report on corporate governance and the ownership structure · report on corporate governance and...

Reporton Corporate Governance

and the Ownership Structure

2 Report on Corporate Governance and the Ownership Structure

pursuant to Article 123-bis of Legislative Decree 58/1998 (Consolidated Finance Act - TUF)

(traditional management and control model)

Issuer: SALINI IMPREGILO S.p.A.www.salini-impregilo.com

Year to which the Report refers: 2016Date of approval of the Report by the Board of Directors: March 15, 2017

Reporton Corporate Governance

and the Ownership Structure

3Report on Corporate Governance and the Ownership Structure

Contents

GLOSSARY 5

INTRODUCTION 6

1. ISSUER PROFILE 7

2. INFORMATION ON THE OWNERSHIP STRUCTURE (ARTICLE 123-bis.1 OF the TUF) as at March 15, 2017 9a) Share capital structure (Article 123-bis. 1.a) of the TUF) 9b) Restrictions on the transfer of securities (Article 123-bis.1.b) of the TUF) 10c) Significant investments in share capital (Article 123-bis.1.c) of the TUF) 10d) Securities carrying special rights (Article 123-bis. 1.d) of the TUF) 10e) Employee share ownership schemes: mechanism for the exercise of voting rights

(Article 123-bis. 1.e) of the TUF) 10f) Restrictions on voting rights (Article 123-bis. 1.f) of the TUF) 11g) Shareholder agreements (Article 123-bis. 1.g) of the TUF) 11h) Change of control clause (Article 123-bis. 1.h) of the TUF) and Bylaws provisions

about takeover bids (Article 104.1-ter and Article 104-bis.1) 11i) Delegated powers regarding share capital increases and to authorize purchase

of own shares (Article 123-bis.1.m) of the TUF) 11I) Management and coordination (Article 2497 et seq of the Italian Civil Code) 12

3. COMPLIANCE (Article 123-bis.2.a) of the TUF) 133.1. Adherence to the Corporate Governance Code. 13

4. BOARD OF DIRECTORS 144.1 Appointment and Substitution (ex Article 123-bis.1, letter l), TUF) 144.2 Composition (Article 123-bis.2.d) of the TUF) 174.3 Role of the Board of Directors (Article 123-bis.2.d) of the TUF) 204.4 Empowered Bodies 234.5 Other Executive Directors 254.6 Independent Directors 254.7 Lead Independent Director 25

5. HANDLING OF COMPANY INFORMATION 26


6. BOARD COMMITTEES (Article 123-bis.2.d) of the TUF) 28

7. COMPENSATION AND NOMINATING COMMITTEE 29

8. DIRECTORS’ REMUNERATION 33

9. CONTROL AND RISK COMMITTEE 34

10. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM 3810.1 Director in Charge of the Internal Control and Risk Management System 4310.2 Chief Internal Auditor 4410.3 Organization Model pursuant to Decree 231/2001 4510.4 Independent Auditors 4710.5 Manager in Charge of Financial Reporting and other Roles and Functions 4710.6 Cooperation Between Parties Involved in the

Internal Control and Risk Management System 48

11. DIRECTORS’ INTERESTS AND RELATED PARTY TRANSACTIONS 50

12. APPOINTMENT OF STATUTORY AUDITORS 51

13. COMPOSITION AND DUTIES OF THE BOARD OF STATUTORY AUDITORS (Article 123-bis.2.d) of the TUF 54

14. INVESTOR RELATIONS 56

15. SHAREHOLDERS’ MEETINGS (Article 123-bis.2.c) of the TUF) 57

16. ADDITIONAL CORPORATE GOVERNANCE PRACTICES (Article 123-bis.2.a) of the TUF) 59

17. CHANGES SINCE YEAR END 60


Glossary

Code/Corporate Governance Code: the CorporateGovernance Code of listed companies approved in July2015 by the Committee for Corporate Governance and promoted by Borsa Italiana S.p.A., ABI, Ania,Assogestioni, Assonime and Confindustria.

Italian Civil Code

Board/Board of Directors: the Board of Directors ofSalini Impregilo S.p.A.

Issuer/Company/Salini Impregilo: Salini ImpregiloS.p.A.

Financial year: the financial year to which the Reportrefers - 2016 financial year.

Consob issuers’ Regulation: the Regulation issued byConsob with Resolution no. 11971 of 1999 (as amended)concerning Issuers.

Consob issuers’ Regulation: the Regulation issued byConsob with Resolution no. 16191 of 2007 (as amended)concerning markets.

Consob Regulation on Related Parties: theRegulation issued by Consob with Resolution no. 17221of 12 March 2010 (as subsequently amended) concerningrelated party transactions.

Report: the report on corporate governance andownership structure that companies are required toprepare pursuant to art. 123-bis of the TUF.

Consolidated Finance Act/TUF: Legislative Decree no.58 of February 24, 1998.


Introduction

The scope of this report on corporate governance andownership structure (the “report (Sixth edition - January2017), aims at illustrating the corporate governancemodel adopted by Salini Impregilo, providing a summarydescription of the actual implementation procedures ofthe traditional administration and control model used bythe Issuer.

The corporate governance structure adopted by SaliniImpregilo is based on the guidelines set out in the"Corporate Governance Code" approved in March2006, whose most recent amendment dates 9 July

2015 by the Committee for Corporate Governanceand promoted by Borsa Italiana S.p.A., ABI, Ania,Assogestioni, Assonime and Confindustria, availableto the market on Borsa Italiana’s websitehttp://www.borsaitaliana.it/comitato-corporate-governance/codice/2015clean.pdf (the “Code”), asit believes that having a well structured governancesystem is a pre-requisite for maximum efficiency andalso ensures greater levels of transparency, thusincreasing investor confidence in the Issuer.

This Report has been approved by the Board of Directorsof Salini Impregilo S.p.A. of March 15, 2017, and hasbeen issued in the "Governance - Governance System -Corporate Governance Report" section of the Company’swebsite.


Salini Impregilo S.p.A. is an issuer with shares listed onthe Mercato Telematico Azionario (electronic stockexchange) managed by Borsa Italiana S.p.A., resultingfrom the merger of Salini S.p.A. into Impregilo S.p.A., witheffect from January 1, 2014. The Company is subject tothe management and coordination of Salini CostruttoriS.p.A., pursuant to Art. 2497 and subsequent ones ofthe Italian Civil Code, and adheres to the CorporateGovernance Code.1

Operating in more than 50 countries with over 35,000employees, a production value at the end of 2016 ofapproximately Euro 6.1 billion (including Lane IndustriesIncorporated, the US subsidiary of Salini Impregilo, leaderin the United States in the road paving sector) and anorder book totalling Euro 36.9 billion, the Salini ImpregiloGroup is a global player in the construction of complexlarge-scale infrastructures.

Salini Impregilo, which in September 2016 celebrated110 years, bases its activities on a strong passion forconstruction which is reflected in its wealth of

international projects. The Group has been operating inthe dams and hydroelectric plants, hydraulic works,railways and metro systems, airports and motorways,civil and industrial building sectors.

From 1906 to the present day, Salini Impregilo hascompleted about 2,000 projects in five continents. Ofthese, 1,017 in Europe; 412 in Africa; 222 in NorthAmerica; 213 in South America; 66 in Asia and Oceania;54 in the Middle East.

The Group ranks first in the water segment and is one ofthe leaders in the construction of large, complexinfrastructure as a whole. It has done 257 dams andelectric plants; 7,230 kilometres of railway and metrolines; 1,450 kilometres of tunnels and 350 kilometres ofbridges and viaducts.

In 2016, the Group has delivered some of the mostsignificant public works in the world, such as the newPanama Canal (for further details, go tohttp://www.webuildvalue.com/en/special-issue/the-

1 Deed of merger drawn up by Mr. Carlo Marchetti, notary public in Milan, filed under No. 10520 of Folder No. 5396 of November 26, 2013.

1. Issuer Profile


new-panama-canal.html), the Gibe III dam in Ethiopia(http://www.webuildvalue.com/it/index.html) and theStavros Niarchos Foundation Cultural Center in Athens(http://www.webuildvalue.com/en/special-issue/stavros-niarchos-foundation-cultural-center.html).

On 4 January 2016, the Company concluded theacquisition of 100% of Lane Industries Incorporated, aUS company with 125 years of history, specialised inthe construction of civil and transport infrastructure andthe main producer of asphalt in the US. This operationrepresented a further milestone for the expansion of theSalini Impregilo Group, as it represents an ideal platformthat allows to seize business opportunities in the US,but more generally, within the entire American continent.

Management and the entire Group are committed tooperating in accordance with environmental, ethical andprofessional principles, which comply with the highestinternational criteria for corporate governance and citizenship.

The Company adopted a Code of Ethics that containsthe general principles and values that inspire theIssuer’s and Group’s activities, both internally and withthird-parties: A tool designed to safeguard, guaranteeand protect the Group’s assets and reputation.

The Company’s Code of Ethics is published on the company’swebsite www.salini-impregilo.com in the “Governance -Governance System - Code of Ethics” section.

On the 16th of June 2016, the Company alsoadopted an Anti-Corruption Model, a further andimportant tool for implementing the Company’sinternal Control and Risk Management System, whichaims at strengthening pre-existing preventionprotocols and at expressly stating the need to abideby applicable international regulations, especially theFCPA-Foreign Corrupt Practices Act and the UKBA-UK Bribery Act.

The Anti-Corruption Model is published on thecompany website http://www.salini-impregilo.comin the “Governance - Internal Control and RiskManagement - Anti-corruption”.

Salini Impregilo S.p.A. also ascribes significantimportance to Corporate Social Responsibility. Tothat end, Salini Impregilo adheres to the UnitedNations Global Compact, the global initiative aimedat promoting a sustainable global economy, byrespecting human and work rights, environmentalsafeguard and anti-corruption.

The Sustainability Report of Salini Impregilo, withinwhich the actions and implemented systems tointegrate the ten ethical principles of the GlobalCompact in the company strategy and in theCompany’s daily activities, is published on thecompany’s website http://www.salini-impregilo.comin the “Sustainability - Sustainability Report” section.


a) Share capital structure (Article 123-bis. 1.a) of the TUF)

The share capital of Salini Impregilo is €544,740,000.00fully paid up, divided into 493,788,182 shares, of which492,172,691 ordinary shares and 1,615,491 savingsshares, all without par value.2

The Company’s shares are listed on the MercatoTelematico Azionario (electronic stock exchange)managed by Borsa Italiana S.p.A.. They are not to

be sold separately, are registered and are includedwithin the centralised system managed by MonteTitoli S.p.A.

Every ordinary share issued by the Company assignsthe right to vote in every ordinary and extraordinaryshareholders’ meeting of the Company, as well as theother administrative rights that are provided for by theapplicable legal dispositions and Bylaws.

To date, there are no other types of shares.

To date, Salini Impregilo has not issued other financialinstruments that give the right to subscribe newlyissued shares.

The Issuer has a share-based incentive plan in place

in the form of Performance Shares, approved by theShareholders’ Meeting of April 30, 2015, whichprovides for allocation, free of charge, to thebeneficiaries of this plan, subject to the achievementof certain goals determined by the Board of Directors,

2. Information on the Ownership Structure (Article 123-bis.1 of the TUF) as at March 15, 2017

2 The shareholders eliminated the nominal amount of the ordinary shares and savings shares in the extraordinary session of the Shareholders’ Meeting on October 12, 2004.

SHARE CAPITAL STRUCTURE No. of shares % of Share CapitalOrdinary shares 492,172,691 99.67 MTASavings shares 1,615,491 0.33 MTA


of shares already in circulation and in the Company’sportfolio (or subsequently purchased) or, at thediscretion of the same, of newly issued sharespursuant to Article 2349 the Italian Civil Code.

To this end, the Extraordinary Shareholders’ Meetingof April 30, 2015, amended Article 7 of the Bylaws byadding the following paragraph: "It is also allowed, incompliance with the law, to allocate profits and/orprofit reserves to employees of the Company or itssubsidiaries, through the issue of shares, pursuant tothe first paragraph of Article 2349 of the Italian CivilCode”.

For further information on this point, please refer tothe Information Document issued in accordance withArticle 84-bis of the Consob’s Issuers Regulation,published on the company’s website www.salini-impregilo.com in the section “Governance -Shareholders’ Meeting” as an annex to the fourth itemon the Ordinary Shareholders’ Meeting of April 30,2015, as well as the 2017 Remuneration Reportpub l ished on the company’s webs i te

www.salini-impregilo.com in the section“Governance - Governance System - CorporateGovernance Report" and in the "Governance -Shareholders’ Meeting” section, in relation to the nextShareholder’s Meeting to be held on April 27, 2017.

b) Restrictions on the transfer of securities(Article 123-bis.1.b) of the TUF)

Salini Impregilo does not have any restrictions on thetransfer of securities, nor limits to the number ofshares held nor the approval of governance bodies orshareholders for admitting new shareholders withinthe shareholding structure.

c) Significant investments in share capital(Article 123-bis.1.c) of the TUF)

Based on the statements made in accordance withArticle 120 of the TUF and further information held bythe Issuer, shareholders with investments exceeding3% of the Issuer’s ordinary share capital are currently:

d) Securities carrying special rights (Article 123-bis. 1.d) of the TUF)

Salini Impregilo has not issued any securities withspecial control rights.

The company’s Bylaws do not contain any provisionson multiple or majority voting rights.

e) Employee share ownership schemes:mechanism for the exercise of votingrights (Article 123-bis. 1.e) of the TUF)

The Performance Share Plan referred to in point a)above of this section does not envisage any specificmechanisms for the exercise of voting rights, where thisis not directly exercised by the employees themselves.

SIGNIFICANT INVESTMENTS IN SHARE CAPITAL

Declarant Direct shareholder, % of ordinary if other than the declarant shares

Salini Simonpietro Salini Costruttori S.p.A. 67.055% Salini Simonpietro 0.836%


f) Restrictions on voting rights (Article 123-bis. 1.f) of the TUF)

The Bylaws do not include provisions that determinerestrictions on voting rights, nor terms imposed forexercising voting rights nor systems where with thecooperation of the Company, the financial rights linkedto the shares are separated from shareholding.

g) Shareholder agreements (Article 123-bis. 1.g) of the TUF)

The Issuer is not aware of any shareholder agreements,considered to be material under Article 122 of the TUF.

h) Change of control clause (Article 123-bis. 1.h) of the TUF) and Bylawsprovisions about takeover bids (Article104.1-ter and Article 104-bis.1)

The Issuer and its subsidiaries have entered into someagreements of a financial nature or contracts which bytaking effect, amend or terminate in the event of achange of shareholders controlling the Issuer. Disclosureof the specifics contained in the agreements could causeserious damage to the Company and its subsidiaries.

Salini Impregilo’s Bylaws do not contain provisions ontakeover bids and, therefore, do not depart from themeasures regarding the passivity rule pursuant to Article104.1 and 1 bis of the Consolidated Finance Act (TUF), nordo they provide for application of the breakthrough rulesenvisaged by Article 104-bis, paragraphs 2 and 3, of the TUF.

i) Delegated powers regarding sharecapital increases and to authorizepurchase of own shares (Article 123-bis.1.m) of the TUF)

Delegated powers to increase share capital

Article 7 of the Bylaws for the purposes of granting theBoard of Directors: (i) the power to increase share

capital, on one or more occasions and, in any event, intranches, with the exclusion of option rights pursuantto Articles 2443 and 2441.4, second sentence, of theItalian Civil Code, namely against payment and in cash,by issuing, also in tranches, a number of ordinaryand/or savings shares that does not exceed 10% of thetotal number of Salini Impregilo shares outstanding onthe date that the Delegated Power is exercised and inany case for a nominal amount that does not exceed€100,000,000.00 (one hundred million) and with thesaid Board being able to establish an additional price;(ii) the power, pursuant to Articles 2443 and 2420-terof the Italian Civil Code, to increase share capital, onone or more occasions and, in any event, in tranches,against payment or for free, for a maximum nominalamount of €200,000,000.00 (two hundred million) andto allow convertible bonds for a maximum amountequal to €400,000,000.00 (four-hundred million), evenwith the exclusion of the pre-emption right pursuant toArt. 2441.4, first part (i.e. to issue new ordinary and/orsavings shares to be paid through contribution in kind)and/or paragraph 5 (i.e. when the interest of thecompany so requires) of the Italian Civil Code, (iii) thepower, pursuant to Art. 2443 of the Italian Civil Codeto increase share capital, on one or more occasionsand, in any event, in tranches, against payment, alsowith the exclusion of the option right pursuant to Article2441.5 (i.e. through the issue of new shares to beoffered to individuals - including directors, contractworkers and/ consultants - in respect of which there isno employee-employer relationship with the companyand/or its subsidiaries and/or parent companies),paragraph 6 and/or 8 (i.e. through the issue of newshares to employees of the company and/or itssubsidiaries and/or parent companies) the Italian CivilCode. and/or to increase share capital, free of charge,pursuant to Article 2349 of the Italian Civil Code. (i.e.through the issue of new shares to offer free of chargeto employees of the company and/or its subsidiariesdrawn from the profits or profit reserve), for a maximumnominal fee of €30,000,000.00 (thirty million) to servicethe remuneration plans based on financial instrumentspursuant to Article 114-bis of the TUF.

