Fila — Governance Information 2017

Apr 6, 2017

F.I.L.A. – FABBRICA!ITALIANA!LAPIS!ED!AFFINI!S.P.A. 2016 CORPORATE!GOVERNANCE!AND!OWNERSHIP!STRUCTURE!REPORT as!per!Article!123!bis%of!Legislative!Decree!No.!58/1998

(traditional!administration!and!control!model)

Issuer:!F.I.L.A.!– Fabbrica!Italiana!Lapis!ed!Affini!S.p.A. Website:!www.filagroup.it Financial!year:!2016 Report!approval!date:!March!21,!2017

		PRINCIPAL!DEFINITIONS 5
1.		COMPANY!PROFILE7
2.		INFORMATION! ON! THE! OWNERSHIP! STRUCTURE! (AS! PER! ARTICLE! 123! BIS,!PARAGRAPH!1,!CFA)8
2.1		SHARE!CAPITAL!STRUCTURE!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!1, LETTER!A), CFA)8
	2.1.1	Share!capital!and!shares!of!the!Company 8
	2.1.2	Warrants 10
2.2	RESTRICTION!	(AS! 123\BIS, ON! THE! TRANSFER! OF! SHARES! PER! ARTICLE! PARAGRAPH!1, LETTER!B), CFA)11
2.3		SIGNIFICANT! HOLDINGS! (AS! PER! ARTICLE! 123\BIS, PARAGRAPH! 1, LETTER! C), CFA)11
2.4		SHARES!WHICH!CONFER!SPECIAL!RIGHTS!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!
	1,	LETTER!D), CFA) 12
2.5		EMPLOYEE!SHARE\PARTICIPATION!RIGHTS: METHOD!FOR!THE!EXERCISE!OF!VOTING! RIGHTS!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!1, LETTER!E), OF!THE!CFA) 12
2.6		VOTING!RESTRICTIONS!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!1, LETTER!F), CFA) 12
2.7	G), CFA)	SHAREHOLDER! AGREEMENTS!(AS! PER! ARTICLE! 123\BIS, PARAGRAPH! 1, LETTER! 12
2.8	H),	CHANGE!OF!CONTROL!CLAUSE!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!1, LETTER! OF! THE! CFA) AND! STATUTORY! PROVISIONS! ON! PUBLIC! PURCHASE! OFFERS! (AS!PER!ARTICLE!104, PARAGRAPH!1\TER!AND!104\BIS, PARAGRAPH!1, OF!THE! CFA)14
2.9		POWER! TO! INCREASE! THE SHARE! CAPITAL! AND! AUTHORISATION! TO! PURCHASE! TREASURY!SHARES!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!1, LETTER!A), CFA) 14
	2.9.1	Share!capital!increases 14
	2.9.2	Treasury!shares14
2.10	CIVIL!CODE)	MANAGEMENT! AND! CO\ORDINATION! ACTIVITIES!(AS! PER!ARTICLE!2497 OF! THE! 14
3.		COMPLIANCE!(AS!PER!ARTICLE!123\BIS,!PARAGRAPH 2,!LETTER!A),!CFA)15
4.		BOARD!OF!DIRECTORS 15
4.1		APPOINTMENT! AND! REPLACEMENY! (AS! PER! ARTICLE! 123\BIS, PARAGRAPH! 1,
	LETTER!L),	CFA)15
4.2		COMPOSITION!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!2, LETTER!D), CFA)18
	4.2.1	Members!of!the!Board!of!Directors18
	4.2.2	Maximum!number!of!offices!held!in!other!companies 22
	4.2.3	Induction!Programme 23
4.3		ROLE!OF!THE!BOARD!OF!DIRECTORS!(AS!PER!ARTICLE!123\BIS, PARA. 2, LETTER!
		D!OF!THE!CFA) 23
	4.3.1	Powers!attributed!to!the!Board!of!Directors24
	4.3.2	Procedures!and!frequency!of!board!meetings25

CONTENTS

4.4	EXECUTIVE!BODIES 27
	4.4.1 Chief!Executive!Officer!and!Executive!Director28
	4.4.2 Honorary!Chairman 32
	4.4.3 Chairman!of!the!Board!of!Directors 33
	4.4.4 Executive!Committee34
	4.4.5 Reporting!to!the!Board!of!Directors 34
4.5	OTHER!EXCUTIVE!DIRECTORS 34
4.6	INDEPENDENT!DIRECTORS34
4.7	LEAD!INDEPENDENT!DIRECTOR 35
4.8	GENERAL!MANAGER 35
5.	HANDLING!OF!CORPORATE!INFORMATION 35
5.1	CODE!FOR!THE!HANDLING OF!INSIDER!INFORMATION35
5.2	DEFINITION!OF!INSIDER!INFORMATION36
	5.2.1 Recipients!of!the!Code!for!the!handling!of!Insider!Information37
	5.2.2 Handling!of!Insider!Information37
5.3	INTERNAL!DEALING!CODE 38
6.	INTERNAL!COMMITTEES!TO!THE!BOARD!OF!DIRECTORS!(AS!PER!ARTICLE!
	123\BIS,!PARAGRAPH!2,!LETTER!D),!OF!THE!CFA)40
7.	REMUNERATION!COMMITTEE40
7.1	COMPOSITION!AND!OPERATION!(AS!PER!ARTICLE!123\BIS, PARAGRAPH!2,	LETTER!
	D) OF!THE!CFA)40
7.2	FUNCTIONS!AND!ACTIVITIES!OF!THE!REMUNERATION!COMMITTEE41
8.	REMUNERATION!OF!DIRECTORS!AND!SENIOR!EXECUTIVES43
9.	INCENTIVE!MECHANISMS FOR!THE!INTERNAL!AUDIT!MANAGER!AND!THE! EXECUTIVE!OFFICER!FOR!FINANCIAL!REPORTING44
10	CONTROL!AND!RISKS!COMMITTEE 44
10.1	COMPOSITION! AND! OPERATION! (AS! PER! ARTICLE! 123\BIS, PARAGRAPH! 2,
	LETTER!!D) OF!THE!CFA)44
10.2	FUNCTIONS!OF!THE!CONTROL!AND!RISKS!COMMITTEE45
11	INTERNAL!CONTROL!AND RISK!MANAGEMENT!SYSTEM!(AS!PER!ARTICLE! 123\BIS,!PARA.!2,!LETTER 3)!OF!THE!CFA) 46
11.1	EXECUTIVE! DIRECTOR! IN! CHARGE! OF THE! INTERNAL! CONTROL	AND! RISK!
	MANAGEMENT!SYSTEM 49
11.2	INTERNAL!AUDIT!MANAGER 50
11.3	ORGANIZATIONAL!MODEL!AS!PER!LEGISLATIVE!DECREE!231 OF!2001	51
11.4	INDEPENDENT!AUDIT!FIRM 52
11.5	EXECTIVE!OFFICER!FOR!FINANCIAL REPORTING 52
11.6	COORDINATION!OF!THE!PARTIES!INVOLVED!IN!THE!INTERNAL!CONTROL!AND!RISK!
	MANAGEMENT!SYSTEM 53
12	DIRECTORS!INTERETS!AND!TRANSACTTIONS!WITH!RELATE!PARTIES54
12.1	RELATED!PARTIES!COMMITTEE54
	12.1.1 Composition!and!Operation!(as!per!Article!123Rbis,!paragraph!2,!letter!! d)!of!the!CFA) 54

12.1.2 Functions!and!activities!of!the!Related!Parties!Committee 55 12.2 PROCEDURE!FOR!TRANSACTIONS!WITH!RELATED!PARTIES55
13 APPOINTMENT!OF!STATUTORY!AUDITORS59
14 COMPOSITION! AND! OPERATION! OF! THE! BOARD! OF! STATUTORY! AUDITORS!(AS!PER!ARTICLE!123\BIS,!PARAGRAPH!2,!LETTER!D)!CFA)61
15 RELATIONS!WITH!SHAREHOLDERS 65
16 SHAREHOLDERS`!MEETING!(AS!PER!ARTICLE!123\BIS,!PAR.!2,!LETTER!C),! OF!THE!CFA)66 16.1 SHAREHOLDERS' AGM CALL66
16.2 RIGHT!TO!ATTEND!SHAREHOLDERS' MEETINGS 66 16.3 PROCEDURES!FOR!SHAREHOLDERS' MEETINGS 67
17 ADDITIONAL CORPORATE!GOVERNANCE PRACTICES69
18 CHANGES!SINCE!THE!END!OF!THE!REFERENCE!YEAR 69

PRINCIPAL!DEFINITIONS!

The!principal!definitions!utilized in!the!present!Report!are!illustrated!below.!!

Borsa!Italiana Borsa! Italiana! S.p.A.,! with! registered! office! at! Milan,! Piazza!degli!Affari!No.!6. Civil!Code refers! TO! LEGISLATIVE! DECREE! 262 OF! MARCH! 16, 1942, AND!SUBSEQUENT!AMENDMENTS!AND!SUPPLEMENTS. Self\Governance!Code the!SelfRGovernance!Code! of! listed! companies! approved! in! July! 2015! by! the! Corporate! Governance! Committee! and!promoted!by Borsa Italiana.,!ABI,!Ania,!Assogestioni,! Assonime! and! Confindustria,! available! on! the! website! www.borsaitaliana.it in! the! section! "Borsa! Italiana! R Regulation!R Corporate!Governance". Consob the! National! Commission! for! Companies! and! the! Stock! Exchange,!with!registered!office!in!Rome,!Via!G.B.!Martini! No.!3. Effective!Merger!Date June!1,!2015. Reporting!date December!31,!2016. Issuer,!FILA!or Company F.I.L.A.!– Fabbrica!Italiana! Lapis! ed!Affini!S.p.A., with! registered!office!at!Pero!(MI),!Via!XXV!Aprile,!5,!REA!No.! 2022589,! Milan! Company's! Registration! and! Tax! No.! 8391050963. Reference!Year year!ended!December!31,!2016 Merger the! merger! by! incorporation! of! FILA,! completed! on! the! Effective!Merger!Date. Group!or FILA!Group FILA! and! the! subsidiaries! pursuant! to! Article! 2359,! paragraph!1.1!of!the!Civil!Code!and!associates!pursuant! to!Article!2359,!paragraph!3!of!the!Civil!Code!included!in! the!consolidation!scope. Stock! Exchange! Instruction!Regulation the! Instructions! to! the! Regulation! for! Markets! organized and!managed!by!Borsa!Italiana. MIV the!Investment! Vehicles!Market!organized and!managed! by!Borsa!Italiana. MTA the! Italian! Stock! Exchange! organized and! managed! by! Borsa!Italiana. Operation! the!reorganization between!Space!and!FILA,!as!approved! by! the! Board! of! Directors! of! the! aboveRmentioned! companies! on! January! 15,! 2015,! undertaken! principally! through!the!Merger.! Pencil Pencil!S.p.A.!with!registered!office!at!Piazza!Carlo!Felice! 7,!Turin.

SME`s	small!and!mediumRsized!issuers!of!listed!shares!pursuant! to!Article!1,!paragraph!1,!letter!wRquater1),!of!the!CFA.
Procedure! for! Transactions! with! Related!Parties	the! procedure! for! transactions! with! related! parties! adopted!by!the!Company!in! compliance with!the!Consob! TRP!Regulation.
Stock! Exchange! Regulation	the! regulation! for! markets! organized and! managed! by! Borsa! Italiana,! and! subsequent! amendments! and! supplements.
Issuers'!Regulation!	the! enacting! regulation! of! the! CFA! concerning! the! governance! of issuers,! adopted! by! Consob! with! motion! No.!11971!of!May!14,!1999!and!subsequent!amendments! and!supplements.!
Related! Parties! Regulation!	the! regulation! adopted! by! Consob! Resolution! No.! 17221! of!March!12,!2010!(as!subsequently!amended)!in!relation! to!transactions!with!related!parties.
Report	the! present! Corporate! Governance! and! Ownership! Structure!Report,!prepared!in!accordance!with!Article!123R bis+of!the!CFA.
Space	Space!S.p.A.
Space!Holding	Space! Holding! S.r.l.,! with! registered! office! at! Piazza! Cavour 1,!Milan,!promotor!of!Space.
Sponsor!Warrant	warrants! pursuant! to! the! regulation! of! the! "Sponsor! Warrant!Space!S.p.A.".
By\Laws	the! ByRLaws! of! the! Company! in! force! at! the! reporting! date.
CFA	Legislative! Decree! No.! 58! of! February! 24,! 1998,! as! subsequently!amended!and!supplemented.!
VEI	Venice!European!Investment!Capital!S.p.A.

1. COMPANY!PROFILE

FILA,!founded!in!Florence!in!1920!and!managed!since!1956!by!the!Candela!family,!is!a! highly!consolidated,!dynamic!and!innovative!Italian!industrial!enterprise!and!continues! to!grow!market!share.

Since! November! 2015,! the! shares! of! FILA! are! listed! on! the! Italian!Stock! Exchange,! STAR!segment.!

The!company!has!achieved!strong!growth over!the!last!twenty!years,!while!undertaking! a! series! of! strategic! acquisitions,! including! the! Italian! Adica! Pongo,! the! US! Dixon! Ticonderoga,!the!German!LYRA,!the!Mexican!Lapiceria!Mexicana,!the!Brazilian!Lycin! and!the!English!DalerRRowney!Lukas!and!St.!Cuthberts!and!the!French!Canson.

FILA! is! an! icon! of! Italian! creativity! globally! through! its! coloring,! drawing,! modelling,! writing!and!painting!tools,!thanks!to!brands!such!as!Giotto,!Tratto,!Das,!Didò,!Pongo,! Lyra,! Doms,! Maimeri! and! Daler.! Since! its! foundation,! FILA! has! chosen! to! focus! on! growth!through!continuous!innovation,!both!in!technological!and!product!terms,!in!order! to! enable! individuals! to! express! their! ideas! and! talent! through! tools! of! exceptional! quality.!In!addition,!FILA!and!the!Group!companies!work!together!with!the!Institutions! to! support! educational! and! cultural! projects! which! promote! creativity! and! expression! among!individuals!and!make!culture!accessible!to!all.

FILA!operates!through!21!production!facilities!(of!which!2!in!Italy)!and!39!subsidiaries! across!the!globe!and!employs!more!than!6,500.

The! Company! has! adopted! the! traditional! administration! and! control! model! with! the! following!bodies!and!committees:

• (i) The!Shareholders'!Meetingi
• (ii) The!Board!of!Directors,!which!also!operates!through!the!Chief!Executive!Officer and!the!Executive!Directori
• (iii) The!Board!of!Statutory!Auditorsi
• (iv) The!Control!and!Risks!Committeei
• (v) The!Remuneration!Committeei
• (vi) The!Related!Parties!Committeei
• (vii) The!Supervisory!Boardi
• (viii) The!Independent!Audit!Firm.

2. INFORMATION! ON! THE! OWNERSHIP! STRUCTURE! (AS! PER! ARTICLE! 123 BIS, PARAGRAPH!1, CFA)

2.1 SHARE! CAPITAL! STRUCTURE!(AS! PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER! A), CFA)

2.1.1 Share!capital!and!shares!of!the!Company

At! the! date! of! the! present! Report,! the! subscribed! and! paidRin! share! capital! of! FILA! amounts! to! Euro! 37,170,830,! divided! into! 41,232,296! shares,! of! which! 34,665,788! ordinary!shares!and!6,566,508!special!B!shares!(B!Shares),!all!without!nominal!value.!

The!share!capital!of!FILA!is!comprised!of!the!following!class of!shares:

Class	No.!of!shares	%!of!share!capital	Listed!/!Non!listed
Ordinary!shares	34,665,788	84.07%	MTA!R STAR!Segment
B!Shares (multiRvote!shares)	6,566,508	15.93%	NonRlisted

The! shares,! both! ordinary! and! B! Shares! are! subject! to! the! dematerialisation! rules! pursuant!to!Article!83Rbis+and!thereafter!of!the!CFA.

The! ordinary! shares! are! to! bearer,! indivisible,! freely! transferable! and! confer! to! the! owners!equal!rights.!In!particular,!each!ordinary!share!attributes!the!right!to!one!vote!at! the! Ordinary! and! Extraordinary! Shareholders'! Meeting! of! the! Company,! as! well! as! additional!equity!and!administrative!rights!pursuant!to!the!ByRLaws!and!statutory!law.

In!accordance!with!Article!5.4!of!the!ByRLaws,!the!B!shares!attribute!the!same!rights!as! the!ordinary!shares,!with!the!exception!of:!

• each!B!Share!confers!the!right!to!three!votes!pursuant!to!Article!127Rsexies+of! the!CFA!at!all!Shareholders'!Meetings!of the!Company,!subject!to!any!statutory! limitationi
• they!automatically!convert!into!ordinary!shares,!based!on!one!ordinary!share!for! each! B! Share! (without! a! resolution! of! the! B! Shares! special! shareholders'! meeting! or! of! the! shareholders'! meeting! of! the! Company)! in! the! event! of! (i)! disposal!to!parties!who!are!not!already!shareholders!of!B!Shares,!except!where! the! transferee! is! a! parent,! is! controlled! by! or! under! common! control! of! the! transferor!and,!provided!that,!in!this!case,!where!the!transferee!loses!the!status! of!parent,!is! controlled!by!or!under! common! control!of!the!transferor,!all!the!B! Shares!held!by!them!are!automatically!converted!into!ordinary!shares,!based!on! one!ordinary!share!for!every!B!Sharei!and!in!the!event!of!(ii)!a!change!in!control! of!the!owner!of!the!B!Shares,!where!the!parent!of!the!owner!concerns!the!party! which,!pursuant!to!current!regulations,!is!required!to!issue!the!communications! on! significant! shareholdings! (the! Ultimate! Parent)! and! with! the! exception! of! where!the!change!in!control!occurs!(1)!not!by!deed!between!living!partiesi!or!(2)! by!deed!between!living!parties!in!favor of!parties!that!are!direct!descendants!of! the! Ultimate! Parent! and/or! in! favor of! companies! or! other! entities! directly! or! indirectly! controlled! by! the! Ultimate Parent! or! by! its! direct! descendants! or! in! which! they! are! beneficiaries,! while! the! change! of! control! exclusively! to! joint! control! with!third! parties! who! act! in! concert! with!the! Ultimate!Parent! does! not! constitute!a!change!of!control!for!the!purposes!of!this!paragraphi

• they! may! be! converted,! in! all! or! in! part! and! also! in! several! tranches,! into! ordinary!shares!on!the!simple!request!of!the!owner,!to!be!sent!to!the!Chairman! of!the!Board!of!Directors!of!FILA!and!in!copy!to!the!Chairman!of!the!Board!of! Statutory!Auditors,!also!based!on!one!ordinary!share!for!every!B!Share.!

The!conversion!is!ratified!by!the!Board!of!Directors!with!resolutions!taken!by!statutory! majority.!In!the!event!of!omission!by!the!Board!of!Directors,!the!conversion!is!ratified!by! the!Board!of!Statutory!Auditors!with!the!approval!of!a!majority!of!those!present.!

Ordinary!shares!may!not!be!converted!into!B!Shares.

The! Company! may! issue! B! Shares! limited! to! the! following! cases! (a)! share! capital! increases!pursuant!to!Article!2442!of!the!Civil!Code!or!through!new!conferment!without! exclusion!or!limitation!of!the!option!right,!in!any!case!together!with!ordinary!sharesi!and! (b)!mergers!or!spinRoffs.

In!the!event!of!a!share!capital!increase!to!be!undertaken!through!the!issue!of!ordinary! shares,! all! shareholders! will! have! the! right! to! subscribe! to! the! newlyRissued! ordinary! shares! (unless! the! option! right! is! excluded! in! accordance! with! law! or! there! is! no! entitlement)! in! proportion! and! in! relation! to! the! shares!R including! ordinary! shares! or! Class!B!shares!– held!at!the!moment!of!the!share!capital!increase.!In!such!an!event,! the! passing! of! the! relative! motion! pursuant! to! Article! 2376! of! the! Civil! Code! by! the! special!shareholders'!meeting!of!the!B!Shares!is!not!required.

In!the!event!of!a!share!capital!increase!through!the!issue!of!ordinary!or!B!Shares:! (i)! the! number! of! the! ordinary! and! B! Shares! to! be! issued! must! be! proportional! to! the! number! of! ordinary! and! B! Shares! of! the! share! capital! at! the! date! of! the! relative! resolutioni! and! (ii)! the! ordinary! and! B! Shares! to! be! issued! must! be! offered! to! each! shareholder!in!relation!to!and!in!proportion!to,!respectively,!the!ordinary!and!B!Shares! held! at!the! date! of!the! share! capital! increase,! noting!that!the!B!Shares!may! only! be! subscribed!by!shareholders!already!holders!of!B!Sharesi!in!the!absence!of!subscription! of!the!newly!issued!B!Shares!by!the!shareholders!of!the!B!Shares,!the!B!Shares!will! automatically!convert!into!ordinary!shares!based!on!one!share!for!every!B!Share!and! will!be!offered!to!the!other!shareholders in!accordance!with!applicable!legal!provisions.

Where! the! Company! participates! in! a! merger! by! incorporation! as! the! incorporating! company! or! in! a! merger,! the! holders! of! the! B! Shares! will! have! the! right! to! receive,! within! the! share! swap! ratio,! shares! with! the! same! characteristics!R in! relation! to! the! multiRvoting!rights!– as!the!B!Shares,!in!accordance!with!applicable!legal!provisions.

At! the! date! of! the! present! Report,! the! Company! adopted! the! remuneration! plans! for! directors!and!employees!of!the!Group!described!in!the!remuneration!report!prepared!in! accordance! with! Article! 123Rter of! the! CFA! and! Article! 84Rquater of! the! Issuers'! Regulation,!as!well!as!the!disclosure!document!prepared!pursuant!to!Article!114Rbis of! the!CFA!and!Article!84Rbis of!the!Issuers'!Regulations!and!the!relative!illustrative!report! prepared! in! accordance! with! Article! 114Rbis! of! the! CFA,! available! on! the! Company! website!www.filagroup.it R Governance!section.

2.1.2 Warrants!

On!October! 9,! 2013,!the!Extraordinary!Shareholders'!Meeting! of!FILA!R among! other! matters!R resolved:!

• to! issue! a! maximum! 2,692,307! ordinary! shares,! without! par! value! R with! a! reduction!of!the!implied!par!value!of!all!shares!in!circulation!R and!without!any! simultaneous!increase!in!share!capital,!in!service!of!the!exercise!of!the!F.I.L.A.! S.p.A. Market! Warrants",! and! under! the! conditions! laid! down! by! the! relevant! regulation! approved! by! the! Extraordinary! Shareholders'! Meeting! at! the! same! meeting,! as! amended! by! the! Board! of! Directors! on! January! 15,! 2015! in! accordance!with!Article!6.3!of!that!regulationi!and
• to increase!the!paidRin!share!capital,!divisible, for!a!maximum!amount,!including! share! premium,! of! Euro! 9,750,000,! through! the! issue! of! a! maximum! 750,000! Sponsor! Warrants! and! in! accordance! with! the! conditions! of! the! relative! regulations! approved! by! the! same! Extraordinary! Shareholders'! Meeting.! Following this! resolution,!690,000!Sponsor!Warrants!were!issued,!all!assigned! to! Space! Holding.! Each! Sponsor! Warrant! gives! rights,! against! the! relative! exercise,!of!the!assignment!of!one!FILA!ordinary!share.

With! reference! to the! "F.I.L.A.! S.p.A. Market! Warrants",! on! January! 4,! 2016! the! exercise! period! concluded.! From! December! 1,! 2015! to! this! date! 8,153,609! Market! Warrants!were!exercised!against!the!subscription!of!2,201,454!ordinary!shares!of!the! Company.! As! established! by! paragraph! 5.1! of! the! "F.I.L.A.! S.p.A.! Market! Warrants"! Regulation,! the! remaining! 22,685! unexercised! "F.I.L.A.! S.p.A.! Market! Warrants"! are! cancelled!and!entirely!invalid.

In! relation! to! the! Sponsor! Warrants,! on! January! 15,! 2015,! the! Board! of! Directors,! pursuant!to!Article!6.2!of!the!regulation, approved!some!amendments!to!the!"Exercise! Price"!of!the!warrants,!in!order!to!adjust!the!terms!and!conditions!of!the!exercise!in!the! event!of!the!distribution!of!reserves!within!the!Operation.!

At the! date! of! this! Report,! Space! Holding! holds! all! of! the! Sponsor! Warrants! (i.e. 690,000).! The! Sponsor! Warrants! are! exercisable,! against! the! assignment! of! one! ordinary! share! of! FILA! for! each! Sponsor! Warrant,! between the! first! stock! market! trading!day!after!June!1,!2015!(the!Effective!Merger!Date)!and!the!tenth!anniversary!of! that!date.

The!Sponsor!Warrants!are!not!listed!on!any!regulated!market.

The! Sponsor! Warrant! Regulation! is! published! on! the! website! of! the! Issuer! www.filagroup.it!– Governance!section.

The! information! on! the! aboveRmentioned! Sponsor! Warrants! are! summarised! in! the! table!below.!

		Listed!/!Non!listed! No.!of!instruments! outstanding	Class!of!shares!for! the! conversion/exercise!	No.!of!shares!for! the! conversion/exercise
Sponsor!Warrant!	NonRlisted	690,000	Ordinary!shares	maximum!750,000! ordinary!shares!

2.2 RESTRICTION!ON!THE!TRANSFER!OF!SHARES!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH! 1, LETTER!B), CFA)

At! the! date! of! the! present! Report,! there! are! no! restrictions! on! the! transfer! of! the! ordinary!shares!of!the!Company,!subject!to!that!illustrated!below.!

It! is! recalled!that!Space! Holding! undertook! a! lockRup! commitment! with!Space! on!the! ordinary! shares! from! the! conversion! of! Class! C! Shares! in! accordance! with! ! the! following!terms:!(i)!with!reference!to!the!ordinary!shares!of!FILA!from!the!conversion!of! 161,000!Class!C!Shares!due!to!the!completion!of!the!Merger,!the!lockRup!commitment! will! be! for! a! duration! of! 12! months! from! the! Effective! Merger! Date! and! (ii)! with! reference!to!the!ordinary!shares!of!FILA!from!the!conversion!of!the!Class!C!Shares!on! the! occurrence! of! certain! events! indicated! in! the! ByRLaws! of! the! Issuer,! the! lockRup! commitment! will! last! until! the! later! date! between! a)! 12! months! from! the! Effective! Merger!Date!and!b)!6!months!from!the!conversion.!

Pursuant!to!the! shareholder!agreement! signed!on! January!15,!2015!between!Space,! Space!Holding,!Pencil!and!VEI!(the!Shareholder!Agreement):

• (i) Pencil!committed!to!a!lockRup!period!with!reference!to!the!ordinary!shares!and! Class!B!Shares!of!a!period!of!18!months!from!the!Effective!Merger!Date,!with! some!exceptions,!including!R among!others!R provisions!within!a!public!purchase! offer,!strategic!operations!or!infraRgroup!operationsi!and!
• (ii) VEI! committed!to! a! lockRup! period! with! reference!to!the! ordinary! shares!for! a! period! of! 180! days! from! the! Effective! Merger! Date,! with! some! exceptions,! including!R among!others!R provisions!within!a!public!purchase!offer,!infraRgroup! operations!and!operations!authorized by!the!corporate!broker!of!the!Issuer.

There! are! no! limits! to! holding! shares! of! the! Company,! nor! any! clauses! to! restrict! becoming!a!shareholder.!

2.3 SIGNIFICANT!HOLDINGS!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!C), CFA)

The! ordinary! shares! of! the! Company! are! traded! within! the! management! system authorized pursuant!to!the!CFA.

At! the! date! of! the! present! Report,! the! Company! is! an! SMEi! therefore,! pursuant! to! Article!120,!paragraph!2!of!the!CFA,!the!significance!threshold!for!the!purposes!of!the! communication! obligations! of! significant! shareholdings! is! equal! to! 5%! of! the! voting! share!capital.

Based!on!the!information!available,!the!shareholders!which,!at!the!date!of!this!Report,! have! holdings! of! above! 5%! of! the! voting! share! capital! of! the! Issuer,! directly! or! indirectly,!including!through!nominees,!trusts!and!subsidiaries,!are!reported!in!the!table! below:

Shareholder!	Direct!shareholder!	%!of!ordinary!share! capital!	%!of!voting!share!capital!
Massimo!Candela	Pencil!!S.p.A.	37.88	60.39
Jacopo!Meneguzzo	Venice!European! Investment!Capital! S.p.A.	11.30	7.20
Space!Holding!S.p.A.	Space!Holding!S.p.A.	5.19	3.31
Free!float		44.90	28.63
Total		100.00	100.00

2.4 SHARES!WHICH!CONFER!SPECIAL!RIGHTS!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!D), CFA)

There! are! no! securities! which! confer! special! control! rights! or! securities! with! special! powers! pursuant! to! the! regulations! and! statutory! provisions,! except! for! that! outlined! below.!

Each!B!Share!has!the!right!to!three!votes!pursuant!to!Article!127Rsexies of!the!CFA!at! all!Shareholders'!Meetings!of!the!Company,!subject!to!any!legal!limitations!and!confer! all!rights!and!obligations!indicated!at!paragraph!2.1.1!of!the!present!Report.!

The! ByRLaws! do! not! contain! provisions! upon! multiRvote! shares! in! accordance with! Article!127Rquinquies of!the!CFA.

