30.6.2016)
Sind International S.p.A. (*)	Controlling company	DANIELI & C.SpA
		Ordinary	27,461,013			27,461,013
		Savings		0		0
Benedetti Gianpietro	President and CEO	DANIELI & C.SpA
		Ordinary	68,537			68,537
		Savings	17,000			17,000
De Colle Carla	Vice-Chairman	DANIELI & C.SpA
		Ordinary
		Savings	7,000			7,000
Alzetta Franco	Director	DANIELI & C.SpA
		Ordinary	32,000			32,000
		Savings
Mareschi Danieli Giacomo	Director	DANIELI & C.SpA
		Ordinary	2,500	1,400		3,900
		Savings
Ravasio Giuliano	Alternate auditor	DANIELI & C.SpA
		Ordinary	1,000			1,000
		Savings

(*) Company controlled jointly by Gianpietro Benedetti and the heirs of Cecilia Danieli.

The people indicated above are owners of their shares.

Danieli & C. Officine Meccaniche S.p.A. Via Nazionale, 41 – 33042 Buttrio (UD) Fully paid-up share capital of euro 81,304,566 Tax number, VAT registration number and number of registration with the Register of Companies of Udine: 00167460302 REA (Index of Economic and Administrative Information): 84904 UD Tel. +39 0432 1958111 - Fax +39 0432 1958289 www.danieli.com

info@danieli.com

Relations with institutional investors and financial analysts: fax +39 0432 1958863 e-mail: investors@danieli.it

Financial statements and publications are available at the company's headquarters, on the authorized storage mechanism SDIR&STORAGE and on the company's Web Site: www.danieli.com, Investors section