These proxies can be exercised by the Board ofDirectors by April 29, 2020.


With regard to what has not be mentioned here,please refer to the Directors’ report and to the minutesof the Shareholder’s Meeting of April 30, 2015,published on the company website www.salini-impregilo.com in the "Governance - Shareholders’Meeting" section, in the documentation concerningsaid extraordinary meeting of April 30, 2015.

Authorization to repurchase treasury shares

On September 19, 2014, the Shareholders’ Meeting ofSalini Impregilo authorized the Board of Directors torepurchase treasury shares in view of a medium-longterm investment, in order to (i) establish a portfolio oftreasury shares to be used for any extraordinarytransactions, (ii) establish a portfolio of treasury sharesto service the remuneration and retention plans formanagement and personnel; and (iii) operate on themarket to support the liquidity of the Company’sshares and for the purpose of stabilizing its price, inthe presence of anomalous fluctuations compared withexpected market trends. The authorisation wasresolved within the maximum 18-month term from thedate of said Meeting (therefore up to March 19, 2016).

According to the resolution of the Shareholders’Meeting of the September 19, 2014, the Issueracquired and holds to date no. 3,104,377 treasuryshares, equal to 0.631% of the ordinary share capitaland 0.629% of the total share capital.

In addition to the above, the Ordinary Shareholders’Meeting on September 19, 2014, authorized theBoard of Directors to sell and/or in any event disposeof all the treasury shares held without any time limit(and therefore also beyond expiry of the deadline perthe purchase of treasury shares mentioned above), forall the purposes specified above and using any of themethods allowed by the prevailing applicable

regulations (also through subsidiaries) at a sale priceto be established from time to time. The Board ofDirectors, as at the present date, has not sold any ofits treasury shares.

Per For everything not mentioned here, please refer tothe Directors’ Report prepared pursuant to Article 73of the Consob Issuers’ Regulation and the minutes ofthe shareholders’ meeting of September 19, 2014published on the company’s website www.salini-impregilo.com in the ”Governance - Shareholders’Meeting” section in the documentation of theShareholders’ Meeting of September 19, 2014.The Board of Directors, as at the present date, hasnot sold any of its treasury shares.

l) Management and coordination (Article2497 et seq of the Italian Civil Code)

The Company is subject to the management andcoordination of Salini Costruttori S.p.A., as confirmedby the Board of Directors on December 12, 2013.

The information required by Article 123-bis.1.i) of theTUF (“agreements between companies and theirdirectors ....that provide for compensation in the caseof their resignation or dismissal without just cause orif their relationship is discontinued following a takeoverbid”) is set out in the 2017 Remuneration Reportpublished pursuant to Article 123-ter of the TUF,according to the terms provided for by the Law.

The information required by Article 123-bis. 1.l) of theTUF (“the rules applicable about the appointment andreplacement of directors ... and changes to theBylaws, if different to those provided for by law andregulations applicable on a substitute basis”) isdisclosed in the section on the Board of Directors inthis report (section 4.1).


3.1. Adherence to the CorporateGovernance Code

Salini Impregilo adheres to the Corporate GovernanceCode approved in March 2016 and (whose lastamendment dates July 9, 2015) by the CorporateGovernance Committee and promoted by BorsaItaliana S.p.A., ABI, Ania, Assogestioni, Assonime andConfindustria, and publicly accessible on the websiteof the Corporate Governance Commit tee athttp://www.borsaitaliana.it/comitato-corporate-governance/codice/2015clean.pdf

* * * * *

Salini Impregilo and its strategically significantsubsidiaries, Impregilo International InfrastructuresN.V. identified as such on March 12, 2007) and LaneIndustries Incorporated, (identified as such on the July14, 2016), are not subject to non-Italian legaldispositions that influence the Issuer’s corporategovernance structure.

3. Compliance (Article 123-bis.2.a) of the TUF)


4.1 Appointment and Substitution (ex Article 123-bis.1, Letter L), TUF)

Composition and Appointment of the Board of Directors

Pursuant to Article 20 of the Bylaws of SaliniImpregilo, the Company is administered by a BoDcomposed of a minimum of seven to a maximum offifteen people.

Directors may not be appointed for a periodexceeding three years which expires on the date ofthe Shareholders’ Meeting held to approve thefinancial statements of the last year of their term ofoffice and may be re-elected.

The Shareholders’ Meeting, prior to proceeding withthe appointment, shall determine the number ofmembers of the Board of Directors and the term ofoffice of Directors within the above limits.

Taking (and remaining in) office as a Director issubject to meeting the requirements set by the

legislation and regulations in force at the time ofappointment.

Directors are elected using lists submitted by theshareholders and the outgoing Board of Directors inwhich the candidates are listed in numeric sequence,as specified below, in compliance with applicablelegislation on gender equality and minimum numberof directors possessing the independencerequirements prescribed by law and by the company’sBylaws, according to the number of members of theBoard of Directors.

The lists shall expressly indicate candidates who meetsuch independence requirements.

The lists shall be deposited at the Issuer’s registeredoffice at least twenty-five days before the date of firstcall of the Shareholders’ Meeting, as detailed in thenotice calling the meeting.

Shareholders, shareholders forming part of significantshareholder agreements as per Article 122 of the TUF,the parent, subsidiaries and jointly controlled entities

4. Board of Directors


pursuant to Article 93 of the TUF, cannot submit orparticipate in the submission of more than one list,either directly or through a third party or a nominee,nor can they vote for more than one list, either directlyor through a third party or a nominee. Acceptances orvotes breaching such prohibition shall not be assignedto any list.

Lists may be filed only by Shareholders who, alone ortogether with other Shareholders, hold sharesrepresenting in the aggregate at least 2% of the sharecapital with the right to vote at Ordinary Shareholders’Meetings, or a lower percentage that may be requiredpursuant to imperative provisions of laws orregulations.

Consob established the percentage as 1% for thepresentation of lists for the election of the directorsand statutory auditors of Salini Impregilo, pursuant tothe TUF and the Issuer Regulation in its resolutionno.19856 of January 25, 2017. 144-quater of theConsob Market Regulations.

Together with each list and within the respective timelimits stated above, the shareholders must file: (i)statements whereby each candidate accepts theircandidature and states, under their own responsibility,the non-existence of any reasons for ineligibility orincompatibility and the existence of the requirementsfor the relevant offices; (ii) a professional and personalprofile of each candidate and mention of whether theyqualify as independent and any offices held as directoror statutory auditor in other companies; and (iii) anyother information that is requested in the notice callingthe shareholders’ meeting and required under theapplicable law or regulations.

A certificate issued by a legally-authorizedintermediary must also be filed, within the time limitestablished in the rules governing the publication oflists by the Company, showing ownership of thenumber of shares necessary to submit lists at the dateof filing of the list with the Company.

Lists containing a number of candidates greater thanor equal to three shall consist of candidates belonging

to both genders, in order that at least one third (in anycase rounded up) of candidates belong to the lessrepresented gender.

Lists submitted that do not meet the aboverequirements will be treated as if they had not beensubmitted.

During the Board of Directors meeting one mustproceed as follows:

If at least one list obtains a number of votesrepresenting at least 29% of the Company sharecapital entitled to vote at the ordinary shareholders’meeting, all Directors except one shall be taken fromthe list with the highest number of votes, in theprogressive order in which they are shown on the list,while the remaining Director shall be taken from theminority list that has obtained the highest number ofvotes and is not connected in any way, even indirectly,with the shareholders who filed or voted the list thatobtained the largest number of votes.

If the first two lists obtain the same number of votes,from each of said lists, in the order in which theywere listed in the list itself, an equal number ofDirectors less one shall be taken and the remainingDirector shall be taken from the list which, in termsof number of votes, came third and is not connectedin any way, not even indirectly, with those whosubmitted or voted the lists that obtained the highestnumber of votes.

If only two lists have been submitted and these havereceived the same number of votes, the remainingDirector will coincide with the oldest candidateamong those not already taken from such lists; ifnone of the lists receives votes equal to at least 29%of the share capital with voting rights at ordinaryshareholders’ meetings, directors are taken from allthe lists submitted as follows: the votes received bythe lists will be divided successively by progressivewhole numbers from one to the number of Directorsto be elected. The resulting scores shall be assignedto the candidates of each list in consecutive orderusing the order in which they are included in the lists.


The candidates are then included in a singledecreasing order list, based on the scores given toeach one. Those with the highest score are elected.If more than one candidate has the same score, theone from the list that has not had any director electedfrom it or has had the smallest number of directorselected is taken.

Lists that do not obtain a vote percentage equal to atleast half that set by the Bylaws for the submission oflists shall not be considered.

If, with the candidates elected in the mannerdescribed above, the necessary number ofDirectors belonging to the less represented genderor the minimum number of directors meeting theindependence requirements established by law isnot ensured, depending on the number of membersof the Board of Directors compliant with theregulations in force at any time, the candidateelected last in sequential order in the list receivingthe highest number of votes shall be replaced bythe first candidate, as appropriate, of the lessrepresented gender and/or meeting theindependence requirements provided for by law,not elected from the same list according to thesequential order.

This replacement procedure shall be continued untilthe composition of the Board of Directors complieswith applicable legislation.

If this procedure does not produce this result,substitution shall take place on the basis of aresolution adopted by a relative majority of theShareholders’ Meeting, after candidates with thenecessary requirements are placed in nomination.

Should no list be filed or accepted, the Shareholders’Meeting shall adopt resolutions with the majoritiesrequired by law, without complying with the above-mentioned procedure, in order in any case to ensurethe presence of the necessary number of Directorswho meet the independence requirements prescribed

by law, and compliance with the applicable legislationon gender equality.

The list voting procedure is only used when an entireboard is being appointed.

The Board of Directors elects, pursuant to Art. 21 aChairman from among its members and, if necessary,one or two Deputy Chairmen who will replace theChairman in the event of his absence or impediment.

* * * * *

The Board of Directors, during its renewal, canexpress its opinion on managerial figures (not onlyprofessional ones), whose presence is deemedadequate, pursuant to criterion 1.C.1. letter h) of theCode. Should the Board of Directors present a listfor its renewal, it will involve the Compensation andNomination Committee, pursuant to Art. 5 of theCode.

Replacement of Directors

Pursuant to Article 20 of the Bylaws, if, during theyear, one or more directors leave, as long as themajority is always composed of Directors appointedby the Board, the Board of Directors shall replacethem pursuant to Article 2386 of the Italian Civil Code,appointing candidates from the list to which theformer director belonged, in consecutive order, andwho are still eligible and willing to accept the position.Directors who have left office are always replaced: (i)ensuring the presence of the necessary number ofdirectors with the independence requirementsestablished by law and (ii) in compliance with theapplicable legislation on gender equality.

If the majority of Directors appointed by theShareholders’ Meeting cease to be in office, theremaining Directors shall be deemed to be no longerin office, effective as of the date when the Board ofDirectors is reconstituted through election by theShareholders’ Meeting.


Non-competition pursuant to Art. referred to in Article2390 the Italian Civil Code

Unless otherwise resolved by the Shareholders’ Meeting,Directors are not subject to the veto referred to in Articlereferred to in Article 2390 the Italian Civil Code.

Remuneration of the Board of Directors

The Shareholders’ Meeting shall determine theremuneration of the Board of Directors and maydetermine the procedures for its division amongdirectors, should the remuneration be determined forthe entire Board.

Board members are entitled to reimbursement ofexpenses incurred by reason of their office.

The remuneration of directors with special duties isdetermined by the Board of Directors afterconsultation with the Board of Statutory Auditors.

For further information regarding the remuneration ofthe Board of Directors, please refer to the 2017Remuneration Report, which will be published in theterms provided for by the law.

Succession Plans

With respect to criterion 5.C.2 of the Code, the Boardof Directors approved a Succession Plan (the “Plan”)defined, also on the basis of the relevant proposalsmade by the Compensation and Nominating Committee.

The current Plan - which has been approved by theBoard of Directors on March 19, 2014, and confirmed,finally, on October 12, 2016, - following a previouspreliminary assessment made by the Compensationand Nominating Committee - envisages the applicableprocedures to guarantee a continuity of the corporatemanagement in any case where the CEO leaves officebefore his/her mandate has reached its normal term,even by taking every necessary decision for thepresent immediate situation, ascribing adequateproxies and powers to the Chairman.

The plan consists of: (i) compliance with provisionscontained within the comment to Art. 5 of the Codewith regard to providing a clear definition of targets,tools and timings of the process, the Board’sinvolvement and a clear division of responsibilities,starting from the preliminary investigation (ii)compliance with the Bylaws concerning thereplacement of Directors ceasing to hold office; (iii)compliance with the regulations approved by theBoard of Directors concerning the maximum numberof positions that can be held in other companiespursuant to criterion 1.C.3 of the Code; (iv)compliance with the principles set forth in criterion2.C.5 of the Code concerning “cross directorship”; (v)competence and experience requirements of theindividual to be appointed; (vi) a balance betweenenhancing internal management skills (though astructured management assessment procedure) andopening to the market.

The Plan provides for appointing the Chairperson ofthe Board of Directors to identify a possible successorof the CEO. The Chairman, after consultation with theCompensation and Nominating Committee, will alsobe required to prepare a proposal for the Board ofDirectors.

The role of the compensation and nominatingcommittee is to assess, on an annual basis, whetherto revise the plan. However, the Board of Directorshas the power to (i) call on, whenever it wishes, thecompensation and nominating committee to proposea revision of the plan providing guidelines or (ii) torevise the plan directly.

4.2 Composition (Article 123-bis.2.D) of the TUF)

The Salini Impregilo Shareholders’ Meeting held onApril 30, 2015, appointed the new Board ofDirectors for three years, and therefore until theShareholders’ Meeting for approval of the financialstatements at December 31, 2017, based on theapplications submitted by means of the following2 lists.


1) Majority list submitted by the shareholder SaliniCostruttori S.p.A., containing 14 candidates forthe office of director of the Company, in thepersons of:

• Marina Brogi• Giuseppina Capaldo• Mario Giuseppe Cattaneo• Roberto Cera• Laura Cioli• Claudio Costamagna• Alberto Giovannini• Nicola Greco• Pietro Guindani• Geert Linnebank• Giacomo Marazzi• Franco Passacantando• Laudomia Pucci• Pietro Salini

These candidates were all elected with the favorablevote of approx. 86.53% of the voting capital.

2) Minority list submitted by the law firm Trevisan &Associati on behalf of shareholders who togetherheld 1.18% 5,801,923) shares of the Company’sshare capital, with the following two candidatesfor the office of director of the Company:

• Marco Bolgiani• Angelo Busani

The first candidate of the minority list, MarcoBolgiani, was elected with the favorable vote of11.77% of the voting capital.

On July 14, 2015, Claudio Costamagna resigned asDirector (non-independent non-executive) andChairman of the Company’s Board of Directors,accordingly also the office of the same as a memberof the Executive Committee being forfeited.

