TERMS OF REFERENCE OF
THE AUDIT AND RISK COMMITTEEOFPRADA S.p.A.

Approved by the Board of Directors of PRADA S.p.A. on July 28, 2022

Audit and Risk Committee Terms of Reference

1.

ARTICLE 1

PURPOSE AND SCOPE
1.1

These terms of reference (the “Terms of Reference”) govern the constitution, functions
and duties of the audit and risk committee of PRADA S.p.A. (the “Company”),
established by the Board of Directors pursuant to article 21.7 of the Company's By-laws(the “Audit and Risk Committee” or the “Committee”).

1.2

To the extent not expressly set out in and so far as consistent with these Terms ofReference, reference is made to the laws and the Company’s By-laws governing theoperation and functions of the Board of Directors and the Rules Governing the Listingof Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

2.

ARTICLE 2

APPOINTMENT AND COMPOSITION
2.1

The members of the Audit and Risk Committee shall be appointed and replaced byresolution of the Board of Directors, which shall resolve also upon their remuneration.

2.2

The Audit and Risk Committee shall consist of a minimum of 3 (three) and a maximumof 5 (five) members, chosen among the non-executive members of the Company’s Boardof Directors, the majority of whom must be independent non-executive directors, i.e.,
meeting the independence requirements set forth in Rule 3.13 of the Listing Rules.

2.3

The members of the Audit and Risk Committee must have adequate expertise in relation
to the tasks they have to perform, and at least one of the Committee members must be
an independent non-executive director with appropriate professional qualifications oraccounting or related financial management expertise as required under Rule 3.10(2)of the Listing Rules. The competences of all members of the Audit and Risk Committee
are assessed by the Board of Directors at the time of their appointment.

2.4

The Audit and Risk Committee shall appoint among the independent non-executive
directors a chairperson (the “Chairperson”) who is responsible for coordinating andplanning the activities of the Committee and conducting its meetings. A former partnerof the Company’s existing auditing firm shall be prohibited from acting as a member ofthe Audit and Risk Committee for a period of 2 (two) years from the date of the person
ceasing: (a) to be a partner of the firm; or (b) to have any financial interest in the firm,
whichever is later.

2.5

The directors agree to serve as a member of the Audit and Risk Committee only if they
believe they can devote sufficient time and make contributions to the Company that arecommensurate with their role and board responsibilities.

2.6

If, for any reason whatsoever, including as a result of the termination of their office asa Director, one or more members of the Audit and Risk Committee cease to hold office,the Board of Directors of the Company shall replace them without delay at the first
relevant meeting in accordance with the provisions set out in the preceding paragraphs.
The term of office of the members of the Audit and Risk Committee appointed to replacethose who have ceased to serve shall expire at the same time as that of the members inoffice at the time of their appointment, unless the Board of Directors determines
otherwise at the time of their appointment.

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Audit and Risk Committee Terms of Reference

2.7

Unless otherwise determined by the Board of Directors at the time of their appointment,
the term of office of the members of the Audit and Risk Committee shall be the same asthat of the Board of Directors to which they belong, and the early termination of as theoffice of any Director, for whatever reason, shall result in his/her simultaneous andautomatic termination as a member of the Audit and Risk Committee.

3.

ARTICLE 3

DUTIES
3.1

The Audit and Risk Committee is an advisory and proposing body with the task ofsupporting the Board of Directors in its assessments and decisions on the internalcontrol and risk management system and the approval of periodic financial and nonfinancial (the latter, when prepared by the Company) reports.