2.5 EMPLOYEE! SHARE\PARTICIPATION! RIGHTS: METHOD! FOR! THE! EXERCISE! OF! VOTING! RIGHTS!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!E), OF!THE!CFA)

At! the! date! of! the! present! Report,! the! Company! adopted! the! remuneration! plans for! directors!and!employees!of!the!Group!described!in!the!remuneration!report!prepared!in! accordance! with! Article! 123Rter of! the! CFA! and! Article! 84Rquater of! the! Issuers' Regulation,!as!well!as!the!disclosure!document!prepared!pursuant!to!Article!114Rbis of! the!CFA!and!Article!84Rbis of!the!Issuers'!Regulations!and!the!relative!illustrative!report! prepared! in! accordance! with! Article! 114Rbis! of! the! CFA,! available! on! the! Company! website www.filagroup.itR Governance! section.! These! plans! do! not! provide! for! the! allocation!of!voting! rights!to!parties!other!than!the! relative!beneficiaries,!nor!particular! mechanisms!for!the!exercise!of!the!voting!right.!

2.6 VOTING!RESTRICTIONS!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!F), CFA)

There! are! no! restrictions! on! voting! rights! for! holders! of! ordinary! shares! and/or! B! Shares.

2.7 SHAREHOLDER! AGREEMENTS!(AS!PER! ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!G), CFA)

On! January! 15,! 2015,! within! the! Operation,! Space,! Space! Holding,! Pencil! and! VEI! signed a!Shareholder!Agreement,!which!will!enter!into!force!from!the!Effective!Merger! Date!and!for!a!duration!of!three!years!from!that!date.

The! Shareholder! Agreement! concerns:! (i)! the! appointment! and! composition! of! the! Board!of!Directors!and!of!the!Board!of!Statutory!Auditors!of!the!company!resulting!from! the!Mergeri!(ii)!the!rights!of!VEI!after!the!Effective!Merger!Datei!and!(iii)!the!circulation! of!the!shares!of!the!company!resulting!from!the!Merger,!i.e.!FILA.!

In! accordance! with! the! Shareholder! Agreement,! Pencil! has,! inter+ alia,! undertaken! commitments!to!ensure!that!the!Board!of!Directors!of!the!Company,!until!the!approval! of!the!FILA!2017!Annual!Accounts,!contains!2!directors!appointed!by!Space!Holding,!of! which! 1! belonging! to! the! underRrepresented! gender! and! independent! pursuant! to! applicable!regulations.!

Pencil!in!particular!undertook!commitments!to!VEI:

• to!ensure!the!presence!on!the!Board!of!Directors!of!FILA,!until!the!approval!of! the!2017!Annual!Accounts,!of!1!director!appointed!by!VEIi
• in!relation!to!the!appointment!of!the!members!of!the!Board!of!Directors!of!FILA! until!the!approval!of!the!2017!Annual!Accounts,!subject!to!the!fact that!on!that! date!VEI!holds!a! stake!in!the! share! capital!of!the!Issuer!equal!to!at!least!6%,! the! commitment! to:! (a)! present! a! slate! with! the! presence! of! one! candidate! nominated! by!VEI! and!to! vote!for!this! candidate!for!the! duration! of!the!threeR year! periodi! (b)! ensure! the! presence! on! the! Board! of! Directors! of! 1! director! appointed!by!VEIi!
• in!relation!to!the!appointment!of!the!members!of!the!Board!of!Statutory!Auditors! of!FILA!until!the!approval!of!the!2017!Annual!Accounts,!subject!to!the!fact!that! on!that!date!VEI!holds!a!stake!in!the!share!capital!of!FILA!equal!to!at!least!6%,! the! commitment! to! present! a! slate! with! the! presence! of! one! standing! auditor! nominated! by!VEI! (which!must! belong!to!the! underRrepresented! gender! of!the! slate!presented!by!Pencil)!and!to!vote!for!this!candidate!for!the!duration!of!the! threeRyear!period.!

Pencil! is! committed,!for!the! entire! duration! of!the!Shareholder!Agreement,!to! consult! VEI! and! inform! them! of! its! voting! intentions! with! reference! to! certain! Shareholders'! Meeting!resolutions.

The! right! of! VEI! to! nominate! 1! director! and! 1! statutory! auditor! and! the! relative! commitments!of!Pencil,!as!well!as!the!prior!consultation!commitments!of!Pencil!to!VEI,! will! lapse! where!VEI! has! a! shareholding! lower!than! 3%! in!the! share! capital! of! FILA,! without!taking!into!account!any!interRgroup!transfers.!

Pursuant! to! the! Shareholder Agreement,! Pencil! and! VEI! undertook! the! lockRup! commitments!described!above.!

Pursuant!to!Article!122!of!the!CFA,!on!January!20,!2015!an!extract!of!the!Shareholder! Agreement!was!published!in!the!daily!newspaper!"Il!Sole!24!Ore",!in!accordance!with! Article! 129! of! the! Issuers'! Regulation,! and! the! main! information! relating! to! the! Shareholder! Agreement! (including! the! amendments! made! on! June! 3,! 2015)! was! published! on! the! website! of! FILA! at! www.filagroup.it R Governance! section,! in! accordance!with!Article!130!of!the!Issuers'!Regulation.

2.8 CHANGE!OF!CONTROL!CLAUSE!(AS!PER!ARTICLE!123*BIS, PARAGRAPH!1, LETTER!H), OF!THE!CFA) AND!STATUTORY!PROVISIONS!ON!PUBLIC!PURCHASE!OFFERS!(AS!PER! ARTICLE!104, PARAGRAPH!1*TER AND!104*BIS, PARAGRAPH!1, OF!THE!CFA).*

At!the! date! of!the! present! Report,!the! Company! has! a! loan,! granted! on! February! 2,! 2016,!from!Intesa!Sanpaolo!S.p.A.,!Mediobanca!– Banca!di!Credito!Finanziario!S.p.A.,! UniCredit!S.p.A.!and!Banca!Nazionale!del!Lavoro!S.p.A..

This!loan!contains!a!"change!of!control"!clause.!In!particular,!the!credit!lines!in!relation! to! the! aboveRmentioned! loan! may! be! cancelled,! and! all! the! amounts! granted! as! principal,!interest!and!expenses!are!immediately!due!where,!among!other!matters,!the! Candela!family!ceases!to!hold,!directly!or!indirectly,!at!least!34%!plus!one!share!of!the! voting!rights!of!the!Company.

With! reference!to!the!current!provisions!in! relation!to!purchase!public!offers,!it!should! be!noted!that!the!Company!ByRLaws!do!not!provide!for!exceptions!to!the!passivity!rule! pursuant!to!Article!104,!paragraphs!1!and!1Rbis of!the!CFA,!nor!expressly!provide!for! the!application!of!the!neutralization rules!pursuant!to!Article!104Rbis,!paragraphs!2!and! 3!of!the!CFA.

2.9 POWER! TO! INCREASE! THE SHARE! CAPITAL! AND! AUTHORISATION! TO! PURCHASE! TREASURY!SHARES!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER!A), CFA)

2.9.1 Share!capital!increases

At! the! date! of! the! present! Report,! the! Board! of! Directors! has! approved! a! motion! to! propose!to!the!Shareholders'!Meeting!called!for!April!27,!2017!powers!to!increase!the! share! capital! pursuant! to! Article! 2443! of! the! Civil! Code! to! service! the! "2017R2019! Performance Shares! Plan"! described! in! the! disclosure! document! prepared! in! accordance!with!Article!114Rbis of!the!CFA!and!Article!84Rbis of!the!Issuers'!Regulation! and!in!the!relative!illustration!report!prepared!in!accordance!with!Article!114Rbis of!the! CFA,!available!on!the!company!website www.filagroup.it R Governance!section.

At! the! date! of! the! present! Report,! the! Board! of! Directors! do! not! have! the! power! to! increase!the!Share!Capital!or!to!issue!financial!instruments.

2.9.2 Treasury!shares

At! the! date! of! the! present! Report,! the! Company! does! not! have! treasury! shares! in! portfolio.

2.10 MANAGEMENT!AND!CO\ORDINATION!ACTIVITIES!(AS!PER!ARTICLE!2497 OF!THE!CIVIL! CODE)

The!company!is!not!subject!to!management!and!coRordination!pursuant!to!Article!2497! and!subsequent!of!the!Civil!Code.!

FILA! is! controlled! pursuant! to! Article! 93! of! the! CFA! by! Massimo! Candela,! through! Pencil,! in!which!Massimo!Candela! holds! (i)! directly! 12%! of!the! share! capital and,! (ii)! indirectly,!through!the! companies!Wood!I!S.r.l.! and!Wood!II!S.r.l! (in! which! he! in!turn! holds!100%!of!the!share!capital),!52.92%!of!the!share!capital,!and!therefore,!an!overall! shareholding!of!64.92%!of!the!share!capital!of!Pencil.!

The!Company!considers!that!Pencil!does!not!exercise!management!and!coRordination! activities,!operating!on!a!corporate!and!business!basis!independently!from!the!aboveR mentioned! parent! company. This! is! due! to! the! fact! that:! (i)! the! Issuer! operates! fully! independently! in! its! relations! and! dealing! with! customers! and! suppliers! without! any! involvement! from! external! parties! to! the! Issueri! (ii)! Pencil! does! not! exercise! any! centralized treasury! function! on! behalf! of! the! Issueri! (iii)! the! principal! decisions! concerning!the!business!of!the!Issuer!and!of!its!subsidiaries!are!taken!by!the!corporate! boards! of!the!Issueri! and! (iv)!the!Board! is! responsible,! among! other!matters,!for!the! review!and!approval!of!the!strategic,!industrial!and!financial!plans!and!the!budgets!of! the!Issuer!and of!the!Group.

***

The! information! required! by! Article! 123Rbis,! paragraph! 1,! letter! i)! of! the! CFA! ("the+ agreements+ between+ the+ company+ and+ directors+ ......which+ provide+ indemnity+ in+ the+ case+ of+ resignation+ or+ dismissal+ from+ office+ without+ just+ cause+ or+ termination+ of+ employment+ following+ a+ public+ purchase+ offer") is! illustrated! in! the! Remuneration! Report,!published!as!per!Article!123Rter of!the!CFA!and!Article!84Rquater of!the!Issuers'! Regulation,! available! in! accordance! with! the! provisions! of! law! on! the! website! of! the! Company www.filagroup.it R Governance!section.!

The!information!required!by!Article!123Rbis,!paragraph!1,!letter!l)!of!the!CFA)!relating!to! the!"applicable+ regulations+ concerning+ the+ appointment+ and+ replacement+ of+ directors+ (.....),+in+addition+to+the+amendment+of+the+ByDLaws+if+differing+from+applicable+law+and+ regulations"++is!illustrated!in!the!Board!of!Directors!section.

3. COMPLIANCE (AS!PER!ARTICLE!123*BIS*, PARAGRAPH!2, LETTER!A), CFA)

On!March! 15,! 2016,!the!Issuer! adopted!the!SelfRGovernance! Code! published! on!the! website! of! the! Italian! Stock! Exchange! (http://www.borsaitaliana.it/comitatoRcorporateR governance/codice/2015clean.pdf).!!During! 2016,!the!Issuer!therefore! adopted! all!the! measures!and! requirements!in!order!to!guarantee!the!effective!implementation!by!the! Company!of!the!recommendations!of!the!SelfRGovernance!Code.

The! Issuer,! and! its! subsidiaries,! are! not! subject! to! laws! in! force! outside! Italy! which! affect!the!Corporate!Governance!structure.

4. BOARD!OF!DIRECTORS

In! accordance! with! current! regulations!for! companies! with! listed! shares! on! regulated! markets,!the!Board!of!Directors!is!central!to!the!governance!system!of!the!Company.!

4.1 APPOINTMENT!AND!REPLACEMENY!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!1, LETTER! L), CFA)

The!Company!is!administered!by!a!Board!of!Directors!made!up!of!between!7!and!12! members.! The! Shareholders'! Meeting! establishes! the! number! of! members! on! the Board!of!Directors,!which!remains!in!place!until!otherwise!resolved.

All!directors!must!satisfy!the!eligibility!and!good!standing!requirements!established!by! applicable! law! and! other! provisions.! In! addition,! in! accordance! with! the! legal! and! regulatory!requirements,!a!number!of!directors!should!be!independent.

The! Shareholders'! Meeting! appoints! the! Board! of! Directors! on! the! basis! of! slates! presented! by! the! shareholders,! in! accordance! with! the! procedure! set! out! in! the! following! paragraphs,! except! where! otherwise! established! by! obligatory! laws! or! regulations.

Shareholders! can! present! a! slate! for! the! appointment! of! Directors! who,! alone! or! together!with!other!presenting!shareholders,!have!a!shareholding!at!least!equal!to!that! determined!by!Consob!in!accordance!with!applicable!provisions!and! regulations.!The! ownership! of! the! minimum! holding! is! established! considering! the! shares! which! have! been! registered! in!favour! of!the! shareholder! on!the! day! on!which!the! slates! are!filed! with!the!Issueri!the! relative! certification!may! be! produced! subsequent!to!filing! of!the! slates,!although!within!the!time!period!established!for!the!publication.

The! slates! must! be! filed! at! the! registered! office! of! the! company! according! to! the! manner! prescribed! by! current! regulations,! at! least! twentyRfive! days! prior! to! the! Shareholders'! Meeting! called! to! appoint! the! directors.! The! slates! must! be! made! available! to! the! public! by! the! Company! at! least! twentyRone! days! prior! to! the! Shareholders'! Meeting! in! accordance! with! the! manner! prescribed! by! current! regulations.

The! slates! provide! for! a! number! of! candidates! not! below! 3! and! not! above! 12,! each! listed! by! progressive! number.! The! slates! may! not! be! composed! of! candidates! only! from!the! same! gender! (masculine! or!feminine)i! each! slate!must! include! a! number! of! candidates!of!the!underRrepresented!gender!to!guarantee!the!composition!of!the!Board! of! Directors! in! accordance! with! legal! and! regulatory! provisions! in! relation! to! gender! equality!(masculine!and!feminine),!rounded!upwards.

The! following! must! be! attached! to! each! slate,! or! else! shall! be! considered! as! not! presented:!

(i) curriculum!vitae!of!the!candidatesi!

(ii)! declarations!of!the!individual!candidates,!in!which!they!accept!their!candidature! and!certify,!under!their!own!responsibility,!the!inexistence!of!any!cause!of!ineligibility!or! incompatibility,!as!well!as!the!satisfaction!of!the!requirements!prescribed!by!applicable! regulations! for! the! office! of! Director! of! the! Company,! including! where! applicable,! declarations!on!the!independence!of!candidatesi!

(iii) the!shareholders!who!have!presented!the!slates!and!their!total!shareholdingi!

(iv) any!other!further!declaration,!disclosure!and/or!document! required!by!law!and! applicable!regulatory!rules.

Individual!Shareholders,! shareholders! belonging!to!the! same! group or!members! of! a! shareholder! agreement! pursuant! to! Article! 122! of! the! CFA,! may! not! present! or! be! involved!in!the!presentation,!even!through nominees!or!trust!companies,!of!more!than! one!slate!or!vote!on!other!slatesi!in!addition,!each!candidate!may!only!be present!on! one!slate,!at!the!risk!of!being!declared!ineligible.

The! candidates!elected!at!the!end!of!the! voting! shall!be!those!on!the!two! slates!that! have!obtained!the!highest!number!of!votes!as!follows:!(i)!from!the!slate!which!obtained

the!highest!number!of!votes!(the!"Majority!Slate"),!all!the!directors!shall!be!elected!in! progressive! number,! less! onei! and! (ii)! from! the! slate! which! obtained! the! ! second! highest! number! of! votes! and! that! is! not! associated,! even! indirectly,! with! the! shareholders!who!presented!or!voted!for!the!Majority!Slate!(the!"Minority!Slate")!one! director!shall!be!elected,!being!the!first!candidate!indicated!on!the!slate.

Consideration! is! not! taken! of! the! slates! which! have! not! obtained! at! least! half! of! the! votes!required!for!the!presentation!of!slates.

Should! two! slates! receive! the! same! number! of! votes,! a! second! vote! of! the! entire! Shareholders'! Meeting! shall! decide,! with! the! candidate! being! elected! by! means! of! a! simple!majority!of!the!votes.

If!voting!does!not!result!in!compliance!with!legal!and!regulatory!provisions!in!relation!to! gender! equality! (including! rounding! up! where! necessary! in! relation! to! the! underrepresented!gender),!the!elected!candidate!appearing!last!on!the!Majority!!Slate! of!the!overrepresented!gender!is!excluded!and!will!be!replaced!by!the!first!candidates! from! the! same! slate! belonging! to! the! other! gender.! Where! it! is! not! possible! to! implement!this!replacement!procedure!in!order!to!guarantee!compliance!with!legal!and! regulatory! provisions! concerning! gender! equality,! the! nonRelected! directors! will! be! elected! by! the! Shareholders'! Meeting! through! ordinary! majority,! with! presentation! of! candidates!belonging!to!the!underRrepresented!gender.

Where!the! candidates! elected! do! not! ensure!the! number! of! independent! directors! as! required! by! applicable! regulations,! the! nonRindependent! candidate(s)! elected! last! in! progressive! order! of! the! Majority! Slate! will! be! replaced! by! the! first! independent! candidate! according! to! the! progressive! numbering! not! elected! in! the! same! Majority! Slate.! Where this! procedure! does! not! ensure! the! required! number! of! independent! directors,! the! Shareholders'! Meeting! will! elect! in! accordance! with! ordinary! majority,! with!presentation!of!independent!candidates.

Where! only! one! slate! is! presented,!the! Shareholders'!Meeting! will! vote! on!that! slate! and,!where!this!slate!receives!the!majority!of!the!votes,!all!the!members!of!the!Board!of! Directors! will! be! taken! from! this! slate! in! accordance! with! applicable! law! and! regulations,!including!gender!equality!regulations.

In!the!absence!of!slates,!or!where!only!one!slate!is!presented!and!this!slate!does!not! receive!the!majority! of!the! votes,! or!where!the! number! of! directors! elected! based! on! the! slates! presented! is! below! the! number! of! members! to! be! elected,! or! where! the! entire! Board! of! Directors! need! not! be! reRelected,! or! where! it! is! not! possible! for! whatever! reason! to! proceed! with! the! nomination! of! the! Board! of! Directors! with! the! aboveRmentioned!procedures,!the!members!of!the!Board!of!Directors!will!be!appointed! by!the!Shareholders'!Meeting!through!ordinary!majority,!without!application!of!the!slate! voting! mechanism,! subject! to! the! obligation! to! maintain! the! minimum! number! of! independent!directors!established!by! law!!and! in!accordance!with!applicable! law!and! regulations!in!relation!to gender!equality.

The!directors!are!elected!for!a!period,!established!by!the!Shareholders!Meeting,!of!not! greater!than!three! years!from!the! acceptance! of!their! office! and! until!the! date! of!the! Shareholders'!Meeting!for!the!approval!of!the!annual!accounts!for!the!last!year!of!their! appointment.

Where!over!half!the!directors!appointed!by!the!Shareholders'!Meeting!resign,!the!entire! Board! shall! be! deemed!to! have! vacated! office!with! effect!from!the! reRappointment! of! the!Board!of!Directors!and!the!remaining!directors!must!promptly!call!a!Shareholders'! Meeting!for!the!appointment!of!the!new!Board!of!Directors.

Where!during!the!year!one!or!more!directors!elected!from!the!slate!which!attained!the! second!highest!number!of!votes!at!the!Shareholders'!Meeting!vacates!office,!the!Board! of!Directors!shall,!where!possible,!coRopt!an!unelected!candidate!from!the!slate!of!the! resigning! director,! subject! to! the! obligation! to! maintain! the! minimum! number! of! independent! directors! established! by! law! and! in! accordance! with! applicable! law! and! regulations!in!relation!to!gender!equality.

The!Board! of! Directors elects! a! Chairman!from! among! its!members,! who! remains! in! this!position!for!the!duration!Board!of!Directors.

The!Board!of!Directors'!meeting!of!July!6,!2016!approved!the!motion!to!confer!mandate! in! order! to! draw! up! the! guidelines! for! the! succession! plans! of! the! Chief! Executive! Officer!of!the!Company,!with!a! view!to! strengthening!the!governance! structure!of!the! Company.

4.2 COMPOSITION!(AS!PER!ARTICLE!123*BIS*, PARAGRAPH!2, LETTER!D), CFA)

4.2.1 Members%of%the%Board%of%Directors

On! July! 22,! 2015,!the! Shareholders'!Meeting! of!the!Issuer! approved!the! proposal!to! increase!the!number!of!members!of!the!Board!of!Directors!to!nine!in!accordance!with! Article! 11.16! of!the!ByRLaws! and!the! duration! of!the! current!Board!for!three!financial! years.!

Therefore!nine!directors!were!appointed!for!the!years!2015,!2016!and!2017,!based!on! the!two!slates!filed,!respectively:

• by!the!shareholder!Pencil,!owner!of!13,133,032!ordinary!shares!and!6,566,508! B! Shares,! which! obtained! 38,593,247! votes,! equal! to! 95.401%! of! the! voting! share!capital!(Slate!1)i!and
• by!the!shareholders!Anima!SGR!S.p.A.,!manager!of!the!Anima!Geo!Italia!Fund,! Anima!Italia!Fund!and!Anima!Star!Italia!Alto!Potenziale!Fundi!Arca!SGR!S.p.A.,! manager! of! the! funds! Arca! Azioni! Italia! and! Arca! Economia! Reale! Equityi! Eurizon! Capital!S.G.R.!S.p.A.,!manager! of!the!funds!Eurizon!Azioni!Italia! and! Eurizon! Azioni! PMI! Italiai! Kairos! Partners! SGR! S.p.A.! as! management! company! of! Kairos! International! SICAV! comp.! Risorgimento! and! Kairos! International!SICAV!comp.!Selection!and!Mediolanum!Gestione!Fondi!Sgr.p.A.,! manager! of! the! funds! Mediolanum! Flessibile! Italia! and! Mediolanum! Flessibile! Sviluppo! Italia,! owner! of! a! total! of! 1,456,637! ordinary! shares,! which! obtained! 1,841,788!favourable!votes!equal!to!4.553%!of!the!share!capital!(Slate!2).

The!following!members!were!elected!to!the!Board!of!Directors!of!FILA:!

Office	Name	Slate
Chairman	Gianni!Mion	Slate!1
Chief!Executive!Officer	Massimo!Candela	Slate!1
Executive!Director	Luca!Pelosin	Slate!1
Director	Alberto!Candela	Slate!1
Director	Fabio!Zucchetti	Slate!1
Director	Annalisa!Barbera	Slate!1
Director	Sergio!Ravagli	Slate!1
Director	Francesca!Prandstraller	Slate!1
Director	Gerolamo!Caccia!Dominioni	Slate!2

All! the! members! of! the! Board! of! Directors! complied! with! the! requisites! for! good! standing!pursuant!to!Article!2!of!the!Ministry!of!Justice!Regulation!No.!162/2000,!and! enacted! in!Article! 147Rquinquies of!the!CFA! and!there!was! no! eligibility! or! lapsing! of! office! pursuant! to! Article! 2382! of! the! Civil! Code! or, where! applicable,! Article! 148,! paragraph! 3! of! the! CFA,! as! enacted! in! Article! 147Rter,! paragraph! 4! of! the! CFA.! In! addition,! the! Independent! Directors! Francesca! Prandstraller,! Sergio! Ravagli! and! Gerolamo! Caccia! Dominioni! declared! their! independence! in! accordance! ! with! applicable!regulations.!

At!the!date!of!the!present!Report!there!were!no!changes!to!the!Board!of!Directors.

For!further!information!on!the!slates!filed!for!the!appointment!of!the!Board!of!Directors! on!July!22,!2015,!reference!should!be!made!to!the!website!of!the!Company!www.fila.it,! Governance! Section,! where! the! professional! curriculum! vitae! of! each! director! is! available.!

The!table!below!reports!the!current!members!of!the!Board!of!Directors.!During!the!year! no!Directors!left!office.

	Board&of&Directors								Control∧& Risks& Committee	Committee	Remuneration&	Related& Parties& Committee&
Office	mbers Me	Date&of& birth	appoint.* Date&of& first&	In&office& m fro	In&office& until	Slate& **	Exec.	Non&Exec.	Ind.&Code	A Ind&CF	offices& No.&of& other& (***)	(*)&	(*)	(**)	(*)&	(**)	(*)&	(**)
Chairman	Gianni(Mion	1943	October( 7,(2013	July( 22,( 2015	December( 31,(2017	M					5	7/7
Chief(Executive( Officer	Massimo( ◊ Candela	1965	June(1,( 2015	July( 22,( 2015	December( 31,(2017	M	X				1	7/7
Executive(Director	Luca(Pelosin•	1966	June(1,( 2015	July( 22,( 2015	December( 31,(2017	M	X				L	7/7
Director( (Honorary( Chairman)	Alberto( Candela	1939	July(22,( 2015	July( 22,( 2015	December( 31,(2017	M		X			1	6/7
Director	Annalisa( Barbera	1969	July(22,( 2015	July( 22,( 2015	December( 31,(2017	M		X			L	7/7			7/8	M
Director	Francesca( Prandstraller	1962	July(29,( 2014	July( 22,( 2015	December( 31,(2017	M		X	X	X	1	6/7			8/8	P
Director	Fabio(Zucchetti(	1966	June(1,( 2015	July( 22,( 2015	December( 31,(2017	M		X			13	7/7	9/9	M			8/8	M
Director	Sergio(Ravagli	1962	July(22,( 2015	July( 22,( 2015	December( 31,(2017	M		X	X	X	9	4/7	8/9	M	8/8	M	8/8	M
Director	Gerolamo( Caccia( ○ Dominioni	1955	July(22,( 2015	July( 22,( 2015	December( 31,(2017	m		X	X	X(	1 Ceased'on' February'28,' 2017	7/7	9/9	P			8/8	C

Number&of&meetings&held∈&the&Reference Year:&7	Remuneration(Committee:(8	Control(and(Risks(Committee:(9	Related(Parties(Committee(( 8
Quorum&required&for&the&presentation&of&slates&by&minority&shareholders&for&the&election&of&one∨&more&members&(as&per&Article&147&ter CFA):&2.5%

_____________________________________________________________________________________________________________________________________________________________________________________ NOTE

The(following(symbols(must(be(indicated(in(the("Office"(column:

• •(This symbol(indicates(the(Director(in(charge(of(the(internal(control(and(risk(management(system.
• ◊ This(symbol(indicates(the(main(person(responsible(for(the(Issuer's(operative(management((Chief(Executive(Officer(or(CEO).
• ○(This(symbol(indicates(the(Lead(Independent(Director((LID).
• *(The(first(appointment(of(each(Director(refers(to(the(date(on(which(the(Director(was(appointed(for(the(first(time(to(the(Board(of(the(Issuer.

**(This(column(indicates(the(slate(from(which(each(Director(originated(("M":(majority(slate("m":(minority(slate("BoD":(slate(presented(by(the(BoD).

***This(column(indicates(the(number(of(offices(a(Director(or(Statutory(Auditor(holds(in(other(companies(listed(on(regulated(markets,(including(foreign(markets,(in( holding,(banking,(insurance(or(large(enterprises.(The(report(on(corporate(governance(indicates(all(offices(held.

(*).(This(column(indicates(the(percentage(of(attendance(of(the(Director(in(relation(to(the(number(of(BoD(and(Committee(meetings((indicates(the(number(of(meetings( attended(compared(to(the(amount(they(could(have(attended(e.g.(6/8(8/8(etc.).

(**).(This(column(indicates(the(position(of(the(Director(on(the(Committee:("C":(chairman("M":(member.

4.2.2 Maximum'number'of'offices'held'in'other'companies

The\$ Board\$ of\$ Directors\$ has\$ not\$ defined\$ the\$ general\$ criteria\$ relating\$ to\$ the\$ maximum\$ number\$ of\$ offices\$ of\$ administration\$ and\$ control\$ in\$ other\$ companies\$ that\$ may\$ be\$ considered\$ compatible\$ with\$the\$ proper\$ carrying\$ out\$ of\$their\$ duties\$ as\$ directors\$ of\$the\$ company.\$

This\$decision\$was\$based\$on\$the\$Board`s\$consideration\$that\$it\$was\$more\$appropriate\$for\$ each\$Director\$to\$decide\$whether\$the\$office\$of\$Director\$or\$Statutory\$Auditor\$is\$compatible\$ with\$ positions\$ held\$ in\$ other\$ listed\$ companies\$ on\$ regulated\$ markets\$ (including\$ overseas),\$ in financial,\$ banking,\$ insurance\$ or\$ large\$ companies,\$ with\$ the\$ diligent\$ undertaking\$of\$their\$duties\$as\$Director\$of\$the\$Issuer.\$\$

This\$assessment\$is\$undertaken\$on\$an\$annual\$basis\$during\$the\$disclosures\$of\$the\$offices\$ held\$ by\$ the\$ Directors\$ and,\$ in\$ the\$ event\$ of\$ incompatibility\$ arising,\$ each\$ Director\$ will\$ present\$to\$the\$Board\$any\$situations\$of\$accumulated\$offices\$not\$compatible\$which\$will\$be\$ assessed\$on\$a\$case\$by\$case\$basis\$by\$the\$Board.

The\$ Board\$ meeting\$ of\$ March\$ 21,\$ 2017\$ assessed\$ the\$ offices\$ held\$ by\$ its\$ Directors\$ in\$ other\$companies,\$and\$considered\$the\$composition\$of\$the\$Board\$in\$accordance\$with\$the\$ provisions\$of\$law\$and\$regulations,\$as\$well\$as\$compatible\$with\$an\$efficient\$undertaking\$of\$ their\$duties\$as\$Director\$of\$the\$Issuer.