The Board of Directors, which met on the same date,therefore:

• appointed, as the new Chairman of the Board ofDirectors, Alberto Giovannini, former Director of theCompany, who, on the same date, resigned fromhis position as Chairman and member of theCommittee for Related Party Transactions;

• reduced the composition of the Executive Committeefrom 5 to 4 members.

On February 24, 2016, the independent and non-executive Director Laura Cioli resigned as Director ofthe Issuer by virtue of offices held in other companies.

On March 16, 2016, the Board of Directors appointedas Director, pursuant to Article 2386 2386 of theItalian Civil Code. Grazia Volo, non-executive and non-independent director, replacing Claudio Costamagna,who will remain in office until the next Shareholders’Meeting. On the same date the Board also called theShareholders’ Meeting for the appointment of twoBoard Members.

The Ordinary Shareholders’ Meeting of April 28, 2016,has therefore appointed Alessandro Salini and GraziaVolo as new Directors until the meeting held toapprove the financial statements as at December 31,2017.

The Board of Directors that was held on this dayverified the non-existence of the independencerequisites both in terms of the TUF, and as regards theCorporate Governance Code.

No further change in the Board of Directors or itscommittees has taken place since year end.

The curricula with the personal and professionalinformation of each Director is available onwww.salini-impregilo.com, in the “Governance -Board and Committees”.

Information concerning the composition of the Boardof Directors at end of year can be seen in Table 1,which is attached to this Report.


Maximum Number of Positions Held in Other Companies

The Board of Directors of February 23, 2017, a reviewof the previous resolution concerning the maximumnumber of positions held in other companies ofDecember 12, 2007, if we consider “significantcompanies”:

a. Italian companies listed on Italian or other EU stateregulated markets and the companies issuingfinancial instruments to the public in significantquantities pursuant to Art. 116 of the TUF;

b. banks, financial brokers pursuant to Article 107 ofLegislative Decree no. 385 of September 1, 1993,stock brokerage companies pursuant to Article1.1.e) of the Consolidated Act (TUF), variablecapital investments companies (OEICs) pursuantto Article 1.1.i) of the TUF, fund managementcompanies pursuant to Article 1.1.o) of the TUFinsurance companies pursuant to Article 1.1.s), t)and u) of Legislative Decree no. 209 of September7, 2005, set up as companies as per paragraphsV, VI and VII, section V, chapter V of the Italian CivilCode not listed on Italian or EU state regulatedmarkets;

c. companies as per paragraphs V, VI and VII,section V, chapter V of the Italian Civil Code thatindividually or collectively at group level, if theyprepare consolidated financial statements, show:i) revenue from goods and services of more thanEuro 500 million; or ii) assets of more than Euro800 million, ruled, confirming the precedingorientation, that the maximum number ofadministrative and controlling positions thatdirectors of Salini Impregilo can hold in othersignificantly big companies is equal to:

• 4 (four) positions, with regard to ExecutiveDirectors

• 6 (six) positions, with regard to non-executivedirectors members of the executive committee,should this be established

• 8 (eight) positions, with regard to non-executivedirectors members of the executive committee,should this be established.

In order to calculate the number of positions:

• positions in companies that are directly and/orindirectly controlled by Salini Impregilo are not tobe considered;

• positions in companies that directly and/orindirectly control Salini Impregilo or that are subjectto the direct and/or indirect control of SaliniImpregilo are not to be considered;

• positions as alternate statutory auditor are notconsidered;

• positions held in significant sized companiesbelonging to the same group which is not that ofthe Issuer are considered to have the following“weight”:

– first position: 1– second position: 1.5– from three up: 2.

Should a director be offered new positions that wouldlead to their exceeding the above ceilings, they shallpromptly inform the Board so that it can grant waivers(also temporary ones) to the maximum number ofpositions set in this rule, motivating the waiver. Thewaiver shall be adequately documented. It shall bedescribed in the company’s corporate governancereport together with the reasons thereof.

The Board of Directors of February 23, 2017, prior toa preliminary investigation of the Compensation andNominating Committee, verified that the Board’s compositioncomplies with the above-mentioned general criteria.

Induction Program

In order to provide the Directors and StatutoryAuditors with an adequate background to the Issuer’s


sector, its characteristics and developments as wellas the relevant legislative framework, the Chairpersonensures, pursuant to Criterion 2.C.2 of the CorporateGovernance Code that:

• the Board of Directors and the committees(through their Chairpersons) are informed thereofduring their meetings, also through theparticipation, at these meetings, of managers andtechnicians who have the necessary expertise toprovide information on particularly complex orimportant issues. In particular, the Chairman invitedthe Group Risk Officer to illustrate, during theBoard meeting, the Risk management frameworkdevelopment process to correctly manage risks,even with regard to "induction" pursuant toCriterion 2.C.2. of the Code;

• directors not part of committees are invited toattend committee meetings when this informationis provided;

• the directors have access to the company’sintranet portal, where they can find information anddocumentation about the above topics (includingorganizational charts, framework and operatingprocedures in force, dispositions andorganisational communication, internalcommunication, guidelines, corporate handbooksand models);

• working sessions are held to illustrate specificbusiness issues to the directors and statutoryauditors.

During 2016, an in-depth session was held fordirectors and statutory auditors regarding thereference regulatory framework, particularly withregard to Public Contracts (Legislative Decree April18, 2016, no. 50). This session has been carried outwith the participation of Directors and StatutoryAuditors, and a lawyer specialised in administrationlaw and public work contracts was called as speaker.The meeting was attended by the Integrity Boardpursuant to Legislative Decree 231/01 of theCompany.

4.3. Role of the Board of Directors (Article 123-bis.2.d) of the TUF)

Tasks and functionsof the Board of Directors

Pursuant to Article Pursuant to Article 24 of theBylaws, the Board of Directors has the widestpowers for the company’s ordinary andextraordinary management with no exceptions. Ithas the power to perform all those actions that itdeems suitable to carry out the company’s activitiesas per its business object or related activities,except for those actions reserved exclusively for theshareholders by law.

The Board of Directors may thus resolve to establishor close branches in Italy or abroad, reduce the sharecapital in the event of a shareholder withdrawal,amend the Bylaws to comply with changes inlegislation, transfer the registered office within Italy,and carry out a merger and spin-off in compliancewith the provisions of Articles 2505 and 2505 bis ofthe Italian Civil the Italian Civil Code.

In addition to what has been mentioned above, theCompany’s Board of Directors, even pursuant tocriterion 1.C.1, letter f) of the Italian Civil Code,reserved itself the right, in addition to the proxies thathave been permanently given to it by the Bylaws, theexclusive competence concerning any inherentdecision:

• the exercise of voting rights (a) at extraordinarymeetings of the shareholders of the strategicsubsidiaries and (b) at ordinary meetings of theaforementioned shareholders of the strategicsubsidiaries called to appoint their directors;

• examining and approving the Budget, the BusinessPlan and the Commercial Plan/Acquisition Plan;

• performing all significant transactions that do notrequire shareholder approval as per the“Regulations for related party transactions”,approved from time to time;


• purchasing and selling equity investments incompanies, consortia or other entities, notincluded in the Group’s perimeter, includingcompanies or business units, for an amountexceeding €50 million.

Pursuant to criterion 1.C.1., letter a) of the Italian CivilCode, the Board of Directors:

• the strategic, business and financial plans of theIssuer and its group, and to periodically monitortheir implementation;

• the Issuer’s corporate governance system;

• the structure of the group headed by the Issuer.

Salini Impregilo’s Board of directors met 17 times in2016; on average, each meeting lasted about 2 hours.Please see the Table 1, which is attached to thisReport, for information on the percentage of meetingsattended by each member of the executive committeeduring the year.

The 2017 financial year calendar (available on the website www.salini-impregilo.com, in the“Governance - Corporate Events” section) envisages5 meetings.

Two other Board meetings were held in 2017, besidesthe scheduled meetings.

The Board, as part of the self-assessment processcarried out in 2016, acknowledged that the Chairman,assisted by the board secretary, has provided thedirectors with the available documentation andinformation about the issues to be discussed beforeeach meeting so that they can be preparedbeforehand, and to have ensured their confidentialitythrough specific safeguarding measures for theDirectors and Statutory Auditors to accessdocumentation. When useful, the documentation wasmade available together with specific executive

summaries to aid the directors’ understanding andreview of the matters to be discussed. In certaincircumstances, the nature of the resolutions to adoptor confidentiality requirements had to necessarily limitany anticipated information. In these cases, theChairman ascertained that adequate and regularcontrols were to be carried out during board meetingspursuant to the comment of Article 1 of the Code.Specifically, the independent directors found that theinformation provided by the CEO to the Board wassatisfactory.

The board meetings were usually attended by thesecretary and the manager in charge of financialreporting. When appropriate, experts and managersof the Issuer and its group companies alsoparticipated, depending on the matters to bediscussed, to ensure the proper and profitableworking of the meetings and to provide any in-depthinformation necessary. In particular, during the year,the following people participated in the meetings ofthe Board of Directors: (i) the Director of theAdministration Finance and Planning department withregard to matters pertaining to the Impairment Testand to the approval of periodical financial reports, (ii)the General Manager International Operations and theHead of the Technical Department with regard tocommercial initiatives of the company, (iii) the Directorof the Internal Audit and Compliance department withregard to the 2016 Audit Plan, (iv) the Group RiskOfficer with regard to Risk Management (iv) the GroupEngineering, Development and Concession Directorto introduce the activities of said department duringthe year.

The Chairman ensured that the items on the agendawere each allowed enough time to allow theircomplete and constructive discussion and to analyzethe supporting documentation, including theinformation provided before each meeting.

The directors expressed their positions andcontributed to the meetings.


The activities of the Board of Directors during 2016

During 2016, the Board of Directors carried out thefollowing activities:

• resolved a refinancing transaction of its debt byplacing a bond issue, for institutional investors, foran overall nominal amount of Euro 600 million,listed on Dublin’s Irish Stock Exchange;

• it examined the provisions in the TransparencyDirective and resolved, in compliance with thesame, to annually approve only the annual and six-monthly financial statements, excluding quarterlyones and to voluntarily communicate for the firstand third quarters of each year, the additionalinformation like the data concerning new ordersand a qualitative update concerning businessactivities, even as regards the declared objectivesfor the current year;

• it examined and approved the 2016-2019 BusinessPlan;

• it called the Savings Shareholders meeting toappoint the representative of the Savings Sharesand approve the fund for expenses;

• it approved the half-year financial report;

• it reviewed its corporate governance system. Indoing so, it resolved to eliminate the ExecutiveCommittee, to allow an improvement of thecorporate governance system by strengthening therole of the Board of Directors, during a plenaryassembly, when analyzing significantly importantoperations of the Company.

The Board of Directors also:

• pursuant to criterion 1.C.1, letter C) of theItalian Civil Code and after a positive feedbackof the Risk control Committee, who examinedthe assessments that were carried out by the

Internal Audit, on 8 March 2017, assessed theadequacy of the organisational, administrativeand accounting structure of the Issuer and of itssubsidiaries that are strategically significant forImpregilo International Infrastructures N.V. andLane Industries Incorporated Ltd, with particularreference to the Internal Control and RiskManagement System;

• with regard to criterion 1.C.1. letter e of the ItalianCivil Code, during institutional meetings, assessedthe general performance of the managementsystem even with regard to programmed targets,also by particularly considering, the informationreceived by the delegated bodies.

Board Evaluation concerning 2016

The Company’s Board of Directors carried out, evenfor 2016, the self-assessment process pursuant tocriterion 1.C.1., letter g, of the Corporate GovernanceCode, after the preliminary investigation of theCompensation and Nomination Committee and havingheard the opinion of the Independent Directors, duringan ad hoc meeting, concerning the procedures forcarrying out the board evaluation.

The self-assessment process, for what is mentionedabove, saw each Director filling out a detailedquestionnaire according to what is stated in theCorporate Governance Code, and previously analyzedand approved by the Board of Directors.

To carry out the self-assessment activities no externalconsultant was used.

During the Board meeting that was held on 23February 2017, based on what was analysed by theCompensation and Nominating Committee on 21February 2017, the 2016 self-assessment results wereexamined, from which the following emerged:

• the composition of the Board is such that eachDirector has adequate professional experience,both in management and at an international level,


in the various issues providing the greatest supportto the activities of the corporate bodies, includingtechnical, economic, financial and legal issues.Thanks to this combination of professionalexperience, the Board of Directors has fulfilled andwill continue to fully discharge all of its functionsand duties;

• the documentation and information available on theissues to be discussed have been provided to thedirectors in a clear and comprehensive manner,ensuring sufficient confidentiality of the pre-boardmeeting information, in adequate time before eachmeeting. The directors participate in the work ofthe Board appropriately and actively contribute tothe discussion and decisions taken;

• the number of board meetings held, their duration,interval and frequency appear to be adequate;

• the issues to be resolved by the Board of Directorshave been thoroughly examined and theempowered bodies have provided information tothe Board of Directors on the activities carried outin exercising the powers conferred upon them;

• the directors take part in initiatives aimed atincreasing their awareness of the company’ssituation and dynamics, also with respect to therelevant legislative framework;

• the number of independent directors is consideredappropriate in relation to the composition of theBoard of Directors and for the activities carried outby the company;

• in the performance of the duties of their office, theBoard of Directors is supported by the internalcommittees. The dimensions, expertise andexperience of these Committees are such that theyare able to effectively carry out their respectivetasks.

With regard to the assessments expressed by theIndependent Directors, these have resulted to be inline with the above-mentioned overall trend.

* * * * *

With respect to criterion 1.C.4. of the Code, Article 20of the Bylaws provides that, unless otherwise resolvedby the Shareholders’ Meeting, Directors are notsubject to the ban referred to in Article 2390 the ItalianCivil Code. In 2015 and 2016, to the present date,there were no critical issues or needs of anorganizational nature that required the need to requestto the Shareholders’ Meeting to make exemptionsfrom the above-mentioned ban.

4.4. Empowered Bodies

Chief Executive Officers

The Board of Directors may delegate part of itspowers to one or more directors, setting limits andproxy operating methods. It may appoint directors andrepresentatives, who do not necessarily have to beboard members, and establishes their powers (Art. 25of the Bylaws).

The Board of Directors appointed Pietro Salini as CEOon April 30, 2015. It gave him the legal power torepresent the company and signatory powers withthird parties and in court. He also has powers tomanage the company (those powers for which theBoard of Directors as in paragraph 4.3 do not detainan exclusive right), and may delegate responsibility forthe organization and running of certain businessactivities.

The CEO, Pietro Salini, is in charge of running thecompany (Chief Executive Officer).

As required by criterion 2.C.5, it should be noted thatno interlocking directorate situation exists, given thatthe CEO does not hold directorships in any otherItalian listed companies.

Chairman of the Board of Directors

The Chairman is the company’s legal representativeand has signatory powers with third parties and in


court pursuant to Article 28 of the Bylaws. TheChairman does not have special strategic decision-making powers.

The Chairman of the Board of Directors is not the chiefexecutive officer, nor is he the majority shareholder ofthe Issuer.

Executive Committee (Article 123-bis.2.d) of the TUF)

The Board of Directors elects, pursuant to Art. 25 ofthe Bylaws, the Board of Directors may delegate all orpart of its powers (not reserved to it by law) to anexecutive committee consisting of a number ofmembers to be less than half that of the Board ofDirectors, including the CEO, who acts as Chairmanof the Executive Committee.

The Board, on December 15, 2016, to improvegovernance rules to promote the treatment of topicsrelated to business strategy during a plenary assembly- which was originally attributed to the ExecutiveCommittee - revoked said body.

The Executive Committee, during 2016 and up to itsannulment date, was composed as follows:

The Executive Committee is convened as requiredand meetings are not scheduled for each year.During the year, the Executive Committee met 3(three times). Each meeting lasted approximately anhour.As regards the information concerning thepercentage of participation of each component ofthe Executive Committee at the meetings heldduring the year, please refer to Table 1 attached tothis Report.

* * * * *

The Executive Committee was given all ordinary andextraordinary administrative powers due to the Boardof Directors, with the exception of the powers reservedto the Board of Directors, as specified in paragraph 4.3.