3.2

The Committee shall perform the following functions:(i)makes recommendations to the Board of Directors of the Company together with
the Board of Statutory Auditors regarding the appointment, confirmation,
revocation of the entity responsible for the statutory audit, as well as any othermatter related to the granting of the mandate to said entity, its remuneration,
terms of engagement, and any questions of its resignation or dismissal;(ii)

assesses and monitors the independence of the entity responsible for thestatutory audit, as well as the effectiveness of its audit activities in accordancewith the applicable accounting standards;(iii)

discusses and defines with the entity responsible for the statutory audit the scopeand nature of the audit and financial reporting requirements before the audit
commences. It acts as the key representative body for overseeing the Company’srelations with the entity responsible for the statutory audit;(iv)

evaluates the advisability of appointing an external auditor to carry out control
activities other than the statutory audit, defining the relevant policy, identifying
the matters in respect of which this intervention is necessary and suggesting theactions to be taken. For this purpose, “external auditor” includes any entity thatis under common control, ownership or management with the audit firm or anyentity that a reasonable and informed third party knowing all relevant
information would reasonably conclude to be part of the audit firm nationallyor internationally. The Committee shall report to the Board of Directors of theCompany, identifying and making recommendations on any matters whereaction or improvement is needed;(v)

verifies the adequacy and accuracy of the Company’s financial statements andreports, in particular, the annual report and accounts, half-yearly reports and (ifprepared for publication) quarterly reports and the financial reporting
judgments contained in these documents, before they are submitted to the Boardof Directors, with particular reference to:(a)any changes in accounting policies and practices;(b)major judgmental areas;(c)significant adjustments resulting from audit;(d)the going concern assumptions and any qualifications;2Audit and Risk Committee Terms of Reference

(vi)

(e)

compliance with accounting standards;(f)compliance with the Listing Rules and legal requirements in relation tofinancial reporting;regarding paragraph (v) above:(a) members of the Committee should liaise with the Board of Directors andsenior management of the Company and the Committee must meet, at least
twice a year, with the Company’s auditors; and(b) the Committee should consider any significant or unusual items that are, or
may need to be, reflected in the financial statements and annual report andaccounts, half-year report and, if prepared for publication, quarterly reports.
It should give due consideration to any matters that have been raised by theCompany’s staff responsible for the Accounting and Financial Reporting
Department, head of the Internal Audit Department or auditors;(vii)

reviews the Company’s financial controls activity carried out by the Accounting
and Financial Reporting Department, and unless expressly addressed by aseparate board risk committee, or by the Board of Directors of the Company
itself, to review the Company’s risk management and internal control systems;(viii)

assesses the suitability of the periodic non-financial information (if prepared bythe Company), to correctly represent the Company’s business model, strategies,
the impact of its activities and the performance achieved;(ix)

discusses with the Company’s management the functioning of the risk
management and internal control systems, in particular with regard to theadequacy of resources, staff experience and qualifications as well as the training
program of the persons responsible for drafting the financial statements andaccounting records and the budget of the Company’s Accounting and Financial
Reporting Department, and ensures that the management guarantee theeffectiveness of the risk management and internal control systems;(x)

considers major investigation findings on risk management and internal control
matters as delegated by the Board of Directors of the Company or on its own
initiative and management’s response to these findings, verifies each statement
relating to the risk management and internal control systems contained in theannual Directors’ Report prepared by the Company before it is submitted to theCompany’s Board of Directors and analyzes any new elements or new issues
relating to internal control and risk management;(xi)monitors the independence, adequacy, effectiveness and efficiency of theInternal Audit Function and ensures that this function is provided withadequate resources and appropriate standing within the Company, as well as
coordination between the Internal Audit Function and parties external to theCompany that may perform audit functions;(xii)

verifies and periodically reviews the Group’s financial and accounting policies
and practices;3