In\$ relation\$to\$the\$ offices\$ held\$ by\$the\$ directors\$ of\$the\$Issuer\$ at\$the\$ date\$ of\$the\$ present\$ Report\$ in\$ financial,\$ banking\$ and\$ insurance\$ companies\$ or\$ of\$ significant\$ size\$ listed\$ on\$ regulated\$ markets\$ (including\$ abroad),\$ other\$ than\$ belonging\$ to\$ the\$ FILA\$ Group,\$ reference\$should\$be\$made\$to\$the\$table\$below.\$

Name	Company\$in\$which\$office\$held\$	Office\$in\$the\$company\$	State\$
Gianni\$ion	Banca\$Popolare\$di\$Vicenza\$S.p.A.	Chairman	In\$office
	Space\$Holding\$	Director	In\$office
	Space\$2\$S.p.A.	Chairman\$	In\$office
	Il\$Gazzettino\$S.p.A.	Director	In\$office
	Immobiliare\$Cewa\$S.r.l.	Director	In\$office
Massimo\$Candela	Pencil	Shareholder\$and\$Director	In\$office
Fabio\$Zucchetti	Pencil	Director\$	In\$office
	Online\$SIM\$S.p.A.	Statutory\$Auditor	In\$office
	Megadyne\$S.p.A.	Statutory\$Auditor	In\$office
	Ersel\$Investimenti\$S.p.A.	Alternate\$Auditor	In\$office
	Ersel\$SIM\$S.p.A.	Alternate\$Auditor	In\$office
	Diageo\$Operations\$Italy\$S.p.A.	Director	In\$office
	Diageo\$Italia\$S.p.A.	Director	In\$office
	EMARC\$S.p.A.	Chair.\$Board\$of\$Statutory\$Auditors	In\$office
	Finproject\$S.p.A.	Chair.\$Board\$of\$Statutory\$Auditors	In\$office
	Gea\$Imaforni\$S.p.A.	Statutory\$Auditor\$	In\$office

Name	Company\$in\$which\$office\$held\$	Office\$in\$the\$company\$	State\$
	Maider\$IBC\$S.r.l.\$	Director	In\$office
	Amut\$S.p.A.	Chair.\$Board\$of\$Statutory\$Auditors	In\$office
	Hyva\$Capital\$Equipment\$S.r.l.	Sole\$Statutory\$Auditor	In\$office
Francesca\$Prandstraller	Space\$2\$S.p.A.	Director	In\$office
Alberto\$Candela	Pencil\$	Chairman\$of\$the\$Board	In\$office
Sergio\$Ravagli	Rina\$S.p.A.	Vice\$Chairman\$of\$the\$Board	In\$office
	Finproject\$S.p.A.	Director\$	In\$office
	Venice\$Shipping\$and\$Logistic\$S.p.A.	Director\$	In\$office
	Palladio\$Corporate\$Finance\$S.p.A.	Chairman\$of\$the\$Board	In\$office
	Venice\$European\$Investment\$Capital\$S.p.A.	Executive\$Director	In\$office
	Eleventy Holding\$S.r.l.	Vice\$Chairman\$of\$the\$Board	In\$office
	Eleventy\$World\$S.r.l.	Vice\$Chairman\$of\$the\$Board	In\$office
	Naus\$S.p.A.	Vice\$Chairman\$of\$the\$Board	In\$office
	VGH\$S.p.A.	Director\$	In\$office\$
Gerolamo\$ Caccia\$ Dominioni	Esperia\$Servizi\$Fiduciari	Director\$	Ceased\$on\$ February\$28,\$ 2017

4.2.3 Induction'Programme

The\$Board\$meetings,\$for\$their\$content\$and\$frequency,\$permits\$the\$Directors\$to\$ receive\$ adequate\$ information\$ on\$ the\$ sector\$ in\$ which\$ the\$ Issuer\$ operates,\$ on\$ the\$ business\$ operations\$ and\$ their\$ performances,\$ on\$ the\$ principles\$ of\$ correct\$ risk\$ management\$ as\$ well\$as\$the\$relative\$regulatory\$framework.\$In\$particular,\$during\$the\$Board\$meetings\$held\$ at\$ the\$ headquarters\$ of\$ the\$ company,\$ the\$ Directors\$ regularly\$ received\$ detailed\$ information\$on\$the\$ sector\$in\$which\$the\$Issuer\$undertakes\$its\$activities,\$in\$order\$to\$fully\$ understand\$ the\$ underlying\$ business\$ operations\$ and\$ the\$ relative\$ developments\$ during\$ the\$year.

In\$ addition\$ to\$ that\$ illustrated\$ above,\$ in\$ the\$ first\$ week\$ of\$ September\$ 2016,\$ specific\$ workshops\$were held\$involving,\$in\$addition\$to\$the\$Directors\$and\$the\$Statutory\$Auditors\$ of\$ FILA,\$ all\$ local\$ management\$ of\$ the\$ Group\$ companies,\$ principally\$ to\$ provide\$ the\$ Directors\$ and\$ the\$ Statutory\$ Auditors\$ of\$ the\$ Company\$ adequate\$ information\$ on\$ the\$ sector\$ in\$ which\$ the\$ Issuer\$ operates,\$ as\$ well\$ as\$ business\$ performance\$ and\$ their\$ developments.\$

4.3 ROLE\$OF\$THE\$BOARD\$OF\$DIRECTORS\$(AS\$PER\$ARTICLE\$123OBIS, PARA. 2, LETTER\$D\$ OF\$THE\$CFA)

4.3.1 Powers attributed to the Board of Directors

The Board of Directors is vested with full powers for the ordinary and extraordinary management of the Company, with the authority to perform all acts deemed appropriate to achieve the corporate purpose, excluding only those reserved to the exclusive authority of the Shareholders' Meeting.

The Board of Directors, pursuant to Article 2365, paragraph 2, of the Italian Civil Code is futhermore empowered to adopt the following resolutions, without prejudice to the concomitant remit of the Shareholders' Meeting: (i) the establishment or closure of branch offices; (ii) the reduction of the share capital from a withdrawal; (iii) the amendment of the By-Laws in line with new regulatory provisions; (iv) the transfer of the registered office within Italy.

The Board has a central role in the operational activities and organisational and strategic direction, as well as the verification of the existence of the necessary controls to monitor the performance of the Issuer and the Group.

The remit of the Board includes the review and approval of the strategic, industrial and financial plans of the Issuer and of the Group, periodically monitoring their implementation.

The Board also defines the corporate governance system of the Issuer and the structure of the Group.

In accordance with regulatory provisions and the Code, the Board reviews and approves the Issuers' and its subsidiaries' operations prior to being carried out, when these operations have a significant strategic, economic, or financial importance for the Issuer, paying particular attention to the situations in which one or more directors have an interest on their own behalf or on behalf of third parties.

The Board has not established criteria for the identification of transactions which have significant strategic, economic, equity or financial importance for the Issuer, in that these transactions, where not within the powers conferred to the Chief Executive Officer are within the remit of the Board.

This ensures that, with the exception of the powers expressly conferred to the Chief Executive Officer and listed in detail in paragraph 4.4.1 below, the Board of the Issuer reviews and assesses the most significant transactions which guarantees constant monitoring of the operating performance and taking an active part in the principal business decisions.

In relation to the management of conflicts of interest and transactions with related parties of the Issuer and of the Group reference should be made to paragraph 13 helow

Pursuant to Article 2381 of the Civil Code and of the application criterion 1.C.1., letter c) of the Self-Governance Code, during the year the Board periodically assessed the adequacy of the organisational, administration and general accounting system of the Issuer, with particular reference to the internal control and risk management system, in accordance with the procedures adopted by the Issuer.

In the undertaking of these activities the Board were assisted, on a case by case basis. by the Control and Risks Committee, the Internal Audit Manager and the Executive Officer,\$ as\$ well\$ as\$ the\$ procedures\$ and\$ verifications\$ implemented\$ in\$ accordance\$ with\$ Law\$262/2005.

The\$Board\$at\$least\$quarterly\$evaluates\$the\$general\$operational\$performance,\$taking\$into\$ account,\$in\$particular,\$the\$information\$received from\$the\$Chief\$Executive\$Officer,\$as\$well\$ as\$periodically,\$comparing\$the\$results\$with\$the\$budgets.

On\$March\$21,\$2017,\$the\$Board\$undertook\$their\$annual\$assessment,\$in\$accordance\$with\$ application\$ criterion\$ 1.C.1.\$ letter\$ g)\$ of\$ the\$ Code,\$ considering\$ that\$ the\$ size,\$ the\$ composition\$and\$the\$functioning\$of\$the\$Board\$and\$of\$its\$committees\$were\$adequate\$in\$ relation\$to\$the\$ operational\$ and\$ organisational\$ needs\$ of\$the\$Company,\$ also\$taking\$ into\$ account\$the\$professional\$characteristics,\$experience,\$including\$managerial\$and\$gender\$ equality\$ rules,\$ of\$ its\$members\$ as\$ well\$ as\$the\$ presence,\$ of\$ a\$total\$ of\$ 9\$ directors,\$ of\$ 5\$ NonExecutive\$ Directors\$ (of\$ which\$ 3\$ independent),\$ capable\$ of\$ influencing,\$ for\$ their\$ number\$ and\$ authority,\$ \$ the\$ Board\$ decisions\$ and\$ contributing\$ their\$ specific knowhow\$ and\$ which\$ also\$ guarantees\$ an\$ appropriate\$ composition\$ of\$ the\$ Committees\$ within\$ the\$ Board.

This\$assessment\$process\$took\$place\$in\$March\$2017\$and\$related\$to\$the\$Reference\$Year\$ and\$was\$undertaken\$by\$means\$of\$a\$questionnaire\$sent to\$all\$board\$members.\$The\$self` assessment\$ questionnaire\$ was\$ structured\$ in\$ various\$ sections\$ (i.e.\$ size,\$ composition\$ and\$ functioning\$ of\$ the\$ Board,\$ size,\$ composition\$ and\$ functioning\$ of\$ the\$ Internal\$ Commttees\$to\$the\$Board,\$communication\$between\$the\$Board\$and\$senior\$management,\$ corporate\$ governance\$ and\$ governance\$ of\$ the\$ risk)\$ and\$ included\$ the\$ possibility\$ for\$ suggestions\$ and\$ comments.\$ Once\$ completed\$ by\$ all\$ Directors,\$ the\$ Board\$ shared\$ the\$ results\$ of\$ this\$ assessment\$ in\$ the\$ Board\$ meeting\$ of\$ March\$ 21,\$ 2017.\$ For\$ the\$ assessment\$ of\$ its\$ functioning,\$ the\$ Board\$ did\$ not\$ consider\$ it\$ necessary\$ to\$ avail\$ of\$ external\$consultants\$of\$the\$Issuer.

As\$of\$the\$date\$of\$this\$Report,\$the\$Shareholders'\$Meeting\$has\$not\$authorized\$any\$general\$ and\$preemptive\$departure\$from\$the\$ competition\$ restrictions\$envisaged\$by\$Article\$2390\$ of\$the\$Italian\$Civil\$Code.

4.3.2 Procedures'and'frequency'of'board'meetings

The\$validity\$of\$Board\$resolutions\$requires\$the\$presence\$of\$a\$majority\$of\$its\$members\$in\$ office,\$with\$resolutions\$approved\$by\$a\$majority\$of\$those\$present.

The\$Board\$ of\$ Directors elects\$ a\$ Chairman\$from\$ among\$ its\$members,\$ who\$ remains\$ in\$ this\$position\$for\$the\$duration\$Board\$of\$Directors.

Under\$Article\$12\$of\$the\$By`Laws,\$the\$Board\$of\$Directors\$may\$delegate\$part\$of\$its\$powers\$ to\$ an\$ Executive\$ Committee,\$ determining\$ the\$ limits\$ of\$ such\$ mandate\$ as\$ well\$ as\$ the\$ number\$of\$members\$of\$the\$committee\$and\$its\$operating\$procedures.

The\$Board\$of\$Directors\$may\$appoint\$one\$or\$more\$executive\$directors,\$granting\$them\$the\$ relevant\$ powers\$ and\$ conferring\$ to\$ one\$ of\$ them,\$ where\$ applicable,\$ the\$ role\$ of\$ Chief\$ Executive\$Officer.\$In\$ addition,\$the\$Board\$ of\$Directors\$may\$ also\$ establish\$ one\$ or\$more\$ committees\$with\$consulting,\$advisory,\$or\$audit\$functions\$in\$accordance\$with\$applicable\$ laws\$ and\$ regulations.\$ The\$ Board\$ of\$ Directors\$ may\$ also\$ appoint\$ General\$ Managers,\$ defining\$their\$powers\$and\$granting\$powers\$of\$attorney\$to\$third\$parties\$for\$certain\$acts\$or\$ categories\$of\$acts.

Under\$ Article\$ 13\$ of\$ the\$ By`Laws,\$ the\$ Board\$ of\$ Directors\$ meets\$ at\$ the\$ Company's\$ registered\$ office\$ or\$ another\$ location,\$ provided\$ that\$ the\$ latter\$ is within\$ the\$ European\$ Union\$ or\$ Switzerland,\$ whenever\$ the\$ Chairman\$ deems\$ it\$ necessary\$ or\$ whenever\$ a\$ request\$ is\$ made\$ by\$ the\$ Chief\$ Executive\$ Office,\$ if\$ appointed,\$ or\$ by\$ at\$ least\$ two\$ of\$ its\$ members\$or\$by\$the\$Board\$of\$Statutory\$Auditors.

The\$ calling\$ of\$ the\$ Board of\$ Directors\$ is\$ made\$ by\$ the\$ Chairman\$ or,\$ if\$ absent,\$ by\$ the\$ Chief\$Executive\$Officer,\$ with\$ notices\$to\$ be\$ sent,\$ by\$ letter,\$telegram,\$fax\$ or\$ email\$ with\$ proof\$of\$receipt,\$to\$the\$domicile\$address\$of\$each\$director\$and\$statutory\$auditor\$at\$least\$ three\$ days\$ before the\$ date\$ set\$for\$the\$meeting_\$ in\$ case\$ of\$ urgency,\$the\$ calling\$ of\$the\$ Board\$ of\$ Directors\$ may\$ be\$ made\$ the\$ day\$ before\$ the\$ date\$ set\$ for\$ the\$ meeting.\$ The\$ meetings\$ of\$ the\$ Board\$ of\$ Directors\$ and\$ its\$ resolutions\$ are\$ valid,\$ even\$ without\$ formal\$ calling,\$ where\$ all\$ the\$ directors\$ and\$ statutory\$ auditors\$ in\$ office\$ are\$ present.\$ In\$ the\$ absence\$ of\$ the\$ Chairman,\$ the\$ chair\$ of\$ the\$ meeting\$ is\$ to\$ assumed\$ by\$ the\$ Chief\$ Executive\$Officer,\$if\$appointed,\$or\$failing\$that\$the\$most\$senior\$director.

The\$meetings\$of\$the\$Board\$of\$Directors may\$also\$be\$held\$by\$audio\$or\$video\$conference,\$ provided\$that:\$(i)\$the\$Chairman\$and\$the\$Secretary,\$if\$appointed,\$are\$present\$in\$the\$same\$ location\$ and\$ write\$ and\$ sign\$ the\$ minutes,\$ verifying\$ that\$ the\$ meeting\$ was\$ held\$ in\$ that\$ location_\$ (ii)\$ the\$ Chairman\$ of\$ the meeting\$ may\$ verify\$ the\$ identity\$ of\$ the\$ participants,\$ direct\$the\$ course\$ of\$the\$meeting\$ and\$witness\$ and\$ announce\$the\$ results\$ of\$the\$ voting_\$ (iii)\$the\$person\$taking\$the\$minutes\$may\$adequately\$observe\$the\$events\$of\$the\$meeting\$to\$ be\$recorded\$in\$the\$minutes_\$and\$(iv)\$participants\$may\$participate\$in\$the\$discussion\$and\$ the\$ simultaneous\$ voting\$ on\$ the\$ matters\$ on\$ the\$ agenda,\$ as\$ well\$ as\$ view,\$ receive\$ or\$ transmit\$documents.

The\$Board\$of\$Directors,\$after\$prior\$mandatory\$consultation\$with\$the\$Board\$of\$Statutory\$ Auditors,\$ shall\$appoint\$an\$Executive\$Officer\$for\$financial\$ reporting,\$in\$accordance\$with\$ Art.\$ 154`bis of\$ the\$ CFA\$ (the\$ Executive\$ Officer),\$ granting\$ this\$ person\$ the\$ adequate\$ means\$and\$powers\$for\$the\$accomplishment\$of\$the\$tasks\$assigned.

During\$the\$ Reference\$Period,\$7\$meetings\$ of\$the\$Board\$ of\$ Directors\$ were\$ held\$ on\$the\$ following\$ dates:\$ February\$ 2,\$ 2016,\$ March\$ 15,\$ 2016,\$ March\$ 22,\$ 2016,\$ May\$ 11,\$ 2016,\$ July\$6,\$2016,\$August\$4,\$2016\$and\$November\$11,\$2016.

Minutes\$were\$kept\$for\$the\$meetings\$of\$the\$Committee.

The\$duration\$of\$the\$meetings\$were\$on\$average\$approximately\$two\$hours\$30\$minutes.

During\$2017,\$in\$addition\$to\$the\$meetings\$already\$held\$on\$January\$25,\$2017,\$March\$16,\$ 2017\$ and\$ March\$ 21,\$ 2017\$ (meetings\$ during\$ which,\$ among\$ other\$ matters,\$ the\$ consolidated\$financial\$statements and\$the\$draft\$financial\$statements\$for\$the\$yearended\$ December\$ 31,\$ 2016\$were\$ approved),\$ 3\$further\$meetings\$ are\$ scheduled\$to\$ be\$ held\$ by\$ the\$ Board\$ of\$ Directors\$ (as\$ per\$ the\$ corporate\$ events\$ calendar\$ communicated\$ to\$ the\$ market\$and\$to\$Borsa\$Italiana\$and\$available\$on\$the\$interent\$site www.filagroup.it,\$Investor\$ Section)\$ on\$ the\$ following\$ dates:\$ May\$ 10,\$ 2017\$ (Interim\$ Report\$ at\$ March\$ 31,\$ 2017)\_\$ August\$ 3,\$ 2017\$ (HalfYear\$ \$ Report\$ at\$ June\$ 30,\$ 2017)_\$ November\$ 13,\$ 2017\$ (Interim\$ Report\$at\$September\$30,\$2017).

Duirng\$the\$Reference\$\$Year,\$given\$an\$overall\$percentage\$equal\$to\$92%\$,the\$percentage\$ of\$ participation\$ of\$ each\$ Director\$ was\$ respectively:\$ 100%\$ for\$ Gianni\$ Mion,\$ 100%\$ for\$ Annalisa\$Barbera,\$100%\$for\$Gerolamo\$Caccia\$Dominioni,\$85.71%\$for\$Alberto\$Candela,\$ 100%\$ for\$ Massimo\$ Candela,\$ 100%\$ for\$ Luca\$ Pelosin,\$ 85.71%\$ for\$ Francesca\$ Prandstraller, 57.14% for Sergio Ravagli and 100% for Fabio Zucchetti.

The Chairman of the Board of Directors ensured that the documentation relating to the matters on the agenda was made available to the directors and statutory auditors with sufficient time before the date of each Board meeting. The timeliness and completeness of pre-meeting information is guaranteed by communication of the documentation with an advance of at least 2 days before the date of the meeting of the Board of Directors. This term was generally respected.

In addition, the Chairman of the Board ensured that sufficient time was provided to the matters on the Agenda in order that all the Directors may contribute, thereby quaranteeing, constructive debate in the Board meetings.

Executives of the Issuer attended Board meetings in order to provide detailed information on matters on the Agenda. In particular, the CEO of the subsidiary Daler-Rowney Ltd attended the Board meeting of July 6, 2016.

In general, the Chief Executive Officer ensures that the executives are available to attend Board meetings so that valuable contributions may be made, in particular for the non-executive Directors to acquire adequate information on the operations of the Issuer.

The Executive Officer appointed normally attends the Board of Director's meetings.

4.4 EXECUTIVE BODIES

In accordance with the By-Laws, the Board of Directors may delegate part of its powers to an Executive Committee, determining the limits of such mandate, as well as the number of members of the committee and its operating procedures.

Under Article 12.3 of the By-Laws, the Board of Directors may appoint one or more executive directors, granting them the relevant powers and conferring to one of them, where applicable, the role of Chief Executive Officer. In addition, the Board of Directors may also establish one or more committees with consulting, advisory, or audit functions in accordance with applicable laws and requlations. The Board of Directors may also appoint General Managers, defining their powers and granting powers of attorney to third parties for certain acts or categories of acts.

Under Article 12.4 of the By-Laws, the Chairman of the Board of Directors is the legal representative of the Company in dealings with third parties and in legal matters (with the right to appoint lawyers and attorneys-of-record). Representation also rests with the directors who have delegated powers granted by the Board of Directors, with the General Managers, senior management and attorneys-in-fact, within the limits of the powers conferred to them.

4.4.1 Chief Executive Officer and Executive Director

On July 22, 2015, the Board of Directors appointed Massimo Candela as Chief Executive Officer and Luca Pelosin as Executive Director, assigning to them the respective powers indicated below.

The Chief Executive Officer is the primary responsible party for the management of the Issuer. There are no interlocking directorates as per Criteria 2.C.5. of the Code.

$(a)$ Powers of the Chief Executive Officer Massimo Candela

Attributed to the Chief Executive Officer Massimo Candela are all powers of ordinary and extraordinary administration, to be exercised with separate signature, with the exclusive exception of those concerning the following matters, which, together with those mandatorily provided for by applicable law, remain the exclusive competence of the Board of Directors:

• The approval of consolidated budgets and business plans and amendments $(a)$ and adjustments to the same approved consolidated budgets and business plans:
• The listing of one of the subsidiaries of the Company pursuant to Article 2359 of $(b)$ the Italian Civil Code:
• The disposal of treasury shares except where carried out under execution of a $(c)$ specific Shareholders' Meeting resolution:
• $(d)$ The acquisition, in any capacity and in any form, of investments or of companies or of business units with a value in excess of Euro 1,000,000, calculated with reference to 100% of the relative enterprise value, including any price component dependent on the results of the Company, as well as any conditional or deferred payment;
• Disposals (or other transfers), in any capacity and in any effective form, of $(e)$ investments or of companies or of business units of the Company, with a value (calculated with reference to 100% of its enterprise value, including any price component dependent on the results of the Company, as well as any conditional or deferred payment) per transaction in excess of Euro 1,000,000, or together with other transactions over the previous 12 months, in excess of Euro $1,000,000;$
• $(f)$ The creation of any lien on company assets for single amounts that are in excess of Euro 2,500,000 or for amounts that together with other transactions over the previous 12 months are in excess of Euro 5,000,000;
• The establishment of subsidiaries, the acquisition of fixed assets, including real $(a)$ estate or real estate companies, in any form, including via financing, with a unitary value in excess of Euro 1,000,000, or together with other transactions over the previous 12 months, with a collective value in excess of Euro 5,000,000;

• $(h)$ Disposals (or other transfers) of fixed assets, including real estate and real estate companies, in any effective form, which individually exceed the amount of Euro 1,000,000, or together with other transactions over the previous 12 months, exceed the amount of Euro 5,000,000;

• (i) Any\$corporate\$restructuring\$operation,\$including\$the\$establishment\$or\$closure\$of\$ any\$branches\$or\$of\$any subsidiaries\$pursuant\$to\$Article\$2359\$of\$the\$Italian\$Civil\$ Code,\$which\$carry\$a\$cost\$both\$for\$the\$Company\$and\$each\$of\$the\$subsidiaries\$of\$ the\$ Company,\$ within\$ the\$ meaning\$ of\$ Article\$ 2359\$ of\$ the\$ Italian\$ Civil\$ Code,\$ in\$ excess\$of\$Euro\$1,000,000_

• (j) The\$assigning\$of\$a\$remuneration\$higher\$than\$Euro\$10,000\$to\$any\$non`executive\$ director\$ of\$ the\$ subsidiaries\$ of\$ the\$ Company\$ pursuant\$ to\$ Article\$ 2359\$ of\$ the\$ Italian\$Civil\$Code_
• (k) The\$ approval\$ of\$ share`based\$ incentive\$ plans\$for\$ executives\$ and\$ employees\$ of\$ the\$ Company\$ and\$ of\$ subsidiaries\$ of\$the\$ Company\$ pursuant\$to\$ Article\$ 2359\$ of\$ the\$Italian\$Civil\$Code_
• (l) The\$ undersigning\$ and\$ the\$ execution\$ of\$ any\$ agreement\$ with\$ the\$ majority\$ shareholder\$ or\$ with\$ companies\$ controlled\$ by\$ or\$ connected\$ to\$ this\$ party\$ within\$ the\$meaning\$of\$Article\$2359\$of the\$Italian\$Civil\$Code\$not\$naturally\$belonging\$to\$ the\$FILA\$Group_
• (m) The\$signing\$of\$contracts,\$and\$subsequent\$amendments\$thereto,\$concerning\$the\$ provision\$ of\$ services\$ by\$ third\$ parties\$ to\$ the\$ Company\$ (excluding\$ utilities),\$ including\$ intellectual\$ property\$ license\$ agreements,\$ insurance\$ contracts\$ and\$ leases,\$of\$a\$unitary\$cost\$in\$excess\$of\$Euro\$1,000,000\$on\$an\$annual\$basis_\$
• (n) The\$assumption\$by\$the\$Company\$of\$new\$third\$party\$financing\$in\$unitary\$amounts\$ in\$excess\$of\$Euro\$2,500,000,\$with\$the\$express\$exclusion\$of:\$\$
• (i) Any\$ changes\$ to\$ existing\$ financing,\$ including\$ the\$ issuing\$ of\$ consents\$ and/or\$ revocations,\$renewals\$or\$extensions\$thereof_\$
• (ii) The\$ subscription\$ of\$ new\$ credit\$ lines\$ to\$ substitute\$ any\$ credit\$ lines\$ already\$ in\$ place_\$
• (iii) Inter`company\$loans_\$
• (iv) Loans\$granted\$on\$the\$submission\$of\$invoices\$or\$other\$similar\$operations.

The\$powers\$above\$include\$the\$appointment\$of\$general\$or\$special\$attorneys\$for\$certain\$ duties.