In addition, with regard to commercial initiatives, theBoard of Directors assigned the following specificfunctions to the Executive Committee:

a. approval of participation in initiatives not includedin the Commercial Plan/Acquisitions Planapproved from time to time;

b. approval of participation in tenders with respectto which the CEO has an interest on his ownbehalf or on that of third parties pursuant to Article2391 of the Italian Civil Code;

c. monitoring of the progress of the acquisition planin place, of tenders submitted in line with thesame and of initiatives under preparation.

Information to be provided to the Board of Directors

The CEO, on a quarterly basis, and wheneverparticular needs required it, also as the Chairman ofthe Executive Committee (up to its date of elimination),reported the information concerning the proxies andthe most significant operations of the year to theBoard and to the Board of Statutory Auditors.

The Board of Directors, according to the provisions ofcriterion 4.C.1. letter d) of the Corporate GovernanceCode, has also been informed, in the first meetingavailable, by the Chairmen of the Committees part ofthe Board of Directors, as in the subsequent sections7, 9 and 11, which will be mentioned in the mainactivities carried out.

Risk Control Committee, pursuant to criterion 7.C.2.letter f) of the Code, also reported to the Board ofDirectors, every six months, as regards the main activities

Executive Committee Chairman Pietro Salini Member Alberto Giovannini Member Nicola GrecoMember Giacomo Marazzi


carried out in the relevant period, and on the adequacyof the Internal Control and Risk Management System.

4.5. Other Executive Directors

The Board of Directors currently consists of oneexecutive director, who can be qualified as suchpursuant to criterion 2.C.1 of the Code (the CEO, whowas appointed the only Executive Director with Boardresolution of March 16, 2016) and 14 non-executivedirectors.

The directors composing the Executive Committee(abrogated, as mentioned above, on 15 September2016), have been considered non-executive,considering the fact that the participation to theExecutive Committee, also considering the subject ofthese resolutions, did not actually entail the systematicparticipation of its members in the day-to-daymanagement of the company nor does it lead toremuneration that would compromise theirindependence.

4.6. Independent Directors

The Issuer’s Board of Directors is currently composedof the following 10 independent directors:

The Board, applying all the criteria provided for by theCorporate Governance Code, evaluated, at the first

opportunity after its appointment and, therefore, onApril 30, 2015, as well as subsequently on March 16,2016, and February 23, 2017, the existence of theindependence requirements provided for by the Codefor each of the non-executive directors, applying allthe criteria provided for by the Code itself, publishingthe results of its evaluation by means of a disclosureto the market.

The Issuer’s 10 independent directors meet theindependence requirements pursuant to both Articles148, paragraph 3, letters b) and c) of the TUF andcriterion 3.C.1. of the Corporate Governance Code.

The Board of Statutory Auditors checked the correctapplication of the criteria and procedures adopted tocheck independence by the Board. The outcome ofsuch process will be communicated by the Board ofStatutory Auditors to the market in its report to theshareholders.

With regard to criterion 3.C.6 of the Code, during theyear two separate independent director meetingswere held - different compared to the ones of theBoard committees. Said meetings were held, inparticular, to support the Compensation andNomination Committee, with regard to the mostappropriate procedures for carrying out the BoardEvaluation for 2016. The independent directors alsoprovided some ideas for the in-depth sessions to becarried out, for the induction activities that areprovided for by the Corporate Government Code.

When agreeing to their inclusion in the lists ofcandidate directors, the independent directors havenot agreed to maintain their independence throughouttheir term of office and, if necessary, to resign.

4.7. Lead Independent Director

As the requirements of the Code are not met, theBoard has not deemed it necessary to designate anindependent director as lead independent director.

Independent Directors Marco Bolgiani Marina Brogi Giuseppina Capaldo Mario Giuseppe Cattaneo Nicola Greco Pietro Guindani Geert Linnebank Giacomo Marazzi Franco Passacantando Laudomia Pucci


Pursuant to criterion 1.C.1 letter j) of the CorporateGovernance Code to guarantee to correctly handlecompany information, the Board of Directors onDecember 12, 2007, approved a special “Procedurefor the internal management and externalcommunication of documents and information” asproposed by the CEO. This procedure replaced the“Internal regulations for disclosing price sensitivedocuments and information to the market” approvedby the Board of Directors on March 27, 2001).

This Procedure contains the dispositions concerninginternal management and the external communicationof documents and of information.

Said procedure is addressed and applies to all thosewho, due to their work, profession or to their function,have access, on a regular or occasional basis, tocompany information concerning the Issuer. Thesepeople are required to (i) keep said confidentialinformation secret; (ii) use this information solely to carryout their employment or professional activities; and (iii)not use said confidential information against the Law.

In particular, directors and statutory auditors of SaliniImpregilo and of subsidiaries must keep all informationand acquired documents confidential when carryingout their tasks, and more generally the contents ofwhat has been said during board meetings and thework that has been carried out by the Board ofStatutory Auditors.

To guarantee full coordination and a commonorientation, all media relations and relations withfinancial analysts and institutional investors, involvingnews (even not confidential) concerning SaliniImpregilo or subsidiaries can only be carried out inagreement with the Chairman or with the CEO of SaliniImpregilo and through the Investor Relations andCorporate Identity and Communication functions, incompliance with the dispositions of the Procedure.

The Chairman and CEO of the Issuer are responsiblefor managing privileged information.

The management of Privileged Information concerningsingle subsidiaries shall be carried out by the relevant

5. Handling Of Company Information


governance body, which can then share thisinformation in full compliance with the Procedure.

Only the Chairman and CEO of Salini Impregilo maydisclose privileged information to the market.

The communication of privileged information mustrespect the criteria of completeness, timeliness,transparency, adequacy and continuity. Investors

should be provided with the same information to avoiddiscontinuity or the creation of situations that couldaffect the listed share price.

The Chairman is responsible for ensuring compliancewith the Procedure.

The Procedure provides for penalties to be applied tothe parties that violate it.


The Board of Directors has set up, besides theExecutive Committee described previously insection 4.4 (cancelled on September 2016), aCompensation and Nominating Committee (Section9) and the Committee for Related - PartyTransactions (Section 11).

For the Issuer, as it is subject to management andcoordination by Salini Costruttori S.p.A., Article 37 ofthe Consob Markets Regulation and Principle 7.P.4 ofthe Code also applies. According to these,subsidiaries subject to management and coordinationby another company must have an internal controlcommittee composed of independent directors. Theforegoing also applies to the other committees

recommended by the Corporate Governance Code,where established.

The composition of these Salini Impregilo committeescomplies with the provisions.

The decision to set up just one committee to combinethe nomination and remuneration functions is basedon organizational and efficiency requirements as thefunctions are complementary and comply with theprovisions of Article 4 of the Code.

The Board of Directors has not retained functionsattributed to one or more of its committees by theCode.

6. Board Committees (Article 123-bis.2.d) of the TUF)


The board, most recently on April 30, 2015, set upa Compensation and Nominating Committee that inaddition to the duties assigned under Article 6 of theCode to the Compensation Committee, it alsocarries out the duties assigned by Article 5 of theCode to the Nominating Committee, as the Coderules for the composition of the two committees arecomplied with and attainment of the objectives isguaranteed.

Composition and Duties of the NominatingCommittee (Article 123-bis.2.D) of the TUF)

The Compensation and Nominating Committee meetswhenever its Chairman deems it necessary, and inorder to carry out its mandate, as there is no calendarfor the year. It is coordinated by its Chairman.

The compensation and nominating committee alsomeets at the justified request to its Chairman of atleast two members of the Committee or of theChairman of the Board of Statutory Auditors.

During the financial year, the compensation and

nominating committee met 8 times with meetingsaveraging roughly one and a quarter hour.

Three meet ings o f the Compensat ion andNominat ing Commit tee were he ld dur ing thecurrent f inancia l year.

As regards the information concerning thepercentage of participation of each component ofthe Compensation and Nominating Committee atthe meetings held during the year, please refer toTable 1 attached to this Report.

Said Committee, as most recently appointed onApril 30, 2015, as a result of the renewal of theBoard of Directors by the Shareholders’ Meeting,currently consists of the following independentdirectors:

7. Compensation and Nominating Committee

Compensation and Nominating Committee Chairman Marina Brogi Nicola Greco Geert Linnebank Laudomia Pucci

The Board, having considered the personal andprofessional characteristics of the members of theCompensation and Nominating Committee, assessedthat the current composition includes people withadequate financial knowledge and experience, evenas regards compensation policies.

The Chairman (on 6 occasions), the CEO (on 2occasions, for issues related to the compensation ofthe Key Management Personnel) the HumanResources Director (on 6 occasions) and the othermanagers of the Issuer attended committee meetingsupon invitation when the Committee deemed itnecessary and appropriate for a more effectivediscussion of the items on the agenda. Directorsabstained from intervening as regards the proposalsmade to the Board during Committee meetingsconcerning their compensation.

Pursuant to criterion 4.C.1. lett. d) of the Code, theChairman of the Compensation and NominationCommittee referred during the first meeting of theBoard of Directors, of the activities carried out in eachsession of said Committee.

Duties of the Nominating Committee

In its meeting of April 30, 2015, the Board of Directorsresolved to give the Compensation and NominatingCommittee the following duties, pursuant to Article 5of the Code.

Therefore, the Compensation and NominatingCommittee is, pursuant to criterion 5.C.1. A and B ofthe Code vested with the following functions:

• the presentation to the Board of Directors of opinionsabout the Board’s size and composition as well asrecommendations about suitable board members;

• the presentation to the Board of Directors ofcandidates when directors need to be coopted orindependent directors replaced.

In the light of the above, the committee also providesadvice about the issues as per criteria 1.C.3 and

1.C.4 of the Code and the procedures for preparing asuccession plan for the executive directors pursuantto criterion 5.C.2 of the Code.

Duties of the Committee with regard to Compensation

In its meeting of April 30, 2015, the Board of Directorsresolved to give the Compensation and NominatingCommittee the advisory and proposal functions,pursuant to Article 6 of the Code. Therefore, thecompensation and nominating committee is vestedwith the task of:

• presenting suggestions for approval to theCommittee to define the Remuneration Policy ofthe executive directors, of the other directors withspecific roles and of Key Strategic Personnel, andthe draft of the Remuneration report to present itduring the Shareholders’ Meeting to approve thefinancial statements, within the time set by theLaw;

• regularly assessing the adequacy, overallconsistency and actual application of the generalpolicy adopted for the remuneration of thedirectors and key management personnel; thelatter’s conduct is assessed based on theinformation provided by the CEOs; making therelevant proposals to the Board of Directors;

• presenting proposals or expressing opinions to theBoard of Directors with regard to the remunerationof the executive directors and of the other directorswho cover specific roles, and to the setting ofperformance targets connected to the variablecomponent of said remuneration; monitoring theapplication of decisions adopted by the saidCommittee verifying, in particular, that performancetargets have actually been reached.

Activities carried out by the Compensation and Nomination Committee during the year

During the year, the Compensation and NominationCommittee, pursuant to Articles 5 and 6 of the Code,



carried out a preliminary investigation, formulatingproposals to the Board of Directors, with regard to thefollowing topics:

a) final target parameters of the variable promotion plansof the CEO, of the General Managers and of the otherKey Management Personnel with regard to 2015;

b) definition of the target parameters of the variablepromotion plans of the CEO, of the GeneralManagers and of the other Key ManagementPersonnel with regard to 2016;

c) annual review of the Succession Plan;

d) definition of the procedures to carry out the boardevaluation for 2015 and analysis of the relevantresults;

e) definition of the procedures to carry out the boardevaluation for 2016;

f) definition of the Remuneration policy for 2016;

g) preparation of the Remuneration Report ex art.123- ter of the TUF concerning 2015;

h) information regarding ex art. 84-bis, paragraph 5,of Consob Regulation concerning activities thathave been carried out to implement the2015/2017 Performance Share Plan.

Among the main activities carried out by theCompensation and Nomination Committee followingthe end of year for 2016 and up to this day, thefollowing things are to be mentioned:

a) final target parameters of the variable promotion plansof the CEO, of the General Managers and of the otherKey Management Personnel with regard to 2016;

b) definition of the target parameters of the variablepromotion plans of the CEO, of the GeneralManagers and of other the Key ManagementPersonnel with regard to 2017;

c) assessment of the results concerning the boardevaluation for 2016;

d) preliminary verification of the independencerequisites of the Directors, pursuant to criterion3.C.4. of the Corporate Governance Code.

e) preliminary investigation concerning compliancewith the number of positions held by directors;

f) preliminary investigation concerning the number ofpositions, pursuant to criterion 1.C.3. of theCorporate Governance Code.

g) definition of the Remuneration Policy for 2017;

h) preparation of the Remuneration Report ex art.123- ter of the TUF concerning 2016.

For further information concerning the activitiescarried out by the Compensation and NominatingCommittee concerning remuneration, even after theend of year closure, please refer to the RemunerationReport for 2016, which will be published on thecompany’s website, in compliance with the legal andregulatory terms.

* * * * *

Minutes of its meetings are drawn up regularly.

When carrying out its duties, the Compensation andNominating Committee had access to internalinformation and functions and to the necessarycompany functions to carry out its duties.

On March 12, 2007, the Board of Directors resolvedto give the Committee an annual budget of €25,000to cover the costs of any necessary consultancy orother services required to carry out its duties. Theprior authorization of outlays is not necessaryalthough the committee is required to document itsexpenses. It may also avail of internal information andfunctions.


The Compensation and Remuneration Committee canuse external consultants: during the year, there wasno need to use them to carry out the tasks assignedto the Committee. The latter used the Issuer’s meansand structures to carry out its duties.

The Compensation and Nominating Committeeapproved, most recently on May 13, 2015, aregulation that envisages that works must becoordinated by the Chairman, that the Chairperson ofthe Board of Statutory Auditors or another Auditor

named by him. Depending on the topics treated, theChairman of the BoD, the CEO and other Directors,the Manager in charge of drawing-up corporatefinancial reports and other executive managers andexternal consultants of the Company.

During the year, the Chairperson of the Board ofStatutory Auditors or another Statutory Auditorchosen by him participated in the Compensation andNominating Committee. Other Statutory Auditors werealso able to participate.


The information in this section is included in the 2017Remuneration Report published pursuant to Article 123-ter of the TUF and will be made available, within the termsprovided for by the Law, on the Internet site www.salini-impregilo.com, under the "Governance - GovernanceSystem - Shareholders’ Meetings” section and in the"Governance - Shareholders’ meeting" section with regardto the next Shareholders’ Meeting of April 27, 2017.

Incentive mechanisms for the Chief Internal Auditorand the Manager in charge of financial reporting

The incentive mechanisms for the Chief Internal Auditorare consistent with the tasks assigned to the same,pursuant to Criterion 6.C.3 of the Code.

The incentive mechanisms for the Manager in charge of financial reporting are described in the 2017Remuneration Report.

Compensation for directors in the case of theirresignation, dismissal, retirement or termination of the relationship following a takeover bid (Article 123-bis.1.i) of TUF)

The Issuer has not entered into agreements with itsdirectors for their compensation in the case of theirresignation, dismissal, retirement, removal from officewithout just cause or termination of the relationshipfollowing a takeover bid.

During the year there were no cases of termination ofoffice or the termination of employment of executivedirectors or general directors that caused anacknowledgement of a compensation and/or otherbenefits pursuant to Principle 6.P.5 of the Code.

8. Directors’ Remuneration


As noted in Section 6 of this report, the Board has setup a Control and Risk Committee.

Composition and Duties of the Control and RiskCommittee (Article 123-bis.2.D) of the TUF)

The Control and Risk Committee, whose works arecoordinated by its Chairman, meets whenever itsChairman deems it necessary, and in order to carryout its mandate, as no calendar of the meeting isenvisaged for the year.

The Committee also meets at the justified request to itsChairman of at least two members of the Committee orof the Chairperson of the Board of Statutory Auditors.

During the financial year, the Control and Risk

Committee met 15 times with meetings averagingroughly 2 hours and 30 minutes.