Audit and Risk Committee Terms of Reference(xiii)

reviews management letters, reports and communications prepared by the entity
responsible for the statutory audit and reviews any material queries raised bysuch entity to the management about accounting records, financial accounts orsystems of control, as well as management’s responses to such queries;(xiv)

assesses the findings relating to risk management, internal control and otherareas that emerge from the audit reports of the Internal Audit Department, thecommunications of the Board of Statutory Auditors and individual members of
the Board of Statutory Auditors, the reports of the Supervisory Board and theanalyses and examinations carried out by third parties;(xv)

ensures that the Board of Directors responds promptly to any comments madeby the entity responsible for the statutory audit in its reports or communications
to the Company or the management letter issued by it;(xvi)

reports to the Board of Directors on matters relating to these Terms of Reference
and the Corporate Governance Code contained in Appendix 14 of the Listing
Rules;(xvii) examines, at least annually, the work plan prepared by the head of the Internal
Audit, as well as the periodic reports;(xviii) reports to the Board of Directors, at least half-yearly, when the Annual Report
and the Half-Year Report are approved, on the work carried out and on theadequacy of the risk management and internal control system;(xix)

expresses its opinion on the proposals for the appointment and revocation of thehead of the Internal Audit made by the Chief Executive Officer(s), in agreementwith the Chairperson, to the Board of Directors and on those relating to his
remuneration, in line with the policies of the Company, as well as the allocationof adequate resources for the performance of his duties;(xx)advises on the rules governing the transparency and substantial and procedural
fairness of transactions with related parties pursuant to the Procedure forConnected Transactions;(xxi)

where deemed appropriate by the Board of Directors, express an opinion ontransactions in which a Director has an interest, either directly or on behalf of athird party;(xxii) verifies the procedures available to the Company’s employees to report any
concerns about possible improprieties and irregularities in financial reporting,in the internal control or in any other matters on a confidential basis. The
Committee shall ensure that proper arrangements are in place for fair andindependent investigation of these matters and for appropriate follow-up action;(xxiii) ensures that procedures are in place to ensure that any confidential information
reported is analyzed with independence and impartiality and that such reports
are followed up appropriately;(xxiv) supports the Board of Directors in defining the guidelines of the internal control
and risk management system, so that the main risks relating to the Company
and its subsidiaries are correctly identified, as well as adequately measured,managed and monitored, determining criteria for the compatibility of such risks
with a sound and proper management of the business;
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Audit and Risk Committee Terms of Reference(xxv)

supports the Board of Directors in describing, within the scope of the annual
corporate governance report, the essential elements of the risk management andinternal control system, as well as for the purpose of assessing its overall
adequacy;(xxvi) periodically verifies, following changes in laws and/or regulations or when it
deems it necessary, the adequacy of these Terms of Reference and submits to theBoard of Directors any proposals for amendments or additions;(xxvii) considers other topics, as defined by the Board of Directors, and performs any
additional duties assigned to it by the Board of Directors.
3.3

The Committee is entitled to access the information and company departments
necessary for the performance of its duties, and may have access to sufficient financial
resources and make use of independent external consultants at the Company’s expense,
within the terms and limits of the budget established for this purpose by the Board ofDirectors, as long as such independent external consultants are adequately bound byconfidentiality. The Audit and Risk Committee shall report to the Board of Directors on
any use of funds at least once a year.

3.4

The Chairperson of the Committee shall inform the Board of Directors, at the firstmeeting convened, on the activities carried out by the Committee. The Committee shallmake available, in a timely manner, any documentation necessary to enable the Boardof Directors to make informed decisions on the matters examined by the Committee.

4.

ARTICLE 4

CALL OF THE MEETING, CONDUCT AND REPORTING
4.1

The Audit and Risk Committee shall meet, upon call by the Chairperson, whenever heor she deems appropriate, or when requested by at least 2 (two) members, or inaccordance with the calendar of meetings of the Audit and Risk Committee establishedwith the Company Secretary, in coordination with the meetings of the Board of Directors
and the other Committees of the Company.