(b) Powers'of'the'Executive'Director'Luca'Pelosin

Attributed\$to\$the\$Executive\$Director\$Luca\$Pelosin\$are\$the\$ roles\$of\$head\$of\$logistics,\$of\$ production,\$of\$purchasing,\$of\$personnel\$and\$of\$information\$technology,\$of\$supervision\$of\$ marketing\$ and\$ ordinary\$ administrative\$ powers\$ aimed\$ at\$ ensuring\$the\$ accomplishment\$ of\$ the\$ assigned\$ duties,\$ including,\$ by\$ way\$ of\$ example\$ and\$ without\$ limitation,\$ the\$ following\$ powers,\$ to\$ be\$ exercised\$ with\$ separate\$ signature,\$ in\$ compliance\$ with\$ any\$ spending\$limits\$and\$the\$exclusions\$set\$forth\$below:

• (a) To\$sign\$ordinary\$correspondence\$and\$debit\$and\$credit\$notes_
• (b) To\$ collect\$ letters\$ and\$ registered\$ and insured\$ letters,\$ parcels\$ and\$ rail\$ and\$ post\$ parcels,\$or\$other\$dispatches\$and\$packages\$of\$any\$kind_
• (c) To\$provide\$for\$customs\$clearance\$at\$any\$customs\$office\$and\$in\$particular\$to\$sign\$ and\$ submit\$ customs\$ declarations,\$ to\$ make\$ and\$ withdraw\$ deposits\$ from\$ any\$ customs\$offices,\$to\$attend\$inspections\$of\$goods,\$to\$provide\$for\$their\$ release\$by\$ performing\$any\$other\$task\$necessary\$for\$the\$fulfillment\$of\$the\$mandate_
• (d) To\$carry\$out\$all\$UTIF\$[Revenue\$and\$Excise\$Office]\$operations\$and\$specifically\$to\$ sign\$and\$to\$submit\$relevant\$statements\$and\$to\$perform\$any\$other\$task\$necessary\$ for\$the\$fulfillment\$of\$the\$mandate_
• (e) To\$ represent\$ the\$ Company\$ in\$ relation\$ to\$ any\$ administrative\$ authorities,\$ public\$ entities\$or\$public\$offices_
• (f) To\$perform\$all\$banking\$transactions\$that\$are\$not\$issuances\$of\$promissory\$notes,\$ acceptances\$of\$drafts,\$establishment\$of\$pledges,\$of\$sureties\$or\$of\$endorsements\$ and\$so\$forth\$and\$by\$way\$of\$example:\$to\$open\$current\$accounts\$also\$in\$overdraft\$ and\$to\$contract\$advances_
• (g) To\$ make\$ funds\$ available\$ by\$ signing\$ checks\$ or\$ money\$ orders\$ or\$ by\$ any\$ other\$ means\$within\$the\$limits\$Euro\$50,000\$for\$each\$individual\$transaction,\$as\$well\$as\$ within\$the\$limits\$of\$loans\$provided\$by\$various\$lenders\$with\$joint\$signature\$with\$the\$ Chief\$Executive\$Officer\$Massimo\$Candela,\$with\$Messrs.\$Stefano\$De\$Rosa\$and\$ Daniele\$Nastasia\$or\$any\$other\$legal\$representative\$with\$adequate\$powers_
• (h) To\$sign\$documents\$relating\$to\$imports\$or\$exports\$with\$banking\$institutions_
• (i) To\$ demand\$ and\$ collect,\$ for\$ any\$ reason\$ and\$ for\$ any\$ amounts,\$ sums,\$ credits,\$ securities,\$ warrants\$ and\$ deposits,\$ whether\$ from\$ the\$ issuer,\$ from\$ the\$ deposits\$ and\$ loans\$ fund,\$ from\$ both\$ provincial\$ and\$ municipal\$ treasuries\$ and\$ accounts\$ offices,\$ from\$ customs,\$ railway\$ offices,\$ post\$ and\$ telegraph\$ offices\$ or\$ generally\$ from\$any\$public\$or\$private\$payer,\$issuing\$related\$receipts\$and\$releases_
• (j) To\$ represent\$ the\$ Company\$ in\$ any\$ bankruptcy,\$ composition\$ and\$ insolvency\$ proceedings,\$filing\$ and\$ contending\$the\$ claims\$ and\$ rights\$ of\$the\$Company,\$ and\$ performing\$any\$act\$for\$their\$protection,\$to\$sign\$acts\$of\$obligation\$and\$to\$proceed\$ with\$enforcement\$measures_\$for\$the\$above,\$to\$appoint\$legal\$representatives_
• (k) To\$represent\$the\$Company\$at\$the\$offices\$of\$state\$and\$private\$railways\$operators,\$ of\$ airline\$ and\$ shipping\$ companies\$ and\$ of\$ other\$ carriers\$ generally\$ and\$ at\$ any\$ government\$office\$or\$stated`owned\$entity\$or\$at\$any\$post,\$telegraph,\$telephone\$or\$ customs\$ office\$ for\$ all\$ operations\$ of\$ shipping,\$ clearance\$ and\$ collection\$ of\$ valuables\$and\$goods,\$thereby\$signing\$any\$forms,\$receipts,\$releases,\$discharges\$ and\$so\$on,\$and\$filing\$any\$eventual\$claims_
• (l) To stipulate,\$with\$all\$opportune\$ clauses,\$to\$amend\$and\$to\$terminate,\$ regarding\$ any\$individual,\$corporate\$or\$public\$entity,\$contracts\$and\$agreements\$of\$any\$kind\$ and\$nature\$for\$the\$purchase\$of\$raw\$materials,\$of\$semifinished\$goods\$and\$of\$the\$ provision\$ of\$ services,\$ both\$ destined\$ for\$ Italy\$ and\$ destined\$ for\$ or\$ from\$ abroad,\$ and\$in\$general\$anything\$that\$can\$form\$part\$of\$the\$mandate\$described\$above\_\$to\$ make\$ intraCommunity\$ transactions,\$ to\$ import\$ and/or\$ to\$ export\$ to\$ countries\$ within\$the\$European\$\$Union\$and\$to\$those\$outside\$the\$European\$Union,\$following\$

relevant\$ procedures\$ and\$ signing\$ any\$ documentation\$ or\$ act\$ necessary\$ to\$ this\$ end,\$including\$customs\$documents,\$intrastate\$declarations\$for\$intraCommunity\$ transactions\$and\$anything\$else\$deemed\$necessary_

(m) To\$ hire,\$to\$transfer,\$to\$ suspend\$ and\$to\$ dismiss\$ employees\$ and\$ so\$to\$manage\$ personnel\$ in\$ all\$ respects,\$ including\$ to\$ set\$ and\$ to\$ amend\$ conditions,\$ roles,\$ qualifications,\$categories\$and\$grades_\$to\$determine\$the\$salaries,\$fees\$and\$duties_\$ to\$ stipulate\$ employment\$ contracts\$ or\$to\$amend\$or\$terminate\$ such\$ contracts_\$to\$ notify\$ employees\$ of\$ any\$ infractions\$ and\$ impose\$ corresponding\$ disciplinary\$ measures_\$ to\$ administer\$ personnel\$ and\$ so\$ ensure\$ the\$ management\$ and\$ liquidation\$ of\$ wages\$ and\$ severance,\$ to\$ provide\$ for\$ the\$ fulfillment\$ of\$ tax\$ and\$ insurance\$ contributions\$ towards\$ relevant\$ institutions,\$ completing\$ the\$ related\$ forms\$and\$making\$payments\$and\$adjustments\$as\$required\$and\$approved\$by\$the\$ provisions\$in\$force_\$to\$provide\$for\$the\$fulfillment\$of\$fiscal\$and\$tax\$compliance\$to\$ which\$the\$Company is\$bound\$including\$the\$filling\$out\$of\$ relevant\$forms\$and\$the\$ making\$ of\$ relevant\$ payments,\$ with\$ the\$ power,\$ among\$ other\$ things,\$ to\$ sign\$ statements,\$declarations,\$ claims,\$petitions\$and\$any\$other\$act_\$to\$perform\$within\$ the\$powers\$conferred,\$all\$other\$acts\$of\$administration\$considered\$appropriate\$in\$ the\$ interests\$ of\$ the\$ Company_\$ to\$ represent\$ the\$ Company\$ both\$ in\$ Italy\$ and\$ abroad\$regarding\$labor\$relations\$and\$related\$obligations\$and\$therefore\$in\$relation\$ to\$ states,\$ regions,\$ provinces,\$ municipalities,\$ districts,\$ ministries,\$ labor\$ inspectorates\$ and\$ offices,\$ agencies,\$ sections,\$ national\$ health\$ services,\$ administrative\$ bodies,\$ health\$ units,\$ social\$ security\$ and\$ insurance\$ institutions,\$ banks\$and\$financial\$institutions,\$central\$and\$local\$governments\$and\$financial\$and\$ tax offices,\$tax\$litigation\$bodies\$and\$all\$other\$authorities,\$institutions,\$central\$and\$ local\$ administrations,\$ public\$ and\$ private\$ institutions,\$ individuals\$ and\$ corporate\$ and\$public\$legal\$entities,\$with\$the\$broadest\$of\$powers,\$without\$limitation,\$and\$so\$ with\$ the\$ right\$ to\$ put\$ forward\$ declarations,\$ petitions,\$ motions,\$ appeals\$ and\$ oppositions\$ in\$ relation\$ to\$ any\$ administrative\$ authority,\$ sustaining\$ related\$ discussions\$ with\$ all\$ of\$ the\$ above\$ mentioned\$ entities\$ and\$ representing\$ the\$ Company\$ also\$ regarding\$ the\$ definition\$ of\$ related\$ disputes\$ or\$ settlements,\$ nothing\$ excluded\$ or\$ excepted_\$ to\$ represent\$ the\$ Company\$ in\$ relation\$ to\$ trade\$ union\$ organizations\$ of\$ both\$ employers\$ and\$ employees\$ in\$ any\$ location\$ and\$ facility,\$ with\$ the\$ authority\$ to\$ enter\$ into\$ agreements\$ also\$ applying\$ to the\$ entire\$ company\$ and\$ to\$ settle\$ disputes_\$ to\$ represent\$ the\$ Company\$ in\$ relation\$ to\$ conciliation\$ and\$ arbitration\$ boards\$ provided\$for\$ by\$ union\$ agreements,\$ with\$the\$ power\$ to\$ settle\$ related\$ disputes_\$ to\$ accept\$ arbitration,\$ appoint\$ arbitrators\$ and\$ conclude\$ arbitration\$ agreements\$ to\$ define\$ labor\$ litigation_\$ to\$ represent\$ the\$ Company\$in\$labor\$disputes,\$both\$in\$court\$and\$out\$of\$court\$and\$in\$relation\$to\$trade\$ unions,\$to\$arbitration,\$to\$provincial\$directorates\$of\$labor\$or\$to\$similar\$regional\$and\$ ministerial\$ bodies\$ and\$ relative\$ conciliation\$ commissions,\$ and\$ also\$ in\$ the\$ case\$ where\$laws\$in\$force\$provide\$for\$the\$personal\$appearance\$of\$the\$parties,\$with\$the\$ express\$ right\$ to\$ reconcile\$ and\$ to\$ settle,\$ to\$ make\$ and\$ to\$ amend\$ petitions,\$ applications,\$ exceptions\$ and\$ conclusions,\$ to\$ respond\$ to\$ questioning\$ whether\$ informal\$ or\$formal,\$to\$ explain\$the\$facts\$ of\$the\$ case,\$to\$ propose\$ and\$to\$ oppose\$ evidence,\$to\$ intervene\$ in\$ discussions,\$to\$ participate\$ in\$ reconciliation\$ efforts,\$to\$ reconcile\$ and\$ to\$ settle\$ disputes,\$ to\$ sign\$ the\$ minutes\$ of\$ non`conciliation,\$ indicating\$solutions\$and\$stating\$the\$amount\$of\$credit\$pertaining\$to\$the\$employee,\$ to\$ elect\$ domiciles,\$ to\$ sign\$ and\$ submit\$ documents,\$ to\$ appoint\$ and\$ to\$ dismiss\$ prosecution,\$defense\$and\$technical\$legal\$counsel\$concerning\$the\$related\$subject\$ matter_\$to\$perform\$all\$that\$is\$opportune\$and\$necessary,\$with\$specific\$reference\$to\$ Articles\$410,\$411,\$412\$and\$420\$of\$the\$Italian\$Code\$of\$Civil\$Law,\$as\$in\$the\$text\$of\$ Law\$ No.\$ 533\$ of\$ August\$ 11,\$ 1973_\$ to\$ perform\$ any\$ other\$ act\$ and\$ to\$ act\$ in\$ any\$ situation\$ in\$the\$field\$ of\$ labor\$ relations\$ and\$ personnel\$management\$ considered\$ appropriate\$ in\$ the\$ interests\$ of\$ the\$ Company,\$ including\$ claims\$ for\$ damages\$ to\$ liable\$third\$parties\$and/or\$to\$insurers\$or\$to\$indemnifying\$bodies\$with\$the\$power\$to\$ settle\$any\$disputes.

The\$ powers\$ above\$ include\$ to\$ appointment\$ of\$ general\$ or\$ special\$ attorneys\$ for\$ certain\$ duties.

4.4.2 Honorary'Chairman

According\$to\$Article\$12.5\$of\$the\$ByLaws,\$on\$the\$proposal\$of\$one\$or\$more\$shareholders\$ representing\$at\$least\$20%\$of\$the\$share\$capital,\$the\$Shareholders'\$Meeting\$may\$proceed\$ to\$ appoint\$ a\$ Chairman\$ with\$ honorary\$ functions,\$ entitled\$ the\$ "Honorary\$ Chairman",\$ selected\$ from\$ among\$ persons\$ of\$ high\$ standing\$ and\$ who\$ have\$ contributed\$ to\$ the\$ establishment,\$ success\$ and/or\$ growth\$ of\$the\$Company.\$The\$Honorary\$Chairman\$may also\$ be\$ appointed\$from\$ outside\$the\$members\$ of\$the\$Board\$ of\$Directors\_\$ in\$ such\$ case\$ the\$ Honorary\$ Chairman\$ may\$ remain\$ in\$ office\$ longer\$ than\$ the\$ term\$ of\$ the\$ Board\$ of\$ Directors.\$The\$Honorary\$Chairman,\$where\$not\$a\$director\$of\$the\$board,\$may\$participate\$ at\$ meetings\$ of\$ the\$ Board\$ of\$ Directors\$ and\$ the\$ Shareholders'\$ Meetings\$ exclusively\$ to\$ express\$assessments\$and\$nonbinding\$opinions\$on\$matters\$dealt\$with\$by\$the\$Board\$of\$ Directors\$ or\$ by\$ the\$ shareholders,\$ and\$ may\$ represent\$ the\$ Company\$ on\$ the\$ basis\$ of\$ special\$ powers\$ of\$ attorney\$ issued\$ in\$ writing\$ by\$the\$ competent\$ corporate\$ boards.\$ The\$ Board\$ of\$ Directors\$ shall\$ determine\$ any\$ fees\$ or\$ any\$ other\$ remuneration\$ and/or\$ reimbursement\$of\$expenses\$due\$to\$the\$Honorary\$Chairman.

On\$July\$22,\$2015,\$the\$Shareholders'\$Meeting\$of\$the\$Issuer\$resolved,\$upon\$the\$proposal\$ of\$Pencil,\$to\$appoint\$as\$Honorary\$Chairman\$the\$director\$Alberto\$Candela.

To\$ the\$ Director\$ and\$ Honorary\$ Chairman\$ Alberto\$ Candela,\$ the\$ Board\$ of\$ Directors\$ resolved,\$on\$July\$22,\$2015,\$to\$confer\$the\$powers\$indicated\$below.

• (a) Powers'to'be'exercised'with'separate'signature
• (a) To\$sign\$ordinary\$correspondence\$and\$debit\$and\$credit\$notes_
• (b) To\$ collect\$ letters\$ and\$ registered\$ and\$ insured\$ letters,\$ parcels\$ and\$ rail\$ and\$ post\$ parcels,\$or\$other\$dispatches\$and\$packages\$of\$any\$kind_
• (c) To\$ sign\$ petitions,\$ statements,\$ briefing\$ papers,\$ reports,\$ memos\$ and\$ general\$ communications\$ with\$ Supervisory\$ Authorities\$ and\$ Borsa\$ Italiana\$ and\$ to\$ sign\$ institutional\$reports\$in\$relation\$to\$the\$latter_
• (d) To\$provide\$for\$customs\$clearance\$at\$any\$customs\$office\$and\$in\$particular\$to\$sign\$ and\$ submit\$ customs\$ declarations,\$ to\$ make\$ and\$ withdraw\$ deposits\$ from\$ any\$ customs\$offices,\$to\$attend\$inspections\$of\$goods\$and\$to\$provide\$for\$their\$release\$ by\$performing\$any\$other\$task\$necessary\$for\$the\$fulfillment\$of\$the\$mandate_
• (e) To\$ carry\$ out\$ all\$ UTIF and\$ UTM\$ [Revenue,\$ Excise\$ and\$ Monopolies\$ Offices]\$ operations\$ and\$ specifically\$ to\$ sign\$ and\$ to\$ submit\$ relevant\$ statements\$ and\$ to\$

perform\$any\$other\$task\$necessary\$for\$the\$fulfillment\$of\$the\$mandate_

• (f) To\$ represent\$ the\$ Company\$ in\$ relation\$ to\$ any\$ administrative\$ authorities,\$ public\$ entities\$or\$public\$offices_
• (g) To\$ represent\$ the\$ Company\$ in\$ relation\$ to\$ financial\$ administration\$ offices\$ and\$ bodies,\$also\$of\$judicial\$nature,\$in\$any\$procedure\$relating\$to\$taxes\$of\$any\$kind\$and\$ description_\$ to\$ sign\$ declarations\$ and\$ statements,\$ including\$ in\$ relation\$ to\$ direct\$ and\$ indirect\$ taxes,\$ to\$ cooperate\$ in\$ verifications\$ and\$ accesses,\$ to\$ oppose\$ investigations,\$to\$submit\$appeals\$to\$any\$authority\$or\$financial\$and\$administrative\$ committee,\$to\$negotiate\$settlements,\$agreed\$recoveries\$and\$transactions_
• (h) To\$sign\$documents\$relating\$to\$imports\$or\$exports\$with\$banking\$institutions_
• (i) To\$ demand\$ and\$ collect,\$ for\$ any\$ reason\$ and\$ for\$ any\$ amount,\$ sums,\$ credits,\$ securities,\$ warrants\$ and\$ deposits\$ whether\$ from\$ the\$ issuer,\$ from\$ the\$ deposits\$ and\$ loans\$ fund,\$ from\$ both\$ provincial\$ and\$ municipal\$ treasuries\$ and\$ accounts\$ offices,\$ from\$ customs,\$ railway\$ offices,\$ post\$ and\$ telegraph\$ offices\$ or\$ generally\$ from\$any\$public\$or\$private\$payer,\$issuing\$related\$receipts\$and\$releases_
• (j) To\$perform\$any\$banking\$and\$postal\$operations,\$including\$the\$use\$of\$loans\$within\$ agreed\$limits,\$including\$advance\$requests\$or\$for\$discounts\$on\$invoices\$or\$similar\$ financial\$instruments,\$as\$well\$as\$to\$sign\$factoring\$or\$trade\$receivables\$insurance\$ contracts,\$within\$the\$limit\$of\$Euro\$50,000\$(fifty\$thousand)_
• (k) To\$stipulate,\$with\$all\$opportune\$clauses,\$to\$amend,\$to\$terminate,\$ regarding\$any\$ individual,\$corporate\$or\$public\$entity,\$contracts\$and\$agreements\$of\$any\$kind\$and\$ nature\$for\$the\$provision\$of\$ services,\$for\$amounts\$not\$in\$excess\$of\$Euro\$50,000\$ (fifty\$thousand).

(b) Powers' to' be' exercised' with' the' joint' signature' of' at' least' one' among' the' Executive'Director'Luca'Pelosin,'Stefano'De'Rosa'or'another'legal'representative'with' adequate'powers

• (a) To\$perform\$any\$banking\$and\$postal\$operations,\$including\$the\$use\$of\$loans\$within\$ agreed\$limits,\$including\$advance\$requests\$or\$for\$discounts\$on\$invoices\$or\$similar\$ financial\$instruments,\$as\$well\$as\$to\$sign\$factoring\$or\$trade\$receivables\$insurance\$ contracts,\$within\$the\$limit\$of\$Euro\$50,000_
• (b) To\$stipulate,\$with\$all\$opportune\$clauses,\$to\$amend,\$to\$terminate,\$ regarding\$any\$ individual,\$corporate\$or\$public\$entity,\$contracts\$and\$agreements\$of\$any\$kind\$and\$ nature\$for\$the\$provision\$of\$services,\$for\$amounts\$not\$in\$excess\$of\$Euro\$50,000.

The\$powers\$above\$include\$the\$appointment\$of\$general\$or\$special\$attorneys\$for\$certain\$ duties.

4.4.3 Chairman'of'the'Board'of'Directors

On\$July\$22,\$2015,\$Gianni\$Mion\$was\$appointed\$Chairman\$of\$the\$Board\$of\$Directors.\$

Under\$Article\$12.4\$of\$the\$ByLaws,\$the\$Chairman\$of\$the\$Board\$of\$Directors\$is\$the\$legal\$ representative\$of\$the\$Company\$in\$dealings\$with\$third\$parties\$and\$in\$legal\$matters\$(with\$ the\$right\$to\$appoint\$lawyers\$and\$attorneysof`record).\$

As\$ of\$ the\$ date\$ of\$ this\$ Report,\$ the\$ Chairman\$ of\$ the\$ Board\$ of\$ Directors\$ has\$ not\$ been\$ granted\$ executive\$ management\$ powers,\$ does not\$ have\$ a\$ specific\$ role\$ in\$ terms\$ of\$ corporate\$strategic\$planning\$and\$is\$not\$the\$controlling\$shareholder\$of\$the\$Issuer.

4.4.4 Executive'Committee

Under\$Article\$12.2\$of\$the\$By`Laws,\$the\$Board\$may\$delegate\$ some\$of\$its\$powers\$to\$an\$ Executive\$Committee,\$determining the\$limits\$of\$the\$mandate,\$as\$well\$as\$the\$number\$of\$ members\$and\$the\$operating\$procedures.

Pursuant\$ to\$ Article\$ 2389\$ of\$ the\$ Italian\$ Civil\$ Code,\$ the\$ remuneration\$ of\$ the\$ Executive\$ Committee\$members\$is\$to\$be\$decided\$by\$the\$Shareholders'\$Meeting.\$

As\$of\$the\$date\$of\$this\$Report,\$an\$Executive\$Committee\$has\$not\$been\$established.\$

4.4.5 Reporting'to'the'Board'of'Directors'

During\$ the\$ year,\$ the\$ Chief\$ Executive\$ Officer\$ reported\$ adequately\$ and\$ in\$ a\$ timely\$ manner,\$at\$least\$on\$a\$quarterly\$basis,\$to\$the\$Board\$and\$the\$Board\$of\$Statutory\$Auditors\$ on\$ the\$ activities\$ undertaken\$ concerning\$ the\$ powers\$ conferred\$ and\$ in\$ a\$ manner\$ to\$ permit\$the\$Board\$to\$express\$in\$an\$informed\$manner\$on\$the\$matters\$under\$examination.\$

4.5 OTHER\$EXCUTIVE\$DIRECTORS

As\$ of\$ the\$ date\$ of\$ this\$ Report,\$ beyond\$ the\$ Chief\$ Executive\$ Officer\$ and\$ the\$ Executive\$ Director,\$no\$other\$directors\$have\$been\$attributed\$delegated\$duties.

4.6 INDEPENDENT\$DIRECTORS

Pursuant\$ to\$ the\$ combined\$ provisions\$ of\$ Articles\$ 147`ter,\$ paragraph\$ 4,\$ and\$ 148,\$ paragraph\$ 3,\$ of\$ the\$ CFA\$ and\$ in\$ accordance\$ with\$ the\$ requirements\$ of\$ Article\$ 2.2.3,\$ paragraph\$ 3,\$ letter\$ k)\$ of\$ the\$ Borsa\$ Italiana\$ Regulation\$ and\$ Article\$ IA.2.10.\$ 6\$ of\$ the\$ Instructions\$to\$the\$Borsa\$Italiana\$Regulation,\$three\$independent\$directors\$currently\$hold\$ office\$ on\$ the\$ Board\$ of\$ Directors,\$ in\$ the\$ persons\$ of\$ Francesca\$ Prandstraller,\$ Sergio\$ Ravagli\$and\$Gerolamo\$Caccia\$Dominioni.

The\$Board\$ of\$ Directors\$ assesses\$the\$ existence\$ and\$ permanence\$ of\$the\$ requirements\$ above,\$ also\$ applying\$ all\$ the\$ criteria\$ as\$ per\$ the\$ Self`Governance\$ Code\$ (application\$ criteria\$3.C.1\$and\$3.C.2)\$on\$the\$basis\$of\$the\$information\$that\$the\$parties\$are\$required\$to\$ provide\$ under\$their\$ own\$ responsibility,\$ or\$ of\$the\$ information\$ available\$to\$the\$Board\$ of\$ Directors.\$

With\$reference\$to\$the\$Board\$of\$Directors\$currently\$in\$office,\$it\$is\$to\$be\$noted\$that\$during\$ the\$ meeting\$ of\$ March\$ 21,\$ 2017\$ the\$ Board\$ carried\$ out\$ the\$ necessary\$ checks\$ on\$ the\$ fulfillment\$ of\$ the\$ independence\$ requirements\$ of\$ the\$ afore`mentioned\$ directors.\$ The\$ outcome\$ of\$ these\$ assessments\$ was\$ announced\$ to\$ the\$ market\$ in\$ the\$ press\$ release\$ dated\$March\$ 21,\$ 2017,\$ available\$ on\$the\$ website\$ of\$the\$Issuer\$www.filagroup.it,\$ under\$ the\$section\$Investors.

The Board of Statutory Auditors has verified the correct application of the criteria and procedures adopted by the Board of Directors to assess the independence of its members. The outcome of these assessments was announced to the market in the press release dated March 21, 2017, available on the website of the Issuer www.filagroup.it, under the section Investors.

The Independent Directors met once during the year in the absence of the other directors to primarily discuss the same issues arising during the meetings of the Control and Risks Committee. For the considerations suggested by the Independent Directors during this meeting reference should be made to paragraph 4.7 below.

$4.7$ LEAD INDEPENDENT DIRECTOR

On October 7, 2015 - on the presentation for admission to listing of the shares of the company on the MTA - the Board of Directors approved the appointment of a lead independent director, as the Independent Director Gerolamo Caccia Dominioni. In accordance with the provisions of the Self-Governance Code, the Lead Independent Director was tasked with the duties of collecting and coordinating the petitions and contributions of non-executive directors, in particular of the independent directors, as well as working with the Chairman of the Board of Directors to ensure that directors receive adequate and timely information and may call meetings of the independent directors to discuss the functioning of the Board and corporate operations.

During the Reference Year, the considerations suggested by the independent directors mainly related to ensuring:

the continual improvement of the governance level, also in view of the growth $(i)$ and expansion of the Group;

$(ii)$ the constant and attentive monitoring of any critical issues arising within the business operations.

Among the initiatives suggested to the Board of Directors by the Lead Independent Director and the other independent directors for the year 2017, of particular relevance, are those aimed at: ensuring the effective and correct implementation of all the necessary procedures in place to identify in advance all operations which are subject to approval by the Committees.

4.8 GENERAL MANAGER

As of the date of this Report, the Board of Directors has not appointed any General Manager.

5. HANDLING OF CORPORATE INFORMATION

The Company has adopted the following procedures:

• The Code for the handling of Insider Information $(i)$
• $(ii)$ The Code of conduct for Internal Dealing,

last updated by the Board of Directors of FILA on July 6, 2016 in order to comply with the new provisions introduced by EU Regulation No. 596/2014 of the European Parliament and of the Council of April 16, 2014 in relation to market abuse and the relative regulations.

5.1 CODE FOR THE HANDLING OF INSIDER INFORMATION

The purpose of the Code for the handling of Insider Information (the Code) is to prevent the transfer of Price Sensitive Information (as defined below) in an untimely, incomplete or inadequate manner, or in any case in such a way as to cause asymmetric information within the market.

In particular, the dissemination of Price Sensitive Information as regulated by the aforementioned Code protects the market and investors, assuring them adequate knowledge of the events concerning the Issuer on which to base their investment decisions

It is also the objective of the Code for the handling of Price Sensitive Information to prevent certain persons or categories of persons from using information not known to the public to make speculative transactions on the markets to the detriment of the investors without knowledge of such information.

Here briefly described are the essential elements of the Code for the handling of Price Sensitive Information.

DEFINITION OF INSIDER INFORMATION 52

Insider Information is taken to mean information:

$(a)$ of a precise nature, namely that:

$(i)$ such refers to a set of existing circumstances or circumstances that may reasonably be expected to occur or to an event that has occurred or which may reasonably be expected to occur;

is specific enough to enable conclusions to be drawn on the possible $(ii)$ effect of the set of circumstances or event referred at letter (i) on the prices of Financial Instruments (as defined below) or of relative derivative financial instruments

In this regard, in the case of an extensive process undertaken to achieve, or which results in, a particular circumstance or a particular event, this future circumstance or future event, in addition to the interim steps taken as part of the process linked to the achievement or the occurrence of the circumstance or future event, may be considered as information of a precise nature;

$(b)$ that has not been made public;

$(c)$ that directly or indirectly concerns the Company or the Subsidiaries or the Financial Instruments of the Company; and

that, if made public, may have a significant effect on the prices of the Financial $(d)$ Instruments or any associated derivative financial instruments, or that a reasonable investor would use as one of the elements on which to base their investment decisions.

An interim step in an extensive process is considered Insider Information if complying with the criteria above.

Financial\$Instruments\$are\$considered\$shares\$issued\$and\$in\$circulation\$of\$the\$company\$ and\$ other\$ instruments\$ described\$ at\$ Article\$ 1,\$ paragraph\$ 2\$ of\$ the\$ CFA,\$ issued\$ by\$ the\$ company\$ and\$ (i)\$ admitted\$ for trading\$ or\$ for\$ which\$ a\$ request\$ for\$ trading\$ has\$ been\$ submitted\$ on\$ a\$ regulated\$market_\$ (ii)\$traded\$or\$for\$which\$ a\$ request\$for\$trading\$ has\$ been\$ submitted\$ on\$ a\$ multilateral\$ trading\$ facility\$ (MTF)_\$ (iii)\$ traded\$ on\$ an\$ organized trading\$facility\$(OTF)_\$or\$(iv)\$not\$considered\$by\$points\$(i),\$(ii)\$or\$(iii),\$whose\$price\$or\$value\$ depends\$on\$a\$financial\$instrument\$indicated\$at\$the\$previous\$points,\$or\$has\$an\$effect\$on\$ this\$ price\$ or\$ value,\$ including,\$for\$ example\$ purposes\$ but\$ not\$ exhaustive,\$ credit\$ default\$ swaps\$and\$contracts\$for\$difference.

5.2.1 Recipients'of'the'Code'for'the'handling'of'Insider'Information'

The\$ following\$ persons\$ must\$ comply\$ with\$ the\$ Code\$ for\$ the\$ handling\$ of\$ Insider\$ Information:\$ (a)\$members\$of\$the\$Board\$of\$Directors\$and\$Control\$Boards,\$in\$addition\$to\$ Employees,\$ of\$ the\$ Company\$ and\$ of\$ the\$ Subsidiaries_\$ and\$ (b)\$ Relevant\$ Persons\$ (hereafter,\$jointly,\$the\$Covered\$Persons).\$

Covered\$ Persons\$ are\$ all\$ parties\$ with\$ access\$to\$Insider\$Information\$ and\$ with\$ whom\$ a\$ professional\$ collaboration\$ exists\$ (contract\$ of\$ employment\$ or\$ other)\$ and\$ who,\$ in\$ the\$ execution\$ of\$their\$ established\$ duties,\$ have\$ access\$to\$Insider\$Information,\$ such\$ as\$for\$ example\$consultants,\$accountants\$or\$credit\$rating\$agencies.