5 meetings of the Control and Risk Committee wereheld during the current financial year.

As regards the information concerning the percentageof participation of each component of the Control andRisk Committee at the meetings held during the year,please refer to Table 1 attached to this Report.

* * * * *

The Control and Risk Committee, is currentlycomposed (as resolved during the Board of Directorsmeeting of April 30, 2015, is composed of thefollowing independent Board Directors:

9. Control And Risk Committee

The Board, having considered the personal andprofessional characteristics of the members of theControl and Risk Committee, assessed that saidCommittee pursuant to Principle 7.P.4 of the Code, isentirely made of independent directors possessingexperience in accounting and financial matters or riskmanagement that was deemed adequate for theBoard when they were appointed.

The Control and Risk Committee has its ownregulation for its functioning. It envisages that worksare coordinated by the Chairman, and that theChairperson of the Board of Statutory Auditors oranother Statutory Auditor appointed by himparticipates in the works carried out by theCommittee. The Chairman of the Board of Directorsand the CEO are invited to the Committee’s meetings.The CEO is invited in relation to carrying out activitiesand tasks that fall under his area of responsibility inthe capacity of Director in Charge of the InternalControl and Risk Management System. TheCommittee’s meetings can also be attended by anyother subject who is deemed important for thematters dealt with in the meeting that the saidCommittee thinks to be appropriate.

All Control and Risk Committee meetings have alwaysbeen attended by the chairperson of the Board ofStatutory Auditors or another statutory auditordesignated by him (and the other statutory auditorswere also free to attend), the Director of the InternalAudit and Compliance department (even as the Chiefof the Internal Audit department).

To these meetings, upon invitation of the Committeeand to make its functions more efficient, alsoparticipated the Chairman of the Board of Directors,the CEO, the Manager in Charge of Financial

reporting, the Group Risk Officer and the companyfunctions who are relevant based on the matters thatare being discussed, the Integrity Board and therepresentatives of the Independent Auditors.

Pursuant to criterion 4.C.1. lett. d) of the Code, theChairman of the Control and Risk Committee referredduring the first meeting of the Board of Directors, ofthe activities carried out in each session of saidCommittee.

Duties of the Control and Risk Committee

As resolved by the Board of Directors on April 30,2015 and December 17, 2015, as regards criteria7.C.1 and 7.C.2 of the Code, the Control and RiskCommittee has the following duties:

• it provides the Board of Directors with opinions on:

– the guidelines for the Internal Control andRisk Management System, so that the mainrisks affecting Salini Impregilo and itssubsidiaries are correctly identified, properlymeasured, managed and monitored,defining the degree of compatibility of theserisks with company management and itsstrategic objectives;

– assessment, at least once a year, of theadequacy of the Internal Control and RiskManagement System considering thecompany’s characteristics and risk profile andtheir efficiency;

– approval at least once a year of the audit planprepared by the Chief Internal Auditor;

– description, in the corporate governance reportand the Owenship Structure of the maincharacteristics of the internal control and RiskManagement System, as well as the proceduresfor coordinating the parties involved, expressingits assessment of their adequacy;

– assessment of the findings presented by the


Control and Risk Committee Chairman Mario Giuseppe Cattaneo Marco Bolgiani Giuseppina Capaldo Pietro Guindani Franco Passacantando


Auditor engaged to carry out the Legally-RequiredAudit in its management letter (if prepared) andin the audit report;

– appointment and removal from office of theChief Internal Auditor;

– reporting to the Board of Directors on thesuitability of the resources of the Internal Auditunit for carrying out their duties;

– definition of the remuneration of the ChiefInternal Auditor, in line with internal policies;

• assessment with the Manager in charge of financialreporting, and after consulting the Auditor engagedto carry out the Legally-Required Audit and theBoard of Statutory Auditors, of the correctapplication of the accounting policies and theirconsistency for preparing the consolidated financialstatements;

• expression of opinions on specific aspects relatedto the identification of key business risks, includingeconomic, asset-related and operational risks;

• review of the periodic reports on the InternalControl and Risk Management System, especiallythose prepared by the Internal Audit Function;

• moni tor the independence, adequacy,effectiveness and efficiency of the Internal AuditFunction;

• it may ask the Internal Audit Function to carry outchecks of specific operating areas and it reportsthereon to the Chairperson of the Board ofStatutory Auditors;

• reporting to the Board of Directors at least twice ayear, during the meetings held to approve theannual and half-yearly reports, on its activities andthe adequacy of the Internal Control and RiskManagement System;

• supporting, with adequate investigations, the

assessments and decisions of the Board ofDirectors with regard to risk management arisingfrom adverse facts which the Board of Directorshas become aware of;

• performance of the other duties assigned to it bythe Board.

During the financial year, the Control and RiskCommittee reviewed and assessed the work plan andreports prepared by the Chief Internal Auditor andChief Compliance Officer, and the reports drawn upby the Integrity Board as per Legislative Decree no.231/2001; it expressed, in agreement with the Boardof Statutory Auditors, a favorable opinion, togetherwith the Manager in charge of financial reporting andthe representatives of the independent auditors, onthe correct application of the accounting policies andtheir consistency during preparation of theconsolidated financial statements, reporting thereonto the Board of Directors.

During approval of the draft annual financialstatements and the half-yearly financial report, theCommittee informed the Board of Directors about itsactivities and the adequacy of the internal control andrisk management, administration and accountingsystems taking into account the Internal control andrisk management system compared to thecharacteristics of the related companies and to theexisting risk profile. The positive opinions have beenshared with the Board of Statutory Auditors.

The Committee, during the financial year: (i) approvedthe revisions of the Organization, Management andControl model required by Article 6 of LegislativeDecree 231/01 and of the Code of Ethics; (ii) theupdates to the Guidelines of the Internal Control andRisk Management system; (iii) the updates to themandate of the Internal Audit Function and the issuingof the Mandate of the Compliance Function; (iv) theexistence of the subjective requisites required by theOrganization, Management and Control Model foreach member of the Integrity Board and, therefore, forthe said body in general; (v) the draft of the summarydocumentation of the pre-final data as at December


31, 2015, of the Annual Financial Statements as atDecember 31, 2015, of the half-yearly financialstatements as at June 30, 2016, and the 2016 draftBudget; (vi) the methods and criteria used to definethe contents of the 2016-2019 Business Plan; (vii) theRisk Management Plan; (viii) the updating of theretribution packet of the Director of the Internal Auditand Compliance department.

The Committee, during the year, also: (a) on June 15,2016, approved some modifications to its InternalRegulations; (b) was updated with regard to the 2016-2019 Financial Plan; (c) Knows about the 2016Compliance Program; (d) expressed his favourableopinion as regards the creation of a Corporate SocialResponsibility department, in order to monitor andmanage issues with a social and ethical impactconnected to business related activities; (e) has beenupdated as regards the integration plan of itssubsidiary Lane Industries Inc. as well as in relation tothe accounting and financial situation of saidsubsidiary; (f) it has received information as regardsthe Company’s HSE system; it verified some companyfunctions (g) it met some company functions andacquired information on specific significant informationfor the Group.

* * * * *

Minutes of the Control and Risk Committee are drawnup regularly.

The Control and Risk Committee, in carrying out itsfunctions, had the chance to access the information andthe company functions needed to execute their tasks.

On May 11, 2011, the Board of Directors resolved to givethe Internal Control Committee an annual budget of Euro50,000 to cover the costs of any necessary consultancyor other services required to carry out its duties, whichcan be increased to Euro 100,000 with the documentedrequest by the Committee’s Chairperson and approval bythe Chairman of the Board. The prior authorization ofoutlays is not necessary although the Committee isrequired to document its expenses. It may also avail ofinternal information and functions to carry out its tasks.

The Control and Risk Committee can make use ofexternal consultants; during the year, said Committeedid not need to use consultants to carry out its tasks.For this reason, the Committee did not use anyfinancial resources as it used the means andstructures of the Issuer to carry out its tasks.


The guidelines for internal controls were defined bythe Board of Directors on March 21, 2000, andsubsequently updated and approved on March 25,2009, November 12, 2014, March 16, 2016 andFebruary 23, 2017.

As required by the Code, the company’s InternalControl and Risk management system consists of aset of rules, procedures and organizational structuresput in place to ensure that business operations arealigned with the objectives defined by the Board ofDirectors, which is able to identify measure, manageand monitor the main risks. The objective is to ensurethe safeguarding of the company’s assets, an efficientand effective operating system, reliable information(not just financial) provided to the governance bodiesand to the market (pursuant to Principles 7.P.2 of theCode), and compliance with the law and regulationsas well as the Bylaws and internal procedures.

The Internal Control and Risk Management System isbased on standards that require business activities tobe based on applicable internal and external rules,that they can be traced and documented, that the

allocation and exercise of powers as part of adecision-making process be matched to the positionsof responsibility and/or with the size and/orsignificance of the underlying transactions, that thoseparties that take or implement decisions, which recordtransactions and those that are required to performthe controls over such transactions provided for bylaw and procedures envisaged by the Internal Controland Risk Management System be different parties andthat confidentiality and compliance with the privacylegislation be ensured.

The parties involved in the Internal Control and Riskmanagement system are the Board of Directors, theCEO as the Director in charge of the Internal Controland Risk Management System, the Control and Riskcommittee, the Manager in charge of financialreporting, the Board of Statutory Auditors, theIndependent Auditors and the Internal Audit andCompliance unit, each by carrying out their duties androles. The Integrity Board appointed pursuant toArticle Article 6 of Legislative Decree 231/01 supportsthe Board of Directors within the scope of itscompetence.

10. Internal Control And Risk Management System

Other subjects involved in the Internal Control andRisk Management System are the Risk Managementfunction (whose activities will be dealt with inparagraph I.1) the General Management departmentsand the Management.

* * * * *

The Internal Audit and Compliance unit wasestablished on November 12, 2016. The Internal Auditand Compliance functions merged is said unit. Thisreview of the organizational model (shared by theBoard of Directors of Salini Impregilo S.p.A. asproposed by the Director in Charge of the InternalControl and Risk Management system, with thefavorable opinion of the Control and Risk Committeeand having heard the opinion of the Board of StatutoryAuditors), is due to the awareness that bettercoordination of the various controls (i.e. operational,financial and compliance) can strengthen the Group’sInternal Control and Risk Management system andimprove things at a general level - typically ex ante(Compliance) and ex post (Internal Audit) - with regardto efficiency and adequateness.

The fact that the Compliance and Internal Auditfunctions coexist in one unit does not compromise thenecessary separation and independence between thetwo functions, which are kept separate both withregard their personnel and in functional terms.

The Internal Audit function, directly reporting to theBoard of Directors, represents the third-level controlstructure, as specified in paragraph 10.2.

The Compliance function is identified as a 2nd levelcontrolling structure. It is responsible for identifyingthe rules, regulations and significant principles for theCompany, and to guarantee that internal proceduresare consistent with these and that they are effectivelyapplied, to prevent, monitor and manage risks relatedwith non-compliance with the law.

The sources and principles comprising the Company’sInternal Control and Risk Management System arerepresented by: the Corporate Governance Code -

July 2015 edition; Salini Impregilo’s Code of Ethics,containing the standards of conduct, ethical and basicvalues that the Group adopts to pursue its objectives;the Organization, Management and Control Modelpursuant to Legislative Decree no. 231/01, the Modelof administrative, accounting and operationalprocedures for preparing the Group’s financialstatements pursuant to Law 262/05, 262/05, the Anti-Corruption Model, the Business Plan, additionalinternal regulations, i.e. the set of corporatedocuments defining roles and responsibilities withinthe organization, including the assignment ofresponsibilities for managing company risks,including, by way of example, but not limited to,Organization Charts, Organizational Communicationsand Memos, the Guidelines pursuant to Law 262/05,Framework, Interfunctional and OperationalProcedures; the power and proxy system, structuredto award authorization and signatory powersconsistent with the organizational and managementresponsibilities assigned; best practices

monitoring of the functioning of the Internal Controland Risk Management System is assigned to theInternal Audit Function. The Board of Directorsapproves, at least once every year, the audit planprepared by the Chief Internal Auditor, subject to theopinion of the Control and Risk Committee and havingconsulted the Director in charge of Internal Controland Risk Management System and the Board ofStatutory Auditors.

Upon approval of the 2016 financial statements, theControl and Risk Committee expressed its favorableopinion to the Board of Directors on the adequacy andeffectiveness of the Internal Control and RiskManagement System with respect to the businesscharacteristics and risk taken, following its review ofthe reports drawn up by the chief internal auditor andthe Integrity Board and based on interviews with thesame and with the Manager in charge of financialreporting and the independent auditors.

This assessment was shared by the Board ofStatutory Auditors and adopted by the Board ofDirectors.



I Description of the main characteristics of the risk management system

After approving the business and strategic plan, whichsets out the management team’s strategic objectives,on March 19, 2014, the Board of Directors began aprocedure to define the nature and level of riskcompatible with these objectives. The assessmentswill include all risks that could be significant in termsof sustainability in the medium-long term, pursuant tocriterion 1.C.1, letter b) of the Code. This process,described in the following paragraphs, was assistedby the Control and Risk Committee.

I.1 Risk Management

From 2015, the Issuer has launched a project for thedevelopment and implementation of a RiskManagement model to address and manage risks inaccordance with the industry best practices, what willbe gradually extended to all operating companies ofthe Group.

In line with the project development plans, the Issuerhas appointed the Group Chief Risk Officer in chargeof the Risk Management Function, with "second level"control functions related, in particular, to the followingactivities:

• identification and monitoring, in consultation withthe Management (Risk Owners) and in support ofthe Director in charge of the Internal Control andRisk Management System, of the risk factors ofsignificance for the Group, ensuring theimplementation of risk mapping and assessment aswell as monitoring of mitigation actions taken bythe Risk Owners.

• support in strategic and commercial planning,proposing to the corresponding guidelines as wellas the company’s risk appetite to the competentbodies;

• support in operations, with a view to achieving thestrategic goals defined in the Business Plan;

• assurance as to the adequacy and consistency ofthe risk management framework adopted throughthe development and the appropriate updating ofthe risk model and methodologies and tools foreffective risk management;

• support in the creation and dissemination of a riskculture throughout the Group.

The Group aimed to equip itself with a system capableof periodically detecting and managing the main risksto which it could be exposed, through a detailedanalysis (for each Country, counterpart and project),both with regard to portfolio, to assess the risk profilein relation to the risk limits that have been defined atan overall level.

The activity mainly focused on the identification andrisk categorization with a potential impact on businessand on the development of methods and tools aimedat managing the dimensions of the identified risk;subsequently, tools and methods aimed at managingthe risks connected with the counterparts and thecountry context within which the Issuer develops itsown business have been also developed.

I.2 Risk Assessment

The Issuer, within the Risk Management processconducted during 2016 a Risk Management activityaimed at identifying and assessing risks that couldimpact the attainment of Business Plan targets.

The Risk Management function assessed both thelevel of exposure to a potentially negative event, interms of impact and risk probability, and the adequacyof the Internal Control System based on theeffectiveness of existing controls.

The Risk Management activity was carried outaccording to these phases:

a) Definition of the method and approachThe method defined for the Group’s RiskManagement system envisages that mapping and

analysing potential risk events, consistently with theadopted Risk Universe, are Group processes.

In line with the sector’s best practices, Assessmentscales were defined which are consistent with theStrategic Plan’s targets in order to provide anindication regarding the potential impact andprobability of each identified event.

b) Identification of RisksRisk identification occurred through meetings thathave been conducted with approximately 40 peopleresponsible for each function: the critical elementsencountered within the processes, even through acomparison with currently adopted policies andprocedures expressing clearly causes and potentialconsequences.

c) Risk analysisRisks were assessed consistently with the methodsidentified and in agreement with the people ofreference of each Function, even considering thelevel of protection guaranteed by the existingControl System.

d) Risk prioritizationThe risks identified and analysed have beenprioritized and shared with the Board of Directorsand with the Control and Risk Committee, with theTop Management and with the Control Functions, inorder to address the subsequent management andmitigation activities. Group Risk Assessment results,in terms of risk events, main generating causes andpossible mitigating actions, are addressed (i) to theBoard of Directors, to the Control and RiskCommittee and to the Top Management, in order toprioritize Top Risks and address the interventionsand, (ii) to the Control Functions, in order to supportand structure the related Intervention Plans.

e) Treatment and monitoring of RisksThe Risk Treatment phase is aimed at managingidentified risks, consistently with their priority level.To this end, multifunctional work tables must analysethe main generating causes of the risk event andstructure the interventions to carry out.

