LU VE S p A : Explanatory report of the BoD on the items on the agenda of the Shareholders' meeting - ordinary session

LU-VE S.p.A.

Via Vittorio Veneto 11 - 21100 Varese

Economic and Administrative Repertory No.: VA-191975

Tax Code: 01570130128

EXPLANATORY REPORT OF THE BOARD OF DIRECTORS ON THE PROPOSALS ON THE AGENDA OF THE ORDINARY SESSION OF THE SHAREHOLDERS' MEETING CONVENED IN ORDINARY AND EXTRAORDINARY SESSION ON 28 APRIL 2023 IN A SINGLECALL

(drawn up pursuant to Article 125-ter of the Consolidated Law on Finance and Articles 73 and 84-ter of the Issuers' Regulation)

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Dear Shareholders,

in compliance with Article 125-ter of Italian Legislative Decree no. 58 of 24 February 1998 (the "Consolidated Law on Finance"), as subsequently amended and supplemented, as well as articles 73 and 84-ter of the Regulation for implementation of the Consolidated Law on Finance concerning the regulation of issuers, adopted by Consob with resolution No. 11971 of 14 May 1999 as subsequently amended and supplemented (the "Issuers' Regulation"), LU-VE S.p.A. (the "Company" or "Issuer") makes available an explanatory report (the "Explanatory Report") on the items on the agenda of the ordinary session of the Shareholders' Meeting convened in ordinary and extraordinary session - by notice of call published on 17 March 2023 on the Company's web site at www.luvegroup.com("Investor Relations" section - "Corporate governance & shareholders" - "For the shareholders" - "Shareholders' meeting" - "Shareholders' meeting 28 April 2023") and on the authorized storage device eMarket Storage www.emarketstorage.com, as well as by abstract, on 18 March 2023, in the daily newspaper "Il Sole 24 ORE" - at the Studio Notarile Marchetti, in Milan, Via Agnello no. 18, on 28 April 2023 at 10:00 a.m., in a single call (the "Shareholders' Meeting").

The agenda of the ordinary sessionfor the above-mentioned Shareholders' Meeting is as follows:

1. Annual Financial Report as at 31 December 2022:
2. 1. presentation of the Financial Statements as at 31 December 2022, the Director's Report, the Board of Statutory Auditors' Report, the Independent Auditors' Report. Related and subsequent resolutions;
   2. proposal for allocation of the net profit of the year and distribution of the dividend. Related and subsequent resolutions.
3. Annual Report on remuneration policy and remuneration paid:
4. 1. approval of the "2023 Remuneration Policy" in Section I, pursuant to Article 123-ter, paragraph 3-bis of Italian Legislative Decree 58/98;

2.2advisory vote on the "Remunerations paid in the 2022 financial year" reported in Section II, pursuant to Article 123-ter, paragraph 6 of Italian Legislative Decree 58/98.

1. Appointment of the Board of Directors
2. 1. determination of the number of members. Related and subsequent resolutions;
   2. determination of the duration of the office. Related and subsequent resolutions;
   3. appointment of the Directors. Related and subsequent resolutions;
   4. appointment of the Chairman of the Board of Directors. Related and subsequent resolutions;
   5. determination of the remuneration. Related and subsequent resolutions;
3. Appointment of the Board of Statutory Auditors for the three-year period 2023/2025:
4. 1. appointment of the Statutory Auditors and of the Chairman of the Board of Statutory Auditors. Related and subsequent resolutions;
   2. determination of the remuneration; Related and subsequent resolutions.
5. Proposed authorisation to purchase and dispose of treasury shares, subject to cancellation of the resolution adopted by the Shareholders' Meeting of 29 April 2022. Related and subsequent resolutions.

This Explanatory Report shall be read together with the other separate reports on the items on

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the agenda of the ordinary session of the Shareholders' Meeting referred to in the text of the same Report, as well as with the explanatory report on the items on the agenda of the extraordinary session of the Shareholders' Meeting.

On 17 March 2023 this Explanatory Report shall be made available to the public at the administrative office of the Company in Uboldo (VA), via Caduti della Liberazione no. 53 and on the web site at www.luvegroup.com, ("Investor Relations" section - "Corporate governance & shareholders" - "For the shareholders" - "Shareholders' meeting" - "Shareholders' meeting 28 April 2023") and on the authorized storage device eMarket Storage www.emarketstorage.com.

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ORDINARY SESSION

FIRST ITEM ON THE AGENDA

ANNUAL FINANCIAL REPORT AS AT 31 DECEMBER 2022:

1.1 PRESENTATION OF THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022,

ACCOMPANIED BY THE DIRECTORS' REPORT, THE BOARD OF STATUTORY AUDITORS' REPORT, THE INDEPENDENT AUDITORS' REPORT. RELATED AND SUBSEQUENT RESOLUTIONS.

Dear Shareholders,

with reference to sub-item1.1 on the agenda of the ordinary session of the Shareholders' Meeting, we would like to inform you that, following the approval Board of Directors on 14 March 2023 of the draft financial statements of LU- VE S.p.A. as at 31 December 2022, you will be called upon to resolve on the same.

The draft financial statements that we submit for your approval closed with a net profit equal to Euro 16,245,097.23 (sixteen million two hundred forty-five thousand ninety-seven/23).