4.2

The notice of meeting, containing an indication of the day, time and place of themeeting and the list of topics to be discussed, should be given by the Chairperson or theSecretary to the Committee members upon request of the Chairperson, at least 3 (three)days before the date set for the meeting by e-mail or any other suitable means. In casesof urgency, the deadline may be shorter. Any documents relating to the items on theagenda shall be made available at the same time as the meeting is convened orsubsequently, but in any case sufficiently in advance, except in exceptional cases or forreasons of confidentiality. A copy of the notice should be sent by the Corporate Affairs
to the Chairperson of the Board of Statutory Auditors and, in the case referred to inparagraph 4.6 below, also to the Chairperson of the Board of Directors and to theCompany’s Chief Executive Officer(s).

4.3

Meetings of the Committee may be held in the absence of a formal notice sent inaccordance with the above terms and procedures if all its members are present and noone objects to the discussion of the items on the agenda due to inadequate priorinformation.

4.4

Audit and Risk Committee meetings are chaired by the Chairperson, or in his/herabsence or impediment, by the member chosen by those present at the beginning of themeeting, who shall direct, coordinate and moderate the discussion.
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Audit and Risk Committee Terms of Reference

4.5

At the invitation of the Chairperson, the Company Secretary may attend meetings of theAudit and Risk Committee in order to act as secretary of those meetings. Alternatively,the Audit and Risk Committee may for one or more meetings appoint a person who is
not a member of the Committee to serve as secretary (the “Secretary”).

4.6

The Chairperson of the Company and the Chief Executive Officer(s) may be invited toattend meetings of the Committee, provided that they do not have any personal interestin the matters to be discussed and may not participate in voting at the Committee. TheChairperson of the Committee may, from time to time, invite any other person to themeetings of the Committee, including external parties, whose attendance may be ofassistance to the best performance of the duties of the Audit and Risk Committee,
provided that such external third parties respect the utmost confidentiality and privacy
with reference both to the matters dealt with and to the performance of the meetings ofthe Audit and Risk Committee they are invited to attend. The Chairperson of the Boardof Statutory Auditors (or another Statutory Auditor designated by the same) is entitled
to attend the meetings of the Committee.

4.7

The Internal Audit Director reports at least annually to the Audit and Risk Committee
on the activities carried out.

4.8

Meetings of the Audit and Risk Committee may also be held exclusively by means oftelecommunications, provided that all the attendees can be identified and that suchidentification is recorded in the relevant minutes and that they are able to follow thediscussion, participate in real time in the discussion of the items on the agenda, vote byopen vote in the cases in which a vote is taken, and view, receive and send documents.
Meetings of the Audit and Risk Committee are considered validly held even if thesecretary and the Chairperson are in different places. In this case, the meeting isconsidered to have been held in the place where the Chairperson is based.

4.9

For meetings of the Audit and Risk Committee to be validly constituted, the absolutemajority of the members in office is required. Resolutions are passed by an absolutemajority of votes; in the event of a tie, the vote of the person chairing the meeting shallbe decisive. Votes may not be cast by proxy and each member is entitled to one vote.

4.10

The Secretary of the Audit and Risk Committee should prepare full minutes of themeetings. Draft minutes are submitted to the Chairperson and the other members of theAudit and Risk Committee for comments within a reasonable time after the meeting isheld, and the minutes are generally approved at the next meeting of the Committee. The
Chairperson of the meeting and the Secretary sign the minutes of the meetings which
are kept by the Secretary in chronological order. Final versions of minutes of themeetings should be sent to all members of the Committee for their records within areasonable time after the meeting.

4.11

The Committee shall promptly exchange with the Board of Statutory Auditors any
information relevant to the performance of their respective duties.

4.12

The Committee meets at least twice a year in the attendance of the entity in charge ofauditing the Company’s accounts.

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Audit and Risk Committee Terms of Reference

5.

ARTICLE 5

FINAL PROVISIONS
5.1

These Terms of Reference are available to the members of the Board of Directors andthe Board of Statutory Auditors at the registered office of the Company and at the place
where the Audit and Risk Committee is convened and published on the website of theCompany and the Hong Kong Stock Exchange.

5.2

Any amendments to these Terms of Reference must be approved by the Board ofDirectors of the Company.

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