Comer Industries S p A : EXPLANATORY REPORT ON THE BOARD OF DIRECTORS APPOINTMENT

Comer Industries S.p.A.

Via Magellano 27 - 42046 Reggiolo (RE)

Registered in the Reggio Emilia Business Register no. 07210440157

Share Capital 18,487,338.60 euros subscribed and paid-up

Tax code 07210440157 - VAT no. IT 01399270352

EXPLANATORY REPORT OF THE BOARD OF DIRECTORS ON THE PROPOSALS ON THE AGENDA OF THE ORDINARY SHAREHOLDERS' MEETING OF APRIL 23, 2024

5TH ITEM ON THE AGENDA

Report prepared pursuant to Article 125-ter of Italian Legislative Decree no. 58 of February 24, 1998, as amended ("TUF").

Comer Industries S.p.A.

Via Magellano, 27 - 42046 Reggiolo (RE) Italy -

www.comerindustries.com- E-mail:info@comerindustries.comTel: +39 0522 974111 - Fax: +39 0522 973249

Reg. Reggio Emilia Business Register no. 07210440157 - Share Capital 18,487,338.60 euros fully paid-up - Tax Code 07210440157 - VAT code IT 01399270352

5. APPOINTMENT OF THE BOARD OF DIRECTORS:

1. DETERMINATION OF THE NUMBER OF MEMBERS OF THE BOARD OF DIRECTORS;
2. DETERMINATION OF THE TERM OF OFFICE OF THE BOARD OF DIRECTORS;
3. APPOINTMENT OF THE MEMBERS OF THE BOARD OF DIRECTORS;
4. APPOINTMENT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS;
5. DETERMINATION OF THE REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS.

Dear Shareholders,

The term of office of the Board of Directors of Comer Industries, appointed by the Ordinary Shareholders' Meeting on April 22, 2021 and subsequently added to on September 14, 2021, comes to an end with the approval of the financial statements as of December 31, 2023.

You are therefore called upon to resolve on (i) the determination of the number of members of the Board of Directors; (ii) the determination of the term of office of the Board of Directors; (iii) the appointment of the members of the Board of Directors; (iv) the appointment of the Chairman of the Board of Directors; and (v) the determination of the remuneration of the members of the Board of Directors.

Determination of the number of members of the Board of Directors

Pursuant to Art. 12 of the By-laws in force, the administrative body of the Company may be composed of a minimum of 3 and a maximum of 11 members, as determined by the Shareholders' Meeting. Directors are appointed for a period not to exceed three financial years and may be re-elected.

The Board currently in office consists of 9 members. In this regard, please recall that the Ordinary Shareholders' Meeting of April 22, 2021 determined that there would be 7 members on the Board of Directors, while on September 14, 2021, it decided to increase the number of Board members from 7 to 9.

Determination of the term of office of the Board of Directors

Pursuant to Article 12, paragraph 3, of the By-laws in force, Directors remain in office for a period not to exceed 3 financial years, as determined by the shareholders' meeting, and their term of office ends as of the date of the Shareholders' Meeting convened to approve the financial statements for the final year of their term of office. They may be re-elected.

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The outgoing Board of Directors invites the Shareholders' Meeting to determine - within the limits established by the By-laws - the term of office of the Board of Directors, on the basis of proposals that may be made.

Appointment of the members of the Board of Directors

The Company's Board of Directors will be appointed in compliance with the provisions of Art. 13 of the By-laws, which should be referred to for all matters not addressed below. All directors shall meet the requirements of professionalism and good standing contemplated by law and other applicable provisions, and they should not have any causes of ineligibility or incompatibility.

Please first of all note that, as concerns regulations currently in force on gender balance, Art. 147-ter, par. 1-ter, TUF, as amended by Law No. 160 of December 27, 2019, referred to in the By-laws, establishes that for the first reappointment subsequent to the Company's listing, the less represented gender must account for at least one-fifth of the directors elected (rounded up).

Submission of lists

According to Art. 13 of the By-laws, shareholders who, alone or together with other shareholders, collectively hold shares representing the amount required by regulations issued by Consob which, according to determination no. 92 of January 31, 2024, is equal to 2.5% of the share capital, are entitled to submit lists. Ownership of the minimum shareholding is determined by means of a dedicated certification issued by a qualified intermediary pursuant to the law proving ownership, when the list is filed with the Company, of the number of shares required to submit the list, to be filed within the term established by applicable regulations for the publication of lists by the Company.

Lists submitted by shareholders must be filed at the Company's headquarters at least 25 (twenty-five) days before the date scheduled for the Shareholders' Meeting (i.e. March 29, 2024), and will also be subject to additional forms of publication and submission methods laid out in regulations and legislation in force at the time.

The following procedures must be followed for the submission of lists: (i) hand delivery to Comer Industries S.p.A. via Magellano 27, Reggiolo (RE), or (ii) delivery by certified email to ir@pec.comerindustries.com, specifying "Submission of Board of Directors lists" in the subject line.

The lists include a list of candidates, each alongside a sequential number. Each list must contain a number of candidates meeting the independence requirements provided for in Art. 148, par. 3, TUF of at least the minimum number provided for in legislation in effect at the time, i.e., at least 1 if the list contains fewer than 7 candidates or 2 directors

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if the list contains more than 7 candidates, and indicate which candidates meet those independence requirements. The lists also must be composed of candidates of both genders, so that at least one-fifth (rounded up) of the candidates belong to the less represented gender.