5.2.2 Handling'of'Insider'Information

Covered\$Persons\$must\$maintain\$ complete\$ confidentiality\$ of\$the\$Insider\$Information\$ of\$ which\$they\$are\$aware.\$\$All\$Insider\$Information\$must\$be\$handled\$with\$the\$necessary\$care\$ to\$ ensure\$ that\$ its\$ circulation\$ within\$ the\$ company\$ does\$ not\$ threaten\$ its\$ confidential\$ nature,\$unless\$such\$is\$announced\$to\$the\$market\$according\$to\$the\$means\$established\$by\$ the\$present\$Code\$for\$the\$handling\$of\$Insider\$Information\$and\$the\$applicable\$regulation.\$

Subject\$to\$Article\$184\$and\$subsequent\$of\$the\$CFA,\$in\$addition\$to\$Articles\$14\$and\$15\$of\$ Regulation\$596/2014,\$Covered\$Persons\$may\$not:\$(a)\$acquire,\$sell\$or\$otherwise\$execute\$ operations\$on\$Financial\$Instruments\$(including\$the\$cancellation\$of\$amendment\$of\$orders\$ where\$ the\$ order\$ has\$ been\$ sent\$ before\$ the\$ interested\$ party\$ came\$ into\$ possession\$ of\$ Insider\$ Information),\$ on\$ their\$ own\$ behalf\$ or\$ on\$ behalf\$ of\$ third\$ parties,\$ directly\$ or\$ indirectly,\$ utilizing Insider\$ Information_\$ (b)\$ advise\$ or\$ induce\$ others,\$ on\$ the\$ basis\$ of\$ Insider\$Information,\$to\$ carry\$ out\$ any\$ operations\$ at\$ point\$ (a)_\$ (c)\$ communicate\$to\$third\$ parties\$ Insider\$ Information\$ outside\$ of\$ the\$ normal\$ exercise\$ of\$ their\$ duties,\$ profession,\$ function\$or\$office.\$\$The\$communication\$to\$third\$parties\$of\$advice\$or\$inducements\$as\$per\$ letter\$ (b)\$ is\$ considered\$ as\$ unlawful\$ communication\$ of\$ Insider\$ Information\$ where\$ the\$ person\$ communicating\$ the\$ advice\$ or\$ inducement\$ knows\$ or\$ should\$ know\$ that\$ such\$ is\$ based\$on\$Insider\$Information.

Covered\$Persons\$are\$absolutely\$prohibited\$from\$ releasing\$interviews\$or\$information\$to\$ the\$press\$or\$declarations\$in\$general\$containing\$insider\$information\$not\$yet\$announced\$to\$ the\$market\$in\$accordance\$with\$the\$present\$Code\$for\$the\$handling\$of\$Insider\$Information.\$

The\$Board\$of\$Directors\$on\$November\$11,\$2016\$\$appointed\$Mr.\$Stefano\$De\$Rosa,\$CFO\$ and\$ Executive\$ Officer,\$ as\$ the\$ Officer\$ in\$ charge\$ of\$ corporate\$ relations,\$ with\$ the\$ responsibility\$ for\$ the\$ drafting\$ of\$ press\$ releases\$ relating\$ to\$ Insider\$ Information\$ concerning\$ the\$ Company\$ or\$ its\$ Subsidiaries\$ and\$ to\$ ensure\$ compliance\$ with\$ the\$ disclosure\$ obligations\$ for\$ Insider\$ Information\$ under\$ the\$ Code\$ for\$ Insider\$ Information\$ and\$applicable\$regulations\$(the\$Disclosure\$Officer).\$

The\$Chief\$Executive\$Officer\$of\$FILA\$(a)\$oversees\$the\$handling\$of\$Insider\$Information,\$in\$ addition\$ to\$ relations\$ between\$ the\$ Company\$ and\$ institutional\$ investors\$ and\$ with\$ the\$ press,\$ utilizing the\$ relevant\$ internal\$ structures_\$ and\$ (b)\$ approves\$ the\$ Press\$ Releases\$ presented\$to\$him\$by\$the\$Disclosure\$Officer.

Any\$interactions\$with\$the\$press\$or\$other\$media\$for\$the\$circulation\$of\$Insider\$Information\$ should\$ be\$ expressly\$ authorized by\$ the\$ Chief\$ Executive\$ Officer\$ of\$ the\$ Company,\$ or\$ parties\$appointed\$by\$this\$latter.\$

The\$ Disclosure\$ Officer\$ (a)\$ ensures,\$ with\$ the\$ assistance\$ and\$ support\$ of\$ the\$ internal\$ Company\$ structures,\$ the\$ fulfilment\$ of\$ the\$ disclosure\$ obligations\$ concerning\$ Insider\$ Information\$ under\$ the\$ present\$ Code\$ and\$ the\$ applicable\$ regulation_\$ \$ (b)\$ utilizing the\$ internal\$ Company\$ structures,\$ oversees\$ relations\$ with\$ the\$ disclosure\$ bodies\$ and\$ prepares\$the\$communications\$concerning\$Insider\$Information.

The\$ Boards\$ of\$ Directors\$ of\$ the\$ Subsidiaries:\$ (a)\$ manage\$ the\$ Insider\$ Information\$ concerning\$ their\$ respective\$ companies_\$ (b)\$ through\$ their\$ appointed\$ director,\$ or\$ the\$ respective\$internal\$structures,\$promptly\$communicate\$to\$the\$Chief\$Executive\$Officer\$of\$ the\$ Company\$ and\$ the\$ Disclosure\$ Officer\$ all\$ Insider\$ Information\$ concerning\$ their\$ respective\$companies.

The\$ text\$ of\$ the\$ press\$ release\$ must\$ be\$ presented\$ to\$ the\$ Chief\$ Executive\$ Officer\$ and,\$ where\$ necessary,\$ to\$ the\$ Board\$ of\$ Directors\$ for\$ final\$ approval\$ before\$ external\$ communication,\$and\$where\$referring\$to\$financial\$information,\$to\$the\$Executive Officer for\$ financial\$reporting.

The\$ press\$ release\$ is\$ issued\$ on\$ the\$ SDIRNIS\$ system\$ and,\$ through\$ the\$ SDIRNIS,\$ is\$ transmitted\$to\$Consob\$and\$\$at\$\$least\$\$two\$\$press\$agencies.\$FILA\$also\$ensures\$insertion\$ of\$the\$ press\$ release\$ on\$the\$ website\$ of\$the\$ Company\$ www.filagroup.it,\$ in\$the\$ relevant\$ section,\$ ensuring\$ that\$ such\$ press\$ releases\$ are\$ kept\$ on\$ the\$ website\$ for\$ at\$ least\$ five\$ years.

A\$copy\$of\$the\$Code\$for\$handling\$Insider\$Information\$is\$available\$on\$the\$website\$of\$the\$ Company\$www.filagroup.it,\$in\$the\$Governance\$section.\$

5.3 INTERNAL\$DEALING\$CODE

The\$internal\$dealing\$code\$identifies\$"Covered\$Persons"\$and\$in\$particular:\$

• (i) the\$members\$of\$the\$Board\$of\$Directors\$and\$of\$the\$Board\$of\$Statutory\$Auditors\$of\$ the\$Company_
• (ii) the\$management\$ of\$the\$ Company\$ and\$ executives\$that\$ have\$regular\$ access\$to\$ insider\$information\$and\$that\$have\$the\$power\$to\$adopt\$operating\$decisions\$which\$ may\$impact\$upon\$the\$performance\$and\$future\$prospects\$of\$the\$Company_
• (iii) any\$other\$persons\$identified\$by\$name\$by\$the\$Board\$of\$Directors\$of\$the\$Company\$

in\$relation\$to\$the\$activity\$they\$perform\$or\$the\$office\$assigned\$to\$them,\$who\$shall\$ be\$ immediately\$ indicated\$ to\$ the\$ Disclosure\$ Officer,\$ who,\$ in\$ turn,\$ shall\$ ensure\$ due\$notice\$as\$per\$this\$Internal\$Dealing\$Code.

The\$internal\$dealing\$code\$also\$identifies\$the\$"Connected\$Persons"\$to\$Covered\$Persons,\$ and\$in\$particular:\$

• (i) the\$ spouse\$ or\$ any\$ partner\$ considered\$ as\$ a\$ spouse\$ under\$ Italian\$ law,\$ any\$ dependent\$children\$under\$Italian\$law\$and\$any\$relatives\$who\$have\$cohabited\$with\$ a\$ Covered\$ Person\$ for\$ at\$ least\$ one\$ year\$ from\$ the\$ date\$ of\$ the Relevant\$ Transaction\$in\$question\$(collectively,\$the\$'Connected\$Family\$Members')_
• (ii) legal\$ entities,\$ companies\$ and\$trusts\$ in\$ which\$ a\$management\$ role\$ is\$ held\$ by\$ a\$ Covered\$Person\$or\$a\$Connected\$Family\$Member\$or\$which\$is\$controlled\$directly\$ or\$ indirectly\$ by\$ a\$ Covered\$ Person\$ or\$ a\$ Connected\$ Family\$ Member\$ or\$ whose\$ economic\$interests\$are\$ substantially\$equivalent\$to\$those\$of\$a\$Covered\$Persons\$ or\$ of\$ a\$ Connected\$ Family\$Member\$ or\$ which\$ is\$ constituted\$for\$the\$ benefit\$ of\$ a\$ Covered\$Person\$or\$of\$a\$Connected\$Family\$Member.

The\$ internal\$ dealing\$ code identifies\$ as\$ "Relevant\$ Transactions"\$ purchases,\$ sales,\$ subscription\$ or\$ exchange\$ of\$ Shares\$ or\$ Related\$ Financial\$ Instruments\$ made\$ by\$ the\$ Covered\$ Persons\$ or\$ the\$ Connected\$ Persons,\$ directly\$ or\$ through\$ nominees,\$ trusts\$ or\$ subsidiaries,\$ with\$the\$ exception\$ as\$ indicated\$ in\$the\$ simplified\$ chapter\$ of\$ Article\$ 19\$ of\$ Regulation\$596/2014\$and\$Article\$10\$of\$EU\$Regulation\$No.\$522/2016\$of\$December\$17,\$ 2015.\$ Excluded\$ are\$transactions\$ whose\$total\$ amount\$ does\$ not\$ exceed\$ Euro\$ 5,000\$ in\$ each\$ year\$ (the\$ "Relevant\$ Amount")_\$ for\$ the\$ related\$ derivative\$ Financial\$ Instruments,\$ the\$Relevant\$Amount\$is\$calculated\$with\$reference\$to\$the\$underlying\$shares.\$The\$above\$ amount\$ is\$ calculated\$ aggregating\$ the\$ transactions\$ relating\$ to\$ the\$ Shares\$ and\$ the\$ Related\$ Financial\$ Instruments,\$ made\$ on\$ behalf\$ of\$ each\$ Covered\$ Person\$ and\$ those\$ made\$ on\$ behalf\$ of\$ the\$ Connected\$ Persons.\$ Relevant\$ Transactions\$ include\$ all\$ transactions\$subsequent\$to\$the\$first\$communication,\$whatsoever\$the\$related\$amount.

The\$internal\$dealing\$code\$also\$governs\$the\$management,\$handling\$and\$communication\$ of\$the\$disclosure\$of\$these\$transactions.\$For\$this\$purpose,\$the\$Code:

• (i) governs\$ the\$ disclosure\$ obligations\$ of\$ the\$ Covered\$ Persons\$ to\$ the\$ Company,\$ requiring\$that\$these\$ parties\$ communicate\$to\$the\$ Disclosure\$ Officer\$ information\$ relating\$ to\$ Relevant\$ Transactions\$ carried\$ out\$ by\$ themselves\$ or\$ by\$ Connected\$ Persons\$attributable\$to\$them,\$within\$two\$trading\$days\$from\$the\$date\$of\$execution\$ of\$the\$Relevant\$Transaction_
• (ii) the\$Disclosure\$Officer\$shall\$communicate\$the\$information\$to\$Consob\$and\$to\$the\$ public\$on\$behalf\$of\$the\$Covered\$Persons,\$also\$availing\$of\$persons\$external\$to\$the\$ Company\$but\$linked\$through\$consultancy\$relationships,\$within\$three\$trading\$days\$ from\$the\$date\$of\$execution\$of\$the\$Relevant\$Transaction_\$
• (iii) governs\$the\$ restrictions\$ and\$ limitations\$to\$ undertake\$Relevant\$Transactions\$ by\$ the\$ Covered\$ Persons\$ and\$ Connected\$ Persons\$ and\$ the\$ manner\$ in\$ which\$ the\$ Disclosure\$ Officer\$ informs\$ the\$ Covered\$ Persons\$ of\$ the\$ obligations\$ in\$ accordance\$with\$the\$Internal\$Dealing\$Code.

In accordance with the provisions of the Internal Dealing Code, the Disclosure Officer, Mr. Stefano De Rosa, is responsible for the implementation of the Code and the updating of the list of Covered Persons.

A copy of the Internal Dealing Code is available on the website of the Company www.filagroup.it, in the Governance section.

6 INTERNAL COMMITTEES TO THE BOARD OF DIRECTORS (AS PER ARTICLE 123-BIS. PARAGRAPH 2, LETTER D), OF THE CFA)

The Board of Directors of FILA have set up the following Committees:

• The Control and Risks Control Committee, whose members were appointed by $(i)$ the Board of Directors on July 22, 2015;
• $(ii)$ The Remuneration Committee, whose members were appointed by the Board of Directors on July 22, 2015;
• The Related Parties Committee, whose members were appointed by the Board $(iii)$ of Directors on July 22, 2015:

The Board did not consider it necessary to set up an Appointments Committee, as recommended by Article 5.P.1. of the Self-Governance Code, as not considered necessary in consideration of the structure of the Group and of the shareholder base of the Issuer

$\overline{7}$ . REMUNERATION COMMITTEE

$7.1$ COMPOSITION AND OPERATION (AS PER ARTICLE 123-BIS, PARAGRAPH 2, LETTER D) OF THE CFA)

In accordance with Article 2.2.3., paragraph 3, letter n) of the Stock Exchange Regulation, applicable to the issuers with shares traded on the MTA. STAR segment, as well as in accordance with the provisions of Article 6 of the Self-Governance Code, the Board of the company set up a Remuneration Committee.

The Remuneration Committee was set up with Board of Directors motion of July 22, 2015.

The Remuneration Committee is composed of 3 non-executive directors, the majority of which independent directors.

Name	Office
Francesca Prandstraller (Chairman)	Independent Director
Sergio Ravagli	Independent Director
Annalisa Barbera(*)	Non-Independent Director

(*) Person with adequate financial and remuneration policy knowledge and experience, as assessed by the Board of Directors meeting of July 22, 2015.

The\$ meetings\$ of\$ the\$ Remuneration\$ Committee\$ are\$ coordinated\$ by\$ its\$ Chairman\$ and\$ minutes\$of\$the\$meetings\$are\$kept.\$The\$Chairman\$regularly\$provided\$information\$on\$the\$ meetings\$held\$by\$the\$Committee\$in\$the\$next\$Board\$of\$Directors\$meeting.

During\$the\$Reference\$Year,\$the\$Remuneration\$Committee\$met\$8\$\$times\$on the\$following\$ dates:\$ January\$ 25,\$ 2016,\$ March\$ 10,\$ 2016,\$ March\$ 21,\$ 2016,\$ May\$ 30,\$ 2016,\$ June\$ 20,\$ 2016,\$July\$6,\$2016,\$November\$8,\$2016\$and\$November\$11,\$2016.\$The\$Chairman\$of\$the\$ Board\$of\$Directors\$of\$the\$company\$has\$always\$attended\$these\$meetings.

The\$ duration\$ of\$ the\$ Remuneration\$ Committee\$ meetings\$ was\$ approx.\$ one\$ and\$ a\$ half\$ hours.

In\$ the\$ Reference\$ Year,\$ against\$ a\$ total\$ attendance\$ level\$ of\$ approx.\$ 96%, the\$ attendance\$ of\$ each\$ Director\$ was\$ respectively\$ equal\$ to:\$ 100%\$ for\$ Francesca\$ Prandstraller,\$100%\$for\$Annalisa\$Barbera\$and\$87.50%\$for\$Sergio\$Ravagli.

At\$ least\$ one\$ member\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ attended\$ the\$ Remuneration\$ Committee\$meeting.

During\$ 2017,\$ the\$ Remuneration\$ Committee\$ has\$ already\$ held\$ 2\$ meetings\$ on\$ the\$ following\$dates:\$February\$16,\$2017\$and\$March\$16,\$2017\$\$At\$least\$2\$two\$more\$meetings\$ are\$scheduled\$for\$the\$current\$year.

In\$ accordance\$ with\$the\$ combined\$ provisions\$ of\$Article\$ 2.2.3,\$ paragraph\$ 3,\$ letter\$ n)\$ of\$ the\$Stock\$Exchange\$Regulations\$applicable\$to\$the\$issuers\$with\$shares\$traded\$on\$the\$ MTA, STAR\$ segment\$ and\$ application\$ criterion\$ 6.C.6\$ of\$the\$ Code,\$ no\$ director\$takes\$ part\$ in\$ the\$ meetings\$ of\$ the\$ Remuneration\$ Committee\$ in\$ which\$ the\$ proposals\$ to\$ the\$ Board\$of\$Directors\$relating\$to\$their\$remuneration\$is\$being\$discussed.

7.2 FUNCTIONS\$AND\$ACTIVITIES\$OF\$THE\$REMUNERATION\$COMMITTEE

The\$Remuneration\$Committee\$provides\$ consultation\$and\$formulates\$proposals\$for\$the\$ Board\$ of\$ Directors\$ for\$ the\$ remuneration\$ policy,\$ including\$ any\$ stock\$ option\$ plans\$ or\$ assignment\$ of\$ shares,\$ of\$ the\$ Chief\$ Executive\$ Officer\$ and\$ those\$ who\$ hold\$ specific\$ offices,\$as\$well\$as,\$on\$the\$indications\$of\$the\$Chief\$Executive\$Officer,\$the\$determination\$ of\$the\$criteria\$for\$the\$remuneration\$of\$the\$key\$management\$personnel\$of\$the\$Company.

The\$Remuneration\$Committee\$ guarantees\$the\$ broadest\$ information\$ and\$transparency\$ on\$ the\$ remuneration\$ of\$ the\$ Chief\$ Executive\$ Officer\$ as\$ well\$ as\$ the\$ manner\$ for\$ determining\$such\$remuneration.\$In\$conformity\$with\$Article\$2389,\$paragraph\$3\$of\$the\$Civil\$ Code,\$ the\$ Remuneration\$ Committee\$ has\$ solely\$ the\$ function\$ of\$ presenting\$ proposals\$ while\$the\$ power\$ of\$ determining\$the\$ remuneration\$ of\$the\$ senior\$ directors\$ remains\$ with\$ the\$Board\$of\$Directors,\$having\$consulted\$the\$Board\$of\$Statutory\$Auditors.

In particular, in accordance with the combined provisions of Article 2.2.3, paragraph 3. letter n) of the Stock Exchange Regulations - applicable to the issuers of shares traded on the MTA, STAR segment and application criterion 6.C.5 of the Self-Governance Code, the duties of the Committee are as follows:

• periodically evaluates the adequacy, the overall compliance and the application of the remuneration policy of directors and senior executives, utilizing for this latter issue the information provided by the Chief Executive Officers; draws up for the Board of Directors related proposals;
• presents proposals or expresses opinions to the Board of Directors on the remuneration of executive directors and other senior directors as well as establishing the performance objectives related to the variable component of this remuneration; monitors the application of the decisions adopted by the Board verifying, in particular, the achievement of the performance objectives.

The Remuneration Committee also has responsibility for the management of any incentive plans approved by the Boards of the Company.

The role, composition and functioning of the Remuneration Committee is governed by a specific regulation approved by the Board on October 7, 2015.

The work of the Remuneration Committee is coordinated by its Chairman, chosen from among the independent members of the Committee. In particular, the Chairman organizes and coordinates the activities of the Committee and directs the activities of the relative meetings.

In the undertaking of their functions, the Remuneration Committee may access all information and departments necessary for the undertaking of their duties as well as utilize external consultants, within the terms established by the Board of Directors.

No financial resources have been earmarked for the Remuneration Committee as the latter avails itself, to carry out its role, of the Issuer's corporate resources and structures.

In the Reference Year, the Remuneration Committee formulated proposals, to be presented to the Board of Directors with prior favourable opinion of the Related Parties Committee, in relation to the remuneration of the Chief Executive Officer and of the Executive Director, for which reference should be made to the remuneration report prepared in accordance with Article 123-ter of the CFA and Article 84-quater of the Issuers' Regulation, available on the company website www.filagroup.it, in the Governance section and also verified that the remuneration of the Executive Directors relating to the Reference Year were in compliance with the commitments undertaken, the responsibilities of the offices held as well as their professional qualifications.

On November 8, 2016 and February 16, 2017, the Committee also assessed an extraordinary bonus tantum based on the shares of the Company to be attributed on a free basis to some senior management of the Group (including the Executive Director Luca Pelosin) (the Extraordinary Bonus) and the 2017-2019 performance shares plan also based on FILA shares to be granted on a free basis to some senior management of the Group (2017-2019 Performance Shares Plan). The Committee analyzed the proposals of the Extraordinary Bonus and 2017-2019 Performance Shares Plan on March\$ 16,\$ 2017,\$ expressing\$their\$favourable\$ opinion\$to\$ be\$ presented\$to\$the\$Board\$ of\$ Directors\$ of\$ the\$ Company.\$ On\$ March 21,\$ 2017,\$ the\$ Board\$ of\$ Directors\$ approved\$ the\$ proposals\$ of\$ the\$ Extraordinary\$ Bonus\$ and\$ 2017`2019\$ Performance\$ Shares\$ Plan,\$ resolving\$to\$present\$these\$proposals\$to\$the\$Shareholders'\$Meeting\$ called\$for\$April\$27,\$ 2017.\$

For\$ further\$ information\$ on\$ the\$ Extraordinary\$ Bonus\$ and\$ 20172019\$ Performance\$ Shares\$ Plan\$ reference\$ should\$ be\$ made\$ to\$ the\$ disclosure\$ document\$ prepared\$ in\$ accordance\$with\$Article\$114bis'of\$the\$CFA\$and\$Article\$84*bis* of\$the\$Issuers'\$Regulation\$ as\$well\$as\$the\$Illustrative\$report\$prepared\$in\$accordance\$with\$Article\$114bis of\$the\$CFA,\$ available\$on\$the\$company\$website\$www.filagroup.it\$in\$the\$Governance\$section.

8. REMUNERATION\$OF\$DIRECTORS\$AND\$SENIOR\$EXECUTIVES

The\$remuneration\$of\$Directors\$is\$established\$by\$the\$Shareholders'\$Meeting.\$Pursuant\$to\$ Article\$15.1\$of\$the\$By`Laws,\$the\$Shareholders'\$Meeting\$may\$determine\$the\$total\$amount\$ of\$the\$remuneration\$of\$all\$of\$the\$directors,\$including\$executive\$directors,\$whose\$division\$ is\$established\$by\$the\$Board\$of\$Directors,\$having\$consulted\$with\$the\$Board\$of\$Statutory\$ Auditors,\$ for\$ the\$ remuneration\$ of\$ the\$ executive\$ directors\$ pursuant\$ to\$ Article\$ 2389,\$ paragraph\$3,\$of\$the\$Civil\$Code.

On\$ July\$ 22,\$ 2015,\$ the\$ Shareholders'\$ Meeting\$ of\$ the\$ Company\$ approved\$ an\$ annual\$ gross\$ remuneration\$ of\$ Euro\$ 15,000,00\$ for\$ each\$ director and\$ Euro\$ 90,000,00\$ gross\$ annual\$remuneration\$for\$the\$Chairman\$of\$the\$Board\$of\$Directors.

Also\$on\$July\$22,\$2015,\$the\$Board\$of\$Directors\$of\$the\$Company,\$with\$the\$approval\$of\$the\$ Related\$ Parties\$ Committee\$ and\$ the\$ Board\$ of\$ Statutory\$ Auditors,\$ allocated\$ a\$ gross\$ annual\$remuneration\$of\$Euro\$80,000.00\$until\$December\$31,\$2015\$and,\$from\$January\$1,\$ 2016,\$a\$gross\$annual\$remuneration\$of\$Euro\$150,000.00,\$to\$the\$Honorary\$Chairman.

On\$July\$21,\$2016,\$with\$the\$approval\$of\$the\$Board\$of\$Statutory\$Auditors\$and\$the\$Related\$ Parties\$ Committee,\$ the\$ Board\$ of\$ Directors\$ allocated\$ the\$ remuneration\$ to\$ the\$ Chief\$ Executive\$Officer\$Massimo\$Candela\$and\$the\$Executive\$Director\$Luca\$Pelosin.

For\$information\$on\$the\$remuneration\$policy\$adopted\$by\$the\$Issuer\$and\$the\$remuneration\$ of\$ the\$ members\$ of\$ the\$ Board\$ of\$ Directors,\$ reference\$ should\$ be\$ made\$ to\$ the\$ Remuneration\$Report\$prepared\$pursuant\$to\$Article\$123*ter* of\$the\$CFA\$and\$84quater of\$ the\$ Consob\$ Issuer's\$ Regulation\$ available\$ within\$ the\$ terms\$ required\$ by\$ law\$ on\$ the\$ internet\$site\$of\$the\$Company\$at\$www.filagroup.it\$in\$the\$Governance\$section.\$

For\$further\$ information\$ on\$the\$Extraordinary\$Bonus\$ and the\$\$ 20172019\$Performance\$ Shares\$Plan\$which\$will\$be\$presented\$to\$the\$Shareholders'\$Meeting\$called\$for\$April\$27,\$ 2017,\$ reference\$ should\$ be\$made\$to\$the\$ disclosure\$ document\$ prepared\$ in\$ accordance\$ with\$Article\$114bis'of\$the\$CFA\$and\$Article\$84*bis* of\$the\$Issuers'\$Regulation\$as\$well\$as\$ the\$Illustrative\$report\$prepared\$in\$accordance\$with\$Article\$114bis of\$the\$CFA,\$available\$ on\$the\$company\$website\$www.filagroup.it\$in\$the\$Governance\$section.

9. INCENTIVE\$MECHANISMS FOR\$THE\$INTERNAL\$AUDIT\$MANAGER\$AND\$THE\$EXECUTIVE\$ OFFICER\$FOR\$FINANCIAL\$REPORTING

In\$relation\$to\$the\$incentives\$for\$the\$Executive\$Officer\$for\$financial\$reporting,\$such\$are\$in\$ line\$ with\$ the\$ responsibilities\$ assigned.\$ There\$ are\$ no\$ incentive\$ mechanisms\$ for\$ the\$ Internal\$Audit\$Manager.

10. CONTROL\$AND\$RISKS\$COMMITTEE

10.1 COMPOSITION\$AND\$OPERATION\$(AS\$PER\$ARTICLE\$123OBIS, PARAGRAPH\$2, LETTER\$\$D) OF\$THE\$CFA)

In\$accordance\$with\$the\$ combined\$provisions\$of\$Article\$2.2.3.,\$paragraph\$3,\$letter\$o)\$of\$ the\$Stock\$Exchange\$Regulation,\$applicable\$to\$issuers with\$shares\$traded\$on\$the\$Italian\$ Stock\$ Exchange,\$ STAR\$ segment,\$ as\$ well\$ as\$ in\$ accordance\$ with\$ the\$ provisions\$ of\$ principle\$7.P.4\$of\$the\$Self`Governance\$Code,\$the\$Board\$of\$Directors\$internally\$set\$up\$a\$ Control\$and\$Risks\$Committee.

The\$Control\$and\$Risks\$Committee\$was\$set\$up\$on\$July\$22,\$2015\$by\$Board\$of\$Directors\$ motion\$ and\$ comprises\$ the\$ following\$ non`executive\$ directors,\$ the\$ majority\$ of\$ whom\$ independent:

NAME	OFFICE
Gerolamo Caccia\$Dominioni\$(Chairman)	Independent\$Director
Sergio\$Ravagli	Independent\$Director
Fabio\$Zucchetti\$(*)	Non`Independent\$Director

(*)\$Person\$ with\$ adequate\$ accounting,\$financial\$ and\$ risk\$management\$ knowledge\$ and\$ experience,\$ as\$ reviewed\$ by\$the\$ Board\$of\$Directors\$meeting\$of\$July\$22,\$2015.\$

The\$meetings\$of\$the\$Control\$and\$Risks\$Committee\$are\$coordinated\$by\$its\$Chairman\$and\$ minutes\$of\$the meetings\$are\$kept.\$The\$Chairman\$regularly\$provided\$information\$on\$the\$ meetings\$held\$by\$the\$Committee\$in\$the\$next\$Board\$of\$Directors\$meeting.\$The\$Chairman\$ of\$the\$Board\$of\$Directors\$attends\$all\$meetings\$of\$the\$Committee.

The\$role,\$composition\$and\$functioning\$of\$the\$Control\$and\$Risks\$Committee\$is\$governed\$ by\$a\$specific\$ regulation\$approved\$by\$the\$Board\$on\$October\$15,\$2013,\$as\$amended\$on\$ June\$4,\$2015.

At\$ least\$ one\$ member\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ attended\$ the\$ Remuneration\$ Committee\$meeting.

During\$ the\$ year,\$ the\$ Remuneration\$ Committee\$ met\$ 9\$ \$ times\$ on\$ the\$ following\$ dates:\$ January\$20,\$2016,\$March\$15,\$2016,\$March\$21,\$2016,\$April\$14,\$2016,\$May\$10,\$2016,\$July\$ 5,\$2016,\$August\$4,\$2016,\$October\$13,\$2016\$and\$November\$8,\$2016.\$The\$Chairman\$of\$ the\$Board\$of\$Directors\$of\$the\$company\$has\$always\$attended\$these\$meetings.

The\$duration\$of\$the\$Control\$and\$Risks\$Committee\$meetings\$was\$approximately\$2\$hour.

During\$ the\$ Reference\$ Year,\$ with\$ an\$ overall\$ attendance\$ level\$ of\$ approx.\$ 96%, the\$ attendance\$of\$each\$Director\$was\$respectively\$equal\$to:\$100%\$for\$Gerolamo\$Caccia\$ Dominioni,\$88.88%\$for\$Sergio\$Ravagli\$and\$100%\$for\$Fabio\$Zucchetti.

During 2017, the Control and Risks Committee has already held 3 meetings on the following dates: January 25, 2017, March 15, 2017 and March 21, 2017. Another 4 Committee meetings are scheduled for the year.