We also submit to your attention:

1. the consolidated financial statements of the LU-VEGroup ("Group" or "LU-VE Group") as at 31 December 2022, approved by the Board of Directors on 14 March 2023, which, although not subject to Shareholders' Meeting approval, complements the information provided with the draft financial statements of LU-VES.p.A.

For all further information in this respect, you are invited to refer to the Annual Financial Report - containing the draft separate financial statements and the consolidated financial statements as at 31 December 2022, the Directors' Report, the Board of Statutory Auditors' Report, the Independent Auditors' Report as well as the attestation pursuant to Article 154-bis, paragraph 5 of the Consolidated Law on Finance - which on 30 March 2023 shall be made available to the public at the administrative office of the Company and on the web site of the Company at www.luvegroup.com ("Investor Relations" section - "Corporate governance & shareholders" - "For the shareholders" - Shareholders' meeting" - "Shareholders' meeting 28 April 2023") and on the authorized storage device eMarket Storagewww.emarketstorage.com, together with additional documentation required by current regulations;

It should be noted that the Annual Financial Report have been drafted pursuant to the Transparency Directive according to the Single Electronic Reporting Format (ESEF) based on the principles provided for by the Delegated Regulation (EU) 2019/815. However, such Report will be published also in a .pdf version to make it easier to read, it being understood that only the version in ESEF format shall have legal value.

1. the 2022 Sustainability Report of LU-VE Group, containing the consolidated non- financial statement related to the financial year 2022 prepared by the Company in compliance with the provisions of article 5, paragraph 3, letter b) of Italian Legislative Decree 254/2016 (hereinafter
   "Statement" or "NFS"). The Statement, which is a separate report from the Directors' Report contained in the Annual Financial Report, has been prepared according to GRI Standards.

The reporting scope of the Statement includes all the companies belonging to LU-VE Group. With reference to the treatment of only environmental data and aspects connected with product safety, in the three-year period only the manufacturing companies have been taken into account, with the exception of LUVEDIGITAL S.r.l., as the environmental impact of commercial offices and of LUVEDIGITAL S.r.l. were not deemed material. It should be noted that the reporting scope of the Statement also includes the companies REFRION S.r.l., R.M.S. S.r.l., Refrion Deutschland GMBH even

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if became part of LU-VE Group during the financial year. Differently, the company TECNAIR LV S.p.A. is excluded from the reporting scope as it was sold during the year.

Artticle 8 of Regulation (EU) 2020/852 of 18 June 2020 (so called "Taxonomy Regulation") and the related Delegated Regulations (EU) 2021/2178 and (EU) 2021/2139 provide for the obligation to include in the DNF 2021 a specific information on how and to what extent the undertaking's activities are associated with economic activities that qualify as environmentally sustainable under the same Regulation. This information is presented in a dedicated separate section of the NFS.

The NFS reports on the Group's performance in relation to issues that affect its capacity to create value in the short, medium and long terms, reflecting the significant impacts of the organisation and those of interest to the Group's stakeholders. On 30 March 2023 it shall be made available to the public at the administrative office of the Company and on the web site of the Company at the address www.luvegroup.com, ("Investor Relations" section - "Corporate governance & shareholders"

• "For the shareholders" - Shareholders' meeting" - "Shareholders' meeting 28 April 2023") as well as on the authorized storage device eMarket Storage www.emarketstorage.com.

In this regard, it should be noted that the attestation required in accordance with Article 3, paragraph 10, Italian Legislative Decree 254/2016 as well as by Article 5 of the Consob Regulation adopted by resolution No. 20267 of January 2018, on compliance of the information provided with that required by the decree and with its principles, methodologies and methods, is issued by the independent auditors Deloitte&Touche S.p.A. and is published and made available as an attachment to the 2022 Sustainability Report of LU-VE Group. Article 8 of abovementioned Taxonomy Regulation does not provide for the auditor's review of the information on the activities required by the same Regulation, as part of the NSF.

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It is therefore proposed that the Shareholders' Meeting adopts the following resolution:

"The ordinary Shareholders' Meeting of LU-VE S.p.A., having examined the Directors' Report and the data of the financial statements of LU-VE S.p.A. as at 31 December 2022, the Board of Statutory Auditors' Report and the Independent Auditors' Report and the further documentation required by the legislation

resolved

1. to approve the financial statements of LU-VE S.p.A. as at 31 December 2022, which show a net profit for the year equal to Euro 16,245,097.23 (sixteen million two hundred forty-five thousand ninety-seven/23), and the Directors' Report;
2. to grant the Board of Directors - and on behalf of the Board to its Chairman - all power necessary to execute, with the right to sub-delegate, this resolution and file it for registration with the relevant Companies' Register, making any formal amendments, additions or deletions that may be necessary.".

1.2 PROPOSAL FOR ALLOCATION OF THE NET PROFIT AND DISTRIBUTION OF THE DIVIDEND. RELATED AND SUBSEQUENT RESOLUTIONS.

Dear Shareholders,

with reference to the issue as per sub-item1.2 on the agenda of the ordinary session of the Shareholders' Meeting, the Board of Directors proposes to allocate the net profit for the year of Euro 16,245,097.23 (sixteen million two hundred forty-five thousand ninety-seven/23) as follows:

1. to set aside a part equal to Euro 9,745,403.93, (nine million seven hundred and forty-five thousand four hundred and three/93) to be allocated as follows:

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