Within the Group’s organisation and the provisions ofthe Internal Control and Risk Management Systemthere are various company Bodies and functionsdedicated to the verification of the system’s effectivefunctioning.

In particular, the Group Risk Officer, according to theglobal vision of the corporate risk profiles, supportsthe Risk Owners in preparing the most appropriaterisk management strategy and in proposing eventualfurther risk management actions to implement in orderto carry out said strategy. Moreover, the Group RiskOfficer coordinates monitoring activities and theGroup’s overall exposure.

I.3 Main characteristics of the risk managementsystem concerning the financial reportingprocess, pursuant to Art. 123-bis, paragraph 2,letter b), of the TUF

The Internal Control and Risk Management Systemapplied to the financial reporting process aims atguaranteeing reliability, accurateness, reliability andpromptness of said financial reporting. Planning,implementation, monitoring and the updating in timeof the system have been carried out by SaliniImpregilo according to the Guidelines which areinspired to frameworks and international bestpractices and dedicated at managing financialreporting.

Said guidelines have been specifically declined toadapt at the Issuer’s characteristics and theiroperating units that contribute to the creation offinancial reporting, both separated (the Parent’s) andconsolidated. Account was taken of the fact that theGroup is composed of entities that are separate inlegal terms from the parent for the purposes of thefinancial reporting referred to herein. The Group in factconsists of both legally separate entities (e.g. Italianand foreign stock companies) as well as entities that,although not legally separate from the parent underItalian law (e.g. foreign branches), have their ownadministrative and organizational structures andproduce their financial reporting independently.


Within the scope of this classification, the System isbased on the dissemination of the applicationprocedures, the training of the personnel involved inthe different stages of the process and a monitoringplan, based on the provisions of Law 262/05, wherebythe effective use of the application procedures ischecked and any developments and integrationsnecessary due to the wide-ranging operating scope inwhich the group works are identified.

The monitoring plan is developed with a risk-basedapproach comparable to that applied for the definitionof the audit plan prepared by the Director of theInternal Audit and Compliance Department as theChief of the Internal Audit department. The Managerin charge of financial reporting assigns specificmandates to the Internal Audit Function to carry outaudits on the financial reporting process.

I.4 Main risks to which the Issuer is exposed

Risk Assessment has been created to be updated andintegrated on a periodical basis. It has been carriedout with the involvement of the company’smanagement and enabled to identify the mostsensitive risk factors based on the Group’s businessactivities:

Business related risks

External risks that could compromise the attainmentof the company’s targets, or all those events thatcannot be directed by company decisions. Risksderiving from a country’s macro-economic and social-political dynamics, from sector trends and from thecompetitive scenario, as well as technologicalinnovation and regulations that characterise theindustry.

Due to these risks, the Group must rely on itsforecasting and managing capacities. The Issuer,integrated risk management within its planning andbusiness processes, by defining commercial and riskguidelines and the structuring of a process aimed atprioritizing and selecting initiatives to pursue,especially on the basis of risks connected to the

country and/or sector in which one is going to workin, instead of the counterpart. Risk monitoringactivities is also guaranteed by monitoring theadvancement of strategic targets, even in terms oforder backlog composition and diversification and itsprogressive developments in terms of risk profile.

Strategic Risks

Risks deriving from strategic, business andorganisational decisions that can jeopardize Groupperformance and that could lead to not reachingstrategic targets. Among these, there are those risksthat derive from choosing a certain type of businessor organisational model through which the Groupintends to operate, those deriving from M&Aoperations, from a non-effective backlog managementor concerning the main counterparts (clients, partners,suppliers, sub-contractors, etc).

The Issuer considers risk to be an essential elementfor the preliminary assessment of decisions andstrategic choices that must be carried out. It hastherefore decided to integrate the strategicdevelopment and definition process with the riskidentification, measurement and managementprocess. Choices concerning the adoption of abusiness or organisational model, the assessment ofwhether to continue with an extraordinary operationor whether a certain partner is the right choice, arethings to be analysed and assessed beforehand, inorder to assess the risk/opportunity ratio, whilemeanwhile identifying risk strategies and managementprocedures to adopt should said risk become reality.

Financial risks

All risks connected with the Group’s equity availability,influenced by credit and cash management and/or bymarket variable volatility, like interest and exchangerates.

In particular, cash management pursues the objectiveof financial independence of the projects that arebeing carried out, keeping the configuration ofconsortia and special-purpose companies in mind,


which can restrict the availability of financial resourcesto the realization of certain projects. Moreover, whenmanaging cash one must consider the existence ofrestrictions concerning monetary transfers set by therules and regulations of certain countries.

The Issuer also considers specific risk areas like thecredit merit of the counterpart and price volatility ofraw goods and also considers essential to equiponeself with effective financial planning tools.

Legal and compliance risks

Risks connected to legal matters or that derive fromcompliance with regulations (e.g.. fiscal, localregulatory matters, etc) that is required to work in thesector and/or in particular countries. For SaliniImpregilo, monitoring of contractual matters linked toproject management activities and to significantcounterparts is fundamental. In this category there arealso risks connected to fraud, both internal andexternal ones, and more generally, compliance withprocedures defined by the company to regulate itsgovernance system.

For this purpose, the Issuer adopts monitoring andmanagement activities related to regulatory risks, inorder to mitigate their effects as much as possible,through a multi-level monitoring activity that envisagesa continuous collaboration ad communication with thesignificant counterparts and the business unitsinvolved and interested with regulatory updates andto assess their potential impact.

Operating risks

Risks that could jeopardize value creation and that aredue to an inefficient and/or ineffective management ofthe characteristic company operativeness, particularlyconnected to bid management and to executing theprojects. Among the various risk activities that fallunder this category we can mention: bid design andplanning, the effective management of the supplychain, warehouse logistics and management, risksconnected to managing information systems, andpersonnel and reporting related risks.

These risks occur when during projectimplementation, company policies or procedures arenot adequate for managing risk factors arising fromthe project’s level of complexity, or followingimponderable events.

To that end, the Group wishes to monitor these risksfrom the phase for analysing the commercial initiativeto pursue (bidding), with regard to assessing theproject’s risk and performance should the tender bewon, and the impact of said bid on the order backlog,both in terms of concentration and overall risk profile.The Issuer, among the other assessments, proceedsto drawing-up a pre-bid risk assessment aimed atidentifying potential risks and consequent impactsconnected to the project, and will also mitigate thenecessary mitigating and/or contingency activities forcoverage purposes. The risk assessment is thencarried out once again when the tender is won andthen monitored while the project is executed, in orderto promptly detect any risk exposure and adopt theappropriate mitigating actions.

10.1. Director in Charge of the InternalControl and Risk ManagementSystem

The Board of Directors elected by the shareholders’meeting on April 30, 2015, confirmed the CEO as the“Director in charge of the Internal Control and RiskManagement System” with all the powers and dutiesenvisaged in Article 7 of the Code.

The Director in charge of the Internal Control andRisk Management System, within the scope of hisrole of supervision of the functionality of the InternalControl and Risk Management System, has thefollowing tasks, in accordance with what has beenenvisaged by criterion 7.C.4 of the CorporateGovernance Code:

• to implement the Guidelines established by theBoard of Directors, ensuring the design,implementation and management of the InternalControl and Risk Management System, constantly


verifying its adequacy and effectiveness, alsoensuring alignment of such System with thedynamics of the operating conditions andlegislative and regulatory framework;

• to ensure the identification of the main corporaterisks, taking into account the characteristics of theactivities carried out by the Company and itssubsidiaries, periodically submitting them to theexamination of the Board of Directors;

• to promptly report to the Control and RiskCommittee (or to the Board of Directors) on issuesand problems emerging in the course of hisactivities or which have otherwise come to hisattention, in order that the Committee (or theBoard) may take appropriate action;

• to request the internal audit unit to perform checksof specific operating areas and the compliance withinternal rules and procedures during businessactivities (when necessary); he informs theChairperson of the Board of Directors, theChairperson of the Control and Risk Committeeand the Chairperson of the Board of StatutoryAuditors thereon.

In addition to and in greater detail with regard to theabove, the Director in charge of the Internal Controland Risk Management System, in accordance withthe Guidelines of the Internal Control and RiskManagement System approved by the Company:

• is responsible for implementing the guidelines ofthe Internal Control and Risk Management System,ensuring that the same is an integral part of theGroup’s operations and culture, activating to thisend suitable information, communication andtraining processes and promoting the adoption ofremuneration and disciplinary systems thatincentivize proper risk management anddiscourage behavior contrary to the principlesdictated by such processes;

• ensures that the Internal Control and RiskManagement System is capable of rapidly

responding to significant risks arising both withinthe Group, as well as from changes to theenvironment in which the Group operates.

10.2. Chief Internal Auditor

The role of the Chief Internal Auditor of SaliniImpregilo was, on May 14, 2014, conferred by theBoard of Directors on Francesco Albieri with a Boardresolution of the same date. Subsequently, onNovember 12, 2016, his role changed to Director ofthe Internal Audit and Compliance department,following the organisational change that made theInternal Audit and Compliance functions unite in oneDepartment.

The Director of the Internal Audit and Compliancedepartment is in charge of the structure that has beenappointed a "third-level" control activity. By this wemean the independent assessment of the overallstructure and functioning of the Internal Control andRisk Management System, even through monitoringof line controls, as well as the so-called "second-level"control activities, and among these a periodic qualityreview concerning the activity carried out by theCompliance function through independent externalconsultants.

As the Chief of the Internal Audit function, the Directorof the Internal Audit and Compliance department isappointed through a formal mandate, to carry out theactivities falling within his area of responsibility,pursuant to the Corporate Governance Code, both ona continuous basis and according to specific needsand in full compliance with international standardsrelating to the role.

The Board of Directors also resolved on theremuneration of the above-mentioned role to carryout his function, consistently with companypolicies.

Said appointment and relevant remuneration isresolved upon proposal of the Director in Charge ofthe Internal Control and Risk Management System,


having received the approval of the Control and RiskCommittee and having heard the Board of StatutoryAuditors.

The Director of the Internal Audit Function, accordingto what is provided for by the Corporate GovernanceCode:

a) verifies, both on an ongoing basis and in relationto specific needs and in compliance withinternational standards, the functioning andsuitability of the Internal Control and RiskManagement System, through an audit plan,approved by the Board of Directors, based on astructured process of analysis and prioritization ofthe key risks;

b) reports directly to the Board of Directors and isnot in charge of any business areas;

c) has direct access to all the functions andinformation useful to carry out his duties;

d) has adequate means to perform the assigned function;

e) prepares periodic reports containing adequateinformation concerning his activities, the way inwhich risk management is performed, as well ascompliance with the plans defined for itscontainment. The periodic reports contain anassessment of the adequacy of the InternalControl and Risk Management System;

f) promptly prepares additional reports and notes onissues and events of particular importance;

g) in parallel transmits the reports referred to inpoints e) and f) to the Chairman of the Board ofDirectors, of the Control and Risk Committee, ofthe Board of Statutory Auditors and to the Directorin charge of the Internal Control and RiskManagement System;

h) verifies, within the scope as of the audit plan, thereliability of information systems, includingaccounting systems.

The structure of the internal audit unit is composed ofpersons with different levels of experience necessaryto carry out their duties. Under the budget assignedand approved by the Board of Directors, the aboveunit engages external consultants when necessary tofulfil specific requirements of the audit plan.

In performing the activities under his responsibility, theChief Internal Auditor had direct access to all thefunctions and information useful to carry out hisduties, he prepared regular reports providing suitableinformation about his activities and the methods usedto manage risk and compliance with risk containmentplans. He also assessed the suitability of the internalcontrols and risk management system. The ChiefInternal Auditor provided timely additional reports andnotes on issues and events of particular significance,and delivered them, as part of his remit, to theChairperson of the Board of Directors, of the Controland Risk Committee, as well as to the Director incharge of the Internal Control and Risk ManagementSystem and to the other parties involved.

During 2016, the Internal Audit unit checked thereliability of the information systems, including theaccounting systems. It also carried out an interventionthat is dedicated to the processes related to theCorporate Information technology department, usinginternationally accepted control-based frameworks.

The Chief Internal Auditor is financially independentwith his own budget approved each year by the Boardof Directors after consulting the Control and RiskCommittee.

Moreover, the Chief Internal Auditor worked togetherwith the other control bodies, as explained in Section10.6 below.

10.3. Organization Model pursuant to Decree 231/2001

On January 29, 2003, the Company adopted the“Organization, Management and Control Model”required by Article 6 of Legislative Decree no. 231/01,


based on the Confindustria guidelines, approved onMarch 7, 2002.

The Model, in the following years, has been constantlyupdated due to the changes concerning the crimes tobe included, but also to the company’s organizationthat changed in the meantime, to changes concerningthe "Areas of activities with risks" and in compliancewith how best practices evolved as promoted byConfindustria and by Associazione NazionaleCostruttori Edili (ANCE).

The "Organization, Management and Control Model",whose current version was approved by the Board ofDirectors of Salini Impregilo on February 23, 2016, isavailable (as regards the General part) on thecompany’s site www.salini-impregilo.com, in the"Governance - Internal Control and Risk Management- Compliance System Model 231).

In order to comply with the specific provisions ofLegislative Decree no. 231/01 and no. considering theanalysis of the company’s situation and activitiespotentially at risk, the offences committed whendealing with the public administration, forgery ofcoins, public credit notes and duty stamps, corporatecrimes, terrorist acts or subversion of democraticorder, crimes against the individual, market abuse andinternational crimes, handling of stolen goods,laundering and use of money, assets or other illegallygained goods, crimes against safety in the workplace,cybercrimes and the unlawful processing of data,organized crime, induction to not make statements orto make false statements to judicial authorities,counterfeiting, crimes against industry and trade,copyright crimes, environmental crimes, employmentof illegally staying third-country nationals, offensesrelating to undue incitement to give or promiseanything of value and corruption between individuals.Moreover, as a result of the recent legislative updates,the offences included in Legislative Decree no. 231/01have been further extended with the introduction ofself-laundering and false accounting offences and withthe extension of environmental offences.

On September 12, 2006, the Board of Directors set

the number of members of the Integrity Board as perArticle 6 of Legislative Decree no. 231/01 as three,in line with that required by the new Organization,Management and Control Model. Previously, theboard had been monocratic (internal controlsupervisor). Currently, the composition of theIntegrity Board envisages a member internal to theCompany, identified in the person of the ChiefInternal Auditor, and two professionals from outsidethe Company, one of which also holds the positionof Independent Director. The Board provided for thecorresponding appointments, most recently onAugust 3, 2015, for three years and therefore untilapproval by the Board of Directors of the half-yearlyfinancial report at June 30, 2018. In accordance withthe Model, the Chairman of the Integrity Board isidentified in the member external to the Companyand who is not a Director. The Integrity Board’smembers have specific expertise in inspections,analyses of control systems and legal issues (inparticular, criminal proceedings) so that they canproperly carry out their duties. The Board of Directorsdecided not to give the Board of Statutory Auditorsthe functions of the Integrity Board.

The strategically significant subsidiary ImpregiloInternational Infrastructures N.V. is a company underDutch law and therefore it is not subject to theprovisions of Italian Legislative Decree no. 231/01.

The Salini Impregilo Group Code of Ethics forms partof the Model (available on the website www.salini-impregilo.com, under the “Governance - Governancesystem”) section.

Anti-corruption Model

On June 16, 2014, the Company implemented theAnti-Corruption Compliance System, whichsummarizes the commitment to the principlesintroduced by the anti-corruption laws and byinternational best practices.