10.2 FUNCTIONS OF THE CONTROL AND RISKS COMMITTEE

The Control and Risks Committee has consultation and proposals functions for the Board of Directors.

In particular, in accordance with the combined provisions of Article 2.2.3, paragraph 3, letter n) of the Stock Exchange Regulations - applicable to the issuers of shares traded on the MTA, STAR segment and application criterion 7.C.2 of the Self-Governance Code, the duties of the Committee are as follows:

• i) evaluate, together with the Executive Officer for financial reporting, and having consulted with the Board of Statutory Auditors, the correct application of the accounting standards and their uniformity for the preparation of the consolidated financial statements:
• express opinions on specific aspects concerning the identification of the principal ii) corporate risks;
• examine the periodic reports, concerning the valuation of the internal control and iii) risk management system, and those of particular size, prepared by the internal audit department;
• iv) monitors the independence, adequacy, efficacy and efficiency of the internal audit department;
• may request the internal audit department to carry out verifications on specific $V)$ operational areas, simultaneously communicating such to the Chairman of the Board of Statutory Auditors;
• reports to the Board, at least every six months, on the approval of the annual and vi) half-yearly accounts, on the work carried out and the adequacy of the internal control and risk management system.

The Committee prepares its opinion for the Board in order to:

• $(a)$ defines (for the Board) the guidelines of the internal control and risk management system, so that the main risks connected to the Issuer and its subsidiaries are correctly identified, as well as adequately measured, managed and monitored, in addition to determining the criteria of compatibility of these risks in line with the strategic objectives of the company:
• periodic assessment (for the Board), at least annually, of the adequacy the $(b)$ compliance of the internal control and risk management system with the particular characteristics of the company and the risk profile assumed, as well as its efficacy;

• approval, at least on an annual basis, of the work plan drawn up by the internal $(c)$ audit manager, after consultation with the Board of Statutory Auditors and the Director in charge of the internal control and risk management system;

• (d) description\$ (for\$ the\$ Board)\$ in\$ the\$ corporate\$ governance\$ report,\$ of\$ the\$ main\$ characteristics\$of\$the\$internal\$control\$and\$risk\$management\$system,\$expressing\$its\$ assessment\$on\$its\$overall\$adequacy_

• (e) evaluates\$(for\$the\$Board),\$after\$consultation\$with\$the\$Board\$of\$Statutory\$Auditors,\$ the\$ results\$of\$the\$independent\$audit\$firm's\$letter\$of\$ recommendations\$and\$of\$the\$ report\$on\$fundamental\$questions\$arising\$during\$the\$audit\$of\$the\$accounts_
• (f) nominates\$ and\$ revokes\$ (for the\$ Board)\$ the\$ internal\$ audit\$ manager_\$ ensures\$ adequate\$ resources\$ for\$ the\$ internal\$ audit\$ department\$ in\$ relation\$ to\$ the\$ responsibilities\$ defined\$ (by\$ the\$ Board)\$ and\$ determines\$ the\$ remuneration\$ of\$ the\$ internal\$audit\$manager\$in\$line\$with\$the\$company's\$policies.

The\$Committee\$is\$also\$required\$to\$support,\$with\$appropriate\$investigative\$activities,\$the\$ evaluations\$ and\$ decisions\$ of\$ the\$ Board\$ of\$ Directors\$ concerning\$ the\$ management\$ of\$ risks\$deriving\$from\$events\$of\$which\$the\$Board\$of\$Directors\$has\$become\$aware.

In\$ the\$ Reference\$ Year,\$ the\$ Control\$ and\$ Risks\$ Committee\$ assessed\$ the\$ correct\$ utilization of\$ the\$ accounting\$ policies\$ and\$ their\$ uniformity\$ in\$ the\$ preparation\$ of\$ the\$ financial\$statements\$for\$the\$period\$and\$\$undertook\$constant\$review\$of\$the\$advancement\$ of\$the\$projects\$for\$the\$review\$of\$the\$organization systems\$and\$models\$of\$the\$Group,\$of\$ the\$ internal\$ control\$ and\$ risk\$ management\$ system\$ as\$ well\$ as\$ in\$ this\$ context,\$ the\$ progress\$of\$the\$2016\$audit\$plan\$and\$the\$compliance\$controls\$undertaken\$in\$accordance\$ with\$Law\$262/2005\$and\$Legislative\$Decree\$No.\$231/2001.

During\$ the\$ meetings\$ held\$ the\$ Control\$ and\$ Risks\$ Committee\$ also\$ discussed\$ the\$ most\$ appropriate\$ initiatives\$ in\$ relation\$ to\$ its\$ own\$ remit\$ and\$ functions,\$ within\$ a\$ progressive\$ improvement\$ of\$ the\$ internal\$ control\$ and\$ risk\$ management\$ system\$ in\$ order\$ to\$ ensure\$ maximum\$efficiency\$and\$security\$of\$the\$system.\$

The\$ meetings\$ of\$ the\$ Control\$ and\$ Risks\$ Committee\$ were\$ largely\$ undertaken\$ simultaneous\$to\$the\$meetings\$of\$the\$Board\$of\$Statutory\$Auditors\$of\$the\$Issuer\$and\$in\$the\$ presence\$of\$the\$members\$of\$the\$Board\$of\$Statutory\$Auditors,\$of\$the\$Executive\$Officer\$ for\$financial\$reporting\$and\$the\$internal\$audit\$manager\$and,\$on\$occasions,\$also\$with\$the\$ participation\$of\$a\$representative\$from\$the\$independent\$audit\$firm.\$The\$presence\$of\$these\$ control\$ and\$ oversight\$ bodies\$ permitted\$ the\$ communication\$ and\$ discussion\$ of\$ the\$ principal\$aspects\$relating\$to\$the\$identification\$of\$the\$business\$risks.\$These\$bodies\$attend\$ the\$Committee\$meetings\$on\$the\$invitation\$of\$the\$Chairman.

In\$the\$carrying\$out\$of\$its\$functions,\$the\$Control\$and\$Risks\$\$Committee\$has\$full\$access\$to\$ the\$ information\$ and\$ to\$ the\$ corporate\$ functions\$ necessary\$ for\$ the\$ carrying\$ out\$ of\$ its\$ remit.

No\$ financial\$ resources\$ have\$ been\$ earmarked\$ for\$ the\$ Control\$ and\$ Risks\$ and\$ Related\$ Parties\$ Committee\$ as\$ the\$ latter\$ avails\$ itself,\$ to\$ carry\$ out\$ its\$ role,\$ of\$ the\$ Issuer's\$ corporate\$resources\$and\$structures.

11. INTERNAL\$ CONTROL\$ AND\$ RISK\$ MANAGEMENT\$ SYSTEM\$ (AS\$ PER\$ ARTICLE\$ 123OBIS, PARA. 2, LETTER\$3) OF\$THE\$CFA)

The\$Internal\$Control\$and\$Risk\$Management\$System\$is\$the\$set\$of\$rules,\$procedures\$and\$ organizational\$ structures\$ aimed\$ at\$ facilitating,\$ through\$ an\$ adequate\$ process\$ of\$ identification,\$ measurement,\$ management\$ and\$ monitoring\$ of\$ the\$ main\$ risks,\$ a\$ sound\$ and\$correct\$management\$consistent\$with\$established\$goals.

An effective internal control and risk management system contributes to ensuring the protection of corporate assets, the efficiency and effectiveness of business operations, the reliability of financial reporting and compliance with laws and regulations.

On October 7, 2015, for the purpose of filing an application for the listing of the ordinary shares of FILA on the MTA market. STAR seament, and for the subsequent delisting from the MIV market, the Board of Directors approved the adoption of the Internal Control and Risk Management System.

This system, which was fully implemented in the Reference Year, allows managers to have on a regular and timely basis a sufficient overview of the economic and financial situation of the Company and of the main companies of the FILA Group and soundly and correctly facilitates: (i) the monitoring of the main key performance indicators and risk factors that relate to the Company and to the main Group companies; (ii) the collection of data and information with particular reference to financial information, in adequate quantities for analysis according to type of business activity, organizational complexity and specificity of the information needs of management : (iii) the development of prospective financial data for the business plan and the budget, as well as for the verification of the meeting of business objectives through an analysis of variances.

The Board of Directors, which guides and evaluates the adequacy of the Internal Control and Risk Management System, in the course of 2016, following the opinion of the Control and Risks Committee:

• oversee the definition of the quidelines for the Internal Control and Risk $(i)$ Management System, so as the main risks regarding the Issuer and its subsidiaries (including the risks which may assume importance in terms of sustainability in the medium/long-term period of the activities of the Company) are correctly identified, measured, managed and monitored in line with business management consistent with the identified strategic objectives;
• $(ii)$ assessed, periodically and at least annually, the adequacy and effectiveness of the Internal Control and Risk Management System in relation to the characteristics of corporate activities:
• $(iii)$ approved the work plan drawn up by the internal audit manager, approved by the Board of Statutory Auditors and the director in charge of the internal control and risk management system (Director in charge);
• $(iv)$ described, in the Corporate Governance and Ownership Structure Report, the main features of the Internal Control and Risk Management System, expressing an evaluation of its adequacy;
• $(v)$ assessed, having consulted the Board of Statutory Auditors, the results presented by the Independent Audit Firm.

In the exercise of these functions, the Board of Directors shall be supported by the Supervisory Director and the Control and Risks Committee.

On July 22, 2015, the Board of Directors approved the guidelines of the Executive Officer for financial reporting in compliance with Law 262/05, together with the procedure for collecting the related internal representations on behalf of the companies of the FILA Group.

During\$ 2016,\$ the\$ Issuer\$ completed\$ the\$ drafting\$ and\$ formalization\$ of\$ the\$ corporate\$ procedures\$to\$ensure\$compliance\$with\$the\$relevant\$applicable\$legislation.

As\$of\$the\$date\$of\$this\$Report\$the\$Company:

• has\$obtained\$the\$following\$certifications:
• o The\$ Forest\$ Stewardship\$ Council\$ (FSC)\$ international\$ chain\$ of\$ custody\$ certification\$ for\$ processors\$ and/or\$ traders\$ of\$ forest\$ products,\$ which\$ seeks\$ to\$ ensure\$ appropriate\$ forest\$ management\$ and\$ traceability\$ of\$ derivative\$products_
• o The\$ Programmed for\$ the\$ Endorsement\$ of\$ Forest\$ Certification\$ (PEFC)\$ which\$ certifies,\$ among\$ other\$ aspects,\$the\$traceability\$ of\$ processed\$ and\$ commercialized\$ timber\$ products\$ coming\$ from\$ certified\$ forests\$ by\$ verifying\$their\$chain\$of\$custody_
• o The\$OHSAS\$18001\$certification\$which\$is\$based\$on\$voluntary\$application,\$ within\$the\$organization,\$of\$a\$system\$which\$guarantees\$adequate\$control\$ regarding\$ the\$ Security\$ and\$ Health\$ of\$ Workers,\$ as\$ well\$ as\$ compliance\$ with\$the\$regulations\$in\$force_
• has\$adopted\$the\$Ethics\$Code\$and\$the\$Organizational\$and\$Management\$Model,\$ with\$ reference\$ to\$ the\$ prevention\$ of\$ offences\$ under\$ Legislative\$ Decree\$ No.\$ 231/01,\$ on\$ appointment\$ of\$ and\$ conferment\$ of\$ the\$ powers\$ of\$ the\$ supervisory\$ board\$of\$the\$Issuer,\$in\$accordance\$with\$the\$resolutions\$passed\$by\$the\$Board of\$ Directors\$of\$the\$Issuer\$on\$July\$22,\$2015.
• completed\$the\$assessment\$on\$the\$IT\$Risk\$Management\$and\$the\$analysis\$of\$the\$ IT\$risks.

Main\$ characteristics\$ of\$ the\$ internal\$ control\$ and\$ risk\$ management\$ system\$ in\$ relation\$to\$the\$financial\$reporting\$process

One\$of\$the\$main\$elements\$of\$the\$Internal\$Control\$and\$Risk\$Management\$System\$is\$the\$ internal\$ control\$ of\$ the\$ financial\$ reporting\$ process.\$ This\$ aims\$ to\$ ensure\$ integrity,\$ accuracy,\$ reliability\$ and\$ timeliness\$ in\$ the\$ preparation\$ and\$ communication\$ of\$ financial\$ information.

During\$ the\$ Reference\$ Year,\$ the\$ internal\$ control\$ and\$ risk\$ management\$ system\$ was\$ structured\$and\$strengthened.\$This\$process\$comprised\$the\$following\$macro`elements:

• definition of\$the\$procedures\$and\$ risk\$control\$matrices\$for\$each\$business\$process\$ for\$each\$Company\$falling\$within\$the\$consolidation\$scope_
• identification\$ of\$ corrective\$ actions,\$ followups\$ and\$ reporting\$ definition\$ and\$ sharing\$ of\$ corrective\$ actions\$with\$the\$management,\$ assessment\$ of\$the\$ effective\$ implementation\$ of\$ the\$ same,\$ preparation\$ of\$ reports\$ to\$ the\$ Executive\$ Officer for\$ financial\$reporting\$and\$for\$the\$supervisory\$and\$control\$bodies_
• updating\$ of\$ Model\$ 262\$ and\$ related\$ documentation,\$ on\$ the\$ basis\$ of\$ corporate,\$ organizational\$and\$procedural\$changes\$made.

The\$methodology\$followed\$for\$designing\$and\$for\$carrying\$out\$checks\$concerning\$Model\$ 262\$ were\$ aligned\$ with\$ best\$ international\$ practice\$ and\$ ensured\$ full\$ traceability\$ in\$ its\$ implementation.

With\$ reference\$ to\$ the\$ identification\$ and\$ assessment\$ of\$ financial\$ reporting\$ risks,\$ the\$ Issuer\$carried\$out\$its\$analyses\$and\$audit\$activities\$on\$subsidiaries\$with\$levels\$of\$revenue\$ and\$balance\$sheet\$assets\$in\$excess\$of\$a\$threshold\$of\$predefined\$materiality,\$as\$well\$as\$ on\$the\$management\$of intercompany\$transactions.\$Following\$qualitative\$considerations,\$ routine\$ analyzes\$ and\$ audits\$ are\$ performed\$ also\$ on\$ other\$ subsidiaries,\$ regardless\$ of\$ their\$quantitative\$contribution\$to\$the\$consolidated\$financial\$statements.

The\$ risks,\$ measured\$ and\$ evaluated\$ according\$ to\$ best\$ practices\$ in\$ the\$ field\$ of\$ international\$ risk\$ assessment,\$ cover\$ the\$ operational\$ processes\$ relating\$ to\$ general\$ accounting\$entries\$and\$the\$estimates\$and\$financial\$statement\$declarations,\$with\$a\$view\$ to\$prevent\$errors\$of\$accuracy\$and\$completeness\$and\$to\$prevent\$fraud.\$The\$assessment\$ of\$ the\$ 'inherency'\$ of\$ the\$ risks\$ is\$ qualitative\$ and\$ is\$ performed\$ both\$ with\$ regard\$ to\$ the\$ materiality\$and\$the\$nature\$of\$the\$accounting\$entries\$and\$with\$regard\$to\$the\$frequency\$of\$ the\$operational\$processes.

In\$relation\$to\$the\$identification\$and\$the\$assessment\$of\$controls\$for\$identified\$risks,\$Model\$ 262\$considers\$preventive,\$investigative\$and\$second\$level\$controls\$on\$processes\$relating\$ to\$ accounting\$ entries\$ and\$ on\$ the\$ estimates.\$ The\$ assessment\$ of\$ the\$ adequacy\$ and\$ effectiveness\$of\$controls\$to\$mitigate\$risks\$were\$qualitative,\$based\$on\$the\$outcome\$of\$the\$ checks\$carried\$out\$in\$the\$course\$of\$Model\$262\$monitoring\$activities.

The\$ monitoring\$ activities\$ were\$ concentrated\$ on\$ the\$ operational\$ processes\$ relating\$ to\$ the\$ material\$ accounting\$ items,\$ which\$ are\$ identified\$ annually\$ via\$ a\$ preliminary\$ scope\$ analysis.\$In\$addition,\$ad`hoc\$checks\$were\$carried\$out\$on\$activities\$relating\$to\$accounts\$ closures\$ and\$ consolidation\$ entries,\$ which\$ the\$ Company\$ allocated\$ in\$ terms\$ of\$ responsibilities\$and\$authorized\$via\$a\$dedicated\$computer\$program\$in\$order\$to\$guarantee\$ completeness\$and\$accuracy\$of\$information.

The\$ Executive\$ Officer\$ and\$ the\$ Internal\$ Audit\$ Manager\$ reported\$ periodically\$ to\$ the\$ Control\$and\$Risks\$Committee,\$the\$Board\$of\$Statutory\$Auditors\$and\$to the\$Supervisory\$ Director\$and,\$to\$the\$extent\$of\$its\$competence,\$to\$the\$Supervisory\$Board\$concerning\$the\$ management\$ of\$ Model\$ 262,\$ expressing\$ an\$ assessment\$ of\$ the\$ adequacy\$ of\$ the\$ administrative\$ and\$ accounting\$ control\$ system\$ and\$ corrective\$ actions\$ to\$ be\$ implemented.

On\$March\$21,\$2017,\$the\$Board\$of\$Directors\$approved\$the\$changes\$to\$the\$internal\$control\$ and\$risks\$management\$system\$in\$relation\$to\$the\$requirements\$of\$the\$business,\$as\$well\$ as\$ its\$ efficiency,\$ based\$ on\$the\$ periodic\$ report\$ received\$from\$the\$Director\$ in\$ charge\$ of\$ the\$ Internal\$ Control\$ and\$ Risks\$ Management\$ System,\$ of\$ the\$ Control\$ and\$ Risks\$ Committee,\$of\$the\$internal\$audit\$manager,\$of\$the\$Supervisory\$Board\$and\$of\$the\$Board\$of\$ Statutory\$Auditors.\$

11.1 \$\$EXECUTIVE\$ DIRECTOR\$ IN\$ CHARGE\$ OF THE\$ INTERNAL\$ CONTROL AND\$ RISK\$ MANAGEMENT\$SYSTEM

As\$part\$of\$the\$process\$of\$the\$structuring\$and\$strengthening\$of\$the\$Internal\$Control\$and\$ Risk\$ Management\$ System,\$ the\$ Board\$ of\$ Directors\$ appointed\$ on\$ July\$ 22,\$ 2015\$ Luca\$ Pelosin\$ as\$ Director in\$ charge for\$ the\$ establishment\$ and\$ maintenance\$ of\$ an\$ effective\$ Internal\$Control\$and\$Risk\$Management\$System.

The risk assessment activity undertaken in the Reference Year by the Director in charge together with the internal audit manager identified the principal risks relating to the main business processes of the Group, taking into account the activities undertaken by the Company. These risks were brought to the attention of the Board, through the periodic reports prepared by the internal audit department.

Based on the results of the risk assessment activities the overall procedural framework was updated and appropriate changes made to the internal control system ensuring overall compliance with legislative and regulatory reguirements and an efficient and effective system in line with operating conditions.

During the meeting of March 16, 2017, the Board of Directors of the Company, with the support of the Director in charge and the internal audit manager, and after consultation with the Board of Statutory Auditors, approved the new risk assessment and, based on the results of this activity, the 2017 audit plan.

11.2 INTERNAL AUDIT MANAGER

Following admission of the shares of the Company to trading on the STAR segment, the Issuer's Board of Directors, by motion of November 13, 2015, with the favorable opinion of the Control and Risks Committee and the Board of Statutory Auditors. resolved to implement a general inspection of the internal control structure and functionality of FILA and, therefore, to establish the Internal Audit function, outsourcing the Key Advisory to Massimiliano Rigo as the Internal Audit Manager.

During the Reference Year, the internal audit manager:

• prepared the audit plan which was presented to the Board of Directors meeting of February 2, 2016, with prior review by the Control and Risks Committee and the Director Appointed:
• prepared and carried out, in line with the audit plan, direct and specific control activities within the Issuer and of the most significant Group companies, in order to uncover any deficiencies in the Internal Control and Risk Management System in the various risk areas:
• verified, on an ongoing basis and in relation to specific needs and in compliance with international standards, the operation and suitability of the Internal Control and Risks Management System:
• verified in the audit plan the reliability of the IT accounting systems, including accounting systems;
• prepared periodic reports containing sufficient information on activities, on the manner in which risk management is carried out, as well as compliance with the plans for their containment, for the purposes of the appropriateness of the internal control and risk management system:
• sent the reports at the points above to the Director in charge of the Internal Control and Risk Management System, to the Chairman of the Board of the Statutory Auditors, the Chairman of the Control and Risks Committee and, where required in relation to events subject to review, the Chairman of the Board of Directors, in addition to the Supervisory Board.

In\$ particular,\$ the\$ internal\$ audit\$ manager,\$ during\$ the\$ Reference\$ Year,\$ carried\$ out\$ the\$ verifications\$on\$the\$internal\$control\$and\$risk\$management\$system,\$in\$line\$with\$the\$audit\$ plan\$and\$undertaking\$the\$follow\$up\$activities\$(in\$particular\$with\$reference\$of\$the\$controls\$ in\$compliance\$with\$the\$provisions\$of\$Law\$262/2005\$and\$Legislative\$Decree\$231/2001).

In\$addition,\$during\$the\$Reference\$Year,\$the\$results\$of\$the\$audit\$activities\$were\$analyzed,\$ discussed\$ and\$ shared,\$ between\$ the\$ internal\$ audit\$ department,\$ the\$ head\$ of\$ the\$ processes/departments\$involved\$from\$time\$to\$time\$and\$management\$of\$the\$company\$in\$ order\$to\$ agree\$ upon\$ and\$ undertake\$ appropriate\$ preventative/corrective\$ action,\$ whose\$ realization was\$ constantly\$monitored\$until\$their\$ complete\$execution.\$The\$internal\$audit\$ manager\$ presented\$ his\$ report\$ on\$ a\$ quarterly basis\$ to\$ the\$ Director\$ in\$ charge,\$ to\$ the\$ Chairman\$ of\$ the\$ Board\$ of\$ Directors,\$ to\$ the\$ Chairman\$ of\$ the\$ Control\$ and\$ Risks\$ Committee,\$ to\$ the\$ Chairman\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors,\$ as\$ well\$ as\$ the\$ Supervisory\$ Board\$ and\$ the\$ Executive\$ Officer\$ for\$ financial\$ reporting\$ in\$ relation\$ to\$ the\$ issues\$concerning\$them.

The\$ Internal\$ Audit\$ manager,\$ in\$ the\$ undertaking\$ of\$ his\$ activities,\$ had\$ access\$ to\$ all\$ information\$for\$the\$execution\$of\$his\$duties.

The\$ remuneration\$ of\$ the\$ internal\$ audit\$ manager\$ was\$ determined\$ in\$ accordance\$ with\$ company\$ policies.\$ The\$ Board\$ ensures\$ that\$ the\$ internal\$ audit\$ manager\$ has\$ adequate\$ resources\$for\$the\$undertaking\$of\$his\$duties.

On\$March\$16,\$2017,\$the\$Issuer's\$Board\$of\$Directors\$approved\$the\$Audit\$Plan\$for\$2017.

11.3 ORGANIZATIONAL\$MODEL\$AS\$PER LEGISLATIVE\$DECREE 231 OF\$2001

The\$Issuer's\$Board\$of\$Directors,\$at\$its\$meeting\$of\$July\$22,\$2015,\$ resolved\$to\$adopt\$for\$ the\$ purposes\$ and\$ effects\$ of\$ Legislative\$ Decree\$ No.\$ 231/01\$ the\$ Organizational,\$ Management\$ and\$ Control\$ Model\$ comprising\$ the\$ Ethics\$ Code,\$ the\$ General\$ Part,\$ the\$ Special\$Parts\$and\$the\$Governance\$System.

The\$ Model\$ provides\$ for\$ policies\$ and\$ measures\$ to\$ guarantee\$ the\$ performance\$ of\$ activities\$in\$accordance\$with\$law\$and\$to\$identify\$and\$eliminate\$situations\$of\$risk,\$as\$well\$ as\$for\$a\$ system\$of\$prevention\$designed\$to\$mitigate\$offence\$ risk\$that\$is\$ consistent\$with\$ the\$organizational\$structure\$and\$with\$best\$practice.\$

This\$consists\$of\$a\$General\$Part\$and\$nine\$Special\$Parts.

In\$particular,\$the\$Special\$Parts\$ clarify\$the\$nature\$and\$the\$possible\$ways\$of\$ committing\$ the\$ types\$ of\$ Relevant\$ Offenses\$ identified\$ in\$ the\$ Risk\$ areas,\$ as\$ well\$ as\$ the\$ specific\$ organizational\$controls\$implemented\$to\$prevent\$their\$commission.

Forming\$an\$integral\$part\$of\$the\$Model\$are\$the\$following\$documents\$attached\$thereto:\$(i)\$ the\$ Supervisory\$ Board\$ Regulation_\$ (Ii)\$ the\$ Governance\$ System\$ and\$ (iii)\$ the\$ Ethics\$ Code.\$

The\$ Ethics\$ Code\$ is\$ an\$ integral\$ part\$ of\$ the\$ Model.\$ It\$ sets\$ ethical\$ principles\$ and\$ prescriptive\$ rules\$ of\$ conduct\$ for\$ employees\$ and\$ other\$ recipients,\$ contributing\$ to\$ establish\$ an\$ appropriate\$ control\$ environment\$ to\$ ensure\$ that\$ the\$ Issuer's\$ activity\$ is\$ always\$based\$on\$the\$principles\$of\$fairness\$and\$transparency\$and\$to\$reduce\$the\$risk\$of\$ the\$offenses\$covered\$under\$Legislative\$Decree\$No.\$231/2001.

The\$requirement\$for\$exemption\$from\$administrative\$liability\$has\$led\$to\$the\$establishment\$ of\$ a\$ Supervisory\$ Board\$ within\$ the\$ Issuer,\$ which\$ has\$ independent\$ powers\$ of\$ initiative\$ and\$ control,\$ with\$ the\$ task\$ of\$ (i)\$ monitoring\$ the\$ effectiveness\$ of\$ the\$ model,\$ which\$ is\$ embodied\$ in\$ the\$ verification\$ of\$ consistency\$ between\$ actual\$ conduct\$ and\$ the\$ model\$ established_\$(ii)\$conducting\$the\$examination\$of\$the\$adequacy\$of\$the\$model,\$or\$rather\$its\$ real\$capacity\$to\$prevent,\$in\$principle,\$undesirable\$conduct_\$(iii)\$carrying\$out\$an\$analysis\$ of\$ the\$ maintenance\$ over\$ time\$ of\$ the\$ soundness\$ and\$ functionality\$ of\$ the\$ Model_\$ (iv)\$ ensuring\$ the\$ necessary\$ dynamic\$ update\$ of\$ the\$ Model,\$ through\$ the\$ formulation\$ of\$ specific\$ suggestions,\$ in\$ the\$ event\$ that\$ analyses\$ performed\$ require\$ corrections\$ and\$ adjustments_\$ (v)\$ carrying\$ out\$ the\$ socalled\$ "followup",\$ or\$ rather\$ verifying\$ the\$ implementation\$and\$the\$functionality\$of\$the\$solutions\$proposed.

The\$Supervisory\$Board,\$ in\$ office\$ until\$ approval\$ of\$the\$ 2017\$financial\$ statements,\$ was\$ appointed\$by\$the\$Board\$of\$Directors\$of\$July\$22,\$2015,\$and\$consists\$of\$three\$members,\$in\$ the\$persons\$of:\$Rosario\$Salonia,\$as\$external\$member\$and\$Chairman_\$Patrizio\$La\$Rocca,\$ as\$ external\$ member_\$ and\$ Massimiliano\$ Rigo,\$ as\$ external\$ member\$ and\$ Internal\$ Audit\$ Manager\$of\$the\$Issuer.

On\$ March\$ 21,\$ 2017,\$ Mr.\$ Rigo,\$ as\$ a\$ member\$ of\$ the\$ Supervisory\$ Board,\$ presented\$ a\$ report\$to\$the\$Board\$of\$Directors\$on\$the\$controls\$and\$checks\$performed\$in\$the\$Reference\$ Year\$and\$their\$outcome.

The\$Supervisory\$Board,\$during\$the\$Reference\$Year,\$met\$5\$times,\$in\$addition\$to\$holding\$ meetings\$for\$training\$purposes.

The\$offenses\$covered\$by\$the\$Issuer's\$model\$are\$in\$line\$with\$current\$law.

The\$Model\$introduces\$an\$adequate\$system\$and\$sanctioning\$mechanisms\$for\$conduct\$in\$ violation.

The\$Ethics\$Code\$is\$available\$in\$the\$Governance section\$of\$the\$website\$of\$the\$Issuer\$at\$ www.filagroup.it.

11.4 INDEPENDENT\$AUDIT\$FIRM\$

On\$ February\$ 20,\$ 2015,\$ the\$ Shareholders'\$ Meeting\$ of\$ Space,\$ inter' alia:\$ (i)\$ approved,\$ pursuant\$to\$Article\$13\$of\$Legislative\$Decree\$No,\$39/2010\$and\$Article\$7\$of\$the\$Regulation\$ adopted\$ with\$ Ministerial\$ Decree\$ No.\$ 261/2012,\$ the\$ mutual\$ resolution\$ of\$ the\$ audit\$ appointment conferred\$ to\$ Reconta\$ Ernst&Young\$ with\$ motion\$ of\$ October\$ 9,\$ 2013,\$ following\$ signing\$ of\$ a\$ private\$ agreement\$ in\$ relation\$ to\$ the\$ resolution\$ of\$ the\$ audit\$ appointment\$ by\$ Space\$ and\$ Reconta\$ Ernst&Young_\$ and\$ (ii)\$ simultaneous\$ conferred\$ a\$ new\$audit\$appointment\$to\$KPMG\$for\$a\$period\$of\$9\$years\$(from\$2015\$to\$2023)\$pursuant\$ to\$Article\$ 13\$ of\$ Legislative\$Decree\$No.\$ 39/2010,\$with\$ effect\$from\$the\$Effective\$Merger\$ Date.