Directors may take office subject to meeting the requirements established by legislation and regulations in force. Directors must meet the requirements established by legislation in force from time to time. A minimum number of them corresponding to the minimum determined by law must meet the independence requirements laid down in Art. 148, par. 3, TUF, as cited by Art. 147-ter, TUF. The Board of Directors will be appointed in accordance with the rules regarding gender balance in effect at the time.

The following annexes must be enclosed with each list: (i) curriculum vitae of the candidates; (ii) statements whereby each of the candidates accept their candidacy and attest, under their own responsibility, to the lack of causes of ineligibility and incompatibility, as well as the fulfillment of the requirements established by regulations in force to hold the office of Director of the Company, including the statement concerning any fulfillment of independence requirements; (iii) an indication of the identity of the shareholders that submitted the lists and their overall shareholding held. Lists for which the above provisions are not observed will be disregarded.

Please also recall that those who submit a "minority list" should refer to the recommendations provided by Consob in its communication no. DEM/9017893 of February 26, 2009.

Each party entitled to vote may vote for only one list; furthermore, each candidate may only be presented in a single list on pain of ineligibility.

Election of the Board of Directors

Pursuant to the By-laws, the election of the Board of Directors takes place as follows.

At the end of the vote, the candidates from the two lists that have obtained the most votes will be elected, according to the following criteria:

1. a number of directors equal to the total number of members to be elected, minus 1, will be taken from the list that obtains the most votes, in the sequential order in which they are presented in the list;
2. the remaining director will be taken from the list that obtained the second- highest number of votes in the shareholders' meeting (the "minority lists") and that is not connected in any way, whether directly or indirectly, with those who submitted or voted for the list that obtained the most votes.

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In the event of a tie between two lists, a new vote will be held by the entire shareholders' meeting, and the candidates who obtain the majority of the votes will be elected.

If at the end of the vote a sufficient number of directors who meet the independence requirements of current laws and regulations has not been elected, the candidate who does not meet those requirements, elected last in sequential order on the list that obtains the highest number of votes, will be excluded and replaced by the next candidate who meets the independence requirements drawn from the same list as the excluded candidate. Where necessary, this procedure will be repeated until the number of independent directors to be elected has been reached.

In addition, if with candidates elected according to the methods indicated above the composition of the board of directors does not comply with the current rules on gender balance, the candidate of the more represented gender elected last in sequential order on the list that obtained the most votes will be replaced by the first candidate of the less represented gender not elected from that same list in sequential order. This replacement procedure will be repeated until the composition of the board of directors complies with the current rules on gender balance. Finally, if this procedure does not ensure the above result, the replacement will be made by resolution passed by the majority of the shareholders' meeting, following the presentation of candidates of the less represented gender.

If only one list is submitted, the directors will be taken from that list, provided that it has received the majority of the votes and, if the directors thus elected do not correspond in number to the number of members of the board of directors set by the shareholders' meeting, if no lists are submitted, if the list submitted does not permit the appointment of independent directors in accordance with current laws and regulations or, finally, if the list submitted does not permit the appointment of independent directors in accordance with the current rules on gender balance, the shareholders' meeting will pass resolutions with the legal majorities.

In consideration of all of the foregoing, the Shareholders are invited to vote during the Shareholders' Meeting for one of the lists of candidates for the office of Board Member which will be prepared, filed and published in accordance with what is set forth above.

Appointment of the Chairman of the Board of Directors

Pursuant to Art. 14 of the By-laws, the Chairman of the Board of Directors is appointed by the Shareholders' Meeting on a priority basis. Indeed, the same Article 14 indicates that the Board of Directors may elect a Chairman from amongst its members if the Shareholders' Meeting has not done so.

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The outgoing Board of Directors invites the Shareholders' Meeting to appoint the Chairman of the Board of Directors from among the Directors who will be elected as a result of the votes related to item c) on the agenda above, based on the proposals submitted.

Determination of the remuneration of the members of the Board of Directors

Pursuant to Art. 18, paragraph 1 of the By-laws, the members of the Board of Directors are reimbursed for expenses incurred in performing their official duties.

The fees due to members of the Board of Directors are established pursuant to Article 2389 of the Italian Civil Code. The Shareholders' Meeting may in any event determine an overall amount for the remuneration of all directors, including directors with special positions.

Provided that the shareholders' meeting has not done so, the board of directors may also assign fees to directors as an end-of-office severance indemnity or allowance.

In this regard, please recall that the Ordinary Shareholders' Meeting of April 22, 2021 and of September 14, 2021 approved the gross annual fixed remuneration for directors of 50,000.00 euros each, leaving it up to the Board of Directors to define any additional remuneration for directors with special positions.

The outgoing Board of Directors invites the Shareholders' Meeting to determine the remuneration due to the Directors, on the basis of proposals that may be made.

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In light of the above, the Board of Directors invites you to:

1. establish the number of members of the Board of Directors, to be defined, in compliance with the By-laws, as between at least three and at most eleven directors;
   
2. establish the term of office of the Board of Directors, in compliance with the limits of law and the By-laws;
3. resolve on the appointment of the Board of Directors, voting for the election of its members based on the nominations submitted and in accordance with the provisions of the law and the By-laws;
4. appoint the Chairman of the Board of Directors;
5. determine the remuneration due to members of the Board of Directors.

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Reggiolo, March 14, 2024

For the Board of Directors

The Chairman

Matteo Storchi

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