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Business Overview and Performance Corporate Governance Financial Statements Enclosure

distort information, or may materially distort economic Lastly, it should be noted that the Code of Consumer
activities of general consumers or members of target Protection stipulates a guideline on consumer goods
groups. In particular, unfair trade practices cover. warranty. In particular, the code states that sellers
have the duty to deliver products to consumers in line
(1) Misleading trading activities and (2) Aggressive with purchase agreements and shall also be liable to
trading activities. Misleading trading activities refer to consumers if the delivery fails to meet any stipulation
practices that use or contain false information, or of the contract. In an event of contractual breach,
generally deceive consumers into making a transaction consumers may exercise judgement in asking the sellers
even when the information is correct in essence. to repair or replace products without any additional
If the said information prompts consumers into making expense. If the sellers fail to provide such remedy or
a transaction that they might not do if taking into fail to proportionately remedy the damages, consumers
account all relevant topics such as the availability or may ask for a discount or the cancellation of the contract.
conditions of products, prices, pricing method, and price End-sellers shall be liable to consumers for any
advantages, it is considered misleading in all events. contractual noncompliance arising out of an action or
Aggressive trading activities refer to events whereby an inaction of manufacturers, any seller, or any intermediary
trading practice violates consumers or forces them in the same chain. When shouldering such liability
with physical means or illegitimate influence in a way towards consumers, end-sellers shall have a right of
that significantly strips them of the freedom to choose recourse against other in the same chain for
or take an action regarding that product, and making the contract except when it has been agreed otherwise
them or having the possibility to make them do or when end-sellers have agreed to waive this right.
a transaction that they would not do otherwise. Sellers shall have the duty to inform consumers of
any non-compliance detected within two years since
The Code of Consumer Protection also defines what are their acceptance of products. Consumers shall also
considered unfair contracts between professionals have the duty to inform sellers of any non-compliance
and consumers. According to the code, a contract detected within two years since the detection.
is unfair when it is dishonest and causes significant Consumers, however, shall not have the duty to inform
inequalities in the rights and duties under the contract sellers of non-compliance in an event that sellers are
with consumers at a disadvantage. Under the code, fully aware of it or try to conceal it.
any unfair clause of contracts shall be invalid
while other clauses remain enforceable. 7. Laws on Employment and Hygiene
Including Workplace Safety
Under the Code of Consumer Protection, sellers have the duty
to submit products to consumers without delay or within Laws and regulations on employment, including
30 days since the signing of contracts. The products can collective bargaining agreements, aims to protect
be submitted by a transfer of ownership or by handing employees and ensure that their workplace is safe and
over the control of the said product to consumers. complies with legal requirements.

If the seller is also a manufacturer, it shall be subject Law No. 300/1970 (“Employment Law”) covers other laws
to manufacturers’ liability stipulations. It must take that stipulate general principles and rights (individual or
responsibility when a product is defective. A defective collective) for employees’ benefits, for example, the right
product is a product that cannot be used safely, to establish or join an organization/a strike, economic
failing to meet the reasonable expectations of persons. benefits, and protection against discrimination and
These stipulations take into account related issues unfair termination of employment.
such as: (1) distribution method; (2) reasonable use of
products or (3) distribution period. In events of defective Regarding employment with clearly specified employment
products, manufacturers must pay compensation for period and staff-leasing, Italian laws and collective bargaining
damages caused to a life or body, as well as assets agreements set the maximum number of employees
in addition to the defective product on conditions that who were recruited without a specified end of employment
that product is for personal use and the damaged party period in the past year, the maximum length of such
is the main product user.

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