Therefore,\$from\$the\$Effective\$Merger\$Date,\$the\$statutory\$audit\$is\$undertaken\$by\$KPMG\$ S.p.A.\$for\$the\$years\$2015`2023.

11.5 EXECTIVE\$OFFICER\$FOR\$FINANCIAL REPORTING

In\$ accordance\$ with\$ Article\$ 16\$ of\$ the\$ Bylaws,\$ the\$ Board\$ of\$ Directors\$ appoints,\$ upon\$ obligatory\$ approval\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors,\$ the\$ Executive\$ Officer\$ for\$ financial\$reporting\$pursuant\$to\$Article\$154bis'of\$the\$CFA,\$providing\$him\$with\$adequate\$ means\$and\$powers\$to\$carry\$out\$the\$role.

On June 4, 2015, the Board of Directors of the Issuer appointed, with prior approval of the Board of Statutory Auditors, Mr. Stefano De Rosa (employee of the Issuer and Chief Financial Officer of the FILA Group) as the Executive Officer for financial reporting pursuant to Article 154-bis the CFA, confirming his appointment on July 22. 2015.

The Executive Officer for financial reporting must be of a professional standard such as to have qualified experience of at least three years in the exercise of administration and control activities, or in executive or consultancy functions, with listed companies and/or relative groups of companies, or companies, entities and enterprises of large and significant size, including the preparation and control of accounting and corporate documents. The Executive Officer for financial reporting must also hold the good standing requisites required for statutory auditors in accordance with legal provisions.

The Executive Officer also has the primary duty to design, manage and monitor the processes concerning, in particular, administrative-accounting information flows, including automatic data processing and accounting recording systems, also to provide - in the legally and regulatory reguired forms - the declarations on their adequacy and effective application.

The Executive Officer is also required to identify and assess the financial disclosure risks, identify and implement the required controls to mitigate the possibility that these risks occur and monitor and assess the effectiveness of the controls within a risk management and internal control system, in relation to the financial disclosure process, which is adequate and functioning.

The Executive Officer is provided with all the necessary powers and means for the execution of his duties.

The Executive Officer, together with the Chief Executive Officer, has the duty to provide instructions also to the subsidiaries belonging to the Group, to ensure adoption of all provisions, administrative and accounting procedures and all other acts and measures necessary for the correct drafting of the consolidated financial statements, in addition to all measures communicated by the Executive Officer in accordance with Law No. 262/05 and Legislative Decree No. 303/06, which ensure the maximum reliability of information flows to the Executive Officer concerning the preparation of the financial statements.

11.6 COORDINATION OF THE PARTIES INVOLVED IN THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

The coordination procedures put in place by the Issuer between the different parties involved in the internal control and risk management system will guarantee an efficient and effective coordination and sharing of information between the bodies involved. In particular:

• (i) the\$ internal\$ audit\$ manager\$ Mr.\$ Massimiliano\$ Rigo\$ must\$ maintain\$ periodic\$ communication\$with\$the\$corporate\$boards\$and\$supervisory\$or\$oversight\$functions\$ of\$ the\$ internal\$ control\$ and\$ risk\$ management\$ system,\$ such\$ as\$ the\$ Executive\$ Officer\$ for\$ financial\$ reporting,\$ the\$ Supervisory\$ Board\$ pursuant\$ to\$ Legislative\$ Decree\$231/01\$(of\$which\$Mr.\$Rigo\$is\$a\$member)\$and\$the\$Audit\$Firm,\$each\$within\$ their\$own\$remit\$and\$responsibility_
• (ii) the\$ participation\$ of\$ the\$ Internal\$ Audit\$ Manager\$ at\$ the\$ meetings\$ of\$ the\$ Supervisory\$ Board\$ and\$ the\$ Control\$ and\$ Risks\$ Committee\$ permits\$ the\$ Internal\$ Audit\$ department\$to\$maintain\$ adequate\$ visibility\$ over\$the\$ business\$ risks\$ within\$ the\$FILA\$Group\$and\$of\$problems\$arising\$and\$to\$bring\$them\$to the\$attention\$to\$the\$ different\$supervisory\$and\$oversight\$functions_
• (iii) the\$ Board\$ of\$ Statutory\$ Auditors\$ maintains\$ periodic\$ communication\$ with\$ the\$ Board\$of\$Directors\$and\$the\$Control\$and\$Risks\$Committee.\$In\$particular,\$at\$least\$ one\$ member\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditor\$ participates\$ at\$ the\$ meetings\$ of\$ the\$Control\$and\$Risks\$Committee_
• (iv) the\$ members\$ of\$ the\$ Supervisory\$ Board\$ other\$ than\$ Mr.\$ Rigo\$ may\$ attend,\$ on\$ invitation,\$ the\$ meetings\$ of\$ the\$ Board\$ of\$ Directors\$ and\$ the\$ Control\$ and\$ Risks\$ Committee,\$reporting\$half`yearly\$on\$the\$activities undertaken_\$
• (v) the\$ Audit\$ Firm\$ participates,\$ on\$ invitation,\$ at\$ the\$ meetings\$ of\$ the\$ Control\$ and\$ Risks\$ Committee\$ in\$ order\$ to\$ remain\$ updated\$ on\$ the\$ activities\$ and\$ on\$ the\$ resolutions\$of\$the\$Committee,\$as\$well\$as\$to\$report\$upon\$the\$planning\$and\$results\$ of\$the\$audit\$activities.\$

12. DIRECTORS\$INTERETS\$AND\$TRANSACTTIONS\$WITH\$RELATE\$PARTIES

12.1 RELATED\$PARTIES\$COMMITTEE\$

12.1.1 Composition'and'Operation'(as'per'Article'123Ibis,'paragraph'2,'letter''d)'

of'the'CFA)

The\$Related\$Parties\$Committee\$was\$set\$up\$with\$Board\$of\$Directors\$motion\$of\$July\$22,\$ 2015.

The\$Related\$Parties\$Committee\$is\$composed\$of\$3\$non`executive\$directors,\$the\$majority\$ of\$whom\$are\$independent\$directors.

NAME\$	OFFICE
Gerolamo\$Caccia\$Dominioni\$(Chairman)	Independent\$Director\$
Sergio\$Ravagli	Independent\$Director\$
Fabio\$Zucchetti	Non`Independent\$Director

During\$ the\$ Reference\$ Year,\$ the\$ Related\$ Parties\$ Committee\$ undertook\$ their\$ duties\$ in\$ accordance\$with\$the\$Procedures\$for\$Transactions\$with\$Related\$Parties.

The\$meetings\$ of\$the\$ Related\$ Parties\$ Committee\$ are\$ coordinated\$ by\$ its\$ Chairman\$ and\$minutes\$of\$the\$meetings\$are\$kept.\$The\$Chairman\$regularly\$provided\$information\$ on\$the\$meetings\$held\$by\$the\$Committee\$in\$the\$next\$Board\$of\$Directors\$meeting.\$The\$ Chairman\$of\$the\$Board\$of\$Directors\$of\$the\$company\$also\$attends\$these\$meetings.

At\$ least\$ one\$ member\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ attended\$ the\$ Remuneration\$ Committee\$meeting.

During\$ the\$ Reference\$ Year,\$ the\$ Related\$ Parties\$ Committee\$ met\$ 8\$ \$ times\$ on\$ the\$ following\$ dates:\$ January\$ 20,\$ 2016,\$March\$ 10,\$2016,\$March\$ 21,\$ 2016,\$ April\$ 14,\$ 2016,\$ May\$10,\$2016,\$June\$5,\$2016,\$July\$5,\$2016,\$November\$8,\$2016\$and\$November\$11,\$2016.\$ The\$ Chairman\$ of\$ the\$ Board\$ of\$ Directors\$ of\$ the\$ company\$ has\$ always\$ attended\$ these\$ meetings.

The\$duration\$of\$the\$Related\$Parties\$Committee\$meetings\$was\$approximately\$1\$hour.

In\$ the\$ Reference\$ Year,\$ the\$ average\$ presence\$ of\$ the\$ Directors\$ at\$ the\$ meetings\$ was\$ 100%\$for\$all\$members.

During\$ 2017,\$the\$ Related\$Parties\$ Committee\$ has\$ already\$ held\$ 3\$meetings\$ on\$the\$ following\$dates:\$January\$25,\$2017,\$March 16,\$2017\$and\$March\$21,\$2017.\$Another\$4\$ Committee\$meetings\$are\$scheduled\$for\$the\$year.

12.1.2 Functions'and'activities'of'the'Related'Parties'Committee

During\$ the\$ Reference\$ Year,\$ the\$ Related\$ Parties\$ Committee\$ undertook\$ their\$ duties\$ in\$ accordance\$with\$the\$Procedures\$for\$Transactions\$with\$Related\$Parties.\$In\$particular,\$the\$ Committee\$for\$Transactions\$with\$Related\$Parties,\$in\$the\$undertaking\$of\$their\$duties:

• (i) reviewed\$all\$the\$operations\$and\$transactions\$with\$related\$parties_
• (ii) expressed\$ their\$ opinion\$ on\$ the\$ completion\$ of\$ transactions\$ with\$ related\$ parties,\$ including\$the\$remuneration\$of\$the\$Executive\$Directors.\$\$

12.2 PROCEDURE\$FOR\$TRANSACTIONS\$WITH\$RELATED\$PARTIES

The\$ Issuer\$ applied\$ the\$ Procedure\$ for\$ Transactions\$ with\$ Related\$ Parties,\$ ensuring\$ transparency\$and\$substantial\$and\$procedural\$correctness.

The\$ procedure\$ governs\$ the\$ undertaking\$ of\$ transactions\$ directly\$ by\$ the\$ company,\$ or\$ through\$ subsidiary\$ companies,\$ with\$ counterparties\$ defined\$ as\$ related\$ parties.\$ In\$ accordance\$with\$the\$Procedures\$for\$Transaction\$with\$Related\$Parties\$a "Related\$Party"\$ is\$a\$party\$that:

• (a) directly\$or\$indirectly,\$also\$through\$Subsidiaries,\$trustees\$or\$nominees:\$\$
• (1) controls'the'Company,'or'is'controlled'by'it,'or'subject'to'common' "Control"K
• (2) has'an'interest'in'the'Company'such'as'to'exercise'"Significant'Influence"' on'this'latterK
• (3) exercises'Joint'Control'on'the'CompanyK'

• (b) is\$an\$"Associated\$Company"\$of\$the\$Company_

• (c) is\$a\$"Joint\$Venture"\$in\$which\$the\$Company\$has\$a\$holding_

• (d) is\$a\$"Senior\$Executive"\$of\$the\$Company\$or\$its\$"Parent"_
• (e) is\$a\$"Connected\$Family\$Member"\$of\$a\$party\$at\$the\$preceding\$letters\$(a)\$or\$(d)_
• (f) is\$ an\$ entity\$ in\$ which\$ one\$ of\$ the\$ parties\$ at\$ (d)\$ or\$ (e)\$ exercises\$ "Control",\$ "Joint\$ Control"\$ or\$ "Significant\$ Influence"\$ or\$ holds,\$ directly\$ or\$ indirectly,\$ a\$ significant\$ holding\$– in\$any\$case\$not\$less\$than\$20%\$of\$the\$voting\$rights_
• (g) is\$ a\$ supplementary,\$ collective\$ or\$ individual\$ pension\$ fund,\$ Italian\$ or\$ overseas,\$ created\$on\$behalf\$of\$Company\$employees,\$or\$any\$other\$related\$entity.

The\$ Procedure\$ for\$ Transactions\$ with\$ Related\$ Parties\$ defines\$ "Transactions\$ \$ with\$ Related\$Parties"\$as\$any\$transfer\$of\$resources,\$services\$or\$obligations\$between\$Related\$ Parties,\$ regardless\$of\$whether\$a\$price\$is\$charged.\$This\$includes:\$(i) mergers,\$spinoffs\$ for\$incorporation\$or\$nonproportional\$spin`offs,\$where\$carried\$out\$with\$Related\$Parties_\$ (ii) all\$ decisions\$ relating\$to\$the\$ allocation\$ of\$ remuneration\$ or\$ benefits,\$ in\$ any\$form,\$to\$ members\$of\$the\$corporate\$boards\$and\$"Senior\$Executives".

The\$Procedures\$distinguishes\$between\$"Minor\$Transactions",\$"Significant\$Transactions"\$ and\$"Less\$Significant\$Transactions"\$as\$follows:\$

• Minor\$ Transactions:\$ Transactions\$ with\$ Related\$ Parties\$ expected\$ to\$ result\$ in\$ maximum\$ consideration\$ or\$ an\$ expected\$ maximum\$ value\$ of\$ not\$ greater\$ than,\$ for\$ each\$ transaction,\$ Euro\$ 200,000,\$ also\$ in\$ the\$ case\$ of\$ Transactions\$ with\$ Related\$ Parties\$ of\$ a\$ similar\$ nature\$ with\$ the\$ same\$ party\$ or\$ within\$ a\$ series\$ of\$ similar\$ transactions,\$considered\$cumulatively.
• Significant\$Transactions:\$those\$transactions\$where\$one\$or\$more\$of\$the\$significance\$ thresholds\$ (value\$ of\$ the\$ transaction,\$ assets,\$ liabilities),\$ applicable\$ depending\$ on\$ the\$specific\$transaction,\$exceeds\$5%.
• Less\$ Significant\$ Transactions:\$ Transactions\$ with\$ Related\$ Parties\$ other\$ than\$ Significant\$Transactions\$and\$Minor\$Transactions.\$
• Ordinary\$ Transactions:\$ Transactions\$ with\$ Related\$ Parties\$ which:\$ (a)\$ take\$ place\$ within\$the\$ordinary\$operations\$of\$the\$company\$or\$the\$related\$financial\$activities_\$and\$ (b)\$are\$concluded\$at\$conditions\$which\$are:\$(i)\$in\$line\$with\$those\$usually\$undertaken\$ with\$unrelated\$parties\$for\$transactions\$of\$a\$similar\$nature,\$size and\$ risk,\$ (ii)\$based\$ on\$regulated\$tariffs\$or\$prices,\$or\$(iii)\$corresponding\$to\$those\$undertaken\$with\$parties\$ with\$which\$the\$company\$is\$obliged\$by\$law\$to\$contract\$at\$a\$set\$price.\$

As\$general\$principles,\$the\$Procedure\$for\$Transactions\$with\$Related Parties\$establishes:

• (a) the\$provisions\$of\$the\$Related\$Parties\$Regulation\$and\$the\$Procedures\$do\$not\$apply to\$Minor\$Transactions_

• (b) subject\$ to\$ Article\$ 5,\$ paragraph\$ 8,\$ of\$ the\$ provisions\$ of\$ the\$ Related\$ Parties\$ Regulation,\$the\$provisions\$of\$the\$Related\$Parties\$Regulation\$and the\$Procedures\$ do\$not\$apply:

• to Ordinary Transactions: $(i)$

• to Transactions with Related Parties with or between "Subsidiary $(ii)$ Companies", also jointly, in addition to those with "Associated Companies", as long as the other Related Parties of the Company do not hold "Significant Interests" in the Subsidiary Companies or the Associated Companies involved in the transaction;
• to financial instrument-based remuneration plans approved by the $(iii)$ Shareholders' Meeting pursuant to Article 114-bis of the CFA and the relative executory operations;
• $(iv)$ to the motions of the Board of Directors concerning the remuneration of directors holding specific offices - other than those motions undertaken in accordance with Article 2389, paragraph 3 of the Civil Code - in addition to Senior Executives, on the condition that:
• the Company has adopted a remuneration policy; $(i)$
• the remuneration policy was drawn up by a committee exclusively $(ii)$ made up of non-executive directors, the majority of whom "Independent Directors":
• the remuneration policy report was put to the consultative vote of the $(iii)$ Shareholders' Meeting;
• (iv) the remuneration awarded was in line with this policy.

With specific reference to the procedures for the individual categories of Transactions with Related Parties:

in relation to the Significant Transactions, the Procedure provide, among other $(a)$ matters, that: (i) the Board of Directors exclusively approves these transactions; (ii) the Chief Executive Officer ensures the involvement in the negotiation phase and in the preliminary phase of a Committee composed of at least 3 "Independent and Non-Related Directors". which may coincide with the Control and Risks Committee: (iii) the Board of Directors deliberates upon the transaction with prior favourable opinion of the above-mentioned Committee, or with the favourable vote of the majority of the "Independent Directors" and with the possibility of the Board of Directors to approve the Significant Transactions, even in the presence of a contrary opinion of the majority of the "Independent Directors", on the condition that the transaction is authorized by the Shareholders' Meeting and provided that, where the "Non-Related Shareholders" represent more than 10% of the voting share capital, a majority of such do not vote against; (iv) where on the Board of Directors there are not at least 3 "Independent and Non-Related Directors" the activities at point (ii) and the opinion of the previous point (iii) are respectively undertaken by the Board of Statutory Auditors, by an independent expert or by the "Independent Non-Related Director" present.

In relation to the Less Significant Transactions, the Procedure provides that the $(b)$ Board of Directors and the executive bodies approve these transactions with prior reasoned and non-binding opinion of a Committee composed of at least 3 "Non-Related Directors" and non-executive, the majority of whom "Independent Directors" (and which may coincide with the Control and Risks Committee), or, where the Board of Directors does not have at least 2 "Independent and Non-Related Directors", by the Board of Statutory Auditors, by an independent expert or by the "Non-Related Independent Director" where present.

The main provisions of the Procedure in relation to the approval processes, provide, in addition, for the following: (i) the above-mentioned committee and relevant body to approve the transaction must be provided with adequate and complete information prior to the Transaction with Related Parties; (ii) the information provided must allow both this committee or the relevant body to resolve upon the transaction and to undertake a detailed and documented review, in the preliminary and approval phases, of the reasons for the transaction, as well as the benefit and substantial correctness of its conditions; the documentation provided must contain objective evidence where the conditions of the Transaction with Related Parties are defined as equivalent to market or standard conditions: (iii) the Transaction with Related Parties is approved by the relevant body only after the provision of a reasoned opinion by the committee, outlining the interest of the Company in undertaking the transaction, as well as the benefit and substantial correctness of the conditions of the transaction; (iv) the committee appointed has the right to be assisted, at the expense of the Company, by one or more independent experts of its choice; (v) the executive bodies provide complete disclosure, at least quarterly, to the Board of Directors and to the Board of Statutory Auditors on the execution of the Transactions with Related Parties; (vi) the minutes of the resolutions approving the transactions include adequate details on the interest of the Company to undertake the transaction, as well as the benefit and substantial correctness of the relative conditions.

In addition the Procedure contains specific provisions: (i) on obligatory market disclosure relating to the Transactions with Related Parties to be undertaken and/or realized; (ii) governing the approval of Transactions with Related Parties to be considered by the Shareholders' Meeting; (iii) the adoption of framework resolutions which permit the approval of a series of Transactions with Related Parties of a similar nature to be undertaken with the same Related Parties or certain categories of Related Parties.

The\$ Board\$ of\$ Directors\$ of\$ March\$ 21,\$ 2017,\$ with\$ prior\$ favourable\$ opinion\$ of\$ the\$ Committee\$ for\$ Transactions\$ with\$ Related\$ Parties,\$ approved\$ a\$ new\$ version\$ for\$ the\$ Procedure\$for\$Transactions\$with\$Related\$Parties\$which\$ reflects\$the\$modifications\$made\$ to\$ the\$ definition\$ of\$ "senior\$ management",\$ in\$ order\$ to\$ include\$ in\$ this\$ category\$ also\$ executives\$of\$subsidiaries\$of\$FILA,\$in\$addition\$to\$some\$modifications\$of\$the\$Transactions\$ with\$ Related\$ Parties\$ which\$ may\$ benefit\$ from\$ the\$ absence\$ from\$ the\$ application\$ of\$ the\$ regulations\$ of\$ the\$ Procedure\$ for\$ Transactions\$ with\$ Related\$ Parties,\$ in\$ line\$ with\$ the\$ Procedure\$for\$the\$Related\$Parties\$Regulation.

The\$Procedures\$for\$the\$Transactions\$with\$Related\$Parties\$and\$the\$ related\$attachments\$ are\$ available\$ on\$ the\$ website\$ of\$ the\$ Issuer\$ on\$ the\$ website\$ www.filagroup.it,\$ in\$ the\$ Governance\$section.

13. APPOINTMENT\$OF\$STATUTORY\$AUDITORS\$

In\$ accordance\$ with\$ Article\$ 17\$ of\$ the\$ By`Laws,\$ the\$ Board\$ of\$ Statutory\$ \$ Auditors\$ comprises\$ three\$ standing\$ members\$ and\$ two\$ alternate\$ members,\$ appointed\$ by\$ the\$ Shareholders'\$Meeting,\$based\$on\$slates\$presented\$by\$the\$shareholders.

As\$per\$Article\$17\$of\$the\$By`Laws,\$shareholders\$may\$present\$a\$slate\$for\$the\$appointment\$ of\$statutory\$auditors\$who,\$alone\$or\$together\$with\$other\$presenting\$shareholders,\$hold\$a\$ percentage\$ in\$ the\$ share\$ capital\$ at\$ least\$ equal\$ to\$ that\$ determined\$ by\$ Consob\$ in\$ accordance\$ with\$ applicable\$ legislation\$ and\$ regulations.\$ Ownership\$ of\$ the\$ minimum\$ shareholding\$is\$determined\$according\$to\$the\$shares\$that\$are\$ registered\$in\$favor of\$the\$ shareholder\$ on\$ the\$ day\$ in\$ which\$ the\$ slates\$ are\$ filed\$ with\$ the\$ issuer_\$ certification\$ can\$ also\$ be\$ made\$ subsequent\$ to\$ the\$ filing\$ provided\$ that\$ it\$ is\$ within\$ the\$ deadline\$ for\$ the\$ publication\$of\$the\$slates.

The\$slates\$must\$be\$filed\$at\$the\$registered\$office\$of\$the\$company\$in\$accordance\$with\$the\$ manner\$ prescribed\$ by\$ current\$ regulations,\$ at\$ least\$ twentyfive\$ days\$ prior\$ to\$ the\$ Shareholders'\$ Meeting\$ called\$ to\$ appoint\$ the\$ statutory\$ auditors.\$ The\$ slates\$ must\$ be\$ made\$ available\$ to\$ the\$ public\$ by\$ the\$ Company\$ at\$ least\$ twentyone\$ days\$ prior\$ to\$ the\$ Shareholders'\$ Meeting\$ in\$ accordance\$ with\$ the\$ manner\$ prescribed\$ by\$ current\$ regulations.

The\$slates\$must\$include\$the\$names\$of\$one\$or\$more\$candidates\$for\$the\$position\$of\$auditor\$ and\$ one\$ or\$ more\$ candidates\$ for\$ the\$ position\$ of\$ alternate\$ auditor.\$ The\$ names\$ of\$ the\$ candidates\$ are\$ divided\$ between\$ each\$ section\$ (standing\$ statutory\$ auditors\$ section,\$ alternate\$statutory\$auditors\$section)\$with\$a\$progressive\$number\$and\$in\$any\$event\$with\$a\$ number\$ not\$ exceeding\$ the\$ board\$ members\$ to\$ be\$ elected.\$ The\$ slates,\$ where\$ they\$ contain,\$considering\$both\$sections,\$a\$number\$of\$candidates\$equal\$to\$or\$above\$3,\$must\$ contain\$ in\$ both\$ sections\$ a\$ number\$ of\$ candidates\$ such\$ as\$ to\$ guarantee\$ that\$ the\$ composition\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors,\$ both\$ in\$ the\$ standing\$ and\$ alternate\$ section,\$comply\$with\$regulations\$concerning\$gender\$equality,\$including\$rounding\$where\$ necessary\$in\$relation\$to\$the\$underrepresented\$gender.

The\$following\$documents\$must\$be\$attached\$to\$each\$ slate,\$at\$the\$ risk\$of\$ineligibility.\$ (i)\$ information\$on\$the\$identity\$of\$shareholders\$who\$have\$presented\$them,\$with\$an\$indication\$ of\$ the\$ total\$ percentage\$ of\$ shares\$ held_\$ (ii)\$ a\$ declaration\$ by\$ shareholders\$ other\$ than\$ those\$ who\$ hold,\$ even\$ jointly,\$ a\$ controlling\$ or\$ majority\$ shareholding,\$ attesting\$ to\$ the\$ absence\$ of\$ any\$ relationship\$ with\$ these\$ latter\$ in\$ accordance\$ with\$ applicable\$ law_\$ (iii)\$ detailed\$ information\$ about\$ the\$ personal\$ and\$ professional\$ characteristics\$ of\$ the\$ candidates,\$ as\$ well\$ as\$ a\$ declaration\$ by\$ the\$ candidates\$ certifying\$ that\$ they\$ meet\$ the\$ statutory\$ requirements,\$ and\$ acceptance\$ of\$ the\$ candidature,\$ accompanied\$ by\$ a\$ list\$ of\$ administrative\$ and\$ control\$ positions\$ held\$ with\$ other\$ companies_\$ (iv)\$ any\$ additional\$ or\$ differing\$declaration,\$information,\$and/or\$documents\$provided\$for\$by\$applicable\$law\$and\$ regulations.

Each\$shareholder,\$shareholders\$who\$belong\$to\$the\$same\$group\$of\$companies,\$as\$well\$ as\$shareholders\$involved\$in\$a\$shareholders'\$agreement\$in\$accordance\$with\$Art.\$122\$of\$ Legislative\$ Decree\$ No.\$ 58/1998,\$ may\$ not\$ present\$ or participate\$ in\$ presenting,\$ even\$ through\$ a\$ nominee\$ or\$ trust\$ company,\$ more\$ than\$ one\$ slate\$ nor\$ can\$ they\$ vote\$ for\$ differing\$slates_\$in\$addition,\$each\$candidate\$may\$be\$present\$in\$only\$one\$slate,\$at\$the\$risk\$ of\$ineligibility.

In\$the\$case\$where\$only\$one\$slate\$is\$filed\$at\$the\$expiry\$date\$of\$the\$term\$for\$presentation\$ of\$ the\$ slates,\$ or\$ slates\$ are\$ only\$ presented\$ by\$ related\$ shareholders\$ pursuant\$ to\$ the\$ applicable\$directives,\$slates\$can\$be\$presented\$up\$to\$the\$third\$day\$subsequent\$to\$such\$ date.\$In\$this\$case,\$the\$above\$threshold\$established\$for\$the\$presentation\$of\$the\$slate\$is\$ reduced\$by\$half.

The\$Statutory\$Auditors\$are\$elected\$as\$follows:\$ (i)\$from\$the\$ slate\$that\$has\$obtained\$the\$ highest\$number\$of\$votes\$("Majority\$Slate"),\$based\$on\$the\$progressive\$order\$with\$which\$ they\$are\$shown\$on\$the\$slate,\$two\$standing\$statutory\$auditors\$and\$an\$alternate\$statutory\$ auditor_\$ (ii)\$from\$the\$ slate\$that\$ has\$ obtained\$the\$ second\$ highest\$ number\$ of\$ votes\$ and\$ that\$ is\$ not\$ associated,\$ even\$ indirectly,\$ with\$ the\$ shareholders\$ who\$ have\$ presented\$ or\$ voted\$on\$the\$Majority\$List\$pursuant\$to\$the\$applicable\$directives\$ ("Minority\$List"),\$based\$ on\$the\$progressive\$order\$with\$which\$they\$are\$shown\$on\$the\$slate,\$one\$standing\$statutory\$ auditor,\$who\$assumes\$the\$ chairmanship\$of\$the\$Board\$of\$Statutory\$Auditors\$ ("Minority\$ Statutory\$Auditor"),\$and\$an\$alternate statutory\$auditor\$("Minority\$Alternate\$Statutory\$ Auditor").\$Should\$two\$slates\$ receive\$the\$same\$number\$of\$votes,\$a\$second\$vote\$of\$the\$ entire\$Shareholders'\$Meeting\$shall\$decide,\$with\$the\$candidate\$being\$elected\$by\$means\$ of\$a\$simple\$majority\$of\$the\$votes.

If voting\$ does\$ not\$ result\$ in\$ compliance\$ with\$ the\$ applicable\$ legal\$ and\$ regulatory\$ provisions\$ in\$ relation\$ to\$ gender\$ equality\$ (including\$ rounding\$ up\$ where\$ necessary\$ in\$ relation\$ to\$ the\$ underrepresented\$ gender),\$ the\$ elected\$ Statutory\$ or\$ Alternate\$ Auditor\$ candidate\$ appearing\$ last\$ on\$ the\$ Majority\$ Slate\$ of\$ the\$ overrepresented\$ gender\$ is\$ excluded\$and\$will\$be\$replaced\$by\$the\$next\$candidate\$from\$the\$same\$slate\$belonging\$to\$ the\$other\$gender.

Where\$ only\$ one\$ slate\$ is\$ presented,\$the\$ Shareholders'\$Meeting\$ will\$ vote\$ on\$ that\$ slate\$ and,\$where\$this\$slates\$receives\$the\$majority\$of\$the\$votes,\$all\$the\$standing\$auditors\$and\$ alternate\$ auditors\$ will\$ be\$taken\$from\$this\$ slate\$ in\$ accordance\$ with\$ applicable\$ law\$ and\$ regulations,\$ including\$ gender\$ equality\$ regulations,\$ which\$ includes\$ rounding\$ up\$ where\$ necessary\$in\$relation\$to\$the\$underrepresented\$gender.