It provides a systematic reference framework of theregulatory instruments and policies on anti-corruption,which Salini Impregilo intends to pursue in order to



prevent active and passive corruption, in particular, foroffers or requests for money, advantages and/or otherbenefits, or payments, made or received, by anyoneacting in the name or on behalf of the Company inrelation to business activities, ensuring compliancewith anticorruption legislation. The System thusintends to act as a guide in dealing with any risks ofcorruption that may arise during the course ofbusiness activities.

The Anti-Corruption Compliance System is embodiedin the following documents and activities:

• Preparation, updating and application of the Anti-Corruption Model, approved by the Board ofDirectors on June 16, 2014 (available at www.salini-impregilo.com in the "Governance - Internal Controland Risk Management - Compliance System - AntiCorruption” section);

• Adoption of the Anti-Corruption Policy;

• Preparation of specific controls, within detailedGuidelines (Evaluation of Relevant ThirdParties and Benefit Management vis-a-visthird parties) and procedures, in order todefine the roles and responsibilities of thoseinvolved and the operating procedures ofprocesses and control tools envisaged in theabove-mentioned documents;

• Establishment of the Anti-Corruption Legal SupportUnit, within the Compliance Function;

• Definition of a Sanctions System;

• Creation of a dedicated channel for Reportingalleged violations of the anti-corruption principles.

The scope of application of the Anti-CorruptionCompliance System is Salini Impregilo SpA, whichpromotes its adoption by Group companies or entities(consortia, joint ventures, etc.).

10.4. Independent Auditors

With resolution dated April 30, 2015, Salini Impregiloappointed KPMG S.p.A. as the statutory auditors forthe nine-year period 2015-2023 pursuant toLegislative Decree 39/10, at the end of a selectionprocess managed by the Board of Statutory Auditors.Following examination of the offers from some of theleading players in the field of statutory auditing, theBoard of Statutory Auditors identified a company withthe requirements of Legislative Decree no. 39/10 tobe submitted with a justified opinion for the approvalof the Shareholders’ Meeting.

Salini Impregilo and its main subsidiaries haveengaged independent auditors to perform thestatutory audit of their financial statements and tocheck that their accounting records are kept correctlyas required by Legislative Decree no. 58 of February24, 1998, and Legislative Decree no. 39 of January27, 2010, in the version in force as at December 31,2016.Their interim financial reports are also reviewed.

The independent auditors audit Salini Impregilo inaccordance with the applicable legislation.

As part of the general audit plan for the group, thesubsidiaries that do not exceed the thresholds set byConsob have nonetheless engaged the independentauditors on a voluntary basis.

10.5. Manager in Charge of FinancialReporting and Other Roles and Functions

Article 26 of the Bylaws requires that the Boardappoints, and removes from office, after consultingthe Board of Statutory Auditors, a manager to be incharge of financial reporting, setting his term of officeand fee. The candidates chosen must have at leastthree years’ experience in: (a) administration andfinance or administration and control or management


duties with responsibility for financial, accounting andcontrol matters, with companies that have a sharecapital of at least Euro 2 million or (b) legal, economicor financial aspects closely related to the company’sactivities; or (c) management at a state body or publicadministration office active in the credit, financial orinsurance sectors or in sectors closely related to thatof the company.

Topics and sectors closely related to the company’sactivities are those set out in the last paragraph ofArticle 29 (which states: “As required by Article 1.2.b)and c) and paragraph 3 of Ministerial Decree no. 162of March 30, 2000, the fields (legal, economic,financial and technical-scientific) and the sectorsserving areas of engineering, geology, construction ofpublic and private works, building, and constructionin general are considered strictly relevant to the scopeof activities of the Company”.

The position of Manager in charge of financial reportingpursuant to Article 154-bis of TUF is currently held,with an open term, by the General Manager Corporate& Finance Group CFO Massimo Ferrari, who wasgranted all the powers and authority required toeffectively carry out his functions and duties, within thebudget limits approved from time to time and the lasttime by the Board of Directors of March 8, 2017. TheBoard of Directors granted powers to the Executive inCharge Massimo Ferrari, and specifically:

• direct access to all information required to produceaccounting data;

• unlimited use of internal communication channelsthat ensure a correct intra-group exchange ofinformation;

• a free hand in organizing his unit in terms of bothhuman and technical resources (materials, IT andany other resources);

• to independently define and adopt administrativeand accounting procedures, also by availing of theassistance of other company functions whennecessary;

• to assess and modify policies, organizationalstructures and procedures that could relate toadministrative and accounting processes;

• to participate in board and committee meetings,especially those which discuss issues related to hisfunction and for which he is responsible;

• to engage external consultants, when necessaryfor specific issues;

• to interact with employees with control duties andexchanging information to ensure the ongoingmapping of risks and processes and propermonitoring of the correct working of administrativeand accounting procedures.

On February 25, 2015, the Board approved theGuidelines of the design of administrative, accountingand risk assessment processes pursuant to Law262/2005, further updated with resolution of January18, 2017.

The Manager in charge of financial reporting, on anannual basis, shall award a mandate to the InternalAudit Function to carry out tests regardingadministrative-accounting procedures.

10.6. Cooperation Between PartiesInvolved in the Internal Control and Risk Management System

In order to maximize the efficiency of the InternalControl and Risk Management System and reduceduplication of activities, the Guidelines of the InternalControl and Risk Management System envisage atimely information flow among those involved in saidsystem. In particular, it is envisaged that:

• Control and Risk Committee meetings are to beattended by the Board of Statutory Auditors, theChairman of the Board of Directors, the Managerin charge of financial reporting and the Chief of theInternal Audit and Compliance Department and theGroup Risk Officer. The Director in charge of the


Internal Control and Risk Management System, theChief Compliance Officer, as well as any otherperson whose presence the Committee deemsappropriate in relation to the matters to bediscussed may also attend.

• the Chief Internal Auditor periodically reports on hisactivities to the Control and Risk Committee, inorder that the latter can inform the Board pursuantto the preceding paragraph;

• the Chief Internal Auditor promptly transmits and,normally, also to the Risk Owners and others

involved in the Internal Control and RiskManagement System, the reports prepared at theend of the audit in order to allow the abovementioned persons to promptly take theappropriate risk mitigating actions according totheir responsibilities for the risks that haveemerged;

• the Chief Compliance Officer, the Chief InternalAuditor and the Group Risk Officer liaise with eachother in carrying out the audits, also through themutual sharing of work plans and information,taking into account any synergies.


On November 30, 2010, the Board of Directorsapproved a specific new procedure concerningrelated party transactions (the "Procedure"), whichreplaced the previous procedure approved by theBoard on July 7, 2005, after receiving the favorableopinion of the Committee for Related-partyTransactions, pursuant to Article 2391-bis of theItalian Civil Code. and of Article 4, paragraphs 1 and3, of the Consob regulation on related parties; OnNovember 29, 2010, the Board of Statutory Auditorsassessed the new procedure’s compliance with thecriteria set out in the Regulation.

The Board of Directors, at the meetings held on April20, 2012, July 9, 2012, and May 13, 2013, December17, 2014 and November 11, 2015, further amendedthe Procedure, after obtaining the favorable opinion ofthe committee for related-party transactions and theconformity assessment made each time by the Boardof Statutory Auditors on compliance with theprinciples of the Consob Related Parties Regulation.

The Procedure (available on the Internet sitewww.salini-impregilo.com, under the "CorporateGovernance - Related party transactions” section) setsout the rules, methods and criteria aimed at ensuringthe transparency and substantial and procedural

correctness of related party transactions carried outby the Issuer either directly or via its subsidiaries.

The Board of Directors set up a committee for Related- Party Transactions, consisting of the independentdirector appointed from the minority list (MarcoBolgiani) and three other independent directors(Marina Brogi, Giuseppina Capaldo, Geert Linnebank)to carry out the functions envisaged by the ConsobRelated Parties Regulation. The Committee elected itsChairman in the person of Marco Bolgiani.

* * * * *

The Board meeting of March 12, 2007, resolved thatsubject to the provisions of Article 2391 of the ItalianCivil Code, directors with interests,either directly or onbehalf of third parties, in a corporate transaction to beapproved by the Board of Directors or ExecutiveCommittee may participate in the related discussionsand vote thereon as such participation represents areason for taking a responsible decision about atransaction about which the director may have greaterknowledge than the other directors; the Board ofDirectors or Executive Committee may still ask thatthese directors leave the meeting during thediscussion on a case-by-case basis.

11. Directors’ Interests and Related Party Transactions


Article 29 of Salini Impregilo’s Bylaws requires that theShareholders’ Meeting elect a Board of StatutoryAuditors, consisting of three standing and twoalternate statutory auditors.

The Statutory Auditors must meet the requirementsprescribed by law, the Bylaws and other applicablestatutes.

Appointment of the Board of Statutory Auditors takesplace using lists submitted by the shareholders usingthe methods and within the time-frame set out belowin accordance with the applicable legislation ongender equality. Candidates shall be listed innumerical sequence in each list. Lists have twosections: one for the candidate for the office ofstatutory auditor and one for the candidate for theoffice of alternate statutory auditor. They shall includeat least one candidate for each position and maycomprise up to a maximum of three candidates for theoffice of statutory auditor and up to two for the officeof alternate auditor.

Lists submitted by the shareholders are filed at the

company’s registered office to be available forpublic consultation as indicated in the noticecalling the shareholders’ meeting. They shall befiled at least twenty-five days before the date offirst call of the meeting, unless other mandatoryterms are established by legislative and regulatoryprovisions.

Lists that have a total number of three or morecandidates must contain candidates belonging toboth genders, so that the gender with fewerrepresentatives has at least one fifth (on the first termof office starting after August 12, 2012) and then one-third (rounded up) of the candidates to the office ofStatutory Auditor, and at least one fifth (on the firstterm of office starting after August 12, 2012) and thenone-third (rounded up) of the candidates to the officeof Alternate Auditor.

Shareholders, shareholders forming part of significantshareholder agreements as per Article 122 ofLegislative Decree no. 58 of February 24, 1998 (TUF)the Parent, subsidiaries and jointly controlled entitiesas per Article 98 of TUF 93 of the same decree may

12. Appointment of Statutory Auditors

not present, or be involved in presenting (also viatrustees or nominees), more than one list. Nor canthey vote (also via trustees or nominees) for more thanone list. Moreover, each candidate may only bepresent in one list in order to be eligible. Acceptancesor votes breaching such prohibition shall not beassigned to any list.

Only those shareholders that, either individually ortogether with other shareholders, own shares makingup the percentage of share capital required forpresentation of lists for candidate directors, maypresent lists (see section 4.1 of this report).

With each list, and within the time-frame describedearlier, shareholders must deposit: (i) informationabout the shareholders presenting the list; (ii)statements whereby each candidate accepts theircandidature and states, under their own responsibility,the non-existence of any ineligibility or incompatibilityreasons, and the existence of the requirements for therelevant offices, including compliance with the ceilingfor the number of positions that can be held under thecurrent law and regulations; (iii) a CV of eachcandidate where professional and personal profile ofeach candidate; and (iv) any other information requiredby the applicable law or regulations given in the noticecalling the shareholders’ meeting.

A certificate issued by a legally-authorizedintermediary must also be filed, within the time limitestablished in the rules governing the publication oflists by the Company, showing ownership of thenumber of shares necessary to submit lists at the dateof filing of the list with the Company.

Lists submitted that do not meet the aboverequirements will be treated as if they had not beensubmitted.

Candidates who are ineligible or incompatible orwho do not meet the requirements established bythe applicable laws and regulations or hold moreoffices than the maximum limits established in theapplicable laws and regulations cannot be includedin the lists.

Statutory Auditors are elected as follows :

1. two Statutory Auditors and one Alternate Auditor aretaken from the list that obtains the highest number ofvotes in the shareholders’ meeting, according to thenumerical sequence in which they are listed in thesections of the list;

2. the remaining Statutory Auditors and theremaining Alternate Auditors are taken from thelist that receives the second highest number ofvotes and is submitted and voted by parties whoare not connected, directly or indirectly, with thereference shareholders, pursuant to Article 148.2of Legislative Decree no. 58 of February 24,1998 (TUF), according to the numericalsequence in which the candidates are listed inthe sections of this list (“Minority list”). If two listsreceive the same amount of votes, the electedcandidates shall be taken from the list submittedby the shareholders holding the largestownership stake or, subordinately, from the listsubmitted by the largest number ofshareholders.

If the above method does not ensure the compositionof the Board of Statutory Auditors in accordance withthe applicable legislation on gender equality, theelected candidates shall be substituted accordinglyusing the list that obtained the most votes, accordingto the numerical sequence in which the candidatesare listed.

When the list system is not used, shareholders electstatutory auditors by majority vote, subject to theapplicable legislation on gender equality.

The candidate listed first on the Minority List shallserve as Chairman of the Board of Statutory Auditors.

Statutory Auditors shall cease to hold office in thecases contemplated in the applicable laws andregulations and whenever they no longer meet therequirements for election prescribed by these Bylaws.

When one of the Statutory Auditors needs to be



replaced, the Alternate Auditor from the same list isco-opted. If both the Statutory and Alternate Auditorsfrom the Minority List are no longer in office, thevacancy shall be filled by the candidate listed next onthat list or, if not available, by the first candidate onthe Minority List that obtained the second largestnumber of votes.

In all cases, the replacement procedure detailedabove must ensure that the composition of the Boardof Statutory Auditors complies with the applicablelegislation on gender equality.

The Shareholders’ Meeting held pursuant to Article2401, Section 1, of the Italian Civil Code, shall elector replace Statutory Auditors in compliance with theprinciple of necessary representation of minorities,and in compliance with the applicable legislation ongender equality.

Outgoing Statutory Auditors may be re-elected.

“As required by Article 1.2.b) and c) and paragraph 3of Ministerial Decree no. 162 of March 30, 2000, thefields (legal, economic, financial and technical-scientific) and the sectors serving areas ofengineering, geology, construction of public andprivate works, building, and construction in generalare considered strictly relevant to the scope ofactivities of the Company”.

* * * * *

The result of the first assessment carried out on theindependence of Statutory Auditors, after theappointment, is made public to the market through apress release, pursuant to criterion 8.C.1. of the Code.

Remuneration of the Statutory Auditors, pursuant tocriterion 8.C.3. of the Code, must be commensurateto the required commitment, to the significance of therole covered and to dimensional and sector relatedbusiness aspects.


At Salini Impregilo Shareholders’ Meeting held on April30, 2014, the shareholders appointed the currentBoard of Statutory Auditors, with expiry during theShareholders’ Meeting of December 31, 2016,including the chairperson on the Board of StatutoryAuditors, electing all the candidates on the sole listpresented by the shareholder Salini Costruttori S.p.A.The appointment of the new Board of StatutoryAuditors was unanimously approved by the votingcapital, equal to 91.25% of the company’s overallvoting rights.

The statutory auditors’ personal and professionalprofiles are presented in their curricula vitae postedon the Internet site www.salini-impregilo.com,under the "Governance - Board of Statutory Auditors”section.

According to what has been stated above, theShareholders’ Meeting of Salini Impregilo of April 27,2017, will be called to appoint a new Board ofStatutory Auditors for the three-year period 2017-2019, with appointment of its Chairman and ofhis/her remuneration. With regard to this topic, please

refer to the Directors’ report published on thecompany website www.salini-impregilo.com in the"Governance - Shareholders’ Meeting" section, withinthe documentation concerning the OrdinaryShareholders’ Meeting convened on April 27, 2017.

The information concerning the composition of theBoard of Statutory Auditors at end of year, in additionto further information regarding the appointment of theStatutory Auditors, their participation in meetings ofthe Board and the other positions held by the subjectin other companies, can be found in Table 2 attachedto this report.

* * * * *

The Board of Statutory Auditors met 12 times duringthe year with meetings averaging roughly one hourand a half.

The Board of Statutory Auditors is convened asrequired and meetings are not scheduled for each year.

Three meetings have been held to this day.