The\$ standing\$ auditors\$ are\$ appointed\$ for\$ a\$ period\$ of\$ three\$ years\$ (and\$ may\$ be\$ re` elected),\$which\$expires\$on\$the\$date\$of\$the\$Shareholders'\$Meeting\$called\$for\$the\$approval\$ of\$the\$financial\$statements\$relating\$to\$the\$final\$year\$in\$office.

Subject\$to\$compliance\$with\$legal\$and\$regulatory\$provisions\$relating\$to\$gender\$equality\$in\$ the\$ cases\$where,\$for\$whatever\$ reason,\$ (i)\$the\$Majority\$Slate\$ standing\$ auditor\$ resigns,\$ this\$ office\$ shall\$ fall\$ to\$ the\$ alternate\$ auditor\$ from\$ the\$ Majority\$ slate,\$ (ii)\$ the\$ Minority\$ Standing\$ Auditor\$ resigns,\$ this\$ latter\$ is\$ replaced\$ by\$ the\$ Minority\$ Alternative\$ Auditor.\$ Where\$ for\$ whatever\$ reason\$ it\$ is\$ not\$ possible\$ to\$ proceed\$ in\$ accordance\$ with\$ the\$ provisions\$ indicated\$ above,\$ the\$ Shareholders'\$ Meeting\$ must\$ be\$ called\$ in\$ order\$ to\$ supplement\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ in\$ accordance\$ with\$ the\$ provisions\$ of\$ ordinary\$majority,\$without\$applying\$the\$slate\$voting\$mechanism,\$which\$includes\$gender\$ equality\$regulations.

Where\$ no\$ slate\$ is presented\$ and\$ therefore\$ it\$ is\$ not\$ possible\$ to\$ appoint\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ in\$ accordance\$ with\$ the\$ provisions\$ of\$ the\$ present\$ article,\$ the\$ three\$ standing\$auditors\$and\$the\$two\$alternate\$auditors\$will\$be\$appointed\$by\$the\$Shareholders'\$ Meeting\$through\$ ordinary\$majority\$ in\$ accordance\$ with\$ applicable\$ law\$ and\$ regulations,\$ including\$gender\$equality\$ regulations,\$which\$includes\$ rounding\$up\$where\$necessary\$in\$ relation\$to\$the\$underrepresented\$gender.

14. COMPOSITION\$AND\$OPERATION\$OF\$THE\$BOARD\$OF\$STATUTORY\$AUDITORS\$(AS\$PER\$ ARTICLE\$123OBIS, PARAGRAPH\$2, LETTER\$D) CFA)

On\$July\$22,\$2015,\$the\$Shareholders'\$Meeting\$appointed\$the\$following\$members\$to\$the\$ Board\$of\$Statutory\$Auditors\$of\$the\$Company:

Office	Name	Date\$of\$appoint.
Chairman	Claudia\$Mezzabotta	July\$22,\$2015
Statutory\$Auditor	Rosalba\$Casiraghi	July\$22,\$2015
Statutory\$Auditor	Stefano\$Amoroso	July\$22,\$2015
Alternate\$Auditor	Pietro\$Villa	July\$22,\$2015
Alternate\$Auditor	Sonia\$Ferrero\$	July\$22,\$2015

On\$ July\$ 22,\$ 2015,\$ the\$ Shareholders'\$ Meeting\$ appointed\$ the\$ members\$ of\$ the\$ current\$ Board\$of\$Statutory\$Auditors\$based\$on\$the\$ slate\$filed\$by\$the\$ shareholder\$Pencil\$ (which\$ obtained\$38,593,247\$votes,\$equal\$to\$95.401%\$of\$the\$voting\$share\$capital)\$and\$the\$slate\$ filed\$ jointly\$ by\$ Anima\$ SGR\$ S.p.A.\$ fund\$ manager\$ of:\$ Fondo\$ Anima\$ Geo\$ Italia,\$ Fondo\$ Anima\$ Italia\$ and\$ Fondo\$ Anima\$ Star\$ Italia\$ Alto\$ Potenziale_\$ \$ Arca\$ SGR\$ S.p.A.\$ fund\$ manager\$of:\$Arca\$Azioni\$Italia\$and\$Arca\$Economia\$Reale\$Equity_\$Eurizon\$Capital\$S.G.R.\$ S.p.A.,\$ fund\$ manager\$ of:\$ Eurizon\$ Azioni\$ Italia\$ and\$ Eurizon\$ Azioni\$ PMI\$ Italia_\$ Kairos\$ Partners\$SGR\$S.p.A.\$as\$management\$ company\$of:\$Kairos\$International\$SICAV\$ comp.\$ Italia,\$Kairos\$International\$SICAV\$comp.\$Risorgimento\$and\$Kairos\$International\$SICAV\$ comp.\$ Selection\$ and\$ Mediolanum\$ Gestione\$ Fondi\$ Sgr.\$ S.p.A.\$ fund\$ manager\$ of:\$ Mediolanum\$Flessibile\$Italia\$and\$Mediolanum\$Flessibile\$Sviluppo\$Italia\$(which\$obtained\$ 1,841,788\$\$votes\$equal\$to\$4.553%\$of\$the\$voting\$share\$capital).

The\$ Board\$ of\$ Statutory\$ Auditors\$ will\$ remain\$ in\$ office\$ until\$ the\$ Shareholders'\$ Meeting\$ called\$for\$the\$approval\$of\$the\$2017\$Annual\$Accounts.

From\$ the\$ end\$ of\$ the\$ Reference\$ Year,\$ there\$ were\$ no\$ changes\$ within\$ the\$ Board\$ of\$ Statutory\$Auditors.

For\$further\$information\$on\$the\$slates\$filed\$for\$the\$appointment\$of\$the\$Board\$on\$July\$22,\$ 2015,\$ reference\$ should\$ be\$ made\$ to\$ the\$ website\$ of\$ the\$ Company\$ www.fila.it,\$ Governance\$Section,\$where\$the\$professional\$curriculum\$vitae\$of\$each\$statutory\$auditor\$ are\$available.

The\$table\$below\$reports\$the\$current\$members\$of\$the\$Board\$of\$Statutory\$Auditors.\$During\$ the\$Reference\$Year\$no\$Statutory\$Auditor\$left\$office.

Board&of&Statutory&Auditors
Office	Members	Date&of& birth	Date&of&first& appointment&*	In&office&until	Slate& **	Ind.&Code	Attendance&at& Board&meetings ***	No.&of&other&offices ****
Chairman	Claudia+Mezzabotta	1970	July+22,+2015	December+31,+2017	m	X	8	0
Statutory+Auditor	Rosalba+Casiraghi	1950	July+22,+2015	December+31,+2017	M	X	8	5
Statutory+Auditor	Stefano+Amoroso	1964	July+22,+2015	December+31,+2017	M	X	9	0
Alternate+Auditor	Pietro+Villa	1967	July+22,+2015	December+31,+2017	M	X	J
Alternate+Auditor	Sonia+Ferrero	1971	July+22,+2015	December+31,+2017	m	X	J
Number&of&meetings&held∈&the&Reference&Year:+8
CFA):&2.5% Quorum&required&for&the&presentation&of&slates&by&minority&shareholders&for&the&election&of&one∨&more&members&(as&per&Article&148&ter

The\$ meetings\$ of\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ may\$ be\$ held\$ in\$ different\$ locations\$ through\$audio\$or\$video\$links,\$on\$the\$condition\$that:\$(i)\$the\$Chairman\$of\$the\$meeting\$may\$ ascertain\$ the\$ identity\$ and\$ right\$ to\$ attend\$ of\$ all\$ present,\$ govern\$ the\$ business\$ of\$ the\$ meeting,\$in\$addition\$to\$verify\$and\$declare\$the\$voting\$results@\$(ii)\$the\$minutesAtaker\$is\$able\$ to\$ adequately\$ note\$ all\$ the\$ matters\$ pertaining\$ to\$ the\$ meeting@\$ (iii)\$ attendees\$ may\$ participate\$in\$the\$discussions\$and\$vote\$simultaneously\$on\$the\$matters\$on\$the\$Agenda,\$ as\$ well\$ as\$ view,\$ receive\$ or\$ transmit\$ documentation.\$ If\$ all\$ the\$ aboveAmentioned\$ conditions\$ are\$ complied\$ with,\$the\$meeting\$ shall\$ be\$ deemed\$to\$ have\$ been\$ held\$ in\$the\$ place\$where\$the\$Chairman\$is\$present\$and\$where\$the\$secretary\$of\$the\$meeting\$must\$be\$ present,\$to\$permit\$the\$minuteAtaking\$of\$the\$meeting.\$

The\$ Board\$ of\$ Statutory\$ Auditors\$ met\$ 9\$ times\$ in\$ the\$ Reference\$ Year.\$ The\$ average\$ participation\$of\$the\$statutory\$auditors\$in\$the\$meetings\$was\$93%.\$The\$average\$duration\$ of\$meetings\$was\$approximately\$2\$hours.

In\$ addition\$to\$the\$meetings\$ held\$ on\$ January\$ 24,\$ 2017,\$March\$ 7,\$ 2017\$ and\$March\$ 15,\$ 2017 at\$least\$6\$other\$meetings\$of\$the\$Board\$of\$Statutory\$Auditors\$will\$be\$held.

In\$ the\$ meeting\$ of\$ March\$ 15,\$ 2017,\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ assessed\$ the\$ independence\$ of\$ its\$ members,\$ already\$ assessed\$ on\$ appointment,\$ and\$ also\$ in\$ accordance\$ with\$ the\$ requirements\$ for\$ independence\$ for\$ Directors\$ by\$ the\$ SelfA Governance\$ Code.\$\$ The\$ result\$ of\$these\$ assessments\$ were\$ sent\$to\$the\$ Directors\$ and\$ announced\$to\$the\$market\$on\$the\$same\$date,\$available\$on\$the\$website\$of\$the\$Company\$ www.filagroup.it,\$in\$the\$Governance\$section.

The\$Board\$of\$Statutory\$Auditors\$reviewed\$the\$independence\$of\$the\$Audit\$Firm,\$ensuring\$ compliance\$ with\$ regulatory\$ provisions,\$ and\$ the\$ nature\$ and\$ extent\$ of\$ the\$ \$ various\$ services\$provided\$to\$the\$Issuer\$and\$its\$subsidiaries\$by\$the\$Audit\$Firm\$and\$its\$network.

The\$ Board\$ constantly\$ maintained\$ normal\$ coordination\$ activities\$ with\$ the\$ Control\$ and\$ Risks\$ Committee,\$ the\$ Internal\$ Audit\$ Department\$ and\$ the\$ Supervisory\$ Body.\$ For\$ information\$on\$the\$manner\$of\$the\$coordination\$reference\$should\$be\$made\$to\$paragraph\$ 11.6.

Legislative\$Decree\$No.\$39/2001\$("Implementation\$of\$EU\$Directive\$No.\$43/2006,\$relating\$ to\$the\$audit\$of\$separate\$and\$consolidated\$annual\$accounts,\$which\$modifies\$EU\$Directive\$ 78/660\$and\$EU\$Directive\$83/349,\$and\$which\$revokes\$EU\$Directive\$84/253)\$attributed\$to\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ the\$ functions\$ of\$ the\$ Internal\$ Control\$ and\$ Audit\$ Committee\$ and,\$ in\$ particular\$ the\$ oversight\$ functions\$ on\$ (i)\$ the\$ financial\$ reporting\$ process@\$ (ii)\$ the\$ efficiency\$ of\$ the\$ internal\$ control\$ system,\$ internal\$ audit,\$ where\$ applicable,\$ and\$ risk\$ management@\$ (iii)\$ the\$ audit\$ of\$ the\$ separate\$ and\$ consolidated\$ annual\$ accounts@\$ (iv)\$ the\$ independence\$ of\$ the\$ Audit\$ Firm,\$ in\$ particular\$ in\$ relation\$ to\$ nonAaudit\$services\$by\$the\$party\$providing\$audit\$services.\$

For\$ all\$ of\$the\$ period\$ of\$trading\$ of\$the\$ shares\$ of\$the\$Company\$ on\$the\$Italian\$ regulated\$ market,\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ exercises\$ all\$ duties\$ and\$ powers\$ provided\$ by\$ special\$laws@\$with\$particular\$reference\$to\$the\$disclosure\$to\$the\$Board,\$the\$directors\$must\$ report\$pursuant\$to\$Article\$150\$of\$the\$CFA\$on\$a\$quarterly\$basis.

The\$ Chairman\$ of\$the\$Board\$ of\$ Directors\$ ensured\$that\$the\$Statutory\$Auditors\$ received\$ adequate\$ information\$ on\$ the\$ sector\$ in\$ which\$ the\$ Issuer\$ operates,\$ on\$ the\$ business\$ operations\$and\$their\$performances,\$of\$the\$principles\$of\$correct\$risk\$management\$as\$well\$ as\$the\$ relative\$ regulatory\$framework.\$In\$ particular,\$ during\$the\$Board\$meetings\$ held\$ at\$ the\$headquarters\$of\$the\$company,\$the\$Directors\$regularly\$received\$detailed\$information\$ on\$the\$sector\$in\$which\$the\$Issuer\$undertakes\$its\$activities,\$in\$order\$to\$fully\$understand\$ the\$underlying\$business\$operations\$and the\$relative\$developments\$during\$the\$year.

In\$ addition,\$ in\$ the\$ first\$ week\$ of\$ September\$ 2016,\$ specific\$ workshops\$ were\$ held\$ involving,\$ in\$ addition\$ to\$ the\$ Directors\$ and\$ the\$ Statutory\$ Auditors\$ of\$ FILA,\$ all\$ local\$ management\$ of\$ the\$ Group\$ companies,\$ principally\$ to\$ provide\$ the\$ Directors\$ and\$ the\$ Statutory\$ Auditors\$ of\$ the\$ Company\$ adequate\$ information\$ on\$ the\$ sector\$ in\$ which\$ the\$ Issuer\$operates,\$as\$well\$as\$business\$performance\$and\$their\$developments.\$

The\$remuneration\$of\$the\$statutory\$auditors\$takes\$account\$of\$the\$commitment\$required,\$ the\$importance\$of\$the\$role,\$in\$addition\$to\$the\$size\$and\$business\$sector.

The\$Issuer\$does\$not\$provide\$a\$specific\$obligation\$for\$the\$Statutory\$Auditors\$to\$promptly\$ inform\$the\$other\$members\$of\$the\$Board\$of\$Statutory\$Auditors\$and\$the\$Chairman of\$the\$ Board\$on\$the\$nature,\$terms,\$origin\$and\$size\$of\$their\$interest,\$where\$the\$Statutory\$Auditor\$ have,\$on\$their\$own\$behalf\$or\$on\$behalf\$of\$third\$parties,\$an\$interest\$in\$a\$transaction\$of\$the\$ Issuer@\$this\$is\$due\$to\$the\$fact\$that\$the\$Issuer\$considers\$that\$this\$disclosure\$information\$a\$ normal\$duty\$for\$the\$parties\$which\$hold\$the\$position\$of\$statutory\$auditor.

In\$ accordance\$ with\$ the\$ ByALaws,\$ the\$ Chief\$ Executive\$ Officer,\$ during\$ the\$ Reference\$ Year,\$ reported\$ adequately\$ and\$ promptly\$ to\$ the\$ Board\$ of\$ Statutory\$ Auditors\$ on\$ the\$ activities\$undertaken,\$on\$the\$general\$operating\$performance\$and\$outlook,\$as\$well\$as\$on\$ major\$ operations\$ for\$ their\$ size\$ or\$ nature\$ by\$ the\$ Issuer\$ and\$ its\$ subsidiaries,\$ in\$ accordance\$with\$the\$ provisions\$ of\$ law\$ and\$the\$ByALaws,\$ and\$therefore\$ on\$ a\$ quarterly\$ basis.\$

15. RELATIONS\$WITH\$SHAREHOLDERS

The\$ disclosure\$ upon\$ relations\$ with\$ shareholders\$ is\$ ensured\$ by making\$ available\$ the\$ most\$relevant\$corporate\$documents\$in\$a\$timely\$and\$continuous\$manner\$on\$the\$Issuer's\$ website\$www.filagroup.it\$in\$the\$'Investors',\$'Governance'\$and\$'Pressroom'\$sections\$and,\$ where\$ required\$ by\$ the\$ applicable\$ regulations,\$ in\$ the\$ authorized\$ storage\$ mechanism\$ 'NisA Storage'\$at\$.

In\$particular,\$all\$press\$releases\$issued\$to\$the\$market\$and\$the\$Issuer's\$periodic\$financial\$ reports\$ are\$ available\$ on\$ the\$ aboveAmentioned\$ website\$ as\$ soon\$ as\$ they\$ have\$ been\$ approved\$by\$the\$relevant bodies\$(annual\$report,\$interim\$report,\$quarterly\$report).

Also\$ available\$ on\$ the\$ aforementioned\$ website\$ are\$ the\$ main\$ Corporate\$ Governance\$ documents,\$ the\$ Organization\$ Model\$ in\$ accordance\$ with\$ Legislative\$ Decree\$ No.\$ 231/2001\$and\$the\$Ethics\$Code.

On\$ June\$ 4,\$ 2015,\$ the\$ Board\$ of\$ Directors\$ appointed\$ Stefano\$ De\$ Rosa\$ as\$ Investor) Relations) Officer of\$ FILA\$ (contact:\$ IR@FILA.IT),\$ for\$ the\$ maintenance\$ of\$ relations\$ with\$ shareholders\$ and\$ institutional\$ investors\$ and\$ to\$ undertake\$ any\$ specific\$ tasks\$ for\$ the\$ management\$ of\$ price\$ sensitive\$ information\$ and\$ relations\$ with\$ CONSOB\$ and\$ Borsa\$ Italiana.\$

The\$ Board\$ of\$ Directors\$ will\$ assess\$ the\$ implementation\$ of\$ any\$ further\$ initiatives\$ to\$ ensure\$ shareholders\$ more\$ timely\$ and\$ straightforward\$ access\$ to essential\$ information\$ upon\$the\$Issuer.

$16.$ SHAREHOLDERS` MEETING (AS PER ARTICLE 123-BIS, PAR. 2, LETTER C), OF THE CFA)

16.1 SHAREHOLDERS' AGM CALL

Pursuant to Article 9 of the By-Laws, the Shareholders' Meeting for the approval of the financial statements must be called by the Board of Directors at least once a year, within one hundred and twenty days from the end of the year or, in the cases provided for by Article 2364, paragraph 2, of the Civil Code, within one hundred and eighty days from the end of the year, pursuant to the provisions of Article 154-ter of the CFA.

The Shareholders' Meeting may be called in Italy, including outside the municipality of the company's registered office, or in another European Union country or Switzerland.

The Shareholders' Meeting is called, in accordance with the terms prescribed by current requiations, with notice published on the internet site of the Company as well as the other methods required by law and applicable regulations, and contains the information required by current requlations, also based on the matters on the Agenda.

As per Article 126-bis of the CFA, shareholders who represent, even jointly, at least one-fortieth of the share capital may request - except for matters within the remit of the Board or based on projects or a report prepared by them - within ten days of publication of the Call Notice, or within five days in the case of calling as per Article 125-bis. paragraph 3, of the CFA or Article 104, paragraph 2, of the CFA, a supplementation to the matters on the Agenda, indicating in the request the further matters to be included on the Agenda, or present proposals on matters already on the Agenda. Shareholders requesting supplementation to the Agenda should draw up a Report outlining the reasons for the proposal of new matters to be added to the Agenda or the reasoning concerning further proposals to be presented on matters already on the Agenda and present such to the Board of Directors by the deadline for the presentation of requests for supplementation.

In accordance with Article 2367 of the Civil Code the directors must call without delay the Shareholders' Meeting where such request is made by shareholders representing at least 20% of the share capital.

Pursuant to Article 127-ter of the CFA, shareholders may submit questions on the matters on the Agenda, also before the Shareholders' Meeting. For questions submitted before the Shareholders' Meeting, responses will be made, at the latest, during the Meeting. The Company may provide a single reply to questions with the same subject matter. The call notice indicates the terms within which the questions to the Shareholders' Meeting must be received by the Company. The period may not be prior to three days before the date of the Shareholders' Meeting in first or single call, or five days where the call notice provides for the Company to reply before the Shareholders' Meeting. In this case, replies are provided at least two days before the Shareholders' Meeting including through publication in a specific section of the website of the Company.

16.2 RIGHT TO ATTEND SHAREHOLDERS' MEETINGS

In accordance with Article 10 of the By-Laws, persons with the right to vote may attend the Shareholders' Meeting.

Those who based on the communication sent to the Company from an appointed intermediary, in accordance with applicable legislation, and in accordance with the accounting\$records\$at\$the\$end\$of\$the\$7th\$trading\$day\$before\$the\$Shareholders'\$Meeting\$in\$ single\$call,\$have\$the\$right\$to\$attend\$and\$vote\$at\$the\$Shareholders'\$Meeting.

Those\$ with\$ the\$ right\$ to\$ vote\$ may\$ be\$ represented\$ by\$ a\$ proxy\$ in\$ accordance\$ with\$ law.\$ Electronic\$notification\$of\$proxy\$to\$the\$company\$may\$be\$carried\$out\$through\$eAmail\$to\$the\$ certified\$eAmail\$address\$of\$the\$company\$indicated\$in\$the\$call\$notice or\$through\$a\$specific\$ section\$on\$the\$website\$of\$the\$Company.

The\$ Company\$ may\$ designate,\$ for\$ each\$ Shareholders'\$ Meeting,\$ with\$ indications\$ contained\$ in\$ the\$ call\$ notice,\$ a\$ party\$ to\$ whom\$ the\$ shareholder\$ may\$ confer\$ proxy\$ with\$ voting\$instructions\$on\$all\$or\$ some of\$the\$proposals\$on\$the\$Agenda,\$in\$accordance\$with\$ law\$(pursuant\$to\$Article\$135Aundecies)of\$the\$CFA).

16.3 PROCEDURES\$FOR\$SHAREHOLDERS' MEETINGS

The\$Shareholders'\$Meeting\$is\$chaired\$by\$the\$Chairman\$of\$the\$Board\$of\$Directors\$or,\$in\$ his\$ absence\$ or\$ impediment\$ or\$ on\$ the\$ request\$ of\$ the\$ Chairman\$ himself,\$ \$ by\$ another\$ person\$designated\$by\$the\$Shareholders'\$Meeting,\$including\$the\$Chief\$Executive\$Officer\$ (where\$ appointed).\$ The\$ Chairman\$ shall\$ be\$ assisted\$ by\$ a\$ secretary\$ designated\$ on\$ his\$ proposal\$by\$the\$majority\$of\$attendees.\$At\$the\$Extraordinary\$Shareholders'\$Meeting\$and,\$ in\$any\$case,\$where\$the\$Chairman\$considers\$it\$appropriate,\$the\$function\$of\$secretary\$may\$ be\$exercised\$by\$a\$notary\$designated\$by\$the\$Chairman.

For\$the\$valid\$constitution\$of\$the\$Shareholders'\$Meeting,\$both\$ordinary\$and\$extraordinary,\$ and\$resolutions\$thereof,\$the\$legal\$and\$statutory\$provisions\$are\$applied.\$For\$the\$purposes\$ of\$ the\$ quorum\$ required\$ by\$ law\$ and\$ the\$ present\$ ByALaws\$ for\$ the\$ constitution\$ of\$ the\$ Ordinary\$ and\$ Extraordinary\$ Shareholders'\$ Meeting\$ for\$ the validity\$ of\$ the\$ relative\$ resolutions,\$reference\$is\$made\$to\$the\$number\$of\$votes\$attached\$to\$the\$shares\$and\$not\$to\$ the\$number\$of\$shares.

The\$Shareholders'\$Meeting\$takes place\$in\$single\$call.

The\$Shareholders'\$Meeting\$may\$be\$held\$in\$several\$locations,\$via\$audio/video\$link,\$on\$the\$ condition\$ that\$ a\$ collective\$ approach\$ is\$ taken\$ and\$ the\$ principles\$ of\$ good\$ faith\$ and\$ of\$ equal\$ treatment\$ of\$ shareholders\$ are\$ upheld\$ and,\$ in\$ particular,\$ provided\$ that:\$ (a)\$ the\$ Chairman\$of\$the\$Shareholders'\$Meeting\$may\$(i)\$ascertain\$the\$identity\$and\$right\$to\$attend\$ of\$ all\$ present,\$ (ii)\$ govern\$ the\$ business\$ of\$ the\$ meeting,\$ in\$ addition\$ to\$ (iii)\$ verify\$ and\$ declare\$ the\$ voting\$ results@\$ (b)\$ the\$ minutesAtaker\$ is\$ able\$ to\$ adequately\$ note\$ \$ all\$ the\$ matters\$ pertaining\$ to\$ the\$ Shareholders'\$ Meeting@\$ (c)\$ attendees\$ may\$ participate\$ in\$ the\$ discussions\$and\$vote\$simultaneously\$on\$the\$matters\$on\$the\$Agenda@\$ (d)\$this\$method\$is\$ contained\$ in\$ the\$ call\$ notice\$ of\$ the\$ Shareholders'\$ Meeting\$ which\$ also\$ indicates\$ the\$ locations.\$ The\$meeting\$ is\$ considered\$to\$ be\$ held\$ where\$the\$ Chairman\$ and\$the\$minuteA taker\$are\$present\$simultaneously.

Pursuant\$to\$Article\$ 7\$ of\$the\$ByALaws,\$ shareholders\$may\$ withdraw\$ in\$ accordance\$ with\$ the\$mandatory\$cases\$provided\$for\$by\$law.

The\$opposition\$of\$Shareholders\$to\$resolutions\$regarding\$the\$extension\$of\$the\$duration\$of\$ the\$Company\$or\$the\$introduction\$or\$the\$removal\$of\$provisions\$concerning\$the\$circulation\$ of\$shares\$does\$not\$constitute\$a\$right\$to\$withdrawal.\$The\$liquidation\$value\$of\$the\$\$shares\$ is\$determined\$in\$accordance\$with\$Article\$2347Ater)of\$the\$Civil\$Code.

In\$accordance\$with\$Article\$20\$of\$the\$ByALaws,\$the\$net\$profit\$resulting\$from\$the\$financial\$ statements,\$ reduced\$ by\$ 5%\$ for\$ the\$ legal\$ reserve,\$ until\$ such\$ reaches\$ oneAfifth\$ of\$ the\$ share capital, is divided between the shareholders in accordance with the resolutions of the Shareholders' Meeting.

$***$

The Shareholders' Meetings of the Issuer adopted Shareholder Meeting regulations. approved on October 5, 2013 by the Shareholders' Meeting of Space. This Shareholders' Meeting regulation provides, among other matters, that:

• the Chairman (the Chairman of the Board of Directors or, in his absence or $(i)$ impediment, the person designated by the Shareholders' Meeting) may adopt all provisions considered appropriate to quarantee the correct proceeding of the Shareholders' Meetings and the exercise of the rights of attendees;
• $(ii)$ in introducing the matters on the Agenda and proposals, the Chairman, as long as the Shareholders' Meeting does not oppose, may introduce a differing Agenda from that stated in the call notice and may amalgamate some or all of the matters on the Agenda under a single heading:
• the Chairman manages the discussion, giving the floor to directors, statutory $(iii)$ auditors and persons requesting such right. Those holding the right to vote and the general representative of the bondholders may request the floor on only one occasion for each matter on the Agenda, making observations and requesting information. Those holding the right to vote may also formulate proposals. Requests may be made on the constitution of the Shareholders' Meeting until the Chairman declares the discussion of the matter closed. In order to quarantee the ordinary workings of the Shareholders' Meetings, the Chairman may establish, on opening of the meeting's business or during the discussion on the individual matters, the time limit for the presentation of the requests. The Chairman establishes the manner in which contribution requests are made and the order in which they are heard. The Chairman and, on his invitation, persons who assist him, respond to speakers at the end of all contributions under discussion, or after each contribution, taking account also of any questions drawn up bv shareholders before the Shareholders' Meeting, which have not been responded to by the Company. Those who have requested the floor have the right to a brief reply;
• $(iv)$ before voting commences, the Chairman of the meeting readmits any shareholders requesting to leave the meeting during the discussion in accordance with the regulation;
• the Chairman decides the order in which the resolutions on the Agenda are $(v)$ presented for voting, normally giving preference to any proposals made by the Board of Directors.

In the Reference Year a Shareholders' Meeting was held on April 29, 2016 (in which 9 Directors attended). The Board of Directors reported to the Shareholders' Meeting on the activities carried out and endeavored to ensure that shareholders had all necessary information so that they could take, with sufficient knowledge, the decisions within the authority of a Shareholders' Meeting.

In relation to shareholder's rights not illustrated in the present Report, reference should be made to applicable law and regulations.

17. ADDITIONAL\$CORPORATE\$GOVERNANCE\$PRACTICES

At\$ the\$ date\$ of\$ the\$ present\$ Report,\$ the\$ Issuer\$ has\$ not\$ applied\$ further\$ corporate\$ governance\$ practices\$ other\$ than\$ those\$ in\$ accordance\$ with\$ applicable\$ legislative\$ and\$ regulatory\$provisions.

18. CHANGES\$SINCE\$THE\$END OF\$THE\$REFERENCE\$YEAR

Since\$ the\$ end\$ of\$ the\$ Reference\$ Year\$ no\$ changes\$ have\$ been\$ made\$ to\$ the\$ corporate\$ governance\$structure.

$***$

Milan, March 30, 2017

F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A.

For the Board of Directors

Gianni Mion Chairman