13. Composition and Duties of the Board of Statutory Auditors (Article 123-bis.2.d) of the TUF


* * * * *

The shareholders appointed the new statutory auditorsin their meeting on April 30, 2014. The Board of StatutoryAuditors confirmed on May 14, 2014, that each statutoryauditor met the independence requirements set out in theCode. The Board of Statutory Auditors, on February 14,2017, ascertained that each Statutory Auditor still hadthese requisites. The Board of Statutory Auditorsapplied all the criteria set out in the CorporateGovernance Code in assessing independence.

* * * * *

Salini Impregilo complies with the guidelines ofcriterion 8.C.4 of the Code whereby statutory auditorsthat either directly or on behalf of third parties have aninterest in a specific transaction shall promptly andcompletely inform the other statutory auditors and theChairman of the Board of Directors about the nature,scope, origin and terms of their interest.

In the meetings held during the year, the StatutoryAuditors met the Independent Auditors who describedthe scope of their appointment, their responsibilitiesand independence, and the procedures carried out forSalini Impregilo and the group companies that haveengaged them. During the year, the independentauditors confirmed their independence in written formto the Board of Statutory Auditors.

The Board of Statutory Auditors, in carrying out itsactivity, coordinated with the Internal Audit functionand with the Control and Risk Committee,participating with the Chief Internal Auditor to themeetings held by the Control and Risk Committee.The Chief Internal Auditor also participated in severalBoard of Statutory Auditors’ meetings where hisactivity was examined.

The Board of Statutory Auditors took part in theInduction Program. Please refer to the previousparagraph 4.2.


The company believes that it is in its interests andalso that it has a duty to the market to have anongoing dialogue with its shareholders andinstitutional investors based on a commonunderstanding of their roles. Such dialogue takesplace within the boundaries established forconfidential information to ensure that investors andpotential investors receive information upon whichthey can base their investment decisions.

Therefore, it set up Investor Relations unit in July 2001which reports to the head of the Investor Relations unit(currently Fabrizio Rossini) whose specific duties

include managing relations with investors. This personhas an e-mail address specifically for receivingcommunications and requests from shareholders([email protected]). The InvestorsRelations section in company’s website www.salini-impregilo.com contains all the financial information aswell as up-to-date documents of interest to theshareholders, so that they may exercise their rights inan informed manner.

Salini Impregilo publishes information of interest to itsshareholders on its Internet site www.salini-impregilo.com.

14. Investor Relations


Article 12 of the Bylaws establishes that Meetings cantake place in Italy and not necessarily at the registeredoffice. Ordinary meetings are called every year withinone hundred and twenty days of the reporting dateand, at the very latest, within one hundred and eightydays if the legal conditions for doing so are met.Ordinary and extraordinary Meetings are also calledwhenever the Board of Directors deems it suitable andwhen provided for by law.

Pursuant to Article 14 of the Bylaws, each holder of a rightto vote who is eligible to attend a Shareholders’ Meetingcan be represented at the Shareholders’ Meeting bymeans of a written proxy given to another party, pursuantto the law. The Chairman of the Shareholders’ Meetingis responsible for verifying the validity of the proxies andthe rights of those present to attend the Meeting.

Article 15 of the Bylaws establishes that both ordinaryand extraordinary Shareholders’ Meetings shall beconstituted and pass resolutions according to the law.Sections 4 and 12 of this report set out the conditionsfor electing members of the Board of Directors andthe Board of Statutory Auditors.

Article 16 of the Bylaws states that the Shareholders’Meeting shall be convened by a notice to be publishedunder the terms and conditions of the law. That articlealso states that the Ordinary and ExtraordinaryShareholders’ Meeting shall take place in a single call,unless the Board of Directors, for a givenShareholders’ Meeting, has resolved to specify thedate for the second and, possibly, third call, providingsuch information in the call notice.

Pursuant to Articles 17, 18, and 19 of the Bylaws, themeeting is chaired by the Chairman of the Board ofDirectors, or in his absence, by one of the deputychairmen. If this is not possible, the meeting appointsa chairperson from among the directors orShareholders present. The Chairman of theShareholders’ Meeting has full powers to verify theeligibility of holders of voting rights to attend themeeting and, more specifically, the validity of proxies,to ascertain whether the meeting is duly convenedand with the required quorum, as well as the powerto manage and govern the proceedings and establishthe voting procedures. The Shareholders’ Meetingappoints a secretary who need not be a shareholder.

15. Shareholders’ Meetings (Article 123-bis.2.c) of the TUF)


Resolutions are recorded in minutes entered in aspecial register signed by the Chairman, the Secretaryand the vote-counters, if appointed. The minutes ofthe Shareholders’ Meeting, if drawn up by a notary(pub l ic ) , a re subsequent ly recorded in theaforementioned register.

As described in Section 4.3 of this Report, theBylaws, in Article 24, attributes to the Board ofDirectors responsibility to resolve to establish orclose branches in Italy or abroad, reduce the sharecapital in the event of a shareholder withdrawal,amend the Bylaws to comply with changes inlegislation, transfer the registered office within Italy,and carry out a merger and spin-off in compliancewith the provisions of Articles 2505 and 2505 bis ofthe Italian Civil Code.

* * * * *

The Issuer’s shareholders, during the Meeting held onApril 28, 2016, submitted the proposal concerning thecomposition of the Board of Directors for approval,considering that the Board of Directors did notpreviously advance a proposal.

* * * * *

The Ordinary Shareholders’ Meeting approved the“Regulation of Shareholders’ Meeting” during theirordinary meeting on May 8, 2001. These rules are

available at www.salini-impregilo.com, under the"Corporate Governance - Shareholders’ Meeting”section, and were drawn up using the formatproposed by Assonime. Their scope is to ensure theorderly conduct of meetings with respect to eachshareholder’s fundamental right to requestclarifications about matters on the agenda, to expressits opinion and make proposals.

These regulations set out the methods used to ensureeach shareholder’s right to take part in discussionsabout the matters on the agenda.

The Shareholders’ Meeting held on April 28, 2016 wasattended by (including the Chairman and the ChiefExecutive Officer) 8 Directors. The Board of Directorsreported to the shareholders about the activities bothcarried out and planned for the future in the uniqueMeeting. It took the necessary steps to ensure thatthe shareholders receive adequate information aboutthe matters in order to be able to make informeddecisions. No shareholder attending the meetingrequired the Chairman of the Compensation andNomination committee to refer on the procedures ofthe functions of the Committee.

In accordance with current Bylaws requirements,changes in the Issuer’s market capitalization duringthe year did not impair the exercise of actions orprivileges designed to protect the minorityshareholders.


Corporate Social Responsibility Department

The Company’s current organizational structureincludes the Corporate Social ResponsibilityDepartment under the CEO. This department definesand guarantees the implementation of a SustainabilityPlan that adheres to the company’s targets and thatis consistent with international standards. It alsoprepares the Sustainability Report.

Sustainability matters connected to companyactivities and to how said company interacts with its stakeholders

The Board of Directors held on December 17, 2015,resolved that although the company does not belongto the FTSE-MIB index, but is aligned to best practices.pursuant to Comment to Art. 4 of the said Code,resolved that supervision on sustainability mattersconnected to the company’s activities and to how thecompany interacts with all the stakeholders must becarried out by the Control and Risk Committee.

Whistleblowing System

With regard to the comment regarding Art. 7 of theCode, which envisages that "The Committee thinksthat at least within issuing companies belonging tothe FTSE-MIB there should be an adequate internalcontrol risk management system that includes aninternal whistleblowing system used by employeesto report any irregular behaviour or legal andregulatory violations that are in line with the bestexisting national and international best practices, toguarantee a specific information channel thatsafeguards the anonymity of the whistleblower." Thisis done voluntarily, as there is no obligation for thecompany to comply, as it is not included in theFTSE-MIB index. In any case, in order to align itselfwith current best practices, having obtained theapproval of the Control and Risk Committee, theBoard of Directors on December 17, 2015, adopteda specific system for managing notificationsregarding irregular behaviour or legal and regulatoryviolations.

16. Additional Corporate Governance Practices(Article 123-bis.2.a) of the TUF)


Since the end of year closing no changes to the corporate governance structure were made except for those mentioned in this Report.

The ChairmanAlberto Giovannini

17. Changes Since Year End

62Report on Corporate Governance and the Ownership Structure61 Report on Corporate Governance and the Ownership Structure

CRC CNC EC CRPT

Position Members Year First In office In office List Exec Non- Indip Indip ( * ) No. ( * ) ( * * ) ( * ) ( * * ) ( * ) ( * * ) ( * ) ( * * ) of birth appointment since until * * exec since from other Code TUF positions

Chairman Alberto Giovannini 1955 17.07.12 17.07.12 Shareholders’ Meeting M X 17/17 7 3/3 M to approve the Financial Statements as at December 31, 2017

Director • ◊ Pietro Salini 1958 17.07.12 17.07.12 Shareholders’ Meeting M X 16/17 1 3/3 P to approve the Financial Statements as at December 31, 2017

Director Marco Bolgiani 1957 30.04.15 30.04.15 Shareholders’ Meeting m X X X 16/17 2 12/15 M 1/1 P to approve the Financial Statements as at December 31, 2017

Director Marina Brogi 1967 17.07.12 17.07.12 Shareholders’ Meeting M X X X 17/17 2 8/8 P 1/1 M to approve the Financial Statements as at December 31, 2017

Director Giuseppina Capaldo 1969 11.06.12 11.06.12 Shareholders’ Meeting M X X X 16/17 2 14/15 M 1/1 M to approve the Financial Statements as at December 31, 2017

Director Mario Cattaneo 1930 17.07.12 17.07.12 Shareholders’ Meeting M X X X 16/17 1 15/15 P to approve the Financial Statements as at December 31, 2017

Director Roberto Cera 1955 17.07.12 17.07.12 Shareholders’ Meeting M X 17/17 - to approve the Financial Statements as at December 31, 2017

follow

Table 1: Structure of the Current Board of Directors and Committees at the end of the 2016 Financial Year

Board of Directors



Director Nicola Greco 1949 12.09.13 12.09.13 Shareholders’ Meeting X X X 16/17 1 8/8 M 3/3 M to approve the Financial Statements as at December 31, 2017

Director Pietro Guindani 1958 17.07.12 17.07.12 Shareholders’ Meeting M X X X 14/17 3 14/15 M to approve the Financial Statements as at December 31, 2017

Director Geert Linnebank 1956 17.07.12 17.07.12 Shareholders’ Meeting M X X X 16/17 3 8/8 M 1/1 M to approve the Financial Statements as at December 31, 2017

Director Giacomo Marazzi 1940 12.09.13 12.09.13 Shareholders’ Meeting X X X 16/17 - 3/3 M to approve the Financial Statements as at December 31, 2017

Director Franco 1947 12.09.13 12.09.13 Shareholders’ Meeting X X X 14/17 3 13/15 M Passacantando effective from effective from to approve the Financial 15.12.13 15.12.13 Statements as at December 31, 2017

Director Laudomia Pucci 1961 17.07.12 17.07.12 Shareholders’ Meeting M X X X 13/17 6 6/8 M to approve the Financial Statements as at December 31, 2017

Director Alessandro Salini 1961 28.04.16 28.04.16 Shareholders’ Meeting X 11/12 - to approve the Financial Statements as at December 31, 2017

Director Grazia Volo 1952 16.03.16 16.03.16 Shareholders’ Meeting X 11/13 - to approve the Financial Statements as at December 31, 2017

follow

CRC CNC EC CRPT Board of Directors



Director Laura Cioli 1963 17.07.12 17.07.12 24.02.16 M X X X 0/2 2

Quorum required to present lists at time of last appointment: 1%

No. of meetings held during the financial year in question: BoD: 17 CRC: 15 CNC: 7 EC: 3 CRPT: 1

Directors who Terminated During the Financial Year 2016

Notes: • This symbol indicates the Director in charge of the Internal Control and Risk Management System.

◊ This symbol indicates the main person responsible for management of the Issuer (Chief Executive Officer).

* By date of first appointment of each director is meant the date on which the director was appointed for the first time (ever) to the Issuer’s Board of Directors.

** This column indicates the list from which each director was taken (“M”: majority list; “m”: minority list; BoD: list submitted by the BoD).

*** This column indicates the number of offices as director or statutory auditor held by the person in other companies listed on regulated markets, includingforeign markets, financial, banking, insurance companies or large companies. In the Report on Corporate Governance the positions are indicated in full.

(*) This column indicates the attendance of directors in Board and committee meetings, respectively, in relation to the total number of meetings held during therespective period of office.

(**) This column indicates the qualification of the director in the Committee: “P”: chairman; “M”: member.

CAPTION

CRC - Control and Risk Committee

CNC - Compensation and Nomination Committee

EC - Executive Committee

CRPT - Committee for Related - Party Transactions

CRC CNC EC CRPT


Position Members Birth First In office In office until List Indip part. Number date appointment since (M/m) of the Code C.S. of other positions

Chairman Trotter Alessandro 1940 07.05.08 30.04.14 Shareholders’ meeting to approve M X 12/12 9 the financial statements at 31.12.16

Statutory Auditor Naddeo Teresa Cristiana 1958 30.04.14 30.04.14 Shareholders’ meeting to approve M X 12/12 6 the financial statements at 31.12.16

Statutory Auditor Villa Gabriele 1964 30.04.14 30.04.14 Shareholders’ meeting to approve M X 12/12 8 the financial statements at 31.12.16

Alternate Auditor Tabellini Marco 1967 30.04.13 30.04.14 Shareholders’ meeting to approve M X the financial statements at 31.12.16

Alternate Auditor Battistin Roberta 1971 30.04.14 30.04.14 Shareholders’ meeting to approve M X the financial statements at 31.12.16

Quorum required to present lists at time of last appointment: 1%

No. of meetings held during the financial year in question: 12

There were no outgoing Statutory Auditors during 2016.

Table 2: Structure of the Board of Statutory Auditors at the End of the 2016 Financial Year

Board of Directors as at 31.12.2016


Directors who terminated their position

Director Company Position

Laura Cioli TELECOM ITALIA S.p.A. Director

RCS MEDIAGROUP (until 03.08.2016) Chief Executive Officer

Franco Passacantando EUROCLEAR PLC Director

EUROCLEAR SA/NV Director

ANTIRION SGR Chairman

Laudomia Pucci FASHION FLORENCE INTERNATIONAL Chairman

EMILIO PUCCI S.R.L. Deputy Chairman

PITTI IMMAGINE S.R.L. Director

POLIMODA Director

FONDAZIONE ALTAGAMMA SETTORE MODA Deputy Chairman

FONDAZIONE PALAZZO STROZZI USA Director

Alessandro Salini NTD

Grazia Volo NTD


List of positions held in other companies listed on regulated markets (also foreign), in financial companies, banks, insurance companies or companies of significant size (the companies in question are not part of the issuer’s Group)


Alberto Giovannini UNIFORTUNE ASSET MANAGEMENT SGR Director

MTS MARKETS S.p.A. Chairman

EURO M.T.S. Chairman

UNIFORTUNE INVESTMENT MANAGEMENT LTD Director

DTCC DERIVATIVES REPOSITORY LTD (UK) Director

DTCC DERIV/SERV LLC (US) Director

DTCC DATA REPOSITORY (US) Director

Pietro Salini SALINI COSTRUTTORI S.p.A. Chief Executive Officer

Marco Bolgiani BANCA POPOLARE DI VICENZA S.p.A Director

441 TRUST CO. LTD Executive Chairman

Marina Brogi LUXOTTICA GROUP S.p.A. Director

CLESSIDRA SGR Statutory Auditor

Giuseppina Capaldo FERRARI N.V. Director

CREDITO FONDIARIO S.p.A. Director

Mario Cattaneo BRACCO S.p.A. Director

Roberto Cera NTD

Nicola Greco PERMASTEELISA S.p.A. Director

Pietro Guindani VODAFONE ITALIA S.p.A. Chairman

ENI S.p.A. Director

FINECOBANK S.p.A. Director

Geert Linnebank INDEPENDENT TELEVISION NEWS Chairman

CARTESIUS ADVISORY NETWORK AG-ZUG Director

REFERENDUM FACTS LTD - London Director

Giacomo Marazzi NTD

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